EXHIBIT 99.1
[CRDA [CRDB
LISTED LISTED
NYSE] NYSE]
[CRAWFORD LOGO]
PRESS RELEASE
CRAWFORD & COMPANY
5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830
FOR IMMEDIATE RELEASE DATE: APRIL 24, 2003
FROM: GROVER L. DAVIS
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
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CRAWFORD REPORTS FIRST QUARTER 2003 RESULTS
Crawford & Company (NYSE: CRDA and CRDB) announced its financial results for the
first quarter ended March 31, 2003.
First quarter 2003 revenues before reimbursements totaled $167.3 million
compared with $171.8 million in the 2002 first quarter. First quarter 2003 net
income was $3.2 million versus $8.2 million for the 2002 first quarter. Net
income in the 2002 first quarter included a payment received from a former
vendor in full settlement of a business dispute of $3.8 million, net of related
income tax expense, or $0.08 per share. First quarter 2003 net income per share
was $0.07 per share, compared with $0.17 in the prior-year quarter.
Operating earnings is one of the key performance measures used by the Company's
senior management to evaluate the performance of its business and make resource
allocation decisions. The Company believes this measure is useful to investors
in that it allows them to evaluate its performance using the same criteria that
management uses. Operating earnings (earnings before special credit, net
corporate interest and taxes) in the 2003 first quarter totaled $6.4 million
compared with $8.0 million in the comparable 2002 quarter. Following is a
reconciliation of consolidated net income to operating earnings and the related
margin as a percentage of revenues before reimbursements:
Quarter Ended Quarter Ended
March 31, Margin March 31, Margin
(in thousands) 2003 % 2002 %
------------- ------ ------------- ------
Net income $3,249 1.9% $ 8,167 4.8%
Add/(deduct):
Special credit -- -- (6,000) (3.5)
Net corporate interest 1,279 .8 1,178 .7
Income taxes 1,859 1.1 4,674 2.7
------ --- ------- ---
Operating earnings $6,387 3.8% $ 8,019 4.7%
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Page 1 of 7
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PRESS RELEASE
CRAWFORD & COMPANY
5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830
U.S. revenues before reimbursements were $115.1 million in the first quarter of
2003 compared with $126.6 million in the 2002 first quarter. Revenues from the
insurance company market were $58.7 million in the 2003 first quarter compared
with $64.8 million in the 2002 period, reflecting a continued softening in the
Company's U.S. insurance company referrals for high-frequency, low-severity
claims in the current quarter. Lower medical bill auditing revenues associated
with the previously reported non-renewal of a contract with a major domestic
insurer contributed $3.1 million of this decline. Revenues from self-insured
clients were $42.5 million in the 2003 first quarter compared with $50.3 million
in the 2002 quarter, primarily reflecting declines in U.S. employment levels and
associated injury rates which have contributed to a reduction in workers'
compensation claims. Class action services revenues were $13.9 million for the
2003 first quarter, compared with $11.5 million in the comparable year-ago
quarter.
First quarter 2003 international revenues grew to $52.2 million from $45.2
million for the same period in 2002. This growth is largely due to the Company's
third quarter 2002 acquisition of the loss adjusting business of Robertson and
Company in Australia and growth within its Canadian and United Kingdom
operations. During the 2003 first quarter, the U.S. dollar weakened
significantly against the British Pound and the Euro, resulting in a net
exchange rate benefit in the quarter. Excluding the benefit of exchange rate
fluctuations, international revenues would have been $48.1 million in the 2003
first quarter.
Mr. Grover L. Davis, chief executive officer of Crawford & Company, stated, "Our
first quarter results reflect a continued industry-wide decline in property &
casualty claims frequency. Conservative underwriting, increases in policy
deductibles, and mild weather have contributed to a decline in property and
casualty claims frequency, resulting in an overall 14% decline in cases received
in the U.S. These factors impacted our U.S. insurance company referrals for
high-frequency, low-severity claims and resulted in lower U.S. revenues. In
addition, our self-insured market revenues in the U.S. were negatively impacted
by a reduction in workers' compensation claims frequency. In fact, the Bureau of
Labor Statistics recently reported an 8% decline in private sector workplace
injuries, and employee absentee rates are at their lowest levels since 1991."
