Crawford & Company Reports 2022 Fourth Quarter and Full Year Results
Record Revenues for Quarter and Year
The Company’s two classes of stock are substantially identical, except with respect to voting rights and the Company’s ability to pay greater cash dividends on the non-voting Class A Common Stock (CRD-A) than on the voting Class B Common Stock (CRD-B), subject to certain limitations. In addition, with respect to mergers or similar transactions, holders of CRD-A must receive the same type and amount of consideration as holders of CRD-B, unless different consideration is approved by the holders of 75% of CRD-A, voting as a class.
GAAP Consolidated Results
Fourth Quarter 2022
-
Revenues before reimbursements of
$322.2 million , up 10% over$292.9 million for the 2021 fourth quarter -
The Company recorded income tax reserves of
$11.8 million on certain international tax assets during the 2022 fourth quarter -
The Company recorded income tax expense of
$12.4 million during the 2022 fourth quarter related to the normalization of the tax rate associated with our third quarter 2022 goodwill impairment -
Net loss attributable to shareholders of
$(14.1) million , compared with income of$1.7 million in the same period last year -
Diluted loss per share of
$(0.29) for both CRD-A and CRD-B, compared with diluted earnings per share of$0.03 for both CRD-A and CRD-B in the prior year fourth quarter
Non-GAAP Consolidated Results
Fourth Quarter 2022
Non-GAAP consolidated results for the fourth quarter of 2022 exclude the non-cash, after-tax amortization of intangible assets of
-
Foreign currency exchange rates decreased revenues before reimbursements by
$(14.5) million or (5)%. Presented on a constant dollar basis to the prior year, revenues before reimbursements totaled$336.7 million , increasing 15% over the 2021 fourth quarter -
Net income attributable to shareholders, on a non-GAAP basis, totaled
$11.4 million in the 2022 fourth quarter, compared with$3.6 million in the same period last year -
Diluted earnings per share, on a non-GAAP basis, totaled
$0.23 for both CRD-A and CRD-B in the 2022 fourth quarter, compared with$0.07 for both CRD-A and CRD-B in the prior year fourth quarter -
Consolidated adjusted operating earnings, on a non-GAAP basis, were
$23.3 million , or 7.2% of revenues before reimbursements in the 2022 fourth quarter, compared with$9.1 million , or 3.1% of revenues, in the 2021 fourth quarter -
Consolidated adjusted EBITDA, a non-GAAP financial measure, was
$30.8 million , or 9.6% of revenues before reimbursements in the 2022 fourth quarter, compared with$17.6 million , or 6.0% of revenues, in the 2021 fourth quarter
GAAP Consolidated Results
Full Year 2022
-
Revenues before reimbursements of
$1.189 billion , up 8% over$1.102 billion for 2021 -
The Company recorded a non-cash goodwill impairment of
$36.8 million , or$33.3 million after tax, during 2022 -
The Company recorded income tax reserves of
$11.8 million on certain international tax assets during 2022 -
Net loss attributable to shareholders of
$(18.3) million , compared with income of$30.7 million in 2021 -
Diluted loss per share of
$(0.37) for both CRD-A and CRD-B, compared with diluted earnings per share of$0.57 for both CRD-A and CRD-B in 2021
Non-GAAP Consolidated Results
Full Year 2022
Non-GAAP consolidated results for 2022 exclude the non-cash, after-tax adjustments for goodwill impairment of
-
Foreign currency exchange rates decreased revenues before reimbursements by
$(34.6) million or (3)%. Presented on a constant dollar basis to the prior year, revenues before reimbursements totaled$1.224 billion , increasing 11% over 2021 -
Net income attributable to shareholders, on a non-GAAP basis, totaled
$34.8 million in 2022, compared with$39.0 million in 2021 -
Diluted earnings per share, on a non-GAAP basis, totaled
$0.70 for both CRD-A and CRD-B in 2022, compared with$0.72 for both CRD-A and CRD-B in 2021 -
Consolidated adjusted operating earnings, on a non-GAAP basis, were
$63.5 million , or 5.3% of revenues before reimbursements in 2022, compared with$62.5 million , or 5.7% of revenues, in 2021 -
Consolidated adjusted EBITDA, a non-GAAP financial measure, was
$96.3 million , or 8.1% of revenues before reimbursements in 2022, compared with$98.3 million , or 8.9% of revenues, in 2021
Management Comments
“Crawford ended 2022 with a quarter and full year of record-breaking revenues, highlighting the strength of our technology and people-focused strategy,” commented Mr.
