AGS Computers 20 Years Achievement...

2 0 YEARS OF ACHIEVEMENT...

... JUST THE BEGINNING

AGS' 3,000 PEOPLE PROVIDE AUTOMATION SOLUTIONS TO

FINANCE, TELECOMMUNICATIONS, COMPUTER AND GOVERNMENT

ORGANIZATIONS.

THESE SERVICES ARE DELIVERED THROUGH A COMBINATION OF CUSTOM

AND PACKAGED SOFTWARE AND MICROCOMPUTER DISTRIBUTION

1987 (9 Months)

REVENUE

Software Products

System Developme

PROFITS System Development

A A I ,

.dware ibution 33%

SOFTWARE

1987 REVENUE ESTIMATE $1 90,000,000

Customer Industry Focus

Telecommunications 24%

Computer 1

Finance

Government 13%

Manufacturing & Other 16%

SOFTWARE STRATEGY

* Focus on Finance, Telecommunications, Computer & Government Accounts

Specialize in Mission Critical Applications

Maintain Repeat Business Record

Leverage Our Unix/C, Communication & Project Management Technical Skills

Emphasize System Integration and Mix of Product & Custom Software

FINANCE INDUSTRY

1987 Revenue Estimate $55 Million

Security Processing

Capital Market Trading

Bank Account Reconciliation

Bank Risk Management

Bank Reporting Systems

FINANCE INDUSTRY

MAJOR CLIENTS:

Banks Securities Insurance

I Morgan Merrill Lynch Guardian

Citibank Drexel, Burnham Prudential Bank of NY Mabon, Nugent Metropolitan

Chase E.F. Hutton Continental Bank of Tokyo Morgan Stanley Marsh &

McLennan

"Financial service firms will soon be the biggest commercial spendors on

I technology outside of the computer companies themselves."

"Increasing reliance on outside software vendors."

SECURITIES PROCESSING

& TRADING SYSTEMS

8 Government & Money Market Bonds & Stocks

8 Comprehensive Broker-Dealer Accounting

Foreign Exchange @ Euro Trading

ACCOUNT RECONCILIATION

Chemical Bank

Software Package

Custom Enhancement

@ Expert System Front-End

RISK MANAGEMENT

0 Trading & Credit Risk

Application Team

Al Tools

TELECOMMUNICATIONS -- -- -

1987 Revenue Estimate $46,000,000

@ Provide Both Telecommunication Application Software and Software to the Telecommunication lndus try

Systems Software

Hardware/Network Interfaces

Industry Application Knowledge to Network Companies

TELECOMMUNICATIONS

Major Clients:

AT&T Nynex

e ITT

Northern Telecom

a Bell of PA.

TELECOMMUNICATIONS

Projects:

@ Protocol lnterfaces SNA, X25, Document

@ AT&T Unix Enhancements

ITT World Net Packet Interfaces X.25 Product & Custom

Security Trading Systems

AT&T Application Development For Total System Sales

GOVERNMENT

1987 Revenue Estimate: $25,000,000

Systems Integration

Project Management

Prime Partner

GOVERNMENT

Major Clients:

NSA

State of NY

@ State of PA

Delaware Bridge

NYC

GOVERNMENT

Projects:

Special Security Systems

Delaware River Bridges

Utility Mapping

GOVERNMENT PARTNERSHIPS & SPECIALTIES

Integration

Project Management

Case

* Communications

0 Unix

Training

COMPUTER INDUSTRY

1987 Revenue Estimates

Software $34,000,000

Hardware (Distribution) $300,000,000

System Software

Industry Specific Application Development

Prime Systems Integrator

@ Factory Automation

@ Internal Data Base/Financial Applications

COMPUTER INDUSTRY

Major Clients:

IBM

DEC

AT&T

0 Nixdorf

Honeywell

COMPUTER INDUSTRY

System Software:

Communication

Security

@ Compilers

@ Micro Code

FACTORY AUTOMATION

Robotics Factory Floor

0 Communications Prime Vendor for Partnerships

---

MICROAMERICA

"Value Added" Distribution

Key Microamerica Strategies and Related Tactics

THE MICR0,COMPUTER MARKETPLACE

Microamerica's Market

Mass Merchandisers

Retail Stores

VADs

Hardware Solutions

Microcomputer VARs

Customized Software/Hardware

Solutions

Minicomputer VARs

PRODUCTS

@ Xenix and UNlX System

Connectivity Products

MS-DOS Compatible Systems and Workstations

Peripherals for All Other Systems

Add Onllns for MS-DOS Compatible Systems

@ Add Ins PS-2 Systems

Add Onllns for Macintosh Systems

Software

MICROAMERICA'S STRATEGY

@ Limited Number of Best Manufacturers

Products Intended for Commercial Market

@ Market Products to Resellers Only

Add Value to Distribution Chain

Leadership through Profitable Growth

KEY MICROAMERICA STRATEGY

Limited Nu

Who's Who of Vendors

Microamerica

- 28 Manufacturers - Concentration on

Hardware

Compuserve

- 38 Manufacturers - Hardware and

Software

m ber of Best Manufacturers

Monitors Terminals 1 0%

Mass Storaae Modems

KEY MICROAMERICA STRATEGY: PRODUCT MIX

Product exclusives - Aldus (North America) - Plus (Canada) - Archive (North America) - lntel (Canada) - 3Com (Canada)

Products with limited distribution - Intel - Altos - Okidata - Datacopy - Hayes - NCR - Plus

KEY MICROAMERICA STRATEGY

Products Intended for Commercial Market

@ System's Orientation

- Laptops (Toshiba and Neche) - XIT's (WYSE and AST) - Multi-User (NCR and ALTOS)

@ Solutions Orientation

- Desktop Publishing - CADICAM - Accounting

KEY MICROAMERICA STRATEGY

- - -

BROAD CUSTOMER BASE - - -

Many small VAD's & VAR's

a Also address large retail accounts (N.R.G.)

