IRVINE, Calif., Jan. 22 /PRNewswire-FirstCall/ -- CorVel Corporation (Nasdaq: CRVL) reported record earnings per share of $0.33 for the quarter ended December 31, 2001, up 15% from per share earnings of $0.29 for the same quarter of the prior year. December quarter revenues were $59 million, up 12% from $52 million in the December quarter of fiscal 2001. Net income increased 13% from $3.3 million in the December 2000 quarter to $3.8 million in the same quarter this year.
For the first nine months of the Company's 2002 fiscal year, diluted earnings per share were $0.96, up 15% from the same period the prior year. Revenues for the period were $175 million versus $154 million for the first nine months of fiscal 2001, up 13%. Revenues and earnings for the quarter reflected increased demand for the Company's services, which are designed to assist patients through episodes of care and to reduce inflation in healthcare costs.
During the December quarter revenues continued to be negatively impacted by the residual effects of the events of September 11th. The reinsurance market has contracted in response to both the direct financial effects of the attack, as well as actions taken by reinsurers to limit such exposures in the future. The resulting disruption within the insurance community has slowed decisions even in unrelated segments of the industry. However, the net effect of these changes appears to be increasing the cost of insurance for employers, which in turn should increase the demand for services such as those provided by CorVel.
Insurers are concerned about concentrations of employees, such as those in New York City, and as a result market pricing in the disability insurance sectors served by CorVel has continued to increase. Workers' compensation insurance premiums, which increased substantially throughout the last year, have moved up again this year, pushed by the events of last fall. The rising cost of insurance increases employer interest in CorVel's healthcare management programs. Offsetting these positive trends was the impact upon productivity caused by the distractions of the war effort and related national security initiatives.
The December quarter continued recent trends within CorVel operations toward increased efficiency, supported by the ongoing implementation of new software. CorVel's CareMC website has been very well received by customers and is a significant component of new service programs. CorVel's latest version of its industry-leading MedCheck medical bill review software, is being implemented in an increasing number of customer relationships. MedCheck includes artificial intelligence modules, which automate and improve the review of medical billings. This application is being expanded in both its service scope and the extent of its implementation. MedCheck services are also being extended to automate more of the activities of major carriers and TPA's, including regulatory interfaces, provider reimbursement and reporting. The automation of information transfers in healthcare is steadily improving the cost effectiveness of claims administration.
Provider Program operations continued to perform above expectations. Revenues for the quarter increased 22% over the levels of the same quarter of the prior year. Profits in the quarter were up 8%, impacted somewhat by the national events in September. CorVel is implementing expanded electronic interfaces with its customers, as well as with the medical professionals in its preferred provider organization. Automating provider reimbursement offers major insurers and TPA's substantial transaction processing efficiencies, a critical element in the ongoing restructuring of the insurance industry's operations. The latest version of CorVel's MedCheck systems establishes the platform for the next phase of such automation enhancements.
CorVel is seeing improvements in its Patient Management service margins. Improvements in productivity, as well as in pricing, combined to increase quarterly field profits approximately 50% over levels of the prior year. Revenues were negatively impacted by reduced productivity during the holiday season. The Company has been gradually re-positioning these services toward the quality-oriented sectors of the market. The ongoing implementation of web-based features, handheld devices and artificial intelligence is intended to continue strengthening this product line. CorVel provides such services through 185 offices nationwide, the largest branch network in its industry.
Efforts underway for the last two years to improve the management of cash flow and capital employed in the business have resulted in a reduction of the capital employed in the business. Accounts receivable "days sales outstanding" (DSO) reached recent years' record lows and, as a result, net cash flow was strong in the quarter. The Company has had a long-term plan to invest pro-actively in the automation of many elements of its operations, and to compete with increasing aggressiveness as the resulting efficiencies are realized.
CorVel Corporation (http://www.corvel.com /) is a national provider of leading-edge services and solutions in the field of managed healthcare. CorVel specializes in applying information technology and e-commerce applications to improve healthcare management in the workers' compensation, group health, auto and disability management insurance markets. The Company provides networks of preferred providers, case management, utilization management, independent medical evaluations and medical bill review to more than 1,000 clients through its 3,100 associates and 185 offices in 49 states. Leveraging its commitment to flexibility and personal service, CorVel delivers custom solutions for employers, insurers, third party administrators and government entities.
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, 2001, and the Company's most recent form 10-Q.
CORVEL CORPORATION
Quarterly Unaudited Income Statements
Three and nine months ending December 31, 2000 and 2001
December 31, December 31, Percentage
Three months ended December 31, 2000 2001 Change
Revenue $52,241,000 $58,724,000 12.4%
Costs and expenses 47,045,000 52,668,000 12.0%
Income before income taxes 5,196,000 6,056,000 16.6%
Income tax expense 1,868,000 2,301,000 23.2%
Net income $3,328,000 $3,755,000 12.8%
Earnings per share:
BASIC $0.29 $0.34 16.1%
DILUTED $0.29 $0.33 15.2%
Weighted average shares:
BASIC 11,343,000 11,027,000 -2.8%
DILUTED 11,613,000 11,377,000 -2.0%
December 31, December 31
Nine months ended December 31 2000 2001
Revenue $154,456,000 $175,136,000 13.4%
Costs and expenses 138,777,000 157,414,000 13.4%
Income before income taxes 15,679,000 17,722,000 13.0%
Income tax expense 5,852,000 6,734,000 15.1%
Net income $9,827,000 $10,988,000 11.8%
Earnings per share:
BASIC $0.86 $0.99 15.4%
DILUTED $0.84 $0.96 14.8%
Weighted average shares:
BASIC 11,443,500 11,090,000 -3.1%
DILUTED 11,704,500 11,404,000 -2.6%
SOURCE CorVel Corporation
Web site: http://www.corvel.com
Company News On-Call: http://www.prnewswire.com/comp/158669.html
CONTACT: Heather Burnham of CorVel Corporation, +1-949-851-1473
