MCSi To Sell Assets Related to Computer Technology Products Division; MCSi To Focus Exclusively On Rapidly Growing Audio Visual and Broadcast Systems Integration And Service

Business Wire, April 29, 2002

Business Editors

DAYTON, Ohio--(BUSINESS WIRE)--April 29, 2002

MCSi, Inc. (Nasdaq:MCSI) announced today that it will devote all of its resources to the rapidly growing, higher margin audio visual and broadcast systems integration and services business and will divest itself of the assets relating to the computer technology products. In that regard, MCSi has entered into a definitive agreement to sell certain assets and to assign certain liabilities relating to its computer technology product line to the computer technology management group. The closing of the agreement is subject to the satisfaction of certain conditions. Financial terms of the transaction were not disclosed.

MCSi anticipates that the transaction will be accretive to earnings. Management believes that the transaction will result in higher growth rates, improved margins and reduced debt.

The computer technology product division accounted for approximately $45 million or 24.4% of revenue from continuing operations for the first quarter of 2002. MCSi anticipates that the sale will result in a one-time non-cash loss in the range of $30 to $40 million.

"This transaction underscores our commitment to concentrate all of our resources on the enormous opportunities in the audio visual and broadcast integration and services industry," said Michael E. Peppel, Chairman, President and Chief Executive Officer of MCSi. "As was previously disclosed, we have faced challenges in the transactional product business in the past few quarters. With the prior sale of the Canadian computer products operation, we have now completed our departure from the end user computer products business. Going forward, our singular focus will be on increasing our leadership position as an audio visual and broadcast systems integration and services company. Additionally, we will use the proceeds from this transaction to further reduce our bank debt and invest in ongoing and new integration projects."

"Over the last three years, MCSi has transformed itself from being solely a reseller of computer products into the nation's leading integrator of state-of-the-art audio-visual, broadcast and computer technology. Throughout this period, we recognized that our integration and services operations delivered higher margins and greater growth than the computer products division and , over the last several quarters have seen a growing momentum and backlog from audio visual services and integration. During the fourth quarter of 2001, integration and services revenues, for the first time, exceeded product revenues," said Mr. Peppel.

Mr. Peppel continued, "This transaction is consistent with our long-term objective of building shareholder value as it further positions the Company to focus all of its resources, including managerial and financial, on the higher growth, higher margin integration and services operations. We expect this heightened focus, our national leadership position in integration, our ability to improve gross margins, the huge opportunity for our services business, and the elimination of interest expense related to the computer technology products operation will have a positive effect on our organization," concluded Mr. Peppel.

About MCSi

MCSi has emerged as the nation's leading systems integrator of state-of-the-art presentation and broadcast facilities. MCSi's foresight and ability to converge three key industries: audio-visual systems, broadcast media and computer technology, combined with design-build and engineering expertise, computer networking and configuration services, an extensive product line, and quality technical support services, has given MCSi a distinct advantage in the systems integration marketplace and has contributed to the dramatic growth of the Company.

MCSi's scalable solutions address clients at every level of the business transaction continuum. Products and services are available directly through the Company and its sales specialists, many of whom provide enterprise-wide solutions and/or work exclusively with clients on strategic and strong relationships maintained with manufacturers and technology leaders. With the largest selection of audio-visual/presentation, computer, and office automation products and the legacy of technical support and field service in locations across the U.S.A. and Canada, MCSi's customers are provided with a unique value that extends beyond the product. MCSi's products are also provided over a robust business-to-business e-commerce platform. Additional information regarding MCSi can be obtained at www.mcsinet.com (but is not part of this release).

The matters discussed in this press release which are not historical facts contain forward-looking information with respect to plans, projections or future performance of MCSi, the occurrence of which involve risks and uncertainties which include, but are not limited to, the closing of the above-described transaction, general economic conditions, industry trends, actions of competitors, MCSi's ability to manage its growth, factors relating to its acquisition/merger strategy, actions of regulatory authorities, restrictions imposed by its debt arrangements, dependence upon key personnel, dependence upon key suppliers, customer demand, risk relating to its international operations, dependence on its computer systems and other factors. A complete description of those factors, as well as other factors which could affect MCSi's business, is set forth in MCSi's Form 10-K for the year ended December 31, 2001.