CorVel(US:CRVL)2019-11-09 17:06Financial Data and Key Metrics Changes - Revenues for the September quarter were $147 million, with earnings per share at $0.69, an increase of 2% from $0.67 per share in the same quarter of the prior year [5][25] - The earnings per share increase was driven by a 4% increase in gross profit, a one percentage point decline in the tax rate, and a 2% reduction in shares outstanding [5][25] - Gross profit and net income increased despite lower revenue due to the higher margin CERiS business [25] Business Line Data and Key Metrics Changes - Revenue for patient management, including third-party administration (TPA) services, was $96 million, an annual increase of 4%, with gross profit increasing by 7% [27] - Revenue for Network Solutions sold in the wholesale market was $51 million, a decrease of 9% from the same quarter of the prior year, although gross profit in the wholesale business was up 2% [28][29] - CERiS has continued to gain traction, contributing to the gross profit margins of Network Solutions despite customer churn [29][30] Market Data and Key Metrics Changes - The market size continues to grow at a 5.5% rate annually, with significant growth in the self-insured marketplace driven by demand for greater transparency and payment accuracy [18] - The payment integrity marketplace has seen recent service and solution acquisitions, providing opportunities for CERiS to replace misaligned partnerships among remaining players [16] Company Strategy and Development Direction - The company is focused on digital transformation and integrated services in the workers' compensation claims management space, aiming to optimize recovery and return to work for injured workers [8][9] - The strategic positioning has sacrificed some short-term growth opportunities but is expected to lead to steadily improving results for customers and investors [9] - The company aims to replace traditional retrospective claim reviews with real-time prospective insights, enhancing the claims management process [22] Management's Comments on Operating Environment and Future Outlook - Management noted that the consolidation of large entities in the market is causing channel conflicts, with firms being bought and sold by private equity firms using high debt levels [11] - The company is excited about future product management and has a rich pipeline of new product releases planned for the next quarter and year [10] - Management emphasized the importance of integrated services and immediate support to improve outcomes for injured workers [12][15] Other Important Information - The company repurchased 224,466 shares for a total price of $19.2 million during the quarter, with a total of 35.8 million shares repurchased to date [31] - The quarter ending cash balance was $98 million, with days sales outstanding (DSO) at 44 days, an increase of four days from a year ago, expected to return to lower levels in the next quarter [31] Q&A Session Summary Question: What are the expectations for future growth in the market? - Management did not provide specific guidance but indicated that the company is well-positioned to capitalize on market trends and has a strong pipeline of new products [10][11]