Exhibit 99.1
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830
| | | | |
| FOR IMMEDIATE RELEASE | | | | Date: February 4, 2008 |
| | | | From: Jeffrey T. Bowman |
| | | | Chief Executive Officer |
Crawford Reports 2007 Fourth Quarter Improvement in Revenues and Net Income -
Quarter and Annual Record Results Generated by International Operations
Crawford & Company (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 fourth quarter and year ended December 31, 2007.
Consolidated Results
Fourth quarter 2007 consolidated revenues before reimbursements totaled $245.2 million compared to $228.3 million in the 2006 fourth quarter. Fourth quarter 2007 net income was $3.3 million compared to a net loss of ($1.3) million for the 2006 fourth quarter. Fourth quarter 2007 earnings per share was $0.07 compared to a loss per share of ($0.03) in the prior-year quarter. During the 2007 fourth quarter the Company recognized previously unrecognized tax benefits which increased net income by approximately $640,000, or $0.01 per share. Net loss in the 2006 fourth quarter included a restructuring charge and loss on early extinguishment of debt of $1.9 million, net of related income taxes, or $0.04 per share, resulting from the purchase of Broadspire Services, Inc during the 2006 fourth quarter.
Consolidated revenues before reimbursements for the year ended December 31, 2007 were $975.1 million compared with $819.5 million in 2006. Net income for 2007 totaled $16.1 million, or $0.32 per share, compared with $15.0 million, or $0.30 per share, for 2006. Comparison of net income year-over-year is affected by several non-recurring items, including: a current year gain on disposal of assets of $2.5 million, net of related income taxes, or $0.05 per share, as a result of the 2007 sale of the Company’s subrogation services unit; the recognition of a $3.1 million gain in 2007, net of related income taxes, or $0.06 per share, related to the 2006 sale of the Company’s former corporate headquarters; a gain in the prior year of $2.0 million, net of related income taxes, or $0.04 per share, resulting from the third quarter 2006 sale of the Company’s investigative services units; and a loss of $1.9 million, net of related income taxes, or $0.04 per share, in the 2006 fourth quarter resulting from a restructuring charge and loss on early extinguishment of debt from the purchase of Broadspire Services, Inc.
Page 1 of 11
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830
During the 2007 fourth quarter, the Company made a discretionary $2.5 million prepayment on its long-term debt. For the year, the Company made $12.5 million in discretionary prepayments on its long-term borrowings. Crawford’s operating cash flows for 2007 reflected cash provided of $23.3 million compared to the prior year of $52.7 million. This change was primarily due to growth in unbilled revenues during 2007 and the reduction of deferred revenues associated with the completion of claims assumed in the Broadspire acquisition. The Company’s consolidated cash and cash equivalent position as of December 31, 2007 totaled $50.9 million, down $10.8 million from $61.7 million at December 31, 2006.
International Operations
Fourth quarter 2007 revenues before reimbursements for international operations grew to a record of $107.3 million from $84.5 million for the same period in 2006. Compared to the 2006 fourth quarter, during the current quarter the U.S. dollar was weaker against most major foreign currencies, resulting in a net exchange rate benefit in the current quarter. Excluding the benefit of exchange rate fluctuations, international revenues would have been $97.8 million in the 2007 fourth quarter, reflecting growth in revenues on a constant dollar basis of 15.8%. The acquisition of Specialty Liability Services, Ltd. in the United Kingdom during the 2006 fourth quarter contributed incremental revenues of $1.3 million in the 2007 fourth quarter. International operating expenses increased by $19.9 million in U.S. dollars, a 25.7% increase, and by 14.9% on a constant dollar basis. Operating earnings improved to a record $9.9 million in the current quarter, increasing 42.6% over last year’s fourth quarter operating earnings of $6.9 million. The related operating margin was 9.2% in the 2007 fourth quarter, improving over the 8.2% operating margin in the 2006 fourth quarter.
