Q2 2023 Crawford & Company Earnings Call

[music].

Good morning, My name is Dennis and I'll be your conference facilitator today.

Welcome everyone to the Crawford <unk> Company second quarter 2023 earnings release conference call in conjunction with this call a supplementary financial presentation is available on our website at www dot crowd code that call.

The Investor Relations section.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer period and instructions will follow at that time should anyone need assistance that in January . 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 Friday August 4th 2023.

Some of the matters to be discussed in this conference call and in the supplementary financial presentation may include forward looking statements and risks and uncertainties.

These statements may relate to among other things our expected future operating results and financial condition.

Ability to grow our revenues and reduce our operating expenses expectations regarding anticipated contribution sorry independent defined benefit pension plans collectability of our billed and Unbilled accounts receivable financial results from our recently completed acquisitions, our continued compliance with financial and other covenants contained in our financing agreements.

I would like Jim Catholic resource and liquidity requirements, and our ability to pay dividends in the future. The company's actual results achieved in future quarters may differ materially from results that may be applied by such forward looking statements.

The company undertakes no obligation to publicly release revisions to any forward looking statements.

My name is coughing skull to reflect events or circumstances occurring after the date of the call ultra restarted yet.

Anticipated events.

In addition, you are reminded that operating results for any historical period are not necessarily indicators of results should be expected for the future period.

A complete discussion regarding factors, which could affect the company's financial performance. Please refer to the company's Form 10-Q for the quarter ended June 30th 2023.

Filed with the Securities and Exchange Commission, particularly the information under the headings risk factors and management's discussion and analysis of financial conditions and results.

That's what I subsequent can't be filings with the S E C.

Jason also includes certain non-GAAP financial measures as defined under SEC rules.

As required a reconciliation is provided for those measures to the most directly comparable GAAP measures.

I'd like to introduce Mr where he very much chief Executive Officer of Crawford <unk> Company. Sir you May begin your conference.

Thank you good morning, and welcome to our second quarter 2023 earnings call. Joining me today is Bruce Swain, our Chief Financial Officer, and Joseph Blanco, Our President after our prepared remarks, we will open the call for your questions.

During Q2, we continued to build upon our strong start to 2023, our sustained momentum drove improved results across all segments of our business, resulting in revenue growth and margin improvement for the company.

Before I jump into specific achievements in the quarter I think it's important to take a moment to step back to highlight our market position and some of the broader trends we're seeing in the business.

As many of you know Crawford continuous to strategically scale, our business across complementary service offerings within the claims space.

We operate globally manage over $18 billion in claims annually and have approximately 10000 employees and thousands of field resources our.

Our customer base is diversified and growing including a wide spectrum of brand names, who are increasingly looking to Crawford as it claims solution provider.

That said, we estimate our market share to be in the low single digits clearly, we have a large market opportunity in front of us.

There are some important growth drivers that support our confidence in the long term opportunity before us.

First natural catastrophes are becoming more prevalent in our services are increasingly called for carriers and other providers need increased resources to help policyholders recover in the aftermath.

Importantly, we do not take underwriting risk and issue that many carriers wrestle with as lost patents continue to get more frequent and more severe rob.

Rather we work with carriers self insured corporations and captives to deliver outsource claims solutions that offer expertise timeliness scale proximity.

First of all quality of service that is representative of their brand.

Second there continues to be a long term tailwind driving the outsourcing of claims processing.

PNC margin pressure is leading to more outsourcing of major and complex claims.

And there is a greater need for a more nimble and empathetic response to major cat events.

So the independent loss adjusting market in the U S is fragmented.

Our growing scale is a considerable competitive advantage in our market.

Where the reliability and resiliency of service providers are becoming more and more critical.

Fourth a key strategic focus of mine since I assumed the role of the CEO has been to strengthen our strategic partnerships and relationships with key clients across all our customer segments. Our relationships have unquestionably grown deeper and this has led to increased business with our existing customers as well as uncovering new.

