EXHIBIT 99.1 [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: OCTOBER 27, 2003 FROM: GROVER L. DAVIS CHAIRMAN AND CHIEF EXECUTIVE OFFICER - -------------------------------------------------------------------------------- CRAWFORD REPORTS THIRD QUARTER AND NINE MONTH FINANCIAL RESULTS ROLL OUT OF CUSTOM CLAIMS HANDLING PROGRAM LANDS LARGE U.S. PERSONAL LINES CUSTOMER 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 third quarter ended September 30, 2003. Third quarter 2003 revenues before reimbursements totaled $172.2 million compared with $175.9 million in the 2002 third quarter. Third quarter 2003 net loss was ($3.7) million, or ($0.08) per fully diluted share, compared with net income of $5.6 million, or $0.11 per fully diluted share, for the 2002 third quarter. Net loss in the 2003 third quarter included an after-tax charge of $8.0 million, or $0.17 per share, under an agreement reached with the Department of Justice to resolve the investigation of the Company's billing practices. This charge is recorded in other accrued liabilities in the accompanying consolidated balance sheets. Operating earnings (earnings before special charge/credit, net corporate interest and taxes) in the 2003 third quarter totaled $8.1 million compared with $10.1 million in the comparable 2002 quarter. Operating earnings in the 2003 nine-month period totaled $25.2 million compared with $26.9 million in the comparable 2002 period. 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. Following is a reconciliation of Page 1 of 9 consolidated net (loss) income to operating earnings and the related margins as a percentage of revenues before reimbursements for all periods presented: Quarter ended Nine months ended ------------------------------------------ --------------------------------------------- September % September % September % September % 30, 2003 Margin 30, 2002 Margin 30, 2003 Margin 30, 2002 Margin -------- ------ --------- ------ --------- ------ --------- ------ Net (loss) income $ (3,726) (2.2%) $ 5,637 3.2% $ 5,574 1.1% $ 18,671 3.5% Add/(deduct): Special charge/credit 8,000 4.7 -- -- 8,000 1.6 (6,000) (1.1) Net corporate interest 1,397 0.8 1,246 0.7 3,855 0.7 3,565 0.7 Income taxes 2,447 1.4 3,226 1.8 7,769 1.5 10,686 2.0 -------- --- -------- --- -------- --- -------- --- Operating earnings $ 8,118 4.7% $ 10,109 5.7% $ 25,198 4.9% $ 26,922 5.1% ======== === ======== === ======== === ======== === U.S. revenues before reimbursements were $117.7 million in the third quarter of 2003 compared with $128.8 million in the 2002 third quarter. Revenues from the insurance company market were $56.8 million in the 2003 third quarter compared with $65.7 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 $2.1 million of this decline. Revenues from self-insured clients were $40.9 million in the 2003 third quarter compared with $47.4 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 $19.9 million for the 2003 third quarter, compared with $15.7 million in the comparable year-ago quarter. Third quarter 2003 international revenues grew to $54.6 million from $47.1 million for the same period in 2002. This growth is partly due to the Company's third quarter 2002 acquisition of the loss adjusting business of Robertson and Company in Australia. During the 2003 third 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 $48.6 million in the 2003 third quarter. Page 2 of 9 Mr. Grover L. Davis, chief executive officer of Crawford & Company, stated, "Our third quarter results reflect a continued industry-wide decline in property and casualty claims frequency. Conservative underwriting by our insurance company clients, including significant increases in policy deductibles, has contributed to a decline in property and casualty claims frequency, resulting in an overall 10% decline in claims referred to Crawford in the U.S. In addition, our self-insured market revenues in the U.S. were negatively affected by a reduction in workers' compensation claims frequency due to the high U.S. unemployment