U.S. Property & Casualty
U.S. property & casualty revenues before reimbursements were $40.4 million in the fourth quarter of 2007 compared to $44.0 million in the 2006 fourth quarter, primarily as a result of lower claims volumes. Revenues generated by the Company’s catastrophe adjuster group were $1.8 million in the 2007 fourth quarter, declining slightly from $2.1 million in the 2006 period. The prior-year quarter included $588,000 in revenues generated by the Company’s subrogation services unit which was sold February 28, 2007. Operating earnings in the U.S. property and casualty segment declined to a loss of ($911,000), or (2.3%) of revenues, compared to a loss of ($39,000), or (0.1%) of revenues in the 2006 fourth quarter.
Broadspire
Revenues before reimbursements from the Broadspire segment were $75.0 million in the 2007 fourth quarter compared to $68.2 million generated in the 2006 quarter. Incremental revenues associated with Broadspire Management Services, Inc., acquired in the 2006 fourth quarter, totaled $12.9 million in the 2007 fourth quarter. In the 2007 fourth quarter, the Broadspire segment’s operating earnings improved to an operating loss of ($277,000), or (0.4%) of revenues from a loss of ($3.5) million, or (5.2%) of revenues.
Page 2 of 11
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830
Legal Settlement Administration
Legal settlement administration revenues before reimbursements were $22.5 million for the 2007 fourth quarter, compared to $31.7 million in the 2006 quarter. Operating earnings totaled $3.4 million in the 2007 fourth quarter, or an operating margin of 15.3% of revenues, compared to $3.7 million, or 11.7% of revenues, in the prior-year period. The segment’s awarded project backlog totaled approximately $45.0 million at December 31, 2007.
Mr. Jeffrey T. Bowman, chief executive officer of Crawford & Company, stated, “Our fourth quarter 2007 operating results reflect strong performance in our international business which generated record revenues and operating earnings for both the fourth quarter and full year, offset by declining revenues in our U.S. property & casualty and legal settlement administration segments. During 2006, the legal settlement administration segment was completing several major securities class action projects and by comparison is experiencing today a period of comparatively slower class action activity. Our U.S. property & casualty segment continues to experience a downturn in revenues, primarily as a result of lower industry-wide frequency and the absence of significant storm activity. We were pleased to make progress against our outstanding long-term borrowings by making $12.5 million in voluntary payments during the year.”
Mr. Bowman concluded, “Despite challenging macro trends in U.S. property and casualty claims frequencies and in our class action business, our outlook for 2008 anticipates improved operating results in each of our operating segments. This company and management team is focused on key financial measures and we are committed to managing our operations toward improved operating margins during the coming year.”
Crawford & Company provided guidance for 2008 as follows:
| | • | | Consolidated revenues before reimbursements between $990 million and $1.02 billion. |
| | • | | Consolidated operating earnings between $54.0 million and $58.7 million. |
| | • | | After reflecting stock-based compensation expense, net corporate interest expense, intangible asset amortization expense, and income taxes, consolidated net income between $19.1 million and $22.1 million, or $0.38 to $0.44 per share. |
Crawford & Company’s management will host a conference call with analysts on Monday, February 4, 2008 at 3:00P.M. EST to discuss quarterly earnings and other developments. The call will be recorded and available for replay through February 11, 2008. You may dial 1-800-642-1687 (706-645-9291 international) to listen to the replay. The access code is 32434094. Alternatively, please visit our web site at www.crawfordandcompany.com for a live audio web cast.
