8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  May 7, 2009

 SXC HEALTH SOLUTIONS CORP.

(Exact name of registrant as specified in its charter)

Commission File Number:  000-52073

Yukon Territory, Canada	75-2578509
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

2441 Warrenville Road, Suite 610

Lisle, Illinois 60532-3246

(Address of principal executive offices, including zip code)

(630) 577-3206

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.         Results of Operations and Financial Condition.

On May 7, 2009, the registrant announced its earnings for the quarter ended March 31, 2009.  Further details are described in the press release issued by the registrant on May 7, 2009, and furnished as Exhibit 99.1 hereto and incorporated herein by reference.

Item 9.01.         Financial Statements and Exhibits.

(d)                      Exhibits

Exhibit No.	Description
99.1	Press released issued May 7, 2009

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SXC HEALTH SOLUTIONS CORP.
Dated: May 7, 2009	By:	/s/ Jeffrey Park
		Name:  Jeffrey Park
		Title:    Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press released issued May 7, 2009

EX-99.1

Exhibit 99.1

SXC HEALTH SOLUTIONS ANNOUNCES STRONG

FIRST QUARTER FINANCIAL RESULTS

Company revises 2009 guidance higher as positive momentum from 2008 continues into 2009

Lisle, Illinois, May 7, 2009 - SXC Health Solutions Corp. (“SXC” or the “Company”) (NASDAQ: SXCI, TSX: SXC), announces its financial results for the three-month period ended March 31, 2009.  Financial references are in U.S. dollars unless otherwise indicated.

Q1 2009 Financial Highlights

• Revenue was $291.0 million, compared to $24.3 million in Q1 fiscal 2008

• Gross profit was $39.2 million, compared to $13.5 million in Q1 fiscal 2008

• Adjusted EBITDA¹ was $16.3 million compared, to $6.3 million in Q1 fiscal 2008

• GAAP net income increased to $7.7 million, or $0.31 per share (diluted), compared to $3.4 million, or $0.16 per share (diluted), in Q1 fiscal 2008

• Non-GAAP adjusted earnings per share¹ (diluted), which excludes the NMHC transaction-related amortization, was $0.38 for Q1 fiscal 2009

• Cash from operations was $11.8 million, compared to $8.0 million in Q1 fiscal 2008

• Adjusted prescription claim volume1 for the PBM segment was 8.4 million in Q1 2009

• Gross margin per adjusted prescription for the PBM segment was $3.43 in Q1 2009

• Transaction processing volume for the HCIT segment was 96.8 million in Q1 2009

Q1 2009 Operational Highlights

• Won three-year, multi-million dollar contract to provide Resident Care Management technology and services to PharMerica Corporation

• Awarded a three-year contract, valued at approximately $80 million annually, to provide PBM services to the 110,000 members of the UFCW & Employers Benefit Trust

• informedRx and the State of Arkansas Employee Benefit Division were co-awarded PBMI’s 2009 Rx Benefit Innovation Award

• Won other informedRx business increasing our covered lives by an additional 150,000.

“The strong momentum we built in 2008 continued in Q1 and resulted in solid financial and operational performance,” said Mark Thierer, President and CEO of SXC. “Our core business is largely resilient to the turbulence in the broader economy and based on our promising outlook we are raising our financial guidance for 2009. Strategically we have emerged as the industry’s technology-enabled PBM; we are now very focused on driving our differentiated model with new sales. We see significant growth opportunities in each of the markets we serve and we’ve built a sales engine that can generate new wins across multiple markets.”

