Crawford
Participating companies
Tami Stevenson – General Counsel
Rohit Verma – Executive Director
José Blanco – President
Bruce Swain – Chief Financial Officer
Conference Call Participants
Mark Hughes – Truist
Kevin Steinke – Barrington Research
Operator
Bonjour. Je call is Colin and I will be your convention host today. At this time, I would like to welcome you to Crawford’s Q2 2022 earnings conference call.
I would now like to introduce Tami Stevenson, General Counsel of Crawford
Tami Stevenson
Some of the topics discussed in this convention call and supplemental financial presentation could include forward-looking statements that involve dangers and uncertainties. These statements could relate to, among other things, the effect of COVID-19, our expected long-term effects of operations and monetary condition, our ability to increase our revenues and reduce our operating expenses, expectations related to our expected contributions to our explained underfunded pension plans, the ability to recover billed and unbilled accounts receivable, the monetary effects of our recently completed acquisitions, our continued compliance with monetary and other commitments contained in our financing agreements, our long-term capital resources and liquidity requirements, and our ability to pay long-term dividends.
The Company’s actual effects on long-term quarters may also differ materially from those that may have been implied by such forward-looking statements. The Company assumes no legal responsibility to publish any revisions to the forward-looking statements made in this call to reflect occasions or instances subsequent to the date of the convention call or to reflect the occurrence of unanticipated occasions.
Furthermore, we remind you that the operational effects of any old era are not necessarily indicative of the expected effects for any long-term era. For a full discussion of items that may affect the Company’s monetary performance, please refer to the Company’s Form 10. -Q for the quarter ended September 30, 2022, filed with the Securities and Exchange Commission, specifically the data under the headings Risk Factors and Discussion and Analysis of the Company’s Financial Condition Management and Results of Operations and subsequent filings with the SEC.
This presentation also includes certain non-GAAP monetary measures as explained in the SEC rules. Where necessary, a reconciliation of those measures to comparable maximum GAAP measures is provided.
I would now like to introduce Mr. Rohit Verma, President and Chief Executive Officer of Crawford.
Rohit Verma
Hello, and welcome to our third quarter 2022 earnings convention call. With me are Bruce Swain, our chief financial officer; Joseph Blanco, our president; and Tami Stevenson, our General Counsel. After our comments ready, we will open the call for your questions.
Before we begin, I need to make our minds bigger to all those affected by Hurricane Ian, especially those in Florida who are still suffering from this terrible devastation and facing a new threat from Hurricane Nicole. As our reaction continues, we are incredibly proud of the entire Crawford team, especially our floor experts who work tirelessly to help repair the communities and businesses that have been affected by this terrible devastation.
Our third quarter effects reflect continued earnings momentum, driven by the strategic investments we have made across the company. Revenue rose 2%, or 6% in uniform currency, to a solid era last year, which included severe weather events in the United States.
With respect to our North American operations, our efforts to increase penetration with the five most sensitive carrier consumers continue to bear fruit. This continued good fortune is a testament to Crawford’s generation- and people-centric strategy, as our customers depend on Crawford’s extensive organization. of experts and commitment to quality when assessing their outsourcing needs. This has resulted in stronger relationships and superior claims assignments for us.
Platform Solutions delivered solid results, posting another quarter of double-digit earnings growth. This evolution is primarily due to the strength of our Networks business and the contributions of our acquisition of Praxis. In North America, we are gaining traction in the market through the integration of more experts and the expansion of our geographic presence within our volume business in the U. S. U. S. This differentiated feature allows Crawford to deal with the increasingly complex nature of claims. As a result, we are an even more valuable player for our customers.
Broadspire also continues to revel in a stable recovery to pre-pandemic levels, helped by increased economic activity and new customers. The investments we have made and continue to make are having an impact across the company. We remain confident that we have the right strategy in place for higher percentage market position gains and higher profitability.
While earnings expansion has maintained its strong momentum, there are obviously spaces in our business that we know are ripe for improvement. We have achieved very high margins and continue to invest in expanding our North American operations. Geographical gaps in the market, making an investment in quality. As those businesses evolve, we expect further margin expansion and profitability. In addition, we are seeing an improvement in power as our new hires increase.
