SXC Health Solutions announces 2007 third quarter financial results



    LISLE, IL, Nov. 8 /CNW/ - SXC Health Solutions Corp. ("SXC" or the
"Company") (NASDAQ:   SXCI, TSX: SXC), announces its financial results for the
three- and nine-month periods ended September 30, 2007. Financial references
are in U.S. dollars unless otherwise indicated.

    
    Third Quarter Fiscal 2007 (Q3 2007) Highlights:
      -  Completed re-alignment plan to optimize costs and support growth;
         reduced workforce by 7% to generate annual savings of approximately
         $3.0 million. Total severance costs of $0.7 million were incurred in
         the quarter
      -  Total revenue increased to $22.2 million from $21.0 million in
         Q3 2006
      -  Revenue from recurring sources was $17.3 million, or 78% of revenue,
         compared to $14.3 million, or 68% of revenue in Q3 2006
      -  Transaction processing revenue, which is the primary driver of
         recurring revenue, increased 27% to $13.2 million from $10.4 million
         in Q3 2006
      -  Adjusted earnings before interest, taxes, depreciation, amortization
         and stock-based compensation (adjusted EBITDA(1)) was $3.7 million,
         or 17% of revenue, compared to $6.0 million, or 29% of revenue, in
         Q3 2006
      -  Net income before income taxes was $2.4 million, compared to
         $4.2 million in Q3 2006
      -  Net income was $2.7 million, or $0.12 per share (fully-diluted),
         compared to net income of $2.5 million, or $0.12 per share
         (fully-diluted) in Q3 2006
      -  Book of Business(1) was $223 million at September 30, 2007, compared
         to $230 million at June 30, 2007, and $175 million at September 30,
         2006
      -  106.5 million transactions were processed in Q3 2007 compared to
         77.2 million in Q3 2006
      -  Launched PBM services for 226,000 people served by AMERIGROUP
         Community Care of Georgia
    

    "In Q3 we completed a thorough review of our business and took the
necessary steps to re-align our operations to better support our most
promising growth opportunities, primarily our PBM services and transaction
processing businesses," said Gordon S. Glenn, Chairman and CEO of SXC. "Over
the past eight quarters we have grown recurring revenue in these businesses
from $9.3 million per quarter to $17.3 million. While our overall growth rates
during this period of transition to a more full-service PBM business model
have been below our expectations, we will continue to invest in the fastest
growing segments of our business to leverage our unique value proposition and
capitalize on our growing pipeline. In addition to organic growth we will
continue to review accretive acquisitions that would complement or expand our
business."

