Crawford & Company · NYSE:CRD.A
Crawford & — Q4 2008 Earnings Presentation
25 slides from Crawford &'s earnings presentation, Feb 9, 2009
Slide 1: Fourth Quarter Fiscal Earnings Conference Call
Exhibit 99.2 the STRENGTH of WORKING TOGETHER SM Fourth Quarter Fiscal Earnings Conference Call Monday, February 9, 2009
Slide 2: Earnings Review
Fourth Quarter Earnings Review February 9, 2009 • Founded in 1941, Crawford is the largest independent global provider of claims management solutions and a fully integrated global provider of these solutions for the growing multi-national market. • Crawford is divided into four reporting segments th
Slide 3: Forward-looking Statements and Segment Operating Earnings
Forward-looking Statements and Segment Operating Earnings Forward Looking Statements: This presentation contains forward-looking statements, including statements about the future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative and q
Slide 4: Agenda
Agenda • Welcome • Overview of Global Economy • Highlights of 2008 Fiscal Year • Fourth Quarter Financial Review • Segment Operating Highlights • Outlook for Fiscal 2009
Slide 5: Fiscal 2008 Overview
Fiscal 2008 Overview • Strong performance in a difficult operating environment Revenue growth of 8% over 2007 Net income double 2007 • Sustained growth internationally and in U.S. Property & Casualty offset declines in other businesses U.S. Property & Casualty revenue up 12.3% International revenue
Slide 6: Financial Review
the STRENGTH of WORKING TOGETHER SM Fourth Quarter 2008 Financial Review
Slide 7: Overview
Fourth Quarter 2008 Overview • Strong performance in a difficult operating environment Revenue growth of 7.2% over 2007 quarter Net income increased 152.3% over 2007 quarter • Sustained growth internationally and in U.S. Property & Casualty offset declines in other businesses U.S. Property & Casualt
Slide 8: Financials
Fourth Quarter 2008 Financials Quarter Ended December 31, % Change Revenues: Revenues Before Reimbursements $262,889 $245,224 7% Reimbursements 17,756 21,261 -16% Total Revenues 280,645 266,485 5% Costs and Expenses: Cost of Services Provided, Before Reimbursements 196,481 186,203 6% Reimbursements
Slide 9: Summary Results, International Operations
Fourth Quarter 2008 Financials 8.5 9.5 10.5 4Q 2008 4Q 2007 Operating Earnings 4Q 2008 4Q 2007 Revenue $ in millions $ in millions $109.6 $107.3 $10.9 $9.9 Operating earnings and margin improved on revenue gains Revenue increased 11.6% on a constant dollar basis Summary Results, International Operat
Slide 10: Summary Results, U.S. Property & Casualty
Fourth Quarter 2008 Financials -1 4Q 2008 4Q 2007 Operating Earnings 4Q 2008 4Q 2007 Revenue $ in millions $ in millions $44.2 $59.8 ($0.5) $4.8 Operating earnings up significantly on revenue growth and technology-led operating efficiencies Catastrophe revenue up $9.5 million from hurricanes Gustav
Slide 11: Summary Results, Broadspire
Fourth Quarter 2008 Financials -3 -2 -1 4Q 2008 4Q 2007 Operating Earnings 4Q 2008 4Q 2007 Revenue $ in millions $ in millions $75.6 $75.2 ($0.4) ($1.8) Operating margin and earnings decline due to lower worker’s compensation claim referrals Revenues stable despite economic conditions Summary Result
Slide 12: Summary Results, Legal Settlement Administration
Fourth Quarter 2008 Financials 0.5 1.5 2.5 4Q 2008 4Q 2007 Operating Earnings 15.5 16.5 17.5 18.5 4Q 2008 4Q 2007 Revenue $ in millions $ in millions $18.0 $18.4 $2.9 $2.3 Revenue and operating earnings decrease reflects slowdown in class action settlements Backlog of $42.0 million Summary Results,
Slide 13: Balance Sheet Highlights
Fourth Quarter 2008 Financials Crawford & Company Balance Sheet Highlights As of December 31, 2008 and December 31, 2007 in thousands, except percentages Unaudited December 31, December 31, Change Cash, cash equivalents, and short-term investments $73,124 $50,855 $22,269 Accounts receivable, net 157
Slide 14: Free Cash Flow (non-GAAP)
Fourth Quarter 2008 Financials Crawford & Company Free Cash Flow (A non-GAAP financial measurement) For the years ended December 31, 2008 and 2007 In Thousands December 31, December 31, Variance Net Income $32,259 $16,116 $16,143 Plus: Depreciation / Non-Cash Items 38,923 31,692 7,231 Less: Special
Slide 15: Fourth Quarter and Fiscal 2008 Segment Highlights
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Slide 16: Highlights: International Operations
Fourth Quarter 2008 Highlights 4Q 2008 4Q 2007 International Claims Claims referred in 000s 144.9 167.7 • International Operations Strong global revenue growth of 11.6% before currency impacts Operating margin increased to 9.9% in 2008 from 9.2% in 2007 Claims referred decreased 13.6% due to absence
Slide 17: Highlights: U.S. Property & Casualty
Fourth Quarter 2008 Highlights • U.S. Property & Casualty Revenue growth of 35.2% Operating margin increased to 8.0% in 2008 from (1.1%) in 2007 Catastrophe revenue up to $11.3 million from $1.8 million Technology-driven efficiencies realized Claims referred increased 4.0% due to increases in proper
Slide 18: Crawford U.S. Catastrophe (CAT) Activity
Crawford U.S. Catastrophe (CAT) Activity 24.5 12.0 Cases Revenues $22.9 $8.3 $ in millions Year ended Dec. 31: In 000s • U.S. Catastrophe 2008 reflects benefit from hurricanes Gustav and Ike Strong incremental margins generated from CAT adjuster revenues Technology and process improvements Outlook f
Slide 19: Highlights: Broadspire
Fourth Quarter 2008 Highlights 4Q 2008 4Q 2007 Broadspire Claims Claims referred in 000s 55.4 65.1 • Broadspire Revenue increase of 0.4% Operating losses of $1.8 million in the fourth quarter Year to date operating earnings of $3.5 million compared with $3.1 million in prior year RiskTech implementa
Slide 20: Highlights: Legal Settlement Administration
Fourth Quarter 2008 Highlights • Legal Settlement Administration Revenue declined 2.5% due to slowdown in class action settlements Fourth quarter operating margin decreased to 12.9% from 15.9% in Full year operating margin increased to 14.4% in 2008 from 12.7% in 2007 Backlog of $42.0 million 4Q 200
Slide 21: 2009 Guidance
2009 Guidance • Full Year 2009: – Consolidated revenue before reimbursements between $960 million and $980 million – Consolidated operating earnings between $50.5 million and $55.8 million – After reflecting stock-based compensation expense, net corporate interest expense, customer-relationship inta
Slide 22: Revenue Bridge from 2008 Actual to 2009 Guidance Midpoint
Revenue Bridge from 2008 Actual to 2009 Guidance Midpoint Dollars in Millions Not to scale $21.3 ($6.6) ($93.3) 1,050 $ $1.048.6 1,000 $ $970.0 $ Net Sale Foreign Midpoint Revenues Organic of Intl. Currency Before Growth Business Impact Revenue Reimb. Guidance
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