Financial Review

Revenue and gross profit segmented by PBM and HCIT was as follows:

Three-months ended March 31, (unaudited, in thousands)²

Effective with the acquisition of NMHC, the Company evaluates segment performance based on revenue and gross profit.  A reconciliation of the Company’s business segments to the consolidated financial statements for the three months ended March 31, 2009 and 2008 is as follows (in thousands):

	PBM						HCIT						Consolidated
	2009			2008			2009			2008			2009			2008
Revenue	$	267,780		$	-		$	23,180		$	24,317		$	290,960		$	24,317
Gross profit	$	28,808		$	-		$	10,376		$	13,480		$	39,184		$	13,480
Gross profit %		10.8	%		0.0	%		44.8	%		55.4	%		13.5	%		55.4	%

²In reviewing the above tables, please note that the revenue for SXC’s legacy informedRx business is captured in the HCIT segment for Q1 2008 and in the PBM segment for Q1 2009. As a result, the HCIT segment shows a slight decline in revenue for the three-month period ended March 31, 2009, due to the inclusion of some of the previously classified HCIT business now recorded in the new PBM segment.

PBM revenue was $267.8 million for Q1 2009, due to the acquisition of NMHC and the launch of new contracts since the purchase.

Q1 2009 HCIT revenue was $23.2 million compared to $24.3 million in the same period in 2008. This decrease is due primarily to the reclassification of certain customers into the PBM segment effective April 1, 2008. Recurring revenue consisted of transaction processing revenue of $13.7 million, compared to $14.6 million in Q1 2008, and maintenance revenue of $4.5 million, compared to $4.2 million in Q1 2008. Recurring revenue accounted for 79% of HCIT revenue in Q1 2009, consistent with 78% in Q1 2008.

Q1 2009 non-recurring revenue consisted of professional service revenue of $3.6 million, compared to $3.8 million in Q1 2008, and system sales revenue of $1.3 million, down from $1.7 million last year.

Product Development Costs

Product development costs for Q1 2009 were $3.2 million compared to $2.5 million for Q1 2008.  Product development remains a key priority for the Company as it develops enhancements to existing products and launches new offerings. Product development costs included stock-based compensation cost of $0.1 million for both Q1 2009 and Q1 2008.

Selling, General and Administration (“SG&A”) Costs

SG&A costs for Q1 2009 were $20.8 million compared to $5.9 million in Q1 2008.The increase is largely attributable to the acquisition of NMHC and initiatives to expand the Company’s sales and support capabilities. SG&A costs included stock-based compensation cost of $0.5 million and $0.7 million for the three months ended March 31, 2009 and 2008, respectively.

Adjusted EBITDA¹

Q1 2009 adjusted EBITDA was $16.3 million compared to $6.3 million in Q1 2008. Q1 2009 adjusted EBITDA benefited from a $2.0 million non-recurring gross margin pick-up due to a high level of demand for seasonal cold and flu medications in the PBM unit’s specialty pharmacy operations and certain activity in the HCIT unit. Q1 2009 adjusted EBITDA increased year-over-year due in part to the addition of the NMHC business, the addition of new contract wins, improved purchasing efficiencies on prescription drugs, cost synergies generated from the acquisition, and was offset in part by the addition of NMHC’s operating expenses.

Income Taxes

The Company recognized income tax expense of $2.9 million in Q1 2009, representing an effective tax rate of 27%, compared to a $1.6 million income tax expense representing an effective tax rate of 33% for the same period in 2008. The change in the effective tax rate is due primarily to the NMHC acquisition.

Net Income

The Company reported Q1 2009 net income of $7.7 million, or $0.31 per share (fully-diluted), which includes $2.8 million of intangible amortization, compared to $3.4 million, or $0.16 per share (fully-diluted), which includes $0.4 million of intangible amortization, in Q1 2008.

Cash from Operations

SXC continues to generate strong cash from operations.  For Q1 2009, the Company generated $11.8 million of cash through its operations, compared to $8.0 million during Q1 2008.  The Company’s quarterly cash flows can be impacted by the timing of pharmacy deposit and rebate payments it receives for certain customers.        

At March 31, 2009 and December 31, 2008, the Company had cash and cash equivalents totalling $80.0 million and $67.7 million, respectively.  The Company believes that its cash on hand, together with cash generated from operating activities and amounts available under its existing credit facility, will be sufficient to support planned operations through the foreseeable future.

