<PAGE>
                                                     Exhibit 13.1

               SUNQUEST INFORMATION SYSTEMS, INC.
  Table of Contents for Financial Section of 2000 Annual Report



Management's Discussion and Analysis of Financial
   Condition and Results of Operations                 1

Report of Independent Auditors                        12

Consolidated Financial Statements and Notes           13

Selected Consolidated Financial Data                  33

<PAGE>

        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS


Forward-Looking Statements

     This report, and other reports and communications to
shareholders, contains forward-looking statements, including
statements which contain words such as "will," "expects,"
"believes," "plans," "anticipates" and words of similar impact.
Certain other factors affecting future performance, including but
not limited to dependence on laboratory information system
("LIS") products, competition in the marketplace, purchase and
installation decisions of customers, pricing decisions of
competitors, changes in regulatory requirements, product status
and development risks and uncertainties concerning the commercial
use of the Internet, could cause actual results to differ
materially from such forward-looking statements.  These and other
factors affecting future performance are detailed in Sunquest
Information Systems, Inc.'s (the "Company's") Securities and
Exchange Commission filings.  The Company undertakes no
obligation to publicly update or revise any forward-looking
statements.


Overview

     The Company was established in 1979 and became a public
company on June 10, 1996, when it closed its initial offering to
the public of Common Stock.  At December 31, 2000, the Company
had an installed customer base of more than 1,200 sites in the
United States, Canada, United Kingdom, Saudi Arabia, Ireland and
Denmark.  Total revenues are derived from the licensing of
software, the provision of value-added services, the sale of
related hardware and subscription fees.  To date, the majority of
the Company's revenues have been derived from the sale of its
LISs and related hardware, support and services.

     During 2000, the Company began software development
activities in Bangalore, India, through its wholly owned
subsidiary Sunquest Information Systems (India) Private Limited
("Sunquest India").  This subsidiary was formed to accelerate
time to market for the Company's products using highly qualified
personnel in a cost-effective manner.

Core Business Segment
---------------------

     In its Core Business segment, the Company designs, develops,
markets, installs and supports healthcare information systems for
large and mid-sized hospitals, clinics and other facilities,
including integrated delivery networks ("IDNs").  The clinical
applications and information systems offered by its Core Business
segment include laboratory, radiology, pharmacy, clinical data
management and clinical financial reporting.  Revenues from the
Company's Core Business segment are derived from the licensing of
software, the provision of value-added services and the sale of
related hardware.

                              1

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     Net income for the Company's Core Business segment was $19.4
million in 2000, $15.8 million in 1999 and $8.3 million in 1998.
Diluted net income per share was $1.24 in 2000, $1.01 in 1999 and
$.54 in 1998.  See Note 13 of Notes to Consolidated Financial
Statements.

     During the quarter ended June 30, 1998, the Company sold the
assets comprising its Managed Care Manager Payor ("MCM") software
product line to Monument Systems, Inc. ("Monument") for
approximately $1.1 million.  Monument assumed the existing
contracts and future support of customer installations.  The pre-
tax gain resulting from the sale, after associated write-offs,
was approximately $404,000.  The after-tax gain was approximately
$238,000, or $.02 per diluted share.

     During the quarter ended March 31, 1999, the Company sold
its Enterprise Master Person Index ("EMPI") product to New Era of
Networks, Inc. for net proceeds of approximately $750,000.  The
pre-tax gain resulting from the sale was approximately $681,000.
The after-tax gain was approximately $429,000, or $.03 per
diluted share.

     During the quarter ended December 31, 1999, the Company
charged operations $971,000 related to the reduction in carrying
value of pharmacy software development costs.  The carrying value
was reduced to recognize that future anticipated revenues would
not be sufficient to recover these costs.  The after-tax effect
was a reduction to net income of approximately $656,000, or $.04
per diluted share.  See Note 6 of Notes to Consolidated Financial
Statements.

e-Commerce Segment
------------------

     The Company's e-Commerce segment currently provides Internet-
based application service provider ("ASP") products targeted at
commercial laboratories and hospitals with less than 200 beds.
During 2000, through e-Suite, Inc. ("e-Suite"), a wholly owned
subsidiary, the Company expanded the distribution of products via
this Internet-delivered ASP model.  At December 31, 2000, the
Company had three ASP products, e-Financial, e-Reference Lab and
e-CEM ("Clinical Event Manager") in general release and live at
four sites.  In addition, a fourth ASP product, e-Hospital Lab,
is in Beta testing.

     Net loss for the Company's e-Commerce segment was $6.1
million in 2000 and the diluted net loss per share was $.39.
Prior to 2000, results were 100% attributable to the Company's
Core Business segment.  See Note 13 of Notes to Consolidated
Financial Statements.

     In August 2000, the Company announced the formation of a new
business, Diagnostix.com, Inc. ("Diagnostix.com"), a wholly owned
subsidiary.  Diagnostix.com is a business-to-business ("B2B")
portal currently in development with three client alpha
contracts.  Diagnostix.com plans phased development of Web-based
products designed to streamline communication between the many
constituents of health care - IDNs, laboratories, pharmacies,
physicians and patients.  Products offered by Diagnostix.com are
currently in the development and testing phase, and no revenues
are anticipated until the second half of 2001.

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     Revenues from the ASP products currently included in the e-
Commerce segment are derived from monthly subscription fees and
related installation services.  Expenses included in the e-
Commerce segment relate to the design, development, marketing,
installation and support of both the existing ASP products and
the products under development, which include the Web enabling of
some of the Core Business segment's products, as well as the
development of Diagnostix.com's Web-based products.


General

     Net income for 2000, 1999 and 1998 was $13.4 million, $15.8
million and $8.3 million, respectively.  Diluted net income per
share was $.85 in 2000, $1.01 in 1999 and $.54 in 1998.  The
effect of the previously described charge to operations and gains
on sales of assets, and a change in tax law, discussed below, on
diluted net income per share follows:

                                       Year Ended December 31,
                                    ----------------------------
                                      2000      1999      1998
                                    --------  --------  --------
Diluted net income per share
 excluding gain on sale of assets,
 charge to operations
 and change in tax law                  $.85      $.97      $.52
Gain on sale of assets, net of tax         -       .03       .02
Change in tax law                          -       .06         -
Capitalized software development
 cost adjustment, net of tax               -      (.04)        -
                                        ----     -----      ----
                                        $.85     $1.01      $.54
                                        ====     =====      ====

     Revenues from system sales include revenues from software
licenses, related hardware, relicensed software and resold
software.  Revenues from software licenses are generated from
contracts that grant the right to use the Company's software
products.  Hardware revenues are generated from sales of third-
party manufactured hardware which is typically sold in
conjunction with the Company's software.  Revenues from
relicensed software and resold software are generated from the
Company's licensing and sale of third-party software.  Support
and service revenues include revenues from installation, training
and documentation related to software license revenues,
consulting revenues, custom-programming revenues, revenues
associated with maintenance and support services and revenues
associated with subscription fees related to the Company's ASP
products.

     The sales cycle for all of the Company's Core Business
products is typically nine to 12 months from initial contact to
contract execution.  Depending upon the combination of products
purchased and the client's installation schedule, typical
installation schedules for the Company's Core Business products
are eight to 12 months for LISs, seven to ten months for
commercial and medical reference laboratory systems, and five to
ten months for other clinical products.  The sales cycle for the
Company's ASP products is typically two to four months, and an
installation typically takes from three to five months.  Revenues
from the software and related installation

                               3

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portions of system sales are recognized on the percentage-of-completion
method and are determined based upon actual hours incurred related to
total estimated installation hours in accordance with Statement of
Position ("SOP") 97-2, "Software Revenue Recognition," and SOP 81-
1, "Accounting for Performance of Construction-Type and Certain
Production-Type Contracts," as amended.  Anticipated losses are
recorded in the earliest period in which such losses become
evident.  Revenues from the hardware portion of system sales are
recognized upon shipment.  Maintenance and support services are
provided under multi-year renewable agreements with revenues
recognized ratably over the term of the agreement.  Fees for
other services are recognized as the work is performed or on a
percentage-of-completion basis.  Subscription fees are provided
under renewable agreements with revenues recognized ratably over
the term of the agreement.

     At December 31, 2000, the Company had a total contract
backlog of $121.3 million, which consisted of $49.4 million of
system sales and services and $71.9 million of support and
subscription fees.  At December 31, 1999, total contract backlog
was $124.6 million, which consisted of $55.9 million of system
sales and services and $68.7 million of support.  System sales
and services backlog consists of the unearned amounts of signed
contracts which have not yet been recognized as revenues.
Support backlog consists primarily of contracted software support
for a period of 12 months.  Subscription fee backlog consists
primarily of contracted subscription fees related to the
Company's ASP products for a period of 12 months.  The Company is
unable to predict accurately the amount of backlog it expects to
fill in any particular period, since it adjusts the timing of
installations to accommodate clients' needs and since
installations typically require eight to 12 months to complete.

     The sales signings delay that began during the third quarter
of 1999 continued throughout 2000.  The Company believes that the
continuation of this delay during 2000 was the result of
carryover issues related to the Year 2000, the Balanced Budget
Amendment of 1997, the potential costs associated with the Health
Insurance Portability and Accountability Act of 1996 ("HIPAA")
and the erosion of customers' investment portfolios due to the
equity market's decline in 2000.  Total sales signings for 2000
were 25.2% below 1999 and estimated gross profit on sales
signings was 26.3% below 1999.  Total sales signings and
estimated gross profit on sales for 1999 were 13.6% and 7.2%,
respectively, below 1998. Based on the existing growth in
requests for proposals to provide software and services to
prospective customers, management believes that sales signings
will accelerate during 2001.  If sales signings do not
accelerate, as anticipated, the Company's financial condition or
results of operations could be adversely affected.

