SXC Health Solutions Announces 2007 Fourth Quarter and Year-end Financial Results



    LISLE, IL, March 6 /CNW/ - SXC Health Solutions Corp. ("SXC" or the
"Company") (NASDAQ:   SXCI, TSX: SXC), announces its financial results for the
three- and twelve-month periods ended December 31, 2007. Financial references
are in U.S. dollars unless otherwise indicated.

    
    2007 Financial Highlights (in millions, except per share data)

                                                          Full    Full
                                                   %      Year    Year   %
                                   Q4-07   Q4-06 change   2007    2006 change
    -------------------------------------------------------------------------
    Total Revenue                 $23.6M  $22.0M   +7%  $93.2M  $80.9M  +15%
    -------------------------------------------------------------------------
      Recurring revenue           $18.3M  $14.5M  +26%  $70.8M  $53.7M  +32%
    Adjusted EBITDA               $ 7.4M  $ 5.7M  +30%  $22.3M  $22.1M   +1%
      Adjusted EBITDA (%)            31%     26%           24%     27%
    Net income before tax         $ 6.4M  $ 5.1M  +25%  $18.3M  $16.3M  +12%
    Net income                    $ 3.8M  $ 3.3M  +15%  $13.2M  $13.5M   -2%
    -------------------------------------------------------------------------
    Earnings per share (f/d)      $ 0.18  $ 0.15  +20%  $ 0.61  $ 0.69  -12%
    -------------------------------------------------------------------------
    Transaction volume            106.1M   92.4M  +15%  404.4M  310.2M  +30%
    Cash                                                $90.9M  $70.9M  +28%


    2007 Operational Highlights

    -   awarded a $6.9 million multi-year contract to provide Pharmacy
        Benefit Management ("PBM") and pharmacy network services for the
        Department of Veterans Affairs, Health Administration Center (HAC) in
        Denver, Colorado
    -   renewed a multi-year contract with MemberHealth, Inc. an innovative
        PBM and major Medicare Part D provider
    -   entered into a five-year transaction processing contract renewal with
        CatalystRx
    -   added William J. Davis, Steven D. Cosler, Anthony R. Masso, and
        Curtis J. Thorne to the Board of Directors
    

    "In 2007, we generated solid growth in our PBM services and transaction
processing segments, and underwent an organizational re-alignment to further
enhance our growth prospects and optimize our cost structure," said Gordon S.
Glenn, Chairman and CEO of SXC. "We believe we have a unique business model
capable of servicing a broad range of organizations grappling with rising drug
costs and a desire to deliver innovative services to their health plan
members. Our goal is to establish SXC as the leader in Pharmacy Spend
Management, and in 2008 we will continue to explore opportunities to add to
our comprehensive suite of technology and benefits-management services and to
ensure those services can be delivered in a flexible and transparent pricing
model."

    Subsequent to Year-End

    SXC and National Medical Health Card Systems, Inc. (NASDAQ:   NMHC)
announced on February 26, 2008, that the two companies had entered into a
definitive agreement for SXC to acquire NMHC. The purchase price will be
funded with a combination of cash and SXC stock, resulting in a transaction
value of approximately $143 million, or an estimated $11.00 per share of NMHC.
For more detail on this transaction, please visit: www.sxc.com
    "This transaction brings together the highly complementary capabilities
of SXC's PBM technology expertise and NMHC's leadership in traditional PBM
services," said Mark Thierer, President and COO of SXC. "The combination is
expected to give us a broader and more competitive set of technical,
contracting and clinical services to offer all our customers and prospects -
from those interested only in our claims processing technology to those who
seek our full-service pharmacy benefits management including mail order and
specialty pharmacy."

