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Exhibit 4.7  

 
 

Form 27
  
    MATERIAL CHANGE REPORT    
    

UNDER SECTION 75(2) OF THE SECURITIES ACT (ONTARIO) and CORRESPONDING PROVISIONS OF THE SECURITIES ACTS OF THE PROVINCES OF BRITISH COLUMBIA and ALBERTA  

 ITEM 1 — Reporting Issuer:  

Systems
Xcellence Inc.

555 Industrial Drive

Milton, Ontario

L9T 5C2 

ITEM 2 — Date of Material Change:  

January 9,2006 

ITEM 3 — Press Release:  

Issued
on January 9,2006 

ITEM 4 — Summary of Material Change:  

SXC
Health Solutions, Inc., a subsidiary of Systems Xcellence Inc. (TSX: SXC), a leading provider of healthcare information technology solutions throughout the pharmaceutical supply
chain, today announced an agreement to provide information technology and claims adjudication support to MedMetrics Health Partners, Inc. as it administers drug benefits to the State of
Vermont's 147,000 Medicaid members. All figures are in U.S. dollars. 

Under
the three-year, approximately $2.0 million contract, SXC will be MedMetrics' technology partner. Utilizing SXC's state-of-the-art claims
processing system, MedMetrics will help the state better control the rapidly rising cost of the prescription drug benefits that it provides to Medicaid beneficiaries, as well as to seniors eligible
for the new Medicare Part D drug coverage which began January 1, 2006. MedMetrics assumed responsibility for the State's drug benefits program from the incumbent pharmacy benefit manager
("PBM") effective January 1, 2006, and SXC has commenced processing the claims for these prescription drug transactions. Services provided by SXC include implementation, claims processing, data
warehouse and development support. 

"This
agreement further demonstrates SXC's capabilities to support critical drug benefit programs such as Medicaid and Medicare Part D. It also enhances SXC's position as we pursue similar
contracts in the public sector for pharmacy benefit and related services and systems," said Mike Bennof, Sr. Vice President for Public Sector Programs. "We are pleased to expand our partnership with
MedMetrics and look forward to working on additional business opportunities with them." 

[ITEM 5 — Full Description of Material Change: 

Please
see the attached Schedule "A". 

ITEM 6 — Reliance on Section 75(3) of the Act:  

n/a

 

ITEM 7 — Omitted Information:  

n/a

ITEM 8 — Senior Officers:  

	Gordon Glenn	 	Irwin Studen
	Chief Executive Officer	 	Chief Financial Officer
	Systems Xcellence Inc.	 	Systems Xcellence Inc.
	Tel: (905) 876-4741	 	Tel: (905) 876-4741
	Fax: (905) 876-4447	 	Fax: (905) 876-4447

investors@sx.com

ITEM 9 — Statement of Senior Officer:  

The
foregoing accurately discloses the material change referred to herein. 

        DATED at Milton, in the Province of Ontario, this 9th day of January, 2006. 

	 	 	Irwin P. Studen

SVP Finance & Administration & CFO

2

	 
	 	 

	INVESTOR RELATIONS CONTACT:

Dave Mason

The Equicom Group Inc.

(416) 815-0700 ext. 237

dmason@equicomgroup.com	 	

 

SXC Health Solutions, Inc. to Provide Pharmacy Claims Processing for the State of Vermont Medicaid Program Under Subcontract with MedMetrics Health
Partners, Inc.

LOMBARD, Illinois January 9, 2006, SXC Health Solutions, Inc., a subsidiary of Systems Xcellence Inc. (TSX: SXC), a leading
provider of healthcare information technology solutions throughout the pharmaceutical supply chain, today announced an agreement to provide information technology and claims adjudication support to
MedMetrics Health Partners, Inc. as it administers drug benefits to the State of Vermont's 147,000 Medicaid members. All figures are in U.S. dollars. 