“We are encouraged by the robust growth trajectory going into 2023 and remain focused on ensuring that we deliver on earnings growth and return to healthy margins across the business. We look forward to another successful year ahead; fulfilling our purpose to restore lives, businesses and communities and creating further value for our shareholders,” concluded
Segment Results for the Fourth Quarter and Full Year
North America Loss Adjusting
North America Loss Adjusting revenues before reimbursements were
The segment had operating earnings of
North America Loss Adjusting revenues before reimbursements were
The segment had operating earnings of
International Operations
International Operations revenues before reimbursements were
Operating losses were
International Operations revenues before reimbursements were
Operating losses were
Platform Solutions
Platform Solutions revenues before reimbursements were
Operating earnings were
Platform Solutions revenues before reimbursements were
Operating earnings were
Unallocated Corporate and Shared Costs and Credits, Net
Unallocated corporate credits were
Unallocated corporate costs were
Goodwill Impairment
The Company recognized a
During the fourth quarter, the income tax benefit of the impairment normalized due to the non-discrete income tax treatment, which resulted in a reduction of the income tax benefit of
Other Matters
The Company recognized no benefit from CEWS in 2022 or in the 2021 fourth quarter. CEWS benefits totaled
During the 2022 fourth quarter, the Company recognized an
In addition, the Company recognized a pretax contingent earnout credit totaling
Balance Sheet and Cash Flow
The Company’s consolidated cash and cash equivalents position as of
The Company’s operations provided
The Company made no contributions to its
During 2022, the Company repurchased 2,656,474 shares of CRD-A and 963,472 shares of CRD-B at an average per share cost of
Conference Call
As previously announced, Crawford & Company will host a conference call on
Non-GAAP Presentation
In the normal course of business, our operating segments incur certain out-of-pocket expenses that are thereafter reimbursed by our clients. Under
Operating earnings is the primary financial performance measure used by our senior management and chief operating decision maker (“CODM”) to evaluate the financial performance of our Company and operating segments, and make resource allocation and certain compensation decisions. Unlike net income, segment operating earnings is not a standard performance measure found in GAAP. We believe this measure is useful to others in that it allows them to evaluate segment and consolidated operating performance using the same criteria used by our senior management and CODM. Consolidated operating earnings represent segment earnings including certain unallocated corporate and shared costs, but before net corporate interest expense, stock option expense, goodwill impairment, amortization of customer-relationship intangible assets, contingent earnout adjustments, reserves on certain income tax assets, income taxes and net income or loss attributable to noncontrolling interests.
Adjusted EBITDA is not a term defined by GAAP and as a result our measure of adjusted EBITDA might not be comparable to similarly titled measures used by other companies. However, adjusted EBITDA is used by management to evaluate, assess and benchmark our operational results. The Company believes that adjusted EBITDA is relevant and useful information widely used by analysts, investors and other interested parties. Adjusted EBITDA is defined as net income attributable to shareholders of the Company with adjustments for depreciation and amortization, net corporate interest expense, goodwill impairment, contingent earnout adjustments, reserves on certain income tax assets, income taxes and stock-based compensation expense.
Unallocated corporate and shared costs and credits include expenses and credits related to our chief executive officer and Board of Directors, certain provisions for bad debt allowances or subsequent recoveries such as those related to bankrupt clients, defined benefit pension costs or credits for our frozen
Income taxes, net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, and contingent earnout adjustments are recurring components of our net income, but they are not considered part of our segment operating earnings because they are managed on a corporate-wide basis. Income taxes are calculated for the Company on a consolidated basis based on statutory rates in effect in the various jurisdictions in which we provide services and vary significantly by jurisdiction. Net corporate interest expense results from capital structure decisions made by senior management and the Board of Directors, affecting the Company as a whole. Stock option expense represents the non-cash costs generally related to stock options and employee stock purchase plan expenses which are not allocated to our operating segments. Amortization expense is a non-cash expense for finite-lived customer-relationship and trade name intangible assets acquired in business combinations. Contingent earnout adjustments relate to changes in the fair value of earnouts associated with our recent acquisitions. None of these costs relate directly to the performance of our services or operating activities and, therefore, are excluded from segment operating earnings to better assess the results of each segment's operating activities on a consistent basis.
