GlobeNewswire

Weather Related Claims Drive Improvement Over 2019ATLANTA, Nov. 02, 2020 (GLOBE NEWSWIRE) — Crawford & Company® (NYSE: CRD-A and CRD-B), the world’s largest publicly listed independent provider of claims management and outsourcing solutions to carriers, brokers and corporates, today announced its financial results for the third quarter ended September 30, 2020. 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 Third Quarter 2020 * Revenues before reimbursements of $253.1 million, compared with $254.7 million for the 2019 third quarter * Net income attributable to shareholders of $24.4 million, compared with $11.0 million in the same period last year * Diluted earnings per share of $0.46 for both CRD-A and CRD-B, compared with $0.21 for CRD-A and $0.19 for CRD-B in the prior year third quarterNon-GAAP Consolidated Results Third Quarter 2020Non-GAAP results for the 2020 third quarter have been presented on a constant dollar basis to 2019 and exclude the non-cash income tax impact of the first quarter 2020 goodwill impairment of $1.9 million and the after-tax gain on disposition of businesses of $11.3 million. Non-GAAP consolidated results for the 2019 quarter exclude arbitration and claim settlements of $0.9 million after tax. * Revenues before reimbursements, on a non-GAAP basis, of $255.2 million, compared with $254.7 million for the 2019 third quarter * Net income attributable to shareholders, on a non-GAAP basis, totaled $15.2 million in the 2020 third quarter, compared with $11.9 million in the same period last year * Diluted earnings per share, on a non-GAAP basis, of $0.29 for both CRD-A and CRD-B in the 2020 third quarter, compared with $0.23 for CRD-A and $0.21 for CRD-B in the prior year third quarter * Consolidated adjusted operating earnings, on a non-GAAP basis, were $28.2 million, or 11.1% of non-GAAP revenues, in the 2020 third quarter, compared with $23.7 million, or 9.3% of revenues, in the 2019 third quarter * Consolidated adjusted EBITDA, a non-GAAP financial measure, was $35.2 million, or 13.8% of non-GAAP revenues, in the 2020 third quarter, compared with $32.2 million, or 12.6% of revenues, in the 2019 third quarterManagement CommentsMr. Rohit Verma, chief executive officer of Crawford & Company, stated, “Crawford delivered strong third quarter 2020 results that grew sequentially from the second quarter and exceeded third quarter 2019 results. Our results were driven by the strength of our core business and further propelled by the surge in weather-related activity in the U.S. Importantly, we expanded profitability, driving non-GAAP operating earnings to $28.2 million during the quarter. Additionally, we continue to see traction from our large-scale clients and momentum remains strong, winning over $22.5 million of new and enhanced business in the quarter. Our financial position remains very healthy, with operating cash flow up 35% over the prior year-to-date period and net debt at the lowest level since 2013.”Mr. Verma concluded, “As we enter the fourth quarter, we remain focused on maintaining our market leadership position through a culture of innovation and unparalleled solutions. Our commitment to our people and service excellence to clients lead our priorities as we carry out our purpose of restoring and enhancing lives, businesses and communities. As a result, we are confident in our financial strength and our ability to deliver superior results for our shareholders over the long term.”Segment Results for the Third QuarterCrawford Claims SolutionsCrawford Claims Solutions revenues before reimbursements were $98.4 million in the third quarter of 2020, increasing from $86.3 million in the third quarter of 2019. Absent foreign currency rate fluctuations of ($0.9) million, third quarter 2020 revenues would have been $99.2 million, up 15.0% from the prior year third quarter.Excluding centralized indirect support costs, gross profit increased to $22.7 million, or a gross margin of 23.1% in 2020 from $19.8 million, or a gross margin of 22.9% in 2019. Included in the 2020 third quarter direct costs was a $1.4 million benefit resulting from the Canada Emergency Wage Subsidy. After the allocation of indirect costs, the segment had operating earnings of $7.2 million in the 2020 third quarter increasing over the $2.7 million in the third quarter of 2019. The operating margin was 7.3% in the 2020 quarter and 3.1% in the 2019 quarter.Crawford Specialty SolutionsCrawford Specialty Solutions revenues before reimbursements were $67.5 million in the third quarter of 2020, down from $68.9 million in the same period of 2019. Absent foreign exchange rate fluctuations of ($0.9) million, revenues would have been $68.5 million for the three months ended September 30, 2020, decreasing 0.6% compared