Express Scripts Reports First Quarter Earnings; Diluted Earnings Per Share Up 29%

Apr 18, 2001, 01:00 ET from Express Scripts, Inc.

    ST. LOUIS, April 18 /PRNewswire/ -- Express Scripts, Inc. (Nasdaq: ESRX)
 announced first quarter net income of $28.1 million, or 71 cents per diluted
 share.  This is a 31 percent increase in net income and a 29 percent increase
 in diluted earnings per share compared with $21.4 million, or 55 cents, in the
 first quarter of 2000.  The company generated $50.1 million of cash flow from
 operations in the first quarter.   Express Scripts' ratio of debt to total
 capitalization has declined to 35% at March 31, 2001 from 48% at March 31,
 2000.
     "Our performance for the first quarter continues our track record of
 strong earnings and cash flow generation," stated Barrett Toan, chairman and
 chief executive officer.  "We're also pleased by our other accomplishments
 during the quarter, including the successful elimination of another claims
 processing platform; the formation of RxHub, an exchange for electronic
 prescribing; the completion of the acquisition of CAPSS, the Quebec pharmacy
 benefit manager; and our credit rating upgrade from Standard & Poor's."
     Based upon growth in new members and utilization, continued cross-selling
 of additional services, development of new products, increased productivity
 and capital structure improvements, the company continues to believe that
 it can achieve earnings growth in 2001 of 25 percent to 30 percent over the
 $2.41 per diluted share earned in 2000, excluding non-recurring items.
 
     Membership and Claims Growth
     Express Scripts serves approximately 45.5 million members as of April 1,
 2001 compared to 38.5 million at April 1, 2000.  The membership count at April
 1, 2000 excludes the 9.5 million members served under the United HealthCare
 (UHC) contract, which expired in 2000.
     In addition to the strong membership growth in the first quarter of 2001,
 Express Scripts cross-sold services to be provided to approximately 1.5
 million members, contributing to the growth in mail pharmacy utilization,
 pharmacy network management and advanced formulary management.  "Cross-selling
 not only enhances our revenue and earnings growth, it also increases the value
 we deliver to plan sponsors and their members as they use these multiple
 services," stated Toan.  Since the Diversified Pharmaceutical Services (DPS)
 acquisition in 1999, the company has cross-sold expanded services to be
 provided to over 12 million members.
     Mail pharmacy prescriptions increased to 4.5 million during the first
 quarter of 2001, a 28 percent increase compared with the same quarter
 last year.  Network pharmacy claims processed in the first quarter were
 72.3 million, a 23 percent increase over the same quarter last year, excluding
 UHC claims.  EBITDA per average member for the first quarter of 2001 increased
 to $1.67, a 14 percent increase over the first quarter of 2000.  EBITDA per
 adjusted claim increased 10 percent to $0.86 from $0.78 for the first quarter
 of 2000.  The EBITDA per claim in the first quarter of 2001 was impacted by
 the acquisition of CAPSS, which provides only claims adjudication services and
 has a lower EBITDA per claim.
 
     Strong Operating Results
     Revenues for the first quarter of 2001 were $2.1 billion, a 39 percent
 increase over $1.5 billion for the first quarter of 2000. The year-to-year
 increase is due primarily to the conversion of historical Express Scripts and
 DPS clients to the company's retail pharmacy networks, higher utilization and
 drug costs, and new membership.  The reduction in UHC lives from last year's
 first quarter did not significantly impact revenues as UHC revenues were
 recorded on the net basis, which only includes administrative fees, but not
 drug ingredient costs.
     Gross profit for the first quarter was $145.1 million, an increase of
 6% sequentially from the fourth quarter of 2000 (during which the company
 served minimal UHC members) due to net new members and cross-selling.
 Operating income for the first quarter increased 8% sequentially from the
 fourth quarter.
     Gross profit for the first quarter increased 10 percent over the
 $132.4 million reported for the first quarter of 2000.  SG&A expenses for
 the quarter, including depreciation and amortization, were $90.0 million,
 an 8 percent increase over the $83.4 million reported for the comparable
 period of 2000.
 
     Investments in Technology
     During the quarter, Express Scripts announced the creation of RxHub, a
 joint venture with two other leading PBMs to develop an electronic exchange
 that will enable physicians who use electronic prescribing technology to link
 to pharmacies, PBMs and health plans.  Express Scripts believes that the use
 of electronic prescribing will result in improved formulary compliance and
 increased generic substitution, which will help clients better manage their
 drug cost trend.
     Express Scripts completed a major step that draws the company
 significantly closer to consolidating its adjudication operations on a single
 systems platform.  Express Scripts eliminated another claims processing
 platform at the beginning of the second quarter, leaving the company with
 just two platforms, down from five after the ValueRx and DPS acquisitions.
     "Systems integration is a key strategy for us and well worth the
 investment in information technology infrastructure," added Toan.  "Having
 all our clients on one platform will enhance our performance on every level
 and position us for continuing growth and evolution as the industry's thought
 leader, as well as reducing operating expenses and complexity."  Work has
 begun to transfer clients from the company's remaining legacy system to the
 company's primary claims adjudication system.
      Express Scripts' strong track record of earnings and cash flow growth has
 allowed the company to reinvest in technology to sustain its long-term growth.
 In addition to the investment in integration and physician connectivity, the
 investment in mail pharmacy software will result in improved efficiencies and
 increased capacity without building new facilities.  The company's e-business
 initiatives are resulting in reduced costs to fill mail pharmacy prescriptions
 and fewer member calls as communications are shifting from our call centers to
 the Internet.
 
     Canadian Acquisition Completed
     ESI Canada, Inc., a subsidiary of Express Scripts, completed the
 acquisition of Centre d'autorisation et de paiement des services de sante
 (CAPSS) on March 1, 2001, which brings together the second and third largest
 Canadian pharmacy benefit management companies.  The purchase price was
 approximately $16.5 million (US).  The acquisition added approximately 1.5
 million members and is Express Scripts' first Quebec-based operation.  The
 transaction is not expected to be dilutive to earnings in 2001 and is expected
 to be slightly accretive in 2002.
 