2009 Financial Guidance

With today’s announcement, SXC is revising certain of its financial targets for 2009:

• Revenue of $1.25-$1.35 billion versus prior estimate of $1.2-$1.3 billion

• Gross profit of $145-$155 million versus prior estimate of $140-$150 million

• GAAP EPS (fully-diluted) of $0.93-$1.01 versus prior estimate of $0.77-$0.85

(including all transaction-related amortization)

• Adjusted EBITDA of $57-$60 million versus prior estimate of $51-$54 million

• Non-GAAP adjusted earnings per share¹ (fully-diluted) of $1.13-$1.21 versus prior estimate of $0.99-$1.08 (excluding the NMHC transaction-related amortization)

Notice of Conference Call

SXC will host a conference call on Thursday, May 7, 2009 at 8:30 a.m. ET to discuss its financial results.  Mark Thierer, President and CEO, and Jeff Park, EVP and CFO will co-chair the call.  All interested parties can join the call by dialing 416-644-3421 or 1-800-731-5774. Please dial in 15 minutes prior to the call to secure a line. The conference call will be archived for replay until Thursday, May 14, 2009at midnight. To access the archived conference call, please dial 416-640-1917 or 1-877-289-8525 and enter the reservation code 21303555 followed by the number sign.

A live audio webcast of the conference call will be available www.sxc.com and www.newswire.ca. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. An archived replay of the webcast will be available for 365 days.

1Non-GAAP Financial Measures

SXC reports its financial results in accordance with generally accepted accounting principles in the United States (“GAAP”).  SXC’s management also evaluates and makes operating decisions using various other measures.  Two such measures are adjusted earnings per share, 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.

Adjusted earnings per share is a non-GAAP measure which takes earnings per share and adds back the impact of amortization expense related to the acquisition of NMHC, net of tax.  Acquisition-related amortization expense is a non-cash expense arising from the acquisition of intangible assets in connection with the acquisition. SXC excludes acquisition-related amortization expense from non-GAAP adjusted earnings per share because it believes (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of SXC business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired intangible assets. Investors should note that the use of these intangible assets will contribute to revenue in the future period presented and periods beyond that and should also note that such expense will recur in future periods.  The 2009 guidance of adjusted earnings per share was computed by taking the Company's GAAP earnings per share guidance and adding back the expected impact of acquisition-related amortization expense, net of tax.

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, 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, certain other one-time charges (including losses on disposals of capital assets) are excluded as these are not considered to be recurring items.

Adjusted prescription volume equals SXC’s Mail Service prescriptions multiplied by three, plus its retail and specialty prescriptions. The Mail Service prescriptions are multiplied by three to adjust for the fact that they typically include approximately three times the amount of product days supplied compared with retail prescriptions.

Management believes that adjusted earnings per share, adjusted EBITDA and adjusted prescription volume provide useful supplemental information to management and investors regarding the performance of the Company’s business operations and facilitate comparisons to its historical operating results.  Management also uses this information internally for forecasting and budgeting as it believes that the measures are indicative of the Company’s core operating results.  Note however, that these items are performance measures only, and do 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 earnings per share and adjusted EBITDA.

Adjusted earnings per share and adjusted EBITDA do not have standardized meanings prescribed by GAAP.  The Company's method of calculating these items 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 and adjusted net income to net income is shown below:

	For the three months ended
	March 31,
	2009			2008
(unaudited, in thousands)
Adjusted EBITDA	$	16,331		$	6,333
Amortization of Intangible Assets		(2,825	)		(396	)
Depreciation of Property & Equipment		(1,976	)		(1,164	)
Stock-Based Compensation		(613	)		(779	)
Other Income (expense)		325			(6	)
Interest (Expense) Income, Net		(710	)		1,019
Income Tax Expense		(2,850	)		(1,649	)
Net Income	$	7,682		$	3,357