Page 3 of 11
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830
Further information regarding the Company’s financial position, operating results, and cash flows for the quarter and year ended December 31, 2007 is shown on the attached unaudited 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 exclude 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, 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 which are not allocated to its operating units, 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 performance of the Company’s services and are therefore excluded in order to accurately assess the results of segment operating activities on a consistent basis. Certain other credits and charges represent events (gain on disposal of assets, loss on extinguishment of debt, 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. Following is a reconciliation of segment operating earnings (loss) to consolidated net income on a GAAP basis and the related margins as a percentage of revenues before reimbursements for all periods presented:
Page 4 of 11
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter ended | | | Year ended | |
| | | December 31,
2007 | | | %
Margin | | | December 31,
2006 | | | %
Margin | | | December 31,
2007 | | | %
Margin | | | December 31,
2006 | | | %
Margin | |
Operating Earnings (Loss): | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. property & casualty | | $ | (911 | ) | | (2.3 | )% | | $ | (39 | ) | | (0.1 | )% | | $ | 4,675 | | | 2.6 | % | | $ | 13,014 | | | 6.2 | % |
International operations | | | 9,850 | | | 9.2 | | | | 6,906 | | | 8.2 | | | | 24,660 | | | 6.5 | | | | 14,451 | | | 4.8 | |
Broadspire | | | (277 | ) | | (0.4 | ) | | | (3,522 | ) | | (5.2 | ) | | | 3,821 | | | 1.2 | | | | (21,603 | ) | | (12.3 | ) |
Legal settlement administration | | | 3,449 | | | 15.3 | | | | 3,707 | | | 11.7 | | | | 12,521 | | | 12.5 | | | | 22,982 | | | 17.6 | |
Unallocated corporate and shared (costs) credits | | | (2,055 | ) | | (0.8 | ) | | | (381 | ) | | (0.1 | ) | | | (8,447 | ) | | (0.9 | ) | | | 3,351 | | | 0.4 | |
Add/(Deduct): | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other credits (charges) | | | — | | | — | | | | (3,096 | ) | | (1.4 | ) | | | 8,824 | | | 0.9 | | | | (27 | ) | | — | |
Stock option expense | | | (290 | ) | | (0.1 | ) | | | (355 | ) | | (0.2 | ) | | | (1,191 | ) | | (0.1 | ) | | | (1,220 | ) | | (0.1 | ) |
Amortization expense | | | (1,507 | ) | | (0.6 | ) | | | (1,124 | ) | | (0.5 | ) | | | (6,025 | ) | | (0.6 | ) | | | (1,124 | ) | | (0.1 | ) |
Net corporate interest expense | | | (4,154 | ) | | (1.7 | ) | | | (3,322 | ) | | (1.5 | ) | | | (17,326 | ) | | (1.8 | ) | | | (5,753 | ) | | (0.7 | ) |
Income taxes | | | (801 | ) | | (0.3 | ) | | | (72 | ) | | (— | ) | | | (5,396 | ) | | (0.6 | ) | | | (9,060 | ) | | (1.1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 3,304 | | | 1.3 | | | $ | (1,298 | ) | | (0.6 | ) | | $ | 16,116 | | | 1.7 | | | $ | 15,011 | | | 1.8 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Based in Atlanta, Georgia, Crawford & Company (www.crawfordandcompany.com) is the world’s largest independent provider of claims management solutions to insurance companies and self-insured entities, with a global network of more than 700 offices in 63 countries. Major service lines include property and casualty claims management, integrated claims and medical management for workers’ compensation, legal settlement administration, including class action and warranty inspections, and risk management information services. The Company’s shares are traded on the NYSE under the symbols CRDA and CRDB.
Except for historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties. The results achieved in the quarter and year-to-date periods ended December 31, 2007 are not necessarily indicative of future prospects for the Company. Actual results in future quarters may differ materially. For a discussion regarding factors which could affect the Company’s financial performance, see the Company’s Form 10-K for the year ended December 31, 2006 filed with the Securities and Exchange Commission, in particular the information under the headings “Business,” “Risk Factors,” “Legal Proceedings” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Page 5 of 11
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830
The Company undertakes no obligation to publicly release any revisions to any forward-looking statements contained herein to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. The Company’s actual results may differ materially from those projected in forward-looking statements made by, or on behalf of, the Company.
FOR FURTHER INFORMATION REGARDING THIS PRESS RELEASE, PLEASE CALL BRUCE SWAIN AT (404) 300-1051.
