Good morning. My name is James, and I will be your conference facilitator today. At this time, I'd like to welcome everyone to the Crawford & Company Third Quarter 2020 Earnings Release Conference Call. In conjunction with this call, a supplementary financial presentation is available at our website, www.crawco.com under the Investor Relations section. [Operator Instructions] As a reminder, ladies and gentlemen, this conference is being recorded today, Tuesday, November 3, 2020. 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 relate to, among other things, the impact of COVID-19, our expected future operating results and financial condition, our ability to grow our revenues and reduce our operating expenses, expectations regarding our anticipated contributions to our underfunded defined benefit pension plan, collectability of our billed and unbilled accounts receivable, financial results from our recently completed acquisitions or continued compliance with the financial and other covenants contained in our financial agreements, our long-term capital resource and liquidity requirements and our ability to pay dividends in the future. The company's actual results achieved in future quarters could differ materially from 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 occurrences 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, 2020, filed with the Securities and Exchange Commission, particularly the information under the heading Risk Factors and management's discussions and analysis of financial condition and results of operation, as well as the subsequent company filings with the SEC. This presentation also includes certain non-GAAP financial measures defined under SEC rules. As required, a reconciliation is provided for those measures to the most directly compared GAAP measures. I'd now like to introduce Mr. Rohit Verma, Chief Executive Officer of Crawford & Company. Rohit, you may begin your conference.

Thank you so much, James. Good morning, everyone. Joining me today is Bruce Swain, our Chief Financial Officer; Joseph Blanco, our President; and Tami Stevenson, our General Counsel. After our prepared remarks, we will open the call for your questions. Our threefold focus over the last 9 months has been to protect the health and safety of our global workforce, navigate the financial turmoil created by the pandemic and deliver on our client commitments. And that is proving successful. We are proud of the commitment and client-centric focus our teams continue to demonstrate in the face of the pandemic. Further, our continued focus on execution aided by the surge in weather-related activity in the U.S. resulted in strong third quarter performance. We exceeded our expectations and achieved sequential improvement over the second quarter. Today, our financial position remains very healthy. As we move into the fourth quarter, we remain well positioned to continue taking advantage of our global scale and competitive position in the market. Turning to our results for the quarter. We delivered solid year-over-year growth, supported by our core business and further propelled by weather-related activity in the U.S. We reported GAAP revenues before reimbursement of $253.1 million and net income attributable to shareholders of $24.4 million or $0.46 per share. In addition, we generated $57.3 million in operating cash flow through September 30, 2020. On a non-GAAP basis, we reported revenues before reimbursement of $255.2 million and operating earnings were $28.2 million in the third quarter. Our third quarter revenues reflected growth over last year, and operating earnings were 19% over the 2019 quarter. Adjusted EBITDA was $35.2 million in the third quarter, up from $32.2 million in the 2019 third quarter, representing a gain of 9.4%. Adjusted EBITDA margin was 13.8% in the 2020 third quarter,…

Thank you, Rohit. As evident in our third quarter financial performance, the resiliency of our global workforce has allowed us to provide the highest level of service to our clients, despite the uncertainty created by COVID-19. As our greatest asset, we remain committed to protecting the safety and well-being of our employees through flexible remote work arrangements, PPE, expert training and previsit screenings to ensure the safety of our teams. The feedback we have received from employees remains overwhelmingly positive, further demonstrating our commitment to preserving the morale of our global workforce. We are also investing in the development of our employees through state-of-the-art training programs aligned with our purpose, values and agile culture. With oversight from members of our executive leadership team, our new employee resource groups provide support to key employee segments, women and people of color. Additionally, our Women Leadership Exploration and Development, LEAD program, a high-impact e-learning and networking experience empowers women leaders to achieve their career goals. These internal programs and initiatives further promote an environment where employees are empowered to grow and bold into act and inspire to innovate. With that, let me turn the call over to Bruce to review the financial results of the third quarter in more detail.