Non-GAAP Adjusted Earnings Per Share	For the 3 months ended Mar 31, 2009
(unaudited) (in thousands, except per share data)
Net Income	$	7,682
Amortization of NMHC Intangibles (Net of Taxes)		1,700
Adjusted Net-Income	$	9,382
Adjusted EPS (diluted)	$	0.38

2On April 30, 2008, SXC closed the acquisition of NMHC. As a result, SXC has introduced some new segmentation and presentation of its financial results. Revenue is now segmented into two groups: Pharmacy Benefits Management (“PBM”) which includes informedRx as well as mail-order and specialty pharmacies, and Health Care Information Technology (“HCIT”). SXC records PBM revenue from NMHC exclusively on a gross basis which equates to the prescription price paid by consumers plus an administrative fee. The HCIT business records revenue only on the basis of the administrative fee; drug ingredient cost is not included in revenues or cost of claims.

The net effect is that SXC’s year-over-year revenues have increased dramatically while gross profit margin and adjusted EBITDA have increased in absolute dollar terms, but have declined as a percentage of total sales. These changes do not affect profitability on an absolute dollar or per share basis.

About SXC Health Solutions Corp.

SXC Health Solutions Corp. is a leading provider of pharmacy benefit management (PBM) services and Healthcare Information Technology (HCIT) solutions to the healthcare benefits management industry. The Company’s product offerings and solutions combine a wide range of advanced PBM services, software applications, application service provider (ASP) processing services, and professional services. SXC serves many of the largest organizations in the pharmaceutical supply chain, such as health plans; employers; Federal, provincial, and state governments; pharmacy benefit managers; and retail pharmacy chains. SXC is headquartered in Lisle, Illinois with multiple locations in North America.

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 U.S. Securities and Exchange Commission, including the risks and uncertainties discussed under that captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2008 Annual Report on Form 10-K and subsequent Form 10-Qs, which are available at www.sec.gov.  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.

For more information, please contact:

Jeff Park	Dave Mason	Susan Noonan
Chief Financial Officer	Investor Relations - Canada	Investor Relations - U.S.
SXC Health Solutions, Inc.	The Equicom Group Inc.	The SAN Group, LLC
Tel: (630) 577-3100	(416) 815-0700 ext. 237	(212) 966-3650
investors@sxc.com	dmason@equicomgroup.com	susan@sanoonan.com

SXC HEALTH SOLUTIONS CORP.

Consolidated Balance Sheets

(in thousands of U.S. dollars, except share data)

	March 31			December 31
	2009			2008
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	79,970		$	67,715
Restricted cash		13,628		$	12,498
Accounts receivable, net of allowance for doubtful accounts of $3,560 (December 31, 2008 - $3,570)		84,379			80,531
Rebates receivable		23,887			29,586
Unbilled revenue		1			73
Prepaid expenses and other		4,803			4,382
Inventory		6,032			6,689
Income tax recoverable		2,933			1,459
Deferred income taxes		8,546			10,219
Total current assets		224,179			213,152
Property and equipment, net of accumulated depreciation of $20,873 (December 31, 2008 - $19,449)		20,117			20,756
Goodwill		143,594			143,751
Other intangible assets, net of accumulated amortization of  $16,924
(December 31, 2008 - $14,099)		43,581			46,406
Deferred financing charges		1,369			1,481
Deferred income taxes		1,461			1,323
Other assets		1,397			1,474
Total assets	$	435,698		$	428,343
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	7,104		$	8,302
Customer deposits		14,049			11,875
Salaries and wages payable		11,779			15,681
Accrued liabilities		24,751			32,039
Pharmacy benefit management rebates payable		38,777			36,326
Pharmacy benefit claim payments payable		51,891			51,406
Deferred revenue		11,225			7,978
Current portion of long-term debt		4,800			3,720
Total current liabilities		164,376			167,327
Long-term debt, less current installments		42,720			43,920
Deferred income taxes		14,539			15,060
Deferred lease inducements		3,105			3,217
Deferred rent		1,528			1,461
Other liabilities		3,035			3,195
Total liabilities		229,303			234,180
Shareholders' equity
Common stock: no par value, unlimited shares authorized;
24,476,544 shares issued and outstanding at March 31, 2009 (December 31, 2008 - 24,103,032 shares)		150,495			146,988
Additional paid-in capital		12,868			11,854
Retained earnings		43,433			35,751
Accumulated other comprehensive income		(401	)		(430	)
Total shareholders' equity		206,395			194,163
Total liabilities and shareholders' equity	$	435,698		$	428,343

