Q4 2024 Crawford & Co Earnings Call
Sylvie: Good morning, my name is Sylvie and I will be your conference solicitator today.
Good morning, My name is Sylvia and I will be your conference to listen.
Sylvie: At this time, I would like to welcome everyone to the Crawford & Co.
Speaker Change: At this time I would like to welcome everyone to the Crawford <unk> company fourth quarter and full year 2024 earnings release conference call in conjunction with this call a supplementary financial presentation is available on our website at www Dot crocco dot com under the Investor Relations.
Sylvie: 4th Quarter and Full Year 2024 Earnings Release Conference Call.
Sylvie: In conjunction with this call, a supplementary financial presentation is available on our website at www.crawco.com under the Investor Relations section. All lines have been placed on mute to prevent any background noise.
Section.
Speaker Change: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer sessions and instructions will follow at that time.
Sylvie: After the speaker's remarks, there will be a question and answer session. Instructions will follow at that time. Should anyone need assistance at any time during the conference, please press star zero for an operator who will assist you.
Speaker Change: Anyone need assistance at any time during the conference. Please press star zero for an operator, who will assist you.
Sylvie: As a reminder, today, ladies and gentlemen, this call is being recorded, and it is March 4, 2025.
Speaker Change: As a reminder, today, ladies and gentlemen, this call is being recorded.
Speaker Change: And it is March 4th 2025, I would now like to introduce Tammy Stevenson Crawford <unk> Company's General Counsel. Please go ahead.
Tami Stevenson: I would now like to introduce Tami Stevenson, Crawfrd, and Company's General Counsel. Please go ahead.
Tami Stevenson: Thank you, Sylvie. Some of the matters to be discussed in this conference call in this supplementary financial presentation may include forward-looking statements that involve risks and uncertainty. These statements may relate to, among other things, our expected future operating results and financial condition, our ability to grow our revenues and reduce our operating expenses, expectations regarding our anticipated contributions to our underfunded defined benefit pension plans, collectibility of our billed and unbilled accounts receivable, financial results from our recently completed acquisitions, 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.
Speaker Change: Thank you Sylvie some of the matters to be discussed in this conference call and the supplementary financial presentation may include forward looking statements that involve risks and uncertainties.
Speaker Change: These statements may relate to among other things our expected future operating results and financial condition, 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.
Speaker Change: Acquisitions, 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.
Tami Stevenson: 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 date of the call or to reflect the occurrence of unanticipated events.
Speaker Change: The company's actual results achieved in future quarters could differ materially from the results that maybe 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 date of the call or to reflect the occurrence of unanticipated events.
Tami Stevenson: In addition, you are reminded that the operating results for any historical period are not necessarily indicative of the results to be expected for any future period.
Speaker Change: In addition, you're reminded that the operating results for any historical period are not necessarily indicative of results to be expected for any future period.
Tami Stevenson: For a complete discussion regarding factors which could affect the company's financial performance, please refer to the company's Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission, particularly the information under the headings BRICS Factors and Management's Discussion and Analysis of Financial Condition and Results of Operation, as well as subsequent company filings with the SEC. This presentation 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.
Speaker Change: For a complete discussion regarding factors, which could affect the company's financial performance. Please refer to the company's Form 10-K for the year ended December 31, 'twenty 'twenty four filed 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 operation as well as subsequent company filings.
Speaker Change: With the SEC. This presentation 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 would now like to introduce Mr. Rohit Verma, Chief Executive Officer of Crawford and company from it. Thank you Tammy good morning.
Rohit Verma: I would now like to introduce Mr. Rohit Verma, Chief Executive Officer of Crawford & Company. Rohit? Thank you, Tami.
Rohit Verma: Good morning and welcome to our fourth quarter and full year 2024 earnings call. Joining me today is Bruce Swain, our Chief Financial Officer, and Tami Stevenson, our General Counsel.
Speaker Change: Welcome to our fourth quarter and full year 'twenty 'twenty four earnings call. Joining me today is Bruce Swain, our Chief Financial Officer, and Tommy Stephenson and our general counsel.
Rohit Verma: After our prepared remarks, we will open the call for your questions. We closed out 2024 with a strong fourth quarter. This reflected the continued strength of our core businesses, BroadSpar, and international operations. Our North America Loss Adjusting and Platform Solution segments, which are largely weather dependent, also delivered a solid quarter, following claims activity from Hurricane Helene and Milton. This morning I'll highlight the key takeaways from the fourth quarter before handing it over to Bruce for a deeper dive into our segment financial performance. On this slide, you'll see some of the top clients we proudly serve.
Speaker Change: After our prepared remarks, we will open the call for your questions. We closed out 2024 with a strong fourth quarter. This reflected the continued strength of our core businesses broad spire and international operations.
Speaker Change: North America loss, adjusting and platform solutions segments, which are largely weather dependent also delivered a solid quarter. Following claims activity from Hurricanes Helene and Milton.
Speaker Change: This morning, I'll highlight the key takeaways from the fourth quarter before handing it over to Bruce for a deeper dive into our segment financial performance.
Speaker Change: On this slide you will see some of the top clients. We proudly serve Crawford manages over $20 billion in claims annually across 70 countries, making us the largest publicly traded claims management provider worldwide.
Rohit Verma: Crawford manages over $20 billion in claims annually across 70 countries, making us the largest publicly traded claims management provider worldwide. Our global scale and reputation for excellence set us apart in a fragmented market. And with a team of 10,000 skilled professionals, we continue to be a trusted partner of choice for our clients. Crawfrd is uniquely positioned to capitalize on long-term industry trends with technology at the core of our strategy to enhance claims management and deliver superior service to our clients. Though we may see quarter-to-quarter variations in catastrophic events, we continue to see an overall increase in the severity and frequency of extreme weather events.