Opportunities.

And finally, we have industry, leading in short tech capabilities that are creating double digit growth across our platform segment. We are investing in innovation, whether its machine learning data visualization or other SaaS based offerings, improving the claims process and experience.

Keenly focused on driving technological evolution in our sector.

Now, let's get into the results for the second quarter, we delivered another quarter of strong results revenue grew by 9% or 12% on a constant currency basis and operating earnings nearly doubled year over year.

We achieved revenue growth and profit expansion across all segments, highlighting the underlying strength of our business model and solid execution of our stated strategy.

Second quarter results, Mark our 11th consecutive quarter of revenue growth, reflecting the hard work and dedication of our valued teams across the globe.

Their unwavering commitment to quality and customer excellence is enabling us to execute our long term strategy and bring our envision future to life.

We added $26 million in new enhanced business in Q2 2023.

This growth included contributions from all of our business segments, helping to drive margin expansion and improved profitability.

In the first quarter of this year, we had a slightly negative operating cash flow as we leverage our liquidity to fund working capital needs related to the storm activities in Australia, and the U S. As expected we saw a significant improvement in cash generation in the second quarter with $27 million in operating cash flow strengthening our position to be able to.

We continue to invest in the business and return capital to shareholders.

To that end, we have decided to raise our quarterly dividend to seven sense going forward.

Finally, our net promoter score a metric use to measure customer loyalty, which we track closely was a healthy 46 in the quarter and we are continuously looking for opportunities to improve our score.

Two years ago, we communicated our strategic commitment to grow organically and improve margins across our business. Our subsequent financial results have demonstrated progress across our organization.

Section of the continued execution of our strategy.

While we may see quarterly fluctuations due to weather. Our overall trajectory is ahead of our plan velocity.

In our North America loss adjusting segment, we focused on driving low to mid single digit revenue growth and improve margins through efficiency on the volume side and investments and expertise on the major and complex side.

Our ongoing investments in Onboarding expert adjusters increase increasing coverage density of our adjusters in the U S and delivering industry, leading quality have continued to drive growth in the U S loss adjusting business.

Additionally, during the second quarter or improve utilization drove meaningful margin expansion, we're seeing some softness in Canada, which we expect to continue for the rest of the year, while they're optimistic moving forward. We may face a tough comparison in the fourth quarter. If you Havent benign hurricane season, you may recall, the fourth quarter of last year included activity.

From Hurricane Ian and Winter Storm Elliot.

We are very pleased with the progress we're making in our international business. Although there is still work to be done.

Our goal has been to get international to a mid single digit growth target in the second quarter, we saw just under 2% or eight 3% growth on a constant dollar basis.

And we have a clear strategy to continue to enhance organic growth in this segment international delivered significantly improved operating earnings of $3 $7 million as compared to an operating loss in the second quarter of last year.

We're still seeing slowness in Asia, but the U K and Latin America have bounce back well.

This turnaround is largely the result of the specific actions, we have taken to address pricing and productivity and to better align our cost structure with current market conditions.

For <unk>, our focus has been to capture share in alternative markets and leverage data to offer cutting edge analytics services to clients.

Similar to Q1 overall sales momentum in Q2 was driven by new client wins and accelerated improvement in medical management revenue.

We expect continued recovery in medical management as claim frequency improved through new and existing client wins.

We're also increasing unbundled offerings for medical management and data analytics. We are on course for what may very well be one of our best sales year in broad spire.

Platform solutions is performing extraordinarily well and we continue to scale this business to deliver double digit revenue growth and a strong flow through to the bottom line.

Platforms is our highest margin operating segment and continues to serve as a key growth engine for our business.

We delivered double digit revenue growth in the quarter driven by improved utilization in contractor connection along with increasing our market share with our top five carrier partners and our cat business and growth in our subrogation business.

We expect continued strength moving forward supported by healthy underlying margins and solid execution.

Turning now to capital allocation.

