Crawford & Company Reports 2023 Second Quarter Results

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Continuing Revenue Growth Leads to Earnings and Margin Expansion

ATLANTA, August 03, 2023--(BUSINESS WIRE)--Crawford & Company® (NYSE: CRD-A and CRD-B), is pleased to announce its financial results for the second quarter ended June 30, 2023.

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. 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 on the Company's website.

GAAP Consolidated Results

Second Quarter 2023

  • Revenues before reimbursements of $320.7 million, up 9% over $293.3 million for the 2022 second quarter

  • Net income attributable to shareholders of $8.4 million, compared with $5.8 million in the same period last year

  • Diluted earnings per share of $0.17 for both CRD-A and CRD-B, compared with diluted earnings per share of $0.12 for both CRD-A and CRD-B in the prior year second quarter

Non-GAAP Consolidated Results

Second Quarter 2023

Non-GAAP consolidated results for 2023 exclude the non-cash, after-tax adjustments for amortization of intangible assets of $1.5 million, non-service related pension costs of $1.6 million, and a contingent earnout adjustment of $0.5 million. Non-GAAP consolidated results for 2022 exclude a similar adjustment for amortization of intangible assets of $1.5 million, non-service related pension credits of $(0.4) million, and a contingent earnout adjustment of $0.2 million.

  • Foreign currency exchange rates decreased revenues before reimbursements by $7.5 million or (3)%. Presented on a constant dollar basis to the prior year, revenues before reimbursements totaled $328.1 million, increasing 12% over the 2022 second quarter

  • Net income attributable to shareholders, on a non-GAAP basis, totaled $12.0 million in the 2023 second quarter, compared with $7.2 million in the same period last year

  • Diluted earnings per share, on a non-GAAP basis, totaled $0.24 for both CRD-A and CRD-B in the 2023 second quarter, compared with $0.15 for both CRD-A and CRD-B in the prior year second quarter

  • Consolidated adjusted operating earnings, on a non-GAAP basis, were $22.8 million, or 7.1% of revenues before reimbursements in the 2023 second quarter, compared with $12.3 million, or 4.2% of revenues, in the 2022 second quarter

  • Consolidated adjusted EBITDA, a non-GAAP financial measure, was $31.5 million, or 9.8% of revenues before reimbursements in the 2023 second quarter, compared with $21.2 million, or 7.2% of revenues, in the 2022 second quarter

Management Comments

"We continued our trend of growth and margin improvement with another strong performance in the second quarter. This was our eleventh consecutive quarter of consolidated revenue growth, reflecting the strength of our client relationships and the commitment of our people to excellence," commented Rohit Verma, Chief Executive Officer of Crawford & Company. "Platform Solutions revenue grew 22% for the second quarter, related to strong activity in our Networks and Contractor Connection service lines. Revenue in our North America Loss Adjusting segment grew 15%, largely driven by the addition of specialty adjusters to our Global Technical Service team, as well as the addition of several new accounts. At Broadspire, usage of our Medical Management service increased as a result of new workers’ compensation business as well as enhanced post-pandemic stability in the sector. Our International business performed well, with improved margins reflecting work done on cost efficiency in 2022 as well as growth in the current year.

"Our balance sheet and cash generation remain strong, providing Crawford the financial flexibility to continue to invest in the technologies and people who will enhance our operational excellence as we execute on our strategic initiatives to drive continued shareholder value," Mr. Verma concluded.

Segment Results for the Second Quarter

North America Loss Adjusting

North America Loss Adjusting revenues before reimbursements were $75.8 million in the second quarter of 2023, increasing 15.3% from $65.8 million in the second quarter of 2022.

The segment had operating earnings of $3.9 million in the 2023 second quarter, increasing from $2.6 million in the second quarter of 2022. The operating margin was 5.1% in the 2023 quarter and 4.0% in the 2022 quarter.

International Operations

International Operations revenues before reimbursements were $95.3 million in the second quarter of 2023, up 1.7% from $93.7 million in the same period of 2022, including $0.6 million from the Van Dijk acquisition. Absent foreign exchange rate decreases of $6.2 million, revenues would have been $101.5 million for the 2023 second quarter.

