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Crawford & Company Reports 2023 Third Quarter Results

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Crawford & Company announces record quarterly revenue in Q3 2023, with revenues before reimbursements of $325.6 million, up 10% from the same period last year. Net income attributable to shareholders was $12.3 million, compared to a loss of $15.1 million in Q3 2022. Diluted earnings per share were $0.25 for both CRD-A and CRD-B, compared to a diluted loss per share of $(0.31) in the prior year.
Positive
  • Record quarterly revenue of $325.6 million, up 10% YoY
  • Net income of $12.3 million, compared to a loss of $15.1 million in Q3 2022
  • Diluted earnings per share of $0.25 for both CRD-A and CRD-B
Negative
  • None.

Record Quarterly Revenue Drives Earnings and Margin Expansion

ATLANTA--(BUSINESS WIRE)-- Crawford & Company® (NYSE: CRD-A and CRD-B), is pleased to announce its financial results for the third quarter ended September 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

Third Quarter 2023

  • Revenues before reimbursements of $325.6 million, up 10% over $294.9 million for the 2022 third quarter
  • Net income attributable to shareholders of $12.3 million, compared with a loss of $(15.1) million in the same period last year
  • Diluted earnings per share of $0.25 for both CRD-A and CRD-B, compared with diluted loss per share of $(0.31) for both CRD-A and CRD-B in the prior year third quarter

Non-GAAP Consolidated Results

Third Quarter 2023

Non-GAAP consolidated results for 2023 exclude the non-cash, after-tax adjustments for amortization of intangible assets of $1.7 million, non-service related pension costs of $1.6 million, and a contingent earnout adjustment of $2.1 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, a contingent earnout adjustment of $0.7 million, and a goodwill impairment of $20.9 million.

  • Foreign currency exchange rates increased revenues before reimbursements by $0.6 million or less than 1%. Presented on a constant dollar basis to the prior year, revenues before reimbursements totaled $325.0 million, increasing 10% over the 2022 third quarter
  • Net income attributable to shareholders, on a non-GAAP basis, totaled $17.7 million in the 2023 third quarter, compared with $7.5 million in the same period last year
  • Diluted earnings per share, on a non-GAAP basis, totaled $0.35 for CRD-A and $0.36 for CRD-B in the 2023 third quarter, compared with $0.15 for both CRD-A and CRD-B in the prior year third quarter
  • Consolidated adjusted operating earnings, on a non-GAAP basis, were $29.9 million, or 9.2% of revenues before reimbursements in the 2023 third quarter, more than doubling the $13.7 million, or 4.6% of revenues, in the 2022 period
  • Consolidated adjusted EBITDA, a non-GAAP measure, was $38.6 million, or 11.9% of revenues before reimbursements in the 2023 third quarter, increasing 81% over the $21.4 million, or 7.2% of revenues, in the 2022 period

Management Comments

“We continued our momentum of growth and profit expansion in the third quarter of 2023 delivering our twelfth consecutive quarter of growth. Revenues grew by 10% to a new quarterly record and profits more than doubled compared to last year. We have built a strong foundation focused on operational excellence at Crawford, and our technology plus people strategy is driving growth and margin improvement across the business,” commented Rohit Verma, Chief Executive Officer of Crawford & Company.

“North America Loss Adjusting revenue grew more than 18% for the third quarter, driven by increased utilization, the addition of new clients, experts, and new account nominations. Broadspire saw record quarterly revenue fueled by business development efforts that have expanded our revenue base and continued growth in Medical Management services as we add workers' compensation clients. Our International segment also showed improved revenues and margins as our transformation of the international business continues. Platforms Solutions had meaningful growth in Contractor Connection and Subrogation, however there was offsetting softness in the Networks group where benign weather and a reduction in high-volume, low severity claim activity impacted results for the quarter. Platforms’ operating margin remained solid at mid-double digits.

“Overall, this was a very strong quarter for Crawford with healthy cash generation and further strengthening of our balance sheet.” Mr. Verma concluded.

Segment Results for the Third Quarter

North America Loss Adjusting

North America Loss Adjusting revenues before reimbursements were $79.4 million in the third quarter of 2023, increasing 18.8% from $66.8 million in the third quarter of 2022. Absent foreign exchange rate decreases of $(0.7) million, revenues would have been $80.1 million for the 2023 third quarter.

The segment had operating earnings of $10.5 million in the 2023 third quarter, increasing from $3.8 million in the third quarter of 2022. The operating margin was 13.2% in the 2023 quarter and 5.6% in the 2022 quarter.

