Crawford & Company · NYSE:CRD.A
Crawford & — Q1 2020 Earnings Presentation
28 slides from Crawford &'s earnings presentation, May 5, 2020
Slide 1: Crawford & Company First Quarter 2020 Earnings Conference Call
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: Crawford & Company
Crawford & Company The world’s largest publicly listed $18+ Billion independent provider of global claims all Claims managed annually management solutions. ) 1.6 Million @av7 Claims handled worldwide Organized across global service lines: ‘ 9,000 * P&C adjusting solutions (Crawford Claims Solutions)
Slide 4: First Quarter 2020 Financial Highlights
First Quarter 2020 Financial Highlights 4
Slide 5: Crawford's Response to COVID-19
Crawford's Response to COVID-19 5
Slide 6: First Quarter 2020 Performance
First Quarter 2020 Performance 6
Slide 7: Execution Across Our Service Lines
7 Execution Across Our Service Lines
Slide 8: Current Market Trends
Current Market Trends COVID-19 is driving a global drop in claims frequency, especially in auto and workers compensation tC ] Carriers are redeploying adjusters or moving operations in-house \ N Acceleration of industry-wide cost reduction measures Expected increase in weather claims as we enter the
Slide 9: Disciplined Capital Allocation
9 Disciplined Capital Allocation
Slide 10: First Quarter 2020 Financial Review
First Quarter 2020 Financial Review Crawford
Slide 11: First Quarter 2020 Financial Summary
11 First Quarter 2020 Financial Summary Quarter Ended March 31, March 31, ($ in millions, except per share amounts) 2020 2019 % Change Revenues $237.5 $247.1 (4)% Non-GAAP Revenues excluding foreign exchange fluctuations(1) $238.8 $247.1 (3)% Net (Loss) Income Attributable to Shareholders of Crawfor
Slide 12: Crawford TPA Solutions Segment Highlights
12 Crawford TPA Solutions Segment Highlights Three months ended Highlights 2020 (in thousands, except March 31, March 31, Based on percentages) 2020 2019 Variance 2019 rates Variance • U.S. client renewal rate at 98% and several new client wins in the quarter Revenues $96,935 $97,794 (0.9%) $97,278
Slide 13: Crawford Claims Solutions Segment Highlights
13 Crawford Claims Solutions Segment Highlights Three months ended 2020 Highlights (in thousands, except March 31, March 31, Based on percentages) 2020 2019 Variance 2019 rates Variance • Secured new Dallas site with over 600 staff Revenues $77,587 $83,319 (6.9%) $78,211 (6.1%) members to support ou
Slide 14: Crawford Specialty Solutions Segment Highlights
14 Crawford Specialty Solutions Segment Highlights Highlights Three months ended • 2020 (in thousands, except March 31, March 31, Based on percentages) 2020 2019 Variance 2019 rates Variance • GTS added several new programs across the globe, and we expanded our presence in Japan, the Revenues $63,00
Slide 15: Balance Sheet Highlights
15 Balance Sheet Highlights March 31, December 31, Unaudited ($ in thousands) 2020 2019 Change Cash and cash equivalents $ 83,110 $ 51,802 $ 31,308 Accounts receivable, net 121,230 128,217 (6,987) Unbilled revenues, net 108,898 103,894 5,004 Total receivables 230,128 232,111 (1,983) Goodwill 62,883
Slide 16: Operating and Free Cash Flow
16 Operating and Free Cash Flow For the year to date periods ended March 31, Unaudited ($ in thousands) 2020 2019 Change Net Income Attributable to Shareholders of Crawford & Company $ (11,399) $ 6,109 $ (17,508) Goodwill Impairment 17,674 — 17,674 Depreciation and Other Non-Cash Operating Items 9,1
Slide 17: 2020 Outlook
2020 Outlook ¢ On April 6, withdrew 2020 guidance * Ongoing slowdown resulting from the COVID-19 crisis could have a material impact to CRD’s operations, financial results, and cash flows in future quarters * Confident in the resiliency of CRD’s business model, strong liquidity, financial strength a
Slide 18: Conclusion: Crawford's four primary objectives
18 CONCLUSION Looking forward at Crawford's four primary objectives:
Slide 19: Crawford & Company
19 Crawford & Company The world’s largest publicly listed independent provider of global claims management and outsourcing solutions. 9,000 50,000+ 70 $18B+ employees Field Resources countries claims managed annually Crawford
Slide 20: Appendix: Non-GAAP Financial Information
Slide 21: Appendix: Non-GAAP Financial Information
21 Appendix: Non-GAAP Financial Information Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessarily comp
Slide 22: Appendix: Non-GAAP Financial Information (cont.)
22 Appendix: Non-GAAP Financial Information (cont.) Segment and Consolidated Gross Profit Gross profit is defined as revenues less direct expenses which exclude indirect overhead expenses allocated to the business. Indirect expenses consist of centralized administrative support costs, regional and l
Slide 23: Total Revenues Before Reimbursements by Major Currency
23 Total Revenues Before Reimbursements by Major Currency The following table illustrates revenue as a percentage of total revenue in the major currencies of the geographic areas in which Crawford does business: Three Months Ended March 31, March 31, (in thousands) 2020 2019 USD USD Geographic Area
Slide 24: Reconciliation of Non-GAAP Items
24 Reconciliation of Non-GAAP Items Revenues, Costs of Services Provided, and Operating Earnings Quarter Ended Quarter Ended March 31, March 31, Unaudited ($ in thousands) 2020 2019 Revenues Before Reimbursements Total Revenues $ 246,046 $ 256,377 Reimbursements (8,515) (9,319) Revenues Before Reimb
Slide 25: Reconciliation of Non-GAAP Items (cont.) Adjusted EBITDA
25 Reconciliation of Non-GAAP Items (cont.) Adjusted EBITDA Quarter Ended March 31, March 31, Unaudited ($ in thousands) 2020 2019 Net (loss) income attributable to shareholders of Crawford & Company $ (11,399) $ 6,109 Add: Depreciation and amortization 10,060 9,624 Stock-based compensation 880 (247
Slide 26: Reconciliation of Non-GAAP Items (cont.) Net Debt
26 Reconciliation of Non-GAAP Items (cont.) Net Debt March 31, December 31, Unaudited ($ in thousands) 2020 2019 Net Debt Short-term borrowings $ 39,784 $ 28,531 Current installments of capital leases 38 15 Long-term debt and capital leases, less current installments 187,271 148,408 Total debt 227,0
Slide 27: Reconciliation of Non-GAAP Items (cont.) Segment Gross Profit
27 Reconciliation of Non-GAAP Items (cont.) Segment Gross Profit Three months ended March 31, 2020 March 31, 2019 (in thousands) Segment gross profit: Crawford TPA Solutions $ 23,241 $ 25,463 Crawford Claims Solutions 13,787 17,077 Crawford Specialty Solutions 19,002 22,441 Segment gross profit 56,0
Slide 28: Reconciliation of First Quarter Non-GAAP Results
28 Reconciliation of First Quarter Non-GAAP Results Three Months Ended March 31, 2020 Net (Loss) Income Non-GAAP Attributable Diluted (Loss) Diluted (Loss) Operating to Crawford & Earnings per Earnings per Unaudited ($ in thousands) Revenues Earnings Pretax Loss Company CRD-A Share CRD-B Share GAAP