Crawford & Company · NYSE:CRD.A
Crawford & — New York Society of Security Analysts (March 2014)
29 slides from Crawford &'s conference presentation, Mar 17, 2014
Slide 1: Crawford & Company New York Society of Security Analysts
Crawford & Company New York Society of Security Analysts March 17, 2014
Slide 2: Forward-Looking Statements and Additional Information
FORWARD-LOOKING STATEMENTS AND ADDITIONAL INFORMATION 2 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 3: Crawford & Company at a Glance
Crawford & Company at a Glance at market close March 7, 2014 Exchange/Tickers: NYSE: CRDA and CRDB Trailing 52 week High/Low: CRDA: $8.63-$4.82 CRDB: $10.32-$5.62 Market Capitalization : $514.6 million Quarterly Dividend: CRDA: $0.05/quarter CRDB: $0.04/quarter Analyst Coverage: Greg Peters, Raymond
Slide 4: A Business Services Leader since 1941
A Business Services Leader since 1941 • The world’s largest independent provider of global claims management solutions • Multiple globally recognized brand names: Crawford, Broadspire, GCG • Clients include multinational insurance carriers, brokers and local insurance firms as well as over 200 of th
Slide 5: Our Global Strength
$1.2 Billion in Revenues 700 Locations 70+ Countries 8,500 Employees OUR GLOBAL STRENGTH 5
Slide 6: Diversified Business and Clients
Diversified Business and Clients 2013 Revenues of Approximately $1.2 Billion • Property and Casualty Services • Global Technical Services • Third Party Administration • Global Markets 30.1% 21.7% 18.8% EMEA/AP Americas • Property and Casualty Services • Catastrophe Management Services • Contractor C
Slide 7: Crawford Provides More Than Claims Services
Crawford Provides More Than Claims Services P&C outsourced claims services provided about $579 million, or 50%, of total Crawford revenue • Claims services is a mature business in most geographies • Revenues are driven by claims volume, which is affected by regional economies, economic growth • Seve
Slide 8: Consolidated Revenues and Operating Earnings
Consolidated Operating Earnings Revenues Revenues • Compound annual growth rate of 3.7% from 2009 to 2013 • Improved diversification of revenue streams • Growth in Broadspire, Contractor Connection and Legal Settlement Administration Operating Earnings • Consolidated operating earnings increased 79%
Slide 9: Americas
Americas $0 $50 $100 $150 $200 $250 U.S. Canada Latin America Revenues by Geographic Region ($ in millions) 2013 vs. 2012 0 100,000 200,000 300,000 400,000 500,000 U.S. Canada Latin America Americas Cases Received 9 International presence No. 1 or 2 market share in key U.S., Canada and Latin America
Slide 10: EMEA/AP
EMEA/AP $0 $20 $40 $60 $80 $100 $120 $140 $160 U.K. CEMEA Asia-Pacific Revenues by Geographic Region ($ in millions) 0 50,000 100,000 150,000 200,000 250,000 U.K. CEMEA Asia-Pacific EMEA/AP Cases Received 2013 vs. 2012 10 Global footprint Ability to service multinational corporations, global insurer
Slide 11: Broadspire
Broadspire $0 $20 $40 $60 $80 $100 $120 $140 Worker's Comp. Casualty Other Revenues by Service Line ($ in millions) 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 Worker's Comp. Medical Mgmt. Risk Mgmt. Info. Svcs. Broadspire Cases Received 2013 vs. 2012 11 Delivering profitab
Slide 12: Legal Settlement Administration
Legal Settlement Administration $0 $20 $40 $60 $80 $100 $120 $140 $160 Yr end 2013 Yr end 2012 Backlog ($ in millions) $0 $50 $100 $150 $200 $250 2013 2012 Revenues ($ in millions) 12 Garden City Group (GCG) provides: • Class Action Services providing technology-intensive administrative services for
Slide 13: 2014-2016 Strategic Initiatives
• Grow business and increase revenues through broader market coverage, investment in future business platforms, and launch of new products • Create a global GTS powerhouse by adding world-class adjusters and further expanding our industry-leading breadth of services • Develop significant cost advant
Slide 14: Financial Review
Financial Review creetord
Slide 15: Full Year 2013 Business Summary
Revenues ($ in millions) Consolidated Operating Earnings ($ in millions) • Revenues of $1.163 billion • Consolidated operating earnings of $94.9 million • Diluted earnings per share of $0.93 for CRDA and $0.90 for CRDB • Operating cash flow of $77.8 million • Significant improvement in funded positi
