Exhibit 99.1
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 300-1000
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 300-1000
FOR IMMEDIATE RELEASE | Date: November 9, 2009 | |
From: Jeffrey T. Bowman | ||
Chief Executive Officer |
Crawford Reports 2009 Third Quarter Results
Net Income Excluding Impairment Charge Improves
Company Amends Credit Agreement
Net Income Excluding Impairment Charge Improves
Company Amends Credit Agreement
Crawford & Company (www.crawfordandcompany.com) (NYSE: CRDA and CRDB), the world’s largest independent provider of claims management solutions to insurance companies and self-insured entities, today announced its financial results for the third quarter ended September 30, 2009.
Consolidated Results
Third quarter 2009 consolidated revenues before reimbursements decreased to $245.8 million compared to $266.9 million in the 2008 third quarter due primarily to the negative effect of foreign currency changes and lower revenues in the Broadspire and U.S. Property & Casualty segments. The third quarter 2009 net loss attributable to Crawford & Company was ($39.5) million, including a non-cash impairment charge of $46.9 million, primarily related to goodwill in the Company’s Broadspire segment, compared to net income attributable to Crawford & Company of $6.9 million in the 2008 third quarter. The third quarter 2009 loss per share was ($0.76) compared to diluted earnings per share of $0.13 in the prior-year quarter. Excluding the non-cash impairment charge, third quarter 2009 net income attributable to Crawford & Company would have been $7.2 million and diluted earnings per share would have been $0.14.
In connection with the preparation of its September 30, 2009 financial statements, the Company completed its previously disclosed interim goodwill impairment analysis of the Broadspire segment which it began during the 2009 second quarter. As a result of this analysis, the Company recorded an additional non-cash impairment charge of $46.9 million, or $0.90 per share. Substantially all of this charge is not deductible for tax purposes. This impairment charge does not affect the Company’s liquidity or cash flows and has no effect on the Company’s compliance with the financial covenants under its credit agreement.
Revenues, net income and earnings per share in the 2009 third quarter were negatively impacted by increased defined benefit pension expense, the impact of foreign currency changes, and the non-cash impairment charge as outlined below:
Page 1 of 12
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 300-1000
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 300-1000
Net | ||||||||||||
Income | ||||||||||||
(Loss) | ||||||||||||
Attributable | ||||||||||||
Revenues before | to Crawford | |||||||||||
In millions, except per share amounts | Reimbursements | & Company | EPS | |||||||||
3rd quarter 2008 results | $ | 266.9 | $ | 6.9 | $ | 0.13 | ||||||
(Less)/Add: | ||||||||||||
Foreign currency impact in 2009 | (14.7 | ) | (0.7 | ) | (0.01 | ) | ||||||
Increase in pension expense in 2009 | — | (2.9 | ) | (0.05 | ) | |||||||
All other operating changes | (6.4 | ) | 3.9 | 0.07 | ||||||||
Subtotal excluding impairment charge | 245.8 | 7.2 | 0.14 | |||||||||
Impairment charge in 2009 | — | (46.7 | ) | (0.90 | ) | |||||||
3rd quarter 2009 results | $ | 245.8 | $ | (39.5 | ) | $ | (0.76 | ) | ||||
Crawford generated $9.8 million of cash from operating activities during the 2009 year-to-date period, compared to the $33.4 million in cash provided by operating activities during the comparable 2008 period. The $23.6 million decrease was due primarily to lower earnings during 2009 before the impairment charge and growth in working capital requirements. The Company’s consolidated cash and cash equivalent position as of September 30, 2009 totaled $55.1 million compared to $56.8 million at September 30, 2008 and $73.1 million at December 31, 2008.