We continue to maintain a disciplined and prudent capital allocation strategy as expected we saw a significant improvement in our cash generation this quarter over the previous quarters.

Stated goal was to have our leverage ratio below two times EBITDA by the end of 2023, and we achieved that ahead of plan coming in at one eight times at the end of Q2.

Our positive earnings results and conservatively managed balance sheet gives us tremendous flexibility to make strategic investments for the benefit of the company.

As we already shared last week, we raised our dividend to seven cents from six cents per share for both CRD, a and C or D b.

We have also reinstated our share buyback program further highlighting our commitment to deliver shareholder value.

As a point of reference we have returned more than $120 million of capital to shareholders through share buybacks and dividends since 2019.

With that I'd like to hand, the call over to Joseph who will discuss our business line results for the second quarter.

Thanks, Rod as most of you know we report our business in four operating segments.

North America, la suggesting campuses, primarily our loss adjusting business in the U S and Canada.

Our international operations is comprised of all reported service lines outside of North America.

Broad spires, our tpa in the U S and platform solutions includes contractor connection our networks business, including catastrophe and we go look as well as our subrogation business.

As you can see revenue contribution is fairly evenly spread across the reportable segments.

Beginning with North America loss, adjusting we achieved revenues of $75 8 million, representing 15% year over year revenue growth.

Operating earnings were $3 9 billion and we expanded our margin by 112 basis points.

Strength in the quarter was driven by specialists adjuster editions as Crawford continues to seek and secure the highest quality industry talent.

Additionally, Q2 revenue increases are attributed to new account nominations and overall increased utilization of adjusters in the U S. Due to severe convective storm activity.

We continue to see progress in our international segment, where second quarter revenue was $95 3 billion and operating earnings were $3 7 billion.

Notably as Robert highlighted a moment ago operating earnings grew by more than $4 million year over year and margins expanded by 463 basis points.

Our ability to significantly improve operating metrics as a direct result of our actions to improve pricing and productivity as well as simplifying our cost structure.

We saw growth in our UK Tpa business and large loss performance in Latin America with continued volume improvement in Brazil and Peru.

Our Australian business continues to see benefits from the tail of 2022 cat activity.

For Europe revenue growth is primarily attributed to growth in high margin areas, including Holland in the Middle East.

Furthermore.

Efficiency improvement measures in Europe helped drive increased margins as Robert mentioned, we remain focused on enhancing organic growth in this segment.

Looking at our broad spire business Q2 revenue grew 5% medical management services continued to perform well with revenues growing 7% as we saw sales momentum and alternative markets and data and analytical services.

Our innovative technology, including advanced analytics, and predictive modeling is driving market share and we retained 97% of our business year to date.

Platform solutions also delivered strong results with double digit revenue growth of 22% over the prior year. This was led by networks, which grew 18% as we continued to deepen our relationships with two of the top five carriers in our property and flood businesses.

We're expanding relations now with a third carrier in this space and are excited about the prospects.

We saw increased contribution from contractor connection benefiting from pricing actions and improved utilization along with continued market share gains and our subrogation business had a stellar quarter.

With that let me turn the call over to Bruce for a deeper look at our financial performance. Thank you Joseph Companywide revenues before reimbursements in the 2023 second quarter were $327 million up 9% from $293 3 million in the prior year second quarter foreign exchange rates decrease.

Revenues before reimbursements by $7 5 million or 3% on a constant dollar basis revenues before reimbursements totaled $328 1 million, increasing 12% compared to the 2022 second quarter.

GAAP net income attributable to shareholders totaled $8 4 million, increasing 45% from $5 8 million in the same period of 2022.

GAAP diluted EPS in the 2023 second quarter was 17 for both CRD, a and CRD b compared to <unk> 12 for both share classes in the 2022 period.

On a non-GAAP basis second quarter 2023 diluted EPS was <unk> 24 cents for both CRD, a and CRD b compared to 15 cents for boats share classes in the prior year period.

