McAfee Associates
Santa Clara, CA
(408)-988-3832

ALEXANDRIA, Va., July 22, 1996/FOOLWIRE/ --- MCAFEE ASSOCIATES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ:MCAF)") else Response.Write("(NASDAQ:MCAF)") end if %> today reported net income of $0.32 per share for the just-completed fiscal second quarter, beating First Call consensus estimates of $0.28 per share. These results were $0.20 better than the year-ago period and up $0.05 sequentially. These numbers are excluding acquisition related expenses.

Sales in the second quarter were $40.8 million, up 119% over the same period last year, $18.6 million. Net Income for the second quarter rose 195% to $11.1 million over $3.8 million last year. For the six months, net income was up 186% at $20.5 million versus $7.2 million last year. Earnings per share for the six months were $0.59 versus $0.22 last year, an increase of 168%. Again, these numbers are exclusive of acquisition related expenses.

The numbers inclusive of acquisition related expenses are as follows: Net income was $9.4 million and EPS were $0.27 for the second quarter. Net income for the first six months rose 46% to $10.5 million over last year's $7.2 million. Earnings per share were $0.30, 36% above last year's $0.22. The acquisition related expenses from the second quarter stem from the write-off of in process R&D from McAfee's purchase of the Remote Desktop Line from Interactive Distributed Systems GmbH of Linz, Austria.

EXPANSION

President and CEO Bill Larson was enthused about McAfee's second quarter numbers. He stressed that business is very strong and that there is good growth with all product lines, channels and geographical areas. Both top and bottom line numbers have improved.

Excitement over products resulted from McAfee's VirusScan which won several awards during Q2 including the "best buy" from PC World. Anti-virus products now include Webshield, which is for internet gateways, and is the first secure anti-virus solution for network firewalls. McAfee is also shipping it's Saber LAN Workstation 6.0 which provides full integration with their Vycor Enterprise client/server help desk solution, positioning McAfee as the only vendor capable of delivering a complete service desk offering. Larson also discussed the Remote Desktop 32 line which runs with the Microsoft 32 bit platform. It will be available in English, German and Japanese as it is fully double bite enabled. He described it as "higher performance and lower maintenace" because it eliminates the need to keep up with new releases from modem manufacturers.

Larson also discussed McAfee's OEM partnership with Microsoft on internet anti-virus products. He believes that this partnership and network security will contribute to growth going forward. Q3 promises to deliver more security related products. Other OEM deals with Hewlett Packard, Packard Bell, NEC, and others also are going well. Larson is bullish on both the help desk and remote desktop markets. McAfee's competitive pricing and unique business model will result in continued revenue growth according to Larson.

McAfee now has over 100 sales representatives. There are also 50 employees in Europe full time. McAfee has 10 offices worldwide. These sales resources will especially benefit the products from acquired companies who previously had little sales/marketing support.

McAfee Associates develops and supports personal computer software designed to provide security from computer viruses. The company also develops software used in the management of PC-based networks. Its primary product line, VirusScan, is a set of programs designed to detect, identify, and eradicate viruses from personal computers and networks. VirusScan is distributed through electronic, and more traditional, channels, such as retailers. McAfee generates its revenue from licensing its products primarily to corporate, government, and institutional customers. (source: Morningstar)

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