Catalyst Health Solutions, Inc. is a full-service pharmacy benefit management, or PBM, company. We operate primarily under the brand name Catalyst Rx. We are built on strong, innovative principles in the management of prescription drug benefits and our client-centered philosophy contributes to our industry-leading client retention rates. Our clients include self-insured employers, including state and local governments; managed care organizations; unions, or MCOs; third-party administrators, or TPAs; hospices; and individuals who contract with us to administer the prescription drug component of their overall health benefit programs. On December 16, 2009, we marked our ten year anniversary as a publically traded company on the NASDAQ Stock Market.
Selling, General and Administrative. For the year ended December 31, 2008, selling, general and administrative expenses increased by approximately $13.8 million over the prior year to $67.8 million, or 2.7% of operating expenses. For the year ended December 31, 2007, selling, general and administrative expenses was $54.0 million, or 3.0% of total 2007 operating expenses. The increase in selling, general and administrative expenses was primarily driven by our growth and the associated personnel, facility and vendor costs to serve and implement new clients as well as incremental selling, general and administrative expenses related to our evaluation of various strategic opportunities and to our acquisition of IPS and HospiScript.
(“Credit Suisse”) seeking rescission, restitution and damages for Credit Suisse’s conduct in connection with our investment account with Credit Suisse.
Net Cash Provided by Financing Activities. Net cash provided by financing activities for the year ended December 31, 2009 was $6.4 million compared to $15.7 million in 2008. In 2009, we received proceeds of $2.9 million from the exercise of stock options and $0.3 million in proceeds from issuance of common stock pursuant to the employee stock purchase plan, had an income tax benefit of $3.6 million related to the exercise of stock options and restricted stock vesting, and received proceeds of $1.0 million related to our First Rx Specialty and Mail Services, LLC arrangement. Additionally, we purchased $1.0 million of treasury stock and incurred $0.4 million in deferred financing cost during 2009.
We have approximately $12.5 million at par value in investments related to ARS, all of which are classified as non-current on our balance sheet at December 31, 2009 and 2008. Our auction rate securities are floating rate securities with longer-term maturities with auction reset dates from 7 to 35 day intervals. Beginning in February 2008, auctions for these securities began to fail. Currently, we are unlikely to be able to access the principal amounts of these securities until future auctions for these ARS are successful, or until we sell the securities in a fully active secondary market, of which there are currently none. However, there has been instances of redemptions at par by issuers of ARS, including issuers of securities we currently own. Although we continue to receive timely interest payments, our ARS investments currently lack short-term liquidity and therefore are classified as non-current on our balance sheet.