Q2 2022 Crawford & Co Earnings Call
Thanks for watching!
Good morning. My name is Michelle and I will be your conference facilitator today.
At this time, I would like to welcome everyone to the Crawford & Company 2nd Quarter 2022 Earnings Release Conference Call.
In conjunction with this call, a supplementary financial presentation is available on our website at www.CRWCO.com.
Under the investor relations section, all lines have been placed on mute to prevent any background noise.
After the speaker's remarks, there will be a question and answer period. Instructions will follow at that time. Should anyone need assistance at any time during this conference, please press star then zero and an operator will assist you.
As a reminder, ladies and gentlemen, this conference is being recorded today, Tuesday, August 9th, 2022.
Now I'd like to introduce Tammy Stevenson, Crawford & Company's General Counsel.
Thank you, Michelle. Some of the matters to be discussed in this conference call and in the supplementary financial presentation may include forward-looking statements that involve risks and uncertainties.
These statements may relate to, among other things, the impact of COVID-19, our expected future operating results and financial conditions, our ability to grow our revenues and reduce our operating expenses, expectations regarding our anticipated contributions to our underfunded defined benefit pension plans, collectability of our billed and unbilled accounts receivable, financial results from our recently completed acquisitions, and our continued compliance with the financial and other covenants contained in our financing agreements.
our long-term capital resource and liquidity requirements and our ability to pay dividends in the future.
The company's actual results achieved in future quarters could differ materially from the results that may be implied by such forward-looking statements.
The company undertakes no obligation to publicly release revisions to any forward-looking statements made in this conference call to reflect events or circumstances occurring after the day of the call or to reflect the occurrence of unanticipated events.
In addition, you are reminded that operating results for any historical period are not necessarily indicative of results to be expected for any future period.
For a complete discussion regarding factors which could affect the company's financial performance, please refer to the company's Form 10Q for the quarter ended June 30, 2022, followed with the Securities and Exchange Commission, particularly the information under the headings Risk Factors and Management's discussion and analysis of financial condition and results of operations, as well as subsequent company filings with the SEC.
This presentation also includes certain non-GAAP financial measures as defined under the FCC rules. As required, a reconciliation is provided for those measures to the most directly comparable GAAP measures.
I would now like to introduce Mr. Rohit Verma, Chief Executive Officer of Crawford & Company. Rohit. Thank you, Tammy. Good morning and welcome to our second quarter 2022 earnings call. Joining me today is Bruce Raine, our Chief Financial Officer, and Tammy Stevenson, our General Counsel. After our prepared remarks, we will open the call for your questions.
Crawford delivered exceptional top-line results during the second quarter, with revenues increasing 10% to $293 million compared to the prior year period. This marks our fifth consecutive quarter of double-digit revenue growth driven by continued strategic investments in our business.
I would like to thank our global team for their unwavering commitment to quality and customer excellence, as well as our clients for their confidence, which is enabling us to execute a long-term strategy and bring our envisioned future to life.
We saw broad-based revenue increases across the business during the second quarter, led by Platform Solution and North America Law Suggesting.
We are actively investing in our North American businesses, which we believe are ripe for achieving even further growth and gaining additional market share. We are building up our loss-adjusting business by acquiring more expertise and increasing the rigor on quality.
This effort has resulted in 70 specialist adjuster hires this year and about 120 over the last 18 months.
As you will recall, our three-year goal is to add over 200 specialist adjusters.
This investment in quality and expertise has allowed Crawford to exceed quality measures resulting in higher allocation of losses to us.
Further, we've continued to invest in platforms and are leading the market in product and quality.
Importantly, Abroad's part business also experienced growth, with claims activity continuing to pick up post-COVID.
This in addition to expanding our existing client base and securing new account lengths.
We expect to continue building on this momentum as we move into the second half of the year.
Looking at our international business, we are focused on improving margins within international operations, particularly within the UK, Asia and Europe .
We are pleased with the progress we saw in Australia and Latin America during the quarter.
