Crawford & Co (CRD.A) 2005 Q2 法說會逐字稿

At this time I would like to welcome everyone to the Crawford & Company second quarter 2005 earnings release conference call. (OPERATOR INSTRUCTIONS). As a reminder, ladies and gentlemen, this conference is being recorded today, Monday, July 25, 2005. Some of the matters to be discussed in this conference call may include forward-looking statements that involve risks and uncertainties. The Company's actual results achieved in future quarters could differ materially from 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. 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, 2004 filed with the Securities and Exchange Commission, particularly the information under the headings Business, Legal Proceedings and Management's Discussion and Analysis of Financial Conditions and Results of Operations.

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 which is available on our website at www.CrawfordandCompany.com/UA_quarterly.HTML

I would now like to introduce Mr. Tom Crawford, Chief Executive Officer of Crawford & Company. Mr. Crawford, you may begin your conference.

Good afternoon everybody. Thank you for joining us today for our second quarter conference call. I'm Tom Crawford, Chief Executive Officer of Crawford & Company, and joining me today is John Giblin, our Chief Financial Officer, and Jeff Bowman, President of our International Division.

Today we will be discussing the Company's performance for the second quarter ended June 30 of '05. And later we will be happy to respond to any questions you may have. Hopefully all of you have received the press release we issued this morning. And I will turn things over to John to go over the highlights.

Companywide revenues before reimbursements increased 8.1% in the quarter to $186 million. Operating earnings totaled $5.5 million, down just under 4% from the 5.7 million we reported in last year's second quarter, but up over 6% from the $5.2 million reported for the first quarter of this year. We generated earnings per share of $0.05 for the quarter as compared to $0.11 in last year's second quarter and $0.05 in the first quarter of 2005. During the second quarter of 2004 the Company settled a tax credit refund claim with the Internal Revenue Service which increased earnings per share by $0.06 in that quarter.

Revenues from U.S. insurance company clients were flat as compared to the 2004 second quarter at $48.2 million on a 10.2% decline in claims volume. This decline in claims volume was broadbase, resulting in volume declines in substantially all the domestic property and casualty service lines of the Company. U.S. insurers posted a net profit on underwriting in 2004 for the first time since 1978, reflecting an industrywide contraction in claims volumes, excluding catastrophe claims in that year. The industry's net underwriting gain recorded in the first quarter of 2005 rose to a record $7.1 billion, the largest underwriting profit posted in any quarter since quarterly record keeping began in 1986.

Revenues from our self-insured clients declined 4.4% in the quarter to $38.6 million on a 4.9 percent decline in case volume from the Company's existing self-insured clients, only partially offset by net new business gains.

Class action revenues, including both administration and inspection services, grew by just under 32% in the quarter to $27.5 million. Our backlog of contracts awarded as of the end of the quarter totaled $40 million, a new record.

International revenues grew 9% in the quarter on a local currency basis, and by 14.8% in U.S. dollars to $71.6 million on an 11.3% increase in claim referrals. This revenue growth is largely due to increased claims volume in our United Kingdom and European operations from new contract awards, as well as hurricane related revenues in the Caribbean region.

Our U.S. operating margin decline from 3.5% in the second quarter of 2004 to 1.6% in the current quarter, despite revenue growth of just over 4%. The substantial decline in claim referrals from our insurance company clients in the quarter put severe pressure on our U.S. operating margins. However, this was partially offset by record revenues and earnings in our class action services unit, which benefited from the investment spending we incurred in the first quarter of 2005 to expand capacity in this unit.

Operating earnings in our international segment nearly doubled in the quarter to $3.7 million, reflecting an improvement in this segment's operating margin from 3.1% in the second quarter of 2004 to 5.2% in the current quarter. We have been awarded substantial new business in the United Kingdom and Europe as we previously mentioned. And we expect our international operating margin to continue to improve over the balance of the year.

Our cash position at the end of the quarter totaled $43.6 million, substantially unchanged from the cash balance at the end of last year. Cash provided by operations totaled 7.9 million for the first half of 2005 as compared to a use of cash of 5.5 million in the first half of 2004, helped by a collection of hurricane related receivables in the second quarter. Our cash position also benefited from collection of a note receivable related to the sale of an undeveloped parcel of land in last year's third quarter, reflected in cash flows from investing activities.

This wraps set my comments. Tom, I will turn it back over to you.