While the absence of climate activity in the U. S. While the U. S. during the third quarter peak put pressure on margins at our North American operations, we expect innovations in the fourth quarter thanks to the Hurricane Ian business. We are taking planned steps to deal with the demanding situations faced by those businesses. These moves come with adjusting charges and deal with a low-productivity or under-performing wallet. We’ve also made adjustments across the organization to optimize our alignment job design. with the dynamics of the existing market. Although it is still in its infancy, we are already seeing the benefits of those efforts in Latin America. In addition to the above measures, in the UK we are resolving issues similar to contracts with previous customers.
Finally, we are improving our product supply and obtaining better quality and service through investments in digitalization. Overall, we remain confident that our positive momentum in North America, combined with the expected growth in our overseas business in 2023, will drive expansion and our overall margin profile.
On capital allocation, given market volatility and geopolitical tensions, we aim to strengthen our monetary position. We were able to leverage our money to fund current capital needs similar to typhoon operations in Australia and the United States. We expect to generate money to improve in the future, which we will use to pay off debt and bring our leverage ratio closer to our target. 2x EBITDA. This gives us monetary flexibility, which deserves to allow us to deal with the macroeconomic disorders imaginable next year.
Overall, Crawford is in a strong monetary position and we are confident in our ability to continue executing our expansion strategy and margins.
Finally, I would like to highlight our recent announcement of the election of Cameron Brady to the Crawford Board of Directors. He will serve on our audit committee. Cameron brings more than 25 years of global finance, operations and threat control experience to the Board, and his new attitude will further help Crawford’s future. With that, I’d like to pass the floor to Joseph to talk about the effects of our industry. for the 3rd trimester.
Jose Blanco
Starting with the loss adjustment in North America, the third-quarter earnings expansion was primarily due to the continued market recovery in Canada, the inclusion of an adjuster, as well as increased activity similar to that of Hurricane Fiona, which hit eastern Canada in September. In the U. S. , mild weather for most of the quarter resulted in a decrease in claims volumes compared to a robust third quarter in 2021, which included the effects of Hurricane Ida.
We continue to make specific investments in expertise and have added more than 80 adjusters so far in 2022. We are way ahead of our three-year purpose set in the past to add two hundred specialized adjusters. While this investment has created margin strain in the short term, the effects are encouraging. Our new hires allow us to better serve our clients and fill experience gaps, getting more loss allocations even when weather activity is low.
As clients become more complex, Crawford is in a position of strength as a result of our people-centric strategy and the investments we have made to build our expert panel. For example, we recently hired a former NASA engineer to review a complex satellite application. This highlights the developing breadth of our experience and illustrates how Crawford is increasingly becoming the first long-term destination for talent. giant component for recruiting and onboarding those experts.
In our overseas operations, we saw a further recovery in our Latin America business, as well as earnings expansion due to weather situations in Australia and Asia throughout the quarter. This partially offset continued weakness in some business sectors in the UK and Europe. Australia, unprecedented flooding in Queensland and New South Wales continued to increase claims. As Rohit mentioned earlier, we have a portfolio of weakness in overseas operations, where we are taking corrective action, which will lead to an improvement next year. We are already experiencing a recovery in Latin America, thanks to our cost reduction initiatives, which have accelerated the flow of profit growth in Chile, Brazil and Peru.
Margins in Asia advanced more than expected due to higher revenues similar to primary flooding in Malaysia and the Philippines, as well as other non-flood growth. We are pleased with this progress. However, margins remain below desired levels, and this will remain a domain of focus.
During the third quarter, our Broadspire business continued to recover solidly to pre-pandemic claims volume levels. The quarter’s revenue expansion was driven by increased economic activity with favorable effects on all claims facilities and medical management, as a result of the expansion of new and existing consumers. as well as healthy prices.