Thank you, Joseph. Company-wide revenues before reimbursements in the 2020 third quarter were $253.1 million compared with $254.7 million in the prior year's third quarter. On a non-GAAP basis, the company saw revenues of $255.2 million. Our net income attributable to shareholders of Crawford & Company totaled $24.4 million in the 2020 third quarter compared to net income of $11 million in the 2019 period. Third quarter 2020 diluted earnings per share was $0.46 for both CRD-A and CRD-B compared with diluted EPS of $0.21 for CRD-A and $0.19 for CRD-B in the 2019 period. On a non-GAAP basis, net income attributable to shareholders was $15.2 million, resulting in third quarter 2020 diluted EPS of $0.29 for both CRD-A and CRD-B as compared to 2019 diluted EPS of $0.23 for CRD-A and $0.21 for CRD-B. The company's non-GAAP operating earnings totaled $28.2 million in the 2020 third quarter or 11.1% of revenues compared with $23.7 million or 9.3% of revenues in the prior year period. Consolidated adjusted EBITDA was $35.2 million in the 2020 third quarter or 13.8% of revenues compared to $32.2 million or 12.6% of revenues in the 2019 quarter. I will now review the third quarter performance of each of our segments. Crawford Claims Solutions' revenues totaled $98.4 million, increasing from $86.3 million reported in last year's quarter. Absent foreign exchange rate fluctuations of approximately $900,000, third quarter 2020 revenues would have been $99.2 million. The segment reported operating earnings of $7.2 million in the 2020 third quarter were 7.3% of revenues, increasing over operating earnings of $2.7 million or 3.1% of revenues in the prior year quarter. Crawford Specialty Solutions' revenues were $67.5 million in the 2020 third quarter, down from $68.9 million in the prior year quarter. Absent foreign exchange rate fluctuations of approximately $900,000,…

Thank you, Bruce. As we enter the fourth quarter, we are focused on maintaining our position as a leader within the industry through innovation and market-leading solutions. To that end, we will continue to evaluate our client solutions to sted industry benchmarks globally. Our global footprint and empowered teams give us the reach and agility to meet the changing needs of the industry. Crawford's emphasis on our people and delivering service excellence to our clients will remain at the forefront of our priorities. We are confident in our financial position and our ability to deliver superior results for our shareholders over the long term. Above all, we remain committed to fulfilling our purpose of restoring and enhancing lives, businesses and communities. Thank you for your time today. Operator, please open the call for questions.

[Operator Instructions] Our first question comes from the line of Mark Hughes with Truist.

The -- and I'm sorry, I missed the first few minutes of the call, so I apologize if you've already touched on some of this. The $500 million event. What is the revenue? Is that the revenue number? And if or if not, what's the timing for that project?

Sure. So the $500 million is the total size of the loss. It's the major event in Asia, which was canceled, and we will be handling that loss. It's not possible for us to estimate what the revenue from that will be at this time because it will be based on a time and expense charge. And we are still working through the loss. We believe that over time, we'll build up the WIP and then realize the revenue in the coming 12 to 18 months.

I believe that will be material to the GTS?

Yes. For the region, it will be material.

Okay. And then about the weather catastrophe claims. How much follow-through do you think there will be in the fourth quarter? I think one of the dynamics recently has been that you've been able to handle some of these claims very quickly. And so you wouldn't see as much follow-through. So I'm just sort of curious how much there is, you think, that extends into 4Q and you've had some more events here in the fourth quarter. So I'm curious when you -- yes, go ahead.

Yes, great question. That is true. We have been much faster in resolving some of this claims activity. We do believe that there are some tailwinds that we're carrying into the fourth quarter. With the recent Zeta event as well, we've seen some activity pick up from that. But it is hard to say how long that will continue at this point. But just reasonable to say that we'll have tailwinds into the fourth quarter.

The -- in Contractor Connection, you're talking about a strong level of daily assignments. Was that related to the cat? Or was that more non-cat activity?

Well, as you know, we've added a couple of very large clients to our Contractor Connection client base. So we have seen some organic growth just coming to the business from these new clients. We've also seen some of our historic clients pick up their volume as we believe direct repair continues to be a preferred choice for a lot of our clients who are choosing not to send adjusters out into the marketplace given COVID concerns. So we've seen growth from our new clients as well as just enhanced revenue from existing clients. Some of that is certainly related to the storms because the storms create pressure on the in-sourcing of claims for our carriers, but we believe that this is a secular growth story and not just related to storms.

And then did you say what the claims volume was declining in TPA, if you look at the, say, same customer, what's the average decline?

Sure. What we are seeing is that if you look at the average of September, say, compared to the average of January and February, we're seeing achieving sort of flattish levels. Our concern is that there is still sort of medical management business, which is lagging behind, which, as you know, and generally lags behind the claims volume. We've seen our workers' comp lost-time claims trend up, which generates the medical management business. But they're still behind our true pre-COVID levels. The biggest drop that we've seen has been in our auto liability and general liability claims, which are directly related to the economic activity. As you know, as people travel more, spend time at hotels, go to restaurants more, go to movie theaters, we will see that volume pick up. But until that happens, we believe that, that volume will remain suppressed.

When you say flat levels in September, are you talking relative to just the most recent month?

January, February. I would take the average of the January, February and say that we're starting to get to a flattish level over there. But remember, a lot of that is actually happening because of COVID claims. And those claims usually don't generate significant medical management revenue.

Okay. So the COVID claims are medical management still down?

Correct.

I got you. And then just 1 more. The Canada Wage Subsidy this quarter, what was that dollar amount?