Overall, the investments we've made in the business continue to highlight the success of our strategy and position Crawford for sustainable future growth.
We remain confident in our ability to deliver revenue growth and targeted profitability over the strategic horizon for our stated strategy for all our businesses.
In addition to driving revenue growth, we remain focused on improving margins across the business.
First, we're adjusting pricing in areas of the business where we are underpriced compared to the value we believe we deliver.
Second, we're aggressively addressing pockets of low productivity and underperformance in our business.
Third, we're optimizing our cost structure to align to current market dynamics.
And finally, rolling out new systems and process improvements for efficiency gains.
This margin improvement plan complements a long-term growth strategy to position Crawford for profitable growth.
As a reminder, our strategy is built around our three pillars of differentiation.
quality that sets the industry benchmark.
expertise that is deep and eminent.
and digital that simplifies our business.
Organic growth remains the foundation of this strategy and is augmented by our selective ebony.
As you have seen in recent quarters, they have invested in strategic opportunities through acquisitions such as E-juster, Praxis and Brospoon.
which has been an important contributor as we bolster our capabilities across the company.
We would also like to take this opportunity to welcome our new colleagues at RP Van Dyke, on US acquisition and that of the US.
Additionally, our people commitment along with environmental, social, and governance principles are at the heart of our long-term strategy.
To that end, we recently announced the appointment of Nidhi Verma to Chief People and ESG Officers.
In our new role, Nadi will continue to drive people and culture initiatives while at the same time spearhead Crawford's ESG priorities, including our commitment to diversity, equity and inclusion.
We believe Nitti's deep expertise in talent, culture and DEI make her strong addition to our executive leadership team, and I'm excited to see the cultural transformation she will co-lead within our organization.
Thank you.
Turning our attention to capital allocation.
Our priorities remain to invest in the long-term growth and health of our company.
particularly through organic growth and M&A, followed by consistent dividends and opportunistic share buybacks.
We bought back 1.4 million shares during the second quarter with a total of 3.6 million shares per J's year to date.
We believe this to be an attractive investment opportunity given our growth trajectory and our firm belief that our shares grade well below their intrinsic value.
Our leverage ratio is approximately 2.5 times EVDA, given the growth in our working capital, share buybacks, and the recent M&A activity.
We expect strong collections through the back half of the year and plan to unwind our working capital.
While this level of leverage ratio is well below our industry average, we expect this ratio to drop below 2 times EBITDA after any transactions between now and the end of the year.
Overall, Crawford is in an enviable financial position and we feel confident in our ability to continue executing a growth strategy to drive margin improvement while navigating an evolving and uncertain macroeconomic environment.
Let me now discuss our business line results for the second quarter.
Let's begin with North America loss adjusting.
North America Loss Adjusting services the North American property and casualty market. Second quarter revenues were driven by new client wins in our large and complex business during the quarter.
We are realizing the benefits from our ongoing investment and expertise which continues to drive new businessmen, especially among large US clients.
This year we have added 70 specialist loss adjusters to our targeted recruiting.
On the volume side, we're investing in quality and widening our footprint to have more market makers on our team.
We are outperforming the client benchmarks and earning a high level of allocation for many of our clients despite benign weather.
Turning to our Canadian business, we experienced year-on-year revenue growth related to a continued market recovery, as well as an added benefit from May and June storm activity in the Toronto area. We expect margin in this business to get in line with expectations as our new highs ramp up.
In our international operations, we are making steady progress as our business in Australia and Latin America experience their recovery during the second quarter.
This helped to offset continued weakness related to certain businesses like in the UK, Europe and Asia.
The year-over-year improvement in Australia was driven by growth in our specialty business.
We also benefited from unprecedented levels of flooding in Southeast Queensland and New South Wales that occurred in February and March.
In Asia, revenue growth was driven primarily by major flooding events across Malaysia and the Philippines as well as other non-plug related growth.
Latin America benefited from volume growth in Brazil during the quarter.
