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VANCOUVER, B.C., CANADA; February 8, 2001 -BUSINESS WIRE- Sierra Systems Group(TSE:SSG.) Grant Gisel, President and CEO, commented on the quarter's results, "As I indicated in our Annual Report, the IT Services Industry in 2000 was negatively impacted by Y2K fatigue and the dot-com collapse. However, by fiscal Q1, markets were rebuilding and heavy-duty work in the eWorld was underway. Sierra Systems saw substantial growth in sequential quarterly revenue and net profit. Key to this was our sales successes, which began improving in our fiscal 2000 Q3."

Major new contracts were signed both in Specialty Practices and as a result of local branch initiatives. Noteworthy Practice wins included the RCMP Canada-wide Integrated Police Records Management System, the Wisconsin Public Services Corporation Customer Information System, and the Capital Health Region Integration project in Victoria. Examples of other local branch successes included the Association of Trial Lawyers of America in Washington, DC, and the California School Information System in Sacramento, California. Press releases in December 2000 and January 2001 covered four of these mandates and are available on the Company's Web site for more detailed information.

The RCMP initiative is a five-year engagement with a planned budget of over one hundred million dollars. Sierra Systems is responsible for driving the Project Office and a variety of implementation tasks. Revenue to the Company, while not yet defined, is expected to be substantial.

These and other new projects indicate fiscal Q2 will see a continuing upward trend. Sequential quarterly revenue growth should be in the 8% to 10% range and a greater earnings improvement is anticipated. These represent a solid trend toward the 2001 goals set in the Company's Annual Report.

Amounts in tables are in thousands of Canadian dollars except earnings per share:

3 Months Ended December 31

Management's Discussion and Analysis of First Quarter Fiscal 2001 Results

First quarter revenue was 4% lower than the same period last year. This was a result of the reduction in market demand throughout fiscal 2000. Compensation costs were also lower by 4%, a result of a lower average headcount in the quarter. Gross margin declined marginally from 21% to20%, leading to a reduction in gross profit by 8%. General and administrative expenses increased 14% arising largely from increased rent costs. The Company posted net earnings of $0.6 million in the quarter compared to$1.3 million in the prior year.

On a sequential quarterly basis, revenue increased 11%, a result of a 9% increase in utilization. Compensation costs were flat, as average headcount remained level. This improved the ratio of compensation costs as a percentage of services revenue to70% from 78%. Other costs increased 9%, but the ratio of other costs as a percentage of services revenue remained level at 10%. Gross margin therefore increased to20% from 13%, leading to an increase of gross profit of 74%. General and Administrative costs declined 26%. Without the unusual bad debt charge in quarter four of fiscal 2000 of $1.6 million, these costs increased 4% as a result of increased rent costs. Amortization of capital assets declined 38%, a result of the Company's depreciation policy of taking a half year of depreciation in the year of acquisition. This gave rise to an increase in net earnings of $2.8 million, from a loss of $2.2 million.

About Sierra Systems
Sierra Systems Group Inc. (TSE - SSG) is a leading source for solutions to North America's top business and technology initiatives. Sierra Systems' core systems integration and management consulting excellence, built over 34 years, gives clients a solid foundation to draw from for their successful eWorld ventures. Sierra Systems' thought leadership is recognized across traditional and emerging industries including health, justice, government, financial services and insurance, utilities and telecommunications. Practical, reliable and innovative, Sierra Systems knows how to identify and deliver high-impact results for clients at any level.  For more information visit 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.

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