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8-K - FORM 8-K - Catamaran Corpd494410d8k.htm

Exhibit 99.1

 

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Catamaran Corporation Announces Record Setting Results for 2012

-Record setting year reaches $9.9 billion in revenue and $116.7 million in net income-

-Quarterly revenue of $3.3 billion and EBITDA of $146.6 million reach all time highs-

-2013 Revenue and EPS (fully-diluted) expected to grow 45% and 74%-

Lisle, Illinois, February 28, 2013—Catamaran Corporation (“Catamaran” or the “Company”) (NASDAQ: CTRX, TSX: CCT), a leading provider of pharmacy benefit management (“PBM”) services and technology, announces its financial results for the three-month and twelve-month periods ended December 31, 2012.

2012 Financial Highlights

 

Revenue increased 100% on a year over year basis to $9.9 billion during 2012, compared to $5.0 billion in 2011

 

Gross profit increased 137% to $733.4 million during 2012, compared to $309.5 million in 2011

 

SG&A includes $44.2 million in transaction and integration related expenses, or $0.17 per share (fully-diluted), related to the Catalyst merger in 2012

 

Net income attributable to the Company of $116.7 million, or $0.70 per share (fully-diluted), in 2012, compared to $91.8 million, or $0.73 per share (fully-diluted) in 2011

 

EBITDA¹ increased 118% to $362.7 million during 2012, compared to $166.4 million in 2011

 

Adjusted EPS¹ (fully-diluted) increased 46% to $1.19 in 2012, compared to $0.82 in 2011

 

Cash flow from operations increased $155.1 million to $249.7 million during 2012, compared to $94.7 million in 2011

 

Repaid $200 million of $1.4 billion borrowed in July to partially finance Catalyst acquisition

 

Adjusted prescription claim volume¹ for the PBM segment increased 117% to 198.9 million in 2012, compared to 91.7 million in 2011

 

Transaction processing volume for the HCIT segment increased 17% to 464.2 million during 2012, compared to 396.9 million in 2011

 

Generic dispensing rate increased to an industry leading 83% for Q4 2012, compared to 79% for Q4 2011

2012 Corporate Highlights

 

Completed the acquisition of HealthTran, a full-service PBM, in January 2012

 

Completed the merger with Catalyst Health Solutions, Inc. (“Catalyst”), a full-service PBM, in July 2012

 

Re-branded the Company as Catamaran Corporation from SXC Health Solutions Corp.

 

Issued 12.0 million common shares in a public offering in May 2012 yielding $519.1 million in net proceeds

 

Ranked 11th in Fortune magazine’s Top 100 Fastest-Growing Companies, the third consecutive year Catamaran has been ranked in this category by Fortune magazine

 

Company’s Employer Group Waiver Plan received a five-star rating from the Centers for Medicare & Medicaid Services

“This past year has been a transformative period for Catamaran, led by the merger with Catalyst which doubled our size. Throughout this period, we never lost sight of our goals and operational plan, which was the foundation for the results we achieved in 2012. Our operational excellence, coupled with the successful progression of our integrations, yielded another record setting year. The dramatic changes embarked upon by Catamaran in 2012, combined with the financial savings and clinical results we delivered to our customers, have created a number of new opportunities for the Company. The entire Company is focused on continuing to deliver superior results, and we are well positioned to take advantage of our growth and enhanced capabilities in 2013,” said Mark Thierer, Chairman and CEO of Catamaran.


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Financial Review

Revenue and Gross Profit segmented by PBM and HCIT:

Catamaran evaluates segment performance based on revenue and gross profit. Reconciliations of the Company’s business segments, PBM and Health Care Information Technology (“HCIT”), to the consolidated financial statements for the three-month and twelve-month periods ended December 31, 2012 are as follows:

Three months ended December 31, (in thousands)

 

     PBM     HCIT     Consolidated  
     2012     2011     2012     2011     2012     2011  

Revenue

   $ 3,292,056      $ 1,348,094      $ 37,484      $ 30,420      $ 3,329,540      $ 1,378,514   

