Thank you for standing by. Welcome to the CorVel Corporation 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 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-end 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. At this time, all participants are in a listen-only mode. A question-and-answer session will be conducted later in the call, with instructions being given at that time. As a reminder this conference call is being recorded. I’d now like to turn the conference over to your host Mr. Gordon Clemons. Sir, you may go ahead.

Thank you for joining us to review CorVel’s June quarter. In the quarter our TPA business continued to win clients, whose service will begin in the current quarter and later in the year. We began an expansion of investment in our Network Solutions business. Adjustments to our expenses were also initiated. A couple of productivity management projects were started that should have an impact later this year. Revenues for the June quarter were a $105 million, 2% over the $102 million in revenue for the June 2011 quarter. Earnings per share for the quarter ended June 30, 2012 were $0.58, up 30% sequentially from $0.44 in the March quarter. Earnings per share for the June quarter of 2011 were $0.70. The cost reduction efforts we were planning the last time we spoke to you are underway. The adjustments from these efforts will begin to impact the September quarter and will continue as we work forward for the coming year. During such period, it is also appropriate to evaluate productivity as well as cost levels. We’ve initiated a couple of programs I mentioned on the last call, designed to improve our labor productivity. We expect some progress on these to be visible in the September quarter. Until the health care insurers feel confident regarding the regulatory environment in which they will be operating, I don’t see us recovering entirely, though, from expense investments we made in preparation for new service to these large healthcare insurers. There is some progress there, but it’s going to be difficult for insurers to plan effectively until well into the next calendar year. The market for the Company’s Claims Administration services continued to firm in the quarter. Premiums for casualty insurance have increased. Low investment income yields, past underwriting losses, and health care inflation are factors…

Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from the line of Gregory Macosko of Lord Abbett.

Yes. With regard to the Network business, the growth did slow down or decelerate first quarter versus second quarter. Could you talk about some of the key wholesaling customers I believe that you have in that area and I know that you - I believe you’re expanding that services to some extent, for that you added a facility in California or something. Could you talk about that a little bit?

Yes, Gregory, thanks. Well, the Network business is sort of our - I would say backbone service. It’s comprised of our PPO or PPOs, we have multiple networks and our bill review service. We also have some specialty review products that layer in additional savings on large bills, especially facility bills. That is a key part of the Company’s business. It is a very high-value added sector. We have a unique position there. I think in fairness we’ve spent three or four years here where we put a lot of attention into expanding into the TPA area and that business has lower margins than the Network services, but we continue to be focused in the other area. I would say that the mid-tier carriers and some of the all but the very largest carriers are ideal customers for CorVel and in addition state funds, such as the California State Fund, those kinds of entities would also be target markets for us. It is - in the sense of the value added nature of our service it’s probably the best part of the business. But it’s has been thought this last year something we hope to pick up here in the future.

I believe there was - you were opening a facility in California or working with a particular customer. How is that going?

I am not familiar with that. We do have some states where there are specialty networks that are certified by state regulations, but they can be in multiple states, California would be one. But we don’t have any facility-based care that we deliver. We’re always just a, behind-the-scenes network provider and not the actual caregiver.

I understand that, but I thought that for your operations and for the network operations, I thought that there was a separate or a new location where your people would be working from and that you were setting up, maybe I am mistaken.

Yes, we did have a pretty big investment in a facility in Texas, and then we’ve had some delays in the group health market that have caused us to carry some expenses there, and maybe that’s what we were talking ...

Yes, I believe. Yes, that is what I am …

Yes.

Just talk about that and how that particular situation is working out.

Well, we were certainly excited about that product. That’s a specialty product for reviewing facility-based bills. We have a very unique database under that that is cross mapping all hospital databases into one common database. It allows us to deliver a very well substantiated review for carriers. And it has been coming along well, but then we had some slowdown when one carrier wanted to kind of rethink the way they were setting up their contracts with customers in order to allow the kind of reviews that we do. I’d say that the challenge in here is that, that product provides a more accreted review than most carriers have historically been involved in and as a result they’re always a little cautious getting started. I think with the regulation or the - with Obamacare being kicked around this year, they have been a specialty, I think hesitant to jump in and front of things, but at the same time we see them taking a more firm position with regard to out of network bills feeling they’re going to have to be tougher on bills than they were in the past. So especially those people going out of network, I think that just today I think it was Humana who had a disappointing earnings release and I think WellPoint did last week. So they’re definitely feeling the pressure of health care inflation. So, we’re optimistic about that product, but as I said in the call, I think we’re 6 to 9 months away from seeing any movement there. We just need some clarification on the government regulations.

With regard to that one particular carrier that was interested or that was going to be involved with that Texas facility I believe. I that carrier still on board or is there still some question there, give me your feeling for that.

Oh, yes. No, they’re - yeah - and they’ve actually began working with us and I would say it hasn’t jumped up to the volume that we were originally hoping for. I think they’re going to go and are kind of going slow here for a little bit, but; no, that one has come along and then we have a subsequent sale that is going to be starting, I really think more like January, but we’ve already closed another one since then. So there is, I would say the thing that’s been a little confusing to us is there is heightened interest in the market for the product, but and I think the carriers I would say are kind of getting their ducts lined up for what they think is going to be a more, I don’t know, challenging 2013 and ’14. So we’re used to things moving a little faster in the comp market and I think we got a little in front of ourselves in some of these group sales, but all in all I think the product is looking better all the time.

Okay. But, just to summarize and that particular situation is progressing maybe not as fast as you would like, but you are sort of ramping slowly and seeing additional customers express interest and come onboard, one other one perhaps in January?

Yes.

Are there any further questions? Your next question comes from the line of Daniel Baldini of Oberon.

I just wanted to follow-up on a comment you made during your prepared statement about letting the cash build up. And I’m curious to know why you’re doing that? Is that in anticipation of further acquisitions or what? Thanks.

Okay. Yes, and I think it's always good to remind everybody to remember the size of CorVel, we’re pretty small. So, when we say cash is building up, it’s probably something most companies might not even notice. But anyway, we have slowed our stock repurchases a little bit and just been a little more cautious with capital expenditures. I feel like it’s a good time for us to - we’re faced with this uncertainty about how healthcare legislation is going to go, and so we’re just being a little more cautious on the balance sheet side. I like to think that companies can be either aggressive operationally or aggressive financially. We never had a tendency to be, I would say financially conservative and then on the operation side more decentralized and aggressive. So it’s probably not out of character for us to be a little on the conservative side financially. We’ve never had any debt and here we’re just letting the cash build up a little bit in lieu of, I’d suppose stock purchases. There I guess, I am hopeful that we’ll see some opportunities in the market place after the legislation settles down. But it could be, will be back on the same path we were before where we’re doing stock repurchases. But at the present time we’re just a little slower on that than we were, say a year ago. But the cash is not - it’s not changed dramatically. It’s just a little bit higher than it has been.

Are there any further questions? There are no further questions. Mr. Clemons, do you have any further remarks?

No. I don’t think so. I’d like to thank everybody for joining us and we’ll look forward to seeing you again at the end of the next quarter.

This concludes our conference call for today. Thank you for your participation. Please disconnect at this time.