Speaker Change: Mobile scale and reputation for excellence set us apart in a fragmented market and with a team of 10000 skilled professionals, we continue to be trusted partner of choice for our clients.
Speaker Change: Crawford is uniquely positioned to capitalize on long term industry trends, but technology at the core of our strategy to enhance claims management and deliver superior service to our clients.
Speaker Change: So we may see quarter to quarter variations in catastrophic events, we continue to see an overall increase in the severity and frequency of extreme weather events.
Rohit Verma: As the demand for advanced claim solutions continues to grow, our technology-enabled response capabilities allow us to quickly scale and support clients through these events. Beyond weather-related claims, the insurance industry is seeing a rapid shift towards outsourced claims activity. Crawford's global scale and deep carrier relationships allow us to efficiently handle complex claims, reducing costs and improving outcomes for clients. We are also well positioned for growth in the PNC insurance markets, gaining market share in the fragmented U.S. independent loss-adjusting sector, and strengthening our partnerships across all business segments. By integrating automation and digital workflow enhancements, we continue to optimize claims handling, positioning Crawfrd as the partner of choice in an evolving industry.
Speaker Change: The demand for advanced claim solutions continues to grow our technology enabled response capabilities allow us to quickly scale and support clients through these events.
Speaker Change: Beyond weather related claims the insurance industry is seeing a rapid shift towards outsourced claims activity.
Speaker Change: Crawford at global scale, and deep carrier relationships allow us to efficiently handle complex claims reducing costs and improving outcomes for clients.
Speaker Change: We are also well positioned for growth in the P&C insurance markets gaining market share in the fragmented U S independent loss adjusting sector and strengthening our partnerships across all business segments.
Speaker Change: By integrating automation and digital workflow enhancements, we continue to optimize claims handling positioning Crawford as the partner of choice in an evolving industry.
Rohit Verma: Our commitment to innovation ensures we remain at the forefront of claims management. By leveraging cutting-edge technology, enhancing operational efficiency, and delivering market-leading solutions, we are well-positioned to drive sustainable growth and reinforce our leadership in the industry. Turning to our fourth quarter performance, we delivered 17% year-over-year revenue growth driven by strong performance in our non-weather core businesses plus the return of weather-related claims activity. Hurricanes Helene and Milton were significant events that contributed to this increase. and our strong client relationships positioned us as a key partner for outsource claims processing, reinforcing Crawfrd's role as a trusted provider in catastrophe response.
Speaker Change: Our commitment to innovation ensures we remain at the forefront of claims management.
Speaker Change: By leveraging cutting edge technology, enhancing operational efficiency and delivering market, leading solutions, we are well positioned to drive sustainable growth and reinforce our leadership in the industry.
Speaker Change: Turning to our fourth quarter performance, we delivered 17% year over year revenue growth driven by strong performance in our non weather core businesses plus the return of weather related claims activity.
Speaker Change: Hurricanes Helene and Milton were significant events that contributed to this increase.
Speaker Change: And our strong client relationships position us as a key partner for outsource claims processing reinforcing crawford's role as a trusted provider in catastrophe response.
Rohit Verma: Importantly, we saw revenue growth across all segments, highlighting the strength and resilience of our diversified business model. North America Loss Adjusting, International Operations, and Platform Solutions all delivered margin expansion and improved profitability, reflecting disciplined execution and continued demand for our services. Our operating earnings increased 140% year-over-year, primarily reflecting high revenues from catastrophe-related claims. While weather remains a variable factor in our business, this quarter's results demonstrate that when storm activity occurs, we are well-positioned to respond and support our clients effectively.
Speaker Change: Importantly, we saw revenue growth across all segments, highlighting the strength and resilience of our diversified business model.
Speaker Change: North America loss, adjusting international operations and platform solutions, all delivered margin expansion and improve profitability, reflecting disciplined execution and continued demand for our services.
Speaker Change: Our operating earnings increased 140% year over year, primarily reflecting higher revenues from catastrophe related claims.
Speaker Change: While the weather remains a variable factor in our business. This quarter's results demonstrate then when storm activity occurs we are well positioned to respond and support our clients effectively.
Rohit Verma: We paid a quarterly dividend of $0.07 per share for CRDA and CRDB, underscoring our commitment to returning capital to shareholders. Additionally, our balance sheet remains strong, with ample liquidity providing us the financial flexibility to invest in growth opportunities. Throughout 2024, we have consistently highlighted the decline in storm activity compared to the historical levels.
Speaker Change: We paid a quarterly dividend of seven cents per share for CRD, a and C or D. B underscoring our commitment to returning capital to shareholders. Additionally, our balance sheet remains strong with ample liquidity, providing us the financial flexibility to invest in growth opportunities.
Speaker Change: Throughout 2024, we have consistently highlighted the decline in storm activity compared to the historical levels, while on a full year basis severe storm activity was down Hurricanes Helene and Milton impacted the fourth quarter and preliminary strong data from NOAA indicates that storm activity increased 50.
Rohit Verma: While on a full-year basis, severe storm activity was down, Hurricanes Helene and Milton impacted the fourth quarter, and preliminary storm data from NOAA indicates that storm activity increased 52 percent year-over-year in the fourth quarter of 2024, following a particularly quiet Q4 in 2023. This uptick in severe weather had a clear impact on our financial performance. Our core non-weather segments grew 7%, demonstrating the strength of our diversified business model. At the same time, weather-related revenue increased 45%, driven by the return of outsource claims activity in our weather-dependent businesses.
