Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD ATLANTA, GEORGIA 30319 (404) 300-1000
FOR IMMEDIATE RELEASE
Date: February 7, 2011
From: Jeffrey T. Bowman
Chief Executive Officer __________________________________________________________________________________________________
Crawford Reports Record 2010 Fourth Quarter Revenues
2010 Annual Results Improve
Net Income Increases 67% in 2010 Fourth Quarter
Board Declares Quarterly Dividend
Crawford & Company (www.crawfordandcompany.com) (NYSE: CRDA and CRDB), the world's largest independen t provider of claims management solutions to insurance companies and self-insured entities, today announced its financial results for the year and fourth quarter ended December 31, 2010.
Consolidated Results
Fourth quarter 2010 consolidated revenues before reimbursements totaled a new quarterly record of $301.5 million, an increase of 26% over $238.4 million in the 2009 fourth quarter. Fourth quarter 2010 net income attributable to Crawford & Company was $14.8 million, increasing 67% over $8.9 million in the 2009 fourth quarter. Fourth quarter 2010 diluted earnings per share was $0.28 compared to diluted earnings pe r share of $0.17 in the prior-year quarter, an increase of 65%.
Full year consolidated revenues before reimbursements totaled more than $1.0 billion for 2010, increasing $60.5 million fr om 2009. Net income attributable to Crawford & Company in 2010 was $28.3 million, compared to a net loss in 2009 of $(115.7) million. Full year 2010 diluted earnings per share was $0.53, compared to a loss per share of $(2.23) in the prior year.
During the 2010 fourth quarter, the Company recorded an additional net $3.5 million goodwill impairment charge related in part to additional consideration paid for the purchase of Broadspire Management Services, Inc. This was in addition to the $7.3 million goodwill impairment charge recorded in the 2010 second quarter for related issues. Excluding the impairment charges, 2010 fourth quarter and full-year net income attributable to Crawford & Company would have been $17.8 million and $38.2 million, respectively, and diluted earnings per share would have been $0.33 and $0.72, respectively.
The 2009 net loss attributable to Crawford & Company includes a non-cash impairment charge of $140.9 million, primarily related to the write-down of goodwill in the Company's Broadspire segment. Excluding the non-cash impairment charge, 2009 net income attributable to Crawford & Company would have been $25.2 million and diluted earnings per share would have been $0.48.
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD ATLANTA, GEORGIA 30319 (404) 300-1000
Diluted earnings (loss) per share and the related non-GAAP adjusted diluted earnings per share, including the required reconciliation for the impact of the goodwill impa irment charges, is set out in the table below:
| | | | | | | | | | | | | |
| | Fourth Quarter | Fourth Quarter | | Full Year | Full Year |
| | 2010 | 2009 | | 2010 | 2009 |
| Reported diluted earnings (loss) per sha re | $ | 0.28 | | $ | 0.17 | | | $ | 0.53 | | $ | (2.23 | ) |
| Add: Goodwill impairment charge | 0.05 | | — | | | 0.19 | | 2.71 | |
| Adjusted diluted earnings per share on a non-GAAP basis | $ | 0.33 | | $ | 0.17 | | | $ | 0.72 | | $ | 0.48 | |
| | | | | | |
Mr. Jeffrey T. Bowman, chief executive officer of Crawford & Company, stated, “Overall, the strength of our results for the quarter and year reflect strong performance in our Legal Settlement Administration and International Operations segments. We also benefited from our ongoing efforts in cost control, which have reduced our selling, general and administrative expense by 3% year-over-year. Revenues and operating earnings in our Legal Settlement Administration segment increased sharply during the second half of the year due primarily to our engagement in the Gulf Coast Claims Facility (GCCF) special project. We continue to have a substantial backlog of awarded projects in this segment and expect the special project activity to continue into the second quarter of 2011."
2010 Segment Results For the Fourth Quarter and Full Year
International Operations
Fourth quarter 2010 revenues before reimbursements for the International Operations segment increased 11% to $114.8 million from $103.7 million for the same period in 2009. During the 2010 fourth quarter compared to the 2009 fourth quart er, the foreign exchange rate impact was insignificant. International Operations operating expenses for the 2010 fourth quarter increased by $8.3 million in U.S. dollars, a 9% increase compared to the 2009 period. Operating earnings increased to $13.2 million in the 2010 fourth quarter, up 26% from last year's fourth quarter operating earnings of $10.4 million, due primarily to weather-related claim surges in our Canadian and Asia-Pacific operating regions. The related operating margin was 12% in the 2010 fourth quarter, increasing from 10% in the 2009 fourth quarter.