Operating earnings were $3.7 million in the 2023 second quarter, compared to a $(0.7) million operating loss in the 2022 period. The segment’s operating margin for the 2023 quarter was 3.9% as compared with (0.7)% in the 2022 quarter.

Broadspire

Broadspire segment revenues before reimbursements were $83.9 million in the 2023 second quarter, increasing 4.7% from $80.1 million in the 2022 second quarter.

Broadspire recorded operating earnings of $8.1 million in the second quarter of 2023, representing an operating margin of 9.7%, increasing from $7.7 million, or 9.6% of revenues, in the 2022 second quarter.

Platform Solutions

Platform Solutions revenues before reimbursements were $65.6 million in the second quarter of 2023, up 22.1% from $53.7 million in the same period of 2022.

Operating earnings were $8.1 million in the 2023 second quarter, increasing over the $4.6 million in the 2022 period. The segment’s operating margin for the 2023 quarter was 12.3% as compared with 8.6% in the 2022 quarter.

Unallocated Corporate and Shared Costs and Credits, Net

Unallocated corporate costs were $1.1 million in the second quarter of 2023, compared with $1.9 million in the same period of 2022. The decrease in the 2023 second quarter was primarily due to an offset to certain internal allocations and other cost reductions.

Other Matters

The Company recognized pretax contingent earnout expenses totaling $0.7 million and $0.3 million in the 2023 second quarter and comparable 2022 period, respectively, 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 $2.1 million in the 2023 second quarter compared with credits of $(0.6) million in the comparable 2022 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, 2023, totaled $47.5 million, compared with $46.0 million at December 31, 2022. The Company’s total debt outstanding as of June 30, 2023, totaled $242.8 million, compared with $238.9 million at December 31, 2022.

The Company’s operations provided $27.2 million of cash during the first six months of 2023, compared with $(12.8) million used in 2022. The increase in cash provided was primarily driven by an increase in net income and improvement in working capital.

The Company made no contributions to its U.S. defined benefit pension plan and $1.0 million in contributions to its U.K. plans for the first half of 2023, compared with no contributions to the U.S. plan and $0.3 million to the U.K. plans in 2022.

There were no shares repurchased during 2023. During the first six months of 2022, the Company repurchased 2,656,474 shares of CRD-A and 963,472 shares of CRD-B at an average per share cost of $7.41 and $7.32, respectively. The total cost of share repurchases during 2022 was $26.7 million through June 30, 2022.

Conference Call

As previously announced, Crawford & Company will host a conference call on August 4, 2023, at 8:30 a.m. Eastern Time to discuss its second quarter 2023 results. The conference call can be accessed live by dialing 1-888-396-8049 and using Conference ID 31233038. 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 4, 2023. You may dial 1-877-674-7070 and use passcode 233038# 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 customer-relationship intangible assets, contingent earnout adjustments, non-service pension costs and credits, 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 and credits, 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 customer-relationship intangible assets, contingent earnout adjustments, and non-service pension costs and credits 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 and credits 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,
2023

June 30,
2022

June 30,
2023

June 30,
2022

Geographic Area

Currency

USD equivalent

% of total

USD equivalent

% of total

USD equivalent

% of total

USD equivalent

% of total

U.S.

USD

$

201,246

62.8

%

$

174,959

59.6

%

$

398,014

62.8

%

$

340,452

59.5

%

U.K.

GBP

34,725

10.8

%

33,435

11.4

%

67,849

10.7

%

67,485

11.8

%

Canada

CAD

24,107

7.5

%

24,676

8.4

%

48,468

7.7

%

48,936

8.5

%

Australia

AUD

22,926

7.1

%

23,643

8.1

%

45,920

7.2

%

42,360

7.4

%

Europe

EUR

14,301

4.5

%

14,372

4.9

%

28,339

4.5

%

28,910

5.1

%

Rest of World

Various

23,360

7.3

%

22,260

7.6

%

45,067

7.1

%

44,227

7.7

%

Total Revenues, before reimbursements

$

320,665

100.0

%

$

293,345

100.0

%

$

633,657

100.0

%

$

572,370

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, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Operating earnings:

North America Loss Adjusting

$

3,900

$

2,649

$

11,965

$

6,783

International Operations

3,742

(661

)

6,777

(3,726

)

Broadspire

8,148

7,667

16,075

14,101

Platform Solutions

8,106

4,596

18,072

12,633

Unallocated corporate and shared costs, net

(1,098

)

(1,945

)

(5,217

)

(4,940

)

Consolidated operating earnings

22,798

12,306

47,672

24,851

(Deduct) add:

Net corporate interest expense

(4,309

)

(1,780

)

(8,708

)

(3,298

)

Stock option expense

(139

)

(130

)

(295

)

(336

)

Amortization of intangible assets

(1,979

)

(2,060

)

(3,878

)

(3,786

)

Non-service pension costs and credits

(2,095

)

572

(4,266

)

1,115

Contingent earnout adjustments

(725

)

(303

)

(973

)

(2,359

)

Income tax provision

(5,206

)

(2,768

)

(10,477

)

(5,194

)

Net loss (income) attributable to noncontrolling interests

82

(7

)

33

(67

)

Net income attributable to shareholders of Crawford & Company

$

8,427

$

5,830

$

19,108

$

10,926

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,
2023

June 30,
2022

June 30,
2023

June 30,
2022

Net income attributable to shareholders of Crawford & Company

$

8,427

$

5,830

$

19,108

$

10,926

Add (Deduct):

Depreciation and amortization

9,191

9,356

18,241

18,455

Stock-based compensation

1,586

1,750

2,609

3,410

Net corporate interest expense

4,309

1,780

8,708

3,298

Non-service pension costs and credits

2,095

(572

)

4,266

(1,115

)

Contingent earnout adjustments

725

303

973

2,359

Income tax provision

5,206

2,768

10,477

5,194

Non-GAAP adjusted EBITDA

$

31,539

$

21,215

$

64,382

$

42,527

Following is a reconciliation of operating cash flow to free cash flow for the six months ended June 30, 2023 and 2022:

Six Months Ended

(in thousands)

June 30, 2023

June 30, 2022

Change

Net Cash Provided by (Used in) Operating Activities

$

27,169

$

(12,752

)

$

39,921

Less:

Property & Equipment Purchases, net

(1,914

)

(3,123

)

1,209

Capitalized Software (internal and external costs)

(16,031

)

(12,561

)

(3,470

)

Free Cash Flow

$

9,224

$

(28,436

)

$

37,660

Following are the reconciliations of GAAP Pretax Earnings, Net Income and Earnings Per Share to related non-GAAP Adjusted figures, which reflect each of 2023 and 2022 before amortization of intangible assets, non-service related pension costs (credits) and contingent earnout adjustments:

Three Months Ended June 30, 2023

(in thousands)

Pretax earnings

Net income
attributable to Crawford & Company

Diluted earnings per
CRD-A
share

Diluted earnings per
CRD-B
share

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

Three Months Ended June 30, 2022

(in thousands)

Pretax earnings

Net income
attributable to Crawford & Company

Diluted earnings per
CRD-A
share(1)

Diluted earnings per
CRD-B
share(1)

GAAP

$

8,605

$

5,830

$

0.12

$

0.12

Adjustments:

Amortization of intangible assets

2,060

1,545

0.03

0.03

Non-service related pension credits

(572

)

(444

)

(0.01

)

(0.01

)

Contingent earnout adjustments

303

224

-

-

Non-GAAP Adjusted

$

10,396

$

7,155

$

0.15

$

0.15

Six Months Ended June 30, 2023

(in thousands)

Pretax earnings

Net income
attributable to Crawford & Company

Diluted earnings per
CRD-A
share(1)

Diluted earnings per
CRD-B
share

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

Six Months Ended June 30, 2022

(in thousands)

Pretax earnings

Net income
attributable to Crawford & Company

Diluted
earnings per
CRD-A
share

Diluted
earnings per
CRD-B
share

GAAP

$

16,187

$

10,926

$

0.22

$

0.22

Adjustments:

Amortization of intangible assets

3,786

2,840

0.06

0.06

Non-service related pension credits

(1,115

)

(865

)

(0.02

)

(0.02

)