rate, which is driving down private sector workplace injuries." "While we continue to endure challenging industry circumstances, we successfully reduced our U.S. operating expenses over 7% in the current quarter in response to the decline in claims volume. However, our operating margin declined to less than 6% as compared to over 8% for the 2003 second quarter, as our U.S claim referrals fell more than anticipated. The operating margins in our international operations improved in the third quarter to nearly 3% from 1% in the 2003 second quarter. We expect continued pressure on our international operating margins in the 2003 fourth quarter, but anticipate improved international operating margins beginning in the 2004 first quarter." Total revenues before reimbursements for the year-to-date period ended September 30, 2003 were $515.8 million compared with $525.7 million in 2002. Operating earnings through September 2003 totaled $25.2 million compared with $26.9 million in 2002. Net income for the current year-to-date period totaled $5.6 million, or $0.11 per share, compared with $18.7 million, or $0.38 per share, reported in the prior year. Net income in 2002 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. U.S. revenues before reimbursements for the 2003 nine-month period were $354.6 million compared with $387.1 million in 2002. International revenues before reimbursements were $161.2 million in 2003 compared with $138.6 million during 2002. Excluding the benefit of exchange rate fluctuations, international revenues would have been $145.6 million in the current year-to-date period. Mr. Davis concluded, "We are very pleased with the growth in our class action services business this year and recorded record revenues during the 2003 third quarter. We benefited from the commencement of work on a significant new contract during the quarter and are aggressively pursuing other opportunities that should contribute to future revenue growth in this business. Overall, our cash and cash equivalents at September 30, 2003 have grown $5.2 million from the end of 2002 after reflecting a $10.0 million contribution to the Company's defined benefit pension plan during September 2003. We recently announced the closing of a new $70 million three-year revolving credit facility and the issuance of $50 million in seven-year 6.08% senior notes. This new financing gives the Company added financial strength and greater working capital flexibility." Page 3 of 9 "We are also pleased to have recently formed an agreement to provide a customized claims handling program for a large U.S. personal lines insurer. This agreement will generate annual revenues of approximately $5 million beginning in the 2003 fourth quarter. This important new program coupled with the recent appointments of Crawford & Company to the preferred adjuster lists of several major property and casualty insurers should greatly strengthen our market penetration and enable us to capture a greater share of revenues when claim volumes increase." Crawford & Company's management will host a conference call with analysts on Monday, October 27, 2003 at 3:00 P.M. EST, to discuss its quarterly earnings and other developments. The call will be recorded and available for replay through November 3, 2003. You may dial 1-800-428-6051 (973-709-2089 international) to listen to the replay. The access code is 308294. Alternatively, please visit our website 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 September 30, 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. 