with prior year third quarter revenues.Excluding centralized indirect support costs, gross profit increased to $28.2 million, or a gross margin of 41.8% in 2020 from $24.8 million, or a gross margin of 36.0%, in 2019. Included in the 2020 third quarter direct costs was a $1.0 million benefit resulting from the Canada Emergency Wage Subsidy. After allocation of indirect costs, operating earnings were $17.4 million in the 2020 third quarter increasing over the $13.3 million in the 2019 period. The segment’s operating margin for the 2020 quarter was 25.7% as compared with 19.3% in the 2019 quarter.Crawford TPA SolutionsCrawford TPA Solutions segment revenues before reimbursements were $87.2 million in the 2020 third quarter, decreasing from $99.5 million in the 2019 third quarter. Absent foreign currency rate fluctuations of ($0.3) million, third quarter 2020 revenues would have been $87.5 million, down 12.0% from prior year third quarter.Excluding centralized indirect support costs, gross profit decreased to $20.3 million, or a gross margin of 23.2% in 2020 from $26.7 million, or a gross margin of 26.8% in 2019. Included in the 2020 third quarter direct costs was a $0.4 million benefit resulting from the Canada Emergency Wage Subsidy. After allocation of indirect costs, Crawford TPA Solutions recorded operating earnings of $4.4 million in the third quarter of 2020 representing an operating margin of 5.1% compared with $9.3 million, or 9.4% of revenues, in the 2019 third quarter.Unallocated Corporate and Shared Costs and Credits, NetUnallocated corporate costs were $1.0 million in the third quarter of 2020, compared to $1.6 million in the same period of 2019. The decrease for the three months ended September 30, 2020 was due to a decrease in self-insurance expenses and a $1.9 million credit from the Canada Emergency Wage Subsidy, partially offset by an increase in incentive compensation.Income Tax Impact of First Quarter Goodwill ImpairmentThe Company recognized a non-cash goodwill impairment in the 2020 first quarter, totaling $17.7 million, related to its Crawford Claims Solutions segment. Due to the non-discrete income tax treatment of the goodwill impairment, the initial income tax benefit related to the impairment will normalize during the remainder of the year, resulting in a lower full year income tax benefit. During the 2020 third quarter, the impact of this treatment decreased the income tax benefit by $1.9 million, or $0.04 per share.Business Acquisitions and DispositionsOn June 12, 2020, the Company sold its 51% interest in Lloyd Warwick International (“LWI”) for cash proceeds of $19.6 million and payment of $3.6 million to settle intercompany indebtedness. In the third quarter, the Company recognized an additional $0.7 million related to net working capital adjustments under the terms of the acquisition agreement which increased the purchase price to $20.3 million. Due to the Company’s two-month reporting lag for reporting its international results, this transaction was recorded in the quarter ended September 30, 2020. The Company recognized a gain of $14.7 million ($11.7 million net of tax) on the disposition. The Company recognized an additional loss on the disposal of Crawford Compliance Inc. of $0.6 million in the third quarter. Both of these disposals were in our Crawford Specialty Solutions segment and resulted in a net gain of $0.21 per diluted share.On July 21, 2020, the Company acquired the remaining 15% membership interests of WeGoLook, LLC for $0.3 million. The non-compete agreements with the former minority members were terminated under the terms of the purchase agreement. As a result, the Company recognized $1.1 million of accelerated amortization on the non-compete agreement in the 2020 third quarter.Subsequent EventsOn October 1, 2020, the Company acquired the remaining 85% equity interests in Crawford Carvallo and its subsidiaries. Crawford Carvallo is a leading provider for loss adjusting, claims management solutions and legal services in Chile. The purchase price includes an initial lump-sum payment $11.6 million and a maximum of $11.7 million payable over the next six years based on achieving certain EBITDA performance goals.On November 1, 2020, the Company acquired 100% of HBA Group in Australia, including 100% of the stock in each of HBA Group’s entities HBA Legal, Pillion and Paratus. HBA Legal is a legal services provider that will complement the Company’s Crawford TPA Solutions segment in Australia. The purchase price includes an initial lump-sum payment of $5.0 million and a maximum $3.2 million payable over the next four years based on achieving certain revenue and EBITDA performance goals.COVID-19The Company estimates that COVID-19 negatively impacted its revenues in the range