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 performance 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 accompany files 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 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, and welcome to CorVel's quarterly review of results. The September quarter continued our recent progress on a number of fronts. Michael Combs will discuss those and the quarter in detail in a moment. .

I want to first take a moment to provide a broader perspective. As most of our investors are familiar, at CorVel, we've been gradually evolving our business and transitioning from the management team which began the business 30 years ago to a third generation in company leadership.

During this transition, CorVel has expanded from a workers' compensation managed care organization to a full service workers' compensation TPA, third-party administrator that is, and from a monoline workers' compensation enterprise to an organization handling claims and other coverage areas such as Regular Health, Medicare and also general liability.

Our workers' compensation TPA has been the fastest growing entity in its space, and more importantly is delivering results which substantially outpace those of the traditional competitors in the industry.

CERiS, our payment integrity vendor in the larger health care market, continues to become a more and more important part of CorVel, and SYMBEO, our digital payments and payables enterprise, is as well.

While we transitioned our management team at a careful pace over the last 10 years, today, CorVel is increasingly benefiting from the processes and disciplines being established by the newest generation of management. .

Some of us who began this journey with passion in the late '80s, still stand in the hallway by the coffee machine talking of the invention of the fax machine and perhaps the teletype. Each generation of CorVelians brings its unique contributions.

Reflecting upon the results achieved in recent quarters, it is exciting to me to reflect upon the innovations coming soon from the company. .

I'll now turn the call over to Michael to discuss the details of the quarter. .

Thank you, Gordon. I will be providing an overview of our financial results for the quarter and then some insight into the markets in which we operate. Lastly, I will share our operating results, the status of our product development and the additional statistics, which we include each quarter..

Earnings per share for the quarter ending September 30, 2018, was a record $0.67, an increase of 51.4% from the same quarter of the prior year. Revenues for the September quarter were $148.2 million, 8.6% above the $136.4 million for the September 2017 quarter. .

We realized strong revenue growth and improved margins with our enterprise comp TPA offering. We also experienced improved margins in our Network Solutions services, which offset a decrease in Network Solutions revenue. .

G&A in the quarter was consistent with expectations. The workers' compensation carrier market has essentially been flat year-over-year. While our carrier clients have not been able to increase their premium rates for the workers' compensation line of business, combined loss ratio for the private carrier market are at historic lows.

So while modest wage growth and employment growth would generally result in a similarly modest premium increases, such is not the case in the current market. .

According to NCCI, the National Council on Compensation Insurance, the number of lost time claims has declined an average of 3.7% per year from 1997 through 2016. During the same time period, there has, however, been an increase in the severity of indemnity claims that more than offsets the decrease in the number of claims.

In fact, indemnity claims severity has outpaced wage inflation by 31 percentage points over the past 2 decades, or 1.9% per year. The medical cost component of indemnity claims continues to be the significant driver of claims severity.

While the Centers for Medicare and Medicaid Services reported a cumulative increase of 61% in the personal health care price index over the past 2 decades, the cumulative change in the medical lost time claims severity for workers' compensation is 175%, over 2x greater than the personal health price index. .

CorVel's broad and deep suite of cost containment services continues to assist our clients in staying ahead of this steep cost curve.

And while the workers' compensation carrier market has been fairly stable over the past decade, there has been a modest amount of middle-market acquisitions resulting in some equally modest shifts among the top workers' compensation underwriters.

CorVel has both lost and benefited from these acquisitions over the years as carriers naturally seek to consolidate program partners. While the worker's compensation payer market has seen modest consolidation, the vendors who serve them have experienced much greater consolidation.

We continue to witness the impact of the private equity markets in the workers' compensation vendor space. This past quarter, we saw another merger of 2 of the industry's largest players, a medical bill review provider and a case management vendor.

The industry continues to migrate towards CorVel's long-standing strategy of providing integrated services to payers, singularly focused vendors are quickly becoming obsolete while payers recognize a greater efficiency and effectiveness of integrated services. .