Speaker Change: 82% year over year in the fourth quarter of 'twenty 'twenty four following a particularly quiet Q4 in 2023.
Speaker Change: This uptick in severe weather had a clear impact on our financial performance our core non weather segments grew 7% demonstrating the strength of our diversified business model at the same time weather related revenue increased 45% driven by the return of outsourced claims activity in our weather dependent businesses.
Rohit Verma: Looking deeper, our network segment, closely tied to catastrophe response, saw a 154% revenue increase, reinforcing Crawford's role as a trusted partner when severe weather strikes.
Speaker Change: Looking deeper our network segment closely tied to catastrophe response saw a 154% revenue increase reinforcing crawford's role as a trusted partner when severe weather strikes.
Rohit Verma: As we enter the first quarter, weather conditions have remained relatively quiet. Our thoughts are with all those impacted by the California fires at the beginning of this year, and our teams are working to assist the recovery efforts where they are needed. We do not anticipate a significant revenue impact from wildfires, as wildfire-related claims are typically characterized as total loss, and the outsourcing of claims is in turn lower. Our capital strategy is centered on driving sustainable growth while maintaining financial flexibility. We prioritize investments in innovation and technology to enhance our service capabilities and efficiency. Additionally, we continue to pursue strategic acqui-hires that expand our expertise and market reach, including the addition of three teams in Spain during the fourth quarter.
Speaker Change: As we enter the first quarter weather conditions have remained relatively quiet.
Speaker Change: Thoughts are with all those impacted by the California fires at the beginning of this year and our teams are working to assist the recovery efforts, where they are needed. We do not anticipate a significant revenue impact from wildfires as wildfire related claims are typically characterized as total loss and the outsourcing of claims is in turn lower.
Speaker Change: Our capital strategy is centered on driving sustainable growth, while maintaining financial flexibility.
Speaker Change: We prioritize investments in innovation and technology to enhance our service capabilities and efficiency. Additionally, we continue to pursue strategic aqua hires that expand our expertise and market reach including the addition of three teams in Spain during the fourth quarter.
Rohit Verma: At the same time, we remain committed to returning capital to shareholders, as reflected in our full-year dividend payment totaling $0.28 per share. Our conservative approach to leverage, which was at 1.85 times EBITDA, ensures we have ample liquidity to execute our strategy while delivering consistent, long-term value to shareholders.
Speaker Change: At the same time, we remain committed to returning capital to shareholders as reflected in our full year dividend payment totaling 28 cents per share our conservative approach to leverage which was at 1.85 times EBITDA ensures we have ample liquidity to execute our strategy, while delivering consistent long term value to.
Speaker Change: <unk>.
Bruce Swain: With that, let me turn over the call to Bruce for a deeper look at our operational and financial performance. Thank you, Rohit. Crawfrd operates a diversified business model across four key segments, promoting a balanced revenue mix, enabling us to navigate market fluctuations while capitalizing on opportunities across our business lines. North America loss adjusting, which includes our loss adjusting operations in the U.S. and Canada, accounted for 24% of 2024 revenues. International operations, covering all service lines outside North America, contributed 32% of total revenue. reflecting our strong global presence. Broadspire, our U.S.-based third-party administration business, represents 30% of total revenue.
Bruce Swain: With that let me turn over the call to Bruce for a deeper look at our operational and financial performance. Thank.
Speaker Change: Thank you Robert Crawford operates a diversified business model across four key segments promoting a balanced revenue mix, enabling us to navigate market fluctuations, while capitalizing on opportunities across our business lines.
Speaker Change: North America loss, adjusting which includes our loss adjusting operations in the U S and Canada accounted for 24% of 2024 revenues International operations covering all service lines outside North America contributed 32% of total revenues, reflecting our strong global presence.
Speaker Change: At spire, our U S based third party administration business represents 30% of total revenues.
Bruce Swain: Platform Solutions, which includes Contractor Connection, Networks, and Subrogation Services, accounted for 14% of revenues, supporting our strategy of offering end-to-end claims management solutions. North America loss adjusting saw strong growth in the fourth quarter of 2024 with revenues increasing 14% year-over-year to $79.4 million. Operating earnings improved substantially from the prior year quarter to $3.4 million, reflecting increased storm activity and the benefit of our continued investment in talent. Within the segment, GTS delivered another record-breaking quarter with revenues reaching $29.2 million, up 37% year-over-year. Additionally, U.S. field operations grew 13% year-over-year to $27.6 million, further demonstrating the strength of our client relationships and our ability to support carriers during periods of heightened claims activity.
Speaker Change: Platform solutions, which includes contractor connection networks and subrogation services accounted for 14% of revenues supporting our strategy of offering end to end claims management solutions.
Speaker Change: North America loss adjusting saw strong growth in the fourth quarter of 2024 with revenues, increasing 14% year over year to $79 4 million operating earnings improved substantially from the prior year quarter to $3 4 million, reflecting increased storm activity and the benefit of our continued.
Speaker Change: The investment in talent.
Speaker Change: Within the segment GTS delivered another record breaking quarter with revenues, reaching $29 2 million up 37% year over year. Additionally, U S field operations grew 13% year over year to $27 6 million further demonstrating the strength of our client relationships and our ability to.
Speaker Change: To support carriers during periods of heightened claims activity.