International Operations
Third quarter 2009 revenues before reimbursements for the International Operations segment declined 11.8% to $101.7 million from $115.4 million for the same period in 2008. Compared to the 2008 third quarter, during the 2009 third quarter the U.S. dollar was stronger against most major foreign currencies, resulting in a negative exchange rate impact. Excluding the negative impact of exchange rate fluctuations, International Operations revenues would have been $116.4 million in the 2009 third quarter, reflecting growth in revenues on a constant dollar basis of nearly 1.0%. Segment operating expenses for the 2009 third quarter decreased by $12.3 million in U.S. dollars, an 11.5% decrease, but increased by 1.3% on a constant dollar basis, compared to the 2008 period. Operating earnings declined to $7.3 million in U.S. dollars during the 2009 third quarter ($8.3 million on a constant dollar basis), down from last year’s third quarter operating earnings of $8.6 million. The related operating margin was 7.1% in the 2009 third quarter, compared to a 7.4% operating margin in the 2008 third quarter.
U.S. Property & Casualty
U.S. Property & Casualty revenues before reimbursements were $52.3 million in the third quarter of 2009, decreasing 7.1% from $56.2 million in the 2008 third quarter, and reflecting softness in claims referred in the 2009 period. Revenues generated by the Company’s catastrophe adjuster group were $6.3 million in the 2009 third quarter, unchanged from the level attained during the 2008 period. Operating
Page 2 of 12
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 300-1000
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 300-1000
earnings in the 2009 third quarter in the U.S. Property & Casualty segment were $4.9 million, or an operating margin of 9.3% of revenues, compared to operating earnings of $6.8 million, or 12.1% of revenues in the 2008 third quarter.
Broadspire
Revenues before reimbursements from the Broadspire segment were $70.4 million in the 2009 third quarter, down 8.4% from $76.9 million in the 2008 quarter. Broadspire had an operating loss of ($1.2 million) in the 2009 third quarter, or an operating margin of (1.7%) of revenues, compared to operating earnings of $1.1 million, or 1.4% 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 Company’s impairment charge did not affect the segment operating results of Broadspire.
Legal Settlement Administration
Legal Settlement Administration revenues before reimbursements were $21.3 million in the 2009 third quarter, up 15.9% from $18.4 million in the 2008 quarter, reflecting the positive impact of several major bankruptcy and securities class action administration projects awarded to the Company during 2009. Operating earnings totaled $4.1 million in the 2009 third quarter, or an operating margin of 19.2% of revenues, compared to $2.9 million, or 15.5% of revenues, in the prior-year period. The segment’s awarded project backlog totaled approximately $55.4 million at September 30, 2009.
Amended Credit Agreement
On November 2, 2009, the Company announced that it had entered into an amendment of its existing credit agreement. Among other provisions, the amendment allows an extension of the revolving commitments from October 30, 2011 until October 30, 2013, and also offers the Company additional financial flexibility.
The amendment provides that Crawford may increase the aggregate amount of its debt under the credit agreement by up to $50 million and may also issue other, unsecured debt of up to $200 million. It also updates certain covenants to allow for this additional flexibility and access to capital, while upwardly revising applicable interest rates.
Management’s Comments
Mr. Jeffrey T. Bowman, chief executive officer of Crawford & Company, stated, “Our third quarter 2009 operating results are reflective of current global economic conditions which continue to be challenging. We are closely managing our cost structure in light of the prolonged nature and depth of the macroeconomic downturn and are simultaneously monitoring the markets we serve for growth opportunities. While our reported consolidated revenues and earnings are down year-over-year, there are encouraging areas within our business.
Page 3 of 12
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 300-1000
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 300-1000
“Our International Operations segment continues to show revenue growth when measured in constant dollars. This growth comes in a very competitive environment where there has been an absence of significant catastrophic activity, and reflects the leadership position we enjoy in this market. Legal Settlement Administration has also grown its business this year partly as a result of increased bankruptcy administration projects. The strategic decision made several years ago to invest in this area is now providing us with a more diversified earnings stream in light of the decline in securities class action projects. We are pleased with the performance of this business year-to-date in 2009.
“We believe the recently announced amendment to our credit agreement is a reflection of our solid operational performance. It increases our financial flexibility and should help us continue to effectively manage our operations going forward. We are pleased with both the immediate and potential future implications of this amendment.
