AlphaServ.com Reports 1999 Fourth Quarter and Year End Results; Results Reflect Sale of Managed Services and Proprietary Hardware Businesses.

    Business Editors

    SANTA ANA, Calif.--(BUSINESS WIRE)--March 30, 2000--
AlphaServ.com(TM)(Nasdaq NM: ALMI), today reported financial results
for its fourth quarter and year ended Dec. 31, 1999.
    For the fourth quarter ended Dec. 31, 1999, the company reported
total revenue of $7.3 million and a net loss of $10.0 million, or a
diluted net loss of $0.93 per share. As announced in January, the
company sold its managed services division, which included its
proprietary hardware manufacturing group, to California-based R. E.
Mahmarian Enterprises LLC ("REM"). The fourth quarter net loss
included a $6.7 million loss on sale and a $196,000 impairment charge
relating to the sale of this division, as well as a $142,000 charge
for IT service parts obsolescence. These non-recurring items accounted
for $0.61 per share of the diluted net loss for the quarter. In
connection with the sale to REM, REM assumed certain of the company's
contractual service obligations associated with the businesses sold.
Because the company remains contingently obligated to honor the
service obligation in the event REM fails to perform, the company has
retained its deferred revenue balance and reclassified it to deferred
gain on sale of the businesses to REM. The company expects to record a
gain of approximately $2.7 million during fiscal years 2000 and 2001
as the contractual obligations lapse. The computation of the fourth
quarter diluted net loss per share included $811,000, or $0.07 per
share, in dividends and accretion related to the company's outstanding
preferred stock.
    For the year ended Dec. 31, 1999, revenues increased 26.8 percent
to $34.9 million, as compared with revenues of $27.5 million for the
year ended Dec. 31, 1998. Net loss for the year was $12.2 million, or
$1.21 per diluted share, compared to $10.0 million or $0.95 per
diluted share for same period in 1998. The results of operations for
the year ended Dec. 31, 1999, included a $6.5 million net loss on sale
of businesses, pertaining to the sale in the fourth quarter of the
company's managed services and proprietary hardware operation as well
as the sale in the second quarter of its telephone installation
business. Additionally, the year end results included a $196,000
impairment charge relating to the sale of the managed services
division, and a $142,000 charge for IT service parts obsolescence. The
computation of the year's diluted net loss per share includes $1.9
million or $0.16 per share in dividends and accretion related to the
company's outstanding preferred stock.
    Douglas J. Tullio, AlphaServ.com chairman, chief executive officer
and president said, "As expected, the company's DCi professional
services division experienced a shortfall of revenue in the fourth
quarter stemming from the delay of technology services and projects
resulting from concerns over anticipated Y2K problems. We are now back
on track with our customers and believe the DCi division will continue
to produce profitable results going forward, as it did in 1999.
    "The sale of our managed services and proprietary hardware
businesses in January allows us to effectively focus our efforts on
marketing the NQL Solutions Internet division and growing our
professional services business," Tullio stated. "We recently
pre-released our Network Query Language (NQL) 1.0, and judging by
response from the marketplace during our trial period, we anticipate
it will be well received. We look forward to the full release version
of NQL in the coming weeks as we implement a comprehensive marketing
campaign and properly staff this division to maximize the potential
for NQL."

    About AlphaServ.com

    AlphaServ.com, the d.b.a. name for Alpha Microsystems, operates an
Internet technologies division, NQL Solutions, and the DCi
professional services division. NQL Solutions is a premier provider of
Internet software solutions to the global marketplace. This division
develops and deploys enabling software technologies based on its
Network Query Language to partner systems integrators, Fortune 1000
corporations, Internet communities and marketplaces, software vendors
and Internet-based service providers. For more information, visit
www.NQLSolutions.com or call 888/785-3370. The company's professional
services division is a premier provider of Internet and Intranet
consulting and networking, onsite network support for customers
primarily located in the Northeastern U.S. For more information, visit
the company's Web site at www.alphaserv.com.

    Certain statements in this press release, including the statements
that the company expects to record a gain of approximately $2.7
million during fiscal years 2000 and 2001 relating to the sale of
businesses to REM; that the DCi division will be profitable going
forward; that it anticipates NQL will be well received and that the
full release version of NQL will be available in the coming weeks are
considered "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) REM's ability to satisfy contractual obligations assumed
in the transaction (ii) the ability of the company's DCi division to
maintain its clients and remain profitable (iii) the company's ability
to successfully release and market its NQL Internet division and its
products along with 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 that without continued acquisitions, the present
trend in revenue growth cannot be expected to continue at historical
rates, nor should the readers place undue reliance on the
forward-looking statements contained herein, which speak only as of
the date hereof.
-0-
*T

                CONSOLIDATED STATEMENTS OF OPERATIONS(a)
                 (In thousands, except per share data)

                                          (Unaudited)
                              Year Ended   Year Ended   Quarter Ended
                              December 31, December 31, December 31,
                                1999          1998         1999
Net sales:
  IT Services                $ 30,399      $ 22,381       $ 6,349
  Product                       4,491         5,132           913

     Total net sales           34,890        27,513         7,262

Cost of sales:
  IT Services                  23,608        19,044         5,672
  Product                       3,424         4,529           792

     Total cost of sales       27,032        23,573         6,464

Gross margin                    7,858         3,940           798

Operating expenses:
  Selling, general and
   administrative              11,858         9,756         3,444
  Engineering, research and
   development                  1,290         1,380           341
  Impairment of long-lived
   assets                         196         2,438           196

     Total operating expenses  13,344        13,574         3,981

Loss from operations           (5,486)       (9,634)       (3,183)

Other expense (income):
  Interest income                 (72)         (134)          (12)
  Interest expense                186           107            53
  Loss on dispositions
   of businesses                6,506           379         6,735
  Other expense, net               52            11            19

     Total other expense        6,672           363         6,795

Loss before taxes             (12,158)       (9,997)       (9,978)
Income tax expense (benefit)       46            (6)           (4)

Net loss                      (12,204)       (9,991)       (9,974)
Accretion on redeemable
 preferred stock                 (333)          (72)         (267)
Dividends on redeemable
 preferred stock               (1,556)         (364)         (544)

Net loss attributable to
 common shareholders        $ (14,093)    $ (10,427)    $ (10,785)

Basic and diluted net
 loss per share             $   (1.21)    $   (0.95)    $   (0.93)

Number of shares used in computing
  basic and diluted
  per share amounts            11,610        11,009        11,656

    (a)The following table presents the results for the year ended
December 31, 1999 and the comparable unaudited pro forma results for
the year ended December 31, 1998. For comparative purposes, the 1998
results of operations for the year ended December 31, 1998 have been
derived from the previously reported results for the ten-month period
ended December 31, 1998 plus two-thirds of the operating results for
the quarter ended February 22, 1998, and are unaudited.

    --30--KM/np*

    CONTACT:  AlphaServ.com, Santa Ana
              Steve Shattuck (media), 714/641-6374
              E-mail:  [e-mail]
                or
              Tamara Yanito (investors), 714/641-6216
              E-mail:  [e-mail]

    KEYWORD:  CALIFORNIA
    INDUSTRY KEYWORD:  INTERNET EARNINGS