Under
the three-year, approximately $2.0 million contract, SXC will be MedMetrics' technology partner. Utilizing SXC's state-of-the-art claims
processing system, MedMetrics will help the state better control the rapidly rising cost of the prescription drug benefits that it provides to Medicaid beneficiaries, as well as to seniors eligible
for the new Medicare Part D drug coverage which began January 1, 2006. MedMetrics assumed responsibility for the State's drug benefits program from the incumbent pharmacy benefit manager
("PBM") effective January 1, 2006, and SXC has commenced processing the claims for these prescription drug transactions. Services provided by SXC include implementation, claims processing, data
warehouse and development support. 

"This
agreement further demonstrates SXC's capabilities to support critical drug benefit programs such as Medicaid and Medicare Part D. It also enhances SXC's position as we pursue similar
contracts in the public sector for pharmacy benefit and related services and systems," said Mike Bennof, Sr. Vice President for Public Sector Programs. "We are pleased to expand our partnership with
MedMetrics and look forward to working on additional business opportunities with them." 

"We
are very pleased with our partnership with SXC and their support for MedMetrics unique model of true financial transparency. In addition to our not-for-profit status,
MedMetrics remains one of the only PBMs in the country associated with a medical school system," said David Calabrese, RPh, MHP, Vice President of Clinical Pharmacy Services for MedMetrics. "We
believe our affiliation with UMass Medical School provides us with an exceptional level of access to outstanding clinical resources, enabling us to deliver to our clients the type of objective,
academically-based clinical programming that the market has been long calling for. Together with SXC's robust and flexible systems, we are able to bring next-generation services to the
public sector." 

About MedMetrics Health Partners, Inc.  

MedMetrics
Health Partners is a non-profit, full-service PBM located in Worcester, Massachusetts, and is affiliated with the University of Massachusetts Medical School. As one
of the nation's only non-profit PBMs, MedMetrics features a business model which differs from that of the traditional PBM by providing true net cost drug management with full transparency
in all financial transactions and data reporting. Unique among PBMs is MedMetrics' association with a major medical school which affords direct access to expert formulary and clinical guidance
and academically rigorous, evidence-based clinical programming support. 

About Systems Xcellence Inc.  

Systems
Xcellence (SXC) is headquartered in Milton, Ontario with offices and processing centres in Lombard, Illinois, Warminster, Pennsylvania, Scottsdale, Arizona and Victoria, British Columbia.
Through its subsidiary, SXC Health Solutions, Inc., SXC is a leading provider of healthcare information technology solutions and services to the U.S. 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 pharmacy benefit managers, managed care organizations, independent, chain and mail-order pharmacies and other
healthcare intermediaries. SXC can be found on the Internet at www.sxc.com. 

This press release contains forward-looking statements based on current expectations. These forward-looking statements entail various
risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Risks and uncertainties about the Company's business are more
fully discussed in the Company's Annual Information Form.

For more information, please contact:  

	Dave Mason	 	Irwin Studen
	Investor Relations	 	Chief Financial Officer
	The Equicom Group Inc.	 	Systems Xcellence Inc.
	(416) 815-0700 ext. 237	 	Tel: (905) 876-4741
	dmason@equicomgroup.com	 	investors@sxc.com

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Form 27 MATERIAL CHANGE REPORTQuickLinks
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Exhibit 4.8  

 
 

Form 27
  MATERIAL CHANGE REPORT    
    

 UNDER SECTION 75(2) OF THE SECURITIES ACT (ONTARIO) and CORRESPONDING PROVISIONS OF THE SECURITIES ACTS OF THE PROVINCES OF BRITISH COLUMBIA and ALBERTA  

	ITEM 1	 	Reporting Issuer:
	 	 	Systems Xcellence Inc.