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 September 30, 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. FOR FURTHER INFORMATION REGARDING THIS PRESS RELEASE, PLEASE CALL JOHN GIBLIN AT (404) 847-4571. Page 4 of 9 CRAWFORD & COMPANY COMPARATIVE STATEMENTS OF INCOME (In Thousands Except Per Share Data) NINE MONTHS ENDED SEPTEMBER 30 2003 2002 % Change - ------------------------------ --------- --------- -------- Revenues: Revenues Before Reimbursements $ 515,802 $ 525,668 -2% Reimbursements 31,782 27,948 14% --------- --------- Total Revenues 547,584 553,616 -1% Costs and Expenses: Cost of Services Before Reimbursements 393,001 398,420 -1% Reimbursements 31,782 27,948 14% --------- --------- Cost of Services 424,783 426,368 0% Selling, General, and Administrative 97,603 100,326 -3% Special Charge/Credit (1) 8,000 (6,000) nm Corporate Interest, Net 3,855 3,565 8% --------- --------- Total Costs and Expenses 534,241 524,259 2% --------- --------- Income Before Income Taxes 13,343 29,357 -55% Income Taxes 7,769 10,686 -27% --------- --------- Net Income $ 5,574 $ 18,671 -70% ========= ========= Net Income Per Share: Basic $ 0.11 $ 0.38 -71% --------- --------- Diluted $ 0.11 $ 0.38 -71% --------- --------- Weighted Average Shares Outstanding: Basic 48,649 48,565 --------- --------- Diluted 48,701 48,625 --------- --------- - ------------------ (1) Special credit in 2002 related to a payment from a former vendor in full settlement of a business dispute. Special charge in 2003 is an after tax fine related to the settlement of the Department of Justice investigation. nm = not meaningful Page 5 OF 9 CRAWFORD & COMPANY COMPARATIVE STATEMENTS OF INCOME (In Thousands Except Per Share Data) QUARTER ENDED SEPTEMBER 30 2003 2002 % Change - -------------------------- --------- --------- -------- Revenues: Revenues Before Reimbursements $ 172,234 $ 175,912 -2% Reimbursements 11,850 10,447 13% --------- --------- Total Revenues 184,084 186,359 -1% Costs and Expenses: Cost of Services Before Reimbursements 131,687 132,725 -1% Reimbursements 11,850 10,447 13% --------- --------- Cost of Services 143,537 143,172 0% Selling, General, and Administrative 32,429 33,078 -2% Special Charge (1) 8,000 -- nm Corporate Interest, Net 1,397 1,246 12% --------- --------- Total Costs and Expenses 185,363 177,496 4% --------- --------- (Loss) Income Before Income Taxes (1,279) 8,863 -114% Income Taxes 2,447 3,226 -24% --------- --------- Net (Loss) Income ($ 3,726) $ 5,637 -166% ========= ========= (Loss) Net Income Per Share: Basic $ (0.08) $ 0.11 -173% --------- --------- Diluted $ (0.08) $ 0.11 -173% --------- --------- Weighted Average Shares Outstanding: Basic 48,700 48,607 --------- --------- Diluted 48,844 48,649 --------- --------- - ------------- (1) Special charge in 2003 is an after tax fine related to the settlement of the Department of Justice investigation. nm = not meaningful Page 6 of 9 CRAWFORD & COMPANY SUMMARY RESULTS BY OPERATING SEGMENT NINE MONTHS ENDED SEPTEMBER 30, 2003 (In Thousands Except Percentages) U.S. International Total 2003 2002 2003 2002 2003 2002 -------- -------- -------- -------- -------- -------- Revenues Before Reimbursements $354,584 $387,074 $161,218 $138,594 $515,802 $525,668 Compensation & Benefits 221,371 246,343 112,895 95,973 334,266 342,316 % of Revenues 62.4% 63.7% 70.0% 69.2% 64.8% 65.1% Expenses Other than Reimbursements, Compensation & Benefits 112,395 119,311 43,943 37,119 156,338 156,430 % of Revenues 31.7% 30.8% 27.3% 26.8% 30.3% 29.8% -------- -------- -------- -------- -------- -------- Operating Earnings (1) $ 20,818 $ 21,420 $ 4,380 $ 5,502 $ 25,198 $ 26,922 % of Revenues 5.9% 5.5% 2.7% 4.0% 4.9% 5.1% -------- -------- -------- -------- -------- -------- QUARTER ENDED SEPTEMBER 30, 2003 (In Thousands Except Percentages) U.S. International Total 2003 2002 2003 2002 2003 2002 -------- -------- -------- -------- -------- -------- Revenues Before Reimbursements $117,653 $128,795 $ 54,581 $ 47,117 $172,234 $175,912 Compensation & Benefits 71,725 79,983 39,078 32,966 110,803 112,949 % of Revenues 61.0% 62.1% 71.6% 69.9% 64.3% 64.3% Expenses Other than Reimbursements, Compensation & Benefits 39,290 39,575 14,023 13,279 53,313 52,854 % of Revenues 33.4% 30.7% 25.7% 28.2% 31.0% 30.0% -------- -------- -------- -------- -------- -------- Operating Earnings (1) $ 6,638 $ 9,237 $ 1,480 $ 872 $ 8,118 $ 10,109 % of Revenues 5.6% 7.2% 2.7% 1.9% 4.7% 5.7% -------- -------- -------- -------- -------- -------- (1) Earnings