Bruce Swain: A key growth driver for this segment is our strategic investments in talent, expanding our roster of highly skilled adjusters, which continues to position us for growth as demand increases for our specialized expertise in complex claims. Our international operations segment continued its strong momentum in the fourth quarter, delivering revenues of $112.5 million, growing 16% year-over-year, or 13% on a constant currency basis. This growth was driven by strong performances across Europe, Australia, and Asia, supported by weather-related claims and large-loss activity. Operating earnings of $8.5 million, more than tripled compared to the prior year quarter. And operating margin expanded by 526 basis points, reflecting the success of our strategic efforts to enhance pricing, improve productivity, and drive new business growth.
Speaker Change: A key growth driver for this segment as our strategic investments in talent expanding our roster of highly skilled adjusters, which continues to position us for growth as demand increases for our specialized expertise in complex claims.
Speaker Change: Our international operations segment continued its strong momentum in the fourth quarter delivering revenues of $112 5 million growing 16% year over year or 13% on a constant currency basis.
Speaker Change: This growth was driven by strong performances across Europe, Australia, and Asia supported by weather related claims and large loss activity.
Speaker Change: Operating earnings of $8 5 million more than tripled compared to the prior year quarter and operating margin expanded by 526 basis points, reflecting the success of our strategic efforts to enhance pricing improve productivity and drive new business growth.
Bruce Swain: While we expect to see quarter-to-quarter variation in international margins, with the presence of some one-time benefits in the fourth quarter. The overall trajectory remains positive. Our focus on operational efficiencies and disciplined execution is delivering results, and we look forward to seeing continued improvement in 2025. Our Broad Spire business delivered fourth quarter revenue of $97.7 million, a 6% increase over the prior year, driven by higher utilization of medical management services. Operating earnings were $10.1 million with an operating margin of 10.4%. During the quarter, we proactively invested in staffing to ensure we have the capacity and expertise to support future growth, and the additional expense impacted our operating margin in the quarter.
Speaker Change: While we expect to see a quarter to quarter variation in international margins with the presence of some one time benefits in the fourth quarter.
Speaker Change: The overall trajectory remains positive our focus on operational efficiencies and disciplined execution is delivering results and we look forward to seeing continued improvement in 2025.
Speaker Change: Our broad spire business delivered fourth quarter revenue of $97 7, million% to 6% increase over the prior year driven by higher utilization of medical management services.
Speaker Change: Operating earnings were $10 1 million with an operating margin of 10, 4%.
Speaker Change: During the quarter, we proactively invested in staffing to ensure we have the capacity and expertise to support future growth and the additional expense impacted our operating margin in the quarter.
Bruce Swain: Our Platform Solutions segment saw a significant increase in revenue in the fourth quarter, growing 55% year-over-year to $57.6 million, primarily due to claims activity from Hurricanes Helene and Milton. Operating earnings also rose 144% year-over-year, reflecting the impact of increased storm-related claims volume. As Rohit mentioned, Network's revenues were a key growth driver, increasing 154% year-over-year, underscoring our strong carrier relationships and ability to support clients when severe weather occurs. Subrogation also saw a 4% year-over-year revenue increase, contributing to overall segment performance. While these results highlight the value of our capabilities and catastrophe response, it's important to note that weather-driven claims volumes can fluctuate.
Speaker Change: Our platform solutions segment saw a significant increase in revenue in the fourth quarter growing 55% year over year to $57 6 million, primarily due to claims activity from Hurricanes Helane and Milton.
Speaker Change: Operating earnings also rose, 144% year over year, reflecting the impact of increased storm related claims volume.
Speaker Change: As Robert mentioned networks revenues were a key growth driver, increasing 154% year over year.
Speaker Change: Underscoring, our strong carrier relationships and ability to support clients when severe weather occurs <unk>.
Speaker Change: Subrogation also saw a 4% year over year revenue increase contributing to overall segment performance.
Speaker Change: While these results highlight the value of our capabilities in catastrophe response. It is important to note that weather driven claims volumes can fluctuate as we move into 2025, we remain focused on strengthening our client partnerships and expanding our capabilities to drive long term sustainable growth.
Bruce Swain: As we move into 2025, we remain focused on strengthening our client partnerships and expanding our capabilities to drive long-term, sustainable growth.
Bruce Swain: Now let's take a look at our consolidated financials. In the fourth quarter of 2024, company-wide revenues before reimbursements were $347.3 million, an increase of 17% compared to the prior year period. foreign exchange rates increased revenues by $2.4 million, or less than 1%. Gap net income attributable to shareholders totaled $5.7 million compared to a net loss of $818,000 in the same period of 2023. Gap diluted EPS in the 2024 fourth quarter was $0.11 for CRDA and $0.12 for CRDB, increasing from a loss of $0.02 for both share classes in the 2023 period. On a non-GAAP basis, diluted EPS was $0.19 for both CRDA and CRDB, compared to $0.06 for CRDA and $0.07 for CRDB in the prior year.
Speaker Change: Now, let's take a look at our consolidated financials.
Speaker Change: In the fourth quarter of 2020 for companywide revenues before reimbursements were $347 3 million, an increase of 17% compared to the prior year period.
Speaker Change: Foreign exchange rates increased revenues by $2 4 million or less than 1%.
Speaker Change: GAAP net income attributable to shareholders totaled $5 7 million compared to a net loss of 818000 in the same period of 2023.
Speaker Change: GAAP diluted EPS in the 2020 for fourth quarter was <unk> 11 cents for CRD, a and <unk> 12 for CRD b, increasing from a loss of <unk> <unk> for both share classes and the 2023 period.
Speaker Change: On a non-GAAP basis diluted EPS was <unk> 19 for both CRD, a and CRD b compared to six cents for CRD, a and seven cents for CRD b in the prior year period.