     Capitalized software development costs are stated at the
lower of net amortized cost or net realizable value.  The Company
capitalizes software development costs incurred from the point of
technological feasibility until the product is ready for general
release to the public. Amortization of capitalized software costs
begins when the related product is available for general release
to customers and is provided for each product based on the
greater of the relationship of current year revenues of the
product to anticipated total revenues or the straight-line
amortization of such costs over a five-year period.

                              4

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Results of Operations
---------------------

     The following table sets forth, for the periods indicated,
certain items from the Company's consolidated statements of
income expressed as a percentage of total revenues.

                                   Year Ended December 31,
                                 ----------------------------
                                   2000      1999      1998
                                 --------  --------  --------
Revenues:
  System sales                     38.0 %     40.7 %    50.1 %
  Support and service              62.0       59.3      49.9
                                  -----      -----     -----
    Total revenues                100.0      100.0     100.0
                                  -----      -----     -----
Operating expenses:
  Cost of system sales             17.8       16.7      22.7
  Client services                  24.9       27.9      27.3
  Research and development         17.3       12.2      12.7
  Sales and marketing              13.5       13.1      14.5
  General and administrative       12.2       11.9      11.7
  Gain on sale of assets              -       (0.5)     (0.3)
  Capitalized software
    development cost adjustment       -        0.7         -
                                  -----      -----     -----
    Total operating expenses       85.7       82.0      88.6
                                  -----      -----     -----
Operating income                   14.3       18.0      11.4
Other income (expense):
  Interest income                   2.7        1.3       1.1
  Interest expense                 (0.9)      (0.9)     (0.9)
  Other                             0.6       (0.6)        -
                                  -----      -----     -----
Income before income taxes         16.7       17.8      11.6
Income tax provision                5.6        5.8       4.7
                                  -----      -----     -----
Net income                         11.1 %     12.0 %     6.9 %
                                  =====      =====     =====


Comparison of Years Ended December 31, 2000 and December 31, 1999

     Revenues.  The Company's total revenues were $120.6 million
in 2000 compared to $131.7 million in 1999, a decrease of $11.1
million, or 8.4%.  Revenues from system sales were $45.9 million
in 2000 compared to $53.7 million in 1999, a decrease of $7.8
million, or 14.5%.  This decrease was attributable to a decrease
in installations of software and hardware system deliveries.
Revenues from support and service were $74.8 million in 2000
compared to $78.0 million in 1999, a decrease of $3.3 million, or
4.2%.  This decrease was primarily attributable to decreased
service fees in 2000 compared to 1999 related to Year 2000
installations of the Company's commercial laboratory products.
This decrease was partially offset by a 10.2% growth in support
services to the Company's installed customer base.

     Cost of System Sales.  Cost of system sales includes the
costs of computer hardware, relicensed software and resold
software purchased from third parties, hardware maintenance
contracts and amortization of previously capitalized software
development costs.  Cost of system sales was $21.4 million in
2000 compared to $21.9 million in 1999, a decrease of $498,000,
or 2.3%.  As a percentage of total revenues, cost of system sales
was 17.8% in 2000 compared to 16.7% in 1999. The dollar decrease
was primarily attributable to a decrease in hardware system

                              5

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deliveries partially offset by increased support and maintenance
costs.  This increase in support and maintenance costs is
primarily attributable to maintenance agreements for additional
sites.  Amortization of previously capitalized software
development costs was $3.6 million in both 2000 and 1999.

     Client Services.  Client services expenses include salaries
and expenses of product installation, support and consulting.
Client services expenses were $30.1 million in 2000 compared to
$36.7 million in 1999, a decrease of $6.6 million, or 18.0%.  As
a percentage of total revenues, client services expenses were
24.9% in 2000 compared to 27.9% in 1999. The dollar decrease in
client services expenses was primarily attributable to reductions
in staff and outside consultants which were dedicated to Year
2000 installations in 1999.

     Research and Development.  Research and development expenses
include salaries and expenses related to development and
documentation of software systems reduced by capitalized software
development costs.  Research and development expenses were $20.9
million in 2000 compared to $16.1 million in 1999, an increase of
$4.7 million, or 29.3%.  As a percentage of total revenues,
research and development expenses were 17.3% in 2000 compared to
12.2% in 1999. The dollar increase in research and development
expenses was primarily attributable to increased efforts related
to the development, enhancement and documentation of the
Company's e-Commerce and clinical laboratory systems partially
offset by decreased expenses related to the Company's commercial
laboratory and non-clinical laboratory systems.  The Company
capitalized $4.0 million of its software development costs in
2000 compared to $3.0 million in 1999, an increase of $1.1
million, or 36.0%.  The increase in capitalized software
development costs was primarily attributable to capitalization of
the Company's e-Commerce products and increased capitalization of
the clinical laboratory, pharmacy and radiology systems.  The
increases were partially offset by decreased capitalization of
the commercial laboratory systems.

     Sales and Marketing.  Sales and marketing expenses include
salaries, commissions, advertising, trade show costs, and user
group costs related to the sale and marketing of the Company's
systems.  Sales and marketing expenses were $16.3 million in 2000
compared to $17.3 million in 1999, a decrease of $1.0 million, or
5.8%.  As a percentage of total revenues, sales and marketing
expenses were 13.5% in 2000 compared to 13.1% in 1999.  The
dollar decrease was primarily attributable to decreases in
commissions resulting from a decline of 25.2% in sales bookings
in 2000 compared to 1999 and to other sales staff incentives.
The decreases were partially offset by expenses related to the
Company's e-Commerce initiatives incurred through its wholly
owned subsidiaries, e-Suite and Diagnostix.com, which were formed
during 2000.

     General and Administrative. General and administrative
expenses include salaries and expenses for the corporate
administration, finance, legal, human resources, corporate
education, facilities administration, internal systems and
internal purchasing departments as well as depreciation, profit
sharing, variable executive compensation, insurance and capital
lease amortization net of rental credit.  General and
administrative expenses were $14.7 million in 2000 compared to
$15.6 million in 1999, a decrease of $915,000, or 5.9%.  As a
percentage of total revenues, general and administrative expenses
were 12.2% in 2000 compared to 11.9% in

                              6

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1999.  The dollar decrease was primarily attributable to decreases in
variable compensation relating to employee incentives, taxes other than
income and amortization of intangible assets.  Employee incentive
goals required for variable compensation were not achieved in the
current year but were in 1999.  The decreases were partially
offset by increases in salaries and benefits related to the
Company's e-Commerce initiatives, legal fees and expenses related
to its wholly owned subsidiary, Sunquest India.

     Transition Costs.  For the year ended December 31, 2000, the
Company paid previously accrued transition costs established at
the time of the acquisition of Antrim Corporation ("Antrim") of
$219,000, as compared to $1.4 million paid in 1999.  These costs
were associated with replacing certain Antrim software products
with Sunquest products.  At December 31, 2000, approximately
$86,000 remains accrued for these costs which will cover the
remaining transition and be paid during the next operating
period.

     Income Taxes.  Income taxes were $6.7 million in 2000
compared to $7.6 million in 1999, a decrease of $896,000, or
11.8%.  This decrease was primarily attributable to lower taxable
income in 2000 compared to 1999 partially offset by a .9%
increase in the Company's effective tax rate.  The increase in
the effective tax rate is primarily attributable to a one-time
tax benefit recognized in 1999 associated with the recognition of
tax losses of Antrim.

     At December 31, 2000, the Company had an acquired net
operating loss carry forward for tax purposes of approximately
$1.9 million that was generated by Antrim.  This amount can be
carried forward and used to offset future taxable income.  This
loss carry forward is subject to limitations as to the amount and
timing of its use.  The Company anticipates that future taxable
income will be sufficient to realize the net operating loss carry
forward.  See Note 8 of Notes to Consolidated Financial
Statements.


Comparison of Years Ended December 31, 1999 and December 31, 1998

     Revenues.  The Company's total revenues were $131.7 million
in 1999 compared to $120.8 million in 1998, an increase of $10.9
million, or 9.0%.  Revenues from system sales were $53.7 million
in 1999 compared to $60.6 million in 1998, a decrease of $6.9
million, or 11.4%.  This decrease was attributable to decreases
in hardware and operating system deliveries partially offset by
increases in installations of software.  Revenues from support
and service were $78.0 million in 1999 compared to $60.2 million
in 1998, an increase of $17.8 million, or 29.6%.  This increase
was primarily attributable to increased installations, growth in
support services to the Company's installed customer base and
growth in other services including consulting.

     Over the last three years, the Company has been experiencing
a favorable trend in revenue mix.  As a percentage of total
revenues, software license fee and services revenues have been
increasing and hardware revenues, which have lower margins, have
been decreasing. Hardware revenues as a percentage of total
revenues were 14% in 1999 compared to 24% and 26% in 1998 and
1997, respectively.  The Company cannot determine with certainty
whether this trend in decreasing hardware revenues will continue
in future periods.

                              7

<PAGE>

     Cost of System Sales. Cost of system sales was $21.9 million
in 1999 compared to $27.4 million in 1998, a decrease of $5.5
million, or 20.0%.  As a percentage of total revenues, cost of
system sales was 16.7% in 1999 compared to 22.7% in 1998. The
dollar decrease was primarily attributable to decreases in
hardware and operating system deliveries partially offset by
increased hardware related costs.  Amortization of previously
capitalized software development costs was $3.6 million for 1999
compared to $3.4 million for 1998, an increase of $198,000, or
5.9%. The increase in amortization was primarily attributable to
increased amortization of the Company's reference laboratory
product.

