CyberGuard Corporation Announces Restated Fiscal Year End Results for 1997 and 1998.

FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--July 26, 1999--

Previously, CyberGuard Corporation (CYBG) had announced that due to a review of its revenue recognition policy relating to distributors and resellers it would restate results for the first three quarters of the fiscal year ended June 30, 1998.

Subsequently, the Company determined that it would also restate its results from fiscal year 1997 including the beginning balance sheet as of July 1, 1996. Accordingly, the Company today announced audited financial results for the fiscal years ended June 30, 1998 and June 30, 1997. Revenues for 1998 were $15,552,000 and the net loss was $18,264,000 or a loss per share of $2.17. For the prior fiscal year ended June 30, 1997 the Company reported restated revenues of $14,224,000 and a net loss of $17,442,000 or a loss per share of $2.46. Previously the Company had reported revenues for fiscal year 1997 of $15,621,000 and a net loss of $12,490,000 or a loss per share of $1.76. Included in the fiscal year end results for June 30, 1998 is a restatement of revenue of $2,195,000 for the first three quarters of fiscal 1998.

These restatements were a result of errors in applying the Company's revenue recognition policy and resulted in the following adjustments to correct revenues previously reported in fiscal year 1998 and 1997. -0-

Fiscal Year 1997

                   Revenue Originally     Restatement      Revenue
                       Reported             Amount         Restated
                     (000 Omitted)       (000 Omitted)   (000 Omitted)
First Quarter           $3,067               $457           $2,610
Second Quarter          $3,047               $389           $2,658
Third Quarter           $4,105                $52           $4,053
Fourth Quarter          $5,402               $499           $4,903

Fiscal Year 1998

                   Revenue Originally     Restatement      Revenue
                       Reported             Amount         Restated
                     (000 Omitted)        (000 Omitted)  (000 Omitted)
First Quarter           $5,063               $890           $4,173
Second Quarter          $4,854               $669           $4,185
Third Quarter           $5,152               $636           $4,516
Fourth Quarter             N/A                N/A           $2,678

CyberGuard Corporation expects to release results from the First Quarter through the Third Quarter of fiscal year 1999 with its audited results for fiscal year 1999 by the end of August 1999. With these filings the Company will be current in its required SEC filings and will then be eligible for relisting on the OTC-BB exchange of NASDAQ.

About CyberGuard Corporation

CyberGuard Corporation is a leading provider of enterprise security solutions to Fortune 1000 companies and governments worldwide. CyberGuard's award winning, industrial-strength firewall products and services protect the integrity of data and applications from unauthorized access. The Company has world headquarters in Ft. Lauderdale, Florida and branch offices worldwide. More information on CyberGuard Corporation can be found at http://www.cyberguard.com

Forward-Looking Statements 

Statements regarding estimates and future prospects contained in this press release are forward-looking statements. These statements are based upon assumptions and analyses made by the Company in light of current conditions, future developments, and other factors the Company believes are appropriate in the circumstances, or information obtained from third parties, and are subject to a number of assumptions, risks and uncertainties. Readers are cautioned that forward-looking statements are not guarantees and that actual results might differ materially from those suggested in the forward-looking statements. Some of the factors that might cause future actual events to differ from those predicted or assumed include: future advances in technologies and computer security; the Company's history of losses; the Company's ability to execute on its business plans; the Company's dependence on outside parties such as its key customers and alliance partners; competition from major computer hardware, software, and networking companies; uncertainties in availability of expansion capital in the future and other risks associated with capital markets; the impact of delinquency in filing the Company's periodic reports with the Securities and Exchange Commission; the outcome of purported class action lawsuits against the Company; and recent changes in management. For a more complete discussion regarding forward-looking statements, the reader is referred to the Company's periodic reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934 and other information filed with the Commission.

Note to Editors: For copies of CyberGuard's recent press releases via fax, at no charge, please call [phone].

Note to Editors: More information on CyberGuard products and services is available through an email request to [e-mail] and from CyberGuard's web site at www.cyberguard.com.