     S&P Upgrade
     Standard & Poor's (S&P) raised its credit ratings on the company's debt to
 BB+ from a BB, and noted the outlook is stable.  S&P indicated the upgrade
 reflects Express Scripts' continued solid operating performance and improved
 balance sheet.  S&P also noted Express Scripts' strong cash flows, which have
 enabled the company to pay down its acquisition-related debt aggressively.
 Lease-adjusted debt to capital has steadily declined from over 60% in 1998 to
 just over 40% at December 31, 2000.
 
     Express Scripts Climbs in Fortune 500 Ranking
     Express Scripts was ranked 276 in Fortune Magazine's Fortune 500 list,
 which was published this month.  The ranking, which is based on revenues, was
 a significant increase over last year's position of 371.
     Express Scripts, Inc. is one of the largest pharmacy benefit management
 (PBM) companies in North America.  Through facilities in seven states and
 Canada, the company serves thousands of client groups, including managed care
 organizations, insurance carriers, third-party administrators, employers and
 union-sponsored benefit plans.
     Express Scripts provides integrated PBM services, including network
 pharmacy claims processing, mail pharmacy services, benefit design
 consultation, drug utilization review, formulary management, disease
 management, medical and drug data analysis services, medical information
 management services (which include development of data warehouses to combine
 medical claims and prescription drug claims, disease management support
 services and outcome assessments through the company's Health Management
 Services division and Practice Patterns Science, Inc. subsidiary), and
 informed decision counseling services through its Express Health Line(SM)
 division.  The company also provides non-PBM services, including infusion
 therapy services through its Express Scripts Infusion Services subsidiary and
 distribution services for specialty pharmaceuticals through its Specialty
 Distribution subsidiary.  Express Scripts is headquartered in St. Louis,
 Missouri.  More information can be found at http://www.express-scripts.com,
 which includes expanded investor information and resources.
 
     SAFE HARBOR STATEMENT
     This press release contains forward-looking statements, including, but not
 limited to, statements related to the company's plans, objectives,
 expectations (financial and otherwise) or intentions. Actual results may
 differ significantly from those projected or suggested in any forward-looking
 statements.  Factors that may impact these forward-looking statements include
 but are not limited to: (i) risks associated with our ability to maintain
 internal growth rates, or to control operating or capital costs; (ii)
 continued pressure on margins resulting from client demands for enhanced
 service offerings and higher service levels; (iii) competition, including
 price competition, and our ability to consummate contract negotiations with
 prospective clients; (iv) adverse results in regulatory matters, the adoption
 of new legislation or regulations (including increased costs associated with
 compliance with new laws and regulations, such as privacy and security
 regulations under the Health Insurance Portability and Accountability Act
 (HIPAA)), more aggressive enforcement of existing legislation or regulations,
 or a change in the interpretation of existing legislation or regulations;
 (v) the possible termination of or unfavorable modification to contracts
 with key clients or providers; (vi) the possible loss of relationships with
 pharmaceutical manufacturers, or changes in pricing, discount or other
 practices of pharmaceutical manufacturers; (vii) adverse results in
 litigation; (viii) risks associated with our leverage and debt service
 obligations; (ix) risks associated with our ability to continue to develop new
 products, services and delivery channels; (x) developments in the health care
 industry generally, including the impact of increases in health care costs,
 changes in drug utilization and cost patterns and introductions of new drugs;
 (xi)  competition from new competitors offering services that may in whole or
 in part replace services that the company now provides to its customers; and
 (xii) other risks described from time to time in our filings with the SEC.
 The company does not undertake any obligation to release publicly any
 revisions to such forward-looking statements to reflect events or
 circumstances after the date hereof or to reflect the occurrence of
 unanticipated events.
 
 
                             EXPRESS SCRIPTS, INC.
 
                       Unaudited Statement of Operations
                     (in thousands, except per share data)
 
                                                3 months ended March 31,
                                                2001                2000
     Revenues
        Revenues                                $2,056,410          $1,472,540
        Other revenues                                   -               2,969
                                                 2,056,410           1,475,509
 
     Cost and expenses:
        Cost of revenues (a)                     1,911,287           1,343,063
        Selling, general and
         administrative (b)                         90,022              83,371
                                                 2,001,309           1,426,434
     Operating income                               55,101              49,075
     Other income (expense):
        Interest income                              1,410               1,381
        Interest expense                            (9,144)            (14,201)
                                                    (7,734)            (12,820)
     Income before income taxes                     47,367              36,255
     Provision for income taxes                     19,288              14,823
     Net income                                    $28,079             $21,432
 
     Basic earnings per share                        $0.72               $0.56
 
     Weighted average number of common
      shares outstanding during the period -
      basic                                         38,770              38,540
 
     Diluted earnings per share                      $0.71               $0.55
 
     Weighted average number of common
      shares outstanding during the period -
 -
      diluted                                       39,817              39,206
 
     EBITDA (c)                                    $74,102             $70,642
 
         See Notes to Unaudited Statement of Operations
 
 
                             EXPRESS SCRIPTS, INC.
 
                                     Notes
                                 (in thousands)
 
     Unaudited Statement of Operations
     (a) Includes depreciation and
      amortization expense of:
           3 months ended March 31, 2001                                $3,144
           3 months ended March 31, 2000                                 2,577
 
     (b) Includes depreciation and
      amortization expense of:
           3 months ended March 31, 2001                               $15,857
           3 months ended March 31, 2000                                18,990
 
     (c)  EBITDA is earnings before other income (expense), interest, taxes,
     depreciation and amortization, or operating income plus depreciation and
     amortization. EBITDA is presented because it is a widely accepted
     indicator of a  company's ability to incur and service indebtedness.
     EBITDA, however, should not be considered as an alternative to net income
     as a measure of operating performance, as an alternative to cash flow or a
     measure of liquidity.  In addition, our calculation of EBITDA may not be
     identical to that used by other companies.
 
