Crawford & Company Q3 diluted EPS rises to $0.31
Operating cash flow for the first nine months was $28.986 million, versus $51.715 million a year earlier, while shareholder-attributable earnings increased.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Crawford & Company (CRD) reported third-quarter total revenues of $329.907 million, compared with $332.807 million a year earlier. Net income attributable to Crawford shareholders was $15.008 million, versus $12.408 million, while diluted earnings per share for both common-stock classes were $0.31, compared with $0.25.
For the first nine months, total revenues were $980.057 million, compared with $990.741 million; net income attributable to shareholders increased to $33.361 million from $26.874 million, and diluted EPS was $0.68 versus $0.54. Net cash provided by operating activities fell to $28.986 million from $51.715 million. Short-term borrowings were $74.500 million as of September 30, 2026, versus $38.500 million as of December 31, 2025.
During the nine months, Crawford repurchased 1,815,458 Class A shares at an average cost of $11.80 per share and 108,963 Class B shares at $10.25 per share. The Class A total included 1,000,000 shares bought on August 10, 2026, from majority shareholder Jesse C. Crawford, father of Jesse C. Crawford, Jr., the Company's Non-Executive Chair of the Board. The approximately $12,813,700 purchase price reflected a 3% discount to the closing market price; the Audit Committee and Board approved the transaction.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointQuarterly shareholder-attributable net income reached $15.008 million, up from $12.408 million.
Negative
- Moderate pointNine-month operating cash flow fell to $28.986 million from $51.715 million.
Filing Explained
At September 30, 2026, $110.1 million of fixed-price remaining work was reported, with about 70% expected to become revenue within one year.
At
The company reported
Crawford expects to recognize approximately
Key Figures
Key Terms
Remaining Performance Obligations financial
variable consideration financial
two-class method financial
rabbi trust financial
contract liability financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was Crawford & Company (CRD)'s third-quarter revenue?
How much did Crawford & Company (CRD) earn in the third quarter?
What were the terms of Crawford & Company (CRD)'s purchase from Jesse C. Crawford?
How many shares remained under Crawford & Company's (CRD) repurchase authorization?
AI-generated analysis. How Rhea-AI works. Not financial advice.
United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the transition period from ____ to ____
Commission file number
(Exact name of Registrant as specified in its charter)
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
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(Registrant's telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
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Non-accelerated filer |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
The number of shares outstanding of each class of the Registrant's common stock, as of October 26, 2026, was as follows:
Class A Common Stock, $1.00 par value:
Class B Common Stock, $1.00 par value:
CRAWFORD & COMPANY
Quarterly Report on Form 10-Q
Quarter Ended September 30, 2026
Table of Contents
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Part I. Financial Information |
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Item 1. |
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Financial Statements: |
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3 |
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Condensed Consolidated Statements of Operations (unaudited) for the three months ended September 30, 2026 and 2025 |
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Condensed Consolidated Statements of Operations (unaudited) for the nine months ended September 30, 2026 and 2025 |
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Condensed Consolidated Statements of Comprehensive Income (unaudited) for the three and nine months ended September 30, 2026 and 2025 |
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Condensed Consolidated Balance Sheets as of September 30, 2026 (unaudited) and December 31, 2025 |
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Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2026 and 2025 |
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Condensed Consolidated Statements of Shareholders' Investment (unaudited) as of and for the three months ended March 31, June 30, and September 30, 2026 and 2025 |
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Notes to Condensed Consolidated Financial Statements (unaudited) |
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Item 2. |
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Management's Discussion and Analysis of Financial Condition and Results of Operations |
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30 |
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Item 3. |
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Quantitative and Qualitative Disclosures About Market Risk |
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Item 4. |
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Controls and Procedures |
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Part II. Other Information |
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Item 1. |
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Legal Proceedings |
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Item 1A. |
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Risk Factors |
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Item 2. |
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Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 5. |
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Other Information |
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Item 6. |
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Exhibits |
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Signatures |
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2
Part I — Financial Information
Item 1. Financial Statements
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
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Three Months Ended September 30, |
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(In thousands, except per share amounts) |
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2026 |
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2025 |
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Revenues: |
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Revenues before reimbursements |
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Reimbursements |
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Total Revenues |
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Costs and Expenses: |
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Costs of services provided, before reimbursements |
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Reimbursements |
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Total costs of services |
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Selling, general, and administrative expenses |
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Corporate interest expense, net of interest income of $ |
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Total Costs and Expenses |
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Other Loss, net |
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Income Before Income Taxes |
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Provision for Income Taxes |
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Net Income |
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Net Loss Attributable to Noncontrolling Interests |
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Net Income Attributable to Shareholders of Crawford & Company |
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Earnings Per Share - Basic: |
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Class A Common Stock |
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Class B Common Stock |
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Earnings Per Share - Diluted: |
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Class A Common Stock |
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$ |
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Class B Common Stock |
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Weighted-Average Shares Used to Compute Basic Earnings Per Share: |
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Class A Common Stock |
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Class B Common Stock |
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Weighted-Average Shares Used to Compute Diluted Earnings Per Share: |
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Class A Common Stock |
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Class B Common Stock |
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(The accompanying notes are an integral part of these condensed consolidated financial statements)
3
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
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Nine Months Ended September 30, |
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(In thousands, except per share amounts) |
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2026 |
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2025 |
Revenues: |
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Revenues before reimbursements |
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$ |
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Reimbursements |
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Total Revenues |
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Costs and Expenses: |
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Costs of services provided, before reimbursements |
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Reimbursements |
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Total costs of services |
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Selling, general, and administrative expenses |
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Corporate interest expense, net of interest income of $ |
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Loss on disposition of businesses, net |
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Total Costs and Expenses |
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Other Loss, net |
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Income Before Income Taxes |
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Provision for Income Taxes |
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Net Income |
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Net Loss (Income) Attributable to Noncontrolling Interests |
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Net Income Attributable to Shareholders of Crawford & Company |
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$ |
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$ |
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Earnings Per Share - Basic: |
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Class A Common Stock |
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$ |
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$ |
Class B Common Stock |
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$ |
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$ |
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Earnings Per Share - Diluted: |
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Class A Common Stock |
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$ |
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Class B Common Stock |
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$ |
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Weighted-Average Shares Used to Compute Basic Earnings Per Share: |
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Class A Common Stock |
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Class B Common Stock |
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Weighted-Average Shares Used to Compute Diluted Earnings Per Share: |
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Class A Common Stock |
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Class B Common Stock |
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(The accompanying notes are an integral part of these condensed consolidated financial statements)
4
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited
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Three Months Ended September 30, |
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(In thousands) |
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2026 |
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2025 |
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Net Income |
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$ |
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$ |
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Other Comprehensive (Loss) Income: |
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Net foreign currency translation loss, net of tax of $ |
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Amortization of actuarial losses for retirement plans included in net periodic pension cost, net of tax of $ |
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Other Comprehensive (Loss) Income |
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Comprehensive Income |
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Comprehensive (income) loss attributable to noncontrolling interests |
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Comprehensive Income Attributable to Shareholders of Crawford & Company |
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$ |
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$ |
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Nine Months Ended September 30, |
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(In thousands) |
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2026 |
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2025 |
Net Income |
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$ |
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$ |
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Other Comprehensive Income: |
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Net foreign currency translation gain, net of tax of $ |
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Amortization of actuarial losses for retirement plans included in net periodic pension cost, net of tax of $ |
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Other Comprehensive Income |
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Comprehensive Income |
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Comprehensive loss (income) attributable to noncontrolling interests |
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( |
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Comprehensive Income Attributable to Shareholders of Crawford & Company |
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$ |
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$ |
(The accompanying notes are an integral part of these condensed consolidated financial statements)
5
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
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September 30, |
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December 31, |
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(In thousands) |
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(Unaudited) |
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* |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, less allowance for expected credit losses of $ |
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Unbilled revenues, at estimated billable amounts |
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Income taxes receivable |
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Prepaid expenses and other current assets |
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Total Current Assets |
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Net Property and Equipment |
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Other Assets: |
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Operating lease right-of-use assets, net |
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Goodwill |
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Intangible assets arising from business acquisitions, net |
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Capitalized software costs, net |
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Deferred income tax assets |
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Other noncurrent assets |
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Total Other Assets |
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TOTAL ASSETS |
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$ |
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$ |
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* Derived from the audited Consolidated Balance Sheet
(The accompanying notes are an integral part of these condensed consolidated financial statements)
6
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS — CONTINUED
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September 30, |
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December 31, |
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(In thousands, except par value amounts) |
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(Unaudited) |
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* |
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LIABILITIES AND SHAREHOLDERS' INVESTMENT |
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Current Liabilities: |
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Short-term borrowings |
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$ |
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$ |
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Accounts payable |
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Accrued compensation and related costs |
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Self-insured risks |
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Income taxes payable |
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Operating lease liability |
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Other accrued liabilities |
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Deferred revenues |
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Total Current Liabilities |
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Noncurrent Liabilities: |
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Long-term debt and finance leases, less current installments |
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Operating lease liability |
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Deferred revenues |
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Accrued pension liabilities |
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Other noncurrent liabilities |
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Total Noncurrent Liabilities |
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Shareholders' Investment: |
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Class A common stock, $ |
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Class B common stock, $ |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive loss |
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( |
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( |
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Shareholders' Investment Attributable to Shareholders of Crawford & Company |
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Noncontrolling interests |
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( |
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( |
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Total Shareholders' Investment |
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TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT |
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$ |
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$ |
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* Derived from the audited Consolidated Balance Sheet
(The accompanying notes are an integral part of these condensed consolidated financial statements)
7
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
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Nine Months Ended September 30, |
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(In thousands) |
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2026 |
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2025 |
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Cash Flows from Operating Activities: |
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Net income |
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$ |
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$ |
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Reconciliation of net income to net cash provided by operating activities: |
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Depreciation and amortization |
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Software impairment |
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Stock-based compensation |
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Loss on disposal of property and equipment |
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Loss on disposition of businesses, net |
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Contingent earnout adjustments |
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( |
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Changes in operating assets and liabilities: |
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Accounts receivable, net |
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( |
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Unbilled revenues, net |
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( |
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( |
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Accrued or prepaid income taxes |
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Accounts payable and accrued liabilities |
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( |
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( |
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Deferred revenues |
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( |
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Accrued retirement costs |
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( |
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Prepaid expenses and other operating activities |
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( |
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Net cash provided by operating activities |
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||
Cash Flows from Investing Activities: |
|
|
|
|
|
|
||
Acquisitions of property and equipment |
|
|
( |
) |
|
|
( |
) |
Capitalization of computer software costs |
|
|
( |
) |
|
|
( |
) |
Proceeds from settlement of life insurance policies |
|
|
|
|
|
|
||
Proceeds from business dispositions, net of cash |
|
|
|
|
|
|
||
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Cash Flows from Financing Activities: |
|
|
|
|
|
|
||
Cash dividends paid |
|
|
( |
) |
|
|
( |
) |
Payments related to shares received for withholding taxes under employee stock-based compensation plans |
|
|
( |
) |
|
|
|
|
Repurchases of common stock |
|
|
( |
) |
|
|
( |
) |
Increases in revolving credit facility borrowings |
|
|
|
|
|
|
||
Payments on revolving credit facility borrowings |
|
|
( |
) |
|
|
( |
) |
Payments of contingent consideration on acquisitions |
|
|
( |
) |
|
|
( |
) |
Increases in fiduciary liabilities |
|
|
|
|
|
|
||
Other financing activities |
|
|
|
|
|
|
||
Net cash provided by (used in) financing activities |
|
|
|
|
|
( |
) |
|
Effects of exchange rate changes on cash and cash equivalents |
|
|
|
|
|
|
||
Increase in Cash, Cash Equivalents, and Restricted Cash |
|
|
|
|
|
|
||
Cash, Cash Equivalents, and Restricted Cash at Beginning of Year |
|
|
|
|
|
|
||
Cash, Cash Equivalents, and Restricted Cash at End of Period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental cash flow information: |
|
|
|
|
|
|
||
Income taxes paid |
|
$ |
|
|
$ |
|
||
Interest paid |
|
|
|
|
|
|
||
(The accompanying notes are an integral part of these condensed consolidated financial statements)
8
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
Unaudited
(In thousands, except per share amounts)
|
|
Common Stock |
|
|
|
|
|
|
|
|
Accumulated |
|
|
Shareholders' |
|
|
|
|
|
|
|
|||||||||||
2026 |
|
Class A |
|
|
Class B |
|
|
Additional |
|
|
Retained |
|
|
Other |
|
|
Shareholders |
|
|
Noncontrolling |
|
|
Total |
|
||||||||
Balance at January 1, 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Other comprehensive income (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Cash dividends paid (Class A - $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Repurchases of common stock |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Shares issued in connection with stock-based compensation plans, net |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Balance at March 31, 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Net income (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash dividends paid (Class A - $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Repurchases of common stock |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Shares issued in connection with stock-based compensation plans, net |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Dividends paid to noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at June 30, 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Net income (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Other comprehensive (loss) income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Cash dividends paid (Class A - $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Repurchases of common stock |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Shares issued in connection with stock-based compensation plans, net |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Balance at September 30, 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
(The accompanying notes are an integral part of these condensed consolidated financial statements)
9
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT - CONTINUED
Unaudited
(In thousands, except per share amounts)
|
|
Common Stock |
|
|
|
|
|
|
|
|
Accumulated |
|
|
Shareholders' |
|
|
|
|
|
|
|
|||||||||||
2025 |
|
Class A |
|
|
Class B |
|
|
Additional |
|
|
Retained |
|
|
Other |
|
|
Shareholders |
|
|
Noncontrolling |
|
|
Total |
|
||||||||
Balance at January 1, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Net income |
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss) |
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|||
Cash dividends paid (Class A - $ |
|
— |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|||
Stock-based compensation |
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||||
Shares issued in connection with stock-based compensation plans, net |
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||||
Balance at March 31, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Net income |
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income |
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash dividends paid (Class A - $ |
|
— |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|||
Stock-based compensation |
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||||
Shares issued in connection with stock-based compensation plans, net |
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||||
Balance at June 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Net income (loss) |
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
|||||
Other comprehensive income (loss) |
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||||
Cash dividends paid (Class A - $ |
|
— |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|||
Stock-based compensation |
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
||||||
Repurchases of common stock |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Shares issued in connection with stock-based compensation plans, net |
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||||
Balance at September 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
(The accompanying notes are an integral part of these condensed consolidated financial statements)
10
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
Based in Atlanta, Georgia, Crawford & Company ("Crawford" or "the Company") 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.
Shares of the Company's two classes of common stock are traded on the New York Stock Exchange ("NYSE") under the symbols CRD-A and CRD-B. 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 can be found on the Company's website www.crawco.com. The information contained on, or hyperlinked from, the Company's website is not a part of, and is not incorporated by reference into, this report.
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (the "SEC"). These unaudited condensed consolidated financial statements omit certain notes and other financial information and therefore, should be read in conjunction with the 2025 Form 10-K. The Condensed Consolidated Balance Sheet information presented herein as of December 31, 2025 has been derived from the audited consolidated financial statements as of that date. For further information, refer to the consolidated financial statements and notes thereto included in the Company's Form 10-K for the year ended December 31, 2025.
Due to the impact of weather activity and other macroeconomic uncertainties, the Company's operating results for the three and nine months ended September 30, 2026 and financial position as of September 30, 2026 are not necessarily indicative of the results or financial position that may be expected for the year ending December 31, 2026 or for other future periods. The financial results from the Company's operations outside of the U.S., Canada, the Caribbean, and certain subsidiaries in the Philippines, are reported and consolidated on a two-month delayed basis (fiscal year-end of October 31) as permitted by GAAP in order to provide sufficient time for accumulation of their results.
In connection with the realignment of management responsibilities, the Company updated its reportable segments effective January 1, 2026. The Company's reportable segments are comprised of the following: U.S. Property & Casualty, Broadspire, and International Operations. Certain prior period amounts among the Company’s reportable segments have been reclassified to conform to the current presentation. These changes have no impact on the Company’s historical consolidated statements of operations, balance sheets, or cash flows. Significant intercompany transactions have been eliminated in consolidation.