SXC HEALTH SOLUTIONS CORP.

Consolidated Statements of Operations

(in thousands of U.S. dollars, except share data)

		Three months ended March 31,
		2009			2008
		(unaudited)
Revenue:
PBM		$	267,780		$	-
HCIT:
	Transaction processing		13,727			14,648
	Maintenance		4,474			4,210
	Professional services		3,642			3,791
	System sales		1,337			1,668
Total revenue			290,960			24,317
Cost of revenue:
	PBM		238,972			-
	HCIT		12,804			10,837
Total cost of revenue			251,776			10,837
Gross profit			39,184			13,480
Expenses:
	Product development costs		3,163			2,458
	Selling, general and administrative		20,797			5,871
	Depreciation of property and equipment		1,482			762
	Amortization of intangible assets		2,825			396
			28,267			9,487
Operating income			10,917			3,993
Interest income			(246	)		(1,053	)
Interest expense			956			34
	Net interest expense (income)		710			(1,019	)
Other (income) expense			(325	)		6
Income before income taxes			10,532			5,006
Income tax expense:
	Current		2,201			1,382
	Deferred		649			267
			2,850			1,649
Net income		$	7,682		$	3,357
Earnings per share:
	Basic	$	0.32		$	0.16
	Diluted	$	0.31		$	0.16
Weighted average number of shares used in computing earnings per share:
	Basic		24,324,911			20,995,688
	Diluted		24,923,208			21,489,156

SXC HEALTH SOLUTIONS CORP.

Consolidated Statements of Cash Flows

(in thousands of U.S. dollars)

	Three months ended March 31,
	2009			2008
	(unaudited)
Cash flows from operating activities:
Net income	$	7,682		$	3,357
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation		613			779
Depreciation of property and equipment		1,976			1,164
Amortization of intangible assets		2,825			396
Deferred lease inducements and rent		(45	)		(64	)
Deferred income taxes		649			302
Tax benefit on option exercises		(1,562	)		(22	)
(Gain) loss on foreign exchange		(94	)		14
Changes in operating assets and liabilities, net of effects from acquisition:
Accounts receivable		(3,863	)		1,210
Rebates receivable		5,699			-
Restricted cash		(1,130	)		-
Unbilled revenue		72			178
Prepaid expenses		(421	)		(467	)
Inventory		657			(15	)
Income tax recoverable		88			1,018
Accounts payable		(1,198	)		(594	)
Accrued liabilities		(8,617	)		358
Pharmacy benefit claim payments payable		485			(238	)
Pharmacy benefit management rebates payable		2,541			1,412
Deferred revenue		3,247			(755	)
Customer deposits		2,174			-
Other		64			-
Net cash provided by operating activities		11,842			8,033
Cash flows from investing activities:
Purchases of property and equipment		(3,289	)		(2,603	)
Acquisitions, net of cash acquired		(180	)		-
Net cash used in investing activities		(3,469	)		(2,603	)
Cash flows from financing activities:
Repayment of long-term debt		(120	)		-
Proceeds from exercise of options		2,346			195
Tax benefit on option exercises		1,562			22
Net cash provided by financing activities		3,788			217
Effect of foreign exchange on cash balances		94			(14	)
Increase in cash and cash equivalents		12,255			5,633
Cash and cash equivalents, beginning of period		67,715			90,929
Cash and cash equivalents, end of period	$	79,970		$	96,562