While the overall margin in this segment is weak, we are taking affirmative steps to improve margin as I've outlined before.
Our Roth spot business was a notable bright spot this quarter as the segment continued to experience the recovery in claims volume.
Revenue growth during the quarter was driven by new business wins in casualty, disability, and accident health claims, as well as growth of our existing clients and increased usage of our case management service.
This enables favorable flow-through and improved our margin compared to last year.
Our platform solution segment demonstrated strong revenue growth in the quarter, driven primarily by our recently acquired Praxis Consulting business and increased activity in our network business.
Margin declined significantly in the quarter, largely driven by the weakness in our contractor connection business.
This weakness was related to decreased claims frequency in the 2022 period along with tougher year-over-year comparability due to winter storm Murray, which impacted results in the second quarter of 2021. We believe the weakness in contractor connection is transitional and expected to improve through the course of the year as weather picks up.
We're excited about the growth we're experiencing in CAD and WeGo Look. We believe that these businesses along with our practice consulting business
We'll continue to make meaningful contributions to the bottom line.
Our efforts in this segment are continuing to drive growth, and we remain confident that the platform segment will deliver best-in-class margins over our strategic horizon.
Our new business momentum continued in the quarter. As always, we continue to deepen our relationship with our existing client base in addition to attracting new business.
During the second quarter, we won over $23 million worth of new and enhanced business.
Our NPS remained healthy at 48 and we're actively looking for opportunities to improve our score.
Additionally, we have obtained 94% of our broad spot business year to date and we continue to increase market share with key carrier clients.
We're also excited to see increased customer interactions. Notably, our 24th annual contractor connection contest restored.
return in person for the first time since 2019.
and brought together more than 2,700 attendees.
We will continue our commitment to delivering service excellence as we move through 2022.
We believe our commitment to environmental, social, and governance principles underpins our ability to execute on our long-term strategy and fulfill our purpose to restore lives, businesses, and communities.
Our commitment to diversity, equity and inclusion, sustainable business practices and ethical behavior are reflected in our purpose, envisioned future and values.
Throughout the quarter, we made progress on our ESG initiatives, beginning with the publication of our inaugural Global Citizenship Report, Stronger Together.
This report highlights our accomplishments to date and outlines our ESG commitments for the future.
The report also serves as an important first step towards transparency in all that we are doing to fulfill our corporate responsibility goals.
As highlighted in the report, you will see that we boast a diverse and inclusive workforce at Crawford.
In the US, 16% of our employees are black or African American, which exceeds the national average of 12%.
Globally, women represent 55% of our workforce, and our global senior management team is over 30% combined women and minorities.
At the governance level, women represent 30% of our board of directors, including our non-executive chair.
Crawford proudly joins other leading companies that have taken the critical step of including at least three women directors on their board.
These are just a few of the ways we are creating an environment where every idea is embraced, every voice is heard and every employee can bring their fullest self to work.
Overall, we are proud of what we have achieved across the globe to prioritize our employees, clients, and communities.
And with the addition of Nadi's role, we look forward to making an even greater impact in the future.
With that, let me turn the call over to Bruce for a deeper look at our financial performance.
for a deeper look at our financial performance. Thank you, Rowan.
Company-wide revenues before reimbursements in the 2022 second quarter were $293.3 million, up 9.7% over the $267.5 million in the prior year's second quarter. Foreign currency exchange rates decreased revenues before reimbursements by $6.3 million, or 2.3%. On a constant dollar basis, revenues before reimbursements totaled $299.6 million.
Gap diluted EPS in the 2022 second quarter was 12 cents for both CRDA and CRDP, compared to 22 cents for both share classes in the 2021 period.
On an on-gap basis, second quarter 2022 diluted EPS was 15 cents for CRDA and 16 cents for CRDB, compared to 25 cents for CRDA.
and 26 cents for CRDB in the 2021 period.
