Crawford & Co (CRD.A) 2011 Q1 法說會逐字稿

Good afternoon. My name is Sarah and I'll be your conference facilitator today. At this time, I'd like to welcome everyone to the Crawford & Company first quarter earnings release conference call. In conjunction with this call, a supplementary financial presentation is available on our website at www.crawfordandcompany.com under the Investor Relations section. (Operator Instructions) As a reminder, ladies and gentlemen, this conference is being recorded today, Friday, May 6, 2011.

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 may include, but are not limited to, statements regarding the funded status of our defined benefit pension plans, our expectations related to future revenues and expenses, our long-term liquidity requirement and our ability to pay dividends in the future. 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.

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 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, 2010, filed with the Securities and Exchange Commission, particularly the information under the Headings Business, Risk Factors, Legal Proceedings, and Management's Discussion and Analysis of Financial Conditions 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. Jeffrey Bowman, President and Chief Executive Officer of Crawford & Company. You may begin your conference.

Thanks, Sarah. A warm welcome to our investors, clients and employees this afternoon. I am Jeffrey Bowman, President and CEO of Crawford & Company. Joining me from the Global Executive Management team this afternoon are Bruce Swain, our CFO, and Allen Nelson, our General Counsel and Chief Administrative Officer. I will begin with some opening comments on our very strong first quarter results. Bruce will then review the first quarter financials in more detail, which will be followed by our review of our business segments, comments on our strategic initiatives, and conclude with our corporate focus and increase to our guidance.

Let me first note that we have realigned two of our business segments by moving the Canadian, Latin American, and Caribbean operations from the former International Operations segment to the new Americas segment. In addition our former US Property and casualty segment is now included in the new Americas segment. The remaining operations and the former International Operations segment, comprising all operations in Europe, including the United Kingdom, Middle East, Africa, as well as Asia Pacific, including Australia and New Zealand, will now be referred to as EMEA AP. The historical results of prior periods have been reclassified to conform to the current presentation of our reportable segments and these schedules are attached to our current earnings release. The change in reportable segments does not have any impact on consolidated financial results as previously reported. It does, however, reflect both clearer geographical groupings and a precise alignment to the Company's current management structure.

I am pleased to report that the consolidated financial results for the first quarter were ahead of expectations. For the quarter, over the prior year, revenue was up 21% and net income attributable to Crawford & Company was up 298%. Claims for the group were also up by 10.5%. As a result, consolidated GAAP earnings per share reached $0.23, compared to earnings per share of $0.06 a year ago. This improvement followed gains in revenue and earnings in the third and fourth quarters in 2010. This is a good start to the year.

The special project in our Legal Settlement Administration segment has been central to our improvement in revenue and earnings over this period. Global weather events have also accelerated over the past several months. Our EMEA AP segment reported improved first quarter results, as weather-related claims in both Australia and the United Kingdom supported stronger claims activity, which was up 26.5% for the quarter. The Americas segment claims activity started off the quarter slowly but in February and March saw significant increases as weather events occurred in the United States and Canada. Obviously, claims intake in the US also increased following the catastrophic weather we had in April across the Southeast. We also see signs of stabilization in the US economy, which bodes well for the industry claims activity going forward.

As claims volumes start to improve in our Americas business unit, we remain confident that the strategies and actions taken by management during the prior years will deliver improved operating results for the balance of 2011. We're also encouraged by these factors and have accordingly raised our expectations for the year. Our guidance reflects strong performance in Legal Settlement Administration, a modest improvement in claims count in the US property area, and stabilization of Broadspire's casualty and workers compensation markets. I would also note that Management has been committed to the restoration of a quarterly dividend since its suspension several years ago. The dividend was restored in February, and was declared again by the Board at $0.02 per share yesterday. We regard the payment of a dividend as an important part of the total return to Crawford's shareholders. That concludes my initial remarks. Bruce, would you please review the Company's overall financial performance for the first quarter?