11
2. Recently Issued Accounting Standards
Recently Adopted Accounting Standards
Measurement of Credit Losses for Accounts Receivable and Contract Assets (ASU 2025-05)
In July 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provided a practical expedient that permits entities to assume that current conditions as of the balance sheet date do not change over the remaining life of the accounts receivable and contract assets when estimating expected credit losses. The guidance is required to be applied prospectively and is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. The Company adopted this guidance effective January 1, 2026. The adoption did not have a material impact on the Company's consolidated financial statements.
Accounting Standards Not Yet Adopted
Disaggregation of Income Statement Expenses (ASU 2024-03)
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosures of disaggregated information about certain income statement expense line items, such as inventory purchases, employee compensation, and depreciation. The new standard is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027, and may be applied retrospectively or prospectively. The Company is currently evaluating the disclosure requirements of this guidance and the impact on its consolidated financial statements.
Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06)
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which provides guidance that simplifies the accounting for internal-use software by replacing stage-based rules with a principles-based approach. Under the new guidance, capitalization of internal-use software costs is permitted once management authorizes funding, commits to use the software, and it is probable the project will be completed. The ASU is effective for fiscal years beginning after December 15, 2027. Entities may elect to apply the guidance retrospectively, prospectively to software costs incurred after the adoption date (including costs related to existing, in-process projects and new projects) or using a modified prospective basis. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
Interim Reporting Narrow Scope Improvements (ASU 2025-11)
In December 2025, the FASB issued ASU 2025‑11, Interim Reporting (Topic 270): Narrow‑Scope Improvements, which clarifies the applicability of interim reporting guidance and improves the navigability of interim disclosure requirements. The amendments add a disclosure principle requiring entities to disclose events since the end of the most recent annual reporting period that have a material impact on the entity and incorporate a comprehensive list of disclosures required in interim reporting periods. The guidance is effective for interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments may be applied retrospectively or prospectively. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.
Codification Improvements (ASU 2025-12)
In December 2025, the FASB issued ASU 2025‑12, Codification Improvements, which includes targeted amendments intended to clarify and improve the application of existing accounting guidance. Certain amendments relate to earnings per share, lease disclosures, treasury stock retirements, and transfers of receivables. The amendments are effective for fiscal years beginning after December 15, 2026, including interim periods therein, with early adoption permitted. The Company does not expect adoption of this guidance to have a material impact on its consolidated financial statements.
3. Revenue Recognition
Revenue from Contracts with Customers
Revenues are recognized when control of the promised services is transferred to the Company's customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Revenues are recognized net of any sales, use or value added taxes collected from customers, which are subsequently remitted to governmental authorities. As the Company completes its performance obligations which are identified below, it has an unconditional right to consideration as outlined in the Company's contracts. Generally, the Company's accounts receivables are expected to be collected in less than
12
The Company's U.S. Property & Casualty and International Operations segments generate revenue for adjusting services provided to insurance companies and self-insured entities related to property and casualty losses caused by physical damage to commercial and residential real property and certain types of personal property through its Claims Solutions and International Loss Adjusting service lines. These segments also generate revenues for claims management services provided to insurance companies and self-insured entities related to large, complex losses with technical adjusting and industry experts servicing a broad range of industries in the Global Technical Services service line. The Company charges on a fee-per-claim basis for each optional purchase of the claims management services exercised by its customer. Revenue is recognized based on the claim type for fixed fee claims applied utilizing a portfolio approach based on time elapsed for these claims. For claims billed on a time and expense incurred basis, which are considered variable consideration, the Company recognizes revenue at the amount in which it has the right to invoice for services performed. These methods of revenue recognition are the most accurate depiction of the transfer of the claims management services to the customer. Task assignment services are single optional purchase performance obligations which are generally satisfied at a point in time when the control of the service is transferred to the customer. Therefore, revenue is recognized when the customer receives the service requested.
The Company's U.S. Property & Casualty segment also generates revenue through its Contractor Connection and Catastrophe Services business lines.
The Contractor Connection service line generates revenue through its independently managed contractor network. Contractor Connection primarily generates revenue by receiving a fee for each project that is sold by its network of contractors. Revenue is recognized at a point in time once the consumer accepts the contractor's proposal as Contractor Connection’s performance obligation of referring projects to its contractors has been completed and the Company is entitled to consideration at that time. The contractor takes control of the service upon the consumer’s acceptance of the contractor’s proposal.
The Catastrophe Services business generates revenues for claims management services provided to insurance companies and self-insured entities related to property, casualty, and catastrophic losses. Revenue is recognized over time as the performance obligations are satisfied through the effort expended to research, investigate, evaluate, document, and report the claim and control of these services is transferred to the customer. Revenue is recognized based on the claim type for fixed fee claims, applied based on time elapsed for these claims. For claims billed on a time and expense incurred basis, which are considered variable consideration, the Company recognizes revenue at the amount for which it has the right to invoice for services performed. These methods of revenue recognition are the most accurate depiction of the transfer of the claims management services to the customer.
The following table presents U.S. Property & Casualty revenues before reimbursements disaggregated by service line for the three and nine months ended September 30, 2026 and 2025:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
(in thousands) |
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
||||
Global Technical Services |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Claims Solutions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contractor Connection |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Catastrophe Services |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total U.S. Property & Casualty Revenues before Reimbursements |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
In addition to adjusting services, the Company previously performed Legal Services within its International Operations segment. Revenue is recognized over time as the performance obligations are satisfied through the effort expended to research, investigate, evaluate, document, and report the claim and control of these services is transferred to the customer.
13
The following table presents International Operations revenues before reimbursements disaggregated by geography and service line for the three and nine months ended September 30, 2026 and 2025:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
(in thousands) |
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
||||
U.K. |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Europe |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Australia |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Canada |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Asia |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Latin America |
|
|
|
|
|
|
|
|
|
|
|
|
||||
International Loss Adjusting |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.K. |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Australia |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Latin America |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Crawford Legal Services |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total International Operations Revenues before Reimbursements |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Company’s Broadspire segment is a third party administrator that generates revenue through its Claims Management, Medical Management, and Subrogation service lines.
The Claims Management service line includes Workers' Compensation, Liability, Property, and Disability Claims Management. This service line also performs additional services such as Accident & Health claims programs, including Affinity type claims, and disability and leave management services. Each claim referred by the customer is considered an additional optional purchase of claims management services under the agreement with the customer. The transaction price is specified in the contract and is fixed for each service. Revenue is recognized over time as services are provided as the performance obligations are satisfied through the effort expended to research, investigate, evaluate, document, and report the claim and control of these services is transferred to the customer. Revenue is recognized based on historical claim closure rates and claim type applied utilizing a portfolio approach based on time elapsed for these claims as the Company believes this is the most accurate depiction of the transfer of claims management services to its customer. Broadspire also provides claims management services on a monthly basis for which revenue is recognized over time based on claims received and staff required to complete its claim handling obligations. Additionally, Broadspire provides Risk Management Information Services and Account Administration Services and generates revenues from income earned for managing funds maintained to administer claims for its customers. For non-claim services provided in the Claims Management service line, revenue is recognized over time as services are provided and control of these services is transferred to the customer. Revenue is recognized as time elapses as this is the most accurate depiction of the transfer of the service to the customer.
The Company's obligation to manage claims under the Claims Management service line can range from less than
The Medical Management service line offers case managers who provide administration services by proactively managing medical treatment plans for claimants while facilitating an understanding of and participation in their rehabilitation process. Revenue for Medical Management services is recognized over time as the performance obligations are satisfied through the effort expended to manage the medical treatment for claimants and control of these services is transferred to the customer. Medical Management services are generally billed based on time incurred, are considered variable consideration, and revenue is recognized at the amount for which the Company has the right to invoice for services performed. This method of revenue recognition is the most accurate depiction of the transfer of the Medical Management services to the customer. The Company also performs medical bill review services. Medical bill review services provide an analysis of medical charges for clients’ claims to identify opportunities for savings. Medical bill review services revenues are recognized over time as control of the service is transferred to the customer. Revenue is recognized based upon the transfer of the results of the medical bill review service to the customer as this is the most accurate depiction of the transfer of the service to the customer.
14
The Subrogation service line provides subrogation recovery and consultative services for the property and casualty insurance industry. Revenue is recognized at a point in time when the subrogation is successful and cash consideration is received.
The following table presents Broadspire revenues before reimbursements disaggregated by service line for the three and nine months ended September 30, 2026 and 2025:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
(in thousands) |
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
||||
Claims Management |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Medical Management |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Subrogation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Broadspire Revenues before Reimbursements |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
In the normal course of business, the Company's segments incur certain out-of-pocket expenses that are thereafter reimbursed by its customers. The Company controls the promised good or service before it is transferred to its customer, therefore it is a principal in the transaction. These out-of-pocket expenses and associated reimbursements are reported on a gross basis within expenses and revenues, respectively, in the Company's unaudited Condensed Consolidated Statements of Operations.
Claims Management Performance Obligations
For claims management services, the Company typically has one performance obligation; however, it also provides the customer with an option to acquire additional services. The Company sells multiple lines of claims processing and different levels of processing depending on the complexity of the claims. The Company typically provides a menu of offerings from which the customer chooses to purchase at its option. The price of each service is separate and distinct and provides a separate and distinct value to the customer. Pricing is consistent for each service irrespective of the other services or quantities requested by the customer. For example, if the Company provides claims processing for both auto and general liability, those services are priced and delivered independently. These additional services represent optional purchases of additional claims management services and do not represent arrangements with multiple performance obligations.
Contract Balances
The timing of revenue recognition, billings, and cash collections result in billed accounts receivables, unbilled accounts receivable reported as "Unbilled revenues, at estimated billable amounts," and "Deferred revenues" on the Company’s unaudited Condensed Consolidated Balance Sheets. Unbilled revenue is recorded for revenue that has been recognized in advance of billing the customer, resulting from professional services delivered that the Company expects and is entitled to receive as consideration under certain contracts. Billing requirements vary by contract but substantially all unbilled revenues are billed within
When the Company receives consideration from a customer prior to transferring services to the customer under the terms of certain claims management agreements, it records deferred revenues on its unaudited Condensed Consolidated Balance Sheets, which represents a contract liability. These fixed-fee service agreements typically result from the Broadspire segment and require the Company to handle claims on either a one- or
15
The table below presents the deferred revenues balance as of January 1, 2026 and the significant activity affecting deferred revenues during the three months and nine months ended September 30, 2026:
(In Thousands) |
|
|
|
|
Customer Contract Liabilities |
|
Deferred |
|
|
Balance as of January 1, 2026 |
|
$ |
|
|
Quarterly additions |
|
|
|
|
Revenue recognized from the prior periods |
|
|
( |
) |
Revenue recognized from current quarter additions |
|
|
( |
) |
Balance as of March 31, 2026 |
|
$ |
|
|
Quarterly additions |
|
|
|
|
Revenue recognized from the prior periods |
|
|
( |
) |
Revenue recognized from current quarter additions |
|
|
( |
) |
Balance as of June 30, 2026 |
|
$ |
|
|
Quarterly additions |
|
|
|
|
Revenue recognized from the prior periods |
|
|
( |
) |
Revenue recognized from current quarter additions |
|
|
( |
) |
Balance as of September 30, 2026 |
|
$ |
|
|
Remaining Performance Obligations
As of September 30, 2026, the Company had $
Costs to Obtain a Contract
The Company has a sales incentive compensation program where payment is based on the revenues recognized in the period. The payment does not represent an incremental cost to the Company that provides a future benefit expected to be longer than one year. Therefore it does not meet the criteria to be capitalized as a contract asset on the Company's unaudited Condensed Consolidated Balance Sheets, and is expensed as incurred.
Practical Expedients Elected
As a practical expedient, the Company does not adjust the consideration in a contract for the effects of a significant financing component it expects, at contract inception, when the period between a customer’s payment of consideration and the transfer of promised services to the customer will be
The Company does not disclose the value of remaining performance obligations for (i) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed, or (ii) contracts with variable consideration allocated entirely to a single performance obligation.
4. Credit Losses
The Company maintains an allowance for expected credit losses resulting primarily from the inability of clients to make required payments. Such losses are accounted for as bad debt expense. These allowances are established using historical write-off or adjustment information to project future experience and by considering the current creditworthiness of clients, any known specific collection problems, and an assessment of current industry and economic conditions. The Company evaluates the risks related to its trade receivables and contract assets by considering customer type, geography, and aging. The Company assumes that the current economic conditions as of the balance sheet date will remain unchanged over the remaining contractual lives of its trade receivables and contract assets. Actual experience may differ significantly from historical or expected loss results. The Company writes off account receivables and unbilled revenues when they become uncollectible, and any payments subsequently received are accounted for as recoveries.
16
5. Goodwill
Goodwill was $
On January 1, 2026, the Company realigned its reportable segments as described in Note 1, “Basis of Presentation” and further described in Note 11, "Segment Information". This change resulted in the allocation of $
The following table shows the changes in the carrying amount of goodwill for the nine months ended September 30, 2026:
|
|
U.S. Property & Casualty |
|
|
Broadspire |
|
|
International Operations |
|
|
Total |
|
||||
|
|
(In thousands) |
|
|||||||||||||
Balance at December 31, 2025: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Goodwill |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Accumulated impairment losses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net goodwill |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
2026 Activity: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reallocation |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Foreign currency effects |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Balance at September 30, 2026: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Goodwill |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Accumulated impairment losses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net goodwill |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
6. Income Taxes
The Company's consolidated effective income tax rate may change periodically due to changes in enacted statutory tax rates, changes in tax law or policy, changes in the composition of taxable income from the countries in which it operates, the Company's ability to utilize net operating loss and tax credit carryforwards, changes in permanent reinvestment assertions, and changes in unrecognized tax benefits.
The provision for income taxes on consolidated income before income taxes totaled $
The provision for income taxes on consolidated income before income taxes totaled $
17
7. Defined Benefit Pension Plans
Net periodic cost related to all of the Company's defined benefit pension plans recognized in the Company's unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2026 and 2025 included the following components:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
(in thousands) |
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
||||
Service cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expected return on assets |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Amortization of actuarial loss |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net periodic cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
For the three months ended September 30, 2026 and 2025, the non-service components of net periodic pension expense totaled $
8. Net Income Attributable to Shareholders of Crawford & Company per Common Share
The Company computes earnings per share of its non-voting Class A Common Stock ("CRD-A") and voting Class B Common Stock ("CRD-B") using the
The computations of basic net income attributable to shareholders of Crawford & Company per common share were as follows:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||||||||||
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
||||||||||||||||||||
(in thousands, except per share amounts) |
|
CRD-A |
|
|
CRD-B |
|
|
CRD-A |
|
|
CRD-B |
|
|
CRD-A |
|
|
CRD-B |
|
|
CRD-A |
|
|
CRD-B |
|
||||||||
Earnings per share - basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allocation of undistributed earnings |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Dividends paid |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common shareholders, basic |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding, basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share - basic |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
18
The computations of diluted net income attributable to shareholders of Crawford & Company per common share were as follows:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||||||||||
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
||||||||||||||||||||
(in thousands, except per share amounts) |
|
CRD-A |
|
|
CRD-B |
|
|
CRD-A |
|
|
CRD-B |
|
|
CRD-A |
|
|
CRD-B |
|
|
CRD-A |
|
|
CRD-B |
|
||||||||
Earnings per share - diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allocation of undistributed earnings |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Dividends paid |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common shareholders, diluted |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding, basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average effect of dilutive securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares outstanding, diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share - diluted |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Listed below are the shares excluded from the denominator in the preceding computation of diluted earnings per share for CRD-A:
|
|
Three Months Ended |
|
Nine Months Ended |
||||
(in thousands) |
|
September 30, |
|
September 30, |
|
September 30, |
|
September 30, |
Performance stock grants excluded because performance conditions have not been met (1) |
|
|
|
|
||||
(1)
The following table details shares issued during the three and nine months ended September 30, 2026 and 2025, including restricted shares that were returned prior to vesting. These shares are included from their dates of issuance in the weighted-average common shares used to compute basic and diluted earnings per share for CRD-A in the table above. There were no shares of CRD-B issued during any of these periods.
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
(in thousands) |
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
||||
CRD-A issued under the Non-Employee Director Stock Plan |
|
|
|
|
|
|
|
|
|
|
|
|
||||
CRD-A issued under the U.K. Sharesave Scheme |
|
|
|
|
|
|
|
|
|
|
|
|
||||
CRD-A issued under the Employee Stock Purchase Plan |
|
|
|
|
|
|
|
|
|
|
|
|
||||
CRD-A issued under the 2016 Omnibus Stock and Incentive Plan |
|
|
|
|
|
|
|
|
|
|
|
|
||||
On November 4, 2021, the Company’s Board of Directors (the "Board") authorized the repurchase of up to
Repurchases may be made from time to time in the open market or through privately negotiated transactions at prices and times determined by management, subject to applicable regulatory guidelines. The authorization does not obligate the Company to repurchase any shares and the Company may suspend or discontinue repurchase activities at any time.