The company's non-GAAP operating earnings totaled $12.9 million in the 2022 second quarter, or 4.4% of revenues, decreasing from $19.6 million, or 7.3% of revenues in the prior year period.
Consolidated adjusted EBITDA was $21.8 million in the 2022 second quarter, or 7.4% of revenues, compared to $29 million, or 10.8% of revenues, in the 2021 quarter.
I'll now review the second quarter 2022 performance for each of our segments.
North America loss adjusting revenues totaled $65.8 million in the 2022 second quarter, increasing 17 percent from $56.2 million reported in last year's quarter. The e-Juster Inc acquisition added $3.6 million in revenues in the 2022 quarter.
foreign exchange rates.
impacts reduced revenues by less than 1 million.
Segment reported operating earnings of $2.7 million in the 2022 second quarter, decreasing from $3.1 million reported in last year's quarter.
The operating margin was 4.1% in the 2022 quarter compared to 5.5% in the 2021 quarter. The prior year period was aided by a $1 million benefit from the Canada Emergency Wage Subsidy, or CEWS.
International operations revenues totaled 93.7 million in the 2022 second quarter, increasing 2.7 percent from 91.3 million reported in last year's quarter.
Foreign exchange rate impacts total 5.3 million in the 2022 quarter.
The boss Boone acquisition added 600,000 in revenues in the 2022 quarter.
The segment reported operating losses of 700,000 in the 2022 second quarter, compared to earnings of 2.1 million reported in last year's quarter. The operating margin was negative 0.8 percent in the 2022 quarter, compared to 2.3 percent in the 2021 quarter.
Broadspire revenues were $80.1 million in the 2022 second quarter, increasing 5.5% from $175.9 million in the 2021 period.
Broadspire operating earnings were 7.7 million in the 2022 second quarter, increasing from last year's second quarter operating earnings of 6.6 million. The operating margin in this segment was 9.6% in the 2022 quarter and 8.7% in the 2021 period.
Revenues for platform solutions were $53.7 million in the 2022 second quarter, up 21.9% from $44.1 million in the prior year quarter. The Praxis Consulting acquisition added $3.8 million of revenue in the 2022 period.
Operating earnings and platform solutions total $4.6 million, or 8.6% of revenues in the 2022 second quarter, decreasing from operating earnings of $9.1 million, or 20.6% of revenues in the prior year quarter.
Unallocated corporate costs were $1.4 million in the 2022 second quarter, compared to costs of $1.2 million in the same period of 2021. This increase was primarily due to a $1.2 million cues benefit in 2021, which was not present in 2022.
partially offset by a reduction in other unallocated costs in the current period.
The company received no benefit from Q's in 2022 compared to an overall benefit of 2.2 million in the prior year order, recorded between North America loss adjusting and unallocated corporate cost.
During 2022, the company repurchased approximately 2.7 million shares of CRDA and 964,000 shares of CRDB at an average cost per share of $7.41 and $7.32 respectively.
The total cost of share repurchases during 2022 was $26.7 million.
At the beginning of the quarter, we purchased certain assets of R.P. Van Dyke in the Netherlands.
The total purchase price included an upfront payment of $4.3 million in cash.
with a maximum payout of $2.2 million structured as a two-year earn-out.
The company's cash and cash equivalent position as of June 30, 2022 totaled $46.3 million compared to $53.2 million at the 2021 year-end.
Our total receivables were up 17.9 million from the 2021 year-end, largely driven by unbilled revenues from recent catastrophe events in international operations and accounts receivable from our recently completed acquisitions.
We made no discretionary contributions to our U.S. Defined Benefit Pension Plan for the second quarter of 2022.
Although the company has made these contributions for the last several years, given the improvement in funding levels, we don't intend to make contributions in 2022.
The company's total debt outstanding as of June 30, 2022 totaled $254.2 million, compared with $175 million as of December 31, 2021, reflecting borrowings to fund negative free cash flow, acquisitions, dividends, and share repurchases.
Net death stood at 207.9 million as of June 30, 2022, while our leverage ratio under our credit agreement closed at 2.47 times EBITDA.