Contingent earnout adjustments

2,359

1,747

0.03

0.03

Non-GAAP Adjusted

$

21,217

$

14,648

$

0.29

$

0.29

(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, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Weighted-Average Shares Used to Compute Basic Earnings Per Share:

Class A Common Stock

28,956

28,757

28,899

29,827

Class B Common Stock

19,848

19,987

19,848

20,381

Weighted-Average Shares Used to Compute Diluted Earnings Per Share:

Class A Common Stock

29,770

29,145

29,456

30,151

Class B Common Stock

19,848

19,987

19,848

20,381

Further information regarding the Company’s operating results for the three and six months ended June 30, 2023, financial position as of June 30, 2023, and cash flows for the six months ended June 30, 2023 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,

2023

2022

% Change

Revenues:

Revenues Before Reimbursements

$

320,665

$

293,345

9

%

Reimbursements

13,073

10,306

27

%

Total Revenues

333,738

303,651

10

%

Costs and Expenses:

Costs of Services Provided, Before Reimbursements

234,031

218,134

7

%

Reimbursements

13,073

10,306

27

%

Total Costs of Services

247,104

228,440

8

%

Selling, General, and Administrative Expenses

66,582

65,397

2

%

Corporate Interest Expense, Net

4,309

1,780

142

%

Total Costs and Expenses

317,995

295,617

8

%

Other (Loss) Income, Net

(2,192

)

571

nm

Income Before Income Taxes

13,551

8,605

57

%

Provision for Income Taxes

5,206

2,768

88

%

Net Income

8,345

5,837

43

%

Net Loss (Income) Attributable to Noncontrolling Interests

82

(7

)

nm

Net Income Attributable to Shareholders of Crawford & Company

$

8,427

$

5,830

45

%

Earnings Per Share - Basic:

Class A Common Stock

$

0.17

$

0.12

42

%

Class B Common Stock

$

0.17

$

0.12

42

%

Earnings Per Share - Diluted:

Class A Common Stock

$

0.17

$

0.12

42

%

Class B Common Stock

$

0.17

$

0.12

42

%

Cash Dividends Per Share:

Class A Common Stock

$

0.06

$

0.06

—

Class B Common Stock

$

0.06

$

0.06

—

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(In Thousands, Except Per Share Amounts and Percentages)

Six Months Ended June 30,

2023

2022

% Change

Revenues:

Revenues Before Reimbursements

$

633,657

$

572,370

11

%

Reimbursements

24,677

19,070

29

%

Total Revenues

658,334

591,440

11

%

Costs and Expenses:

Costs of Services Provided, Before Reimbursements

461,109

423,715

9

%

Reimbursements

24,677

19,070

29

%

Total Costs of Services

485,786

442,785

10

%

Selling, General, and Administrative Expenses

129,951

130,239

(0

)%

Corporate Interest Expense, Net

8,708

3,298

164

%

Total Costs and Expenses

624,445

576,322

8

%

Other (Loss) Income, Net

(4,337

)

1,069

nm

Income Before Income Taxes

29,552

16,187

83

%

Provision for Income Taxes

10,477

5,194

102

%

Net Income

19,075

10,993

74

%

Net Loss (Income) Attributable to Noncontrolling Interests

33

(67

)

nm

Net Income Attributable to Shareholders of Crawford & Company

$

19,108

$

10,926

75

%

Earnings Per Share - Basic:

Class A Common Stock

$

0.39

$

0.22

77

%

Class B Common Stock

$

0.39

$

0.22

77

%

Earnings Per Share - Diluted:

Class A Common Stock

$

0.39

$

0.22

77

%

Class B Common Stock

$

0.39

$

0.22

77

%

Cash Dividends Per Share:

Class A Common Stock

$

0.12

$

0.12

—

Class B Common Stock

$

0.12

$

0.12

—

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

As of June 30, 2023 and December 31, 2022

Unaudited

(In Thousands, Except Par Values)

June 30,

December 31,

2023

2022

ASSETS

Current Assets:

Cash and Cash Equivalents

$

47,479

$

46,007

Accounts Receivable, Net

160,333

141,106

Unbilled Revenues, at Estimated Billable Amounts

129,121

126,274

Income Taxes Receivable

9,164

9,098

Prepaid Expenses and Other Current Assets

29,032

28,782

Total Current Assets

375,129

351,267

Net Property and Equipment

25,406

27,809

Other Assets:

Operating Lease Right-of-Use Asset, Net

92,535

93,334

Goodwill

76,720

76,622

Intangible Assets Arising from Business Acquisitions, Net

86,852

88,039

Capitalized Software Costs, Net

90,119

82,975

Deferred Income Tax Assets

18,812

19,573

Other Noncurrent Assets

56,201

51,888

Total Other Assets

421,239

412,431

Total Assets

$

821,774

$

791,507

LIABILITIES AND SHAREHOLDERS’ INVESTMENT

Current Liabilities:

Short-Term Borrowings

$

30,552

$

27,048

Accounts Payable

44,094

50,847

Accrued Compensation and Related Costs

76,558

79,285

Self-Insured Risks

15,500

12,614

Income Taxes Payable

143

1,208

Operating Lease Liability

24,028

22,910

Other Accrued Liabilities

64,518

56,293

Deferred Revenues

33,950

29,282

Total Current Liabilities

289,343

279,487

Noncurrent Liabilities:

Long-Term Debt and Finance Leases, Less Current Installments

212,217

211,810

Operating Lease Liability

82,359

84,628

Deferred Revenues

25,472

24,737

Accrued Pension Liabilities

25,250

25,914

Other Noncurrent Liabilities

37,238

41,553

Total Noncurrent Liabilities

382,536

388,642

Shareholders’ Investment:

Class A Common Stock, $1.00 Par Value

28,977

28,764

Class B Common Stock, $1.00 Par Value

19,848

19,848

Additional Paid-in Capital

81,025

78,158

Retained Earnings

226,348

213,094

Accumulated Other Comprehensive Loss

(204,840

)

(215,321

)

Shareholders’ Investment Attributable to Shareholders of Crawford & Company

151,358

124,543

Noncontrolling Interests

(1,463

)

(1,165

)

Total Shareholders’ Investment

149,895

123,378

Total Liabilities and Shareholders’ Investment

$

821,774

$

791,507

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
Adjusting

%

International Operations

%

Broadspire

%

Platform Solutions

%

2023

2022

Change

2023

2022

Change

2023

2022

Change

2023

2022

Change

Revenues Before Reimbursements

$

75,827

$

65,775

15.3%

$

95,312

$

93,710

1.7%

$

83,888

$

80,114

4.7%

$

65,638

$

53,746

22.1%

Direct Compensation, Fringe Benefits & Non-Employee Labor

54,619

48,349

13.0%

62,331

65,311

(4.6)%

54,500

49,801

9.4%

43,689

36,467

19.8%

% of Revenues Before Reimbursements

72.0

%

73.5

%

65.4

%

69.7

%

65.0

%

62.2

%

66.6

%

67.9

%

Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor

17,308

14,777

17.1%

29,239

29,060

0.6%

21,240

22,646

(6.2)%

13,843

12,683

9.1%

% of Revenues Before Reimbursements

22.8

%

22.5

%

30.7

%

31.0

%

25.3

%

28.3

%

21.1

%

23.6

%

Total Operating Expenses

71,927

63,126

13.9%

91,570

94,371

(3.0)%

75,740

72,447

4.5%

57,532

49,150

17.1%

Operating Earnings (Loss) (1)

$

3,900

$

2,649

47.2%

$

3,742

$

(661

)

