Crawford & Company Reports 2024 Second Quarter Results

Rhea-AI Summary

Crawford & Company (NYSE: CRD-A, CRD-B) reported its Q2 2024 results, with revenues before reimbursements at $314.2 million, down from $324.6 million in Q2 2023. Net income attributable to shareholders increased to $8.6 million from $8.4 million last year, with diluted EPS at $0.17 for both share classes, unchanged from Q2 2023. Non-GAAP diluted EPS rose to $0.25 from $0.24. The company added $23 million in new business, with a robust pipeline.

Segment Results:

• North America Loss Adjusting: Revenues of $76 million, slight decline; operating earnings up to $4.9 million.
• International Operations: Revenues up 7.3% to $102.3 million; operating earnings rose to $5.7 million.
• Broadspire: Record revenues of $97.1 million, up 11.3%; operating earnings surged to $15.1 million.
• Platform Solutions: Revenues fell 40.8% to $38.8 million; operating earnings down to $1.5 million.

Company's debt rose to $233.8 million, with cash and equivalents at $46.7 million. Cash used in operations was $8.3 million for H1 2024, versus $27.2 million provided in 2023. No CRD-A shares were repurchased, but 230,861 shares of CRD-B were repurchased for $2.1 million.

Positive

• Net income increase to $8.6 million from $8.4 million.
• Non-GAAP diluted EPS increased to $0.25 from $0.24.
• Broadspire segment achieved record revenues of $97.1 million, up 11.3%.
• International Operations revenues increased by 7.3% to $102.3 million.

Negative

• Revenues before reimbursements decreased to $314.2 million from $324.6 million.
• Platform Solutions segment revenues declined 40.8% to $38.8 million.
• Increased unallocated corporate costs to $5.1 million from $1.1 million.

Insights

Financial Analyst

Crawford & Company's Q2 2024 results show a mixed performance. While revenues declined 3.2% to $314.2 million, net income increased slightly to $8.6 million. The company maintained stable earnings per share at $0.17 for both share classes.

Key positives include strong growth in Broadspire segment with record quarterly revenues and improved margins. International Operations also saw revenue growth and margin expansion. However, the Platform Solutions segment experienced a significant 40.8% revenue decline due to reduced weather-related claims.

The company's diversified model helped offset weather-related weakness, demonstrating resilience. With $23 million in new business added and a robust pipeline, Crawford appears well-positioned for future growth. However, investors should monitor the impact of weather patterns on the Platform Solutions segment.

Market Research Analyst

Crawford's Q2 results reflect broader industry trends in the insurance claims management sector. The company's ability to grow in segments like Broadspire and International Operations despite a challenging environment demonstrates its market adaptability.

The 40.8% revenue decline in Platform Solutions highlights the volatility of weather-dependent services. This could be a concern for investors, as climate change may lead to more unpredictable weather patterns, affecting this segment's performance.

The addition of $23 million in new and enhanced business suggests Crawford is successfully expanding its market share. This, combined with the company's global presence in over 70 countries, positions it well to capitalize on growth opportunities in the insurance outsourcing market.

Risk Management Specialist

Crawford's Q2 results highlight both strengths and vulnerabilities in its business model. The company's diversified revenue streams helped mitigate the impact of reduced weather-related claims, demonstrating effective risk management.

However, the significant decline in Platform Solutions revenue exposes a key risk factor - dependence on weather events. This volatility could impact future earnings predictability.

The company's strong balance sheet, with $46.7 million in cash and a manageable debt level of $233.8 million, provides financial flexibility. This positions Crawford well to weather potential storms in its business environment and pursue strategic growth initiatives.

Investors should monitor Crawford's efforts to further diversify its revenue streams and reduce weather-related vulnerabilities to ensure long-term stability.

ATLANTA--(BUSINESS WIRE)-- Crawford & Company® (NYSE: CRD-A and CRD-B), is pleased to announce its financial results for the second quarter ended June 30, 2024. Based in Atlanta, Crawford & Company (NYSE: CRD‐A and CRD‐B) is a leading global provider of claims management and outsourcing solutions to insurance companies and self‐insured entities with an expansive network serving clients in more than 70 countries. Refer to the Company's website (www.crawco.com) for more information.

Rohit Verma, president and chief executive officer of Crawford & Company, commented, “Our growth strategy and initiatives are yielding results. Despite a difficult comparison due to weather events last year, three of our four business segments showed operating earnings growth with improved margins in the quarter. This enabled us to achieve consolidated earnings consistent with last year and reflects Crawford’s diversified revenue model with a healthy balance between weather and non-weather dependent businesses. We added $23 million in new and enhanced business in the quarter, and our pipeline remains robust. As we move through the back half of 2024, I am optimistic about the overall direction of the Company and believe we are well-positioned to drive enhanced value for customers and shareholders."

