SANTA CLARA, Calif.--(BUSINESS WIRE)--April 22, 1996--McAfee (Nasdaq: MCAF), a leading vendor of network security and management software for PC networks, today reported record results for the first quarter ended March 31, 1996.
Revenue for the first quarter reached a record $33,845,000, or 105% above revenues of $16,521,000 reported in the same period a year ago. Net income for the first quarter, excluding charges associated with McAfee's acquisition of client/server help desk vendor Vycor, increased 175% to $9,380,000, versus net income of $3,413,000 for the same period a year ago. First quarter earnings per share, exclusive of the acquisition charge, increased 155% to $.41, versus $.16 in the year ago period.
Inclusive of the acquisition expense, net income and earnings per share for the quarter were $1,083,000 and $.05, respectively. The Vycor acquisition was accounted for as a purchase and closed in late March. McAfee did not recognize any Vycor-related revenues or expenses during the first quarter of 1996, other than expenses associated with the merger related write-off. -0-
Earnings before Acquisition Related Charges Three Months Ended March 31
1996(A) 1995
Revenue $33,845,000 $16,521,000 Income before taxes $15,719,000 $5,665,000 Net income $9,380,000 $3,413,000 Earnings per share $.41 $.16 Shares used in computation 23,020,000 21,300,000
(A) Excludes the write-off of $8,297,000 taken in the first quarter associated with the acquisition of Vycor Corporation. The transaction was accounted for as a purchase and closed in late March, 1996. With these merger related charges, earnings before taxes for the quarter were $7,422,000, net income was $1,083,000, and earnings per share were $.05.
Earnings per share figures do not reflect a three-for-two stock split, effected as a dividend, which is scheduled to be distributed May 16, 1996 to stockholders of record on April 29, 1996. Results for the first quarter of 1996 were impacted favorably by the previously announced unbundling of license and maintenance revenue effective July, 1995, as more fully discussed in the Company's Form 10-K for the year ended December 31, 1995, and as a result are not directly comparable to prior periods. "We're pleased with our accomplishments during the first quarter of 1996," said Bill Larson, McAfee president, CEO, and chairman. "We continued to achieve solid revenue and income growth, while introducing compelling new products and customer support initiatives. We're extremely pleased with our recent acquisition of Vycor and we're confident of the smooth integration of the combined companies." McAfee extended its reach in client/server network security and management during the quarter with the introduction of new products and initiatives. Several of McAfee's most exciting new products, including WebStor, McAfee's new Internet-enabled client backup solution, were announced in March and therefore did not contribute to the financial results of the first quarter.
WebStor Automates Backup of Personal Data Files over the Internet
McAfee's new WebStor is an innovative software application that allows customers to back up personal data files over the Internet. WebStor is one of the first of an emerging category of software applications to leverage the Internet as a network operating system. McAfee pioneered this new category with WebScan, its popular anti-virus scanner for Web browsers that began shipping in November of 1995.
McAfee Ships New Anti-Virus Products for NT
In late March, McAfee began shipping VirusScan 2.5 for NT and NetShield 2.5 for NT, the industry's first anti-virus scanners for the emerging Windows NT market to utilize the Task Explorer interface. In February, McAfee introduced VirusScan for Solaris, the industry's first anti-virus scanner for Sun Solaris servers.
McAfee Completes Acquisition of Vycor Corporation
In March, McAfee became the first PC network management vendor to integrate client/server help desk capabilities into its product line when the Company completed its acquisition of Vycor Corporation of College Park, MD. Vycor's product line allows help desk personnel to automate problem prevention, problem management and problem resolution. Vycor is McAfee's fifth technology acquisition in two years.
SaberTools 6.0 Provides Desktop Configuration Management for NT and NetWare
McAfee introduced SaberTools 6.0 in March, an integrated suite of five Windows desktop configuration management utilities for NT and NetWare networks. SaberTools integrates technology previously found in McAfee's NetTools and Saber Software's Saber Menus. McAfee completed its acquisition of Saber in August, 1995, and has now integrated the formerly separate products, technologies, and product development teams of the two companies. The Company launched the McAfee Internet Support Forum in February. This free Web-based service allows McAfee customers to interact with McAfee support engineers and other customers to discuss the use of McAfee's network security and management products. The new service also helped McAfee's Web site earn the coveted Web HotList designation from InfoWorld newspaper. The weekly Web HotList recognizes innovative web sites of interest to information systems managers. The Company further enhanced the McAfee Web site with the introduction of The McAfee Store, which allows customers to purchase McAfee products, updates, and maintenance plans. McAfee also unveiled plans to leverage the Web site's popularity by introducing paid advertising on the site. In other news today, the Company announced that John C. Bolger has been elected to McAfee's Board of Directors. Mr. Bolger, who is a former Chief Financial Officer of Cisco Systems, Inc. (Nasdaq: CSCO), is currently a business consultant and private investor. Mr. Bolger is a board member of several public and privately technology companies. Founded in 1989, McAfee is a leading worldwide vendor of Network Security and Management products for enterprise networks. The Company is also a leader in Internet and Web-based electronic software distribution. McAfee is headquartered in Santa Clara, California and can be reached by phone at (408) 988-3832 or by fax at (408) 970-9727. McAfee's Web address is http://www.mcafee.com. -0-
McAfee Associates, Inc. and Subsidiaries Consolidated Statements of Income (000's except per share data)
Unaudited
Three months ended March 31
1996 1995
Net Revenue $33,845 $16,521 Operating Costs & Expenses: Cost of net revenue 2,067 1,241 Research & development 3,810 2,020 Marketing & sales 9,583 6,113 General & administrative 2,713 1,537 Amortization of intangibles 550 264 Acquisition and related costs 8,297 - Total operating costs and expenses 27,020 11,175 Income from operations 6,825 5,346 Other Income 597 319 Net income before tax 7,422 5,665 Provision for Income taxes 6,339 2,252 Net income $1,083 $3,413 Net income per share $0.05 $0.16 Shares used 23,020 21,300
McAfee Associates, Inc. and Subsidiaries Consolidated Balance Sheet (000's)
UNAUDITED
3/31/96 12/31/95
Assets Current assets:
Cash and short term investments $ 68,158 $ 55,357 Accounts receivable, net 20,476 20,892 Prepaids & other current assets 3,375 3,373 Prepaid taxes 1,513 6,064 Deferred taxes 4,369 4,999
Total current assets 97,891 90,685
Fixed assets, net 4,047 3,399 Intangibles 3,491 3,129 Deferred taxes 6,243 6,513 Other assets 424 294
Total assets $ 112,096 $ 104,020
Liabilities & Stockholders' Equity Current liabilities:
Accounts payable $ 4,656 $ 2,214
Accrued liabilities 9,219 8,844
Deferred revenue 23,421 24,795
Total Current liabilities 37,296 35,853 Deferred revenue, less current portion 2,730 4,625
Total liabilities 40,026 40,478 Common stock 208 205 Additional paid in capital 38,608 31,145 Retained earnings 33,254 32,192
Total stockholders' equity 72,070 63,542
Total liabilities
& stockholders' equity $ 112,096 $ 104,020
CONTACT: McAfee Associates
Terry Duryea, 408/988-3832
terry_duryea@cc.mcafee.com
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