ATLANTA--(BUSINESS WIRE)--Crawford & Company® (NYSE: CRD-A and CRD-B), is pleased to announce its financial results for the second quarter ended June 30, 2024. Based in Atlanta, Crawford & Company (NYSE: CRD-A and CRD-B) is a leading global provider of claims management and outsourcing solutions to insurance companies and self-insured entities with an expansive network serving clients in more than 70 countries. Refer to the Company's website (www.crawco.com) for more information.
Rohit Verma, president and chief executive officer of Crawford & Company, commented, "Our growth strategy and initiatives are yielding results. Despite a difficult comparison due to weather events last year, three of our four business segments showed operating earnings growth with improved margins in the quarter. This enabled us to achieve consolidated earnings consistent with last year and reflects Crawford's diversified revenue model with a healthy balance between weather and non-weather dependent businesses. We added $23 million in new and enhanced business in the quarter, and our pipeline remains robust. As we move through the back half of 2024, I am optimistic about the overall direction of the Company and believe we are well-positioned to drive enhanced value for customers and shareholders."
GAAP Consolidated Results
Second Quarter 2024
- Revenues before reimbursements of $314.2 million, compared to $324.6 million for the 2023 second quarter
- Net income attributable to shareholders of $8.6 million, increasing from the $8.4 million in the same period last year
- Diluted earnings per share of $0.17 for both CRD-A and CRD-B, unchanged from diluted earnings per share of $0.17 for both share classes in the prior year second quarter
Non-GAAP Consolidated Results
Second Quarter 2024
- Diluted earnings per share, on a non-GAAP basis, totaled $0.25 for both CRD-A and CRD-B in the 2024 second quarter, compared with $0.24 for both share classes in the prior year second quarter
- Net income attributable to shareholders, on a non-GAAP basis, totaled $12.4 million in the 2024 second quarter, compared with $12.0 million in the same period last year
- Consolidated adjusted operating earnings, on a non-GAAP basis, were $22.1 million, or 7.0% of revenues before reimbursements in the 2024 second quarter, compared with $22.8 million, or 7.0% of revenues, in the 2023 second quarter
- Consolidated adjusted EBITDA, a non-GAAP financial measure, was $30.6 million, or 9.7% of revenues before reimbursements in the 2024 second quarter, compared with $31.5 million, or 9.7% of revenues, in the 2023 second quarter
- Foreign currency exchange rates decreased revenues before reimbursements by $1.9 million or less than (1)%. Presented on a constant dollar basis to the prior year period, revenues before reimbursements totaled $316.1 million, decreasing (3)% from the 2023 second quarter
Mr. Verma continued, "Our second quarter performance was highlighted by strong revenue growth and margin improvement at Broadspire, resulting in another record quarter for this business. Additionally, we achieved continued improvement over the prior year period in our International Operations segment. Our North American Loss Adjusting business achieved improved margin performance and consistent revenues quarter over quarter, despite a decline in extreme weather events, reflecting the segment's increased market share in the industry. The absence of severe weather continued to impact weather-related demand for our Platform Solutions business as carriers have capacity to meet current volumes. However, we remain well positioned to respond to seasonal storm activity. Our balance sheet remains strong, providing us flexibility to execute our strategic growth strategy."
Segment Results for the Second Quarter
North America Loss Adjusting
North America Loss Adjusting revenues before reimbursements were $76.0 million in the second quarter of 2024, decreasing (0.4)% from $76.4 million in the second quarter of 2023.
The segment had operating earnings of $4.9 million in the 2024 second quarter, increasing from $3.9 million in the second quarter of 2023. The operating margin was 6.4% in the 2024 quarter and 5.1% in the 2023 quarter.
International Operations
International Operations revenues before reimbursements were $102.3 million in the second quarter of 2024, up 7.3% from $95.3 million in the same period of 2023. Absent foreign exchange rate decreases of $1.5 million, revenues would have been $103.7 million for the 2024 second quarter.
Operating earnings were $5.7 million in the 2024 second quarter, increasing from $3.7 million in the 2023 period. The segment's operating margin for the 2024 quarter was 5.6% as compared with 3.9% in the 2023 quarter.
Broadspire
Broadspire segment revenues before reimbursements were a new quarterly record of $97.1 million in the 2024 second quarter, increasing 11.3% from $87.2 million in the 2023 second quarter.
Broadspire recorded operating earnings of $15.1 million in the second quarter of 2024, representing an operating margin of 15.5%, increasing from $8.1 million, or 9.3% of revenues, in the 2023 second quarter.
Platform Solutions
Platform Solutions revenues before reimbursements were $38.8 million in the second quarter of 2024, down (40.8)% from $65.6 million in the same period of 2023 as the Networks service line had significantly reduced weather related claim volumes.
Operating earnings were $1.5 million in the 2024 second quarter, decreasing from the $8.1 million in the 2023 period. The segment's operating margin for the 2024 quarter was 3.8% as compared with 12.3% in the 2023 quarter.
