-------------------------------------------------------------------------------- SUN MICROSYSTEMS NET INCOME TRIPLES FROM PRIOR QUARTER SunFLASH Vol 13 #15 January 1990 -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE FOR MORE INFORMATION Sun Microsystems, Inc. Austin Wing Mayer (415) 336-6255 MOUNTAIN VIEW, Calif. - January 24, 1990 - Sun Microsystems, Inc. (SUNW), today reported record revenues for its second quarter of fiscal 1990, ended December 29, 1989. Revenues for the second quarter were $595.4 million, up about 10 percent over the $538.5 million reported in the preceding quarter. Net income for the quarter was $20.2 million, or $0.23 per share. Although this was below reported net income of $29.5 million, or $0.36 per share, in the same quarter a year ago, it represents more than a tri- pling of net income from the first quarter of fiscal 1990. Scott McNealy, president and CEO of Sun, said, "Again this quarter, we are delivering on our commitment to improve our financial results throughout the balance of the fiscal year, most importantly by improving profitability. We logged record orders in the second quarter, finished the period with our highest backlog ever, reported record reve- nues, reduced inventories, consolidated product lines, sub- stantially increased our profitability from last quarter and strengthened our liquidity considerably through two major financings. Although our profitability has not yet reached the levels we think we can ultimately achieve, it was a very positive quarter for Sun." "The marketplace continues to vote overwhelmingly in favor of Sun," McNealy commented. "In early January, Mentor Graphics, the leading supplier of electronic design automa- tion systems, announced its intention to make its products available on Sun's SPARCTM-based workstations. In view of the many choices available to Mentor from much larger, longer-established vendors, this can only be viewed as a major competitive win for Sun." "Lotus will be shipping 1-2-3 for Sun within the next couple of months, Ashton-Tate announced that dBase IV will ship on Sun later this year, and Goldstar, the leading Korean electronics company, recently announced plans to develop SPARC-based computers and to license products from Sun that will provide a complete software environment for SPARC/UNIX(R)/OPEN LOOKTM. In fact, Sun's customers con- tinue to vote decisively in favor of the SPARC/UNIX/OPEN LOOK environment, with SPARC-based products now accounting for more than 80 percent of our hardware revenues," McNealy said. "Sun's record second quarter revenues pushed us over the $2 billion mark for calendar 1989. Clearly, Sun's momentum in the marketplace is picking up steam ," McNealy remarked. Shortly after the close of the quarter, Data- quest, a leading market research and consulting firm, announced that Sun had regained its leadership position in the worldwide workstation market with a 28.7 percent share of market, up from 27.0 percent in calendar 1988. "Sun is as aggressive as ever in delivering new tech- nology to customers," McNealy said. "In December, Sun announced two new server products complementing the company's network computing strategy and addressing the most demanding computational, file server, database management, compute, and multi-user requirements of professionals in both large and small organizations. These new systems can access the world's largest library of RISC/UNIX applications--more than 1,500 third-party solutions from the Sun SPARCwareTM catalog. And yesterday at the UniForum trade show, Sun introduced a new release of its UNIX operat- ing system, called SunOSTM 4.1, adding significant new func- tionality and support for international standards, as well as offering customers a clear migration path to UNIX System V Release 4.0. Sun remains a clear leader in all aspects of network-based distributed computing," according to McNealy. "In concert with our vision for the future, investments in our new Scotland manufacturing plant continued in the second quarter and we are still on schedule to begin first shipments from the site before July 1. In addition, we will soon establish Sun's first European research and development center, the International Center for Network Computing, near Paris. Sun is today a truly multinational company with about half its revenues coming from the international mark- etplace and we've always invested aggressively in developing our presence around the world. This facility in France, combined with our R&D centers in Canada, Japan and others in the U.S., reflects our long-term development strategy to tap into rich talent pools wherever we can find and develop them," McNealy said. "Sun's steadily improving productivity can best be seen in revenue-per-employee which, at $195,000, is one of the highest in the computer industry, having increased 10 per- cent over the past year," McNealy said. "As we look ahead at the second half of the fiscal year, we expect that the cost control and asset management measures we implemented in the first quarter, and which were so evident in the second quarter's improved results, will help return Sun to more desirable levels of profitability," McNealy said. Sun Microsystems, Inc., headquartered in Mountain View, Calif., is a leading multibillion dollar worldwide supplier of network-based distributed computing systems, including professional workstations, servers and UNIX(R) operating system and productivity software. ### SPARC and SPARCware are trademarks of Sun Microsystems, Inc. OPEN LOOK is a trademark of AT&T. UNIX is a registered trademark of AT&T. All other products or services mentioned in this document are identified by the trademarks or service marks of their respective companies or organizations. ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Sunflash is an electronic mail news service from Sun Microsystems, Ft. Lauderdale, FL. Please address comments to John McLaughlin (sun!sunvice!johnj or johnj@sunvice.sun.COM). (305) 776-7770.