Banyan Systems Announces First Quarter Results; Revenues Increase 22 Percent; Software Revenues Up 30 Percent.

WESTBORO, Mass.--(BUSINESS WIRE)--April 27, 1995--Banyan Systems Incorporated (NASDAQ: BNYN), a leading provider of enterprise networking services, today reported that net income increased to $3,557,000, or $0.20 per share, for its first quarter ended March 31, 1995, compared with net income of $3,276,000, or $0.18 per share, for the same period in 1994. Including the impact of a one-time charge after tax of $10,916,000 due to the acquisition of Beyond Incorporated, the Company reported a net loss for 1994's first quarter of $7,640,000, or $0.44 per share. Revenues for the first quarter increased 22 percent to $40.3 million, compared with $33.1 million in last year's first quarter.

Banyan's software revenues grew 30 percent to $33.7 million from $25.9 million for the comparable period in 1994. Banyan's international software business continued to grow as revenues expanded to $6.0 million, a 33 percent increase compared with last year's first-quarter level of $4.5 million.

Commenting on Banyan's first-quarter performance, David C. Mahoney, president and chief executive officer of Banyan, stated, "Banyan's growth demonstrates the increasing global acceptance of our enterprise networking solutions. Our revenue increase for the first quarter of 1995 reflects the successful expansion of our customer base as well as an increased level of business with existing customers, particularly through our Messaging products."

"We have continued to grow our business internationally as our expanded sales and marketing efforts have been instrumental in winning new accounts," Mahoney said. "In April, Banyan signed an OEM agreement with Hitachi, which will enable Hitachi to license all Japanese versions of our enterprise networking services and integrate them with Hitachi's hardware platforms and applications software products. Additionally, Marubeni Corporation, one of Japan's largest and most prestigious trading companies, and Banyan have entered into a joint venture partnership including product localization and joint selling. Marubeni Corporation also has purchased a minority position in our Japanese subsidiary, Nihon Banyan Systems K.K.. We believe that this partnership will help accelerate our growth in this promising market."

Mahoney added, "In recent weeks, we have announced several key marketing initiatives designed to build on our leadership position in the enterprise networking marketplace, as well as to ensure customer satisfaction on a global scale. We have received positive feedback from both our customers and partners about our directory initiative, Universal StreetTalk, which will enable software and hardware developers to leverage the capabilities of our proven directory service to deliver scaleable enterprise solutions. Additionally, we established a worldwide technical support agreement with Hewlett- Packard Company, enabling Hewlett-Packard to provide our customers with a full range of support services on all Banyan products.

"One of Banyan's highlights during the quarter was the announcement of our Enterprise Network Services (ENS) for the Sun Solaris computing platform, which brings the benefits of our enterprise network services to the Sun operating environment," noted Mahoney. "At our recent user conference, we introduced VINES Version 6.0 which includes enhancements to our StreetTalk Global Directory and Intelligent Messaging services in addition to our new DeMarc management architecture. At this conference, we also announced ENS for NetWare, Version 6.0, which strengthens our delivery of ENS services to the NetWare users to better leverage the power of our enterprise capabilities."

Mahoney concluded, "While we are pleased with our performance for this past quarter and are encouraged by the expanding market opportunities, we also acknowledge the business challenges that lie ahead. Moving forward, we will continue to extend the range of our enterprise network services across today's leading computing platforms, which should enable us to enter new markets of opportunity with both prospective and existing customers worldwide."

Under the Company's previously announced stock repurchase program, Banyan repurchased 240,000 shares of its common stock in open market transactions during the first quarter of 1995. It is the Company's intention to acquire up to one million shares of its common stock for use in its Stock Incentive and Employee Stock Purchase Plans, and similar corporate purposes.

The consolidated statements of operations and condensed balance sheets are attached.

About Banyan Systems Incorporated

Banyan Systems (NASDAQ:BNYN) is a pioneer and leader in enterprise network services. These products make it easy to find, share and manage information and resources within enterprise networks. Founded in 1983 and headquartered in Westboro, Massachusetts, USA, the company markets products worldwide through authorized network integrators, resellers and international distributors. Banyan can be reached on the World Wide Web at http://www.banyan.com. -0-

                      Banyan Systems Incorporated
                   Consolidated Statements of Operations
                  (In thousands, except per share amounts)

                            Three Months ended
                                March 31,
                            1995        1994

Revenues:
  Software             $  33,679   $  25,943
  Hardware                 1,352       2,187
  Support and training     5,318       4,931
    Total revenues        40,349      33,061

Cost of related revenues   7,685       7,286

Gross margin              32,664      25,775
%                            81%         78%

Operating expenses:
  Sales and marketing     18,722      13,710
  Product development      5,706       4,544
  General and
   administrative          3,189       2,759
  Purchased research and
   development               ---      17,606(a)

  Total operating
   expenses               27,617      38,619

  Income (loss) from
   operations              5,047     (12,844)

  Other income, net          478         396

  Income (loss) before
   income taxes            5,525     (12,448)

  Provision (benefit) for
   income taxes            1,968      (4,808)(a)

  Net income (loss)       $3,557     ($7,640)

  Net income per
   common share            $0.20      ($0.44)

  Weighted average number
   of common and dilutive
   common equivalent
   shares outstanding     17,958      17,282

                Condensed Consolidated Balance Sheets
                           (in thousands)

                                   March 31,         December 31,
                                     1995                1994
                                  (Unaudited)         (Audited)

ASSETS

Cash and marketable securities     $50,566            $50,695
Accounts receivable, net            31,795             33,482
Other current assets                11,608              8,694
Property, equipment and other
  assets                            25,840             22,801
Deferred tax asset                   7,685              9,288(a)
     Total assets                 $127,494           $124,960

LIABILITIES AND STOCKHOLDERS'
  EQUITY

Current liabilities                $25,161            $28,419
Deferred revenue                    24,285             21,463
Other liabilities                    2,848              1,199
Stockholders' equity                75,200             73,879
     Total liabilities and stock-
      holders' equity             $127,494           $124,960(a) In the first quarter of 1994, the company took a one time charge of $17,606 with an associated deferred tax benefit of $6,690 resulting in an after tax charge of $10,916 related to the acquisition of Beyond.

CONTACT: Banyan Systems

Jeffrey D. Glidden/Patrick T. Wright, 508/898-1000

or

Sharon Merrill Associates

Andrew M. Kramer, 617/262-1800