EXHIBIT 99.1
[CRDA NYSE LOGO] [CRDB NYSE LOGO]
[CRAWFORD & COMPANY 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 26, 2004
FROM: MARSHALL G. LONG
CHIEF EXECUTIVE OFFICER
- -------------------------------------------------------------------------------
CRAWFORD REPORTS FIRST QUARTER 2004 RESULTS
Crawford & Company (NYSE: CRDA and CRDB) announced its financial results for
the first quarter ended March 31, 2004.
First quarter 2004 revenues before reimbursements totaled $169.9 million
compared with $167.3 million in the 2003 first quarter. First quarter 2004 net
income was $2.4 million versus $3.2 million for the 2003 first quarter. First
quarter 2004 net income per share was $0.05 per share, compared with $0.07 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 net corporate interest and
taxes) in the 2004 first quarter totaled $5.1 million compared with $6.4
million in the comparable 2003 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) 2004 % 2003 %
------------- ------ ------------- -----
Net income $2,389 1.4% $3,249 1.9%
Add:
Net corporate interest 1,337 .8 1,279 .8
Income taxes 1,368 .8 1,859 1.1
------ --- ------ ---
Operating earnings $5,094 3.0% $6,387 3.8%
====== === ====== ===
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U.S. revenues before reimbursements were $109.3 million in the first quarter of
2004 compared with $115.1 million in the 2003 first quarter. Revenues from the
insurance company market were $50.4 million in the 2004 first quarter compared
with $58.7 million in the 2003 period, reflecting a continued softening in the
Company's U.S. insurance company referrals for high-frequency, low-severity
claims in the current quarter. Revenues from self-insured clients were $40.4
million in the 2004 first quarter compared with $42.5 million in the 2003
quarter, primarily reflecting declines in U.S. employment levels and associated
injury rates, which have contributed to a reduction in workers' compensation
claims. Recently reported gains in U.S. employment levels should benefit future
revenues from self-insured clients. Class action services revenues were $18.5
million for the 2004 first quarter, compared with $13.9 million in the
comparable year-ago quarter. This increase is primarily the result of work
performed on major projects which were awarded in late 2003.
First quarter 2004 international revenues grew to $60.5 million from $52.2
million for the same period in 2003. This growth is largely due to foreign
currency fluctuations. During the 2004 first quarter the U.S. dollar weakened
significantly, primarily 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 $53.1 million in the
2004 first quarter.
Mr. Marshall G. Long, interim Chief Executive Officer of Crawford & Company,
stated, "The ongoing industry-wide contraction in U.S. claims volumes continued
to be evident in Crawford's core domestic operations during the first quarter.
There were encouraging areas of performance, for example, in our class action
services which grew revenues at 32% over the prior year first quarter. However,
this growth was not sufficient to offset double-digit volume declines among our
insurance company and self-insured clients."
"These trends were most evident in our U.S. operating margin, which improved
from the fourth quarter but declined year-over-year. Expenses also reflected a
$775,000 severance cost associated with overhead reductions made in January
2004. Absent this cost, our U.S. operating margin for the 2004 quarter would
have been 3.4% as compared with 3.5% in the prior year period," Mr. Long said.
"Even in a pressured operating environment, "Crawford Quality" requires that our
organization stay proportionally balanced. Delivering consistent, high-quality
service remains the single most important aspect of our business. So while we
have taken and will continue to take steps both in the field and in the home
office to manage costs in line with revenue trends, we are equally committed to
maintain the bench strength critical to prompt quality service."
The Company recently announced the resignation of its former Chairman and Chief
Executive Officer. Although still subject to negotiation, severance costs
associated with this resignation are estimated to approximate $850,000, or
$0.01 per share, during the 2004 second quarter.
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Crawford & Company's management will host a conference call with analysts on
Monday, April 26, 2004 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 3, 2004. You may dial 1-800-428-6051 (973-709-2089 international) to
listen. The access code is 350702. 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, 2004 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 March 31, 2004 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, 2003 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.
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CRAWFORD & COMPANY
COMPARATIVE STATEMENTS OF INCOME
(In Thousands Except Per Share Data)
QUARTER ENDED MARCH 31 2004 2003 % Change
-------- -------- --------
Revenues:
Revenues Before Reimbursements $169,855 $167,258 2%
Reimbursements 14,881 14,707 1%
-------- --------
Total Revenues 184,736 181,965 2%
Costs and Expenses:
Cost of Services Before Reimbursements 131,125 127,792 3%
Reimbursements 14,881 14,707 1%
-------- --------
Cost of Services 146,006 142,499 2%
Selling, General, and Administrative 33,636 33,079 2%
Corporate Interest, Net 1,337 1,279 5%
-------- --------
Total Costs and Expenses 180,979 176,857 2%
-------- --------
Income Before Income Taxes 3,757 5,108 -26%
Income Taxes 1,368 1,859 -26%
-------- --------
Net Income $ 2,389 $ 3,249 -26%
======== ========
Net Income Per Share:
Basic $ 0.05 $ 0.07 -29%
-------- --------
Diluted $ 0.05 $ 0.07 -29%
-------- --------
Weighted Average Shares Outstanding:
Basic 48,724 48,622
-------- --------
Diluted 48,869 48,689
-------- --------
CRAWFORD & COMPANY
SUMMARY RESULTS BY OPERATING SEGMENT
QUARTER ENDED MARCH 31, 2004
(In Thousands Except Percentages)
U.S. International Total
2004 2003 2004 2003 2004 2003
-------- -------- ------- ------- -------- --------
Revenues Before Reimbursements $109,313 $115,073 $60,542 $ 52,185 $169,855 $167,258
Compensation & Benefits 69,367 74,344 42,420 35,493 111,787 109,837
% of Revenues 63.5% 64.6% 70.1% 68.0% 65.8% 65.7%
Expenses Other than Reimbursements,
Compensation & Benefits 37,054 36,680 15,920 14,354 52,974 51,034
% of Revenues 33.9% 31.9% 26.3% 27.5% 31.2% 30.5%
-------- -------- ------- ------- -------- --------
Operating Earnings (1) $ 2,892 $ 4,049 $ 2,202 $ 2,338 $ 5,094 $ 6,387
% of Revenues 2.6% 3.5% 3.6% 4.5% 3.0% 3.8%
======== ======== ======= ======= ======== ========
(1) Earnings before net corporate interest and taxes.
