CorVel Announces Revenues and Earnings
IRVINE, California, February 7, 2006 - CorVel Corporation (NASDAQ: CRVL) reported earnings per share of $0.17 for the quarter ended December 31, 2005, up 45% from per share earnings of $0.12 for the same quarter of the prior year. December quarter revenues were $63 million, down from $70 million in the December quarter of 2005. Revenues and earnings for the quarter reflected the Company's improving results in its Network Solutions product line. The continuing soft workers' compensation claims market, regulatory compliance expenses and recent hurricane disruptions also impacted results. Ongoing improvements to CorVel's line of document management and medical review systems, as well as expansions to the Company's PPO's, are improving Network Solutions results. Reduced operating expenses and improving productivity also contributed to improving results. Regulatory compliance expenses continue to add to corporate overhead; however, branch operations continued to improve productivity. The globalization of labor markets continued to impact the U.S. labor market, extending the period of low claims in the current industry cycle. Regulatory changes in several states are requiring product configuration changes. The Company is a leader in the facilitation of employer compliance with such regional workers' compensation requirements. About CorVel
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 2,000 clients nationwide. Leveraging its commitment to flexibility and personal service, CorVel delivers custom solutions for employers, insurers, third party administrators and government entities. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 All statements included in this report, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on the Company's current expectations, estimates and projections about the Company, management's beliefs, and certain assumptions made by the Company, and events beyond the Company's control, all of which are subject to change. Such forward-looking statements include, but are not limited to, statements relating to the Company's financial statements. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause the Company's actual results to differ materially and adversely from those expressed in any forward-looking statement. The risks and uncertainties referred to above include, but are not limited to, factors described in this report and the Company's filings with the Securities and Exchange Commission, including "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended March 31, 2005. The forward-looking statements in this report speak only as of the date they are made. The Company undertakes no obligation to revise or update publicly any forward-looking statement for any reason. CorVel Corporation
Income Statement - Unaudited
Three months ended December 31, 2004 and 2005
| | 2004 | 2005 | | Revenues | $69,788,000 | $63,073,000 | | Cost of revenues | 60,884,000 | 53,025,000 | | Gross profit | 8,904,000 | 10,048,000 | | General and administrative expenses | 6,855,000 | 7,341,000 | | Income before income taxes | 2,049,000 | 2,707,000 | | Income tax provision | 788,000 | 1,042,000 | | Net Income | $1,261,000 | $1,665,000 |
| | Net income per share | | | Basic | $0.12 | $0.17 | | Diluted | $0.12 | $0.17 |
| | Weighted average shares outstanding | | | Basic | 10,395,000 | 9,531,000 | | Diluted | 10,510,000 | 9,553,000 |
CorVel Corporation
Income Statement - Unaudited
Nine months ended December 31, 2004 and 2005 | | 2004 | 2005 | | Revenues | $218,200,000 | $200,083,000 | | Cost of revenues | 184,693,000 | 167,158,000 | | Gross profit | 33,507,000 | 32,925,000 | | General and administrative expenses | 20,974,000 | 22,055,000 | | Income before income taxes | 12,533,000 | 10,870,000 | | Income tax provision | 4,824,000 | 4,184,000 | | Net Income | $7,709,000 | $6,686,000 |
| | Net income per share | | | Basic | $0.74 | $0.68 | | Diluted | $0.73 | $0.68 |
| | Weighted average shares outstanding | | | Basic | 10,488,000 | 9,783,000 | | Diluted | 10,604,000 | 9,828,000 |
CorVel Corporation
Balance Sheet
Summary Balance Sheet Information
As of March 31, 2005 (audited) and December 31, 2005 (unaudited) | | March 31, 2005 | Dec. 31, 2005 | | Assets | | | Cash and cash equivalents | $8,945,000 | $8,784,000 | | Accounts receivable, net | 45,611,000 | 37,550,000 | | Prepaid taxes and expenses | 3,891,000 | 4,508,000 | | Deferred income taxes | 4,152,000 | 4,439,000 | | Property and equipment, net | 29,649,000 | 27,546,000 | | Goodwill and other assets | 13,045,000 | 12,960,000 | | TOTAL ASSETS | $105,293,000 | $95,787,000 |
| | Liabilities and Stockholders’ Equity | | | Accounts payable | $11,294,000 | $12,016,000 | | Income taxes payable | $999,000 | $1,924,000 | | Accrued liabilities | 11,059,000 | 9,557,000 | | Deferred income taxes | 7,700,000 | 6,628,000 | | Common stock and paid-in-capital | 57,672,000 | 61,131,000 | | Treasury stock | -113,481,000 | -132,205,000 | | Retained earnings | 130,050,000 | 136,736,000 | | TOTAL LIABILITIES AND EQUITY | $105,293,000 | $95,787,000 |
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