Platform Solutions delivered another quarter of double-digit earnings expansion, supported by increased activity in our Networking business and the inclusion of Praxis. Margins declined slightly in the quarter as we continue to see some weakness in Contractor Connection allocation volumes. This weakness was similar to a favorable accident environment in the 3rd quarter, as well as a more complicated year-on-year comparison due to Hurricane Ida. We remain confident of the medium-term expansion of this business. In fact, we have added a new five operators and expect to see contributions in 2023.
The weakness in Contractor Connection was offset by positive contributions from our in-office consulting business, CAT and WeGoLook during the quarter. It comes from the solid execution we have demonstrated over the more than 2 years.
We are making solid progress in executing our long-term strategy. Our focus on quality, experience and virtual helps us process claims faster and provide exceptional service to our consumers and their policyholders. We are proud of how generation has played a central role in our efforts to help consumers during the recent typhoon season. As Rohit said, our reaction to Hurricane Ian at the end of the third quarter was impressive. Our recent investments in generation have allowed us to reduce adjuster implementation time by approximately 85%. This immediate implementation not only allows help to succeed among policyholders more quickly, but also gives us the merit of being first to market and allows us to conquer market share.
These are some examples of the progress we are making in executing our strategy and a testament to our relentless pursuit of service excellence that underpins our key pillars.
Returning now to the new business drive, as we enter the fourth quarter, we continue to deepen our relationships with our existing consumers and attract new business. During the third quarter, we earned approximately $25 million in new and d contracts, a strong sign that our focus on a reimagined claims ecosystem continues to resonate with our consumers. Our NPS remains healthy at 47% and we are actively looking for opportunities for our score. In addition, we have retained 95. 5% of our Broadspire business since the beginning of the year and are expanding our market share with key consumers.
Overall, we remain committed to providing service excellence through the end of 2022. We believe our commitment to environmental, social and governance principles supports our ability to execute our long-term strategy and fulfill our purpose of restoring our lives, businesses and communities. Our commitments to diversity, equity and inclusion, sustainable business practices, and moral behavior are reflected in our purpose, our intended long-term, and our values.
Throughout the quarter, we made steady progress on our EDI and human capital initiatives. To monitor painters’ satisfaction and engagement, Crawford surveys painters twice a year. More than 75% of our painters responded to the most recent survey and the comments continue. Be positive. Elements of the survey also revealed the current state of painters’ sentiment towards DCI, with 88% of respondents indicating that they do not revel in prejudice in paintings due to their non-public identity. This positive reaction is 22% higher than the professional reaction. industry standard.
In addition, 82% of respondents agree with superior control of FDI initiatives. The effects of the survey highlight the effectiveness of our culture and other people systems and the creation of an inclusive workplace. We will continue to focus on spaces to improve the overall worker experience. That said, let me pass the word to Bruce to take a deeper look at our monetary performance.
Bruce Swain
Thank you, Joseph. Company-wide earnings before redemptions in the third quarter of 2022 $294. 9 million, up 2% from $288. 5 million in the third quarter of last year and our highest profit since the fourth quarter of 2017. Presented in consistent dollars compared to last year, earnings before refunds totaled $306 million. GAAP diluted earnings per share in the third quarter of 2022 a loss of $0. 31 consistent with the consistent percentage for CRD-A and CRD-B, compared to earnings of $0. 20 for CRD-A and $0. 21 for CRD-B in the consistent period of 2021. On a non-GAAP basis, diluted EPS for the third quarter of 2022 $0. 16 for CRD-A and CRD-B, compared to $0. 24 for CRD-A and $0. 25 for CRD-B for the consistent period within 2021.
The company’s non-GAAP operating income source $14. 2 million in the third quarter of 2022, or 4. 8% of revenue, compared to $20. 8 million or 7. 2% of revenue in the prior year period. Consolidated adjusted EBITDA $21. 9 million in the third quarter of 2022, or 7. 4% of revenue, compared to $29. 5 million or 10. 2% of revenue in the quarter of 2021.
