Crawford & Co (CRD.A) 2015 Q3 法說會逐字稿

Good afternoon. My name is Bonita, and I will be your conference facilitator today.

At this time, I would like to welcome everyone to the Crawford & Company third-quarter 2015 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 conferences is being recorded today, Monday, November 9, 2015.

Now I would like to introduce Allen W. Nelson, Crawford & Company's General Counsel and Chief Administrative Officer.

Thank you, Bonita.

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; expectations regarding the timing, costs and synergies from our recently announced global business services center; our acquisition of GAB Robins in the United Kingdom, as well as other restructuring activities; our long-term liquidity requirements; 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 certain 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-Q for the quarter ended September 30, 2015, 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 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. Harsha Agadi, Interim President and Chief Executive Officer of Crawford & Company. Harsha, you may begin our conference.

Good afternoon, and welcome to our third-quarter earnings call. Joining me today are Bruce Swain, our Chief Financial Officer, and Allen Nelson, our General Counsel and Chief Administrative Officer. After our prepared remarks, we will open the call for your questions.

To begin with, I am very excited to be leading Crawford as the interim CEO, given the significant opportunity that I clearly see for our employees, Company, shareholders and clients. Throughout my career, I've had several opportunities to work with companies as they have strived to unlock their true potential and achieve improved profitability, growth, and ultimately, consistent operational experience. At Crawford, I see an even bigger opportunity, and I'm very optimistic with what the future holds, both from a cost perspective as well as the potential for sustained revenue growth.

Since being named interim CEO by the Board this past August, I have completed a strategic review of our business segments that have included in-depth conversations with our employees, managers, business heads, and clients around the world. My goal was to better understand the challenges facing Crawford today, in order to develop a strategy to unlock the true earnings power of the Company over the near term. Through my conversations, I have been struck by not only the resiliency of our employees in the face of a challenging market environment, but also the broad product offering that Crawford currently possesses. Our client relationships are strong, the brand is well respected globally, and our competitive position continues to improve. The opportunity from my perspective is to refocus our discipline on costs to drive improved profitability and earnings in order to reduce our dependence on severe weather.

My team and I strongly believe that the Crawford brand remains powerful, which gives us great optimism that we can achieve our objectives, and I am witnessing that in my first 75 days at the head of the Company. This is an important point, given the extremely challenging market backdrop that Crawford has faced over the last several years. The lack of severe weather globally has been a headwind to both our revenues and earnings, and looks set to continue as our third-quarter results were once again impacted.

For the third quarter, we delivered revenues before reimbursements of $293.3 million, which was flat versus $293.8 million for the third quarter of 2014. Our consolidated operating earnings were $23.1 million, up slightly from $22.9 million in a year-ago quarter. On a GAAP basis, diluted loss per share was negative $0.01 per CRDA share and negative $0.03 per CRDB share, as compared with diluted earnings per share of $0.19 for CRDA and $0.17 for CRDB for the third quarter of 2014. On a non-GAAP basis, diluted earnings per share for the 2015 third quarter were $0.14 for CRDA shares and $0.12 for CRDB before restructuring and special charges.

Beyond the pressures driven by a lack of severe weather, we also experienced a more rapid decline in volumes in our legal settlement administration business, given the continued runoff of several large cases, further depressing profitability only temporarily. While the environment is challenging, it has become clear to me that Crawford has the opportunity to become a company with more predictable business results and growth without the case volume associated with severe weather. Today, many of our business lines, such as Broadspire and Contractor Connection, are already delivering more consistent results, as they are businesses that have recurring revenue models. In fact, Broadspire this quarter delivered 9% revenue growth, with 10% operating margins. Additionally, the Americas are benefiting from the cost take-out plan that was implemented in the first quarter of this year, having delivered an operating margin of 13%, up 500 basis points year over year.

What is suppressing these positive results is an administrative cost structure that has materially increased over the last several years. This increased cost structure requires the benefit of higher margin claims, driven by extreme events such as the Thai floods or Deepwater Horizon project, in order to drive growth in earnings. The opportunity is to significantly reduce excessive administrative and back-office expenses, as well as excess management layers in order to streamline our operations. Importantly, these measures can be implemented without impacting Crawford's competitive positioning, ability to generate revenue growth, or most importantly, our ability to deliver exceptional service to our clients.