Revenues befo re reimbursements from our International Operations segment totaled $430.7 million for 2010,
a 10% increase from $391.7 million in 2009. During 2010 the U.S. dollar weakened against most major foreign currencies, resulting in a positive exchange rate impact to revenues of $24.9 million on this segment’s revenues from 2009 to 2010. Excluding the positive impact of exchange rate changes, International Operations revenues would have been $405.8 million in 2010. International Operations operating earnings increased to $34.9 million in 2010, an increase of 3% from 2009 operating earnings of $33.8 million. The operating margin declined from 9% in 2009 to 8% in 2010.
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD ATLANTA, GEORGIA 30319 (404) 300-1000
U.S. Property & Casualty
U.S. Property & Casualty revenues before reimbursements were $45.2 million in the fourth quarter of 2010, a slight increase from $44.9 million in the 2009 fourth quarter, due primarily to higher catastrophe-related revenues. Revenues generated by the Company's catastrophe adjuster group were $5.2 million in the 2010 fourth quarter, increasing from $3.7 million in the 2009 period. U.S. Property & Casualty recorded an operating loss in the 2010 fourth quarter of $(0.5) million, or an operating margin of (1)%, compared to operating earnings of $1.6 million, or 4% of revenues in the 2009 fourth quarter. This loss was primarily the result of higher operating expenses during the 2010 fourth quarter.
U.S. Property & Casualty revenues before reimbursements decreased 8% to $190.0 million in 2010 compared to $207.5 million in 2009. Operating earnings decreased from $18.7 million in 2009 to $11.5 million in 2010, representing an operating margin of 6% in 2010 compared to 9% in 2009.
Broadspire
Revenues before reimbursements from the Broadspire segment were $60.7 million in the 2010 fourth quarter, a decline of 14% from $70.6 million in the 2009 quarter. Broadspire had an operating loss of $(6.9) million in the 2010 fourth quarter, or (11)% of revenues, compared to operating earnings of $2.1 million, or 3% of revenues, in the prior-year period. This decline was primarily due to lower workers' compensation claim referrals as a result of lower U.S. employment levels, the bankruptcy of a major client, the impact of a previously-announced 2009 nonrenewal of a major contract within the segment, and certain nonrecurring expenses during the 2010 fourth quarter.
Broadspire segment revenues before reimbursements decreased 15% to $245.5 million in 2010 compared to $288.7 million in 2009. Broadspire recorded an operating loss of $(11.7) million, or (5)% of segment revenues before reimbursements in 2010 compared to an operating loss of $(1.6) million, or (1)% of segment revenues before reimbursements in 2009.
Legal Settlement Administration
Legal Settlement Administration revenues before reimbursements were $80.8 million in the 2010 fourth quarter, a fourfold increase compared to $19.2 million in the 2009 quarter, primarily due to its engagement in the GCCF special project as well as strong bankruptcy administration and securities class action caseloads. Operating earnings were $27.8 million in the fourth quarter, or 34% of revenues, compared to $3.2 million, or 17% of revenues, in the prior-year period. The segment's awarded project backlog totaled a record of approximately $90.0 million at December 31, 20 10, compared to approximately $55.0 million at December 31, 2009.
Legal Settlement Administration revenues before reimbursements for the year doubled in 2010 to $164.2 million, compared to $82.0 million in 2009. Legal Settlement Administration operating earnings were $47.7 million, increasing 263% from $13.1 million in 2009, with the related operating margin increasing from 16% in 2009 to 29% in 2010.
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD ATLANTA, GEORGIA 30319 (404) 300-1000
Balance Sheet and Cash Flow
Crawford & Company's consolidated cash and cash equivalents position as of December 31, 2010 totaled $93. 5 million compared to $70.4 million at December 31, 2009, reflecting borrowings held at year end 2010 that were used to make a $20 million contribution to the frozen U.S. defined benefit pension plan in January 2011.
The Company generated $26.2 million of cash from operations during 2010, compared with $51.7 mi llion during 2009. The $25.5 million decrease was due primarily to higher contributions to the Company's frozen U.S. defined benefit pension plan. Crawford made accelerated contributions to this pension plan totaling $30 million during the fourth quarter of 2010 and an additional $20 million in January 2011. The contributions were funded through an additional $50 million borrowing under the Company's existing credit facility. Excluding the accelerated contribution of $30 million during the 2010 fourth quarter, operating cash flow for the year on a non-GAAP basis would have been $56.2 million.