Company-wide revenues before reimbursements in the 2011 first quarter were $285 million, up 21% over the $236.3 million in the prior year's first quarter. Net income attributable to Crawford & Company totaled $12.1 million in the 2011 first quarter, increasing 298% over $3.1 million in the 2010 period. First quarter diluted earnings per share on a GAAP basis was $0.23 in the 2011 period, compared to earnings per share of $0.06 in the 2010 period. During the 2010 first quarter, the Company recorded a loss on sublease of $2 million after related income taxes. These costs reduced earnings per share by $0.04 in the 2010 first quarter. Similar costs were not incurred in the 2011 first quarter. The Company's selling, general and administrative expenses, or SG&A, totaled $56 million, or 19.6% of revenues in the 2011 first quarter, increasing $7 million from $49 million, or 20.7% of revenues, in the prior year quarter. This increase in cost is primarily due to higher self-insurance costs, increases in bad debt expense, non-capitalized professional fees associated with IT system implementations, and higher incentive compensation expense, which is funded by our improved performance.

Revenues, net income attributable to Crawford & Company and earnings per share in the 2011 and 2010 first quarters were impacted by a few non-operating items, including the positive effects of decreased defined benefit pension expense and the absence of lease termination costs in the current period, partially offset by increased income tax expense in the 2011 period. However, the Company's improved financial results were primarily driven by operational strength in the first quarter of 2011.

Revenues from the Americas segment totaled $85.3 million in the 2011 first quarter, a slight increase from the $84.9 million reported in last year's first quarter. An increase in Canadian revenues as a result of the positive impact of exchange rate movements was substantially offset by revenue declines in our US property and casualty and Latin America/Caribbean operations. Operating earnings in our Americas segment totaled $3.1 million, for an operating margin of 3.6% of revenues in the 2011 first quarter. This is compared to operating earnings of $6.8 million, or 8.1% of revenues, in the prior-year quarter. Revenues generated by our US catastrophe adjustors totaled approximately $5.4 million in the 2011 first quarter, increasing from $3.2 million in the 2010 quarter. While case volumes were down quarter-over-quarter, the revenues increased due to support provided to handle weather-related claims in Australia, and temporary assistance with the Legal Settlement Administration special project.

EMEA AP revenues increased 16% in the 2011 first quarter to $79.8 million. Our revenue performance reflects weather-related claim increases in the UK and Australia, as compared to the 2010 period, during the 2011 first quarter, the foreign exchange impact to the segment operating results was insignificant. EMEA AP operating earnings increased to $7.2 million during the current quarter, up 49% from last year's first quarter operating earnings of $4.8 million. The operating margin in this segment was 9% in the 2011 quarter, increasing from 7% in the 2010 first quarter.

Revenues from our Broadspire segment decreased to $59.8 million in the 2011 first quarter, down 3.5% from $62 million in the prior year quarter. Broadspire's operating loss in the 2011 quarter totaled $3.2 million, or negative 5.3% of revenues, declining from an operating loss of $2.3 million, or negative 3.8% of revenues, in the 2010 first quarter. We continue to focus on new business development and cost efficiency within this segment.

Legal Settlement Administration revenues comprised of class action and bankruptcy claims administration services, as well as significant special project revenues, totaled $60.2 million in the 2011 first quarter, compared to $20.7 million in the prior-year quarter. Operating earnings totaled $17 million in the 2011 first quarter, or 28.3% of revenues as compared to $3.3 million, or 15.9% of revenues in the prior-year period. Legal Settlement Administration continues to have a strong backlog of projects awarded, totaling approximately $110 million at March 31, 2011, as compared to $50.7 million at March 31, 2010.

Our cash and cash equivalent position at March 31, 2011, totaled $46.7 million, as compared to $93.5 million at December 31, 2010, reflecting borrowings held at year-end 2010 that were used to make a $20 million contribution to the frozen US defined benefit pension plan in January 2011. Our investment in unbilled and billed receivables has increased by $32 million during 2011 as a result of sharply higher first quarter 2011 revenues. Our pension liabilities declined through March 31, 2011, by $22.6 million, primarily as a result of the $20 million contribution to our frozen US defined benefit pension plan during January 2011. Our total debt has increased in 2011 by $13.3 million due primarily to the increase in unbilled and billed receivables from the 2010 year-end.

