Crawford & Company Reports 2023 Fourth Quarter and Full Year Results Achieved Record Revenues for Year
Crawford & Company (CRD) releases Q4 2023 financial results with a revenue decrease of 8% compared to 2022. GAAP net loss improved to $(0.8) million from $(14.1) million in 2022 Q4. Non-GAAP net income was $3.3 million in 2023 Q4, down from $11.4 million in the previous year. Full year 2023 showed a 7% revenue increase over 2022, with net income of $30.6 million compared to a loss of $(18.3) million in 2022.
Positive
Positive: Record-setting consolidated revenue of $1.27 billion in 2023.
Positive: Enhanced margin performance and growth strategy success.
Positive: Significant progress in International segment and U.S. Loss Adjusting.
Negative: Revenue decrease of 8% in Q4 2023 compared to 2022.
Negative: Net income decrease on a non-GAAP basis in 2023 Q4.
The disclosed financial results from Crawford & Company highlight a mixed performance, with a year-over-year decrease in fourth-quarter revenues but an overall annual revenue increase. The revenue decline in Q4 2023, attributed partially to reduced weather-related revenue, contrasts with the full-year revenue growth . This growth is indicative of successful strategic initiatives and strong client relationships, particularly in U.S. Loss Adjusting, Broadspire and Praxis. However, the Q4 results may raise concerns about the company's quarterly volatility and its dependency on external factors such as weather conditions.
From a stock market perspective, the improved full-year net income and diluted earnings per share (EPS) are positive signals for investors, reflecting a turnaround from the previous year's loss. The increased consolidated adjusted EBITDA and operating earnings suggest enhanced operational efficiency and margin performance. Investors should consider the company's ability to sustain this margin expansion in the face of potential headwinds like benign weather patterns that may affect future earnings.
Examining Crawford & Company's performance in the context of the claims management and outsourcing industry , the company's international expansion and double-digit revenue growth in certain segments are noteworthy. These achievements reflect a strategic focus on diversification and may provide a competitive edge in a global market. However, the decrease in Q4 revenue and adjusted operating earnings as a percentage of revenues indicates potential challenges in maintaining market share and profitability, especially during off-peak periods for weather-related claims.
The company's constant dollar basis analysis, which shows an 8% increase in revenues over 2022, helps stakeholders understand performance without the distortion of foreign currency fluctuations. This is especially relevant for a global company like Crawford, where currency risk can significantly impact reported results. Stakeholders should monitor how the company manages these risks, especially in light of ongoing global economic uncertainties.
The financial results of Crawford & Company provide insights into broader economic trends , such as the impact of foreign exchange rates and global weather patterns on corporate performance. The company's ability to grow revenues in a year marked by benign weather suggests resilience in its core business operations, despite external economic factors. However, the reduced weather-related revenue in Q4 2023 serves as a reminder of the cyclical nature of some revenue streams and the importance of economic diversification.
Furthermore, the company's performance, particularly the non-GAAP measures such as adjusted EBITDA and operating earnings, offer a more nuanced understanding of its operational health, excluding one-time adjustments and non-operational expenses. These figures, favorable in comparison to the previous year, may reflect well on the company's financial management practices in an environment where many businesses are facing tightening margins due to inflationary pressures and economic uncertainty.