I will now review the third-quarter functionality of our segments. The profit source from loss adjustment in North America totaled $66. 8 million, adding $1. 9 million from the edjuster acquisition, up 3. 9% from $64. 3 million in last year’s quarter. The effects of the exchange rate reduced profits to $900,000. The segment reported an operating source of profit of $3. 7 million in the third quarter of 2022, or 5. 5% profit, compared to $4. 4 million or 6. 8% profit in the prior year quarter. Margins have been under pressure due to continued investment in skills recruitment, benign weather activities, and the lack of CEWS profits in 2022.
International revenue totaled $86. 1 million in the third quarter of 2022, adding $1. 4 million from the acquisitions of BosBoon and Van Dijk, down 6. 3% from $91. 9 million in the year-to-year quarter. Exchange rate effects reduced revenue by $10. 1 million in the 2022 quarter. Based on a consistent currency, revenue was $96. 2 million, representing an expansion of 4. 7% compared to the quarter of 2021. The segment reported an operating loss of $3. 8 million in the third quarter of 2022, compared to the operating revenue source of $1. 9 million in the prior quarter. Last year’s quarter. Negative operating margin of 4. 5% in the quarter of 2022 compared to 2. 1% in the quarter of 2021. Weakness in some business segments in the UK and Europe led to a decline in earnings.
Broadspire’s revenue was $78. 4 million in the third quarter of 2022, up 3. 4% from $75. 8 million in the 2021 period. Operating margin of this segment 7. 9% in the quarter 2022 compared to 9. 2% in the period 2021. The reduction in operating margin is due to higher repayment expenses. The recovery of our medical monitoring business continues to lag. Our portfolio of visitors and recent victories.
Platform Solutions revenue was $63. 7 million in the third quarter of 2022, up 12. 7% from $56. 5 million in the year-ago quarter. Revenue from the acquisition of Praxis Consulting totaled $5. 4 million in the current quarter. Platform Solutions’ operating income source totaled $10. 1 million or 15. 8% of revenue in the third quarter of 2022, up from the operating income source of $9. 7 million or 17. 2% of revenue in the 2021 quarter. The shift in the combination of our higher-margin contractor connection business to our networking business, as well as our continued investments in technology, reduced margins for the quarter.
Main office retained costs were $1. 9 million in the third quarter of 2022, compared to $2. 2 million in the same period in 2021. This reduction is basically due to a reduction in incentive compensation, partially offset by a relief in CEWS benefits and an accumulation in safe prices. During the third quarter of 2022, the Company did not recognize any pre-tax benefits from CEWS, compared to $1. 8 million in the quarter of 2021. The company does not expect to recognize any other benefits of CEWS in the future.
During the quarter of 2022, the Company recorded an impairment of non-cash capital gains of $36. 8 million. This rate was partially offset through a $15. 9 million relief at source of income tax expense for a net effect of $20. 9 million or $0. 43 consistent with stock. Due to the undefined tax solution of the impairment of capital gain, the tax benefits of the impairment will normalize in the fourth quarter, resulting in a reduction of anticipated tax benefits of $3. 4 million for the full year.
We recorded a pre-tax contingent value top-up rate of $887,000 overall in the third quarter of 2022. This is due to favourable adjustments to the projections of certain acquired entities. We did not buy back any consistent percentage in the third quarter of 2022. In the first nine months of 2022, the Company repurchased approximately $2. 7 million consistent with CRD-A percentages and nine63,000 consistent with CRD-B percentages at an average charge consistent with percentages of $7. 41 and $7. 32, respectively. in 2022 $26. 7 million.
The Company’s money and monetary position as of September 30, 2022 amounted to $33. 1 million, compared to $53. 2 million as of December 31, 2021. corporate has made those contributions in recent years in the U. S. In the U. S. , we do not intend to make contributions in 2022.
The Company’s overall outstanding debt as of September 30, 2022 was $257. 4 million, compared to $175 million as of December 31, 2021, reflecting loans to fund negative loose cash flow, acquisitions, dividend completions and percentage repurchases. Net debt $224. 3 million as of September 30, 2022, while our leverage ratio under our credit agreement closed at 2. 84x EBITDA. In addition, our pension liabilities decreased to $10. 2 million at the end of the third quarter, reflecting an investment ratio of 92. 8%.