Additionally, our pension liability was down to $12.6 million at the end of the second quarter, reflecting a funded ratio of 93.8%.
As Rolik mentioned previously, we will work to bring down the leverage ratio below 2.0 times EBITDA by year-end.
Cash used by operations totaled $12.8 million during 2022, compared with $10.5 million provided in 2021.
The decrease in cash provided by operating activities was primarily due to a $20.5 million increase in the change in unbuilt receivables, largely from the flooding in all 22 as compared to 2021.
and $2 million in prior year Q's benefits, partially offset by a $4.6 million reduction.
in pension contributions.
Pre-cash flow was negative 28.4 million for the first six months of...
I'd like to turn the call back to Rohit for conclusions.
Thank you, Bruce. While we're pleased with the continued momentum and revenue expansion, we're committed to expanding profitability and improving margins across the business.
As we set our sights on the second half of 2022,
We will continue to advance our long-term growth strategy through technological and people-focused initiatives.
We need to deliver superior results for our shareholders.
to fulfill our purpose of restoring lives.
businesses and communities.
Thank you for your time today. Operator, please open the call for questions.
Thank you.
At this time, if you would like to ask a question, please press star, then the number 1 on your telephone keypad.
To withdraw your question press star 2. If you're using a speakerphone, please
Please pick up your handset before asking your question.
We'll pause for just a moment to compile the Q&A roster.
Jews of the truth please go ahead
Thank you. Good morning. I regret that I missed most of your presentation. I'm just able to join. I did want to ask just a general question. I'm not sure if you can hear me.
because thisShiftGroves applies
I know you talked about investing in hiring and that all makes sense.
What's the visibility for being able to get ahead of those costs and start to show some operating costs? John , just very quickly could you gameplay briefly on your
Meyeradj Hurricane Appliance of Mallee
I'm Mark.
I'm happy to have you on the call. You're absolutely right. The costs have risen higher than or faster than revenues.
in our business today. The first dynamic is that there are truly businesses where we need to do the combination of making sure we're getting the right price compared to the quality and value that we deliver.
There's an element of making sure that there are no pockets of load.
productivity or underperformance within the business.
that the systems are configured and the processor...
So that's that.
But we're seeing generally in places like Europe , places like Asia, and to some extent
We are very bullish on the long-term prospects of the business and are making
making investments in those businesses.
adjusting are a great example where we believe there is considerable upside and headroom for us to grow in North America.
and investing in those businesses.
makes sense for us.
The third dynamic...
that is playing is that there are businesses where the underlying transactional dynamics are actually pretty strong. So like WeGo Look, like Contractor Connection, like...
and operating leverage.
And then finally there are some businesses which are true.
truly weather dependent right the catastrophe business in the US as an example is significantly weather dependent so those those type of businesses
because it has generally been a benign first half of the year, probably are showing a little bit of a weakening in the margin, but the longer term prospects in the margin there or the margin over the cycle we feel very good about.
If you look at our fixed cost or infrastructure, that fixed cost infrastructure has largely remained fixed. So we believe that the revenue growth that we've seen over the last two years where we've added close to $180 million of revenue to the top line, that's giving us a good amount of leverage. So we believe these margin sort of compression is temporary as we go through the business and work on it. As you can imagine, we have not demonstrated growth for many years prior to this.
our first order of the business was let's start to grow the business and then
Let's continue to make it better from a margin perspective as we add revenue from the top.
We've had a 12-month process. I know you've described some different parts, and so they're probably going to work on their own schedule.
If you think about where you think margins should be, is that...
12, 18 months, 24 months? Yeah, I would say, admittedly, I think we are behind schedule from where I'd like to be in Europe , specifically, as well as UK to some extent. I would say that next year we should start to see, it's hard to show it on a total level because there are different parts in the portfolio, as you know. But we're seeing improvements. For example, Asia is doing better than we expected.
