Form 10-Q Crawford & Company
Quarter Ended March 31, 1997 Page 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Financial Statements:
Year-to-Date Unaudited Consolidated Statements of Income for the Three-Month
Periods ended March 31, 1997 and March 31, 1996:
(In Thousands of Dollars
Except Share and Per Share Data)
1997 1996
Revenues $165,951 $161,563
Costs and Expenses:
Cost of services provided, less reimbursed expenses
of $8,575 in 1997 and $7,784 in 1996 119,594 116,804
Selling, general and administrative expenses 27,075 27,281
Restructuring charge 13,000 0
Total costs and expenses 159,669 144,085
Income Before Income Taxes and Minority Interest 6,282 17,478
Provision for Income Taxes 3,166 7,047
Income Before Minority Interest 3,116 10,431
Minority Interest in Loss of Joint Venture 3,199 0
Net Income $6,315 $10,431
Earnings Per Share $0.13 $0.20
Weighted Average Shares Outstanding 50,030,061 51,465,714
Declared Dividends Per Share - Class A Common Stock $0.110 $0.100
Declared Dividends Per Share - Class B Common Stock $0.110 $0.097
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended March 31, 1997 Page 3
Consolidated Balance Sheets as of March 31, 1997 and December 31, 1996:
(In Thousands of Dollars)
(Unaudited)
March 31 December 31
1997 1996
ASSETS
Current Assets:
Cash and cash equivalents $64,640 $55,485
Accounts receivable, less allowance for doubtful
accounts of $15,005 in 1997 and $11,692 in 1996 128,085 112,975
Unbilled revenues, at estimated billable amounts 93,646 68,593
Prepaid income taxes 2,677 2,677
Prepaid expenses and other current assets 13,150 7,166
Total current assets 302,198 246,896
Property and Equipment:
Property and equipment, at cost: 154,416 123,901
Less accumulated depreciation and amortization (112,402) (92,264)
Net property and equipment 42,014 31,637
Other Assets:
Intangible assets arising from acquisitions,
less accumulated amortization of $9,193
in 1997 and $8,768 in 1996 51,934 52,266
Prepaid pension obligation 42,759 41,405
Other 6,249 5,881
Total other assets 100,942 99,552
TOTAL ASSETS $445,154 $378,085
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended March 31, 1997 Page 4
Consolidated Balance Sheets - (Continued)
(In Thousands of Dollars)
(Unaudited)
March 31 December 31
1997 1996
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Short-term borrowings $19,028 $8,437
Accounts payable 16,052 13,329
Accrued compensation and related costs 27,386 30,811
Other accrued liabilities 59,409 32,645
Deferred revenues 15,992 16,300
Current installments of long-term debt 9,717 9,130
Total current liabilities 147,584 110,652
Noncurrent Liabilities:
Long-term debt, less current installments 4,330 376
Deferred income taxes 13,810 13,810
Deferred revenues 12,921 12,902
Postretirement medical benefit obligation 8,155 8,037
Self-insured risks 9,075 8,172
Minority interest 27,719 0
Other 5,851 2,600
Total noncurrent liabilities 81,861 45,897
Shareholders' Investment:
Class A Common Stock, $1.00 par value; 50,000,000
shares authorized; 24,285,960 and 24,392,393
shares issued in 1997 and 1996, respectively 24,286 24,392
Class B Common Stock, $1.00 par value; 50,000,000
shares authorized; 25,677,343 and 25,718,919
shares issued in 1997 and 1996, respectively 25,677 25,719
Retained earnings 171,370 173,708
Cumulative translation adjustment (5,624) (2,283)
Total shareholders' investment 215,709 221,536
TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT $445,154 $378,085
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended March 31, 1997 Page 5
Unaudited Consolidated Statements of Cash Flows for the Three-Month Periods
Ended March 31, 1997 and March 31, 1996:
(In Thousands of Dollars)
1997 1996
Cash Flows From Operating Activities:
Net income $6,315 $10,431
Reconciliation of net income to net cash
provided by operating activities:
Minority interest in loss of joint venture (3,199) 0
Depreciation and amortization 3,800 4,163
Deferred income taxes (6,007) 2,547
Loss on sales of property and equipment 75 42
Changes in operating assets and liabilities,
net of effects of acquisitions:
Short-term investments 0 2,212
Accounts receivable, net 1,759 (727)
Unbilled revenues 4,910 (4,522)
Prepaid or accrued income taxes 4,416 3,477
Accounts payable and accrued liabilities 11,108 12,232
Deferred revenues (264) 328
Prepaid expenses and other assets (4,819) (7,099)
Net cash provided by operating activities 18,094 23,084
Cash Flows From Investing Activities:
Acquisitions of property and equipment (4,602) (2,148)
Proceeds from sales of property and equipment 142 23
Net cash used in investing activities (4,460) (2,125)
Cash Flows From Financing Activities:
Dividends paid (5,504) (5,085)
Repurchase of common stock (4,399) (6,644)
Issuance of common stock 1,103 306
Increase in short-term borrowings 1,410 483
(Decrease) increase in long-term debt (576) 102
Net cash used in financing activities (7,966) (10,838)
Effect of exchange rate changes on cash and
cash equivalents 3,487 (82)
Increase in cash and cash equivalents 9,155 10,039
Cash and cash equivalents at beginning of period 55,485 40,802
Cash and cash equivalents at end of period $64,640 $50,841
Cash payments for income taxes $1,494 $1,569
(See accompanying notes to condensed financial statements)