The company's non-GAAP operating earnings totaled $22 8 million in the 2023 second quarter were seven 1% of revenues up 85% from $12 3 million or four 2% of revenues in the prior year period.

Consolidated adjusted EBITDA was $31 5 million in the 2023 second quarter were nine 8% of revenues compared to $21 2 million or seven 2% of revenues in the 2022 quarter.

I will now review the second quarter performance for each of our segments.

North America loss adjusting revenues totaled $75 8 million in the 2023 second quarter, increasing 15, 3% from $65 8 million reported in last year's quarter. Due to the continued addition of expert adjustors in the segment and the impact of severe weather in the quarter.

The segment reported operating earnings of $3 9 million in the 2023 second quarter, increasing from $2 6 million reported in last year's quarter. The operating margin was five 1% into 2023 quarter compared to 4% in the 2022 quarter.

International operations revenues totaled $95 3 million in the 2023 second quarter up one 7% from $93 7 million reported in last year's quarter, including 600000 from the Van Dyke acquisition on a constant dollar basis international revenues totaled $101 5 million.

Eight 3% over last year's quarter.

The segment reported operating earnings of $3 7 million in the 2023 second quarter improving significantly from losses of 700000 reported in last year's quarter. The operating margin was three 9% in the 2023 quarter compared to negative <unk>, 7% in the 2022 quarter.

<unk> revenues were $83 9 million in the 2023 second quarter, increasing four 7% from $80 1 million in the 2022 period, driven primarily by improving medical management revenues.

<unk> operating earnings were $8 1 million in the 2023 second quarter up from last year's second quarter operating earnings of $7 7 million.

The operating margin in the segment was nine 7% in the 2023 quarter.

Proving from nine 6% in the 2022 period.

Revenues for platform solutions were $65 6 million in the 2023 second quarter, increasing 22, 1% or $53 7 million in the prior year quarter due to growth in networks subrogation in contractor connection.

Operating earnings in platform solutions totaled $8 1 million or 12, 3% of revenues into 2023 second quarter compared to operating earnings of $4 6 million or eight 6% of revenues in the prior year quarter.

Unallocated corporate costs were $1 1 million in the 2023 second quarter compared to cost of $1 9 million in the same period of 2022.

The decrease was primarily due to an offset to certain internal allocations and other cost reductions.

During the 2023 second quarter non service pension costs were $2 1 million compared to a $600000 credit in the 2022 period.

These cost of credits are not a component of operating earnings and are added back for non-GAAP earnings and EPS.

We recognized a pre tax contingent earn out expense of 700000 in the 2023 period compared to 300000 in the 2022 quarter.

This was related to the fair value adjustment of certain earn out liabilities arising from recent acquisitions.

During the first six months of 2023, the company did not repurchase any shares of CRD, a or CRD b. As a reminder, approximately one 8 million shares are eligible to be repurchased under our 2021 share repurchase authorization.

The company's cash and cash equivalent position as of June 32023 totaled $47 5 million compared to $46 million at the 2022 year end or.

Our total receivables were up $22 1 million from the 2022 year end, primarily due to increased U S revenues.

The company's total debt outstanding as of June 32023 totaled $242 8 million compared with $238 9 million as of December 31, 2022.

Net debt stood at $195 3 million as of June 32023, while our leverage ratio under our credit agreement closed at one eight times EBITDA.

Additionally, our pension liability was $25 3 million at the end of the second quarter, reflecting our funded ratio of 93, 4%.

We made no discretionary contributions to our U S defined benefit pension plan for the second quarter of 2023, and we do not intend to make contributions during the remainder of the year.

Cash flow from operations for the first six months of 2023 totaled $27 2 million with free cash flow of $9 2 million. This compares to cash used in operating activities last year of $12 8 million and negative free cash flow of $28 4 million. This significant improvement in cash flow was driven.

The increase in net income and an improvement in working capital with that I'll turn the call back to ROE. It for concluding remarks. Thank you Bruce this quarter reinforces our confidence in the long term strategy, we're implementing at Crawford the company's financial strength and liquidity provides us with the flexibility to grow our market share.