Crawford & Company Board Declares Quarterly Dividend
On February 1, 2011, at its regular quarterly meeting, the Board of Directors of Crawford & Company declared a quarterly dividend of $0.02 per share on the Class A and Class B Common Stock, payable on March 22, 2011, to shareholders of record as of the close of business on March 7, 2011.
Management's Comments
Mr. Jeffrey T. Bowman, chief executive office r of Crawford & Company, stated, “Over the past four years, management has pursued our strategic initiatives by working to improve operating performance, reducing our pension obligations and reinstating a dividend. Our operating results for 2010 reflect the benefit of a diversified business portfolio. While we have demonstrated strength in our Legal Settlement Administration and International Operations, we continue to face challenges in our North American property & casualty business. In our Broadspire workers' compensation business, operating performance has been depressed by the general economic conditions, and specifically unemployment levels, in the United States."
He continued, "Importantly for our shareholders, the Company has delivered on its pledge f our years ago to restore a dividend on our common stock as declared by our Board of Directors last week. The decision to restore the dividend was made possible both by improved operating results for the year and by progress made in addressing the Company's frozen U.S. defined benefit pension plan obligations during the fourth quarter of 2010 and in January 2011."
Regarding the Company's frozen pension plan, Mr. Bowman stated, "The $50 million in contributions made over that period to the funding of this frozen pension plan will benefit the Company in the future through increased financial flexibility and liquidity as the required pension contributions in the United States are significantly reduced over the next two years."
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD ATLANTA, GEORGIA 30319 (404) 300-1000
Mr. Bowman concluded, “Crawford enters 2011 in a strengthened financial position, but with a number of operational challenges ahead. The hard work in 2010 on cost control and on our balance sheet positions us to make progress in addressing these operating challenges over the next 12 months. We regard the improvement of operating performance in our Broadspire and U.S. Proper ty & Casualty businesses as our top priority for the coming year. ”
2011 Guidance
Crawford & Company is providing initial guidance for 2011 as follows:
| |
| • | Consolidated revenues before reimbursements between $990 million and $1.02 billion. |
| |
| • | Consolidated operating earnings between $58.0 million and $63.0 million. |
| |
| & bull; | Consolidated cash provided by operating activities between $30.0 and $35.0 million. |
| |
| • | After reflecting stock-based compensation expense, net corporate interest expense, customer-relationship intangible asset amortization expense, and income taxes, net income attributable to Crawford & Company between $25.0 million and $28.0 million, or $0.46 to $0.52 dilute d earnings per share. |
Crawford & Company's management will host a conference call with investors on Monday, February 7, 2011 at 3:00 p.m. EST to discuss earnings and other developments. The call will be recorded and available for replay through February 14, 2011. You may dial 1-800-642-1687 (706-645-9291 international) to listen to the replay. The access code is 38399880. Alternatively, please visit our web site at www.crawfordandcompany.com for a live audio web cast and related financial presentation.
Further information regarding the Company's financial position, operating results, and cash flows for the quarter and year ended December 31, 2010 is shown on the attached unaudited condensed consolidated financial statements.
In the normal course of business, our operating segments incur certain out-of-pocket expenses that are thereafter reimbursed by our clients. Under GAAP, these out-of-pocket expenses and associated reimbursements are reported as revenues and expenses, respectiv ely, 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 revenues and expenses 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 (loss) or operating earnings (loss). 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 operating segments and make resource allocation decisions. Unlike net income, our operating earnings measure is not a standard performance measure found in GAAP. However, since it is our segment measure of profitability presented in conformity with the Financial Accounting Standards Board's (“FASB”) Accounting Standards Codification (“ASC”) Topic 280 “Segment Reporting,” it is not considered a non-GAAP financial measure requiring reconciliation pursuant to Securities and Exchange Commission (“SEC”) guidance contained in Regulation G and Item 10(e) of Regulation S-K. We believe this measure is useful to others in that it allows them to evaluate segment operating performance using the same criteria our management and CODM use. Operating earnings represent segment earnings excluding income tax expense, net corporate interest expense, amortization of customer-relationship intangible assets, stock option expense, certain other gains and expenses, and certain unallocated corporate and shared costs. Net income or loss attributable to noncontrolling interests has also been removed from operating earnings.
