Applied Digital Solutions Reports Record 1999 Revenues and Net Income.

Business Editors/High Tech Writers

PALM BEACH, Fla.--(BUSINESS WIRE)--March 14, 2000

REVENUES INCREASED 63% TO $337 MILLION

CASH EARNINGS INCREASED 44% TO $8.4 MILLION

Company completed a major reorganization in 1999, positioning itself

as a leading provider of integrated e-business solutions

Applied Digital Solutions, Inc. (NASDAQ: ADSX) today reported revenues for the year ended December 31, 1999, of $336.7 million, a 63% increase over the $207.1 million in revenues reported for same period in 1998.

EBITDA increased 109% to $28.1 million from $13.4 million in 1998. Cash earnings increased 44% to $8.4 million in 1999 from $5.8 million in 1998. Cash earnings per share, on a fully diluted basis, were $0.18 in 1999 compared to $0.17 in 1998.

For the fourth quarter of 1999, the Company reported an 89% increase in revenue over the prior-year quarter, growing to $104.9 million from $55.6 million. EBITDA increased 1,000% to $16.5 million from $1.5 million in 1998. Cash earnings increased 1,814% to $7.2 million in 1999 from $0.4 million in 1998. Cash earnings per share, on a fully diluted basis, were $0.14 in 1999 compared to $0.01 in 1998.

Commenting on the Company's year-end 1999 results, Applied Digital's Chairman and CEO Richard J. Sullivan said, "We're extremely pleased with our continued strong revenue, EBITDA and cash earnings growth. We're also delighted with the progress we've made in our strategic restructuring and our ongoing transformation into a leading provider of integrated e-business solutions. By creating and aligning our four core business groups - Internet, Telephony, Network and Applications, we made enormous strides in 1999. We truly have positioned the Company - both financially and strategically -- for even greater growth as we take advantage of unprecedented growth opportunities in the e-business solutions arena."

Sullivan continued, "1999 truly was a pivotal year for Applied Digital. We're definitely on the move, which can be seen both in our growing customer base and in the recent rise in our stock price. The investment community is beginning to take note of our progress. And they should. After all, our balance sheet is rock solid. Stockholders' equity grew by over 37%, total assets grew by over 84%, and working capital increased by 160%. We're very well positioned for strong profitable growth going forward."

Major Events of 1999

In announcing full-year and fourth-quarter results for 1999, the Company highlighted the major events that occurred during the past year. In the course of 1999, the Company:

--Successfully refocused its strategic direction and reorganized into four core business groups: Internet, Telephony, Network and Applications. As part of this successful transformation, the Company positioned itself as a leading provider of Computer, Telephony, Internet Integration (CTII) services. This CTII focus will differentiate Applied Digital Solutions in the e-business solutions marketplace.

--Sold four non-core businesses in 1999 (Aurora Electric, Cra-Tek Company, C.T. Specialists and Winward Electric) and, in connection, repurchased 2.7 million shares of stock. At the time, those shares were valued at $11 million. At today's stock price, those shares are now worth approximately $37 million.

--Sold its Canadian subsidiary, TigerTel, to AT&T Canada for approximately $30 million. The sale helped accelerate Applied Digital's strategic restructuring into an e-business solutions provider.

--Announced a proposed $50 million IPO (Initial Public Offering) for Intellesale.com. This Applied Digital subsidiary sells refurbished and new computer equipment and related components through its website ( http://www.intellesale.com ) as well as through traditional channels which Intellesale.com is migrating to the Internet. Intellesale.com's 1999 results, reported last week, included revenues of $145.3 million, a 139% increase over 1998 revenues of $60.7 million. Intellesale.com's Internet-related revenues jumped seven-fold, surging from $7.3 million in 1998 to $52.8 million for the year ended December 31, 1999. Having already filed the registration statement with the Securities and Exchange Commission -- and having otherwise laid the required groundwork for the IPO -- the Company is prepared to take the necessary steps to unleash the true value of Intellesale.com.