Unallocated Corporate and Shared Costs and Credits, Net
Unallocated corporate costs were $5.1 million in the second quarter of 2024, compared with $1.1 million in the same period of 2023. The increase in the 2024 second quarter was primarily due to an increase in professional fees and other reserves.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses ("SG&A") increased $1.8 million, or 2.6%, in the three months ended June 30, 2024 as compared with the 2023 period. The increase was primarily due to professional fees, IT costs, and compensation expense, including taxes and benefits.
Other Matters
The Company recognized pretax contingent earnout expenses totaling $0.4 million in the 2024 second quarter, compared to $0.7 million in the same period of 2023, related to the fair value adjustment of earnout liabilities arising from recent acquisitions. This adjustment, which is not a component of operating earnings, is based on favorable changes to projections of acquired entities over the respective earnout periods, which span multiple years.
The Company recognized non-service pension costs of $2.4 million in the 2024 second quarter compared with $2.1 million in the 2023 period. Non-service pension costs represent the U.S. and U.K. non-service defined benefit pension costs, which are non-operating in nature as the U.S. plan is frozen and the U.K. plans are closed to new participants.
Balance Sheet and Cash Flow
The Company's consolidated cash and cash equivalents position as of June 30, 2024, totaled $46.7 million, compared with $58.4 million at December 31, 2023. The Company's total debt outstanding as of June 30, 2024, totaled $233.8 million, compared with $209.1 million at December 31, 2023.
The Company's operations used $8.3 million of cash during the first six months of 2024, compared with $27.2 million provided in 2023. The increase in cash used was due primarily to $13.5 million lower operating earnings, $16.7 million net change in incentive compensation, and a $5.9 million increase in other working capital items over the prior year.
The Company made no contributions to its U.S. defined benefit pension plan and $1.2 million in contributions to its U.K. plans for the first half of 2024, compared with no contributions to the U.S. plan and $1.0 million to the U.K. plans in 2023.
During the first six months of 2024, the Company didn't repurchase any shares of CRD-A, but repurchased 230,861 shares of CRD-B at an average per share cost of $8.98. There were no shares repurchased during the first six months of 2023. The total cost of share repurchases during 2024 was $2.1 million.
Conference Call
As previously announced, Crawford & Company will host a conference call on August 6, 2024, at 8:30 a.m. Eastern Time to discuss its second quarter 2024 results. The conference call can be accessed live by dialing 1-888-259-6580 and using Conference ID 95332233. A presentation for tomorrow's call can also be found on the investor relations portion of the Company's website, https://ir.crawco.com. The call will be recorded and available for replay through September 5, 2024. You may dial 1-877-674-7070 and use passcode 332233# to listen to the replay.
Non-GAAP Presentation
In the normal course of business, our operating segments incur certain out-of-pocket expenses that are thereafter reimbursed by our clients. Under U.S. generally accepted accounting principles ("GAAP"), these out-of-pocket expenses and associated reimbursements are required to be included when reporting expenses and revenues, respectively, in our consolidated results of operations. In the foregoing discussion and analysis of segment results of operations, we do not include a gross up of segment expenses and revenues for these pass-through reimbursed expenses. The amounts of reimbursed expenses and related revenues offset each other in our results of operations with no impact to our net income or operating earnings. A reconciliation of revenues before reimbursements to consolidated revenues determined in accordance with GAAP is self-evident from the face of the accompanying unaudited condensed consolidated statements of operations.
Operating earnings is the primary financial performance measure used by our senior management and chief operating decision maker ("CODM") to evaluate the financial performance of our Company and operating segments, and make resource allocation and certain compensation decisions. Unlike net income, segment operating earnings is not a standard performance measure found in GAAP. We believe this measure is useful to others in that it allows them to evaluate segment and consolidated operating performance using the same criteria used by our senior management and CODM. Consolidated operating earnings represent segment earnings including certain unallocated corporate and shared costs, but before net corporate interest expense, stock option expense, amortization of acquisition-related intangible assets, contingent earnout adjustments, non-service pension costs, income taxes and net income or loss attributable to noncontrolling interests.
Adjusted EBITDA is not a term defined by GAAP and as a result our measure of adjusted EBITDA might not be comparable to similarly titled measures used by other companies. However, adjusted EBITDA is used by management to evaluate, assess and benchmark our operational results. The Company believes that adjusted EBITDA is relevant and useful information widely used by analysts, investors and other interested parties. Adjusted EBITDA is defined as net income attributable to shareholders of the Company with adjustments for depreciation and amortization, net corporate interest expense, contingent earnout adjustments, non-service pension costs, income taxes and stock-based compensation expense.
Unallocated corporate and shared costs and credits include expenses and credits related to our chief executive officer and Board of Directors, certain provisions for bad debt allowances or subsequent recoveries such as those related to bankrupt clients, certain unallocated professional fees and certain self-insurance costs and recoveries that are not allocated to our individual operating segments.