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD ATLANTA, GEORGIA 30319 (404) 300-1000
Income tax expense, net corporate interest expense, amortization of customer-relationship intangible assets, and stock option expense are recurring components of our net income or loss, but they are not considered part of our segment operating earnings because they are managed on a corporate-wide basis. Income tax expense is based on statutory rates in effect in each of the jurisdictions where we provide services, and vary throughout the world. Net corporate interest expense results from capital structure decisions made by management and affecting the Company as a whole. Amortization expense relates to non-cash amortization expense of customer-relationship intangible assets resulting from business c ombinations. 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. 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.
Certain other gains and expenses may arise from events (expenses related to restructurings, losses on subleases, and goodwill impairment charges) that are not allocated to any particular segment since they historically have not regularly impacted our performance and are not expected to impact our future performance on a regular basi s.
Following is a reconciliation of segment operating earnings (loss) to net income (loss) attributable to Crawford & Company on a GAAP basis and the related margins as a percentage of revenues before reimbursements for all periods presented (in thousands, except percentages):
| | | | | | | | | | | | | | | | | | | | | |
| | Quarter ended | | Year ended |
| | December 31, 2010 | % Margin | December 31, 2009 | % Margin | | December 31, 2010 | % Margin | December 31, 2009 | % Margin |
| Operating Earnings (Loss): | | | | | | | | | |
| U.S. property & casualty | $ | (452 | ) | (1 | )% | $ | 1,597 | | 4 | % | | $ | 11,512 | | 6 | % | $ | 18,727 | | 9 | % |
| International operations | 13,210 | | 12 | % | 10,447 | | 10 | % | | 34,894 | | 8 | % | 33,786 | | 9 | % |
| Broadspire | (6,948 | ) | (11 | )% | 2,129 | | 3 | % | | (11,712 | ) | (5 | )% | (1,602 | ) | (1 | )% |
| Legal settlement administration | 27,844 | | 34 | % | 3,219 | | 17 | % | | 47,661 | | 29 | % | 13,130 | | 16 | % |
| Unallocated corporate and shared costs | (4,320 | ) | (1 | )% | (2,566 | ) | (1 | )% | | (6,671 | ) | (1 | )% | (10,714 | ) | (1 | )% |
| Deduct: | | | | | | | | | |
| Restructuring and other costs | — | | — | % | (2,244 | ) | (1 | )% | | (4,650 | ) | (0 | )% | (4,059 | ) | (0 | )% |
| Goodwill impairment | (3,485 | ) | (1 | )% | — | | — | % | | (10,788 | ) | (1 | )% | (140,945 | ) | (15 | )% |
| Stock option expense | (175 | ) | (0 | )% | (218 | ) | (0 | )% | | (761 | ) | (0 | )% | (914 | ) | (0 | )% |
| Amortization expense | (1,499 | ) | (0 | )% | (1,500 | ) | (1 | )% | | (5,995 | ) | (1 | )% | (5,994 | ) | (1 | )% |
| Net corporate interest expense | (3,270 | ) | (1 | )% | (3,915 | ) | (2 | )% | | (15,002 | ) | (1 | )% | (14,166 | ) | (1 | )% |
| Income taxes | (5,774 | ) | (2 | )% | 1,958 | | 1 | % | | (9,712 | ) | (1 | )% | (2,618 | ) | (0 | )% |
| Net income attributable to non-controlling interests | (320 | ) | 0 | % | (38 | ) | 0 | % | | (448 | ) | 0 | % | (314 | ) | 0 | % |
| Net income (loss) attributable to Crawford & Company | $ | 14,811 | | 5 | % | $ | 8,869 | | 4 | % | | $ | 28,328 | | 3 | % | $ | (115,683 | ) | (12 | )% |
| | | | | | | | | | |
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD ATLANTA, GEORGIA 30319 (404) 300-1000
Based in Atlanta, Georgia, Crawford & Company (www.crawfordandcompany.com) is the world's largest independent provider of claims management solutions to the risk management and insurance industry as well as self-insured entities, with a global network of more than 700 locations in more than 100 countries. The Crawford System of Claims SolutionsSM offers comprehensive, integrated claims services, business process outsourcing and consulting services for major product lines including property and casualty claims management; workers' compensation claims and medical management, and legal settlement administration. The Company's shares are traded on the NYSE under the symbols CRDA and CRDB.
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| This press release contains forward-looking statements, including statements about the 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. 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 f orward-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 or in the Investor Relations section of Crawford & Company's website at www.crawfordandcompany.com. |
FOR FURTHER INFORMATION REGARDING THIS PRESS RELEASE, PLEASE CALL BRUCE SWAIN AT (404) 300-1051.