 
                             EXPRESS SCRIPTS, INC.
 
                            Unaudited Balance Sheet
                                 (in thousands)
 
                                                  March 31,        December 31,
                                                     2001               2000
     ASSETS
     Current assets
        Cash and cash equivalents                  $85,100            $53,204
        Receivables, net                           791,848            802,790
        Inventories                                 85,478            110,053
        Other current assets                        31,625             32,122
             Total current assets                  994,051            998,169
 
     Property and equipment, net                   147,787            147,709
     Goodwill, net                                 967,981            967,017
     Other intangible assets, net                  160,134            157,094
     Other assets                                    9,754              6,655
 
     Total assets                               $2,279,707         $2,276,644
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities
        Claims and rebate payable                 $846,637           $878,622
        Other current liabilities                  220,896            237,322
             Total current liabilities           1,067,533          1,115,944
 
     Long-term debt                                396,360            396,441
     Other long-term liabilities                    63,832             59,015
             Total liabilities                   1,527,725          1,571,400
 
     Total stockholders' equity                    751,982            705,244
 
     Total liabilities and stockholders'
      equity                                    $2,279,707         $2,276,644
 
 
                             EXPRESS SCRIPTS, INC.
                       Unaudited Statement of Cash Flows
                                 (in thousands)
 
                                                   3 months ended March 31,
                                                2001                     2000
 
     Cash flow from operating activities:
     Net income                               $28,079                  $21,432
     Adjustments to reconcile net income
      to net cash provided by operating
      activities:
       Depreciation and amortization           19,001                   22,153
       Other                                    2,983                   17,091
     Net cash provided by operating
       activities                              50,063                   60,676
 
     Cash flows from investing and
      financing activities:
       Purchases of property and equipment    (10,442)                 (11,723)
       Acquisitions and joint venture         (17,733)                     -
       Repayment of long-term debt                -                    (30,000)
       Treasury stock acquired                    -                    (20,910)
       Other                                   10,008                      874
     Net cash (used in) investing and
       financing activities                   (18,167)                 (61,759)
 
     Net increase (decrease) in cash and
      cash equivalents                         31,896                   (1,083)
 
     Cash and cash equivalents at
      beginning of period                      53,204                  132,630
 
     Cash and cash equivalents at end
     of period                                $85,100                 $131,547
 
 
                               EXPRESS SCRIPTS, INC.
                                      Table 1
                           Unaudited Operating Statistics
                  (in thousands, except per claim and per member)
 
                            3 months     3 months   3 months      3 months
                             ended         ended      ended         ended
                           03/31/2001   12/31/2000  09/30/2000   03/31/2000
 
     Drug Spending
     Drug spend, excl. UHC  $3,652,074  $2,999,854  $2,735,701   $2,582,901
     UHC                    $     -         79,142     595,884      908,909
        Total               $3,652,074  $3,078,996  $3,331,585   $3,491,810
 
     Revenue Detail
     PBM revenues (a)       $2,033,998   $1,899,052  $1,715,008   $1,454,241(b)
     Non-PBM revenues           22,412       22,447      21,481       21,268
     Total revenues         $2,056,410   $1,921,499  $1,736,489   $1,475,509
 
     Per Claim
     Network revenue/claim      $20.74       $20.50      $17.15       $13.11(b)
     Mail revenue/claim        $123.18      $119.97     $116.62      $111.83
 
     Claims Detail
     Network, excl. UHC         72,345       66,469      57,855       58,867
     Mail                        4,496        4,061       3,906        3,515
     Total claims, excl.
      UHC                       76,841       70,530      61,761       62,382
     UHC claims                      -        1,585      14,452       21,150
     Total claims               76,841       72,115      76,213       83,532
     Adjusted claims (c)        85,833       80,237      84,025       90,562
 
     Membership Detail (d)
     Members, excl. UHC         45,500       43,500      41,500       38,500
     UHC members                     -            -         500        9,500
     Total members, incl
      UHC                       45,500       43,500      42,000       48,000
     Avg. members, incl UHC     44,500       42,750      45,400       48,000
 
     Per avg. member (e)
     Drug spend                 $82.07       $72.02      $73.38       $72.75
     Gross profit                $3.26        $3.20       $2.93        $2.76(f)
     EBITDA                      $1.67        $1.64       $1.48        $1.47(f)
 
     Margin Analysis
     Gross profit margin          7.1%         7.1%        7.6%         9.0%(g)
     EBITDA margin                3.6%         3.6%        3.9%         4.7%(g)
 
     Per Adjusted Claim
     Drug spend                 $42.55      $38.37      $39.65        $38.56
     Gross profit                $1.69       $1.71       $1.58         $1.46(f)
     EBITDA                      $0.86       $0.87       $0.80         $0.78(f)
 
     See Notes to Unaudited Operating Statistics
 
 
                               EXPRESS SCRIPTS, INC.
                                      Table 2
               Unaudited Trend Analysis, Excluding Nonrecurring Items
                        (in thousands, except per share data)
 
                                         3 months       3 months    3 months
                                           ended          ended       ended
                                        03/31/2001     12/31/2000  09/30/2000
     Revenues
        Revenues                         $2,056,410   $1,921,499    $1,732,151
        Other revenues                            -            -         4,338
                                          2,056,410    1,921,499     1,736,489
 
     Cost and expenses:
        Cost of revenues (a)              1,911,287    1,784,515     1,603,650
        Selling, general and
         administrative (b)                  90,022       85,981        82,687
                                          2,001,309    1,870,496     1,686,337
     Operating income                        55,101       51,003        50,152
     Other income (expense):
        Interest income                       1,410        2,229         2,774
        Interest expense                     (9,144)      (9,658)      (12,361)
                                             (7,734)      (7,429)       (9,587)
     Income before income taxes              47,367       43,574        40,565
     Provision for income taxes              19,288       17,566        16,718
     Net income                             $28,079      $26,008       $23,847
 
     Basic earnings per share                 $0.72        $0.68         $0.62
 
     Weighted average number of common
      shares outstanding during the period
      - basic                                38,770       38,443        38,331
 
     Diluted earnings per share               $0.71        $0.66         $0.61
 
     Weighted average number of common
      shares outstanding during the period
      -     - diluted                              39,817       39,502
 39,290
 
     EBITDA (c)                             $74,102      $69,988       $67,307
 
     See Notes to Unaudited Trend Analysis
 
 
                               EXPRESS SCRIPTS, INC.
 
