<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): January 28, 1998
BANYAN SYSTEMS INCORPORATED
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Massachusetts
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
0-20364 04-2798394
-------------------------- -----------------------------------
(Commission File Number) (IRS Employer Identification No.)
120 Flanders Road, Westboro, Massachusetts 01581
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(508) 898-1000
- --------------------------------------------------------------------------------
Registrant's Telephone Number, Including Area Code
Not Applicable
- --------------------------------------------------------------------------------
(Former Name or Address, if Changed Since Last Report)
<PAGE>
ITEM 5. OTHER EVENTS
On January 28, 1998, Banyan Systems Incorporated (the "Company") issued a
press release announcing the Company's financial results for the fiscal quarter
and the fiscal year ended December 31, 1997. A copy of such press release has
been filed with this Current Report on Form 8-K as Exhibit 99 and is
incorporated herein by reference. The announced financial results indicate that
the Company had no goodwill and approximately $5,077,000 of net tangible assets
as of December 31, 1997.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired.
None.
(b) Pro Forma Financial Information.
None.
(c) Exhibits.
(99) Press Release dated January 28, 1998.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: January 28, 1998 BANYAN SYSTEMS INCORPORATED
/s/ Richard M. Spaulding
-----------------------------------------
By: Richard M. Spaulding
Title: Vice President, Finance, and
Chief Financial Officer
3
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
99 Press Release dated January 28, 1998
<PAGE>
EXHIBIT 99
WEDNESDAY JANUARY 28, 8:11 AM EASTERN TIME
COMPANY PRESS RELEASE
BANYAN SYSTEMS ANNOUNCES 1997 FOURTH QUARTER PROFIT AND
1997 YEAR-END RESULTS
WESTBORO, MASS. --(BUSINESS WIRE)-- JANUARY 28, 1998 -- Banyan Systems Inc.
(NASDAQ:BNYN - news), today announced its financial results for the fourth
quarter and year ended Dec. 31, 1997.
For the fourth quarter of 1997, Banyan reported net income of $2,380,000,
or $0.13 per share, which included the reversal of previously recorded
restructuring and other charges of $1.7 million, or $0.09 per share, related to
the company's better-than-expected progress in consolidating facilities and
product lines, completing its severance programs, and selling and redeploying
fixed assets. Banyan's 1997 fourth-quarter earnings compare with a 1996 fourth-
quarter net loss of $26,802,000, or $1.56 per share, which included after-tax
restructuring and other charges of $5.5 million, or $0.32 per share, and a one-
time, non-cash charge of $8.0 million, or $0.47 per share, for previously
deferred tax assets. Revenues for the fourth quarter of 1997 were $18.4
million, compared with $17.2 million for the fourth quarter of 1996.
For the year ended December 31, 1997, Banyan reported a net loss of
$16,908,000, or $0.97 per share, compared with a net loss of $27,030,000, or
$1.59 per share, for 1996. Revenues for 1997 were $74.3 million versus $105.4
million for 1996.
<PAGE>
Banyan's financial results for 1997 reflect net restructuring and other
charges of $8.0 million, or $0.46 per share, which includes the previously
mentioned reversal, for severance costs associated with a reduction in the
company's work force, as well as charges related to facility and product line
consolidations. Banyan's net loss in 1996 reflected the previously mentioned,
after-tax restructuring and other charges of $5.5 million, as well as the one-
time, non-cash tax-related charge of $8.0 million. Excluding the 1997 and 1996
charges, Banyan's loss from operations in 1997 was $8.6 million, compared with a
net loss from operations for 1996 of $13.6 million.
