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CorVel Corporation (CRVL 2.14%)
Q1 2019 Earnings Call
May 30, 2019, 11:30 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Thank you for standing by. Welcome to the CorVel Corporation Quarterly Earnings Release Webcast.
During the course of this webcast, CorVel Corporation may make projections or other forward-looking statements regarding future events or the future financial performances of the Company. CorVel wishes to caution you that these statements are only predictions and that actual events or results may differ materially. CorVel refers you to the documents that the Company filed from time to time with the Securities and Exchange Commission, specifically the Company's last Form 10-K and 10-Q files for the most recent fiscal year in quarter.
These documents contain and identify important factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements.
I would now like to turn it over to Michael Combs, President and Chief Executive Officer.
Michael Combs -- President and Chief Executive Officer
Thank you for joining us to review CorVel's fiscal year 2019 and the March quarter. On the call with me today is, Brandon O'Brien, CorVel's Chief Financial Officer. CorVel has always focused on making a meaningful difference to those we serve. It was truly rewarding to receive feedback from the market during a recent industry conference held in Boston. At a roundtable discussion, CorVel was for the fourth consecutive year, the only TPA to be given an A rating by retail customers participating in the conversation. During that same conference, several notable prospects reached out to learn more about our claims management services. They had been hearing from peers and brokers that we are doing something different, something better.
The workers' compensation and liability market is responding well to the services, which deliver meaningful differentiating results for our partners. To that end, this quarter, as with the past number of quarters, we saw the continuation of our TPA service leading to growth in revenue and profit.
Pharmacy benefits management is an additional specific area in which we are making a meaningful difference. We saw on the news this last month, the unprecedented law enforcement intervention in five states, as well as the arrests of drug distributors, actions all related to the opioid crisis. CorVel has been working these last number of years to diligently combat this genuine crisis. Efforts in this area include our clinical modeling interface, pain management program, and our high-touch prospective pharmacy benefits program.
I will now turn my discussion from our primary market of workers' compensation and liability to our other markets served, including health and accounts payable services. Our CERiS operation competes primarily in the regular health market. Bill volume for a top insurer implemented in late 2018, increased nicely during the quarter. Within the self-insured health market, another Top 5 TPA initiated implementation, planning for a rollout later this year.
As CorVel's foundational products continue to mature, cost containment enhancements and client analytics will further increase its value to our current partners and be a greater differentiator in the market.
CorVel's payment solution provider SYMBEO experienced consistent sales and revenue growth during the quarter. Several partnerships, which are foundational to the Company's strategy to expand its accounts payable services beyond North America, were established. The target market consisting of large Fortune 500 Companies continues to show demand for these expanded services and these new partnerships position SYMBEO to begin serving that demand in the second half of 2019.
Product development efforts were focused on the following key areas this past quarter; The Edge, our claims management workstation interface, which supports our carrier and employer customers, along with enhancements for our integrated intake and new customer onboarding modules, we deployed the initial version of The Edge a little less than two years ago. Each month we've been deliberately enhancing the functionality in this platform. While we have a rich backlog of remaining enhancements, key stakeholders are embracing the vision. During the quarter, we made solid progress implementing functionality, which better supports the needs of our wholesale managed care clients.
The Edge workstation continues to advance delivering the market's leading prospective claims management platform. During the March quarter, significant progress was made to integrate our bill review platform, which ensures delivery of the most consistent bill review savings in a timely manner into The Edge. Our executive summary dashboard, which provides a dynamic analytical overview of the results for all services being provided by CorVel was also integrated into The Edge.
Work progressed on our integrated claim intake project. The goal of the effort is to connect the injured claimant to the appropriate medical professionals quickly and seamlessly following an incident. The process begins with our 24/7 team, which engages the injured employee and directs them to the appropriate medical care.
