Welcome to the CorVel Corporation’s Earnings Release Conference Call. During the course of this conference call, 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 the company has 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 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. (Operator Instructions) I would now like to the conference over to your host Mr. Dan Starck and Gordon Clemons. Gentlemen, please go ahead.

First, I’d like to thank everyone for joining us today to review and discuss CorVel’s December 2007 quarter’s results. I’m joined here by our Chairman, Gordon Clemons, and as we have for the past couple of calls, I will be covering the quarter’s results and future initiatives and Gordon will be covering product development. After our overview, as we always do, we’ll open the call to questions. Now, onto the December quarter results, revenue for the quarter was $76.7 million, which is a 15.2% increase from the December 2006 quarter. Earnings per share were $0.43 for the quarter, up 61% from the $0.27 reported in the December 2006 quarter. During the December quarter, in our traditional business lines, Network Solutions savings continued to expand and we recorded a second consecutive quarter of improvements in our Case Management product line. We continue to advance our Enterprise Comp expansion, our strategic initiative of bringing a new approach to claims management, and we also made substantial investments in our current technology foundation as well as ensuring that we are prepared for future growth by relocating our data center to a Colo facility. From a marketplace perspective, claims volumes continue at historic lows and premiums have been soft however, it appears that things may be stabilizing. California always seems to lead the way for the rest of the country. However, there have been a number of years of double-digit premium rate reductions there appears to be bottoming and even reports of a potential slight increase in rates for 2008. While claim volumes continue to be low, the severity, that is the cost of claims, continues to rise. From a political perspective, states continue to develop legislation mostly geared towards automating the healthcare transaction process. Several states have fairly significant legislation that took effect either…

Thanks Dan. Our development teams have never been busier, and I’ll summarize some of that for you. I’ll consolidate the various projects under the operating priorities Dan discussed. It is important though to remember that healthcare information processing becomes more and more sophisticated or as it does and workflow tools become involved everything is really integrated and all of our separate projects really deliver information and customer value through our CareMC portal. We have been steadily adding more and more customer value to CareMC over the years. This is an initiative that began in 1999. On the sale side, of course, our first goal is always to try to build a better mousetrap and all of the projects Dan discussed work in that direction to support our salespeople with the best possible products. In addition, on the administrative side, we have efforts underway to improve our systems in support of our sales efforts, for example, CRM systems are an important investment. We’re improving systems in this area primarily through leased software, as those kinds of tools are readily available. We are also now working with business intelligence vendors to improve our knowledge of the marketplace. On the Enterprise Comp side, our vision is to bring employers and PPAs throughout the country to a new and more effective approach to claims management. The key to this new service is a combination of rules engine and workflow management processes developed over the last five years in other areas of our total systems environment. Dan spoke to both the effort and the results in the Network Solutions area. We are now looking to bring that into the claims side. We installed our medical review systems in the companies joining Enterprise Comp or joining that family of services. In addition, we will be integrating…

Thank you, Gordon. I just like to add a few more items prior to opening the call to questions. Cash flow for the quarter was positive $2 million with quarter-ending cash balance at $11.3 million. Our DSO maintained at 48 days. We repurchased 171,473 shares in the quarter, spending $4 million. We’ve spent $162 million inception to date and have repurchased 11.7 million shares. Hard shares for the quarter were 13,731,000; diluted EPS shares were 13,964,000. Although we had not planned to buy back stock last quarter, market conditions changed and at that point we felt that it was appropriate to restart our share buyback. In summary, we’re pleased with the progress that we are making in a number of areas. We have achieved record earnings and made significant investments in the future of the business. We are starting to show growth in each of the main business lines while at the same time improving our internal efficiencies. Last, we have been able to make substantial progress in our strategic initiatives and our price comp. Our ability to execute in all of these areas is only made possible by the outstanding work of the entire CorVel field organization. This concludes my comments and I’d like to open the call to questions.

(Operator Instructions) Your first question comes from John Szabo - Flint Ridge Capital.

What was the impact on the operating expenses from the move of the data center?

The expense in the quarter was approximately $400,000.

Should we assume that would not be an on-going expense from here or will there be additional expenses related to that change going forward?

It happened partway through the quarter so, there could be some additional expenses, but our goal here obviously would be to start leveraging that business. My thought here would be if we are going to have opportunities continue to make substantial investments in that facility which will leverage the growth of the company, we will continue to do that. But I think from our perspective, we’ve come a long way and where our systems are maintained and how they are maintained, we feel like we have a Class A facility now that any company would be proud to have, and we’ll look to leverage that going forward.

