HLEX Healthextras (MM)

HealthExtras, Inc. (NASDAQ:HLEX), a pharmacy benefit management company, today announced its financial results for the fourth quarter and year ended December 31, 2007. 2007 Highlights Net income for 2007 was $39.3 million or $0.91 per diluted share, a 24% increase from the $31.6 million or $0.75 per diluted share reported in 2006. Revenue for 2007 was $1.9 billion, a 46% increase over 2006 revenue of $1.3 billion. Over 41.4 million prescriptions processed an increase of 41% over the 29.3 million processed in 2006. Fourth Quarter Highlights Net income for the fourth quarter 2007 was $11.6 million or $0.27 per diluted share. Revenues for the fourth quarter 2007 totaled $531.9 million, a 34% increase over fourth quarter 2006 revenues of $396.2 million. Over 11.4 million prescriptions were processed during the quarter including 403,000 unadjusted mail claims. According to David T. Blair, Chief Executive Officer of HealthExtras, �The significant achievements in 2007 were the successful implementation of new business representing $700 million of annualized revenues and the retention of over 98% of the Company�s existing clients. During the year, the Company commenced pharmacy management services for the States of Maryland and Ohio employees, several prominent self insured employers and Medical Card Systems, a major managed care client in Puerto Rico.� All new client implementations proceeded smoothly and business volumes are meeting management expectations. In addition to the significant new business added in 2007, for the second consecutive year the Company received the top customer satisfaction ratings for �Overall Service and Performance� in the Pharmacy Benefit Management Institute (PBMI) 2007 Pharmacy Benefit Manager (PBM) Customer Satisfaction Report. �The results of the PBMI report reflect our commitment to service excellence. In 2008, we will continue to drive pricing transparency and align our incentives with those of our plan sponsors through new and innovative programs,� added Blair. 2008 Financial Guidance Based on business under contract, new sales commitments and industry trends, management anticipates 2008 revenues and net income to grow by 30% to 35% over 2007. Net income for 2008 is projected to range between $50.5 million and $54.0 million, which is expected to yield diluted earnings per share of $1.17 to $1.25. Revenues in 2008 are projected to exceed $2.5 billion. HealthExtras is well positioned to deliver improving profitability as a result of the strong prescription volume and revenue increases associated with the Company�s sales and retention success in 2007. In addition, management expects to complement the Company�s strong organic growth through strategic acquisitions in 2008. About HealthExtras (www.healthextras.com): HealthExtras, Inc. is a full-service pharmacy benefit management company. Its clients include self-insured employers, including state and local governments, third-party administrators, managed care organizations, unions and individuals. The Company's integrated pharmacy benefit management services marketed under the name Catalyst Rx include: claims processing, benefit design consultation, drug utilization review, formulary management, drug data analysis services and mail order services. Additionally, the Company operates a national retail pharmacy network with over 60,000 participating pharmacies. 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, 2006 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. HEALTHEXTRAS, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) � � � � For the three months ended December 31, For the year ended December 31, 2007 2006 2007 2006 Revenue (excludes member co-payments of $171,333, $142,809, $635,556 and $476,983 for the three months and year ended December 31, 2007 and 2006, respectively) $531,928 $396,208 $1,857,697 $1,271,006 Direct expenses 502,751 366,448 1,747,264 1,176,877 Selling, general and administrative expenses 13,729 12,380 53,994 46,414 Total operating expenses 516,480 378,828 1,801,258 1,223,291 Operating income 15,448 17,380 56,439 47,715 Interest and other income (expense), net 2,041 1,506 6,531 4,515 Income before minority interest and income taxes 17,489 18,886 62,970 52,230 Minority interest - 129 31 248 Income before income taxes 17,489 18,757 62,939 51,982 Income tax expense 5,880 7,489 23,671 20,408 Net income $ 11,609 $ 11,268 $ 39,268 $ 31,574 � Net income per share, basic $ 0.28 $ 0.28 $ 0.95 $ 0.78 Net income per share, diluted $ 0.27 $ 0.27 $ 0.91 $ 0.75 Weighted average shares of common stock outstanding, basic 41,977 40,745 41,525 40,270 Weighted average shares of common stock outstanding, diluted 43,274 42,447 43,006 42,319