"In the face of challenging industry circumstances, we successfully reduced our
U.S. operating expenses nearly 8% in the current quarter in response to the
decline in claims volume. While we could not maintain our operating margin, we
remain committed to preserving our profitability and are currently taking
aggressive steps to reduce our U.S. annual operating costs by approximately $15
million from their current level. This is a difficult and painful decision, but
we believe that it is essential in order to increase our U.S. operating margin
to an acceptable level of 6% to 7% over the remainder of the year. This
operating margin would equate to an after-tax margin of approximately 4%. By
achieving these cost reductions, we believe that we will be able to preserve our
current level of dividends, which is of paramount importance to us in delivering
shareholder value and building investor confidence."
Page 2 of 7
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PRESS RELEASE
CRAWFORD & COMPANY
5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830
Mr. Davis concluded, "Our technology initiatives are continuing to bear fruit
and we will begin our pilot implementation of a case management system to
support our medical and vocational consultants in the next month. This system
will greatly improve employee mobility and information access, service
consistency and quality, and the validation of the benefits our clients gain
from our services. The production rollout of this system will begin in July."
Crawford & Company's management will host a conference call with analysts on
Thursday, April 24, 2003 at 3:00 P.M. EDT, to discuss its quarterly earnings and
other developments. The call will be recorded and available for replay through
May 1, 2003. You may dial 1-800-428-6051 (973-709-2089 international) to listen
to the replay. The access code is 289711. Alternatively, please visit our web
site at www.crawfordandcompany.com for a live audio web cast.
Further information regarding the Company's financial position, operating
results, and cash flows for the quarter ended March 31, 2003 is shown on the
attached statements.
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 67 countries. Major service lines include workers'
compensation claims administration and healthcare management services, property
and casualty claims management, class action services and risk management
information services. The Company's shares are traded on the NYSE under the
symbols CRDA and CRDB.
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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 ended March 31, 2003 are not
necessarily indicative of future prospects for the Company. Actual results in
future quarters may differ materially. For a complete discussion regarding
factors which could affect the Company's financial performance, see the
Company's Form 10-K for the year ended December 31, 2002 filed with the
Securities and Exchange Commission, in particular the information under the
headings "Business", "Legal Proceedings" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
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.
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FOR FURTHER INFORMATION REGARDING THIS PRESS RELEASE, PLEASE CALL JOHN GIBLIN AT
(404) 847-4571.
Page 3 of 7
[CRAWFORD LOGO]
PRESS RELEASE
CRAWFORD & COMPANY
5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830
CRAWFORD & COMPANY
COMPARATIVE STATEMENTS OF INCOME
(In Thousands Except Per Share Data)
QUARTER ENDED MARCH 31 2003 2002 % Change
- ---------------------- -------- -------- --------
Revenues:
Revenues Before Reimbursements $167,258 $171,767 -3%
Reimbursements 9,615 8,634 11%
-------- --------
Total Revenues 176,873 180,401 -2%
Costs and Expenses:
Cost of Services Before Reimbursements 127,792 130,591 -2%
Reimbursements 9,615 8,634 11%
-------- --------
Cost of Services 137,407 139,225 -1%
Selling, General, and Administrative 33,079 33,157 0%
Special Credit(1) -- (6,000) nm
Corporate Interest, Net 1,279 1,178 9%
-------- --------
Total Costs and Expenses 171,765 167,560 3%
-------- --------
Income Before Income Taxes 5,108 12,841 -60%
Income Taxes 1,859 4,674 -60%
-------- --------
Net Income $ 3,249 $ 8,167 -60%
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Net Income Per Share:
Basic $ 0.07 $ 0.17 -59%
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Diluted $ 0.07 $ 0.17 -59%
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Weighted Average Shares Outstanding:
Basic 48,622 48,541
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Diluted 48,689 48,644
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(1) Special credit related to a payment from a former vendor in full settlement
of a business dispute.
