Wednesday, March 5, 2003

For Release at 4:30 PM EST

            Pittsburgh, PA: Allin Corporation (OTCBB: ALLN), a solutions-oriented information technology consulting company, reported record earnings results for both the three months and twelve months ended December 31, 2002.

          For the three months and twelve months ended December 31, 2002, revenue was $3.8 million and $13.3 million, respectively, compared to $4.9 million and $18.1 million for the three months and twelve months ended December 31, 2001, respectively.  The Company recorded net income attributable to common shareholders of $0.7 million ($0.06 per common share) and $0.3 million ($0.04 per common share) for the quarter and year ended December 31, 2002, respectively.  The Company recorded a net profit attributable to common shareholders of $0.4 million ($0.04 per common share) for the quarter ended December 31, 2001.  The Company reported a net loss attributable to common shareholders of  $12.6 million ($1.81 per share) for the twelve-month period ended December 31, 2001.  The year-end December 31, 2001 results included an impairment charge in the amount of $11.1 million ($1.59 per common share) taken in the second quarter of 2001 related to reductions in the carrying value of goodwill, the carrying value of assets in a discontinued business and inventory related to an abandoned business model in the interactive media area. 

           “In the face of a difficult environment for technology services, we are pleased to be able to report record earnings for the full year 2002,” commented Rich Talarico, Allin’s chief executive officer.  “Despite a decline in revenue, we were able to record positive earnings by aggressively managing costs in every area of our business.  The Company recorded a 35% decline in selling, general and administrative costs between 2001 and 2002.  We have an excellent client base and, despite the expense reductions, believe the Company is well positioned to take advantage of any rebound in technology spending.”

Reflecting the difficult environment for technology spending, revenue for both the quarter and year ended December 31, 2002 declined across almost all business segments.   Revenue in the Technology Infrastructure Solutions Area was indicative of the resistance to spending to upgrade or update corporate infrastructure. The Company recorded a 38% decline in revenue in this segment for the full year 2002 compared to the full year 2001.  By the fourth quarter of 2002, the decline had slowed to some extent with the Company recording a 26% decline in the fourth quarter of 2002, compared to the fourth quarter of 2001.  While the Company’s E-Business Solutions Area also recorded a decline of 7% in revenue for the full year 2002, this segment was able to record a 25% increase in revenue to $736,000, comparing the fourth quarter of 2002 to the fourth quarter of 2001.  The Company’s Interactive Media Solutions Area also recorded a decline in revenue for both the full year and the fourth quarter of 2002.  The revenue level for both the quarter and full year periods in 2002 were affected by a number of factors.  The Company introduced a new generation interactive television solution to the market in the second half of 2002 that reduced the price of the implementations to the Company’s clients.  Also affecting revenue in these periods was the delay until 2003 of an implementation that was contractually scheduled to take place in the fourth quarter of 2002, which left only six interactive television implementations in the full year 2002, compared to seven similar implementations in 2001.  The Company also completed a large interactive television software development project in 2001, while no similar sized interactive development project was recorded during 2002.

An analysis of gross margin for the full year and the fourth quarter illustrates the continued progression of the Company.  The change in the mix of revenue, with the lower margin Outsourced Services making up a smaller portion of consolidated revenue, allowed the Company to boost it gross margin percent.  This improvement in gross margin percent allowed the Company to record a 23% decline in gross margin dollars for the full year 2002, as compared to the full year 2001, on a 26% revenue decline between the same periods.

The Company continued to aggressively manage its cost of operations during 2002.  Excluding the $11 million impairment charge recorded by the Company in 2001, selling, general and administrative costs were reduced by $3.1 million, or 35%, comparing the full year 2002 to the full year 2001.  The decline included a $1.1 million reduction in depreciation and amortization and a $2.0 million reduction in other selling, general and administrative costs.  The Company also recorded a tax benefit of $272,000 in 2002 related to net operating losses available for use in future periods.  The reduction in operating expenses, coupled with the recorded tax benefit, allowed the Company to record improved earnings per share for both the fourth quarter and full year 2002.

Business Outlook

The following statements are based on current expectations.  These statements are forward-looking, and actual results may differ materially.  See “Forward-Looking Statements” below.  The Company undertakes no obligation to update these statements.

The Company does not foresee a rebound in technology spending during the 2003 calendar year.  Due to the continued slump in overall technology spending, the Company expects revenue to remain relatively flat for the full year.  Due to the timing of implementations in the Company’s Interactive Media Solutions Area, the Company expects to record year-to-year growth in the first quarter of 2003 of approximately 12% to 18%, compared to the first quarter of 2002.  The Company estimates that revenue in the first quarter of this year will be in the range of $3.1 million to $3.3 million.  The Company anticipates that revenue for the full year 2003 will be in the range of $13.0 million to $13.3 million.

The Company estimates that gross margin percentages will be in the range of 47% to 49% in the first quarter and for the full year 2003.  The Company anticipates a net loss attributable to common shareholders in the range of break even to $200,000 ($0.00 to $0.02 per common share) in the first quarter of 2003.  The Company anticipates that the net loss attributable to common shareholders for the full year 2003 will be in the range of $200,000 to $450,000 ($0.03 to $0.06 per common share).

About Allin Corporation

          Allin Corporation is a leading provider of solutions-oriented application development and technology infrastructure consulting and systems integration services.  Allin specializes in interactive media and Microsoft-based technologies with operations centered on three solution areas:  Interactive Media, Technology Infrastructure and E-Business.  Allin leverages its experience in these areas to work with clients through a disciplined project delivery framework to ensure that solutions are delivered on time and on budget. The Company maintains offices in Pittsburgh, Pennsylvania, Ft. Lauderdale, Florida and San Jose and Walnut Creek, California.  Allin delivers these services through the trade names Allin Consulting and Allin Interactive.

          For additional information about Allin, visit the Company’s Internet site on the World Wide Web at <http://www.allin.com>.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to the safe harbors created thereby.  These forward-looking statements are based on current expectations and projections about future events and financial trends.  The words or phrases “believe”, “continued”, “expects”, “estimates”, “anticipates” and similar words or expressions are intended to identify forward-looking statements.  In addition, any statements that refer to expectations or other characterizations of future events or circumstances are forward-looking statements.  The forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward-looking statements, including, among other things, the Company’s limited operating history under its new marketing strategies, risks inherent in the development of new markets and products, the need for management of growth, limited capital and competitive market conditions. These are representative of factors which could affect the outcome of the forward-looking statements.  In addition, such statements could be affected by general industry and market conditions and growth rates, general domestic and international economic conditions and future incidents of terrorism or other events that may negatively impact the markets where the Company competes.  The Company undertakes no obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

CONTACT:        Dean C. Praskach                      Phone:           (412) 928-2022

                        Chief Financial Officer                 Telefax:         (412) 928-0225

                        Allin Corporation                        E-mail:           Dean.Praskach@allin.com

ALLIN CORPORATION & SUBSIDIARIES

SELECTED FINANCIAL DATA

(Dollars in thousands, except for per share data)

     The selected financial data for each of the periods ended December 31, 2002 and 2001, presented below, have been derived from the consolidated financial statements of the Company for 2002 and 2001.