You know, UK is probably not doing as well as we would have expected or Europe is not doing it.
but overall we feel that we're making good progress. And our commitment is towards law.
in North America.
challenges in internationals.
So we're taking an approach where we're trying to make sure that for the long term we're
Just a general comment on inflation, I'd be curious to hear the extent does that help your revenue?
Pre ING a benefit.
You're dusting larger claims, but then...
you know, maybe more so of an impact on the expense line. Could you just break out the different aspects of inflation as it is impacting the business?
Sure, I'll start there and then I'll probably lean on Bruce a little bit. I think when we look at inflation there's...
like anybody else's.
As far as the loss costs are concerned, loss costs when they go up, they don't impact
directly our revenue for the most part because our fee structure is in time.
or do the hours that we put in the time.
because the cost of certain goods go up. So I don't see a change there. There is a slight benefit in
That is based on the percentage of project sizes.
And as a result of that, you know, inflationary pressures do give us a little bit of advantage in contractor connection. But there are lots of other things going on there, real shortage and labor shortage, which has caused supply workers to just avoid the loss of capital for the large tractors of
projects to take a lot longer than they would take so there are other dynamics in the business that are having a little bit of a compensating...
a compensating effect, I think.
I think.
And finally, our broad screen.
from a revenue perspective again because we're not
I think my bigger concern will be that if the inflationary pressures start to impact the overall economic activity, and that starts to slow down economic activity, then the economy
and that results in claim volume to slow down, particularly in our casualty side of business, which is largely on our TPA side.
Yes. you
So maybe the other thing looking at the...
competitive landscape to the extent a lot of
competitors have significantly higher leverage levels than us, you know, six times, seven times EBITDA. Rising interest rates are going to put pressure on them.
And to the extent that they're focused on.
You know, managing through a higher rate environment and not on growth in the marketplace, that could create open doors for us to go in given the relatively strong financial position that we have heading into this period of economic uncertainty. So we feel good about where we are. Yeah. But I just, Bruce, I'm compelled to add that that's not what we're banking on. That's right. Yeah.
Yeah, yeah, good point. Yeah. How about within broadsby area, I don't know if you mentioned workers comp, claim frequency, severity, I think last quarter you talked about you're seeing maybe some uptick in demand for the medical case management services. How does that end today?
Yeah, and actually our claim volume is back up to 2019 levels, if not higher than 2019 levels, and that's a combination of both new business wins as well as sort of economic activity returning and claim activity returning. We haven't seen a major change in the severity of the claims, and candidly speaking, Mark, it's hard to say that. Is that because overall severity in the industry is down, or just our book mix has shifted over time because we have made some concerted efforts to diversify our book and not be focused purely on
Thank you.
The next question comes from Kevin Steinke of
Barrington Research, please go ahead.
Good morning.
ya
and pricing
And, you know, I recall when I was, you know, kind of getting up to speed on the company,
when I was getting up to speed on the company.
A year ago that we talked about pricing.
Um, you know
just being able to adjust that to reflect the value of the services you're providing. It sounds like that's really why you're adjusting pricing. It's not necessarily tied to trying to combat inflation or anything like that, but just simply, again, you know.
trying to get better value for your services. That's a great way to think about it.
Hi, Kevin. This is Roy. Thank you for being on the call. I won't say that that's the only reason to do it. I do think that actually the inflationary environment that Mark just alluded to gives us a favorable backdrop to have those conversations with our clients and they are much more open to it. I also believe that we enjoy strong partnership with most of our clients so it enables us to have those conversations. I just think that over the past few years,
we've not had those conversations and now we're sort of forcing those conversations. And candidly, so far, we feel that we've made good progress. And as the renewal book works its way, which largely will start to show in last quarter of this year and the quarters next year, we should start to see an impact of that improved pricing.
But it's not just service and there's an element of inflationary piece to it.
And when we think about margins for North American law suggesting goals for hiring there.
Um, it sounds like that's also leading to new business wins, new revenue, but, um...