     Client Services. Client services expenses were $36.7 million
in 1999 compared to $32.9 million in 1998, an increase of $3.8
million, or 11.5%.  As a percentage of total revenues, client
services expenses were 27.9% in 1999 compared to 27.3% in 1998.
The dollar increase in client services expenses was primarily
attributable to additional staff and outside consultants
dedicated to the support and installation of the Company's
systems and to providing consulting services to customers.

     Research and Development.  Research and development expenses
were $16.1 million in 1999 compared to $15.3 million in 1998, an
increase of $819,000, or 5.3%.  As a percentage of total
revenues, research and development expenses were 12.2% in 1999
compared to 12.7% in 1998. The dollar increase in research and
development expenses was primarily attributable to increased
efforts related to the development, enhancement and documentation
of the Company's clinical laboratory systems, legal and
professional fees associated with the United States Food and Drug
Administration registration of the Company's Blood Bank product
and increased efforts related to the development, enhancement and
documentation of the Company's e-Suite and CEM systems.  The
increases were partially offset by decreased expenses related to
non-laboratory products and the discontinuance of the MCM and
EMPI products.  The Company capitalized $3.0 million of its
software development costs in 1999 compared to $3.1 million in
1998, a decrease of $198,000, or 6.3%.  The decrease in
capitalized software development costs was primarily attributable
to decreased capitalization of the Company's reference laboratory
and pharmacy products.  The decreases were partially offset by
increased capitalization of the clinical laboratory systems.

     Sales and Marketing. Sales and marketing expenses were $17.3
million in 1999 compared to $17.6 million in 1998, a decrease of
$252,000, or 1.4%.  As a percentage of total revenues, sales and
marketing expenses were 13.1% in 1999 compared to 14.5% in 1998.
The dollar decrease was primarily attributable to decreased
commissions resulting from a decline of 13.6% in sales bookings
in 1999 partially offset by additional sales staff for the
Company's reference laboratory products and the European market
and increased advertising and marketing expense.

     General and Administrative. General and administrative
expenses were $15.6 million in 1999 compared to $14.2 million in
1998, an increase of $1.4 million, or 10.2%.  As a percentage of
total revenues, general and administrative expenses were 11.9% in
1999 compared to 11.7% in 1998.  The dollar increase was
primarily attributable to increased variable compensation
relating to employee incentives and additional employees and
related hiring expenses. Employee

                              8

<PAGE>

incentive goals required for variable compensation were not achieved in
the prior year.  The increases were partially offset by decreased
depreciation expense.

     Transition Costs.  For the year ended December 31, 1999, the
Company paid previously accrued transition costs established at
the time of the acquisition of Antrim of $1.4 million, as
compared to $1.5 million paid in 1998.  These costs were
primarily associated with replacing certain Antrim software
products with Sunquest products.

     Income Taxes.  Income taxes were $7.6 million in 1999
compared to $5.7 million in 1998, an increase of $1.9 million, or
32.8%.  This increase was primarily attributable to higher
taxable income in 1999 compared to 1998 partially offset by an
8.3% decrease in the Company's effective tax rate.  The decrease
in the effective tax rate was primarily attributable to a
decrease in the Company's valuation allowance and research and
development credits.  The decrease in valuation allowance was due
to a change in tax law that has mitigated certain limitations on
pre-acquisition net operating loss carry forwards.  Based on the
tax law change, management determined that it is more likely than
not that the pre-acquisition net operating loss obtained in
connection with the Antrim acquisition will be realized.
Therefore, the previously recorded valuation allowance of
$950,000 provided for Antrim's separate company net operating
loss was eliminated.  Recently issued accounting rules resulted
in this non-recurring reduction to the valuation allowance being
recognized as a credit to income taxes.


Liquidity and Capital Resources

     At December 31, 2000, the Company had cash, cash equivalents
and short-term investments of $70.4 million, which consisted of
cash of $8.5 million and short-term investments of $61.9 million.
This compares to cash, cash equivalents and short-term
investments of $46.9 million at December 31, 1999, an increase of
$23.6 million.  Cash provided by operating activities was $35.0
million, $19.8 million and $18.8 million in 2000, 1999 and 1998,
respectively.

     As of December 31, 2000, the Company had net trade
receivables of $35.4 million which consisted of $21.9 million in
net billed trade receivables and $13.5 million in unbilled trade
receivables.  See Note 4 of Notes to Consolidated Financial
Statements.  At December 31, 1999, the Company had net trade
receivables of $43.1 million which consisted of $31.0 million in
net billed trade receivables and $12.1 million in unbilled trade
receivables.  Net trade receivables have decreased by $7.7
million since December 31, 1999, with $9.1 million related to the
net billed trade receivables partially offset by an increase in
the unbilled portion of $1.4 million. The unbilled receivables
represent revenue that has been recognized in accordance with the
percentage-of-completion accounting method, but which has not yet
been billed to customers under contractual milestone billings.
Generally, the unbilled amounts will be billed and collected
within the following twelve months.  The Company maintains an
allowance for doubtful accounts that it believes is adequate to
cover potential credit losses.  The average collection period, a
twelve-month average, on net billed trade receivables was 73 days
at December 31, 2000 compared to 76 days at December 31, 1999.
The Company's intensified collection efforts

                              9

<PAGE>

have resulted in a seven-day decrease in the average collection period
since September 30, 2000.  Days sales outstanding ("DSO") was 99 at
December 31, 2000 compared to 107 at September 30, 2000 and 120
at December 31, 1999.  This represents the Company's lowest
reported DSO since its initial public offering in May of 1996.

     Cash used in investing activities was $34.6 million, $17.7
million and $34.7 million in 2000, 1999 and 1998, respectively.
During 2000, purchases of investments totaled $42.7 million,
proceeds from the sale of investments totaled $16.1 million and
proceeds from the maturity of investments totaled $1.9 million.
Purchases of property and equipment totaled $5.5 million and
consisted primarily of purchases of computers, computer-related
equipment, computer software, office furniture and equipment, and
leasehold improvements.  Capitalized software development costs
totaled $4.1 million. Costs related to acquisitions totaled
$254,000 and were primarily associated with previously accrued
sales tax payments and replacing certain Antrim software products
with Sunquest products.

     Cash used in financing activities was $902,000 in 2000.
Cash provided by financing activities was $706,000 in 1999. Cash
used in financing activities was $658,000 in 1998.  During 2000,
the Company made principal payments on capital leases of $1.1
million.  In addition, the Company issued 9,436 shares of the
Company's Common Stock for approximately $99,000 under the
Employee Stock Purchase Plan and 6,288 shares of Common Stock for
approximately $63,000 under the Stock Incentive Plan of 1996, as
amended.

     At December 31, 2000, working capital was $78.0 million, an
increase of $10.3 million from December 31, 1999.

     At December 31, 2000, the Company had a revolving line of
credit with a bank allowing the Company to borrow up to $10.0
million.  Any borrowings under the line of credit will bear
interest at the bank reference rate unless the Company elects a
fixed rate or certain variable rates contemplated by the
agreement.  All outstanding principal and interest under the line
of credit is due April 28, 2001 except for any amounts
outstanding under standby letters of credit which have a maximum
maturity of 365 days.  Borrowings under the line of credit are
secured by all of the Company's assets.  Approximately $610,000
of the line of credit is used to secure letters of credit and is
not available for immediate expenditure.  There were no
borrowings outstanding as of December 31, 2000.  See Note 7 of
Notes to Consolidated Financial Statements.

     The Company has no significant purchase commitments at this
time.  However, the Company continues to be actively involved in
identifying and evaluating potential acquisitions, which may
result in the future expenditure of funds.

     Management believes that existing cash, cash equivalents,
short-term investments, cash available under its revolving line
of credit and funds generated from operations will be sufficient
to meet operating requirements for at least the next twelve
months.

     To date, inflation has not had a material impact on the
Company's revenues or income, and the Company does not expect
inflation to have a material impact in the foreseeable future.

                             10

<PAGE>

New Accounting Standards

     In June 1998, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and for Hedging
Activities" ("SFAS No. 133").  SFAS No. 133 provides a
comprehensive and consistent standard for the recognition and
measurement of derivatives and hedging activities.  SFAS No. 133
is effective for years beginning after June 15, 2000.  Presently,
management does not believe that SFAS No. 133 will have a
material impact on the Company's financial statements.

     During the fourth quarter of 1999, the Securities and
Exchange Commission issued Staff Accounting Bulletin ("SAB No.
101"), "Revenue Recognition in Financial Statements."  The
adoption of SAB No. 101 did not have a material impact on the
Company's financial position and results of operations.

     On March 31, 2000, FASB issued Interpretation No. 44  ("FIN
44"), "Accounting for Certain Transactions Involving Stock
Compensation," which provides guidance on several implementation
issues related to Accounting Principles Board Opinion No. 25 and
is effective July 1, 2000.  FIN 44 clarifies the definition of
employee and the accounting for stock options that have been
repriced.  The Company adopted FIN 44 during the second quarter
of 2000.  The adoption of FIN 44 did not have a material impact
on the Company's financial position and results of operations.

                             11

<PAGE>

REPORT OF INDEPENDENT AUDITORS


To the Board of Directors and Shareholders
Sunquest Information Systems, Inc. and Subsidiaries

     We have audited the accompanying consolidated balance sheets
of Sunquest Information Systems, Inc. and subsidiaries as of
December 31, 2000 and 1999 and the related consolidated
statements of income and comprehensive income, shareholders'
equity, and cash flows for each of the three years in the period
ended December 31, 2000. These financial statements are the
responsibility of the Company's management.  Our responsibility
is to express an opinion on these financial statements based on
our audits.