International Operations

International Operations revenues before reimbursements were $98.1 million in the third quarter of 2023, up 13.9% from $86.1 million in the same period of 2022. Absent foreign exchange rate increases of $1.3 million, revenues would have been $96.8 million for the 2023 third quarter.

Operating earnings were $2.2 million in the 2023 third quarter, compared with a $(3.9) million operating loss in the 2022 period. The segment’s operating margin for the 2023 quarter was 2.2% as compared with (4.6)% in the 2022 quarter.

Broadspire

Broadspire segment revenues before reimbursements were $88.3 million in the 2023 third quarter, increasing 12.7% from $78.4 million in the 2022 third quarter.

Broadspire recorded operating earnings of $13.5 million in the third quarter of 2023, representing an operating margin of 15.3%, increasing from $6.2 million, or 7.9% of revenues, in the 2022 third quarter.

Platform Solutions

Platform Solutions revenues before reimbursements were $59.8 million in the third quarter of 2023, down (6.0)% from $63.7 million in the same period of 2022.

Operating earnings were $8.5 million in the 2023 third quarter, decreasing from the $10.1 million in the 2022 period. The segment’s operating margin for the 2023 quarter was 14.2% as compared with 15.8% in the 2022 quarter.

Unallocated Corporate and Shared Costs and Credits, Net

Unallocated corporate costs were $4.8 million in the third quarter of 2023, compared with $2.4 million in the same period of 2022. The increase in the 2023 third quarter was primarily due to increased incentive compensation and an increase in unallocated payroll tax and benefits costs.

2022 Goodwill Impairment

The Company recognized a $36.8 million pre-tax non-cash goodwill impairment in the third quarter of 2022. This charge was partially offset by a $15.9 million reduction in income tax expense, for a net impact of $20.9 million, or $0.43 per share. There was no goodwill impairment in 2023.

Other Matters

The Company recognized pretax contingent earnout expenses totaling $2.1 million and $0.9 million in the 2023 third 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 $2.2 million in the 2023 third quarter compared with credits of $(0.5) million in the 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 September 30, 2023, totaled $49.2 million, compared with $46.0 million at December 31, 2022. The Company’s total debt outstanding as of September 30, 2023, totaled $218.4 million, compared with $238.9 million at December 31, 2022.

The Company’s operations provided $68.1 million of cash during the first nine months of 2023, compared with $(16.2) million used in 2022. The increase in cash provided was primarily driven by improved earnings, changes in working capital, including a reduction in work in process, increases in accrued incentive compensation as compared to payouts for prior year performance, and an increase in income tax refunds received.

The Company made no contributions to its U.S. defined benefit pension plan and $1.8 million in contributions to its U.K. plans for the first nine months of 2023, compared with no contributions to the U.S. plan and $0.5 million to the U.K. plans in 2022.

During 2023, the Company didn't repurchase any shares of CRD-A, but repurchased 63,103 shares of CRD-B at an average share cost of $9.24. During the first nine 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 2023 was $0.6 million through September 30, 2023.

Conference Call

As previously announced, Crawford & Company will host a conference call on November 7, 2023, at 8:30 a.m. Eastern Time to discuss its third quarter 2023 results. The conference call can be accessed live by dialing 1-888-259-6580 and using Conference ID 94766677. 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 December 7, 2023. You may dial 1-877-674-7070 and use passcode 766677# 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, 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, 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 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

 

 

Nine Months Ended

 

(in thousands)

 

September 30,
2023

 

 

September 30,
2022

 

 

September 30,
2023

 

 

September 30,
2022

 

Geographic Area

Currency

USD equivalent

 

% of total

 

 

USD equivalent

 

% of total

 

 

USD equivalent

 

% of total

 

 

USD equivalent

 

% of total

 

U.S.

USD

$

203,340

 

 

62.5

%

 

$

183,197

 

 

62.1

%

 

$

601,354

 

 

62.7

%

 

$

523,650

 

 

60.4

%

U.K.