As most of you know I am getting close to ending my rookie year with Crawford & Company. We started September 1st of '04, and I'm sure most of you have made a note of that. And despite the fact that we have tow of the three major components of our Company doing reasonably well, I have been asked more than once in the last few weeks actually if the results in the U.S. operation disappoint me. And let me make that a clear answer. The answer is no.

This team that we have put together has a clear view of the amount of work that must be done to attain growth. There were, however, and I have answered this question clearly, I hope, and something you need to know, certainly more issues they were first anticipated. And again follow that with the good news that I strongly believe that we are moving rapidly to eliminate the causes behind lower claims volume for our Company.

And the key words, and I have been using them -- I used them extensively this morning, which I will chat about in just a second -- are people, training and quality. And we have had major issues in all three of those areas in the U.S. operations. You probably picked up on the fact already that I have not blamed the lower claim count on the industry who are experiencing record frequencies and profits. I am, however, realizing that we're paying a price, especially in the U.S., for the issues that we're addressing. I will talk some details with you, if anyone has questions about that as we go along.

We have made significant progress with our people and training and the improvement in quality. We are investing strongly on the top end. There is other good news X the claim count decrease. And that is the street is fully aware of our activities at Crawford & Company. I was addressing the Southwestern Work Comp Association this morning. I attended the REM's conference, had our people within the property loss committee meetings in Dallas, Texas, and the word is strong on the streets that we're doing things that are necessary to get the business back into Crawford & Company. And I had five, six people, risk managers, walk up to me this morning that do not do business with Crawford & Company and told me they know what is going on. And that is a good sign for us.

The better sign will be the margins improving, and I know that. And I think you can see from the international side that when we do invest on the top line, with good leadership and putting things in place, and I will give an example of that. Jeff Bowman and his team. The investment we have made in the international operation and people and quality are paying off. And that is clearly evident to me as we look at the decline in claims in the international market, the same in the U.S., we're up over 22% in claim counts increases in the international division with our revenues and margins improving.

And I'm going to stop just a moment and what Jeff Bowman pick a comment or two about the international operation, because it is an area right now that I think we're getting the payback for the investments in the past.

We're very pleased with the second quarter growth in pretax income. And that looks good for the balance of the year. We are actually at this moment chasing down a number of very large contracts where we changed the basis of our organization from individual referrals to contractual-based assignments. And that is beginning to have very significant effects in our UK, European and Canadian operations. Very recently we have been tendering on some large contracts in Asia-Pacific as well.

Just as a note, Hurricane Emily, which touched down in Mexico last week will not have that significant effect on our Latin American operations, as it cut through the Yucatan peninsula into Monterey. The damage there are was not as significant as perhaps the TV made out. To date, we are 19.4% up on claims assignments for the year to date, and 11.3% in the quarter. At the moment we see that trend continuing over the next two quarters at least.

Jeff will be available for questions later. Let me get back to the U.S. for a few moments because I think that is where most of your attention is going to be focused. I don't think at this point in time the solution to the weak margins in revenue in our U.S. business is cost-cutting. And although we are carefully monitoring all the expenditures, in fact, probably better than any time in the history of this Company.

I have said before and I will say it again, we have invested strongly in the top line for the U.S. side, and we will continue to do that. It is not to say that we won't sit back sometime in the third quarter, because I very believe by the end of the third quarter we have to look at ourselves from the standpoint of the margin, and possibly even introduce some things into the Company that will improve the margins from an infrastructure standpoint.

I'm going to spend most of my time in the second half of the year doing something that I have not done to date. I have spent a lot of time with our employees. I have spent a lot of time with our self-insured market. During the second half my plan is to be in front of major insurance companies. Our clients on that side of the business, especially the CMS side, addressing a couple of things. How we might work better together and to tell the Crawford story.

And I think we have done a good job of that with our self-insured side and employees. We certainly have not touched the insurance companies side. And I'm sure you are going to say why? Clearly until the quality is on the right path and where we need it, it is very difficult to walk in and tell a claims -- an insurance company that we can deliver the indemnity on the claim side that we have to deliver. And I don't think we would have a second chance. So I think we're prepared to do that at this point in time with the improving quality, and I plan to do that in the second half.