Cost of revenue

     3,046,365        1,271,776        17,583        17,372        3,063,948        1,289,148   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

   $ 245,691      $ 76,318      $ 19,901      $ 13,048      $ 265,592      $ 89,366   

Gross profit %

     7.5     5.7     53.1     42.9     8.0     6.5

Year ended December 31, (in thousands)

 

     PBM     HCIT     Consolidated  
     2012     2011     2012     2011     2012     2011  

Revenue

   $ 9,785,084      $ 4,859,243      $ 155,036      $ 116,253      $ 9,940,120      $ 4,975,496   

Cost of revenue

     9,141,029        4,602,662        65,715        63,346        9,206,744        4,666,008   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

   $ 644,055      $ 256,581      $ 89,321      $ 52,907      $ 733,376      $ 309,488   

Gross profit %

     6.6     5.3     57.6     45.5     7.4     6.2

PBM Revenue

PBM revenue increased by $4.9 billion, or 101% to $9.8 billion in 2012, compared to $4.9 billion for the same period in 2011. PBM revenue increased by $1.9 billion, or 144% to $3.3 billion in Q4 0212, compared to $1.3 billion in Q4 2011. The increase in revenue for both periods is primarily due to the recent merger with Catalyst, which was completed on July 2, 2012, and contributed $3.2 billion and $1.6 billion in additional revenue in 2012 and Q4, 2012, respectively, as well as organic growth as a result of the implementation of new customer contracts in 2012.

HCIT Revenue

Total HCIT revenue increased $38.8 million, or 33% to $155.0 million in 2012, compared to $116.3 million for the same period in 2011. HCIT revenue increased $7.1 million, or 23% to $37.5 million in Q4 2012, compared to $30.4 million in Q4 2011. The increase in both periods was primarily due to an increase in transaction volume or rates from existing customers, plus additional revenues earned from Catalyst and HealthTran customers acquired that are included in the HCIT segment.

Consolidated Gross Profit

Gross profit increased $423.9 million, or 137% to $733.4 million in 2012, compared to $309.5 million in 2011. Gross profit was $265.6 million in Q4 2012, compared to $89.4 million in Q4 2011. The increase in both periods is mainly due to an increase in PBM revenue generated from the recent merger with Catalyst, organic growth as a result of new customer contract implementations in 2012 and the acquisition of HealthTran. Consolidated gross profit percentage increased from 6.2% of revenue in 2011 to 7.4% of revenue in 2012. Consolidated gross profit percentage increased from 6.5% in Q4 2011 to 8.0% in Q4 2012. The increases were the result of synergies realized from the integrations of Catalyst and HealthTran customers, increased generic utilization and improved mail and specialty volume during 2012.

Selling, General and Administrative (“SG&A”) Costs

SG&A costs increased $223.7 million, or 153% to $369.5 million in 2012, compared to $145.8 million in 2011. SG&A costs for Q4 2012 were $114.4 million, compared to $41.7 million in Q4 2011. SG&A costs have increased due to the addition of operating costs related to the Company’s recent merger with Catalyst and acquisition of HealthTran during 2012, as well as transaction and integration costs incurred related to increased headcount and operating expenses as a result of the merger with Catalyst totaling approximately $44.2 million in 2012.

 

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Amortization

Total amortization expense increased $113.7 million to $130.1 million in 2012, compared to $16.4 million in 2011. Amortization expense was $59.4 million in Q4 2012, compared to $5.3 million in Q4 2011. The increase in both periods is primarily due to the amortization of the intangible asset acquired in the recent merger with Catalyst.

Interest and other expense, net

Interest and other expense, net increased $24.4 million to $26.7 million in 2012, from $2.3 million in 2011. Interest and other expense, net, was $11.6 million in Q4 2012, compared to $0.3 million in Q4 2011. The increase in both periods is driven by an increase in interest expense, compared to the same periods in 2011 related to the $1.4 billion utilized from the Company’s credit facility to partially finance the merger with Catalyst.