GBP

 

38,290

 

 

11.8

%

 

 

25,352

 

 

8.6

%

 

 

106,139

 

 

11.0

%

 

 

92,837

 

 

10.7

%

Canada

CAD

 

24,188

 

 

7.4

%

 

 

25,661

 

 

8.7

%

 

 

72,656

 

 

7.6

%

 

 

74,597

 

 

8.6

%

Australia

AUD

 

22,867

 

 

7.0

%

 

 

27,434

 

 

9.3

%

 

 

68,787

 

 

7.2

%

 

 

69,794

 

 

8.1

%

Europe

EUR

 

14,629

 

 

4.5

%

 

 

13,063

 

 

4.4

%

 

 

42,968

 

 

4.5

%

 

 

41,973

 

 

4.8

%

Rest of World

Various

 

22,280

 

 

6.8

%

 

 

20,217

 

 

6.9

%

 

 

67,347

 

 

7.0

%

 

 

64,443

 

 

7.4

%

Total Revenues, before reimbursements

$

325,594

 

 

100.0

%

 

$

294,924

 

 

100.0

%

 

$

959,251

 

 

100.0

%

 

$

867,294

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Following is a reconciliation of consolidated operating earnings to net income (loss) attributable to shareholders of Crawford & Company on a GAAP basis:

 

Three Months Ended

 

 

Nine Months Ended

 

(in thousands)

September 30,

2023

 

September 30,

2022

 

 

September 30,

2023

 

September 30,

2022

 

Operating earnings (loss):

 

 

 

 

 

 

 

 

 

North America Loss Adjusting

$

10,468

 

$

3,750

 

 

$

22,433

 

$

10,533

 

International Operations

 

2,197

 

 

(3,922

)

 

 

8,974

 

 

(7,648

)

Broadspire

 

13,532

 

 

6,198

 

 

 

29,607

 

 

20,299

 

Platform Solutions

 

8,523

 

 

10,080

 

 

 

26,595

 

 

22,714

 

Unallocated corporate and shared costs, net

 

(4,781

)

 

(2,438

)

 

 

(9,998

)

 

(7,378

)

Consolidated operating earnings

 

29,939

 

 

13,668

 

 

 

77,611

 

 

38,520

 

(Deduct) add:

 

 

 

 

 

 

 

 

 

Net corporate interest expense

 

(4,556

)

 

(2,903

)

 

 

(13,264

)

 

(6,201

)

Stock option expense

 

(145

)

 

(142

)

 

 

(440

)

 

(478

)

Amortization of intangible assets

 

(1,986

)

 

(1,998

)

 

 

(5,864

)

 

(5,784

)

Non-service pension costs and credits

 

(2,170

)

 

532

 

 

 

(6,436

)

 

1,646

 

Goodwill impairment

 

 

 

(36,808

)

 

 

 

 

(36,808

)

Contingent earnout adjustments

 

(2,127

)

 

(887

)

 

 

(3,100

)

 

(3,246

)

Income tax (provision) benefit

 

(6,781

)

 

13,286

 

 

 

(17,258

)

 

8,092

 

Net loss attributable to noncontrolling interests

 

145

 

 

108

 

 

 

178

 

 

41

 

Net income (loss) attributable to shareholders of Crawford & Company

$

12,319

 

$

(15,144

)

 

$

31,427

 

$

(4,218

)

 

 

 

 

 

 

 

 

 

 

Following is a reconciliation of net income (loss) attributable to shareholders of Crawford & Company on a GAAP basis to non-GAAP adjusted EBITDA:

 

Three Months Ended

 

 

Nine Months Ended

 

(in thousands)

September 30,

2023

 

September 30,

2022

 

 

September 30,

2023

 

September 30,

2022

 

Net income (loss) attributable to shareholders of Crawford & Company

$

12,319

 

$

(15,144

)

 

$

31,427

 

$

(4,218

)

Add (Deduct):

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

9,115

 

 

8,924

 

 

 

27,356

 

 

27,379

 

Stock-based compensation

 

1,574

 

 

808

 

 

 

4,183

 

 

4,218

 

Net corporate interest expense

 

4,556

 

 

2,903

 

 

 

13,264

 

 

6,201

 

Non-service pension costs and credits

 

2,170

 

 

(532

)

 

 

6,436

 

 

(1,646

)

Goodwill impairment

 

 

 

36,808

 

 

 

 

 

36,808

 

Contingent earnout adjustments

 

2,127

 

 

887

 

 

 

3,100

 

 

3,246

 

Income tax provision (benefit)

 

6,781

 

 

(13,286

)

 

 

17,258

 

 

(8,092

)

Non-GAAP adjusted EBITDA

$

38,642

 

$

21,368

 

 

$

103,024

 

$

63,896

 

 

 

 

 

 

 

 

 

 

 

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

Nine Months Ended

 

(in thousands)

September 30, 2023

 

 

September 30, 2022

 

 

