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Catalyst Health Solutions Inc. Reports Operating Results (10-Q)

November 05, 2010 | About:
10qk

10qk

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Catalyst Health Solutions Inc. (CHSI) filed Quarterly Report for the period ended 2010-09-30.

Catalyst Health Solutions Inc. has a market cap of $1.93 billion; its shares were traded at around $43.59 with a P/E ratio of 26.4 and P/S ratio of 0.7. Catalyst Health Solutions Inc. had an annual average earning growth of 27.2% over the past 5 years.CHSI is in the portfolios of Paul Tudor Jones of The Tudor Group, Steven Cohen of SAC Capital Advisors, Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC, Jeremy Grantham of GMO LLC.

Highlight of Business Operations:

Selling, general and administrative expenses of $26.7 million for the three months ended September 30, 2010, consisted of $13.2 million in compensation and benefits, which includes $1.1 million in non-cash compensation, $4.1 million in professional fees and technology services, $2.6 million in facility costs, $1.6 million in travel expenses, $1.0 million in insurance and other corporate expenses, $0.3 million in non-employee non-cash compensation expense, $0.9 million in other, which includes $0.4 million in recruitment and temporary help, and $3.0 million in depreciation and amortization.

Selling, general and administrative expenses of $21.1 million for the three months ended September 30, 2009, consisted of $11.3 million in compensation and benefits, which includes $1.1 million in non-cash compensation, $1.8 million in professional fees and technology services, $2.4 million in facility costs, $0.8 million in travel expenses, $0.8 million in insurance and other corporate expenses, $0.6 million in non-employee non-cash compensation expense, $0.9 million in other, which includes and $0.2 million in recruitment and temporary help, and $2.5 million in depreciation and amortization.

Selling, general and administrative expenses of $73.0 million for the nine months ended September 30, 2010, consisted of $37.3 million in compensation and benefits, which includes $4.0 million in non-cash compensation, $9.6 million in professional fees and technology services, $7.5 million in facility costs, $3.8 million in travel expenses, $2.6 million in insurance and other corporate expenses, $1.3 million in non-employee non-cash compensation expense, $2.6 million in other, which includes $0.8 million in recruitment and temporary help, and $8.3 million in depreciation and amortization.

Net Cash Provided by Operating Activities. Our operating activities provided $70.0 million of cash from operations in the nine-month period ended September 30, 2010, a $2.8 million change from the $67.2 million cash generated in the comparable prior year period. This $70.0 million in cash provided by operating activities in 2010 reflects $58.4 million in net income, plus $17.7 million in net non-cash charges and a $6.1 million net decrease in cash provided by changes in working capital and other assets and liabilities. This $6.1 million net decrease in cash provided by changes in working capital, net of effects from acquisitions, was primarily due to changes in accounts receivable of $10.5 million, rebates receivable of $33.5 million, income tax receivable $5.2 million, accounts payable of $18.1 million and other assets of $4.2 million, offset by changes in rebates payable of $40.6 million, accrued liabilities of $24.2 million and inventory of $0.6 million. The changes in accounts receivable and rebates receivable reflect the impact of a previously realized temporary delay in the timing of the receivables. The changes in rebates payable reflect the temporary benefit in the timing of payments of these payable. The change in accounts payable reflects the reduction in a previous realized temporary benefit in the timing of payments of our accounts payable.

The $67.2 million in cash provided by operating activities in 2009 reflects $47.2 million in net income, plus $14.3 million in net non-cash charges and $5.7 million net increase in working capital and other assets and liabilities. This $5.7 million net increase in working capital, net of effects from acquisitions, was primarily due to changes in accounts receivable of $24.6 million, income tax receivable of $2.9 million, rebates payable of $1.0 million and accrued expenses of $10.0 million, offset by changes in rebates receivable of $17.2 million, accounts payable of $13.1 million, inventory of $1.1 million and other assets of $1.4 million. The $13.1 million change in accounts payable reflects the reduction in a previous realized temporary benefit in the timing of payments of our accounts payable.

Net Cash Provided by Financing Activities. Net cash provided by financing activities for the nine months ended September 30, 2010 was $149.1 million compared to $4.0 million in the prior year period. In the current period, we received $150.0 million from term loan proceeds, $3.1 million from the exercise of stock options, $0.3 million in proceeds from issuance of common stock pursuant to our employee stock purchase plan and had an income tax benefit of $4.9 million related to the exercise of stock options and restricted stock vesting. Additionally, we purchased $2.6 million of treasury stock during the nine months ended September 30, 2010, incurred $3.6 million in deferred financing cost related to our new credit facilities, and made a $3.0 million contingent consideration payment. In the prior year period, we received proceeds of $1.9 million from the exercise of stock options, $0.2 million in proceeds from issuance of common stock pursuant to the employee stock purchase plan, had an income tax benefit of $1.8 million related to the exercise of stock

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