     We conducted our audits in accordance with auditing
standards generally accepted in the United States.  Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement.  An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable
basis for our opinion.

     In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of Sunquest Information Systems, Inc. and
subsidiaries at December 31, 2000 and 1999 and the consolidated
results of their operations and their cash flows for each of the
three years in the period ended December 31, 2000 in conformity
with accounting principles generally accepted in the United
States.



                                             /s/ Ernst & Young LLP
Pittsburgh, Pennsylvania
February 2, 2001

                             12

<PAGE>

                    Sunquest Information Systems, Inc.
                        Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                        December 31,
                                                    --------------------
                                                      2000        1999
                                                    --------    --------
                                              (in thousands, except share data)
        <S>                                         <C>        <C>
                        ASSETS
        Current assets:
          Cash and cash equivalents                 $  8,523   $  9,660
          Short-term investments                      61,908     37,218
          Receivables, less allowance for
            doubtful accounts of $1,212 in
            2000 and $1,970 in 1999                   35,385     43,079
          Other receivables                              381        312
          Inventory                                    1,309        612
          Prepaid expenses and other                   1,573      1,469
          Deferred tax assets                          1,547      1,888
                                                    --------   --------
              Total current assets                   110,626     94,238

        Property and equipment, net of
          accumulated depreciation                    12,207     10,100
        Capital leases from related party,
          net of accumulated amortization              1,720      2,512
        Software development costs, net of
          accumulated amortization                    10,053      9,493
        Other receivables                                 29         31
        Deferred tax assets                            1,973        479
        Other assets                                     307        410
                                                    --------   --------
                  Total assets                      $136,915   $117,263
                                                    ========   ========

         LIABILITIES AND SHAREHOLDERS' EQUITY
        Current liabilities:
          Accounts payable                          $  6,909   $  2,485
          Obligations under capital leases
            from related party                         1,280      1,064
          Accrued compensation and related taxes       4,990      5,646
          Accrued expenses                             4,045      5,468
          Deferred revenue                            15,439     11,919
                                                    --------   --------
              Total current liabilities               32,663     26,582

        Obligations under capital leases from
          related party                                1,819      3,099
        Deferred income taxes                          3,922      1,959
        Commitments (Notes 9, 10)                          -          -
        Shareholders' equity:
          Preferred stock, 15,000,000 shares
            authorized, no shares issued                   -          -
          Common stock, no par value,
            35,000,000 shares authorized,
            15,562,924 and 15,547,200 shares
            issued and outstanding
            in 2000 and 1999, respectively            52,653     52,460
          Retained earnings                           46,863     33,490
          Accumulated other comprehensive loss        (1,005)      (327)
                                                    --------   --------
              Total shareholders' equity              98,511     85,623
                                                    --------   --------
                  Total liabilities and
                    shareholders' equity            $136,915   $117,263
                                                    ========   ========
</TABLE>


See accompanying notes.

                             13

<PAGE>

                    Sunquest Information Systems, Inc.
        Consolidated Statements of Income and Comprehensive Income

<TABLE>
<CAPTION>

                                       Year Ended December 31,
                                  ----------------------------------
                                     2000        1999        1998
                                  ----------  ----------  ----------
                                 (in thousands, except per share data)
<S>                                 <C>         <C>         <C>
Revenues:
  System sales                      $ 45,872    $ 53,656    $ 60,549
  Support and service                 74,761      78,049      60,226
                                    --------    --------    --------
    Total revenues                   120,633     131,705     120,775
                                    --------    --------    --------
Operating expenses:
  Cost of system sales                21,432      21,930      27,424
  Client services                     30,113      36,720      32,945
  Research and development            20,851      16,128      15,309
  Sales and marketing                 16,298      17,304      17,556
  General and administrative          14,725      15,640      14,196
  Gain on sale of assets                   -        (681)       (404)
  Capitalized software
    development cost adjustment            -         971           -
                                    --------    --------    --------
    Total operating expenses         103,419     108,012     107,026
                                    --------    --------    --------
Operating income                      17,214      23,693      13,749
Other income (expense):
  Interest income                      3,213       1,710       1,348
  Interest expense                    (1,083)     (1,211)     (1,090)
  Other                                  731        (796)          2
                                    --------    --------    --------
Income before income taxes            20,075      23,396      14,009
Income tax provision                   6,702       7,598       5,720
                                    --------    --------    --------
Net income                            13,373      15,798       8,289
Other comprehensive (loss)
  income, net of tax:
  Foreign currency translation
    adjustment                          (678)       (208)        (64)
  Unrealized (loss) gain on
    securities available-for-sale          -          (5)          5
                                    --------    --------    --------
Comprehensive income                $ 12,695    $ 15,585    $  8,230
                                    ========    ========    ========

Net income per common share:
  Basic                                 $.86       $1.02        $.54
                                        ====       =====        ====
  Diluted                               $.85       $1.01        $.54
                                        ====       =====        ====

Weighted-average number of common
  shares outstanding:
  Basic                               15,553      15,445      15,383
                                      ======      ======      ======
  Diluted                             15,665      15,609      15,404
                                      ======      ======      ======
</TABLE>

See accompanying notes.

                             14

<PAGE>

                       Sunquest Information Systems, Inc.
                 Consolidated Statements of Shareholders' Equity

<TABLE>
<CAPTION>
                                                                               Accumulated
                                                                                  Other          Total
                                                 Common Stock       Retained  Comprehensive  Shareholders'
                                              Shares      Amount    Earnings  (Loss) Income     Equity
                                            ----------  ----------  --------  -------------  -------------
                                                           (in thousands, except share data)
<S>                                         <C>            <C>       <C>            <C>            <C>
Balance at December 31, 1997                15,375,962     $50,474   $ 9,403        $   (55)       $59,822
  Issuance of common stock through
    Employee Stock Purchase Plan, net           18,498         142         -              -            142
  Foreign currency translation adjustment            -           -         -            (64)           (64)
  Net change in unrealized gain on
    securities available-for-sale                    -           -         -              5              5
  Net income                                         -           -     8,289              -          8,289
                                            ----------     -------   -------        -------        -------
Balance at December 31, 1998                15,394,460      50,616    17,692           (114)        68,194
  Issuance of common stock through
    Employee Stock Purchase Plan, net           10,652         129         -              -            129
  Issuance of common stock upon the
    exercise of nonqualified stock options     142,088       1,494         -              -          1,494
  Tax benefit related to exercise of
    nonqualified stock options                       -         221         -              -            221
  Foreign currency translation adjustment            -           -         -           (208)          (208)
  Net change in unrealized gain on
    securities available-for-sale                    -           -         -             (5)            (5)
  Net income                                         -           -    15,798              -         15,798
                                            ----------     -------   -------        -------        -------
Balance at December 31, 1999                15,547,200      52,460    33,490           (327)        85,623
  Issuance of common stock through
    Employee Stock Purchase Plan, net            9,436          99         -              -             99
  Issuance of common stock upon the
    exercise of nonqualified stock options       6,288          63         -              -             63
  Tax benefit related to exercise of
    nonqualified stock options                       -           8         -              -              8
  Compensation expense related to
    nonqualified stock options                       -          23         -              -             23
  Foreign currency translation adjustment            -           -         -           (678)          (678)
  Net income                                         -           -    13,373              -         13,373
                                            ----------     -------   -------        -------        -------
Balance at December 31, 2000                15,562,924     $52,653   $46,863        $(1,005)       $98,511
                                            ==========     =======   =======        =======        =======
</TABLE>


See accompanying notes.

                                                     15
<PAGE>

                             Sunquest Information Systems, Inc.
                           Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                             Year Ended December 31,
                                                        ----------------------------------
                                                           2000        1999        1998
                                                        ----------  ----------  ----------
                                                                  (in thousands)
<S>                                                      <C>         <C>         <C>
Cash flows from operating activities:
  Net income                                             $  13,373   $  15,798   $   8,289
  Adjustments to reconcile net income to
    net cash provided by operating activities:
    Depreciation and amortization                            7,886       8,273       8,108
    Employee stock compensation expense                         23           -           -
    Capitalized software development cost adjustment             -         971           -
    Bad debt expense                                           842       1,497         670
    Deferred revenue                                         3,520      (1,347)      1,811
    Deferred income taxes                                      810      (1,176)      1,830
    Tax benefit related to exercise of nonqualified
      stock options                                              8         221           -
    Gain on sale of assets                                       -        (681)       (404)
  Changes in operating assets and liabilities:
    Receivables                                              6,852      (4,274)     (4,831)
    Inventory                                                 (697)        (46)         27
    Prepaid expenses and other                                (104)       (242)       (118)
    Other assets                                               (64)         85         159
    Accounts payable                                         4,424      (1,236)        320
    Accrued compensation and related taxes                    (656)      1,047          76
    Other accrued expenses                                  (1,169)        914       2,896
                                                         ---------   ---------   ---------
        Net cash provided by operating activities           35,048      19,804      18,833
                                                         ---------   ---------   ---------
Cash flows from investing activities:
  Purchase of property and equipment                        (5,533)     (3,195)     (2,559)
  Costs related to acquisitions                               (254)     (1,362)     (1,894)
  Capitalized software development costs                    (4,128)     (3,950)     (4,148)
  Purchase of investments                                  (42,708)    (42,103)    (89,594)
  Proceeds from sale of investments                         16,118      29,996      62,319
  Proceeds from maturity of investments                      1,900       2,165           -
  Proceeds from sale of assets                                   -         750       1,130
                                                         ---------   ---------   ---------
        Net cash used in investing activities              (34,605)    (17,699)    (34,746)
                                                         ---------   ---------   ---------

Cash flows from financing activities:
  Principal payments on capitalized leases,
    primarily from related party                            (1,064)       (917)       (800)
  Net proceeds from issuance of stock                          162       1,623         142
                                                         ---------   ---------   ---------
        Net cash (used in) provided by
          financing activities                                (902)        706        (658)
                                                         ---------   ---------   ---------
Foreign currency translation adjustment                       (678)       (208)        (64)
                                                         ---------   ---------   ---------
        Net (decrease) increase in cash
          and cash equivalents                              (1,137)      2,603     (16,635)
Cash and cash equivalents at beginning of year               9,660       7,057      23,692
                                                         ---------   ---------   ---------
Cash and cash equivalents at end of year                 $   8,523   $   9,660   $   7,057
                                                         =========   =========   =========

Supplemental disclosure of cash flow information:
  Cash paid for income taxes                             $   6,070   $   8,108   $   2,550
                                                         =========   =========   =========
  Cash paid for interest                                 $       2   $       1   $      15
                                                         =========   =========   =========

Supplemental disclosure of non cash investing
  and financing activities:
  Disposal of property and equipment                     $   3,428   $   2,345   $   3,768
                                                         =========   =========   =========
  Capitalized software development cost adjustment       $       -   $   1,662   $       -
                                                         =========   =========   =========
</TABLE>

See accompanying notes.