Income taxes, net corporate interest expense, stock option expense, amortization of acquisition-related intangible assets, contingent earnout adjustments, and non-service pension costs are recurring components of our net income, but they are not considered part of our segment operating earnings because they are managed on a corporate-wide basis. Income taxes are calculated for the Company on a consolidated basis based on statutory rates in effect in the various jurisdictions in which we provide services and vary significantly by jurisdiction. Net corporate interest expense results from capital structure decisions made by senior management and the Board of Directors, affecting the Company as a whole. Stock option expense represents the non-cash costs generally related to stock options and employee stock purchase plan expenses which are not allocated to our operating segments. Amortization expense is a non-cash expense for finite-lived customer-relationship and trade name intangible assets acquired in business combinations. Contingent earnout adjustments relate to changes in the fair value of earnouts associated with our recent acquisitions. Non-service pension costs represent the U.S. and U.K. non-service defined benefit pension costs, which are non-operating in nature as the U.S. plan was frozen in 2002 and the U.K. plans are closed to new participants. None of these costs relate directly to the performance of our services or operating activities and, therefore, are excluded from segment operating earnings to better assess the results of each segment's operating activities on a consistent basis.
A significant portion of our operations are international. These international operations subject us to foreign exchange fluctuations. The following table illustrates revenue as a percentage of total revenue for the major currencies of the geographic areas that Crawford does business:
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||
(in thousands) | June 30,
| June 30,
| June 30,
| June 30,
| ||||||||||||||||||||||||
Geographic Area | Currency | USD equivalent | % of total | USD equivalent | % of total | USD equivalent | % of total | USD equivalent | % of total | |||||||||||||||||||
U.S. | USD | $ | 189,743 | 60.4 | % | $ | 204,854 | 63.1 | % | $ | 369,464 | 60.0 | % | $ | 404,711 | 63.1 | % | |||||||||||
U.K. | GBP | 41,420 | 13.2 | % | 34,725 | 10.7 | % | 81,675 | 13.3 | % | 67,849 | 10.6 | % | |||||||||||||||
Canada | CAD | 22,201 | 7.1 | % | 24,390 | 7.5 | % | 46,042 | 7.5 | % | 49,004 | 7.6 | % | |||||||||||||||
Australia | AUD | 22,316 | 7.1 | % | 22,926 | 7.1 | % | 41,977 | 6.8 | % | 45,920 | 7.2 | % | |||||||||||||||
Europe | EUR | 15,661 | 5.0 | % | 14,301 | 4.4 | % | 30,546 | 5.0 | % | 28,339 | 4.4 | % | |||||||||||||||
Rest of World | Various | 22,886 | 7.2 | % | 23,360 | 7.2 | % | 46,177 | 7.4 | % | 45,067 | 7.1 | % | |||||||||||||||
Total Revenues, before reimbursements | $ | 314,227 | 100.0 | % | $ | 324,556 | 100.0 | % | $ | 615,881 | 100.0 | % | $ | 640,890 | 100.0 | % | ||||||||||||
Following is a reconciliation of consolidated operating earnings to net income attributable to shareholders of Crawford & Company on a GAAP basis:
Three Months Ended | Six Months Ended | ||||||||||||
(in thousands) | June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||
Operating earnings: | |||||||||||||
North America Loss Adjusting | $ | 4,885 | $ | 3,900 | $ | 9,364 | $ | 11,965 | |||||
International Operations | 5,702 | 3,742 | 7,392 | 6,777 | |||||||||
Broadspire | 15,091 | 8,148 | 27,895 | 16,075 | |||||||||
Platform Solutions | 1,469 | 8,106 | 2,584 | 18,072 | |||||||||
Unallocated corporate and shared costs, net | (5,079 | ) | (1,098 | ) | (13,086 | ) | (5,217 | ) | |||||
Consolidated operating earnings | 22,068 | 22,798 | 34,149 | 47,672 | |||||||||
(Deduct) add: | |||||||||||||
Net corporate interest expense | (4,256 | ) | (4,309 | ) | (7,852 | ) | (8,708 | ) | |||||
Stock option expense | (139 | ) | (139 | ) | (306 | ) | (295 | ) | |||||
Amortization of intangible assets | (1,856 | ) | (1,979 | ) | (3,724 | ) | (3,878 | ) | |||||
Non-service pension costs | (2,399 | ) | (2,095 | ) | (4,872 | ) | (4,266 | ) | |||||
Contingent earnout adjustments | (430 | ) | (725 | ) | (581 | ) | (973 | ) | |||||
Income tax provision | (4,486 | ) | (5,206 | ) | (5,533 | ) | (10,477 | ) | |||||
Net loss attributable to noncontrolling interests | 82 | 82 | 140 | 33 | |||||||||
Net income attributable to shareholders of Crawford & Company | $ | 8,584 | $ | 8,427 | $ | 11,421 | $ | 19,108 | |||||
Following is a reconciliation of net income attributable to shareholders of Crawford & Company on a GAAP basis to non-GAAP adjusted EBITDA:
Three Months Ended | Six Months Ended | ||||||||||||
(in thousands) | June 30,
| June 30,
| June 30,
| June 30,
| |||||||||