Change

 

Net Cash Provided by (Used in) Operating Activities

$

68,077

 

 

$

(16,195

)

 

$

84,272

 

Less:

 

 

 

 

 

 

 

 

Property & Equipment Purchases, net

 

(3,360

)

 

 

(4,983

)

 

 

1,623

 

Capitalized Software (internal and external costs)

 

(24,323

)

 

 

(19,933

)

 

 

(4,390

)

Free Cash Flow

$

40,394

 

 

$

(41,111

)

 

$

81,505

 

 

 

 

 

 

 

 

 

 

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

Three Months Ended September 30, 2023

 

(in thousands)

Pretax earnings

 

Net income
attributable to

Crawford & Company

 

Diluted earnings per
CRD-A
share

 

Diluted earnings per
CRD-B
share(1)

 

GAAP

$

18,955

 

$

12,319

 

$

0.25

 

$

0.25

 

Adjustments:

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

1,986

 

 

1,711

 

 

0.03

 

 

0.03

 

Non-service related pension costs

 

2,170

 

 

1,612

 

 

0.03

 

 

0.03

 

Contingent earnout adjustments

 

2,127

 

 

2,101

 

 

0.04

 

 

0.04

 

Non-GAAP Adjusted

$

25,238

 

$

17,743

 

$

0.35

 

$

0.36

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2022

 

(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

 

GAAP

$

(28,538

)

$

(15,144

)

$

(0.31

)

$

(0.31

)

Adjustments:

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

1,998

 

 

1,499

 

 

0.03

 

 

0.03

 

Goodwill impairment

 

36,808

 

 

20,908

 

 

0.43

 

 

0.43

 

Non-service related pension credits

 

(532

)

 

(412

)

 

(0.01

)

 

(0.01

)

Contingent earnout adjustments

 

887

 

 

657

 

 

0.01

 

 

0.01

 

Non-GAAP Adjusted

$

10,623

 

$

7,508

 

$

0.15

 

$

0.15

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 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

$

48,507

 

$

31,427

 

$

0.63

 

$

0.64

 

Adjustments:

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

5,864

 

 

5,039

 

 

0.10

 

 

0.10

 

Non-service related pension costs

 

6,436

 

 

4,782

 

 

0.10

 

 

0.10

 

Contingent earnout adjustments

 

3,100

 

 

2,503

 

 

0.05

 

 

0.05

 

Non-GAAP Adjusted

$

63,907

 

$

43,751

 

$

0.88

 

$

0.89

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2022

 

(in thousands)

Pretax (loss) earnings

 

Net (loss) income
attributable to

Crawford & Company

 

Diluted (loss)
earnings per
CRD-A
share(1)

 

Diluted (loss)
earnings per
CRD-B
share

 

GAAP

$

(12,351

)

$

(4,218

)

$

(0.08

)

$

(0.09

)

Adjustments:

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

5,784

 

 

4,338

 

 

0.09

 

 

0.09

 

Goodwill impairment

 

36,808

 

 

20,908

 

 

0.42

 

 

0.42

 

Non-service related pension credits

 

(1,646

)

 

(1,277

)

 

(0.03

)

 

(0.03

)

Contingent earnout adjustments

 

3,246

 

 

2,403

 

 

0.05

 

 

0.05

 

Non-GAAP Adjusted

$

31,841

 

$

22,154

 

$

0.44

 

$

0.44

 

 

 

 

 

 

 

 

 

 

(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

 

Nine Months Ended

 

(in thousands)

September 30,

2023

 

September 30,

2022

 

September 30,

2023

 

September 30,

2022

 

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

 

 

 

 

 

 

 

 

Class A Common Stock

 

29,140

 

 

28,553

 

 

28,980

 

 

29,397

 

Class B Common Stock

 

19,837

 

 

19,848

 

 

19,845

 

 

20,202

 

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

 

 

 

 

 

 

 

 

Class A Common Stock

 

30,063

 

 

28,553

 

 

29,659

 

 

29,397

 

Class B Common Stock

 

19,837

 

 

19,848

 

 

19,845

 

 

20,202

 

 

 

 

 

 

 

 

 

 

Non-GAAP (1)

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Class A Common Stock

 

30,063

 

 

28,930

 

 

29,659

 

 

29,754

 

Class B Common Stock

 

19,837

 

 

19,848

 

 

19,845

 

 

20,202

 

 

 

 

 

 

 

 

 

 