Mr. Bowman concluded, “Before the impairment charge, our operating results for the 2009 third quarter showed solid improvement over our first two quarters’ results, even as the global economy remained weak. However, we are seeing some softness in claim assignments across our international and U.S. markets. While we remain confident in our long-term business model, our outlook for the 2009 fourth quarter is conservative as reflected in our revised guidance for the year. Included in that revised guidance is a fourth quarter special charge of $1.8 million, or $0.02 per share, related to a long-term sublease we have entered into for Broadspire’s former headquarters building located in Plantation, Florida. We remain fully committed to managing our operations toward improved operating performance and market share expansion, and are focusing significant attention on our cost base across the entire organization to ensure we are operating as efficiently as possible.”
2009 Guidance
Crawford & Company revised its previously issued guidance for full-year 2009 as follows:
• | Consolidated revenues before reimbursements between $970 million and $975 million. | ||
• | Consolidated operating earnings between $48.5 million and $51.5 million. | ||
• | Consolidated cash provided by operating activities between $30.0 million and $35.0 million. | ||
• | After reflecting stock-based compensation expense, net corporate interest expense, customer-relationship intangible asset amortization expense, special charges and credits, and income taxes, net loss attributable to Crawford & Company on a GAAP basis between ($120.0) million and ($122.0) million, or ($2.32) to ($2.36) loss per share. | ||
• | Before reflecting the special charges related to the impairments, net income attributable to Crawford & Company on a non-GAAP basis between $19.1 million and $21.2 million, or $0.37 to $0.41 diluted earnings per share. |
Page 4 of 12
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 300-1000
Crawford & Company’s management will host a conference call with investors on Monday, November 9, 2009 at 3:00p.m. EST to discuss earnings and other developments. The call will be recorded and available for replay through November 16, 2009. You may dial 1-800-642-1687 (706-645-9291 international) to listen to the replay. The access code is 38382799. 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 nine-month periods ended September 30, 2009 is shown on the attached condensed consolidated unaudited financial statements. Operating earnings (a non-GAAP financial measure) is the key financial performance measure used by the Company’s senior management to evaluate the performance of its segments and make resource allocation decisions. The Company believes this measure is useful to investors in that it allows them to evaluate operating performance using the same criteria that management uses. Operating earnings represent net income (loss) attributable to Crawford & Company excluding net corporate interest expense, stock option expense, income tax expense, amortization of customer relationship intangible assets, unallocated corporate and shared costs, and certain other charges and credits. Net corporate interest expense, stock option expense and income taxes are recurring components of the Company’s net income (loss), but they are not considered part of operating earnings since they are managed on a corporate-wide basis. Net corporate interest expense results from capital