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD, ATLANTA, GEORGIA 30319 (404) 300-1000
&nbs p;
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In Thousands, Except Earnings Per Share Amounts and Percentages) | | | | | | | | | |
| | | |
| Three Months Ended December 31 | 2010 | | 2009 | % Change |
| | | | | |
| Revenues: | | | | |
| | | | | |
| Revenues Before Reimbursements | $ | 301,477 | | | $ | 238,369 | | 26 | % |
| Reimbursements | 23,175 | | | 19,050 | | 22 | % |
| Total Revenues | 324,652 | | | 257,419 | | 26 | % |
| | | | | |
| Costs and Expenses: | | | | |
| | | | | |
| Costs of Services Before Reimbursements | 220,721 | | | 175,540 | | 26 | % |
| Reimbursements | 23,175 | | | 19,050 | | 22 | % |
| Total Costs of Services | 243,896 | | | 194,590 | | 25 | % |
| | | | | |
| Selling, General, and Administrative | 53,096 | | | 49,721 | | 7 | % |
| Corporate Interest Expense, Net | 3,270 | | | 3,915 | | (16 | )% |
| Goodwill Impairment Charge | 3,485 | | | — | | nm | |
| Restructuring and Other Costs | — | | | 2,244 | | nm | |
| | | | | |
| Total Costs and Expenses | 303,747 | | | 250,470 | | 21 | % |
| | | | | |
| Income Before Income Taxes | 20,905 | | | 6,949 | | 201 | % |
| Provision (Benefit) for Income Taxes | 5,774 | | | (1,958 | ) | 395 | % |
| | | | | |
| Net Income | 15,131 | | | 8,907 | | 70 | % |
| | | | | |
| Less: Net Income Attributable to Noncontrolling Interests | 320 | | | 38 | | 742 | % |
| | | | | |
| Net Income Attributable to Crawford & Company | $ | 14,811 | | | $ | 8,869 | | 67 | % |
| | | | | |
| Earnings Per Share - Basic | $ | 0.28 | | | $ | 0.17 | | 65 | % |
| Earnings Per Share - Diluted | $ | 0.28 | | | $ | 0.17 | | 65 | % |
| | | | | |
| Weighted-average Shares Used in Calculating: | | | | |
| Basic Earnings Per Share | 52,854 | | | 52,053 | | |
| Diluted Earnings Per Share | 53,801 | | | 52,902 | | |
nm = not meaningful
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD, ATLANTA, GEORGIA 30319 (404) 300-1000
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In Thousands, Except Earnings Per Share Amounts and Percentages)
| | | | | | | | | |
| | | | | |
| Year Ended December 31 | 2010 | | 2009 | % Change |
| | | | | |
| Revenues: | | | | |
| | | | | | | |
| Revenues Before Reimbursements | $ | 1,030,417 | | | $ | 969,868 | | 6 | % |
| Reimbursements | 80,384 | | | 78,334 | | 3 | % |
| Total Revenues | 1,110,801 | | | 1,048,202 | | 6 | % |
| ; | | | | |
| Costs and Expenses: | | | | |
| | | | | |
| Costs of Services Before Reimbursements | 758,863 | | | 713,991 | | 6 | % |
| Reimbursements | 80,384 | | | 78,334 | | 3 | % |
| Total Costs of Services | 839,247 | | | 792,325 | | 6 | % |
| | | | | |
| Selling, General, and Administrative | 202,626 | | | 209,458 | | (3 | )% |
| Corporate Interest Expense, Net | 15,002 | | | 14,166 | | 6 | % |
| Goodwill Impairment Charge | 10,788 | | | 140,945 | | (92 | )% |
| Restructuring and Other Costs | 4,650 | | | 4,059 | | 15 | % |
| | | | | |
| Total Costs and Expenses | 1,072,313 | | | 1,160,953 | | (8 | )% |
| | | | | |
| Income (Loss) before Income Taxes | 38,488 | | | (112,751 | ) | 134 | % |
| Provision for Income Taxes | 9,712 | | | 2,618 | | 271 | % |
| | | | | |
| Net Income (Loss) | 28,776 | | | (115,369 | ) | 125 | % |
| | | | | |
| Less: Net Income Attributable to Noncontrolling Interests | 448 | | | 314 | | 43 | % |
| | | | | |
| Net Income (Loss) Attributable to Crawford & Company | $ | 28,328 | | | $ | (115,683 | ) | 124 | % |
| | | | | |
| Earnings (Loss) Per Share - Basic | $ | 0.54 | | | $ | (2 .23 | ) | 124 | % |
| Earnings (Loss) Per Share - Diluted | $ | 0.53 | | | $ | (2.23 | ) | 124 | % |
| | | | | |
| Weighted-average Shares Used in Calculating: | | | | |
| Basic Earnings (Loss) Per Share | 52,664 | | | 51,830 | | |
| Diluted Earnings (Loss) Per Share | 53,234 | | | 51,830 | | |
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD, ATLANTA, GEORGIA 30319 (404) 300-1000
CRAWFORD & COMPANY