                                             16

<PAGE>
               SUNQUEST INFORMATION SYSTEMS, INC.
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2000

1.  Significant Accounting Policies

     Nature of Business

     Sunquest Information Systems, Inc. ("the Company") designs,
develops, markets, installs and supports healthcare information
systems for large and mid-sized hospitals, clinics and other
healthcare facilities in the United States, Canada, United
Kingdom, Saudi Arabia, Ireland and Denmark.  Beginning in 2000,
the Company's e-Commerce segment began providing Internet-based
application service provider ("ASP") products targeted at
commercial laboratories and hospitals with less than 200 beds.
Total revenues are derived from the licensing of software, the
provision of value-added services, the sale of related hardware
and subscription fees associated with the Company's ASP products.
To date, the Company has derived the majority of its revenues
from sales of laboratory information systems ("LISs") and related
implementation and support services in the United States.  The
Company expects that it will continue to derive a significant
portion of its total revenues for the foreseeable future from
sales of LISs and related implementation and support services.

     Principles of Consolidation

     The consolidated financial statements include the accounts
of the Company, Sunquest Europa Limited, Sunquest Germany GmbH,
Antrim Corporation ("Antrim"), Sunquest Pharmacy Information
Systems, Inc., e-Suite, Inc. ("e-Suite"), Sunquest Information
Systems (India) Private Limited ("Sunquest India") and
Diagnostix.com, Inc. ("Diagnostix.com").  Sunquest India and e-
Suite are wholly owned subsidiaries that were formed during the
first quarter of 2000.  Diagnostix.com, a wholly owned
subsidiary, was formed during the third quarter of 2000.  All
transactions between the Company and its consolidated
subsidiaries have been eliminated in preparing the consolidated
financial statements.

     Use of Estimates

     The preparation of the consolidated financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and
expenses during the reporting period.  Actual results could
differ from those estimates.

                             17

<PAGE>

     Revenue Recognition

     Revenues for the proprietary software, training and
installation portion of system sales are recognized using the
percentage-of-completion method and are determined based upon
actual hours incurred related to total estimated installation
hours in accordance with Statement of Position ("SOP") 97-2,
"Software Revenue Recognition," and SOP 81-1, "Accounting for
Performance of Construction-Type and Certain Production-Type
Contracts," as amended.  Anticipated losses are recorded in the
earliest period in which such losses become evident.

     Revenues for the hardware portion of system sales are
recognized upon shipment.  Maintenance and support services are
provided under multi-year renewable agreements with revenues
recognized ratably over the term of the agreement.  Fees for
other services are recognized as the work is performed or on a
percentage-of completion basis.  Subscription fees are provided
under renewable agreements with revenues recognized ratably over
the term of the agreement.

     Customer payment terms vary and typically become billable in
periods different from the revenues recognized.  Revenues
recognized in advance of billings are classified with current
assets as unbilled receivables and are included in the balance
sheet as receivables. Billings recognized in advance of revenues
are classified with current liabilities as deferred revenue.

     Software Development Costs

     Software development costs incurred internally are expensed
as research and development until the technological feasibility
of the newly designed product is established.  Thereafter, all
software development costs are capitalized until the product is
ready for general release to the public.  Capitalized software
development costs are stated at the lower of unamortized cost or
net realizable value.  Net realizable value relating to a
particular software product is assessed based on anticipated
gross margins applicable to sales of the product in future
periods.  Amortization of capitalized software development costs
begins when the related product is available for general release
to clients and is provided for each product based on the greater
of the relationship of current year revenues of the product to
anticipated total revenues or the straight-line amortization of
such costs over a five-year period.  Historically, the straight-
line approach has produced the greater amortization amount.

     Cash and Cash Equivalents

     The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.  Cash equivalents are stated at cost, which
approximates market value.

                              18

<PAGE>

     Investment Securities

     The Company accounts for investment securities based on
Statement of Financial Accounting Standards No. 115, "Accounting
for Certain Investments in Debt and Equity Securities" ("SFAS No.
115").  SFAS No. 115 provides the accounting and reporting
requirements for investments in securities that have readily
determinable fair values and for all investments in debt
securities.  At December 31, 2000 and 1999, all of the Company's
investments in debt securities have been classified as available-
for-sale securities.  Available-for-sale securities are carried
at fair value with net unrealized gains and losses on such
securities, net of tax, reported as a component of shareholders'
equity and associated changes as an element of comprehensive
income.  See Note 2 of Notes to Consolidated Financial
Statements.

     Inventory

     Inventory consists primarily of computer hardware held for
resale and is recorded at the lower of cost (first-in, first-out)
or market.

     Property and Equipment

     Property and equipment are recorded at cost.  Depreciation
is provided principally on the straight-line basis over estimated
useful lives of three or five years for equipment and software
and five or seven years for furniture and fixtures. Leasehold
improvements are depreciated over the estimated useful life of
the asset or the term of the lease, whichever is less.

     Long-Lived Assets

     The Company periodically assesses the recoverability of the
costs of its long-lived assets.  In accordance with Statement of
Financial Accounting Standards No. 121, "Impairment of Long-Lived
Assets and Long-Lived Assets to be Disposed Of," measurement of
impairment losses for long-lived assets that the Company expects
to hold and use is based on estimated fair values of the assets.
Estimates of fair values are based on quoted market prices, when
available, prices of similar assets and the results of valuation
techniques utilizing discounted cash flows.  Long-lived assets to
be disposed of are reported at the lower of the carrying amount
or fair value less costs to sell.

     Intangibles/Acquisition

     Certain intangible assets were acquired in connection with
the acquisition of 100% of the outstanding capital stock of
Antrim in 1996.  This acquisition was accounted for as a
purchase.  Total consideration for Antrim was $5,000,000 plus
assumed obligations.  These assets are being amortized over their
remaining useful lives of five and seven years.

                             19

<PAGE>

     Stock-Based Compensation

     The Company has adopted the disclosure provisions of
Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation"  ("SFAS No. 123").  SFAS No. 123
permits the Company to continue accounting for stock-based
compensation as set forth in Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" ("APB Opinion
No. 25"), provided the Company discloses the pro forma effect on
net income and earnings per share of adopting the full provisions
of SFAS No. 123.  Accordingly, the Company continues to account
for stock-based compensation under APB Opinion No. 25 and has
provided the required pro forma disclosures.  See Note 11 of
Notes to Consolidated Financial Statements.


2.  Investments

     At December 31, 2000, the Company had $61,908,000 of
securities available-for-sale, which consisted of $8,800,000 of
tax-exempt municipals and $53,108,000 of short-term demand notes.
At December 31, 1999, the Company had $37,218,000 of securities
available-for-sale, which consisted of $12,300,000 of tax-exempt
municipals and $24,918,000 of short-term demand notes.  At
December 31, 2000 and 1999, the cost of these securities was
equal to their fair value, therefore, there were no gross
unrealized gains or losses.

     In determining gross realized gains and losses on sales or
maturities of securities, specific identification is used.  Gross
realized gains were $1,000 in 2000.  Gross realized losses were
$7,000 in 1999.  There were no gross realized gains or losses in
1998.

     The amortized cost and estimated fair value of debt
securities at December 31, 2000, by contractual maturity, are
shown below.

                                              Estimated
                                    Cost      Fair Value
                                  --------    ----------
                                      (in thousands)
          Within one year          $53,108       $53,108
          Five to ten years          1,000         1,000
          Over ten years             7,800         7,800
                                   -------       -------
            Total                  $61,908       $61,908
                                   =======       =======

                             20

<PAGE>

3.  Net Income Per Share

     The following table sets forth the computation of basic and
diluted net income per share:

<TABLE>
<CAPTION>
                                                     Year Ended December 31,
                                             --------------------------------------
                                                 2000         1999         1998
                                             ------------ ------------ ------------
<S>                                          <C>          <C>          <C>
Numerator for basic and diluted net
  income per share:
  Net income                                  $13,373,000  $15,798,000   $8,289,000
                                              ===========  ===========   ==========
Denominator:
   Denominator for basic net income
     per share -- weighted-average shares      15,552,981   15,445,125   15,382,508
     Dilutive effect of stock options             111,949      163,734       21,950
                                              -----------  -----------   ----------
   Denominator for diluted net income
    per share -- adjusted
    weighted-average shares                    15,664,930   15,608,859   15,404,458
                                              ===========  ===========   ==========

Basic net income per share                           $.86        $1.02         $.54
                                                     ====        =====         ====
Diluted net income per share                         $.85        $1.01         $.54
                                                     ====        =====         ====
</TABLE>

     Options to purchase 1,875,534, 410,006 and 920,473 shares of
common stock were outstanding at December 31, 2000, 1999 and
1998, respectively, but were not included in the computation of
diluted earnings per share because the options' exercise price
was greater than the average market price of the common shares
and, therefore, the effect would be antidilutive.