GAAP Consolidated Results

Second Quarter 2024

• Revenues before reimbursements of $314.2 million, compared to $324.6 million for the 2023 second quarter
• Net income attributable to shareholders of $8.6 million, increasing from the $8.4 million in the same period last year
• Diluted earnings per share of $0.17 for both CRD-A and CRD-B, unchanged from diluted earnings per share of $0.17 for both share classes in the prior year second quarter

Non-GAAP Consolidated Results

Second Quarter 2024

• Diluted earnings per share, on a non-GAAP basis, totaled $0.25 for both CRD-A and CRD-B in the 2024 second quarter, compared with $0.24 for both share classes in the prior year second quarter
• Net income attributable to shareholders, on a non-GAAP basis, totaled $12.4 million in the 2024 second quarter, compared with $12.0 million in the same period last year
• Consolidated adjusted operating earnings, on a non-GAAP basis, were $22.1 million, or 7.0% of revenues before reimbursements in the 2024 second quarter, compared with $22.8 million, or 7.0% of revenues, in the 2023 second quarter
• Consolidated adjusted EBITDA, a non-GAAP financial measure, was $30.6 million, or 9.7% of revenues before reimbursements in the 2024 second quarter, compared with $31.5 million, or 9.7% of revenues, in the 2023 second quarter
• Foreign currency exchange rates decreased revenues before reimbursements by $1.9 million or less than (1)%. Presented on a constant dollar basis to the prior year period, revenues before reimbursements totaled $316.1 million, decreasing (3)% from the 2023 second quarter

Mr. Verma continued, “Our second quarter performance was highlighted by strong revenue growth and margin improvement at Broadspire, resulting in another record quarter for this business. Additionally, we achieved continued improvement over the prior year period in our International Operations segment. Our North American Loss Adjusting business achieved improved margin performance and consistent revenues quarter over quarter, despite a decline in extreme weather events, reflecting the segment’s increased market share in the industry. The absence of severe weather continued to impact weather-related demand for our Platform Solutions business as carriers have capacity to meet current volumes. However, we remain well positioned to respond to seasonal storm activity. Our balance sheet remains strong, providing us flexibility to execute our strategic growth strategy.”

Segment Results for the Second Quarter

North America Loss Adjusting

North America Loss Adjusting revenues before reimbursements were $76.0 million in the second quarter of 2024, decreasing (0.4)% from $76.4 million in the second quarter of 2023.

The segment had operating earnings of $4.9 million in the 2024 second quarter, increasing from $3.9 million in the second quarter of 2023. The operating margin was 6.4% in the 2024 quarter and 5.1% in the 2023 quarter.

International Operations

International Operations revenues before reimbursements were $102.3 million in the second quarter of 2024, up 7.3% from $95.3 million in the same period of 2023. Absent foreign exchange rate decreases of $1.5 million, revenues would have been $103.7 million for the 2024 second quarter.

Operating earnings were $5.7 million in the 2024 second quarter, increasing from $3.7 million in the 2023 period. The segment’s operating margin for the 2024 quarter was 5.6% as compared with 3.9% in the 2023 quarter.

Broadspire

Broadspire segment revenues before reimbursements were a new quarterly record of $97.1 million in the 2024 second quarter, increasing 11.3% from $87.2 million in the 2023 second quarter.

Broadspire recorded operating earnings of $15.1 million in the second quarter of 2024, representing an operating margin of 15.5%, increasing from $8.1 million, or 9.3% of revenues, in the 2023 second quarter.

Platform Solutions

Platform Solutions revenues before reimbursements were $38.8 million in the second quarter of 2024, down (40.8)% from $65.6 million in the same period of 2023 as the Networks service line had significantly reduced weather related claim volumes.

Operating earnings were $1.5 million in the 2024 second quarter, decreasing from the $8.1 million in the 2023 period. The segment’s operating margin for the 2024 quarter was 3.8% as compared with 12.3% in the 2023 quarter.

Unallocated Corporate and Shared Costs and Credits, Net

Unallocated corporate costs were $5.1 million in the second quarter of 2024, compared with $1.1 million in the same period of 2023. The increase in the 2024 second quarter was primarily due to an increase in professional fees and other reserves.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses (“SG&A”) increased $1.8 million, or 2.6%, in the three months ended June 30, 2024 as compared with the 2023 period. The increase was primarily due to professional fees, IT costs, and compensation expense, including taxes and benefits.