BANYAN'S NETWORKING BUSINESS
William P. Ferry, Banyan's chairman and chief executive officer, stated,
"1997 was marked by substantial progress in our efforts to stabilize Banyan's
networking business. This was reflected in our fourth quarter results as we
achieved a better balance between revenues and expenses and improved our balance
sheet. As a result of our on-going efforts to strengthen relationships with our
customers, we announced a comprehensive 'Year 2000 Readiness' program and closed
a three-year, $8 million agreement with GTE Data Services for products and
services as well as significant transactions with the State of Michigan and Bell
Atlantic Mobile. Additionally, our professional services operation expanded its
business by initiating a number of new consulting engagements with customers
such as Merrill Lynch, Sprint and EMC. These commitments demonstrate that our
customers continue to rely on Banyan for proven networking solutions."
2
<PAGE>
Ferry commented, "In 1998, we will leverage our expertise in directory
technology by adding new products to the Banyan family of Intranet solutions.
Banyan's professional services operation will continue to expand by resolving
critical networking issues for customers such as Year 2000 compliance, the
expansion of corporate Intranets and the integration of new technologies.
Additionally, we will continue to support our loyal base of customers with
enhancements to our enterprise networking products such as VINES and StreetTalk
for NT as well as with high-quality services."
SWITCHBOARD INC.
Banyan's Internet subsidiary, Switchboard Inc., dramatically increased its
popularity with Internet users in 1997. This year, Switchboard rose from the
twenty-third most popular site on the Internet at the end of 1996 to eleventh
most popular destination and the leading directory service according to Media
Matrix, a PC Meter Company. Switchboard also enhanced its functionality with
the addition of a number of new, consumer- and advertiser-oriented features.
Additionally, Switchboard began implementing new sales and marketing strategies
during the second half of the year that are resulting in the expansion of its
advertising base. During the fourth quarter, leading companies such as American
Greetings, Barnes & Noble and 1-800-FLOWERS began their advertising campaigns on
Switchboard. In addition, Switchboard recently established a parntership with
Digital Equipment Corp. [NYSE:DEC - news] that should furher increase the
visibiilty of the Switchboard directory service through Digital's popular Alta
Vista search engine.
3
<PAGE>
Ferry stated, "In 1997, Switchboard focused on implementing strategies
aimed at increasing its traffic, enhancing its functionality and expanding its
business potential. As the Internet continues to become a more strategic
advertising vehicle for businesses worldwide, Switchboard's goals in 1998 are to
become a top 10 web site and to accelerate its advertising sales in order to
make a more significant contribution to Banyan's revenue in the second half of
the year. To achieve these objectives, we will increase our investment in
Switchboard, particularly through establishing strategic relationships, and
implementing sales and marketing programs that are designed to increase its
traffic and broaden its roster of advertisers."
In conclusion, Ferry commented, "Banyan enters 1998 as a healthier company
with a stronger management team, enhanced customer relationships and a clear
focus on opportunities for growth. We will continue to tightly manage our core
networking business in order to support the further development of our intranet
and professional services businesses. While we anticipate continuing to
generate cash from operations, we believe that our increased investment in
Switchboard will affect the company's overall profitability during the first
half of 1998, particularly during the first quarter. This plan should enable us
to rejuvenate the company's overall top-line growth, and build greater long-term
value for our shareholders."
In addition, Banyan announced that the company believes it is currently in
compliance with Nasdaq's continued listing requirements to remain on the Nasdaq
National Market (NNM) and also believes it has complied with Nasdaq's minimum
requirement to achieve $5 million in net tangible assets on or before Jan. 31,
1998. In
4
<PAGE>
conjunction with its proposed compliance, Banyan will file a Form 8-K with the
Securities and Exchange Commission.
The company noted that each of the above forward-looking statements
including without limitation the plans for the company's business and the impact
of the company's increased investment in Switchboard were subject to change
based on various important factors, including, without limitation, competitive
actions in the marketplace and buying trends by businesses, the success of the
company's new Year 2000 Readiness program and consulting services and the
ability of Switchboard to increase revenues. Further information on potential
factors which could affect the company's financial results are included in the
company's Form 10-K for the 1996 fiscal year, which was filed with the SEC at
the end of March 1997, and in the company's Form 10-Q for the period ended Sept.
