Gordon Clemons - Chairman and Chief Executive Officer Michael Combs - President

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 event or results may differ materially. CorVel refers you to the documents the company files from time to time with the Securities and Exchange Commission, specifically the company’s last Form 10-K and 10-Q filed for the most recent fiscal year and 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 Mr. Gordon Clemons.

Thank you for joining us to review CorVel's September quarter. Revenues for the September quarter were $136.4 million, up 6% compared to the revenue for the September 2016 quarter. Earnings per share for the quarter ended September 30, 2017 were $0.44, up 25% from $0.35 for the same quarter of 2016. In general, the quarter reflected good results. We continue to make progress improving our operations. Michael Combs will discuss operations further in a moment. Every quarter is impacted by what most refer to as one time event. Although typically such references are to unusual expenses, we are impacted by onetime events that are both positive and negative. For once we could pick out an occasional item of this nature, in recent years it feels as though every quarter has some. Each is, yes, a onetime event but every quarter has a number of such onetime events so in the aggregate they are not really one time in nature. The quarter was impacted by the unusual hurricane activity. We are fortunate to have a de-centralized service structure in which we can route work to offices less affected by unusual conditions. We have unusually high expenses in our own self-insured healthcare benefits. We expect those costs to return in the future quarters to levels closure to our trend lines. Reserves were increased in some AR accounts, as well as in an incubator venture investment made several years ago. Our PBM had seasonally lower margins and the quarter had one less work day than did the June quarter. On the positive side, stock option exercises reduced our quarterly tax rate and we had lower legal expenses than in the prior periods. On balance, these items more or less offset one another. We don’t typically comment on such items. This quarter we just…

Thank you, Gordon. I will start by discussing our product line results. Patient management includes third-party administration; TPA, services and traditional case management. Revenue for the quarter was $78 million. Gross profit increased 19.3% from the September quarter of 2016. Our TPA services had another nice increase this quarter. The results that we have been able to achieve with our integrated model are compelling. It is our expectation that the product initiatives that I will be reviewing momentarily will further differentiate CorVel in the market place. Our case management revenues continue to fall short of expectations. Product initiatives are underway to move our case management services into the 21st century. It is our expectation that these efforts in addition to renewed focus will result in expansion of this segment of the business. Network solutions revenue sold in the wholesale market for the quarter was $58 million, an increase of 3.5% over the same quarter of the prior year. The services in this segment continue to benefit by our consistent investment in the underlying technology which has increased over the course of the year. Our systems development efforts had a productive quarter. Broad areas of focus include, increasing the value of the medical review services that we deliver to the carrier market, the evolution of our hubbed activities, smart technology and business process workflow, laying the foundation for the next generation of medical review, and ongoing improvements to our claims intake, medical review, TPO and return to work processes. During the quarter we released the first phase of our new adjuster interface called CareMC Edge, which consolidates and prioritizes claims management information so the adjuster can make faster decisions and spend less time managing the system and more time interacting with the injured parties. In future phases, CareMC Edge will connect…

This concludes today's webcast. You may disconnect your lines at this time.