Other Matters

The Company recognized pretax contingent earnout expenses totaling $0.4 million in the 2024 second quarter, compared to $0.7 million in the same period of 2023, related to the fair value adjustment of earnout liabilities arising from recent acquisitions. This adjustment, which is not a component of operating earnings, is based on favorable changes to projections of acquired entities over the respective earnout periods, which span multiple years.

The Company recognized non-service pension costs of $2.4 million in the 2024 second quarter compared with $2.1 million in the 2023 period. Non-service pension costs represent the U.S. and U.K. non-service defined benefit pension costs, which are non-operating in nature as the U.S. plan is frozen and the U.K. plans are closed to new participants.

Balance Sheet and Cash Flow

The Company’s consolidated cash and cash equivalents position as of June 30, 2024, totaled $46.7 million, compared with $58.4 million at December 31, 2023. The Company’s total debt outstanding as of June 30, 2024, totaled $233.8 million, compared with $209.1 million at December 31, 2023.

The Company’s operations used $8.3 million of cash during the first six months of 2024, compared with $27.2 million provided in 2023. The increase in cash used was due primarily to $13.5 million lower operating earnings, $16.7 million net change in incentive compensation, and a $5.9 million increase in other working capital items over the prior year.

The Company made no contributions to its U.S. defined benefit pension plan and $1.2 million in contributions to its U.K. plans for the first half of 2024, compared with no contributions to the U.S. plan and $1.0 million to the U.K. plans in 2023.

During the first six months of 2024, the Company didn't repurchase any shares of CRD-A, but repurchased 230,861 shares of CRD-B at an average per share cost of $8.98. There were no shares repurchased during the first six months of 2023. The total cost of share repurchases during 2024 was $2.1 million.

Conference Call

As previously announced, Crawford & Company will host a conference call on August 6, 2024, at 8:30 a.m. Eastern Time to discuss its second quarter 2024 results. The conference call can be accessed live by dialing 1-888-259-6580 and using Conference ID 95332233. A presentation for tomorrow’s call can also be found on the investor relations portion of the Company’s website, https://ir.crawco.com. The call will be recorded and available for replay through September 5, 2024. You may dial 1-877-674-7070 and use passcode 332233# to listen to the replay.

Non-GAAP Presentation

In the normal course of business, our operating segments incur certain out-of-pocket expenses that are thereafter reimbursed by our clients. Under U.S. generally accepted accounting principles (“GAAP”), these out-of-pocket expenses and associated reimbursements are required to be included when reporting expenses and revenues, respectively, in our consolidated results of operations. In the foregoing discussion and analysis of segment results of operations, we do not include a gross up of segment expenses and revenues for these pass-through reimbursed expenses. The amounts of reimbursed expenses and related revenues offset each other in our results of operations with no impact to our net income or operating earnings. A reconciliation of revenues before reimbursements to consolidated revenues determined in accordance with GAAP is self-evident from the face of the accompanying unaudited condensed consolidated statements of operations.

Operating earnings is the primary financial performance measure used by our senior management and chief operating decision maker (“CODM”) to evaluate the financial performance of our Company and operating segments, and make resource allocation and certain compensation decisions. Unlike net income, segment operating earnings is not a standard performance measure found in GAAP. We believe this measure is useful to others in that it allows them to evaluate segment and consolidated operating performance using the same criteria used by our senior management and CODM. Consolidated operating earnings represent segment earnings including certain unallocated corporate and shared costs, but before net corporate interest expense, stock option expense, amortization of acquisition-related intangible assets, contingent earnout adjustments, non-service pension costs, income taxes and net income or loss attributable to noncontrolling interests.

Adjusted EBITDA is not a term defined by GAAP and as a result our measure of adjusted EBITDA might not be comparable to similarly titled measures used by other companies. However, adjusted EBITDA is used by management to evaluate, assess and benchmark our operational results. The Company believes that adjusted EBITDA is relevant and useful information widely used by analysts, investors and other interested parties. Adjusted EBITDA is defined as net income attributable to shareholders of the Company with adjustments for depreciation and amortization, net corporate interest expense, contingent earnout adjustments, non-service pension costs, income taxes and stock-based compensation expense.

Unallocated corporate and shared costs and credits include expenses and credits related to our chief executive officer and Board of Directors, certain provisions for bad debt allowances or subsequent recoveries such as those related to bankrupt clients, certain unallocated professional fees and certain self-insurance costs and recoveries that are not allocated to our individual operating segments.

