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EXHIBIT 99.1
[ALPHASERV.COM LETTERHEAD] NEWS RELEASE
MEDIA CONTACT: INVESTOR CONTACT:
Steve Shattuck Tamara Yanito
PR Manager Director, Investor Relations
714.641.6374 714.641.6216
sshattuck@alphaserv.com tyanito@alphaserv.com
FOR IMMEDIATE RELEASE
ALPHASERV.COM STREAMLINES OPERATIONS WITH SALE OF MANAGED SERVICES AND
PROPRIETARY HARDWARE BUSINESS DIVISIONS
COMPANY FOCUSES ON EXPANSION OF ITS PROFESSIONAL IT SERVICES BUSINESS AND
ACCELERATED DEVELOPMENT OF ITS INTERNET DIVISION THROUGH SALE OF NON-CORE ASSETS
SANTA ANA, CALIF., JAN. 4, 2000 - ALPHASERV.COM (NASDAQNM: ALMI), announced
today that it has entered into a definitive agreement with California-based R.
E. Mahmarian Enterprises LLC ("REM") for the sale of its managed services
division, which includes its proprietary hardware manufacturing group. The
transaction is valued at approximately $2.8 to $3.2 million, consisting
primarily of liabilities to be assumed by REM. In addition, approximately $2.5
million of the division's accounts receivable will be retained by AlphaServ.com
and converted into cash within 60 to 90 days from the transaction's closing
date.
Richard E. Mahmarian, a current board member of AlphaServ.com, owns REM. Under
the terms of the agreement, AlphaServ.com will receive a ten percent contingent
interest upon the occurrence of certain liquidity events involving REM following
its acquisition of the managed services business. REM will have use of the name
Alpha Microsystems in addition to all trade names, logos and trademarks
associated with the managed services and proprietary hardware businesses. The
transaction is expected to close on or before Jan. 31, 2000 and is subject to
lender and preferred stockholder approval, as well as the receipt of a favorable
"fairness" opinion from an investment banking firm engaged by the special
committee of AlphaServ.com's board of directors.
"It is important that we stay focused on our strengths and objectives - the
growth of our Internet technology division and the expansion of our professional
services group," said Douglas J. Tullio, AlphaServ.com's chairman, chief
executive officer and president. "Although the managed services and proprietary
hardware businesses have played a role in our strategy in the past, the
company's ultimate goals are to provide innovative Internet technologies and
expand our role as a professional solutions provider, making the managed
services operations no longer synergistic to our future growth strategy," added
Tullio.
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AlphaServ.com Streamlines Operations with Sale of Managed Services and
Proprietary Hardware Businesses
Jan. 4, 2000
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AlphaServ.com expects the sale to result in a pre-tax charge to operations of
approximately $3.9 to $6.6 million, or $0.34 to $0.57 per share, which will be
recorded in the fourth quarter ended Dec. 31, 1999. As a result of the
transaction, the company may retain up to approximately $2.7 million in deferred
revenue on its balance sheet and recognize this amount as a reduction to the
loss on disposition over the next 12 months as REM provides the services
relating to the deferred revenue. The company also anticipates other fourth
quarter charges related to this transaction. As previously announced, the
company expects a shortfall of revenue for the fourth quarter stemming from the
delay of technology services and projects due to the impact of anticipated Y2K
problems. Tullio continued, "This shortfall is expected to be followed by an
improved first quarter as our clients begin installation projects that have been
on hold for the last three to four months."
According to REM President Richard E. Mahmarian, the acquired operations, which
will operate under the Alpha Microsystems name, will maintain their present
management team and the vast majority of existing employees. "We will maintain a
strong alliance with AlphaServ.com as we continue to provide nationwide service
to AlphaServ.com's remaining customer base on a preferred vendor basis."
Mahmarian added, "Under a five-year licensing agreement, AlphaServ.com will
provide us with utilization of its AlphaCONNECT Internet technologies. This will
allow us to continue offering our customers a significant competitive advantage
through existing applications such as ServiceTrak(sm) and RangeFinder(sm), as
well as future applications developed under the AlphaCONNECT brand."
The company's professional services division will now be entirely focused on
providing high value-added professional services to major accounting firms,
financial institutions, hospitals and pharmaceutical companies located in the
Northeastern U.S. Tullio added, "At the same time, we will continue providing
our remaining customers with nationwide support through our preferred vendor
status with REM.
"In addition, management will be able to better focus its energies on expanding
the sales and marketing efforts of the company's Internet division, soon to be
operating under the name, NQL Solutions Inc., while identifying and evaluating a
number of strategic partnerships to provide the funding for establishing NQL
Solutions as a separate entity."
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AlphaServ.com Streamlines Operations with Sale of Managed Services and
Proprietary Hardware Businesses
Jan. 4, 2000
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ABOUT ALPHASERV.COM
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AlphaServ.com, the name under which Alpha Microsystems does business, is a
premier provider of true multi-vendor and professional services to the IT
marketplace. The company's services include Internet and Intranet consulting and
networking, onsite network support and nationwide on-call support for customers
throughout North America. For more information, visit the company's Web site at
www.alphaserv.com. The AlphaCONNECT division of AlphaServ.com, which will be
marketing its technologies under the NQL Solutions name, is the premier provider
of intelligent agent technologies to the global marketplace. This division
develops and deploys enabling software technologies based on its Network Query
Language to partner systems integrators that create information solutions for
today's e-businesses, as well as to organizations developing software
applications and Internet services. For more information, visit
www.NQLsolutions.com or call 888.785.3370.
Certain statements in this press release, including statements regarding the
conditions for completing the transaction, expectations of charges and timing
relating to the transaction, 1999 fourth quarter and 2000 first quarter results,
and the company's intentions for its NQL Solutions division are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks and
uncertainties, including (i) the company's ability to attain necessary approvals
for consummation of transaction (ii) the actual timing and amounts of charges
relating to the transaction to occur as expected (iii) actual results from the
company's 1999 fourth quarter and 2000 first quarter (iv) REM's ability to
successfully fulfill and maintain service contracts with existing customers (v)
the ability of the company to identify and obtain additional funding for its NQL
Solutions subsidiary and other factors which may cause the actual results,
performance or achievements of the company, or industry results, to be
materially different from any future results, performance, or achievements
expressed or implied by such forward-looking statements. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date hereof.
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