Form 10-Q Crawford & Company
Quarter Ended March 31, 1998 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, 1998 and March 31, 1997:
(In Thousands of Dollars
Except Share and Per Share Data)
1998 1997
Revenues $166,133 $165,951
Costs and Expenses:
Cost of services provided, less reimbursed expenses
of $9,351 in 1998 and $8,575 in 1997 123,782 119,594
Selling, general and administrative expenses 22,803 27,075
Year 2000 expenses 1,028 0
Restructuring charge 0 13,000
Total costs and expenses 147,613 159,669
Income Before Income Taxes and Minority Interest 18,520 6,282
Provision for Income Taxes 7,113 3,166
Income Before Minority Interest 11,407 3,116
Minority Interest in Loss of Joint Venture 13 3,199
Net Income $11,420 $6,315
Net Income Per Share
Basic $0.23 $0.13
Diluted $0.23 $0.12
Average Number of Class A and Class B Common
Shares used in Net Income per Share Calculations
Basic 49,319,110 50,030,061
Diluted 50,081,447 51,416,151
Declared Dividends Per Share - Class A Common Stock $0.125 $0.110
Declared Dividends Per Share - Class B Common Stock $0.125 $0.110
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended March 31, 1998 Page 3
Consolidated Balance Sheets as of March 31, 1998 and December 31, 1997:
(In Thousands of Dollars)
(Unaudited)
March 31 December 31
1998 1997
ASSETS
Current Assets:
Cash and cash equivalents $45,309 $55,380
Accounts receivable, less allowance for doubtful
accounts of $16,730 in 1998 and $16,802 in 1997 117,056 117,338
Unbilled revenues, at estimated billable amounts 86,771 87,688
Prepaid income taxes 1,261 981
Prepaid expenses and other current assets 13,467 12,558
Total current assets 263,864 273,945
Property and Equipment:
Property and equipment, at cost: 148,829 149,506
Less accumulated depreciation and amortization (108,841) (110,314)
Net property and equipment 39,988 39,192
Other Assets:
Intangible assets arising from acquisitions,
less accumulated amortization of $11,045
in 1998 and $10,533 in 1997 51,297 51,968
Prepaid pension obligation 49,010 45,972
Other 9,219 5,981
Total other assets 109,526 103,921
TOTAL ASSETS $413,378 $417,058
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended March 31, 1998 Page 4
Consolidated Balance Sheets - (Continued)
(In Thousands of Dollars)
(Unaudited)
March 31 December 31
1998 1997
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Short-term borrowings $19,836 $19,812
Accounts payable 18,059 19,956
Accrued compensation and related costs 20,185 26,616
Other accrued liabilities 44,478 41,419
Deferred revenues 15,911 16,241
Current installments of long-term debt 453 594
Total current liabilities 118,922 124,638
Noncurrent Liabilities:
Long-term debt, less current installments 680 731
Deferred income taxes 15,323 14,921
Deferred revenues 13,556 13,404
Postretirement medical benefit obligation 8,263 8,105
Self-insured risks 9,151 9,067
Minority interest 26,719 26,732
Other 5,111 4,455
Total noncurrent liabilities 78,803 77,415
Shareholders' Investment:
Class A Common Stock, $1.00 par value; 50,000,000
shares authorized; 23,931,433 and 23,915,727
shares issued in 1998 and 1997, respectively 23,931 23,916
Class B Common Stock, $1.00 par value; 50,000,000
shares authorized; 25,439,054 and 25,477,233
shares issued in 1998 and 1997, respectively 25,439 25,477
Retained earnings 177,113 174,973
Accumulated other comprehensive income (10,830) (9,361)
Total shareholders' investment 215,653 215,005
TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT $413,378 $417,058
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended March 31, 1998 Page 5
Unaudited Consolidated Statements of Cash Flows for the Three-Month Periods
Ended March 31, 1998 and March 31, 1997:
(In Thousands of Dollars)
1998 1997
Cash Flows From Operating Activities:
Net income $11,420 $6,315
Reconciliation of net income to net cash
provided by operating activities:
Minority interest in loss of joint venture (13) (3,199)
Depreciation and amortization 3,832 3,800
Deferred income taxes 336 (6,007)
(Gain)/loss on sales of property and equipment (75) 75
Changes in operating assets and liabilities,
net of effects of acquisitions:
Accounts receivable, net (1,951) 1,759
Unbilled revenues (1,091) 4,910
Prepaid or accrued income taxes 5,686 4,416
Accounts payable and accrued liabilities (6,696) 11,108
Deferred revenues (370) (264)
Prepaid expenses and other assets (6,676) (4,819)
Net cash provided by operating activities 4,402 18,094
Cash Flows From Investing Activities:
Acquisitions of property and equipment (4,630) (4,602)
Proceeds from sales of property and equipment 31 142
Net cash used in investing activities (4,599) (4,460)
Cash Flows From Financing Activities:
Dividends paid (6,176) (5,504)
Repurchase of common stock (7,427) (4,399)
Issuance of common stock 4,301 1,103
Increase in short-term borrowings 905 1,410
Decrease in long-term debt (115) (576)
Net cash used in financing activities (8,512) (7,966)
Effect of exchange rate changes on cash and
cash equivalents (1,362) 3,487
(Decrease)/increase in cash and cash equivalents (10,071) 9,155
Cash and cash equivalents at beginning of period 55,380 55,485
Cash and cash equivalents at end of period $45,309 $64,640
Cash payments for income taxes $2,587 $1,494
(See accompanying notes to condensed financial statements)