Net income attributable to shareholders of Crawford & Company | $ | 8,584 | $ | 8,427 | $ | 11,421 | $ | 19,108 | |||||
Add: | |||||||||||||
Depreciation and amortization | 8,845 | 9,191 | 18,144 | 18,241 | |||||||||
Stock-based compensation | 1,613 | 1,586 | 2,831 | 2,609 | |||||||||
Net corporate interest expense | 4,256 | 4,309 | 7,852 | 8,708 | |||||||||
Non-service pension costs | 2,399 | 2,095 | 4,872 | 4,266 | |||||||||
Contingent earnout adjustments | 430 | 725 | 581 | 973 | |||||||||
Income tax provision | 4,486 | 5,206 | 5,533 | 10,477 | |||||||||
Non-GAAP adjusted EBITDA | $ | 30,613 | $ | 31,539 | $ | 51,234 | $ | 64,382 | |||||
Following is a reconciliation of operating cash flow to free cash flow for the six months ended June 30, 2024 and 2023:
Six Months Ended | |||||||||||
(in thousands) | June 30, 2024 | June 30, 2023 | Change | ||||||||
Net Cash (Used in) Provided by Operating Activities | $ | (8,253 | ) | $ | 27,169 | $ | (35,422 | ) | |||
Less: | |||||||||||
Property & Equipment Purchases, net | (1,418 | ) | (1,914 | ) | 496 | ||||||
Capitalized Software (internal and external costs) | (17,031 | ) | (16,031 | ) | (1,000 | ) | |||||
Free Cash Flow | $ | (26,702 | ) | $ | 9,224 | $ | (35,926 | ) | |||
Non-GAAP consolidated results for 2024 and 2023 exclude the non-cash, after-tax adjustments for amortization of intangible assets, non-service-related pension costs, and contingent earnout adjustment.
Following are the reconciliations of GAAP Pretax Earnings, Net Income and Earnings Per Share to related non-GAAP Adjusted figures, which reflect each of 2024 and 2023 before amortization of intangible assets, non-service related pension costs and contingent earnout adjustments:
Three Months Ended June 30, 2024 | ||||||||||||
(in thousands) | Pretax earnings | Net income
| Diluted earnings per
| Diluted earnings per
| ||||||||
GAAP | $ | 12,988 | $ | 8,584 | $ | 0.17 | $ | 0.17 | ||||
Adjustments: | ||||||||||||
Amortization of intangible assets | 1,856 | 1,565 | 0.03 | 0.03 | ||||||||
Non-service related pension costs | 2,399 | 1,876 | 0.04 | 0.04 | ||||||||
Contingent earnout adjustments | 430 | 423 | 0.01 | 0.01 | ||||||||
Non-GAAP Adjusted | $ | 17,673 | $ | 12,448 | $ | 0.25 | $ | 0.25 | ||||
Three Months Ended June 30, 2023 | ||||||||||||
(in thousands) | Pretax earnings | Net income
| Diluted earnings per
| Diluted earnings per
| ||||||||
GAAP | $ | 13,551 | $ | 8,427 | $ | 0.17 | $ | 0.17 | ||||
Adjustments: | ||||||||||||
Amortization of intangible assets | 1,979 | 1,484 | 0.03 | 0.03 | ||||||||
Non-service related pension costs | 2,095 | 1,557 | 0.03 | 0.03 | ||||||||
Contingent earnout adjustments | 725 | 537 | 0.01 | 0.01 | ||||||||
Non-GAAP Adjusted | $ | 18,350 | $ | 12,005 | $ | 0.24 | $ | 0.24 | ||||
Six Months Ended June 30, 2024 | ||||||||||||
(in thousands) | Pretax earnings | Net income
| Diluted earnings per
| Diluted earnings per
| ||||||||
GAAP | $ | 16,814 | $ | 11,421 | $ | 0.23 | $ | 0.23 | ||||
Adjustments: | ||||||||||||
Amortization of intangible assets | 3,724 | 3,139 | 0.06 | 0.06 | ||||||||
Non-service related pension costs | 4,872 | 3,805 | 0.08 | 0.08 | ||||||||
Contingent earnout adjustments | 581 | 574 | 0.01 | 0.01 | ||||||||
Non-GAAP Adjusted | $ | 25,991 | $ | 18,939 | $ | 0.38 | $ | 0.38 | ||||
Six Months Ended June 30, 2023 | ||||||||||||
(in thousands) | Pretax earnings | Net income
| Diluted
| Diluted
| ||||||||
GAAP | $ | 29,552 | $ | 19,108 | $ | 0.39 | $ | 0.39 | ||||
Adjustments: | ||||||||||||
Amortization of intangible assets | 3,878 | 2,909 | 0.06 | 0.06 | ||||||||
Non-service related pension costs | 4,266 | 3,170 | 0.06 | 0.06 | ||||||||
Contingent earnout adjustments | 973 | 720 | 0.02 | 0.02 | ||||||||
Non-GAAP Adjusted | $ | 38,669 | $ | 25,907 | $ | 0.52 | $ | 0.53 | ||||
(1) Sum of reconciling items may differ from total due to rounding of individual components. | ||||||||||||
Following is information regarding the weighted average shares used in the computation of basic and diluted earnings per share:
Three Months Ended | Six Months Ended | |||||||||||
(in thousands) | June 30, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||||
Weighted-Average Shares Used to Compute Basic Earnings Per Share: | ||||||||||||
Class A Common Stock | 29,728 | 28,956 | 29,657 | 28,899 | ||||||||
Class B Common Stock | 19,374 | 19,848 | 19,458 | 19,848 | ||||||||
Weighted-Average Shares Used to Compute Diluted Earnings Per Share: | ||||||||||||
Class A Common Stock | 30,171 | 29,770 | 30,225 | 29,456 | ||||||||
Class B Common Stock | 19,374 | 19,848 | 19,458 | 19,848 | ||||||||
Further information regarding the Company's operating results for the three and six months ended June 30, 2024, financial position as of June 30, 2024, and cash flows for the six months ended June 30, 2024 is shown on the attached unaudited condensed consolidated financial statements.