of $21.0 to $25.0 million for the three months ended September 30, 2020, and negatively impacted its revenues in the range of $46.0 to $54.0 million for the nine months ended September 30, 2020. The Company expects the ongoing global economic slowdown resulting from COVID-19 could have a material impact to its results of operations, financial condition and cash flow in one or more future quarters.Balance Sheet and Cash FlowThe Company’s consolidated cash and cash equivalents position as of September 30, 2020, totaled $48.7 million, compared with $51.8 million at December 31, 2019. The Company’s total debt outstanding as of September 30, 2020, totaled $127.8 million, compared with $177.0 million at December 31, 2019.The Company’s operations provided $57.3 million of cash during 2020, compared with $42.3 million provided in 2019. The increase in cash provided by operating activities was primarily due to deferred payroll tax filings and a benefit from the Canada Emergency Wage Subsidy, totaling $17.3 million. The Company incurred higher software development and capital expenditures in 2020, which partially offset the increase in cash flows from operations, leading to a free cash flow increase of $4.3 million as compared to the prior year.The Company made $3.0 million in contributions to its U.S. defined benefit pension plan and $0.5 million to its U.K. plans for 2020, compared with no contributions to the U.S. plan and $0.5 million to the U.K. plans in 2019.During 2020, the Company repurchased 155,351 shares of CRD-A and 161,459 of CRD-B at an average cost of $8.42 per share. The total cost of share repurchases during 2020 was $2.7 million. The Company did not repurchase any shares during the 2020 third quarter.Conference CallAs previously announced, Crawford & Company will host a conference call on November 3, 2020 at 8:30 a.m. Eastern Time to discuss its third quarter 2020 results. The conference call can be accessed live by dialing 1-800-374-2518 and using Conference ID 3377243. A presentation for tomorrow’s call can also be found on the investor relations portion of the Company’s website, https://ir.crawco.com. The call will be recorded and available for replay through December 3, 2020. You may dial 1-855-859-2056 to listen to the replay.Non-GAAP PresentationIn 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 customer-relationship intangible assets, goodwill impairment, restructuring costs, arbitration and claims settlement, gain on disposition of businesses, income taxes and net income or loss attributable to noncontrolling interests and redeemable noncontrolling interests.Gross profit is defined as revenues less direct expenses which exclude indirect overhead expenses allocated to the business. Indirect expenses consist of centralized administrative support costs, regional and local shared services that are allocated to each segment based on usage.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 recurring adjustments for depreciation and amortization, net corporate interest expense, income taxes, stock-based compensation expense and foreign exchange fluctuations. Additionally, adjustments for non-recurring expenses for goodwill impairment, restructuring costs, arbitration and claim settlements and gain on disposition of businesses have been included in the calculation of adjusted EBITDA.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 U.S. pension plan, 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 and amortization of customer-relationship intangible assets 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. 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.A significant portion of our operations are international. These international operations subject us to foreign exchange fluctuations. The following table illustrates revenue as a percentage of total revenue for the major currencies of the geographic areas that Crawford does business:  Three Months Ended  Nine Months Ended  (in thousands) September 30, 2020  September 30, 2019  September 30, 2020  September 30, 2019  Geographic AreaCurrencyUSD equivalent % of total  USD equivalent % of total  USD equivalent % of total  USD equivalent % of total  U.S.USD$152,728  60.3% $146,177  57.4% $419,064  57.8% $432,292  57.0% U.K.GBP 30,060  11.9%  30,844  12.1%  95,003  13.1%  93,967  12.4% CanadaCAD 22,267  8.8%  28,350  11.1%  68,339  9.4%  87,037  11.5% AustraliaAUD 19,946  7.9%  18,649  7.3%  54,270  7.5%  54,223  7.1% EuropeEUR 12,730  5.0%  13,817  5.4%  40,137  5.5%  40,002  5.3% Rest of WorldVarious 15,393  6.1%  16,840  6.7%  48,258  6.7%  51,095  6.7% Total Revenues, before reimbursements$253,124  100.0% $254,677  100.0% $725,071  100.0% $758,616  100.0%                               Following is a reconciliation of segment and