Bruce Swain: The company's non-GAAP operating earnings totaled $18.7 million in the 2024 fourth quarter or 5.4% of revenues, increasing 140% from $7.8 million or 2.6% of revenues in the prior year period. Consolidated Adjusted EBITDA was $27.9 million in the 2024 fourth quarter, or 8% of revenues, increasing 78% from $15.7 million, or 5.3% of revenues in the 2023 quarter. The company's cash and cash equivalent position as of December 31, 2024 totaled $55.4 million, compared to $58.4 million at the 2023 year-end. Our total receivables were up $25.2 million from the 2023 year-end, primarily due to an increase in weather-related claims that we expect to unwind in the coming years.
Speaker Change: The company's non-GAAP operating earnings totaled $18 7 million in the 2020 for fourth quarter were five 4% of revenues, increasing 140% from $7 8 million or two 6% of revenues in the prior year period.
Speaker Change: Consolidated adjusted EBITDA was $27 9 million in the 2020 for fourth quarter or 8% of revenues, increasing 78% from $15 7 million or five 3% of revenues in the 2023 quarter.
Speaker Change: The company's cash and cash equivalent position as of December 31, 2024 totaled $55 4 million compared to $58 4 million at the 2023 year and our.
Speaker Change: Total receivables were up $25 2 million from the 2023 year end, primarily due to an increase in weather related claims that we expect to unwind in the coming year.
Bruce Swain: The company's total debt outstanding as of December 31, 2024 totaled $218.1 million, up from $209.1 million as of December 31, 2023. Net debt stood at $162.7 million as of December 31, 2024, while our U.S. pension liability was $21.1 million at the end of the year, reflecting a funded ratio of 92.4%.
Speaker Change: The company's total debt outstanding as of December 31, 2024 totaled $218 1 million up from $209 1 million as of December 31, 2023.
Speaker Change: Net debt stood at $162 7 million as of December 31, 2024, while our U S pension liability was $21 1 million at the end of the year, reflecting our funded ratio of 92, 4%.
Bruce Swain: We made no discretionary contributions to our U.S. Defined Benefit Pension Plan during 2024, and we do not intend to make contributions during the coming year. Cash provided by operating activities for 2024 was $51.6 million, with free cash flow of $10 million. This compares to cash flow from operations last year of $103.8 million and free cash flow of $67.2 million. This decrease in free cash flow in 2024 was primarily due to the $48 million impact from the change in billed and unbilled accounts receivables. This decrease in our free cash flow is a result of timing-related variations, and it is not uncommon for us to see such fluctuations.
Speaker Change: We made no discretionary contributions to our U S defined benefit pension plan during 2024, and we do not intend to make contributions during the coming year.
Speaker Change: Cash provided by operating activities for 2024 was $51 6 million with free cash flow was $10 million. This compares to cash flow from operations last year of $103 8 million and free cash flow was $67 2 million.
Speaker Change: This decrease in free cash flow in 2024 was primarily due to the $48 million impact from the change in billed and Unbilled accounts receivable.
Speaker Change: This decrease in our free cash flow as a result of timing related variations and it is not uncommon for us to see such fluctuations the decrease in free cash flow in 2024 is not a reflection of the company's long term cash generating capabilities.
Bruce Swain: The decrease in free cash flow in 2024 is not a reflection of the company's long-term cash-generating capabilities. Unallocated corporate costs were $8 million in the 2024 fourth quarter, compared to costs of $9.4 million in the same period of 2023. The increase was primarily due to increases in self-insured expense and professional fees. During the 2024 fourth quarter, non-service pension costs were $2.5 million, compared to $2.2 million in the 2023 period. We recognize pre-tax contingent earn out cost of $448,000 in the 2024 fourth quarter compared to cost of $925,000 in the 2023 period.
Speaker Change: Unallocated corporate costs were $8 million in 2020 for fourth quarter compared to cost of $9 4 million in the same period of 2023. The increase was primarily due to increases in self insured expense and professional fees.
Speaker Change: During the 2020 for fourth quarter non service pension costs were $2 5 million compared to $2 2 million in the 2023 period.
Speaker Change: We recognized pre tax contingent earn out cost of 448000 in the 2020 for fourth quarter compared to cost of 925000 in the 2023 period.
Bruce Swain: As Rohit mentioned earlier, we paid a $0.07 dividend per share for both CRDA and CRDB in the fourth quarter.
Speaker Change: As Robert mentioned earlier, we paid a <unk> <unk> dividend per share for both CRD, a and CRD b in the fourth quarter.
Bruce Swain: During the fourth quarter of 2024, the company did not repurchase any shares of CRDA, but repurchased approximately 24,000 shares of CRDB at an average share cost of $10.94. As a reminder, approximately 1.1 million shares are eligible to be repurchased under our 2021 share repurchase authorization.
Speaker Change: During the fourth quarter of 2024, the company did not repurchase any shares of CRD, a but repurchased approximately 24000 shares of CRD b at an average share cost of $10 94.
Speaker Change: As a reminder, approximately one 1 million shares are eligible to be repurchased under our 2021 share repurchase authorization.
Rohit Verma: With that, I'll turn the call back over to Rohit for concluding remarks. Thank you, Bruce. We closed out 2024 with a strong fourth quarter, delivering revenue growth and improved profitability. This performance highlights the strength of our diversified business model and our ability to respond effectively when demand arises. Our deep client relationships and operational expertise continue to position us as a trusted partner in times of need. While weather remains unpredictable, our focus on innovation, efficiency, and client service ensures we are positioned to deliver value across market cycles.
Speaker Change: With that I'll turn the call back over to ROE with for concluding remarks. Thank you Bruce we closed out 2024 with a strong fourth quarter delivering revenue growth and improve profitability. This performance highlights the strength of our diversified business model and our ability to respond effectively when demand arises.