A significant portion of our operations are international. These international operations subject us to foreign exchange fluctuations. The following table illustrates revenue as a percentage of total revenue for the major currencies of the geographic areas that Crawford does business:
|
|
|
Three Months Ended |
|
Year Ended |
||||||||||||||||||||||||
|
(in thousands) |
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Geographic Area |
Currency |
USD
|
% of
|
|
USD
|
% of
|
|
USD
|
% of
|
|
USD
|
% of
|
||||||||||||||||
|
|
USD |
$ |
210,615 |
|
|
65.4 |
% |
|
$ |
182,115 |
|
|
62.2 |
% |
|
$ |
734,264 |
|
|
61.7 |
% |
|
$ |
658,785 |
|
|
59.8 |
% |
|
|
GBP |
|
28,977 |
|
|
9.0 |
% |
|
|
32,153 |
|
|
11.0 |
% |
|
|
121,814 |
|
|
10.2 |
% |
|
|
134,116 |
|
|
12.2 |
% |
|
|
CAD |
|
23,169 |
|
|
7.2 |
% |
|
|
22,493 |
|
|
7.7 |
% |
|
|
97,766 |
|
|
8.2 |
% |
|
|
85,338 |
|
|
7.7 |
% |
|
|
AUD |
|
24,898 |
|
|
7.7 |
% |
|
|
21,166 |
|
|
7.2 |
% |
|
|
94,692 |
|
|
8.0 |
% |
|
|
85,780 |
|
|
7.8 |
% |
|
|
EUR |
|
12,474 |
|
|
3.9 |
% |
|
|
13,133 |
|
|
4.5 |
% |
|
|
54,447 |
|
|
4.6 |
% |
|
|
54,511 |
|
|
4.9 |
% |
|
Rest of World |
Various |
|
22,055 |
|
|
6.8 |
% |
|
|
21,834 |
|
|
7.4 |
% |
|
|
86,499 |
|
|
7.3 |
% |
|
|
83,502 |
|
|
7.6 |
% |
|
Total Revenues, before reimbursements |
$ |
322,188 |
|
|
100.0 |
% |
|
$ |
292,894 |
|
|
100.0 |
% |
|
$ |
1,189,482 |
|
|
100.0 |
% |
|
$ |
1,102,032 |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Following is a reconciliation of consolidated operating earnings to net (loss) income attributable to shareholders of Crawford & Company on a GAAP basis:
|
|
Three Months Ended |
|
Year Ended |
||||||||||
|
(in thousands) |
2022 |
2021 |
|
2022 |
2021 |
||||||||
|
Operating earnings: |
|
|
|
|
|
|
|
|
|
||||
|
North America Loss Adjusting |
$ |
8,923 |
|
$ |
3,211 |
|
|
$ |
19,431 |
|
$ |
15,015 |
|
|
International Operations |
|
(5,646 |
) |
|
1,519 |
|
|
|
(13,269 |
) |
|
4,918 |
|
|
|
|
6,722 |
|
|
4,540 |
|
|
|
27,021 |
|
|
24,783 |
|
|
Platform Solutions |
|
13,032 |
|
|
9,215 |
|
|
|
35,746 |
|
|
32,048 |
|
|
Unallocated corporate and shared costs, net |
|
273 |
|
|
(9,425 |
) |
|
|
(5,459 |
) |
|
(14,259 |
) |
|
Consolidated operating earnings |
|
23,304 |
|
|
9,060 |
|
|
|
63,470 |
|
|
62,505 |
|
|
(Deduct) add: |
|
|
|
|
|
|
|
|
|
||||
|
Net corporate interest expense |
|
(4,110 |
) |
|
(2,116 |
) |
|
|
(10,311 |
) |
|
(6,559 |
) |
|
Stock option expense |
|
(70 |
) |
|
(353 |
) |
|
|
(548 |
) |
|
(1,053 |
) |
|
Amortization expense |
|
(2,052 |
) |
|
(2,603 |
) |
|
|
(7,836 |
) |
|
(11,029 |
) |
|
|
|
— |
|
|
— |
|
|
|
(36,808 |
) |
|
— |
|
|
Contingent earnout adjustments |
|
325 |
|
|
— |
|
|
|
(2,921 |
) |
|
— |
|
|
Reserves on certain income tax assets |
|
(11,767 |
) |
|
— |
|
|
|
(11,767 |
) |
|
— |
|
|
Income tax provision |
|
(19,903 |
) |
|
(2,389 |
) |
|
|
(11,811 |
) |
|
(13,316 |
) |
|
Net loss attributable to noncontrolling interests |
|
186 |
|
|
54 |
|
|
|
227 |
|
|
144 |
|
|
Net (loss) income attributable to shareholders of Crawford & Company |
$ |
(14,087 |
) |
$ |
1,653 |
|
|
$ |
(18,305 |
) |
$ |
30,692 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Following is a reconciliation of net (loss) income attributable to shareholders of Crawford & Company on a GAAP basis to non-GAAP adjusted EBITDA:
|
|
Three Months Ended |
|
Year Ended |
||||||||||
|
(in thousands) |
|
|
|
|
|
||||||||
|
Net (loss) income attributable to shareholders of Crawford & Company |
$ |
(14,087 |
) |
$ |
1,653 |
|
|
$ |
(18,305 |
) |
$ |
30,692 |
|
|
Add (Deduct): |
|
|
|
|
|
|
|
|
|
||||
|
Depreciation and amortization |
|
8,719 |
|
|
9,408 |
|
|
|
36,098 |
|
|
40,176 |
|
|
Stock-based compensation |
|
705 |
|
|
2,021 |
|
|
|
4,923 |
|
|
7,585 |
|
|
Net corporate interest expense |
|
4,110 |
|
|
2,116 |
|
|
|
10,311 |
|
|
6,559 |
|
|
|
|
— |
|
|
— |
|
|
|
36,808 |
|
|
— |
|
|
Contingent earnout adjustments |
|
(325 |
) |
|
— |
|
|
|
2,921 |
|
|
— |
|
|
Reserves on certain income tax assets |
|
11,767 |
|
|
— |
|
|
|
11,767 |
|
|
— |
|
|
Income tax provision |
|
19,903 |
|
|
2,389 |
|
|
|
11,811 |
|
|
13,316 |
|
|
Non-GAAP adjusted EBITDA |
$ |
30,792 |
|
$ |
17,587 |
|
|
$ |
96,334 |
|
$ |
98,328 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Following is a reconciliation of operating cash flow to free cash flow for the twelve months ended
|
Twelve Months Ended |
|||||||||||
|
(in thousands) |
|
|
|
|
