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Crawford & Company Reports 2023 Second Quarter Results

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Crawford & Company announces financial results for Q2 2023, with revenues up 9% and net income of $8.4 million. The company reports 11 consecutive quarters of revenue growth and improved margins. CEO Rohit Verma highlights growth in Platform Solutions and North America Loss Adjusting segments.
Positive
  • Crawford & Company reports 9% revenue growth in Q2 2023, reaching $320.7 million, compared to $293.3 million in Q2 2022. Net income increases to $8.4 million, up from $5.8 million in the same period last year. Diluted earnings per share remain steady at $0.17 for both CRD-A and CRD-B. Platform Solutions revenue grows 22%, while North America Loss Adjusting segment sees a 15% increase in revenue. Broadspire segment records a 4.7% revenue growth. Consolidated adjusted operating earnings reach $22.8 million, or 7.1% of revenues. Consolidated adjusted EBITDA is $31.5 million, or 9.8% of revenues.
  • Crawford & Company's Q2 2023 results show continued revenue growth and margin improvement. The company reports 9% revenue growth, reaching $320.7 million, and net income of $8.4 million. Diluted earnings per share remain steady at $0.17 for both CRD-A and CRD-B. The Platform Solutions segment experiences a 22% revenue growth, while the North America Loss Adjusting segment sees a 15% increase. Consolidated adjusted operating earnings reach $22.8 million, or 7.1% of revenues, and consolidated adjusted EBITDA is $31.5 million, or 9.8% of revenues.
Negative
  • None.

Continuing Revenue Growth Leads to Earnings and Margin Expansion

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, 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.

 

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

 

Source: Crawford & Company

FAQ

What are Crawford & Company's Q2 2023 financial results?

Crawford & Company reports Q2 2023 revenues of $320.7 million, up 9% from the same period last year. Net income is $8.4 million, with diluted earnings per share of $0.17 for both CRD-A and CRD-B.

Which segments of Crawford & Company show growth in Q2 2023?

The Platform Solutions segment experiences a 22% revenue growth, while the North America Loss Adjusting segment sees a 15% increase.

What are the consolidated adjusted operating earnings and EBITDA for Q2 2023?

Consolidated adjusted operating earnings reach $22.8 million, or 7.1% of revenues. Consolidated adjusted EBITDA is $31.5 million, or 9.8% of revenues.

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