Applied Digital Solutions Completes Far-Reaching Corporate Restructuring With Sale or Closure of 27 Business Units.Business Editors/High Tech Writers PALM BEACH, Fla.--(BUSINESS WIRE)--Feb. 19, 2002 "A new era has begun!" Sale of seven business units generates over $11 million in proceeds; closures reduce SG&A by over $75 million Applied Digital Solutions, Inc. (Nasdaq: ADSX ADSX Applied Digital Solutions, Inc. (stock symbol) ), an advanced technology development company, announced today that it has completed its corporate restructuring that began in August 2001. The company has sold seven business units, generating proceeds of over $11 million. The majority of these proceeds have been used to reduce debt obligations to its senior secured lender, IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) Credit Corp. At the same time, the company has closed 20 business units, reducing pro-forma 2002 SG&A by over $75 million and dramatically reducing employee headcount from its high of over 1600 last year. Headcount will drop to less than 200 upon the closing of the pending merger between Digital Angel Corporation and Medical Advisory Systems (AMEX AMEX See: American Stock Exchange : DOC). Commenting on the restructuring, Richard J. Sullivan, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Applied Digital Solutions, stated: "In August 2001, our management team, with the advice of outside consultants, concluded that a full transition to an advanced technology company required the sale or closure of all units that did not fit into our new business model or were not cash-flow positive. This restructuring process has now been accomplished. We have completely transformed this company. A new era has begun!" Mr. Sullivan continued: "The restructuring creates a leaner, more focused and agile organization. Our advanced technology initiatives -- Digital Angel(TM), Thermo Life(TM), and VeriChip(TM) -- are underpinned and supported by our other remaining business units. We consider these supportive units as core to our business model. They provide state-of-the-art hardware, software and call-center deliverables, a superb customer base, and a positive revenue and income stream." Mr. Sullivan's statement concluded: "With the anticipated execution of our new debt restructuring Debt Restructuring A method used by companies with outstanding debt obligations to alter the terms of the debt agreements in order to achieve some advantage. Notes: agreement with IBM Credit Corp., the company expects to be cash-flow positive for 2002. This will allow us to execute our business strategy as a leading developer of proprietary, life-enhancing, advanced technologies. As I stated in my letter to shareholders last November, Digital Angel, Thermo Life, and VeriChip are just the beginning. With the assistance of our new R&D center in Shen Shen, in the Bible, place, perhaps close to Bethel, near which Samuel set up the stone Ebenezer. Zhen, China, we expect to bring advanced technologies to the marketplace that will seamlessly integrate with our more traditional infrastructure business units." About VeriChip(TM) VeriChip, first announced on December 19, 2001, is a miniaturized, implantable, radio frequency identification See RFID. device (RFID (Radio Frequency IDentification) A data collection technology that uses electronic tags for storing data. The tag, also known as an "electronic label," "transponder" or "code plate," is made up of an RFID chip attached to an antenna. ) that can be used in a variety of medical, security and emergency applications. About the size of the point of a typical ballpoint pen, each VeriChip will contain a unique identification number and other critical data. Utilizing an external scanner, radio frequency energy passes through the skin energizing energizing, adj giving energy to; revitalizing; rejuvenating. the dormant VeriChip, which then emits a radio frequency signal transmitting the identification number and other data contained in the VeriChip. VeriChip, Inc., a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of Applied Digital Solutions, was established on February 7, 2002. About Digital Angel(TM) Digital Angel represents the first-ever combination of advanced biosensor A device that detects and analyzes body movement, temperature or fluids and turns it into an electronic signal. See lab on a chip and data glove. Biosensor technology and Web-enabled wireless telecommunications linked to Global Positioning Systems (GPS). By utilizing advanced biosensor capabilities, Digital Angel will be able to monitor key body functions - such as temperature and pulse - and transmit that data, along with accurate location information, to a ground station or monitoring facility. Digital Angel Corporation has announced a proposed merger with Medical Advisory Systems. For more information on Digital Angel, visit www.digitalangel.net. About Thermo Life(TM) In November of 2001, Applied Digital Solutions created a wholly owned subsidiary called Advanced Power Solutions, Inc. (APSI APSI Association of Plastic Surgeons of India APSI Agence de Promotion, de Soutien et de Suivi des Investissements (French) APSI Aircraft Propulsion Subsystem Integration APSI Associazione Prevenzione Studio Infezioni ). This new unit will further develop, market and license Thermo Life(TM), a proprietary, thermoelectric ther·mo·e·lec·tric also ther·mo·e·lec·tri·cal adj. Characteristic of, resulting from, or using electrical phenomena occurring in conjunction with a flow of heat. generator powered by body heat. Thermo Life is intended to provide a miniaturized power source for a wide range of consumer electronic devices, including attachable or implantable medical devices and wristwatches. About Applied Digital Solutions, Inc. Applied Digital Solutions is an advanced technology development company that focuses on a range of early warning alert, miniaturized power sources and security monitoring systems combined with the comprehensive data management services required to support them. Through its Advanced Wireless unit, the Company specializes in security-related data collection, value-added data intelligence and complex data delivery systems for a wide variety of end users including commercial operations, government agencies and consumers. For more information, visit the company's website at http://www.adsx.com. Statements about the Company's future expectations, including future revenues and earnings, and all other statements in this press release other than historical facts are 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform Act of 1995. The Company intends that such forward-looking statements involve risks and uncertainties and are subject to change at any time, and the Company's actual results could differ materially from expected results. The Company undertakes no obligation to update forward-looking statements to reflect subsequently occurring events or circumstances. |
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