I am also pleased, extremely pleased, with the enthusiasm which Crawford employees have embraced the changes we have made in the Company's operations. This is extremely important to us as we go forward. I know that we have to focus on the things that are not going particularly well, and also look at the things that we're pleased with. And I have to tell you one that I'm extremely pleased with is Garden City, the operations there -- investments made under the outstanding leadership that is in Garden City. We're getting great dividends. And I say quite literally at this point in time. And we believe we will continue to see strong performance from both our international operation and Garden City operations for the remainder of the year.

I'm kind of looking forward to your questions today. And I'm going to close out and pitch it back to John.

I would like to give our callers a chance to ask any questions they might have about our second quarter release. Chastity, could you please explain the procedure for handling questions to our audience?

(OPERATOR INSTRUCTIONS). David Lewis with SunTrust Robinson.

John, you mentioned the U.S. insurance company claim counts. I missed that. What was that down?

The claim counts for the quarter -- the claims referred in the quarter were down 10%.

I might add, David, that June was an extreme month. We were, as I said last time, had leveled -- fairly leveled on claim count volume. And June hit us with a fairly significant decrease, which don't know if I have the full answer to that yet. I know where it is coming from, what part of the claims side it is coming from, but not a real good story yet on why the sudden decrease just in June, because April and May showed a leveling, in fact, for five months showed a leveling.

John, under the current spending level what kind of revenue growth does Crawford need to get to that 6% operating margin?

As a matter of fact, we were talking about -- we were anticipating that question right before the call. And the fact is we could achieve to 6% margin if our claims volumes remained stable. And we had just inflationary growth in our revenues in the range of say 2%, 2 to 3%. We could keep out costs in line to achieve a margin in the 5 to 6% range. And if we were to grow, if volumes would grow in just the mid single digits, then we could achieve margins in the range of 7 to 8%. But if the volume declines and revenue declines that prevent us from seeing margins in that 6% range, which is our target and continues to be our target.

Although that is going to be pretty challenging unless we get the benefit from an active hurricane season. Don't you agree?

Absolutely. Given the volumes that we have seen for the first half of the year, it is unlikely that we would achieve a 6% -- certainly a 6% margin for the full year. That would mean a substantial growth in margin for the last half of the year. But it is going to be based on volume growth.

I want to tell you, David, that one of the things that we're doing now is we feel what we're ready to do. And again you don't do things before you are ready from a quality standpoint, because we are now going out to the local brokerage business all over the United States. It is something the Company had backed away from for a period of time. In fact, no contact with local brokerage houses. And all of our branches right now on the CMS side are approaching the local operations to obtain the local business. And that is a void in the Company probably for three or four years.

In a couple of questions for Jeff on the international operations. One, can you give us sense of how much of the growth in claim referrals came from customers -- from the customers one using less vendors and giving you a greater piece of the overall pie; two, catastrophe related work; and three, new customers.

Sure.

Just generally.

A significant amount of the Canadian, European and UK business now comes from volume contracts. In the past 18 months we have probably won about eight or nine major contracts where the potential revenue over a five-year period is somewhere in the region of about $150 million. So that is business that comes in through a contractual base where the number of providers has been decreased from whenever the number was to perhaps one, too, or three, which is said common number. We have been pretty successful on that.

From the Caribbean side on the catastrophes, and we have had other catastrophes as well, obviously out in the Asia-Pacific region earlier this year where we have benefited some revenue. That isn't a larger part of our revenue. That really is small increases on the overall side. But there has been a profit increase in that period at the same time as well.

And the third part of that statement was?

I guess I was just trying to figure out how much of it was catastrophe related. Can you give us the dollar amount of catastrophes in the second quarter?

Yes, I think in our international operations for the first six months the catastrophe related revenues would be in the 2 million on a U.S. dollar basis. On a -- I'm sorry -- on a local currency basis it would be about 2 million.

How about U.S. catastrophe revenues, John?

U.S. catastrophe revenues were 3.4 million in the second quarter. And that is up just under 5% compared to the second quarter of 2004, and it was 3.3 million.

I have other questions, but I will come back after -- I also wanted to make some comments. Thank you.

Ira Zuckerman with Sanford Group.

Tom, with the big drop-offs in claims from your insurance customers can you identify how much of this is just the Company's doing more of the work themselves and how much of it is just an overall decline for their incoming claims?

I think the industry is probably seeing some of the best results they have ever seen. And I am not -- and I will not use that as a rationale for us not having more volume. Because I think the volume is there, but they're having record years. In '04, in fact, '05 may be the record year for property and casualty, which means frequency is significantly down across the board, where comp frequency in probably showing the most dramatic change of anywhere in the industry.