Income Taxes

The Company recognized income tax expense of $69.3 million for 2012, representing an effective tax rate of 36.4%, compared to $46.5 million, or 33.6% in 2011. The Company recognized income tax expense of $26.0 million in Q4 2012, representing an effective tax rate of 35.2%, compared to $13.4 million, or 33.5% in Q4 2011. The Company’s effective tax rate increased during each period primarily due to costs related to the merger with Catalyst.

Net Income and EPS attributable to the Company

The Company executed a two-for-one stock split on October 1, 2012. All share and per share data presented in this release have been retroactively adjusted to reflect this stock split. The Company reported 2012 net income attributable to the Company of $116.7 million, or $0.70 per share (fully-diluted), compared to $91.8 million, or $0.73 per share (fully-diluted) in 2011. The Company reported net income attributable to the Company of $42.5 million, or $0.21 per share (fully-diluted) in Q4 2012, compared to $26.7 million, or $0.21 per share (fully-diluted) in Q4 2011. Net income attributable to the Company increased during both periods as a result of the addition of the HealthTran and Catalyst books of business and new customer implementations during the year. These increases were offset by increased headcount and operating expenses, increased interest expense as a result of the Company’s borrowings utilized to partially finance the merger with Catalyst, costs incurred to complete the merger and an increase in amortization expense as a result of an intangible asset acquired in the merger. EPS attributable to the Company decreased in 2012 compared to the same period in 2011, primarily due to an increase in the number of common shares outstanding as a result of the Company’s issuance of approximately 12 million common shares in May 2012 in a public offering and the issuance of approximately 66.8 million shares to complete the merger with Catalyst. EPS attributable to the Company was unchanged during Q4 2012 as compared to Q4 2011, mainly due to an increase in net income attributable to the Company offset by an increase in the number of common shares as described above.

Adjusted EPS¹ (fully-diluted), which excludes all amortization of intangible assets of $130.1 million, net of tax, increased 46% to $1.19 per share (fully-diluted) in 2012, compared to $0.82 per share (fully-diluted) in 2011. Adjusted EPS was $0.39 per share (fully-diluted) in Q4 2012, compared to $0.24 per share (fully-diluted) in Q4 2011.

EBITDA¹

EBITDA for 2012 increased $196.3 million, or 118% to $362.7 million, compared to $166.4 million in 2011. EBITDA for Q4 2012 increased 203% to $146.6 million, compared to $48.3 million for Q4 2011. The EBITDA growth was due to additional business generated from the recent merger with Catalyst, other recent acquisitions and their associated synergies, as well as new contract implementations, offset in part by costs related to the merger including transaction and integration expenses.

Cash Flow from Operations

For 2012, the Company generated $249.7 million of cash from operations, compared to $94.7 million of cash from operations during the same period in 2011. The Company generated $102.3 million of cash flow from operations in Q4 2012, compared to $10.2 million during Q4 2011. Cash from operating activities increased during both periods mainly due to an increase in net income, net of non-cash items. The increased transaction volume in the PBM segment, propelled by new customer implementations during 2012, as well as the additional business generated as a result of the Company’s merger with Catalyst and other recent acquisitions, were also drivers of increased operating cash flow during 2012.

 

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2013 Full Year Financial Guidance

Catamaran has set the following 2013 full year financial targets.

 

   

Revenue of $14.2 to $14.6 billion

 

   

EBITDA1 of $660 to $670 million

 

   

GAAP EPS (fully-diluted) of $1.18 to $1.25

 

   

Adjusted EPS1 (fully-diluted) of $1.81 to $1.88 (excluding all amortization of intangible assets)

Notice of Conference Call

Catamaran will host a conference call on Thursday, February 28, 2013, at 8:30 a.m. ET to discuss its financial results. Mark Thierer, Chairman and CEO, and Jeff Park, EVP and CFO, will co-chair the call. This call is being webcast and can be accessed from the IR Events page of the Catamaran Corporation web site at www.catamaranrx.com. An archived replay of the webcast will be available for 90 days.