Cash used in operations totaled $50.2 million for the 2011 first quarter, compared to $23.8 million used in operations in the prior-year period. This $26.4 million increase was primarily due to accelerated US pension contributions during the 2011 first quarter, growth in unbilled and billed receivables, and increased payments in the first quarter related to an annual incentive compensation and 401(k) contributions in the US. Lower mandatory principal payments on the Company's long-term debt, in addition to the other factors just mentioned, produced a decline of $21.3 million in free cash flow for the quarter. The Company's cash requirements typically peak during the first half of the year and decline over the balance of the year, with substantial cash in-flows usually occurring in the fourth quarter from some of our major markets. Back to you, Jeff.

Thanks, Bruce. Our process on attracting new business and retaining our current customers is linked to the Crawford System of Claims Solutions, which is prominently displayed on our website and in our recent annual report. Our clients range from the largest multinational insurance carriers to local insurance companies. The system defines our competitive advantage, reinforces our industry leadership and clarifies our portfolio of businesses to our clients. Significant attention has been put into key account management and cross-selling initiatives throughout our businesses globally. Our clients continue to challenge us to be more responsive in our claims handling as they demand sustainable performance improvement through better control of indemnity spend, improved business processes, special automation, and increased data analytics, and we as an organization are well-positioned to handle these challenges going forward.

We are also focused on innovation as a means of creating value for our clients. As one example, by accelerating our overall technology strategy and investment to deliver better analytics to both local and global clients. We will continue to be very diligent on expense control, and we'll stay focused on maintaining our long-term strategic goals of improving operating performance and maximizing our cash generation.

Overall case growth versus the first quarter a year ago reflects a 10.5% increase driven by weather events and new business gains. We have also noticed our businesses are sensitive to catastrophic weather events that trigger large numbers of insurance claims. Over the past several months, we have seen a number of these events occur globally. In particular, in Australia, Queensland, and Victoria flooding during December 2010 to January 2011; the New Zealand earthquake in February 2011; the Japanese earthquake in March 2011; and now in the US, severe weather between February and April 2011. Activity related to these catastrophes should continue to impact our case volume positively for the remainder of the year.

Let me now turn to the outlook for each of our business units, starting with the Americas segment, which represents 30% of our consolidated revenue. Our property and casualty clients in the United States, similar to the rest of the world, still see a softening of P&C premiums and in reported figures, industry gross written premium was down 9% in 2010; however there is an expectation that 2011 premium income will increase over 2010. As was reported previously, our US field operations are experiencing pressure consistent with an industry-wide reduction in claims frequency. Although we saw a contraction in property and vehicle claims for the quarter, this was partially offset by a significant increase in February and March of claims due to catastrophic weather events. Overall, Crawford US property and casualty experienced a reduction in claims reported of 4.7% over the first quarter 2010. From our analysis, we are satisfied that we are performing better than the industry in securing new accounts. The increase in frequency we saw in February or March has significantly continued into April 2011.

Some additional bright spots for the US property and casualty give us increased confidence in our 2011 outlook. The US Group has invested in resources for our casualty services business, and we expect to grow this area in 2011 through some recent client wins. Our goal of growing GTS, our large complex claims unit in the United States, is on track as we are nominated on accounts with high-value complex claims, and as a result, we continue to add executive general adjustors, EGAs, aggressively.

Our industry-leading contractor connection business in the US still continues to build momentum as we add more contractors to the program and more importantly, several new clients. 2011 claims are up 8.8% over 2010 in the first quarter. The ongoing expansion of contractor connection in the US is a direct result of insurance carriers moving high-frequency, low-severity property claims to repair networks. We expect this trend to continue in the future and we are positioned as the market leader in this important area. We are also pleased that in the first quarter, the US was able to supply 56 catastrophe adjustors to our Australian offices in support of our Australian clients, who are dealing with the weather-related claims from the significant flooding in Australia.

Our operations in Canada improved over last year. Revenues up in the first quarter, as well as claims volume. This is mainly due to more weather-related events and we continue to manage costs as we grow the business, and during the first quarter of this year, we were able to renew our three largest accounts.

Now turning to the EMEA AP operations, which represent 28% of our first quarter revenue. Our focus on sustainable client revenue has been successful in this business segment. We are making good progress with our initiatives to grow our Lloyd's market share with increased activity. Our European third-party administration services are expanding with US multinational clients. The segment reflected an increase in claims volume of 26.5% for the first quarter. Our UK operation benefited from a surge in weather events in early 2011 following severe cold weather through December and January. These small homeowner claims were managed by the UK and the inventory should reduce through the quarter three and quarter four of 2011.