555 Industrial Drive

Milton, Ontario

L9T 5C2
	
ITEM 2	
 	

Date of Material Change:
	 	 	May 4,2006
	
ITEM 3	
 	

Press Release:
	 	 	Issued on May 4, 2006
	
ITEM 4	
 	

Summary of Material Change:

        MILTON, Ontario May 4, 2006, Systems Xcellence Inc., ("SXC" or the "Company") (TSX: SXC) a leading provider of healthcare
information technology solutions throughout the pharmaceutical supply chain, announces financial results for the three-month period ended March 31, 2006. All figures are in U.S. dollars,
unless otherwise noted. 

Highlights for Q1:  

	•
	Revenue
increased 83% to $19.3 million from $10.6 million in Q1 fiscal 2005

	•
	Transaction
processing revenue, which is the primary driver of recurring revenue, increased 77% to $8.8 million from $5.0 million

	•
	Revenue
from recurring sources increased 52% to $12.4 million from $8.2 million

	•
	Earnings
before interest, taxes, depreciation and amortization (EBITDA) increased 343% to $5.8 million or 30% of revenue from $1.3 million, or 12% of revenue

	•
	Net
income before tax increased to $3.7 million from $45,606.

	•
	Increased
"Book of Business" to $140 million at March 31, 2006, up from $108 million at December 31, 2005

	•
	Now
supporting more than 1.6 million U.S. Medicare Part D pharmacy benefit program ("Part D") members on behalf of 11 InformedRx and
claims processing customers. 

"We
are extremely pleased with our start to the new year," said Gordon S. Glenn President and CEO of SXC. "Q1 results exceeded our expectations due primarily to increased transaction processing
revenue generated from both the Medicare Part D program and new customers that began processing on January 1, 2006. To a lesser extent, significant professional service and software
license revenue from clients that are participating in the Part D program also contributed to this growth. So far, both the number of lives and the volume of transactions processed relative to
Part D have surpassed our initial targets. We believe the contribution of revenue related to Part D will normalize somewhat throughout the remainder of the year, however, due to our
strong start, we are revising our guidance upward." 

 

	[ITEM 5	 	Full Description of Material Change:
	 	 	Please see the attached Schedule "A".
	
ITEM 6	
 	

Reliance on Section 75(3) of the Act:
	 	 	n/a
	
ITEM 7	
 	

Omitted Information:
	 	 	n/a
	
ITEM 8	
 	

Senior Officers:

	 	 	Gordon Glenn	 	Jeff Park
	 	 	Chief Executive Officer	 	Chief Financial Officer
	 	 	Systems Xcellence Inc.	 	Systems Xcellence Inc.
	 	 	Tel: (905) 876-4741	 	Tel: (905) 876-4741
	 	 	Fax: (905) 876-4447	 	Fax: (905) 876-4447

investors@sxc.com

	ITEM 9	 	Statement of Senior Officer:
	 	 	The foregoing accurately discloses the material change referred to herein.
	
 	
 	
DATED at Milton, in the Province of Ontario, this fourth day of May, 2006.

	
 	
 	

Irwin P. Studen

SVP Finance & Administration & CFO

2

	INVESTOR RELATIONS CONTACT:

Dave Mason
 The Equicom Group Inc.

(416) 815-0700 ext. 237

www.equicomgroup.com	 	

 

 
 

SYSTEMS XCELLENCE ANNOUNCES RECORD
  2006 FIRST QUARTER FINANCIAL RESULTS
  — Revenue and EBITDA increase organically 83% and 343%, respectively —

MILTON, Ontario May 4, 2006, Systems Xcellence Inc., ("SXC" or the "Company") (TSX: SXC) a leading provider of healthcare information
technology solutions throughout the pharmaceutical supply chain, announces financial results for the three-month period ended March 31, 2006. All figures are in U.S. dollars, unless
otherwise noted. 

Highlights for Q1:  

	•
	Revenue
increased 83% to $19.3 million from $10.6 million in Q1 fiscal 2005

	•
	Transaction
processing revenue, which is the primary driver of recurring revenue, increased 77% to $8.8 million from $5.0 million

	•
	Revenue
from recurring sources increased 52% to $12.4 million from $8.2 million

	•
	Earnings
before interest, taxes, depreciation and amortization (EBITDA) increased 343% to $5.8 million or 30% of revenue from $1.3 million, or 12%
of revenue

	•
	Net
income before tax increased to $3.7 million from $45,606.