About Crawford & Company
Based in Atlanta, Crawford & Company (NYSE: CRD-A and CRD-B) is a leading provider of claims management and outsourcing solutions to insurance companies and self-insured entities with an expansive network serving clients in more than 70 countries. The Company's two classes of stock are substantially identical, except with respect to voting rights for the Class B Common Stock (CRD-B) and protections for the non-voting Class A Common Stock (CRD-A). More information is available at www.crawco.com.
TAG: Crawford-Financial, Crawford-Investor-News-and-Events
FOR FURTHER INFORMATION REGARDING THIS PRESS RELEASE, PLEASE CALL BRUCE SWAIN AT (404) 300-1051.
This press release contains forward-looking statements, including statements about the expected future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative and quantitative, that are not historical facts may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from historical experience or Crawford & Company's present expectations. Accordingly, no one should place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Crawford & Company does not undertake to update forward-looking statements to reflect the impact of circumstances or events that may arise or not arise after the date the forward-looking statements are made. For further information regarding Crawford & Company, including factors that could cause our actual financial condition, results or earnings to differ from those described in any forward-looking statements, please read Crawford & Company's reports filed with the SEC and available at www.sec.gov and in the Investor Relations section of Crawford & Company's website at www.crawco.com. |
CRAWFORD & COMPANY | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
Unaudited | ||||||||||||
(In Thousands, Except Per Share Amounts and Percentages) | ||||||||||||
Three Months Ended June 30, | 2024 | 2023 | % Change | |||||||||
Revenues: | ||||||||||||
Revenues Before Reimbursements | $ | 314,227 | $ | 324,556 | (3 | )% | ||||||
Reimbursements | 12,626 | 13,073 | (3 | )% | ||||||||
Total Revenues | 326,853 | 337,629 | (3 | )% | ||||||||
Costs and Expenses: | ||||||||||||
Costs of Services Provided, Before Reimbursements | 222,265 | 234,031 | (5 | )% | ||||||||
Reimbursements | 12,626 | 13,073 | (3 | )% | ||||||||
Total Costs of Services | 234,891 | 247,104 | (5 | )% | ||||||||
Selling, General, and Administrative Expenses | 72,270 | 70,473 | 3 | % | ||||||||
Corporate Interest Expense, Net | 4,256 | 4,309 | (1 | )% | ||||||||
Total Costs and Expenses | 311,417 | 321,886 | (3 | )% | ||||||||
Other Loss, Net | (2,448 | ) | (2,192 | ) | 12 | % | ||||||
Income Before Income Taxes | 12,988 | 13,551 | (4 | )% | ||||||||
Provision for Income Taxes | 4,486 | 5,206 | (14 | )% | ||||||||
Net Income | 8,502 | 8,345 | 2 | % | ||||||||
Net Loss Attributable to Noncontrolling Interests | 82 | 82 | - | |||||||||
Net Income Attributable to Shareholders of Crawford & Company | $ | 8,584 | $ | 8,427 | 2 | % | ||||||
Earnings Per Share - Basic: | ||||||||||||
Class A Common Stock | $ | 0.17 | $ | 0.17 | - | |||||||
Class B Common Stock | $ | 0.17 | $ | 0.17 | - | |||||||
Earnings Per Share - Diluted: | ||||||||||||
Class A Common Stock | $ | 0.17 | $ | 0.17 | - | |||||||
Class B Common Stock | $ | 0.17 | $ | 0.17 | - | |||||||
Cash Dividends Per Share: | ||||||||||||
Class A Common Stock | $ | 0.07 | $ | 0.06 | 17 | % | ||||||
Class B Common Stock | $ | 0.07 | $ | 0.06 | 17 | % | ||||||
CRAWFORD & COMPANY | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
Unaudited | ||||||||||||
(In Thousands, Except Per Share Amounts and Percentages) | ||||||||||||
Six Months Ended June 30, | 2024 | 2023 | % Change | |||||||||
Revenues: | ||||||||||||
Revenues Before Reimbursements | $ | 615,881 | $ | 640,890 | (4 | )% | ||||||