    Financial Review

    Total revenue for Q3 2007 was $22.2 million, an increase of $1.2 million,
or 6%, from $21.0 million in Q3 2006. Year-to-date ("YTD") revenue was
$69.6 million, an 18% increase over the same period in 2006. Revenue growth
for the Q3 and the YTD periods was driven primarily by an increase in
transaction processing volume which was offset in part by a reduction in
Medicare Part D Program-related consulting and implementation activity during
the same periods of the prior year.
    Recurring revenue was $17.3 million in Q3 2007, up 22% compared to
$14.3 million for the same period last year. Recurring revenue consisted of
transaction processing revenue of $13.2 million, up 27% from $10.4 million for
Q3 2006, and maintenance revenue of $4.1 million, up 8% from $3.8 million in
Q3 2006. Overall, recurring revenue accounted for 78% of total revenue in Q3
2007, compared to 68% in Q3 2006.
    Driven by an increase in its PBM services business, SXC's transaction
volume increased 39% from 77.2 million in Q3 2006 to 106.5 million in Q3 2007.
Average revenue per transaction declined slightly year-over-year due primarily
to the deferral of revenue from certain Q3 2007 transactions. As noted in its
October 1, 2007 press release, some of SXC's recent InformedRx contract awards
require the Company to defer certain revenues until future delivery of
services such as rebate collection and submission has been completed, and/or
the achievement of performance measures such as call center or network
performance objectives has been met. In the coming quarters, SXC expects to
reach the bulk of these performance objectives and to recognize a majority of
the revenue that has been deferred or reserved.
    YTD recurring revenue was $52.4 million, up 34% compared to $39.2 million
for the same period last year. For the YTD period, recurring revenue consisted
of transaction processing revenue of $40.1 million, up 42% from $28.2 million
last year, and maintenance revenue of $12.3 million, up 12% from last year.
Overall, recurring revenue accounted for 75% of total YTD revenue in 2007,
compared to 67% in the same period in 2006.
    Non-recurring revenue was $4.9 million for Q3 2007 compared to
$6.8 million in Q3 2006. Non-recurring revenue consisted of system sales
revenue of $1.5 million, down 45% from $2.7 million last year, and
professional service revenue of $3.4 million, down 17% from $4.1 million in Q3
2006.
    YTD non-recurring revenue was $17.2 million, compared to $19.7 million in
the same period last year. For the YTD period, non-recurring revenue consisted
of system sales revenue of $7.2 million, down 4% from $7.5 million last year,
and professional service revenue of $10.0 million, down 18% from $12.2 million
last year. Non-recurring revenue declined due in large part to delays in the
signing of certain systems sales contracts and an influx of professional
service work for certain Medicare Part D customers that was completed in 2006.
    Gross profit margin in Q3 2007 was 56% compared to 61% for the same
period last year. YTD gross profit margin was 59%, compared to 60% in the same
period of the prior year. The year-over-year change in gross margin was
primarily due to a decrease in high margin system sales, approximately
$0.2 million in severance costs, the aforementioned deferral of certain
transaction processing revenue and increased investment in our infrastructure
to support our pharmacy benefits administrative services offering. This was
partially offset by the 42% increase in our strong margin transaction
processing revenue.
    Q3 2007 product development expenses were $2.3 million, or 11% of
revenue, compared to $2.3 million, or 11% of revenue, in Q3 2006. YTD product
development expenses were $7.8 million, or 11% of revenue, compared to
$6.4 million, or 11% of revenue, in the same period last year. Year-over-year,
product development expenses rose primarily due to the redeployment of
personnel resources from certain completed professional services projects to
product enhancement and new product development initiatives.
    Q3 2007 selling, general and administrative (SG&A) expenses were
$6.4 million, or 29% of revenue, compared with $4.5 million, or 22% of
revenue, in Q3 2006. SG&A costs in Q3 2007 included severance costs of $0.3
million resulting from the Company's previously announced re-alignment plan.
The plan saw the Company reduce its workforce by approximately 7% to generate
cost savings and to be in a position to deploy a portion of the savings to
support growth in the fastest growing segments of the business. SG&A in Q3
2007 also continued to experience higher then expected legal and professional
fees associated with delayed and protested contracts as well as well as
additional receivables reserves of approximately $0.6 million.
    YTD SG&A expenses were $18.7 million, or 27% of revenue, compared to
$12.7 million, or 22% of revenue, in the same period last year.
Year-over-year, SG&A expenses rose primarily due to the ongoing investment in
personnel and infrastructure costs to support the Company's growth, a
significant increase in public reporting costs resulting from the listing of
SXC's shares in the U.S., and the aforementioned charges.
    Adjusted EBITDA(1) for Q3 2007 was $3.7 million, or 17% of revenue,
compared to $6.0 million, or 29% of revenue, for the same period of 2006. YTD,
Adjusted EBITDA was $14.9 million, or 21% of revenue, compared to
$16.4 million, or 28% of revenue, in the same period last year.
Year-over-year, lower adjusted EBITDA reflects the decrease in high margin
systems sales revenue and expense increases in product development and SG&A,
partially offset by the increase in transaction processing revenue. Adjusted
EBITDA for Q3 2007 and the YTD period was also impacted by the $0.7 million
severance charge, additional receivables reserves and the higher than expected
legal and professional fees.
    Income before income taxes was $2.4 million in Q3 2007, compared to
$4.2 million in Q3 2006. YTD income before income taxes was $11.9 million,
compared to $11.2 million in the same period last year. In fiscal 2006, SXC
incurred a blended tax rate of approximately 17%, while in fiscal 2007, the
Company expects to be taxable at a rate of approximately 23%.
    SXC reported net income of $2.7 million, or $0.12 per share
(fully-diluted), in Q3 2007 compared to net income of $2.5 million, or $0.12
per share (fully-diluted), for the same period last year. Q3 2007 net income
was impacted negatively by $0.05 per share due to $0.7 million in severance
costs combined with $0.6 million in additional receivables reserves as well as
higher than expected legal and professional fees. This $0.05 impact was offset
by an income tax benefit of $0.3 million recognized in Q3 2007.
    YTD, SXC reported net income of $9.4 million, or $0.43 per share,
compared to net income of $10.2 million, or $0.54 per share, in the same
period last year.

