Greetings, and good morning, 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 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] As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host Mr. Gordon Clemons. Sir, please go ahead.

Thank you for joining us to review CorVel's December quarter. In the quarter, we made progress on each of our key initiatives. The TPA business continued to win clients, and to enjoy its emerging acceptance in the market. We began an expansion of our network solutions product features, expense reductions continued, the productivity management and efficiency projects started in the June quarter reached initial implementation, as expected in the quarter. Revenues for the December quarter were $107 million, 6% over the revenue for the December 2011 quarter. Earnings per share for the quarter ended December 31, 2012 were $0.53, 13% above the $0.47 reported a year earlier. From a strategy perspective, the insurance market continues to harden, which typically improves the demand for self-insurance administration services. Our full-service workers' compensation solution, which we sell under the name Enterprise Comp, is gaining momentum. Brokerage recognition for and support of CorVel has continued to expand. We've also continued to increase the number of workers' compensation insurers that approve CorVel as a manager of claims in their high deductible programs. The private employer marketplace requires the approval of CorVel by their insurers before these employers can use our services in their programs. We've continued to build out our liability claims administration services as well. Many employers bundle their liability and workers' compensation administration, so our continuing expansion of this service complements our disability management programs. Workers' compensation claims costs continue to increase. Healthcare and especially pharmacy costs continues to inflate at rates well in excess of trends elsewhere in the economy. This has raised interest in our pharmacy management solutions. However, as the election neared, and later as discussions of the fiscal cliff expanded, health insurers put new programs on hold pending further clarification of the Administration's plans. We now expect a more…

[Operator Instructions] And your first question comes from the line of Gregory Macosko.

With regard to patient management, we saw improved growth there from the previous quarter, up 10% last quarter, up 13% this quarter. Just some color on why that has accelerated a little bit, what are we looking at as the sort of the background?

We've had increasing wins in the TPA space, and so our enterprise comp product is picking up a little more volume in just hard dollars all the time. We actually had a little softer quarter in that product area for case management. The calendar is particularly tough this last year because Christmas was on Tuesday, and that makes it especially tough for us just generating billable time in that month. So I'd say the quarter was actually even a little stronger than it looked and most - all of the gains were in the TPA space, where we had a number of wins that started in the fall, and some more that will begin here in January.

If I look at that, well, you mentioned TPA and new wins et cetera, do you ever look at it with regard to sort of same customer growth, or is all the growth really new customers-oriented?

Normally, I would say it is new customers. There is some inflation in the cost of workers' compensation so there is some growth in certain programs, let's say, pharmacy expenditures have been a tough area for employers to control, so there is a little bit of growth in there that's caused by inflation. And then, because we're new in this space, we do have customers where we're only working on their new claims we're not working on the claims that were reported prior to or taking over their program. So in those customers, we will see more growth quarter-to-quarter than would be normal, and that's just -- I'd say just a nature of a business like ours which is picking up a number of new customers as a percentage of its total mix, is probably higher than normal.

And if I look at just the workers comp area overall, we're sort of seeing sort of stabilization decrease in the number of claims. How does that -- how does that affect your new business. Does it really have an effect on it, or does it matter in terms of just the overall environment relative to workers' comp claims?

Well, yes, I think that when the economy is particularly strong, and it hasn't gotten there yet, then claims tend to be a little more prevalent than they are during weaker economies. So I'd say that comp market has been a little soft. The premium or pricing for insurance aspect of comp has begun to harden a bit, but that's sometimes not directly connected to the claims volume. Also, although claims have declined over the years, the serious claims have not. So I'd say that the business has become more made up of the more serious claims, or people will say the severity has gone up. So the claims trends are also quite mild compared to just whether we're winning or losing business. So I think that we feel like our results are dominated pretty much by our ability to get out and compete.

I see; in other words, gain share in the space is kind of no matter what happens on claims. Obviously, the overall market affects you, but the sales driver here is much more new accounts, new customers?

Yes, yes we'd love to see - claims growth would certainly - while it wouldn't be good for employers it would probably be good for us, but we feel like we are new enough in the space that most of our results, we have to go out and dig up ourselves.

Okay, and then could you talk about the Texas facility, and where that stands and what you're expecting there? I know you had that big customer there.

Well, let's see, I am trying to remember, I think we have a service down there that had a delay in a customer and that was somewhat related to the national healthcare legislation, and I would say that we now have more clarity on whether or not the ObamaCare is going to become law. I think it's still probably a little uncertain as to whether there could be delays or some difficulty in getting it all working, but at this point, the customers in that market know the hand they're dealt. And so we are working on picking those volumes back up -- they haven't started yet, but we are hopeful that this coming year will be a better time in that marketplace.

Just looking at that facility, how utilized is it, I mean, at this particular point? I know that in July you talked about maybe there was one customer that might begin in 2013, I believe, or early in January?

Yes. Well, I don't know if it will be January, but we do have expectations that our volumes will pick up there. We also had some other sales in that same sector, so we are feeling better there. We do have some capacity in that operation. We did expand to take care of a customer that then delayed, so we are in a place where we would be picking up better margins as we fill up some of that capacity in the coming year.

Okay, and I would assume that there is more fixed cost in that operation than the rest of your operations?

Well not - no, not so much. I would think that it's just that our margins are tough enough that anything that affects our employment impacts our bottom line. So we just got our hiring a little ahead of that customer and we have worked it off a little bit, but we didn't want to bounce around too much on our employment, so we did swallow some expenses there, but I think these days we are a little more normalized, and -- but we do have the rented space and we have some fixed expenses, but our business is not - that doesn't have a lot of truly fixed costs. In this case, we have some because we just got a little ahead of ourselves.

Okay. I appreciate your answer to the questions. Just lastly I didn't get the -- in terms of the buyback you said, 395,000 shares or...

Yes, yes that's right. We had a little acceleration in our program in the quarter and we also opened it up to pick up a couple of blocks, so we did purchase, I think, close to $20 million worth of stock in the quarter.

[Operator Instructions] And there are no further telephone questions at this time.

All right. Well, then I would like to thank everybody for joining us today, and we'll look forward to talking to you again after the March quarter. Thank you.

And this does conclude today's conference call. You may now disconnect.