consolidated operating earnings to net income attributable to shareholders of Crawford & Company on a GAAP basis: Three months ended  Nine Months Ended  (in thousands)September 30, 2020 September 30, 2019  September 30, 2020 September 30, 2019  Operating earnings:              Crawford Claims Solutions$7,219 $2,661  $6,329 $4,058  Crawford Specialty Solutions 17,390  13,301   38,340  38,108  Crawford TPA Solutions 4,414  9,347   13,870  21,106  Unallocated corporate and shared costs, net (968) (1,649)  (5,227) (2,393) Consolidated operating earnings 28,055  23,660   53,312  60,879  (Deduct) add:              Net corporate interest expense (1,599) (3,162)  (6,275) (8,346) Stock option expense (457) (450)  (1,033) (1,348) Amortization expense (3,665) (2,829)  (9,153) (8,429) Goodwill impairment —  —   (17,674) —  Restructuring costs —  —   (5,714) —  Arbitration and claim settlements —  (1,200)  —  (12,552) Gain on disposition of businesses, net 14,104  —   13,763  —  Income tax provision (11,729) (5,328)  (9,554) (11,120) Net (income) loss attributable to noncontrolling interests and redeemable noncontrolling interests (312) 355   1,224  713  Net income attributable to shareholders of Crawford & Company$24,397 $11,046  $18,896 $19,797                 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  Nine Months Ended  (in thousands)September 30, 2020 September 30, 2019  September 30, 2020 September 30, 2019  Net income attributable to shareholders of Crawford & Company$24,397 $11,046  $18,896 $19,797  Add (Deduct):              Depreciation and amortization 10,700  10,236   30,150  30,086  Stock-based compensation 734  1,211   2,732  2,610  Net corporate interest expense 1,599  3,162   6,275  8,346  Goodwill impairment —  —   17,674  —  Restructuring costs —  —   5,714  —  Arbitration and claim settlements —  1,200   —  12,552  Gain on disposition of businesses, net (14,104) —   (13,763) —  Income tax provision 11,729  5,328   9,554  11,120  Foreign exchange fluctuations 142  —   516  —  Non-GAAP adjusted EBITDA$35,197 $32,183  $77,748 $84,511                 Following is a reconciliation of operating cash flow to free cash flow for the nine months ended September 30, 2020 and 2019:Nine Months Ended  (in thousands)September 30, 2020  September 30, 2019  Change  Net Cash Provided by Operating Activities$57,316  $42,325  $14,991  Less:            Property & Equipment Purchases, net (10,850)  (5,664)  (5,186) Capitalized Software (internal and external costs) (12,793)  (7,276)  (5,517) Free Cash Flow$33,673  $29,385  $4,288               Following are the reconciliations of GAAP Revenue, Operating Earnings, Pretax Earnings, Net Income and Earnings Per Share to related non-GAAP Adjusted figures, which reflect 2020 on a constant dollar basis before goodwill impairment, restructuring costs and gain on disposition of businesses and for 2019 exclude the results of the arbitration and claim settlements:Three Months Ended September 30, 2020  (in thousands)Revenues Non-GAAP Operating earnings Pretax earnings Net income attributable to Crawford & Company(1) Diluted earnings per CRD-A share(1) Diluted earnings per CRD-B share(1)  GAAP$253,124 $28,055 $36,438 $24,397 $0.46 $0.46  Adjustments:                   Income tax impact of first quarter goodwill impairment —  —  —  1,935  0.04  0.04  Gain on disposition of businesses, net —  —  (14,104) (11,275) (0.21) (0.21) Foreign exchange fluctuations 2,120  179  142  142  —  —  Non-GAAP Adjusted$255,244 $28,234 $22,476 $15,199 $0.29 $0.29                      Three Months Ended September 30, 2019  (in thousands)Revenues Non-GAAP Operating earnings Pretax earnings Net income attributable to Crawford & Company Diluted earnings per CRD-A share Diluted earnings per CRD-B share  GAAP$254,677 $23,660 $16,019 $11,046 $0.21 $0.19  Adjustments:                   Arbitration and claim settlements —  —  1,200  887  0.02  0.02  Non-GAAP Adjusted$254,677 $23,660 $17,219 $11,933 $0.23 $0.21                      Nine Months Ended September 30, 2020  (in thousands)Revenues Non-GAAP Operating earnings Pretax income Net income attributable to Crawford & Company(1) Diluted earnings per CRD-A share(1) Diluted earnings per CRD-B share(1)  GAAP$725,071 $53,312 $27,226 $18,896 $0.36 $0.34  Adjustments:                   Goodwill impairment —  —  17,674  13,274  0.25  0.25  Restructuring costs —  —  5,714  3,263  0.06  0.06  Gain on disposition of businesses, net —  —  (13,763) (10,807) (0.20) (0.20) Foreign exchange fluctuations 9,220  594  516  502  0.01  0.01  Non-GAAP Adjusted$734,291 $53,906 $37,367 $25,128 $0.48 $0.46                      Nine Months Ended September 30, 2019  (in thousands)Revenues Non-GAAP Operating earnings Pretax earnings Net income attributable to Crawford & Company Diluted