No single customer is more than 10J0 of sales - 18,000 active customers (U.S. & Canada)

MICROAMERICA'S SALES AND REVENUE

Office Products Dealers 1 %

Consultants 5%

Retailers 45OA

KEY MICROAMERICA STRATEGY: STAY CLOSE TO THE CUSTOMER

Local, full service, stocking distribution centers

- Local inventory - Local training and demo rooms - Customer pick-up

@ 16 full support centers in the U.S.

5 full support centers in Canada

e 4 remote sales offices

UNITED STATES LOCATIONS

-.-. -------~ _ --- --

d-.----L'.-? / -1

Portland ( ..& Minneapolis ,? ,/-) //---

\,- ,< Chicago.:&

. I - - . y .,,k5 ....*. ; i , Boston

San Francisco &<. I .-,-' b4 New York t Cleveland $i: Philadelphia

Los Angeles \ .$y Washington, D.C.

\ \ \

Kansas City Y? ',

CANADIAN LOCATIONS

.--- I ,

Calgary . .. .. ... !-.-. . ,> st L s

.I , ' i

7k !-.....

/' .. -

I..-,:- ' , ! 1 '\: * '. /' -& . . . . . . . . . . . . . . . . . . . .-. .-. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Montreal I . -. - -

Vancouver Winnipeg % " 0 t t a w a . & . , I .,% '';\ ... I '. '

- . . ..... _ - ' , .he. 7% J \ *

. . Toronto ; .. ,., > .' I I . ,.. /

, , , #

. , . .

: I <, ' Halifax <.

KEY MICROAMERICA STRATEGY

Leverage for Resellers

KEY MICROAMERICA STRATEGY: SERVICE TO THE CUSTOMER

Sales support inside and outside

@ Microcharge

@ MicroPromotions TI PS (Technical Information & Product Support)

@ Information flow

- Publications - Trade Shows - Partnerships

@ Microschool

Economies of Scale

KEY MICROAMERICA STRATEGY

Leverage for Manufacturers

KEY MICROAMERICA STRATEGY: SERVICE TO THE VENDOR

- - - - - - - -

High visibility/mindshare

I Consultative selling for technical products Joint marketing Microschool Efficient liaison with channel

VAR's, VAD's, Retailers

Long term relationships

KEY MICROAMERICA STRATEGY

International Presence

KEY MICROAMERICA STRATEGY: INTERNATIONAL PRESENCE

Compuserve

Largest Canadian distributor Hardware and software More exclusives Leverage U.S. relationships Economies of scale

Publications Programs

@ Ongoing exploration in other markets

MICROAMERICA

Summary of Strategic Advantages

a Broad Customer Base

Located near the Customers, for Local Service and Support

Historic Strength with VAR'S

9 Complete Solutions

Strategic Partnerships with

the Foremost Vendors

Balanced Mix of Vendors

+ Consistent and Focused Plan

@ Experienced Senior Management

a Strong Middle Management

MICROAMERICA STRATEGICALLY POSITIONED

@ Strong corporate culture @ Special sense of the market

Reputation @ International presence @ Management Information Systems

14 systems1440 users Decentralization Centralization

All the key building blocks are "in placew Tried and true "systems" Experienced staff to use the systems

MICROAMERICA

"The IBM of Microcomputer Distribution"

- Computer Reseller 1 1/86

FINANCIAL HIGHLIGHTS

(In thousands, except per share amounts)

Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nine' Months

- 1987 1986 1987 1986

Revenues

Net Income 3,988 2,3 10 10,289 6,023

Earnings Per Share (Fully Diluted) -30 -20 -80 -55

CONSISTENCY RECORDS

@ Revenues up 28 consecutive comparative periods

Profits up 27 of 28 consecutive comparative periods

Profitable for 36 consecutive periods

MANAGEMENT ......... ................................................ ............................ I L. J. SCHOENBERG J. ABRAMS

/ Corporate Staff

L. OSTFELD

A. PEARL I R. THATCHER I

... .

.............................. ...-...::::::::r : : : : : : : : : : : . . : .............. 1 ........................................................................ .... -. . . . . . . . . . . . . - ........... ....................................................................

I I ..................& I Distribution System Development

. . . . . .............. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............. I G. HOFFSTEIN A. STEPANSKI D. LEVINE

P. BRUMME M. ARANOW M. ORNSTEIN

J. CONNERS J. BURLEY J. PUHALA

K. PERRIN P. ERDMAN P. ROSENTHAL

J. LITTMAN-QUINN R. HUNTLEY

I / Software Products

S. ADELMAN A. HARRIS

J. HERBETS

E. DENMARK

J. TURNER J. KANE

WE REACH OUR GOALS

(In Thousands)

. .

1971

1976

1980

1985

. ~ ~ .

SALES PROFITS

$ 1,019 $ 51

5,442 298

14,121 563

279,182 7,493

~ ..... --.. .-....-......--...--.----.-

SALES PROFITS SALES PROFITS

1976 $ 5,000 $ 250 $ 5,442 $ 298

198 1 25,000 1,250 38,773 1,796

1985 100,000 5,000 279,182 7,493

1992 1,000,000 30,000 ~ - - . . -.--... -.. . ..--.....-.-...

AGS COMPUTERS, INC. IS STRATEGICALLY POSITIONED

* Leverage technical skills

* Leverage corporate size and range of skills

a Leadership position in current markets

Provide complete solutions

e Growing market share