before special charge/credit, net corporate interest, and taxes. Page 7 of 9 CRAWFORD & COMPANY CONSOLIDATED COMPARATIVE BALANCE SHEETS SEPTEMBER 30, 2003 AND DECEMBER 31, 2002 (In Thousands) SEPTEMBER 30 December 31 ASSETS 2003 2002 ----- ------------ ----------- Current Assets: Cash and Cash Equivalents $ 36,338 $ 31,091 Accounts Receivable, Net 141,629 135,174 Unbilled Revenues 98,738 93,792 Prepaid Expenses and Other Current Assets 15,585 11,968 --------- --------- Total Current Assets 292,290 272,025 --------- --------- Property and Equipment, at Cost 152,431 144,706 Less Accumulated Depreciation (115,450) (108,607) --------- --------- Net Property and Equipment 36,981 36,099 --------- --------- Other Assets: Intangible Assets Arising from Acquisitions, Net 103,344 97,798 Capitalized Software Costs, Net 29,578 23,977 Deferred Income Tax Asset 31,955 31,899 Other 13,292 12,978 --------- --------- Total Other Assets 178,169 166,652 --------- --------- Total Assets $ 507,440 $ 474,776 ========= ========= LIABILITIES AND SHAREHOLDERS' INVESTMENT ---------------------------------------- Current Liabilities: Short-Term Borrowings $ 35,169 $ 30,019 Accounts Payable 33,301 31,956 Accrued Liabilities 86,080 66,265 Deferred Revenues 20,010 18,516 Current Installments of Long-Term Debt 1,509 1,493 --------- --------- Total Current Liabilities 176,069 148,249 --------- --------- Noncurrent Liabilities: Long-Term Debt, Less Current Installments 51,799 49,976 Deferred Revenues 11,765 12,127 Self-Insured Risks 11,901 11,819 Postretirement Medical Benefit Obligation 6,201 6,289 Minimum Pension Liability 75,627 76,747 Other 9,711 10,138 --------- --------- Total Noncurrent Liabilities 167,004 167,096 --------- --------- Shareholders' Investment: Class A Common Stock, $1.00 Par Value 24,027 23,925 Class B Common Stock, $1.00 Par Value 24,697 24,697 Additional Paid-in Capital 840 523 Retained Earnings 188,582 191,767 Accumulated Other Comprehensive Loss (73,779) (81,481) --------- --------- Total Shareholders' Investment 164,367 159,431 --------- --------- Total Liabilities and Shareholders' Investment $ 507,440 $ 474,776 ========= ========= Page 8 of 9 CRAWFORD & COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 2003 AND SEPTEMBER 30, 2002 (In Thousands) 2003 2002 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: - ------------------------------------- Net Income $ 5,574 $ 18,671 Reconciliation of Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 12,095 13,145 Deferred Income Taxes 271 (287) Loss (Gain) on Sales of Property and Equipment 100 (39) Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions: Accounts Receivable, Net (1,246) 1,596 Unbilled Revenues (1,272) (7,662) Accrued or Prepaid Income Taxes 3,017 4,300 Accounts Payable and Accrued Liabilities 9,807 179 Deferred Revenues 1,302 1,534 Prepaid and Accrued Pension Costs 1,788 2,161 Prepaid Expenses and Other Assets (1,242) (6,423) -------- -------- Net Cash Provided by Operating Activities 27,269 27,175 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: - ------------------------------------- Acquisitions of Property and Equipment, Net (7,954) (6,612) Capitalization of Computer Software Costs (9,390) (8,704) Acquisitions of Businesses, Net of Cash Acquired (412) (12,798) -------- -------- Net Cash Used in Investing Activities (17,756) (28,114) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: - ------------------------------------- Dividends Paid (8,760) (16,510) Proceeds from Exercise of Stock Options 419 578 Increase in Short-Term Borrowings 957 4,807 (Decrease) Increase in Long-Term Debt (1,076) 11,108 -------- -------- Net Cash Used in Financing Activities (8,460) (17) -------- -------- Effect of Exchange Rate Changes on Cash and Cash Equivalents 1,269 1,042 -------- -------- Increase in Cash and Cash Equivalents 5,247 86 Cash and Cash Equivalents at Beginning of Period 31,091 21,966 -------- -------- Cash and Cash Equivalents at End of Period $ 36,338 $ 22,052 ======== ======== Page 9 of 9