Aztec Announces Restructuring Initiatives, Management Changes and Strategic Process Update.

BOSTON--(BUSINESS WIRE)--Oct. 1, 1999--

Aztec Technology Partners, Inc., (Nasdaq: AZTC), a leading single-source provider of innovative e-Solutions for middle market and Fortune 1000 companies, today announced that it is implementing the following initiatives to improve operational efficiencies and enhance shareholder value:

- Realignment of Senior Management

- Restructuring of its non-profitable businesses

- Focus on e-Solutions market

In order to drive these key initiatives, the Board of Directors announced the promotion of Ira Cohen to President of Aztec. In addition to his new responsibilities, Mr. Cohen will continue to hold the title and responsibilities of Chief Operating Officer. James Claypoole announced his retirement today as Chairman of the Board, President and Chief Executive Officer of the Company. Clifford Mitman, a member of the Board's Special Committee, was elected Chairman of the Board to replace Mr. Claypoole, who will continue to serve the Company as a Board member.

In addition, as part of the broad restructuring, Aztec announced that it is reducing its workforce by approximately 6% by closing its Canfield, Ohio location, significantly reducing staff at its Trumbull, Connecticut office and in its hardware maintenance/repair line of business located in Boston, Massachusetts. Aztec's Chief Financial Officer, Ross Weintraub, explained, "These initiatives are focused on operating Aztec's growth businesses going forward and reducing or closing non-profitable operations."

As a result of these changes, the Company expects to incur estimated pre-tax restructuring charges of $11 to $13 million, or $0.39 to $0.46 per share, in the third quarter. These charges will include the write-off of certain intangible assets, employee severance, contractual commitments, as well as other costs associated with personnel reductions and facility closures. In addition, the Company said it expects to record a charge in the range of $20 million to $30 million for the write-down of intangible assets to their estimated fair value.

Mr. Cohen stated, "These actions move the Company closer to achieving our long held vision for the business. We believe the most valuable part of the Company is our core competencies in web-based applications development and networking services. This focus on e-Solutions clearly represents the hottest spot in technology today and holds the highest potential for Aztec's growth, profitability and value for the shareholders."

The Company currently expects revenues, earnings per share and EBITDA for the calendar year 1999 to be approximately $350 million, $0.09 and $16 million, respectively, before restructuring charges and write-downs of intangible assets. It expects earnings per share, before goodwill, to be $0.22.

The Company also reported that the work of the Board's Special Committee with Donaldson, Lufkin & Jenrette on strategic initiatives is progressing favorably. The Company said DLJ has reported that a number of entities have expressed initial interest in some form of transaction with the Company, and that it is continuing to provide information to those entities and to evaluate the benefits to shareholders of each expression of interest, although no assurance can be given that any such transaction will be finalized. The Board hopes to be in a position to say more about its strategic alternatives before the end of the year. In addition, the Company said it has begun discussions with its bank group for obtaining temporary waivers on its Revolving Credit Agreement based on the effect that these results may have on the Company's compliance with certain of its financial covenants. The bank group has indicated it will work with Aztec to resolve its compliance issues under the Credit Agreement after reviewing with the Company its expected results and restructuring plans; however, there can be no assurance that such temporary waivers will be granted.

Mr. Cohen concluded, "While the overall company is profitable and we continue to achieve successes in our web application and network services business, we are not satisfied with the current mix." Mr. Cohen added, "After our spin-off from USOP, Aztec was a roll-up of thirteen different business units that has proven to be too diverse to successfully integrate into a unified solutions provider. In addition, we believe that this diversity has camouflaged the true value and core competencies of Aztec. As a result, we are taking these restructuring actions to create a company that can be a formidable competitor in the technology business and create maximum value to our shareholders. We are already successful in the e-Solutions market and continue to see tremendous growth opportunities in this burgeoning industry."

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 Internet, intranet 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 operating results for the quarter ended September 30, 1999, and the full year ended December 31, 1999, and 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 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, our dependence on acquisitions for future growth, 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.