03/04/2024 - 04:42 PM
ATLANTA --(BUSINESS WIRE)--
Crawford & Company® (NYSE: CRD-A and CRD-B) today announced its financial results for the fourth quarter ended December 31, 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
Fourth Quarter 2023
Revenues before reimbursements of $296.1 million $322.2 million
Net loss attributable to shareholders of $(0.8) million ($14.1) million in the 2022 fourth quarter
Diluted loss per share of $(0.02) $0.29
Non-GAAP Consolidated Results
Fourth Quarter 2023
Non-GAAP consolidated results for the fourth quarter of 2023 exclude the non-cash, after-tax amortization of intangible assets of $1.6 million $1.6 million $0.8 million $1.5 million $11.8 million $12.4 million $(0.2) million
Foreign currency exchange rates increased revenues before reimbursements by $3.4 million 1% . Presented on a constant dollar basis to the prior year, revenues before reimbursements totaled $292.7 million
Net income attributable to shareholders, on a non-GAAP basis, totaled $3.3 million $11.4 million
Diluted earnings per share, on a non-GAAP basis, totaled $0.06 $0.07 $0.23
Consolidated adjusted operating earnings, on a non-GAAP basis, were $7.8 million 2.6% of revenues before reimbursements in the 2023 fourth quarter, compared with $23.4 million 7.3% of revenues, in the 2022 fourth quarter
Consolidated adjusted EBITDA, a non-GAAP financial measure, was $15.7 million 5.3% of revenues before reimbursements in the 2023 fourth quarter, compared with $30.8 million 9.6% of revenues, in the 2022 fourth quarter
GAAP Consolidated Results
Full Year 2023
Revenues before reimbursements of $1.26 7 billion7% over $1.18 9 billion
Net income attributable to shareholders of $30.6 million $(18.3) million
Diluted earnings per share of $0.61 $0.62 $(0.37)
Non-GAAP Consolidated Results
Full Year 2023
Non-GAAP consolidated results for 2023 exclude the non-cash, after-tax amortization of intangible assets of $6.7 million $6.4 million $3.4 million $5.9 million $11.8 million $33.3 million $(1.4) million $2.2 million
Foreign currency exchange rates decreased revenues before reimbursements by $(12.8) million $1.28 0 billion8% over 2022
Net income attributable to shareholders, on a non-GAAP basis, totaled $47.0 million $33.4 million
Diluted earnings per share, on a non-GAAP basis, totaled $0.95 $0.67
Consolidated adjusted operating earnings, on a non-GAAP basis, were $85.4 million 6.7% of revenues before reimbursements in 2023, compared with $61.9 million 5.2% of revenues, in 2022
Consolidated adjusted EBITDA, a non-GAAP financial measure, was $118.7 million 9.4% of revenues before reimbursements in 2023, compared with $94.7 million 8.0% of revenues, in 2022
Management Comments
Mr. Rohit Verma, president and chief executive officer of Crawford & Company, commented, “2023 was a strong year for Crawford with a record-setting consolidated revenue of $1.27 billion U.S. Loss Adjusting, Broadspire and Praxis as well as significant progress in our International segment. As indicated in our third quarter earnings materials, our fourth quarter performance was impacted by benign weather activity, which resulted in reduced weather-related revenue as compared to the fourth quarter of 2022, where several severe weather events drove significant revenue performance for the Company. That said, both Broadspire and our International business saw double digit revenue growth in the fourth quarter of 2023, reflecting the underlying strength of our businesses.”
Mr. Verma continued, “2023 marked a momentous year of growth and margin expansion with operating earnings increasing 38% from 2022. As we move through 2024, I am optimistic about the prospects that lie ahead for our business, presenting ample opportunities to further enhance our brand presence and expand our market share.”
Segment Results for the Fourth Quarter and Full Year
North America Loss Adjusting
North America Loss Adjusting revenues before reimbursements were $69.7 million $77.7 million
The segment had operating earnings of $0.8 million $8.6 million 1.1% in the 2023 quarter and 11.0% in the 2022 quarter.
North America Loss Adjusting revenues before reimbursements were $303.6 million 10.5% from $274.8 million $(3.6) million $307.2 million
The segment had operating earnings of $23.2 million $19.1 million 7.6% in 2023 and 7.0% in 2022.
International Operations
International Operations revenues before reimbursements were $97.2 million 9.9% from $88.4 million $3.5 million $93.7 million
Operating earnings were $2.2 million $(5.3) million 2.3% as compared with (6.0)% in the 2022 quarter.
International Operations revenues before reimbursements were $382.4 million 7.0% from $357.5 million $1.5 million $9.2 million $391.6 million
Operating earnings were $11.2 million $(12.9) million 2.9% as compared with (3.6)% in 2022.
Broadspire
Broadspire segment revenues before reimbursements were $92.1 million 17.2% from $78.6 million
Broadspire operating earnings were $12.3 million 13.3% , increasing from $6.7 million 8.6% of revenues, in the 2022 fourth quarter.
