Corvel Corp 10-Q for FY2025 Q2

Corvel Corp (CRVL)

10-Q 2024-11-07 For: 2024-09-30

Added on April 04, 2026

About this 10-Q

Corvel Corp filed this 10-Q on November 7, 2024, covering the quarter ended September 30, 2024 (FY2025 Q2).

Headline figures

Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $224.38M; up 14.8% from $195.52M a year earlier
Net income: $23.4M; up 17.6% from net income of $19.9M a year earlier
Diluted EPS: $1.35; up 17.4% from $1.15 a year earlier

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5128 Apache Plume Road, Suite 400
Fort Worth, TX		76109
(Address of principal executive offices)		(Zip Code)


Large accelerated filer	☑	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐


		Page

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	3

	Consolidated Balance Sheets – September 30, 2024 (unaudited) and March 31, 2024	3
	Consolidated Income Statements (unaudited) – Three months ended September 30, 2024 and 2023	4
	Consolidated Income Statements (unaudited) – Six months ended September 30, 2024 and 2023	6
	Consolidated Statements of Stockholders’ Equity (unaudited) – Three and six months ended September 30, 2024 and 2023	6
	Consolidated Statements of Cash Flows (unaudited) – Six months ended September 30, 2024 and 2023	7
	Notes to Consolidated Financial Statements (unaudited) – September 30, 2024	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24

Item 4.	Controls and Procedures	24

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	25

Item 1A.	Risk Factors	25

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 3.	Defaults Upon Senior Securities	34

Item 4.	Mine Safety Disclosures	34

Item 5.	Other Information	34

Item 6.	Exhibits	35

	Signatures	36


	September 30, 2024			March 31, 2024
	(Unaudited)
Assets
Current Assets
Cash and cash equivalents	$	138,349,000		$	105,563,000
Customer deposits		109,110,000			88,142,000
Accounts receivable, net		102,393,000			97,108,000
Prepaid taxes and expenses		13,481,000			11,418,000
Total current assets		363,333,000			302,231,000
Property and equipment, net		89,115,000			85,892,000
Goodwill		36,814,000			36,814,000
Other intangibles, net		611,000			821,000
Right-of-use asset, net		23,818,000			24,058,000
Deferred tax asset, net		4,183,000			3,545,000
Other assets		679,000			1,318,000
TOTAL ASSETS	$	518,553,000		$	454,679,000
Liabilities and Stockholders' Equity
Current Liabilities
Accounts and taxes payable	$	14,174,000		$	16,631,000
Accrued liabilities		198,685,000			167,868,000
Total current liabilities		212,859,000			184,499,000
Long-term lease liabilities		22,922,000			22,533,000
Total liabilities		235,781,000			207,032,000
Commitments and contingencies
Stockholders' Equity
Common stock, $.0001 par value: 120,000,000 shares authorized at September 30, 2024 and March 31, 2024; 55,238,600 shares issued (17,135,160 shares outstanding, net of Treasury shares) and 55,162,075 shares issued (17,128,896 shares outstanding, net of Treasury shares) at September 30, 2024 and March 31, 2024, respectively		3,000			3,000
Paid-in capital		242,894,000			233,629,000
Treasury stock (38,103,440 shares at September 30, 2024 and 38,033,179 shares at March 31, 2024)		(813,020,000	)		(793,905,000	)
Retained earnings		852,895,000			807,920,000
Total stockholders' equity		282,772,000			247,647,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	518,553,000		$	454,679,000


	Three Months Ended September 30,
	2024		2023
REVENUES	$	224,380,000	$	195,522,000
Cost of revenues		173,632,000		151,270,000
Gross profit		50,748,000		44,252,000
General and administrative expenses		22,078,000		19,538,000
Income before income tax provision		28,670,000		24,714,000
Income tax provision		5,272,000		4,816,000
NET INCOME	$	23,398,000	$	19,898,000
Net income per common and common equivalent share
Basic	$	1.37	$	1.16
Diluted	$	1.35	$	1.15
Weighted average common and common equivalent shares
Basic		17,133,000		17,123,000
Diluted		17,341,000		17,346,000


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Six Months Ended September 30,
	2024		2023
REVENUES	$	436,102,000	$	385,775,000
Cost of revenues		337,200,000		299,644,000
Gross profit		98,902,000		86,131,000
General and administrative expenses		42,198,000		35,989,000
Income before income tax provision		56,704,000		50,142,000
Income tax provision		11,729,000		10,439,000
NET INCOME	$	44,975,000	$	39,703,000
Net income per common and common equivalent share
Basic	$	2.63	$	2.32
Diluted	$	2.60	$	2.29
Weighted average common and common equivalent shares
Basic		17,127,000		17,133,000
Diluted		17,327,000		17,365,000


