AZTEC TECHNOLOGY PARTNERS TO SELL AS MUCH
AS 20% OF ITS E-SOLUTIONS BUSINESS THROUGH AN IPO,
CONTINUES TO PURSUE OPTIONS TO REDUCE DEBT,
AND DIVEST NON-STRATEGIC BUSINESSES
Contact:
Aztec Technology
Ross Weintraub
(781) 849-1702
rossw@aztectech.com
Ludgate Communications
Kristin Anderson
(212) 688-5144
anderson@ludgateny.com
BOSTON, MA, November 9, 1999 ---Aztec Technology Partners, Inc. (NASDAQ: AZTC), a leading single-source provider of e-Solutions for business, today announced that it plans to sell as much as 20% of its e-Solutions business led by its web-based applications subsidiary PCSI. In order to explore the option of a tax-free spin-off of PCSI to shareholders, the Company has requested a private letter ruling from the Internal Revenue Service. The Company also said it will continue to explore alternatives to pay down debt and to implement its e-Solutions strategy.
As part of its plan to divest its non-strategic businesses, the Company said it is pursuing a sale of its voice and cabling operations through its investment banker Donaldson, Lufkin and Jenrette, and will continue to reshape its e-Integration business by decreasing commodity hardware sales and increasing networking services revenues.
"We are targeting the IPO for the first half of 2000, and we have already begun the preparation process because we believe it is the best mechanism to reveal and increase shareholder value," commented Ira Cohen, Aztec's president and chief operating officer.
"Since we began our strategic process with DLJ, the market has placed high valuations on 'pure play' e-Solutions shops like Scient (NASDAQ: SCNT) and Viant (NASDAQ: VIAN)," added Mr. Cohen. "As a result, we believe a public offering will highlight the value of the e-Solutions business within Aztec and enable it to become a formidable competitor in the e-Solutions space.
"An important market metric in e-Solutions is the number of developers a provider retains. Since PCSI has over 100 e-solutions developers," Mr. Cohen continued, "we believe Aztec's stock is significantly undervalued based on current market conditions and valuation parameters. The value of PCSI as a standalone enterprise should be significantly greater than Aztec's current market value.
"In addition," Mr. Cohen added, "PCSI's revenue has grown over 40% over last year to $23 million with a 45% gross margin and a professional employee retention rate over 90%."
Dr. Ben Tandowski, Aztec's chief technology officer and founder of PCSI, added, "Our web-applications business has an aggressive growth plan to expand into new technologies as well as new geographies. That growth should help us increase shareholder value.
"The web-based applications practice already has a blue chip client base and years of experience developing innovative e-Solutions," continued Dr. Tandowski. "We have created market intelligence portals as well as web-masterless knowledge management systems that reduce time to market and accelerate revenue growth for clients.
"This year we earned the 1999 Microsoft Technology Impact Award," Dr. Tandowski added, "for developing an e-Solutions application for a national property certification firm that handles one million transactions per day using a database with 100 million records. It significantly reduced costs and enhanced service value for our client.
"The web-based application group's technical expertise and ability to deliver key projects for large, middle market and emerging enterprise clients strongly position us to capitalize on the hottest segment of the e-Solutions market," Dr. Tandowski concluded.
In a separate release today, the Company announced third quarter 1999 and YTD calendar year results. Three-month and nine-month revenues were up 24% and 29%, respectively, over prior year periods, and three-month and nine-month pro-forma EPS, before charges, were $0.04 and $0.16, respectively.
About Aztec Technology Partners
Aztec Technology Partners, Inc. is a single-source provider of e-Solutions for middle market and Fortune 1000 companies across a broad range of industries. Aztec helps clients throughout the U.S. gain competitive advantages by exploiting the power of Intranet, internet and extranet technologies. For more information, please visit the Company's web site at www.aztectech.com.
This press release contains "forward-looking statements." Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. In particular, these include statements relating to our anticipated cash flow, and to future actions, future performance, or results of current and anticipated sales and marketing efforts, expenses, the outcome of contingencies such as legal proceedings, the need for bank waivers of financial covenants and bank approvals of certain transactions, the existence of a market for securities of the company or its subsidiaries, and other financial results.
Any of these forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. These risks include the absence of the Company's history as a stand-alone company, the risks relating to acquisitions, the variability of our quarterly operating results, the inherent difficulties in projecting financial results in the services industry, and other risks identified by us from time to time in our 1O-Q, 8-K and 1O-K reports filed with the Securities and Exchange Commission. We urge you to read these reports in evaluating the forward-looking statements in this press release. Other factors besides those listed could also adversely affect the Company. Finally, we call your attention to the fact that we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
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