(1) The Company had a net loss for GAAP reporting during the three and nine months ended September 30, 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 three and nine months ended September 30, 2022, 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 nine months ended September 30, 2023, financial position as of September 30, 2023, and cash flows for the nine months ended September 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 September 30,

 

2023

 

 

2022

 

 

% Change

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues Before Reimbursements

 

$

325,594

 

 

$

294,924

 

 

 

10

%

Reimbursements

 

 

12,066

 

 

 

11,493

 

 

 

5

%

Total Revenues

 

 

337,660

 

 

 

306,417

 

 

 

10

%

 

 

 

 

 

 

 

 

 

 

Costs and Expenses:

 

 

 

 

 

 

 

 

 

Costs of Services Provided, Before Reimbursements

 

 

229,969

 

 

 

221,233

 

 

 

4

%

Reimbursements

 

 

12,066

 

 

 

11,493

 

 

 

5

%

Total Costs of Services

 

 

242,035

 

 

 

232,726

 

 

 

4

%

 

 

 

 

 

 

 

 

 

 

Selling, General, and Administrative Expenses

 

 

69,920

 

 

 

62,983

 

 

 

11

%

Corporate Interest Expense, Net

 

 

4,556

 

 

 

2,903

 

 

 

57

%

Goodwill Impairment

 

 

-

 

 

 

36,808

 

 

 

(100

)%

Total Costs and Expenses

 

 

316,511

 

 

 

335,420

 

 

 

(6

)%

 

 

 

 

 

 

 

 

 

 

Other (Loss) Income, Net

 

 

(2,194

)

 

 

465

 

 

 

(572

)%

 

 

 

 

 

 

 

 

 

 

Income (Loss) Before Income Taxes

 

 

18,955

 

 

 

(28,538

)

 

 

166

%

Provision (Benefit) for Income Taxes

 

 

6,781

 

 

 

(13,286

)

 

 

151

%

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

 

12,174

 

 

 

(15,252

)

 

 

180

%

 

 

 

 

 

 

 

 

 

 

Net Loss Attributable to Noncontrolling Interests

 

 

145

 

 

 

108

 

 

 

34

%

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) Attributable to Shareholders of Crawford & Company

 

$

12,319

 

 

$

(15,144

)

 

 

181

%

 

 

 

 

 

 

 

 

 

 

Earnings (Loss) Per Share - Basic:

 

 

 

 

 

 

 

 

 

Class A Common Stock

 

$

0.25

 

 

$

(0.31

)

 

 

181

%

Class B Common Stock

 

$

0.25

 

 

$

(0.31

)

 

 

181

%

 

 

 

 

 

 

 

 

 

 

Earnings (Loss) Per Share - Diluted:

 

 

 

 

 

 

 

 

 

Class A Common Stock

 

$

0.25

 

 

$

(0.31

)

 

 

181

%

Class B Common Stock

 

$

0.25

 

 

$

(0.31

)

 

 

181

%

 

 

 

 

 

 

 

 

 

 

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)

 

Nine Months Ended September 30,

 

2023

 

 

2022

 

 

% Change

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues Before Reimbursements

 

$

959,251

 

 

$

867,294

 

 

 

11

%

Reimbursements

 

 

36,743

 

 

 

30,564

 

 

 

20

%

Total Revenues

 

 

995,994

 

 

 

897,858

 

 

 

11

%

 

 

 

 

 

 

 

 

 

 

Costs and Expenses:

 

 

 

 

 

 

 

 

 

Costs of Services Provided, Before Reimbursements

 

 

691,078

 

 

 

644,948

 

 

 

7

%

Reimbursements

 

 

36,743

 

 

 

30,564

 

 

 

20

%

Total Costs of Services

 

 

727,821

 

 

 

675,512

 

 

 

8

%

 

 

 

 

 

 

 

 

 

 

Selling, General, and Administrative Expenses

 

 

199,871

 

 

 

193,222

 

 

 

3

%

Corporate Interest Expense, Net

 

 

13,264

 

 

 

6,201

 

 

 

114

%

Goodwill Impairment

 

 

-

 

 

 

36,808

 

 

 

(100

)%

Total Costs and Expenses

 

 

940,956

 

 

 

911,743

 

 

 

3

%

 

 

 

 

 

 

 

 

 

 

Other (Loss) Income, Net

 

 

(6,531

)

 

 

1,534

 

 

 

(526

)%

 

 

 

 

 

 

 

 

 

 

Income (Loss) Before Income Taxes

 

 

48,507

 

 

 

(12,351

)

