Banyan Systems Announces 1999 First-Quarter Results; Performance Driven by 85 Percent Growth in Network Services Business.WESTBORO, Mass.--(BUSINESS WIRE)--April 27, 1999-- Banyan Systems Incorporated (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BNYN BNYN ePresence (stock symbol; formerly known as Banyan) ) today announced its financial results for the quarter ended March 31, 1999. For the first quarter of 1999, Banyan reported net income of $457,000, or $0.02 per diluted share, compared with a 1998 first-quarter net income of $377,000, or $0.02 per diluted share. Revenues for the first quarter of 1999 were $19.0 million, a 7.2 percent increase over $17.8 million in the first quarter of 1998. "Banyan is off to a strong start in 1999. Our first-quarter performance was highlighted by considerable growth in our Network Services business, our global alliance with the Microsoft(R) Corporation and continued achievements by our Switchboard subsidiary in building its business with local merchants," said Bill Ferry, Banyan's chairman and chief executive officer. "We are particularly enthusiastic about the continued growth of our Network Services business and our launch of the initial development, training, sales and marketing activities associated with our alliance with Microsoft. I am also encouraged by Switchboard's new strategic relationships and the business potential they represent. Bolstered by the initial funding by Microsoft, we ended the quarter with cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has of $30.9 million - resources that will help fund our growth initiatives going forward." Microsoft Alliance During the first quarter, Banyan established a global alliance with Microsoft to support the expansion of its Network Services business through packaged services, solutions and support offerings and to enhance the interoperability of the two company's products. As a cornerstone of the alliance, Banyan plans to expand its network services workforce over the next three years by at least 500 professionals who will attain Microsoft Certified Systems Engineer See Microsoft certification. or Solutions Developer status. During the quarter, Microsoft contributed $5.9 million of the $10 million to be paid to Banyan over three years for training, marketing and product development. Additionally, Microsoft has received warrants to purchase 1,750,000 shares of common stock at an exercise price of $10 per share, which upon exercise would represent approximately 7.5 percent ownership in Banyan. Microsoft is subject to a lockup See hang and abend. on such shares for up to three years. "With Microsoft as both a business and financial partner, we substantially enhanced our ability to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. opportunities to grow our Network Services business," said Ferry. "By combining our areas of expertise, both companies are able to provide customers with cost-effective services and solutions to expand their networks and leverage the Internet by deploying Microsoft's enterprise platform." Network Services Banyan's Network Services business grew to $9.2 million during the quarter, an 85 percent increase over the first quarter of 1998. Banyan's growth in network services is attributable to increased demand for the Company's network consulting and support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services . This operation now represents nearly 50 percent of Banyan's total revenue and employs 60 percent of its total workforce. During the quarter, Banyan entered into a number of new consulting engagements including the Educational Testing Service The Educational Testing Service (or ETS) is the world's largest private educational testing and measurement organization, operating on an annual budget of approximately $1.1 billion on a proforma basis in 2007. and the U.S. Army Soldier Systems Center, and expanded its network support and operations services by adding a major governmental agency, Human Resources Development Canada “HRDC” redirects here. For other uses, see HRDC (disambiguation). The Department of Human Resources Development, also referred to as Human Resources Development Canada (HRDC), is a former department of the Government of Canada. . In addition, sales of the Company's Internet-related third-party software offerings, including Banyan Siteminder and Oblix's Corporate Services Activities that combine or consolidate certain enterprise-wide needed support services, provided based on specialized knowledge, best practices, and technology to serve internal (and sometimes external) customers and business partners. Automation solution, contributed to additional services activity during the first quarter. Network Software Banyan's first-quarter Network Software sales of $8.3 million compares to $11.7 million in the first quarter of 1998. These results reflect lower demand for the Company's traditional VINES(R), StreetTalk(R) and messaging offerings, as well as decreased sales volume for related third-party networking software  This article is written like a personal reflection or and may require .Please [ improve this article] by rewriting this article in an . products. However, during the quarter, Banyan broadened its Internet-related portfolio of third-party software products and announced agreements to market and sell Oblix's Corporate Services Automation solution and Check Point Software Technologies' network security, traffic control and IP address management products. Switchboard