Catalyst Health Solutions Updates 2011 Financial Guidance

ROCKVILLE, Md.--(BUSINESS WIRE)--Catalyst Health Solutions, Inc. (NASDAQ: CHSI), today announced its updated 2011 financial guidance to reflect the impact from its acquisition of Walgreens Health Initiatives, Inc. (WHI).

Revenue in 2011 is now projected to grow by 35% to 41% over the prior year to $5.1 billion to $5.3 billion. The Company expects 2011 adjusted earnings per diluted share to range from $2.30 to $2.40. Adjusted earnings per diluted share excludes WHI acquisition related expenses and the amortization of acquisition related intangibles as detailed in the attached table.

Over the past several months, Catalyst and WHI associates have developed detailed integration plans and identified best practices. “The Day-1 transition proceeded smoothly. We are confident that the integration of WHI will be completed within the next eighteen months and the Company will reach its stated financial targets,” said David T. Blair, Chief Executive Officer of Catalyst. During the initial six months of integration, the Company’s primary focus will be client retention, contract optimization, and clinical and formulary management. During the following twelve months, management expects to integrate information technology systems, business processes and adjudication platforms.

“In addition to the successful close of WHI, our core business continues to perform as expected,” added Blair. “With the addition of new sales commitments, recent client renewals, operational improvements and trends in prescription utilization, we are poised to deliver another year of outstanding growth.”

As announced in April, Catalyst completed an equity offering comprised of 4.5 million new shares which netted proceeds of $228 million to the Company. The equity offering provides Catalyst with increased liquidity and flexibility in its capital structure to execute on its strategic growth initiatives. Weighted average diluted shares for 2011 is expected to be approximately 48.1 million shares and the Company’s 2011 earnings guidance reflects the impact of the equity offering.

The transaction and integration expenses excluded from adjusted EPS are comprised of charges related to the acquisition of WHI. The transaction expenses primarily consist of closing costs and professional fees; such as, banking, legal and accounting. The integration expenses include items such as transition services, retention payments, severance and other integration-related expenses. The integration-related charges include only expenses that are expected to end when the integration is complete. Catalyst believes that the non-GAAP adjusted earnings per diluted share measurement provides useful information regarding the underlying performance of its business operations and facilitates comparisons to our historical operating results.

Conference Call

Catalyst will host a conference call tomorrow, July 7, 2011, at 10:00 a.m. Eastern time to discuss its updated financial guidance. To participate, call 1-866-791-6248, access code 5554639 ten minutes prior to the scheduled start time, and request to be connected to the call.

A replay will be available for one week following the call through July 14th. To access the telephonic replay, dial 1-888-203-1112, replay access code 5554639, or visit the investor information section on Catalyst's website at www.catalysthealthsolutions.com.

Non-GAAP Financial Information

This press release includes certain non-GAAP financial information as defined by Securities and Exchange Commission Regulation G. Pursuant to the requirements of this regulation, reconciliations of this non-GAAP financial information to Catalyst Health Solutions, Inc. financial statements as prepared under generally accepted accounting principles (GAAP) are included in this press release. Catalyst’s management believes providing investors with this information give additional insights into its results of operations. While Catalyst’s management believes that these non-GAAP financial measures are useful in evaluating its operations, this information should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with GAAP.

About Catalyst Health Solutions, Inc. (www.chsi.com):

Catalyst Health Solutions, Inc., the fastest growing national PBM in the U.S., is built on strong, innovative principles in the management of prescription 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 (PBM) serving more than 18 million lives in the United States and Puerto Rico; HospiScript Services, LLC, one of the largest providers of PBM services to the hospice industry; FutureScripts, LLC, a full-service PBM serving approximately one million lives in the mid-Atlantic region, and Immediate Pharmaceutical Services, Inc., a fully integrated prescription mail service facility in Avon Lake, Ohio. 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” as defined in the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks and uncertainties that might materially affect our results, particularly those risks referred to in our Annual Report on Form 10-K for the year ended December 31, 2010, and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, under “Item 1A. Risk Factors.” Readers are urged to carefully review and consider the various disclosures made in our Annual Report on Form 10-K, our Forms 10-Q, 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. Catalyst Health Solutions, Inc. does not undertake any obligation to update forward-looking statements, whether as a result of new information, future events, or other developments.