structure decisions made by the Company, stock option expense relates to historically granted stock options and employee stock purchase plan expenses which are not allocated to operating segments, and income taxes are based on statutory rates in effect in each of the locations where the Company provides services, and vary throughout the world. Amortization expense relates to non-cash amortization of customer relationship intangible assets resulting from business combinations. These costs are not allocated to the segments for assessing performance. None of the aforementioned costs relate directly to the Company’s products or the performance of the Company’s services and the Company believes it is therefore appropriate to exclude them in order to accurately assess the results of segment operating activities on a consistent basis. Certain other credits and charges represent events (gains on disposal of assets, restructuring activities, goodwill impairment, etc.) that are not considered part of segment operating earnings since they historically have not regularly impacted the Company’s operating performance and are not expected to regularly impact future performance. Because this measure is not calculated and recognized in accordance with GAAP, it may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. 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:
Page 5 of 12
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 300-1000
Quarter ended | Year-to-date period ended | |||||||||||||||||||||||||||||||
September | % | September | % | September | % | September | % | |||||||||||||||||||||||||
30, 2009 | Margin | 30, 2008 | Margin | 30, 2009 | Margin | 30, 2008 | Margin | |||||||||||||||||||||||||
Operating Earnings (Loss): | ||||||||||||||||||||||||||||||||
U.S. property & casualty | $ | 4,862 | 9.3 | % | $ | 6,781 | 12.1 | % | $ | 17,250 | 10.7 | % | $ | 17,822 | 11.4 | % | ||||||||||||||||
International operations | 7,258 | 7.1 | 8,594 | 7.4 | 22,943 | 7.9 | 28,027 | 8.4 | ||||||||||||||||||||||||
Broadspire | (1,171 | ) | (1.7 | ) | 1,079 | 1.4 | (3,731 | ) | (1.7 | ) | 5,366 | 2.3 | ||||||||||||||||||||
Legal settlement administration | 4,097 | 19.2 | 2,853 | 15.5 | 9,911 | 15.8 | 8,492 | 14.9 | ||||||||||||||||||||||||
Unallocated corporate and shared costs | (878 | ) | (0.4 | ) | (3,737 | ) | (1.4 | ) | (8,148 | ) | (1.1 | ) | (5,147 | ) | (0.7 | ) | ||||||||||||||||
Add/(Deduct): | ||||||||||||||||||||||||||||||||
Other charges | — | — | — | — | (1,815 | ) | (0.2 | ) | — | — | ||||||||||||||||||||||
Impairment charge | (46,945 | ) | (19.1 | ) | — | — | (140,945 | ) | (19.3 | ) | — | — | ||||||||||||||||||||
Stock option expense | (266 | ) | (0.1 | ) | (243 | ) | (0.1 | ) | (696 | ) | (0.1 | ) | (717 | ) | (0.1 | ) | ||||||||||||||||
Amortization expense | (1,500 | ) | (0.6 | ) | (1,507 | ) | (0.6 | ) | (4,494 | ) | (0.6 | ) | (4,521 | ) | (0.6 | ) | ||||||||||||||||
Net corporate interest expense | (3,126 | ) | (1.3 | ) | (4,334 | ) | (1.6 | ) | (10,251 | ) | (1.4 | ) | (13,406 | ) | (1.7 | ) | ||||||||||||||||
Income taxes | (1,841 | ) | (0.7 | ) | (2,564 | ) | (1.0 | ) | (4,576 | ) | (0.6 | ) | (11,994 | ) | (1.5 | ) | ||||||||||||||||
Net (loss) income attributable to Crawford & Company | $ | (39,510 | ) | (16.1 | ) | $ | 6,922 | 2.6 | $ | (124,552 | ) | (17.0 | ) | $ | 23,922 | 3.0 | ||||||||||||||||
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 63 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.
Page 6 of 12