Reimbursements | 24,045 | 24,677 | (3 | )% | ||||||||
Total Revenues | 639,926 | 665,567 | (4 | )% | ||||||||
Costs and Expenses: | ||||||||||||
Costs of Services Provided, Before Reimbursements | 436,654 | 461,109 | (5 | )% | ||||||||
Reimbursements | 24,045 | 24,677 | (3 | )% | ||||||||
Total Costs of Services | 460,699 | 485,786 | (5 | )% | ||||||||
Selling, General, and Administrative Expenses | 149,590 | 137,184 | 9 | % | ||||||||
Corporate Interest Expense, Net | 7,852 | 8,708 | (10 | )% | ||||||||
Total Costs and Expenses | 618,141 | 631,678 | (2 | )% | ||||||||
Other Loss, Net | (4,971 | ) | (4,337 | ) | 15 | % | ||||||
Income Before Income Taxes | 16,814 | 29,552 | (43 | )% | ||||||||
Provision for Income Taxes | 5,533 | 10,477 | (47 | )% | ||||||||
Net Income | 11,281 | 19,075 | (41 | )% | ||||||||
Net Loss Attributable to Noncontrolling Interests | 140 | 33 | 324 | % | ||||||||
Net Income Attributable to Shareholders of Crawford & Company | $ | 11,421 | $ | 19,108 | (40 | )% | ||||||
Earnings Per Share - Basic: | ||||||||||||
Class A Common Stock | $ | 0.23 | $ | 0.39 | (41 | )% | ||||||
Class B Common Stock | $ | 0.23 | $ | 0.39 | (41 | )% | ||||||
Earnings Per Share - Diluted: | ||||||||||||
Class A Common Stock | $ | 0.23 | $ | 0.39 | (41 | )% | ||||||
Class B Common Stock | $ | 0.23 | $ | 0.39 | (41 | )% | ||||||
Cash Dividends Per Share: | ||||||||||||
Class A Common Stock | $ | 0.14 | $ | 0.12 | 17 | % | ||||||
Class B Common Stock | $ | 0.14 | $ | 0.12 | 17 | % | ||||||
CRAWFORD & COMPANY | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
As of June 30, 2024 and December 31, 2023 | ||||||||
Unaudited | ||||||||
(In Thousands, Except Par Values) | ||||||||
June 30, | December 31, | |||||||
2024 | 2023 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and Cash Equivalents | $ | 46,742 | $ | 58,363 | ||||
Accounts Receivable, Net | 133,847 | 131,362 | ||||||
Unbilled Revenues, at Estimated Billable Amounts | 131,119 | 116,611 | ||||||
Income Taxes Receivable | 4,894 | 4,842 | ||||||
Prepaid Expenses and Other Current Assets | 35,393 | 58,168 | ||||||
Total Current Assets | 351,995 | 369,346 | ||||||
Net Property and Equipment | 20,365 | 22,742 | ||||||
Other Assets: | ||||||||
Operating Lease Right-of-Use Asset, Net | 83,175 | 88,615 | ||||||
Goodwill | 76,572 | 76,724 | ||||||
Intangible Assets Arising from Business Acquisitions, Net | 78,127 | 81,786 | ||||||
Capitalized Software Costs, Net | 103,884 | 96,770 | ||||||
Deferred Income Tax Assets | 25,456 | 26,247 | ||||||
Other Noncurrent Assets | 46,238 | 36,969 | ||||||
Total Other Assets | 413,452 | 407,111 | ||||||
Total Assets | $ | 785,812 | $ | 799,199 | ||||
LIABILITIES AND SHAREHOLDERS' INVESTMENT | ||||||||
Current Liabilities: | ||||||||
Short-Term Borrowings | $ | 24,425 | $ | 14,813 | ||||
Accounts Payable | 43,378 | 45,107 | ||||||
Accrued Compensation and Related Costs | 77,828 | 97,842 | ||||||
Self-Insured Risks | 19,332 | 33,238 | ||||||
Income Taxes Payable | - | 6,130 | ||||||
Operating Lease Liability | 24,411 | 24,351 | ||||||
Other Accrued Liabilities | 46,657 | 42,271 | ||||||
Deferred Revenues | 36,193 | 35,540 | ||||||
Total Current Liabilities | 272,224 | 299,292 | ||||||
Noncurrent Liabilities: | ||||||||
Long-Term Debt and Finance Leases, Less Current Installments | 209,410 | 194,335 | ||||||
Operating Lease Liability | 70,888 | 78,029 | ||||||
Deferred Revenues | 23,768 | 24,871 | ||||||
Accrued Pension Liabilities | 23,221 | 24,006 | ||||||
Other Noncurrent Liabilities | 36,594 | 38,835 | ||||||
Total Noncurrent Liabilities | 363,881 | 360,076 | ||||||
Shareholders' Investment: | ||||||||
Class A Common Stock, $1.00 Par Value | 29,743 | 29,525 | ||||||
Class B Common Stock, $1.00 Par Value | 19,324 | 19,555 | ||||||
Additional Paid-in Capital | 85,461 | 82,589 | ||||||