So I -- even though that is down, I believe all the opportunity in the world for our volume to grow is there. And I am not -- hopefully you don't think I'm trying to kid myself into something that is not going to happen. This whole issue of our claim drop off is quality. And we have paid a pretty dear price for that over the past 18 months to 2 years.

It looks to me from what I'm getting (indiscernible) at least on the private passenger side, it looks like claim frequency is sort of leveling out. Maybe that is some small hope.

I knew where the claims are coming from every direction. We know the property. The property right now is continuing to increase slightly on property on the -- let me get the others here. I'm looking at some graphs here. Automobile has dropped off slightly. Vehicle inspections have dropped off slightly. Casualty is up slightly. Heavy equipment is up. So it is a mixture here, but overall I think we have kind of put ourselves in this box, not the industry. Clearly I think the industry would look for help on the claims side if the quality was there.

Manny Riser (ph) with Wachovia Securities.

Tom you mentioned that you're going to be going out to the insurance clients in the near future and talk about I guess the improvement in quality or where we're headed with the quality issue?

Correct.

Could you give us a little bit more color on that, because certainly as you have been stressing quality hasn't been where you would like to be. So tell me a little bit more specifically where the improvements are or when we will start to see the improvements?

I think we have already seen the improvements in quality. I wouldn't have gone out before. I think one of the reasons I chose to go see our self-insured clients is that we have those under contract. We have dedicated units in a lot of cases for our major self-insureds, so that is an area that we have better quality because we have the dedicated units.

On the insurance companies side, where you've got to walk in and tell the vice presidents of claims that you can deliver the same indemnity that their department delivers, and we couldn't do that. Yes, we get claim counts. We get claims from these companies, and we still do. But not to the degree that you would get if you could demonstrate the severity -- the controlled severity of the claim and the closure of the claim.

And I wasn't prepared, and certainly I would hope you would understand why you don't go out and talk about that until you are ready to deliver, our quality of our organization has been changing probably since April of last year. Prior to me getting here, when it became known to a lot of people in here that quality was really an issue, despite the fact that some of the people here were saying it was okay, and we're big, and they have to do business with us. I think John Giblin may have brought that to the forefront as the CFO prior -- long before I got here. And they did put some things in place.

But quality isn't something -- quality you can impact clearly within hours if you make wrong decisions, but you don't build it back in hours. Quality will take this Company probably at least 18 months to build back to the level it should be. But we can't wait 18 months. I don't plan to wait 18 months. We're approaching 89, 90% quality ratios, and there's a lot of details behind that that I don't think I can get into in here. But we have broken down to contact time, to supervisory involvement within the first week, to how many are open after 30 days, 60 days, 90 days. Typical what you have to do to run a claim operation the same as the company's.

I think we're prepared right now to go into the offices of the claim vice president. I was in one two weeks ago and got a very strong response from one of the top companies in the United States about what we're doing. And so I think it is time that we started opening the faucet up and see what we can do in it. And time will tell. But one of the reasons I don't want to back away from the investments in the top end that we're making right now is that we haven't it yet as far as opening the faucet up. But you can't go and ask for it until you're ready to handle it. I think we are border line ready, but I can't wait any longer.

What about on the technology side? Are we nearing the end of our major investments?

I don't think we can say we're near the end, because of the investment in Risk tech alone. Risk tech is coming to fruition. We will introduce it in Houston in the fall of this year. And we will introduce it to a major client in the first quarter of next year. But that system alone is costing us a lot of money, and I can't back away from that right now. It is the answer to a lot of our issues from what the companies are wanting from us, and that is online claims management.

How much are you spending on technology this year?

In the U.S., in the neighborhood of $40 million. It is a lot of money. And I believe that when you look at revenue and look at 9% at revenue, it is there alone is where I hope over a period time -- not hope -- where we will get a margin increase, because that number should be around 5%. At the highest it should be no more than 6. When you're investing in something new it might go to 6. But when you finish that it should float around 5% for a service company. And look at ours at 9 you can certainly see some margin enthusiasm for me as we mature this risk tech system. And quite frankly that process won't begin probably where you see that $40 million coming down until anywhere from -- and I hate to say this -- but probably September of next year would be the earliest that I can move on that number.