SUMMARY RESULTS BY OPERATING SEGMENT
Three Months Ended December 31
Unaudited
(In Thousands, Except Percentages)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | U.S. Property & Casualty | % | International | % | Broadspire | % | Legal Settlement Administration | % |
| | 2010 | 2009 | Change | 2010 | 2009 | Change | 2010 | 2009 | Change | 2010 | 2009 | Change |
| | | | | | | | | | | | | |
| Revenues Before Reimbursements | $ | 45,172 | ; | $ | 44,906 | | 1 | % | $ | 114,818 | | $ | 103,717 | | 11 | % | $ | 60,670 | | $ | 70,563 | | (14 | )% | $ | 80,817 | | $ | 19,183 | | 321 | % |
| | | | | | | | | | | | | |
| Compensation & Benefits | 28,982 | | 29,106 | | (0 | )% | 73,417 | | 69,294 | | 6 | % | 3 7,719 | | 38,722 | | (3 | )% | 20,149 | | 8,597 | | 134 | % |
| % of Revenues Before Reimbursements | 64 | % | 65 | % | | 64 | % | 67 | % | | 62 | % | 55 | % | | 25 | % | 45 | % | |
| | | | | | | | | | | | | |
| Expenses Other than Reimbursements, | | | | | | | | | | | | |
| Compensation & Benefits | 16,642 | | 14,203 | | 17 | % | 28,191 | | 23,976 | | 18 | % | 29,899 | | 29,712 | | 1 | % | 32,824 | | 7,367 | | 346 | % |
| % of Revenues Before Reimbursements | 37 | % | 31 | % | | 24 | % | 23 | % | | 49 | % | 42 | % | | 41 | % | 38 | % | |
| | | | | | | | | | | | | |
| Total Operating Expenses | 45,624 | | 43,309 | | 5 | % | 101,608 | | 93,270 | | 9 | % | 67,618 | | 68,434 | | (1 | )% | 52,973 | | 15,964 | | 232 | % |
| | | | | | | | | | | | | |
| Operating (Loss) Earnings (1) | $ | (452 | ) | $ | 1,597 | | (128 | )% | $ | 13,210 | | $ | 10,447 | | 26 | % | $ | (6,948 | ) | $ | 2,129 | | (426 | )% | $ | 27,844 | | $ | 3,219 | | 765 | % |
| % of Revenues Before Reimbursements | (1 | )% | 4 | % | | 12 | % | 10 | % | | (11 | )% | 3 | % | | 34 | % | 17 | % | |
Year Ended December 31
Unaudited
(In Thousands, Except Percentages) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | U.S. Property & Casualty | % | International | % | Broadspire | % | Legal Settlement Administration | % |
| | 2010 | 2009 | Change | 2010 | 2009 | Change | 2010 | 2009 | Change | 2010 | 2009 | Change |
| | | | | | | | | | | | | |
| Revenues Before Reimbursements | $ | 190,029 | | $ | 207,450 | | (8 | )% | $ | 430,709 | | $ | 391,749 | | 10 | % | $ | 245,496 | | $ | 288,650 | | (15 | )% | $ | 164,183 | | $ | 82,019 | | 100 | % |
| | | | | | | | | | | | | |
| Compensation & Benefits | 117,269 | | 126,483 | | (7 | )% | 287,045 | | 267,514 | | 7 | % | 145,685 | | 161,786 | | (10 | )% | 54,596 | | 35,859 | | 52 | % |
| % of Revenues Before Reimbursements | 62 | % | 61 | % | | 67 | % | 68 | % | | 59 | % | 56 | % | | 33 | % | 44 | % | |
| | | | | | | | | | | | | |
| Expenses Other than Reimbursements, | | | | | | | | | | | | |
| Compensation & Benefits | 61,248 | | 62,240 | | (2 | )% | 108,770 | | 90,449 | | 20 | % | 111,523 | | 128,466 | | (13 | )% | 61,926 | | 33,030 | | 87 | % |
| % of Revenues Before Reimbursements | 32 | % | 30 | % | | 25 | % | 23 | % | | 46 | % | 45 | % | | 38 | % | 40 | % | |
| | | | | | | | | | | | | |
| Total Operating Expenses | 178,517 | | 188,723 | | (5 | )% | 395,815 | | 357,963 | | 11 | % | 257,208 | | 290,252 | | (11 | )% | 116,522 | | 68,889 | | 69 | % |
| | | | | | | | | | | | | |
| Operating Earnings (Loss) (1) | $ | 11,512 | | $ | 18,727 | | (39 | )% | $ | 34,894 | | $ | 33,786 | | 3 | % | $ | (11,712 | ) | $ | (1,602 | ) | (631 | )% | $ | 47,661 | | $ | 13,130 | | 263 | % |
| % of Revenues Before Reimbursements | 6 | % | 9 | % | | 8 | % | 9 | % | | (5 | )% | (1 | )% | | 29 | % | 16 | % | |
(1) A non-GAAP financial measurement which represents net income attributable to Crawford & Company excluding income tax expense, net corporate interest expense, amortization of customer-relationship intangible assets, stock option
expense, certain other gains and expenses and certain unallocated overhead corporate and shared costs. See page 6 for a reconciliation of Operating Earnings to Net Income (Loss) computed in accordance with GAAP.