19
On August 10, 2026, the Company entered into a Stock Purchase and Sale Agreement with Jesse C. Crawford, pursuant to which the Company purchased
During the nine months ended September 30, 2026, the Company repurchased
On September 30, 2026, the Company had
20
9. Accumulated Other Comprehensive Loss
Comprehensive (loss) income for the Company consists of the total of net income, foreign currency translation adjustments, and accrued pension. Foreign currency translation adjustments include the net realized gains from intra-entity loans that are long-term in nature of $
|
|
Three Months Ended September 30, 2026 |
|
|
Nine Months Ended September 30, 2026 |
|
||||||||||||||||||
(in thousands) |
|
Foreign |
|
|
Retirement |
|
|
AOCL |
|
|
Foreign |
|
|
Retirement |
|
|
AOCL |
|
||||||
Beginning balance |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Other comprehensive (loss) income before reclassifications |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Amounts reclassified from accumulated other comprehensive income to net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net current period other comprehensive (loss) income |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Ending balance |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
Three Months Ended September 30, 2025 |
|
|
Nine Months Ended September 30, 2025 |
|
||||||||||||||||||
(in thousands) |
|
Foreign |
|
|
Retirement |
|
|
AOCL |
|
|
Foreign |
|
|
Retirement |
|
|
AOCL |
|
||||||
Beginning balance |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Other comprehensive (loss) income before reclassifications |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
Amounts reclassified from accumulated other comprehensive income to net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net current period other comprehensive (loss) income |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Ending balance |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
(1) Retirement liabilities reclassified to net income are related to the amortization of actuarial losses and are included in "Other Loss, net" in the Company's unaudited Condensed Consolidated Statements of Operations. See Note 7, "Defined Benefit Pension Plans" for additional details.
The other comprehensive loss amounts attributable to noncontrolling interests presented in the Company's unaudited Condensed Consolidated Statements of Shareholders' Investment are foreign currency translation adjustments.
10. Fair Value Measurements
The Company did not have any assets or liabilities measured at fair value on a recurring basis as of September 30, 2026.
Fair Value Disclosures
There were
The fair values of accounts receivable, unbilled revenues, accounts payable and short-term borrowings approximate their respective carrying values due to the short-term maturities of the instruments. The interest rate on the Company's variable rate long-term debt resets at least every
21
Nonrecurring Fair Value Disclosures
Goodwill is an asset that represents the excess of the purchase price over the fair value of the separately identifiable net assets (tangible and intangible) acquired in certain business combinations. Indefinite-lived intangible assets consist of trade names associated with acquired businesses. Goodwill and indefinite-lived intangible assets are not amortized but are subject to impairment testing at least annually. Other long-lived assets consist primarily of property and equipment, capitalized software, and amortizable intangible assets related to customer relationships, technology, and trade names with finite lives. Other long-lived assets are evaluated for impairment when impairment indicators are identified.
The fair value of reporting units used in the Company's goodwill impairment analysis is estimated using a combination of the income and market approaches and is classified in Level 3 of the fair value hierarchy. See Note 5, "Goodwill" for additional information.
11. Segment Information
In connection with the realignment of management responsibilities, the Company updated its reportable segments effective January 1, 2026. The Company's reportable segments are comprised of the following:
The Company's
Segment operating earnings includes allocations of certain corporate and shared costs. If the Company changes its allocation methods or changes the types of costs that are allocated to its three reportable segments, prior period amounts presented in the current period financial statements are adjusted to conform to the current allocation process.
In the normal course of its business, the Company sometimes pays for certain out-of-pocket expenses that are thereafter reimbursed by its clients. Under GAAP, these out-of-pocket expenses and associated reimbursements are required to be included when reporting expenses and revenues, respectively, in the Company's consolidated results of operations. However, in evaluating segment results, Company management excludes these reimbursements and related expenses from segment results, as they offset each other.
22
Financial information as of and for the three and nine months ended September 30, 2026 and 2025 related to the Company's reportable segments is presented below:
|
|
Three Months Ended September 30, 2026 |
|
||||||||||
|
|
U.S. Property & Casualty |
|
Broadspire |
|
International |
|
Total |
|
||||
|
|
(In thousands) |
|
||||||||||
Revenues before reimbursements |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||
Less: |
|
|
|
|
|
|
|
|
|
||||
Segment Expenses: |
|
|
|
|
|
|
|
|
|
||||
Compensation |
|
|
|
|
|
|
|
|
|
||||
Benefits and payroll taxes |
|
|
|
|
|
|
|
|
|
||||
Non-employee labor |
|
|
|
|
|
|
|
|
|
||||
Total Compensation |
|
|
|
|
|
|
|
|
|
||||
Office rent and occupancy |
|
|
|
|
|
|
|
|
|
||||
Other office operating expense(1) |
|
|
|
|
|
|
|
|
|
||||
Depreciation |
|
|
|
|
|
|
|
|
|
||||
Professional fees |
|
|
|
|
|
|
|
|
|
||||
Cost of risk |
|
|
|
|
|
|
|
|
|
||||
Other, net(2) |
|
|
|
|
|
|
|
|
|
||||
Total Other Operating Expense |
|
|
|
|
|
|
|
|
|
||||
Allocated corporate, shared services, and administrative costs(3) |
|
|
|
|
|
|
|
|
|
||||
Total Segment Expenses |
|
|
|
|
|
|
|
|
|
||||
Segment Operating Earnings |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||
Reconciliation of segment operating earnings: |
|
|
|
|
|
|
|
|
|
||||
Unallocated corporate administrative costs(4) |
|
|
|
|
|
|
|
|
( |
) |
|||
Net corporate interest expense |
|
|
|
|
|
|
|
|
( |
) |
|||
Stock option expense |
|
|
|
|
|
|
|
|
( |
) |
|||
Amortization of acquisition-related intangible assets |
|
|
|
|
|
|
|
|
( |
) |
|||
Non-service pension costs |
|
|
|
|
|
|
|
|
( |
) |
|||
Income before income taxes |
|
|
|
|
|
|
|
|
|
||||
Income taxes |
|
|
|
|
|
|
|
|
( |
) |
|||
Net Income |
|
|
|
|
|
|
|
|
|
||||
Net Loss Attributable to Noncontrolling Interests |
|
|
|
|
|
|
|
|
|
||||
Net Income Attributable to Shareholders of Crawford & Company |
|
|
|
|
|
|
|
$ |
|
||||
23
|
|
Nine Months Ended September 30, 2026 |
|||
|
|
U.S. Property & Casualty |
Broadspire |
International |
Total |
|
|
(In thousands) |
|||
Revenues before reimbursements |
|
$ |
$ |
$ |
$ |
Less: |
|
|
|
|
|
Segment Expenses: |
|
|
|
|
|
Compensation |
|
||||
Benefits and payroll taxes |
|
||||
Non-employee labor |
|
||||
Total Compensation |
|
||||
Office rent and occupancy |
|
||||
Other office operating expense(1) |
|
||||
Depreciation |
|
||||
Professional fees |
|
||||
Cost of risk |
|
||||
Other, net(2) |
|
||||
Total Other Operating Expense |
|
||||
Allocated corporate, shared services, and administrative costs(3) |
|
||||
Total Segment Expenses |
|
||||
Segment Operating Earnings |
|
$ |
$ |
$ |
$ |
Reconciliation of segment operating earnings: |
|
|
|
|
|
Unallocated corporate administrative costs(4) |
|
|
|
|
( |
Net corporate interest expense |
|
|
|
|
( |
Stock option expense |
|
|
|
|
( |
Amortization of acquisition-related intangible assets |
|
|
|
|
( |
Non-service pension costs |
|
|
|
|
( |
Contingent earnout adjustments |
|
|
|
|
|
Loss on disposition of businesses, net(5) |
|
|
|
|
( |
Software impairment |
|
|
|
|
( |
Income before income taxes |
|
|
|
|
|
Income taxes |
|
|
|
|
( |
Net Income |
|
|
|
|
|
Net Loss Attributable to Noncontrolling Interests |
|
|
|
|
|
Net Income Attributable to Shareholders of Crawford & Company |
|
|
|
|
$ |
24
|
|
Three Months Ended September 30, 2025 |
|||
|
|
U.S. Property & Casualty |
Broadspire |
International |
Total |
|
|
(In thousands) |
|||
Revenues before reimbursements |
|
$ |
$ |
$ |
$ |
Less: |
|
|
|
|
|
Segment Expenses: |
|
|
|
|
|
Compensation |
|
||||
Benefits and payroll taxes |
|
||||
Non-employee labor |
|
||||
Total Compensation |
|
||||
Office rent and occupancy |
|
||||
Other office operating expense(1) |
|
||||
Depreciation |
|
||||
Professional fees |
|
||||
Cost of risk |
|
||||
Other, net(2) |
|
( |
( |
( |
|
Total Other Operating Expense |
|
||||
Allocated corporate, shared services, and administrative costs(3) |
|
||||
Total Segment Expenses |
|
||||
Segment Operating Earnings |
|
$ |
$ |
$ |
$ |
Reconciliation of segment operating earnings: |
|
|
|
|
|
Unallocated corporate administrative costs(4) |
|
|
|
|
( |
Net corporate interest expense |
|
|
|
|
( |
Non-service pension costs |
|
|
|
|
( |
Stock option expense |
|
|
|
|
( |
Amortization of acquisition-related intangible assets |
|
|
|
|
( |
Contingent earnout adjustments |
|
|
|
|
( |
Income before income taxes |
|
|
|
|
|
Income taxes |
|
|
|
|
( |
Net Income |
|
|
|
|
|
Net Loss Attributable to Noncontrolling Interests |
|
|
|
|
|
Net Income Attributable to Shareholders of Crawford & Company |
|
|
|
|
$ |
25
|
|
Nine Months Ended September 30, 2025 |
|||
|
|
U.S. Property & Casualty |
Broadspire |
International |
Total |
|
|
(In thousands) |
|||
Revenues before reimbursements |
|
$ |
$ |
$ |
$ |
Less: |
|
|
|
|
|
Segment Expenses: |
|
|
|
|
|
Compensation |
|
||||
Benefits and payroll taxes |
|
||||
Non-employee labor |
|
||||
Total Compensation |
|
||||
Office rent and occupancy |
|
||||
Other office operating expense(1) |
|
||||
Depreciation |
|
||||
Professional fees |
|
||||
Cost of risk |
|
||||
Other, net(2) |
|
||||
Total Other Operating Expense |
|
||||
Allocated corporate, shared services, and administrative costs(3) |
|
||||
Total Segment Expenses |
|
||||
Segment Operating Earnings |
|
$ |
$ |
$ |
$ |
Reconciliation of segment operating earnings: |
|
|
|
|
|
Unallocated corporate administrative costs(4) |
|
|
|
|
( |
Net corporate interest expense |
|
|
|
|
( |
Non-service pension costs |
|
|
|
|
( |
Stock option expense |
|
|
|
|
( |
Amortization of acquisition-related intangible assets |
|
|
|
|
( |
Contingent earnout adjustments |
|
|
|
|
( |
Income before income taxes |
|
|
|
|
|
Income taxes |
|
|
|
|
( |
Net Income |
|
|
|
|
|
Net Income Attributable to Noncontrolling Interests |
|
|
|
|
( |
Net Income Attributable to Shareholders of Crawford & Company |
|
|
|
|
$ |
26
Segment assets consist of accounts receivable, less allowance for expected credit losses, unbilled revenues at estimated billable amounts, goodwill and intangible assets arising from business acquisitions, net. Assets at September 30, 2026 and December 31, 2025 were as follows:
|
|
U.S. Property & Casualty |
|
|
Broadspire |
|
|
International Operations |
|
|
Total |
|
||||
|
|
(In thousands) |
|
|||||||||||||
September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues by geographic region and major service line for the U.S. Property & Casualty, Broadspire, and International Operations segments are shown in Note 3, "Revenue Recognition."
Capital expenditures for the three and nine months ended September 30, 2026 and 2025 are shown in the following table:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
(in thousands) |
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
||||
U.S. Property & Casualty |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Broadspire |
|
|
|
|
|
|
|
|
|
|
|
|
||||
International Operations |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total capital expenditures |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The total of the Company's reportable segments' revenues before reimbursements reconciled to total consolidated revenues for the three and nine months ended September 30, 2026 and 2025 was as follows:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
(in thousands) |
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
||||
Segments' revenues before reimbursements |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Reimbursements |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total consolidated revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Company's reportable segments' total operating earnings reconciled to consolidated income before income taxes for the three and nine months ended September 30, 2026 and 2025 were as follows:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
(in thousands) |
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
||||
Operating earnings of all reportable segments |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Unallocated corporate and shared costs and credits |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net corporate interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Stock option expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Amortization of acquisition-related intangible assets |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Non-service pension costs |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Loss on disposition of businesses, net |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Software impairment |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Contingent earnout adjustments |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Income before income taxes |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
27
The Company's reportable segments' total assets reconciled to consolidated total assets of the Company at September 30, 2026 and December 31, 2025 are presented in the following table:
|
|
September 30, |
|
|
December 31, |
|
||
|
|
(In thousands) |
|
|||||
Assets of reportable segments |
|
$ |
|
|
$ |
|
||
Corporate assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
|
|
|
|
|
||
Income taxes receivable |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
|
||
Net property and equipment |
|
|
|
|
|
|
||
Operating lease right-of-use asset, net |
|
|
|
|
|
|
||
Capitalized software costs, net |
|
|
|
|
|
|
||
Deferred income tax assets |
|
|
|
|
|
|
||
Other noncurrent assets |
|
|
|
|
|
|
||
Total corporate assets |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
12. Commitments and Contingencies
As part of the Company's credit facility, the Company maintains a letter of credit to satisfy certain of its own contractual requirements. On September 30, 2026, the aggregate committed amount of letters of credit outstanding under the credit facility was $
From time to time, the Company enters into certain agreements for the purchase or sale of assets or businesses that contain provisions that may require the Company to make additional payments in the future depending upon the achievement of specified operating results of the acquired company or provide the Company with an option or similar right to purchase additional assets.
In the normal course of its business, the Company is sometimes named as a defendant or responsible party in suits or other actions by insureds or claimants contesting decisions made by the Company or its clients with respect to the settlement of claims. Additionally, certain clients of the Company have in the past brought, and may, in the future bring, claims for indemnification on the basis of alleged actions by the Company, its agents, or its employees in rendering services to clients. The majority of these claims are of the type covered by insurance maintained by the Company. However, the Company is responsible for the deductibles and self-insured retentions under various insurance coverages. In the opinion of Company management, adequate provisions have been made for such known and probable risks. No assurances can be provided, however, that the result of any such action, claim or proceeding, now known or occurring in the future, will not result in a material adverse effect on its business, financial condition or results of operations.
The Company is subject to numerous federal, state, and foreign labor, employment, worker health and safety, antitrust and competition, environmental and consumer protection, import/export, anti-corruption, and other laws. From time to time the Company faces claims and investigations by employees, former employees, and governmental entities under such laws or employment contracts with such employees or former employees. Such claims, investigations, negotiations, and any litigation involving the Company could divert management's time and attention from the Company's business operations and could potentially result in substantial costs of defense, settlement or other disposition, which could have a material adverse effect on the Company's results of operations, financial position, and cash flows. In the opinion of Company management, adequate provisions have been made for any items that are probable and reasonably estimable.
28
13. Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and marketable securities with original maturities of three months or less. The fair value of cash and cash equivalents approximates carrying value due to their short-term nature. Cash balances that are legally restricted as to usage or withdrawal are separately included in "Prepaid expenses and other current assets" within the Company's unaudited Condensed Consolidated Balance Sheets. Additionally, Restricted cash includes the $
(In thousands) |
|
September 30, 2026 |
|
|
December 31, 2025 |
|
|
September 30, 2025 |
|
|
December 31, 2024 |
|
||||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Restricted cash within prepaid expenses and other current assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total cash, cash equivalents and restricted cash |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
14. Restructuring and Other Costs, Net
The Company did not incur any restructuring costs during the nine months ended September 30, 2026 and 2025. The Company incurred pre-tax restructuring costs of $
The Company records restructuring charges when they are probable and estimable. Restructuring costs are accrued when the Company announces a restructuring event or communicates the employee termination, and the amounts can be reasonably estimated.
