CorVel Corp. (CRVL, Financial) filed Quarterly Report for the period ended 2010-09-30.
Corvel Corp. has a market cap of $546.16 million; its shares were traded at around $46 with a P/E ratio of 19.66 and P/S ratio of 1.62. Corvel Corp. had an annual average earning growth of 10.6% over the past 10 years. GuruFocus rated Corvel Corp. the business predictability rank of 2.5-star.CRVL is in the portfolios of Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.
The Companys income tax expense decreased by $2.7 million, or 63.5%, from $4.2 million for the quarter ended September 30, 2009 to $1.5 million for the quarter ended September 30, 2010 due to the decrease in income before income taxes from $10.6 million to $9.1 million combined with the resolution of certain outstanding tax issues which resulted in a reduction to the income tax liability by $1.8 million. The income tax expense as a percentage of income before income taxes (i.e. effective tax rate) was 39.6% for the three months ended September 30, 2009 and 16.9% for the three months ended September 30, 2010. The income tax provision rates were based upon managements review of the Companys estimated annual income tax rate, including state taxes. This effective
Revenues increased from $163.7 million for the six months ended September 30, 2009 to $184.9 million for the six months ended September 30, 2010, an increase of $21.2 million or 12.9%. The Companys patient management revenues increased $18.6 million or 27.0% from $68.8 million in the six months ended September 2009 to $87.4 million in the six months ended September 2010. This increase was primarily due to improvements in customer utilization of the Companys TPA services. The Companys network solutions revenues increased from $94.9 million in the six months ended September 2009 to $97.5 million in the six months ended September 2010, an increase of $2.6 million or 2.7%. This increase was primarily due to an increase in customer utilization of the Companys pharmacy and directed care services.
The Companys cost of revenue increased from $121.8 million in the six months ended September 30, 2009 to $137.9 million in the six months ended September 30, 2010, an increase of $16.1 million, or 13.2%. The increase in cost of revenues of 13.2% approximates the increase in revenues of 12.9%. This increase was primarily due to the costs associated with the increase in demand for the Companys TPA services, directed care and pharmacy services, which are lower margin services. The Companys TPA service costs increased $12.1 million, pharmacy costs increased $5.7 million and directed care costs increased $2.6 million in the six months ended September 30, 2010 from the comparable six month period in 2009.
General and administrative expense increased from $20.7 million in the six months ended September 30, 2009 to $25.7 million in the six months ended September 30, 2010, an increase of $5.0 million, or 24.2%. This increase is primarily due to an increase in the Companys legal costs related to a number of small claims. We do not expect any material loss on these small claims. Legal costs increased due to the $2.8 million accrual of estimated costs to settle the litigation as discussed below under litigation in our Management Discussion and Analysis. Systems cost increased from $11.8 million to $12.3 million due to an increase in non-capitalizable software development expenditures to further improve the Companys TPA product. The Company expects software development expenditures to increase. Exclusive of the $2.8 million accrual noted above, general and administrative costs increased 10.6%, close to the 12.9% increase in revenues.
The Companys income tax expense decreased by $2.4 million, or 28.2%, from $8.5 million for the six months ended September 30, 2009 to $6.1 million for the six months ended September 30, 2010 due to the resolution of outstanding state tax issues which resulted in a reduction to the income tax liability by $1.8 million. This was slightly offset by an increase in income before income taxes from $21.3 million to $21.4 million. The income tax expense as a percentage of income before income taxes, also known as the effective tax rate, was 39.9% for the six months ended September 30, 2009 and 28.5% for the six months ended September 30, 2010. The income tax provision rates were based upon managements review of the Companys estimated annual income tax rate, including state taxes. This effective tax rate differed from the statutory federal tax rate of 35.0% primarily due to state income taxes, the liability reduction and certain non-deductible expenses. It is expected that the future effective income tax rate will return to the 38% to 40% range.