Change |
||||||
|
Net Cash Provided by Operating Activities |
$ |
27,634 |
|
|
$ |
54,321 |
|
|
$ |
(26,687 |
) |
|
Less: |
|
|
|
|
|
|
|
|
|||
|
Property & Equipment Purchases, net |
|
(6,838 |
) |
|
|
(9,225 |
) |
|
|
2,387 |
|
|
|
|
(27,761 |
) |
|
|
(21,729 |
) |
|
|
(6,032 |
) |
|
Free Cash Flow |
$ |
(6,965 |
) |
|
$ |
23,367 |
|
|
$ |
(30,332 |
) |
|
|
|
|
|
|
|
|
|
|
|||
Following are the reconciliations of GAAP Pretax Earnings, Net (Loss) Income and (Loss) Earnings Per Share to related non-GAAP Adjusted figures, which reflect 2022 before goodwill impairment, amortization of intangible assets, reserves on certain income tax assets, and contingent earnout adjustments, and for 2021 exclude the amortization of intangible assets:
|
Three Months Ended |
||||||||||||
|
(in thousands) |
Pretax earnings |
Net (loss) income
|
Diluted (loss)
|
Diluted (loss)
|
||||||||
|
GAAP |
$ |
17,397 |
|
$ |
(14,087 |
) |
$ |
(0.29 |
) |
$ |
(0.29 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
|
||||
|
Amortization of intangible assets |
|
2,052 |
|
|
1,539 |
|
|
0.03 |
|
|
0.03 |
|
|
Income tax impact of third quarter goodwill impairment |
|
— |
|
|
12,392 |
|
|
0.25 |
|
|
0.25 |
|
|
Contingent earnout adjustments |
|
(325 |
) |
|
(241 |
) |
|
— |
|
|
— |
|
|
Reserves on certain income tax assets |
|
— |
|
|
11,767 |
|
|
0.24 |
|
|
0.24 |
|
|
Non-GAAP Adjusted |
$ |
19,124 |
|
$ |
11,370 |
|
$ |
0.23 |
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Three Months Ended |
||||||||||||
|
(in thousands) |
Pretax earnings |
Net income
|
Diluted
|
Diluted
|
||||||||
|
GAAP |
$ |
3,988 |
|
$ |
1,653 |
|
$ |
0.03 |
|
$ |
0.03 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
||||
|
Amortization of intangible assets |
|
2,603 |
|
|
1,952 |
|
|
0.04 |
|
|
0.04 |
|
|
Non-GAAP Adjusted |
$ |
6,591 |
|
$ |
3,605 |
|
$ |
0.07 |
|
$ |
0.07 |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Year Ended |
|
|||||||||||
|
(in thousands) |
Pretax earnings |
Net (loss) income attributable
|
Diluted (loss)
|
Diluted (loss)
|
||||||||
|
GAAP |
$ |
5,046 |
|
$ |
(18,305 |
) |
$ |
(0.37 |
) |
$ |
(0.37 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
|
||||
|
Amortization of intangible assets |
|
7,836 |
|
|
5,877 |
|
|
0.12 |
|
|
0.12 |
|
|
|
|
36,808 |
|
|
33,300 |
|
|
0.67 |
|
|
0.67 |
|
|
Contingent earnout adjustments |
|
2,921 |
|
|
2,163 |
|
|
0.04 |
|
|
0.04 |
|
|
Reserves on certain income tax assets |
|
— |
|
|
11,767 |
|
|
0.24 |
|
|
0.24 |
|
|
Non-GAAP Adjusted |
$ |
52,611 |
|
$ |
34,802 |
|
$ |
0.70 |
|
$ |
0.70 |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Year Ended |
||||||||||||
|
(in thousands) |
Pretax earnings |
Net income attributable to
|
Diluted earnings
|
Diluted earnings
|
||||||||
|
GAAP |
$ |
43,864 |
|
$ |
30,692 |
|
$ |
0.57 |
|
$ |
0.57 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
||||
|
Amortization of intangible assets |
|
11,029 |
|
|
8,272 |
|
|
0.15 |
|
|
0.15 |
|
|
Non-GAAP Adjusted |
$ |
54,893 |
|
$ |
38,964 |
|
$ |
0.72 |
|
$ |
0.72 |
|
|
|
|
|
|
|
|
|
|
|
||||
(1) The income tax impact of goodwill impairment was based on the estimated annual effective income tax rate. Due to the non-discrete income tax treatment of the third quarter 2022 goodwill impairment, the income tax benefit normalized as income was earned during the remainder of the year, resulting in a lower full year income tax benefit during 2022.
Following is information regarding the weighted average shares used in the computation of basic and diluted earnings per share:
|
|
Three Months Ended |
Year Ended |
||||||||||
|
(in thousands) |
|
|
|
|
||||||||
|
Weighted-Average Shares Used to Compute Basic Earnings Per Share: |
|
|
|
|
|
|
|
|
||||
|
Class A Common Stock |
|
28,597 |
|
|
30,681 |
|
|
29,196 |
|
|
30,760 |
|
|
Class B Common Stock |
|
19,848 |
|
|
21,640 |
|
|
20,113 |
|
|
22,237 |
|
|
Weighted-Average Shares Used to Compute Diluted Earnings Per Share: |
|
|
|
|
|
|
|
|
||||
|
Class A Common Stock |
|
28,597 |
|
|
31,249 |
|
|
29,196 |
|
|
31,743 |
|
|
Class B Common Stock |
|
19,848 |
|
|
21,640 |
|
|
20,113 |
|
|
22,237 |
|
|
|
|
|
|
|
|
|
|
|
||||
|
Non-GAAP (1) |
|
|
|
|
|
|
|
|
||||
|
Weighted-Average Shares Used to Compute Diluted Earnings Per Share: |
|
|
|
|
|
|
|
|
||||
|
Class A Common Stock |
|
28,966 |
|
|
31,249 |
|
|
29,553 |
|
|
31,743 |
|
|
Class B Common Stock |
|
19,848 |
|
|
21,640 |
|
|
20,116 |
|
|
22,237 |
|
|
|
|
|
|
|
|
|
|
|
||||
(1) The Company had a net loss for GAAP reporting during the three and twelve months ended
Further information regarding the Company’s operating results for the three and twelve months ended
For further information regarding this press release, please call
About Crawford®
Based in
Earnings per share may be different between CRD-A and CRD-B due to the payment of a higher per share dividend on CRD-A than CRD-B, and the impact that has on the earnings per share calculation according to generally accepted accounting principles.