Page 6 of 11
Press Release
CRAWFORD & COMPANY 1001 Summit Blvd., Atlanta, GA 30319 (404) 300-1000
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(In Thousands, Except Per Share Amounts)
| | | | | | | | | | |
Year Ended December 31 | | 2007 | | 2006 | | | % Change | |
Revenues: | | | | | | | | | | |
Revenues Before Reimbursements | | $ | 975,143 | | $ | 819,522 | | | 19 | % |
Reimbursements | | | 76,135 | | | 80,858 | | | -6 | % |
| | | | | | | | | | |
Total Revenues | | | 1,051,278 | | | 900,380 | | | 17 | % |
| | | |
Costs and Expenses: | | | | | | | | | | |
Cost of Services Before Reimbursements | | | 733,392 | | | 638,174 | | | 15 | % |
Reimbursements | | | 76,135 | | | 80,858 | | | -6 | % |
| | | | | | | | | | |
Total Cost of Services | | | 809,527 | | | 719,032 | | | 13 | % |
Selling, General, and Administrative | | | 211,737 | | | 151,497 | | | 40 | % |
Corporate Interest Expense, Net | | | 17,326 | | | 5,753 | | | 201 | % |
Restructuring Costs | | | — | | | 1,695 | | | nm | |
| | | | | | | | | | |
Total Costs and Expenses | | | 1,038,590 | | | 877,977 | | | 18 | % |
Loss on Early Retirement of Debt | | | — | | | (1,401 | ) | | nm | |
Gain on Disposal of Investigations Business | | | — | | | 3,069 | | | nm | |
Gain on Disposal of Subrogation Business | | | 3,980 | | | — | | | nm | |
Gain on Sale of Former Corporate Headquarters | | | 4,844 | | | — | | | nm | |
| | | | | | | | | | |
Income Before Income Taxes | | | 21,512 | | | 24,071 | | | -11 | % |
Income Taxes | | | 5,396 | | | 9,060 | | | -40 | % |
| | | | | | | | | | |
Net Income | | $ | 16,116 | | $ | 15,011 | | | 7 | % |
| | | | | | | | | | |
Earnings Per Share - Basic and Diluted | | $ | 0.32 | | $ | 0.30 | | | 7 | % |
| | | | | | | | | | |
Average Numbers of Shares Used to Compute: | | | | | | | | | | |
Basic Earnings Per Share | | | 50,464 | | | 49,423 | | | | |
| | | | | | | | | | |
Diluted Earnings Per Share | | | 50,598 | | | 49,576 | | | | |
| | | | | | | | | | |
Cash Dividends Per Share: | | | | | | | | | | |
Class A Common Stock | | $ | 0.00 | | $ | 0.18 | | | | |
Class B Common Stock | | $ | 0.00 | | $ | 0.18 | | | | |
nm = not meaningful
Page 7 of 11
Press Release
CRAWFORD & COMPANY 1001 Summit Blvd., Atlanta, GA 30319 (404) 300-1000
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Unaudited
(In Thousands, Except Per Share Amounts)
| | | | | | | | | | |
Quarter Ended December 31, | | 2007 | | 2006 | | | % Change | |
Revenues: | | | | | | | | | | |
Revenues Before Reimbursements | | $ | 245,224 | | $ | 228,256 | | | 7 | % |
Reimbursements | | | 21,261 | | | 18,352 | | | 16 | % |
| | | | | | | | | | |
Total Revenues | | | 266,485 | | | 246,608 | | | 8 | % |
| | | |
Costs and Expenses: | | | | | | | | | | |
Cost of Services Before Reimbursements | | | 186,203 | | | 177,646 | | | 5 | % |
Reimbursements | | | 21,261 | | | 18,352 | | | 16 | % |
| | | | | | | | | | |
Total Cost of Services | | | 207,464 | | | 195,998 | | | 6 | % |
Selling, General, and Administrative | | | 50,762 | | | 45,418 | | | 12 | % |
Corporate Interest Expense, Net | | | 4,154 | | | 3,322 | | | 25 | % |
