Crawford & Company · NYSE:CRD.A
Crawford & — New York Society of Security Analysts (March 2016)
30 slides from Crawford &'s conference presentation, Mar 21, 2016
Slide 1: New York Society of Security Analysts
New York Society of Security Analysts March 21, 2016 Crawford & Company Exhibit 99.1
Slide 2: Forward-Looking Statements
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 and quantitative, that are not statements of historica
Slide 3: Crawford & Company at a Glance
CRAWFORD & COMPANY AT A GLANCE Our History Founded in 1941 with the vision that an independent claims adjusting firm could provide insurers with a cost effective and efficient alternative to in-house adjusters Our Business We provide claims management, Business Process Outsourcing (BPO) programs, an
Slide 4: Global Business Services Leader
GLOBAL BUSINESS SERVICES LEADER INTERNATIONAL 1 Serves the Canadian, Latin American, U.K., European and Asia Pacific markets BROADSPIRE 3 Serves large national accounts, carriers and self-insured entities U.S. SERVICES 2 Serves the United States markets GARDEN CITY GROUP 4 Provides administration fo
Slide 5: Global Claims Business Overview
Overview Crawford’s global claims business offers a broad array of claims services including P&C, liability, marine & aviation, vehicle, transportation, catastrophe, contractor managed repair services (Contractor Connection), Global Technical Services for large and complex losses, and forensic accou
Slide 6: Contractor Connection – North America
CONTRACTOR CONNECTION – NORTH AMERICA A technology-enabled, best-in-class industry leader of contractor managed repair networks for residential and commercial losses Network of 4,800 general and specialty contractors Revenues of $64.1 million in 2015 versus $55.9 million in 2014 Recognized by J.D. P
Slide 7: Broadspire and Garden City Group
BROADSPIRE A leading third party administrator to employers and insurance companies, offering casualty claim, medical management, disability and absence management solutions, and risk management information services Broadspire offers critical services that help customers increase their employee prod
Slide 8: Executive Management
EXECUTIVE MANAGEMENT Harsha V. Agadi - Interim President and Chief Executive Officer 30 years of experience in leadership positions at both public and private companies, including several Fortune 500 companies Member of the Crawford Board of Directors since 2010 Chairman of GHS Holdings, LLC, which
Slide 9: Strategic Review
STRATEGIC REVIEW Board of Directors appointed Harsha V. Agadi interim President and Chief Executive Officer August 2015 Strategic business review initiated - opportunities uncovered Crawford’s client relationships and brand are strong globally Broadspire and U.S. Contractor Connection are experienci
Slide 10: Expanding Margins and Delivering Growth
EXPANDING MARGINS AND DELIVERING GROWTH Ø $45 million in total cost savings identified and removed through two restructuring plans during 2015 Headcount reduction in U.S. Services and the U.K. Reduced overhead costs in central functions and business segments Streamlined senior management to reduce c
Slide 11: Over $45 Million of Cost Removed in 2015
OVER $45 MILLION OF COST REMOVED IN 2015 Restructuring and Special Charges Totals: 2015 $34,395 2016 Expected $15,600 $25,300 to $28,300 > $45,000
Slide 12: Global Business Services Center
GLOBAL BUSINESS SERVICES CENTER Located in Manila, Philippines Crawford owned and operated - staffed by Crawford employees Consolidated global operations will drive improved customer service levels and lower costs Client impact: Improving turnaround time Enhancing process control Increasing service
Slide 13: Priorities for 2016
PRIORITIES FOR 2016 Ø Continue to exhibit cost discipline – focus on margin expansion Ø Be more client centric Deliver customized value propositions to clients Increase the speed of doing business enterprise wide Ø Drive synergies in strategic initiatives Ø Capitalize on cross-sell opportunities acr
Slide 14: Fourth Quarter and Full Year 2015 Highlights
Fourth quarter operating earnings grew 24%, year over year, to $19.0 million driven by strong results from Broadspire and U.S. Services Full year 2015 operating earnings declined 4% to $70.4 million compared to $73.1 million in 2014 U.S. Services revenues increased 12% in the fourth quarter and 13%