Broadspire segment revenues before reimbursements were $355.7 million 13.4% from $313.6 million
Broadspire operating earnings were $41.9 million 11.8% , increasing from $27.0 million 8.6% of revenues, in 2022.
Platform Solutions
Platform Solutions revenues before reimbursements were $37.2 million $77.4 million
Operating earnings were $1.9 million $13.0 million 5.2% as compared with 16.8% in the 2022 quarter.
Platform Solutions revenues before reimbursements were $225.5 million $243.7 million
Operating earnings were $28.5 million $35.7 million 12.7% as compared with 14.7% in 2022.
Unallocated Corporate and Shared Costs and Credits, Net
Unallocated corporate costs were $9.4 million $0.3 million $2.5 million $2.7 million $1.2 million $1.5 million
Unallocated corporate costs were $19.4 million $7.1 million $3.7 million $1.8 million $1.5 million $1.4 million $1.2 million $1.6 million $1.1 million
2022 Goodwill Impairment
The Company recognized a $36.8 million $15.9 million
During the 2022 fourth quarter, the income tax benefit of the impairment normalized due to the non-discrete income tax treatment, which resulted in a reduction of the income tax benefit of $12.4 million $0.25 $33.3 million $0.67
Presentation Revision of 2023 Quarters
“Revenues before reimbursements” for the year ended December 31, 2023 includes income earned which offsets the costs of managing the funds maintained to administer claims for certain of the Company's customers. These amounts were previously presented as reductions to “Selling, general, and administrative expenses” in the Company’s Consolidated Statements of Operations in the first, second, and third quarter 2023 interim financial statements. The Company adjusted its interim financial information for an immaterial revision in presentation of amounts totaling approximately $3,343,000 $3,890,000 $4,528,000
The revisions are reflected in "Revenues before reimbursements" for the Company's North America Loss Adjusting and Broadspire segments. In North America Loss Adjusting, the revised presentation was approximately $472,000 $533,000 $597,000 $2,871,000 $3,357,000 $3,930,000
Other Matters
The Company recognized pretax contingent earnout adjustments totaling an expense of $0.9 million $(0.3) million $4.0 million $2.9 million
The Company recognized non-service pension costs of $2.2 million $0.1 million $8.6 million $(1.6) million 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.
During the 2022 fourth quarter, the Company recognized an $11.8 million $0.24
Balance Sheet and Cash Flow
The Company’s consolidated cash and cash equivalents position as of December 31, 2023, totaled $58.4 million $46.0 million $209.1 million $238.9 million
The Company’s operations provided $103.8 million $27.6 million $58.4 million $19.8 million
The Company made no contributions to its U.S. defined benefit pension plan and $2.4 million U.K. plans for 2023, compared with no contributions to the U.S. plan and $0.6 million U.K. plans in 2022.
During 2023, the Company didn't repurchase any shares of CRD-A, but repurchased 293,952 shares of CRD-B at an average per share cost of $9.30 $2.7 million
Conference Call
As previously announced, Crawford & Company will host a conference call on March 5, 2024 at 8:30 a.m. Eastern Time to discuss its fourth quarter and full year 2023 results. The conference call can be accessed live by dialing 1-888-259-6580 and using Conference ID 83186255. 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 April 5, 2024. You may dial 1-877-674-7070 and use passcode 186255# 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, goodwill impairment, amortization of customer-relationship intangible assets, contingent earnout adjustments, reserves on certain income tax assets, 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, goodwill impairment, contingent earnout adjustments, reserves on certain income tax assets, 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.
Goodwill impairments and reserves on certain income tax assets arise from time to time due to various factors, but are not allocated to our operating segments since they historically have not regularly impacted our performance and are not expected to impact our future performance on a regular 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
Year Ended
(in thousands )
December 31,
December 31,
December 31,
December 31,
Geographic Area
Currency
USD
equivalent
% of total
USD
equivalent
% of total
USD
equivalent
% of total
USD
equivalent
% of total
U.S.
USD
$176,087
59.5%
$210,615
65.4%
$788,364
62.2%
$734,264
61.7%
U.K.
