Crawford & Company · NYSE:CRD.A
Crawford & — Q4 2009 Earnings Presentation
26 slides from Crawford &'s earnings presentation, Feb 8, 2010
Slide 1: Fourth Quarter 2009 Earnings Conference Call
Fourth Quarter 2009 Earnings Conference Call Monday, February 8, 2010
Slide 2: Market-Leading Global Businesses
2 Market-Leading Global Businesses The world's largest fully-integrated independent provider of global claims management solutions. International Operations U.S. Property & Casualty Broadspire Legal Settlement Administration Serves the global insurance industry and multi-national corporations Serves
Slide 3: Forward-looking Statements and Segment Operating Earnings
3 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
Slide 4: Today's Agenda
Welcome and opening comments Highlights of 2009 fiscal year Industry and economic context Business performance Business segment operating results 2010 focus Today's Agenda
Slide 5: Factors Affecting the Insurance Claims Administration Industry
Factors Affecting the Insurance Claims Administration Industry 5 ....Declining Workers Compensation Claims Frequency Year over Year Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec 2008 5 4.8 5.1 5 5.4 5.5 5.8 6.1 6.2 6.6 6.9 7.4 2009 7.7 8.2 8.6 8.9 9.4 9.5 9.4 9.7 9.8 10.1 10 10 Increasing U.S. U
Slide 6: 2009 Business Summary
6 2009 Business Summary Revenue declined 7.5%, reflecting industry economic factors and foreign exchange rates Earnings per share before goodwill impairment were $0.48 versus $0.62 in 2008 Working capital management produced operating cash flow of $51.7 million and year-end cash of $70.4 million Sol
Slide 7: Fiscal Year 2008 to 2009 Bridge
Fiscal Year 2008 to 2009 Bridge 7
Slide 8: Financial Review
Fourth Quarter 2009 Financial Review
Slide 9: Financials
9 Fourth Quarter 2009 Financials
Slide 10: Financials: 4Q 2009 revenue and operating earnings
10 4Q 2009 4Q 2008 Revenue 103.877 109.551 Revenue at 2008 FX rates 1.223 4Q 2009 4Q 2008 Operating Earnings 10.364 10.866 Operating Earnings at 2008 FX rates 1 $ in millions $ in millions Fourth Quarter 2009 Financials $103.9 $109.6 $10.9 Revenue declined 4.1% on a constant dollar basis Operating e
Slide 11: Financials: 4Q 2009 segment results
11 4Q 2009 4Q 2008 Revenue 44.746 59.8 4Q 2009 4Q 2008 Operating Earnings 1.642 4.8 $ in millions $ in millions $59.8 $44.7 $4.8 $1.6 Catastrophe revenue in 2009 was $7.6 million below last year Overall revenue declined due to lower claims volumes Fourth Quarter 2009 Financials
Slide 12: U.S. Catastrophe (CAT) Activity
12 U.S. Catastrophe (CAT) Activity 1st H 09 1st H 08 2nd H 09 2nd H 08 13.4 1st H 09 1st H 08 2nd H 09 2nd H 08 Revenues 12.1 5.3 10 17.6 Revenues North $12.1 $10.0 $ in millions Revenues In 000s U.S. Catastrophe CAT revenue of $22.1 million in fiscal 2009 compared to $22.9 million in fiscal 2008 CA
Slide 13: Financials: 4Q 2009 segment results
13 4Q 2009 4Q 2008 Revenue 70.563 75.552 4Q 2009 4Q 2008 Operating Earnings (Loss) 2.129 -1.84 $ in millions $ in millions $70.6 $75.6 $2.1 ($1.8) Revenues declined due to lower workers' compensation claim referrals Operating earnings improvement reflects cost control activities Fourth Quarter 2009
Slide 14: Financials: 4Q 2009 segment results
14 4Q 2009 4Q 2008 Revenue 19.183 17.968 4Q 2009 4Q 2008 Operating Earnings 3.219 2.322 $ in millions $ in millions $19.2 $18.0 $2.3 $3.2 Revenue and operating earnings increase reflects benefit of significant bankruptcy and securities class action administration cases Backlog of $55 million versus
Slide 15: Financials
15 Fourth Quarter 2009 Financials
Slide 16: Financials
16 Fourth Quarter 2009 Financials
Slide 17: 2010 Focus
Crawford 2010 Focus
Slide 18: 2010 Focus
2010 Focus Attract new business and retain customers Key account management/cross-selling through the "System" Grow Business Process Outsourcing Service and quality initiatives Support existing business operations with technology improvements Improve processes to deliver operating efficiencies Bette
Slide 19: International Operations
19 International Operations 4Q 2009 3Q 2009 2Q 2009 1Q 2009 4Q 2008 International Claims 137.5 142.4 139.5 150.3 144.9 Claims referred in 000s 142.4 Grow revenue and market share New client acquisition Cross-selling Business Process Outsourcing Additional investment in EMEA Supporting market share e
Slide 20: U.S. Property & Casualty
20 U.S. Property & Casualty 4Q 2009 3Q 2009 2Q 2009 1Q 2009 4Q 2008 U.S. P&C Claims 102.6 113.4 116.7 115.3 102.9 CAT claims 12.5 6.5 Claims referred in 000s 113.4 116.7 115.3 102.9 102.6 Grow revenue and market share Emphasis on casualty Expand Global Technical Services (GTS) Business Process Outso
Slide 21: Broadspire
21 Broadspire 4Q 2009 3Q 2009 2Q 2009 1Q 2009 4Q 2008 Broadspire Claims 53.2 56.7 57.2 55.4 55.4 Claims referred in 000s 56.7 57.2 55.4 55.4 53.2 Significant progress in 2009 fourth quarter operating earnings Previously-announced loss of customer is expected to limit 2010 growth Claims volume, linke
Slide 22: Legal Settlement Administration
22 Legal Settlement Administration 4Q 2009 4Q 2008 Backlog 55.4 42 Backlog in millions $55.0 $42.0 Grow revenue and profitability Challenged by pricing pressures Consolidation in the market place Expand class action markets Increase bankruptcy business Currently a growth market Large market share Im
Slide 23: 2010 Guidance
23 2010 Guidance Full Year 2010 Guidance: Consolidated revenue before reimbursements between $970 million and $990 million Consolidated operating earnings between $54.3 million and $60.3 million Consolidated cash provided by operating activities between $30 and $35 million After reflecting stock-bas
Slide 24: Earnings Conference Call Monday, February 8, 2010
Fourth Quarter 2009 Earnings Conference Call Monday, February 8, 2010
Slide 25: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items 25
Slide 26: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items 26