The integrated system facilitates the engagement of all stakeholders participating in the management of the claim, allowing them to intervene directly on behalf of the injured claimant. During the quarter, work was completed to simplify the interfaces utilized by the 24/7 team to record instance of injury information and also to enhance our ability to address customer-specific requirements. The majority of our product development is focused on the service and care, once the claim is known to our system. But this next area of focus involves a step back to the process of getting the claim into our system when we take over a new customer.
When a prospective employer selects CorVel's TPA claims management solution, CorVel will typically take over all existing open and closed claims from the prior TPA or carrier. It is not unusual for employers to work with several carriers and have data from multiple systems and TPAs. This transfer process has historically been slow and an industrywide area of concern for risk managers and key decision makers when considering to move to a new TPA. It could take months to merge even the most important and critical items to the new claims system.
As we continually seek to improve, we appreciate the opportunity to introduce an innovative solution, which addresses the historical industrywide challenges in this area. Our proprietary automated onboarding solution is a cloud-based application, which codifies thousands of historical and industry data sets. It automatically maps and validates the incoming data for incorporation into the CorVel claims system. This new application reduces the time that it takes to onboard new clients, while increasing the accuracy of the process.
The combination of the enhancements or intake process; our prospective claims management interface, The Edge; and our onboarding process, is changing how claims are managed and improving the results possible. While we're pleased with the current momentum, we're not satisfied, we look to build upon the solid foundation that we have.
Brandon O'Brien will now discuss our operating results for the fiscal year-end quarter.
Brandon O'Brien -- Chief Financial Officer
Thank you, Michael and good morning, everyone. Revenues for fiscal 2019 were a record $596 million. Earnings per share were a record $2.46, an increase of 31% year-over-year. The March quarter revenues were a record $151 million, 5% over the revenue for the March 2018 quarter. Earnings per share for the quarter ending March 31, 2019 were $0.63, an increase of 34% over the same quarter of the prior year.
Revenue for patient management, including third-party administration TPA services, and traditional case management for the fiscal year ended March 31st was a record $368 million, an annual increase of 16%. Gross profit increase 60%. Revenue for the quarter was a record $96.2 million, an annual increase of 17%. Gross profit increased 113% from the March quarter of 2018.
Patient management, driven by CorVel's enterprise comp TPA business, led our growth in revenue and profit. In addition to the new customer sales based revenue growth, profit gains were achieved by improvements to economies of scale in the claim operation, more consistent revenue recognition of delivered services, and further customer utilization of value-add ancillary services.
Revenue for networks solutions sold in the wholesale market for the fiscal year was $228 million, a reduction of 6% from the prior fiscal year. Gross profit in the wholesale business was down 7% year-over-year. For the quarter, wholesale network solutions was $54.9 million, off 10% from the same quarter of the prior year. Gross profit in the wholesale business was down 20% from March 2018. This annual decrease was primarily due to the churn in the government segment portion of this business. Although lower in annual comparisons, revenue and gross profit in network solutions were higher sequentially from the December quarter.
So work in The Edge platform is designed to attract a new round of network solutions wholesale customers, who are interested in having their adjusters work on a modern cloud-based platform. The Edge platform brings together the multi-facets of their services, without the capital expenditures needed to upgrade all the elements of their existing systems. As Michael indicated earlier in the discussion, these changes are being well-received in the market.
I would now like to review a few additional financial items. During the quarter, the Company repurchased 195,607 shares for a total price of $12.6 million. Inception to-date, the Company has repurchased 35.5 million shares for a cost of $466 million. Through this program, the Company has repurchased 66% of the total shares outstanding. The quarter-ending cash balance was $92 million. Our DSO, that is Day Sales Outstanding in receivables, was 43 days, up two days from a year ago. That concludes our remarks for today.
Thank you for joining us. I'll now return the call to our operator.
Operator -- Chief Financial Officer
This concludes today's webcast. You may disconnect your lines at this time.
Questions and Answers:
Duration: 12 minutes
Call participants:
Michael Combs -- President and Chief Executive Officer
Brandon O'Brien -- Chief Financial Officer
