SXC Health Solutions Corp. ("SXC" or the
"Company") (NASDAQ: SXCI, TSX: SXC), a leading provider of technology
and pharmacy benefit management ("PBM") services, announces its
financial results for the three-month period ended March 31, 2012.
Q1 2012 Highlights
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Revenue grew 56% on a year over year basis to $1.7 billion, compared to
$1.1 billion in Q1 2011
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Gross profit increased 74% to $110.4 million, compared to $63.6 million
in Q1 2011
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Net income increased 44% to $26.3 million, or $0.42 per share
(fully-diluted), compared to $18.3 million, or $0.29 per share
(fully-diluted), in Q1 2011
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EBITDA increased 62% to $54.4 million, compared to $33.5 million in Q1
2011
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Non-GAAP adjusted earnings per share¹ (fully-diluted), increased 58% to
$0.52, compared to $0.33 in Q1 2011
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Cash from operations increased to $56.2 million compared to $0.8 million
in Q1 2011
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Adjusted prescription claim volume for the PBM segment increased 61.5%
to 34.4 million, compared to 21.3 million in Q1 2011
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Transaction processing volume for the HCIT segment increased to 119.4
million compared to 99.2 million in Q1 2011
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Generic dispense rate increased to 80% compared to 78% in Q1 2011
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Successfully converted one HCIT client to PBM services in the quarter
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Completed the acquisition of HealthTran LLC ("HealthTran"), a
full-service pharmacy benefit manager
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Awarded $1.2 billion contract over a 3 year term with Blue Cross & Blue
Shield of Rhode Island
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Announced merger with Catalyst Health Solutions, Inc. (NASDAQ: CHSI),
subsequent to the end of the period
"Q1 was another quarter where we were hitting on all cylinders and
utilizing the momentum we have built. Our results from operations
continue to set new records due to successfully executing our plan, and
these strong results have set the table for a successful 2012. Our
contract win with Blue Cross & Blue Shield of Rhode Island continues to
showcase our ability to successfully compete for some of the largest
health plan opportunities in the market. The integration of HealthTran
continued to move along successfully and provided a positive impact to
our Q1 results. Along with these great results, the Company has been
energized with our recently announced merger with Catalyst, and we're
all looking forward to entering the next chapter of SXC. All of these
factors have put us in a great position to deliver a record setting
2012 and continued growth moving forward," said Mark Thierer, Chairman
and CEO of SXC.
Financial Review
Revenue and Gross Profit segmented by PBM and HCIT:
SXC evaluates segment performance based on revenue and gross profit.
Reconciliations of the Company's business segments to the consolidated
financial statements for the three months ended March 31, 2012 and 2011
are as follows:
Three months ended March 31, (unaudited, in thousands)
PBM Revenue
PBM revenue increased $0.6 billion, or 56.8%, to $1.7 billion in Q1 2012
compared to $1.1 billion in Q1 2011. The increase in revenue is
primarily due to increased prescription claim volume as a result of new
customer wins, conversion of clients from HCIT to full service PBM
contracts, as well as revenues generated from the acquisition of
HealthTran, which closed in January 2012.
HCIT Revenue
HCIT revenue increased $10.2 million, or 39.7%, to $36.0 million in Q1
2012 compared to $25.7 million in Q1 2011. The increase was primarily
due to an increase in revenues earned from transaction processing as
well as revenues from HealthTran's HCIT customer base.
Consolidated Gross Profit
Gross profit for Q1 2012 increased $46.8 million, or 73.6%, to $110.4
million compared to $63.6 million in Q1 2011, mostly due to incremental
PBM revenues generated from new customer starts in 2012 and the
HealthTran acquisition. Gross profit percentage increased to 6.4% of
revenue in Q1 2012 from 5.8% of revenue in Q1 2011 due to the higher gross profit
percentage from both PBM and HCIT segments, due in part to the
HealthTran acquisition, as well as higher utilization of generics and
specialty medications.