CorVel(US:CRVL)2020-06-10 21:18Stock Repurchase and Financial Performance - In fiscal 2020, the company repurchased 822,353 shares of its common stock at a cost of $66 million, bringing total repurchases since 1996 to 36,285,591 shares for $532 million[18]. - The company has lifted the temporary suspension of its stock repurchase program and expects to resume it in the June 2020 quarter[18]. - The stock repurchase program has authorized the repurchase of up to 37,000,000 shares since its inception in 1996, with the most recent increase in February 2019[103]. - The company has a stock repurchase program authorized for up to 37 million shares, with 36,285,591 shares repurchased to date[148]. - The company has never paid cash dividends and intends to retain future earnings for business use and stock repurchase[146]. - Revenues for the fiscal year ended March 31, 2020, were $592.225 million, a slight decrease of 0.9% from $595.740 million in fiscal 2019[200]. - Gross profit for the fiscal year 2020 was $125.921 million, representing an increase of 0.9% compared to $124.809 million in fiscal 2019[200]. - Net income for fiscal 2020 was $47.377 million, up from $46.703 million in fiscal 2019, reflecting a growth of 1.4%[200]. - Basic net income per share increased to $2.59 in fiscal 2020 from $2.48 in fiscal 2019, marking a rise of 4.4%[200]. - Total assets as of March 31, 2020, were $416.260 million, an increase from $318.018 million in the previous year, indicating a growth of 30.9%[200]. - Cash and cash equivalents decreased to $83.223 million from $91.713 million in fiscal 2019, a decline of 9.1%[200]. - Working capital as of March 31, 2020, was $75.302 million, down from $98.574 million in fiscal 2019, a decrease of 23.5%[200]. - Return on beginning of year equity for fiscal 2020 was 24.3%, down from 27.3% in fiscal 2019[200]. - The company reported a total stockholders' equity of $189.711 million as of March 31, 2020, compared to $194.805 million in the previous year, a decrease of 2.2%[200]. - The income tax provision for fiscal 2020 was $13.334 million, slightly lower than $14.810 million in fiscal 2019, a decrease of 10.0%[200]. Services and Technology - The company offers a proprietary national PPO network comprising over 750,000 board-certified providers, enhancing healthcare cost management for employers[24]. - CorVel's artificial intelligence engine automates the bill review process with over 112 million individual rules, resulting in faster turnaround times and higher total savings[22]. - The company provides a full-feature pharmacy program that includes formulary management and discounted prescriptions, contributing to cost savings for workers' compensation claims[34]. - CorVel's claims management services utilize a proprietary rules engine to process reported incidents and injuries, ensuring immediate attention and expert claims professional assignment[40]. - CorVel's Symbeo technologies include scanning and document management services, expanding office automation capabilities across the company[32]. - CorVel's case management services focus on early intervention and rehabilitation, aiming to reduce the duration of disability and promote timely recovery[43]. - The company offers Medicare solutions to help employers comply with CMS requirements, including Medicare Set Asides and Agent Reporting Services[37]. - CorVel's Virtual Care Platform allows injured workers to connect with registered nurses for immediate assessment and care recommendations, potentially preventing minor injuries from escalating into costly claims[48]. - The company offers Utilization Management programs that utilize experienced registered nurses and proprietary protocols to avoid unnecessary treatments and associated costs[49]. - CorVel's Vocational Rehabilitation program assists injured workers in returning to work, providing services such as ergonomic assessments and job placement[50]. - Life Care Planning services project long-term care needs and costs for catastrophic injuries, aiding in timely claim resolutions[51]. - CareMC, CorVel's application platform, facilitates electronic communication and reporting, allowing users to manage claims and receive alerts for outlier events[59][61]. - CorVel Corporation provides medical cost containment and managed care services to address escalating medical costs in workers' compensation, automobile insurance, and group health insurance[205]. - The company offers network solutions services aimed at reducing medical service costs, including automated medical fee auditing and preferred provider management[206]. - Patient management services include claims management, case management, and 24/7 nurse triage, designed to expedite return to work for injured employees[207]. Market and Competitive Environment - The healthcare cost containment industry is competitive, with CorVel facing significant competition from larger companies with greater resources[65]. - There is a risk of declining sequential revenue growth, influenced by factors such as reduced manufacturing employment and competition in the workers' compensation market[84]. - The company faces challenges in maintaining market share among national and regional insurance carriers, which may impact future revenue[93]. - Increased competition from national managed care providers and insurance companies could adversely affect the company's growth and profits[94]. - The ongoing impacts of the pandemic may lead to prolonged economic slowdowns, affecting demand for the company's services and overall financial performance[89]. - Increased competition from managed care providers and legislative reforms may hinder the company's ability to retain customers and grow[112]. Operational Risks and Challenges - The company has experienced adverse effects on operations and financial results due to the COVID-19 pandemic, leading to significant volatility and economic disruption[82]. - Cybersecurity threats pose significant risks, including potential loss of sensitive information and operational disruptions, which could harm the company's reputation and financial condition[95]. - The company is subject to risks associated with strategic acquisitions, including integration challenges and potential negative impacts on operating results[90]. - The company is dependent on key management personnel, and the loss of key individuals could materially affect its business and financial condition[131]. - Customer contracts allow for termination without cause, and losing several customers in a short period could adversely impact results[132]. - The effectiveness of the company's information systems is crucial for enhancing its service model, and delays in system upgrades could negatively affect operations[134]. - The company has implemented remote working arrangements to mitigate COVID-19 risks, which may not fully address operational challenges[89]. - The company is sensitive to regional weather conditions, which can temporarily affect operations and results[137]. Regulatory and Economic Factors - CorVel's services are subject to various state and federal regulations, which may impact the demand for its services depending on legislative changes[67]. - Changes in government regulations may increase operational costs and reduce demand for services, impacting competitiveness[125]. - The reduction in workers' compensation claims due to a less labor-intensive economy may materially harm the company's results of operations[106]. - Rising costs of professional and general liability insurance could adversely affect profitability, with significant increases noted in recent years[123]. - Sustained increases in employee benefits costs may materially reduce profitability, influenced by macro-economic factors[124]. - Future performance may be impacted by risks such as global pandemics, cybersecurity incidents, and changes in regulatory environments[204]. Financial Reporting and Accounting - The consolidated balance sheets and statements of income for the fiscal years ended March 31, 2020, 2019, and 2018 are detailed on pages 48 to 51 of the annual report[178]. - The company's financial statements are incorporated by reference from the Definitive Proxy Statement for the 2020 Annual Meeting of Stockholders[178]. - The report of the independent registered public accounting firm is included on page 44 of the annual report[178]. - The consolidated statements of stockholders' equity for the fiscal years ended March 31, 2020, 2019, and 2018 are presented on page 50[178]. - The consolidated statements of cash flows for the fiscal years ended March 31, 2020, 2019, and 2018 are available on page 51[178]. - The financial statement schedule includes valuation and qualifying accounts, with specific details on the allowance for doubtful accounts[179]. - The allowance for doubtful accounts as of March 31, 2020, was $5,133,000, down from $5,508,000 in 2019, reflecting a decrease of approximately 6.8%[179]. - Additions charged to cost expenses for doubtful accounts in the fiscal year ended March 31, 2020, were $1,606,000, compared to $1,875,000 in 2019, indicating a decrease of about 14.3%[179]. - Deductions for doubtful accounts in the fiscal year ended March 31, 2020, were $(1,981,000), compared to $(918,000) in 2019, showing an increase in deductions of approximately 116.5%[179]. - The company has incorporated various exhibits related to stock option agreements and incentive plans in its filings[182]. - The company disclaims any obligation to update forward-looking statements based on future events or new information[204].