As a result, we have begun the implementation of a $25 million to $28 million cost take-out plan that will largely be complete by the end of 2015. This plan is incremental to the plans that we have previously announced in the first quarter, which are targeting approximately $22 million of cost savings expected to be realized during 2016. These restructuring plans will help our businesses to achieve their target operating margins in this current low value claim environment.

Today, Crawford's revenue base, competitive positioning and client relationships are impressive. It is our profitability that has lagged. What is reassuring is that we can control our own destiny with no help from outside forces, as we become laser focused on margin expansion. What you will see when we emerge through 2016 is a more predictable business that can deliver sustained moderate growth in a depressed claims environment.

Beyond costs, we're also exploring several areas that expand our Business to drive top-line growth. In fact, I've had the opportunity to have talked to many of our clients who have outlined several ideas to enhance our business relationships, given the value that Crawford provides. This will be the second leg to our strategic plan, and I look forward to updating you on the specific products and services that we have identified to enhance our top line on subsequent calls. To conclude, my goal is to help unlock the incredible opportunity that exists in Crawford today, and return the Company to a growing and more profitable business to my eventual successor.

I would now like to turn the call over to Bruce to review the financial results of the third quarter in more detail. Thank you.

Thank you, Harsha.

Company-wide revenues before reimbursements in the 2015 third quarter were $293.3 million, flat as compared with $293.8 million in the prior year's third quarter. The Company's selling, general and administrative expenses, or SG&A, totaled $61.7 million, up from $59.3 million in the prior-year quarter. As a percentage of revenues, these costs increased to 21% of revenues in the 2015 third quarter from 20.2% of revenues in the prior-year quarter. This increase is primarily due to SG&A costs from the acquired GAB Robins organization, and increased self insurance costs in the US.

During the 2015 third quarter, the Company recorded restructuring and special charges of $11.1 million, or $0.15 per share. The restructuring charges of $6.1 million were associated with the ongoing implementation of the global business services center, GAB Robins integration, and other restructuring activities in the Americas and EMEA/AP. The special charges of $5 million were incurred for certain legal and professional fees, and employee separation costs.

The Company's effective tax rate is up sharply this year due to our overall low level of earnings, driven in part by our restructuring cost and special charges during 2015, and net operating losses in certain international operations with lower tax rates or where the losses are unable to be benefited from a tax perspective. Our net loss attributable to shareholders of Crawford & Company totaled $857,000 in the 2015 third quarter, compared to net income of $10.2 million in the 2014 period. Third-quarter 2015 diluted loss per share was $0.01 for CRDA and a loss of $0.03 for CRDB compared to diluted earnings per share of $0.19 for CRDA and $0.17 for CRDB in the 2014 period. On a non-GAAP basis, before restructuring cost and special charges, third-quarter 2015 diluted earnings per share were $0.14 for CRDA and $0.12 for CRDB.

I will now review the third-quarter performance of each of our business units, starting with the Americas segment. Benign weather in the US has persisted into the 2015 third quarter, and a stronger US dollar reduced revenues by 6% during the period. However, this was offset by higher special project revenues for a major US insurance carrier, growth in Contractor Connection, and the positive impact of the cost-reduction activities commenced earlier in the year. Revenues from the Americas segment totaled $92 million, relatively flat with $92.2 million reported in last year's quarter. Operating earnings in our Americas segment were $12.2 million in the 2015 third quarter or 13% of revenues, improving from operating earnings of $7 million or 8% of revenues in the prior-year quarter, and reflecting the benefits of our cost-reduction measures in the segment.

Case volumes in the Americas declined by 14% in the 2015 third quarter, reflecting weather-related declines in our US field offices, lower volumes in Latin America from exiting certain business lines in Brazil, as well as the transfer of Affinity claims to our Broadspire segment. Excluding this transfer of Affinity claims, the segment's claim volumes would have decreased approximately 9% in the 2015 third quarter. Revenues generated by our catastrophe adjustors in the US totaled $19.5 million in the 2015 third quarter, up from $12.3 million in the 2014 quarter. The revenue increase for the 2015 quarter was driven by the previously mentioned outsourcing contract that is expected to continue throughout 2016.