	Three Months Ended September 30, 2024
	Common Shares		Stock Amount		Paid-in- Capital		Treasury Shares			Treasury Stock			Retained Earnings		Total Stockholders' Equity
Balance – June 30, 2024		55,194,878	$	3,000	$	237,804,000		(38,071,317	)	$	(803,431,000	)	$	829,497,000	$	263,873,000
Stock issued under employee stock purchase plan		1,102		—		342,000		—			—			—		342,000
Stock issued under stock option plan, net of shares repurchased		42,620		—		3,266,000		—			—			—		3,266,000
Stock-based compensation expense		—		—		1,482,000		—			—			—		1,482,000
Purchase of treasury stock		—		—		—		(32,123	)		(9,589,000	)		—		(9,589,000	)
Net income		—		—		—		—			—			23,398,000		23,398,000
Balance – September 30, 2024		55,238,600	$	3,000	$	242,894,000		(38,103,440	)	$	(813,020,000	)	$	852,895,000	$	282,772,000



	Three Months Ended September 30, 2023
	Common Shares		Stock Amount		Paid-in- Capital		Treasury Shares			Treasury Stock			Retained Earnings		Total Stockholders' Equity
Balance – June 30, 2023		55,019,773	$	3,000	$	221,486,000		(37,905,858	)	$	(765,982,000	)	$	751,473,000	$	206,980,000
Stock issued under employee stock purchase plan		1,797		—		336,000		—			—			—		336,000
Stock issued under stock option plan, net of shares repurchased		49,272		—		3,472,000		—			—			—		3,472,000
Stock-based compensation expense		—		—		1,301,000		—			—			—		1,301,000
Purchase of treasury stock		—		—		—		(45,501	)		(9,418,000	)		—		(9,418,000	)
Net income		—		—		—		—			—			19,898,000		19,898,000
Balance – September 30, 2023		55,070,842	$	3,000	$	226,595,000		(37,951,359	)	$	(775,400,000	)	$	771,371,000	$	222,569,000


	Six Months Ended September 30, 2024
	Common Shares		Stock Amount		Paid-in- Capital		Treasury Shares			Treasury Stock			Retained Earnings		Total Stockholders' Equity
Balance – March 31, 2024		55,162,075	$	3,000	$	233,629,000		(38,033,179	)	$	(793,905,000	)	$	807,920,000	$	247,647,000
Stock issued under employee stock purchase plan		1,102		—		342,000		—			—			—		342,000
Stock issued under stock option plan, net of shares repurchased		75,423		—		6,371,000		—			—			—		6,371,000
Stock-based compensation expense		—		—		2,552,000		—			—			—		2,552,000
Purchase of treasury stock		—		—		—		(70,261	)		(19,115,000	)		—		(19,115,000	)
Net income		—		—		—		—			—			44,975,000		44,975,000
Balance – September 30, 2024		55,238,600	$	3,000	$	242,894,000		(38,103,440	)	$	(813,020,000	)	$	852,895,000	$	282,772,000

	Six Months Ended September 30, 2023
	Common Shares		Stock Amount		Paid-in- Capital		Treasury Shares			Treasury Stock			Retained Earnings		Total Stockholders' Equity
Balance – March 31, 2023		54,987,366	$	3,000	$	218,700,000		(37,817,866	)	$	(748,195,000	)	$	731,668,000	$	202,176,000
Stock issued under employee stock purchase plan		1,797		—		336,000		—			—			—		336,000
Stock issued under stock option plan, net of shares repurchased		81,679		—		4,946,000		—			—			—		4,946,000
Stock-based compensation expense		—		—		2,613,000		—			—			—		2,613,000
Purchase of treasury stock		—		—		—		(133,493	)		(27,205,000	)		—		(27,205,000	)
Net income		—		—		—		—			—			39,703,000		39,703,000
Balance – September 30, 2023		55,070,842	$	3,000	$	226,595,000		(37,951,359	)	$	(775,400,000	)	$	771,371,000	$	222,569,000


	Three Months Ended		Three Months Ended
	September 30, 2024		September 30, 2023
Patient management services	$	147,173,000	$	129,805,000
Network solutions services		77,207,000		65,717,000
Total services	$	224,380,000	$	195,522,000


	Six Months Ended		Six Months Ended
	September 30, 2024		September 30, 2023
Patient management services	$	286,345,000	$	257,643,000
Network solutions services		149,757,000		128,132,000
Total services	$	436,102,000	$	385,775,000


	September 30, 2024			March 31, 2024
Billed receivables	$	65,935,000		$	58,936,000
Allowance for expected credit losses		(5,668,000	)		(4,245,000	)
Unbilled receivables		42,126,000			42,417,000
Accounts receivable, net	$	102,393,000		$	97,108,000


	Six Months Ended
	September 30, 2024
Beginning balance at April 1, 2024	$	29,961,000
Additions		28,653,000
Revenue recognized from beginning of period		(9,635,000	)
Revenue recognized from additions		(19,021,000	)
Ending balance at September 30, 2024	$	29,958,000


	Three Months Ended September 30, 2024					Three Months Ended September 30, 2023
	Shares			Weighted Average Exercise Price		Shares			Weighted Average Exercise Price
Options outstanding, beginning		469,167		$	136.02		611,901		$	110.10
Options granted		6,250			306.82		16,500			222.26
Options exercised		(46,405	)		93.04		(50,776	)		74.53
Options cancelled/forfeited		(403	)		167.86		(2,362	)		145.71
Options outstanding, ending		428,609		$	143.14		575,263		$	116.31


