Crawford United Corp

croco.com under the investor relation section. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. Instructions will follow at that time. Should anyone need assistance at any time during this conference, please press star, then zero, and an operator will assist you. As a reminder, ladies and gentlemen, this conference is being recorded today, Tuesday, August 5, 2025. Now I would like to introduce Tammy Stevenson, Crawford & Company's General Counsel. Please go ahead.

Thank you, Angeline. Some of the matters to be discussed in this conference call and in the supplementary financial presentations may include forward-looking statements that involve risks and uncertainties. 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, 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. The company's actual results achieved in future quarters could differ materially from the results that may be implied by such forward-looking statements. The company undertakes no obligation to publicly release revisions to any forward-looking statements made in this conference call to reflect events or circumstances occurring after the day of the call or to reflect the occurrence of unanticipated events. In addition, you are reminded that operating results for any historical period are not necessarily indicative of the results to be expected for any future period. For a complete discussion regarding factors which could affect the company's financial performance, please refer to the company's Form 10-Q for the quarter ended June 30, 2025, 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 of operation, as well as subsequent company filings with the SEC. This presentation also includes certain non-GAAP financial measures as defined under the SEC rules. As required, a reconciliation is provided for these matters to those most directly comparable GAAP measures. I would like to now introduce Mr. Rohit Verma, Chief Executive Officer of Crawford Company. Rohit?

Thank you, Tammy. Good morning and welcome to our second quarter 2025 earnings call. Joining me today is Bruce Swain, our Chief Financial Officer, and Tammy Stevenson, our General Counsel. After our prepared remarks, we will open the call for your questions. This quarter, we continue to make progress on our strategic objectives. Consolidated revenue grew year over year. with three of our four segments delivering top-line growth. While we're seeing the effects of lower property claims frequency in the U.S., which puts some pressure on revenues in our North America loss adjusting and platform solution segments, we saw encouraging results across the broader business. Notably, we achieved growth in our non-weather segments, highlighting the effectiveness of our diverse business model and disciplined execution in navigating various market options. This morning, I'll review our segment operations for the second quarter before handing it over to Bruce for a deeper dive into our financial performance. As you've heard me say before, our scale, expertise, and longstanding legacy of service excellence are true differentiators in the marketplace. We operate in over 70 countries with 10,000 employees and access to more than 50 000 field resources and was one of the only companies with the capability to respond to complex claims of any size anywhere each year we manage more than 20 billion dollars in claims globally reflecting our reliability in meeting the needs of the world's leading carriers corporations and public entities our global presence deep technical expertise and over eight decades of experience position us competitively as a critical partner to clients navigating increased complexity and risk across a wide range of geographies and market conditions. We see several core components driving our growth. First, the global frequency of weather events continues to add volatility to claim staffing needs of carriers. That heightens demand for our proven capabilities in managing complex weather-related claims. At the same time, our diversified business model ensures that we're not solely dependent on weather. When one area experiences lower claims volume, like we've been seeing in U.S. property, that downturn can be offset by growth in non-weather-related areas of our businesses, like Broad Spire and parts of international operations. We continue to gain market share where carriers are increasingly prioritizing reliability, scalability, and compliance, signaling a flight to quality service providers. As a trusted, well-established partner, we believe Crawford is uniquely positioned to surpass those expectations. We have formed many valuable strategic partnerships with clients across the globe and remain focused on deepening those relationships across multiple service lines and new geographies. Finally, our market leadership is reinforced by our deep bench of technical expertise and our investment in cutting-edge technology. These capabilities not only set us apart from competitors, but are also a key factor in winning new business and enhancing profitability. With these drivers in place, we are confident in our ability to generate sustainable long-term growth regardless of quarter-to-quarter weather fluctuations. In the second quarter, consolidated revenue grew 2.8% with North America loss adjusting, international operations, and Broad Spire each contributing to our top line growth and Broad Spire having another record revenue quarter. Consolidated operating earnings were largely consistent with last year's second quarter and improved sequentially compared to first quarter 2025. excluding the impact of a non-recurring international tax item, consolidated operating margin would have been 7.8% representing an improvement over the second quarter of 2024. Bruce will share more details on that shortly. North America loss adjusting saw an year-over-year decrease in operating earnings due to lower U.S. property claims activity, and broad-spire operating earnings decreased year-over-year due to strategic headcount additions and investment in technology. International operations and platform solutions posted improved operating earnings and margin expansion. We continue to see strong new business momentum, which is encouraging for future growth. Based on the company's solid performance and confidence in our continued growth, our board has approved an increase in the quarterly dividend to 7.5 cents per share for both CRDA and CRDB. Our balance sheet remains strong, with liquidity well maintained and a leverage ratio steady at 1.75 times EBITDA. In the second quarter, storm activity was relatively stable, year over year up just 1%. A 3.8% decline in weather-related revenue in the quarter was offset by revenue growth of 5.2% in our non-weather businesses, enabling us to achieve consolidated revenue growth in the quarter. We are seeing a lower frequency of claims filed for comparable events. We believe this is largely related to affordability dynamics playing in the residential property market in the U.S. Tire deductible and concern for increased insurance pricing has suppressed residential property claims filing. We view the lower U.S. property claims frequency as a temporary dynamic and not a structural shift. As reinsurance pricing stabilizes, we expect this trend to normalize over the next 12 to 18 months. In the meantime, the resilience of our non-weather segments and the strength of our balanced model continues to support steady, sustainable growth. This top-line result demonstrates the effectiveness of our diversified business model, which enables us to respond and grow in an environment of changing weather patterns and market dynamics. Our capital allocation strategy is rooted in discipline and long-term value creation. We remain focused on deploying capital in ways that support sustainable growth, strengthen our competitive position, and return value to short shareholders. We continue to invest in our core business with an emphasis on operational excellence initiatives, technology enhancements, and talent development, ensuring we are well-positioned to serve clients and expand market share. We are also open to evaluating M&A opportunities that can expand our capabilities and our geographic reach. Our balance sheet reflects our progress in reducing leverage and our liquidity position is strong, giving us the financial flexibility to respond to both opportunities and challenges as they arise. We remain committed to returning capital to shareholders and are pleased to have had the opportunity to raise our dividend. With that, let me turn over the call to Bruce for a deeper look at our segment, Operational and Financial Performance.