We are seeing encouraging developments and changes in Continental Europe, Middle East and Africa, CEMEA. Both our revenue and our claims are increasing. A new management team is driving this region to improve operational and financial performance. Of note is the acquisition in quarter one of the Italian company Studio Bolton, which now makes us the largest international claims company in Italy, and adds expertise in medical malpractice and municipality claims handling. The acquisition was finalized at the end of February 2011, and was very well received by our clients in Italy and the London market.

Turning to Asia Pacific. The significant weather events have continued into 2011 for Australia. We are handing over 8500 claims through Queensland and the city of Brisbon, which were devastated with widely-reported flooding, as well as Cyclone Yasi. Many of the claims were of significant size and we continue to monitor the full extent of our clients aggregated reserves. Market feedback has been excellent, acknowledging the response we were able to provide from around the world.

Teams are also working in New Zealand, and more recently in Tokyo, responding to both local and international instructions. Following the tragic earthquake and tsunami in Japan, we anticipate this business will continue to develop as the full extent of contingent business interruption, CBI, claims from the effects of the supply chain become clearer. Our regional forensic accountancy businesses are already heavily involved.

Our Broadspire operation, which represents 21% of revenue for the quarter, reported a loss for the quarter on lower revenues. We believe strongly that Broadspire's solid market position, integrated service model, and the quality of service offer the market a truly competitive product. Broadspire's internal ability to fully integrate all of our services, claims management, medical management, and medical bill review, give us market-leading capabilities to provide innovative solutions and improve the bottom line for our customers. This is critical to Crawford's strategic development. While we work on improving results in these operations, we recognize that Broadspire is an integral part of the Crawford product line and strategy. In the first quarter, we saw an increase in claims at Broadspire. Quarter one casualty claims were influenced by a global product recall assignment, which will continue for some years. The workers compensation claims volume is holding firm, due to increases in the staffing and healthcare segments, while the manufacturing and construction areas wait for a return to job growth.

We continue to receive significant numbers of new RFPs, which confirm that our prospects in our pipeline are very encouraging. Our focus is to convert these opportunities into new revenue. We continue to emphasize the development of new business opportunities with an enhanced value proposition and target marketing approach, executed by cross-selling additional services and balancing our cost base over this period.

As reported last quarter, there's a significant M&A activity involving our competitors. We see opportunities for further client wins as these companies grapple with integration issues. Service innovation is a critical success factor for Broadspire. We continue to enhance current services through technology and to develop new ways of managing loss costs to meet the complex challenges in today's marketplace. We believe that our aggressive marketing and sales programs are gaining traction on this basis. As we continue to drive our sales and marketing plans, we expect to see improved financial performance later this year.

We are very pleased with the Legal Settlement Administration, or LSA, segment revenue and operating earnings. These results were the second-best quarter in LSA's history, and they represented 21% of our total revenue, and the quarter was a continuation of the very strong performance of the second-half of 2010 in respect of revenue and operating earnings. Revenue and earnings have increased significantly due to the special project that started in 2010 third quarter. Our ascension to assist in the creation of management of the Gulf Coast claims facility has been a very important for the Corporation and has a very positive effect on our results. We have increased our expectations for the balance of 2011 from this project. Additionally, we have retained in several new significant class actions, and I've seen an uptick in small- and mid-market bankruptcy matters. Our backlog at the end of the period stands at $110 million. That concludes my comments on our business segments.

Let me turn to our 2011 focus and guidance. As discussed, we have updated and increased our initial guidance for 2011. Factors affecting these increases include the special project and Legal Settlement Administration and catastrophic events in the US and Asia Pacific. Our revised guidance is as follows. Consolidated revenue before reimbursements between $1.04 billion and $1.07 billion. Consolidated operating earnings between $74 million and $82 million. Consolidated cash provided by operating activities between $30 million and $35 million. Net income attributable to Crawford & Company on a GAAP basis between $33 million and $38 million, or $0.60 to $0.70 diluted earnings per share, an increase of more than 30% over our original guidance.