GBP
37,214
12.6%
28,977
9.0%
143,353
11.3%
121,814
10.2%
Canada
CAD
22,882
7.7%
23,169
7.2%
96,374
7.6%
97,766
8.2%
Australia
AUD
20,692
7.0%
24,898
7.7%
89,479
7.1%
94,692
8.0%
Europe
EUR
14,545
4.9%
12,474
3.9%
57,513
4.5%
54,447
4.6%
Rest of World
Various
24,701
8.3%
22,055
6.8%
92,048
7.3%
86,499
7.3%
Total Revenues, before reimbursements
$296,121
100.0%
$322,188
100.0%
$1,267,131
100.0%
$1,189,482
100.0%
Following is a reconciliation of consolidated operating earnings to net (loss) income attributable to shareholders of Crawford & Company on a GAAP basis:
Three Months Ended
Year Ended
(in thousands)
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Operating earnings:
North America Loss Adjusting
$
752
$
8,575
$
23,185
$
19,108
International Operations
2,207
(5,298
)
11,181
(12,946
)
Broadspire
12,266
6,722
41,873
27,021
Platform Solutions
1,946
13,032
28,541
35,746
Unallocated corporate and shared costs, net
(9,421
)
328
(19,419
)
(7,050
)
Consolidated operating earnings
7,750
23,359
85,361
61,879
(Deduct) add:
Net corporate interest expense
(3,772
)
(4,110
)
(17,036
)
(10,311
)
Stock option expense
(112
)
(70
)
(552
)
(548
)
Amortization expense
(1,926
)
(2,052
)
(7,790
)
(7,836
)
Non-service pension costs and credits
(2,165
)
(55
)
(8,601
)
1,591
Goodwill impairment
—
—
—
(36,808
)
Contingent earnout adjustments
(925
)
325
(4,025
)
(2,921
)
Reserves on certain income tax assets
—
(11,767
)
—
(11,767
)
Income tax provision
161
(19,903
)
(17,097
)
(11,811
)
Net loss attributable to noncontrolling interests
171
186
349
227
Net (loss) income attributable to shareholders of Crawford & Company
$
(818
)
$
(14,087
)
$
30,609
$
(18,305
)
Following is a reconciliation of net (loss) income attributable to shareholders of Crawford & Company on a GAAP basis to non-GAAP adjusted EBITDA:
Three Months Ended
Year Ended
(in thousands)
December 31,
December 31,
December 31,
December 31,
Net (loss) income attributable to shareholders of Crawford & Company
$
(818
)
$
(14,087
)
$
30,609
$
(18,305
)
Add (Deduct):
Depreciation and amortization
8,386
8,719
35,742
36,098
Stock-based compensation
1,420
705
5,603
4,923
Net corporate interest expense
3,772
4,110
17,036
10,311
Non-service pension costs and credits
2,165
55
8,601
(1,591
)
Goodwill impairment
—
—
—
36,808
Contingent earnout adjustments
925
(325
)
4,025
2,921
Reserves on certain income tax assets
—
11,767
—
11,767
Income tax provision
(161
)
19,903
17,097
11,811
Non-GAAP adjusted EBITDA
$
15,689
$
30,847
$
118,713
$
94,743
Following is a reconciliation of operating cash flow to free cash flow for the twelve months ended December 31, 2023 and 2022:
Twelve Months Ended
(in thousands)
December 31, 2023
December 31, 2022
Change
Net Cash Provided by Operating Activities
$
103,790
$
27,634
$
76,156
Less:
Property & Equipment Purchases, net
(4,890
)
(6,838
)
1,948
Capitalized Software (internal and external costs)
(31,706
)
(27,761
)
(3,945
)
Free Cash Flow
$
67,194
$
(6,965
)
$
74,159
Following are the reconciliations of GAAP Pretax (Loss) Earnings, Net (Loss) Income and (Loss) Earnings Per Share to related non-GAAP Adjusted figures, which reflect each of 2023 and 2022 before goodwill impairment, amortization of intangible assets, reserves on certain income tax assets, non-service related pension costs (credits) and contingent earnout adjustments:
Three Months Ended December 31, 2023
(in thousands )
Pretax (loss)
earnings
Net (loss) income
attributable to
Crawford &
Company
Diluted (loss)
earnings per
CRD-A
share
Diluted (loss)
