Banyan Worldwide Announces 1999 Fourth Quarter Results; Reports 56% Revenue Growth from Continuing Operations - Company Financial Information

Edge: Work-Group Computing Report, Feb 7, 2000

Banyan Worldwide (NASDAQ:BNYN), a market leader in delivering e-business services based on leading-edge Internet and directory technology, Wednesday announced its financial results for the fourth quarter and year ended December 31, 1999.

Revenues from continuing operations for the fourth quarter of 1999 were $14.1 million, a 56% increase over revenues from continuing operations of $9.0 million for the fourth quarter of 1998. For the fourth quarter of 1999, Banyan Worldwide reported net income from continuing operations of $30.4, million or $1.17 per share, which includes $12.5 million, or $0.48 per share, of realized gains related to the sale of 130,000 shares of common stock of Software.com and a $22.6 million, or $0.87 per share, one-time tax benefit primarily related to the reversal of a valuation allowance on previously reserved deferred tax assets due to the realizeability of these assets. Banyan Worldwide's results for the fourth quarter of 1999 compares with a net loss from continuing operations of $2.4 million or $0.13 per share, for the same period in 1998.

Consistent with the Company's previously announced decision to exit its software business, the fourth quarter of 1999 included net after tax losses from discontinued operations of $6.2 million, which reflects a pre-tax charge of $5.0 million related to the write down of certain assets, excess facilities and a personnel reduction of approximately 45 staff. Additionally, total revenues for all periods presented reflect the reclassification of revenues associated with the software business to discontinued operations.

For the year ended December 31, 1999, Banyan Worldwide reported revenues from continuing operations of $45.8 million, a 65% increase over revenue from continuing operations of $27.8 million in 1998. Banyan Worldwide reported 1999 net income from continuing operations of $26.2 million, or $1.03 per share, which includes a one-time tax benefit of $22.3 million, or $0.88 per share, from the aforementioned reversal of a previously recorded valuation allowance, as well as $16.6 million, or $0.65 per share, of realized gains related to the sale of common stock of Software.com. These results compare with a 1998 net loss from continuing operations of $11.9 million, or $0.53 per share, which included a one-time charge of $1.4 million, or $0.06 per share, for purchased research and development.

Banyan Worldwide ended the fourth quarter of 1999 with $130.8 million in cash and marketable securities, compared with $22.3 million as of December 31, 1998. The cash and marketable securities as of December 31, 1999 included common stock ownership in Software.com of $85.6 million. The net unrealized gain on the Software.com shares of $84.2 million is included in stockholders' equity.

"Banyan Worldwide's fourth quarter results are the culmination of a highly successful year in which we sharpened our strategic focus and produced substantial results in our two growth businesses, e-services and Switchboard," stated Bill Ferry, Banyan Worldwide's chairman and chief executive officer.

"Notably, our services business reported fourth quarter revenues of $11.0 million, a 51% gain over the same period last year. We also achieved an important milestone with our recent acquisition of ePresence, Inc., which reinforces our strategy to expand our services business by delivering solutions that span from web presence through the infrastructure."

Fourth Quarter and Recent Highlights

Banyan Worldwide has successfully positioned itself to continue expanding its business in the high-growth, e-services market, and achieved the following milestones during the fourth quarter of 1999 and early 2000:

* The Company's majority-owned subsidiary, Switchboard Incorporated, filed a registration statement for an initial public offering and continued to progress in expanding its revenues, merchant customer base and strategic partnerships.

* The appointment of two new directors to the Company's board of directors, John Rando, former senior vice president and general manager of Compaq Services, and Albert Notini, former executive vice president of Wang Global, bring considerable experience in growing large information technology services businesses.

* The acquisition in January 2000 of ePresence, Inc., a privately held e-services company that specializes in Web design, development and integration. ePresence's capabilities complement the e-infrastructure capability of Banyan Worldwide Services and ideally positions the Company to deliver highly personalized, customer-centric solutions.

* The introduction of new services including e-Infrastructure Services designed to extend the reach and capabilities of an organization's IT infrastructure by providing a sound foundation for deploying e-business applications.

* New consulting engagements and expanded business with major organizations such as Lucent Technologies, Warner Music, Morgan Stanley Dean Witter and the Office of the Currency Comptroller.