earnings per CRD-A share Diluted earnings per CRD-B share  GAAP$758,616 $60,879 $19,084 $19,797 $0.39 $0.33  Adjustments:                   Arbitration and claim settlements —  —  12,552  9,276  0.17  0.17  Non-GAAP Adjusted$758,616 $60,879 $31,636 $29,073 $0.56 $0.50                      (1) The income tax impact of goodwill impairment is based on the estimated annual effective income tax rate. Due to the non-discrete income tax treatment of the first quarter goodwill impairment, the income tax benefit will normalize as income is earned during the remainder of the year, resulting in a lower full year income tax benefit.Following is information regarding the weighted average shares used in the computation of basic and diluted earnings per share: Three months ended Nine Months Ended  (in thousands)September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019  GAAP             Weighted-Average Shares Used to Compute Basic Earnings Per Share:             Class A Common Stock 30,643  30,645  30,575  30,701  Class B Common Stock 22,510  22,831  22,533  23,071  Weighted-Average Shares Used to Compute Diluted Earnings Per Share:             Class A Common Stock 30,937  31,140  30,810  31,116  Class B Common Stock 22,510  22,831  22,533  23,071                Non-GAAP (2)             Weighted-Average Shares Used to Compute Diluted Earnings Per Share:             Class A Common Stock 30,937  31,140  30,801  31,116  Class B Common Stock 22,510  22,831  22,533  23,071                (2) The Company determines year to date dilutive shares for GAAP reporting by averaging all quarterly dilutive shares for quarters where positive net income was reported. The Company had a net loss for GAAP reporting during the first quarter of 2020, that resulted in no additional dilutive securities added to the basic weighted average shares in calculating diluted weighted average shares for GAAP reporting as their impact would be anti-dilutive. As the Company had Non-GAAP positive net income for each quarter in 2020, dilutive securities from each quarter were averaged to determine Non-GAAP earnings per share for the nine months ended September 30, 2020.Further information regarding the Company’s operating results for the quarter ended September 30, 2020, financial position as of September 30, 2020, and cash flows for the quarter ended September 30, 2020 is shown on the attached unaudited condensed consolidated financial statements.About Crawford & CompanyBased in Atlanta, Crawford & Company (NYSE: CRD-A and CRD-B) is the world’s largest publicly listed independent provider of claims management and outsourcing solutions to carriers, brokers and corporates with an expansive global network serving clients in more than 70 countries. The Company’s shares are traded on the 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 and the Company’s ability to pay greater cash dividends on the non-voting Class A Common Stock than on the voting Class B Common Stock, subject to certain limitations. In addition, with respect to mergers or similar transactions, holders of Class A Common Stock must receive the same type and amount of consideration as holders of Class B Common Stock, unless different consideration is approved by the holders of 75% of the Class A Common Stock, voting as a class. More information is available at www.crawco.com.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.FOR FURTHER INFORMATION REGARDING THIS PRESS RELEASE, PLEASE CALL BRUCE SWAIN AT (404) 300-1051.This press release contains forward-looking statements, including statements about the expected future financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative and quantitative, that are not historical facts may be “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from historical experience or Crawford & Company’s present expectations. Accordingly, no one should place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Crawford & Company does not undertake to update forward-looking statements to reflect the impact of circumstances or events that may arise or not arise after the date the forward-looking statements are made. For further information regarding Crawford & Company, including factors that could cause our actual financial condition, results or earnings to differ from those described in any forward-looking statements, please read Crawford & Company’s reports filed with the SEC and available at www.sec.gov and in the Investor Relations section of Crawford & Company’s website at www.crawco.com. CRAWFORD & COMPANY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (In Thousands, Except Per Share Amounts and Percentages)Three Months Ended September 30, 2020  2019  % Change                Revenues:             Revenues Before Reimbursements $253,124  $254,677   (1)% Reimbursements  8,545   11,165   (23)% Total Revenues  261,669   265,842   (2)%               Costs and Expenses:             Costs of Services Provided, Before Reimbursements  177,061   180,849   (2)% Reimbursements  8,545   11,165   (23)% Total Costs of Services  185,606   192,014   (3)%               Selling, General, and Administrative Expenses  52,065   52,564   (1)% Corporate Interest Expense, Net  1,599   3,162   (49)% Arbitration and Claim Settlements  —   1,200  nm  Gain on Disposition of Businesses, Net  (14,104)  —  nm  Total Costs and Expenses  225,166   248,940   (10)%               Other Expense, Net  (65)  (883)  (93)%               Income Before Income Taxes  36,438   16,019   127% Provision for Income Taxes  11,729   5,328   120%               Net Income  24,709   10,691   131%               Net (Income) Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests  (312)  355   (188)%               Net Income Attributable to Shareholders of Crawford & Company $24,397  $11,046   121%               Earnings Per Share – Basic:             Class A Common Stock $0.46  $0.22   109% Class B Common Stock $0.46  $0.19   142%               Earnings Per Share – Diluted:             Class A Common Stock $0.46  $0.21   119% Class B Common Stock $0.46  $0.19   142%               Cash Dividends Per Share:             Class A Common Stock $0.04  $0.07   (43)% Class B Common Stock $0.04  $0.05   (20)%               nm = not meaningfulCRAWFORD & COMPANY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (In Thousands, Except Per Share Amounts and Percentages)Nine Months Ended September 30, 2020  2019  % Change                Revenues:             Revenues Before Reimbursements $725,071  $758,616   (4)% Reimbursements  25,519   31,449   (19)% Total Revenues  750,590   790,065   (5)%               Costs and Expenses:             Costs of Services Provided, Before Reimbursements  518,263   533,664   (3)% Reimbursements  25,519   31,449   (19)% Total Costs of Services  543,782   565,113   (4)%               Selling, General, and Administrative Expenses  163,327   171,407   (5)% Corporate Interest Expense, Net  6,275   8,346   (25)% Goodwill Impairment  17,674   —  nm  Restructuring Costs  5,714   —  nm  Arbitration and Claim Settlements  —   12,552  nm  Gain on Disposition of Businesses, Net  (13,763)  —  nm  Total Costs and Expenses  723,009   757,418   (5)%               Other Expense, Net  (355)  (2,443)  (85)%               Income Before Income Taxes  27,226   30,204   (10)% Provision for Income Taxes  9,554   11,120   (14)%               Net Income  17,672   19,084   (7)%               Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests  1,224   713   72%               Net Income Attributable to Shareholders of Crawford & Company $18,896  $19,797   (5)%               Earnings Per Share – Basic:             Class A Common Stock $0.36  $0.39   (8)% Class B Common Stock $0.34  $0.33   3%               Earnings Per Share – Diluted:             Class A Common Stock $0.36  $0.39   (8)% Class B Common Stock $0.34  $0.33   3%               Cash Dividends Per Share:             Class A Common Stock $0.14  $0.21   (33)% Class B Common Stock $0.12  $0.15   (20)%               nm = not meaningfulCRAWFORD & COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS As of September 30, 2020 and December 31, 2019 Unaudited (In Thousands, Except Par Values)  September 30,  December 31,    2020  2019  ASSETS                   Current Assets:         Cash and Cash Equivalents $48,739  $51,802  Accounts Receivable, Net  123,563   128,217  Unbilled Revenues, at Estimated Billable Amounts  106,610   103,894  Income Taxes Receivable  7,820   7,820  Prepaid Expenses and Other Current Assets  26,641   23,476  Total Current Assets  313,373   315,209            Net Property and Equipment  34,160   31,425            Other Assets:         Operating Lease Right-of-Use Asset, Net  107,956   102,354  Goodwill  61,151   80,642  Intangible Assets Arising from Business Acquisitions, Net  66,223   75,083  Capitalized Software Costs, Net  64,130   66,445  Deferred Income Tax Assets  18,107   17,971  Other Noncurrent Assets  74,522   70,884  Total Other Assets  392,089   413,379            Total Assets $739,622  $760,013            LIABILITIES AND SHAREHOLDERS’ INVESTMENT                   Current Liabilities:         Short-Term Borrowings $3,028  $28,531  Accounts Payable  33,592   34,377  Operating Lease Liability  31,918   30,765  Accrued Compensation and Related Costs  74,681   68,499  Self-Insured Risks  9,941   11,311  Income Taxes Payable  7,022   3,030  Other Accrued Liabilities  34,117   31,449  Deferred Revenues  27,129   28,288  Current Installments of Finance Leases  49   15  Total Current Liabilities  221,477   236,265            