In the first quarter of 2011, Crawford has delivered an improved financial position. We are still focused on the operating improvement in our Broadspire and US property and casualty business that are a top priority for the balance of 2011. We have created in Crawford a worldwide management team that will aggressively execute on our strategies as laid out, and a culture in which our employees worldwide understand the values that foster improved performance. Our first quarter results and 2011 guidance are tangible evidence of the benefit of having a diversity of earnings in a volatile market. Given the market strength and reputation of our business segments, and the balance of earning power for our Corporation, we continue to remain very optimistic and confident about our growth opportunities as we execute on our corporate strategies for our shareholders.

Thank you for your time and we look forward to your questions. Operator? Will you please explain the process for asking questions to our audience?

(Operator Instructions) Mark Hughes, SunTrust.

The Broadspire business, I think you're describing a significant number of new RFPs, is that an acceleration over prior periods? Do you have reason to think your win rate, you might be a little more successful there, just any thoughts there would be helpful.

Yes, sure, Mark. Broadspire is obviously a very strategically important part of our group. We're seeing a lot more RFPs coming in, we are converting the RFPs into one business. We had 23 new accounts in the first quarter. We see that as a good start to the year, and we have a significant pipeline that we're working on at this moment. So in brief synopsis, we think our aggressive marketing, our increased capabilities that we are able to offer to our clients, beginning to start to really come through to our clients.

In one of your publications, you'd mentioned client losses in 2010 and 2011. Was there one or two clients that dropped off this year? Your revenue was down much less, almost flat versus down more meaningfully last year. Would you have been up from the loss or one or two clients?

Hey, Mark, this is Bruce. I think we would have at least have been flat and maybe slightly up. The losses that we're talking about, one, I guess the larger one, occurred in 2011, and that was one that was related to, it was a client that went bankrupt at the end of 2010, and we had talked about that at the end of the fourth quarter call. As a result of the bankruptcy they went out with an RFP and we didn't retain that business. There was another less significant account that happened prior to that in the fourth quarter of 2010. So but for those two accounts, I think we would have been at least flat.

Right. What's your sense on, when I look at the government numbers for claims adjustors, you've seen significant declines over the last couple of years. Is it your sense that insurance carriers have cut meaningfully in that area, such that if we do see claims starting to pick back up, there ought to be more outsourcing? What's your sense?

I think on the outsourcing issue, there is definitely a change that we see with a number of our clients as consolidation takes place, and as the number of independent adjustors on large programs are starting to be called into significant players. And that really comes around the technology being able to report in on a more efficient basis that the clients require from organizations. And, again, it's to that question that we've been posing for a while, is that change from the fixed-cost to a variable-cost model that we promote to our clients, and it's also having the right skill sets and technology platforms to be able to meet the requirements that those corporations require. So I think the answer really is we are seeing some changes in the marketplace.

Thank you.

(Operator Instructions) Mark Hughes, SunTrust.

Thank you. The cost structure in Broadspire, what's your latest thoughts on, assuming the revenue top line stabilizes here, what's the strategy and time period for getting that back to profitability?

Hi, Mark, this is Bruce. I think that the stabilization of the revenue obviously is the first step, and we feel confident during the course of this year we'll be able to get there. Once we have a stable revenue platform, we feel that we can match the cost structure to at least break-even and maybe a bit profitable. The key is that you have to have a stable top line, because it's difficult to match the cost when your revenues are declining. Then as we put new business on the books, and given the very scalable fixed-cost infrastructure that we have in our back office, we feel we would be able to generate significant incremental margins off of those new revenue gains, similar to the incremental margins that we generate as a Company when you see increased catastrophe business and we get better leveraging of our fixed-cost there, and the same economics apply to the Broadspire business.

Mark, if I could just add one other comment to that. A great deal of transparency for us is looking at the claims volume. And I think the stabilization of the workers compensation claims is very, very important to us, as well as the significant increase that we've seen in the casualty claims. And I think, as that position I think will over the coming year stabilize, that has a very, very positive effect on the Broadspire operation. We can manage costs very well within that division.

The special project you're doing in the Southeast seems like its had a very good effect on the Legal Settlement business. To what extent should we anticipate that that will endure in coming quarters, what's your current outlook in terms of I guess what the incremental contribution is going to be? And then as part of that, you give the project backlog of $110 million up very strongly. So how much of that is related to, say the special project versus the underlying Legal Settlement business?