    Financial Review

    Total revenue for Q4 2007 was $23.6 million, an increase of $1.6 million,
or 7%, from $22.0 million in Q4 2006. Fiscal 2007 revenue was $93.2 million, a
15% increase over fiscal 2006. Revenue growth for Q4 and fiscal 2007 was
driven primarily by an increase in transaction processing activity from the
Company's PBM business which was offset in part by a reduction in system sales
and consulting related activity during the same periods of the prior year.
    Recurring revenue was $18.3 million in Q4 2007, up 26% compared to
$14.5 million for the same period last year. Recurring revenue consisted of
transaction processing revenue of $14.2 million, up 34% from $10.6 million for
Q4 2006, and maintenance revenue of $4.1 million, up 6% from $3.9 million in
Q4 2006. Overall, recurring revenue accounted for 78% of total revenue in Q4
2007, compared to 66% in Q4 2006. Driven by growth in its PBM services
business, SXC's transaction volume increased 15% from 92.4 million in Q4 2006
to 106.1 million in Q4 2007. For 2007, transaction volume was 404.4 million,
up 30% from 310.2 million in 2006.
    Recurring revenue for fiscal 2007 was $70.8 million, up 32% compared to
$53.7 million for the same period last year. For fiscal 2007, recurring
revenue consisted of transaction processing revenue of $54.3 million, up 40%
from $38.8 million last year, and maintenance revenue of $16.5 million, up 10%
from last year. Overall, recurring revenue accounted for 76% of total fiscal
2007 revenue, compared to 66% in fiscal 2006.
    Non-recurring revenue was $5.2 million for Q4 2007 compared to
$7.5 million in Q4 2006. Non-recurring revenue consisted of system sales
revenue of $1.2 million, down from $2.8 million last year, and professional
service revenue of $4.0 million, down 14% from $4.7 million in Q4 2006. This
reduction reflects the continued slowing of new claim processing only licenses
as new clients focus on a full service outsourced model.
    Fiscal 2007 non-recurring revenue was $22.4 million, compared to
$27.2 million in the same period last year. For fiscal 2007, non-recurring
revenue consisted of system sales revenue of $8.4 million, down 19% from
$10.3 million last year, and professional service revenue of $14.0 million,
down 17% from $16.9 million last year. Non-recurring revenue for 2006 was
bolstered by professional services for the implementation of Medicare Part D
programs for the Company's customers. The reduction of these professional
services provided during 2007 resulted in a decrease in non-recurring revenue
for the year ended December 31, 2007 as compared to the same period last year.
    Gross profit margin in Q4 2007 was 58% compared to 56% for the same
period last year. Fiscal 2007 gross profit margin was 57%, compared to 58%
last year. Gross profit margin was relatively consistent year-over-year as the
decrease in lower system sales, the majority of which is comprised of high
margin upgrades to existing license customers, was largely offset by an
increase in higher-margin transaction processing revenue. Cost of revenue in
2007 included $1.5 million of depreciation expense related to the Company's
data center operations, compared to $0.9 million in 2006. This increase
resulted from an expansion of the data center capacity to support the higher
transaction processing volume.
    In the accompanying consolidated statement of operations, 2007
stock-based compensation expense was allocated to cost of revenue, product
development expense and SG&A, in the amount of $0.3 million, $0.3 million and
$2.5 million, respectively. This compares to the allocation in 2006 to cost of