                                       Notes
                                   (in thousands)
 
     Unaudited Operating Statistics (excludes non-recurring items)
 
     (a) Our PBM revenues generally include administrative fees, dispensing
     fees and ingredient costs of pharmaceuticals dispensed from retail
     pharmacies included in one of our networks or from one of our mail
     pharmacies, and the associated costs are recorded in cost of revenues (the
     Gross Basis). Where we only administer the contracts between our clients
     and the clients' retail pharmacy networks we record as revenues only the
     administrative fee we received from our activities (the Net Basis).
 
     (b) This increase primarily reflects the transfer of clients to pharmacy
     networks managed by us (Gross Basis -- see footnote 1); higher utilization
     and drug costs; and new membership.
 
     (c) Adjusted claims represent network claims plus mail claims, which are
     multiplied by 3, as mail claims are typically 90 day scripts and network
     claims are generally 30 day scripts.
 
     (d) Represents members as of April 1, 2001, January 1, 2001, October 1,
     2000, and April 1, 2000 respectively.  In computing the number of members
     we serve, we make certain estimates and adjustments.  We believe different
     PBMs use different factors in making these estimates and adjustments.  We
     also believe, however, that these numbers are a reasonable approximation
     of the actual number of members we serve.
 
     (e) Calculated based on average members.
 
     (f) Reflects the increase in mail prescriptions and the success in cross-
     selling additional services to our existing membership.
 
     (g) Margin analysis is not indicative of profitability -- margins are
     greatly impacted by the transfer of clients to pharmacy networks managed
     by us (Gross Basis) from the clients' network (Net Basis).  When we
     process claims for a client's pharmacy network, all we record as revenue
     is an administrative fee (Net Basis).  When a client is transferred to one
     of our networks, we charge the administrative fee and a fee for managing
     the pharmacy network.  In addition, we gross up revenues and cost of
     revenues to include the ingredient cost (Gross Basis). Thus, while the
     margin percentage appears to decline because revenues are grossed up for
     the ingredient cost, our actual profit per claim and net income improves
     due to the fee we receive for managing the pharmacy network.
 
     Unaudited Trend Analysis
     (a) Includes depreciation and
      amortization expense of:
           3 months ended December 31,
            2000                                                        $3,451
           3 months ended September 30,
            2000                                                         2,674
 
     (b) Includes depreciation and
       mortization expense of:
           3 months ended December 31,
            2000                                                       $15,534
           3 months ended September 30,
            2000                                                        14,481
 
     (c)  EBITDA is earnings before other income (expense), interest, taxes,
     depreciation and amortization, or operating income plus depreciation and
     amortization.  EBITDA is presented because it is a widely accepted
     indicator of a company's ability to incur and service indebtedness.
     EBITDA, however, should not be considered as an alternative to net income
     as a measure of operating performance, as an alternative to cash flow, or
     as a measure of liquidity.  In addition, our definition of EBITDA may not
     be identical to that used by other companies.
 
 
                             EXPRESS SCRIPTS, INC.
             Unaudited Cash Earnings, Excluding Non-Recurring Items
                                    Table 3
                     (in thousands, except per share data)
 
 
                                        3 months  3 months  3 months  3 months
                                          ended    ended     ended    ended
                                      03/31/2001 12/31/2000 9/30/2000 3/31/2000
 
 
     Net income, excluding nonrecurring
      items                              $28,079   $26,008  $23,847    $21,432
 
     Goodwill amortization, net of tax
      effect                               6,445     6,482    6,486      6,382
 
     Net income excluding goodwill
      amortization                       $34,524   $32,490  $30,333    $27,814
 
     Weighted average number of shares
        outstanding during period -
        diluted                           39,817    39,502   39,290     39,206
 
     Diluted cash earnings per share       $0.87     $0.82    $0.77      $0.71
 
 
                             EXPRESS SCRIPTS, INC.
 
                            Selected Ratio Analysis
                                    Table 4
 
 
                                   3 months    3 months    3 months   3 months
                                    ended       ended       ended      ended
                                  03/31/2001 12/31/2000  09/30/2000  03/31/2000
 
           Debt to EBITDA ratio
           (a)                        1.4x        1.4x       1.7x        2.5x
           Interest coverage
           ratio (a)                  6.6x        5.8x       4.9x        3.6x
           Debt to enterprise
            value                    10.5%        9.1%       13.3%      27.2%
           Debt to
            capitalization           34.5%       35.9%       39.0%      47.9%
 
           (a)  Uses financial information for the twelve months ended
 
 
                             Days Sales Outstanding
                                     (DSO)
                                    Table 5
 
                                 (in thousands)
 
                                03/31/2001  12/31/2000  09/30/2000  03/31/2000
 
           Total revenue        $2,056,410  $1,921,499  $1,732,151  $1,475,509
           Client/pharmacy pass
            through (a)            346,291     467,090     668,710     795,979
           Total                $2,401,701  $2,388,589  $2,400,861  $2,271,488
 
           Avg monthly gross
            receivables           $821,954    $806,882    $833,436    $786,595
 
           DSO (in days)              30.8        31.1        31.9        31.5
 
 
           (a)  For clients that have their own pharmacy network, we record
           only an administrative fee in revenue (Net Basis).  The
           client/pharmacy pass through reflects the amounts paid to the
           pharmacies that are not included in revenue, but are recorded
           as both an Accounts Receivable and Accounts Payable on our books.
 
