Catalyst Health Solutions Reports Third Quarter Results; Revenues Grow 55% Over Prior Year

Catalyst Health Solutions, Inc. (NASDAQ: CHSI), today announced its financial results for the third quarter ended September 30, 2011. Revenue for the quarter grew by $504.3 million, or 55%, to $1.43 billion from $925.1 million in the prior year.

Third quarter 2011 adjusted earnings per diluted share increased by $0.12, or 24%, to $0.63 from $0.51 adjusted earnings per diluted share in the prior year. Adjusted earnings per share excludes the impact of transaction costs and integration expenses associated with the acquisition of Walgreens Health Initiatives (WHI), as well as acquisition related amortization. The Company reported quarterly net income of $15.2 million and earnings per diluted share of $0.31. Management believes that adjusted earnings per share, a non-GAAP financial measure, provides useful supplemental information regarding the performance of our business operations and facilitates comparisons to our historical operating results.

“We are extremely pleased with the Company’s performance this quarter,” stated David T. Blair, Chief Executive Officer of Catalyst. “During the quarter, we reached $400 million of new business sold for 2012, we made substantial progress towards the integration of WHI and we began to pay down our credit facility. In addition, the integration of FutureScripts is largely complete and the Company will achieve its previously stated financial targets from this acquisition.”

Third Quarter Results

Revenue for the third quarter increased by $504.3 million, or 55%, to $1.43 billion from $925.1 million in the prior year’s comparable quarter. The increase in revenue is due to the addition of WHI and FutureScripts prescription volume for the full quarter, as well as higher prescription volume from new business, partially offset by increased generic utilization. Total unadjusted claims processed in the third quarter, excluding administrative service only (ASO) claims, increased to 24.4 million from 17.0 million for the same period in 2010. Due to the limited nature of services, ASO claims are accounted for on a net basis in revenue. The increase in our prescription volume was primarily due to the addition of WHI, a full quarter of FutureScripts volume and new clients. Generic utilization increased to 74.2% from 71.5% in the third quarter of 2010.