Slide 16: Income Statement Highlights
Income Statement Highlights Unaudited ($ in thousands, except per share amounts) 16 Years ended Dec. 31 2013 2012 % Change Revenues $1,163,445 $1,176,717 -1% Costs of Services 846,442 846,638 - Selling, General, and Administrative Expenses 232,307 228,411 2% Corporate Interest Expense, Net 6,423 8,6
Slide 17: Balance Sheet Highlights
Unaudited ($ in thousands) December 31, 2013 December 31, 2012 Change Cash and cash equivalents $75,953 $71,157 $4,796 Accounts receivable, net 160,350 164,708 (4,358 ) Unbilled revenues, net 105,791 124,881 (19,090 ) Total receivables 266,141 289,589 (23,448 ) Goodwill 132,777 131,995 782 Deferred
Slide 18: Defined Benefit Pension Liabilities
Unaudited ($ in thousands) For the years ended December 31, $102,960 $168,216 $133,995 $165,030 $212,507 Defined Benefit Pension Liabilities 18
Slide 19: Consolidated Debt and Cash on Hand
Unaudited ($ in thousands) For the years ended December 31, *Net debt is defined by the Company as long-term debt, capital leases and short-term borrowings, net of cash and cash equivalents Consolidated Debt and Cash on Hand 19
Slide 20: Operating and Free Cash Flow
2013 2012 Variance Net Income Attributable to Shareholders of Crawford & Company $50,978 $48,888 $2,090 Depreciation and Other Non-Cash Operating Items 38,096 37,322 774 Unbilled and Billed Receivables Change 18,630 (22,922 ) 41,552 Working Capital Change (11,910 ) 43,041 (54,951 ) U.S. Pension Cont
Slide 21: Shareholder Returns
Dividends: • For 2013, Crawford paid dividends of $0.18 per share on CRDA and $0.14 per share on CRDB Share Repurchases: • From inception through December 31, 2013, Crawford has repurchased 1,162,335 shares of CRDA at an average cost of $5.55 per share and 7,000 shares of CRDB at an average cost of
Slide 22: Management Alignment with Shareholders
Management Alignment with Shareholders Short-Term Incentive Compensation Plan Matrix: Metric: Weight: Revenues 30% Operating Earnings 25% Operating Margin 25% DSO 20% 22 Stock Ownership Guidelines: Multiple of Officer: Base Salary: President/CEO 3x CFO/EVPs 2x Balanced short and long term compensa
Slide 23: 2014 Guidance
On February 26, 2014, Crawford & Company provided a range of guidance for 2014 as follows: Year ending December 31, 2014 Low End High End Consolidated revenues before reimbursements $1.10 $1.13 billion Consolidated operating earnings $95.0 $103.0 million Consolidated cash provided by operating activ
Slide 24: Capital Structure and Governance
Capital Structure and Governance Class A and B Shares: As of February 21, 2014, there were approximately 29.9 million shares of Class A Common Stock and 24.7 million shares of Class B Common Stock outstanding. The two classes of stock are substantially identical, except with respect to voting rights
Slide 25: Crawford Is Positioned for Shareholder Returns
25 Global Footprint World’s largest independent provider of claims management solutions Diverse customer base Global catastrophe response Innovative Technology Platforms Analytics RiskTech Risk Sciences Group/Dmitri Claims Management System (CMS) Command Center Specialized Resources Legal Settlement
Slide 26: Appendix
Appendix i) creetord
Slide 27: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information 27 Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessarily comp
Slide 28: Reconciliation of Non-GAAP Items
28 Reconciliation of Non-GAAP Items Unaudited ($ in millions) 2009 2010 2011 2012 2013 2014G* Revenues Before Reimbursements Total Revenues 1,048$ 1,111$ 1,211$ 1,266$ 1,253$ 1,205$ Reimbursements (78) (81) (86) (89) (90) (90) Revenues Before Reimbursements 970$ 1,030$ 1,125$ 1,177$ 1,163$ 1,115$ Co
Slide 29: Reconciliation of Non-GAAP Items (cont.)
29 Reconciliation of Non-GAAP Items (cont.) Unaudited ($ in thousands) 2009 2010 2011 2012 2013 Net Debt Short-term borrowings 32$ $ — 1,794$ 13,275$ 35,000$ Current installments of long-term debt and capital leases 8,189 2,891 410 838 875 Long-term debt and capital leases, less current installments
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