As we continue to invest in our industry leading capabilities.

These top quality services differentiate us as a reliable and trusted partner, which is of critical importance in a landscape where customers are increasingly outsourcing service elements and responding to higher volume of cat events.

Crawford as an industry leader in the next generation in short tech capabilities, a very exciting opportunity for us reflected in the strong growth we're seeing in our platforms revenue and we will continue to leverage new and existing customer relationships in order to create deeper and more durable partnerships. This is an exciting time to be part of <unk>.

And as we advance through 2023, we'll continue to work towards driving shareholder value, while delivering top quality services properly for our customers. Thank you for your time today honest. Please open the call for questions.

Thank you Mr. Vermont discharging who'd like to ask a question. Please press Star then the number one on your telephone keypad.

So we withdraw your question please press star two.

Using a speakerphone please pick up your handset before pressing any keys.

Pause for just a moment to compile the Q&A roster.

Your first question comes from Mike Hughes with <unk>. Please go ahead.

Yes. Thank you good morning.

ROE at ARVO.

Momentum in your business you think is the.

Being spurred by just the harder personal lines market a lot of inflation out there are a lot of pressure on carriers.

How much is that contributing to the good momentum you're seeing.

Mark I think it's a factor as you know inflation environment per se doesn't change for us.

It just doesn't change the business trajectory for us So I don't I won't attribute too much inflation, we do have some parts of our business that are impacted by inflation, but as you know as a macro trend I don't think that is what's impacting our business I do think that.

As the property market is putting pressure on our clients, they're looking for new and improved ways in which they make the claims outcomes are better and I think they are increasingly looking towards us to help them with that so I do see that as a factor.

You had mentioned more outsourcing of complex claims.

That's one of the.

Result of all this pressure could you talk a little bit more about that is there.

How do you gauge that.

I know youre seeing your own flow of business kind.

Kind of intriguing point.

Yes, I think I think three things number one.

As a as severe convective storms have increased in the U S. We're seeing more and more attention of the of.

The claims adjusters inside the organizations focused on dose and and that's creating an opportunity for us to get more overflow of claims.

And then in a lot of times those are the large and complex claims because they just have a longer trajectory.

Second factor that I believe is that there are just more large and complex claims theory right. The number of $1 billion buildings that you had in the world is.

More today than it was two years ago or three years ago. So I think that there is just that frequency and then the third thing is that the complexity of claims is not just increasing because of the values, but also because of the structures that are that are there today there are a lot many.

<unk> that are being written with multiple carriers using quota shares or layers as opposed to before where the capacity was more easy to come. So I think those are the three biggest factors that are creating more outsourcing of the large and complex claims.

So the complexity of the claim just because.

You've got more participants in the coverage tower leads.

Yes, yes, okay. So anytime you have more than one participated in our coverage dollar general rule is to bring an independent adjuster and the mix.

Yeah Okay.

Okay.

And then you had mentioned in broad spire part of the pipeline as the alternative market opportunities could you expand on that.

Yeah, I think it's that is also related to what we're seeing in terms of the market trends, we're seeing more and more business moving to alternative markets and alternative markets would be defined as M. G. H M. G use captives sort of other instruments that are being used by risk bearing entities, both from a distribution perspective, as well as as well that sort of risk transfer and.

And then a lot of cases those are those new entrants don't have the claims capabilities and are relying on providers like us to provide those claims capabilities. We think it's an attractive segment. We also think its a segment, which is less price sensitive than say at the corporate segment.

And and is looking for more technology and more value.

So and we are well positioned to take charge of that of that segment.

And then one final one you mentioned.

In networks.

<unk> top five clients.

Adding the third the third also in the top five top 10.

And does it I would say top 10, I don't have the best list in front of me. So I can't tell you. If there are top five at all but there are definitely top 10.

Yeah, and do you think those will scale like or that will scale like the other two.