earnings per
CRD-B
share(1)
GAAP
$
(1,150
)
$
(818
)
$
(0.02
)
$
(0.02
)
Adjustments:
Amortization of intangible assets
1,926
1,623
0.03
0.03
Non-service related pension costs
2,165
1,614
0.03
0.03
Contingent earnout adjustments
925
849
0.02
0.02
Non-GAAP Adjusted
$
3,866
$
3,268
$
0.06
$
0.07
Three Months Ended December 31, 2022
(in thousands)
Pretax earnings
Net (loss) income
attributable to
Crawford &
Company(2)
Diluted (loss)
earnings per
CRD-A
share(2)
Diluted (loss)
earnings per
CRD-B
share(2)
GAAP
$
17,397
$
(14,087
)
$
(0.29
)
$
(0.29
)
Adjustments:
Amortization of intangible assets
2,052
1,539
0.03
0.03
Non-service related pension costs
55
48
—
—
Contingent earnout adjustments
(325
)
(241
)
—
—
Income tax impact of third quarter goodwill impairment
—
12,392
0.25
0.25
Reserves on certain income tax assets
—
11,767
0.24
0.24
Non-GAAP Adjusted
$
19,179
$
11,418
$
0.23
$
0.23
Year Ended December 31, 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
$
47,357
$
30,609
$
0.61
$
0.62
Adjustments:
Amortization of intangible assets
7,790
6,662
0.13
0.13
Contingent earnout adjustments
4,025
3,352
0.07
0.07
Non-service related pension costs
8,601
6,396
0.13
0.13
Non-GAAP Adjusted
$
67,773
$
47,019
$
0.95
$
0.95
Year Ended December 31, 2022
(in thousands )
Pretax earnings
Net (loss) income
attributable to
Crawford &
Company(2)
Diluted (loss)
earnings per
CRD-A
share(2)
Diluted (loss)
earnings per
CRD-B
share(2)
GAAP
$
5,046
$
(18,305
)
$
(0.37
)
$
(0.37
)
Adjustments:
Amortization of intangible assets
7,836
5,877
0.12
0.12
Non-service related pension costs
(1,591
)
(1,389
)
(0.03
)
(0.03
)
Contingent earnout adjustments
2,921
2,163
0.04
0.04
Goodwill impairment
36,808
33,300
0.67
0.67
Reserves on certain income tax assets
—
11,767
0.24
0.24
Non-GAAP Adjusted
$
51,020
$
33,413
$
0.67
$
0.67
(1) Sum of reconciling items may differ from total due to rounding of individual components.
(2) The income tax impact of goodwill impairment was based on the estimated annual effective income tax rate. Due to the non-discrete income tax treatment of the third quarter 2022 goodwill impairment, the income tax benefit normalized as income was earned during the remainder of the year, resulting in a lower full year income tax benefit during 2022.
Following is information regarding the weighted average shares used in the computation of basic and diluted earnings per share:
Three Months Ended
Year Ended
(in thousands )
December 31,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Weighted-Average Shares Used to Compute Basic Earnings Per Share:
Class A Common Stock
29,213
28,597
29,039
29,196
Class B Common Stock
19,653
19,848
19,796
20,113
Weighted-Average Shares Used to Compute Diluted Earnings Per Share:
Class A Common Stock
29,213
28,597
29,799
29,196
Class B Common Stock
19,653
19,848
19,796
20,113
Non-GAAP (1)
Weighted-Average Shares Used to Compute Diluted Earnings Per Share:
Class A Common Stock
30,218
28,966
29,799
29,553
Class B Common Stock
19,653
19,848
19,796
20,113
(1) The Company had a net loss for GAAP reporting during the three months ended December 31, 2023 and three and twelve months ended December 31, 2022, resulting in no additional dilutive securities added to the basic weighted average shares in calculating diluted weighted average shares for GAAP reporting as their impact would be anti-dilutive. As the Company has Non-GAAP positive net income for the twelve months ended December 31, 2023, these dilutive securities were added back to calculate Non-GAAP earnings per share.