30, 1997, which was filed with the SEC in November 1997.
The consolidated statements of operations and condensed balance sheets are
attached.
###
ABOUT BANYAN SYSTEMS INCORPORATED:
Over eight million business users, including over half the Fortune 1000, depend
on Banyan technology and solutions. Banyan Systems (NASDAQ:BNYN - news) is a
pioneer and leader in providing proven, standards-based networking directory and
messaging products. Coupled with professional and support services, these
unique offerings provide solutions to help people communicate simply and easily
across enterprise networks, intranets and the Internet. Founded in 1983 and
headquartered in Westboro, Mass., 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.
5
<PAGE>
<TABLE>
<CAPTION>
BANYAN SYSTEMS INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months ended Year Ended
December 31, December 31,
------------------------- -------------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Software $13,278 $12,688 $57,849 $87,281
Services 4,931 4,297 15,796 16,456
Hardware 187 177 697 1,687
-------- -------- -------- --------
Total revenues 18,396 17,162 74,342 105,424
Cost of related revenues 4,228 6,310 17,680 24,802
Gross Margin 14,168 10,852 56,662 80,622
% 77% 63% 76% 76%
Operating expenses:
Sales and marketing 8,178 14,978 40,236 60,811
Product development 3,282 5,533 15,909 21,875
General and administrative 1,767 2,968 9,069 11,521
Restructuring and other charges (1,700) (a) 5,500 (b) 8,000 (a) 5,500 (b)
-------- -------- -------- --------
Total operating expenses 11,527 28,979 73,214 99,707
Income/(loss) from operations 2,641 (18,127) (16,552) (19,085)
Other (expense)/income, net (239) 466 (101) 1,068
-------- -------- -------- --------
Income/(loss) before income taxes 2,402 (17,661) (16,653) (18,017)
Provision for income taxes 22 9,141 (b) 255 9,013 (b)
-------- -------- -------- --------
Net income/(loss) $2,380 ($26,802) ($16,908) ($27,030)
======== ======== ======== ========
Income/(loss) per common share: (c)
Basic $0.14 ($1.56) ($0.97) ($1.59)
======== ======== ======== ========
Diluted $0.13 ($1.56) ($0.97) ($1.59)
======== ======== ======== ========
Weighted average number of common shares: (c)
Basic 17,489 17,133 17,367 16,947
======== ======== ======== ========
Diluted 18,036 17,133 17,367 16,947
-------- -------- -------- --------
CONDENSED CONSOLIDATED BALANCE SHEETS December 31, December 31,
(IN THOUSANDS) 1997 1996
------------ -------------
ASSETS
Cash and marketable securities $10,876 $19,188
Accounts receivable, net 16,960 $19,754
Other current assets 4,136 9,247
Property, equipment and other ssets 10,956 21,343
-------- --------
Total assets $42,928 $69,532
======== ========
LIABILITIES AND STOCKHOLDERS ' EQUITY
Current liabilities $15,774 $25,380
Deferred revenue 18,930 19,886
Other liabilities 590 590
Minority interests in consolidated subsidiaries 2,557 3,354
Stockholders' equity 5,077 20,322
-------- --------
Total liabilities and
stockholders' equity $42,928 $69,532
======== ========
</TABLE>
(a) In 1997, the company took a net charge of $8,000 related to restructuring
the company.
(b) In 1996, the company took a charge of $5,500 related to restructuring the
company, and wrote off deferred tax assets of $8,038.
(c) Income per share on a new reporting basis as required by SFAS No. 128,
"Earnings per Share." Prior amounts have been restated.
6
<PAGE>
- --------------------------
Contact:
Banyan Systems Inc.
Richard M. Spaulding, 508/871-2271
or
John P. Mitchell, 508/871-2271
7