Retained Earnings | 231,263 | 228,564 | ||||||
Accumulated Other Comprehensive Loss | (214,402 | ) | (218,615 | ) | ||||
Shareholders' Investment Attributable to Shareholders of Crawford & Company | 151,389 | 141,618 | ||||||
Noncontrolling Interests | (1,682 | ) | (1,787 | ) | ||||
Total Shareholders' Investment | 149,707 | 139,831 | ||||||
Total Liabilities and Shareholders' Investment | $ | 785,812 | $ | 799,199 | ||||
CRAWFORD & COMPANY | ||||||||||||||||||||||||||||||||||||
SUMMARY RESULTS BY OPERATING SEGMENT WITH DIRECT COMPENSATION AND OTHER EXPENSES | ||||||||||||||||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||||||||||||||||
(In Thousands, Except Percentages) | ||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
North America Loss
| % | International Operations | % | Broadspire | % | Platform Solutions | % | |||||||||||||||||||||||||||||
2024 | 2023 | Change | 2024 | 2023 | Change | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||||||||||
Revenues Before Reimbursements | $ | 76,030 | $ | 76,362 | (0.4 | )% | $ | 102,283 | $ | 95,312 | 7.3 | % | $ | 97,087 | $ | 87,244 | 11.3 | % | $ | 38,827 | $ | 65,638 | (40.8 | )% | ||||||||||||
Direct Compensation, Fringe Benefits & Non-Employee Labor | 54,708 | 54,619 | 0.2 | % | 66,047 | 62,331 | 6.0 | % | 58,162 | 54,500 | 6.7 | % | 23,404 | 43,689 | (46.4 | )% | ||||||||||||||||||||
% of Revenues Before Reimbursements | 72.0 | % | 71.5 | % | 64.6 | % | 65.4 | % | 59.9 | % | 62.5 | % | 60.3 | % | 66.6 | % | ||||||||||||||||||||
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor | 16,437 | 17,843 | (7.9 | )% | 30,534 | 29,239 | 4.4 | % | 23,834 | 24,596 | (3.1 | )% | 13,954 | 13,843 | 0.8 | % | ||||||||||||||||||||
% of Revenues Before Reimbursements | 21.6 | % | 23.4 | % | 29.9 | % | 30.7 | % | 24.5 | % | 28.2 | % | 35.9 | % | 21.1 | % | ||||||||||||||||||||
Total Operating Expenses | 71,145 | 72,462 | (1.8 | )% | 96,581 | 91,570 | 5.5 | % | 81,996 | 79,096 | 3.7 | % | 37,358 | 57,532 | (35.1 | )% | ||||||||||||||||||||
Operating Earnings (1) | $ | 4,885 | $ | 3,900 | 25.3 | % | $ | 5,702 | $ | 3,742 | 52.4 | % | $ | 15,091 | $ | 8,148 | 85.2 | % | $ | 1,469 | $ | 8,106 | (81.9 | )% | ||||||||||||
% of Revenues Before Reimbursements | 6.4 | % | 5.1 | % | 5.6 | % | 3.9 | % | 15.5 | % | 9.3 | % | 3.8 | % | 12.3 | % | ||||||||||||||||||||
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||
North America Loss
| % | International Operations | % | Broadspire | % | Platforms Solutions | % | |||||||||||||||||||||||||||||||||||||
2024 | 2023 | Change | 2024 | 2023 | Change | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||||||||||||||||||
Revenues Before Reimbursements | $ | 153,395 | $ | 153,959 | (0.4 | )% | $ | 200,375 | $ | 187,175 | 7.1 | % | $ | 191,385 | $ | 171,298 | 11.7 | % | $ | 70,726 | $ | 128,458 | (44.9 | )% | ||||||||||||||||||||
Direct Compensation, Fringe Benefits & Non-Employee Labor | 110,175 | 108,783 | 1.3 | % | 131,026 | 123,752 | 5.9 | % | 115,419 | 107,141 | 7.7 | % | 42,334 | 84,600 | (50.0 | )% | ||||||||||||||||||||||||||||
% of Revenues Before Reimbursements | 71.8 | % | 70.7 | % | 65.4 | % | 66.1 | % | 60.3 | % | 62.5 | % | 59.9 | % | 65.9 | % | ||||||||||||||||||||||||||||
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor | 33,856 | 33,211 | 1.9 | % | 61,957 | 56,646 | 9.4 | % | 48,071 | 48,082 | (0.0 | )% | 25,808 | 25,786 | 0.1 | % | ||||||||||||||||||||||||||||
% of Revenues Before Reimbursements | 22.1 | % | 21.6 | % | 30.9 | % | 30.3 | % | 25.1 | % | 28.1 | % | 36.5 | % | 20.1 | % | ||||||||||||||||||||||||||||
Total Operating Expenses | 144,031 | 141,994 | 1.4 | % | 192,983 | 180,398 | 7.0 | % | 163,490 | 155,223 | 5.3 | % | 68,142 | 110,386 | (38.3 | )% | ||||||||||||||||||||||||||||