Restructuring Costs | | | — | | | 1,695 | | | nm | |
| | | | | | | | | | |
Total Costs and Expenses | | | 262,380 | | | 246,433 | | | 6 | % |
| | | |
Loss on Early Retirement of Debt | | | — | | | (1,401 | ) | | nm | |
| | | | | | | | | | |
Income (Loss) Before Income Taxes | | | 4,105 | | | (1,226 | ) | | -435 | % |
Income Taxes | | | 801 | | | 72 | | | 1013 | % |
| | | | | | | | | | |
Net Income (Loss) | | $ | 3,304 | | $ | (1,298 | ) | | 255 | % |
| | | | | | | | | | |
Earnings (Loss) Per Share - Basic and Diluted | | $ | 0.07 | | $ | (0.03 | ) | | 233 | % |
| | | | | | | | | | |
Average Numbers of Shares Used to Compute: | | | | | | | | | | |
Basic Earnings Per Share | | | 50,551 | | | 50,229 | | | | |
| | | | | | | | | | |
Diluted Earnings Per Share | | | 50,643 | | | 50,229 | | | | |
| | | | | | | | | | |
Cash Dividends Per Share: | | | | | | | | | | |
Class A Common Stock | | $ | 0.00 | | $ | 0.00 | | | | |
Class B Common Stock | | $ | 0.00 | | $ | 0.00 | | | | |
nm = not meaningful
Page 8 of 11
Press Release
CRAWFORD & COMPANY 1001 Summit Blvd., Atlanta, GA 30319 (404) 300-1000
CRAWFORD & COMPANY
SUMMARY RESULTS BY OPERATING SEGMENT
Year Ended December 31
Unaudited
(In Thousands, Except Percentages)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | U.S. Property &
Casualty | | | %
Change | | | International | | | %
Change | | | Broadspire | | | %
Change | | | Legal Settlement
Administration | | | %
Change | |
| | | 2007 | | | 2006 | | | | 2007 | | | 2006 | | | | 2007 | | | 2006 | | | | 2007 | | | 2006 | | |
Revenues Before Reimbursements | | $ | 177,179 | | | $ | 209,985 | | | -15.6 | % | | $ | 376,639 | | | $ | 303,697 | | | 24.0 | % | | $ | 320,774 | | | $ | 175,149 | | | 83.1 | % | | $ | 100,551 | | | $ | 130,691 | | | -23.1 | % |
| | | | | | | | | | | | |
Compensation & Benefits | | | 117,347 | | | | 135,422 | | | -13.3 | % | | | 260,041 | | | | 212,522 | | | 22.4 | % | | | 197,893 | | | | 118,342 | | | 67.2 | % | | | 50,483 | | | | 53,122 | | | -5.0 | % |
% of Revenues | | | 66.3 | % | | | 64.5 | % | | | | | | 69.1 | % | | | 69.9 | % | | | | | | 61.7 | % | | | 67.5 | % | | | | | | 50.2 | % | | | 40.6 | % | | | |
Expenses Other than Reimbursements, Compensation & Benefits | | | 55,157 | | | | 61,549 | | | -10.4 | % | | | 91,938 | | | | 76,724 | | | 19.8 | % | | | 119,060 | | | | 78,410 | | | 51.8 | % | | | 37,547 | | | | 54,587 | | | -31.2 | % |
% of Revenues | | | 31.1 | % | | | 29.3 | % | | | | | | 24.4 | % | | | 25.3 | % | | | | | | 37.1 | % | | | 44.8 | % | | | | | | 37.3 | % | | | 41.8 | % | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 172,504 | | | | 196,971 | | | -12.4 | % | | | 351,979 | | | | 289,246 | | | 21.7 | % | | | 316,953 | | | | 196,752 | | | 61.1 | % | | | 88,030 | | | | 107,709 | | | -18.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating Earnings (Loss) (1) | | $ | 4,675 | | | $ | 13,014 | | | -64.1 | % | | $ | 24,660 | | | $ | 14,451 | | | 70.6 | % | | $ | 3,821 | | | $ | (21,603 | ) | | 117.7 | % | | $ | 12,521 | | | $ | 22,982 | | | -45.5 | % |