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD, ATLANTA, GEORGIA 30319 (404) 300-1000
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
As of December 31, 2010 and December 31, 2009
(In Thousands, Except Par Values) | | | | | | | |
| | Unaudited | | * |
| | December 31 | | December 31 |
| | 2010 | | 2009 |
| ASSETS | | | |
| | | | |
| Current Assets: | | | |
| Cash and Cash Equivalents | $ | 93,540 | | | $ | 70,354 | |
| Accounts Receivable, Net | 142,521 | | | 139,215 | |
| Unbilled Revenues, at Estimated Billable Amounts | 122,933 | | | 93,796 | |
| Prepaid Expenses and Other Current Assets | 20,411 | | | 22,350 | |
| | | | |
| Total Current Assets | 379,405 | | | 325,715 | |
| | | | |
| Property and Equipment | 149,444 | | | 144,254 | |
| Less Accumulated Depreciation | (106,073 | ) | | (102,108 | ) |
| Net Property and Equipment | 4 3,371 | | | 42,146 | |
| | | | |
| Other Assets: | | | |
| Goodwill | 125,764 | | | 123,169 | |
| Intangible Assets Arising from Business Acquisitions, Net | 97,881 | | | 104,409 | |
| Capitalized Software Costs, Net | 55,204 | | | 50,463 | |
| Deferred Income Tax Assets | 91,930 | | | 69,504 | |
| Other Noncurrent Assets | 27,119 | | | 27,499 | |
| Total Other Assets | 397,898 | | | 375,044 | |
| | | | |
| Total Assets | $ | 820,674 | | | $ | 742,905 | |
| | | | |
| LIABILITIES AND SHAREHOLDERS’ INVESTMENT | | | |
| | | | |
| Current Liabilities: | | | |
| Short-Term Borrowings | $ | — | | | $ | 32 | |
| Accounts Payable | 53,517 | | | 35,449 | |
| Accrued Compensation and Related Costs | 90,590 | | | 70,871 | |
| Self-Insured Risks | 15,094 | | | 18,475 | |
| Income Taxes Currently Payable | 2,558 | | | — | |
| Deferred Income Taxes | 17,146 | | | — | |
| Deferred Rent | 15,750 | | | 15,777 | |
| Other Accrued Liabilities | 31,097 | | | 31,541 | |
| Deferred Revenues | 48,198 | | | 53,664 | |
| Mandatory Company Contributions due to Pension Plan | 20,000 | | | 25,000 | |
| Current Installments of Long-Term Debt and Capital Leases | 2,891 | | | 8,189 | |
| | | | |
| Total Current Liabilit ies | 296,841 | | | 258,998 | |
| | | | |
| Noncurrent Liabilities: | | | |
| Long-Term Debt and Capital Leases, Less Current Installments | 220,437 | | | 173,061 | |
| Deferred Revenues | 30,048 | | | 33,524 | |
| Self-Insured Risks | 18,274 | | | 14,824 | |
| Accrued Pension Liabilities, Less Current Mandatory Contributions | 145,030 | | | 187,507 | |
| Other Noncurrent Liabilities | 14,813 | | | 13,705 | |
| Total Noncurrent Liabilities | 428,602 | | | 422,621 | |
| | | | |
| Shareholders’ Investment: | | | |
| Class A Common Stock, $1.00 par value | 28,002 | | & nbsp; | 27,355 | |
| Class B Common Stock, $1.00 Par Value | 24,697 | | | 24,697 | |
| Additional Paid-In Capital | 32,348 | | | 29,570 | |
| Retained Earnings | 168,791 | | | 140,463 | |
| Accumulated Other Comprehensive Loss | (164,322 | ) | | (165,403 | ) |
| Total Crawford & Company Shareholders’ Investment | 89,516 | | | 56,682 | |
| | | | |
| Noncontrolling Interests | 5,715 | | | 4,604 | |
| | | | |
| Total Shareholders’ Investment | 95,231 | | | 61,286 | |