revenue, product development expense and SG&A, in the amount of $0.4 million,
$0.2 million, and $1.4 million, respectively.
    Q4 2007 product development expenses were $1.3 million, or 5.7% of
revenue, compared to $2.3 million, or 10.3% of revenue, in Q4 2006. Fiscal
2007 product development expenses were $9.3 million, or 10% of revenue,
compared to $8.9 million, or 11% of revenue, in the same period last year.
Product development costs for 2007 were reduced in the fourth quarter by
$0.9 million due to the successful application of scientific research and
education (SRED) credits related to previous years. For U.S. GAAP presentation
purposes, the SRED credit will be a reduction of the company's effective tax
rate compared to a reduction of product development expense for Canadian GAAP
purposes.
    Q4 2007 selling, general and administrative (SG&A) expenses were
$6.0 million, or 26% of revenue, inclusive of $0.6 million of non-cash stock
compensation charges, compared with $5.1 million, or 23% of revenue, inclusive
of $0.4 million in non-cash stock compensation charges, in Q4 2006. Fiscal
2007 SG&A expenses were $26.6 million, or 29% of revenue, compared to
$18.7 million, or 23% of revenue, in the same period last year. SG&A costs for
2007 included severance costs of approximately $0.3 million, resulting from
the Company's re-alignment plan announced, at the end of Q3 2007. The Company
reduced its workforce in the third quarter of 2007 by approximately 7%, of
which a portion will be re-deployed to support the fastest growing areas of
the Company's business. SG&A costs also increased due to the addition of new
sales, marketing, finance and administration resources to support the growth
of the Company's operations.
    Adjusted EBITDA(1) for Q4 2007 was $7.4 million, or 31% of revenue,
compared to $5.7 million, or 26% of revenue, for the same period of 2006. For
fiscal 2007, Adjusted EBITDA was $22.3 million, or 24% of revenue, compared to
$22.1 million, or 27% of revenue, in fiscal 2006. Year-over-year, lower
Adjusted EBITDA reflects the decrease in high margin systems sales revenue,
expense increases in legal, product development and SG&A, and $0.7 million in
severance charges, partially offset by the increase in transaction processing
revenue.
    Income before income taxes was $6.4 million in Q4 2007, up 24% compared
to $5.1 million in Q4 2006. Fiscal 2007 income before income taxes was
$18.3 million, compared to $16.3 million last year. In fiscal 2006, SXC
incurred a blended tax rate of approximately 17%, while in fiscal 2007, the
Company incurred a tax rate of 28%.
    SXC reported net income of $3.8 million, or $0.18 per share
(fully-diluted), in Q4 2007, up 20% from $3.3 million, or $0.15 per share
(fully-diluted), for the same period last year. Q4 2007 net income increased
$0.5 million primarily due to an increase in gross profit of $1.2 million, net
interest income of $0.3 million, and a decrease in product development costs
of $0.9 million. This was partially offset by an increase of depreciation and
amortization to $0.2 million, and income taxes of $0.7 million.
    For fiscal 2007, SXC reported net income of $13.2 million, or $0.61 per
share, compared to net income of $13.5 million, or $0.69 per share, in fiscal
2006. Net income decreased $0.3 million primarily due to a $2.3 million
increase in income tax expense and an $8.4 million increase in expenses,
offset by a $3.5 million increase in net interest income and a $6.7 million
increase in gross profit. Also, diluted earnings per share decreased due to
additional shares included in the weighted average number of common shares
outstanding as compared to fiscal 2006.