Slide 15: Segment Revenues and Operating Earnings
SEGMENT REVENUES AND OPERATING EARNINGS
Slide 16: Q4 and Full Year Revenues and Operating Earnings
Q4 AND FULL YEAR REVENUES AND OPERATING EARNINGS Consolidated Operating Earnings (1) ($ in millions) Fourth Quarter Full Year (1) See Appendix for non-GAAP explanation and reconciliation Revenues ($ in millions) Consolidated Operating Earnings (1) ($ in millions) Revenues ($ in billions)
Slide 17: 2016 Guidance
Crawford & Company issued guidance for 2016 as follows: YEAR ENDING DECEMBER 31, 2015 Low End High End Consolidated revenues before reimbursements $1.05 $1.10 billion Consolidated operating earnings $80.0 $90.0 million Before expected restructuring charges, net income attributable to shareholders of
Slide 18: Crawford Is Focused on Shareholder Returns
CRAWFORD IS FOCUSED ON SHAREHOLDER RETURNS Global Footprint World’s Largest Independent Provider of Claims Management Solutions Global BPO Platform Global C atastrophe Response Specialized Resources Global Technical Services (GTS) Medical Cost Containment Contractor Connection Crawford Specialty Mar
Slide 19: Questions & Answers
Questions & Answers
Slide 20: Appendix A: Consolidated Financial Information
Appendix A: Consolidated Financial Information
Slide 21: Consolidated Statement of Operations
Unaudited ($ in thousands, except per share amounts) Years Ended December 31, 2015 2014 % Change Revenues Before Reimbursements $1,170,385 $1,142,851 2 % Costs of Services Provided, Before Reimbursements 869,217 840,702 3 % Selling, General, and Administrative Expenses 241,602 237,880 2 % Corporate
Slide 22: Non-GAAP Net Income and Earnings Per Share
Unaudited ($ in thousands, except per share amounts) Net (Loss) Income Attributable to Crawford & Company Net (Loss) Income Attributable to Crawford & Company Diluted (Loss) Earnings per CRDA Share Diluted (Loss) Earnings per CRDA Share Diluted (Loss) Earnings per CRDB Share Diluted (Loss) Earnings
Slide 23: Selected Balance Sheet Items
Unaudited ($ in thousands) December 31, 2015 December 31, 2014 Change Cash and cash equivalents $76,066 $52,456 $23,610 Accounts receivable, net 164,596 180,096 (15,500 ) Unbilled revenues, net 98,659 103,163 (4,504 ) Total receivables 263,255 283,259 (20,004 ) Goodwill 95,616 131,885 (36,269 ) Inta
Slide 24: Operating and Free Cash Flow
Unaudited ($ in thousands) 2015 2015 2014 2014 Variance Variance Net (Loss) Income Attributable to Shareholders of Crawford & Company $ (45,488 ) $ 30,624 $ (76,112 ) Impairment of Goodwill 49,314 — 49,314 Depreciation and Other Non-Cash Operating Items 50,374 54,267 (3,893 ) Unbilled and Billed Rec
Slide 25: Appendix B: Non-GAAP Financial Information
Appendix B: Non-GAAP Financial Information
Slide 26: Non-GAAP Measures Explanation
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 comparable to other similarly-titled measurement
Slide 27: Reconciliation of Non-GAAP Items: Full Year
Full Year Revenues, Costs of Services Provided, and Operating Earnings RECONCILIATION OF NON-GAAP ITEMS * Midpoints of Company's March 10, 2016 Guidance Full Year Full Year Guidance Guidance Unaudited ($ in millions) 2015 2015 2014 2014 2016 * 2016 * Revenues Before Reimbursements Total Revenues $ 1
Slide 28: Reconciliation of Non-GAAP Items: Fourth Quarter
RECONCILIATION OF NON-GAAP ITEMS Fourth Quarter Revenues and Operating Earnings Quarter Ended Quarter Ended Quarter Ended Quarter Ended December 31, December 31, December 31, December 31, Unaudited ($ in thousands) 2015 2015 2014 2014 Revenues Before Reimbursements Total Revenues $ 300,504 $ 305,642
Slide 29: Non-GAAP Adjusted Net Income and Diluted EPS
RECONCILIATION OF NON-GAAP ITEMS (cont.) Non-GAAP Adjusted Net Income and Diluted Earnings Per Share Year Ended December 31, 2015 Unaudited ($ in thousands) (Loss) Income Before Taxes (Loss) Income Before Taxes Income Taxes Income Taxes Net (Loss) Income Net (Loss) Income Net (Loss) Income Attributa
Slide 30: Reconciliation of Non-GAAP Items: Net Debt
RECONCILIATION OF NON-GAAP ITEMS (cont.) Net Debt December 31, December 31, December 31, December 31, Unaudited ($ in thousands) 2015 2015 2014 2014 Net Debt Short-term borrowings $ 19,958 $ 2,002 Current installments of capital leases 1,959 763 Long-term debt and capital leases, less current instal
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