Crawford & Company · NYSE:CRD.A
Crawford & — Q1 2022 Earnings Presentation
29 slides from Crawford &'s earnings presentation, May 10, 2022
Slide 1: Crawford & Company First Quarter 2022 Earnings Conference Call
Crawford & Company First Quarter 2022 Earnings Conference Call CRD-A & CRD-B (NYSE)
Slide 2: Forward-Looking Statements and Additional Information
2 Forward-Looking Statements and Additional Information Forward-Looking Statements This presentation contains forward-looking statements, including statements about the expected future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative
Slide 3: Key Highlights
3 3 Key Highlights First Quarter 2022 Crawford’s strong top-line momentum continued into 2022 with double-digit revenue growth for the fourth Q1 2022 GAAP METRICS consecutive quarter Our strategy execution continues to bear favorable results • We experienced revenue growth in all of our businesses,
Slide 4: Evolving Crawford's Strategy for Long-Term Growth
4 Evolving Crawford’s Strategy for Long-Term Growth We have realigned our segments to create better scale and synergies by moving to a geographic-centered reporting structure¹ Corporate Strategy North America International Broadspire Platform Solutions Loss Adjusting Operations (US-only) (US-only) (
Slide 5: Our Capital Allocation Strategy
5 Our Capital Allocation Strategy We’re committed to employing a disciplined approach to capital allocation Continuing buyback program Regular quarterly dividend Investing in long-term growth Additional 5M share repurchase of $0.06 per share through Cap Ex and M&A authorization for CRD-A and CRD-B1
Slide 6: Corporate Strategy Overview
6 Corporate Strategy Overview
Slide 7: Impact Across Our Global Service Lines (GSLs)
7 7 Impact Across Our Global Service Lines (GSLs) First Quarter 2022 Performance Q1 Revenues • Q1 revenue growth of 14.5% over prior year North America • Onboarded 35 specialist adjusters in Q1 2022 progressing toward $64.4M Loss Adjusting our three-year goal of recruiting 200 specialists Q1 OE¹ 23%
Slide 8: Customer Excellence
8 8 Customer Excellence Exceeded pre-pandemic client service delivery levels Increased overall score to 52, up 1 point from Q4 2021 and 7 points from Q1 2021 Net Promoter Score Referenced as part of our standard operations to further improve client service Added $43.5 million in new and enhanced bus
Slide 9: Environmental, Social and Governance
9 Environmental, Social and Governance We are continuing to look for opportunities across our enterprise to become more socially responsible and are increasingly integrating ESG best practices into our operations Environmental Stewardship Human Capital Management ENTERPRISE PRINTING: Reducing carbon
Slide 10: Financial Overview
Financial Overview Crawford
Slide 11: First Quarter 2022 Financial Summary
11 11 First Quarter 2022 Financial Summary Quarter Ended March 31, March 31, ($ in millions, except per share amounts) 2022 2021 % Change Revenues $279.0 $253.2 10% Non-GAAP Revenues excluding foreign exchange fluctuations(1) $281.8 $253.2 11% Net Income Attributable to Shareholders of Crawford & Co
Slide 12: North America Loss Adjusting
12 North America Loss Adjusting Three months ended (in thousands, except percentages) March 31, 2022 March 31, 2021 Variance Q1 Highlights • Q1 revenue growth of 14.5% over prior year Revenues $64,438 $56,298 14.5% • Onboarded 35 specialist adjusters in Q1 2022 progressing toward our three-year goal
Slide 13: International Operations
13 International Operations Three months ended (in thousands, except percentages) March 31, 2022 March 31, 2021 Variance Revenues $89,272 $86,467 3.2% Q1 Highlights • Q1 revenue growth of 3.2% over prior year Direct expenses 79,308 75,092 5.6% • Margin pressures continue to impact certain business l
Slide 14: Broadspire
14 Broadspire Three months ended (in thousands, except percentages) March 31, 2022 March 31, 2021 Variance Q1 Highlights Revenues $76,454 $74,276 2.9% • Q1 revenue growth of 2.9% over prior year Direct expenses 60,038 57,757 3.9% • Medical management continues to show early signs of recovery Gross p
Slide 15: Platform Solutions
15 Platform Solutions Three months ended (in thousands, except percentages) March 31, 2022 March 31, 2021 Variance Revenues $48,861 $36,140 35.2% Q1 Highlights Direct expenses 36,330 28,268 28.5% • Q1 revenue growth of 35.2% over prior year • Contributions from Praxis and Networks drove margin expan