During the 2015 third quarter, our EMEA/AP segment operating results continue to reflect a challenging operating environment due to a weak claims environment in the UK. However, this was offset by improvement in our European operations. We are seeing our UK claim volumes begin to flatten out, after adjusting for the impact from the December 2014 GAB Robins acquisition.

EMEA/AP revenues increased to $98.3 million from $86.2 million in the 2014 period, primarily due to the positive impact from the acquired GAB Robins operations, which were partially offset by a stronger US dollar, which reduced revenues by 14% during the 2015 third quarter. Absent these two factors, EMEA/AP revenues would have increased 6% in the 2015 third quarter. EMEA/AP operating earnings were $6.7 million during the current quarter, as compared to last year's third-quarter operating earnings of $4.2 million. The operating margin in this segment was 7% in the 2015 period, compared with 5% in the 2014 quarter.

During the quarter, claim volumes increased 15% across the three regions that make up EMEA/AP. Excluding the impact of the GAB Robins acquisition, cases would have increased 3% in the 2015 third quarter, as weather-related declines in the UK have moderated, and high-frequency, low-severity claims in Europe increased from expanded client relationships.

Broadspire revenues increased to $74.2 million in the 2015 third quarter, up from $68.2 million in the prior-year quarter, primarily as a result of organic growth, new client wins, and the shift of accident and health, or A&H, claims previously handled by our Americas segment. Operating earnings in Broadspire totaled $7.4 million or 10% of revenues in the 2015 third quarter, increasing from operating earnings of $4.4 million or 6% of revenues in the 2014 third quarter.

During the 2015 third quarter, cases increased 17% over 2014 levels. Included in this increase is the transfer of 16,900 A&H claims. Excluding this shift, Broadspire cases would have been relatively flat in the current quarter.

Legal settlement administration revenues totaled $28.8 million in the 2015 third quarter, decreasing from $47.2 million in the prior quarter. This revenue decrease was largely related to lower levels of work on certain large projects which we're continuing to wind down during the 2015 period. Operating earnings totaled $1.1 million in the 2015 third quarter or 4% of revenues, declining from $7.7 million or 16% of revenues in the prior-year period. Our backlog at the end of the 2015 third quarter was $76 million, compared to $89 million at the close of the third quarter last year. Activity related to Deepwater Horizon is expected to continue to decline as we close 2015.

The Company's cash and cash equivalent position at September 30, 2015, totaled $58.3 million as compared to $52.5 million at the 2014 year end. Our investment in unbilled and billed receivables has increased by $7.4 million during 2015, as a result of the GAB Robins acquisition. Goodwill and intangible assets arising from business acquisitions increased by $43.4 million, reflecting the impact of recording the preliminary balance sheet for the GAB Robins acquisition.

Pension liabilities decreased by $27.2 million, reflecting cash contributions made in the US and UK during the 2015 year-to-date period, and a conversion of the Netherlands defined benefit pension plan from a defined benefit plan to a defined contribution plan. Our total debt increased in 2015 by $102.1 million as a result of borrowings to fund the GAB Robins acquisition and our ongoing restructuring activities.

Cash provided by operations totaled $21.1 million for the 2015 period, compared to $44.2 million used in operations in the prior-year period. This improvement was primarily due to the collections of 2014 year-end accounts receivable, and lower payments for accrued liabilities, including incentive compensation, which offset the decline in net income.

As Harsha outlined, we have initiated a $25 million to $28 million cost take-out plan that is incremental to the restructuring plans we have previously disclosed. We expect the total cost take-out to provide at least $47 million of benefit to 2016 over the 2015 run rate. The majority of the cost benefit will be achieved by reducing administrative and back-office costs in our shared service support centers, administrative costs in the Americas and EMEA/AP segments, along with duplicative layers of upper-level management. We expect to incur a total of $27 million to $32 million of restructuring charges in 2015, and $11 million in 2016, as we execute these restructuring initiatives. In addition, we have incurred a total of $5 million in special charges in 2015 related to certain legal and professional fees, and employee separation payments.