The following table summarizes the remaining costs in the Company’s accrued restructuring balances as of September 30, 2026. Severance and termination costs are included in “Accrued compensation and related costs” and
Restructuring Charges |
|
Accrued compensation and related costs |
|
|
Operating lease liability |
|
|
Other accrued liabilities |
|
|
Total |
|
||||
|
|
(In thousands) |
|
|||||||||||||
Balance at December 31, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Additions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments to accruals |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Cash payments |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at September 30, 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
15. Client Funds
The Company maintains funds in custodial accounts at financial institutions to administer claims for certain clients. These funds are not available for the Company's general operating activities and, as such, have not been recorded in the accompanying unaudited Condensed Consolidated Balance Sheets. The amount of these funds totaled $
29
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Statement Concerning Forward-Looking Statements
This report contains forward-looking statements within the meaning of that term in the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Statements contained in this report that are not statements of historical fact are forward-looking statements made pursuant to the "safe harbor" provisions thereof. These statements may relate to, among other things, our expected future operating results and financial condition, our ability to grow our revenues and reduce our operating expenses, expectations regarding our anticipated contributions to our underfunded defined benefit pension plans, collectability of our billed and unbilled accounts receivable, financial results from our recently completed acquisitions, our continued compliance with the financial and other covenants contained in our financing agreements, and our other long-term capital resource and liquidity requirements. These statements may also relate to our business strategies, goals and expectations concerning our market position, future operations, margins, case and project volumes, profitability, contingencies, liquidity position, and capital resources. The words "anticipate", "believe", "could", "would", "should", "estimate", "expect", "intend", "may", "plan", "goal", "strategy", "predict", "project", "will" and similar terms and phrases, or the negatives thereof, identify forward-looking statements contained in this report.
Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate and the forward-looking statements based on these assumptions could be incorrect. Our operations and the forward-looking statements related to our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially adversely affect our financial condition and results of operations, and whether the forward-looking statements ultimately prove to be correct. Included among the risks and uncertainties we face are risks related to the following:
30
As a result, undue reliance should not be placed on any forward-looking statements. Actual results and trends in the future may differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements speak only as of the date they are made and we undertake no obligation to publicly update any of these forward-looking statements in light of new information or future events.
The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with (i) our unaudited condensed consolidated financial statements and accompanying notes thereto for the three and nine months ended September 30, 2026 and 2025, and as of September 30, 2026, and December 31, 2025, contained in Item 1 of this Quarterly Report on Form 10-Q, and (ii) our Annual Report on Form 10-K for the year ended December 31, 2025. As described in Note 1, "Basis of Presentation," the financial results of our operations outside of the U.S., Canada, the Caribbean, and certain subsidiaries in the Philippines are included in our consolidated financial statements on a two-month delayed basis (fiscal year-end of October 31) as permitted by U.S. generally accepted accounting principles ("GAAP") in order to provide sufficient time for accumulation of their results.
Results of Operations
Consolidated revenues before reimbursements decreased $0.5 million, or (0.2)%, for the three months ended September 30, 2026, compared with the same period of 2025. This decrease was primarily driven by lower volumes in our U.S. Property & Casualty reportable segment, a reduction in revenues within our Broadspire reportable segment, as well as revenue reductions due to the disposal of the Crawford Legal Services businesses in our International Operations reportable segment. Changes in foreign exchange rates increased our consolidated revenues before reimbursements by $7.9 million, or 2.4%, for the three months ended September 30, 2026 and increased revenues by $23.5 million, or 2.4%, for the nine months ended September 30, 2026, as compared with the prior year periods. To illustrate this impact, segment revenues are presented below, using a constant exchange rate, for the three and nine months ended September 30, 2026.
|
|
Three Months Ended |
|
|
Three Months Ended |
|
||||||||||||||
|
|
|
|
|
Based on exchange rates for the three months ended September 30, 2025 |
|
||||||||||||||
(in thousands, except percentages) |
|
September 30, |
|
|
September 30, |
|
|
Variance |
|
|
September 30, |
|
|
% Variance |
|
|||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. Property & Casualty |
|
$ |
75,953 |
|
|
$ |
76,227 |
|
|
|
(0.4 |
)% |
|
$ |
75,953 |
|
|
|
(0.4 |
)% |
Broadspire |
|
|
108,965 |
|
|
|
110,618 |
|
|
|
(1.5 |
)% |
|
|
108,965 |
|
|
|
(1.5 |
)% |
International Operations |
|
|
136,710 |
|
|
|
135,326 |
|
|
|
1.0 |
% |
|
|
128,769 |
|
|
|
(4.8 |
)% |
Total revenues before reimbursements |
|
|
321,628 |
|
|
|
322,171 |
|
|
|
(0.2 |
)% |
|
|
313,687 |
|
|
|
(2.6 |
)% |
Reimbursements |
|
|
8,279 |
|
|
|
10,636 |
|
|
|
(22.2 |
)% |
|
|
8,265 |
|
|
|
(22.3 |
)% |
Total Revenues |
|
$ |
329,907 |
|
|
$ |
332,807 |
|
|
|
(0.9 |
)% |
|
$ |
321,952 |
|
|
|
(3.3 |
)% |
|
Nine Months Ended |
|
Nine Months Ended |
||||||
|
|
|
Based on exchange rates for the nine months ended September 30, 2025 |
||||||
(in thousands, except percentages) |
September 30, |
|
September 30, |
|
Variance |
|
September 30, |
|
% Variance |
Revenues: |
|
|
|
|
|
|
|
|
|
U.S. Property & Casualty |
$222,903 |
|
$240,917 |
|
(7.5)% |
|
$222,903 |
|
(7.5)% |
Broadspire |
323,146 |
|
322,448 |
|
0.2% |
|
323,146 |
|
0.2% |
International Operations |
406,543 |
|
393,835 |
|
3.2% |
|
383,069 |
|
(2.7)% |
Total revenues before reimbursements |
952,592 |
|
957,200 |
|
(0.5)% |
|
929,118 |
|
(2.9)% |
Reimbursements |
27,465 |
|
33,541 |
|
(18.1)% |
|
26,485 |
|
(21.0)% |
Total Revenues |
$980,057 |
|
$990,741 |
|
(1.1)% |
|
$955,603 |
|
(3.5)% |
31
Excluding foreign currency impacts, consolidated revenues before reimbursements decreased $8.5 million, or (2.6)%, for the three months ended September 30, 2026 and decreased $28.1 million, or (2.9)%, for the nine months ended September 30, 2026 compared with the same periods of 2025. Revenues from the U.S. Property & Casualty segment decreased in the 2026 third quarter and year to date period primarily due to a continued decrease in staff augmentation and weather-driven services within our Catastrophe Services and Contractor Connection businesses. Revenues from the Broadspire segment decreased in all service lines in the 2026 third quarter compared with the same period in 2025. Revenues from the Broadspire segment increased for the nine months ended September 30, 2026 compared to the prior year period due to increases in the Claims Management and Medical Management service lines, offset by a decrease in Subrogation revenues. Excluding foreign currency impacts, revenues from the International Operations segment decreased in the 2026 third quarter compared with the same period in 2025 due to reductions in the U.K., Australia, Latin America, Europe and Asia, partially offset by revenue increases in Canada. Excluding foreign currency impacts, revenues from the International Operations segment decreased in the nine months ended September 30, 2026 as compared to the same period in 2025 due to reductions in the U.K., Europe, and Latin America, partially offset by revenue increases in Australia, Canada, and Asia.
Overall, there were increases in cases received of 6.0% and 2.2% for the three and nine months ended September 30, 2026, respectively. Within our U.S. Property & Casualty segment, cases decreased slightly for the three months ended September 30, 2026 as a result of weather-related reductions in Catastrophe Services and Global Technical Services, partially offset by increases in Claims Solutions and Contractor Connection. Cases decreased for the nine months ended September 30, 2026 as a result of a weather-related reduction in all service lines within our U.S. Property & Casualty segment. There was a slight increase in cases within our Broadspire segment for the three months ended September 30, 2026 as compared to the prior year period due to an increase in cases within our Subrogation service line as well as new disability clients within our Claims Management, partially offset by decreased casualty claims within our Claims Management service line and decreased utilization review claims within our Medical Management Service Line. For the nine months ended September 30, 2026, Broadspire cases increased due primarily to increases in new disability clients within our Claims Management service line, partially offset by a decline in Subrogation cases and decreased casualty claims within our Claims Management service line. Cases within our International Operations segment increased for the three and nine months ended September 30, 2026, as compared to the prior year period, primarily due to an increase in high-frequency, low-severity cases in Spain and an increase in weather related claims in Canada.
Cases received are presented below by segment for the three and nine months ended September 30, 2026 and 2025:
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
(whole numbers, except percentages) |
|
September 30, |
|
September 30, |
|
Variance |
|
September 30, |
|
September 30, |
|
Variance |
U.S. Property & Casualty |
|
88,367 |
|
89,932 |
|
(1.7)% |
|
246,963 |
|
280,366 |
|
(11.9)% |
Broadspire |
|
149,727 |
|
149,213 |
|
0.3% |
|
459,105 |
|
446,048 |
|
2.9% |
International Operations |
|
149,162 |
|
126,230 |
|
18.2% |
|
448,435 |
|
402,867 |
|
11.3% |
Total Crawford Cases Received |
|
387,256 |
|
365,375 |
|
6.0% |
|
1,154,503 |
|
1,129,281 |
|
2.2% |
To illustrate exposure to the impact of changes in foreign currencies, revenues before reimbursements are presented below by denominated currency for the three and nine months ended September 30, 2026:
|
|
|
|
Three Months Ended |
|
|||||||||||||
|
|
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
||||||||||
(in thousands) |
|
|
|
USD equivalent |
|
|
% of total |
|
|
USD equivalent |
|
|
% of total |
|
||||
U.S. |
|
USD |
|
$ |
184,918 |
|
|
|
57.5 |
% |
|
$ |
186,845 |
|
|
|
58.0 |
% |
U.K. |
|
GBP |
|
|
41,036 |
|
|
|
12.8 |
% |
|
|
45,476 |
|
|
|
14.1 |
% |
Canada |
|
CAD |
|
|
25,222 |
|
|
|
7.8 |
% |
|
|
22,473 |
|
|
|
7.0 |
% |
Australia |
|
AUD |
|
|
26,198 |
|
|
|
8.1 |
% |
|
|
24,116 |
|
|
|
7.5 |
% |
Europe |
|
EUR |
|
|
18,365 |
|
|
|
5.7 |
% |
|
|
17,237 |
|
|
|
5.3 |
% |
Rest of World |
|
|
|
|
25,889 |
|
|
|
8.1 |
% |
|
|
26,024 |
|
|
|
8.1 |
% |
Total Revenues, before reimbursements |
|
|
|
$ |
321,628 |
|
|
|
|
|
$ |
322,171 |
|
|
|
|
||
|
|
|
|
Nine Months Ended |
||||||
|
|
|
|
September 30, 2026 |
|
September 30, 2025 |
||||
(in thousands) |
|
|
|
USD equivalent |
|
% of total |
|
USD equivalent |
|
% of total |
U.S. |
|
USD |
|
$546,049 |
|
57.3% |
|
$563,365 |
|
58.9% |
U.K. |
|
GBP |
|
127,220 |
|
13.4% |
|
134,140 |
|
14.0% |
Canada |
|
CAD |
|
72,691 |
|
7.6% |
|
67,518 |
|
7.1% |
Australia |
|
AUD |
|
72,327 |
|
7.6% |
|
64,771 |
|
6.8% |
Europe |
|
EUR |
|
54,255 |
|
5.7% |
|
49,911 |
|
5.2% |
Rest of World |
|
|
|
80,050 |
|
8.4% |
|
77,495 |
|
8.0% |
Total Revenues, before reimbursements |
|
|
|
$952,592 |
|
|
|
$957,200 |
|
|
32
Costs of services provided, before reimbursements, decreased $5.4 million, or (2.4)%, for the three months ended September 30, 2026 primarily due to lower operating costs in the International Operations segment. Costs of services provided, before reimbursements decreased $4.2 million, or (0.6)%, for the nine months ended September 30, 2026, as compared to the 2025 period. As a percentage of revenues before reimbursements, the decrease in costs of services was consistent with the decrease in revenues.
Selling, general, and administrative expenses (“SG&A”) increased $2.3 million, or 3.2%, in the three months ended September 30, 2026 as compared with the 2025 period, primarily due to increases in cloud software costs, E&O insurance, and bad debt expense. SG&A decreased $4.9 million, or (2.2)%, during the nine months ended September 30, 2026 compared with the same period in 2025. The decrease was primarily due to a $3.1 million one-time indirect tax expense incurred in 2025 and lower compensation costs, partially offset by a $2.3 million software impairment charge in the second quarter of 2026.
Operating Earnings of our Operating Segments
We believe that a discussion and analysis of the segment operating earnings of our operating segments is helpful in understanding the results of our operations. Operating earnings is our segment measure of profitability presented in conformity with the Financial Accounting Standards Board's ("FASB") Accounting Standards Codification ("ASC") Topic 280 "Segment Reporting." Operating earnings is the primary financial performance measure used by our senior management and CODM to evaluate the financial performance of our operating segments and make resource allocation and certain compensation decisions.
We believe operating earnings is a measure that is useful for others to evaluate segment operating performance using the same criteria used by our senior management and CODM. Segment operating earnings represents segment earnings, including the direct and indirect costs of certain administrative functions required to operate our business, but excludes unallocated corporate and shared costs and credits, net corporate interest expense, stock option expense, amortization of acquisition-related intangible assets, contingent earnout adjustments, non-service pension costs, income taxes, loss on disposal of businesses, net, software impairment, and net (income) loss attributable to noncontrolling interests.
Administrative functions such as finance, human resources, information technology, quality and compliance, exist both in a centralized shared-service arrangement and within certain operations. Each of these functions is managed by centralized management and the costs of those services are allocated to the segments as indirect costs based on usage.
In addition, we believe that a non-GAAP discussion and analysis of segment gross profit is helpful in understanding the results of our segment operations, excluding indirect centralized administrative support costs. Our discussion and analysis of segment gross profit includes the revenues and direct expenses of each segment. Segment gross profit is defined as revenues, less direct costs, which exclude indirect centralized administrative support costs allocated to the business.
Income taxes, net corporate interest expense, stock option expense, amortization of acquisition-related intangible assets, contingent earnout adjustments, and non-service pension costs 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. Contingent earnout adjustments represent fair value adjustments of earnout liabilities arising from recent acquisitions. Amortization expense is a non-cash expense for finite-lived customer-relationship and trade name intangible assets acquired in business combinations. 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. The service cost component of the U.K. plans remains in compensation expense. The exclusion of this measurement is intended to exclude market volatility related to an expense that is non-operating in nature and not related to business performance. None of these costs relate directly to the performance of our services or operating activities and, therefore, are excluded from segment operating earnings in order to better assess the results of each segment's operating activities on a consistent basis.
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, certain payroll tax and benefits, and certain self-insurance costs and recoveries that are not allocated to our individual operating segments.
Additional discussion and analysis of our income taxes, net corporate interest expense, stock option expense, amortization of acquisition-related intangible assets, contingent earnout adjustments, non-service pension costs, and unallocated corporate and shared costs, net follows the discussion and analysis of the results of operations of our three operating segments.
33
Segment Revenues
In the normal course of business, our segments incur certain out-of-pocket expenses that are thereafter reimbursed by our clients. Under 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 as we are considered the principal in these transactions. In the discussion and analysis of results of operations which follows, we do not include a gross up of 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 statements of operations. Unless noted in the following discussion and analysis, revenue amounts exclude reimbursements for out-of-pocket expenses.
Our segment results are impacted by changes in foreign exchange rates. We believe that a non-GAAP discussion and analysis of segment revenues before reimbursements by major region, based on actual exchange rates and using a constant exchange rate, is helpful in understanding the results of our segment operations.
Segment Expenses
Our discussion and analysis of segment operating expenses is comprised of two components: "Direct Compensation, Fringe Benefits & Non-Employee Labor" and "Expenses Other Than Direct Compensation, Fringe Benefits & Non-Employee Labor."