1Non-GAAP Financial Measures

Catamaran reports its financial results in accordance with generally accepted accounting principles in the United States (“GAAP”). Catamaran’s management also evaluates and makes operating decisions using various other measures. Two such measures are Adjusted EPS and EBITDA, which are non-GAAP financial measures. Catamaran’s management believes that these two measures provide useful supplemental information regarding the performance of Catamaran’s business operations.

Adjusted EPS adds back the impact of all intangible assets amortization expenses, net of tax. Amortization of intangible asset expense arises from the acquisition of intangible assets in connection with the Company’s business acquisitions. The Company excludes intangible assets amortization expense from EPS because it believes: (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of Catamaran’s business operations and; (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired intangible assets. Investors should note that the use of these intangible assets contributes to revenue in the periods presented as well as future periods and should also note that such expenses will recur in future periods.

EBITDA is a non-GAAP measure that management believes is a useful supplemental measure of operating performance. EBITDA consists of earnings prior to amortization, depreciation, interest and other expense, net, income taxes and adjustments to remove the applicable depreciation and interest expense impact of the non-controlling interests. Management believes it is useful to exclude amortization, depreciation, interest and other expense, net, as they are essentially amounts that cannot be influenced by management in the short term.

The 2013 full year EBITDA guidance was computed using the Company’s estimated 2013 earnings before amortization, depreciation, interest and other expense, net and income taxes. The 2013 full year Adjusted EPS guidance was computed by taking the Company’s GAAP EPS (fully-diluted) guidance and adding back the expected impact of all 2013 amortization expense totaling approximately $195 million, less estimated 2013 income taxes at an estimated effective tax rate of 32-33%.

Adjusted prescription claim volume equals Catamaran’s mail service prescriptions multiplied by three, plus its retail and specialty prescriptions. The mail service prescriptions are multiplied by three to adjust for the fact that they typically include approximately three times the amount of product days supplied compared with retail prescriptions.

Management believes that Adjusted EPS, EBITDA and adjusted prescription claim volume provide useful supplemental information to management and investors regarding the performance of the Company’s business operations and facilitate comparisons to its historical operating results. Management also uses this information internally for forecasting and budgeting as it believes that the measures are indicative of the Company’s core operating results. Note, however, that these items are performance measures only, and do not provide any measure of the Company’s cash flow or liquidity. Non-GAAP financial measures should not be considered as a substitute for measures of financial performance in accordance with GAAP, and investors and potential investors are encouraged to review the reconciliations of Adjusted EPS and EBITDA to their most directly comparable GAAP measure.

Adjusted EPS and EBITDA do not have standardized meanings prescribed by GAAP. The Company’s method of calculating these items may differ from the methods used by other companies and, accordingly, may not be comparable to similarly titled measures used by other companies.

 

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Reconciliations of EBITDA to net income and GAAP EPS (fully-diluted) to Adjusted EPS (fully-diluted) are shown below:

 

EBITDA Reconciliation    Three Months Ended December 31,      Years Ended December 31,  
(in thousands)    2012     2011      2012     2011  
     (unaudited)      (unaudited)  

Net income attributable to the Company (GAAP)

   $ 42,529      $ 26,684       $ 116,658      $ 91,786   

Add:

         

Amortization of intangible assets

     59,407        5,260         130,116        16,385   

Depreciation of property and equipment

     7,288        2,676         20,234        9,492   

Interest and other expense, net

     11,619        302         26,682        2,277   

Income tax expense

     26,008        13,418         69,316        46,508   

Adjustments related to non-controlling interests

     (260     —           (276     —     
  

 

 

   

 

 

    

 

 

   

 

 

 

EBITDA

   $ 146,591      $ 48,340       $ 362,730      $ 166,448   
  

 

 

   

 

 

    

 

 

   

 

 

 

 

Adjusted EPS Reconciliation  
(in thousands, except per share data)                                                 
     Three Months Ended December 31,     Years Ended December 31,  
     2012     2011     2012     2011  
     Operational
Results
    Per
Diluted
Share
    Operational
Results
    Per
Diluted
Share
    Operational
Results
    Per
Diluted
Share
    Operational
Results
    Per
Diluted
Share
 