Let me now review the guidance for the year. While we are reducing our full-year guidance, we are optimistic that our cost take-out initiatives will drive margin expansion and earnings growth through 2016. 2015 guidance will include both the impact of restructuring cost and special charges discussed above. In the aggregate, these 2015 charges will total approximately $32 million to $37 million pre-tax, or [$0.41 to $0.47] in diluted earnings per share.

As a result, our 2015 guidance is as follows. Consolidated revenues before reimbursements between $1.15 billion and $1.17 billion; consolidated operating earnings between $60 million and $65 million; consolidated cash provided by operating activities between $20 million and $30 million; before reflecting the restructuring cost and special charges discussed, net income attributable to shareholders of Crawford & Company on a non-GAAP basis between $20 million and $25 million, or $0.39 to $0.48 per CRDA share and $0.32 to $0.41 diluted earnings per CRDB share; after the restructuring costs and special charges, net income attributable to shareholders of Crawford & Company of between a loss of $4 million and income of $1 million, or a loss of $0.04 per share to income of $0.05 per share for the CRDA shares, and losses of $0.11 to $0.02 per diluted CRDB share.

With that, I'd like to turn the call back to Harsha for concluding remarks.

Thank you, Bruce.

Crawford remains the preeminent independent claims manager globally, with an unparalleled competitive position and robust revenue base. Our brand is very resilient. While our profitability has come under pressure due to the challenging market conditions, I believe through the recently initiated restructuring plan that we can achieve our target operating margins on a business segment level, returning Crawford to growth and, more importantly, predictable business results.

One final note before we take questions: As you may have seen, and as we have disclosed in our Form 10-Q filed today, we have recently voluntarily self-reported certain potential violations of the FCPA to the SEC and the DOJ, which occurred prior to my tenure as interim CEO. We are fully cooperating with both the SEC and the DOJ as they review this matter, and will continue to cooperate throughout the process. I want to assure all of you that we take our compliance and ethical standards extremely seriously, and hence the self-reporting. Given the ongoing nature of this process, it would be inappropriate for us to comment further or provide additional detail at this time. As a result, we ask that any questions today be limited to those that relate to our discussed and announced results. Thank you for your understanding of this process.

Operator, please open the call to questions.

(Operator Instructions)

Your first question comes from the line of Mark Hughes with SunTrust.

Thank you very much. Good afternoon.

Hey, Mark.

Good afternoon, Mark.

The cost savings, when we look at the different segments, how much or could you give us a sense of where we ought to see improvement? Which segments are perhaps the most ripe for these potential savings versus what might be at sort of a corporate level, how would you allocate those?

Most of the corporate savings that we talk about, Mark, are costs that get allocated to the business units.

Okay.

So we really see the primary beneficiaries of really all of these cost take-outs as being the Americas, EMEA/AP, and Broadspire first and foremost. There will also be benefits for the legal settlement administration segment, but I think the first three I mentioned are probably going to be the biggest beneficiaries.

The Americas segment seems to be doing pretty well now in terms of profitability. The outsourcing work you're doing for the major insurer, is that a recurring piece of business, so it will be sustained or perhaps grow if things go as planned in the coming periods? Or is that once we lap that does it make for a tough comparison?

I think, Mark, based on what we can see in our pipeline it is recurring business and I won't go into more details than that. You work with the bank so you know we don't go you through client-level detail. Also, what I would say is, yes, the Americas is doing well and will benefit further from this cost reduction that is across the board.

The legal settlement I think you describe more contraction perhaps in that through the end of 2015, how should we think about 2016? You've got your underlying business which I assume volumes are -- your backlog has been declining, volumes may be under a little bit of pressure when you take into account the visibility you've got for the Deepwater Horizon.

How should we think about that business next year? It looks like that's where the margin pressure and top line pressure is.

Yes, I think Deepwater Horizon will continue to decline just as predicted and reported. And the management there is obviously going through settling costs to a different revenue structure, so that process is ongoing. So I would say that change will continue throughout over the next few quarters.

But I don't think I can say more other than as you would expect our legal settlement administration continues to be very active in the marketplace, bidding on a lot of new work. But there is nothing that I can see on the horizon to the likes of Deepwater Horizon.

