Irvine-based CorVel Corp. recently posted another quarter of growth by catering to employers seeking to control workers’ compensation costs—the latest in a streak that has sent its shares up by about 50% in the past year.
CorVel sells software and services for managing workers’ compensation claims, reviewing medical bills and providing healthcare services to keep insurance costs in check.
The company also employs nurses to manage the healthcare of injured workers and maintains a network of other healthcare service providers.
For the three months through December, CorVel’s quarterly profit rose 4% from a year earlier to $6.7 million. Quarterly revenue was up 10% to $95.3 million.
The company had a recent market value of $570 million, though it largely operates below Wall Street’s radar.
Customers include insurance companies, employers with healthcare plans and third-party administrators in both areas.
Employer customers include Rochester, N.Y.-based Eastman Kodak Co., Foster Farms of California’s Central Valley, Fort Worth, Texas-based AMR Corp.’s American Airlines and Chicago-based United Continental Holdings Inc.
Rivals include diversified companies that offer workers’ compensation management software and services. Those include Coventry Health Care Inc. of Bethesda, Md., and Genex Services Inc. of Wayne, Pa.
CorVel has about 110 offices in the U.S. and 2,845 employees, including 240 in Irvine and Orange.
It is looking to build on recent gains, President and Chief Operating Officer Daniel Starck said on a conference call with analysts and investors earlier this month.
The company is looking to continued expansion of its Enterprise Comp software, which is used to handle workers’ compensation cases and aid healthcare providers by suggesting early treatment and other steps.
The software was “a major contributor to our growth,” he said.
Enterprise Comp is part of CorVel’s patient management business, which accounts for 45% of the company’s $340 million in yearly revenue.
The company’s network solutions division, which includes medical bill reviewing, makes up the rest of its revenue.
CorVel wants to “continue improving our overall sales performance,” Starck said.
“We’ve now achieved double-digit growth for five consecutive quarters, and there’s plenty of opportunity for us to maintain or increase that pace,” he said.
The company expects more sales from Enterprise Comp and what it calls “directed care network products,” which include medical imaging and physical therapy offered within its network of healthcare providers.
The company’s other pushes include its MedCheck software for reviewing medical bills and its case management business.
A key to boosting case management will be investments in technology that allow companies to cut the amount of time between injury and treatment, according to Starck.
That means programs that can deliver information that remove “inherent delays in claims management and improving the overall outcomes of a claim,” he said.
Low Profile
CorVel’s recent conference call provided some insight into one of the county’s lower-profile public companies.
Only one analyst, Arpit Airan of Boston-based Virtua Research, follows CorVel. Airan does not publish research on the company.
The call featured a pair of participants identified as representatives of the New York Times and Visa Inc.
“We appreciate the questions this go-around,” CorVel’s founder and Chairman V. Gordon Clemons said during the call. “It’s nice to have a dialogue rather than just a monologue.”
CorVel’s shares primarily are controlled by institutional investors, mutual funds and directors, which leaves a relatively small amount available for trading.
Director Jeffrey Michael, a Minnesota investor who heads Corstar Holdings Inc., has 3.9 million shares, or about a third of CorVel’s outstanding shares.
Chairman Clemons owns about 1.1 million shares, or 9% of CorVel.
Boston-based Wellington Management Co. LLP holds about 8%.
CorVel has spent more than $240 million to retire 14.3 million shares through stock buy backs since 1996.
The company had no long-term debt and $15.8 million of cash in hand as of Dec. 31.
See related stories in Healthcare >
CorVel Corp. Irvine
Business: workers’ compensation claims management, bill review, other services
Market value: $570 million
Revenue, nine months through Dec.: $280 million, up 12%
Profit, nine months through Dec.: $22 million, up 13%