|
This press release contains forward-looking statements, including statements about the expected future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative and quantitative, that are not historical facts may be “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from historical experience or Crawford & Company’s present expectations. Accordingly, no one should place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Crawford & Company does not undertake to update forward-looking statements to reflect the impact of circumstances or events that may arise or not arise after the date the forward-looking statements are made. For further information regarding Crawford & Company, including factors that could cause our actual financial condition, results or earnings to differ from those described in any forward-looking statements, please read Crawford & Company’s reports filed with the |
Tag:
|
CRAWFORD & COMPANY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (In Thousands, Except Per Share Amounts and Percentages) |
||||||||||||
|
Three Months Ended |
|
2022 |
|
2021 |
|
% Change |
||||||
|
|
|
|
|
|
|
|
|
|
|
|||
|
Revenues: |
|
|
|
|
|
|
|
|
|
|||
|
Revenues Before Reimbursements |
|
$ |
322,188 |
|
|
$ |
292,894 |
|
|
|
10 |
% |
|
Reimbursements |
|
|
11,181 |
|
|
|
10,075 |
|
|
|
11 |
% |
|
Total Revenues |
|
|
333,369 |
|
|
|
302,969 |
|
|
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Costs and Expenses: |
|
|
|
|
|
|
|
|
|
|||
|
Costs of Services Provided, Before Reimbursements |
|
|
238,180 |
|
|
|
220,856 |
|
|
|
8 |
% |
|
Reimbursements |
|
|
11,181 |
|
|
|
10,075 |
|
|
|
11 |
% |
|
Total Costs of Services |
|
|
249,361 |
|
|
|
230,931 |
|
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Selling, General, and Administrative Expenses |
|
|
62,528 |
|
|
|
66,730 |
|
|
|
(6 |
)% |
|
Corporate Interest Expense, Net |
|
|
4,110 |
|
|
|
2,116 |
|
|
|
94 |
% |
|
Total Costs and Expenses |
|
|
315,999 |
|
|
|
299,777 |
|
|
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Other Income (Expense), Net |
|
|
27 |
|
|
|
796 |
|
|
|
(97 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Income Before Income Taxes |
|
|
17,397 |
|
|
|
3,988 |
|
|
|
336 |
% |
|
Provision for Income Taxes |
|
|
31,670 |
|
|
|
2,389 |
|
|
|
1226 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Net (Loss) Income |
|
|
(14,273 |
) |
|
|
1,599 |
|
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests |
|
|
186 |
|
|
|
54 |
|
|
|
244 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Net (Loss) Income Attributable to Shareholders of Crawford & Company |
|
$ |
(14,087 |
) |
|
$ |
1,653 |
|
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
(Loss) Earnings Per Share - Basic: |
|
|
|
|
|
|
|
|
|
|||
|
Class A Common Stock |
|
$ |
(0.29 |
) |
|
$ |
0.03 |
|
|
nm |
|
|
|
Class B Common Stock |
|
$ |
(0.29 |
) |
|
$ |
0.03 |
|
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
(Loss) Earnings Per Share - Diluted: |
|
|
|
|
|
|
|
|
|
|||
|
Class A Common Stock |
|
$ |
(0.29 |
) |
|
$ |
0.03 |
|
|
nm |
|
|
|
Class B Common Stock |
|
$ |
(0.29 |
) |
|
$ |
0.03 |
|
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Cash Dividends Per Share: |
|
|
|
|
|
|
|
|
|
|||
|
Class A Common Stock |
|
$ |
0.06 |
|
|
$ |
0.06 |
|
|
|
— |
|
|
Class B Common Stock |
|
$ |
0.06 |
|
|
$ |
0.06 |
|
|
|
— |
|
|
CRAWFORD & COMPANY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (In Thousands, Except Per Share Amounts and Percentages) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||
|
Year Ended |
|
2022 |
|
2021 |
|
% Change |
||||||
|
|
|
|
|
|
|
|
|
|
|
|||
|
Revenues: |
|
|
|
|
|
|
|
|
|
|||
|
Revenues Before Reimbursements |
|
$ |
1,189,482 |
|
|
$ |
1,102,032 |
|
|
|
8 |
% |
|
Reimbursements |
|
|
41,744 |
|
|
|
37,199 |
|
|
|
12 |
% |
|
Total Revenues |
|
|
1,231,226 |
|
|
|
1,139,231 |
|
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Costs and Expenses: |
|
|
|
|
