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Systems Xcellence Reports 85% increase
In Third Quarter Revenues 

MILTON, Ontario (January 19, 2000) -- 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 strong third quarter financial results.

Systems Xcellence Inc. is pleased to report an 85% increase in third quarter revenue. Revenue for the third quarter increased to 8.6 million, up from 4.6 million for the same quarter last year. For the nine months ending November 30, 1999, revenue totalled 19.6 million, compared to 12.4 million for the same nine-month period last year, representing a 57% increase.

The Company's revenue breaks down as follows:

While the gross profit margins appear to be down compared to the same period in the prior year, (54.4% for the third quarter, compared to 74.6% for the same quarter last year; and 64.8% year to date as compared to 71.6% for the same period last year). The reduction is as a result of management initiating value-added, but lower margin, sales of hardware with its core products and the addition of third party software to the corporation's product line. Sales of hardware and third party software accounted for $0.9 million and $1.6 million respectively. The Company's gross profit margins on its core products are 71.8% for the quarter and 72.5% on a year to date basis.

 The net income for the three months ending November 30, 1999 was $686,939, or $0.03 per share, up considerably from $ 18,985 or $0.00 per share for the same quarter last year. For the nine months ending November 30, 1999, the net income was $1,713,586 or $0.08 per share, a dramatic improvement over the same period last year where the net loss was ($1,025,978), or ($0.05) per share.

Quarterly Highlights:

• Blue Cross and Blue Shield of Texas contracts Systems Xcellence to upgrade their Claims Processing Network Gateway.

• Major HMO customer successfully "goes live" with SX's Decision Support solution.

• Systems Xcellence partners with ProVantage to market their Patient Data Warehouse & Decision Support System under the name HX-Eval/Health.

"The Company is very pleased with its third quarter results," states Gordon Glenn, President & CEO. " Such strong increases in revenue, net income and earnings per share, further strengthen and position us to meet our financial objectives set forth at the beginning of the fiscal year, namely growing revenues to $25 million and increasing profitability to a level of $0.10 per share. We are currently sitting with a contracted order backlog of $19.0 million, $6.0 million of which we expect to recognize as revenue in the last quarter of the year. Also of significant importance this quarter is the fact that we generated a positive cash flow from operations of $1.8 million for the quarter as compared to a negative cash flow of ($0.4) million for the same period last year. On a year to date basis, we have generated a positive cash flow of $1.9 million, a substantial improvement over the same period in the prior year, in which cash flows generated from operations were negative ($2.9) million. We are confident that we will meet our objectives for this fiscal year and look forward to beginning the next fiscal year strategically positioned to expand our presence in the global healthcare arena."

Systems Xcellence is headquartered in Milton, Ontario, and provides advanced online transaction processing solutions for the healthcare benefits management industry. The Company combines robust software products, business expertise and services to deliver superior solutions to the ever-changing managed care sector. The Company's shares are traded on the Toronto Stock Exchange under the symbol SXC.