	•
	Increased
"Book of Business" to $140 million at March 31, 2006, up from $108 million at December 31, 2005

	•
	Now
supporting more than 1.6 million U.S. Medicare Part D pharmacy benefit program ("Part D") members on behalf of 11 InformedRx and
claims processing customers. 

"We
are extremely pleased with our start to the new year," said Gordon S. Glenn President and CEO of SXC. "Q1 results exceeded our expectations due primarily to increased transaction processing
revenue generated from both the Medicare Part D program and new customers that began processing on January 1, 2006. To a lesser extent, significant professional service and software
license revenue from clients that are participating in the Part D program also contributed to this growth. So far, both the number of lives and the volume of transactions processed relative to
Part D have surpassed our initial targets. We believe the contribution of revenue related to Part D will normalize somewhat throughout the remainder of the year, however, due to our
strong start, we are revising our guidance upward." 

Financial Review  

        Revenue for the three-month period ended March 31, 2006 was $19.3 million, up 83% compared to $10.6 million in the same period last year.
Revenue of a recurring nature was $12.4 million during this period, up 52% compared to $8.2 million in the first quarter of 2005. Transaction processing revenue was $8.8 million
in the first quarter, up 77% compared to $5.0 million in the same period of 2005. 

        Revenue
from non-recurring sources was $6.9 million in Q1 compared to $2.4 million in the prior period, a 187.5% increase. Systems sales revenue (which
includes both software and hardware license revenue) was $2.55 million in the current period, compared to $1.1 million in the prior period, a 132% increase. Professional service revenue
was $4.4 million compared to $1.3 million in the prior period, a 238% increase. First quarter revenue growth was driven primarily to the increase in transaction processing volume along
with consulting and implementation services performed for customers who are participating in the Part D program. 

        Gross
margin for the first quarter was 61%, compared with 57% in the same period last year. The increase in gross margin is primarily due to the increase in higher margin transaction
processing revenue and professional services revenue related to the launch of Part D. 

        Product
development expenses on an absolute dollar basis were consistent at $2.1 million, or 11% of revenue, compared with $2.1 million, or 20% in the same period last
year. Product development expenses decreased as a percentage of revenue due primarily to personnel resources being temporarily allocated to Part D professional services projects in
Q1 2006. 

        SG&A
expenses were $3.9 million, or 20% of revenue, compared with $2.6 million, or 24% of revenue in the same period last year. SG&A expenses rose on an absolute dollar
basis as the Company invested in its sales capabilities and in bringing new products to market. 

        First
quarter EBITDA was $5.8 million, or 30% of revenue, compared to $1.3 million, or 12% of revenue. The increase in EBITDA reflects the significant increase in revenue,
an increase in higher margin transaction processing revenue and SXC's ongoing efforts at cost control. 

        Net
income for the first quarter was $5.6 million, or $0.08 per share (fully diluted) compared with $15,606, or $0.00 per share, in the first quarter last year. Net income
includes a $0.8 million lease termination charge for its facility in Illinois as the Company has entered into a lease for a new location. The new landlord has provided an offsetting
$0.8 million lease inducement; however this inducement will be amortized over the term of the new lease. In addition net income includes a non-cash $1.9 million future tax
recovery that was recognized based on the expected future profitability of SXC coupled with its tax loss carry forwards. 

Liquidity and Resources  

        SXC continues to operate with a strong balance sheet from which to pursue its growth initiatives. At March 31, 2006, the company had a working capital
position of $41.0 million, with cash and cash-equivalents of $36.9 million, compared with $37.3 million of working capital and $36 million of cash and
cash-equivalents at March 31, 2005. 