4.  Receivables

     Receivables consist of the following:

                                             December 31,
                                          ------------------
                                            2000      1999
                                          --------  --------
                                            (in thousands)
          Billed receivables               $23,072   $32,922
          Unbilled receivables              13,525    12,127
                                           -------   -------
                                            36,597    45,049
          Allowance for doubtful accounts   (1,212)   (1,970)
                                           -------   -------
               Total receivables           $35,385   $43,079
                                           =======   =======

     Unbilled receivables represent recorded revenue that is
billable by the Company at future dates based on contractual
payment terms.

     Substantially all receivables are derived from sales and
related implementation and support services of the Company's LISs
to healthcare providers located throughout the United

                             21

<PAGE>

States and in certain foreign countries.  Included in receivables at
December 31, 2000 and 1999 are amounts due from European
healthcare providers of approximately $1,315,000 and $2,932,000,
respectively.  Total revenues include European revenues of
$2,582,000 and $4,537,000 for the years ended December 31, 2000
and 1999, respectively.

     Credit is extended based on an evaluation of the customer's
financial condition and generally collateral is not required.
The provision for bad debt expense recognized in 2000, 1999 and
1998 was $842,000, $1,497,000 and $670,000, respectively.  During
2000, 1999 and 1998, $1,600,000, $1,572,000 and $577,000,
respectively, of receivables were charged against the allowance.


5.  Property and Equipment

     Property and equipment consist of the following:

                                             December 31,
                                          ------------------
                                            2000      1999
                                          --------  --------
                                            (in thousands)
          Building                         $ 2,000   $ 2,000
          Land                                 257       257
          Computers and software            10,980     9,840
          Furniture and fixtures             1,901     1,542
          Leasehold improvements             4,861     4,292
          Other equipment and vehicles          74        37
                                           -------   -------
                                            20,073    17,968
          Accumulated depreciation          (7,866)   (7,868)
                                           -------   -------
               Total property and
                 equipment, net            $12,207   $10,100
                                           =======   =======

     Depreciation expense for the years ended December 31, 2000,
1999 and 1998 was approximately $3,426,000, $3,296,000 and
$3,605,000, respectively.


6.  Capitalized Software Development Costs

     During the years ended December 31, 2000, 1999 and 1998, the
Company capitalized $4,013,000, $2,950,000 and $3,148,000,
respectively, of total software development costs of $24,864,000,
$19,078,000 and $18,457,000, respectively.  Amortization expense
related to capitalized software development costs for the years
ended December 31, 2000, 1999 and 1998 was $3,568,000, $3,562,000
and $3,364,000, respectively, and accumulated amortization was
$22,778,000, $19,210,000 and $16,350,000, respectively.

     In accordance with Statement of Financial Accounting
Standards No. 86, "Accounting for the Costs of Computer Software
to be Sold, Leased, or Otherwise Marketed," the Company

                             22

<PAGE>

charged operations $971,000 related to the reduction in carrying
value of pharmacy software development costs during the fourth
quarter of 1999.  The carrying value was reduced to recognize that
future anticipated revenues would not be sufficient to recover these
costs.  The after-tax effect was a reduction to net income of
approximately $656,000, or $.04 per diluted share.


7.  Line of Credit

     On December 30, 1997, the Company entered into a $10,000,000
line of credit agreement with the Bank of America National Trust
and Savings Association ("Bank of America").  Unless the Company
elects one of the optional interest rates (the "Optional Rates"),
the interest rate is the reference rate as announced from time to
time by the Bank of America (the "Bank of America Rate").

     At December 31, 2000, the Optional Rates and the Bank of
America Rate ranged from 7.55% to 9.5%.  All outstanding
principal and interest under the line of credit are due April 28,
2001 except for any amounts under the line of credit outstanding
under financing standby letters of credit which have a maximum
maturity of 365 days.  Amounts borrowed under the line of credit
are secured by all of the Company's assets.  Approximately
$610,000 of the line of credit is used to secure letters of
credit and is not available for immediate expenditure.  The
amount of letters of credit outstanding at any one time may not
exceed $5,000,000.

     The line of credit contains requirements as to minimum
levels of working capital, net worth and cash flow and places
certain restrictions on new debt, acquisitions, capital
expenditures and loans to related parties.  The agreement
prohibits the payment of any capital distributions or dividends.

     There were no borrowings outstanding as of December 31, 2000
and 1999 under the line of credit.

                             23

<PAGE>

8.  Income Taxes

     The provision for income taxes, reconciliation of income tax
expense and components of deferred tax assets and liabilities are
set forth below.

     Provision for Income Taxes

                                    Year Ended December 31,
                                 ----------------------------
                                   2000      1999      1998
                                 --------  --------  --------
                                        (in thousands)
Current tax expense:
  Federal                          $5,055    $7,176    $3,223
  State                               837     1,600       813
                                   ------    ------    ------
    Total current tax expense       5,892     8,776     4,036
                                   ------    ------    ------
Deferred tax expense (benefit):
  Federal                             673    (1,108)    1,449
  State                               137       (70)      235
                                   ------    ------    ------
    Total deferred tax
      expense (benefit)               810    (1,178)    1,684
                                   ------    ------    ------
         Total income tax expense  $6,702    $7,598    $5,720
                                   ======    ======    ======

     Reconciliation of Income Tax Expense

                                    Year Ended December 31,
                                 ----------------------------
                                   2000      1999      1998
                                 --------  --------  --------
                                        (in thousands)
Income tax provision at the
  statutory rate                   $7,026    $7,955    $4,763
Increases (decreases):
  State income taxes                  633     1,081       647
  Valuation allowance reduction         -      (950)        -
  Research and development credit    (726)     (300)        -
  Tax-exempt interest income         (209)     (584)     (471)
  Meals and entertainment              47       248       223
  Foreign taxes                        17       (63)      105
  Other                               (86)      211       453
                                   ------    ------    ------
      Total income tax expense     $6,702    $7,598    $5,720
                                   ======    ======    ======

     The decrease in the valuation allowance during 1999 was due
to a change in tax law that has mitigated certain limitations on
pre-acquisition net operating loss carry forwards.  Based on the
tax law change, management determined that it is more likely than
not that the pre-acquisition net operating loss obtained in
connection with the Antrim acquisition will be realized.  In
accordance with Emerging Issues Task Force Issue 99-15, the
Company recorded the non-recurring reduction in valuation
allowance as a credit to income tax expense.

                             24

<PAGE>

     Sunquest India was granted a ten-year holiday from income
taxes by the Government of India, Ministry of Industry, that will
terminate in March of 2010.  This holiday from income taxes
reduced the Company's income tax expense by approximately $31,000
during the year ended December 31, 2000.

     Components of Deferred Tax Assets and Liabilities

                                             December 31,
                                          ------------------
                                            2000      1999
                                          --------  --------
                                            (in thousands)
          Deferred tax assets:
            Net operating loss carry
              forwards acquired             $  668    $  846
            Transition costs accruals          222       228
            Capital leases                     767       638
            Vacation and compensation
              accruals                         474     1,165
            Bad debt allowance                 481       745
            Deferred revenue                    59        56
            Fixed assets                        67         -
            Other                              782       622
                                            ------    ------
                Total deferred tax assets    3,520     4,300
                                            ------    ------
          Deferred tax liabilities:
            Software development             3,789     3,604
            Acquired intangibles               103       129
            Fixed assets                         -        84
            Other                               30        75
                                            ------    ------
                Total deferred tax
                  liabilities                3,922     3,892
                                            ------    ------
                    Net deferred tax
                      (liabilities) assets  $ (402)   $  408
                                            ======    ======

     The Company has an acquired net operating loss carry forward
of approximately $1,909,000 that was generated by Antrim.  This
amount can be carried forward and used to offset future taxable
income.  This loss carry forward is subject to limitations as to
the amount and timing of its use.  The net operating loss carry
forward will expire in the year 2010.


9.  Leases

     The Company leases two buildings from Any Travel, Inc. ("Any
Travel"), an affiliated entity, under capital leases.  The
affiliation is through common ownership of the Company and Any
Travel.  The Company also leases certain buildings and equipment
from third parties under noncancelable lease arrangements that
may be adjusted for increases in maintenance and insurance costs
and the consumer price index.  These capital and operating leases
expire in various years through May 2006 and may be renewed for
periods ranging from one to five years.

                             25

<PAGE>

     Amortization expense related to leased assets for the years
ended December 31, 2000, 1999 and 1998 was $792,000, $838,000 and
$883,000, respectively.

     Future minimum payments under capital leases and
noncancelable operating leases with initial terms of one year or
more consisted of the following at December 31, 2000:

                                          Capital   Operating
                                           Leases     Leases
                                         ---------  ---------
                                            (in thousands)
2001                                        $2,178     $1,212
2002                                         1,771      1,175
2003                                         1,249      1,004
2004                                           416        740
2005                                             -        752
Thereafter                                       -        316
                                            ------     ------
Total minimum lease payments                 5,614     $5,199
                                                       ======
Amounts representing interest                2,515
                                            ------
     Present value of net minimum
       lease payments (including current
       portion of $1,280)                   $3,099
                                            ======

     At December 31, 2000, aggregate future minimum rental
payments to be received under noncancelable leases and subleases
were approximately $1,104,000.