    Liquidity and Resources

    SXC has a strong balance sheet from which to pursue its growth
initiatives. At September 30, 2007, the Company had cash and cash-equivalents
of $81.1 million, compared with $70.9 million of cash and cash-equivalents at
December 31, 2006. SXC also continues to generate strong cash from operations.
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. YTD, SXC has generated $11.9 million in cash from operations. Net of
pharmacy deposits and rebates payments, YTD cash from operations is
approximately $11.5 million.

    2007 Financial Guidance

    
    SXC's guidance for fiscal 2007:
      -  Consolidated revenue of $92-$93 million
      -  Adjusted EBITDA of $19-$20 million
      -  Pre-tax income of $15.5-$16.5 million
      -  Based on an expected tax rate of 23%, the Company has revised its
         earnings per share (EPS) guidance from October 1, 2007, and now
         expects EPS (fully-diluted) of $0.55-$0.60
    

    Notice of Conference Call

    SXC will host a conference call on November 8, 2007 at 8:30AM (ET) to
discuss its third quarter 2007 financial results. Mr. Gordon S. Glenn,
Chairman and CEO, will host the call. To participate on the call, please dial
416-644-3428 or 1-800-594-3615. A replay of the call can be heard by dialling
416-640-1917 or 1-877-289-8525 and entering the reference code 21251551. The
taped call will be available until November 15, 2007.
    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. Two such measures are
book of business and adjusted EBITDA, which are non-GAAP financial measures.
SXC's management believes that these measures provide useful supplemental
information regarding the performance of SXC's business operations.
    Book of business is management's estimate of the total revenue expected
to be recognized over future periods generally not exceeding three years based
on the existing portfolio of in-place contracts at a point in time. It is
composed of two components: (1) revenue expected to be recognized over such
period from in-place renewable contracts related to transaction processing,
and maintenance contracts described as recurring revenues in the above
discussion; and (2) revenue expected to be recognized from in-place
professional services and systems sales contracts, described as non-recurring
revenues in the above discussion. SXC's book of business at any time does not
indicate demand for the Company's products and services and may not reflect
actual revenue for any period in the future.
    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:

    
                                     For the                  For the
                               three months ended         nine months ended
                                     Sept 30,                 Sept 30,
                                2007         2006         2007         2006
                          ------------ ------------ ------------ ------------
                                               (unaudited)

    Adjusted EBITDA        $3,687,364   $6,011,904  $14,871,496  $16,406,257

    Amortization           (1,437,891)  (1,191,747)  (4,130,241)  (3,138,294)

    Stock-based
     compensation          (1,117,456)    (471,110)  (2,268,560)  (1,384,843)

    Net loss on
     disposal of assets             -            -     (133,489)           -

    Lease termination               -            -            -     (757,815)

    Other income
     (expense)                 40,873        9,254      238,693      (21,177)

    Interest income
     (expense), net         1,192,325     (158,629)   3,349,996      105,812

    Income tax
     recovery (expense)       298,917   (1,656,055)  (2,576,396)    (975,246)
                          ------------ ------------ ------------ ------------

    Net Income             $2,664,132   $2,543,617   $9,351,499  $10,234,694
                          ------------ ------------ ------------ ------------
                          ------------ ------------ ------------ ------------
    

    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 under Item 8,
Risk Factors in our Annual Information Form 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. Risks and uncertainties
about our business are more fully discussed in our Annual Information Form.
    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

                                                    (unaudited)
                                                  September 30,  December 31,
                                                          2007          2006
                                                  ------------- -------------
                                              (All amounts are in US dollars)
    ASSETS

    Current assets
      Cash and cash equivalents                   $ 81,113,709  $ 70,943,380
      Accounts receivable, net of allowance
       for doubtful accounts of $729,958
       (December 31, 2006 - $214,276)               18,193,742    14,311,573
      Unbilled revenue                               1,288,925     1,975,765
      Prepaid expenses                               2,016,426     2,026,248
      Inventory                                        282,152       260,234
      Income tax receivable                          2,389,334             -
      Future tax asset, current portion              2,372,469     2,359,903
                                                  ------------- -------------
        Total current assets                       107,656,757    91,877,103