        In
the first quarter of 2006, SXC generated cash from operations of $1.8 million, an increase of 148% compared to $0.7 million generated in the first quarter
last year. 

2006 Financial Guidance  

        As a result of the strong start to 2006, the Company has revised its guidance upward and has established the following financial goals for fiscal 2006:
consolidated revenue of $70-73 million, EBITDA of $17.5-19 million and earnings per share (fully-diluted) of $0.16-0.18. 

        In
addition, for 2006, the Company expects to increase overall transaction processing levels by at least 96% to more than 275 million adjudicated and switched transactions.
Approximately 41% of this growth, or 55 million transactions, is expected to result from the Part D program with the balance originating from the Company's commercial and State Medicaid
initiatives. 

EBITDA Reconciliation to Net Income  

        EBITDA (earnings before interest, taxes, depreciation and amortization) is a non-GAAP measure that management believes is a useful supplemental
measure of operating performance prior to amortization, debt service and income tax. Investors are cautioned that EBITDA should not be construed as an alternative to net income determined in
accordance with GAAP as an indicator of the Company's performance or to cash flows from operations as a measure of liquidity and cash flows. EBITDA does not have a standardized meaning prescribed by
GAAP. The Company's method of calculating 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 EBITDA to net income is shown below: 

	 
	 	For the three months ended
	 
	 
	 	31-Mar-06
	 	31-Mar-05
	 
	EBITDA	 	$	5,757,708	 	$	1,301,170	 
	Amortization	 	 	(896,625	)	 	(775,388	)
	Stock-based Compensation	 	 	(478,857	)	 	(138,537	)
	Lease Termination	 	 	(757,815	)	 	—	 
	Interest expense, net	 	 	93,323	 	 	(353,976	)
	Income Taxes	 	 	1,858,798	 	 	(30,000	)
	 	 	
	 	
	 
	Income (loss) after taxes	 	$	5,576,532	 	$	15,606	 
	 	 	
	 	
	 

Notice of Conference Call  

        SXC will host a conference call on May 4, 2006 at 8:30AM (ET) to discuss its first quarter financial results. Mr. Gordon S. Glenn, President and
CEO, will host the call. To participate on the call, please dial 416-644-3429 or 1-800-814-4857. 

        A
replay of the call can be heard by dialling 1-877-289-8525 or 416-640-1917 and entering the reference code 21185972. The
taped call is available until May 11, 2006. 

        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. 

About Systems Xcellence  

        Systems Xcellence (SXC) is headquartered in Milton, Ontario with offices and processing centres in Lombard, Illinois, Scottsdale, Arizona, Warminster,
Pennsylvania and Victoria, British Columbia. SXC is a leading provider of healthcare information technology solutions and services 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 pharmacy benefit managers, managed care organizations, retail pharmacy chains and other healthcare intermediaries. SXC can be found on the Internet at
www.sxc.com. 

        This press release contains forward-looking statements based on current expectations. These forward-looking statements entail various risks and uncertainties that
could cause actual results to differ materially from those reflected in these forward-looking statements. Risks and uncertainties about the Company's business are more fully discussed in the Company's
Annual Information Form.

For more information, please contact:  

	Dave Mason	 	Jeff Park
	Investor Relations — Canada	 	Chief Financial Officer
	The Equicom Group Inc.	 	Systems Xcellence Inc.
	(416) 815-0700 ext. 237	 	Tel: (905) 876-4741
	dmason@equicomgroup.com	 	investors@sxc.com
	
OR	
 	

 
	
Susan Noonan

Investor Relations — U.S.
 The SAN Group, LLC

212) 966-3650

susan@sanoonan.com	
 	

 

SYSTEMS XCELLENCE INC.