"Direct Compensation, Fringe Benefits & Non-Employee Labor" includes direct compensation, payroll taxes, and benefits provided to the employees of each segment, as well as payments to outsourced service providers that augment our staff in each segment. As a service company, these costs represent our most significant and variable operating expenses.
Costs of administrative functions, including direct compensation, payroll taxes, and benefits, are managed centrally and considered indirect costs. The allocated indirect costs of our shared-services infrastructure are allocated to each segment based on usage and reflected within "Expenses Other Than Direct Compensation, Fringe Benefits & Non-Employee Labor" of each segment.
In addition to allocated corporate and shared costs, "Expenses Other Than Direct Compensation, Fringe Benefits & Non-Employee Labor" includes travel and entertainment, office rent and occupancy costs, automobile expenses, office operating expenses, data processing costs, cost of risk, professional fees, and amortization and depreciation expense other than amortization of acquisition-related intangible assets.
Unless noted in the following discussion and analysis, revenue amounts exclude reimbursements for out-of-pocket expenses and expense amounts exclude reimbursed out-of-pocket expenses.
Segment Performance Indicators
We typically earn our revenues on an individual fee-per-claim basis for claims management services we provide to carriers, brokers and corporates. Accordingly, the volume of claim referrals to us is a key driver of our revenues. We believe that a discussion and analysis of the segment unit volumes, as measured by cases received, is helpful in understanding the results of our operations.
34
Operating results for our U.S. Property & Casualty, Broadspire, and International Operations segments reconciled to net income before income taxes and net income attributable to shareholders of Crawford & Company were as follows:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
(in thousands, except percentages) |
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Property & Casualty |
|
$ |
75,953 |
|
|
$ |
76,227 |
|
|
$ |
222,903 |
|
|
$ |
240,917 |
|
Broadspire |
|
|
108,965 |
|
|
|
110,618 |
|
|
|
323,146 |
|
|
|
322,448 |
|
International Operations |
|
|
136,710 |
|
|
|
135,326 |
|
|
|
406,543 |
|
|
|
393,835 |
|
Total Revenues before reimbursements |
|
|
321,628 |
|
|
|
322,171 |
|
|
|
952,592 |
|
|
|
957,200 |
|
Reimbursements |
|
|
8,279 |
|
|
|
10,636 |
|
|
|
27,465 |
|
|
|
33,541 |
|
Total Revenues |
|
$ |
329,907 |
|
|
$ |
332,807 |
|
|
$ |
980,057 |
|
|
$ |
990,741 |
|
Direct Compensation, Fringe Benefits & Non-Employee Labor: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Property & Casualty |
|
$ |
46,872 |
|
|
$ |
47,170 |
|
|
$ |
137,854 |
|
|
$ |
148,958 |
|
% of related revenues before reimbursements |
|
|
61.7 |
% |
|
|
61.9 |
% |
|
|
61.8 |
% |
|
|
61.8 |
% |
Broadspire |
|
|
62,011 |
|
|
|
62,828 |
|
|
|
182,959 |
|
|
|
181,865 |
|
% of related revenues before reimbursements |
|
|
56.9 |
% |
|
|
56.8 |
% |
|
|
56.6 |
% |
|
|
56.4 |
% |
International Operations |
|
|
88,132 |
|
|
|
91,119 |
|
|
|
267,460 |
|
|
|
265,751 |
|
% of related revenues before reimbursements |
|
|
64.5 |
% |
|
|
67.3 |
% |
|
|
65.8 |
% |
|
|
67.5 |
% |
Total |
|
$ |
197,015 |
|
|
$ |
201,117 |
|
|
$ |
588,273 |
|
|
$ |
596,574 |
|
% of Revenues before reimbursements |
|
|
61.3 |
% |
|
|
62.4 |
% |
|
|
61.8 |
% |
|
|
62.3 |
% |
Expenses Other than Direct Compensation, Fringe Benefits & Non-Employee Labor: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Property & Casualty |
|
$ |
19,381 |
|
|
$ |
19,257 |
|
|
$ |
60,578 |
|
|
$ |
64,928 |
|
% of related revenues before reimbursements |
|
|
25.5 |
% |
|
|
25.3 |
% |
|
|
27.2 |
% |
|
|
27.0 |
% |
Broadspire |
|
|
33,980 |
|
|
|
32,504 |
|
|
|
100,627 |
|
|
|
99,118 |
|
% of related revenues before reimbursements |
|
|
31.2 |
% |
|
|
29.4 |
% |
|
|
31.1 |
% |
|
|
30.7 |
% |
International Operations |
|
|
37,910 |
|
|
|
36,555 |
|
|
|
113,556 |
|
|
|
110,881 |
|
% of related revenues before reimbursements |
|
|
27.7 |
% |
|
|
27.0 |
% |
|
|
27.9 |
% |
|
|
28.2 |
% |
Total before reimbursements |
|
|
91,271 |
|
|
|
88,316 |
|
|
|
274,761 |
|
|
|
274,927 |
|
% of Revenues before reimbursements |
|
|
28.4 |
% |
|
|
27.4 |
% |
|
|
28.8 |
% |
|
|
28.7 |
% |
Reimbursements |
|
|
8,279 |
|
|
|
10,636 |
|
|
|
27,465 |
|
|
|
33,541 |
|
Total |
|
$ |
99,550 |
|
|
$ |
98,952 |
|
|
$ |
302,226 |
|
|
$ |
308,468 |
|
% of Revenues |
|
|
31.0 |
% |
|
|
29.7 |
% |
|
|
30.8 |
% |
|
|
31.1 |
% |
Segment Operating Earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Property & Casualty |
|
$ |
9,700 |
|
|
$ |
9,800 |
|
|
$ |
24,471 |
|
|
$ |
27,031 |
|
% of related revenues before reimbursements |
|
|
12.8 |
% |
|
|
12.9 |
% |
|
|
11.0 |
% |
|
|
11.2 |
% |
Broadspire |
|
|
12,974 |
|
|
|
15,286 |
|
|
|
39,560 |
|
|
|
41,465 |
|
% of related revenues before reimbursements |
|
|
11.9 |
% |
|
|
13.8 |
% |
|
|
12.2 |
% |
|
|
12.9 |
% |
International Operations |
|
|
10,668 |
|
|
|
7,652 |
|
|
|
25,527 |
|
|
|
17,203 |
|
% of related revenues before reimbursements |
|
|
7.8 |
% |
|
|
5.7 |
% |
|
|
6.3 |
% |
|
|
4.4 |
% |
(Deduct) Add: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unallocated corporate and shared costs, net |
|
|
(4,510 |
) |
|
|
(6,147 |
) |
|
|
(17,583 |
) |
|
|
(19,268 |
) |
Net corporate interest expense |
|
|
(2,893 |
) |
|
|
(3,788 |
) |
|
|
(8,390 |
) |
|
|
(11,590 |
) |
Stock option expense |
|
|
(135 |
) |
|
|
(52 |
) |
|
|
(435 |
) |
|
|
(450 |
) |
Amortization of acquisition-related intangible assets |
|
|
(1,757 |
) |
|
|
(2,126 |
) |
|
|
(5,323 |
) |
|
|
(5,751 |
) |
Non-service pension costs |
|
|
(1,720 |
) |
|
|
(2,363 |
) |
|
|
(5,158 |
) |
|
|
(7,050 |
) |
Loss on disposition of businesses, net |
|
|
— |
|
|
|
— |
|
|
|
(1,285 |
) |
|
|
— |
|
Software impairment |
|
|
— |
|
|
|
— |
|
|
|
(2,294 |
) |
|
|
— |
|
Contingent earnout adjustments |
|
|
— |
|
|
|
(60 |
) |
|
|
180 |
|
|
|
(503 |
) |
Income before income taxes |
|
|
22,327 |
|
|
|
18,202 |
|
|
|
49,270 |
|
|
|
41,087 |
|
Provision for income taxes |
|
|
(7,327 |
) |
|
|
(5,813 |
) |
|
|
(15,937 |
) |
|
|
(14,138 |
) |
Net income |
|
|
15,000 |
|
|
|
12,389 |
|
|
|
33,333 |
|
|
|
26,949 |
|
Net loss (income) attributable to noncontrolling interests |
|
|
8 |
|
|
|
19 |
|
|
|
28 |
|
|
|
(75 |
) |
Net income attributable to shareholders of Crawford & Company |
|
$ |
15,008 |
|
|
$ |
12,408 |
|
|
$ |
33,361 |
|
|
$ |
26,874 |
|
35
U.S. PROPERTY & CASUALTY SEGMENT
Operating earnings in our U.S. Property & Casualty segment totaled $9.7 million, or 12.8% of revenues before reimbursements, for the three months ended September 30, 2026, compared with 2025 operating earnings of $9.8 million, or 12.9% of revenues before reimbursements. For the nine months ended September 30, 2026, our U.S. Property & Casualty segment reported operating earnings of $24.5 million, or 11.0% of revenues before reimbursements, compared with 2025 operating earnings of $27.0 million, or 11.2% of revenues before reimbursements. The decrease in operating earnings in the three and nine months ended September 30, 2026 as compared to the prior year periods was driven by a decline in revenues within Catastrophe Services, offsetting benefits from reduced centralized indirect support costs.
Excluding centralized indirect support costs, gross profit decreased from $22.6 million, or 29.6% of revenues before reimbursements in 2025, to $21.3 million, or 28.0% of revenues before reimbursements, in the three months ended September 30, 2026. For the nine months ended September 30, 2026, gross profit decreased from $67.0 million or 27.8% of revenues before reimbursements in 2025 to $61.1 million, or 27.4% of revenues before reimbursements, primarily due to revenue declines within the Catastrophe Services and Contractor Connection service lines, partially offset by a reduction in office rent and software amortization.
Operating results for our U.S. Property & Casualty segment, including gross profit, for the three and nine months ended September 30, 2026 and 2025 were as follows:
|
|
In thousands (except percentages) |
|
|||||||||
Three Months Ended September 30, |
|
2026 |
|
|
2025 |
|
|
Variance |
|
|||
Revenues |
|
$ |
75,953 |
|
|
$ |
76,227 |
|
|
|
(0.4 |
)% |
Direct expenses |
|
|
54,676 |
|
|
|
53,633 |
|
|
|
1.9 |
% |
Gross profit |
|
|
21,277 |
|
|
|
22,594 |
|
|
|
(5.8 |
)% |
Indirect expenses |
|
|
11,577 |
|
|
|
12,794 |
|
|
|
(9.5 |
)% |
Total U.S. Property & Casualty Operating Earnings |
|
$ |
9,700 |
|
|
$ |
9,800 |
|
|
|
(1.0 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Gross profit margin |
|
|
28.0 |
% |
|
|
29.6 |
% |
|
|
(1.6 |
)% |
Operating margin |
|
|
12.8 |
% |
|
|
12.9 |
% |
|
|
(0.1 |
)% |
|
|
In thousands (except percentages) |
|
|||||||||
Nine Months Ended September 30, |
|
2026 |
|
|
2025 |
|
|
Variance |
|
|||
Revenues |
|
$ |
222,903 |
|
|
$ |
240,917 |
|
|
|
(7.5 |
)% |
Direct expenses |
|
|
161,826 |
|
|
|
173,957 |
|
|
|
(7.0 |
)% |
Gross profit |
|
|
61,077 |
|
|
|
66,960 |
|
|
|
(8.8 |
)% |
Indirect expenses |
|
|
36,606 |
|
|
|
39,929 |
|
|
|
(8.3 |
)% |
Total U.S. Property & Casualty Operating Earnings |
|
$ |
24,471 |
|
|
$ |
27,031 |
|
|
|
(9.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Gross profit margin |
|
|
27.4 |
% |
|
|
27.8 |
% |
|
|
(0.4 |
)% |
Operating margin |
|
|
11.0 |
% |
|
|
11.2 |
% |
|
|
(0.2 |
)% |
36
Revenues before Reimbursements
U.S. Property & Casualty segment revenues are primarily derived from the property and casualty insurance company markets within the U.S. Revenues before reimbursements by service line for the three and nine months ended September 30, 2026 and 2025 were as follows:
|
|
Three Months Ended |
|
|||||||||
(in thousands, except percentages) |
|
September 30, |
|
|
September 30, |
|
|
Variance |
|
|||
Global Technical Services |
|
$ |
26,929 |
|
|
$ |
26,632 |
|
|
|
1.1 |
% |
Claims Solutions |
|
|
30,057 |
|
|
|
27,890 |
|
|
|
7.8 |
% |
Contractor Connection |
|
|
16,711 |
|
|
|
16,516 |
|
|
|
1.2 |
% |
Catastrophe Services |
|
|
2,256 |
|
|
|
5,189 |
|
|
|
(56.5 |
)% |
Total U.S. Property & Casualty Revenues before Reimbursements |
|
$ |
75,953 |
|
|
$ |
76,227 |
|
|
|
(0.4 |
)% |
|
|
Nine Months Ended |
|
|||||||||
(in thousands, except percentages) |
|
September 30, |
|
|
September 30, |
|
|
Variance |
|
|||
Global Technical Services |
|
$ |
80,268 |
|
|
$ |
79,889 |
|
|
|
0.5 |
% |
Claims Solutions |
|
|
87,305 |
|
|
|
87,402 |
|
|
|
(0.1 |
)% |
Contractor Connection |
|
|
47,807 |
|
|
|
51,897 |
|
|
|
(7.9 |
)% |
Catastrophe Services |
|
|
7,523 |
|
|
|
21,729 |
|
|
|
(65.4 |
)% |
Total U.S. Property & Casualty Revenues before Reimbursements |
|
$ |
222,903 |
|
|
$ |
240,917 |
|
|
|
(7.5 |
)% |
Revenues before reimbursements from our U.S. Property & Casualty segment totaled $76.0 million in the three months ended September 30, 2026, compared with $76.2 million in the 2025 period. This slight decrease was primarily driven by a continued decrease in weather-driven services within our Catastrophe Services business partially offset by increases in our Claims Solutions business. There was a decrease in segment unit volume, measured principally by cases received, of (1.7)% for the three months ended September 30, 2026, compared with the 2025 period. There was a decrease in revenues of $(1.9) million, or (2.5)%, for certain clients within our Catastrophe Services business which have minimal cases due primarily to a continued decrease in staff augmentation and weather-driven services. During the third quarter of 2026, there was an increase in low value inspection services cases, of 300 or 0.3%. Changes in product mix and in the rates charged for those services accounted for a 3.5% revenue increase for the three months ended September 30, 2026 compared with the same period in 2025.
Revenues before reimbursements from our U.S. Property & Casualty segment totaled $222.9 million in the nine months ended September 30, 2026, compared with $240.9 million in the 2025 period. This decrease was primarily driven by a continued decrease in weather-driven services within our Catastrophe Services and Contractor Connection businesses. There was a decrease in segment unit volume, measured principally by cases received, of (11.9)% for the nine months ended September 30, 2026, compared with the 2025 period. This includes a decrease in low value inspection services cases, of 15,600 or (5.5)%. There was a decrease in revenues of $(11.5) million, or (4.8)%, for certain clients within our Catastrophe Services business which have minimal cases due primarily to a continued decrease in staff augmentation and weather-driven services. Changes in product mix and in the rates charged for those services accounted for a 3.7% revenue increase for the nine months ended September 30, 2026 compared with the same period in 2025.
Revenue variance components for our U.S. Property & Casualty segment, for the three and nine months ended September 30, 2026 are summarized as follows:
2026 Period compared to 2025 Period Ending: |
|
For the Three Months |
|
|
For the Nine Months |
|
||
Decrease in cases received |
|
|
(1.7 |
)% |
|
|
(11.9 |
)% |
Decrease in low value inspection services cases |
|
|
0.3 |
% |
|
|
5.5 |
% |
Decrease in revenues from catastrophe related activity with no related cases |
|
|
(2.5 |
)% |
|
|
(4.8 |
)% |
Change in product mix and rates |
|
|
3.5 |
% |
|
|
3.7 |
% |
Decrease in Revenues before Reimbursements |
|
|
(0.4 |
)% |
|
|
(7.5 |
)% |
37
Reimbursed Expenses included in Total Revenues
Reimbursements for out-of-pocket expenses incurred in our U.S. Property & Casualty segment, which are included in total Company revenues, were $1.5 million for each of the three months ended September 30, 2026 and 2025. Reimbursements were $4.8 million and $5.1 million for the nine months ended September 30, 2026 and 2025, respectively.