Switchboard Incorporated, Banyan's majority-owned subsidiary majority-owned subsidiary A firm in which more than 50% of outstanding voting stock is owned by the parent company. , which hosts one of the leading Web sites for locating people, products, services and Web sites, reported sales of $1.6 million for the first quarter of 1999, up from $1.1 million in the first quarter of 1998. The majority of Switchboard's first-quarter sales were generated by its national advertising program and also reflected growth in its local advertising revenues. During the quarter, the Company accelerated the implementation of its strategy to tap the rapidly growing local merchant marketplace by establishing a number of strategic relationships aimed at connecting consumers with business owners in their communities. During the quarter, Switchboard forged partnerships with Discover Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , Comcast Online Communications, iAtlas Corp. and Qwest Communications
"Switchboard made excellent progress in building momentum in its local merchant initiative during the quarter. As a result, Switchboard has substantially advanced its business, and is attracting greater interest from major media and telecommunications enterprises seeking opportunities to leverage the Internet," said Ferry. "In light of these partnerships and additional prospects, we expect to see Switchboard's local business expand more rapidly in the future." Outlook "We believe Banyan moves into the second quarter with attractive growth opportunities," Ferry concluded. "As we implement the programs related to our Microsoft alliance, we anticipate continued expansion in our Network Services business. We also expect that Switchboard's revenues will grow in the coming quarters as we continue to pursue new partnerships and invest in driving increased traffic to the site. Overall, we believe we are on track to make 1999 a year of top-line growth for Banyan." The Company noted that each of the above statements under the heading "Outlook" and other statements using the terms "believe," "expects," "expected," "plans," and "anticipate," are forward-looking statements and are subject to change based on various important factors, including, without limitation, the impact of the Company's strategic initiatives to increase its focus on its Network Services business and Switchboard, ability to enter strategic alliances, the Company's plans and strategy for its business, increased competition, acceptance of the Company's products in the marketplace, sales and marketing and product development efforts, available resources, the ability of Switchboard to expand its traffic and revenues, the Company's ability to attract and retain qualified personnel, and the success of the Company's Year 2000 Readiness program, Network Services business and alliance with Microsoft. Actual events or results could differ materially from those indicated by such forward-looking statements. Further information on potential factors which could affect the Company's financial results are included in the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the 1998 year, which was filed with the SEC at the end of March 1999. The consolidated statements of operations and condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. balance sheets are attacfor business applications and tools to deploy and manage Intranets, directories and messaging. Its majority-owned Internet subsidiary, Switchboard Incorporated, is a lead Three months ended March 31, 1999 1998 Revenues: Software $8,271 $11,718 Services 9,153 4,955 Switchboard 1,602 1,080 Total revenues 19,026 17,753 Gross profit Software 6,767 10,431 Services 3,146 1,822 Switchboard 1,252 608 Total gross profit 11,165 12,861 % 59% 72% Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. : Sales and marketing 6,317 8,196 Product development 2,520 2,847 General and administrative 1,810 1,481 Total operating expenses 10,647 12,524 Income from operations 518 337 Other income, net 75 107 Income before income taxes 593 444 Provision for income taxes 136 67 Net income $457 $377 Net income per common share: Basic $0.02 $0.02 Diluted $0.02 $0.02 Weighted average number of common shares: Basic 19,158 17,672 Diluted 24,632 19,880 Condensed Consolidated Balance Sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. (in thousands) March 31, December 31, 1999 1998 ASSETS Cash and marketable securities $30,887 $22,288 Accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying , net 16,203 21,392 Other current assets Other Current Assets A balance sheet item that includes the value of non-cash assets due within one year. Notes: Examples are things like prepaid expenses and accounts receivable. 5,043 4,698 Property, equipment and other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. 7,584 7,832 Total assets $59,717 $56,210 LIABILITIES AND STOCKHOLDERS' EQUITY Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. Current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. $15,756 $16,623 Deferred revenue 17,657 18,430 Other liabilities other liabilities Small and relatively insignificant liabilities. For financial reporting purposes, firms often combine small liabilities into this single category rather than listing each liability separately. 675 750 Minority interests in consolidated subsidiaries 1,975 2,008 Stockholders' equity 23,654 18,399 Total liabilities and stockholders' equity $59,717 $56,210 |
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