% of Revenues | | | 2.6 | % | | | 6.2 | % | | | | | | 6.5 | % | | | 4.8 | % | | | | | | 1.2 | % | | | -12.3 | % | | | | | | 12.5 | % | | | 17.6 | % | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Quarter Ended December 31
Unaudited
(In Thousands, Except Percentages)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | U.S. Property &
Casualty | | | %
Change | | | International | | | %
Change | | | Broadspire | | | %
Change | | | Legal Settlement
Administration | | | %
Change | |
| | | 2007 | | | 2006 | | | | 2007 | | | 2006 | | | | 2007 | | | 2006 | | | | 2007 | | | 2006 | | |
Revenues Before Reimbursements | | $ | 40,393 | | | $ | 43,960 | | | -8.1 | % | | $ | 107,309 | | | $ | 84,460 | | | 27.1 | % | | $ | 75,002 | | | $ | 68,159 | | | 10.0 | % | | $ | 22,520 | | | $ | 31,677 | | | -28.9 | % |
| | | | | | | | | | | | |
Compensation & Benefits | | | 27,053 | | | | 29,813 | | | -9.3 | % | | | 71,019 | | | | 57,532 | | | 23.4 | % | | | 45,750 | | | | 44,596 | | | 2.6 | % | | | 11,859 | | | | 14,493 | | | -18.2 | % |
% of Revenues | | | 67.0 | % | | | 67.8 | % | | | | | | 66.2 | % | | | 68.1 | % | | | | | | 61.0 | % | | | 65.5 | % | | | | | | 52.7 | % | | | 45.8 | % | | | |
| | | | | | | | | | | | |
Expenses Other than Reimbursements, Compensation & Benefits | | | 14,251 | | | | 14,186 | | | 0.5 | % | | | 26,440 | | | | 20,022 | | | 32.1 | % | | | 29,529 | | | | 27,085 | | | 9.0 | % | | | 7,212 | | | | 13,477 | | | -46.5 | % |
% of Revenues | | | 35.3 | % | | | 32.3 | % | | | | | | 24.6 | % | | | 23.7 | % | | | | | | 39.4 | % | | | 39.7 | % | | | | | | 32.0 | % | | | 42.5 | % | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Expenses | | | 41,304 | | | | 43,999 | | | -6.1 | % | | | 97,459 | | | | 77,554 | | | 25.7 | % | | | 75,279 | | | | 71,681 | | | 5.0 | % | | | 19,071 | | | | 27,970 | | | -31.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating Earnings (Loss) (1) | | $ | (911 | ) | | $ | (39 | ) | | 2235.9 | % | | $ | 9,850 | | | $ | 6,906 | | | 42.6 | % | | $ | (277 | ) | | $ | (3,522 | ) | | 92.1 | % | | $ | 3,449 | | | $ | 3,707 | | | -7.0 | % |
% of Revenues | | | -2.3 | % | | | -0.1 | % | | | | | | 9.2 | % | | | 8.2 | % | | | | | | -0.4 | % | | | -5.2 | % | | | | | | 15.3 | % | | | 11.7 | % | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | A non-GAAP financial measurement which represents earnings before gain on disposal of assets, net corporate interest expense, acquisition related intangible assets amortization expense, stock option expense, income tax expense, and certain unallocated corporate and shared costs. |
Page 9 of 11
Press Release
CRAWFORD & COMPANY 1001 Summit Blvd., Atlanta, GA 30319 (404) 300-1000
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2007 and December 31, 2006
(In Thousands)
| | | | | | | | |
| | | Unaudited
December 31
2007 | | | *
December 31
2006 | |
Assets | | | | | | | | |
Current Assets: | | | | | | | | |
Cash and Cash Equivalents | | $ | 50,855 | | | $ | 61,674 | |
Short-term Investment | | | — | | | | 5,000 | |
Accounts Receivable, Net | | | 178,528 | | | | 178,447 | |
Unbilled Revenues, Net | | | 136,652 | | | | 117,098 | |
Prepaid Expenses and Other Current Assets | | | 17,398 | | | | 19,924 | |