Noncurrent Liabilities:         Long-Term Debt and Finance Leases, Less Current Installments  124,684   148,408  Operating Lease Liability  91,963   87,064  Deferred Revenues  23,921   24,080  Accrued Pension Liabilities  56,542   65,909  Other Noncurrent Liabilities  38,749   33,410  Total Noncurrent Liabilities  335,859   358,871            Redeemable Noncontrolling Interests  –   2,310            Shareholders’ Investment:         Class A Common Stock, $1.00 Par Value  30,645   30,610  Class B Common Stock, $1.00 Par Value  22,510   22,671  Additional Paid-in Capital  66,339   63,392  Retained Earnings  258,504   249,551  Accumulated Other Comprehensive Loss  (195,002)  (206,907) Shareholders’ Investment Attributable to Shareholders of Crawford & Company  182,996   159,317  Noncontrolling Interests  (710)  3,250  Total Shareholders’ Investment  182,286   162,567            Total Liabilities and Shareholders’ Investment $739,622  $760,013            CRAWFORD & COMPANY SUMMARY RESULTS BY OPERATING SEGMENT WITH DIRECT COMPENSATION AND OTHER EXPENSES Unaudited (In Thousands, Except Percentages)Three Months Ended September 30,  Crawford Claims Solutions  %  Crawford Specialty Solutions  %  Crawford TPA Solutions  %    2020  2019  Change  2020  2019  Change  2020  2019  Change                                        Revenues Before Reimbursements $98,369  $86,250   14.1% $67,545  $68,932   (2.0)% $87,210  $99,495   (12.3)%                                       Direct Compensation, Fringe Benefits & Non-Employee Labor  65,673   56,985   15.2%  32,928   35,993   (8.5)%  53,613   58,594   (8.5)%                                       % of Revenues Before Reimbursements  66.8%  66.1%      48.7%  52.2%      61.5%  58.9%                                           Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor  25,477   26,604   (4.2)%  17,227   19,638   (12.3)%  29,183   31,554   (7.5)%                                       % of Revenues Before Reimbursements  25.9%  30.8%      25.5%  28.5%      33.5%  31.7%                                           Total Operating Expenses  91,150   83,589   9.0%  50,155   55,631   (9.8)%  82,796   90,148   (8.2)%                                       Operating Earnings (1) $7,219  $2,661   171.3% $17,390  $13,301   30.7% $4,414  $9,347   (52.8)%                                       % of Revenues Before Reimbursements  7.3%  3.1%      25.7%  19.3%      5.1%  9.4%     Nine Months Ended September 30,  Crawford Claims Solutions  %  Crawford Specialty Solutions  %  Crawford TPA Solutions  %    2020  2019  Change  2020  2019  Change  2020  2019  Change                                        Revenues Before Reimbursements $257,407  $255,572   0.7% $196,794  $206,237   (4.6)% $270,870  $296,807   (8.7)%                                       Direct Compensation, Fringe Benefits & Non-Employee Labor  171,107   168,951   1.3%  102,677   106,003   (3.1)%  166,243   177,911   (6.6)%                                       % of Revenues Before Reimbursements  66.5%  66.1%      52.2%  51.4%      61.4%  59.9%                                           Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor  79,971   82,563   (3.1)%  55,777   62,126   (10.2)%  90,757   97,790   (7.2)%                                       % of Revenues Before Reimbursements  31.1%  32.3%      28.3%  30.1%      33.5%  32.9%                                           Total Operating Expenses  251,078   251,514   (0.2)%  158,454   168,129   (5.8)%  257,000   275,701   (6.8)%                                       Operating Earnings (1) $6,329  $4,058   56.0% $38,340  $38,108   0.6% $13,870  $21,106   (34.3)%                                       % of Revenues Before Reimbursements  2.5%  1.6%      19.5%  18.5%      5.1%  7.1%     (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 customer-relationship intangible assets, goodwill impairment, restructuring costs, gain on disposition of businesses, arbitration and claim settlements, and certain unallocated corporate and shared costs and credits. See page 4-5 for additional information about segment operating earnings.CRAWFORD & COMPANY SUMMARY RESULTS BY OPERATING SEGMENT WITH DIRECT AND INDIRECT COSTS Unaudited (In Thousands, Except Percentages)         Three Months Ended September 30,  Crawford Claims Solutions  %  Crawford Specialty Solutions  %  Crawford TPA Solutions  %    2020  2019  Change  2020  2019  Change  2020  2019  Change                                        Revenues Before Reimbursements $98,369  $86,250   14.1% $67,545  $68,932   (2.0)% $87,210  $99,495   (12.3)%                                       Direct Expense  75,689   66,498   13.8%  39,306   44,130   (10.9)%  66,937   72,785   (8.0)%                                       % of Revenues Before Reimbursements  