Total amount was $4.7 million for the quarter.

[Operator Instructions] Our next question comes from the line of Greg Peters with Raymond James.

I was wondering if you could comment on the savings you might be realizing from travel and entertainment. A lot of other service providers, because you're doing things virtually, you're not traveling as much. I'm just curious, as we look across the 3 segments, if you've -- we've seen some improvement in expenses in some of the areas, but I'm just wondering where the pickup is.

Yes. We have seen a considerable benefit from lower travel and entertainment expense, [Mark], not just across our segments, but in our administrative areas as well. I would say that our travel and entertainment cost is probably trending down 50% this year.

Yes. But Greg, by the way, I hope you're well. We have about 2% of our expense, which really is travel and entertainment. So it's not a significant chunk for us, but as Bruce mentioned, even in that, there is about a 50% trending down.

Well, let me come at it this a different way. How many of your employees are in a work-from-home position versus where we were a year ago? And I guess, ultimately, I'm wondering is there an opportunity for you to harvest some savings and a reduced office footprint type of scenario?

Yes. I would -- I'll start off and I'll let Rohit comment. The vast majority of our employees are in work from home and have been since March. So we've largely been working remote since March. And that continues today, and that will continue through the rest of this year and probably into the first quarter of '21. We are evaluating our corporate real estate in light of that. I think that this is still an evolving situation. I don't see us going fully remote as a company. I think that we need to have places where our employees can congregate and come together and interact. We're a business that needs contact amongst our employees, our nurses with the adjusters or adjusters with their managers, et cetera. But we do think that there will be a rationalization as we go forward with the mixture of work from home and then people in the office. And ultimately, having what I would refer to as a clubhouse for the employees within a particular region to come into and be tethered to.

Yes. That makes sense. And that's how we're moving forward, Greg. 95% to 96% of our staff, just so you know is working from home now globally.

And what was it last year? Just -- was it every one working from the office? Because I mean, given your business model, there's a lot of remote work anyways.

Yes. I would say probably about -- if I take the total workforce, there was probably about 20% of it that was working remote, and that's an estimate because we had adjusters who were out and about, but they were still tethered to an office. So whether they came in once a week or once every other week, that obviously varied, but we did have brick-and-mortar. And we do believe that having some form of brick-and-mortar is still important for the -- to demonstrate proximity to our clients, which they like because one of the reasons they pick us is because we are in places that they may not want to be or they couldn't afford to be.

Our next question comes from the line of Mark Hughes with Truist.

The -- you talked about a nice backlog. I think it's in the TPA business of $265 million. When does that potentially come to fruition? Is that kind of a Jan 1 backlog you're looking at? Or pipeline?

Are you talking about our pipeline?

Correct. Yes.

Right. I would not call that backlog because that's just pipeline of what clients are in various stages. Some of them may be an acquisition for us in acquisition mode, some of them may be in qualifying mode, some of them may be in presentation mode. That's just a demonstration that our sales is working, and we're starting to build a huge pipeline of potential client candidates.

Is there -- please go ahead.

Sorry, go ahead. No, no, please you go ahead.

Okay. I was going to ask, when you look at the number of RFPs in the -- out in the market, are those back to a normal level? Or is it still somewhat depressed?

It's definitely better than what it was, Mark, in, say, the may through July time frame. But it's not back to where it used to be pre-COVID. If you look at our numbers, we've roughly written, in total new business, $60-plus million of new business this year on an annualized basis. And so we feel good about that given the current circumstances of COVID. We've had over 3,000 client meetings, which have been remote just in this quarter. So we feel good about the activity. But the RFP activity is not back to the levels that it used to be.

And I think you mentioned one of the top personal lines carrier contract in Canada. How significant can that be for Contractor Connection?

In Canadian terms, it's extremely significant. In U.S. terms, as you know, we have some very large clients in the U.S. So -- but for Canada, it could be one of the largest client wins in Canada for us in Contractor Connection.

And there are no further questions in queue at this time. I'd like to turn the call back over to Mr. Verma for some closing remarks.

Thank you, James. I just wanted to thank our employees, our clients and all our shareholders for their confidence and commitment to Crawford and company. With our strong results in Q2, which are sequentially better -- Q3, which are sequentially better than Q2, it demonstrates the resilience of our almost 80-plus year business. We are confident in our future of the company. We want to wish everybody well, be safe and God bless us all. Thank you so much.

Thank you for participating in today's Crawford & Company conference call. This call will be available for replay beginning at 11:30 a.m. Eastern Standard Time today through 11:59 p.m. Eastern Standard Time on December 3, 2020. The conference ID number for the replay is 7888597. The number to dial for the replay is (800) 585-8367 or (416) 621-4642. Thank you. You may now disconnect.