CorVel(CRVL) - 2019 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Earnings per share for the quarter ended June 30, 2019, were a record $0.71, increasing 15% from $0.62 per share in the same quarter of the prior year [5][32] - Revenues for the period were $150 million [5][32] - Net income increased due to attracting a higher mix of CERiS customer business, offsetting decreases in lower margin services [33] Business Line Data and Key Metrics Changes - Revenue for patient management, including third-party administration (TPA) services, was a record $99 million, an annual increase of 13% [33] - Revenue for network solutions sold in the wholesale market for the quarter was $51 million, down 19% from the same quarter of the prior year [35] - Gross profit in the wholesale business was down 17% from March 2018, but improved sequentially from the March quarter [35] Market Data and Key Metrics Changes - The landscape of the Work Comp TPA business consolidated further, opening additional opportunities for the company to align with customers focused on moving their programs forward [34] - The company has now risen to fourth place among the top three workers' compensation third-party administrators [34] Company Strategy and Development Direction - The company is focused on enhancing its claims management model, which has not evolved much over the past 50 years, by creating a new value-added service that improves patient experiences while reducing total costs for employers [6][7] - The company is leveraging emerging technologies such as AI and machine learning to transform its service offerings and improve operational efficiencies [10][15] - The Edge platform is attracting new wholesale customers who are embracing innovative approaches to casualty claims management [36] Management's Comments on Operating Environment and Future Outlook - Management noted that the current healthcare market is very active, with ongoing discussions about healthcare reform and the aging population [17] - The company anticipates that the market will shift from early adopters to a broader customer base as the benefits of new approaches become more apparent [13] - Management addressed a recent security incident that temporarily affected system availability but expressed confidence that it would not have a long-term material adverse impact on the business [29][30] Other Important Information - The company repurchased 124,411 shares for a total price of $9.1 million during the quarter, with a total of 35.6 million shares repurchased to date [37] - The quarter ending cash balance was $104 million, and days sales outstanding (DSO) increased to 41 days, up from one day a year ago [37] Q&A Session Summary Question: What is the impact of the recent security incident? - Management indicated that they are in the early stages of assessing the impact of the security incident and expect to incur certain costs and experience delays, but do not believe it will have a long-term material adverse impact on the business [30]