And that 40 million is for this year, for 2005 or --?

Just to clarify, that is the total P&L cost of our information technology operations. It is the cost of maintaining our existing systems and the development costs and so on. It is not the investment that we're making say in new computer software that would float through the cash-flow statement, if that is what you were referring to.

Was that what you were referring to?

Yes.

And that number -- the costs that we have put in over the last several years -- in 2002 we invested 11 million in new software, 13 million in '03, just under 8 million in '04. And we're on track to do about 2.6 million through the first half of '05 to -- it is going to accelerate in the second half '05. And will probably be in the 8 million range, similar to where we were in '04. And then it will start to level off in '06.

Now that is just the software. That does conclude the hardware, which a big chunk of our property and equipment additions is IT cost. And that is mostly PCs for our field operations. And that has been running in the neighborhood of 8 to 9 million over the last three years. And it has come down a little bit.

I would assume though that those hardware costs become pretty much a fixed nature, because you're already always replacing PCs every (multiple speakers).

You're right. You're right. You're constantly replacing those costs.

That is clear to me. When I say 5% in the month or so I'm talking about total IT costs. And that is what I focus on. I believe, and I think most analysts know, that we certainly haven't got the bang for the buck for the investment we have made into IT.

Just one general type of question. With the significant investment in technology, and certainly the whole world has become a lot closer because of the technology features that we all are dealing with, is it still really necessary to maintain all the bricks and mortars that we have out there? Because it just seems that many industries -- you replaced some human manpower with these technology features. I understand the growth initiatives that we want, but it seems like -- I'm just wondering if having all those offices out in every single town, city, state whatever is truly necessary?

You think a little bit the way I do when you talk about infrastructure. I know how many branches I have got. I certainly think this is an area that we'll be addressing. I don't want to talk a lot about it at this point in time. I came in here looking what I inherited. We have made some move on the CMS side. They're going to 92 branches from 72. But I am not at this point in time saying that is where it needs to end.

I think that we will be addressing it in the second half of this year. Is the infrastructure what we want? And that strategic, and I think it is some opportunity for us. I would say the numbers right now are probably not the place to go.

I will say that we are gradually over time shifting out of the office space that we hold. And we do have a lot more home-based workers today than we had last year and the year before. It has been a gradual thing. And you see that if you were to look at our financial statements in just the rent line. Our rent and occupancy costs have come down over the last several years in double digits. And for the first half of this year it is down 11%, over $1 million from where it was in the prior year. So what you're suggesting that we should be doing actually is occurring out there.

I just wonder you have to take another very hard look at it and --.

Could we move faster us what you are saying.

Yes, obviously. You have gone through the margins. I mean 1.6% on the U.S. side, when this year we were hoping to be closer to I think 6 -- 5 to 6. I think you have to examine that. One or two other quick questions. Has there been any further progress or anything that you could share with us on the U.S. subpoena side with the Attorney General?

I'll handle that one. We are as confident today as ever before that this Company has been doing business the right way. And as you know, the international has been released. The Garden City Group has been released from that subpoena in writing. And we are sitting here waiting for further positive news. That is about as much as I can say right now.

Okay, very good. I'll get off and I will let somebody else get on. Thank you guys.

(OPERATOR INSTRUCTIONS). David Lewis with SunTrust Robinson.

I have a couple of questions. One, can you give us an outlook on what you think Hurricane Dennis claims revenues might equate to, and whether you think you received any margin from that business?

There will be of minimal impact on us. Certainly it was one we -- it is hard to hope for stuff, but at times you start hoping, but it didn't materialize until -- what it did do for us probably that made me feel good is the fact that we today have built one of the finest cat responsive programs in the country. And I have been deeply involved in that. The man running it, Bud Price, has a lot of experience in it. And the response we had to that situation was far superior to any that we have responded to in the U.S. in a long time. And that will mean something to us eventually.

Again, we're early in the season to have it tested as good. We also tested something that is fairly unique in the industry, and that is the satellite communication trucks that we have available on a leased basis through Crawford & Company that we can deploy anywhere in the United States in 24 hours. So that word has also gotten out. It has also been written up for several national magazines. And that will bode well for us when the storms do hit and we do, without planning for it, we do anticipate however, that this is going to be a tough storm year. But Dennis had very little impact on us.

And can you talk a little bit about the self-insured and the health care segment losses in the second quarter versus the year ago?