CONSOLIDATED BALANCE SHEETS

(All amounts are in US dollars)  

	 
	 	March 31, 2006
	 	December 31, 2005
	 
	 
	 	(unaudited)

	 	 
	 
	ASSETS	 	 	 	 	 	 	 
	Current assets:	 	 	 	 	 	 	 
	 	Cash and cash equivalents	 	$	36,853,736	 	$	35,951,932	 
	 	Accounts receivable	 	 	13,550,433	 	 	8,649,801	 
	 	Unbilled revenue	 	 	1,243,103	 	 	1,001,971	 
	 	Prepaid expenses	 	 	1,117,518	 	 	1,191,444	 
	 	Inventory	 	 	423,553	 	 	437,674	 
	 	Future tax asset	 	 	806,805	 	 	320,000	 
	 	 	
	 	
	 
	 	 	 	53,995,148	 	 	47,552,822	 
	Capital assets	 	 	4,663,713	 	 	3,777,954	 
	Deferred charges	 	 	740,674	 	 	787,686	 
	Goodwill and other intangible assets	 	 	26,427,711	 	 	26,825,147	 
	Future tax asset	 	 	2,410,000	 	 	360,000	 
	Other assets	 	 	2,000,000	 	 	2,000,000	 
	 	 	
	 	
	 
	 	 	$	90,237,246	 	$	81,303,609	 
	 	 	
	 	
	 
	
LIABILITIES AND SHAREHOLDERS' EQUITY	
 	
 	

 	
 	
 	

 	
 
	Current liabilities:	 	 	 	 	 	 	 
	 	Accounts payable and accrued liabilities	 	$	7,434,036	 	$	5,598,912	 
	 	Deferred revenue	 	 	3,661,248	 	 	3,131,031	 
	 	Current portion of long-term debt	 	 	1,700,000	 	 	1,530,000	 
	 	 	
	 	
	 
	 	 	 	12,795,284	 	 	10,259,943	 
	Long-term debt	 	 	11,075,953	 	 	11,572,858	 
	Deferred leasehold inducement	 	 	757,815	 	 	—	 
	Shareholders' equity:	 	 	 	 	 	 	 
	 	Capital stock	 	 	64,129,217	 	 	64,047,220	 
	 	Contributed surplus	 	 	2,197,229	 	 	1,718,372	 
	 	Deficit	 	 	(718,252	)	 	(6,294,784	)
	 	 	
	 	
	 
	 	 	 	65,608,194	 	 	59,470,808	 
	 	 	
	 	
	 
	 	 	$	90,237,246	 	$	81,303,609	 
	 	 	
	 	
	 

SYSTEMS XCELLENCE INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(All amounts are in US dollars)  

	 
	 	Three Months

Ended

March 31, 2006
	 	Three Months

Ended

March 31, 2005
	 
	Revenue	 	$	19,337,153	 	$	10,572,667	 
	Project costs	 	 	7,605,479	 	 	4,519,916	 
	 	 	
	 	
	 
	 	 	 	11,731,674	 	 	6,052,751	 
	
Expenses:	
 	
 	

 	
 	
 	

 	
 
	 	Product development costs	 	 	2,105,361	 	 	2,161,309	 
	 	Selling, general and administration	 	 	3,868,605	 	 	2,577,935	 
	 	Amortization	 	 	896,625	 	 	775,388	 
	 	Lease termination	 	 	757,815	 	 	—	 
	 	Stock-based compensation	 	 	478,857	 	 	138,537	 
	 	 	
	 	
	 
	 	 	 	8,107,263	 	 	5,653,169	 
	 	 	
	 	
	 
	Income before the undernoted	 	 	3,624,411	 	 	399,582	 
	
Net interest:	
 	
 	

 	
 	
 	

 	
 
	 	Income	 	 	(483,801	)	 	(72,106	)
	 	Expense	 	 	390,478	 	 	426,082	 
	 	 	
	 	
	 
	 	 	 	(93,323	)	 	353,976	 
	Income before income taxes	 	 	3,717,734	 	 	45,606	 
	Income tax expense (recovery):	 	 	 	 	 	 	 
	 	Current	 	 	678,007	 	 	30,000	 
	 	Future	 	 	(2,536,805	)	 	—	 
	 	 	
