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Network Associates Announces Preliminary Record Fourth Quarter Results
SCOTTSDALE, Ariz., Jan. 6 /PRNewswire/ -- Network Associates (Nasdaq: NETA), a leading supplier of enterprise network security and management software, today announced preliminary unaudited results for the fourth quarter and twelve months ended December 31, 1998. The announcement was made today in advance of a presentation to be given at the Morgan Stanley Software, Networking and Internet Conference in Scottsdale, Ariz.
* Revenues for the fourth quarter are estimated at $272 million, representing a 30% increase over the same quarter of the prior year and a 12% sequential increase over comparable results of the third quarter. Fiscal Year 1998 estimated revenue totaled $972 million, representing a 34% increase over the Fiscal Year 1997 revenue total of $727 million.
* Earnings per share for the fourth quarter are estimated at $.47 per share, a 62% increase over the same quarter of the prior year, and a 15% sequential increase over comparable results of the third quarter. Earnings per share for Fiscal Year 1998 are estimated at $1.54 per share, representing a 48% increase over comparable results for fiscal year 1997.
All results are before non-recurring acquisition charges in prior periods and restated for the acquisitions of Dr Solomon's (Solly) and Trusted Information Systems (TIS).
"We are extremely proud that in our first year as Network Associates we have grown to become one of the top ten software companies in the world," said Bill Larson, chairman,
president and CEO of Network Associates. "In our second year, we will continue to deliver integrated, best of breed products that provide a new level of centralized security and management for corporate networks."
Network Associates separately announced it received a comment letter from the Securities and Exchange Commission (SEC), related principally to acquisition related matters and the write-off of in-process research and development (R&D). The SEC recently
issued new guidelines for the determination of write-offs of acquisition-related in-process R&D. The Company believes that its write-offs of in-process R&D were made in accordance with established industry practice at the time. In addition, these write-offs
were based upon valuations provided by the Company's independent accountants and independent appraisers. Final operating results for 1998 and the fourth quarter of 1998 may likely vary and the release of such earnings will be deferred until the Company has
conclusively resolved these matters with the SEC.
The Company will host a conference call today at 8:30 am Eastern Standard Time, 5:30 am Pacific Standard Time to discuss its quarterly results. Participants should call (212) 896-6108, reservation number 11341915.
Q4 Network Security Highlights
Network Associates' security product line continued to drive the market. Net Tools Secure, the integration of Network Associates' anti-virus and security products, shipped during the quarter and garnered industry acclaim as one of 1999's best new enterprise solutions. Net Tools Secure was the only network security suite to be named to the Open Systems Advisors, Inc., "Crossroads 99 A-List." The point products comprising Net Tools Secure also won several awards during the quarter, including Gauntlet Active Firewall and its revolutionary Adaptive Proxy technology being recognized by Networld+Interop with
"Best in Show."
In the quarter, Network Associates' OpenPGP was promoted to "Proposed Standard" status by the official Internet standards body, the Internet Engineering Task Force (IETF).
The Company continued to build on its leadership position at the forefront of virus research, uncovering a new type of virus, the Remote Explorer strain, at a large customer site. Network Associates worked closely with the customer to contain, clean and provide
a solution for the outbreak, minimizing financial and operational impact for all Network
Associates' customers. McAfee Total Virus Defense (TVD) 4.0 -- a fully-integrated application which combines the world's two top anti-virus products, McAfee and Dr Solomon's, into one world-class anti-virus solution for desktop, server, groupware and Internet gateway protection -- shipped during the quarter. Additionally, Seagate
Software announced the incorporation of VIPER (Virus Interface for Protective Early Response), Network Associates' VirusScan API, with all shipments of version 7.2 of Seagate Backup Exec for Windows NT, and version 7.0 of Seagate Backup Exec Small Business
Server Suite for Windows NT.