    Capital assets                                  13,739,331    10,113,858
    Goodwill and other intangible assets            26,053,147    27,241,147
    Future tax asset                                 2,504,765     1,992,039

                                                  ------------- -------------
    Total Assets                                  $149,954,000  $131,224,147
                                                  ------------- -------------
                                                  ------------- -------------


    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities
      Accounts payable                            $  1,680,705  $    654,976
      Salaries and wages payable                     3,451,211     4,183,314
      Income taxes payable                                   -       594,274
      Accrued liabilities                            3,933,098     3,456,710
      Pharmacy benefit management rebates payable    2,266,151     1,172,801
      Pharmacy benefit claim payments payable        2,286,835     2,963,719
      Deferred revenue, current portion              3,534,443     3,241,924
                                                  ------------- -------------
        Total current liabilities                   17,152,443    16,267,718

    Future income tax liability                        589,016             -
    Deferred revenue                                   179,459             -
    Deferred lease inducements                       3,311,892     3,168,757
    Deferred rent                                    1,013,592       297,608
                                                  ------------- -------------
        Total liabilities                           22,246,402    19,734,083
                                                  ------------- -------------

    Shareholders' equity
      Capital stock                                103,130,961    99,839,769
      Contributed surplus                            7,993,304     4,418,461
      Retained earnings                             16,583,333     7,231,834
                                                  ------------- -------------
        Total shareholders' equity                 127,707,598   111,490,064

                                                  ------------- -------------
    Total Liabilities and Shareholders' Equity    $149,954,000  $131,224,147
                                                  ------------- -------------
                                                  ------------- -------------



                         SXC HEALTH SOLUTIONS CORP.
                    Consolidated Statements of Operations
                                 (unaudited)

                              Three months ended           Nine months ended
                                 September 30,               September 30,
                              2007          2006          2007          2006
                      ------------- ------------- ------------- -------------
    Revenue:
      Transaction
       processing     $ 13,179,831  $ 10,411,186  $ 40,105,626  $ 28,159,580
      Maintenance        4,141,732     3,840,906    12,330,346    11,030,536
      Professional
       services          3,395,334     4,088,397    10,002,173    12,231,571
      System sales       1,492,364     2,705,711     7,180,583     7,489,437
                      ------------- ------------- ------------- -------------
    Total revenue       22,209,261    21,046,200    69,618,728    58,911,124

    Cost of revenue      9,791,552     8,208,940    28,282,190    23,318,771
                      ------------- ------------- ------------- -------------
    Gross profit        12,417,709    12,837,260    41,336,538    35,592,353

    Expenses:
      Product
       development
       costs             2,335,917     2,277,937     7,801,456     6,447,325
      Selling,
       general and
       administration    6,394,428     4,547,419    18,663,586    12,738,771
      Depreciation and
       amortization      1,437,891     1,191,747     4,130,241     3,138,294
      Lease
       termination               -             -             -       757,815
      Stock-based
       compensation      1,117,456       471,110     2,268,560     1,384,843
                      ------------- ------------- ------------- -------------
                        11,285,692     8,488,213    32,863,843    24,467,048

                      ------------- ------------- ------------- -------------
    Operating income     1,132,017     4,349,047     8,472,695    11,125,305

    Interest income     (1,219,135)     (894,671)   (3,435,487)   (1,943,292)
    Interest expense        26,810     1,053,300        85,491     1,837,480
                      ------------- ------------- ------------- -------------
      Net interest
       income           (1,192,325)      158,629    (3,349,996)     (105,812)

    Net loss on
     disposal of
     capital assets              -             -       133,489             -
    Other (income)
     expense               (40,873)       (9,254)     (238,693)       21,177

                      ------------- ------------- ------------- -------------
    Income before
     income taxes        2,365,215     4,199,672    11,927,895    11,209,940

    Income tax expense
     (recovery):
      Current              (92,030)      937,851     3,032,935     2,735,187
      Future              (206,887)      718,204      (456,539)   (1,759,941)
                      ------------- ------------- ------------- -------------
                          (298,917)    1,656,055     2,576,396       975,246

