PEC Solutions Reports 73% Net Income Growth for First Quarter 2001; Company's Revenue Growth at...

Business Editors/Hi-Tech Writers

FAIRFAX, Va.--(BUSINESS WIRE)--April 23, 2001

PEC Solutions, Inc. (NASDAQ:PECS), a professional technology services firm specializing in high-end eGovernment solutions, today reported first quarter 2001 earnings per share of 10 cents fully diluted (on

Net income was $2.4 million in the first quarter, compared to $1.4 million in the first quarter of last year, an increase of 73%.

PEC also reported that revenue for first quarter 2001 was $21.9 million, compared to $15.6 million for the same period in 2000, a growth of 41%.

Paul Rice, PEC's Chief Operating Officer, commented, "Our markets continue to display strong accelerating demand for eGovernment services. After a net gain of 119 new staff in the first quarter of this year, the company continues to be in an aggressive staffing posture going forward into the remainder of Fiscal year 2001 on the strength of our new business pipeline."

Rice also noted several key recent business developments.

-- PEC Solutions announced two new work areas under the Navy/Marine Corps
Intranet (NMCI) Information Strike Force program with EDS to support the San
Diego, California, and Norfolk, Virginia, Network Operations Centers. The
combined value of these tasks is approximately $100 million over the full
program life of eight years. This is in addition to previously announced work
valued at $18 million for year 2001 in support of the transition activities of
the program. Early in the first quarter, PEC executed a eight-year subcontract
with EDS under the Navy/Marine Corps Intranet Information Strike Force program.
The NMCI program is the largest Federal information technology contract in
history, valued at $6.9 billion over eight years.

-- PEC made significant progress in its efforts in the integrated justice
systems market at the federal, state and county levels. PEC has been selected
for engagements in two states for development of a justice systems
architecture, and for the implementation of an integrated justice information
system. Integrated justice systems provide law enforcement, judicial, and
corrections entities capabilities to track and share information across the
entire justice process: from investigations, arrest and booking, through court
proceedings and judgment, to incarceration and parole.

-- Demand for the company's services in its traditional Federal market
continued to be strong, with new contract actions in the Department of Justice,
the Departments of Justice, Veterans Affairs, Health and Human Services,
Treasury, Interior, and the state of Colorado and Fairfax county, Virginia.

-- Viking Technology, PEC's wholly owned subsidiary, announced the release of a
new public safety reporting software system for Fire and Emergency Medical
Services (EMS). The new Fire/EMS Enterprise Information System allows public
safety agencies to consolidate state reporting requirements and provide full
access to reports and related fire and patient information.

About PEC

PEC Solutions is a professional services firm that helps clients harness the power of the Internet and other advanced technologies to improve organizational performance. The company specializes in Web-Enabling Government(R) by planning, designing, building, and managing high-technology solutions that enhance productivity and improve services to the public.

PEC Solutions is based in Fairfax, Virginia, with offices around the nation. Visit the company on the Web at www.pec.com.

For more information, contact John McNeilly, PEC Solutions' Manager of Corporate Communications and Investor Relations, at 703/679-4900.

This press release may contain forward-looking information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by those sections. PEC Solutions assumes no obligation to update the information contained in this press release.

PEC Solutions' future results may be affected by its ability to continue to implement its eGovernment solutions, its dependence on the federal government and other federal government contractors as its major customers, its dependence on procuring, pricing and performing short-term government contracts, its dependence on hiring and retaining qualified professionals, potential fluctuations in its quarterly operating results, its dependence on certain key employees and its ability to timely and effectively integrate the businesses it may acquire.

                          PEC SOLUTIONS, INC.
                      CONSOLIDATED BALANCE SHEETS
                        (DOLLARS IN THOUSANDS)


                                          AS OF           AS OF
                                         MARCH 31,       DEC. 31,
                                          2001             2000
                                         --------        --------
                                       (UNAUDITED)

         ASSETS

Current assets:
   Cash and cash equivalents             $12,514         $14,655
   Short-term investments                 22,087          21,017
   Accounts receivable, net               21,029          15,764
   Other current assets                    1,674           1,491
                                        --------        --------
      Total current assets                57,304          52,927

Property and equipment, net                2,554           2,585
Goodwill, net                              2,639           3,365
Other assets                               3,184           2,523
                                        --------        --------
      Total assets                       $65,681         $61,400
                                        ========        ========

  LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable and accrued
    expenses                             $ 1,870         $ 2,150
   Advance payments on contracts             736           1,258
   Retirement plan contribution payable      284               2
   Accrued payroll                         4,147           4,214
   Accrued vacation                        1,519           1,183
   Other current liabilities               2,247             938
                                        --------        --------
       Total current liabilities          10,803           9,745

Supplemental retirement program
 liability                                   505             482
Deferred rent payable                        567             459
Other long-term liabilities                    8              14
                                        --------        --------
        Total long-term liabilities        1,080             955

   Total liabilities                      11,883          10,700
                                        --------        --------

Commitments and contingencies:

Stockholders' equity
   Undesignated capital stock,
    10,000,000 shares authorized
   Common stock, $0.01 par value,
    75,000,000 shares authorized,
    22,499,880 and 22,345,440 shares
    issued and outstanding,
    respectively                             225              223
   Additional paid-in capital             29,418           28,692
   Retained earnings                      24,158           21,779
   Accumulated other comprehensive
     Income (loss)                            (3)               6
                                        --------         --------

         Total stockholders' equity       53,798           50,700
                                        --------         --------
         Total liabilities and
          stockholders' equity           $65,681          $61,400
                                        ========         ========




                         PEC SOLUTIONS, INC.
                  CONSOLIDATED STATEMENTS OF INCOME
            (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

                                          Three Months Ended
                                      -----------------------------
                                      March 31,           March 31,
                                        2001                2000
                                              (Unaudited)

Revenues                              $21,920             $15,582
                                      -------             -------
Operating costs and expenses:
    Direct costs                       11,798               8,903
    General and administrative
     expenses                           5,368               3,941
    Sales and marketing expenses          895                 540
    Goodwill amortization                 180                  --
                                      -------             -------
        Total operating costs and
         expenses                      18,241              13,384
                                      -------             -------
Operating income                        3,679               2,198
Other income, net                         468                 115
                                      -------             -------
Income before income taxes              4,147               2,313
Provision for income taxes              1,709                 900
                                      -------             -------
Net income                             $2,438             $ 1,413
                                      =======             =======

Earnings per share:
    Basic                               $0.11               $0.08
                                      =======             =======
    Diluted                             $0.10               $0.06
                                      =======             =======
Weighted average shares used in
 computing earnings per share
    Basic                              22,472              18,257
                                      =======             =======
    Diluted                            25,536              23,442
                                      =======             =======





                          PEC SOLUTIONS, INC.
                  UNAUDITED STATEMENTS OF CASH FLOWS
                        (DOLLARS IN THOUSANDS)

                                                   QUARTERS ENDING
                                                ---------------------
                                                MARCH 31,    MARCH 31,
                                                  2001          2000

                                                     (Unaudited)
Cash flows from operating activities:
 Net income                                     $ 2,438        $1,413
 Adjustments to reconcile net
  income to net cash provided by
  operating activities:
  Depreciation                                      272           139
  Amortization of goodwill                          180            --
  Deferred rent payable                             108            --
  Deferred income taxes                             (48)           --
Changes in operating assets and liabilities:
  Accounts receivable, net                       (5,265)        1,076
  Other current assets                             (164)          (66)
  Other assets                                       (3)          (59)
  Accounts payable and accrued
   expenses                                        (259)         (109)
  Advance payments on contracts                    (523)         (359)
  Retirement plan contribution
   payable                                          282           248
  Accrued payroll                                   (61)         (632)
  Accrued vacation                                  337           268
  Other current liabilities                       1,802           117
  Supplemental retirement program
   liability                                         23            55
  Other long-term liabilities                        (5)           --
                                               --------      --------
   Net cash provided (used) by operating
    activities                                     (886)        2,091
                                               --------      --------
Cash flows from investing activities:
  Purchases of property and
   equipment                                       (188)         (230)
  Purchases of short-term investments            (1,045)           --
  Capitalized software                             (177)           --
                                               --------      --------
   Net cash used in investing
    activities                                   (1,410)         (230)
                                               --------      --------

Cash flows from financing activities:
  Dividends paid                                      --         (413)
  Proceeds from issuance of common
   stock                                             155        2,179
  Common stock offering costs                         --         (162)
                                                --------     --------
   Net cash provided by financing activities         155        1,604
                                                --------      --------
Net increase (decrease) in cash                   (2,141)       3,465
Cash and cash equivalents at
 beginning of period                              14,655        7,981
Cash and cash equivalents at end
 of period                                      $ 12,514     $ 11,446
                                                  ======       ======
Income taxes paid                               $    100     $    171
                                                  ======       ======
Interest paid                                   $      1     $     --
                                                  ======       ======