    Liquidity and Resources

    SXC has a strong balance sheet from which to pursue its growth
initiatives. At December 31, 2007, the Company had cash and cash-equivalents
of $90.9 million, up $20.0 million from $70.9 million at December 31, 2006.
    SXC also continues to generate strong cash from operations. In fiscal
2007, the Company generated cash from operations of approximately
$22.2 million, compared to $18.0 million of cash from operations generated in
fiscal 2006. The Company's quarterly cash flows can be impacted by the timing
of pharmacy deposit and rebate payments it receives for certain customers, and
as a result, SXC measures its cash from operations performance on a
year-to-date basis. Net of pharmacy deposits and rebates payments, fiscal 2007
cash from operations was approximately $23.1 million, and fiscal 2006 cash
from operations, net of pharmacy deposits and rebate payments, was
approximately $13.8 million.

    
    2008 Financial Guidance

    SXC's stand-alone guidance for fiscal 2008:
    -   Consolidated revenue of $97-$103 million
    -   Adjusted EBITDA of $23-$25 million
    -   Net income before tax of $19.0 to $21.0 million
    -   Based on an expected tax rate of 32-34%, the Company expects EPS
        (fully-diluted) of $0.58 to $0.64.
    

    This guidance will be adjusted upon completion of the acquisition of
NMHC, which is expected to occur in the second quarter of 2008.

    Notice of Conference Call

    SXC will host a conference call on March 6, 2008 at 8:30AM (ET) to
discuss its fourth quarter and year-end 2007 financial results. Mr. Gordon S.
Glenn, Chairman and CEO, will host the call. To participate on the call,
please dial 416-644-3420 or 1-800-731-5319. A replay of the call can be heard
by dialling 416-640-1917 or 1-877-289-8525 and entering the reference code
21263941. The taped call will be available until March 13, 2008.
    A live audio webcast of the call will be available at www.sxc.com and
www.newswire.ca. Webcast attendees are welcome to listen to the conference in
real-time or on-demand at your convenience.

    (1) Non-GAAP Financial Measures

    SXC reports its financial results in accordance with Canadian generally
accepted accounting principles ("GAAP"). SXC's management also evaluates and
makes operating decisions using various other measures. One such measure is
adjusted EBITDA, which is a non-GAAP financial measure. SXC's management
believes that this measure provides useful supplemental information regarding
the performance of SXC's business operations.
    Adjusted EBITDA is a non-GAAP measure that management believes is a
useful supplemental measure of operating performance prior to net interest
income (expense), income taxes, depreciation, amortization, stock-based
compensation, debt service, and certain other one-time charges. Management
believes it is useful to exclude depreciation, amortization and net interest
income (expense) as these are essentially fixed amounts that cannot be
influenced by management in the short term. In addition, management believes
it is useful to exclude stock-based compensation as this is not a cash
expense. Lastly, debt service and certain other one-time charges (including
lease termination charges and losses on disposals of capital assets) are
excluded as these are not recurring items.
    Management believes that Adjusted EBITDA provides useful supplemental
information to management and investors regarding the performance of the
Company's business operations and facilitates comparisons to its historical
operating results. Management also uses this information internally for
forecasting and budgeting as it believes that the measure is indicative of the
Company's core operating results. Note however, that Adjusted EBITDA is a
performance measure only, and it does not provide any measure of the Company's
cash flow or liquidity. Non-GAAP financial measures should not be considered
as a substitute for measures of financial performance in accordance with GAAP,
and investors and potential investors are encouraged to review the
reconciliation of Adjusted EBITDA.
    Adjusted EBITDA does not have a standardized meaning prescribed by GAAP.
The Company's method of calculating Adjusted EBITDA may differ from the
methods used by other companies and, accordingly, it may not be comparable to
similarly titled measures used by other companies. Reconciliation of Adjusted
EBITDA to net income is shown below (in thousands):

    
                                     For the three           For the twelve
                                     months ended            months ended
                                      December 31,            December 31,
                                    2007        2006        2007        2006
                               ----------  ----------  ----------  ----------
                                                 (unaudited)

    Adjusted EBITDA            $   7,399   $   5,701   $  22,271   $  22,106

    Depreciation                  (1,052)       (569)     (3,994)     (2,519)
    Amortization                    (396)       (396)     (1,584)     (1,584)
    Stock-based compensation        (800)       (573)     (3,069)     (1,958)
    Net loss on disposal
     of assets                         -           -        (133)          -
    Lease termination                  -           -           -        (758)
    Other income (expense)           (19)          3         221         (18)
    Interest income
     (expense), net                1,230         966       4,578       1,074
    Income tax recovery
     (expense)                    (2,549)     (1,841)     (5,126)     (2,816)
                                  -------     -------     -------     -------

    Net Income                 $   3,813   $   3,291   $  13,164   $  13,527
    

    About SXC Health Solutions Corp.