| | | | | | | | |
Total Current Assets | | | 383,433 | | | | 382,143 | |
| | | | | | | | |
Property and Equipment, at Cost | | | 153,733 | | | | 140,729 | |
Less Accumulated Depreciation | | | (104,467 | ) | | | (99,845 | ) |
| | | | | | | | |
Net Property and Equipment | | | 49,266 | | | | 40,884 | |
| | | | | | | | |
Other Assets: | | | | | | | | |
Goodwill | | | 263,769 | | | | 256,700 | |
Intangible Assets, Net | | | 118,678 | | | | 127,869 | |
Capitalized Software Costs, Net | | | 40,032 | | | | 36,903 | |
Deferred Income Tax Assets | | | 14,222 | | | | 13,498 | |
Other Noncurrent Assets | | | 29,362 | | | | 34,991 | |
| | | | | | | | |
Total Other Assets | | | 466,063 | | | | 469,961 | |
| | | | | | | | |
Total Assets | | $ | 898,762 | | | $ | 892,988 | |
| | | | | | | | |
| | |
Liabilities and Shareholders’ Investment | | | | | | | | |
Current Liabilities: | | | | | | | | |
Short-Term Borrowings | | $ | 29,389 | | | $ | 27,795 | |
Accounts Payable | | | 39,601 | | | | 42,262 | |
Accrued Compensation and Related Costs | | | 69,655 | | | | 64,636 | |
Other Accrued Liabilities | | | 57,360 | | | | 46,526 | |
Self-Insured Risks | | | 18,290 | | | | 21,722 | |
Accrued Income Taxes | | | 6,415 | | | | 363 | |
Deposit on Sale of Former Corporate Headquarters | | | — | | | | 8,000 | |
Deferred Revenues | | | 64,363 | | | | 68,359 | |
Current Installments of Notes Payable and Capital Leases | | | 2,475 | | | | 2,621 | |
| | | | | | | | |
Total Current Liabilities | | | 287,548 | | | | 282,284 | |
| | | | | | | | |
Noncurrent Liabilities: | | | | | | | | |
Notes Payable and Capital Leases, net of current portions | | | 183,449 | | | | 199,044 | |
Deferred Revenues | | | 58,925 | | | | 77,110 | |
Self-Insured Risks | | | 18,439 | | | | 12,338 | |
Postretirement Medical Benefit Obligation | | | 1,898 | | | | 2,440 | |
Accrued Pension Liabilities | | | 76,977 | | | | 90,058 | |
Other Noncurrent Liabilities | | | 12,265 | | | | 14,019 | |
| | | | | | | | |
Total Noncurrent Liabilities | | | 351,953 | | | | 395,009 | |
| | | | | | | | |
Minority Interest in Equity of Consolidated Affiliates | | | 5,046 | | | | 4,544 | |
Shareholders’ Investment: | | | | | | | | |
Class A Common Stock, $1.00 Par Value | | | 25,935 | | | | 25,741 | |
Class B Common Stock, $1.00 Par Value | | | 24,697 | | | | 24,697 | |
Additional Paid-in Capital | | | 19,057 | | | | 15,468 | |
Retained Earnings | | | 223,793 | | | | 207,891 | |
Accumulated Other Comprehensive Loss | | | (39,267 | ) | | | (62,646 | ) |
| | | | | | | | |
Total Shareholders’ Investment | | | 254,215 | | | | 211,151 | |
| | | | | | | | |
Total Liabilities and Shareholders’ Investment | | $ | 898,762 | | | $ | 892,988 | |
| | | | | | | | |
| * | Derived from the audited Consolidated Balance Sheet |
Page 10 of 11
Press Release
CRAWFORD & COMPANY 1001 Summit Blvd., Atlanta, GA 30319 (404) 300-1000
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
December 31, 2007 and December 31, 2006
Unaudited
(In Thousands)
| | | | | | | | |
| | | 2007 | | | 2006 | |
Cash Flows From Operating Activities: | | | | | | | | |