Slide 16: Additional Financial Matters
16 Additional Financial Matters • Unallocated corporate costs of $2.5 million in 2022 compared to $1.4 million in the prior year period Unallocated Corporate • Primary components of this variance were a Canada Emergency Wage Subsidy and Shared Costs and ("CEWS") benefit in 2021 (not present in 2022)
Slide 17: Balance Sheet Highlights
17 Balance Sheet Highlights March 31, December 31, Unaudited ($ in thousands) 2022 2021 Change Cash and cash equivalents $ 49,156 $ 53,228 $ (4,072) Accounts receivable, net 126,388 134,458 (8,070) Unbilled revenues, net 130,417 118,722 11,695 Total receivables 256,805 253,180 3,625 Goodwill 114,710
Slide 18: Net Debt and Pension Liability
18 18 Net Debt and Pension Liability Net Debt Pension Liability $183.4 million 200,000 120,000 $105.2 million 180,000 100,000 160,000 140,000 80,000 120,000 100,000 60,000 80,000 $106.4 million 40,000 60,000 $15.4 million 40,000 20,000 20,000 0 - 2016 2017 2018 2019 2020 2021 Q1 2022 2016 2017 2018
Slide 19: Operating And Free Cash Flow
19 Operating And Free Cash Flow For the period ended March 31, Unaudited ($ in thousands) 2022 2021 Change Net Income Attributable to Shareholders of Crawford & Company $ 5,096 $ 6,064 $ (968) Depreciation and Other Non-Cash Operating Items 10,819 12,057 (1,238) Gain on Disposals of Property and Equ
Slide 20: Crawford & Company
20 20 Crawford & Company The world’s largest publicly listed independent provider of global claims management and outsourcingsolutions. 9,400 50,000+ 70 $18B+ employees Field Resources countries claims managed annually
Slide 21: Appendix: Non-GAAP Financial Information
21 Appendix: Non-GAAP Financial Information
Slide 22: Appendix: Non-GAAP Financial Information
22 Appendix: Non-GAAP Financial Information Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessarily comp
Slide 23: Appendix: Non-GAAP Financial Information (cont.)
23 Appendix: Non-GAAP Financial Information (cont.) Segment and Consolidated Gross Profit Gross profit is defined as revenues less direct expenses which exclude indirect overhead expenses allocated to the business. Indirect expenses consist of centralized administrative support costs, regional and l
Slide 24: Total Revenues Before Reimbursements by Major Currency
24 Total Revenues Before Reimbursements by Major Currency The following table illustrates revenue as a percentage of total revenue in the major currencies of the geographic areas in which Crawford does business: Three Months Ended March 31, March 31, (in thousands) 2022 2021 Geographic Area Currency
Slide 25: Reconciliation of Non-GAAP Items
25 Reconciliation of Non-GAAP Items Revenues, Costs of Services Provided, and Operating Earnings Quarter Ended Quarter Ended March 31, March 31, Unaudited ($ in thousands) 2022 2021 Revenues Before Reimbursements Total Revenues $ 287,789 $ 262,155 Reimbursements (8,764) (8,974) Revenues Before Reimb
Slide 26: Reconciliation of Non-GAAP Items (cont.)
26 Reconciliation of Non-GAAP Items (cont.) Adjusted EBITDA ) Quarter Ended March 31, March 31, Unaudited ($ in thousands) 2022 2021 Net income attributable to shareholders of Crawford & Company $ 5,096 $ 6,064 Add: Depreciation and amortization 9,099 10,478 Stock-based compensation 1,660 1,609 Net
Slide 27: Reconciliation of Non-GAAP Items (cont.)
27 Reconciliation of Non-GAAP Items (cont.) Net Debt March 31, December 31, Unaudited ($ in thousands) 2022 2021 Net Debt Short-term borrowings $ 32,201 $ 10,643 Current installments of finance leases and other obligations 60 61 Long-term debt and finance leases, less current installments 200,304 16
Slide 28: Reconciliation of Non-GAAP Items (cont.)
28 Reconciliation of Non-GAAP Items (cont.) Segment Gross Profit Three months ended March 31, 2022 March 31, 2021 ($ in thousands) Segment gross profit: North America Loss Adjusting $ 11,068 $ 11,255 International Operations 9,964 11,375 Broadspire 16,416 16,519 Platform Solutions 12,531 7,872 Segme
Slide 29: Reconciliation of First Quarter Non-GAAP Results
29 Reconciliation of First Quarter Non-GAAP Results Three Months Ended March 31, 2022 Net Income Non-GAAP Attributable Diluted Diluted Operating Pretax to Crawford & Earnings per Earnings per Unaudited ($ in thousands) Revenues Earnings Earnings Company CRD-A Share CRD-B Share GAAP $ 279,025 $ 13,08