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CRAWFORD & COMPANY
CONSOLIDATED COMPARATIVE BALANCE SHEETS
March 31, 2004 and December 31, 2003
(In Thousands)
MARCH 31 December 31
2004 2003
--------- -----------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 31,061 $ 41,564
Accounts Receivable, Net 147,782 142,273
Unbilled Revenues 106,835 100,253
Prepaid Expenses and Other Current Assets 13,258 13,028
--------- ---------
Total Current Assets 298,936 297,118
--------- ---------
Property and Equipment, at Cost 155,810 154,786
Less Accumulated Depreciation (118,937) (117,618)
--------- ---------
Net Property and Equipment 36,873 37,168
--------- ---------
Other Assets:
Intangible Assets Arising from Acquisitions, Net 106,125 104,523
Capitalized Software Costs, Net 32,156 31,540
Deferred Income Tax Asset 28,584 28,505
Other 15,401 14,144
--------- ---------
Total Other Assets 182,266 178,712
--------- ---------
Total Assets $ 518,075 $ 512,998
========= =========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Short-Term Borrowings $ 50,957 $ 43,007
Accounts Payable 38,936 41,451
Accrued Liabilities 74,264 76,727
Deferred Revenues 20,472 19,172
Current Installments of Long-Term Debt 2,826 3,106
--------- ---------
Total Current Liabilities 187,455 183,463
--------- ---------
Noncurrent Liabilities:
Long-Term Debt, Less Current Installments 51,082 50,664
Deferred Revenues 10,473 10,559
Self-Insured Risks 8,969 11,920
Postretirement Medical Benefit Obligation 6,077 6,077
Minimum Pension Liability 69,063 67,846
Other 9,839 9,875
--------- ---------
Total Noncurrent Liabilities 155,503 156,941
--------- ---------
Shareholders' Investment:
Class A Common Stock, $1.00 Par Value 24,027 24,027
Class B Common Stock, $1.00 Par Value 24,697 24,697
Additional Paid-in Capital 840 840
Retained Earnings 187,214 187,747
Accumulated Other Comprehensive Loss (61,661) (64,717)
--------- ---------
Total Shareholders' Investment 175,117 172,594
--------- ---------
Total Liabilities and Shareholders' Investment $ 518,075 $ 512,998
========= =========
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CRAWFORD & COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
QUARTER ENDED MARCH 31, 2004 AND MARCH 31, 2003
(In Thousands)
2004 2003
-------- -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 2,389 $ 3,249
Reconciliation of Net Income to Net Cash Provided by
Operating Activities:
Depreciation and Amortization 4,377 4,040
Deferred Income Taxes (107) 221
Loss on Sales of Property and Equipment 19 71
Changes in Operating Assets and Liabilities, Net of Effects
of Acquisitions:
Accounts Receivable, Net (2,723) 3,056
Unbilled Revenues (3,445) (5,986)
Accrued or Prepaid Income Taxes 1,241 (1,012)
Accounts Payable and Accrued Liabilities (6,630) (2,961)
Deferred Revenues 776 1,039
Accrued Pension Costs (3,646) 3,946
Prepaid Expenses and Other Assets (296) 803
-------- -------
Net Cash (Used in) Provided by Operating Activities (8,045) 6,466
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of Property and Equipment, Net (2,132) (2,228)
Capitalization of Computer Software Costs (2,418) (3,167)
Acquisitions of businesses, net of cash acquired (106) --
-------- -------
Net Cash Used in Investing Activities (4,656) (5,395)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends Paid (2,923) (2,918)
Increase in Short-Term Borrowings 4,257 2,140
Decrease in Long-Term Debt (21) (75)
Capitalized Loan Costs 33 --
-------- -------
Net Cash Provided by (Used in) Financing Activities 1,346 (853)
-------- -------
Effect of Exchange Rate Changes on Cash and Cash Equivalents 852 788
-------- -------
(Decrease) Increase in Cash and Cash Equivalents (10,503) 1,006
Cash and Cash Equivalents at Beginning of Period 41,564 31,091
-------- -------
Cash and Cash Equivalents at End of Period $ 31,061 $32,097
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