SEDONA Corporation Announces 48% Increase in Fourth Quarter Combined Revenues and Backlog Over Third Quarter; Annual Revenues in 2000 Advance 600% Over 1999 Levels.

Business Editors

KING OF PRUSSIA, Pa.--(BUSINESS WIRE)--Feb. 6, 2001

SEDONA(R) Corporation (NASDAQ:SDNA) (www.sedonacorp.com), a leading provider of Customer Relationship Management (CRM) software for financial services institutions, today reported preliminary bookings, backlog and revenue results for the fourth quarter and for the year ended December 31, 2000.

SEDONA's flagship product, Intarsia(TM), is a comprehensive CRM solution that assists small- and mid-sized financial services institutions in obtaining more qualified and profitable customers as well as in retaining and optimizing their relationships with current customers.

CEO and President Marco Emrich commented, "We are very pleased with SEDONA's performance in the first year after the realignment of our business into the CRM marketplace. In February of last year, we made our first acquisition followed by a strategic equity investment that provided SEDONA with the necessary technologies which enabled us to deliver, in the second quarter, the first version of Intarsia, a comprehensive Internet-based CRM application solution. By the third quarter we had beta tested and released the product to our newly hired sales force that was able to quickly secure a number of direct sales deals with community banks and credit unions in the United States and Canada."

Mr. Emrich continued, "Market penetration and acceptance of Intarsia V2, in only its first quarter of general availability, was most impressive. And, to add to this immediate success, we were selected by IBM as their strategic small and mid-market financial services CRM offering. IBM is now marketing and selling Intarsia to their customers, prospects, and partners. We are now poised to leverage both the pipeline developed last year by our sales force and the increasing number of opportunities generated from the IBM channel."

Highlights from the fourth quarter:

-- IBM selected SEDONA's Intarsia to sell and market to community financial
services clients through its Midmarket Banking, Finance, and Securities Group
(BFS)

-- SEDONA held its first annual Customer Conference in San Diego bringing
together SEDONA customers, SEDONA executives, and strategic partners including
IBM, Acxiom, E.piphany, Profit Resources, Sigma Analytics, and DataMentors.

-- SEDONA announced a new partnership with DataMentors to provide
state-of-the-art "householding" capabilities to Intarsia.

-- New headquarter offices were opened in King of Prussia, PA to accommodate
rapid company growth.

-- Acxiom selected Intarsia's Visual Profiling technology to use in its
delivery of marketing services to its customers.

-- BankZIP.com selected Intarsia as their CRM offering within their ASP
portfolio for community banks.

-- Jim Henley, a financial services veteran and long-time software manager, was
named new VP of Professional Services.

Intarsia Update:

Several new capabilities were added to Intarsia in the fourth quarter including:

-- Intarsia CRM solution now available on the IBM eServer

(AS/400) platform

-- The addition of campaign management working with E.piphany and

their E.5 system

-- The addition of Lead Factory for lead tracking, contact

management and referral tracking

-- Conversion of Intarsia code base to Java to enable

unparalleled extensibility and true Internet functionality

-- New front-end report writer added, making it easier to use and

to install

-- Advanced profitability management capabilities developed to do

more advanced profitability analysis of products, customers,

households, and operations

Fourth Quarter and Year 2000 Bookings and Revenue Preliminary Result

SEDONA reported record quarterly (unaudited) bookings (contracts signed) of $1,415,000 for the fourth quarter ended December 31, 2000, up 30% from the prior quarter's level of $1,093,000. Bookings for the year totaled $4,415,000. The Company further reported that it ended the fourth quarter with an unaudited sales backlog of $2,763,000 and recognized revenues of $420,000 for the three months ended December 31, 2000, compared to revenues of $22,000 for the same period a year ago.

The $2,763,000 sales backlog (unaudited) at the end of the fourth quarter included $1,943,000 in contract backlog and $820,000 in deferred revenue. Approximately 60% of this backlog is expected to be converted to revenues in 2001.