As Rohit discussed earlier, we have accessed our money to fund operating capital needs similar to recent typhoon activity. As ongoing works and accounts receivable are completed, we will use the money to pay off the debt to bring our debt-to-equity ratio closer to 2x EBITDA.
Cash used through operations totaled $16. 2 million in the first nine months of 2022, compared to $20 million expected in the 2021 period. The reduction in money provided through operating activities is basically due to $19. 9 million similar to the payroll tax date. and similar taxes and the accumulation on incentive payment bills of $10. 4 million in 2022. We also saw an accumulation in the use of invoiced and unbilled accounts receivable of $6. 5 million. This was partially offset by a $9 million relief in pension contributions.
Free money was negative at $41. 1 million during the first nine months of 2022, compared to $580,000 last year. With that, I would like to refer the appeal to Rohit for final comments.
Rohit Verma
As we enter the fourth quarter, we continue to face a dubious macroeconomic environment and inflationary pressures. However, we remain very focused on accelerating our market leadership position within the industry through innovation and best-in-class responses as we pursue our goal. Crawford’s continues to focus on our people, our goal and strategy, and our commitment to service excellence for our consumers continues to be at the forefront of our priorities at the end of 2022. Overall, we remain confident in our ability to capitalize on the many opportunities for us, as well as impressive long-term effects for our shareholders. Thank you for your time today. Colin, opens the call for questions.
Q&A session
Operator
[Operator Instructions] The first is by Mark Hughes of Truist.
Marc Hugo
Are you, with emerging interest rates and your emerging investment index, going to find a more comprehensive solution for retirement?Can you move the pension risk? Or are there limits?
Bruce Swain
Marc is Bruce. Es anything we compare as a company. Over the past few years, we’ve done some small annuity buybacks under the plan and actually made one for this year as well. Threat of the plan. But certainly, with the point of investment you’re in, I think we’ll have long-term opportunities to compare a more permanent solution with the advantage-making system explained by the US. U. S.
Marc Hugo
Do you think Contractor Connection sees an increase in typhoon activity?Or is that not part of their goal?
Rohit Verma
Hi, Mark, I’m Rohit. Contractor Connection sometimes benefits more from what we call severe convection storms than from a naturally natural hurricane. the deductible and that the insurer asks to repair. What we’ve noticed, as an example with Ian so far, is that a lot of damage is less than the franchise. That’s why we haven’t noticed as much contractor connection activity this year because the overall frequency due to weather has been less than Hurricane Ian for the past month, around 1. 5 months.
Marc Hugo
In Broadspire, you discussed that you were returning to pre-pandemic levels. How far do you think you have to go to get back to those levels?
Rohit Verma
I think if you take a look at our claims volume and the profit we’re generating on the claims side, we’re not just there, but a little bit ahead of what we were before the pandemic. Mainly because of what we have done with new consumers gained as well as volume growth. Our challenge remains the aspect of medical monitoring, which had declined in the time of COVID and has yet to recover. It remains an enigma to us that what deserves to be seen correlates with medical monitoring and volume. Of claims he has, we don’t see returning.
However, there are several assumptions. A speculation that there are other people who do not undergo elective procedures for fear of COVID. Hospitals are still constrained from a staff perspective, which has an effect on elective procedures. But we believe that there is no structural replacement in the market where this activity has disappeared. We continue to think it is a matter of time and this component of the business deserves to continue to regress in the coming months and quarters.
Marc Hugo
You argued that the UK is a bit more difficult. And how much of the quarter’s loss is similar to the UK deal?
Rohit Verma
In the UK, we have a number of things going on. We had 1 or 2 problematic contracts that we worked on. We believe we’ve worked effectively on those contracts, so most of that deserves to be resolved. However, we have a little tail threat that comes with that because we still have claims to liquidate forced under the original contracts that we have yet to liquidate. But we no longer settle for new claims under those contracts. We believe we deserve to see a better position in the UK as the new year approaches.
Marc Hugo
And then he discussed the highest penetration with the five most sensible operator ratios. Could you elaborate on that?What motivates this?