Hi, Mark. This is Bruce. So in terms of the specific impact that that project has or what the composition of the backlog is related to that project, we don't talk about our individual client engagements, so I'm afraid I can't add any color to that. I can say that we had a strong first quarter in Legal Settlement, and the special project certainly had a meaningful impact there. In our review of the guidance for the remainder of the year, we looked at the special project and what our expectations were, and we think that it will continue through 2011 based upon the best information we have today. We don't think it will be at the same level as the first quarter, but it will be significant for us for the full year.

We also think that the results in EMEA AP and in some of the catastrophic claims that we've seen there and the strong first quarter we had in that business also factored into the increase in guidance, so it's going to be a meaningful contributor. The exact numbers of which we really can't get into and really, the timing beyond this year, we can't get into. I mean, it's a very fluid project and it's subject to some changes as we go forward.

When I see these tornadoes in the Southeast, how big are those or the magnitude of an incident like that or a storm like that versus a hurricane? Any way to think about what impact that could have on your business?

Good question. I mean, there's a lot of difference between tornado flooding in the springtime, and then the hurricanes. Hurricanes tend to be -- we haven't had real hurricanes since 2008 in Texas and prior to that Katrina in 2005 and Florida in 2004. But the tornadoes, we've actually, it's very interesting, we have an eye on 200 people deployed at this moment. It's the highest 7-day moving figure we've had for probably about 2.5 to 3 years, and we have significant numbers of assignments coming in at this moment through most of the Southeast states from what is CAT46 and CAT45, which were the two that hit in the mid-part of April. So I think they will have an effect on our results as we bring in the claims. We've got a CAT team, members of our CAT team deployed, and we should start to see some of the benefit of that in the end of the second quarter and at the beginning of the third quarter.

Hurricanes are a very different event, because whereas a tornado is a very short-lived event that has a very specific path, what happens with hurricanes is they are widely-dispersed and hit larger areas, and it is a very different process that we would put in place for both of those. But I will say, we have within our head office, we have our command center, which we've talked about before, which has a lot of interactive technology in it that we're able to monitor very closely every single claim that we have within this organization on a 15-minute basis, and we understand exactly the load level that we have to put on to make sure we're able to meet our clients' service level agreements. So I think we're positive about this.

Great. Thank you.

Howard Lu.

Wondering if you can maybe talk about the pension plan a little bit, maybe just in terms of the cash flow contribution the next couple years and whether there's been any change in your outlook?

Yes, sure. The pension plan, I assume you're talking about the US pension plan, we made a $20 million contribution in January of this year to the plan, and that's on the heels of $30 million that we put in in December 2010, and we funded those through the exercise of an accordion feature in our credit facility, and that's something that was done at the end of 2010. As we disclosed in our 10-Q -- 10-K, rather, at the end of 2010, our estimated minimum funding requirements for 2012 will be about $12.5 million, and then for 2013, they go back up to $27 million. For the rest of 2011, we don't have any further required contributions to the US plan but depending upon where our financial performance goes and our operating cash flows, we may make a discretionary contribution towards the end of the year.

Okay, thank you.

At this time, there are no further questions. Mr. Bowman, do you have any closing remarks?

Yes, I do. Thank you very much for your questions. Our strategies remain intact, firstly, securing new business wins; secondly, focusing on improving operational efficiency; thirdly, a disciplined approach to expense management and working capital; fourthly our employee commitment and engagement to our clients; and fifthly, our 100% commitment to shareholders that we are improving the Corporation. And on a final note, since the founding of our US Company in 1941, we are this year celebrating our 70th Anniversary on May 27. I would like to thank our global employees, our clients, partners and shareholders, whose trust in us has contributed to our growth, innovative spirit, and unmatched expertise. And finally, I'd like to thank everyone for joining us this afternoon and wish you all a great weekend. Thank you and goodbye.

Thank you for participating in today's Crawford & Company conference call. This call will be available for replay beginning at 6 p.m. today through 11.59 p.m. on May 13, 2011. The conference ID for the replay is 61726158. The number to dial for the replay is 1-800-642-1687 or 706-645-9291. Thank you. You may now disconnect.