Speaker Change: Our deep client relationships and operational expertise continue to position us as a trusted partner in times of need.
Speaker Change: While weather remains unpredictable our focus on innovation efficiency and client service ensures we are positioned to deliver value across market cycles.
Rohit Verma: I want to thank our employees for their dedication and expertise, which continue to set Crawford apart as a leader in the industry. I also want to thank our clients, shareholders, and partners for their ongoing trust and support.
Speaker Change: Thank our employees for their dedication and expertise, which continue to set Crawford apart as a leader in the industry I also want to thank our clients shareholders and partners for their ongoing trust and support.
Rohit Verma: Thank you for your time today.
Speaker Change: Thank you for your time today Sylvie please open the call for questions.
Sylvie: Sylvie, please open the call for questions. Thank you.
Sylvie: At this time, if you would like to ask a question, please press start and number one on your telephone keypad. To withdraw from the question queue, please press start and number two. And if you're using a speakerphone, please lift the handset before pressing any key.
Speaker Change: Q.
Speaker Change: At this time, if you would like to ask a question. Please press Star then the number one on your telephone keypad to withdraw from the question queue. Please press Star then the number two and if you're using a speaker phone. Please lift the handset before pressing any keys.
Sylvie: We will pause a brief moment to compile the Q&A roster.
Speaker Change: We will pause a brief moment to compile the Q&A roster.
Maxwell Fritscher: And your first question will be from Maxwell Fritscher at Tourist. Please go ahead. Hi, good morning. I'm calling in from Mark Hughes. Morning.
Maxwell fixture: And your first question will be from Maxwell fixture at tourists. Please go ahead.
Speaker Change: Hi, good morning, I'm, calling any morning, Matthew good morning.
Maxwell Fritscher: In Broad Spire, any observations about the underlying claims, specifically workers comp? Are you seeing any material inflection and claims activity there?
Speaker Change: In broad spire any observations about the underlying claims specifically workers' comp are you seeing any material.
Speaker Change: Flips in claims activity there.
Rohit Verma: Hi, Max, this is Rohit. No, you know, we obviously saw changes emerge as we were just coming out of COVID. But in general, we've seen stabilization in the in the type of claims and the frequency of claims. So nothing really different this year or this quarter to report.
Roy: Hi, Max this is Roy.
Roy: No. We obviously saw changes emerge as we were just coming out of Covid, but in general we've seen stabilization and in the type of claims and the frequency of claims so nothing really different this year or this quarter to report.
Rohit Verma: And then the operating margin there at Broad Spire, a little lower versus the mid-teens run rate for the year. Any observations there you can point to? You know, in 2024, we wrote a lot of new business, and we grew by about 9%. We had already planned that, you know, there'll be some increased expenses in the fourth quarter reflecting the increased hiring that we anticipate for the new business that we've written. So we're not really worried about the broad spire margin.
Roy: And then the operating margin there at broad buyer, a little lower versus the mid teens run rate for the year.
Speaker Change: Observations there you can point to.
Speaker Change: You know in in 2024, we wrote a lot of new business and we grew by about 9%.
Speaker Change: We had a we had already planned that there'll be some increased expenses in the fourth quarter, reflecting the increased hiring that we anticipate for the new business that we've written so we're not really worried about the broad spire margin.
Maxwell Fritscher: I mean, we're still holding on overall in the mid-teens, and that's what we expect to Okay, and another good result in international, and you had mentioned that it was partially driven by enhanced pricing. So how are you, or how do you look at pricing going into 2025 in international? You know, in international, we had done some analysis and we found that there were some accounts that we needed to adjust pricing on, and we've done that. We also believe that we have enforced pricing discipline, just not in international, but across the organization. But I think we've largely closed the pricing gap that we had.
Speaker Change: We're still holding on overall.
Speaker Change: In the mid teens and that's what we expect to continue.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Another good result in international and you had mentioned that dude, partially driven by enhanced pricing so.
Speaker Change: How are you or how do you look at pricing going into 2025.
Speaker Change: International.
Speaker Change: In International we had done some analysis and we found that there were some accounts that are that we needed to adjust pricing on and and we've done that we also believe that we have enforced pricing discipline, just not in international but across the organization.
Speaker Change: But I think we've largely close the pricing gap that we had there might be still a handful of accounts here or there that might that might need that adjustment, but overall, we're feeling very good about our international trajectory.
Rohit Verma: There might be still a handful of accounts here or there that might need that adjustment. But overall, we're feeling very good about it in international.
Maxwell Fritscher: Thank you.
Speaker Change: Thank you and then last one for me on capital allocation any any expectations for share repurchases in 2025.
Rohit Verma: And then last one from me on capital allocation. Any any expectations for share repurchases in 2025? We have still, you know, over a million dollars, or I'm sorry, a million shares left in our authorization. And as you know, we've been disciplined buyers. We will continue to look for opportunities where there are blocks available for us to buy. But other than that, we'll, you know, we'll continue the program, but expect to sort of be at similar levels to what you've seen so far.
Speaker Change: We have still you know over $1 million or I'm, sorry, 1 million shares left in our authorization.
Speaker Change: And as you know we've been disciplined buyers. We will continue to look for opportunities where there are blocks available for us to buy but other than that though we will continue the program but.
Speaker Change: Expect to sort of be at similar levels to what you've seen so far.
Sylvie: Great, thanks for taking my questions. Once again, if you do have any questions, please press star followed by 1 on your touchtone phone.
Great. Thanks for taking my questions.
Speaker Change: Thanks.
