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Systems Xcellence Reports Record
Second Quarter Results 

MILTON, Ontario (October 21, 1999) -- Systems Xcellence Inc. (TSE: SXC), a leading supplier of a unique patient-centric electronic transaction processing software for the healthcare information technology industry, today reported record second quarter financial results.

Systems Xcellence Inc. is pleased to report a 51% increase in second quarter revenue. Revenue for the second quarter increased to 5.6 million, up from 3.7 million for the same quarter last year. For the six months ending August 31, 1999, revenue totalled 11.0 million, compared to 7.8 million for the same six-month period last year, representing a 41% increase.

The Company's revenue breaks down as follows:

Three Months ended August 31, 1999

Three Months ended August 31, 1998

Six Months ended August 31, 1999

Six Months
ended
August 31, 1998

Software Licenses

$ 3,468,421

$ 1,875,406

$ 6,726,611

$ 4,223,631

Services

$ 1,629,871

$ 1,465,737

$ 3,106,567

$ 2,631,301

Maintenance

$ 519,018

$ 378,252

$ 1,164,383

$ 958,972

Total Revenue

$ 5,617,310

$ 3,719,395

$ 10,997,561

$ 7,813,904

The Company continues to show an improvement in gross profit margins. Our second quarter gross profit margins were 71% for the three month period ending August 31, 1999, compared to 67% for the same quarter last year. For the six-month period ending August 31, 1999, gross profit margin was 73%, up from 70% from the same period last year.

The net income for the three months ending August 31, 1999 was $409,278, or $0.02 per share, up considerably from a net loss of ($ 1,079,584) or ($0.05) per share for the same quarter last year. For the six months ending August 31, 1999, the net income was $1,026,647 or $0.05 per share, a dramatic improvement over the same period last year where the net loss was ($1,044,963), or ($0.05) per share.

Quarterly Highlights:

  • The Systems Xcellence Board of Directors was strengthened with the addition of four new members, all of whom have significant healthcare experience in both the US and Canadian markets.

  • Integrated Pharmaceutical Services, Inc. awards SX a multi-million dollar contract.

  • FFI Rx Managed Care Inc. is added to the SX blue chip customer list with the signing of a multi-million dollar contract.

  • Blue Cross and Blue Shield of South Carolina becomes the third Blue Cross and Blue Shield organization to become an SX customer with the signing of a multi-million dollar contract.

"The Company is pleased with its quarterly results," states Gordon Glenn, President & CEO. "Strong increases in revenue, coupled with steady gross profit margin increases position SX to meet the growth targets set forth at the beginning of the fiscal year, specifically achieving 30 percent growth in revenue, as well as increasing profitability to a level of $0.10 per share. We are currently sitting with a record contracted order backlog of $22.3 million, $11.2 million of which we are expecting to recognize as revenue in the balance of the fiscal year. It is also important to note that the Corporation has generated a positive cash flow from operations this quarter, and on a year to date basis. SX has reason to be confident in our anticipated success for the last half of the year and beyond. Already accepted in the marketplace as a leader in the Pharmacy Benefit Management (PBM) arena, we are currently positioned to not only expand vertically into other healthcare markets, but to also increase our presence in the growing US healthcare market as well as internationally."

Systems Xcellence, headquartered in Milton, Ontario, is a leading supplier of patient-centric electronic transaction processing software for the healthcare information technology industry. Systems Xcellence combines robust software products, business expertise, and services to deliver superior solutions to the demanding managed care sector. The Company's shares are traded on the Toronto Stock Exchange under the symbol SXC.