 

SOURCE Express Scripts, Inc.
    ST. LOUIS, April 18 /PRNewswire/ -- Express Scripts, Inc. (Nasdaq: ESRX)
 announced first quarter net income of $28.1 million, or 71 cents per diluted
 share.  This is a 31 percent increase in net income and a 29 percent increase
 in diluted earnings per share compared with $21.4 million, or 55 cents, in the
 first quarter of 2000.  The company generated $50.1 million of cash flow from
 operations in the first quarter.   Express Scripts' ratio of debt to total
 capitalization has declined to 35% at March 31, 2001 from 48% at March 31,
 2000.
     "Our performance for the first quarter continues our track record of
 strong earnings and cash flow generation," stated Barrett Toan, chairman and
 chief executive officer.  "We're also pleased by our other accomplishments
 during the quarter, including the successful elimination of another claims
 processing platform; the formation of RxHub, an exchange for electronic
 prescribing; the completion of the acquisition of CAPSS, the Quebec pharmacy
 benefit manager; and our credit rating upgrade from Standard & Poor's."
     Based upon growth in new members and utilization, continued cross-selling
 of additional services, development of new products, increased productivity
 and capital structure improvements, the company continues to believe that
 it can achieve earnings growth in 2001 of 25 percent to 30 percent over the
 $2.41 per diluted share earned in 2000, excluding non-recurring items.
 
     Membership and Claims Growth
     Express Scripts serves approximately 45.5 million members as of April 1,
 2001 compared to 38.5 million at April 1, 2000.  The membership count at April
 1, 2000 excludes the 9.5 million members served under the United HealthCare
 (UHC) contract, which expired in 2000.
     In addition to the strong membership growth in the first quarter of 2001,
 Express Scripts cross-sold services to be provided to approximately 1.5
 million members, contributing to the growth in mail pharmacy utilization,
 pharmacy network management and advanced formulary management.  "Cross-selling
 not only enhances our revenue and earnings growth, it also increases the value
 we deliver to plan sponsors and their members as they use these multiple
 services," stated Toan.  Since the Diversified Pharmaceutical Services (DPS)
 acquisition in 1999, the company has cross-sold expanded services to be
 provided to over 12 million members.
     Mail pharmacy prescriptions increased to 4.5 million during the first
 quarter of 2001, a 28 percent increase compared with the same quarter
 last year.  Network pharmacy claims processed in the first quarter were
 72.3 million, a 23 percent increase over the same quarter last year, excluding
 UHC claims.  EBITDA per average member for the first quarter of 2001 increased
 to $1.67, a 14 percent increase over the first quarter of 2000.  EBITDA per
 adjusted claim increased 10 percent to $0.86 from $0.78 for the first quarter
 of 2000.  The EBITDA per claim in the first quarter of 2001 was impacted by
 the acquisition of CAPSS, which provides only claims adjudication services and
 has a lower EBITDA per claim.
 
     Strong Operating Results
     Revenues for the first quarter of 2001 were $2.1 billion, a 39 percent
 increase over $1.5 billion for the first quarter of 2000. The year-to-year
 increase is due primarily to the conversion of historical Express Scripts and
 DPS clients to the company's retail pharmacy networks, higher utilization and
 drug costs, and new membership.  The reduction in UHC lives from last year's
 first quarter did not significantly impact revenues as UHC revenues were
 recorded on the net basis, which only includes administrative fees, but not
 drug ingredient costs.
     Gross profit for the first quarter was $145.1 million, an increase of
 6% sequentially from the fourth quarter of 2000 (during which the company
 served minimal UHC members) due to net new members and cross-selling.
 Operating income for the first quarter increased 8% sequentially from the
 fourth quarter.
     Gross profit for the first quarter increased 10 percent over the
 $132.4 million reported for the first quarter of 2000.  SG&A expenses for
 the quarter, including depreciation and amortization, were $90.0 million,
 an 8 percent increase over the $83.4 million reported for the comparable
 period of 2000.
 
     Investments in Technology
     During the quarter, Express Scripts announced the creation of RxHub, a
 joint venture with two other leading PBMs to develop an electronic exchange
 that will enable physicians who use electronic prescribing technology to link
 to pharmacies, PBMs and health plans.  Express Scripts believes that the use
 of electronic prescribing will result in improved formulary compliance and
 increased generic substitution, which will help clients better manage their
 drug cost trend.
     Express Scripts completed a major step that draws the company
 significantly closer to consolidating its adjudication operations on a single
 systems platform.  Express Scripts eliminated another claims processing
 platform at the beginning of the second quarter, leaving the company with
 just two platforms, down from five after the ValueRx and DPS acquisitions.
     "Systems integration is a key strategy for us and well worth the
 investment in information technology infrastructure," added Toan.  "Having
 all our clients on one platform will enhance our performance on every level
 and position us for continuing growth and evolution as the industry's thought
 leader, as well as reducing operating expenses and complexity."  Work has
 begun to transfer clients from the company's remaining legacy system to the
 company's primary claims adjudication system.
      Express Scripts' strong track record of earnings and cash flow growth has
 allowed the company to reinvest in technology to sustain its long-term growth.
 In addition to the investment in integration and physician connectivity, the
 investment in mail pharmacy software will result in improved efficiencies and
 increased capacity without building new facilities.  The company's e-business
 initiatives are resulting in reduced costs to fill mail pharmacy prescriptions
 and fewer member calls as communications are shifting from our call centers to
 the Internet.
 
     Canadian Acquisition Completed
     ESI Canada, Inc., a subsidiary of Express Scripts, completed the
 acquisition of Centre d'autorisation et de paiement des services de sante
 (CAPSS) on March 1, 2001, which brings together the second and third largest
 Canadian pharmacy benefit management companies.  The purchase price was
 approximately $16.5 million (US).  The acquisition added approximately 1.5
 million members and is Express Scripts' first Quebec-based operation.  The
 transaction is not expected to be dilutive to earnings in 2001 and is expected
 to be slightly accretive in 2002.
 