nm = not meaningful
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PRESS RELEASE
CRAWFORD & COMPANY
5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830
CRAWFORD & COMPANY
SUMMARY RESULTS BY OPERATING SEGMENT
QUARTER ENDED MARCH 31, 2003
(In Thousands Except Percentages)
U.S. International Total
----------------------- --------------------- -----------------------
2003 2002 2003 2002 2003 2002
-------- -------- ------- ------- -------- --------
Revenues Before Reimbursements $115,073 $126,610 $52,185 $45,157 $167,258 $171,767
Compensation & Benefits 74,344 81,759 35,493 31,400 109,837 113,159
% of Revenues 64.6% 64.5% 68.0% 69.5% 65.7% 65.9%
Expenses Other than Reimbursements,
Compensation & Benefits 36,680 38,572 14,354 12,017 51,034 50,589
% of Revenues 31.9% 30.5% 27.5% 26.6% 30.5% 29.4%
-------- -------- ------- ------- -------- --------
Operating Earnings (1) $ 4,049 $ 6,279 $ 2,338 $ 1,740 $ 6,387 $ 8,019
% of Revenues 3.5% 5.0% 4.5% 3.9% 3.8% 4.7%
======== ======== ======= ======= ======== ========
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(1) Earnings before special credit, net corporate interest, and taxes.
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PRESS RELEASE
CRAWFORD & COMPANY
5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830
CRAWFORD & COMPANY
CONDENSED COMPARATIVE BALANCE SHEETS
MARCH 31, 2003 AND DECEMBER 31, 2002
(In Thousands)
MARCH 31 December 31
ASSETS 2003 2002
--------- -----------
Current Assets:
Cash and Cash Equivalents $ 32,097 $ 31,091
Accounts Receivable, Net 135,437 135,174
Unbilled Revenues 101,919 93,792
Prepaid Expenses and Other Current Assets 10,889 11,968
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Total Current Assets 280,342 272,025
--------- ---------
Property and Equipment, at Cost 147,249 144,706
Less Accumulated Depreciation (111,157) (108,607)
--------- ---------
Net Property and Equipment 36,092 36,099
--------- ---------
Other Assets 171,805 166,652
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Total Assets $ 488,239 $ 474,776
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LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Short-Term Borrowings $ 34,293 $ 30,019
Accounts Payable 30,743 31,956
Accrued Liabilities 67,026 66,265
Deferred Revenues 19,733 18,516
Current Installments of Long-Term Debt 1,704 1,493
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Total Current Liabilities 153,499 148,249
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Noncurrent Liabilities 170,255 167,096
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Shareholders' Investment:
Class A Common Stock, $1.00 Par Value 23,925 23,925
Class B Common Stock, $1.00 Par Value 24,697 24,697
Additional Paid-in Capital 523 523
Retained Earnings 192,099 191,767
Accumulated Other Comprehensive Loss (76,759) (81,481)
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Total Shareholders' Investment 164,485 159,431
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Total Liabilities and Shareholders' Investment $ 488,239 $ 474,776
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Page 6 of 7
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PRESS RELEASE
CRAWFORD & COMPANY
5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404)256-0830
CRAWFORD & COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
QUARTER ENDED MARCH 31, 2003 AND MARCH 31, 2002
(In Thousands)
2003 2002
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 3,249 $ 8,167
Reconciliation of Net Income to Net Cash Provided by
Operating Activities:
Depreciation and Amortization 4,055 4,335
Deferred Income Taxes 221 (287)
Loss on Sales of Property and Equipment 71 7
Changes in Operating Assets and Liabilities, Net of Effects
of Acquisitions:
Accounts Receivable, Net 3,056 (1,005)
Unbilled Revenues (5,986) (3,512)
Accrued or Prepaid Income Taxes (1,012) 433
Accounts Payable and Accrued Liabilities (2,961) (3,561)
Deferred Revenues 1,039 (1,174)
Prepaid and Accrued Pension Costs 3,946 3,485
Prepaid Expenses and Other Assets 788 (3,592)
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Net Cash Provided by Operating Activities 6,466 3,296
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CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of Property and Equipment, Net (2,228) (2,555)
Capitalization of Computer Software Costs (3,167) (2,609)
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Net Cash Used in Investing Activities (5,395) (5,164)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends Paid (2,918) (6,796)
Proceeds from Exercise of Stock Options -- 55
Increase in Short-Term Borrowings 2,140 2,983
Decrease in Long-Term Debt (75) (30)
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Net Cash Used in Financing Activities (853) (3,788)
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Effect of Exchange Rate Changes on Cash and Cash Equivalents 788 (197)
Increase (Decrease) in Cash and Cash Equivalents 1,006 (5,853)
Cash and Cash Equivalents at Beginning of Period 31,091 21,966
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Cash and Cash Equivalents at End of Period $32,097 $16,113
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