Case Volume Analysis
U.S. Property & Casualty segment unit volumes by service line, measured by cases received, for the three and nine months ended September 30, 2026 and 2025 were as follows:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||
(whole numbers, except percentages) |
|
September 30, |
|
|
September 30, |
|
|
Variance |
|
|
September 30, |
|
|
September 30, |
|
|
Variance |
|
||||||
Global Technical Services |
|
|
6,736 |
|
|
|
7,654 |
|
|
|
(12.0 |
)% |
|
|
20,624 |
|
|
|
27,642 |
|
|
|
(25.4 |
)% |
Claims Solutions |
|
|
51,282 |
|
|
|
45,673 |
|
|
|
12.3 |
% |
|
|
141,896 |
|
|
|
150,844 |
|
|
|
(5.9 |
)% |
Contractor Connection |
|
|
29,652 |
|
|
|
29,304 |
|
|
|
1.2 |
% |
|
|
82,192 |
|
|
|
84,959 |
|
|
|
(3.3 |
)% |
Catastrophe Services |
|
|
697 |
|
|
|
7,301 |
|
|
|
(90.5 |
)% |
|
|
2,251 |
|
|
|
16,921 |
|
|
|
(86.7 |
)% |
Total U.S. Property & Casualty Cases Received |
|
|
88,367 |
|
|
|
89,932 |
|
|
|
(1.7 |
)% |
|
|
246,963 |
|
|
|
280,366 |
|
|
|
(11.9 |
)% |
Overall, there was a decrease in cases of (1.7)% in the three months ended September 30, 2026, compared to the same period in 2025. There were decreases in our Catastrophe Services business in the 2026 third quarter primarily due to less weather-driven activity, as compared with the 2025 period. The increase in Claims Solutions volumes in the 2026 third quarter was primarily due to increases in U.S. Loss Adjusting and an increase in low value inspection services.
There was a decrease in cases of (11.9)% for the nine months ended September 30, 2026, compared to the same period in 2025. Global Technical Services declined primarily due to cases received in the prior year for a specific complex event and a decrease in claim referrals from specialized programs. The decrease in Claims Solutions volumes in the 2026 year to date period was primarily due to the decrease in low value inspection services of 13,000 cases. There were decreases in our Contractor Connection and Catastrophe Services businesses for the nine months ended September 30, 2026 primarily due to less weather-driven activity, as compared with the 2025 period.
Direct Compensation, Fringe Benefits & Non-Employee Labor
The most significant expense in our U.S. Property & Casualty segment is the compensation of employees, including related payroll taxes and fringe benefits, and the payments to outsourced service providers that augment the functions performed by our employees. As a percentage of revenues before reimbursements, these expenses were 61.7% for the three months ended September 30, 2026 compared with 61.9% for the 2025 period. These expenses were 61.8% for each of the nine months ended September 30, 2026 and September 30, 2025. The total dollar amount of these expenses decreased to $46.9 million for the three months ended September 30, 2026 from $47.2 million for the comparable 2025 period, and were $137.9 million for the nine months ended September 30, 2026, decreasing from $149.0 million in 2025. The slight decline in expenses for the three months ended September 30, 2026 was in line with the decrease in revenues, primarily driven by lower activity within Catastrophe Services, partially offset by increases in the other service lines. The decreases for the year to date period were also primarily in line with the reduction of revenues, driven primarily by the reduction of costs associated with Catastrophe Services and Contractor Connection service lines. There was an average of 1,634 full-time equivalent employees in this segment in the nine months ended September 30, 2026 compared with an average of 1,781 in the 2025 period.
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor
U.S. Property & Casualty expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were $19.4 million for the three months ended September 30, 2026 compared with $19.3 million for the 2025 period. As a percentage of revenues before reimbursements, these expenses were 25.5% for the three months ended September 30, 2026 compared with 25.3% for the 2025 period. For the nine months ended September 30, 2026, these expenses were $60.6 million, compared with $64.9 million for the 2025 period. As a percentage of revenues before reimbursements, these expenses were 27.2% for the nine months ended September 30, 2026 compared with 27.0% for the 2025 period. The decrease in expenses for the nine months ended September 30, 2026 as compared to the prior year period was due to reductions in software amortization and centralized indirect support costs, partially offset by a prior year reduction in allowance for estimated credit losses.
38
BROADSPIRE SEGMENT
Our Broadspire segment reported operating earnings of $13.0 million, or 11.9% of revenues before reimbursements, for the three months ended September 30, 2026 as compared with $15.3 million, or 13.8% of revenues before reimbursements, for the third quarter of 2025. For the nine months ended September 30, 2026, our Broadspire segment reported operating earnings of $39.6 million, or 12.2% of revenues before reimbursements, compared with 2025 operating earnings of $41.5 million, or 12.9% of revenue before reimbursements. The decrease in the 2026 third quarter operating earnings was due to a decline in casualty revenues, partly offset with growth in the disability business and increased software amortization costs. The decrease in 2026 year-to-date operating earnings as compared to the prior year period was due to increased compensation and software amortization costs, partially offset by a reduction of centralized indirect support costs.
Excluding centralized indirect support costs, third quarter gross profit decreased from $34.9 million, or 31.5% of revenues before reimbursements, in 2025 to $32.6 million, or 29.9% of revenues before reimbursements in 2026. For the nine months ended September 30, 2026, gross profit decreased from $101.7 million, or 31.5% of revenues before reimbursements in 2025, to $99.1 million, or 30.7% of revenues before reimbursements. The decrease for the 2026 third quarter was due to a decline in Casualty revenues partly offset with growth in the disability business and increased software amortization costs. The decrease in the year-to-date period was due to increased compensation and software amortization costs.
Operating results for our Broadspire segment, including gross profit, for the three and nine months ended September 30, 2026 and 2025 were as follows:
|
|
In thousands (except percentages) |
|
|||||||||
Three Months Ended September 30, |
|
2026 |
|
|
2025 |
|
|
Variance |
|
|||
Revenues |
|
$ |
108,965 |
|
|
$ |
110,618 |
|
|
|
(1.5 |
)% |
Direct expenses |
|
|
76,339 |
|
|
|
75,751 |
|
|
|
0.8 |
% |
Gross profit |
|
|
32,626 |
|
|
|
34,867 |
|
|
|
(6.4 |
)% |
Indirect expenses |
|
|
19,652 |
|
|
|
19,581 |
|
|
|
0.4 |
% |
Total Broadspire Operating Earnings |
|
$ |
12,974 |
|
|
$ |
15,286 |
|
|
|
(15.1 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Gross profit margin |
|
|
29.9 |
% |
|
|
31.5 |
% |
|
|
(1.6 |
)% |
Operating margin |
|
|
11.9 |
% |
|
|
13.8 |
% |
|
|
(1.9 |
)% |
|
|
In thousands (except percentages) |
|
|||||||||
Nine Months Ended September 30, |
|
2026 |
|
|
2025 |
|
|
Variance |
|
|||
Revenues |
|
$ |
323,146 |
|
|
$ |
322,448 |
|
|
|
0.2 |
% |
Direct expenses |
|
|
224,040 |
|
|
|
220,774 |
|
|
|
1.5 |
% |
Gross profit |
|
|
99,106 |
|
|
|
101,674 |
|
|
|
(2.5 |
)% |
Indirect expenses |
|
|
59,546 |
|
|
|
60,209 |
|
|
|
(1.1 |
)% |
Total Broadspire Operating Earnings |
|
$ |
39,560 |
|
|
$ |
41,465 |
|
|
|
(4.6 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Gross profit margin |
|
|
30.7 |
% |
|
|
31.5 |
% |
|
|
(0.8 |
)% |
Operating margin |
|
|
12.2 |
% |
|
|
12.9 |
% |
|
|
(0.7 |
)% |
39
Revenues before Reimbursements
Broadspire revenues are derived from the property, casualty and disability insurance and self-insured markets in the U.S. Revenues before reimbursements by service line for the three and nine months ended September 30, 2026 and 2025 were as follows:
|
|
Three Months Ended |
|
|||||||||
(in thousands, except percentages) |
|
September 30, |
|
|
September 30, |
|
|
Variance |
|
|||
Claims Management |
|
$ |
52,927 |
|
|
$ |
53,383 |
|
|
|
(0.9 |
)% |
Medical Management |
|
|
49,209 |
|
|
|
50,018 |
|
|
|
(1.6 |
)% |
Subrogation |
|
|
6,829 |
|
|
|
7,217 |
|
|
|
(5.4 |
)% |
Total Broadspire Revenues before Reimbursements |
|
$ |
108,965 |
|
|
$ |
110,618 |
|
|
|
(1.5 |
)% |
|
|
Nine Months Ended |
|
|||||||||
(in thousands, except percentages) |
|
September 30, |
|
|
September 30, |
|
|
Variance |
|
|||
Claims Management |
|
$ |
156,298 |
|
|
$ |
155,028 |
|
|
|
0.8 |
% |
Medical Management |
|
|
146,053 |
|
|
|
145,374 |
|
|
|
0.5 |
% |
Subrogation |
|
|
20,795 |
|
|
|
22,046 |
|
|
|
(5.7 |
)% |
Total Broadspire Revenues before Reimbursements |
|
$ |
323,146 |
|
|
$ |
322,448 |
|
|
|
0.2 |
% |
Revenues before reimbursements from our Broadspire segment totaled $109.0 million in the three months ended September 30, 2026 compared with $110.6 million in the 2025 period. Revenues declined in each of the Claims Management, Medical Management, and Subrogation service lines. There was a slight increase in segment unit volume, measured principally by cases received, of 0.3% for the three months ended September 30, 2026 compared with the same period of 2025. There was an increase of high-frequency, low-severity claims within our Claims Management service line of 5,575, or 3.9%, primarily related to new disability clients. Revenues were negatively impacted by a $(1.0) million decrease in revenues within our Claims Management service line related to income earned which offsets the costs of managing the funds maintained to administer claims for our customers, for which no cases are received, or (0.9)% decrease in revenues. There was also a $(0.3) million decrease in revenues within our Medical Management service line for which no cases are received, or a (0.3)% decrease in revenues. Changes in product mix and in the rates charged for those services accounted for a 3.1% revenue increase for the 2026 third quarter compared with the 2025 period.
For the nine months ended September 30, 2026, revenues before reimbursements from our Broadspire segment totaled $323.1 million compared with $322.4 million in the 2025 period. This increase was primarily due to an increase in cases in the Claims Management and Medical Management service lines, partially offset by a decline in the Subrogation service line. There was an increase in segment unit volume, measured principally by cases received, of 2.9% for the nine months ended September 30, 2026 compared with the same period of 2025. This was primarily due to an increase of high-frequency, low-severity claims within our Claims Management service line of 26,800, or 6.0%, primarily related to new disability clients. Revenues were negatively impacted by a $(3.1) million decrease in revenues within our Claims Management service line related to income earned which offsets the costs of managing the funds maintained to administer claims for our customers, for which no cases are received, or (0.9)% decrease in revenues. There was also a $1.4 million increase in revenues within our Medical Management service line for which no cases are received, or a 0.4% increase in revenues. Changes in product mix and in the rates charged for those services accounted for a 3.8% revenue increase for the nine months ended September 30, 2026 compared with the 2025 period.
Revenue variance components for our Broadspire segment, for the three and nine months ended September 30, 2026 are summarized as follows:
2026 Period compared to 2025 Period Ending: |
|
For the Three Months |
|
|
For the Nine Months |
|
||
Increase in cases received |
|
|
0.3 |
% |
|
|
2.9 |
% |
Decrease in claims management revenues with no cases received |
|
|
(0.9 |
)% |
|
|
(0.9 |
)% |
(Decrease) increase in medical management revenues with no cases received |
|
|
(0.3 |
)% |
|
|
0.4 |
% |
Increase in high-frequency, low-severity disability cases received |
|
|
(3.7 |
)% |
|
|
(6.0 |
)% |
Change in product mix and rates |
|
|
3.1 |
% |
|
|
3.8 |
% |
(Decrease) increase in Revenues before Reimbursements |
|
|
(1.5 |
)% |
|
|
0.2 |
% |
40
Reimbursed Expenses included in Total Revenues
Reimbursements for out-of-pocket expenses incurred in our Broadspire segment were $0.7 million for each of the three months ended September 30, 2026 and 2025. Reimbursements were $2.1 million and $2.4 million for the nine months ended September 30, 2026 and 2025, respectively.
Case Volume Analysis
Broadspire unit volumes by service line, as measured by cases received, for the three and nine months ended September 30, 2026 and 2025 were as follows:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||
(whole numbers, except percentages) |
|
September 30, |
|
|
September 30, |
|
|
Variance |
|
|
September 30, |
|
|
September 30, |
|
|
Variance |
|
||||||
Claims Management |
|
|
103,690 |
|
|
|
102,302 |
|
|
|
1.4 |
% |
|
|
314,398 |
|
|
|
300,724 |
|
|
|
4.5 |
% |
Medical Management |
|
|
38,472 |
|
|
|
40,307 |
|
|
|
(4.6 |
)% |
|
|
121,674 |
|
|
|
119,968 |
|
|
|
1.4 |
% |
Subrogation |
|
|
7,565 |
|
|
|
6,604 |
|
|
|
14.6 |
% |
|
|
23,033 |
|
|
|
25,356 |
|
|
|
(9.2 |
)% |
Total Broadspire Cases Received |
|
|
149,727 |
|
|
|
149,213 |
|
|
|
0.3 |
% |
|
|
459,105 |
|
|
|
446,048 |
|
|
|
2.9 |
% |
Overall case volumes slightly increased 0.3% for the three months ended September 30, 2026 due to new disability clients within our Claims Management service line, as well as an increase in our Subrogation service line. These increases were partially offset by a reduction in utilization management cases within Medical Management, and decreased casualty claims within our Claims Management service line.
There was an increase in cases of 2.9% in the nine months ended September 30, 2026, compared to the same period in 2025, due primarily to increases in new disability clients within our Claims Management service line and medical unit claims within our Medical Management service line. These increases were partially offset by a decline in Subrogation cases due to the loss of a customer and decreased casualty claims within our Claims Management service line.
Direct Compensation, Fringe Benefits & Non-Employee Labor
The most significant expense in our Broadspire segment is the compensation of employees, including related payroll taxes and fringe benefits, and the payments to outsourced service providers that augment the functions performed by our employees. These expenses totaled $62.0 million for the three months ended September 30, 2026, compared to $62.8 million for the 2025 period. As a percent of the related revenues before reimbursements, these expenses increased from 56.8% in the 2025 third quarter to 56.9% in the 2026 third quarter. For the nine months ended September 30, 2026, these expenses totaled $183.0 million, compared to $181.9 million in 2025. For the nine months ended September 30, 2026, these expenses, as a percent of the related revenues before reimbursements, increased from 56.4% for the nine months ended September 30, 2025 to 56.6% for the 2026 period. The slight decrease in costs for the three month period directly relates to the decrease in revenues as compared to the prior year period. The increase in costs for the 2026 nine month period was primarily due to increased employees and average wages related to the increase in revenues, as well as product mix changes. Average full-time equivalent employees in this segment totaled 2,918 in the nine months ended September 30, 2026, compared with 2,874 in the 2025 period.
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor
Broadspire segment expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor as a percent of revenues before reimbursements increased to 31.2% for the three months ended September 30, 2026, from 29.4% in the 2025 period. The amount of these expenses increased from $32.5 million for the three months ended September 30, 2025 to $34.0 million in 2026. These expenses were $100.6 million for the nine months ended September 30, 2026, compared to $99.1 million for the nine months ended September 30, 2025. As a percentage of revenues before reimbursements, these expenses were 31.1% for the nine months ended September 30, 2026, compared with 30.7% for the 2025 period. The increase in expenses in total and as a percentage of revenues before reimbursements for the three and nine months ended September 30, 2026 as compared to the prior year periods was primarily due to an increase in software amortization costs.
41
INTERNATIONAL OPERATIONS SEGMENT
Operating earnings in our International Operations segment were $10.7 million, or 7.8% of revenues before reimbursements, for the three months ended September 30, 2026, compared with $7.7 million, or 5.7% of revenues before reimbursements, in the 2025 period. For the nine months ended September 30, 2026, our International Operations segment reported operating earnings of $25.5 million, or 6.3% of revenues before reimbursements, compared with operating earnings of $17.2 million, or 4.4% of revenues before reimbursements in 2025. The increase in operating earnings in the three months ended September 30, 2026 compared to the prior year was primarily due to improved operating results in Canada, Australia, Asia, and Latin America, partially offset by a reduction in operating earnings within the U.K. and Europe. The increase in operating earnings in the nine months ended September 30, 2026 compared to the prior year was primarily due to improved operating results in Canada, Australia, and Asia, partially offset by a reduction in operating earnings within the U.K. and Europe.