    SXC Health Solutions Corp. (formerly Systems Xcellence, Inc.) is a
leading provider of pharmacy benefits management (PBM) services and healthcare
IT solutions to the healthcare benefits management industry. The Company's
product offerings and solutions combine a wide range of software applications,
application service provider (ASP) processing services and professional
services, designed for many of the largest organizations in the pharmaceutical
supply chain, such as Federal, provincial, and, state and local governments,
pharmacy benefit managers, managed care organizations, retail pharmacy chains
and other healthcare intermediaries. SXC is based in Lisle, Illinois with
locations in; Scottsdale, Arizona; Warminster, Pennsylvania; Alpharetta,
Georgia; Milton, Ontario and Victoria, British Columbia. For more information
please visit www.sxc.com.

    Forward-Looking Statements

    Certain statements included herein, including those that express
management's expectations or estimates of our future performance, constitute
"forward-looking statements" within the meaning of applicable securities laws.
Forward-looking statements are necessarily based upon a number of estimates
and assumptions that, while considered reasonable by management at this time,
are inherently subject to significant business, economic and competitive
uncertainties and contingencies. We caution that such forward-looking
statements involve known and unknown risks, uncertainties and other risks that
may cause our actual financial results, performance, or achievements to be
materially different from our estimated future results, performance or
achievements expressed or implied by those forward-looking statements.
Numerous factors could cause actual results to differ materially from those in
the forward-looking statements, including without limitation, our ability to
achieve increased market acceptance for our product offerings and penetrate
new markets; consolidation in the healthcare industry; the existence of
undetected errors or similar problems in our software products; our ability to
identify and complete acquisitions, manage our growth and integrate
acquisitions; our ability to compete successfully; potential liability for the
use of incorrect or incomplete data; the length of the sales cycle for our
healthcare software solutions; interruption of our operations due to outside
sources; our dependence on key customers; maintaining our intellectual
property rights and litigation involving intellectual property rights; our
ability to obtain, use or successfully integrate third-party licensed
technology; compliance with existing laws, regulations and industry
initiatives and future change in laws or regulations in the healthcare
industry; breach of our security by third parties; our dependence on the
expertise of our key personnel; our access to sufficient capital to fund our
future requirements; and potential write-offs of goodwill or other intangible
assets. This list is not exhaustive of the factors that may affect any of our
forward-looking statements. Other factors that should be considered are
discussed from time to time in SXC's filings with the Canadian Securities
Administrators, including the risks and uncertainties discussed in our 2006
Annual Report dated March 23, 2007, which is available at www.sedar.com.
Investors are cautioned not to put undue reliance on forward-looking
statements. All subsequent written and oral forward-looking statements
attributable to SXC or persons acting on our behalf are expressly qualified in
their entirety by this notice. We disclaim any intent or obligation to update
publicly these forward-looking statements, whether as a result of new
information, future events or otherwise.
    Certain of the assumptions made in preparing forward-looking information
and management's expectations include: maintenance of our existing customers
and contracts, our ability to market our products successfully to anticipated
customers, the impact of increasing competition, the growth of prescription
drug utilization rates at predicted levels, the retention of our key
personnel, our customers continuing to process transactions at historical
levels, that our systems will not be interrupted for any significant period of
time, that our products will perform free of major errors, our ability to
obtain financing on acceptable terms and that there will be no significant
changes in the regulation of our business.

    
                         SXC HEALTH SOLUTIONS CORP.
                         Consolidated Balance Sheets
                               (in thousands)

                                                             December 31,
                                                       ----------------------
                                                            2007        2006
                                                       ----------  ----------
                                              (All amounts are in US dollars)
    ASSETS

    Current assets
      Cash and cash equivalents                        $  90,929   $  70,943
      Accounts receivable, net of allowance for
       doubtful accounts of $605 (2006 - $214)            17,990      14,312

      Unbilled revenue                                     1,195       1,976
      Prepaid expenses                                     2,361       2,026
      Inventory                                              242         260
      Income tax recoverable                               1,073           -
      Future tax asset, current                            3,246       2,360
                                                       ----------  ----------
        Total current assets                             117,036      91,877