|
|
|
|
|
|||
|
Costs of Services Provided, Before Reimbursements |
|
|
883,128 |
|
|
|
810,231 |
|
|
|
9 |
% |
|
Reimbursements |
|
|
41,744 |
|
|
|
37,199 |
|
|
|
12 |
% |
|
Total Costs of Services |
|
|
924,872 |
|
|
|
847,430 |
|
|
|
9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Selling, General, and Administrative Expenses |
|
|
255,750 |
|
|
|
244,850 |
|
|
|
4 |
% |
|
Corporate Interest Expense, Net |
|
|
10,311 |
|
|
|
6,559 |
|
|
|
57 |
% |
|
Goodwill Impairment |
|
|
36,808 |
|
|
|
- |
|
|
nm |
|
|
|
Total Costs and Expenses |
|
|
1,227,741 |
|
|
|
1,098,839 |
|
|
|
12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Other Income (Expense), Net |
|
|
1,561 |
|
|
|
3,472 |
|
|
|
(55 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Income Before Income Taxes |
|
|
5,046 |
|
|
|
43,864 |
|
|
|
(88 |
)% |
|
Provision for Income Taxes |
|
|
23,578 |
|
|
|
13,316 |
|
|
|
77 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Net (Loss) Income |
|
|
(18,532 |
) |
|
|
30,548 |
|
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests |
|
|
227 |
|
|
|
144 |
|
|
|
58 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||
|
Net (Loss) Income Attributable to Shareholders of Crawford & Company |
|
$ |
(18,305 |
) |
|
$ |
30,692 |
|
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
(Loss) Earnings Per Share - Basic: |
|
|
|
|
|
|
|
|
|
|||
|
Class A Common Stock |
|
$ |
(0.37 |
) |
|
$ |
0.58 |
|
|
nm |
|
|
|
Class B Common Stock |
|
$ |
(0.37 |
) |
|
$ |
0.58 |
|
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
(Loss) Earnings Per Share - Diluted: |
|
|
|
|
|
|
|
|
|
|||
|
Class A Common Stock |
|
$ |
(0.37 |
) |
|
$ |
0.57 |
|
|
nm |
|
|
|
Class B Common Stock |
|
$ |
(0.37 |
) |
|
$ |
0.57 |
|
|
nm |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Cash Dividends Per Share: |
|
|
|
|
|
|
|
|
|
|||
|
Class A Common Stock |
|
$ |
0.24 |
|
|
$ |
0.24 |
|
|
|
— |
|
|
Class B Common Stock |
|
$ |
0.24 |
|
|
$ |
0.24 |
|
|
|
— |
|
|
CRAWFORD & COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS
As of Unaudited (In Thousands, Except Par Values) |
||||||||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
||||
|
|
|
2022 |
|
2021 |
||||
|
ASSETS |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
Current Assets: |
|
|
|
|
|
|
||
|
Cash and Cash Equivalents |
|
$ |
46,007 |
|
|
$ |
53,228 |
|
|
Accounts Receivable, Net |
|
|
141,106 |
|
|
|
134,458 |
|
|
Unbilled Revenues, at Estimated Billable Amounts |
|
|
126,274 |
|
|
|
118,722 |
|
|
Income Taxes Receivable |
|
|
9,098 |
|
|
|
4,936 |
|
|
Prepaid Expenses and Other Current Assets |
|
|
28,782 |
|
|
|
34,576 |
|
|
Total Current Assets |
|
|
351,267 |
|
|
|
345,920 |
|
|
|
|
|
|
|
|
|
||
|
Net Property and Equipment |
|
|
27,809 |
|
|
|
33,721 |
|
|
|
|
|
|
|
|
|
||
|
Other Assets: |
|
|
|
|
|
|
||
|
Operating Lease Right-of-Use Asset, Net |
|
|
93,334 |
|
|
|
99,369 |
|
|
|
|
|
76,622 |
|
|
|
116,526 |
|
|
Intangible Assets Arising from Business Acquisitions, Net |
|
|
88,039 |
|
|
|
97,571 |
|
|
Capitalized Software Costs, Net |
|
|
82,975 |
|
|
|
75,802 |
|
|
Deferred Income Tax Assets |
|
|
19,573 |
|
|
|
21,266 |
|
|
Other Noncurrent Assets |
|
|
51,888 |
|
|
|
62,464 |
|
|
Total Other Assets |
|
|
412,431 |
|
|
|
472,998 |
|
|
|
|
|
|
|
|
|
||
|
Total Assets |
|
$ |
791,507 |
|
|
$ |
852,639 |
|
|
|
|
|
|
|
|
|
||
|
LIABILITIES AND SHAREHOLDERS’ INVESTMENT |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
Current Liabilities: |
|
|
|
|
|
|
||
|
Short-Term Borrowings |
|
$ |
27,048 |
|
|
$ |
10,704 |
|
|
Accounts Payable |
|
|
50,847 |
|
|
|
48,470 |
|
|
Accrued Compensation and Related Costs |
|
|
79,285 |
|
|
|
96,018 |
|
|
Self-Insured Risks |
|
|
12,614 |
|
|
|
13,222 |
|
|
Income Taxes Payable |
|
|
1,208 |
|
|
|
1,200 |
|
|
Operating Lease Liability |
|
|
22,910 |
|
|
|
25,238 |
|
|
Other Accrued Liabilities |
|
|
56,293 |
|
|
|
76,884 |
|
|
Deferred Revenues |
|
|
29,282 |