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 300-1000
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 within the meaning of 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 of operations, or cash flows to differ from those described in any forward-looking statements, please read Crawford & Company’s reports filed with the United States Securities and Exchange Commission 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.
Page 7 of 12
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)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In Thousands, Except Earnings Per Share Amounts and Percentages)
2009 | 2008 | % Change | ||||||||||
Nine Months Ended September 30 | ||||||||||||
Revenues: | ||||||||||||
Revenues Before Reimbursements | $ | 731,499 | $ | 785,693 | -7 | % | ||||||
Reimbursements | 59,284 | 69,578 | -15 | % | ||||||||
Total Revenues | 790,783 | 855,271 | -8 | % | ||||||||
Costs and Expenses: | ||||||||||||
Costs of Services Before Reimbursements | 538,451 | 572,743 | -6 | % | ||||||||
Reimbursements | 59,284 | 69,578 | -15 | % | ||||||||
Total Cost of Services | 597,735 | 642,321 | -7 | % | ||||||||
Selling, General, and Administrative | 159,737 | 163,313 | -2 | % | ||||||||
Corporate Interest Expense, Net | 10,251 | 13,406 | -24 | % | ||||||||
Restructuring Costs | 1,815 | — | nm | |||||||||
Goodwill and Intangible Asset Impairment Charges | 140,945 | — | nm | |||||||||
Total Costs and Expenses | 910,483 | 819,040 | 11 | % | ||||||||
(Loss) Income Before Income Taxes | (119,700 | ) | 36,231 | nm | ||||||||
Provision for Income Taxes | 4,576 | 11,994 | -62 | % | ||||||||
Net (Loss) Income | (124,276 | ) | 24,237 | nm | ||||||||
Less: Net Income Attributable to Noncontrolling Interests | (276 | ) | (315 | ) | -12 | % | ||||||
Net (Loss) Income Attributable to Crawford & Company | $ | (124,552 | ) | $ | 23,922 | nm | ||||||
(Loss) Earnings Per Share — Basic and Diluted | $ | (2.41 | ) | $ | 0.47 | nm | ||||||
Weighted-average Shares Used in Calculating: | ||||||||||||
Basic (Loss) Earnings Per Share | 51,755 | 50,870 | ||||||||||
Diluted (Loss) Earnings Per Share | 51,755 | 51,275 | ||||||||||
nm = | not meaningful |
Page 8 of 12
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)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In Thousands, Except Earnings Per Share Amounts and Percentages)
2009 | 2008 | % Change | ||||||||||
Three Months Ended September 30 | ||||||||||||
Revenues: | ||||||||||||
Revenues Before Reimbursements | $ | 245,752 | $ | 266,916 | -8 | % | ||||||
Reimbursements | 23,105 | 24,416 | -5 | % | ||||||||
Total Revenues | 268,857 | 291,332 | -8 | % | ||||||||
Costs and Expenses: | ||||||||||||
Costs of Services Before Reimbursements | 179,405 | 196,329 | -9 | % | ||||||||
Reimbursements | 23,105 | 24,416 | -5 | % | ||||||||
Total Cost of Services | 202,510 | 220,745 | -8 | % | ||||||||
Selling, General, and Administrative | 53,835 | 56,606 | -5 | % | ||||||||
Corporate Interest Expense, Net | 3,126 | 4,334 | -28 | % | ||||||||
Goodwill and Intangible Asset Impairment Charges | 46,945 | — | nm | |||||||||
Total Costs and Expenses | 306,416 | 281,685 | 9 | % | ||||||||
(Loss) Income Before Income Taxes | (37,559 | ) | 9,647 | -489 | % | |||||||
Provision for Income Taxes | 1,841 | 2,564 | -28 | % | ||||||||
Net (Loss) Income | (39,400 | ) | 7,083 | -656 | % | |||||||
Less: Net Income Attributable to Noncontrolling Interests | (110 | ) | (161 | ) | -32 | % | ||||||