There will be some ongoing expense to lease access to a Colo facility and that’s not trivial. We were involved in a data center that was in a high-rise building jointly with our development team and we are probably going to continue to occupy all that space. So, I think that for the next year or so, there will be a little more expense than there was in the past.

So, if I look at admin expense, the G&A, that $10.584 million, it took quite a jump from the prior quarter. So, as I sort of think about how that’s going to go for the next several quarters, I should probably assume that $10 forms a decent run rate or it maybe it falls back slightly year-over-year?

Yes, it could vary a little bit. But I think our efforts are focused on the top line and we struggle a little bit with that expense and internally we’ve had some serious discussions about it. But I think investing in our future and the platform there has been our overriding interest.

And then I’m curious about your comments about a potential bottoming in the volumes. And Dan, I think you said that you saw an upturn in case management volume, and I was just curious, was that beyond the volume you may have gotten out of the two acquisitions? So, in other words was it more than just that?

Yes, it was John. We have seen a strengthening on the case management revenues in the past couple of quarters and so, whether that’s a leading indicator for claims volumes, we are not sure. But there has just been some reports that we have come across here in the last little bit that indicate there may be some slight premium rate increases coming in ‘08.

You mentioned the Accident & Health market. Could you maybe just help us size that market and what the potential would be? And did that contribute to any of the revenue growth in the quarter or is that something that is sort of a multi-year effort before it becomes a material driver of your top line growth?

It is a small part of our network solutions business today. We have shown some growth in it over the course of the past year, and the A&H market is significantly bigger than comp, upwards of eight to ten times larger than the comp market. But I think, John, it really is a multi-year effort for us here as we go forward. The specialty review product and our specialty review product specifically do very well in that market, and we’ve hired some resources to try to sell into that market specifically.

Maybe you can just help me out when you say “specialty review product” what exactly does that entail?

It is really our out of network bill review process.

So, then it will –be out of your network or someone else’s network? I mean are you agnostic about that?

John, we are agnostic about that I think but this would be a carrier or TPAs volumes and they would take their PPO discount where they can, and then they have some percentage of their volume that falls outside the network. We have a product that is based on some specific database processes and is not just a simple fee negotiation product. So, it’s fairly conservative in its approach and is attractive to people in the A&H marketplace for that reason and we have seen some improvement in the interest in that product.

Your next question comes from Brandon [Fazio] - Brant Point Capital. Brandon [Fazio] - Brant Point Capital : I was just looking at the numbers, usually December quarter’s been, I guess, a seasonally a weaker quarter with revs and margins typically lower. This quarter it seemed like you had lower gross margins but certainly the operating margin was flat and the revenues certainly went up. Could you just talk about some of the components there that may drive that or what kind of drove the better than normal December quarter results?

A couple of things, I think contributed to that. One, on a sequential basis, we had 4.3% revenue growth, which we traditionally haven’t seen in the fourth quarter. There was actually the same number of days in the December quarter versus the September quarter this year. And so, we had some very nice pick up again on the revenue piece and just really have had, we feel momentum on the sales side which I think really carried us through the quarter. Brandon [Fazio] - Brant Point Capital : So, this is really all sales driven as pretty much the little better than expected business wins or is it just some of your new products taken off?

There were some new wins. We really saw growth, actually not gigantic growth but small growth in all business lines.

I think it is a little early for us to know, but it would appear that the underlying claims volumes on a same customer basis improved a little bit. And then it is hard for Dan to say, but I would note that there is a remarkable correlation between his time with the company and two successively improving December quarters. So, not to cast aspersions on the prior CEO, but I think Dan has done a hell of a job. Brandon [Fazio] - Brant Point Capital : Less impact from the holidays or whatever else?

That is tough to say because the way that calendar fell, it actually didn’t work very well because Christmas and New Year were both on a Tuesday which meant that Mondays were normally fairly soft as far as the level of work getting done or the amount of people at work. So, it really feels like we’ve got a little bit of sales momentum here. One quarter does not is not a trend to make. But certainly we are very pleased with where revenues came in for the quarter.

There are no further questions at this time.

We have certainly appreciated everybody joining in the call, and look forward to talking to everybody again soon.