Operating Earnings(1) | $ | 9,364 | $ | 11,965 | (21.7 | )% | $ | 7,392 | $ | 6,777 | 9.1 | % | $ | 27,895 | $ | 16,075 | 73.5 | % | $ | 2,584 | $ | 18,072 | (85.7 | )% | ||||||||||||||||||||
% of Revenues Before Reimbursements | 6.1 | % | 7.8 | % | 3.7 | % | 3.6 | % | 14.6 | % | 9.4 | % | 3.7 | % | 14.1 | % | ||||||||||||||||||||||||||||
(1) A non-GAAP financial measurement which represents net income attributable to the applicable reporting segment excluding income taxes, net corporate interest expense, stock option expense, amortization of acquisition-related intangible assets, non-service pension costs, contingent earnout adjustments, and certain unallocated corporate and shared costs and credits. See pages 3 and 4 for additional information about segment operating earnings. | ||||||||||||||||||||||||||||||||||||||||||||
CRAWFORD & COMPANY | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
Year-to-Date Period Ended June 30, 2024 and June 30, 2023 | ||||||||
Unaudited | ||||||||
(In Thousands) | ||||||||
2024 | 2023 | |||||||
Cash Flows From Operating Activities: | ||||||||
Net Income | $ | 11,281 | $ | 19,075 | ||||
Reconciliation of net income to net cash (used in) provided by operating activities: | ||||||||
Depreciation and amortization | 18,145 | 18,241 | ||||||
Stock-based compensation | 2,831 | 2,609 | ||||||
(Gain) loss on disposal of property and equipment | (80 | ) | 116 | |||||
Contingent earnout adjustments | 581 | 973 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | (2,537 | ) | (15,107 | ) | ||||
Unbilled revenues, net | (14,234 | ) | 1,828 | |||||
Accrued or prepaid income taxes | (6,652 | ) | (1,217 | ) | ||||
Accounts payable and accrued liabilities | (22,336 | ) | (3,928 | ) | ||||
Deferred revenues | (798 | ) | 4,529 | |||||
Accrued retirement costs | 1,581 | 750 | ||||||
Prepaid expenses and other operating activities | 3,965 | (700 | ) | |||||
Net cash (used in) provided by operating activities | (8,253 | ) | 27,169 | |||||
Cash Flows From Investing Activities: | ||||||||
Acquisitions of property and equipment | (1,418 | ) | (1,914 | ) | ||||
Capitalization of computer software costs | (17,031 | ) | (16,031 | ) | ||||
Net cash used in investing activities | (18,449 | ) | (17,945 | ) | ||||
Cash Flows From Financing Activities: | ||||||||
Cash dividends paid | (6,880 | ) | (5,854 | ) | ||||
Repurchases of common stock | (2,073 | ) | - | |||||
Increases in short-term and revolving credit facility borrowings | 48,592 | 20,958 | ||||||
Payments on short-term and revolving credit facility borrowings | (23,769 | ) | (18,879 | ) | ||||
Payments of contingent consideration on acquisitions | (579 | ) | (4,916 | ) | ||||
Other financing activities | 364 | 213 | ||||||
Net cash provided by (used in) financing activities | 15,655 | (8,478 | ) | |||||
Effects of exchange rate changes on cash and cash equivalents | (155 | ) | 1,062 | |||||
(Decrease) Increase in cash, cash equivalents, and restricted cash(1) | (11,202 | ) | 1,808 | |||||
Cash, cash equivalents, and restricted cash at beginning of year(1) | 59,545 | 46,645 | ||||||
Cash, cash equivalents, and restricted cash at end of period(1) | $ | 48,343 | $ | 48,453 | ||||
(1) The 2024 amounts include beginning restricted cash of $1,182 at December 31, 2023, and ending restricted cash of $1,601 at June 30, 2024, and the 2023 amounts include beginning restricted cash of $638 at December 31, 2022, and ending restricted cash of $974 at June 30, 2023, which we present as part of "Prepaid expenses and other current assets" on the Balance Sheets. | ||||||||
Contacts
Media Contacts: mediarelations@us.crawco.com
Lynn Cufley
+44 207 265 4067
Lynn.Cufley@crawco.uk
Katie Cline
+1 470 792 5678
Katie.Cline@us.crawco.com
Investor Contact:
Jennifer Belodeau/Rosalyn Christian
IMS Investor Relations
203 972 9200
crawford@imsinvestorrelations.com
