Crawford & Company

Good morning, my name is Michelle and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Crawford and Company fourth quarter and full year 2022 earnings release conference call. In conjunction with this call, a supplementary financial presentation is available on our website at www.crawco.com under investor relations section. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. Instructions will follow at that time. Should anyone need assistance at any time during this conference, please press star then zero and an operator will assist you. As a reminder, ladies and gentlemen, this conference is being recorded today, Tuesday, March 7, 2023. Now I would like to introduce Tammy Stevenson, Crawford & Company's General Counsel. Please go ahead.

Thank you, Michelle. Some of the matters to be discussed in this conference call and in the supplementary financial presentation may include forward-looking statements that involve risks and uncertainties. These statements relate to, among other things, our expected future operating results and financial conditions, our ability to grow our revenues and reduce our operating expenses, expectations regarding our anticipated contributions to our underfunded defined benefit pension plans, collectability of our billed and unbilled accounts receivable, financial results from our recently completed acquisitions, our continued compliance with the financial and other covenants contained in our financing agreement, our long-term capital resource and liquidity requirements, and our ability to pay dividends in the future. The company's actual results achieved in future quarters could differ materially from the results that may be implied by such forward-looking statements. The company undertakes no obligation to publicly release revisions to any forward-looking statements made in this conference call to reflect events or circumstances occurring after the date of the call or to reflect the occurrence of any unanticipated events. In addition, you are reminded that operating results for any historical period are not necessarily indicative of results to be expected for any future period. For 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, 2022, 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 operations, 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. I would now like to introduce Mr. Rohit Verma, Chief Executive Officer of Crawford & Company. Rohit?

Thank you, Tammy. Good morning and welcome to our fourth quarter and full year 2022 earnings call. Joining me today is Bruce Swain, our Chief Financial Officer, Joseph Blanco, our President, and Tammy Stevenson, our General Counsel. After our prepared remarks, we will open the call for your questions. Before we begin, I would like to extend our thoughts to all those that have been impacted by the devastating earthquakes that hit Turkey and Syria in early February. The severity and frequency of catastrophic events continues to increase and is making our work even more meaningful in these difficult times. I convey my sincere gratitude to all insurance professionals and rescue workers engaged in helping those that have been impacted. Turning to our results, Crawford delivered record revenue in the fourth quarter and the full year, highlighting the significant progress we have made on our long-term growth strategy. For the full year, revenues reached nearly $1.2 billion, an increase of 8% over the prior year, or 11% on a constant currency basis. This quarter marked our ninth straight quarter of revenue growth. Since we laid out our growth strategy two years ago, We have consistently delivered top line expansion, which highlights the strong execution and dedication of our global team. In North America loss adjusting, we shared our growth plan that was centered on building our team of experts for large and complex accounts and expanding our U.S. footprint to drive deeper penetration in local and regional markets. We are currently well ahead on our hiring goals, and as a result, our sales momentum with large and complex claims is increasing, while at the same time we are driving market share gains with local and regional carriers. We have seen increasing demand for our differentiated services as claims complexity rises and carriers continue to outsource large and complex claims. Our strategy within platforms is to reimagine traditional claims management by bringing together network resources and technology that transforms the current insurance claims ecosystem. We focus our efforts on continued innovation and scaling the business as well as deepening relationships with the top 10 carriers to drive growth in this segment. Increased activity in our networks business as well as the contributions from Praxis continue to support our top line growth. Importantly, within our platform's business, we are now partnered with eight of the top 10 PNC carriers in the U.S. Revenue in Broad Spire grew at mid-single digits in 2022, driven by our differentiated technology capabilities, which have resulted in increased sales. In international, we had shared that our expectations for top-line growth for this segment was low single digits. However, ongoing activities related to the catastrophic flooding in Australia drove a 9% increase in international revenues on a constant currency basis in 2022. We expect the growth in international to normalize to mid single digit levels moving forward. Overall, we are extremely pleased that our strategy to grow the top line across all our businesses is yielding results and performing in line and in certain cases better than our expectations. Turning now to our approach on improving margins. We remain focused on ensuring our revenue growth translates into expanded profitability across the company. For the year, we delivered margin expansion in North America loss adjusting as well as Broad Spire. The ongoing investments we have made, including adding experts, closing geographic market gaps, and investing in quality are driving improved margins across the business. We expect to see further margin and profitability expansion as our new hires ramp and we continue scaling the North America loss adjusting business. Additionally, our work to improve underpriced accounts is showing encouraging results. Operating leverage for new sales growth as well as an accelerated recovery in medical management should boost margins in BroadSpot. Our profit contribution from platform solutions was strong. However, the operating margin was lowered compared to the prior year due to the impact of decreased weather frequency in our contractor connection business and a mixed shift impact from increased growth in our networks business. We expect margins to get even stronger as frequency rebounds and our pricing changes take effect. Margins across our international operations remain challenged. In past quarters, we laid out the deliberate actions we are taking to improve margins in the business. This includes pricing, productivity improvement, new systems and improved processes, and aligning our cost structure to current market conditions. These actions continue, and early indications show that they are bearing fruit. We have made leadership changes, addressed unfavorable contracts and pricing tiers to improve underlying profitability issues. While there's more work to do, we remain confident that we're making the necessary changes to turn the tide, and we expect to see improvement in first quarter of 2023. We are continuing to execute on our capital allocation strategy, which includes further strengthening our financial position. We leverage our liquidity to fund working capital needs related to the storm activities in the US during the fourth quarter. We expect improved cash generation as we move forward, which we will use to pay down debt and guide our leverage ratio to a target of well below two times EBITDA by the end of 2023. As we look forward, we are committing to expanding margins and improving profitability across the business. Our $127 million of new business wins in 2022, combined with our pricing focus, support our confidence in sustained revenue growth and profit expansion. We are in a solid financial position and we feel confident in our ability to continue executing on our growth strategy while navigating an evolving macroeconomic environment. With that, I'd like to hand the call over to Joseph, who will discuss our business line results for the year.