Catalyst Health Solutions Reports Third Quarter 2008 Results.Third Quarter Revenues Up 31% to $653 Million Net Income Increases 29% to $0.29 per Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. Share ROCKVILLE, Md. -- Catalyst Health Solutions, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CHSI CHSI Comcast High Speed Internet ), a pharmacy benefit management A Pharmacy Benefit Manager (PBM) is a third party administrator of prescription drug programs. They are primarily responsible for processing and paying prescription drug claims. company, today announced its financial results for the quarter ended September 30, 2008. The Company reported revenue of $653.0 million and net income of $12.6 million, or $0.29 per diluted share compared to quarterly revenue of $498.4 million and net income of $9.8 million, or $0.23 per diluted share in the prior year. "We are pleased with the Company's financial performance. Third quarter revenue and earnings results were consistent with our expectations," said David T. Blair, Chief Executive Officer of Catalyst Health Solutions. "While our primary focus this quarter was on the successful implementation of new business and the integration of our recent acquisitions, the Company also reached $300 million in cumulative new sales. As our guidance reflects, new sales combined with over 97% client retention provides us with solid revenue visibility for the upcoming year." Third Quarter Results Revenue for the third quarter increased by $154.6 million, or 31.0%, to $653.0 million from $498.4 million in the prior year's comparable quarter. Total claims processed in the third quarter increased to 13.0 million from 10.7 million for the same period in 2007. The increase in prescription volume was primarily due to the addition of new clients. Gross profit for the third quarter increased $10.5 million, to $37.7 million or 5.8% of revenue compared to $27.2 million, or 5.5% of revenue, in the third quarter of the prior year. Third quarter operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased 36.2% to $19.5 million from $14.3 million in the third quarter of 2007. The increase in operating income was primarily due to the increase in gross profit, offset by a $5.3 million increase in selling, general and administrative expenses. The increase in selling, general and administrative expenses was primarily associated with initiatives to support the Company's continued growth, such as additional employee, facility and vendor costs to implement and serve new clients, as well as consolidating the results from the Company's recent acquisitions. Net income for the third quarter of 2008 was $12.6 million, or $0.29 per diluted share, compared to the prior year's net income of $9.8 million, or $0.23 per diluted share. Nine Month Results Revenue for the nine months ended September 30, 2008 increased 40.0%, to approximately $1.9 billion from $1.3 billion in the prior year. Total claims processed increased to 38.3 million for the nine months ended September 30, 2008 from 30.0 million for the same period in 2007. The increase in prescription volume was primarily due to the addition of new clients. Gross profit for the first nine months of 2008, increased by $21.7 million to $103.0 million, or 5.5% of revenue, compared to $81.3 million, or 6.1% of revenue, in the first nine months of the prior year. Operating income increased by $13.5 million to $54.5 million in the first nine months of 2008 from $41.0 million in the same period of the prior year. The increase in operating income was primarily due to the increase in gross profit offset by an increase in selling, general and administrative expenses. The increase in selling, general and administrative expenses was primarily associated with initiatives to support the Company's continued growth, such as additional employee, facilities and vendor costs to implement and serve new clients, as well as consolidating the results from the Company's recent acquisitions. Net income for the first nine months of 2008 was $36.2 million, or $0.83 per diluted share, compared to $27.7 million, or $0.64 per diluted share, in the prior year. 2008 Financial Guidance The Company confirms that it is tracking towards its previously stated guidance of $2.5 billion in revenue and earnings of $1.17 per diluted share reflecting increases of 34% and 29%, respectively over 2007 results. Preliminary 2009 Financial Guidance Based on business under contract, new sales commitments, and recent trends in prescription utilization, management expects 2009 net income to grow 15% to 25% over 2008. Net income for 2009 is projected between $59.5 million and $64.0 million, which should equate e·quate v. e·quat·ed, e·quat·ing, e·quates v.tr. 1. To make equal or equivalent. 2. To reduce to a standard or an average; equalize. 3. to earnings per share of $1.35 to $1.45. Revenues in 2009 are projected to be approximately $3.0 billion. Factors that could contribute to results exceeding the guidance described above include: * new business additions with 2009 effective dates; * better than expected integration of acquisitions; * better than projected formulary formulary /for·mu·lary/ (for´mu-lar?e) a collection of recipes, formulas, and prescriptions. National Formulary see under N. for·mu·lar·y n. compliance; and * increased generic drug generic drug, a drug sold or prescribed under the nonproprietary name of its active ingredients or under a generally descriptive name rather than under a brand or trade name. utilization. In addition, financial results may be impacted by general economic conditions and the Company's ability to execute on its strategic initiatives to capture margins on mail order prescriptions and expand its hospice hospice, program of humane and supportive care for the terminally ill and their families; the term also applies to a professional facility that provides care to dying patients who can no longer be cared for at home. business. About Catalyst Health Solutions, Inc. (www.catalysthealthsolutions.com): Catalyst Health Solutions, Inc. (formerly HealthExtras, Inc.) is built on strong, innovative principles in the management of prescription drug prescription drug Prescription medication Pharmacology An FDA-approved drug which must, by federal law or regulation, be dispensed only pursuant to a prescription–eg, finished dose form and active ingredients subject to the provisos of the Federal Food, Drug, benefits and provides an unbiased, client-centered philosophy resulting in industry-leading client retention rates. The Company's subsidiaries include Catalyst Rx, a full-service pharmacy benefit manager serving more than five million lives in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. ; HospiScript Services, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , one of the largest providers of pharmacy benefit management services to the hospice industry; and Immediate Pharmaceutical Services, Inc., a fully-integrated prescription mail service facility based out of Avon Lake, Ohio Avon Lake is a city in Lorain County, Ohio, United States. The population was 18,145 at the 2000 census. Geography Avon Lake is located at (41.501595, -82.006309). . The Company's clients include self-insured employers including state and local governments, managed care organizations, unions, hospices, third-party administrators and individuals. This press release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve a number of risks and uncertainties. Factors that we have identified that might materially affect our results are discussed in our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2007 under "Item 1.A Risk Factors." Readers are urged to carefully review and consider the various disclosures made in our Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission that attempt to advise interested parties of the risks and uncertainties that may affect our business. [TABLE OMITTED] [TABLE OMITTED] (1) Adjusted prescription volume equals the number of mail-order prescriptions multiplied mul·ti·ply 1 v. mul·ti·plied, mul·ti·ply·ing, mul·ti·plies v.tr. 1. To increase the amount, number, or degree of. 2. Mathematics To perform multiplication on. by 3, plus retail prescriptions. Mail-order prescriptions are multiplied by 3 to adjust for the fact that they include approximately 3 times the number of product days supplied compared with retail prescriptions. (2) The percentage of adjusted mail-order prescriptions to total adjusted prescriptions. |
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