     (unaudited)     (unaudited)  

Net income attributable to the Company (GAAP)

   $ 42,529      $ 0.21      $ 26,684      $ 0.21      $ 116,658      $ 0.70      $ 91,786      $ 0.73   

Amortization of intangible assets

     59,407        0.28        5,260        0.04        130,116        0.77        16,385        0.13   

Tax effect of reconciling item

     (20,911     (0.10     (1,762     (0.01     (47,362     (0.28     (5,505     (0.04
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income attributable to the Company

   $ 81,025      $ 0.39      $ 30,182      $ 0.24      $ 199,412      $ 1.19      $ 102,666      $ 0.82   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

About Catamaran Corporation

Catamaran, the industry’s fastest-growing pharmacy benefits manager, helps organizations and the communities they serve take control of prescription drug costs. Managing more than 250 million prescriptions each year on behalf of 25 million members, our flexible, holistic solutions improve patient care and empower individuals to take charge of their health. Processing one in every five prescription claims in the U.S., Catamaran’s skill and scale deliver compelling financial results and sustainable improvement in the overall health of members. Catamaran is headquartered in Lisle, IL. with multiple locations in the U.S. and Canada. For more information, please visit www.catamaranrx.com.

Forward-Looking Statements

Certain information included herein is forward-looking within the meaning of certain securities laws and is subject to important risks, uncertainties and assumptions. This forward-looking information includes, among other things, information with respect to the Company’s anticipated operating results and the Company’s objectives and the strategies to achieve those objectives, as well as information with respect to the Company’s beliefs, plans, expectations, anticipations, estimates and intentions. Numerous factors could cause actual results to differ materially from those in the forward-looking statements, including without limitation, our dependence on, and ability to retain, key customers; our ability to achieve increased market acceptance for our product offerings and penetrate new markets; consolidation in the healthcare industry; the existence of undetected errors or similar problems in our software products; our ability to identify and complete acquisitions, manage our growth, integrate acquisitions and achieve expected synergies from acquisitions; our ability to compete successfully; potential liability for the use of incorrect or incomplete data; the length of the sales cycle for our solutions and services; interruption of our operations due to outside sources; maintaining our intellectual property rights and litigation involving intellectual property rights; our ability to obtain, use or successfully integrate third-party licensed technology; compliance with existing laws, regulations and industry initiatives and future changes in laws or regulations in the healthcare industry; breach of our security by third parties; our dependence on the expertise of our key personnel; our access to sufficient capital to fund our future requirements; potential write-offs of goodwill or other intangible assets; and the outcome of any legal proceeding that has been or may be instituted against us. This list is not exhaustive of the factors that may affect any of our forward-looking statements and is subject to change.

 

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In addition, numerous factors could cause actual results with respect to the merger with Catalyst Health Solutions, Inc. (“Catalyst” or the “Merger”) to differ materially from those in the forward-looking statements, including without limitation, the possibility that the expected efficiencies and cost savings from the Merger will not be realized, or will not be realized within the expected time period; the risk that the Company’s and Catalyst’s businesses will not be integrated successfully; disruption from the Merger making it more difficult to maintain business and operational relationships; the risk of customer attrition; and the impact on the availability of funds for other business purposes due to our debt service obligations and funds required to integrate Catalyst.