    Property, plant and equipment, net of
     accumulated depreciation of $13,004
     (2006 - $10,055)                                     13,629      10,114
    Goodwill                                              15,996      15,996
    Other intangible assets, net of accumulated
     amortization of $4,734 (2006 - $3,150)                9,661      11,245
    Future tax asset                                       2,066       1,992
                                                       ----------  ----------
    Total assets                                       $ 158,388   $ 131,224
                                                       ----------  ----------
                                                       ----------  ----------



    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities
      Accounts payable                                 $   2,977   $     655
      Salaries and wages payable                           2,909       4,183
      Income taxes payable                                     -         594
      Accrued liabilities, current                         4,807       3,457
      Pharmacy benefit management rebates payable          1,133       1,173
      Pharmacy benefit claim payments payable              2,059       2,964
      Deferred revenue, current                            6,750       3,242
                                                       ----------  ----------
        Total current liabilities                         20,635      16,268

    Accrued liabilities                                      562           -
    Deferred revenue                                         223           -
    Deferred lease inducements                             3,222       3,169
    Deferred rent                                          1,087         297
                                                       ----------  ----------
        Total liabilities                                 25,729      19,734
                                                       ----------  ----------

    Shareholders' equity
      Capital stock                                      103,520      99,840
      Contributed surplus                                  8,743       4,418
      Retained earnings                                   20,396       7,232
                                                       ----------  ----------
        Total shareholders' equity                       132,659     111,490

                                                       ----------  ----------
    Total liabilities and shareholders' equity         $ 158,388   $ 131,224
                                                       ----------  ----------
                                                       ----------  ----------


                         SXC HEALTH SOLUTIONS CORP.
                    Consolidated Statements of Operations
                       (in thousands except share data)


                                 Three months ended  Years ended December 31,
                               ----------------------  ----------------------
                                    2007        2006        2007        2006
                               ----------  ----------  ----------  ----------

    Revenue:
      Transaction processing   $  14,167   $  10,607   $  54,273   $  38,767
      Maintenance                  4,145       3,900      16,476      14,931
      Professional services        4,030       4,684      14,031      16,915
      System sales                 1,210       2,821       8,391      10,310
                               ----------  ----------  ----------  ----------
    Total revenue                 23,552      22,012      93,171      80,923

    Cost of revenue                9,975       9,668      39,598      34,053
                               ----------  ----------  ----------  ----------
    Gross profit                  13,577      12,344      53,573      46,870

    Expenses:
      Product development costs,
       net of investment tax
       credits of $875
       (2006 and 2005 - nil)       1,334       2,272       9,334       8,870
      Selling, general and
       administration              6,039       5,070      26,555      18,740
      Depreciation of property,
       plant and equipment           657         443       2,476       1,631
      Amortization of
       intangible assets             396         396       1,584       1,584
      Lease termination                -           -           -         758
                               ----------  ----------  ----------  ----------
                                   8,426       8,181      39,949      31,583

                               ----------  ----------  ----------  ----------
    Operating income               5,151       4,163      13,624      15,287

    Interest income               (1,255)       (996)     (4,690)     (2,941)
    Interest expense                  25          30         112       1,867
                               ----------  ----------  ----------  ----------
      Net interest income         (1,230)       (966)     (4,578)     (1,074)

    Net loss (gain) on
     disposal of capital
     assets                            -           -         133           -
    Other (income) expense            19          (3)       (221)         18
                               ----------  ----------  ----------  ----------
    Income before income taxes     6,362       5,132      18,290      16,343

    Income tax expense
     (recovery):
      Current                      2,178       3,753       5,211       6,488
      Future                         371      (1,912)        (85)     (3,672)
                               ----------  ----------  ----------  ----------
                                   2,549       1,841       5,126       2,816

                               ----------  ----------  ----------  ----------
    Net income and
     comprehensive income      $   3,813   $   3,291   $  13,164   $  13,527
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------