     Rental expense for the years ended December 31, 2000, 1999
and 1998 was approximately $1,240,000, $1,199,000 and $1,227,000,
respectively.


10. Commitments

     The Company has granted liens on all of its assets to a
vendor to secure amounts due for purchases of hardware and other
equipment.


11. Employee Benefit Plans

     Profit Sharing Plan

     The Company has a Profit Sharing Plan covering substantially
all of its employees.  Under provisions of the plan, participants
may contribute up to 15% of their eligible compensation to the
plan and the Company can make discretionary contributions to the
plan.  Effective January 1, 1998, the Company began matching 100%
of up to the first 3% of employee contributions and the vesting
period was reduced from five years to three years.  Matching
contributions were $1,029,000, $1,050,000 and $912,000 in 2000,
1999 and 1998, respectively.

                             26

<PAGE>

     Employee Stock Purchase Plan

     The Employee Stock Purchase Plan authorizes the sale of up
to 450,000 shares of Common Stock to substantially all employees
of the Company and its subsidiaries.  Offerings under the plan
commence on the first day of each calendar quarter and end on the
last day of the same calendar quarter at a purchase price that is
equal to 90% of the last sale price of the Common Stock, as
reported on the National Association of Security Dealers, Inc.
Automated Quotation System ("Nasdaq"), on the commencement date
of the offering.  During 2000, 1999 and 1998, 9,436, 10,652 and
18,498 shares, respectively, of Common Stock were issued under
the plan for net proceeds to the Company of $99,000, $129,000 and
$142,000, respectively.  The weighted-average fair value of
shares sold under the Employee Stock Purchase Plan was $2.61 in
2000, $3.01 in 1999 and $2.08 in 1998.  These fair values were
estimated using the Black-Scholes option pricing model with the
following weighted-average assumptions for 2000, 1999 and 1998,
respectively: risk-free interest rate of 5.90%, 4.59% and 5.06%;
dividend yield of 0%; volatility factor of the expected market
price of the Company's Common Stock of .61, .62 and .62; and a
weighted-average expected life of the options of .25 years.

     Stock Incentive Plan

     The Stock Incentive Plan of 1996, as amended, authorizes the
issuance of up to 3,800,000 shares of Common Stock pursuant to
stock options or other awards granted to employees and other
eligible persons at prices not less than the fair market value of
the stock at the date of grant.  All options granted have ten-
year terms and become exercisable as specified in the stock
option agreements. The plan will expire in March 2006.

     During 2000, the Company modified outstanding stock option
agreements to allow employees 120 days to exercise vested options
upon separation of employment, but did not extend the maximum
contractual terms.  This modification resulted in the Company
recognizing $23,000 in compensation expense.  No compensation
expense was recognized during 1999 and 1998.

     The Company has complied with the pro forma requirements of
SFAS No. 123 for those companies which choose not to account for
the effects of stock-based compensation in the financial
statements under SFAS No. 123.  The fair value of these options
was estimated at the dates of grant using the Black-Scholes
option pricing model with the following weighted-average
assumptions for 2000, 1999 and 1998, respectively: risk-free
interest rate of 6.43%, 4.98% and 5.24%; dividend yield of 0%;
volatility factor of the expected market price of the Company's
Common Stock of .62, .64 and .64; and a weighted-average expected
life of the options of 4.7, 4.3 and 4.3 years.

     The Black-Scholes option valuation model was developed for
use in estimating the fair value of traded options which have no
vesting restrictions and are fully transferable.  In addition,
option valuation models require the input of highly subjective
assumptions including the expected stock price volatility.
Because the Company's options under the Employee Stock Purchase
Plan and the Stock Incentive Plan of 1996, as amended, have
characteristics

                             27

<PAGE>

significantly different from those of traded options and because
changes in the subjective input assumptions can materially affect
the fair value estimate, in management's opinion, the Black-Scholes
option valuation model does not necessarily provide a reliable measure
of the fair value of its employee stock options.

     For purposes of pro forma disclosures, the estimated fair
value of the options is amortized to expense over the options'
vesting periods.  The Company's pro forma information follows:

                                 Year Ended December 31,
                              ----------------------------
                                2000      1999      1998
                              --------  --------  --------
                         (in thousands, except per share data)
Net income:
  As reported                 $13,373    $15,798    $8,289
  Pro forma                    10,902     13,873     7,105
Net income per share:
  As reported:
    Basic                         .86       1.02       .54
    Diluted                       .85       1.01       .54
  Pro forma:
    Basic                         .70        .90       .46
    Diluted                       .70        .89       .46

     A summary of the Company's stock option activity and related
information for the years ended December 31, 2000, 1999 and 1998
follows:

<TABLE>
<CAPTION>

                                         2000                  1999                  1998
                                   --------------------  --------------------  --------------------
                                              Weighted-             Weighted-             Weighted-
                                               Average               Average               Average
                                              Exercise              Exercise              Exercise
                                    Options     Price     Options     Price     Options     Price
                                   ---------  ---------  ---------  ---------  ---------  ---------
<S>                                <C>           <C>     <C>           <C>     <C>           <C>
Outstanding at beginning of year   1,501,054     $11.70  1,150,633     $10.42  1,167,604     $10.50
Granted                            1,098,942     $10.55    654,706     $13.58    303,760     $10.42
Exercised                             (6,288)    $ 9.90   (142,088)    $10.51          -     $    -
Forfeited                           (222,335)    $11.08   (162,197)    $11.23   (320,731)    $10.71
                                   ---------             ---------             ---------
Outstanding at end of year         2,371,373     $11.23  1,501,054     $11.70  1,150,633     $10.42
                                   =========             =========             =========
Exercisable at end of year         1,050,299     $10.98    482,670     $10.19    284,201     $10.12
                                   =========             =========             =========
Weighted-average fair value of
  options granted during the year                $ 5.97                $ 7.36                $ 5.67
Reserved for future options        1,280,251             2,156,858             2,649,367

</TABLE>

                             28

<PAGE>

     The following table presents weighted-average price and life
information about significant option groups outstanding at
December 31, 2000:

<TABLE>
<CAPTION>
                          Options Outstanding              Options Exercisable
                     -----------------------------  ---------------------------------
                                     Weighted-      Weighted-               Weighted-
                                      Average        Average                 Average
Range of               Number        Remaining      Exercise     Number     Exercise
Exercise Prices      Outstanding  Contractual Life    Price    Exercisable    Price
-------------------  -----------  ----------------  ---------  -----------  ---------
<S>                    <C>              <C>            <C>       <C>           <C>
$7.1875 - $9.8125        636,839        8.76 years     $ 8.21      234,523     $ 8.03
$10.1250 - $12.9375    1,021,593        7.34 years     $11.37      551,902     $10.84
$13.0000 - $15.1875      634,510        8.42 years     $13.48      229,776     $13.63
$15.5625 - $17.1875       78,431        8.54 years     $15.77       34,098     $15.77
                       ---------                                 ---------
                       2,371,373        8.05 years               1,050,299
                       =========                                 =========

</TABLE>


12. Fair Value of Financial Instruments

     The carrying amounts of the Company's financial instruments
approximate the fair values at December 31, 2000 and 1999.


13. Segment Information

  Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related
Information" ("SFAS No. 131"), redefined how operating segments
are determined and requires disclosure of certain financial and
descriptive information about a company's operating segments.  In
addition, SFAS No. 131 establishes standards for related
disclosures about major customers, products and services and
geographic areas.  Operating segments are defined as a component
of a business enterprise that discrete financial information is
available for review by the chief operating decision maker, or
decision-making group, in making decisions about resources to be
allocated and to assess performance.  Since it is management's
intent to expand operations related to e-Commerce, a segment
which has not been material in prior periods, it is believed that
the financial statement user would benefit from a separate
presentation of selected financial information attributable to
this operating segment.

     Currently, the Company manages its operations through two
business segments: Core Business and e-Commerce.

          Core Business: This reportable segment consists of the
     Company's healthcare information systems that include
     software licenses, related hardware, relicensed software,
     resold software and value-added services.  The principal
     markets for this segment include large and mid-sized
     hospitals, clinics and other facilities, including
     integrated delivery networks.

                            29

<PAGE>

          e-Commerce: This reportable segment consists of the
     Company's Internet-based product offerings. Currently, the
     Company offers three products, e-Reference Lab, e-Financial
     and e-CEM ("Clinical Event Manager"), which are Internet-
     based ASP products hosted and maintained at the Company's
     offices and accessed by customers over the Internet for a
     monthly fee.  By hosting and maintaining applications at a
     central site and providing user access over the Internet,
     these products eliminate the customer's need for capital
     investment in information systems and internal staff, while
     providing access to state-of-the-art clinical systems.  In
     addition, e-Hospital Lab is in Beta testing and development
     has begun on the Web enabling of some of the Core Business
     segment's products. The principal markets for the products
     currently available are the smaller hospital and commercial
     laboratories.  In August 2000, the Company announced the
     formation of a new business, Diagnostix.com.  Diagnostix.com
     plans phased development of Web-based products designed to
     streamline communication between the many constituents of
     healthcare - integrated delivery networks, laboratories,
     pharmacies, physicians and patients.  The Company's
     strategic initiatives include development of future releases
     of ASP product offerings as well as introducing additional
     Internet ventures and products, which will target expanded
     markets.