Rohit Verma
Yes, it’s more wallet sharing. As we continue to work for those top five operators and continue to deepen our appointments with those top five operators, this gives us the opportunity to not only accumulate volumes in the businesses we have recently, but also to demonstrate our capability in other businesses. Where we can just help carriers, and that’s what we’re seeing. Something that as a pure loss agreement commitment can expand to come with Contractor Connection, maybe expand to come with content, maybe expand to come with surrogacy. We’re just seeing an expansion of our appointments with those clients, and that’s what we strive to develop with those clients.
Operator
The next one comes from Kevin Steinke of Barrington Research.
Kevin Steinke
I tried to start by asking about the four profitability improvement projects that you discussed on the current quarterly call. Maybe you can update us on the progress of each of those projects?
Rohit Verma
Of course, Kevin is Rohit. Kevin, the four things we talked about, let me step back and rephrase. We said that there are actually 3 key types of disorders that are at the origin. First, we make planned investments in safe places where margin is reduced because we make planned investments. Examples would be our loss adjustment activities in North America, where we are making investments to recruit new experts and geographically expand our presence in the United States. Then we have businesses where we have: we think there’s a transient decline in profitability, basically because of what’s going on with the weather. And those, examples of that would be things like Contractor Connection. And then we have corporations where we want to do active work, especially internationally, for margins and give them back to where we would call them our target margins.
From this point of view, we have had problems with some problematic contracts. We’ve talked about this before, as I mentioned earlier with Mark. We sought to make sure our costs matched the quality and type of service we provided. Dealing with it, so it’s a work in progress. We also said we would replace our staff grades to more clearly reflect the market dynamics we are seeing. We’ve made several of those replacements.
As you can imagine, given the labor law under which we operate, especially in the foreign market, it may infrequently take longer than you and I would like them took. We believe we are well on this path. The put options where we’ve already had an effect are put options like Latin America, where we’ve made the adjustments we were looking to make, and we’re already seeing signs of recovery from a profitability perspective. Australia has been in a strong position for us and remains incredibly strong. In fact, Asia is something that needs more work from a profitability perspective, but it’s working better than we originally planned. Companies.
Kevin Steinke
It is ok. Super. This is a useful overview. And when we think about when we deserve to start seeing some of the benefits of those projects wrapped in a more draped way, do you think. . . I guess what’s your opinion about the moment?Guess? I’ll leave it open.
Rohit Verma
Sí. No, I perceive the query perfectly. I would say we deserve to be able to let you know at the end of the first quarter where things are going, and then a bigger impact on the source of revenue you deserve to see in the current quarter. That is our goal.
Kevin Steinke
It is ok. He didn’t have: he discussed the possibility of a recession or the most dubious economic environment at the moment. Do you see anything in one of your corporations that would imply that it is affected by an economic downturn?Or what is your overview of the economy and foresight have an effect on the future?
Rohit Verma
Kevin, if you take a look at our previous performance, we regularly have. . . If you think about our business and break it down into the look of corporate assets and the look of corporate assets, the look of corporate assets sometimes isn’t affected by a recession. You can imagine, hail, wind or rain do not take into account the economic environment. I think we expect this component of our business to continue to behave exactly like the overall real estate market and weather. I believe that 50% of our activities are based, I would say, on accidents, which is closely related to economic activity.
So far, we haven’t noticed any signals in any of our markets similar to a slowdown in economic activity. On the contrary, we continue to see higher levels of economic activity. As a result, we are seeing an increase in claims volumes, as we discussed in Broadspire, which is the most productive indicator of economic activity for us in our portfolio. We don’t see any of that right now, but obviously there’s a lot of discussion, a lot of discussion about it. I’m sure if you looked at the Wall Street Journal today, there were some big tech corporations that were starting to make cuts, so we’re watching that carefully. We need to make sure our balance sheet is solid, our monetary capacity is strong, our liquidity is strong as we enter 2023. And that’s why he’s listened to the paintings Bruce and his team have made for that balance.
