SEDONA Corporation Announces 2002 Second Quarter Results; Company Achieves Record Bookings, Revenues and Gross Profits Since Becoming a CRM Software Provider

Business Wire, July 30, 2002

Business Editors/Hi-Tech Writers

KING OF PRUSSIA, Pa.--(BUSINESS WIRE)--July 30, 2002

SEDONA(R) Corporation (NASDAQ:SDNA) (www.sedonacorp.com), the leading provider of Internet-based Customer Relationship Management (CRM) solutions for small and mid-sized financial services companies, today announced unaudited results from its second quarter ended June 30, 2002.

Revenues for the second quarter of 2002 were $770,000, compared to $753,000 reported in same quarter of 2001. These revenues represent the highest quarterly achievement for SEDONA since its transition to a CRM software provider. The loss reported for the quarter was $1,108,000 or (.02) per share, a 52% decrease when compared with a loss of $2,331,000 or (.06) per share reported a year earlier.

Bookings were also at a record level of $858,000 in the second quarter.

Revenues for the six months ending June 30, 2002 were $1,493,000 up 25% from the same period a year ago and 55% above revenues in the last half of 2001. The loss for the first half of 2002 was $2,910,000 a 54% reduction from the same period a year ago.

Bill Williams, SEDONA's CFO, commented, "This Company has come through a most difficult time for emerging technology companies, and is well on its way to positive cash flow and profitability as the multiple licensee relationships now begin to move into the sell through stage. Second quarter revenues showed positive momentum, and, in combination with our cost cutting, trimmed losses by 52% versus a year ago while bringing our operational cash burn rate close to breakeven and 69% lower than in the second quarter a year ago."

Mr. Williams commented further that, "The Company reported an increasing gross profit for the third consecutive quarter, as well as ending the quarter with an increased cash position and reduced accounts payables when compared with the first quarter 2002. These solid fiscal improvements, when combined with existing agreements entering the sales cycle and the real potential of additional agreements, forecasts continuing progress in all our financial metrics for the remainder of 2002 and into 2003."

President and CEO Marco Emrich commented, "As reported at our Annual Meeting in late June, SEDONA sees its indirect business model functioning ahead of schedule, and is now anticipating ending 2002 on a very positive note. Thanks to the multiple licensee agreements that were signed during the 1st and 2nd quarters of this year, we continue the ongoing work with those partners to capitalize on the strength of their brands, existing customer bases, and their sales and marketing resources. This allows SEDONA to realize greater revenues at lower sales costs than would be possible under a direct sales model."

Emrich continued, "We continue to be approached by additional potential technology licensees and reseller organizations, in and outside of financial services, that recognize that Intarsia can help them in meeting their customers' urgent needs."

Mr. Emrich then added, "The fact that some of the higher-end, horizontal CRM providers are encountering market resistance appears to be working to SEDONA's benefit. Since Intarsia is a low cost, full-featured CRM solution, customers, licensees, and potential licensees see SEDONA as the leading company in the market that can deliver a comprehensive yet affordable CRM system that meets both the market's technical and business requirements. Additionally, with our multiple technology license agreements, in the near future our CRM technology will be offered by partners as part of an entire enterprise-wide technology package to institutions, creating seamless integration between applications, thus increasing productivity and reducing costs. Today we see the 24,000 small and mid-sized financial services institutions in the US as a far more penetrable marketspace than might have been open to us in perhaps even more affluent times."

About SEDONA(R) Corporation

SEDONA(R) Corporation (Nasdaq:SDNA) is the leading provider of Customer Relationship Management (CRM) solutions for small and mid-sized financial services companies.

SEDONA's Web-based software, Intarsia(TM), employs leading-edge CRM technology that enables financial institutions to create a 360-degree view of customers and their interactions by consolidating customer information across departments, products lines, and channels.

Organizations can capitalize on information captured during each customer interaction to effectively cross-sell and up-sell products and services, resulting in maximized profitability through increased customer retention. Through a network of highly respected channel and technology partners, SEDONA provides the most comprehensive CRM offering in the financial services market.

SEDONA has been chosen by such market leaders as Fiserv, Inc., Financial Services, Inc. (FSI), Open Solutions, Inc. (OSI) and Sanchez Computer Associates, Inc., and is an Advanced Level Business Partner of IBM Corporation. For additional information, visit the SEDONA Web site at www.sedonacorp.com or call 1-800-815-3307.