Net Income | | $ | 16,116 | | | $ | 15,011 | |
Reconciliation of Net Income to Net Cash Provided by | | | | | | | | |
Operating Activities: | | | | | | | | |
Depreciation and Amortization Expense | | | 29,646 | | | | 20,545 | |
Deferred Income Tax (Benefit) Provision | | | (1,103 | ) | | | 3,063 | |
Stock-Based Compensation Costs | | | 2,929 | | | | 3,567 | |
Net Loss on Sales of Property and Equipment | | | 554 | | | | 267 | |
Loss on Early Extinguishment of Debt | | | — | | | | 1,401 | |
Gain on Sale of Investigations Business | | | — | | | | (3,069 | ) |
Gain on Sale of Subrogation Business | | | (3,980 | ) | | | — | |
Gain on 2006 Sale of Former Corporate Headquarters | | | (4,844 | ) | | | — | |
Changes in Operating Assets and Liabilities, net of effects of acquisitions and disposition: | | | | | | | | |
Accounts Receivable, net | | | 12,450 | | | | 11,078 | |
Unbilled Revenues, net | | | (11,298 | ) | | | 6,144 | |
Accrued Income Taxes | | | 3,988 | | | | (2,920 | ) |
Accounts Payable and Accrued Liabilities | | | (1,949 | ) | | | 210 | |
Deferred Revenues | | | (22,571 | ) | | | (6,091 | ) |
Accrued Retirement Costs | | | 2,188 | | | | 5,064 | |
Prepaid Expenses and Other Operating Activities | | | 1,158 | | | | (1,553 | ) |
| | | | | | | | |
Net Cash Provided by Operating Activities | | | 23,284 | | | | 52,717 | |
| | | | | | | | |
| | |
Cash Flows From Investing Activities: | | | | | | | | |
Acquisitions of Property and Equipment, net | | | (15,734 | ) | | | (12,707 | ) |
Capitalization of Computer Software Costs | | | (11,980 | ) | | | (9,852 | ) |
Proceeds from Sale of Investment Security | | | 5,000 | | | | — | |
Proceeds from Sale of Subrogation Unit | | | 5,000 | | | | — | |
Deposit Received on Sale of Real Estate | | | — | | | | 8,000 | |
Proceeds from Sale of Investigations Unit | | | — | | | | 3,000 | |
Payments for Business Acquisitions, net of Cash Acquired | | | (1,323 | ) | | | (162,461 | ) |
Other Investing Activities | | | (50 | ) | | | (586 | ) |
| | | | | | | | |
Net Cash Used in Investing Activities | | | (19,087 | ) | | | (174,606 | ) |
| | | | | | | | |
| | |
Cash Flows From Financing Activities: | | | | | | | | |
Dividends Paid | | | — | | | | (8,869 | ) |
Proceeds from Stock Issued to Employees Under Incentive Plans | | | 717 | | | | 1,912 | |
Short-Term Borrowings, net | | | (1,483 | ) | | | (1,617 | ) |
Proceeds from Long-Term Borrowings | | | — | | | | 210,000 | |
Payments on Long-Term Debt and Capital Lease Obligations | | | (15,515 | ) | | | (60,946 | ) |
Other Financing Activities | | | (908 | ) | | | (4,694 | ) |
| | | | | | | | |
Net Cash (Used in) Provided by Financing Activities | | | (17,189 | ) | | | 135,786 | |
| | | | | | | | |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | | | 2,173 | | | | 929 | |
| | | | | | | | |
(Decrease) Increase in Cash and Cash Equivalents | | | (10,819 | ) | | | 14,826 | |
Cash and Cash Equivalents at Beginning of Year | | | 61,674 | | | | 46,848 | |
| | | | | | | | |
Cash and Cash Equivalents at End of Year | | $ | 50,855 | | | $ | 61,674 | |
| | | | | | | | |
Page 11 of 11