You, I think given kind of a general thought on 2016. I think what that the earnings ought to be improved off of the underlying run rate in 2015, excluding the one-time items. Is that a fair reading?

And any way to sharpen that up? It will be up a lot, up a little? How should we think about that?

Mark, this is Bruce. Certainly we expect a substantial improvement in 2016 over where we'll end 2015. So we guided 2015 operating earnings and this is before special charges and the like of being in the low $60 million range.

We're talking about cost take-outs of mid $40 million to $50 million. So while there's always work to do to make sure we achieve all of those, we're expecting our operating earnings next year to be north of $100 million.

Which is significant but driven by the cost reduction or the cost reset, if you will.

Right. We've taken a significant amount of restructuring cost and special charges this year. That number will be between $32 million and $37 million.

As we look towards 2016, we'll still have some costs that we'll take a as a restructuring charge, mainly around the continuing work with the Global Business Service Center in Manila. And also a little bit of extra cost related to the last leg of the GAB Robins integration. And we see that as being approximately $11 million next year. So we're looking at a significant lift from cost take-out helping operating earnings and then the restructuring charge coming down significantly year-over-year.

I think the other thing, Mark, to note is 2016 will be an interesting year where the dependence on GCG for earnings will not be as much as it might have been in the past. We have an increasing mix, if you will, of sustained revenue and sustained earnings coming out of divisions like Broadspire, Contractor Connection, and others.

Right. In the operating earnings that's pre tax or that's also pre-interest expense?

Operating earnings is pre-interest expense.

Okay. Is that an EBITDA number or just an EBIT number?

Operating earnings is an EBIT number.

Okay. Thank you very much.

Thank you, Mark.

We are again pausing for any additional questions.

(Operator Instructions)

Your next question comes from the line of Adam Klauber with William Blair.

Good afternoon. Thanks. A couple different questions.

It sounds like you're in for roughly $50 million of cost savings next year. Do you expect most of that to hit the bottom line or will some of that be reinvested?

Some of it will be reinvested but majority will go to the bottom line.

Okay. And then what sort of normalized expense growth should we think about on your core business, excluding the restructuring costs?

Expense growth just normally we would expect to be in kind of a CPI-type of a range. Of course our expenses can be volatile due to spikes in weather-related business and we're always going to have that. Where we're trying to drive the business is to more predictable, sustainable earnings that don't include the benefits we can see from claim fluxes from severe weather. And we want to take that out of the base and just have that be upside.

So as we look at our business, certainly we need to readjust our cost base and become more efficient in what we do in all aspects of what we do. And that's been the driving force in the restructuring activity that we've been taking this year and have actually accelerated with Harsha coming on the scene as the interim CEO.

I think in addition to that, the culture is clearly moving towards making sure cost and compensation is very aligned to revenue. So we're going to be much nimbler, much faster, but at no times compromising our standards. So our attention to detail and making sure cost is in line with revenue is going to be very, very top of mind across all business units going forward.

Okay. And as far as the timing of the benefit of cost savings, will it -- will we see more benefit in the back half than the front half or will it be more evenly distributed?

Adam, this is Bruce. If you look at slide 16, which was in the earnings presentation, we kind of have four main sleeves of cost take-out. The corporate overhead cost take-out which is what we're announcing in this call that's taken place now and through the fourth quarter is targeting $25 million to $28 million. And we will see the benefit of that from day one in 2016. So we should see that ratably over the course of 2016.

Similarly, the Americas cost take-out, which is almost $6 million, that's the runout of actions that we've already taken in 2015. So we should see that from day one as well.

The GBSC savings of about $6 million will have some work to get those done. Some of that will be related to the restructuring activities I talked about that will be a part of the $11 million that we see in 2016 in terms of restructuring charges. I would look at those savings to come in, in the last three quarters of the year and then the GAB Robins integration savings in the back half of the year. The lion's share of what we've outlined, the administrative cost take-outs coupled with the Americas cost reduction, is north of $30 million and that starts on January 1.

Okay. And then also on the cost side as you were thinking about it, were you thinking about legal having a down year from this year from a revenue standpoint more equal? I guess what sort of assumptions are you baking in when you think about that business next year?