    Earnings per share:
      Basic                    $    0.18   $    0.16   $    0.63   $    0.72
      Diluted                  $    0.18   $    0.15   $    0.61   $    0.69



                         SXC HEALTH SOLUTIONS CORP.
                    Consolidated Statements of Cash Flows
                               (in thousands)

                                  Three months ended        Years ended
                                     December 31,           December 31,
                               ----------------------  ----------------------
                                    2007        2006        2007        2006
                               ----------  ----------  ----------  ----------

    Cash flow from operations:
      Net income               $   3,813   $   3,291   $  13,164   $  13,527
      Items not involving
       cash, net of effects
       from acquisition:
        Stock-based
         compensation                800         573       3,069       1,958
        Depreciation of
         property, plant and
         equipment                 1,052         569       3,994       2,519
        Amortization of
         intangible assets           396         396       1,584       1,584
        Deferred lease
         inducements and rent        (16)        298         452         298
        Deferred charges -
         long-term debt                -           -           -         788
        Loss (gain) on
         disposal of property,
         plant and equipment           -           -         133           -
        Future tax asset            (435)     (1,912)       (960)     (3,672)
        (Gain) loss on foreign
         exchange                     (2)         10        (152)          6
      Cash received for lease
       inducement                      -           -           -         758
      Changes in operating
       assets and liabilities:
        Accounts receivable          204        (273)     (3,678)     (5,662)
        Unbilled revenue              94         354         781        (974)
        Prepaid expenses            (345)       (417)       (335)       (835)
        Inventory                     40         (13)         18         177
        Income tax receivable      1,316           -      (1,073)          -
        Income taxes payable           -       1,391        (594)        404
        Accounts payable           1,296        (447)      2,322        (111)
        Accrued liabilities          305       2,024         638       2,940
        Deferred revenue           3,259         113       3,731         111
        Pharmacy benefit claim
         payments payable           (228)      2,529        (905)      3,021
        Pharmacy benefit
         management rebates
         payable                  (1,133)      1,165         (40)      1,173
                               ----------  ----------  ----------  ----------
          Net cash provided by
          operations              10,416       9,650      22,149      18,010

    Cash flow from investing
     activities:
      Purchase of property,
       plant and equipment          (941)     (4,177)     (7,651)     (8,887)
      Lease inducements received       -       2,442         391       2,442
      Proceeds from disposal
       of property, plant and
       equipment                       -           -           9           -
                               ----------  ----------  ----------  ----------
        Net cash used in
         investing activities       (941)     (1,735)     (7,251)     (6,445)

    Cash flow from financing
     activities:
      Proceeds from exercise of
       options                       329         213       2,531         421
      Tax benefit on option
       exercises                       9       1,433       2,405       1,433
      Proceeds from public
       offering, net of costs
       of issuance                     -         (52)          -      34,680
      Repayment of debt                -           -           -     (13,102)
                               ----------  ----------  ----------  ----------
        Net cash provided by
        financing activities         338       1,594       4,936      23,432

    Effect of foreign exchange
     on cash balances                  2         (10)        152          (6)

                               ----------  ----------  ----------  ----------
    Increase in cash and cash
     equivalents                   9,815       9,500      19,986      34,991

    Cash and cash equivalents,
     beginning of period          81,114      61,442      70,943      35,952

                               ----------  ----------  ----------  ----------
    Cash and cash equivalents,
     end of period             $  90,929   $  70,942   $  90,929   $  70,943
                               ----------  ----------  ----------  ----------
                               ----------  ----------  ----------  ----------
    

    %SEDAR: 00001439E




For further information:

For further information: Jeff Park, Chief Financial Officer, SXC Health
Solutions Corp., Tel: (630) 577-3206, investors@sxc.com; Dave Mason, Investor
Relations - Canada, The Equicom Group Inc., (416) 815-0700 ext. 237,
dmason@equicomgroup.com; Susan Noonan, Investor Relations - U.S., The SAN
Group, LLC, (212) 966-3650, susan@sanoonan.com

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