Speaker Change: Once again, if you do have any questions. Please press star followed by one on your Touchtone phone.
Kevin Steinke: Next question will be from Kevin Steinke at Barrington Research, please go ahead. a good morning. Thank you, Kevin.
Speaker Change: Next question will be from Kevin Spanky Barrington Research. Please go ahead.
Speaker Change: Hey, good morning.
Rohit Verma: Bye, Kevin. I wanted to start out by asking about just the share of weather-related claims. You know, you feel like you're getting relative to... prior spikes in severe weather activity, you know, given your onboarding of clients, etc. Do you feel like you're gaining share of the weather-related claims? We definitely feel that, Kevin, that we are gaining share and doing well through these cycles of storms. As you know, particularly Milton, we would have had a very different result had Milton crossed over Tampa versus it was south of that. But all things considered, we thought that we got a very fair share of claims during the weather.
Speaker Change: Kevin.
Speaker Change: Lynn.
Speaker Change: I wanted to start out.
Are you asking about just.
Speaker Change: The share of weather related claims.
Speaker Change: Do you feel like you're getting relative to.
Speaker Change: Prior spikes and severe weather activity.
Speaker Change: Given your Onboarding of.
Speaker Change: Uh huh.
Speaker Change: Sure.
Speaker Change: What.
Speaker Change: Do you feel like you're gaining share.
Speaker Change: Of the weather.
Speaker Change: Weather related claims.
Speaker Change: We definitely feel that Kevin that we are we are gaining share and and and.
Doing well through these through the cycle those storms storms as you know, particularly Milton.
We would have had a very different result had milton crossover.
Speaker Change: Over Tampa versus it was it was south of that.
Speaker Change: But.
All things considered we thought <unk> got a very fair share.
Speaker Change: Of claims during the weather.
Kevin Steinke: during this interview.
During the severe weather.
Rohit Verma: OK, thanks and. The broad spire margin, just to follow up on that again. You noted the investments in staffing levels. It sounds like that's something you might leverage pretty quickly, given the ramp up of new business, or are there more investments to be made there? Just kind of thinking about the trajectory of the broad spire margin as we enter 2025. Yeah, I think BroadSpy, we believe that our biggest differentiator in BroadSpy has been our technology. And as we've stated before, that the lion's share of our CapEx technology investment has been in BroadSpy. We expect similar levels of investment to continue in 2025 as we continue to not just shore up some of the things that we've done, but also advance into new areas that relate to analytics and AI.
Speaker Change: Okay. Thanks.
Speaker Change:
Speaker Change: The broad spire margin just to follow up on that again.
Speaker Change: You noted the <unk>.
Speaker Change: The investments and staffing levels.
Speaker Change: It sounds like that's something you might leverage pretty quickly.
Speaker Change: Given the ramp up of new business.
Speaker Change: Or.
Speaker Change: Are there more investments to be made there just kind of.
Speaker Change: Thinking about the.
Jack: For Jack <unk>.
Speaker Change: Broad spire margin.
Speaker Change: We enter 2025.
Speaker Change: Yes, I think broad spire, we believe that our biggest differentiator in broad spot has been our technology and as we've stated before that aligns share of our Capex technology investment has been in broad spire. We expect similar levels of investment to continue in 2025 as we as we continue to not just shore up.
Speaker Change: Some of the things that we've done but also advance into new areas that relate to analytics and AI.
Rohit Verma: So I think you will see a combination of people as well as tech investment to continue in BroadSpy.
So I think youll see a combination of people as well as tech investment to continuing broad spire.
Kevin Steinke: Okay, thanks. And just again, also on the international operating, international operations margin in the quarter, obviously very strong. Bruce, I think you mentioned some one-time benefits as well in the quarter.
Speaker Change: Okay. Thanks.
Speaker Change: And.
Speaker Change: Just again also on the.
Speaker Change: International operating international operations margin in the quarter.
Speaker Change: Obviously very strong.
Speaker Change: Bruce I think you mentioned, some one time benefits as well in the quarter I don't know if that's.
Bruce Swain: I don't know if that's, you know, something very meaningful to call out quantitatively or not, but I don't know if there's any additional color you could offer there. Yeah, we had a one-time, you know, indirect tax benefit that came in in the quarter, you know. About a million and a half or so. which helped in the fourth quarter. It'll be non-continuing.
Speaker Change: Something very meaningful to call out.
Speaker Change: Quantitatively or not but I don't know if there is any additional color you could offer there.
Speaker Change: Yeah, we had a we had a one time.
Speaker Change: Yes.
Speaker Change: Direct tax benefit that came in in the quarter.
Speaker Change: <unk>.
Speaker Change: At a million and a half or so.
Speaker Change: Which we.
Speaker Change: Which helped in the fourth quarter it will be non continuing but even when you back that out so still a solid quarter for international and are in a good year for them overall.
Bruce Swain: But even when you back that out, still a solid quarter for international and a good year for them. Kevin, I think if you look at 2024, you know, every quarter we bumped up the international margin. And I think that, you know, as we head into 2025, our goal is to make sure that on a quarterly comparison that international continues on that positive.
Speaker Change: Okay. That's helpful.
Speaker Change: You look at 2024 every quarter.
Speaker Change: We bumped up the international margin.
Speaker Change: And I think that.
Speaker Change: As we head into 2025, our goal is to make.
Speaker Change: Make sure that at it on a quarterly comparison that international continues on that positive trajectory.
Kevin Steinke: Okay, that's great. and the very strong growth you had in global technical services. I think you set up 37 percent year-over-year.
Speaker Change: Okay.
Speaker Change: That's great.