	Three Months Ended	Three Months Ended
	September 30, 2024	September 30, 2023
Risk-free interest rate	3.89%	4.19%
Expected volatility	35%	36%
Expected dividend yield	0.00%	0.00%
Expected weighted average life of option in years	9.2 years	4.2 years


Range of Exercise Price	Number of Outstanding Options		Weighted Average Remaining Contractual Life		Outstanding Options – Weighted Average Exercise Price		Exercisable Options – Number of Exercisable Options		Exercisable Options – Weighted Average Exercise Price
$33.16 to $87.69		126,453		2.43	$	68.03		125,847	$	67.94
$87.70 to $155.99		143,695		2.84		143.06		68,685		135.24
$156.00 to $200.55		121,460		3.68		187.09		35,152		179.04
$200.56 to $306.82		37,001		5.62		255.82		3,569		222.26
Total		428,609		3.20	$	143.14		233,253	$	106.86



2025	$	5,182,000
2026		8,800,000
2027		7,165,000
2028		6,261,000
2029		4,048,000
Thereafter		3,591,000
Total lease payments		35,047,000
Less interest		(3,346,000	)
Total lease liabilities	$	31,701,000


					Total Number of		Maximum Number
					Shares Purchased		of Shares Remaining
					as Part of Publicly		Available to
	Total Number of		Average Price Paid		Announced		be Purchased
Period	Shares Purchased		Per Share		Program		Under the Program
July 1 to July 31, 2024		11,865	$	277.77		11,865		916,818
August 1 to August 31, 2024		10,723	$	307.37		10,723		906,095
September 1 to September 30, 2024		9,535	$	314.22		9,535		896,560
Total		32,123	$	298.47		32,123		896,560


	Number of Options			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value as of September 30, 2024
Options outstanding at July 1, 2024		469,167		$	136.02
Granted		6,250			306.82
Exercised		(46,405	)		93.04
Cancelled – forfeited		(403	)		167.86
Cancelled – expired		—			—
Ending outstanding		428,609		$	143.14		3.20	$	78,758,230
Ending vested and expected to vest		367,624		$	129.20		3.23	$	69,625,471
Ending exercisable at September 30, 2024		233,253		$	106.86		2.71	$	51,322,012


	September 30, 2024		March 31, 2024
Accounts payable	$	13,700,000	$	16,410,000
Income taxes payable and uncertain tax positions		474,000		221,000
Total accounts and taxes payable	$	14,174,000	$	16,631,000


	September 30, 2024		March 31, 2024
Payroll, payroll taxes and employee benefits	$	36,533,000	$	26,291,000
Customer deposits		109,110,000		88,142,000
Accrued professional service fees		9,617,000		9,838,000
Self-insurance accruals		3,488,000		3,818,000
Deferred revenue		29,958,000		29,961,000
Operating lease liabilities		8,779,000		8,864,000
Other		1,200,000		954,000
Total accrued liabilities	$	198,685,000	$	167,868,000


	Three Months Ended			Three Months Ended						Percentage
	September 30, 2024			September 30, 2023			Change			Change
Revenue	$	224,380,000		$	195,522,000		$	28,858,000			14.8	%
Cost of revenues		173,632,000			151,270,000			22,362,000			14.8	%
Gross profit		50,748,000			44,252,000			6,496,000			14.7	%
Gross profit as percentage of revenue		22.6	%		22.6	%
General and administrative expenses		22,078,000			19,538,000			2,540,000			13.0	%
General and administrative as percentage of revenue		9.8	%		10.0	%
Income before income tax provision		28,670,000			24,714,000			3,956,000			16.0	%
Income before income tax provision as percentage of revenue		12.8	%		12.6	%
Income tax provision		5,272,000			4,816,000			456,000			9.5	%
Net income	$	23,398,000		$	19,898,000		$	3,500,000			17.6	%
Weighted average common and common equivalent shares
Basic		17,133,000			17,123,000			10,000			0.1	%
Diluted		17,341,000			17,346,000			(5,000	)		—
Net income per common and common equivalent shares
Basic	$	1.37		$	1.16		$	0.21			18.1	%
Diluted	$	1.35		$	1.15		$	0.20			17.4	%


31.1		Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) Promulgated under the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) Promulgated under the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

32.2*		Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

101.INS		Inline XBRL Instance Document.

101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbases Document.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*		The certifications attached as Exhibit 32.1 and Exhibit 32.2 accompany this Quarterly Report pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ("SOX"), and shall not be deemed “filed” by the registrant for purposes of Section 18 of the Exchange Act and are not to be incorporated by reference into any of the registrant’s filings under the Securities Act or the Exchange Act, irrespective of any general incorporation language contained in any such filing.


	CORVEL CORPORATION

Dated: November 7, 2024	By:	/s/ Michael G. Combs
	Michael G. Combs, Chief Executive Officer and President (Principal Executive Officer)

Dated: November 7, 2024	By:	/s/ Brandon T. O’Brien
	Brandon T. O’Brien,
	Chief Financial Officer (Principal Financial Officer)