Excluding centralized indirect support costs, gross profit increased from $27.0 million, or 20.0% of revenues before reimbursements in 2025, to $30.1 million, or 22.0% of revenues before reimbursements, in the three months ended September 30, 2026. For the nine months ended September 30, 2026, gross profit increased from $76.3 million, or 19.4% of revenues before reimbursements in 2025, to $83.5 million, or 20.5% of revenues before reimbursements. The increase in gross profit in the three months ended September 30, 2026 as compared to 2025 was primarily due to improved operating results in Canada, Australia, and Asia. The increase in gross profit for the nine months ended September 30, 2026 as compared to 2025 was primarily due to improved operating results in Canada, Australia, and Asia, partially offset by a reduction in earnings within the U.K, Europe, and Latin America.
Operating results for our International Operations segment, including gross profit, for the three and nine months ended September 30, 2026 and 2025 were as follows:
|
|
In thousands (except percentages) |
|
|||||||||||||||||
|
|
Based on actual exchange rates |
|
|
Based on exchange rates |
|
||||||||||||||
Three Months Ended September 30, |
|
2026 |
|
|
2025 |
|
|
Variance |
|
|
2026 |
|
|
Variance |
|
|||||
Revenues |
|
$ |
136,710 |
|
|
$ |
135,326 |
|
|
|
1.0 |
% |
|
$ |
128,769 |
|
|
|
(4.8 |
)% |
Direct expenses |
|
|
106,660 |
|
|
|
108,311 |
|
|
|
(1.5 |
)% |
|
|
100,496 |
|
|
|
(7.2 |
)% |
Gross profit |
|
|
30,050 |
|
|
|
27,015 |
|
|
|
11.2 |
% |
|
|
28,273 |
|
|
|
4.7 |
% |
Indirect expenses |
|
|
19,382 |
|
|
|
19,363 |
|
|
|
0.1 |
% |
|
|
18,258 |
|
|
|
(5.7 |
)% |
Total International Operations Operating Earnings |
|
$ |
10,668 |
|
|
$ |
7,652 |
|
|
|
39.4 |
% |
|
$ |
10,015 |
|
|
|
30.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross profit margin |
|
|
22.0 |
% |
|
|
20.0 |
% |
|
|
2.0 |
% |
|
|
22.0 |
% |
|
|
2.0 |
% |
Operating margin |
|
|
7.8 |
% |
|
|
5.7 |
% |
|
|
2.1 |
% |
|
|
7.8 |
% |
|
|
2.1 |
% |
|
|
In thousands (except percentages) |
|
|||||||||||||||||
|
|
Based on actual exchange rates |
|
|
Based on exchange rates |
|
||||||||||||||
Nine Months Ended September 30, |
|
2026 |
|
|
2025 |
|
|
Variance |
|
|
2026 |
|
|
Variance |
|
|||||
Revenues |
|
$ |
406,543 |
|
|
$ |
393,835 |
|
|
|
3.2 |
% |
|
$ |
383,069 |
|
|
|
(2.7 |
)% |
Direct expenses |
|
|
323,072 |
|
|
|
317,527 |
|
|
|
1.7 |
% |
|
|
304,640 |
|
|
|
(4.1 |
)% |
Gross profit |
|
|
83,471 |
|
|
|
76,308 |
|
|
|
9.4 |
% |
|
|
78,429 |
|
|
|
2.8 |
% |
Indirect expenses |
|
|
57,944 |
|
|
|
59,105 |
|
|
|
(2.0 |
)% |
|
|
54,556 |
|
|
|
(7.7 |
)% |
Total International Operations Operating Earnings |
|
$ |
25,527 |
|
|
$ |
17,203 |
|
|
|
48.4 |
% |
|
$ |
23,873 |
|
|
|
38.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Gross profit margin |
|
|
20.5 |
% |
|
|
19.4 |
% |
|
|
1.1 |
% |
|
|
20.5 |
% |
|
|
1.1 |
% |
Operating margin |
|
|
6.3 |
% |
|
|
4.4 |
% |
|
|
1.9 |
% |
|
|
6.2 |
% |
|
|
1.8 |
% |
42
Revenues before Reimbursements
International Operations segment revenues are primarily derived from the global property and casualty insurance company markets in the U.K., Europe, Australia, Canada, Asia and Latin America. Revenues before reimbursements by major region, based on actual exchange rates and using a constant exchange rate, for the three and nine months ended September 30, 2026 and 2025 were as follows:
|
|
Three Months Ended |
|
|||||||||||||||||
|
|
Based on actual exchange rates |
|
|
Based on exchange rates |
|
||||||||||||||
(in thousands, except percentages) |
|
September 30, |
|
|
September 30, |
|
|
Variance |
|
|
September 30, |
|
|
Variance |
|
|||||
U.K. |
|
$ |
41,036 |
|
|
$ |
45,476 |
|
|
|
(9.8 |
)% |
|
$ |
38,946 |
|
|
|
(14.4 |
)% |
Europe |
|
|
28,293 |
|
|
|
26,801 |
|
|
|
5.6 |
% |
|
|
26,071 |
|
|
|
(2.7 |
)% |
Australia |
|
|
26,198 |
|
|
|
24,116 |
|
|
|
8.6 |
% |
|
|
23,495 |
|
|
|
(2.6 |
)% |
Canada |
|
|
25,222 |
|
|
|
22,473 |
|
|
|
12.2 |
% |
|
|
25,040 |
|
|
|
11.4 |
% |
Asia |
|
|
7,356 |
|
|
|
8,077 |
|
|
|
(8.9 |
)% |
|
|
7,124 |
|
|
|
(11.8 |
)% |
Latin America |
|
|
8,605 |
|
|
|
8,383 |
|
|
|
2.6 |
% |
|
|
8,093 |
|
|
|
(3.5 |
)% |
Total International Operations Revenues before Reimbursements |
|
$ |
136,710 |
|
|
$ |
135,326 |
|
|
|
1.0 |
% |
|
$ |
128,769 |
|
|
|
(4.8 |
)% |
|
|
Nine Months Ended |
|
|||||||||||||||||
|
|
Based on actual exchange rates |
|
|
Based on exchange rates |
|
||||||||||||||
(in thousands, except percentages) |
|
September 30, |
|
|
September 30, |
|
|
Variance |
|
|
September 30, |
|
|
Variance |
|
|||||
U.K. |
|
$ |
127,220 |
|
|
$ |
134,140 |
|
|
|
(5.2 |
)% |
|
$ |
120,664 |
|
|
|
(10.0 |
)% |
Europe |
|
|
85,248 |
|
|
|
80,354 |
|
|
|
6.1 |
% |
|
|
78,179 |
|
|
|
(2.7 |
)% |
Australia |
|
|
72,327 |
|
|
|
64,771 |
|
|
|
11.7 |
% |
|
|
66,045 |
|
|
|
2.0 |
% |
Canada |
|
|
72,691 |
|
|
|
67,518 |
|
|
|
7.7 |
% |
|
|
71,459 |
|
|
|
5.8 |
% |
Asia |
|
|
24,729 |
|
|
|
21,480 |
|
|
|
15.1 |
% |
|
|
23,849 |
|
|
|
11.0 |
% |
Latin America |
|
|
24,328 |
|
|
|
25,572 |
|
|
|
(4.9 |
)% |
|
|
22,873 |
|
|
|
(10.6 |
)% |
Total International Operations Revenues before Reimbursements |
|
$ |
406,543 |
|
|
$ |
393,835 |
|
|
|
3.2 |
% |
|
$ |
383,069 |
|
|
|
(2.7 |
)% |
Revenues before reimbursements from our International Operations segment totaled $136.7 million in the three months ended September 30, 2026, compared with $135.3 million in the 2025 period. The change in exchange rates increased our International Operations segment revenues by approximately 5.8%, or $7.9 million, for the three months ended September 30, 2026 as compared with the 2025 period. Absent foreign exchange rate fluctuations, International Operations segment revenues would have been $128.8 million for the three months ended September 30, 2026. There was an increase in segment unit volume, measured principally by cases received, of 18.2% for the three months ended September 30, 2026, compared with the 2025 period. There was a net increase in high-frequency, low-severity cases of 16,500, or 13.1%, primarily in Spain, Canada, and the Netherlands. In addition, revenues decreased by $(4.9) million or (3.7)% in the current year due to the disposition of Crawford Legal Services businesses. Within the U.K. there was a decrease in higher-value third-party administration claims, which led to a $(3.5) million, or (2.6)% decrease in revenues. In Australia, revenues were earned in the prior year third quarter on 3,500 storm related cases, or 2.8%, recorded in prior quarters. Changes in product mix and in the rates charged for those services accounted for a (0.8)% revenue decrease for the three months ended September 30, 2026 compared with the same period in 2025.
Revenues before reimbursements from our International Operations segment totaled $406.5 million in the nine months ended September 30, 2026, compared with $393.8 million in the 2025 period. The change in exchange rates increased our International Operations segment revenues by approximately 5.9%, or $23.5 million, for the nine months ended September 30, 2026 as compared with the 2025 period. Absent foreign exchange rate fluctuations, International Operations segment revenues would have been $383.1 million for the nine months ended September 30, 2026. There was an increase in segment unit volume, measured principally by cases received, of 11.3% for the nine months ended September 30, 2026, compared with the 2025 period. There was a net increase in high-frequency, low-severity cases of 37,900, or 9.4%, primarily in Spain and Canada. In addition, revenues decreased by $(12.1) million or (3.1)% in the current year due to the disposition of Crawford Legal Services businesses. Within the U.K. there was a decrease in higher-value third-party administration claims, which led to a $(6.1) million, or (1.5)% decrease in revenues. In Australia, storm related cases recorded in the prior year second quarter with revenues recorded in future periods decreased by 2,500, or (0.6)%. Changes in product mix and in the rates charged for those services accounted for a (0.6)% revenue decrease for the nine months ended September 30, 2026 compared with the same period in 2025.
43
Excluding the impact of foreign currencies, revenues decreased in the U.K. for the three and nine month periods due to a reduction in higher-value third-party administration claims as well as a reduction in legal services. There was a decrease in revenues in Europe in the 2026 periods, compared with 2025, due to a reduction in flood related revenues in the Middle East. There was a decrease in Australia in the three months ended September 30, 2026, compared to the prior year period, due to the sale of the legal services business. For the nine months ended September 30, 2026, compared with the prior year periods, revenues increased within Australia due to increased weather-related activity, partially offset by the sale of the legal services business. Canada increased in each period due to a new client in third-party administration, as well as increased weather-related activity during the third quarter. There was a decrease in revenues in Asia for the three month period, compared with 2025, due to earthquakes in Thailand in 2025. These earthquake claims have continued to result in revenues in 2026, resulting in the increase in revenues within Asia for the nine months ended September 30, 2026 over the 2025 period. The decrease in revenues in Latin America in the 2026 periods was primarily driven by a reduction in weather-related cases in Chile as well as the exit of the legal services business.
Revenue variance components for our International Operations segment, for the three and nine months ended September 30, 2026 are summarized as follows:
2026 Period compared to 2025 Period Ending: |
|
For the Three Months |
|
|
For the Nine Months |
|
||
Increase in cases received |
|
|
18.2 |
% |
|
|
11.3 |
% |
Increase due to foreign currency exchange rates |
|
|
5.8 |
% |
|
|
5.9 |
% |
Decrease in U.K. revenues related to higher-value third-party administration claims |
|
|
(2.6 |
)% |
|
|
(1.5 |
)% |
Change in high-frequency, low-severity cases received, primarily within Spain, Canada, and Netherlands |
|
|
(13.1 |
)% |
|
|
(9.4 |
)% |
Storm related cases received in Australia in the second quarter of 2025 with revenue recognized in later periods |
|
|
(2.8 |
)% |
|
|
0.6 |
% |
Reduction in revenues related to disposition of Crawford Legal Services businesses |
|
|
(3.7 |
)% |
|
|
(3.1 |
)% |
Change in product mix and rates |
|
|
(0.8 |
)% |
|
|
(0.6 |
)% |
Increase in Revenues before Reimbursements |
|
|
1.0 |
% |
|
|
3.2 |
% |
Reimbursed Expenses included in Total Revenues
Reimbursements for out-of-pocket expenses incurred in our International Operations segment, which are included in total Company revenues, were $6.2 million and $8.2 million for the three months ended September 30, 2026 and 2025, respectively. Reimbursements were $20.8 million and $26.0 million for the nine months ended September 30, 2026 and 2025, respectively.
Case Volume Analysis
International Operations segment unit volumes by geographic region, measured by cases received, for the three and nine months ended September 30, 2026 and 2025 were as follows:
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||
(whole numbers, except percentages) |
|
September 30, |
|
September 30, |
|
Variance |
|
September 30, |
|
September 30, |
|
Variance |
U.K. |
|
27,279 |
|
27,616 |
|
(1.2)% |
|
83,418 |
|
86,388 |
|
(3.4)% |
Europe |
|
57,981 |
|
40,827 |
|
42.0% |
|
183,211 |
|
133,587 |
|
37.1% |
Australia |
|
7,370 |
|
10,154 |
|
(27.4)% |
|
30,486 |
|
32,629 |
|
(6.6)% |
Canada |
|
31,275 |
|
23,974 |
|
30.5% |
|
84,490 |
|
72,727 |
|
16.2% |
Asia |
|
7,649 |
|
8,194 |
|
(6.7)% |
|
22,939 |
|
23,374 |
|
(1.9)% |
Latin America |
|
17,608 |
|
15,465 |
|
13.9% |
|
43,891 |
|
54,162 |
|
(19.0)% |
Total International Operations Cases Received |
|
149,162 |
|
126,230 |
|
18.2% |
|
448,435 |
|
402,867 |
|
11.3% |
44
Overall, there was an increase in cases received of 18.2% for the three months ended September 30, 2026, compared with the 2025 period. The increases were primarily related to high-frequency, low-severity cases within Europe, where Spain had an increase of 4,250 cases and the Netherlands increased by 4,300 cases. Canada volume improved due to increased weather-related activity, which led to an increase of approximately 5,000 high-frequency, low-severity cases. Latin America volume improved due to increased weather-related activity in Chile. Australia had a decrease in storm claims as compared to the prior year period. U.K. had a decline in third-party administration cases. Asia experienced fewer claims primarily due to claims related to earthquakes in Thailand which took place during the prior year third quarter. In addition, Malaysia had fewer cases in the 2026 period.
There was an increase in cases received of 11.3% for the nine months ended September 30, 2026, compared with the 2025 period. The increases were primarily related to high-frequency, low-severity cases within Europe, where Spain had an increase of 30,250 cases. In addition, Canada volume improved due to the addition of a new client with high-frequency, low-severity cases, as well as increased weather-related activity during the third quarter. Australia had a decrease in storm related claims in the 2026 period. U.K. had a decline in third-party administration cases. Latin America also had decreased cases due to a reduction in high-frequency, low-value cases received in Brazil of 10,800 cases.
Direct Compensation, Fringe Benefits & Non-Employee Labor
The most significant expense in our International Operations segment is the compensation of employees, including related payroll taxes and fringe benefits, and the payments to outsourced service providers that augment the functions performed by our employees. As a percentage of revenues before reimbursements, these expenses were 64.5% and 67.3% for the three months ended September 30, 2026 and 2025, respectively. The total dollar amount of these expenses was $88.1 million for the three months ended September 30, 2026, compared to $91.1 million for the 2025 period. This decrease was due to lower compensation costs within Canada, Crawford Legal Services, and administration, as well as non-employee costs within the U.K., partially offset by an increase due to fluctuations in exchange rates that resulted in a $5.1 million increase to these expenses. These efficiencies within compensation also contributed to the decrease as a percentage of revenues before reimbursements. For the nine months ended September 30, 2026, these expenses were 65.8%, compared with 67.5% in 2025, and were $267.5 million for the nine months ended September 30, 2026 compared to $265.8 million in 2025. The fluctuation in exchange rates resulted in an increase to these expenses by $15.5 million. This increase was partially offset by reductions in compensation costs within Canada, Crawford Legal Services, and other administrative compensation costs, as well as non-employee labor within the U.K. These efficiencies within compensation also contributed to the decrease as a percentage of revenues before reimbursements. There was an average of 4,178 full-time equivalent employees in this segment in the nine months ended September 30, 2026, compared with an average of 4,379 in the comparable 2025 period.