     S&P Upgrade
     Standard & Poor's (S&P) raised its credit ratings on the company's debt to
 BB+ from a BB, and noted the outlook is stable.  S&P indicated the upgrade
 reflects Express Scripts' continued solid operating performance and improved
 balance sheet.  S&P also noted Express Scripts' strong cash flows, which have
 enabled the company to pay down its acquisition-related debt aggressively.
 Lease-adjusted debt to capital has steadily declined from over 60% in 1998 to
 just over 40% at December 31, 2000.
 
     Express Scripts Climbs in Fortune 500 Ranking
     Express Scripts was ranked 276 in Fortune Magazine's Fortune 500 list,
 which was published this month.  The ranking, which is based on revenues, was
 a significant increase over last year's position of 371.
     Express Scripts, Inc. is one of the largest pharmacy benefit management
 (PBM) companies in North America.  Through facilities in seven states and
 Canada, the company serves thousands of client groups, including managed care
 organizations, insurance carriers, third-party administrators, employers and
 union-sponsored benefit plans.
     Express Scripts provides integrated PBM services, including network
 pharmacy claims processing, mail pharmacy services, benefit design
 consultation, drug utilization review, formulary management, disease
 management, medical and drug data analysis services, medical information
 management services (which include development of data warehouses to combine
 medical claims and prescription drug claims, disease management support
 services and outcome assessments through the company's Health Management
 Services division and Practice Patterns Science, Inc. subsidiary), and
 informed decision counseling services through its Express Health Line(SM)
 division.  The company also provides non-PBM services, including infusion
 therapy services through its Express Scripts Infusion Services subsidiary and
 distribution services for specialty pharmaceuticals through its Specialty
 Distribution subsidiary.  Express Scripts is headquartered in St. Louis,
 Missouri.  More information can be found at http://www.express-scripts.com,
 which includes expanded investor information and resources.
 
     SAFE HARBOR STATEMENT
     This press release contains forward-looking statements, including, but not
 limited to, statements related to the company's plans, objectives,
 expectations (financial and otherwise) or intentions. Actual results may
 differ significantly from those projected or suggested in any forward-looking
 statements.  Factors that may impact these forward-looking statements include
 but are not limited to: (i) risks associated with our ability to maintain
 internal growth rates, or to control operating or capital costs; (ii)
 continued pressure on margins resulting from client demands for enhanced
 service offerings and higher service levels; (iii) competition, including
 price competition, and our ability to consummate contract negotiations with
 prospective clients; (iv) adverse results in regulatory matters, the adoption
 of new legislation or regulations (including increased costs associated with
 compliance with new laws and regulations, such as privacy and security
 regulations under the Health Insurance Portability and Accountability Act
 (HIPAA)), more aggressive enforcement of existing legislation or regulations,
 or a change in the interpretation of existing legislation or regulations;
 (v) the possible termination of or unfavorable modification to contracts
 with key clients or providers; (vi) the possible loss of relationships with
 pharmaceutical manufacturers, or changes in pricing, discount or other
 practices of pharmaceutical manufacturers; (vii) adverse results in
 litigation; (viii) risks associated with our leverage and debt service
 obligations; (ix) risks associated with our ability to continue to develop new
 products, services and delivery channels; (x) developments in the health care
 industry generally, including the impact of increases in health care costs,
 changes in drug utilization and cost patterns and introductions of new drugs;
 (xi)  competition from new competitors offering services that may in whole or
 in part replace services that the company now provides to its customers; and
 (xii) other risks described from time to time in our filings with the SEC.
 The company does not undertake any obligation to release publicly any
 revisions to such forward-looking statements to reflect events or
 circumstances after the date hereof or to reflect the occurrence of
 unanticipated events.
 
 
                             EXPRESS SCRIPTS, INC.
 
                       Unaudited Statement of Operations
                     (in thousands, except per share data)
 
                                                3 months ended March 31,
                                                2001                2000
     Revenues
        Revenues                                $2,056,410          $1,472,540
        Other revenues                                   -               2,969
                                                 2,056,410           1,475,509
 
     Cost and expenses:
        Cost of revenues (a)                     1,911,287           1,343,063
        Selling, general and
         administrative (b)                         90,022              83,371
                                                 2,001,309           1,426,434
     Operating income                               55,101              49,075
     Other income (expense):
        Interest income                              1,410               1,381
        Interest expense                            (9,144)            (14,201)
                                                    (7,734)            (12,820)
     Income before income taxes                     47,367              36,255
     Provision for income taxes                     19,288              14,823
     Net income                                    $28,079             $21,432
 
     Basic earnings per share                        $0.72               $0.56
 
     Weighted average number of common
      shares outstanding during the period -
      basic                                         38,770              38,540
 
     Diluted earnings per share                      $0.71               $0.55
 
     Weighted average number of common
      shares outstanding during the period -
 -
      diluted                                       39,817              39,206
 
     EBITDA (c)                                    $74,102             $70,642
 
         See Notes to Unaudited Statement of Operations
 
 
                             EXPRESS SCRIPTS, INC.
 
                                     Notes
                                 (in thousands)
 
     Unaudited Statement of Operations
     (a) Includes depreciation and
      amortization expense of:
           3 months ended March 31, 2001                                $3,144
           3 months ended March 31, 2000                                 2,577
 
     (b) Includes depreciation and
      amortization expense of:
           3 months ended March 31, 2001                               $15,857
           3 months ended March 31, 2000                                18,990
 
     (c)  EBITDA is earnings before other income (expense), interest, taxes,
     depreciation and amortization, or operating income plus depreciation and
     amortization. EBITDA is presented because it is a widely accepted
     indicator of a  company's ability to incur and service indebtedness.
     EBITDA, however, should not be considered as an alternative to net income
     as a measure of operating performance, as an alternative to cash flow or a
     measure of liquidity.  In addition, our calculation of EBITDA may not be
     identical to that used by other companies.
 