The Company reported unaudited recognized revenues of $1,710,000 for the year ended December 31, 2000, an increase of 600% over revenues of $244,000 for the same period a year ago.

The financial data above is preliminary and subject to audit and will be released in final form with all other financial information at the completion of the audit process.

Outlook for 2001:

With its first year of realignment under its belt and a well-defined sales distribution strategy with IBM, SEDONA is ready to capitalize on the growing market of small and mid-sized financial services companies ready to acquire a CRM solution.

Mr. Emrich noted, "As the market projections for CRM remain extremely positive with projected expenditures of $14.2 billion in 2001 and compound annual growth rate of over 30% in the 2000 to 2003 period, and with over 22 thousand small to mid-sized financial companies in SEDONA's target market, we are positioned to capitalize on this opportunity as the premier provider of CRM application solutions within this market space. Working with our partners such as IBM, we have the strength and ability to develop the distribution channels necessary to grow SEDONA quickly and profitably."

The Company enters its first full year with Intarsia V2 anticipating strong 2001 sales bookings, with an initial outlook of over 3 times 2000 bookings. Revenues for 2001 are estimated to grow over 400% versus 2000 revenues. In addition, in only the second year in the CRM industry, the Company anticipates achieving breakeven operations by the end of 2001.

In order to comply with the requirements of the SEC's recently adopted Regulation FD which governs corporate disclosure, the Company will, when appropriate, include an Outlook section in its quarterly earnings releases intended to articulate its guidance with respect to future operating results and the factors that drive those results. The Company will keep its earnings releases, including the Outlook section, publicly available on its website (sedonacorp.com) for a period of six months.

About SEDONA Corporation...

SEDONA(R) Corporation (NASDAQ: SDNA) is a leading provider of Internet-based Customer Relationship Management (CRM) solutions for small and mid-sized financial services companies. SEDONA offers Intarsia(TM), the company's flagship software product, as an Application Service Provider (ASP) solution or as a customer hosted system providing a very affordable, quick and easy system implementation. In addition, SEDONA provides strategic business and marketing services that allow SEDONA clients to optimize their use of the CRM system so that they can substantially increase their customer acquisition and retention, cross-selling opportunities and overall operational profitability. SEDONA's partners such as IBM(R), Acxiom(R) and E.piphany(R), also utilize Intarsia technology to provide best-in-breed CRM capabilities. For additional information, visit the SEDONA Web site at www.sedonacorp.com or call 800/815-3307

Forward Looking Statements...

Statements made in this news release that relate to future plans, events or performances, such as those relating to customer adoption of Intarsia V2, the porting of Intarsia by IBM and future business and financial performance, are forward-looking statements within the meaning of the federal Private Securities Litigation Reform Act of 1995. Any statement containing words such as "believes," "anticipates," "plans" or "expects" and other statements which are not historical facts contained in this release are forward-looking, and these statements involve risks and uncertainties and are based on current expectations. These risks and uncertainties include market acceptance of our new and future products, growing competition and our ability to maintain and manage our growth. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements.

CONFERENCE CALL: SEDONA will hold a Teleconference at 10:00 AM. - EST on Tuesday, February 6, 2001 for interested investors, analysts, and portfolio managers. To participate in the Teleconference dial 888/604-5272 (Domestic) or 908/228-5002 (International) 10 minutes prior to the call and ask for the "SEDONA Q &A Conference." Marco Emrich, President and CEO of SEDONA will host the call and be available to answer questions.

REPLAY: For those unable to participate in the "live" teleconference, you will have two options to review the teleconference. First, a replay of the conference will be available after 4:00 PM EST by calling 888/789-0549 (Domestic) or 815/639-8925 (International). The replay code is 020601.

In addition, the Conference Call will be archived via webcast on the SEDONA website for 30 days thereafter.

SEDONA(R) is a registered trademark and Intarsia(TM) is a trademark of SEDONA Corporation. All other trade names are the property of their respective owners.

This press release and prior releases are available on the SEDONA Corporation Web site at www.sedonacorp.com.