Net (Loss) Income Attributable to Crawford & Company | $ | (39,510 | ) | $ | 6,922 | -671 | % | |||||
(Loss) Earnings Per Share: | ||||||||||||
Basic | $ | (0.76 | ) | $ | 0.14 | nm | ||||||
Diluted | $ | (0.76 | ) | $ | 0.13 | nm | ||||||
Weighted-average Shares Used in Calculating: | ||||||||||||
Basic (Loss) Earnings Per Share | 52,011 | 50,994 | ||||||||||
Diluted (Loss) Earnings Per Share | 52,011 | 52,022 | ||||||||||
nm = | not meaningful |
Page 9 of 12
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD, ATLANTA, GEORGIA 30319 (404) 300-1000
CRAWFORD & COMPANY
SUMMARY RESULTS BY OPERATING SEGMENT
Nine Months Ended September 30
Unaudited
(In Thousands, Except Percentages)
SUMMARY RESULTS BY OPERATING SEGMENT
Nine Months Ended September 30
Unaudited
(In Thousands, Except Percentages)
Legal Settlement | ||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Property & Casualty | % | International | % | Broadspire | % | Administration | % | |||||||||||||||||||||||||||||||||||||||||
2009 | 2008 | Change | 2009 | 2008 | Change | 2009 | 2008 | Change | 2009 | 2008 | Change | |||||||||||||||||||||||||||||||||||||
Revenues Before Reimbursements | $ | 161,852 | $ | 156,935 | 3.1 | % | $ | 288,724 | $ | 335,505 | -13.9 | % | $ | 218,087 | $ | 236,289 | -7.7 | % | $ | 62,836 | $ | 56,964 | 10.3 | % | ||||||||||||||||||||||||
Compensation & Benefits | 96,968 | 96,277 | 0.7 | % | 200,510 | 229,992 | -12.8 | % | 123,064 | 132,672 | -7.2 | % | 27,262 | 26,571 | 2.6 | % | ||||||||||||||||||||||||||||||||
% of Revenues Before Reimbursements | 59.9 | % | 61.3 | % | 69.4 | % | 68.6 | % | 56.4 | % | 56.1 | % | 43.4 | % | 46.6 | % | ||||||||||||||||||||||||||||||||
Expenses Other than Reimbursements, Compensation & Benefits | 47,634 | 42,836 | 11.2 | % | 65,271 | 77,486 | -15.8 | % | 98,754 | 98,251 | 0.5 | % | 25,663 | 21,901 | 17.2 | % | ||||||||||||||||||||||||||||||||
% of Revenues Before Reimbursements | 29.4 | % | 27.3 | % | 22.7 | % | 23.0 | % | 45.3 | % | 41.6 | % | 40.8 | % | 38.5 | % | ||||||||||||||||||||||||||||||||
Total Operating Expenses | 144,602 | 139,113 | 3.9 | % | 265,781 | 307,478 | -13.6 | % | 221,818 | 230,923 | -3.9 | % | 52,925 | 48,472 | 9.2 | % | ||||||||||||||||||||||||||||||||
Operating Earnings (Loss) (1) | $ | 17,250 | $ | 17,822 | -3.2 | % | $ | 22,943 | $ | 28,027 | -18.1 | % | ($3,731 | ) | $ | 5,366 | -169.5 | % | $ | 9,911 | $ | 8,492 | 16.7 | % | ||||||||||||||||||||||||
% of Revenues Before Reimbursements | 10.7 | % | 11.4 | % | 7.9 | % | 8.4 | % | -1.7 | % | 2.3 | % | 15.8 | % | 14.9 | % | ||||||||||||||||||||||||||||||||
Three Months Ended September 30
Unaudited
(In Thousands, Except Percentages)
Unaudited
(In Thousands, Except Percentages)
Legal Settlement | ||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Property & Casualty | % | International | % | Broadspire | % | Administration | % | |||||||||||||||||||||||||||||||||||||||||
2009 | 2008 | Change | 2009 | 2008 | Change | 2009 | 2008 | Change | 2009 | 2008 | Change | |||||||||||||||||||||||||||||||||||||
Revenues Before Reimbursements | $ | 52,253 | $ | 56,227 | -7.1 | % | $ | 101,725 | $ | 115,362 | -11.8 | % | $ | 70,430 | $ | 76,911 | -8.4 | % | $ | 21,344 | $ | 18,416 | 15.9 | % | ||||||||||||||||||||||||
Compensation & Benefits | 31,976 | 34,115 | -6.3 | % | 70,420 | 79,656 | -11.6 | % | 39,293 | 43,552 | -9.8 | % | 9,426 | 8,494 | 11.0 | % | ||||||||||||||||||||||||||||||||
