Catalyst Health Solutions (CHSI) 8-K Healthextras Reports Record First Quarter Results

Exhibit 99.1

[HEALTHEXTRAS LOGO APPEARS HERE]

FOR IMMEDIATE RELEASE	Contact:	Aaron Finch
		AFinch@HealthExtras.com
		HealthExtras, Inc.
		(301) 548-2900

HEALTHEXTRAS REPORTS RECORD FIRST QUARTER RESULTS

Quarterly Results Exceed Consensus for Revenues, Operating Income, Net Income and Earnings Per Share; Company Revenues Exceed $110 Million

ROCKVILLE, MD (April 28, 2004) – HealthExtras, Inc. (NASDAQ: HLEX), a pharmacy benefit management company, today announced its financial results for the first quarter ended March 31, 2004.

First Quarter Highlights

• Net income was $3.4 million or $.10 per share (basic and diluted), a 79% increase over first quarter 2003 earnings of $1.9 million or $.06 per share.

• Revenues totaled $110.5 million, a 21% increase over first quarter 2003 revenues of $91.7 million.

• Over 2.4 million prescriptions were processed during the quarter and total earnings before interest, taxes, deprecation, and amortization (EBITDA) were $6.2 million.

“We continue to be pleased with the Company’s financial performance,” said David T. Blair, Chief Executive Officer of HealthExtras. “The quarter’s financial performance reflects the completion of a quarter in which we met both our revenue and profitability objectives. Our strong financial results for the quarter were the result of our ability to continue to retain and attract new clients.”

Operating income for the three months ended March 31, 2004 increased to $5.6 million, a 75% increase over the $3.2 million for the same period in 2003. The financial results were consistent with management’s expectations, and the Company confirmed that it is well positioned to meet or exceed its previously stated 2004 financial guidance of approximately $440 to $470 million in revenues and earnings of $.41 to $.43 per share.

During the quarter, Catalyst Rx, HealthExtras’ pharmacy benefit management subsidiary, was notified by the State of Louisiana, that from a group of competing proposers, it was awarded the right to negotiate a contract to manage pharmacy benefits for the state’s employees and retirees, effective July 1, 2004. The negotiation of the contract is pending the resolution of a protest by the incumbent service provider. The financial guidance provided above is not contingent upon the award of this contract.

Following the end of the quarter, the Company reached a favorable legal settlement with S.G. Cowen related to a private placement of securities in 2001. The terms of the settlement are confidential, however proceeds from the settlement, net of related expenses will be included in the Company’s results in the quarter ending June 30, 2004. The Company expects the cumulative after-tax benefit of the settlement to be not more than $.02 per share. The settlement resolves the litigation initiated by the Company on December 3, 2002.

About HealthExtras (www.healthextras.com)

HealthExtras, Inc., a pharmacy benefit management company, currently provides benefits to over two million members and the Company’s clients include managed care organizations, large employer groups, unions, government agencies and individual consumers. The Company’s integrated pharmacy benefit management services marketed under the name Catalyst Rx include: claims processing, mail order services, benefit design consultation, drug utilization review, formulary management and drug data analysis services. Additionally, the Company operates a national retail pharmacy network with over 53,000 participating pharmacies.

This press release may contain forward-looking information. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. Forward-looking statements may be significantly impacted by certain risks and uncertainties described in HealthExtras’ filings with the Securities and Exchange Commission.

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Financial statements follows:

HealthExtras, Inc.

Balance Sheet Information

(In thousands)

	March 31, 2004
Assets
Current assets:
Cash and cash equivalents	$	30,287
Accounts receivable, net of allowance for doubtful accounts of $800		50,420
Deferred income taxes		1,225
Deferred charges:
Direct		1,445
Marketing and promotion		765
Other current assets		1,735
Total current assets		85,877
Fixed assets, net		2,557
Intangible assets, net of accumulated amortization of $1,503		14,108
Goodwill		37,764
Restricted cash		1,000
Other assets		749
Total assets	$	142,055
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	48,606
Accrued expenses and other current liabilities		2,130
Deferred revenue		4,908
Total current liabilities		55,644
Deferred income taxes		4,591
Notes payable		7,000
Total liabilities		67,235
Stockholders’ equity:
Common stock		331
Additional paid-in capital		71,975
Retained earnings		2,514
Total stockholders’ equity		74,820
Total liabilities and stockholders’ equity	$	142,055

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Income Statement

(In thousands, except per share data)

	For the quarter ended March 31, 2003		For the quarter ended March 31, 2004
Revenue	$	91,735	$	110,520
Direct expenses		82,460		97,695
Selling, general & administrative expenses		6,069		7,226
Total operating expenses		88,529		104,921
Operating income		3,206		5,599
Interest expense, net		149		79
Income before tax		3,057		5,520
Income tax provision		1,183		2,081
Net income	$	1,874	$	3,439
EPS—basic and diluted	$	0.06	$	0.10
Weighted average common shares, basic		32,337		32,964
Weighted average common shares, diluted		32,507		35,937
Adjusting items for EBITDA:
Net income	$	1,874	$	3,439
Depreciation and amortization		599		596
Interest expense, net		149		79
Income tax provision		1,183		2,081
EBITDA	$	3,805	$	6,195

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