Income taxes, net corporate interest expense, stock option expense, amortization of 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. Amortization expense is a non-cash expense for finite-lived customer-relationship and trade name intangible assets acquired in business combinations. Contingent earnout adjustments relate to changes in the fair value of earnouts associated with our recent acquisitions. Non-service pension costs represent the U.S. and U.K. non-service defined benefit pension costs, which are non-operating in nature as the U.S. plan was frozen in 2002 and the U.K. plans are closed to new participants. None of these costs relate directly to the performance of our services or operating activities and, therefore, are excluded from segment operating earnings to better assess the results of each segment's operating activities on a consistent basis.

A significant portion of our operations are international. These international operations subject us to foreign exchange fluctuations. The following table illustrates revenue as a percentage of total revenue for the major currencies of the geographic areas that Crawford does business:

		Three Months Ended														Six Months Ended
(in thousands)		June 30, 2024							June 30, 2023							June 30, 2024							June 30, 2023
Geographic Area	Currency	USD equivalent			% of total				USD equivalent			% of total				USD equivalent			% of total				USD equivalent			% of total
U.S.	USD	$	189,743			60.4	%		$	204,854			63.1	%		$	369,464			60.0	%		$	404,711			63.1	%
U.K.	GBP		41,420			13.2	%			34,725			10.7	%			81,675			13.3	%			67,849			10.6	%
Canada	CAD		22,201			7.1	%			24,390			7.5	%			46,042			7.5	%			49,004			7.6	%
Australia	AUD		22,316			7.1	%			22,926			7.1	%			41,977			6.8	%			45,920			7.2	%
Europe	EUR		15,661			5.0	%			14,301			4.4	%			30,546			5.0	%			28,339			4.4	%
Rest of World	Various		22,886			7.2	%			23,360			7.2	%			46,177			7.4	%			45,067			7.1	%
Total Revenues, before reimbursements		$	314,227			100.0	%		$	324,556			100.0	%		$	615,881			100.0	%		$	640,890			100.0	%

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

	Three Months Ended							Six Months Ended
(in thousands)	June 30, 2024			June 30, 2023				June 30, 2024			June 30, 2023
Operating earnings:
North America Loss Adjusting	$	4,885		$	3,900			$	9,364		$	11,965
International Operations		5,702			3,742				7,392			6,777
Broadspire		15,091			8,148				27,895			16,075
Platform Solutions		1,469			8,106				2,584			18,072
Unallocated corporate and shared costs, net		(5,079	)		(1,098	)			(13,086	)		(5,217	)
Consolidated operating earnings		22,068			22,798				34,149			47,672
(Deduct) add:
Net corporate interest expense		(4,256	)		(4,309	)			(7,852	)		(8,708	)
Stock option expense		(139	)		(139	)			(306	)		(295	)
Amortization of intangible assets		(1,856	)		(1,979	)			(3,724	)		(3,878	)
Non-service pension costs		(2,399	)		(2,095	)			(4,872	)		(4,266	)
Contingent earnout adjustments		(430	)		(725	)			(581	)		(973	)
Income tax provision		(4,486	)		(5,206	)			(5,533	)		(10,477	)
Net loss attributable to noncontrolling interests		82			82				140			33
Net income attributable to shareholders of Crawford & Company	$	8,584		$	8,427			$	11,421		$	19,108

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

	Three Months Ended							Six Months Ended
(in thousands)	June 30, 2024			June 30, 2023				June 30, 2024			June 30, 2023
Net income attributable to shareholders of Crawford & Company	$	8,584		$	8,427			$	11,421		$	19,108
Add:
Depreciation and amortization		8,845			9,191				18,144			18,241
Stock-based compensation		1,613			1,586				2,831			2,609
Net corporate interest expense		4,256			4,309				7,852			8,708
Non-service pension costs		2,399			2,095				4,872			4,266
Contingent earnout adjustments		430			725				581			973
Income tax provision		4,486			5,206				5,533			10,477
Non-GAAP adjusted EBITDA	$	30,613		$	31,539			$	51,234		$	64,382

Following is a reconciliation of operating cash flow to free cash flow for the six months ended June 30, 2024 and 2023:

Six Months Ended
(in thousands)	June 30, 2024				June 30, 2023				Change
Net Cash (Used in) Provided by Operating Activities	$	(8,253	)		$	27,169			$	(35,422	)
Less:
Property & Equipment Purchases, net		(1,418	)			(1,914	)			496
Capitalized Software (internal and external costs)		(17,031	)			(16,031	)			(1,000	)
Free Cash Flow	$	(26,702	)		$	9,224			$	(35,926	)

Non-GAAP consolidated results for 2024 and 2023 exclude the non-cash, after-tax adjustments for amortization of intangible assets, non-service-related pension costs, and contingent earnout adjustment.