CorVel continues to be very well positioned to take advantage of this evolution with our broad suite of integrated services on a single technological platform. At the same time, CorVel has been able to invest in systems that positively impact both service and outcomes without the encumbrance of increasingly larger interest payments. .

James Bessen, an economist who teaches at the Boston University School of Law, recently wrote a paper on the challenges of automation and artificial intelligence.

He notes that the most successful technology companies build their own software, inventing and perfecting their own processes instead of aligning their business model with some outside developer's idea of it.

Inventing and perfecting our core business systems, our consistent investment in technology has resulted in a widening gap in the results that we are able to deliver to our customers relative to other vendors in our space..

In addition to market consolidation, we are seeing ongoing pricing pressures, especially amongst industry participants that lack our clear competitive advantage, the strength of our services and the results that we deliver. Some vendors have resorted to below cost pricing or pricing at levels where the customers' experience suffers.

The underlying goal being to simply gain revenue and satisfy the private equity requirements. The momentum that we are seeing in the growth of our TPA service is concurrent with the challenges our competition is having providing consistent service and results. We believe very strongly in our model and our prospects for continued growth..

As we discussed on previous calls, the broader health care market will be increasingly important to CorVel's overall results. CorVel continues to penetrate the health payment integrity market with the signing and implementation of another top insurer. Payment integrity, as a whole, is continuing to mature in its focus and increase in its depth.

CorVel intends to grow into this very large market in both cost-containment and patient management. .

The Adjuster Edge workstation interface supporting our carrier and easy customers; completion of enhancements to our Return-to-Work module; roll out of the latest version of our new bill review platform; and enhancements to our integrated intake module.

The Adjuster workstation modifications included enhancements to the pharmacy first fill functionality and systematic communications for pharmacy eligibility and prior authorizations. .

In addition, we implemented MD guidelines to aid in the prediction of claim lost time and surgical action alerts based on the codified utilization review results. Significant progress was also made integrating business intelligence-driven executive dashboards and directed care services.

Additionally, the Edge is being expanded to facilitate seamless case management oversight for our carrier customers. .

Return to work has been a key focus for our TPA and case management services for several quarters. The final phase of enhancements to our Return-to-Work module was completed in the September quarter. Ensuring that adjusters have accurate and up-to-date work information is essential to delivering optimal outcomes. .

Solid progress was made with the initial release of CorVel's new bill review platform. Our system upgrade leveraging processes that allow for a more fluid bill review adjudication from the receipt of bills to the payment and reporting of results.

The delivery of this enhanced platform harnessing emerging technologies continues to allow CorVel to deliver superior bill review with industry-leading results. The initial phase of our integrated intake module was also released in the quarter. CorVel's intake team is now utilizing the new platform.

The enhancement allows CorVel to address the needs of the injured worker faster from the initial report of injury through to initial care, and facilitates an optimal Return-to-Work outcome from the start of the claims process..

I'll now discuss our operating results. Patient management includes third-party administration, TPA, services and traditional case management. Revenue for the quarter was $91.9 million, an annual increase of 17.6%. Gross profit increased 42.4% from the September quarter of 2017.

We are pleased to see the change to the strategic operating parameters made over the past 2 quarters to the case management service translating to bottom line results in the September quarter. .

Revenue for Network Solutions, sold in the wholesale market, was $56.2 million for the quarter, down 3.4% for the same quarter of the prior year. Gross profit in the wholesale business was up 8.5% year-over-year. .

I would now like to review a few additional financial items. During the quarter, the company repurchased 133,425 shares for a total price of $7.8 million. Inception-to-date, the company has repurchased 35 million shares for a total cost of $442 million. The quarter ending cash balance was $90 million.

Our DSO, that is days sales outstanding and receivables, was 40 days, down 4 days from a year ago. .

That concludes our remarks for today. Thank you for joining us. I'll now turn the call over to our operator. .

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