| | | | |
| Total Liabilities and Shareholders' Investment | $ | 820,674 | | | $ | 742,905 | |
* derived from the audited Consolidated Balance Sheet
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD, ATLANTA, GEORGIA 30319 (404) 300-1000
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2010 and December 31, 2009
Unaudited
(In Thousands)
| | | | | | | |
| | 2010 | | 2009 |
| Cash Flows From Operating Activities: | | | |
| Net Income (Loss) | $ | 28,776 | | | $ | (115,369 | ) |
| Reconciliation of Net Income (Loss) to Net Cash Provided By Operating Activities: | | | |
| Depreciation and Amortization | 30,599 | | | 31,010 | |
| Goodwill Impairment Charge | 10,788 | | | 140,945 | |
| Deferred Income Taxes | 2,710 | | | 463 | |
| Stock-Based Compensation | 3,651 | | | 5,510 | |
| Loss on Disposals of Property and Equipment, Net | 449 | | | 117 | |
| Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions and Dispositions: | | | |
| Accounts Receivable, Net | (372 | ) | | 27,193 | |
| Unbilled Revenues, Net | (28,384 | ) | | 12,481 | |
| Accrued or Prepaid Income Taxes | 963 | | | (7,782 | ) |
| Accounts Payable and Accrued Liabilities | 35,861 | | | (16,749 | ) |
| Deferred Revenues | (8,830 | ) | | (15,827 | ) |
| Accrued Retirement Costs | (47,844 | ) | | (7,844 | ) |
| Prepaid Expenses and Other Operating Activit ies | (2,200 | ) | | (2,484 | ) |
| Net Cash Provided By Operating Activities | 26,167 | | | 51,664 | |
| | | | |
| Cash Flows From Investing Activities: | | | |
| Acquisitions of Property and Equipment | (13,473 | ) | | (9,886 | ) |
| Proceeds from Disposals o f Property and Equipment | 51 | | | 135 | |
| Capitalization of Computer Software Costs | (14,306 | ) | | (14,823 | ) |
| Additional Purchase Price Consideration for Acquisition of BMSI | (14,803 | ) | | — | |
| Payments for Business Acquisitions, Net of Cash Acquired | — | | | (6,260 | ) |
| Other Investing Activities | — | | | (335 | ) |
| Net Cash Used In Investing Activities | (42,531 | ) | | (31,169 | ) |
| | | | |
| Cash Flows From Financing Activities: | | | |
| Shares Used to Settle Withholding Taxes Under Stock-Based Compensation Plans | (703 | ) | | (1,903 | ) |
| Proceeds from Employee Stock-Based Compensation Plans | 477 | | | 453 | |
| Increase in Short-Term Borrowings | 33,965 | | | 39,336 | |
| Payments on Short-Term Borrowings | (33,960 | ) | | (57,622 | ) |
| Proceeds from Long-Term Borrowings | 50,575 | | | — | |
| Payments on Long-Term Debt and Capital Lease Obligations | (8,760 | ) | | (2,400 | ) |
| Capitalized Loan Costs | (1,856 | ) | | (4,145 | ) |
| Dividends Paid to Noncontrolling Interests | (218 | ) | | (274 | ) |
| Net Cash Provided By (Used In) Financing Activities | 39,520 | | | (26,555 | ) |
| | | ; | |
| Effect of Exchange Rate Changes on Cash and Cash Equivalents | 30 | | | 3,290 | |
| |
| Increase (Decrease) in Cash and Cash Equivalents | 23,186 | | | (2,770 | ) |
| Cash and Cash Equivalents at Beginning of Year | 70,354 | | | 73,124 | |
| Cash and Cash Equivalents at End of Year | $ | 93,540 | | | $ | 70,354 | |
