ST. LOUIS, May 12 /PRNewswire/ -- CITATION Computer Systems, Inc.
(Nasdaq: CITA) today announced fourth-quarter and full-year results for its
1998 fiscal year, which ended March 31, 1998.
    As previously announced, revenues for the fourth quarter of the 1998
fiscal year totaled $3.8 million, compared with $5.0 million for the same
period last year.  Included in last year's results were about $73,000 in
revenues from the Company's United Kingdom operations, which were sold in
March 1997.
    The Company reported a loss from ongoing operations, before non-recurring
charges, of $800,000, or $0.21 a share, compared with break-even results on an
ongoing basis in the prior year.  Fourth-quarter 1998 results included non-
recurring pretax charges of nearly $1 million, or $0.16 a share after tax,
related to restructuring of operations and for expenses related to the
strategic review of alternatives following an unsolicited expression of
interest in the company in January.  Fourth-quarter 1997 results included non-
recurring pretax charges of $3.1 million, or $0.50 a share after tax, related
to the restructuring as well as the operating losses and ultimate disposal
of CITATION's operations in the United Kingdom.
    Including those charges, CITATION reported a net loss of $1.4 million, or
$0.37 a share, for the fourth quarter of fiscal 1998, compared with a net loss
of $1.9 million, or $0.50 a share, in the prior year.
    "As we indicated in April, our system sales this quarter suffered from
delays due to the anticipated release of our new NT products and from
uncertainty over CITATION's future because of our strategic review of the
Company," said J. Robert Copper, CITATION's chairman and chief executive
officer.
    "We're encouraged that the product back up is ending.  Our NT radiology
product is on the market and being installed in three hospitals.  And two
other new products,  C-Lab, a laboratory product, and C-Com, a clinical data
repository and remote ordering and results reporting system, are in Beta
testing and are scheduled for release this quarter," Copper said.
    System sales in the 1998 fourth quarter were $1.5 million, compared with
$2.7 million in the prior-year quarter.  Service revenue increased slightly,
to $2.25 million in the quarter, from $2.22 million in the prior year.
    On January 20, CITATION announced that it had received an unsolicited
expression of interest in the Company.  CITATION also said it had engaged an
investment banker, Goldsmith, Agio, Helms and Company, to evaluate this
expression of interest and to explore other strategic alternatives to enhance
shareholder value.  Those discussions are continuing, Copper said.  He added,
"CITATION has a bright future, either as a stand-alone company or as part of a
larger organization."
    For the full 1998 fiscal year, revenues were $16.6 million, compared with
$22.0 million for the prior year.  Fiscal 1997 included about $900,000 in
revenues from CITATION's UK operations.
    The Company reported a net loss for the 1998 fiscal year of
$1.7 million, or $0.43 a share, compared with a loss of $3.3 million, or
$0.87 a share, in the 1997 fiscal year.  As described above, the 1998 fiscal
year included about $1 million in non-recurring charges, while the 1997 fiscal
year included $4.3 million in charges related to the restructuring and sale of
CITATION's UK operations, as well as $543,000 in expenses related to a
terminated secondary stock offering.
    CITATION Computer Systems, Inc. is a full solutions provider, offering
information systems solutions for the effective and profitable management of
all departments and patient groups within a healthcare enterprise.  CITATION
provides comprehensive client/server information systems for clinical areas,
financial/administrative areas, and a community-wide registration system.
CITATION's systems are found in more than 600 applications in 450 healthcare
facilities throughout the United States, Canada, the United Kingdom, Ireland,
Asia-Pacific, and other countries.
    The preceding discussions of expected future results constitute forward-
looking statements.  Actual results could differ from expected results due to
various factors, including whether final costs exceed estimates and other
factors discussed in company filings with the Securities and Exchange
Commission.

      CITATION -- The Best Information Systems Value in Healthcare

                       CITATION COMPUTER SYSTEMS, INC.
                       Condensed Summary of Operations
                   (in thousands, except per share amounts)

                             Three Months Ended       Twelve Months Ended
                                 (unaudited)              (audited)
                             3/31/98    3/31/97(a)    3/31/98    3/31/97(a)
    Net system sales and
     service revenues:
     System sales             $1,528     $2,741        $8,214   $12,972
     Service revenue           2,253      2,216         8,426     9,033
    Total revenues             3,781      4,957        16,640    22,005

    Cost of products and
     services sold:
     System costs              1,452      2,043         6,252     8,337
     Service costs               660        567         2,048     2,313
    Total cost of products
     and services sold         2,112      2,610         8,300    10,650

    Gross profit               1,669      2,347         8,340    11,355

    Research and development   1,384        609         3,199     3,268
    Selling and administrative
     expense                   1,528      1,944         6,686     8,516
    Restructuring costs and other
     non-recurring charges       832      2,831           832     4,298

    Operating loss            (2,075)    (3,037)       (2,377)   (4,727)

    Other income (expense)       (42)        16          (132)      (10)
    Other non-recurring
     expenses                   (158)        --          (158)       --
    Secondary offering
     expenses                     --         --            --      (543)
    Loss before income taxes  (2,275)    (3,021)       (2,667)   (5,280)
    Benefit for income taxes    (865)    (1,125)       (1,014)   (2,006)
    Net loss                 ($1,410)   ($1,896)      ($1,653)  ($3,274)

    Net loss per share -
     basic and diluted        ($0.37)    ($0.50)       ($0.43)   ($0.87)

    Weighted average shares outstanding -
     basic and diluted         3,810      3,797         3,807     3,773

    (a)  Includes results of United Kingdom operations, which were sold in
         March 1997.

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