76.9%  77.1%      58.2%  64.0%      76.8%  73.2%                                           Segment Gross Profit  22,680   19,752   14.8%  28,239   24,802   13.9%  20,273   26,710   (24.1)%                                       % of Revenues Before Reimbursements  23.1%  22.9%      41.8%  36.0%      23.2%  26.8%                                           Indirect Costs  15,461   17,091   (9.5)%  10,849   11,501   (5.7)%  15,859   17,363   (8.7)%                                       % of Revenues Before Reimbursements  15.7%  19.8%      16.1%  16.7%      18.2%  17.5%                                           Operating Earnings (1) $7,219  $2,661   171.3% $17,390  $13,301   30.7% $4,414  $9,347   (52.8)%                                       % of Revenues Before Reimbursements  7.3%  3.1%      25.7%  19.3%      5.1%  9.4%     Nine Months Ended September 30,  Crawford Claims Solutions  %  Crawford Specialty Solutions  %  Crawford TPA Solutions  %    2020  2019  Change  2020  2019  Change  2020  2019  Change                                        Revenues Before Reimbursements $257,407  $255,572   0.7% $196,794  $206,237   (4.6)% $270,870  $296,807   (8.7)%                                       Direct Expense  201,936   199,190   1.4%  124,470   133,771   (7.0)%  207,594   220,956   (6.0)%                                       % of Revenues Before Reimbursements  78.5%  77.9%      63.2%  64.9%      76.6%  74.4%                                           Segment Gross Profit  55,471   56,382   (1.6)%  72,324   72,466   (0.2)%  63,276   75,851   (16.6)%                                       % of Revenues Before Reimbursements  21.5%  22.1%      36.8%  35.1%      23.4%  25.6%                                           Indirect Costs  49,142   52,324   (6.1)%  33,984   34,358   (1.1)%  49,406   54,745   (9.8)%                                       % of Revenues Before Reimbursements  19.1%  20.5%      17.3%  16.7%      18.2%  18.4%                                           Operating Earnings (1) $6,329  $4,058   56.0% $38,340  $38,108   0.6% $13,870  $21,106   (34.3)%                                       % of Revenues Before Reimbursements  2.5%  1.6%      19.5%  18.5%      5.1%  7.1%     (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 customer-relationship intangible assets, goodwill impairment, restructuring costs, gain on disposition of businesses, arbitration and claim settlements, and certain unallocated corporate and shared costs and credits. See page 4-5 for additional information about segment operating earningsCRAWFORD & COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Year to Date Period Ended September 30, 2020 and September 30, 2019 Unaudited (In Thousands)  2020  2019  Cash Flows From Operating Activities:         Net income $17,672  $19,084  Reconciliation of net income to net cash provided by operating activities:         Depreciation and amortization  30,150   30,086  Goodwill impairment  17,674   —  Gain on disposition of businesses, net  (13,763)  —  Stock-based compensation  2,732   2,610  Changes in operating assets and liabilities:         Accounts receivable, net  485   1,108  Unbilled revenues, net  (9,223)  (8,740) Accrued or prepaid income taxes  2,462   443  Accounts payable and accrued liabilities  16,097   (4,361) Deferred revenues  (1,491)  514  Accrued retirement costs  (6,101)  1,545  Prepaid expenses and other operating activities  622   36  Net cash provided by operating activities  57,316   42,325            Cash Flows From Investing Activities:         Acquisitions of property and equipment  (10,850)  (5,664) Capitalization of computer software costs  (12,793)  (7,276) Cash proceeds from disposition of business, net of cash disposed  19,273   —  Payments for business acquisitions, net of cash acquired  —   (2,296) Net cash used in investing activities  (4,370)  (15,236)           Cash Flows From Financing Activities:         Cash dividends paid  (6,986)  (9,894) Proceeds from shares purchased under employee stock-based compensation plans  811   1,909  Repurchases of common stock  (2,666)  (25,673) Increases in revolving credit facility borrowings  76,876   65,449  Payments on revolving credit facility borrowings  (124,454)  (64,962) Payments on finance lease obligations  (33)  (106) Cash paid for equity investments  (603)  —  Dividends paid to noncontrolling interests  (196)  (458) Net cash used in financing activities  (57,251)  (33,735)           Effects of exchange rate changes on cash and cash equivalents  1,242   (372) Decrease in cash and cash equivalents  (3,063)  (7,018) Cash and cash equivalents at beginning of year  51,802   53,119  Cash and cash equivalents at end of period $48,739  $46,101            Tag: [Crawford-Investor-News-and-Events, Crawford-Financial]