Following are the reconciliations of GAAP Pretax Earnings, Net Income and Earnings Per Share to related non-GAAP Adjusted figures, which reflect each of 2024 and 2023 before amortization of intangible assets, non-service related pension costs and contingent earnout adjustments:

Three Months Ended June 30, 2024
(in thousands)	Pretax earnings			Net income attributable to Crawford & Company			Diluted earnings per CRD-A share			Diluted earnings per CRD-B share
GAAP	$	12,988		$	8,584		$	0.17		$	0.17
Adjustments:
Amortization of intangible assets		1,856			1,565			0.03			0.03
Non-service related pension costs		2,399			1,876			0.04			0.04
Contingent earnout adjustments		430			423			0.01			0.01
Non-GAAP Adjusted	$	17,673		$	12,448		$	0.25		$	0.25

Three Months Ended June 30, 2023
(in thousands)	Pretax earnings			Net income attributable to Crawford & Company			Diluted earnings per CRD-A share			Diluted earnings per CRD-B share
GAAP	$	13,551		$	8,427		$	0.17		$	0.17
Adjustments:
Amortization of intangible assets		1,979			1,484			0.03			0.03
Non-service related pension costs		2,095			1,557			0.03			0.03
Contingent earnout adjustments		725			537			0.01			0.01
Non-GAAP Adjusted	$	18,350		$	12,005		$	0.24		$	0.24

Six Months Ended June 30, 2024
(in thousands)	Pretax earnings			Net income attributable to Crawford & Company			Diluted earnings per CRD-A share			Diluted earnings per CRD-B share
GAAP	$	16,814		$	11,421		$	0.23		$	0.23
Adjustments:
Amortization of intangible assets		3,724			3,139			0.06			0.06
Non-service related pension costs		4,872			3,805			0.08			0.08
Contingent earnout adjustments		581			574			0.01			0.01
Non-GAAP Adjusted	$	25,991		$	18,939		$	0.38		$	0.38

Six Months Ended June 30, 2023
(in thousands)	Pretax earnings			Net income attributable to Crawford & Company			Diluted earnings per CRD-A share(1)			Diluted earnings per CRD-B share
GAAP	$	29,552		$	19,108		$	0.39		$	0.39
Adjustments:
Amortization of intangible assets		3,878			2,909			0.06			0.06
Non-service related pension costs		4,266			3,170			0.06			0.06
Contingent earnout adjustments		973			720			0.02			0.02
Non-GAAP Adjusted	$	38,669		$	25,907		$	0.52		$	0.53
(1) Sum of reconciling items may differ from total due to rounding of individual components.

Following is information regarding the weighted average shares used in the computation of basic and diluted earnings per share:

	Three Months Ended						Six Months Ended
(in thousands)	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Weighted-Average Shares Used to Compute Basic Earnings Per Share:
Class A Common Stock		29,728			28,956			29,657			28,899
Class B Common Stock		19,374			19,848			19,458			19,848
Weighted-Average Shares Used to Compute Diluted Earnings Per Share:
Class A Common Stock		30,171			29,770			30,225			29,456
Class B Common Stock		19,374			19,848			19,458			19,848

Further information regarding the Company’s operating results for the three and six months ended June 30, 2024, financial position as of June 30, 2024, and cash flows for the six months ended June 30, 2024 is shown on the attached unaudited condensed consolidated financial statements.

About Crawford & Company

Based in Atlanta, Crawford & Company (NYSE: CRD-A and CRD-B) is a leading provider of claims management and outsourcing solutions to insurance companies and self-insured entities with an expansive network serving clients in more than 70 countries. The Company's two classes of stock are substantially identical, except with respect to voting rights for the Class B Common Stock (CRD-B) and protections for the non-voting Class A Common Stock (CRD-A). More information is available at www.crawco.com.

TAG: Crawford-Financial, Crawford-Investor-News-and-Events

FOR FURTHER INFORMATION REGARDING THIS PRESS RELEASE, PLEASE CALL BRUCE SWAIN AT (404) 300-1051.

This press release contains forward-looking statements, including statements about the expected future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative and quantitative, that are not historical facts may be “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from historical experience or Crawford & Company’s present expectations. Accordingly, no one should place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Crawford & Company does not undertake to update forward-looking statements to reflect the impact of circumstances or events that may arise or not arise after the date the forward-looking statements are made. For further information regarding Crawford & Company, including factors that could cause our actual financial condition, results or earnings to differ from those described in any forward-looking statements, please read Crawford & Company’s reports filed with the SEC and available at www.sec.gov and in the Investor Relations section of Crawford & Company’s website at www.crawco.com.

CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In Thousands, Except Per Share Amounts and Percentages)
Three Months Ended June 30,		2024				2023				% Change
Revenues:
Revenues Before Reimbursements		$	314,227			$	324,556				(3	)%
Reimbursements			12,626				13,073				(3	)%
Total Revenues			326,853				337,629				(3	)%
Costs and Expenses:
Costs of Services Provided, Before Reimbursements			222,265				234,031				(5	)%
Reimbursements			12,626				13,073				(3	)%
Total Costs of Services			234,891				247,104				(5	)%
Selling, General, and Administrative Expenses			72,270				70,473				3	%
Corporate Interest Expense, Net			4,256				4,309				(1	)%
Total Costs and Expenses			311,417				321,886				(3	)%
Other Loss, Net			(2,448	)			(2,192	)			12	%
Income Before Income Taxes			12,988				13,551				(4	)%
Provision for Income Taxes			4,486				5,206				(14	)%
Net Income			8,502				8,345				2	%
Net Loss Attributable to Noncontrolling Interests			82				82				—
Net Income Attributable to Shareholders of Crawford & Company		$	8,584			$	8,427				2	%
Earnings Per Share - Basic:
Class A Common Stock		$	0.17			$	0.17				—
Class B Common Stock		$	0.17			$	0.17				—
Earnings Per Share - Diluted:
Class A Common Stock		$	0.17			$	0.17				—
Class B Common Stock		$	0.17			$	0.17				—
Cash Dividends Per Share:
Class A Common Stock		$	0.07			$	0.06				17	%
Class B Common Stock		$	0.07			$	0.06				17	%

CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In Thousands, Except Per Share Amounts and Percentages)
Six Months Ended June 30,		2024				2023				% Change
Revenues:
Revenues Before Reimbursements		$	615,881			$	640,890				(4	)%
Reimbursements			24,045				24,677				(3	)%
Total Revenues			639,926				665,567				(4	)%
Costs and Expenses:
Costs of Services Provided, Before Reimbursements			436,654				461,109				(5	)%
Reimbursements			24,045				24,677				(3	)%
Total Costs of Services			460,699				485,786				(5	)%
Selling, General, and Administrative Expenses			149,590				137,184				9	%
Corporate Interest Expense, Net			7,852				8,708				(10	)%
Total Costs and Expenses			618,141				631,678				(2	)%
Other Loss, Net			(4,971	)			(4,337	)			15	%
Income Before Income Taxes			16,814				29,552				(43	)%
Provision for Income Taxes			5,533				10,477				(47	)%
Net Income			11,281				19,075				(41	)%
Net Loss Attributable to Noncontrolling Interests			140				33				324	%
Net Income Attributable to Shareholders of Crawford & Company		$	11,421			$	19,108				(40	)%
Earnings Per Share - Basic:
Class A Common Stock		$	0.23			$	0.39				(41	)%
Class B Common Stock		$	0.23			$	0.39				(41	)%
Earnings Per Share - Diluted:
Class A Common Stock		$	0.23			$	0.39				(41	)%
Class B Common Stock		$	0.23			$	0.39				(41	)%
Cash Dividends Per Share:
Class A Common Stock		$	0.14			$	0.12				17	%
Class B Common Stock		$	0.14			$	0.12				17	%

CRAWFORD & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2024 and December 31, 2023
Unaudited
(In Thousands, Except Par Values)
		June 30,				December 31,
		2024				2023
ASSETS
Current Assets:
Cash and Cash Equivalents		$	46,742			$	58,363
Accounts Receivable, Net			133,847				131,362
Unbilled Revenues, at Estimated Billable Amounts			131,119				116,611
Income Taxes Receivable			4,894				4,842
Prepaid Expenses and Other Current Assets			35,393				58,168
Total Current Assets			351,995				369,346
Net Property and Equipment			20,365				22,742
Other Assets:
Operating Lease Right-of-Use Asset, Net			83,175				88,615
Goodwill			76,572				76,724
Intangible Assets Arising from Business Acquisitions, Net			78,127				81,786
Capitalized Software Costs, Net			103,884				96,770
Deferred Income Tax Assets			25,456				26,247
Other Noncurrent Assets			46,238				36,969
Total Other Assets			413,452				407,111
Total Assets		$	785,812			$	799,199
LIABILITIES AND SHAREHOLDERS’ INVESTMENT
Current Liabilities:
Short-Term Borrowings		$	24,425			$	14,813
Accounts Payable			43,378				45,107
Accrued Compensation and Related Costs			77,828				97,842
Self-Insured Risks			19,332				33,238
Income Taxes Payable			—				6,130
Operating Lease Liability			24,411				24,351
Other Accrued Liabilities			46,657				42,271
Deferred Revenues			36,193				35,540
Total Current Liabilities			272,224				299,292
Noncurrent Liabilities:
Long-Term Debt and Finance Leases, Less Current Installments			209,410				194,335
Operating Lease Liability			70,888				78,029
Deferred Revenues			23,768				24,871
Accrued Pension Liabilities			23,221				24,006
Other Noncurrent Liabilities			36,594				38,835
Total Noncurrent Liabilities			363,881				360,076
Shareholders’ Investment:
Class A Common Stock, $1.00 Par Value			29,743				29,525
Class B Common Stock, $1.00 Par Value			19,324				19,555
Additional Paid-in Capital			85,461				82,589
Retained Earnings			231,263				228,564
Accumulated Other Comprehensive Loss			(214,402	)			(218,615	)
Shareholders’ Investment Attributable to Shareholders of Crawford & Company			151,389				141,618
Noncontrolling Interests			(1,682	)			(1,787	)
Total Shareholders’ Investment			149,707				139,831
Total Liabilities and Shareholders’ Investment		$	785,812			$	799,199