                      ------------- ------------- ------------- -------------
    Net income and
     comprehensive
     income           $  2,664,132  $  2,543,617  $  9,351,499  $ 10,234,694
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------

    Earnings per share:
      Basic           $       0.13  $       0.12  $       0.45  $       0.56
      Diluted         $       0.12  $       0.12  $       0.43  $       0.54

    Weighted average
     number of shares
     used in computing
     earnings per
     share:
      Basic             20,852,239    20,351,311    20,698,438    18,139,263
      Diluted           21,785,207    21,355,666    21,682,929    19,113,463



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

                              Three months ended           Nine months ended
                                 September 30,               September 30,
                              2007          2006          2007          2006
                      ------------- ------------- ------------- -------------
    Cash flow from
     operations:
      Net income      $  2,664,132  $  2,543,617  $  9,351,499  $ 10,234,694
      Items not
       involving cash,
       net of effects
       from acquisition:
        Depreciation of
        capital assets   1,041,891       795,747     2,942,241     1,950,294
        Amortization of
         intangible
         assets            396,000       396,000     1,188,000     1,188,000
        Deferred lease
         inducements
         and rent           83,223             -       468,334             -
        Deferred charges-
         long-term debt          -       693,712             -       787,735
        Net loss on
         disposal of
         capital assets          -             -       133,489             -
        Stock-based
         compensation    1,117,456       471,110     2,268,560     1,384,843
        Future income
         tax liability    (238,584)            -       589,016             -
        Future tax
         asset              31,697       718,204      (525,292)   (1,759,941)
      Cash received for
       lease inducement          -             -             -       757,815
      Changes in
       operating assets
       and liabilities:
        Accounts
         receivable     (3,705,897)     (993,835)   (3,882,169)   (5,388,595)
        Unbilled revenue   674,171      (826,086)      686,840    (1,327,974)
        Prepaid expenses  (233,641)        2,190         9,822      (417,901)
        Inventory          (15,866)      105,657       (21,918)      190,096
        Income tax
         receivable     (1,651,482)            -    (2,389,334)            -
        Income taxes
         payable                 -      (198,875)     (594,274)     (987,047)
        Accounts payable   768,833       403,327     1,025,729       335,768
        Accrued
         liabilities       693,088       564,188      (255,715)      916,424
        Deferred revenue   999,427      (555,685)      471,978        (2,146)
        Pharmacy benefit
         claim payments
         payable         2,283,908    (1,819,968)     (676,884)      491,990
        Pharmacy benefit
         management
         rebates payable 1,687,200      (191,371)    1,093,350         7,958
                      ------------- ------------- ------------- -------------
          Net cash
           provided by
           operations    6,595,556     2,107,932    11,883,272     8,362,013

    Cash flow from
     investing
     activities:
      Purchase of
       capital assets     (529,342)   (1,385,873)   (6,710,503)   (4,709,930)
      Lease inducements
       received                  -             -       390,785             -
      Proceeds from
       disposal of
       capital assets            -             -         9,300             -
                      ------------- ------------- ------------- -------------
        Net cash used
         in investing
         activities       (529,342)   (1,385,873)   (6,310,418)   (4,709,930)

    Cash flow from
     financing
     activities:
      Proceeds from
       exercise of
       options             173,029        56,389     2,202,625       207,967
      Tax benefit on
       option exercises    179,104             -     2,394,850             -
      Net proceeds from
       public offering           -             -             -    36,064,000
      Costs paid related
       to financing
       activities                -      (262,048)            -    (1,330,742)
      Repayment of debt          -   (12,449,048)            -   (13,102,858)
                      ------------- ------------- ------------- -------------
        Net cash provided
         by (used in)
         financing
         activities        352,133   (12,654,707)    4,597,475    21,838,367

                      ------------- ------------- ------------- -------------
    Increase (decrease)
     in cash and cash
     equivalents         6,418,347   (11,932,648)   10,170,329    25,490,450

    Cash and cash
     equivalents,
     beginning of
     period             74,695,362    73,375,030    70,943,380    35,951,932

                      ------------- ------------- ------------- -------------
    Cash and cash
     equivalents,
     end of period    $ 81,113,709  $ 61,442,382  $ 81,113,709  $ 61,442,382
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------
    

    %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, 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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