When relying on forward-looking information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. In making the forward-looking statements contained herein, the Company does not assume any significant future acquisitions, dispositions or one-time items. It does assume, however, the renewal of certain customer contracts. Every year, the Company has major customer contracts that come up for renewal. In addition, the Company also assumes new customer contracts. In this regard, the Company is pursuing large opportunities that present a very long and complex sales cycle which substantially affects its forecasting abilities. The Company has assumed certain timing for the realization of these opportunities which it believes is reasonable but which may not be achieved. Furthermore, the pursuit of these larger opportunities does not ensure a linear progression of revenue and earnings since they may involve significant up-front costs followed by renewals and cancellations of existing contracts. The Company has assumed certain revenues which may not be realized. The Company has also assumed that the material factors referred to in the previous paragraphs will not cause such forward-looking information to differ materially from actual results or events. The foregoing list of factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. Other factors that should be considered are discussed from time to time in Catamaran’s filings with the U.S. Securities and Exchange Commission, including the risks and uncertainties discussed under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K and subsequent Form 10-Qs, which are available at www.sec.gov. Investors are cautioned not to put undue reliance on forward-looking statements. All subsequent written and oral forward-looking statements attributable to Catamaran or persons acting on our behalf are expressly qualified in their entirety by this notice. We disclaim any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or otherwise.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS RELEASE REPRESENTS THE COMPANY’S CURRENT EXPECTATIONS AND, ACCORDINGLY, IS SUBJECT TO CHANGE. HOWEVER, THE COMPANY EXPRESSLY DISCLAIMS ANY INTENTION OR OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING INFORMATION, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE, EXCEPT AS REQUIRED BY APPLICABLE LAW.

For more information, please contact:

Tony Perkins

Investor Relations

Catamaran Corporation

(312) 261-7805

tony.perkins@catamaranrx.com

 

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CATAMARAN CORPORATION

Consolidated Balance Sheets

(in thousands, except share data)

 

     December 31,  
     2012     2011  
ASSETS     

Current assets

    

Cash and cash equivalents

   $ 370,776      $ 341,382   

Restricted cash

     52,422        12,017   

Accounts receivable, net of allowance for doubtful accounts of $7,899 (2011—$2,725)

     725,809        240,425   

Rebates receivable

     302,461        33,834   

Other current assets

     101,311        35,605   
  

 

 

   

 

 

 

Total current assets

     1,552,779        663,263   

Property and equipment, net of accumulated depreciation of $64,048 (2011—$43,304)

     105,201        21,658   

Goodwill

     4,478,038        291,045   

Other intangible assets, net of accumulated amortization of $178,188 (2011—$48,072)

     1,198,991        69,777   

Other long-term assets

     50,118        4,564   
  

 

 

   

 

 

 

Total assets

   $ 7,385,127      $ 1,050,307   
  

 

 

   

 

 

 
LIABILITIES AND EQUITY     

Current liabilities

    

Accounts payable

   $ 644,818      $ 219,380   

Accrued expenses and other current liabilities

     254,811        66,729   

Pharmacy benefit management rebates payable

     302,065        59,235   

Current portion—long-term debt

     41,250        —     
  

 

 

   

 

 

 

Total current liabilities

     1,242,944        345,344   

Deferred income taxes

     344,232        18,361   

Long-term debt

     1,132,153        —     

Other long-term liabilities

     55,937        15,564   
  

 

 

   

 

 

 

Total liabilities

     2,775,266        379,269   

Shareholders’ equity

    

Common shares: no par value, unlimited shares authorized; 205,399,102 shares issued and outstanding at December 31, 2012 (2011—124,767,322)

     4,180,778        394,769   

Additional paid-in capital

     73,530        37,936   

Retained earnings

     354,991        238,333   

Accumulated other comprehensive income (loss)

     (2,191     —     
  

 

 

   

 

 

 

Total shareholders’ equity

     4,607,108        671,038   

Non-controlling interest

     2,753        —     

Total equity

     4,609,861        671,038   
  

 

 

   

 

 

 

Total liabilities and equity

   $ 7,385,127      $ 1,050,307   
  

 

 

   

 

 

 

 

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CATAMARAN CORPORATION

Consolidated Statements of Operations

(in thousands, except share and per share data)

 

     Three Months Ended
December 31,
    Years Ended
December 31,
 
     2012     2011     2012     2011  
     (unaudited)              

Revenue

   $ 3,329,540      $ 1,378,514      $ 9,940,120      $ 4,975,496   

Cost of revenue

     3,063,948        1,289,148        9,206,744        4,666,008   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     265,592        89,366        733,376        309,488   

Expenses:

        