Finally, according to an anti-virus report issued by Gartner Group's Dataquest division, Network Associates garnered 50% worldwide market share, expanding its leadership over Symantec which held 25%. The figures were released in Dataquest's "Anti-virus Continues to Consolidate" report, dated October 26, 1998.
Q4 Network Management Highlights
The Sniffer(TM) Total Network Visibility (TNV) Suite continued to deliver on the promise of automated, pro-active network management. This quarter saw the shipment of several new products including Sniffer TNV 2.0, which enables customers to cost-effectively deploy the industry's number one solution to reduce network downtime
across all LANs, WANs, and High Speed networks. Sniffer TNV 2.0 significant new components include:
* Sniffer Pro 98 Suite 2.0, which allows the successful management of new Cisco, Microsoft and Novell products, while supporting complex legacy environments.
* Distributed Sniffer/RMON Suite 2.0, the first and only distributed network instrumentation to combine 24x7 Sniffer Expert troubleshooting with simultaneous RMON1 and RMON2 network and application monitoring capabilities.
* Network Informant Suite, the first Windows NT-based enterprise reporting application to enable monitoring of network status through analysis of real time and historical data.
Users of the Magic Total Service Desk continued to reap the benefit of the on-going integration between the McAfee and Magic help desk products. The City of Austin is centralizing all of its IT support functions on the Magic Total Service Desk (TSD) suite, standardizing on TSD to initially support up to 4,000 users in 26 divisions across the city. Visio Corp., a leading provider of business diagramming and technical drawing software, also implemented Network Associates' SupportMagic SQL help desk solution throughout the United States and Europe to dramatically improve IT problem resolution and reporting. Additionally, Ontario Hydro's nuclear business is implementing SupportMagic SQL in a move to consolidate multiple help desk applications, supporting 3,500 clients, to one centralized support center.
Q4 Partner Highlights
Network Associates continued to expand its partnerships with leading consulting firms, value-added resellers and systems integrators. Ernst & Young and Network Associates announced that Ernst & Young will deliver Network Associates' full product line around the world. The companies also announced that Ernst & Young's Information Security Services practice will team with Network Associates to develop "advanced security resolutions" which suggest fixes for network vulnerabilities discovered by CyberCop,
Network Associates' intrusion protection suite. The companies will also join forces to establish new global "best practices" benchmarks for computer network security to be available to Ernst & Young clients.
Network Associates and a leading IT consultant, KPMG Peat Marwick LLP, announced that KPMG will use Network Associates' Network Informant enterprise reporting solution in KPMG's new business service to provide customers with increased network visibility.
McAfee Highlights
Long a pioneer in Internet distribution, Network Associates extended its presence in the online community with the launch of mcafee.com (http://www.mcafee.com), which offers the first product-based smart portal service available on the Internet. mcafee.com, with over 9.5 million subscribers, is the largest product-based subscription service available. It is the first comprehensive online service to secure and manage PCs on the Web. Based on HTML versions of McAfee's award-winning VirusScan, Nuts & Bolts and First
Aid, mcafee.com includes a Web-based subscription service that offers users an interactive environment to tune and secure their PCs and to receive real-time diagnostics and treatment for problems without leaving their browser.
The site has generated several significant deals with leading Internet companies including Snap (http://www.snap.com), the Internet portal service from NBC and CNET, Neo Planet (www.neoplanet.com), a division of Bigfoot International, Inc., and Beyond.Com
(http://www.beyond.com), a leading online reseller of software.
With headquarters in Santa Clara, California, Network Associates, Inc. is a leading supplier of enterprise network security and management software. Network Associates' Net Tools Secure and Net Tools Manager offer best-of- breed, suite-based network security and
management solutions. Net Tools Secure and Net Tools Manager suites combine to create Net Tools which centralizes these point solutions within an easy-to-use, integrated systems management environment. For more information, Network Associates can be reached
at 408-988-3832 or on the Internet at nai.com.
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