Banyan Systems announces third quarter results.

WESTBORO, Mass.--(BUSINESS WIRE)--Oct. 21, 1996-- Banyan Systems Incorporated (NASDAQ:BNYN), today announced revenue for the third quarter ended September 30, 1996 of $28.1 million, compared with $31.2 million for the third quarter of 1995. The Company reported a net loss of $783,000, or $0.05 per share, compared with a net loss of $4,317,000, or $0.26 per share, in the third quarter of 1995.

Revenues for the nine months ended September 30, 1996 were $88.3 million, compared with $101.7 million in the same period of 1995. For the first nine months of 1996, Banyan reported a net loss of $228,000, or $0.01 per share, compared with a net loss of $4,052,000, or $0.24 per share, for the same period in 1995.

Banyan's software revenues in the third quarter of 1996 were $23.9 million, compared with $25.0 million for the same period in 1995. Banyan's international business reported sales of $6.5 million, compared with last year's third- quarter level of $8.2 million.

David C. Mahoney, chairman and chief executive officer, said, "Banyan's third-quarter revenues reflect order delays within our traditional customer base that coincide with the launch of several product lines at the close of the quarter. Although we are disappointed with our third-quarter results, we have made important progress over the past year to streamline our operations, lower costs and reduce channel inventories. In fact, our channel partners reported customer `sell through' for the third quarter that exceeded Banyan's channel shipments which resulted in a further reduction in channel inventory."

Mahoney continued, "Toward the end of the third quarter, Banyan introduced several new products for our customers, including VINES 7.0 and StreetTalk for Windows NT. StreetTalk for Windows NT, which shipped at the end of September, won `Best of Show' award in the networking applications and services category at the 1996 Networld+Interop show. Our sales force is now working closely with customers to plan and implement ongoing integration of StreetTalk and VINES into users' emerging computing strategies."

"Complementing these initiatives, Coordinate.com is moving forward with its strategy to leverage the growing popularity of Switchboard, our electronic directory service for Internet users, through banner advertising. It is rewarding to note that since July 1996, the number of electronic links to Switchboard has doubled to more than 14,000 and the number of consumer and business listings has grown to more than 120 million. We will continue to capitalize on Switchboard's popularity as we expand both its functionality and content."

Mahoney concluded, "Moving forward, we believe that the recently introduced new products, coupled with the planned release of enhanced versions of BeyondMail, will play an important role in creating demand both within our traditional customer base and new markets. In addition to maintaining a strong product development cycle, we will continue to monitor and streamline our operations. During the fourth quarter of 1996, we will continue to evolve our distribution activities and reduce channel inventories."

The Company noted that each of the above forward-looking statements were subject to change based on various important factors, including, without limitation, competitive actions in the marketplace and buying trends by businesses. Further information on potential factors which could affect the Company's financial results are included in the Company's Form 10-K for the 1995 fiscal year, which was filed with the SEC at the end of March 1996, and the Company's Form 10-Q for the period ended June 30, 1996, which was filed with the SEC in August.

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//.banyan.com. StreetTalk is a product of Banyan Systems Incorporated and not a product of McCarthy, Crisanti & Maffei, Inc. -0-

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

                            Three months ended     Nine months ended
                              September 30,           September 30,
                             1996        1995       1996       1995
                                (Unaudited)          (Unaudited)

Revenues:
 Software                   $23,917    $24,990    $74,593    $83,011
 Support and training         3,795      5,244     12,159     15,771
 Hardware                       417        969      1,510      2,924
                            --------   -------    -------    -------
  Total revenues             28,129     31,203     88,262    101,706

Cost of related revenues      6,251      7,236     18,492     21,940

Gross margin                 21,878     23,967     69,770     79,766
   %                            78%        77%        79%        78%

Operating expenses:
 Sales and marketing         15,229     21,631     45,833     60,322
 Product development          5,370      6,216     16,342     17,772
 General and administrative   2,721      3,490      8,553      9,648
                             ------     -------    -------   -------
   Total operating expenses  23,320     31,337     70,728     87,742

Loss from operations         (1,442)    (7,370)      (958)    (7,976)

Other income, net               220        413        602      1,309
                             -------    -------    -------    ------
Loss before income taxes     (1,222)    (6,957)      (356)    (6,667)

Benefit from income taxes      (439)    (2,640)      (128)    (2,615)
                             -------    -------    -------    ------
Net loss                      ($783)   ($4,317)     ($228)   ($4,052)
                             -------    -------    -------    ------
Net loss per common share    ($0.05)    ($0.26)    ($0.01)    ($0.24)
                             -------    -------    -------    ------
Weighted average number
 of common shares
 outstanding                 17,040     16,576     16,887     16,812
                             -------    ------     -------    ------


-0-


Condensed Consolidated Balance Sheets
(in thousands)
                                  September 30,         December 31,
                                     1996                   1995
                                  (Unaudited)

ASSETS

Cash and marketable securities      $20,263               $31,263
Accounts receivable, net             26,659                24,288
Income tax receivable                   233                 6,042
Other current assets                  8,523                10,454
Property, equipment and
 other assets                        25,774                21,896
Deferred tax asset                   10,434                12,366
                                    --------             ---------
    Total assets                    $91,886              $106,309
                                    --------             ---------

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities                 $20,828               $36,378
Deferred revenue                     21,709                22,323
Other liabilities                     3,382                 3,266
Stockholders' equity                 45,967                44,342
                                    --------              --------
    Total liabilities and
    stockholders' equity            $91,886              $106,309
                                    --------             ---------

CONTACT: Jeffrey D. Glidden or Richard M. Spaulding

Banyan Systems Inc. Banyan Systems Inc.

[phone] [phone]