Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Financial Statements:
Year-to-Date Unaudited Consolidated Statements of Income for the Six-Month
Periods ended June 30, 1997 and June 30, 1996:
(In Thousands of Dollars
Except Share and Per Share Data)
1997 1996
Revenues $348,520 $319,192
Costs and Expenses:
Cost of services provided, less reimbursed expenses
of $18,789 in 1997 and $15,868 in 1996 249,615 229,996
Selling, general and administrative expenses 56,960 54,574
Restructuring charge 13,000 0
Total costs and expenses 319,575 284,570
Income Before Income Taxes and Minority Interest 28,945 34,622
Provision for Income Taxes 11,703 13,963
Income Before Minority Interest 17,242 20,659
Minority Interest in Loss of Joint Venture 2,505 0
Net Income $19,747 $20,659
Earnings Per Share $0.40 $0.40
Weighted Average Shares Outstanding 49,882,717 51,311,262
Declared Dividends Per Share - Class A Common Stock $0.22 $0.20
Declared Dividends Per Share - Class B Common Stock $0.22 $0.19
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 3
Quarterly Unaudited Consolidated Statements of Income for the Three-Month
Periods ended June 30, 1997 and June 30, 1996:
(In Thousands of Dollars
Except Share and Per Share Data)
1997 1996
Revenues $182,569 $157,629
Costs and Expenses:
Cost of services provided, less reimbursed expenses
of $10,214 in 1997 and $8,089 in 1996 130,021 113,192
Selling, general and administrative expenses 29,885 27,293
Total costs and expenses 159,906 140,485
Income Before Income Taxes and Minority Interest 22,663 17,144
Provision for Income Taxes 8,537 6,916
Income Before Minority Interest 14,126 10,228
Minority Interest in Income of Joint Venture (694) 0
Net Income $13,432 $10,228
Earnings Per Share $0.27 $0.20
Weighted Average Shares Outstanding 49,736,992 51,156,812
Declared Dividends Per Share - Class A Common Stock $0.11 $0.10
Declared Dividends Per Share - Class B Common Stock $0.11 $0.10
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 4
Consolidated Balance Sheets as of June 30, 1997 and December 31, 1996:
(In Thousands of Dollars)
(Unaudited)
June 30 December 31
1997 1996
ASSETS
Current Assets:
Cash and cash equivalents $71,343 $55,485
Accounts receivable, less allowance for doubtful
accounts of $15,777 in 1997 and $11,692 in 1996 122,983 112,975
Unbilled revenues, at estimated billable amounts 95,886 68,593
Prepaid income taxes 5,260 2,677
Prepaid expenses and other current assets 14,656 7,166
Total current assets 310,128 246,896
Property and Equipment:
Property and equipment, at cost 152,342 123,901
Less accumulated depreciation and amortization (111,428) (92,264)
Net property and equipment 40,914 31,637
Other Assets:
Intangible assets arising from acquisitions,
less accumulated amortization of $9,625
in 1997 and $8,768 in 1996 51,479 52,266
Prepaid pension obligation 42,958 41,405
Other 7,131 5,881
Total other assets 101,568 99,552
TOTAL ASSETS $452,610 $378,085
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 5
Consolidated Balance Sheets - (Continued)
(In Thousands of Dollars)
(Unaudited)
June 30 December 31
1997 1996
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Short-term borrowings $27,015 $8,437
Accounts payable 17,426 13,329
Accrued compensation and related costs 29,245 30,811
Other accrued liabilities 59,247 32,645
Deferred revenues 16,102 16,300
Current installments of long-term debt 9,915 9,130
Total current liabilities 158,950 110,652
Noncurrent Liabilities:
Long-term debt, less current installments 3,551 376
Deferred income taxes 10,030 13,810
Deferred revenues 13,478 12,902
Postretirement medical benefit obligation 8,296 8,037
Self-insured risks 9,123 8,172
Minority interest 28,412 0
Other 4,771 2,600
Total noncurrent liabilities 77,661 45,897
Shareholders' Investment:
Class A Common Stock, $1.00 par value; 50,000,000
shares authorized; 23,909,275 and 24,392,393
shares issued in 1997 and 1996, respectively 23,909 24,392
Class B Common Stock, $1.00 par value; 50,000,000
shares authorized; 25,647,760 and 25,718,919
shares issued in 1997 and 1996, respectively 25,648 25,719
Retained earnings 173,499 173,708
Cumulative translation adjustment (7,057) (2,283)
Total shareholders' investment 215,999 221,536
TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT $452,610 $378,085
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 6
Unaudited Consolidated Statements of Cash Flows for the Six-Month Periods Ended
June 30, 1997 and June 30, 1996:
(In Thousands of Dollars)
1997 1996
Cash Flows From Operating Activities:
Net income $19,747 $20,659
Reconciliation of net income to net cash
provided by operating activities:
Minority interest in loss of joint venture (2,505) 0
Depreciation and amortization 8,028 8,341
Deferred income taxes (6,363) 1,214
Loss on sales of property and equipment 907 90
Changes in operating assets and liabilities:
Short-term investments 0 3,336
Accounts receivable, net 6,509 (2,761)
Unbilled revenues 2,583 (4,728)
Prepaid or accrued income taxes (1,900) 252
Accounts payable and accrued liabilities 12,931 11,672
Deferred revenues 393 1,130
Prepaid expenses and other assets (9,775) (12,011)
Net cash provided by operating activities 30,555 27,194
Cash Flows From Investing Activities:
Acquisitions of property and equipment (6,293) (4,371)
Sales of property and equipment 179 115
Net cash used in investing activities (6,114) (4,256)
Cash Flows From Financing Activities:
Dividends paid (10,977) (10,117)
Repurchase of common stock (11,265) (7,604)
Issuance of common stock 1,733 330
Increase/(decrease) in short-term borrowings 9,740 (525)
(Decrease)/increase in long-term debt (1,167) 121
Net cash used in financing activities (11,936) (17,795)
Effect of exchange rate changes on cash
and cash equivalents 3,353 (129)
Increase in cash and cash equivalents 15,858 5,014
Cash and cash equivalents at beginning of period 55,485 40,802
Cash and cash equivalents at end of period $71,343 $45,816
Cash payments for income taxes $14,260 $13,026
(See accompanying notes to condensed financial statements)