NEWPORT BEACH, Calif. – October 21, 2003 – The TriZetto Group, Inc. (Nasdaq:TZIX) today reported financial results for the third quarter ended September 30, 2003, which included the company's first GAAP quarterly profit, a quarter earlier than analysts' expectations. On revenues of $76.0 million, TriZetto earned $0.06 per share on a pro forma basis compared to a First Call consensus estimate of $0.05 (pro forma). The company earned $0.01 per share on a GAAP basis.

"I am very pleased to be announcing TriZetto's first GAAP profitable quarter as a public company," said Jeff Margolis, TriZetto's Chairman and CEO. "This achievement was primarily due to improved financial management, including collections, contract compliance, expense containment and capital control. We also continued to refine and narrow the company's scope towards our most profitable businesses."

Third Quarter Highlights

• Total revenues were $76.0 million, up 11% from $68.6 million in the year-ago quarter. Revenues for the first nine months were $223.7 million, up 15% over the prior year period.
• EBITDA was $9.8 million in the quarter, up 28% from $7.7 million in the third quarter of 2002. For the first nine months, EBITDA was $23.2 million, up 34% from $17.4 million in 2002.
• Pro forma net income for the quarter was $2.9 million, or $0.06 per diluted share, compared to $4.5 million, or $0.10 per diluted share in 2002. Pro forma numbers exclude acquisition-related expenses. For a detailed definition of pro forma, see the attached financial statements. In 2003, TriZetto is taxing pro forma numbers at a 40% rate; in 2002, pro forma numbers were taxed at less than 5%.
• GAAP net income for the third quarter was $0.6 million, or $0.01 per diluted share, compared to a net loss of ($3.5) million or ($0.08) per diluted share a year-ago.
• Days sales outstanding was 55 for the quarter, compared to 62 in the same quarter last year.
• At September 30, 2003, total revenue backlog was approximately $594 million and the 12-month revenue backlog was approximately $175 million. The timing of contract closings and other factors can cause the company's backlog to vary from one quarter to the next.
• 365 contracts were signed in the third quarter with a total value of $37.4 million. 48 of those were outsourced services contracts (software hosting, business process outsourcing, and other services) valued at $15.4 million, and 60 were software license contracts valued at $7.9 million. 257 contracts were for consulting, implementation services, software customizations and other services valued at $14.1 million.

"We experienced similar seasonality in third quarter revenues and bookings as a year-ago, which affected the timing of new contracts," added Margolis. "This included the delay of several deals that we had hoped to close in the third quarter.

"As we near implementation completion for several new hosting customers and consider the positive market response of our new products such as Facets Extended EnterpriseTM, I continue to be optimistic about future bookings. Our innovation in both licensed and hosted customers is generating discussions with some of the largest and most forward-thinking health plans and benefits administrators in the country."

Outlook

Management expects to achieve the low end of its guidance range for 2003. In addition, while not yet ready to provide complete guidance for 2004, the company is projecting to grow EBITDA by between 25% and 35%, and maintain capital expenditures at or below 2003 levels.

Guidance for 2003 is posted on the company's web site at www.trizetto.com, "Investor Relations," "Financial Reports." TriZetto's actual financial results may vary from guidance, depending upon the timing of contract signings, competition, changes in demand for products and services, and other factors that are identified in TriZetto's Form 10-K and other SEC filings. Click here to view financial reports (PDF).

Financial Review

Revenue – Third quarter revenues totaled $76.0 million, up 11% from $68.6 million in the third quarter of 2002, but slightly below the company's projected range. Recurring revenues totaled $40.5 million in the quarter. Non-recurring revenues were $35.5 million and included $2.2 million of payments contractually due to TriZetto related to the change of control of Altius Health Plans Inc., one of TriZetto's customers. Recurring revenues represented 53% of total revenues compared to 59% in the third quarter of 2002 and 53% in the second quarter of 2003. The year-over-year decrease in the percentage of recurring revenue reflects a change in the mix of business as revenue from software licenses and implementation contracts grew at a faster rate.

EBITDA – TriZetto reported EBITDA of $9.8 million in the third quarter compared to $7.7 million in the year-ago quarter. The growth in EBITDA illustrates the company's continued progress on reducing its cost structure and refining its businesses.

Pro forma and GAAP Net Income – Pro forma net income for the quarter was $2.9 million, or $0.06 per diluted share, compared to $4.5 million, or $0.10 per diluted share in 2002. Pro forma numbers exclude acquisition-related expenses. TriZetto reported GAAP net income of $0.6 million in the third quarter, or $0.01 per diluted share, compared with a net loss of ($3.5) million or ($0.08) per diluted share a year ago.

Cash Resources – Cash, restricted cash and short-term investments totaled $81.2 million at September 30, 2003. Net cash provided by operating activities was $7.2 million. The company currently has net operating loss carryforwards of $67 million, which will be applied against future taxable income.

Conference Call

TriZetto will host a conference at 10:30 a.m. Eastern Time / 7:30 a.m. Pacific Time today to discuss its results. Investors may access the Web cast through TriZetto's Web site at www.trizetto.com, first by clicking on the Investors button, and then on the Company Information drop-down menu item. The conference call will be archived and available through TriZetto's Web site for 30 days following the call.

The web cast will also be distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at www.fulldisclosure.com or by visiting any of the investor sites in CCBN's Individual Investor Network. Institutional investors can access the call via CCBN's password-protected event management site, StreetEvents (www.streetevents.com).

About TriZetto

The TriZetto Group, Inc. offers a broad portfolio of healthcare information technology (IT) products and services that can be delivered individually or combined to create a comprehensive solution.

The company provides:

• leading proprietary and third-party software, including e-business applications;
• outsourced services, such as software hosting, transaction processing and IT department operations; and
• strategic and implementation consulting.

TriZetto is focused on three healthcare markets: payers, benefits administrators and physician groups. Its more than 400 customers represent approximately 40 percent of the U.S. insured population. Headquartered in Newport Beach, Calif., TriZetto can be reached at (949) 719-2200 or www.trizetto.com.

Important Notice Regarding Forward-Looking Statements

CONTACTS:

Media
Audrey Mautner
303-495-7197
audrey.mautner@trizetto.com

Investors
Brad Samson
949-719-2220
brad.samson@trizetto.com

Information

For more detailed information, please call 1-800-569-1222 or click on the link below. Request more information     Contact a sales rep