	 	
	 
	 	 	 	(1,858,798	)	 	30,000	 
	Net income	 	$	5,576,532	 	$	15,606	 
	 	 	
	 	
	 
	
Net income per share:	
 	
 	

 	
 	
 	

 	
 
	 	Basic	 	$	0.08	 	$	0.00	 
	 	Diluted	 	$	0.08	 	$	0.00	 
	
Weighted average number of shares used in computing net income per share:	
 	
 	

 	
 	
 	

 	
 
	 	Basic	 	 	67,804,330	 	 	58,334,867	 
	 	Diluted	 	 	72,148,240	 	 	60,441,866	 

CONSOLIDATED STATEMENTS OF DEFICIT

(unaudited)  

	 
	 	Three Months

Ended

March 31, 2006
	 	Three Months

Ended

March 31, 2005
	 
	Deficit, beginning of period	 	$	(6,294,784	)	$	(14,016,920	)
	Net income	 	 	5,576,532	 	 	15,606	 
	 	 	
	 	
	 
	Deficit, end of period	 	$	(718,252	)	$	(14,001,314	)
	 	 	
	 	
	 

SYSTEMS XCELLENCE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(All amounts are in US dollars)  

	 
	 	Three Months

Ended

March 31, 2006
	 	Three Months

Ended

March 31, 2005
	 
	Cash provided by (used in):	 	 	 	 	 	 	 
	
Operations:	
 	
 	

 	
 	
 	

 	
 
	 	Net income	 	$	5,576,532	 	$	15,606	 
	 	Items not involving cash, net of effects from acquisition:	 	 	 	 	 	 	 
	 	 	Amortization of capital assets	 	 	499,189	 	 	396,223	 
	 	 	Amortization of intangible assets	 	 	397,436	 	 	332,500	 
	 	 	Amortization of deferred charges	 	 	47,012	 	 	46,665	 
	 	 	Stock-based compensation	 	 	478,857	 	 	138,537	 
	 	 	Future tax asset	 	 	(2,536,805	)	 	—	 
	 	Changes in non-cash operating working capital	 	 	(2,688,372	)	 	(213,711	)
	 	 	
	 	
	 
	 	Net cash provided by operations	 	 	1,773,849	 	 	715,820	 
	
Financing:	
 	
 	

 	
 	
 	

 	
 
	 	Proceeds from exercise of share-purchase options	 	 	81,997	 	 	6,160	 
	 	Repayment of short-term liabilities	 	 	—	 	 	(18,000,000	)
	 	Increase in deferred leasehold inducements	 	 	757,815	 	 	—	 
	 	Financing costs related to long-term liabilities	 	 	—	 	 	50,000	 
	 	Repayment of long-term liabilities	 	 	(326,905	)	 	(12,939	)
	 	 	
	 	
	 
	 	Net cash used in financing	 	 	512,907	 	 	(17,956,779	)
	
Investing:	
 	
 	

 	
 	
 	

 	
 
	 	Purchase of capital assets	 	 	(1,384,952	)	 	(247,572	)
	 	 	
	 	
	 
	 	Cash used in investments	 	 	(1,384,952	)	 	(247,572	)
	 	 	
	 	
	 
	Increase (decrease) in cash and cash equivalents	 	 	901,804	 	 	(17,488,531	)
	Cash and cash equivalents, beginning of period	 	 	35,951,932	 	 	29,636,643	 
	 	 	
	 	
	 
	Cash and cash equivalents, end of period	 	$	36,853,736	 	$	12,148,112	 
	 	 	
	 	
	 

QuickLinks

Form 27 MATERIAL CHANGE REPORT

SYSTEMS XCELLENCE ANNOUNCES RECORD 2006 FIRST QUARTER FINANCIAL RESULTS — Revenue and EBITDA increase organically 83% and 343%, respectively —

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