Sierra Systems Q3 Forecast Update.

Business Editors

Sierra (TSX:SSG.TO) Today, we are providing the following updated guidance to reflect our current business indicators and expectations. We expect services revenue for Q3 will be in a range of $33 million to $33.6 million. This is 2% to 3.5% below our previous guidance. We anticipate organic operating costs to be consistent with Q2. Incremental operating costs from the acquisition of INSI Strategic Technologies Inc., incurred as of June 1, 2002, will be consistent with previous guidance.

A significant variance in earnings per share will arise from the dramatic strengthening in the Canadian dollar versus the U.S. dollar during the quarter. We are projecting a foreign exchange loss of $0.7 million. This will affect earnings per share by $0.07. Our current projection for the earnings per share in Q3 (both basic and fully diluted) is for a loss of $0.04 to breakeven. Inherent in this guidance is risk associated with estimates to completion on project deliveries. Fiscal Q3 results will be released August 1, 2002.

About Sierra Systems 

Sierra Systems Group Inc. (TSX:SSG) is one of North America's original business consulting and technology services organizations. For over 35 years, the Company has cultivated lasting associations with clients by integrating technical experience with industry knowledge for innovative, sustainable results. Sierra Systems has built industry-leading practices in health, justice, electronic government, enterprise solutions, financial services and insurance, utilities and telecommunications, and established regional market expertise in its 14 strategic locations. Reach Sierra Systems at www.SierraSystems.com.

The statements that are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties. Sierra Systems' actual results could differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, technological shifts, employee retention, fixed price contract delivery, competition, general economic conditions, and other risks detailed in the Company's filings with Canadian securities regulatory authorities.