Kevin Steinke
It is ok. Yes, it is useful. I just wanted to move on to one of the projects you discussed there and discussed, it’s just the price and I’m wondering what you think about traction and your ability to get costs when you’re running this. initiative?
Rohit Verma
We know that we have a very strong courtship with our partners, whether in the aspect of carrier, in the corporate aspect or other types of entities dicy. And as a result of that, we think when we have real, transparent verbal exchanges about dating suitability, wallet where we think we have pricing issues, we can have that verbal exchange in a pretty powerful way physically. We who the wallet of our business or the express conditions of our consumers where we have disruptions with the adequacy of our company prices, we face them and get intelligent help and traction from our consumers. I have yet to hear or see that we have lost a visitor due to prices where we needed prices. We feel smart about this and that this traction deserves to continue.
Kevin Steinke
This bien. Super. Je also wanted to ask him about his efforts to load adjusters. And certainly, he argued that he’s ahead in his purpose of carrying two hundred, or he’s ahead in pace, I guess. Can you, first of all, tell us what you think has allowed you to succeed by uploading those specialists?And if you had the chance, would you look to climb more than that goal of two hundred?Or is it the type of number that you think provides you with the right amount of capacity for your company as a whole?
Rohit Verma
Yes, Kevin, if you take a look at our strategic pillars, one of our strategic pillars is having a deep and outstanding experience. We know we’re in the experience business, so it’s incredibly vital for us to have the right base of experts at our bank actively serving our clients. I don’t think: two hundred was a smart goal for us, but I have no challenge if we exceed that goal because as long as we have the right visitor base and can keep our staff engaged and productive, there’s no reason we shouldn’t. I don’t have that. Our workers are our greatest asset and having the experience only adds to this asset base that we have. As for why we control doing this, I would say 3 main reasons. One is to focus on making sure we’re focused on adding expertise. Second, the relationships we have with customers allow us to demonstrate and execute that expertise, allowing experts to come and register with us and, frankly, deepen their own expertise, build their own eminence, and continue that development.
And third, I would say the unique culture that we’re building in the industry, that allows Americans to come in and really shine. We have said that we build a culture of expansion, a mindset of expansion and empowerment. And as experts, sign up and join the team, they feel they can do their best by being part of our team. These are the 3 big reasons why I think we see the traction we have.
Kevin Steinke
It is ok. Great. Just plus a monetary control factor here. But what do we deserve to expect in terms of tax rates in the fourth quarter or so?Do you know if it is imaginable to bring visibility or not?
Bruce Swain
Our tax rate is going to be a bit weird, considering how passenger depreciation is treated. It’s not just treated as a discreet detail only found in the third trimester. The effect of the tax is also distributed, so we will expect approximately $12. 5 million in tax expenses to occur in the fourth quarter as a result of this deterioration. And that’s why we argue that the overall benefits for the full year are $3. 4 million in impairment. Normally, even for goodwill depreciation, if you remove all that noise, we expected our rate to be between 31% and 32%, which I think is a pretty safe rate for the overall course of work.
Kevin Steinke
It is ok. Finally, regarding the $25 million in new and advanced business you mentioned, that’s another false figure. Should this primarily Broadspire? I guess that’s how you can measure it to the maximum easily, or is it a little wider?
Rohit Verma
Kevin is Rohit. Je I would say is broader. We’ve really had smart traction for new businesses this year, and we expect that traction to continue. Obviously, surely you’re right, Broadspire’s activities are much more quantifiable, however, we have our tactics of estimating the contribution of other lines of business as well, so it’s an overall figure.
Kevin Steinke
It is ok. Super. Thank you for answering the questions.
Operator
[Operator Instructions] Okay, no questions at this time. I will move back for the final comments.
Rohit Verma
Thank you very much Colin. Thank you all. I need to thank all of our employees, all of our customers, everyone who is running in Florida right now to help policyholders who have been affected. Our third quarter affects our long-term confidence in the company, and we look forward to ending 2022 on a positive and impactful note. As always, we wish you good luck. Thank you and God bless you.
Operator
Ladies and gentlemen, this concludes your convention for today. We thank you for your participation and kindly ask you to disconnect your lines.