CorVel Corporation Announces Quarterly Revenues and Earnings

IRVINE, Calif., Feb. 8 /PRNewswire-FirstCall/ -- CorVel Corporation (NASDAQ: CRVL) reported earnings per share of $0.27 for the quarter ended December 31, 2006, up 125% from the $0.12 earnings per share reported for December quarter of 2005. Earnings in the quarter increased 170% from the $0.10 non-GAAP earnings per share for the December quarter of 2005 adjusted to include stock compensation expenses. December quarter revenues were $67 million, up from $63 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.

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 and systems expenses added to corporate overhead; however, branch operations continued to improve productivity. Although industry claims volumes remained depressed, the Company continued to make progress adjusting to the lower demand levels. Regulatory changes in workers' compensation are continuing in several states. The Company is a leader in the facilitation of employer compliance with such regional workers' compensation legislation.

During the quarter the Company declared a three-for-two stock split of the Company's Common Shares, effected in the form of a 50% stock dividend. The stock dividend was distributed on December 8, 2006 to stockholders of record on November 20, 2006.

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 1,500 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 press release, 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 press release 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, 2006. The forward-looking statements in this press release 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, 2005 and 2006

(All share and per share amounts have been retroactively adjusted to reflect the three-for-two stock split which occurred during the December 2006 quarter)

                                             Three months ended December 31,
                                                   2005          2006
  Revenues                                     $63,073,000     $66,580,000
  Cost of revenues                              53,025,000      51,048,000
  Gross profit                                  10,048,000      15,532,000
  General and administrative expenses            7,341,000       9,263,000
  Income before income taxes                     2,707,000       6,269,000
  Income tax provision                          $1,042,000       2,444,000
  Net Income                                    $1,665,000      $3,825,000

  Net income per share
  Basic                                              $0.12           $0.27
  Diluted                                            $0.12           $0.27

  Weighted average shares outstanding
  Basic                                         14,297,000      14,026,000
  Diluted                                       14,330,000      14,368,000



  CorVel Corporation
  Income Statement - Unaudited
  Nine months ended December 31, 2005 and 2006

                                             Nine months ended December 31,
                                                 2005             2006
  Revenues                                   $200,083,000     $203,671,000
  Cost of revenues                            167,158,000      155,416,000
  Gross profit                                 32,925,000       48,255,000
  General and administrative expenses          22,055,000       26,472,000
  Income before income taxes                   10,870,000       21,783,000
  Income tax provision                          4,184,000        8,495,000
  Net Income                                   $6,686,000      $13,288,000

  Net income per share
  Basic                                             $0.46            $0.94
  Diluted                                           $0.45            $0.93

  Weighted average shares outstanding
  Basic                                        14,675,000       14,091,000
  Diluted                                      14,742,000       14,255,000



  CorVel Balance Sheet
  Summary Balance Sheet Information
  As of March 31, 2006 (audited) and December 31, 2006 (unaudited)

                                       March 31, 2006      Dec. 31, 2006
  Assets
  Cash and cash equivalents                   $14,206,000      $24,003,000
  Accounts receivable, net                     39,521,000       38,569,000
  Prepaid taxes and expenses                    2,221,000        2,875,000
  Deferred income taxes                         4,521,000        5,200,000
  Property and equipment, net                  26,459,000       24,100,000
  Goodwill and other assets                    13,170,000       13,069,000
  TOTAL ASSETS                               $100,098,000     $107,816,000

  Liabilities and Stockholders' Equity
  Accounts payable                            $13,712,000      $13,357,000
  Accrued liabilities                          12,160,000       12,937,000
  Deferred income taxes                         6,190,000        5,400,000
  Common stock and paid-in-capital             61,086,000       72,515,000
  Treasury stock                             (132,205,000)    (148,836,000)
  Retained earnings                           139,155,000      152,443,000
  TOTAL LIABILITIES AND EQUITY               $100,098,000     $107,816,000