We're going to be pretty conservative as we think about that business next year coming off some large projects, namely the Deepwater Horizon project. We also had this large Indian settlement that was a big driver of revenue and growth tore for us over the past few years.

We're returning back to an era in that business where the performance can be a little lumpy based on the nature of cases and when they're awarded. So we'll be conservative as we look to that business next year and setting our expectations.

And also as I mentioned earlier, our increase that we're projecting due to cost reductions in -- our increase in earnings will not be as dependent on the legal settlement administration because cost within our control is what we're taking action now.

Okay. But I guess what I'm asking, what you're giving us some color is that given that business has materially lower revenues, which we knew was coming, and also a bit more lumpy, do you think by 2016 you can get the cost structure in line so that's a profitable business or do you think that's a two-year process?

We see that as a profitable business.

I think, Adam, our mantra here is to go -- is to move at high speed on all sides. So we will do our best to continue to keep it as a profitable business and the management team there is moving quick to make sure cost is in alignment with revenue.

Okay. Okay. Different topic.

Having a tougher year this year, hopefully things will help next year. Can you see a scenario where the dividend is at risk?

The dividend is examined every quarter, which is done obviously through due process by the Board. And I think the Board obviously clearly wants to see the capacity on earnings growth, and they will continue to review on a quarterly basis. I can't comment further than that.

Okay. Okay. Thank you very much.

And there is a follow-up question from the line of Mark Hughes with SunTrust.

Was there any consideration of perhaps streamlining the businesses, selling off some operation, maybe legal settlement? Is that still a possibility?

Here's what I would say is we'll continue to look at streamlining and giving greater independence to our operating divisions and how they operate. But opportunities we will look and see as time travels forward. And, again, we have a -- call it an eclectic Board that is well suited to review and outline those opportunities.

Doesn't matter which division we're in, we're in the claims business. And there is some synergies of clients that they share et cetera, et cetera, but down the road that might be an opportunity, but at this time we're focused on running the business.

Understood. The corporate overhead, the savings at $25 million to $28 million, kind of refresh me on what's the base that you're taking those cuts off of.

If you look at our SG&A cost as a Company, that's the base that we're taking it off of. So that's a $260 million to $280 million number.

Okay. So it's a corporate overhead but you would say that's all SG&A is kind of in that bucket perhaps.

Absolutely. All SG&A and the four corners of the world.

Okay. Thank you.

Thank you.

Your next question is from the line of Joel Salomon with SaLaurMor Capital.

Great. Thanks for taking the question. Just a follow-up maybe more specifically on Mark's question.

I was recently talking with an activist investor about Crawford and the activist asked me what can be done given the huge disparity in the value between the current market price and the fact that the value of the Company is dramatically higher than where the stock is today. And one consideration that we discussed was splitting up the Company given that one can look at the value of the comparables for Broadspire alone and see that on an enterprise value to EBITDA basis that you're essentially getting contractor connection in the AP, and even legal settlement which we just said is profitable, for free.

So if an activist did come to the Board with this suggestion to split up the Company, how would the Board respond?

Here's what I would say. I've been on the Board now five years. I'm a sitting Board member and the interim CEO.

The focus of the Management team is clear, to turn the profitability around of the Company and run the Company. I think no Board can say no other than look at the opportunity and respond accordingly.

Having said that, I think when you're running a business that's doing $60 million to $65 million in operating earnings, it needs to grow and it needs to be a much higher margin business before we talk about other ideas or other ways to realize value. So that's where I would stand and I'm sure anybody can contact the Board and discuss the offer. And I'm sure they can reach the Chairman of the Board to have that discussion.

Great. Thanks for answering the question.

And there are no further questions at this time. I would now like to turn the call back over to Mr. Agadi for closing remarks.

Thank you very much again for participating on this earnings call. I remain extremely optimistic, even much more than when I first walked in 75 days ago, the true potential of the Company, the brand, and the earnings capacity.

I can also tell you that the Management team is very energized, very focused, and wanting to do the right thing in terms of growing the Company forward, again without sacrificing any standards that have been established in the Company. Thank you.

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 December 8, 2015.

The conference ID number for the replay is 33498436. The number to dial for the replay is 1-855-859-2056 or 404-537-3406.

Thank you. You may now disconnect.