|
|
|
32,119 |
|
|
Total Current Liabilities |
|
|
279,487 |
|
|
|
303,855 |
|
|
|
|
|
|
|
|
|
||
|
Noncurrent Liabilities: |
|
|
|
|
|
|
||
|
Long-Term Debt and Finance Leases, Less Current Installments |
|
|
211,810 |
|
|
|
164,315 |
|
|
Operating Lease Liability |
|
|
84,628 |
|
|
|
88,408 |
|
|
Deferred Revenues |
|
|
24,737 |
|
|
|
23,786 |
|
|
Accrued Pension Liabilities |
|
|
25,914 |
|
|
|
17,892 |
|
|
Other Noncurrent Liabilities |
|
|
41,553 |
|
|
|
42,986 |
|
|
Total Noncurrent Liabilities |
|
|
388,642 |
|
|
|
337,387 |
|
|
|
|
|
|
|
|
|
||
|
Shareholders’ Investment: |
|
|
|
|
|
|
||
|
Class A Common Stock, |
|
|
28,764 |
|
|
|
30,996 |
|
|
Class B Common Stock, |
|
|
19,848 |
|
|
|
20,812 |
|
|
|
|
|
78,158 |
|
|
|
74,229 |
|
|
Retained Earnings |
|
|
213,094 |
|
|
|
266,369 |
|
|
Accumulated Other Comprehensive Loss |
|
|
(215,321 |
) |
|
|
(180,441 |
) |
|
Shareholders’ Investment Attributable to Shareholders of Crawford & Company |
|
|
124,543 |
|
|
|
211,965 |
|
|
Noncontrolling Interests |
|
|
(1,165 |
) |
|
|
(568 |
) |
|
Total Shareholders’ Investment |
|
|
123,378 |
|
|
|
211,397 |
|
|
|
|
|
|
|
|
|
||
|
Total Liabilities and Shareholders’ Investment |
|
$ |
791,507 |
|
|
$ |
852,639 |
|
|
CRAWFORD & COMPANY SUMMARY RESULTS BY OPERATING SEGMENT WITH DIRECT COMPENSATION AND OTHER EXPENSES Unaudited (In Thousands, Except Percentages)
Three Months Ended |
||||||||||||||||
|
|
|
North America Loss Adjusting |
% |
International Operations |
% |
|
|
% |
|
Platforms Solutions |
% |
|||||
|
|
|
2022 |
2021 |
Change |
|
2022 |
2021 |
Change |
|
2022 |
2021 |
Change |
|
2022 |
2021 |
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues Before Reimbursements |
|
|
|
16.1% |
|
|
|
0.1% |
|
|
|
4.7% |
|
|
|
23.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Compensation, Fringe Benefits & Non-Employee Labor |
|
55,623 |
49,954 |
11.3% |
|
64,230 |
63,415 |
1.3% |
|
50,862 |
48,433 |
5.0% |
|
53,025 |
44,264 |
19.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
71.6% |
74.6% |
|
|
72.7% |
71.8% |
|
|
64.7% |
64.5% |
|
|
68.5% |
70.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor |
|
13,174 |
13,780 |
(4.4)% |
|
29,820 |
23,351 |
27.7% |
|
21,031 |
22,080 |
(4.8)% |
|
11,392 |
9,132 |
24.7% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
17.0% |
20.6% |
|
|
33.7% |
26.4% |
|
|
26.8% |
29.4% |
|
|
14.7% |
14.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
68,797 |
63,734 |
7.9% |
|
94,050 |
86,766 |
8.4% |
|
71,893 |
70,513 |
2.0% |
|
64,417 |
53,396 |
20.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings (1) |
|
|
|
177.9% |
|
|
|
(471.7)% |
|
|
|
48.1% |
|
|
|
41.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
11.5% |
4.8% |
|
|
(6.4)% |
1.7% |
|
|
8.6% |
6.0% |
|
|
16.8% |
14.7% |
|
|
Twelve Months Ended |
||||||||||||||||
|
|
|
North America Loss Adjusting |
% |
International Operations |
% |
|
|
% |
|
Platforms Solutions |
% |
|||||
|
|
|
2022 |
2021 |
Change |
|
2022 |
2021 |
Change |
|
2022 |
2021 |
Change |
|
2022 |
2021 |
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues Before Reimbursements |
|
|
|
12.7% |
|
|
|
(0.1)% |
|
|
|
4.2% |
|
|
|
22.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Compensation, Fringe Benefits & Non-Employee Labor |
|
199,009 |
176,538 |
12.7% |
|
254,049 |
249,060 |
2.0% |
|
198,473 |
187,458 |
5.9% |
|
163,449 |
131,736 |
24.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
72.4% |
72.4% |
|
|
71.1% |
69.6% |
|
|
63.3% |
62.3% |
|
|
67.1% |
66.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor |
|
56,315 |
52,236 |
7.8% |
|
116,672 |
103,931 |
12.3% |
|
88,070 |
88,794 |
(0.8)% |
|
44,516 |
35,515 |
25.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
20.5% |
21.4% |
|
|
32.6% |
29.0% |
|
|
28.1% |
29.5% |
|
|
18.3% |
17.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
255,324 |
228,774 |
11.6% |
|
370,721 |
352,991 |
5.0% |
|
286,543 |
276,252 |