 

 

493

%

Provision (Benefit) for Income Taxes

 

 

17,258

 

 

 

(8,092

)

 

 

313

%

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

 

31,249

 

 

 

(4,259

)

 

 

834

%

 

 

 

 

 

 

 

 

 

 

Net Loss Attributable to Noncontrolling Interests

 

 

178

 

 

 

41

 

 

 

334

%

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) Attributable to Shareholders of Crawford & Company

 

$

31,427

 

 

$

(4,218

)

 

 

845

%

 

 

 

 

 

 

 

 

 

 

Earnings (Loss) Per Share - Basic:

 

 

 

 

 

 

 

 

 

Class A Common Stock

 

$

0.64

 

 

$

(0.08

)

 

 

900

%

Class B Common Stock

 

$

0.64

 

 

$

(0.09

)

 

 

811

%

 

 

 

 

 

 

 

 

 

 

Earnings (Loss) Per Share - Diluted:

 

 

 

 

 

 

 

 

 

Class A Common Stock

 

$

0.63

 

 

$

(0.08

)

 

 

888

%

Class B Common Stock

 

$

0.64

 

 

$

(0.09

)

 

 

811

%

 

 

 

 

 

 

 

 

 

 

Cash Dividends Per Share:

 

 

 

 

 

 

 

 

 

Class A Common Stock

 

$

0.19

 

 

$

0.18

 

 

 

6

%

Class B Common Stock

 

$

0.19

 

 

$

0.18

 

 

 

6

%

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

As of September 30, 2023 and December 31, 2022

Unaudited

(In Thousands, Except Par Values)

 

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and Cash Equivalents

 

$

49,208

 

 

$

46,007

 

Accounts Receivable, Net

 

 

151,142

 

 

 

141,106

 

Unbilled Revenues, at Estimated Billable Amounts

 

 

131,251

 

 

 

126,274

 

Income Taxes Receivable

 

 

4,245

 

 

 

9,098

 

Prepaid Expenses and Other Current Assets

 

 

44,145

 

 

 

28,782

 

Total Current Assets

 

 

379,991

 

 

 

351,267

 

 

 

 

 

 

 

 

Net Property and Equipment

 

 

24,322

 

 

 

27,809

 

 

 

 

 

 

 

 

Other Assets:

 

 

 

 

 

 

Operating Lease Right-of-Use Asset, Net

 

 

91,364

 

 

 

93,334

 

Goodwill

 

 

76,637

 

 

 

76,622

 

Intangible Assets Arising from Business Acquisitions, Net

 

 

84,960

 

 

 

88,039

 

Capitalized Software Costs, Net

 

 

93,370

 

 

 

82,975

 

Deferred Income Tax Assets

 

 

18,142

 

 

 

19,573

 

Other Noncurrent Assets

 

 

58,405

 

 

 

51,888

 

Total Other Assets

 

 

422,878

 

 

 

412,431

 

 

 

 

 

 

 

 

Total Assets

 

$

827,191

 

 

$

791,507

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ INVESTMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

Short-Term Borrowings

 

$

16,955

 

 

$

27,048

 

Accounts Payable

 

 

44,473

 

 

 

50,847

 

Accrued Compensation and Related Costs

 

 

81,579

 

 

 

79,285

 

Self-Insured Risks

 

 

22,545

 

 

 

12,614

 

Income Taxes Payable

 

 

632

 

 

 

1,208

 

Operating Lease Liability

 

 

24,766

 

 

 

22,910

 

Other Accrued Liabilities

 

 

65,219

 

 

 

56,293

 

Deferred Revenues

 

 

34,512

 

 

 

29,282

 

Total Current Liabilities

 

 

290,681

 

 

 

279,487

 

 

 

 

 

 

 

 

Noncurrent Liabilities:

 

 

 

 

 

 

Long-Term Debt and Finance Leases, Less Current Installments

 

 

201,487

 

 

 

211,810

 

Operating Lease Liability

 

 

80,411

 

 

 

84,628

 

Deferred Revenues

 

 

25,535

 

 

 

24,737

 

Accrued Pension Liabilities

 

 

24,969

 

 

 

25,914

 

Other Noncurrent Liabilities

 

 

41,138

 

 

 

41,553

 

Total Noncurrent Liabilities

 

 

373,540

 

 

 

388,642

 

 

 

 

 

 

 

 

Shareholders’ Investment:

 

 

 

 

 

 

Class A Common Stock, $1.00 Par Value

 

 

