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» Catalyst Health Solutions, Inc. Q4 2008 Earnings Call Transcript
» Catalyst Health Solutions Inc. Q3 2008 Earnings Call Transcript
For the quarter, revenue increased 38% and adjusted earnings per share increased 23% over the prior year. We ended the year with over $400 million of new business wins. The acquisition of WHI and our recently announced business development initiatives positioned Catalyst to continue our growth trajectory.We certainly expect to continue our growth through new client wins, margin expansion across our installed base and strategic acquisitions. We are confident in our strategy and our mission to improve the quality of health for our members while controlling healthcare costs for our clients. Next, let me comment on our Invest Now initiative that we launched last quarter to capture additional opportunities in the evolving PBM market. We’ve made significant progress with our equipment efforts, business development and product expansion such as the acquisition of a shell insurance company through our employer group waiver plan business. We continue to see in-bound RFP activity running over 30% higher than last year and are responding to significantly more RFPs. We’re optimistic about our organic growth for 2012 and 2013. Now, I’ll turn the call over to Tim for review of our financial results and then following Tim’s comments Rick present on our business performance, progress and integration, and new investments. Tim Pearson Thank you, David. In the fourth quarter, we continue to deliver strong earnings growth with significant year-over-year revenue and adjusted EPS gains. Revenue grew 38% to $1.54 billion from $1.12 billion in the prior year. The increase is primarily due to the addition of WHI prescription volume for the fourth -- for the full quarter, as well as higher prescription volume for new business. This is partially offset by larger member co-pays and increased generic utilization. Total adjusted managed claims processed in the fourth quarter increased to $32.1 million from $26 -- $24.6 million for the same period in 2010. The increase in prescription volume was again primarily due to the addition of WHI and new clients.
Generic utilization increased to 75% from 73% in the fourth quarter of 2010 and we realized mail penetration of 10% in 90-day prescriptions of 28%, both reflecting the addition of the WHI book of business.Gross profit for the fourth quarter increased 40% to $92.6 million from $66.1 million in the prior year. This is due to the addition of WHI revenue, higher generic utilization and margin contribution from new clients, offset by thinner margins on renewal business. Gross margin in the quarter was also favorably impacted by incremental synergies for WHI realized ahead of schedule. Fourth quarter gross profit is also reported net of $5.6 million of intangible asset amortization related to acquisitions. WHI related transition and integration expense during the quarter was approximately $13.5 million or $0.17 per diluted share, roughly half of this is for professional fees related to IT, integration and analytical support to maximize synergies. The other half represents payments to WHI for transition services and severance costs. Amortization of acquisition-related intangible assets included in SG&A was $5 million. In total, this gets you to our adjusted EPS for the fourth quarter of $0.69, as compared to $0.56 per diluted share in 2010 or 23% increase. From a cash flow perspective, CapEx for the quarter was $18 million, depreciation and amortization was $14 million, and cash flow from operations was $17 million. We ended the quarter with $49 million of cash on the balance sheet and paid down our revolving credit facility by $25 million to $130 million. Moving to the full year 2011 guidance, we’re reiterating our prior revenue and EPS guidance for the revenue range of $5.8 billion to $6.2 billion and adjusted earnings per share of $2.60 to $2.80. The integration of the WHI is still ongoing and I’m continuing to expect $15 million to $20 million in transition and integration expense in 2012, and $40 million of acquisition-related intangible amortization from all prior deals. For clarification, these items are added back towards adjusted EPS. As we enter into 2012 we’re on track to achieve the $75 million of run rate EBITDA from WHI by the beginning of 2013. Read the rest of this transcript for free on seekingalpha.com