Speaker Change: And.
Speaker Change: The very strong growth you had in <unk>.
Speaker Change: Global Technical services.
Speaker Change: I think you set up 37% year over year.
Rohit Verma: Should we think of that being influenced meaningfully by weather or is that just kind of a continued trajectory of hiring and, you know, people getting more productive as they join your platform? Yeah, I would say it's largely because of the continued aqua hires that we've been focused on in that segment. We still believe that we have a low market share in that space, and there's more room for us to grab. Obviously, the growth levels are not going to be similar on a percentage basis, given we were coming off a low base. But as we get to a critical mass, those would start to stabilize.
Speaker Change: Should we think of that being influenced meaningfully by weather or is that just kind of the continued trajectory of hiring.
Speaker Change: People are getting more productive as they join your platform.
Speaker Change: Yes, I would say, it's largely because of the.
Speaker Change: The continued aqua hires that we've been focused on in that in that segment.
Speaker Change: We still believe that we have a low market share in that space.
Speaker Change: And there is more room for us to grab obviously the.
The growth levels are now going to be similar on a percentage basis, given we were coming off a low base, but as we get to a critical mass those would start to stabilize but we still think that mid single digit to low double digit is not out of question.
Rohit Verma: But we still think that mid-single-digit to low-double-digit is not out of the question.
Rohit Verma: Okay, makes sense. And you also mentioned Hiring I think three teams in Spain. Can you just maybe give us a little bit more color on that?
Speaker Change: Okay makes sense.
Speaker Change: And you also mentioned.
Speaker Change: Hearing I think three teams in Spain.
Speaker Change: Can you just maybe give us a little bit more color on that.
Rohit Verma: What business those folks are in and just the overall strategy there internationally. Yeah, I think that when we look at our AQUI-HAR strategy, which is acquired teams of experts wherever we can, that is something that we have been trying to execute globally. We've had more success in the U.S. certainly, but we've also seen success internationally. We had reported on teams that we had brought on board in Netherlands before. We had an opportunity in Spain to pick these three teams up that are going to add significant depth to our loss-adjusting capabilities in Spain, and we have several others in the pipeline across the world that we're working on.
Speaker Change: What.
Speaker Change: Business those folks are in.
Speaker Change: The overall.
Speaker Change: Strategy there internationally.
Speaker Change: I think that when we look at our Aqua hire strategy, which is to.
Speaker Change: Acquired teams of experts wherever we can and that is something that we have been trying to execute globally. We've had more success in the U S. Certainly, but we've also seen success internationally. We had reported on teams that we brought onboard in Netherlands before.
Speaker Change: We had an opportunity in Spain two to pick. These three teams up that are going to add significant depth to our loss adjusting capabilities in Spain.
Speaker Change: And we have several others in the pipeline across the world that we're working on.
Rohit Verma: Okay, and lastly, Do you expect any meaningful carryover in terms of flames volume and revenue generation into the first quarter of 2025 from the hurricanes Helene and Milton? Not really. Both those hurricanes did not have long tails, so we largely addressed the backlog of claims in 2024 itself. And as we look at 2025, we feel that the trajectory of our core non-weather businesses remains strong. From a weather perspective, it has been light, absent any polar vortex-like events. So everything seems as we would expect.
Speaker Change: Okay and lastly.
Speaker Change: Do you expect any more.
Speaker Change: Meaningful.
Speaker Change: Carryover in terms of.
Speaker Change: Claims volume revenue generation into the first quarter of 2025 from.
Speaker Change: Hurricanes Helene and Milton.
Speaker Change: Not really both those hurricanes did not have long tail. So we largely addressed.
Speaker Change: The backlog of claims in 2020 for itself.
Speaker Change: And as we look at 2025, we feel that the trajectory of our core non weather businesses remained strong from a weather perspective, it has been light.
Speaker Change: Absent any polar vortex like events.
Speaker Change: So everything seems as we would expect and if normal weather patterns.
Kevin Steinke: And if normal weather Okay, well thanks for taking the questions and congratulations.
Speaker Change: To happen this year, we feel pretty good about where we stand.
Speaker Change: Okay, well, thanks for taking the questions.
Kevin Steinke: I'll turn it back over. Thank you, Kevin.
Speaker Change: And congratulations I will turn it back over.
Kevin: Thanks, Kevin.
Rohit Verma: And at this time, I would like to turn the call back over to Mr. Verma for closing remarks. Thank you, Sylvie, and thank you to all our employees, clients, and shareholders for your continued commitment to Crawford and Company.
Speaker Change: And at this time I would like to turn the call back over to Mr. <unk> for closing remarks.
Speaker Change: Thank you Sylvia and thank you to all our employees clients and shareholders for your continued commitment to Crawford <unk> company. This.
Rohit Verma: This concludes our call today. Thank you so much, and God bless. Thank you for participating in today's Crawford & Company conference call.
Speaker Change: This concludes our call today. Thank you so much and God bless.
Speaker Change: Yes.
Speaker Change: Thank you for participating in today's Crawford <unk> Company Conference call.
Sylvie: This call will be available for replay beginning at 1130 a.m. ET today through 1159 p.m. ET on April 4, 2025. The conference ID for the replay is 03099-POUND.
Speaker Change: This call will be available for replay beginning at 11 30 am Eastern time today to 11 59 PM Eastern time on April 4th 2025.
Speaker Change: The conference I'd for the replay is 03099 pound the number 2000. The replay is one to believe 666 to six four.
Sylvie: The number to dial for the replay is 1-888-660-6264. Thank you. You may now disconnect your line.
Speaker Change: You may now disconnect your lines.