29,148

 

 

 

28,764

 

Class B Common Stock, $1.00 Par Value

 

 

19,785

 

 

 

19,848

 

Additional Paid-in Capital

 

 

83,548

 

 

 

78,158

 

Retained Earnings

 

 

234,718

 

 

 

213,094

 

Accumulated Other Comprehensive Loss

 

 

(202,577

)

 

 

(215,321

)

Shareholders’ Investment Attributable to Shareholders of Crawford & Company

 

 

164,622

 

 

 

124,543

 

Noncontrolling Interests

 

 

(1,652

)

 

 

(1,165

)

Total Shareholders’ Investment

 

 

162,970

 

 

 

123,378

 

 

 

 

 

 

 

 

Total Liabilities and Shareholders’ Investment

 

$

827,191

 

 

$

791,507

 

CRAWFORD & COMPANY

SUMMARY RESULTS BY OPERATING SEGMENT WITH DIRECT COMPENSATION AND OTHER EXPENSES

Unaudited

(In Thousands, Except Percentages)

Three Months Ended September 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

 

$

79,390

 

$

66,822

 

18.8

%

 

$

98,066

 

$

86,066

 

13.9

%

 

$

88,299

 

$

78,381

 

12.7

%

 

$

59,839

 

$

63,655

 

(6.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct Compensation, Fringe Benefits & Non-Employee Labor

 

 

53,635

 

 

48,331

 

11.0

%

 

 

66,426

 

 

61,666

 

7.7

%

 

 

54,310

 

 

49,863

 

8.9

%

 

 

39,638

 

 

42,106

 

(5.9

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of Revenues Before Reimbursements

 

 

67.6

%

 

72.3

%

 

 

 

67.7

%

 

71.6

%

 

 

 

61.5

%

 

63.6

%

 

 

 

66.2

%

 

66.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

15,287

 

 

14,741

 

3.7

%

 

 

29,443

 

 

28,322

 

4.0

%

 

 

20,457

 

 

22,320

 

(8.3

)%

 

 

11,678

 

 

11,469

 

1.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of Revenues Before Reimbursements

 

 

19.3

%

 

22.1

%

 

 

 

30.0

%

 

32.9

%

 

 

 

23.2

%

 

28.5

%

 

 

 

19.5

%

 

18.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating Expenses

 

 

68,922

 

 

63,072

 

9.3

%

 

 

95,869

 

 

89,988

 

6.5

%

 

 

74,767

 

 

72,183

 

3.6

%

 

 

51,316

 

 

53,575

 

(4.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Earnings (Loss) (1)

 

$

10,468

 

$

3,750

 

179.1

%

 

$

2,197

 

$

(3,922

)

nm

 

$

13,532

 

$

6,198

 

118.3

%

 

$

8,523

 

$

10,080

 

(15.4

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of Revenues Before Reimbursements

 

 

13.2

%

 

5.6

%

 

 

 

2.2

%

 

(4.6

)%

 

 

 

15.3

%

 

7.9

%

 

 

 

14.2

%

 

15.8

%

 

Nine Months Ended September 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

 

$

232,344

 

$

197,035

 

17.9

%

 

$

285,241

 

$

269,048

 

6.0

%

 

$

253,369

 

$

234,949

 

7.8

%

 

$

188,297

 

$

166,262

 

13.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

\

 

Direct Compensation, Fringe Benefits & Non-Employee Labor

 

 

162,418

 

 

142,937

 

13.6

%

 

 

190,178

 

 

190,273

 

(0.0

)%

 

 

161,451

 

 

147,611

 

9.4

%

 

 

124,238

 

 

110,424

 

12.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of Revenues Before Reimbursements

 

 

69.9

%

 

72.5

%

 

 

 

66.7

%

 

70.7

%

 

 

 

63.7

%

 

62.8

%

 

 

 

66.0

%

 

66.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

47,493

 

 

43,565

 

9.0

%

 

 

86,089

 

 

86,423

 

(0.4

)%

 

 

62,311

 

 

67,039

 

(7.1

)%

 

 

37,464

 

 

33,124

 

13.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of Revenues Before Reimbursements

 

 

20.4

%

 

22.1

%

 

 

 

30.2

%

 

32.1

%

 

 

 

24.6

%

 

28.5

%

 

 

 

19.9

%

 

19.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Operating Expenses

 

 

209,911

 

 

186,502

 

12.6

%

 

 

276,267

 

 

276,696

 

(0.2

)%

 

 