And that's our intention.

Two to scale it but as you know with a lot of these large clients. It takes time to scale as we've shared that with you all before.

Yeah, Yeah, okay.

Thank you very much.

Mark.

Your next question comes from Kevin Steinke with Barrington Research. Please go ahead.

Good morning.

Yeah, Hi.

Hi, Kevin.

Okay.

I wanted to just start off by asking about.

You talked about continued investments in technology and.

Leading the technology Revolution for.

For the industry, just wondering what youre seeing.

From the competition I mean, if you.

Feel like Youre continuing to build.

Build a competitive differentiation through those investments and.

When you go out.

Competing for new business, how much of a differentiator.

Technology investments have been.

Sure Kevin we are extremely excited about this space, we definitely believe that it is a competitive advantage for us.

We don't believe that we're seeing the same thing from our traditional competitors as much as is as we have seen that from more of what I would call. It in short at competitors.

As you know that the insured tech market has been has been challenged because of what's happening in the capital markets broadly and.

And as a result of that we believe that our history in this space our brand name our expertise in claims space already is giving us the edge to sort of push forward on these technology solutions and because of our history because of our brand because of our expertise we're edging out even the insure tech competitors in this space. So we feel.

Very good about the progress that we're making here and we certainly believe that a lot of the business that we're winning as an example in our <unk> unit can be attributed to our superior technology capabilities in that space.

Okay great.

Wondering if you could just get an update on your you're hiring a specialist adjustors.

I think you talked about last quarter, surpassing that goal of 200 hires.

If you are continuing to make progress there.

And.

Maybe just talk about it.

If your platform.

Is really something that's helping to attract those.

Skilled professionals to Crawford in terms of just.

Your stability in your expertise.

Relationships et cetera.

Yeah. When in 2020, we set our strategy and reset our vision of a critical element of our vision was to be the place where experts want to be.

So we've been investing a lot in our culture in our approach to people to be a place where experts want to be and and yes. We had this target that we surpassed in Q1 that we had targeted to surpassed by Q4 of this year, but we're not slowing down.

We are certainly continuing to attract experts and we're continuing to add exports into our into our business. Even in Q2, we added additional experts. So we don't see that slowing down yes, certainly we are getting to a point where we.

We.

Within the markets Theyre not that no longer are there that many experts left for us to attract but we're also starting to build our own quite a bit now so we're investing quite a bit in internal development of our people. So that we not only attract experts from the outside but build and develop experts and then retain them to be part of the Crawford family.

Okay that's interesting.

This.

The development of experts internally.

E.

A little more attractive from a financial standpoint or are the investments in.

Growing the similar to maybe try to attract.

Experts from the outside.

When we say growing them from <unk>. It is it is about giving them the exposure and the experiences that they needed to become experts at is about mentoring and coaching them.

For them to become experts so there's definitely an element of financial investment that comes with it but it's also about our mindset and attitude, which is focused and geared towards learning, which is something that we have been pushing across the organization.

At the end of the day, we arent expertise based organization people come to us because we have the expertise. So its important that that's an area that we continue to invest in.

As you know due to the demographics, it's a it's becoming a H is becoming a big factor in our industry. Many people refer to it as the silver tsunami. So we're also focused on that for the long term view of our organization in the industry. We are continuing to bring in new talent into the industry or I would say talent, which has a significant more runway.

Our 10 year left so so they can have longevity of their career in this space.

Okay, that's great.

Just a few questions on that particular segments you.

You talked about your growth aspirations within.

International.

Yeah.

<unk> improvement in the quarter in your operating earnings both on absolute dollar basis as well as the operating earnings margin.

Much more room do you think there is to run do you think international profitability.

In terms of the ability to improve margins in that segment.

As I mentioned during my prepared remarks that there is still more work to be done and we're continuing to do the work. We believe that there is absolutely more room.

International segment.

To get more margin and and I'm proud to say that the entire international team is diligently working on that and over the coming quarters you should see.