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor
International Operations expenses other than reimbursements, direct compensation, fringe benefits, and non-employee labor were $37.9 million for the three months ended September 30, 2026 compared to $36.6 million for the 2025 period. As a percentage of revenues before reimbursements, these expenses were 27.7% for the three months ended September 30, 2026 compared with 27.0% for the 2025 period. For the nine months ended September 30, 2026, these expenses were $113.6 million, compared with $110.9 million for the 2025 period. As a percentage of revenues before reimbursements, these expenses were 27.9% for the nine months ended September 30, 2026, compared with 28.2% for the 2025 period. The increase in expenses for the three months ended September 30, 2026 as compared to the 2025 period was due to an increase in the allowance for credit losses. The increase in expenses for the nine months ended September 30, 2026 as compared to the prior period was due to the increased professional fees and an increase in self-insurance costs, partially offset by a reduction in centralized indirect support costs.
EXPENSES AND CREDITS EXCLUDED FROM SEGMENT OPERATING EARNINGS
Income Taxes
The Company's consolidated effective income tax rate may change periodically due to changes in enacted statutory tax rates, changes in tax law or policy, changes in the composition of taxable income from the countries in which it operates, the Company's ability to utilize net operating loss and tax credit carryforwards, changes in permanent reinvestment assertions, and changes in unrecognized tax benefits. We estimate that our effective income tax rate for 2026 will be approximately 33% to 35% after considering known discrete items as of September 30, 2026.
The provision for income taxes on consolidated income before income tax totaled $7.3 million and $5.8 million for the three months ended September 30, 2026 and 2025, respectively. The overall effective tax rate increased to 32.8% for the three months ended September 30, 2026 compared with 31.9% for the 2025 period primarily due to changes in the mix of income and U.S. taxation of foreign subsidiary profits in the 2026 results.
The provision for income taxes on consolidated income before income tax totaled $15.9 million and $14.1 million for the nine months ended September 30, 2026 and 2025, respectively. The overall effective tax rate decreased to 32.3% for the nine months ended September 30, 2026 compared with 34.4% for the 2025 period primarily due to a one-time expense of $1.3 million relating to administrative guidance issued by a foreign tax authority in 2025.
45
Net Corporate Interest Expense
Net corporate interest expense consists of interest expense that we incur on our short- and long-term borrowings, partially offset by any interest income we earn on available cash balances and short-term investments. These amounts vary based on interest rates, borrowings outstanding and the amounts of invested cash. Corporate interest expense totaled $3.8 million and $4.6 million for the three months ended September 30, 2026 and 2025, respectively. Interest income was $0.9 million for the three months ended September 30, 2026 and $0.8 million for the three months ended September 30, 2025. Corporate interest expense totaled $10.8 million and $14.0 million for the nine months ended September 30, 2026 and 2025, respectively. Interest income was $2.4 million for each of the nine months ended September 30, 2026 and 2025.
Stock Option Expense
Stock option expense, a component of stock-based compensation, is comprised of non-cash expenses related to stock options granted under our various stock option and employee stock purchase plans. Stock option expense is not allocated to our operating segments. Stock option expense totaled $0.1 million for each of the three months ended September 30, 2026 and 2025. Stock option expense totaled $0.4 million and $0.5 million for the nine months ended September 30, 2026 and 2025, respectively.
Amortization of Acquisition-Related Intangible Assets
Amortization of acquisition-related intangible assets represents the non-cash amortization expense for finite-lived customer-relationship and trade name intangible assets. Amortization expense associated with these intangible assets totaled $1.8 million for the three months ended September 30, 2026 and $2.1 million for the three months ended September 30, 2025. Amortization expense associated with these intangible assets totaled $5.3 million for the nine months ended September 30, 2026 and $5.8 million for the nine months ended September 30, 2025. This amortization expense is included in "Selling, general, and administrative expenses" in our unaudited Condensed Consolidated Statements of Operations.
Unallocated Corporate and Shared Costs, Net
Certain unallocated corporate and shared costs are excluded from the determination of segment operating earnings. For the three and nine months ended September 30, 2026 and 2025, unallocated corporate and shared costs and credits represented expenses for our chief executive officer and our Board of Directors, certain adjustments to our self-insured liabilities, certain unallocated legal costs and professional fees, and certain adjustments and recoveries to our allowances for estimated credit losses.
Unallocated corporate and shared costs were $4.5 million and $6.1 million for the three months ended September 30, 2026 and 2025, respectively. The decrease in the 2026 quarter was primarily due to lower medical self-insurance and compensation expense. Unallocated corporate and shared costs were $17.6 million for the nine months ended September 30, 2026 and $19.3 million for the nine months ended September 30, 2025. The decrease in the 2026 year to date period was primarily due to one-time $3.1 million indirect tax expense incurred in 2025, partially offset by increased compensation expense.
Contingent Earnout Adjustments
Contingent earnout expense represents the fair value adjustment of earnout liabilities arising from recent acquisitions. There was no adjustment for the three months ended September 30, 2026, and a benefit of $0.2 million for the nine months ended September 30, 2026, compared to expenses of $0.1 million and $0.5 million for the three and nine months ended September 30, 2025. The fair value adjustment is based on changes to projections of acquired entities over the respective earnout periods, which span multiple years.
Non-Service Pension Costs
Non-service pension costs totaled $1.7 million and $5.2 million for the three and nine months ended September 30, 2026, compared to $2.4 million and $7.1 million for the three and nine months ended September 30, 2025. 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. The service cost component of the U.K. plans remains in compensation expense.
LIQUIDITY, CAPITAL RESOURCES, AND FINANCIAL CONDITION
At September 30, 2026, our working capital balance (current assets less current liabilities) was approximately $56.5 million, an increase of $13.7 million from the working capital balance at December 31, 2025. Our cash and cash equivalents were $79.0 million at September 30, 2026, compared with $64.1 million at December 31, 2025.
46
Cash and cash equivalents as of September 30, 2026 consisted of $25.0 million held in the U.S. and $54.0 million held in our foreign subsidiaries. The Company generally does not provide for additional U.S. and foreign income taxes on undistributed earnings of foreign subsidiaries because they are considered to be indefinitely reinvested. The Company maintained its permanent reinvestment assertion on a portion of prior year undistributed earnings for certain foreign operations and accrued deferred taxes attributable to earnings that were not permanently reinvested. The majority of the remaining historical earnings and future foreign earnings are expected to remain permanently reinvested and will be used to provide working capital for these operations, fund defined benefit pension plan obligations, repay non-U.S. debt, fund capital improvements, and fund future acquisitions.
However, if at a future date or time funds that remain permanently reinvested are necessary for our operations in the U.S. or we otherwise believe it is in our best interests to repatriate all or a portion of such funds, we may be required to accrue and pay taxes to repatriate these funds. No assurances can be provided as to the amount or timing thereof, the tax consequences related thereto, or the ultimate impact any such action may have on our results of operations or financial condition.
Cash Provided by Operating Activities
Cash provided by operating activities was $29.0 million for the nine months ended September 30, 2026, compared with $51.7 million provided by operating activities in the 2025 period. The decrease in cash provided by operations was primarily driven by increases in billed and unbilled receivables, partially offset by higher earnings compared to prior year.
Cash Used in Investing Activities
Cash used in investing activities was $16.3 million for the nine months ended September 30, 2026, compared with $25.2 million used in the first nine months of 2025. The decrease in cash used in 2026 was due to proceeds from business dispositions and decreases in capital expenditures in 2026 compared to 2025.
Cash Provided by (Used in) Financing Activities
Cash provided by financing activities was $3.9 million for the nine months ended September 30, 2026, compared with $13.8 million of cash used in the 2025 period. During the nine months of 2026, there was an increase of $36.0 million in net borrowing from our revolving credit facility, compared with a net decrease during the 2025 period of $0.7 million. The increase in borrowing in the 2026 period was primarily related to the increase in payments of our accounts payable, accrued liabilities, and share repurchases. We added $1.6 million of fiduciary liabilities, due to the timing of fund transfers. We repurchased shares for $22.5 million in the 2026 period, compared with $3.0 million in the 2025 period. We paid $11.1 million in dividends in the nine months ended September 30, 2026 compared with $10.6 million in the 2025 period.
Other Matters Concerning Liquidity and Capital Resources
As a component of our Credit Facility with Bank of America (the "Credit Facility"), we maintain a letter of credit facility to satisfy certain contractual obligations. Including $8.0 million of undrawn letters of credit issued under the letter of credit facility, the available balance under our credit facility totaled $261.7 million at September 30, 2026. Our short-term debt obligations typically peak during the first half of each year due to the annual payment of incentive compensation, contributions to retirement plans, working capital fluctuations, and certain other recurring payments, and generally decline during the balance of the year. The balance of short-term borrowings represents amounts under our credit facility that we expect, but are not required, to repay in the next twelve months. Long- and short-term borrowings outstanding, including current installments and finance leases, totaled $225.1 million as of September 30, 2026 compared with $189.1 million at December 31, 2025.
Our liquidity is defined as cash on hand and borrowing capacity under our Credit Facility based on our trailing twelve month EBITDA, as defined in our Credit Facility. At September 30, 2026, this resulted in total liquidity of $356.4 million.
Defined Benefit Pension Funding and Cost
We sponsor a qualified defined benefit pension plan in the U.S. (the "U.S. Qualified Plan"), three defined benefit pension plans in the U.K., and defined benefit pension plans in the Netherlands, Norway, Germany, and the Philippines. Effective December 31, 2002, we froze our U.S. Qualified Plan. Our frozen U.S. Qualified Plan and U.K. plans were underfunded by $15.4 million and overfunded by $12.0 million, respectively, at December 31, 2025, based on accumulated benefit obligations of $233.4 million and $156.9 million for the U.S. Qualified Plan and the U.K. plans, respectively.
For the nine months ended September 30, 2026 we contributed $3.0 million to our U.S. defined benefit pension plan and $2.0 million to our U.K defined benefit pension plans, compared with no contributions to the U.S. plan and $2.2 million to the U.K. plans for the nine months ended September 30, 2025. Anticipated funding for the other international plans is not significant.
47
Dividend Payments
Our Board of Directors makes dividend decisions from time to time based in part on an assessment of current and projected earnings and cash flows. During the nine months ended September 30, 2026, we paid $11.1 million in dividends. Our ability to pay future dividends could be impacted by many factors including the funding requirements of our defined benefit pension plans, repayments of outstanding borrowings, levels of cash expected to be generated by our operating activities, and covenants and other restrictions contained in any credit facilities or other financing agreements.
Financial Condition
Other significant changes on our unaudited Condensed Consolidated Balance Sheets as of September 30, 2026, compared with our Condensed Consolidated Balance Sheets as of December 31, 2025 were as follows:
At September 30, 2026, we were not a party to any off-balance sheet arrangements which we believe could materially impact our operations, financial condition, or cash flows.
As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, we have certain material obligations under operating lease agreements to which we are a party. The Company records operating lease-related assets and liabilities on our unaudited Condensed Consolidated Balance Sheets.
We also maintain funds in various trust accounts to administer claims for certain clients. These funds are not available for our general operating activities and, as such, have not been recorded in the accompanying unaudited Condensed Consolidated Balance Sheets. We have concluded that we do not have a material off-balance sheet risk related to these funds.
APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES
There have been no material changes to our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
New Accounting Standards Adopted
Additional information related to the adoption of recently issued accounting standards is provided in Note 2 to the accompanying unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q.
Pending Adoption of New Accounting Standards
Additional information related to the pending adoption of new accounting standards is provided in Note 2 to the accompanying unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
For a discussion of quantitative and qualitative disclosures about the Company's market risk, see Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," of our Annual Report on Form 10-K for the year ended December 31, 2025. Our exposures to market risk have not changed materially since December 31, 2025.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Registrant maintains a set of disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the "Exchange Act"), designed to ensure that information required to be disclosed by the Registrant in reports that it files or submits under the Exchange Act is recorded, processed, summarized or reported within the time periods specified in SEC rules and regulations.
48
Management necessarily applies its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management's control objectives. The Company's management, including the Chief Executive Officer and the Chief Financial Officer, does not expect that its disclosure controls and procedures can prevent all possible errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. Judgments in decision-making can be faulty, and breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of one or more persons. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and while the Company's disclosure controls and procedures are designed to be effective under circumstances where they should reasonably be expected to operate effectively, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in any control system, misstatements due to possible errors or fraud may occur and not be detected.
The Registrant's management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Registrant's disclosure controls and procedures as of September 30, 2026. Based on that evaluation, the Registrant's Chief Executive Officer and Chief Financial Officer concluded that the Registrant's disclosure controls and procedures were effective as of September 30, 2026.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
49
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
See Item 1 of Part I, “Financial Statements — Note 12 — Commitments and Contingencies — Legal Proceedings.”
Item 1A. Risk Factors
In addition to the other information set forth in this report, the factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 could materially affect our business, financial condition, or results of operations. The risks described in this report and in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, or results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The Company's share repurchase authorization, approved on November 4, 2021 by the Company's Board of Directors, provided the Company with the ability to repurchase up to 2,000,000 shares of CRD-A or CRD-B (or a combination of the two) through December 31, 2023 (the "2021 Repurchase Authorization"). On February 10, 2022, the Company’s Board of Directors added 5,000,000 shares to this authorization. On October 30, 2025, the Company's Board of Directors added 2,000,000 shares to this authorization and amended this authorization to allow for repurchases through December 31, 2027. Under the 2021 Repurchase Authorization, repurchases may be made for cash, in the open market or privately negotiated transactions at such times and for such prices as management deems appropriate, subject to applicable contractual and regulatory restrictions.
On August 10, 2026, the Company entered into a Stock Purchase and Sale Agreement pursuant to which the Company purchased 1,000,000 shares of the Company's Class A Common Stock. As the Company's Board of Directors separately authorized this repurchase, the authorized shares remaining under the 2021 Repurchase Authorization were not impacted. As of September 30, 2026 the Company was authorized to repurchase 1,197,469 shares under the 2021 Repurchase Authorization.
Period |
|
Total |
|
|
Average Price |
|
|
Total Number |
|
|
Maximum Number |
|
||||
Balance as of June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
1,260,373 |
|
|||
July 1, 2026 - July 31, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
CRD-A |
|
|
51,881 |
|
|
$ |
10.92 |
|
|
|
51,881 |
|
|
|
|
|
CRD-B |
|
|
10,227 |
|
|
$ |
10.34 |
|
|
|
10,227 |
|
|
|
|
|
Totals as of July 31, 2026 |
|
|
|
|
|
|
|
|
|
|
|
1,198,265 |
|
|||
August 1, 2026 - August 31, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
CRD-A |
|
|
1,000,000 |
|
|
$ |
12.81 |
|
|
|
— |
|
|
|
|
|
CRD-B |
|
|
796 |
|
|
$ |
10.54 |
|
|
|
796 |
|
|
|
|
|
Totals as of August 31, 2026 |
|
|
|
|
|
|
|
|
|
|
|
1,197,469 |
|
|||
September 1, 2026 - September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
CRD-A |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
|
|
CRD-B |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
|
|
|
Totals as of September 30, 2026 |
|
|
1,062,904 |
|
|
|
|
|
|
62,904 |
|
|
|
1,197,469 |
|
|
50
Item 5. Other Information
Rule 10b5-1 Trading Plans
During the three months ended September 30, 2026, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act)
Item 6. Exhibits
Exhibit |
|
|
No. |
|
Description |
31.1 |
|
Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2 |
|
Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1# |
|
Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
32.2# |
|
Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101.INS |
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document |
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
|
|
|
# These certifications are deemed furnished and not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
51
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
Crawford & Company |
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date: |
November 2, 2026
|
|
/s/ W. Bruce Swain |
|
|
|
|
W. Bruce Swain |
|
|
|
|
President and Chief Executive Officer |
|
|
|
|
(Principal Executive Officer) |
|
|
|
|
|
|
Date: |
November 2, 2026
|
|
/s/ Holly B. Boudreau |
|
|
|
|
Holly B. Boudreau |
|
|
|
|
Executive Vice President and Chief Financial Officer |
|
|
|
|
(Principal Financial Officer) |
|
52