% of Revenues Before Reimbursements | 61.2 | % | 60.7 | % | 69.2 | % | 69.0 | % | 55.8 | % | 56.6 | % | 44.2 | % | 46.1 | % | ||||||||||||||||||||||||||||||||
Expenses Other than Reimbursements, Compensation & Benefits | 15,415 | 15,331 | 0.5 | % | 24,047 | 27,112 | -11.3 | % | 32,308 | 32,280 | 0.1 | % | 7,821 | 7,069 | 10.6 | % | ||||||||||||||||||||||||||||||||
% of Revenues Before Reimbursements | 29.5 | % | 27.2 | % | 23.7 | % | 23.6 | % | 45.9 | % | 42.0 | % | 36.6 | % | 38.4 | % | ||||||||||||||||||||||||||||||||
Total Operating Expenses | 47,391 | 49,446 | -4.2 | % | 94,467 | 106,768 | -11.5 | % | 71,601 | 75,832 | -5.6 | % | 17,247 | 15,563 | 10.8 | % | ||||||||||||||||||||||||||||||||
Operating Earnings (Loss) (1) | $ | 4,862 | $ | 6,781 | -28.3 | % | $ | 7,258 | $ | 8,594 | -15.5 | % | ($1,171 | ) | $ | 1,079 | -208.5 | % | $ | 4,097 | $ | 2,853 | 43.6 | % | ||||||||||||||||||||||||
% of Revenues Before Reimbursements | 9.3 | % | 12.1 | % | 7.1 | % | 7.4 | % | -1.7 | % | 1.4 | % | 19.2 | % | 15.5 | % | ||||||||||||||||||||||||||||||||
(1) | A non-GAAP financial measurement which represents net income attributable to Crawford & Company excluding net corporate interest expense, amortization of customer-relationship intangible assets, stock option expense, income tax expense, unallocated corporate and shared costs, restructuring costs, and goodwill impairment charge. See page 6 for a reconciliation of Operating Earnings to Net (Loss) Income computed in accordance with GAAP. |
Page 10 of 12
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD, ATLANTA, GEORGIA 30319 (404) 300-1000
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2009 and December 31, 2008
(In Thousands, Except Par Values)
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2009 and December 31, 2008
(In Thousands, Except Par Values)
Unaudited | * | |||||||
September 30 | December 31 | |||||||
2009 | 2008 | |||||||
Assets | ||||||||
Current Assets: | ||||||||
Cash and Cash Equivalents | $ | 55,089 | $ | 73,124 | ||||
Accounts Receivable, Net | 161,507 | 157,430 | ||||||
Unbilled Revenues, Net | 102,521 | 99,115 | ||||||
Prepaid Expenses and Other Current Assets | 22,725 | 18,688 | ||||||
Total Current Assets | 341,842 | 348,357 | ||||||
Property and Equipment | 146,601 | 140,399 | ||||||
Less Accumulated Depreciation | (104,189 | ) | (95,785 | ) | ||||
Net Property and Equipment | 42,412 | 44,614 | ||||||
Other Assets: | ||||||||
Goodwill | 119,760 | 251,897 | ||||||
Intangible Assets Arising from Business Acquisitions, Net | 106,007 | 111,389 | ||||||
Capitalized Software Costs, Net | 48,803 | 46,296 | ||||||
Deferred Income Tax Asset, Net | 65,952 | 67,695 | ||||||
Other Noncurrent Assets | 24,693 | 25,000 | ||||||
Total Other Assets | 365,215 | 502,277 | ||||||
Total Assets | $ | 749,469 | $ | 895,248 | ||||
Liabilities and Shareholders’ Investment | ||||||||
Current Liabilities: | ||||||||
Short-Term Borrowings | $ | 11,327 | $ | 13,366 | ||||
Accounts Payable | 34,457 | 40,711 | ||||||
Accrued Compensation and Related Costs | 69,227 | 77,802 | ||||||
Other Accrued Current Liabilities | 52,990 | 56,978 | ||||||
Self-Insured Risks | 18,807 | 17,939 | ||||||
Accrued Income Taxes | 7,513 | 9,937 | ||||||
Deferred Revenues | 59,312 | 59,679 | ||||||
Current Installments of Long-Term Debt and Capital Leases | 2,296 | 2,284 | ||||||
Total Current Liabilities | 255,929 | 278,696 | ||||||
Noncurrent Liabilities: | ||||||||
Long-Term Debt and Capital Leases, Less Current Installments | 179,494 | 181,206 | ||||||