 
                             EXPRESS SCRIPTS, INC.
 
                            Unaudited Balance Sheet
                                 (in thousands)
 
                                                  March 31,        December 31,
                                                     2001               2000
     ASSETS
     Current assets
        Cash and cash equivalents                  $85,100            $53,204
        Receivables, net                           791,848            802,790
        Inventories                                 85,478            110,053
        Other current assets                        31,625             32,122
             Total current assets                  994,051            998,169
 
     Property and equipment, net                   147,787            147,709
     Goodwill, net                                 967,981            967,017
     Other intangible assets, net                  160,134            157,094
     Other assets                                    9,754              6,655
 
     Total assets                               $2,279,707         $2,276,644
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities
        Claims and rebate payable                 $846,637           $878,622
        Other current liabilities                  220,896            237,322
             Total current liabilities           1,067,533          1,115,944
 
     Long-term debt                                396,360            396,441
     Other long-term liabilities                    63,832             59,015
             Total liabilities                   1,527,725          1,571,400
 
     Total stockholders' equity                    751,982            705,244
 
     Total liabilities and stockholders'
      equity                                    $2,279,707         $2,276,644
 
 
                             EXPRESS SCRIPTS, INC.
                       Unaudited Statement of Cash Flows
                                 (in thousands)
 
                                                   3 months ended March 31,
                                                2001                     2000
 
     Cash flow from operating activities:
     Net income                               $28,079                  $21,432
     Adjustments to reconcile net income
      to net cash provided by operating
      activities:
       Depreciation and amortization           19,001                   22,153
       Other                                    2,983                   17,091
     Net cash provided by operating
       activities                              50,063                   60,676
 
     Cash flows from investing and
      financing activities:
       Purchases of property and equipment    (10,442)                 (11,723)
       Acquisitions and joint venture         (17,733)                     -
       Repayment of long-term debt                -                    (30,000)
       Treasury stock acquired                    -                    (20,910)
       Other                                   10,008                      874
     Net cash (used in) investing and
       financing activities                   (18,167)                 (61,759)
 
     Net increase (decrease) in cash and
      cash equivalents                         31,896                   (1,083)
 
     Cash and cash equivalents at
      beginning of period                      53,204                  132,630
 
     Cash and cash equivalents at end
     of period                                $85,100                 $131,547
 
 
                               EXPRESS SCRIPTS, INC.
                                      Table 1
                           Unaudited Operating Statistics
                  (in thousands, except per claim and per member)
 
                            3 months     3 months   3 months      3 months
                             ended         ended      ended         ended
                           03/31/2001   12/31/2000  09/30/2000   03/31/2000
 
     Drug Spending
     Drug spend, excl. UHC  $3,652,074  $2,999,854  $2,735,701   $2,582,901
     UHC                    $     -         79,142     595,884      908,909
        Total               $3,652,074  $3,078,996  $3,331,585   $3,491,810
 
     Revenue Detail
     PBM revenues (a)       $2,033,998   $1,899,052  $1,715,008   $1,454,241(b)
     Non-PBM revenues           22,412       22,447      21,481       21,268
     Total revenues         $2,056,410   $1,921,499  $1,736,489   $1,475,509
 
     Per Claim
     Network revenue/claim      $20.74       $20.50      $17.15       $13.11(b)
     Mail revenue/claim        $123.18      $119.97     $116.62      $111.83
 
     Claims Detail
     Network, excl. UHC         72,345       66,469      57,855       58,867
     Mail                        4,496        4,061       3,906        3,515
     Total claims, excl.
      UHC                       76,841       70,530      61,761       62,382
     UHC claims                      -        1,585      14,452       21,150
     Total claims               76,841       72,115      76,213       83,532
     Adjusted claims (c)        85,833       80,237      84,025       90,562
 
     Membership Detail (d)
     Members, excl. UHC         45,500       43,500      41,500       38,500
     UHC members                     -            -         500        9,500
     Total members, incl
      UHC                       45,500       43,500      42,000       48,000
     Avg. members, incl UHC     44,500       42,750      45,400       48,000
 
     Per avg. member (e)
     Drug spend                 $82.07       $72.02      $73.38       $72.75
     Gross profit                $3.26        $3.20       $2.93        $2.76(f)
     EBITDA                      $1.67        $1.64       $1.48        $1.47(f)
 
     Margin Analysis
     Gross profit margin          7.1%         7.1%        7.6%         9.0%(g)
     EBITDA margin                3.6%         3.6%        3.9%         4.7%(g)
 
     Per Adjusted Claim
     Drug spend                 $42.55      $38.37      $39.65        $38.56
     Gross profit                $1.69       $1.71       $1.58         $1.46(f)
     EBITDA                      $0.86       $0.87       $0.80         $0.78(f)
 
     See Notes to Unaudited Operating Statistics
 
 
                               EXPRESS SCRIPTS, INC.
                                      Table 2
               Unaudited Trend Analysis, Excluding Nonrecurring Items
                        (in thousands, except per share data)
 
                                         3 months       3 months    3 months
                                           ended          ended       ended
                                        03/31/2001     12/31/2000  09/30/2000
     Revenues
        Revenues                         $2,056,410   $1,921,499    $1,732,151
        Other revenues                            -            -         4,338
                                          2,056,410    1,921,499     1,736,489
 
     Cost and expenses:
        Cost of revenues (a)              1,911,287    1,784,515     1,603,650
        Selling, general and
         administrative (b)                  90,022       85,981        82,687
                                          2,001,309    1,870,496     1,686,337
     Operating income                        55,101       51,003        50,152
     Other income (expense):
        Interest income                       1,410        2,229         2,774
        Interest expense                     (9,144)      (9,658)      (12,361)
                                             (7,734)      (7,429)       (9,587)
     Income before income taxes              47,367       43,574        40,565
     Provision for income taxes              19,288       17,566        16,718
     Net income                             $28,079      $26,008       $23,847
 
     Basic earnings per share                 $0.72        $0.68         $0.62
 
     Weighted average number of common
      shares outstanding during the period
      - basic                                38,770       38,443        38,331
 
     Diluted earnings per share               $0.71        $0.66         $0.61
 
     Weighted average number of common
      shares outstanding during the period
      -     - diluted                              39,817       39,502
 39,290
 
     EBITDA (c)                             $74,102      $69,988       $67,307
 
     See Notes to Unaudited Trend Analysis
 
 
                               EXPRESS SCRIPTS, INC.
 