CRAWFORD & COMPANY
SUMMARY RESULTS BY OPERATING SEGMENT WITH DIRECT COMPENSATION AND OTHER EXPENSES
Unaudited
(In Thousands, Except Percentages)
Three Months Ended June 30,
		North America Loss Adjusting						%			International Operations						%			Broadspire						%			Platform Solutions						%
		2024			2023			Change			2024			2023			Change			2024			2023			Change			2024			2023			Change
Revenues Before Reimbursements		$	76,030		$	76,362		(0.4	)%		$	102,283		$	95,312		7.3	%		$	97,087		$	87,244		11.3	%		$	38,827		$	65,638		(40.8	)%
Direct Compensation, Fringe Benefits & Non-Employee Labor			54,708			54,619		0.2	%			66,047			62,331		6.0	%			58,162			54,500		6.7	%			23,404			43,689		(46.4	)%
% of Revenues Before Reimbursements			72.0	%		71.5	%					64.6	%		65.4	%					59.9	%		62.5	%					60.3	%		66.6	%
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor			16,437			17,843		(7.9	)%			30,534			29,239		4.4	%			23,834			24,596		(3.1	)%			13,954			13,843		0.8	%
% of Revenues Before Reimbursements			21.6	%		23.4	%					29.9	%		30.7	%					24.5	%		28.2	%					35.9	%		21.1	%
Total Operating Expenses			71,145			72,462		(1.8	)%			96,581			91,570		5.5	%			81,996			79,096		3.7	%			37,358			57,532		(35.1	)%
Operating Earnings (1)		$	4,885		$	3,900		25.3	%		$	5,702		$	3,742		52.4	%		$	15,091		$	8,148		85.2	%		$	1,469		$	8,106		(81.9	)%
% of Revenues Before Reimbursements			6.4	%		5.1	%					5.6	%		3.9	%					15.5	%		9.3	%					3.8	%		12.3	%

Six Months Ended June 30,
		North America Loss Adjusting								%		International Operations									%			Broadspire								%			Platforms Solutions								%
		2024				2023				Change			2024				2023				Change			2024				2023				Change			2024				2023				Change
Revenues Before Reimbursements		$	153,395			$	153,959			(0.4	)%		$	200,375			$	187,175			7.1	%		$	191,385			$	171,298			11.7	%		$	70,726			$	128,458			(44.9	)%
																																							\
Direct Compensation, Fringe Benefits & Non-Employee Labor			110,175				108,783			1.3	%			131,026				123,752			5.9	%			115,419				107,141			7.7	%			42,334				84,600			(50.0	)%
% of Revenues Before Reimbursements			71.8	%			70.7	%						65.4	%			66.1	%						60.3	%			62.5	%						59.9	%			65.9	%
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor			33,856				33,211			1.9	%			61,957				56,646			9.4	%			48,071				48,082			(0.0	)%			25,808				25,786			0.1	%
% of Revenues Before Reimbursements			22.1	%			21.6	%						30.9	%			30.3	%						25.1	%			28.1	%						36.5	%			20.1	%
Total Operating Expenses			144,031				141,994			1.4	%			192,983				180,398			7.0	%			163,490				155,223			5.3	%			68,142				110,386			(38.3	)%
Operating Earnings(1)		$	9,364			$	11,965			(21.7	)%		$	7,392			$	6,777			9.1	%		$	27,895			$	16,075			73.5	%		$	2,584			$	18,072			(85.7	)%
% of Revenues Before Reimbursements			6.1	%			7.8	%						3.7	%			3.6	%						14.6	%			9.4	%						3.7	%			14.1	%
(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, amortization of acquisition-related intangible assets, non-service pension costs, contingent earnout adjustments, and certain unallocated corporate and shared costs and credits. See pages 3 and 4 for additional information about segment operating earnings.

CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year-to-Date Period Ended June 30, 2024 and June 30, 2023
Unaudited
(In Thousands)
		2024				2023
Cash Flows From Operating Activities:
Net Income		$	11,281			$	19,075
Reconciliation of net income to net cash (used in) provided by operating activities:
Depreciation and amortization			18,145				18,241
Stock-based compensation			2,831				2,609
(Gain) loss on disposal of property and equipment			(80	)			116
Contingent earnout adjustments			581				973
Changes in operating assets and liabilities:
Accounts receivable, net			(2,537	)			(15,107	)
Unbilled revenues, net			(14,234	)			1,828
Accrued or prepaid income taxes			(6,652	)			(1,217	)
Accounts payable and accrued liabilities			(22,336	)			(3,928	)
Deferred revenues			(798	)			4,529
Accrued retirement costs			1,581				750
Prepaid expenses and other operating activities			3,965				(700	)
Net cash (used in) provided by operating activities			(8,253	)			27,169
Cash Flows From Investing Activities:
Acquisitions of property and equipment			(1,418	)			(1,914	)
Capitalization of computer software costs			(17,031	)			(16,031	)
Net cash used in investing activities			(18,449	)			(17,945	)
Cash Flows From Financing Activities:
Cash dividends paid			(6,880	)			(5,854	)
Repurchases of common stock			(2,073	)		—
Increases in short-term and revolving credit facility borrowings			48,592				20,958
Payments on short-term and revolving credit facility borrowings			(23,769	)			(18,879	)
Payments of contingent consideration on acquisitions			(579	)			(4,916	)
Other financing activities			364				213
Net cash provided by (used in) financing activities			15,655				(8,478	)
Effects of exchange rate changes on cash and cash equivalents			(155	)			1,062
(Decrease) Increase in cash, cash equivalents, and restricted cash(1)			(11,202	)			1,808
Cash, cash equivalents, and restricted cash at beginning of year(1)			59,545				46,645
Cash, cash equivalents, and restricted cash at end of period(1)		$	48,343			$	48,453
(1) The 2024 amounts include beginning restricted cash of $1,182 at December 31, 2023, and ending restricted cash of $1,601 at June 30, 2024, and the 2023 amounts include beginning restricted cash of $638 at December 31, 2022, and ending restricted cash of $974 at June 30, 2023, which we present as part of "Prepaid expenses and other current assets" on the Balance Sheets.

 

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Media Contacts: mediarelations@us.crawco.com



Lynn Cufley

+44 207 265 4067

Lynn.Cufley@crawco.uk



Katie Cline

+1 470 792 5678

Katie.Cline@us.crawco.com



Investor Contact:

Jennifer Belodeau/Rosalyn Christian

IMS Investor Relations

203 972 9200

crawford@imsinvestorrelations.com

Source: Crawford & Company

FAQ

What were Crawford & Company's Q2 2024 revenues?

Crawford & Company's Q2 2024 revenues before reimbursements were $314.2 million, compared to $324.6 million in Q2 2023.

How did Crawford & Company's net income change in Q2 2024?

Net income attributable to shareholders increased to $8.6 million in Q2 2024 from $8.4 million in Q2 2023.

What was the diluted EPS for Crawford & Company in Q2 2024?

Diluted EPS was $0.17 for both CRD-A and CRD-B in Q2 2024, unchanged from Q2 2023.

What was the non-GAAP diluted EPS for Crawford & Company in Q2 2024?

Non-GAAP diluted EPS was $0.25 for both CRD-A and CRD-B in Q2 2024, compared to $0.24 in Q2 2023.

How did the Broadspire segment perform in Q2 2024?

The Broadspire segment achieved record revenues of $97.1 million, up 11.3%, with operating earnings rising to $15.1 million.

What were the changes in Crawford & Company's debt and cash position?

Crawford & Company's total debt rose to $233.8 million by June 30, 2024, from $209.1 million at December 31, 2023. Cash and cash equivalents were at $46.7 million compared to $58.4 million.

Did Crawford & Company repurchase any shares in Q2 2024?

Crawford & Company did not repurchase any CRD-A shares but repurchased 230,861 shares of CRD-B for $2.1 million in Q2 2024.