     The Company evaluates performance based on several factors,
of which the primary financial measure is net income for the Core
Business segment and net income potential for the e-Commerce
segment.  In arriving at each reportable segment's net income,
the Company is allocating department overhead expenses, sales and
marketing expenses, general and administrative expenses and other
income/expense.  These items are being allocated as follows: (1)
department overhead and general and administrative expenses on
direct labor; (2) sales and marketing based on total sales
dollars and (3) other income/expense based on revenue dollars.

     Summarized financial information concerning the Company's
operating segments is shown below for 2000.  The 1999 and 1998
results were 100% attributable to the Core Business segment.

2000                             Core Business  e-Commerce    Total
                                 -------------  ----------  --------
                              (in thousands, except per share amounts)
Revenues                              $120,476     $   157  $120,633
Operating income (loss)                 26,324      (9,110)   17,214
Income taxes (benefit)                   9,742      (3,040)    6,702
Net income (loss)                       19,439      (6,066)   13,373
Net income (loss) per
  diluted share <F1>                      1.24        (.39)      .85
Total assets                           127,413       9,502   136,915
Capital expenditures                     4,734         799     5,533
Interest income                          3,209           4     3,213
Interest expense                         1,082           1     1,083
Depreciation and amortization            7,482         404     7,886

[FN]
<F1>  Diluted net income (loss) per share is determined for each
      operating segment assuming diluted shares outstanding for the
      Company are attributable to each segment.
</FN>

                             30

<PAGE>

      During 2000, four customers each accounted for greater than
10% of the revenues for the e-Commerce segment.  During 2000,
1999 and 1998, no single customer accounted for 10% or more of
consolidated revenues.  For the years ended December 31, 2000,
1999 and 1998, 94.7%, 94.4% and 96.9%, respectively, of the
Company's software revenues were related to LISs.

                            31

<PAGE>

14. Quarterly Financial Data (Unaudited)

Summarized quarterly financial data for the years ended December 31, 2000
and 1999 appear below:


                                  1st      2nd      3rd      4th
                                Quarter  Quarter  Quarter  Quarter    Total
                                -------  -------  -------  -------  --------
                                  (in thousands, except per share amounts)
2000
Total revenues                  $28,671  $30,560  $29,079  $32,323  $120,633
Operating expenses               25,066   25,950   24,971   27,432   103,419
Operating income                  3,605    4,610    4,108    4,891    17,214
Net income                        2,625    3,186    3,101    4,461    13,373
Net income per common share:
  Basic                            $.17     $.20     $.20     $.29      $.86
  Diluted                          $.17     $.20     $.20     $.28      $.85
Weighted-average number of
  common Shares outstanding:
  Basic                          15,547   15,550   15,553   15,561    15,553
  Diluted                        15,637   15,585   15,735   15,702    15,665

1999
Total revenues                  $32,720  $33,765  $33,032  $32,188  $131,705
Operating expenses <F1>          28,009   27,731   25,598   26,674   108,012
Operating income <F1>             4,711    6,034    7,434    5,514    23,693
Net income <F1>, <F2>             2,890    3,948    4,400    4,560    15,798
Net income per common
  share <F1>, <F2>:
  Basic                            $.19     $.26     $.28     $.29     $1.02
  Diluted                          $.19     $.25     $.28     $.29     $1.01
Weighted-average number of
  common Shares outstanding:
  Basic                          15,394   15,402   15,441   15,542    15,445
  Diluted                        15,512   15,550   15,698   15,674    15,609

[FN]
<F1> During the first quarter, the Company sold its Enterprise Master
     Person Index product for net proceeds of approximately $750,000.  The pre-
     tax gain resulting from the sale was approximately $681,000.  The after-tax
     gain was approximately $429,000, or $.03 per diluted share.  In addition,
     during the fourth quarter the Company charged operations $971,000 ($656,000
     after-tax, or $.04 per diluted share) related to a reduction in the
     carrying value of pharmacy software development costs.
<F2> Pursuant to a change in tax law, the Company's income tax expense for
     the fourth quarter of 1999 was reduced by $950,000.  This resulted in an
     increase in earnings per diluted share of $.06.
</FN>

                             32

<PAGE>

                   SELECTED CONSOLIDATED FINANCIAL DATA

     The following selected consolidated financial data for the five years
ended December 31, 2000, should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
and the Consolidated Financial Statements and Notes thereto included
herein.  The selected consolidated financial data presented below have been
derived from the Company's Consolidated Financial Statements, which have
been audited (except for pro forma data) by Ernst & Young LLP, independent
auditors.

<TABLE>
<CAPTION>

                                                    Year Ended December 31,
                                       ------------------------------------------------
                                         2000      1999      1998      1997      1996
                                       --------  --------  --------  --------  --------
                                           (in thousands, except per share amounts)
<S>                                    <C>       <C>       <C>       <C>        <C>
Statement of Income Data:
Revenues:
  System sales                         $ 45,872  $ 53,656  $ 60,549  $ 52,761   $45,059
  Support and service                    74,761    78,049    60,226    49,576    35,937
                                       --------  --------  --------  --------   -------
    Total revenues                      120,633   131,705   120,775   102,337    80,996
                                       --------  --------  --------  --------   -------
Operating expenses:
  Cost of system sales                   21,432    21,930    27,424    26,015    20,056
  Client services                        30,113    36,720    32,945    27,438    18,401
  Research and development               20,851    16,128    15,309    13,244     9,988
  Sales and marketing                    16,298    17,304    17,556    14,007    10,896
  General and administrative             14,725    15,640    14,196    12,343     9,758
  Gain on sale of assets <F1>, <F4>           -      (681)     (404)        -         -
  Capitalized software development
    cost adjustments <F2>, <F5>               -       971         -     2,419         -
  Acquired, in-process technology <F6>        -         -         -     1,211     3,252
                                       --------  --------  --------  --------   -------
    Total operating expense             103,419   108,012   107,026    96,677    72,351
                                       --------  --------  --------  --------   -------
Operating income                         17,214    23,693    13,749     5,660     8,645
Other income (expense):
  Interest income                         3,213     1,710     1,348     1,154     1,345
  Interest expense                       (1,083)   (1,211)   (1,090)   (1,237)   (1,395)
  Other                                     731      (796)        2      (316)      (98)
                                       --------  --------  --------  --------   -------
Income before income taxes               20,075    23,396    14,009     5,261     8,497
Income tax provision:
  Current year operations <F3>            6,702     7,598     5,720     2,491     2,755
  Change in tax status                        -         -         -         -     1,122
                                       --------  --------  --------  --------   -------
Net income                             $ 13,373  $ 15,798  $  8,289  $  2,770   $ 4,620
                                       ========  ========  ========  ========   =======

Pro forma data (unaudited): <F7>
  Historical income before
    income taxes                       $      -  $      -  $      -  $      -   $ 8,497
  Pro forma income tax provision              -         -         -         -     4,459
                                       --------  --------  --------  --------   -------
  Pro forma net income                 $      -  $      -  $      -  $      -   $ 4,038
                                       ========  ========  ========  ========   =======

Net income per common share: <F7>
  Basic                                    $.86     $1.02      $.54      $.18      $.29
                                           ====     =====      ====      ====      ====
  Diluted                                  $.85     $1.01      $.54      $.18      $.29
                                           ====     =====      ====      ====      ====

Weighted-average number of
  common shares outstanding:
  Basic                                  15,553    15,445    15,383    15,369    13,919
                                       ========  ========  ========  ========   =======
  Diluted                                15,665    15,609    15,404    15,428    13,919
                                       ========  ========  ========  ========   =======

Balance Sheet Data (at end of period):
Cash and cash equivalents              $  8,523  $  9,660  $  7,057  $ 23,692   $31,911
Short-term investments                   61,908    37,218    27,283         -         -
Working capital                          77,963    67,656    48,463    38,090    39,065
Total assets                            136,915   117,263   104,244    94,173    96,911
Long-term debt and obligations
  under capital leases, primarily
  from related party, net of
  current portion                         1,819     3,099     4,163     6,080     5,921
Total shareholders' equity               98,511    85,623    68,194    59,822    56,767

</TABLE>

                                                  33
<PAGE>

[FN]
<F1> In 1999, the Company sold its Enterprise Master Person Index product
     for net proceeds of approximately $750,000.  The pre-tax gain resulting
     from the sale was approximately $681,000.  The after-tax gain was
     approximately $429,000, or $.03 per diluted share.
<F2> In 1999, the Company charged operations $971,000 ($656,000 after-tax,
     or $.04 per diluted share) related to a reduction in the carrying value of
     pharmacy software development costs.
<F3> Pursuant to a change in tax law, the Company's income tax expense for
     1999 was reduced by $950,000.  This resulted in an increase in earnings per
     diluted share of $.06.
<F4> In 1998, the Company sold the assets comprising its Managed Care
     Manager Payor software product line for approximately $1.1 million.  The
     pre-tax gain resulting from the sale, after associated write-offs, was
     approximately $404,000.  The after-tax gain was approximately $238,000, or
     $.02 per diluted share.
<F5> In 1997, the Company charged operations $2,419,000 ($1,451,000 after-
     tax, or $.10 per diluted share) related to the reduction in the carrying
     value of IntelliCare software development costs.
<F6> In 1997, the Company charged operations $1,265,000 ($1,113,000 after-
     tax, or $.07 per diluted share) for acquired, in-process technology in
     conjunction with the purchase of the PreciseCare Medication Management
     System.  In 1996, the Company charged operations $3,252,000, or $.23 per
     diluted share, for acquired, in-process technology in conjunction with the
     Antrim acquisition.
<F7> Pro forma data for the year 1996 has been computed as if the Company
     had been subject to federal and all applicable state income taxes.
</FN>

                             34