Further information regarding the Company’s operating results for the three and twelve months ended December 31, 2023, financial position as of December 31, 2023, and cash flows for the twelve months ended December 31, 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
Earnings per share may be different between CRD-A and CRD-B due to the payment of a higher per share dividend on CRD-A than CRD-B, and the impact that has on the earnings per share calculation according to generally accepted accounting principles.
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 December 31,
2023
2022
% Change
Revenues:
Revenues Before Reimbursements
$
296,121
$
322,188
(8
)%
Reimbursements
13,044
11,181
17
%
Total Revenues
309,165
333,369
(7
)%
Costs and Expenses:
Costs of Services Provided, Before Reimbursements
216,981
238,180
(9
)%
Reimbursements
13,044
11,181
17
%
Total Costs of Services
230,025
249,361
(8
)%
Selling, General, and Administrative Expenses
74,877
62,528
20
%
Corporate Interest Expense, Net
3,772
4,110
(8
)%
Total Costs and Expenses
308,674
315,999
(2
)%
Other (Expense) Income, Net
(1,641
)
27
nm
(Loss) Income Before Income Taxes
(1,150
)
17,397
(107
)%
(Benefit) Provision for Income Taxes
(161
)
31,670
(101
)%
Net Loss
(989
)
(14,273
)
93
%
Net Loss Attributable to Noncontrolling Interests
171
186
(8
)%
Net Loss Attributable to Shareholders of Crawford & Company
$
(818
)
$
(14,087
)
94
%
Loss Per Share - Basic:
Class A Common Stock
$
(0.02
)
$
(0.29
)
93
%
Class B Common Stock
$
(0.02
)
$
(0.29
)
93
%
Loss Per Share - Diluted:
Class A Common Stock
$
(0.02
)
$
(0.29
)
93
%
Class B Common Stock
$
(0.02
)
$
(0.29
)
93
%
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)
Year Ended December 31,
2023
2022
% Change
Revenues:
Revenues Before Reimbursements
$
1,267,131
$
1,189,482
7
%
Reimbursements
49,788
41,744
19
%
Total Revenues
1,316,919
1,231,226
7
%
Costs and Expenses:
Costs of Services Provided, Before Reimbursements
908,059
883,128
3
%
Reimbursements
49,788
41,744
19
%
Total Costs of Services
957,847
924,872
4
%
Selling, General, and Administrative Expenses
286,506
255,750
12
%
Corporate Interest Expense, Net
17,036
10,311
65
%
Goodwill Impairment
-
36,808
(100
)%
Total Costs and Expenses
1,261,389
1,227,741
3
%
Other (Expense) Income, Net
(8,173
)
1,561
(624
)%
Income Before Income Taxes
47,357
5,046
839
%
Provision for Income Taxes
17,097
23,578
(27
)%
Net Income (Loss)
30,260
(18,532
)
263
%
Net Loss Attributable to Noncontrolling Interests
349
227
54
%
Net Income (Loss) Attributable to Shareholders of Crawford & Company
$
30,609
$
(18,305
)
267
%
Earnings (Loss) Per Share - Basic:
Class A Common Stock
$
0.63
$
(0.37
)
270
%
Class B Common Stock
$
0.63
$
(0.37
)
270
%
Earnings (Loss) Per Share - Diluted:
Class A Common Stock
$
0.61
$
(0.37
)
265
%
Class B Common Stock
$
0.62
$
(0.37
)
268
%
Cash Dividends Per Share:
Class A Common Stock
$
0.26
$
0.24
8
%
Class B Common Stock
$
0.26
$
0.24
8
%
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
As of December 31, 2023 and December 31, 2022
Unaudited
(In Thousands, Except Par Values)
December 31,
December 31,
2023
2022
ASSETS
Current Assets:
Cash and Cash Equivalents
$
58,363
$
46,007
Accounts Receivable, Net
131,362
141,106
Unbilled Revenues, at Estimated Billable Amounts
116,611
126,274
Income Taxes Receivable
4,842
9,098
Prepaid Expenses and Other Current Assets
58,168
28,782
Total Current Assets