--Was recognized as the fifth fastest-growing technology company in the Deloitte & Touche Technology Fast 500. Companies were ranked based on their five-year (1994-1998) revenue growth records. Applied Digital recorded a five-year revenue growth of 64,012%, putting it in the top 1% of all technology companies in the United States. Only four technology companies grew at a faster rate than Applied Digital Solutions during the same five-year period: Siebel Systems, Inc. (NASDAQ: SEBL), Excite @Home (NASDAQ: ATHM), Earthlink Network Inc. (NASDAQ: ELNK), and Netscape Communications Corporation.

Applied Digital's Chairman and CEO, Richard J. Sullivan, concluded his remarks about the Company's 1999 results with the following comments: "1999 was a very successful and eventful year for Applied Digital Solutions. By far our greatest accomplishments had to do with listening to our customers, assessing the market, creating a vision and implementing that vision. But now is not the time to rest on our past accomplishments. Instead we must build on the solid foundation we laid in 1999 in order to stay ahead of the fast-moving e-business curve -- as we're doing with our recent initiative to form Internet-based, B2B vertical trade communities -- while continuing to drive increased sales and profits."

About Applied Digital Solutions, Inc.

Applied Digital Solutions, Inc. is an e-business to business solutions provider offering Internet, telecom, LAN and software services to a wide variety of businesses throughout North America. Applied Digital Solutions differentiates itself in the marketplace by enabling e-business through Computer, Telephony, and Internet Integration (CTII). With five-year revenue growth (from 1994 to 1998) of 64,012%, Applied Digital Solutions was ranked as the fifth fastest-growing technology company by Deloitte & Touche in its 1999 Technology Fast 500 listing. For more information, visit the Company's web site at http://www.adsx.com .

Financial Information Follows

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 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.

           Applied Digital Solutions, Inc. and Subsidiaries
                    Selected Operating Information
                 (In thousands, except per share data)

                          Three Months Ended       Twelve Months Ended
                             December 31,              December 31,
                          1999          1998        1999          1998
                             (Unaudited)                (Audited)

Revenue              $ 104,951      $ 55,573   $ 336,741     $ 207,081
EBITDA (1)(4)           16,496         1,499      28,070        13,436
Pretax income            8,357          (334)      9,146         7,702
Net income
 available to common
 stockholders        $   6,288       $    44   $   5,431     $   4,646

Net income per
 common share:
Basic                $    0.13       $  0.00   $    0.12     $    0.14
Diluted              $    0.12       $  0.00   $    0.11     $    0.13

Cash earnings (2)(4) $   7,236       $   378   $   8,405     $   5,843
Cash earnings per
 common share (3)(4)
Basic                $    0.15       $  0.01   $    0.18     $    0.18
Diluted              $    0.14       $  0.01   $    0.18     $    0.17

Weighted average number
 of common shares
 outstanding:
Basic                   48,767        37,056      46,814        32,318
Diluted                 51,583        41,858      47,364        34,800

Selected Balance Sheet Data:                        December 31,
(in thousands)                                  1999             1998
                                             (Audited)        (Audited)
Cash and cash equivalents                   $   5,138        $   4,555
Total current assets                          138,881           65,244
Total assets                                  228,976          124,116
Total current liabilities                     101,158           50,757
Stockholders' equity                           92,937           67,560

(1) EBITDA as used herein is pre-tax income, including gain on sale of subsidiaries of $20.1 million, before interest income and expense, depreciation and amortization, and is before restructuring and unusual costs of $2.6 million incurred in the first quarter of 1999, and $3.5 million of non-recurring costs incurred in the fourth quarter of 1999.

(2) Cash Earnings is generally defined as after-tax income that excludes any negative effects of goodwill amortization.

(3) Cash Earnings per common share is computed by dividing Cash Earnings by the basic or diluted weighted average number of common shares outstanding.

(4) Unaudited.