nm

$

8,148

$

7,667

6.3%

$

8,106

$

4,596

76.4%

% of Revenues Before Reimbursements

5.1

%

4.0

%

3.9

%

(0.7

)%

9.7

%

9.6

%

12.3

%

8.6

%

Six Months Ended June 30,

North America Loss
Adjusting

%

International Operations

%

Broadspire

%

Platforms Solutions

%

2023

2022

Change

2023

2022

Change

2023

2022

Change

2023

2022

Change

Revenues Before Reimbursements

$

152,954

$

130,213

17.5%

$

187,175

$

182,982

2.3%

$

165,070

$

156,568

5.4%

$

128,458

$

102,607

25.2%

Direct Compensation, Fringe Benefits & Non-Employee Labor

108,783

94,606

15.0%

123,752

128,607

(3.8)%

107,141

97,748

9.6%

84,600

68,318

23.8%

% of Revenues Before Reimbursements

71.1

%

72.7

%

66.1

%

70.3

%

64.9

%

62.4

%

65.9

%

66.6

%

Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor

32,206

28,824

11.7%

56,646

58,101

(2.5)%

41,854

44,719

(6.4)%

25,786

21,656

19.1%

% of Revenues Before Reimbursements

21.1

%

22.1

%

30.3

%

31.8

%

25.4

%

28.6

%

20.1

%

21.1

%

Total Operating Expenses

140,989

123,430

14.2%

180,398

186,708

(3.4)%

148,995

142,467

4.6%

110,386

89,974

22.7%

Operating Earnings (Loss)(1)

$

11,965

$

6,783

76.4%

$

6,777

$

(3,726

)

nm

$

16,075

$

14,101

14.0%

$

18,072

$

12,633

43.1%

% of Revenues Before Reimbursements

7.8

%

5.2

%

3.6

%

(2.0

)%

9.7

%

9.0

%

14.1

%

12.3

%

(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 customer-relationship intangible assets, non-service pension costs and credits, 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, 2023 and June 30, 2022

Unaudited

(In Thousands)

2023

2022

Cash Flows From Operating Activities:

Net income

$

19,075

$

10,993

Reconciliation of net income to net cash provided by (used in) operating activities:

Depreciation and amortization

18,241

18,455

Stock-based compensation

2,609

3,410

Loss (gain) on disposal of property and equipment

116

(1,544

)

Contingent earnout adjustments

973

2,359

Changes in operating assets and liabilities:

Accounts receivable, net

(15,107

)

1,241

Unbilled revenues, net

1,828

(27,557

)

Accrued or prepaid income taxes

(1,217

)

(5,275

)

Accounts payable and accrued liabilities

(3,928

)

(9,403

)

Deferred revenues

4,529

(1,080

)

Accrued retirement costs

750

(3,016

)

Prepaid expenses and other operating activities

(700

)

(1,335

)

Net cash provided by (used in) operating activities

27,169

(12,752

)

Cash Flows From Investing Activities:

Acquisitions of property and equipment

(1,914

)

(3,123

)

Capitalization of computer software costs

(16,031

)

(12,561

)

Payments for business acquisitions, net of cash acquired

—

(25,941

)

Cash proceeds from sale of property and equipment

—

3,032

Net cash used in investing activities

(17,945

)

(38,593

)

Cash Flows From Financing Activities:

Cash dividends paid

(5,854

)

(6,034

)

Repurchases of common stock

—

(26,749

)

Increases in short-term and revolving credit facility borrowings

20,958

86,865

Payments on short-term and revolving credit facility borrowings

(18,879

)

(6,011

)

Payments of contingent consideration on acquisitions

(4,916

)

(1,654

)

Other financing activities

213

(285

)

Net cash (used in) provided by financing activities

(8,478

)

46,132

Effects of exchange rate changes on cash and cash equivalents

1,062

(1,400

)

Increase (Decrease) in cash, cash equivalents, and restricted cash(1)

1,808

(6,613

)

Cash, cash equivalents, and restricted cash at beginning of year(1)

46,645

53,689

Cash, cash equivalents, and restricted cash at end of period(1)

$

48,453

$

47,076

(1) The 2023 amounts include beginning restricted cash of $638 at December 31, 2022, and ending restricted cash of $974 at June 30, 2023, and the 2022 amounts include beginning restricted cash of $461at December 31, 2021, and ending restricted cash of $822 at June 30, 2022, which we present as part of "Prepaid expenses and other current assets" on the Balance Sheets.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230803718952/en/

Contacts

Lynn Cufley
+44 207 265 4067
Lynn.Cufley@crawco.uk

Katie Cline
+1 470 792 5678
Katie.Cline@us.crawco.com

Jennifer Belodeau/Rosalyn Christian
IMS Investor Relations
203 972 9200
crawford@imsinvestorrelations.com

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