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Corvel Corp. has a market cap of $546.16 million; its shares were traded at around $46 with a P/E ratio of 19.66 and P/S ratio of 1.62. Corvel Corp. had an annual average earning growth of 10.6% over the past 10 years. GuruFocus rated Corvel Corp. the business predictability rank of 2.5-star.CRVL is in the portfolios of Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations:
Revenues increased from $82.4 million for the three months ended September 30, 2009 to $93.4 million for the three months ended September 30, 2010, an increase of $11.0 million, or 13.3%. The increase was primarily due to an increase in the Companys patient management revenues by $8.3 million or 23.1% from $35.8 million in the September 2009 quarter to $44.1 million in the September 2010 quarter. This increase was primarily due to improvements in customer utilization of the Companys TPA services. This was complemented by an increase in network solutions revenue by $2.7 million, or 5.8%, from $46.6 million in the September 2009 quarter to $49.3 million in the September 2010 quarter. This increase was primarily due to an increase in revenues from the Companys pharmacy and directed care services.The Companys income tax expense decreased by $2.7 million, or 63.5%, from $4.2 million for the quarter ended September 30, 2009 to $1.5 million for the quarter ended September 30, 2010 due to the decrease in income before income taxes from $10.6 million to $9.1 million combined with the resolution of certain outstanding tax issues which resulted in a reduction to the income tax liability by $1.8 million. The income tax expense as a percentage of income before income taxes (i.e. effective tax rate) was 39.6% for the three months ended September 30, 2009 and 16.9% for the three months ended September 30, 2010. The income tax provision rates were based upon managements review of the Companys estimated annual income tax rate, including state taxes. This effective
Revenues increased from $163.7 million for the six months ended September 30, 2009 to $184.9 million for the six months ended September 30, 2010, an increase of $21.2 million or 12.9%. The Companys patient management revenues increased $18.6 million or 27.0% from $68.8 million in the six months ended September 2009 to $87.4 million in the six months ended September 2010. This increase was primarily due to improvements in customer utilization of the Companys TPA services. The Companys network solutions revenues increased from $94.9 million in the six months ended September 2009 to $97.5 million in the six months ended September 2010, an increase of $2.6 million or 2.7%. This increase was primarily due to an increase in customer utilization of the Companys pharmacy and directed care services.
The Companys cost of revenue increased from $121.8 million in the six months ended September 30, 2009 to $137.9 million in the six months ended September 30, 2010, an increase of $16.1 million, or 13.2%. The increase in cost of revenues of 13.2% approximates the increase in revenues of 12.9%. This increase was primarily due to the costs associated with the increase in demand for the Companys TPA services, directed care and pharmacy services, which are lower margin services. The Companys TPA service costs increased $12.1 million, pharmacy costs increased $5.7 million and directed care costs increased $2.6 million in the six months ended September 30, 2010 from the comparable six month period in 2009.
General and administrative expense increased from $20.7 million in the six months ended September 30, 2009 to $25.7 million in the six months ended September 30, 2010, an increase of $5.0 million, or 24.2%. This increase is primarily due to an increase in the Companys legal costs related to a number of small claims. We do not expect any material loss on these small claims. Legal costs increased due to the $2.8 million accrual of estimated costs to settle the litigation as discussed below under litigation in our Management Discussion and Analysis. Systems cost increased from $11.8 million to $12.3 million due to an increase in non-capitalizable software development expenditures to further improve the Companys TPA product. The Company expects software development expenditures to increase. Exclusive of the $2.8 million accrual noted above, general and administrative costs increased 10.6%, close to the 12.9% increase in revenues.
The Companys income tax expense decreased by $2.4 million, or 28.2%, from $8.5 million for the six months ended September 30, 2009 to $6.1 million for the six months ended September 30, 2010 due to the resolution of outstanding state tax issues which resulted in a reduction to the income tax liability by $1.8 million. This was slightly offset by an increase in income before income taxes from $21.3 million to $21.4 million. The income tax expense as a percentage of income before income taxes, also known as the effective tax rate, was 39.9% for the six months ended September 30, 2009 and 28.5% for the six months ended September 30, 2010. The income tax provision rates were based upon managements review of the Companys estimated annual income tax rate, including state taxes. This effective tax rate differed from the statutory federal tax rate of 35.0% primarily due to state income taxes, the liability reduction and certain non-deductible expenses. It is expected that the future effective income tax rate will return to the 38% to 40% range.
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