Continued improvement as as you see with our North America business, where there can be fluctuations on a quarterly basis just based on just.

Based on volumes coming from either a cat event or one time project events.

We might see something similar in international but the overall trajectory is towards <unk>.

<unk> margins, both over the short term as well as over the long term.

Okay.

You just kind of touched on it there I guess within North American.

North America loss adjusting.

The.

The operating earnings margin it was up year over year, but down.

Sequentially.

Could you just speak to that a little bit more to the sequential trend that you saw there.

Yeah. So a couple of things that impacted the sequential trend as you know we had quite a lot of business that are that we were carrying into Q1 that was coming from Q4 storm activity, so and and as you've been working with US Youre aware that typically we have some costs that are upfront loaded on a on a cat event. So I think what you saw.

Saw in Q1 was the costs were more probably in Q4 of last year versus <unk>.

What came into Q1. So you saw that was one effect second effect is certainly that we are as I've mentioned continuing to invest in.

Adding more people into our business, where we see expertise we continue to do that in Q2. So there was a little bit of drag that came from that we also saw some softness in Canada. In Q2, Q2 tends to be a quarter for us where we should have seen some storm activity in Canada, which usually gives us a it gives us a margin left we didn't see that if anything we ask.

We saw a slowdown in Canada.

So those were probably the biggest factor is I don't know Bruce if you want to add anything to that no. I think you covered that I think that's right.

But we're not worried about the margin I mean this was.

There were some one time things as well, but that probably created a drag a little bit in Q2.

Okay.

That's helpful.

Maybe speak to contractor connection U C.

It sounded like it hits hits them.

Further momentum there.

Maybe just how that.

Business is developing I think you've recently added some.

New client wins.

Maybe how that could kind of ramp up for that business going forward.

Yes, we continue to feel good about the contractor connection business that as one business as a matter of fact, just referring back to Mark's question before that does have a positive and get some positive impact from inflation.

Because the size up the size of the project has a direct.

As a direct correlation to walk through our revenue there.

So we feel that that business is in good shape. You asked me a added a new client or we've added several new clients and we will continue to do that as you know and contractor connection, particularly with our larger clients. The change management on the large client side as you know is time consuming so.

It takes time for us to hit the run rate, but our goal has been to onboard clients and then have a very strong account management structure in place that helps pull through more assignments for those clients. So again, we feel we feel very good about it and we feel that the trajectory is solid.

Okay great.

Lastly, our medical management.

You referenced some.

New business, there as well as.

Post pandemic stability.

Just in terms of where you were.

Versus prior where you are prior to the pandemic is that better.

Just one of them.

Great.

Yes, we're getting there we're still below if we look at our <unk>.

2019, Q1, and Q2 is sort of a pre pandemic, we're probably still somewhere between 3% to 5% below that level from where we were in 2019, but certainly much better from where we were in Q2 of 2000 22021 2022, and so we've seen a sequential improvement in our medical management business, but we're still not at that.

Pre pandemic level.

But because of what we've seen in prior quarters, we feel the trajectory continues to be on the up and and we shipped pretty soon either get to it yet.

Our eclipse what was that pre pandemic.

Okay, great. Thank you for taking the questions.

Thank you Kevin Thanks, Kevin.

Thank you gentlemen, there are no further questions at this time I will turn the conference back to Mr. Vermont for closing remarks.

Thank you Alice and thank you to all our employees clients and shareholders for your continued commitment to Crawford <unk> company. We look forward to building on our strong second quarter as we move into the second half of 2023 and as always we wish you well and look forward to.

Taking you along on this journey with us Thank you and God bless.

Thank you participating in today's Crawford <unk> Company Conference call. This call will be available for replay beginning at 11 30, a M. E. S. T. Today through 11 59 P. M. On September 4th 2023 Conference I'd number for the replay is 2333.

Three a pound the number to dial for the replay is 870, 767470, 70 or 41676486 19.

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Okay.