369,346
351,267
Net Property and Equipment
22,742
27,809
Other Assets:
Operating Lease Right-of-Use Asset, Net
88,615
93,334
Goodwill
76,724
76,622
Intangible Assets Arising from Business Acquisitions, Net
81,786
88,039
Capitalized Software Costs, Net
96,770
82,975
Deferred Income Tax Assets
26,247
19,573
Other Noncurrent Assets
36,969
51,888
Total Other Assets
407,111
412,431
Total Assets
$
799,199
$
791,507
LIABILITIES AND SHAREHOLDERS’ INVESTMENT
Current Liabilities:
Short-Term Borrowings
$
14,813
$
27,048
Accounts Payable
45,107
50,847
Accrued Compensation and Related Costs
97,842
79,285
Self-Insured Risks
33,238
12,614
Income Taxes Payable
6,130
1,208
Operating Lease Liability
24,351
22,910
Other Accrued Liabilities
42,271
56,293
Deferred Revenues
35,540
29,282
Total Current Liabilities
299,292
279,487
Noncurrent Liabilities:
Long-Term Debt and Finance Leases, Less Current Installments
194,335
211,810
Operating Lease Liability
78,029
84,628
Deferred Revenues
24,871
24,737
Accrued Pension Liabilities
24,006
25,914
Other Noncurrent Liabilities
38,835
41,553
Total Noncurrent Liabilities
360,076
388,642
Shareholders’ Investment:
Class A Common Stock, $1.00
29,525
28,764
Class B Common Stock, $1.00
19,555
19,848
Additional Paid-in Capital
82,589
78,158
Retained Earnings
228,564
213,094
Accumulated Other Comprehensive Loss
(218,615
)
(215,321
)
Shareholders’ Investment Attributable to Shareholders of Crawford & Company
141,618
124,543
Noncontrolling Interests
(1,787
)
(1,165
)
Total Shareholders’ Investment
139,831
123,378
Total Liabilities and Shareholders’ Investment
$
799,199
$
791,507
CRAWFORD & COMPANY
SUMMARY RESULTS BY OPERATING SEGMENT WITH DIRECT COMPENSATION AND OTHER EXPENSES
Unaudited
(In Thousands, Except Percentages)
Three Months Ended December 31,
North America Loss Adjusting
%
International Operations
%
Broadspire
%
Platforms Solutions
%
2023
2022
Change
2023
2022
Change
2023
2022
Change
2023
2022
Change
Revenues Before Reimbursements
$69,684
$77,720
(10.3)%
$97,152
$88,404
9.9%
$92,123
$78,615
17.2%
$37,162
$77,449
(52.0)%
Direct Compensation, Fringe Benefits & Non-Employee Labor
52,224
55,508
(5.9)%
66,382
64,344
3.2%
55,802
50,862
9.7%
23,563
53,025
(55.6)%
% of Revenues Before Reimbursements
74.9%
71.4%
68.3%
72.8%
60.6%
64.7%
63.4%
68.5%
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor
16,708
13,637
22.5%
28,563
29,358
(2.7)%
24,055
21,031
14.4%
11,653
11,392
2.3%
% of Revenues Before Reimbursements
24.0%
17.5%
29.4%
33.2%
26.1%
26.8%
31.4%
14.7%
Total Operating Expenses
68,932
69,145
(0.3)%
94,945
93,702
1.3%
79,857
71,893
11.1%
35,216
64,417
(45.3)%
Operating Earnings (Loss) (1)
$752
$8,575
(91.2)%
$2,207
$(5,298)
141.7%
$12,266
$6,722
82.5%
$1,946
$13,032
(85.1)%
% of Revenues Before Reimbursements
1.1%
11.0%
2.3%
(6.0)%
13.3%
8.6%
5.2%
16.8%
Twelve Months Ended December 31,
North America Loss Adjusting
%
International Operations
%
Broadspire
%
Platforms Solutions
%
2023
2022
Change
2023
2022
Change
2023
2022
Change
2023
2022
Change
Revenues Before Reimbursements
$303,629
$274,755
10.5%
$382,393
$357,452
7.0%
$355,650
$313,564
13.4%
$225,459
$243,711
(7.5)%
Direct Compensation, Fringe Benefits & Non-Employee Labor
214,642
198,445
8.2%
256,560
254,617
0.8%
217,253
198,473
9.5%
147,801
163,449
(9.6)%
% of Revenues Before Reimbursements
70.7%
72.2%
67.1%
71.2%
61.1%
63.3%
65.6%
67.1%
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor
65,802
57,202
15.0%
114,652
115,781
(1.0)%
96,524
88,070
9.6%
49,117
44,516
10.3%
% of Revenues Before Reimbursements
21.7%
20.8%
30.0%
32.4%
27.1%
28.1%
21.8%
18.3%
Total Operating Expenses
280,444
255,647
9.7%
371,212
370,398
0.2%
313,777
286,543
9.5%
196,918
207,965
(5.3)%
Operating Earnings (Loss) (1)
$23,185
$19,108
21.3%
$11,181
$(12,946)
186.4%
$41,873
$27,021
55.0%
$28,541
$35,746
(20.2)%
% of Revenues Before Reimbursements
7.6%
7.0%
2.9%
(3.6)%
11.8%
8.6%
12.7%
14.7%
(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, goodwill impairments, reserves on certain income tax assets, and certain unallocated corporate and shared costs and credits. See page 5 for additional information about segment operating earnings.
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31, 2023 and December 31, 2022
Unaudited
(In Thousands)
2023
2022
Cash Flows From Operating Activities:
Net income (loss)
$
30,260
$
(18,532
)
Reconciliation of net income (loss) to net cash provided by operating activities:
Depreciation and amortization
35,742
36,098
Goodwill impairment
—
36,808
Deferred income taxes
(12,279
)
7,397
Stock-based compensation
5,603
4,923
Loss (gain) on sale of property and equipment
646
(1,490
)
Contingent earnout adjustments
4,025
2,921
Changes in operating assets and liabilities:
Accounts receivable, net
11,663
(15,537
)
Unbilled revenues, net
11,879
(19,319
)
Accrued or prepaid income taxes
13,063
(7,444
)
Accounts payable and accrued liabilities
(2,822
)
(5,985
)
Deferred revenues
5,913
(397
)
Accrued retirement costs
7,174
(1,366
)
Prepaid expenses and other operating activities
(7,077
)
9,557
Net cash provided by operating activities
103,790
27,634
Cash Flows From Investing Activities:
Acquisitions of property and equipment
(4,890
)
(6,838
)
Capitalization of computer software costs
(31,706
)
(27,761
)
Payments for business acquisitions, net of cash acquired
—
(26,309
)
Cash proceeds from sale of property and equipment
—
3,032
Net cash used in investing activities
(36,596
)
(57,876
)
Cash Flows From Financing Activities:
Cash dividends paid
(12,701
)
(11,842
)
Repurchases of common stock
(2,731
)
(26,749
)
Increases in short-term and revolving credit facility borrowings
37,578
106,481
Payments on short-term and revolving credit facility borrowings
(69,066
)
(39,025
)
Payments of contingent consideration on acquisitions
(7,060
)
(2,118
)
Other financing activities
(700
)
(807
)
Net cash (used in) provided by financing activities
(54,680
)
25,940
Effects of exchange rate changes on cash and cash equivalents
386
(2,742
)
Increase (decrease) in cash, cash equivalents, and restricted cash(1)
12,900
(7,044
)
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)
$
59,545
$
46,645
(1) The 2023 amounts include beginning restricted cash of $638 $1,182
View source version on businesswire.com: https://www.businesswire.com/news/home/20240304650662/en/
Bruce Swain, 404-300-1051
Source: Crawford & Company
Revenues before reimbursements in Q4 2023 were $296.1 million, down 8% from 2022.
The net loss attributable to shareholders in Q4 2023 was $(0.8) million, an improvement from $(14.1) million in 2022.
Non-GAAP net income was $3.3 million in 2023 Q4, down from $11.4 million in the previous year.
Full year 2023 showed a 7% revenue increase over 2022.
Net income for Crawford & Company in full year 2023 was $30.6 million, compared to a loss of $(18.3) million in 2022.
