874866--6/30/2006--CORVEL

related topics

{system, service, information}

{product, market, service}

{product, liability, claim}

{regulation, government, change}

{capital, credit, financial}

{personnel, key, retain}

{regulation, change, law}

{financial, litigation, operation}

{cost, operation, labor}

{tax, income, asset}

{customer, product, revenue}

Exposure to possible litigation and legal liability may adversely affect the Company s business, financial condition and results of operations. The Company s failure to compete successfully could make it difficult for the Company to add and retain customers and could reduce or impede the growth of the Company s business. A change in workers compensation market may harm the Company s results of operations. If the average annual growth in nationwide employment does not offset declines in the frequency of workplace injuries and illnesses, then the size of our market may decline, which may adversely affect our ability to grow. If the utilization by healthcare payors of early intervention services continues to increase, the revenue from our later stage network and healthcare management services could be negatively affected. The Company faces competition for staffing, which may increase its labor costs and reduce profitability. The failure to attract and retain qualified or key personnel may prevent the Company from effectively developing, marketing, selling, integrating and supporting its services. If the Company fails to increase revenue, it may be unable to execute its business plan, maintain high levels of service or adequately address competitive challenges. Our Internet-based services are dependent on the development and maintenance of the Internet infrastructure. Demand for our services could be adversely affected if our prospective customers are unable to implement the transaction and security standards required under HIPAA. An interruption in the Company s ability to access critical data may cause customers to cancel their service and/or may reduce the Company s ability to effectively compete. The introduction of software products incorporating new technologies and the emergence of new industry standards could render the Company s existing software products less competitive, obsolete or unmarketable. A breach of security may cause the Company s customers to curtail or stop using the Company s services. Changes in the accounting treatment of stock options could adversely affect the Company s results of operations. If we are unable to increase our market share among national and regional insurance carriers and large, self-funded employers, our results may be adversely affected. If we lose several customers in a short period, our results may be adversely affected. We are subject to risks associated with acquisitions of intangible assets. If we are unable to leverage our information systems to enhance our outcome-driven service model, our results may be adversely affected. If competition increases, our growth and profits may decline. If lawsuits against us are successful, we may incur significant liabilities. The increased costs of professional and general liability insurance may have an adverse effect on our profitability. We have experienced a decline in the referrals for our patient management services. If we are unable to leverage our information systems to enhance our outcome-driven service model, our results may be adversely affected. If competition increases, our growth and profits may decline. If lawsuits against us are successful, we may incur significant liabilities. The increased costs of professional and general liability insurance may have an adverse effect on our profitability. We have experienced a decline in the referrals for our patient management services.

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874866--6/30/2006--CORVEL_CORP