223,762

 

 

214,650

 

4.2

%

 

 

161,702

 

 

143,548

 

12.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Earnings (Loss)(1)

 

$

22,433

 

$

10,533

 

113.0

%

 

$

8,974

 

$

(7,648

)

nm

 

$

29,607

 

$

20,299

 

45.9

%

 

$

26,595

 

$

22,714

 

17.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of Revenues Before Reimbursements

 

 

9.7

%

 

5.3

%

 

 

 

3.1

%

 

(2.8

)%

 

 

 

11.7

%

 

8.6

%

 

 

 

14.1

%

 

13.7

%

 

(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, 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 September 30, 2023 and September 30, 2022

Unaudited

(In Thousands)

 

 

 

2023

 

 

2022

 

Cash Flows From Operating Activities:

 

 

 

 

 

 

Net income (loss)

 

$

31,249

 

 

$

(4,259

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

27,355

 

 

 

27,379

 

Goodwill impairment

 

 

 

 

 

36,808

 

Stock-based compensation

 

 

4,183

 

 

 

4,218

 

Loss (gain) on disposal of property and equipment

 

 

96

 

 

 

(1,562

)

Contingent earnout adjustments

 

 

3,100

 

 

 

3,246

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

(6,309

)

 

 

(9,329

)

Unbilled revenues, net

 

 

419

 

 

 

(23,537

)

Accrued or prepaid income taxes

 

 

5,306

 

 

 

(23,162

)

Accounts payable and accrued liabilities

 

 

(1,437

)

 

 

(20,612

)

Deferred revenues

 

 

4,869

 

 

 

(191

)

Accrued retirement costs

 

 

4,818

 

 

 

(1,684

)

Prepaid expenses and other operating activities

 

 

(5,572

)

 

 

(3,510

)

Net cash provided by (used in) operating activities

 

 

68,077

 

 

 

(16,195

)

 

 

 

 

 

 

 

Cash Flows From Investing Activities:

 

 

 

 

 

 

Acquisitions of property and equipment

 

 

(3,360

)

 

 

(4,983

)

Capitalization of computer software costs

 

 

(24,323

)

 

 

(19,933

)

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

 

 

(27,683

)

 

 

(48,193

)

 

 

 

 

 

 

 

Cash Flows From Financing Activities:

 

 

 

 

 

 

Cash dividends paid

 

 

(9,284

)

 

 

(8,938

)

Repurchases of common stock

 

 

(582

)

 

 

(26,749

)

Increases in short-term and revolving credit facility borrowings

 

 

20,958

 

 

 

99,952

 

Payments on short-term and revolving credit facility borrowings

 

 

(43,719

)

 

 

(15,129

)

Payments of contingent consideration on acquisitions

 

 

(6,760

)

 

 

(2,118

)

Other financing activities

 

 

1,317

 

 

 

(87

)

Net cash (used in) provided by financing activities

 

 

(38,070

)

 

 

46,931

 

 

 

 

 

 

 

 

Effects of exchange rate changes on cash and cash equivalents

 

 

1,313

 

 

 

(2,351

)

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

 

 

3,637

 

 

 

(19,808

)

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)

 

$

50,282

 

 

$

33,881

 

(1) The 2023 amounts include beginning restricted cash of $638 at December 31, 2022, and ending restricted cash of $1,074 at September 30, 2023, and the 2022 amounts include beginning restricted cash of $461 at December 31, 2021, and ending restricted cash of $782 at September 30, 2022, which we present as part of "Prepaid expenses and other current assets" on the Balance Sheets.

 

Media Contacts: mediarelations@us.crawco.com

Lynn Cufley

+44 7585 901936

Lynn.Cufley@crawco.uk

Katie Cline

+1 470 792 5678

katie.cline@us.crawco.com

Investor Contact:

Jennifer Belodeau/Rosalyn Christian

IMS Investor Relations

+1 203 972 9200

crawford@imsinvestorrelations.com

Source: Crawford & Company

FAQ

What were Crawford & Company's Q3 2023 revenues?

Crawford & Company's Q3 2023 revenues before reimbursements were $325.6 million.

How did Crawford & Company's net income perform in Q3 2023?

Crawford & Company reported net income attributable to shareholders of $12.3 million in Q3 2023, compared to a loss of $15.1 million in the same period last year.

What were the diluted earnings per share for CRD-A and CRD-B in Q3 2023?

The diluted earnings per share for both CRD-A and CRD-B in Q3 2023 were $0.25.

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