Crawford & Company Reports 2023 Fourth Quarter and Full Year Results Achieved Record Revenues for Year
Based in
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 ( in the 2022 fourth quarter$14.1) million -
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
-
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
-
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
Mr. Verma continued, “2023 marked a momentous year of growth and margin expansion with operating earnings increasing
Segment Results for the Fourth Quarter and Full Year
North America Loss Adjusting
North America Loss Adjusting revenues before reimbursements were
The segment had operating earnings of
North America Loss Adjusting revenues before reimbursements were
The segment had operating earnings of
International Operations
International Operations revenues before reimbursements were
Operating earnings were
International Operations revenues before reimbursements were
Operating earnings were
Broadspire
Broadspire segment revenues before reimbursements were
Broadspire operating earnings were
Broadspire segment revenues before reimbursements were
Broadspire operating earnings were
Platform Solutions
Platform Solutions revenues before reimbursements were
Operating earnings were
Platform Solutions revenues before reimbursements were
Operating earnings were
Unallocated Corporate and Shared Costs and Credits, Net
Unallocated corporate costs were
Unallocated corporate costs were
2022 Goodwill Impairment
The Company recognized a
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
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
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
Other Matters
The Company recognized pretax contingent earnout adjustments totaling an expense of
The Company recognized non-service pension costs of
During the 2022 fourth quarter, the Company recognized an
Balance Sheet and Cash Flow
The Company’s consolidated cash and cash equivalents position as of December 31, 2023, totaled
The Company’s operations provided
The Company made no contributions to its
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
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
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
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 |
|
USD |
|
|
|
|
|
|
|
|
|
|
|
|
GBP |
37,214 |
|
|
28,977 |
|
|
143,353 |
|
|
121,814 |
|
|
CAD |
22,882 |
|
|
23,169 |
|
|
96,374 |
|
|
97,766 |
|
|
AUD |
20,692 |
|
|
24,898 |
|
|
89,479 |
|
|
94,692 |
|
|
EUR |
14,545 |
|
|
12,474 |
|
|
57,513 |
|
|
54,447 |
|
Rest of World |
Various |
24,701 |
|
|
22,055 |
|
|
92,048 |
|
|
86,499 |
|
Total Revenues, before reimbursements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
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, |
|
|
29,525 |
|
|
|
28,764 |
|
Class B Common Stock, |
|
|
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 |
|
|
|
(10.3)% |
|
|
|
|
|
|
|
|
|
|
|
(52.0)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Compensation, Fringe Benefits & Non-Employee Labor |
|
52,224 |
55,508 |
(5.9)% |
|
66,382 |
64,344 |
|
|
55,802 |
50,862 |
|
|
23,563 |
53,025 |
(55.6)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor |
|
16,708 |
13,637 |
|
|
28,563 |
29,358 |
(2.7)% |
|
24,055 |
21,031 |
|
|
11,653 |
11,392 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
68,932 |
69,145 |
(0.3)% |
|
94,945 |
93,702 |
|
|
79,857 |
71,893 |
|
|
35,216 |
64,417 |
(45.3)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings (Loss) (1) |
|
|
|
(91.2)% |
|
|
|
|
|
|
|
|
|
|
|
(85.1)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
|
|
|
|
|
(6.0)% |
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7.5)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Compensation, Fringe Benefits & Non-Employee Labor |
|
214,642 |
198,445 |
|
|
256,560 |
254,617 |
|
|
217,253 |
198,473 |
|
|
147,801 |
163,449 |
(9.6)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor |
|
65,802 |
57,202 |
|
|
114,652 |
115,781 |
(1.0)% |
|
96,524 |
88,070 |
|
|
49,117 |
44,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
280,444 |
255,647 |
|
|
371,212 |
370,398 |
|
|
313,777 |
286,543 |
|
|
196,918 |
207,965 |
(5.3)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings (Loss) (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(20.2)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
|
|
|
|
|
(3.6)% |
|
|
|
|
|
|
|
|
|
(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
View source version on businesswire.com: https://www.businesswire.com/news/home/20240304650662/en/
Bruce Swain, 404-300-1051
Source: Crawford & Company