I think those are the two biggest concerns I have. Health care actually has leveled a little bit. The RMS -- the self-insured side is still showing deterioration. And that is probably the biggest challenge I have right now is to stop that. And that is -- we're getting some flow of new business recently, but not enough to offset the loss of business. And that is my biggest concern and challenge. And I think that we are putting some things in place to address that, beyond what we have talked about in the past. I'm not sure we are ready to chat a lot about that, but it is a concern and one that I think we have to take some action on from the standpoint of how do we get scale on the RMS side?

I guess the question I was looking for is if that were separated would the U.S. margin have been material or any higher than the 1.6% that you reported?

It would be higher.

Don't want to quantify, I guess?

There are a lot of issues in terms of allocation of cost between our services between the services to the insurance company and the self-insured entities. And I guess I would hesitate to get too much into quantification of those different areas. But I would definitely agree that our margin would be higher if that were separated out.

I guess you all have talked about Fresno as an example having as much as several million dollars of losses. Have you seen any improvements there or is that still in the fix it stage?

It is in the fix it stage, but we are seeing improvement, and I think significant improvement. We passed three state exams in three of our offices. We just finished the Fresno exam from the state, and we're waiting word on that. I don't anticipate the Fresno exam to be particularly good, because it went back and looked at '01 and '02 files, and you can't fix history.

But I think they know that Crawford & Company has made every effort possible to get the quality in place in Fresno, and from the middle of '04 forward the quality is good in Fresno. And that is going to save us money. As you know, we pay penalties and interest when we don't do it right. And that has been one of the bigger issues -- one of the bigger issues that I was faced with when I took the job. And Bob Kulbick, who runs the RMS side, has put enough people there and enough training in place that that will be a significant issue to this Company going forward -- a positive issue from the standpoint of impact on margins. We're talking millions in Fresno alone from a cost standpoint. And that will go away. We're very confident of that.

Do you think that is a 24 months type of --?

I told the Board that by the beginning of '06 that we -- Fresno would be handled the way it is suppose to be handled. Which means if we get it there, other than the historical clients that we may be faced with, the ongoing situation will be millions less than what it has been in the past. And acceptable to me. And acceptable to me, we're talking 1, 2% error ratio which is pretty traditional in the business. We have been much, much higher than that.

I think that is -- I always -- I picked out three or four things that we had to change in the Company. Fresno was one of them as far as impact on the margin. The reason I was confident that we could get the margin of this Company back to an acceptable level.

I do want to just clarify -- this is John -- on the self-insured business segment that it is -- not segment, but self-insured market. It does produce a contribution to our overhead. So it is not 0-- I don't want to imply that it is losing money on a direct cost basis. But it does not contribute as much to our overhead costs as the services provided to our insurance company marketplace at this point in time due in large measure to those problems in California that Tom just mentioned.

Finally on the positive side, I want to talk a little more about Garden City, what kind of new business you picked up? What might the outlook be for the second half? You have had clearly a nice acceleration the last couple of quarters in revenue on a record backlog.

Right now -- I'm talking to leadership there -- they have never been more excited. We have opened up the West Coast operation. They're very excited about the business coming in on the West Coast. We have a base in Seattle, Washington with strong leadership. We have a base in the Midwest, and we have one in New York City. And that is one of bright spots of the Company right now. And I don't anticipate that dimming anytime soon, if at all.

You read the papers, the next couple of years are going to be extremely strong on the class action side. And we are -- we're better positioned I think that anyone in the industry to capture that business. As you know, we had six of the top ten class action settlements. And we will probably be able to tell you we have added to that very shortly.

Do you care to venture out into a revenue range for the second half, or do we -- will we be pleased if we saw the revenue on a sequential basis off that 27 million flat in each of the third and fourth quarters?

I think we going to be pleased with Garden City period for the entire year.

At this time there are no further questions. Mr. Crawford, are there any closing remarks?

No, actually, other than to say I enjoy these sessions. I think they're healthy. And I look forward to our future discussions and questions that come from our analysts. So thank you everybody.

Thank you for participating in today's Crawford & Company conference call. This call will be available for a replay beginning at 6 PM Eastern standard time today through 11:59 PM Eastern standard time on August 1, 2005. The conference ID number for the replay is 7810341. The number to dial for the replay is 1-800-642-1687 or 706-645-9291. Thank you. You may now disconnect.