Selling, general and administrative

     114,400        41,721        369,492        145,788   

Depreciation of property and equipment

     6,196        1,981        16,749        6,744   

Amortization of intangible assets

     59,407        5,260        130,116        16,385   
  

 

 

   

 

 

   

 

 

   

 

 

 
     180,003        48,962        516,357        168,917   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     85,589        40,404        217,019        140,571   

Interest and other expense, net

     11,619        302        26,682        2,277   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     73,970        40,102        190,337        138,294   

Income tax expense (benefit):

        

Current

     45,237        17,816        107,241        52,402   

Deferred

     (19,229     (4,398     (37,925     (5,894
  

 

 

   

 

 

   

 

 

   

 

 

 
     26,008        13,418        69,316        46,508   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     47,962        26,684        121,021        91,786   

Less net income attributable to non-controlling interest

     5,433               4,363          
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to the Company

   $ 42,529      $ 26,684      $ 116,658      $ 91,786   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share:

        

Basic

   $ 0.21      $ 0.21      $ 0.70      $ 0.74   

Diluted

   $ 0.21      $ 0.21      $ 0.70      $ 0.73   

Weighted average number of shares used in computing earnings per share:

        

Basic

     205,231,817        124,694,774        166,765,682        124,253,312   

Diluted

     206,147,295        126,244,708        167,830,620        125,903,516   

 

8


LOGO

 

CATAMARAN CORPORATION

Consolidated Statements of Cash Flows

(in thousands)

 

     Three Months Ended
December 31,
    Years Ended December 31,  
     2012     2011     2012     2011  
     (unaudited)              

Cash flows from operating activities:

        

Net income

   $ 47,962      $ 26,684      $ 121,021      $ 91,786   

Items not involving cash:

        

Stock-based compensation

     4,506        2,938        17,667        9,445   

Depreciation of property and equipment

     7,288        2,676        20,234        9,492   

Amortization of intangible assets

     59,407        5,260        130,116        16,385   

Deferred lease inducements and rent

     1,727        1,156        3,136        759   

Deferred income taxes

     (19,229     (4,398     (37,925     (5,894

Tax benefit on option exercises

     (2,183     (1,482     (19,397     (10,804

Deferred financing cost amortization

     2,493        —          4,985        —     

Changes in operating assets and liabilities, net of effects from acquisitions:

        

Accounts receivable

     (48,123     (16,469     (134,282     (110,528

Rebates receivable

     (47,669     651        (40,988     5,267   

Restricted cash

     (33     2,954        9,305        1,773   

Other current assets

     30,978        (6,143     73,492        10,213   

Accounts payable

     11,143        6,280        70,620        94,799   

Accrued expenses and other current liabilities

     1,512        (9,501     (36,005     (10,806

Pharmacy benefit management rebates payable

     50,593        (715     60,929        (6,019

Other

     1,882        269        6,825        (1,200
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     102,254        10,160        249,733        94,668   

Cash flows from investing activities:

        

Acquisitions, net of cash acquired

     (1,320     (67,641     (1,565,705     (79,825

Purchases of property and equipment

     (27,334     (6,615     (40,236     (9,690
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (28,654     (74,256     (1,605,941     (89,515

Cash flows from financing activities:

        

Proceeds from issuance of debt

     5,000        —          1,475,448        —     

Proceeds from public offering, net of issuance costs

     —          —          519,075        —     

Repayment of long-term debt

     (105,000     —          (616,993     —     

Proceeds from exercise of options

     2,025        456        7,763        5,735   

Tax benefit on option exercises

     2,183        1,482        19,397        10,804   

Payment of financing costs

     —          (1,595     (18,806     (1,595

Other

     (6     —          (268     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (95,798     343        1,385,616        14,944   

Effect of foreign exchange on cash balances

     (58     24        (14     1   
  

 

 

   

 

 

   

 

 

   

 

 

 

(Decrease) increase in cash and cash equivalents

     (22,256     (63,729     29,394        20,098   

Cash and cash equivalents, beginning of period

     393,032        405,111        341,382        321,284   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 370,776      $ 341,382      $ 370,776      $ 341,382   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

9