Think about margins in that particular segment continuing to kind of you know lag the improved revenue growth just as you continue hiring or do we get to a point where that growth starts to really you know leverage that hiring more significantly. I'm just trying to get a sense as to you know that the time frame for kind of you know margins to start leveraging the investments or both of leveraging investments.
I think Kevin that's a great question. Let me answer this. I believe that you will mention of the profit contribution from the segment because we're growing and adding revenue and and you'll start to see that.
Pure, on a percentage basis, a margin improvement will probably take a little bit of time because we're not slowing down. We believe that there's significantly more headroom for us to grow in that. We believe that we have pulled back from a geographic presence pretty significantly about 10 or 12 years ago. We're starting to bring that back in. On the major and complex side, we believe that there are still a lot of verticals and specialty areas that we can add on. And there is a little bit of an upfront investment that you make, which is in the form of either sign-on compensations or...
Gerald, a little bit more too on the growth in the networks line of business on the quarter strong growth there and what was driving that. Yeah so in the network side as you know we've got our we go look business that continued to benefit from from onboarding your clients and deeper penetration with some existing clients. We've also had a couple of one-off projects that we did in that business during the quarter.
which have had a helpful impact on revenues. And then on the catastrophe side, we have been doing providing, I'm just gonna put it in quotes, temp staffing for a client, which may or may not be directly related to weather, which has helped us have a strong revenue growth in that area. And again, we're doing good with the clients there and we expect that we'll continue to see deployment.
from clients in that space. Okay, yeah, that maybe dovetails into another question that you know you've mentioned last quarter, staffing issues at some of your clients and how that was driving more demand for your services. Is that kind of assumed kind of the dynamic you're seeing in the market still?
Yeah, we're still seeing that dynamic. It has slowed down in some parts. I think some clients have been able to get ahead of that, but we're still seeing that dynamic.
All right, if I could just circle back on
North American law suggesting, and you talked about the volume side of the business there as well.
you're you're you're you're you're. Are you experienced? Did you experience growth on All right let's hear it.
I'm just wondering what trends you're seeing on the volume size. Although not as much as what we would have liked to see related to the benign weather environment.
on that side of the business we have.
of weather dependence.
But also that is a part of the business like I said before that we had pulled back.
back on several years ago and we're now in the process of repopulating that business, making sure that we've got the geographic footprint and...
the expertise that we need.
to see greater allocation of losses to us from clients.
OK, all right, good.
Just for the platform solutions margin, you talked about
contractor connection and how is that something we should
I think you know continues for the next couple quarters or is that something you move past? Well I think I think the way we think about it that it was a difficult comparison to last year where we had the strong and Texas hurry where the contractor connection impact of that storm really came into the second quarter. As you know that's when the repairs happened and the repairs were completed and that's when we...
That's when we start to see the impact. So that's what we saw last year. So it made the first half comparison difficult. Now, if we don't get any weather activity in the second half of the year compared to last year, yeah, then that'll make it a difficult comparison in the second half of the year. But right now we're still expecting a normal weather season. We've just seen something form off the coast of Africa. Not sure if that makes its way all the way here and has an impact or not. But if we don't have a difficult...
Thank you.
There are no further questions at this time. I will turn the call back over to Mr. Verma for closing the call. Thank you to all our employees, clients and shareholders for your continued commitment to the second quarter results are not only indicative of the impact of COVID-19 on our handheld network but also the promise of
market position but also evidence
of our incredible growth momentum we have experienced throughout the first six months of 2022. Overall, we remain confident in the future of the company and we look forward to seeing you again soon.
We look forward to taking you on the journey with us as we make our way through the second half of 2022. As always, we wish you well, thank you and God bless.
replay beginning 11 30 a.m. Eastern Standard Time today through 11 59 p.m. Eastern Standard Time.
The conference ID number for the replay is 204978, followed by the number for the replay.
The number to dial for the replay is 877-674-7070 or 416-764-8692.
Thank you. You may now disconnect.
Very I.