3.7% |
|
207,965 |
167,251 |
24.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings (1) |
|
|
|
29.4% |
|
|
|
(369.8)% |
|
|
|
9.0% |
|
|
|
11.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Revenues Before Reimbursements |
|
7.1% |
6.2% |
|
|
(3.7)% |
1.4% |
|
|
8.6% |
8.2% |
|
|
14.7% |
16.1% |
|
|
(1) A non-GAAP financial measurement which represents net income attributable to the applicable reporting segment excluding income taxes, net corporate interest expense, stock option expense, goodwill impairment, amortization of customer-relationship intangible assets, contingent earnout adjustments, and certain unallocated corporate and shared costs and credits. See page 5 for additional information about segment operating earnings. |
||||||||||||||||
|
CRAWFORD & COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended Unaudited (In Thousands) |
||||||||
|
|
|
2022 |
|
2021 |
||||
|
Cash Flows From Operating Activities: |
|
|
|
|
|
|
||
|
Net (loss) income |
|
$ |
(18,532 |
) |
|
$ |
30,548 |
|
|
Reconciliation of net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
|
Depreciation and amortization |
|
|
36,098 |
|
|
|
40,176 |
|
|
|
|
|
36,808 |
|
|
|
— |
|
|
Deferred income taxes |
|
|
7,397 |
|
|
|
(2,992 |
) |
|
Stock-based compensation |
|
|
4,923 |
|
|
|
7,585 |
|
|
Gain on sale of property and equipment |
|
|
(1,490 |
) |
|
|
104 |
|
|
Contingent earnout adjustments |
|
|
2,921 |
|
|
|
— |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
|
Accounts receivable, net |
|
|
(15,537 |
) |
|
|
(5,475 |
) |
|
Unbilled revenues, net |
|
|
(19,319 |
) |
|
|
(9,979 |
) |
|
Accrued or prepaid income taxes |
|
|
(7,444 |
) |
|
|
(7,232 |
) |
|
Accounts payable and accrued liabilities |
|
|
(5,985 |
) |
|
|
13,470 |
|
|
Deferred revenues |
|
|
(397 |
) |
|
|
3,562 |
|
|
Accrued retirement costs |
|
|
(1,366 |
) |
|
|
(15,478 |
) |
|
Prepaid expenses and other operating activities |
|
|
9,557 |
|
|
|
32 |
|
|
Net cash provided by operating activities |
|
|
27,634 |
|
|
|
54,321 |
|
|
|
|
|
|
|
|
|
||
|
Cash Flows From Investing Activities: |
|
|
|
|
|
|
||
|
Acquisitions of property and equipment |
|
|
(6,838 |
) |
|
|
(9,225 |
) |
|
Capitalization of computer software costs |
|
|
(27,761 |
) |
|
|
(21,729 |
) |
|
Proceeds from settlement of life insurance policies |
|
|
— |
|
|
|
6,526 |
|
|
Payments for business acquisitions, net of cash acquired |
|
|
(26,309 |
) |
|
|
(46,398 |
) |
|
Cash proceeds from sale of property and equipment |
|
|
3,032 |
|
|
|
— |
|
|
Net cash used in investing activities |
|
|
(57,876 |
) |
|
|
(70,826 |
) |
|
|
|
|
|
|
|
|
||
|
Cash Flows From Financing Activities: |
|
|
|
|
|
|
||
|
Cash dividends paid |
|
|
(11,842 |
) |
|
|
(12,663 |
) |
|
Repurchases of common stock |
|
|
(26,749 |
) |
|
|
(19,134 |
) |
|
Increases in short-term and revolving credit facility borrowings |
|
|
106,481 |
|
|
|
113,312 |
|
|
Payments on short-term and revolving credit facility borrowings |
|
|
(39,025 |
) |
|
|
(52,306 |
) |
|
Payments of contingent consideration on acquisitions |
|
|
(2,118 |
) |
|
|
(1,544 |
) |
|
Other financing activities |
|
|
(807 |
) |
|
|
(3,008 |
) |
|
Net cash provided by financing activities |
|
|
25,940 |
|
|
|
24,657 |
|
|
|
|
|
|
|
|
|
||
|
Effects of exchange rate changes on cash and cash equivalents |
|
|
(2,742 |
) |
|
|
881 |
|
|
(Decrease) increase in cash, cash equivalents, and restricted cash(1) |
|
|
(7,044 |
) |
|
|
9,033 |
|
|
Cash, cash equivalents, and restricted cash at beginning of year(1) |
|
|
53,689 |
|
|
|
44,656 |
|
|
Cash, cash equivalents, and restricted cash at end of period(1) |
|
$ |
46,645 |
|
|
$ |
53,689 |
|
|
(1)The 2022 amounts include beginning restricted cash of |
||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230306005716/en/
Media Contacts: mediarelations@us.crawco.com
+44 207 265 4067
Lynn.Cufley@crawco.uk
+1 470 792 5678
Katie.Cline@us.crawco.com
Source: Crawford & Company