                                       Notes
                                   (in thousands)
 
     Unaudited Operating Statistics (excludes non-recurring items)
 
     (a) Our PBM revenues generally include administrative fees, dispensing
     fees and ingredient costs of pharmaceuticals dispensed from retail
     pharmacies included in one of our networks or from one of our mail
     pharmacies, and the associated costs are recorded in cost of revenues (the
     Gross Basis). Where we only administer the contracts between our clients
     and the clients' retail pharmacy networks we record as revenues only the
     administrative fee we received from our activities (the Net Basis).
 
     (b) This increase primarily reflects the transfer of clients to pharmacy
     networks managed by us (Gross Basis -- see footnote 1); higher utilization
     and drug costs; and new membership.
 
     (c) Adjusted claims represent network claims plus mail claims, which are
     multiplied by 3, as mail claims are typically 90 day scripts and network
     claims are generally 30 day scripts.
 
     (d) Represents members as of April 1, 2001, January 1, 2001, October 1,
     2000, and April 1, 2000 respectively.  In computing the number of members
     we serve, we make certain estimates and adjustments.  We believe different
     PBMs use different factors in making these estimates and adjustments.  We
     also believe, however, that these numbers are a reasonable approximation
     of the actual number of members we serve.
 
     (e) Calculated based on average members.
 
     (f) Reflects the increase in mail prescriptions and the success in cross-
     selling additional services to our existing membership.
 
     (g) Margin analysis is not indicative of profitability -- margins are
     greatly impacted by the transfer of clients to pharmacy networks managed
     by us (Gross Basis) from the clients' network (Net Basis).  When we
     process claims for a client's pharmacy network, all we record as revenue
     is an administrative fee (Net Basis).  When a client is transferred to one
     of our networks, we charge the administrative fee and a fee for managing
     the pharmacy network.  In addition, we gross up revenues and cost of
     revenues to include the ingredient cost (Gross Basis). Thus, while the
     margin percentage appears to decline because revenues are grossed up for
     the ingredient cost, our actual profit per claim and net income improves
     due to the fee we receive for managing the pharmacy network.
 
     Unaudited Trend Analysis
     (a) Includes depreciation and
      amortization expense of:
           3 months ended December 31,
            2000                                                        $3,451
           3 months ended September 30,
            2000                                                         2,674
 
     (b) Includes depreciation and
       mortization expense of:
           3 months ended December 31,
            2000                                                       $15,534
           3 months ended September 30,
            2000                                                        14,481
 
     (c)  EBITDA is earnings before other income (expense), interest, taxes,
     depreciation and amortization, or operating income plus depreciation and
     amortization.  EBITDA is presented because it is a widely accepted
     indicator of a company's ability to incur and service indebtedness.
     EBITDA, however, should not be considered as an alternative to net income
     as a measure of operating performance, as an alternative to cash flow, or
     as a measure of liquidity.  In addition, our definition of EBITDA may not
     be identical to that used by other companies.
 
 
                             EXPRESS SCRIPTS, INC.
             Unaudited Cash Earnings, Excluding Non-Recurring Items
                                    Table 3
                     (in thousands, except per share data)
 
 
                                        3 months  3 months  3 months  3 months
                                          ended    ended     ended    ended
                                      03/31/2001 12/31/2000 9/30/2000 3/31/2000
 
 
     Net income, excluding nonrecurring
      items                              $28,079   $26,008  $23,847    $21,432
 
     Goodwill amortization, net of tax
      effect                               6,445     6,482    6,486      6,382
 
     Net income excluding goodwill
      amortization                       $34,524   $32,490  $30,333    $27,814
 
     Weighted average number of shares
        outstanding during period -
        diluted                           39,817    39,502   39,290     39,206
 
     Diluted cash earnings per share       $0.87     $0.82    $0.77      $0.71
 
 
                             EXPRESS SCRIPTS, INC.
 
                            Selected Ratio Analysis
                                    Table 4
 
 
                                   3 months    3 months    3 months   3 months
                                    ended       ended       ended      ended
                                  03/31/2001 12/31/2000  09/30/2000  03/31/2000
 
           Debt to EBITDA ratio
           (a)                        1.4x        1.4x       1.7x        2.5x
           Interest coverage
           ratio (a)                  6.6x        5.8x       4.9x        3.6x
           Debt to enterprise
            value                    10.5%        9.1%       13.3%      27.2%
           Debt to
            capitalization           34.5%       35.9%       39.0%      47.9%
 
           (a)  Uses financial information for the twelve months ended
 
 
                             Days Sales Outstanding
                                     (DSO)
                                    Table 5
 
                                 (in thousands)
 
                                03/31/2001  12/31/2000  09/30/2000  03/31/2000
 
           Total revenue        $2,056,410  $1,921,499  $1,732,151  $1,475,509
           Client/pharmacy pass
            through (a)            346,291     467,090     668,710     795,979
           Total                $2,401,701  $2,388,589  $2,400,861  $2,271,488
 
           Avg monthly gross
            receivables           $821,954    $806,882    $833,436    $786,595
 
           DSO (in days)              30.8        31.1        31.9        31.5
 
 
           (a)  For clients that have their own pharmacy network, we record
           only an administrative fee in revenue (Net Basis).  The
           client/pharmacy pass through reflects the amounts paid to the
           pharmacies that are not included in revenue, but are recorded
           as both an Accounts Receivable and Accounts Payable on our books.
 
 SOURCE  Express Scripts, Inc.