BTG and GTSI Reach Agreement on Product Contracts.

FAIRFAX, Va.--(BUSINESS WIRE)--Feb. 10, 1999--BTG, Inc. (Nasdaq: BTGI), an information systems and technical services company, announced today that it has signed an agreement with Government Technology Services, Inc. (Nasdaq: GTSI) to resolve a number of issues that arose subsequent to GTSI's purchase of substantially all of BTG's product reselling division in February 1998.

Under the terms of the agreement, BTG will novate certain additional product contracts to GTSI, and GTSI will assume warranty service responsibility for those contracts. In addition, GTSI has agreed to purchase 400,000 shares of its stock from BTG at $5.00 a share, and has been granted an option at $5.25 per share to purchase the remaining 1.3 million shares of GTSI stock currently held by BTG.

"We believe the agreement we have reached with GTSI is in the best long-term interests of our shareholders and the company," said BTG President and CEO Ed Bersoff. "It allows us to fully focus our efforts on expanding the profitable growth of our services business while transferring responsibility for our non-strategic product contracts. This agreement meets four important objectives for BTG: strategic clarity, mitigation of future warranty liability, final resolution of all outstanding issues between BTG and GTSI, and further liquidation of our holdings in GTSI."

As a result of the settlement agreement with GTSI, Bersoff said that BTG will record a non-recurring after-tax charge of $1.6 million. This charge includes the transfer to GTSI of $800,000 in cash and 200,000 shares of GTSI's stock, which were being held in escrow pursuant to the original purchase agreement between the two companies in February 1998. BTG anticipates that this charge will be offset by a gain in the fourth quarter from the planned sale of 41,000 shares of Cisco Systems' stock, which were part of the consideration BTG received in 1998 when Cisco purchased the WheelGroup Corporation (see BTG news release 98-9, February 19, 1998.) Bersoff said BTG recently bought a $100 "put" on its Cisco shares to protect the significant gain the company has in the stock.

Bersoff said two other recent actions reflect the company's continuing efforts to reduce its non-strategic product business. BTG is in the process of selling its Pentagon retail operation, a computer and electronics franchise that the company has operated since 1992. In addition, at the end of its last fiscal quarter, BTG discontinued a products unit that was focused on health affairs. "These actions, coupled with today's GTSI agreement, clearly define BTG as an information systems and technical services firm that provides solutions to complex information technology issues for government and commercial clients," Bersoff said.

Additional information on BTG is available on the Internet at www.btg.com, by e-mail at [e-mail], or by calling 703-383-8000.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks and uncertainties include the Company's dependence on continued funding of U.S. government programs, government contract procurement and termination risks, entry into new commercial businesses, and other risks described in the Company's Securities and Exchange Commission filings.

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