Deferred Revenues | 35,824 | 42,795 | ||||||
Self-Insured Risks | 16,492 | 18,531 | ||||||
Accrued Pension Liabilities | 173,077 | 179,542 | ||||||
Other Noncurrent Liabilities | 13,504 | 14,119 | ||||||
Total Noncurrent Liabilities | 418,391 | 436,193 | ||||||
Shareholders’ Investment: | ||||||||
Class A Common Stock, $1.00 Par Value | 27,355 | 26,523 | ||||||
Class B Common Stock, $1.00 Par Value | 24,697 | 24,697 | ||||||
Additional Paid-in Capital | 27,178 | 26,342 | ||||||
Retained Earnings | 131,594 | 256,146 | ||||||
Accumulated Other Comprehensive Loss | (140,272 | ) | (158,157 | ) | ||||
Total Crawford & Company Shareholders’ Investment | 70,552 | 175,551 | ||||||
Noncontrolling Interests | 4,597 | 4,808 | ||||||
Total Shareholders’ Investment | 75,149 | 180,359 | ||||||
Total Liabilities and Shareholders’ Investment | $ | 749,469 | $ | 895,248 | ||||
* | Derived from the audited Consolidated Balance Sheet |
Page 11 of 12
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD, ATLANTA, GEORGIA 30319 (404) 300-1000
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2009 and September 30, 2008
Unaudited
(In Thousands)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2009 and September 30, 2008
Unaudited
(In Thousands)
2009 | 2008 | |||||||
Cash Flows From Operating Activities: | ||||||||
Net(Loss) Income | $ | (124,276 | ) | $ | 24,237 | |||
Reconciliation of Net (Loss) Income to Net Cash Provided By | ||||||||
Operating Activities: | ||||||||
Depreciation and Amortization | 23,102 | 22,737 | ||||||
Goodwill and Intangible Asset Impairment Charges | 140,945 | — | ||||||
Stock-Based Compensation | 3,118 | 4,345 | ||||||
Loss on Sales of Property and Equipment, Net | 54 | 67 | ||||||
Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions and Disposition: | ||||||||
Accounts Receivable, net | 2,626 | 2,003 | ||||||
Unbilled Revenues, net | 2,105 | 3,903 | ||||||
Accrued Income Taxes | (4,139 | ) | 6,609 | |||||
Accounts Payable and Accrued Liabilities | (15,686 | ) | 11,062 | |||||
Deferred Revenues | (7,791 | ) | (13,845 | ) | ||||
Retirement Plan Liabilities | (5,728 | ) | (23,435 | ) | ||||
Prepaid Expenses and Other Operating Activities | (4,539 | ) | (4,249 | ) | ||||
Net Cash Provided By Operating Activities | 9,791 | 33,434 | ||||||
Cash Flows From Investing Activities: | ||||||||
Acquisitions of Property and Equipment, net | (6,346 | ) | (9,737 | ) | ||||
Capitalization of Computer Software Costs | (10,775 | ) | (11,518 | ) | ||||
Other Investing Activities | (1,089 | ) | (204 | ) | ||||
Net Cash Used In Investing Activities | (18,210 | ) | (21,459 | ) | ||||
Cash Flows From Financing Activities: | ||||||||
Shares used to settle withholding taxes under stock-based compensation plans | (1,903 | ) | (20 | ) | ||||
Proceeds from exercises of stock options/ESPP plans | 453 | 2,016 | ||||||
Decrease in Short-Term Borrowings, net | (6,964 | ) | (5,864 | ) | ||||
Payments on Long-Term Debt and Capital Lease Obligations | (1,837 | ) | (1,970 | ) | ||||
Capitalized Loan Costs | (944 | ) | — | |||||
Other Financing Activities | (274 | ) | (309 | ) | ||||
Net Cash Used In Financing Activities | (11,469 | ) | (6,147 | ) | ||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 1,853 | 136 | ||||||
Change in Cash and Cash Equivalents | (18,035 | ) | 5,964 | |||||
Cash and Cash Equivalents at Beginning of Period | 73,124 | 50,855 | ||||||
Cash and Cash Equivalents at End of Period | $ | 55,089 | $ | 56,819 | ||||
Page 12 of 12