CHSI Catalyst Health Solutions, (MM)

Catalyst Health Solutions, Inc. (NASDAQ:CHSI), a pharmacy benefit management company, announced its financial results for the fourth quarter and year ended December 31, 2008. For 2008, the Company reported revenue of $2.5 billion and net income of $50.4 million, or $1.16 per diluted share compared to revenue of $1.9 billion and net income of $39.3 million, or $0.91 per diluted share in the prior year.

�The Company continued to benefit from robust growth as reflected in our financial performance and resulting margin expansion,� said David T. Blair, Chief Executive Officer of Catalyst. �Our primary focus in the fourth quarter was on the successful implementation of new business and the integration of our recent acquisitions.�

The Company confirmed that it is tracking towards its previously stated guidance for 2009 of $3.0 billion in revenue and earnings between $1.35 and $1.45 per share.

Fourth Quarter Results

Revenue for the fourth quarter increased by $155.5 million, or 29.2%, to $687.4 million from $531.9 million in the prior year's comparable quarter. Total claims processed in the fourth quarter increased to 13.6 million from 11.5 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 fourth quarter increased $11.1 million, to $40.3 million or 5.9% of revenue compared to $29.2 million, or 5.5% of revenue, in the fourth quarter of the prior year.

Fourth quarter operating income increased 35.4% to $20.9 million from $15.4 million in the fourth quarter of 2007. The increase in operating income was primarily due to the increase in gross profit, offset by a $5.6 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, evaluation of various strategic opportunities, as well as consolidating the results from the Company's recent acquisitions. This increase included approximately $1.1 million or $0.02 per diluted share of non-recurring expenditures relating to corporate development activities.

Net income for the fourth quarter of 2008 increased 22% to $14.2 million, or $0.33 per diluted share, including the non-recurring expenditures, compared to the prior year's net income of $11.6 million, or $0.27 per diluted share.

Full Year Results

Revenue for the year ended December 31, 2008 increased 36.9%, to $2.5 billion from approximately $1.9 billion in the prior year. Total claims processed increased to 52.0 million for the year ended December 31, 2008, up from 41.5 million in 2007. The increase in prescription volume was primarily due to the addition of new clients.

Gross profit for 2008, increased by $32.9 million to $143.3 million, or 5.6% of revenue, compared to $110.4 million, or 5.9% of revenue, in the prior year.

Operating income increased by $19.0 million to $75.4 million in 2008 from $56.4 million in 2007. The increase in operating income was primarily due to the increase in gross profit offset by a $13.9 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, facilities and vendor costs to implement and serve new clients, evaluation of various strategic opportunities, as well as consolidating the results from the Company's recent acquisitions.

Net income for the year ended December 31, 2008 increased 28% to $50.4 million, or $1.16 per diluted share, compared to $39.3 million, or $0.91 per diluted share, in the prior year.

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 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 and Puerto Rico; HospiScript Services, LLC, 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. 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 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 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.

� CATALYST HEALTH SOLUTIONS, INC. and Subsidiaries � CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) � � � � �

For the three monthsended December 31,

For the twelve monthsended December 31,

� 2008 � � 2007 � � 2008 � � 2007 � Revenue (excludes member co-payments of $195,623, $171,333, $753,547 and $635,556 for the three and twelve months ended December 31, 2008 and 2007, respectively) $ 687,400 � $ 531,928 � $ 2,543,379 � $ 1,857,697 � Direct expenses 647,120 502,751 2,400,125 1,747,264 Selling, general and administrative expenses � 19,365 � � 13,729 � � 67,822 � � 53,994 � Total operating expenses � 666,485 � � 516,480 � � 2,467,947 � � 1,801,258 � Operating income 20,915 15,448 75,432 56,439 Interest income 607 2,020 4,542 6,634 Interest expense (76 ) (37 ) (311 ) (162 ) Other income (loss) � (2 ) � 58 � � � � � 59 � Income before minority interest and income taxes 21,444 17,489 79,663 62,970 Minority interest � � � � � � � � � � 31 � Income before income taxes 21,444 17,489 79,663 62,939 Income tax expense � 7,264 � � 5,880 � � 29,269 � � 23,671 � Net income $ 14,180 � $ 11,609 � $ 50,394 � $ 39,268 � � Net income per share, basic $ 0.33 $ 0.28 $ 1.18 $ 0.95 Net income per share, diluted $ 0.33 $ 0.27 $ 1.16 $ 0.91 Weighted average shares of common stock outstanding, basic 42,848 41,977 42,527 41,525 Weighted average shares of common stock outstanding, diluted 43,615 43,274 43,588 43,006 � � � � � CATALYST HEALTH SOLUTIONS, INC. and Subsidiaries � CONSOLIDATED SELECTED INFORMATION (In thousands) (Unaudited) � �

For the three monthsended December 31,

For the twelve monthsended December 31,

2008 2007 2008 2007 Retail prescriptions 13,093 11,066 50,150 40,077 Total mail prescriptions 540 � 403 � 1,871 � 1,408 � Total prescriptions 13,633 11,469 52,021 41,485

Total adjusted prescriptions(1)

14,713 12,275 55,763 44,301 � �

Adjusted mail order penetration %(2)

11 % 10 % 10 % 10 % Generic utilization % 66 % 62 % 65 % 61 % � �

Gross profit

40,280 29,177 143,254 110,433 Operating income 20,915 15,448 75,432 56,439 Depreciation & amortization 2,929 2,071 10,074 7,897 �

(1) Adjusted prescription volume equals the number of mail-order prescriptions multiplied 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.

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(2) The percentage of adjusted mail-order prescriptions to total adjusted prescriptions.

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