Earnings per share for the six months ended September 30, 2003 increased to $.81 from $.73 for the same period in the prior year, an increase of 11%. Net income for the six months ended September 30 increased to $8.8 million from $8.1 million for the same period in the prior year. Revenues increased from $136 million to $153 million, an increase of 13%.
The Company's results benefited from ongoing employer interest in methods of controlling the high cost of workers' compensation insurance. The soft labor market and plateauing healthcare costs have depressed workers' compensation claims activity.
CorVel's medical bill review services and PPO revenues were up 17% from the same quarter of the prior year. New accounts and product line expansions contributed to this result. During the quarter the Company began the launch of a next-generation version of its industry-leading software, MedCheck. The newest version of the software, MedCheck QL, supports "Application Services Provider" (ASP) applications, making it attractive as a replacement for older software now in use among CorVel's customers. Previously the Company competed primarily as a service bureau vendor, but is now actively soliciting business as a vendor of software.
MedCheck QL medical bill review software substantially increases processing speeds, meaningfully reducing the cost of operation for insurers and TPAs. Payors of healthcare claims have been under pressure to improve their processing and adjudication of medical billings. MedCheck QL offers expanded web access for both payors and providers. Implementation within CorVel has begun and will continue through the next two quarters. Newer configurations of artificial intelligence are also expanding the amount of automated processing now possible, which further reduces the cost of processing medical bills.
This press release contains forward-looking statements that are subject to risks and uncertainties, including the risk that the historical financial performance of the Company may not be indicative of future financial performance and the risk that the recent performance of the Company's Common Stock may not be indicative of its future performance, as well as other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended March 31, 2003, and the Company's most recent form 10-Q.
Three months ended Sept. 30,
2002 2003
Revenues $69,353,000 $76,978,000
Cost of revenues 56,021,000 63,548,000
Gross profit 13,332,000 13,430,000
General and administrative expenses 6,734,000 6,239,000
Income before income taxes 6,598,000 7,191,000
Income tax provision 2,507,000 2,733,000
Net Income $4,091,000 $4,458,000
Net income per share
Basic $0.38 $0.42
Diluted $0.37 $0.41
Weighted average shares outstanding
Basic 10,750,000 10,593,000
Diluted 11,056,000 10,877,000
CorVel Corporation
Income Statement (unaudited)
Six months ended September 30, 2002 and 2003
Six months ended Sept. 30,
2002 2003
Revenues $135,654,000 $152,890,000
Cost of revenues 110,012,000 125,852,000
Gross profit 25,642,000 27,038,000
General and administrative expenses 12,545,000 12,819,000
Income before income taxes 13,097,000 14,219,000
Income tax provision 4,977,000 5,404,000
Net Income $8,120,000 $8,815,000
Net income per share
Basic $0.75 $0.83
Diluted $0.73 $0.81
Weighted average shares outstanding
Basic 10,789,000 10,609,000
Diluted 11,124,000 10,886,000
CorVel Balance Sheet
Summary Balance Sheet Information
As of March 31, 2003 (audited) and September 30, 2003 (unaudited)
March 31, Sept. 30,
2003 2003
Assets (audited) (unaudited)
Cash and cash equivalents $5,913,000 $6,361,000
Accounts receivable, net 45,394,000 43,241,000
Prepaid taxes and expenses 1,815,000 1,967,000
Deferred income taxes 5,029,000 5,029,000
Property and Equipment, Net 25,848,000 27,690,000
Other Assets 9,326,000 13,568,000
TOTAL ASSETS $93,325,000 $97,856,000
Liabilities and Stockholders' Equity
Accounts payable $6,880,000 $8,870,000
Accrued liabilities 13,758,000 11,631,000
Deferred income taxes 5,467,000 5,467,000
Common stock and paid-in-capital 47,467,000 50,715,000
Treasury Stock (84,127,000) (91,522,000)
Retained earnings 103,880,000 112,695,000
TOTAL LIABILITIES AND EQUITY $93,325,000 $97,856,000
