EXHIBIT 99.1 [CRDA LISTED NYSE LOGO] [CRDB LISTED 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: JULY 26, 2004 FROM: MARSHALL G. LONG CHIEF EXECUTIVE OFFICER - ------------------------------------------------------------------------------- Crawford Reports Second Quarter 2004 Results 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 second quarter ended June 30, 2004. Second quarter 2004 revenues before reimbursements totaled $172.0 million compared with $176.3 million in the 2003 second quarter. Second quarter 2004 net income was $5.5 million compared to $6.1 million for the 2003 second quarter. Second quarter 2004 net income per share was $0.11 per share compared to $0.12 in the prior-year quarter. During the 2004 second quarter, the Company settled a tax credit refund claim with the Internal Revenue Service which increased net income by $2.8 million, or $0.06 per share. Operating earnings (earnings before net corporate interest and taxes) in the 2004 second quarter totaled $5.7 million compared with $10.7 million in the prior year quarter. U.S. revenues before reimbursements were $109.6 million in the second quarter of 2004 compared with $121.9 million in the 2003 second quarter. Revenues from the insurance company market were $48.4 million in the 2004 second quarter compared with $62.2 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 second quarter compared with $42.1 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 $20.9 million for the 2004 second quarter, compared with $17.6 million in the comparable year-ago quarter. This increase is primarily the result of work commenced on several new projects awarded during 2004. Page 1 of 9 Second quarter 2004 international revenues grew to $62.4 million from $54.5 million for the same period in 2003. This growth is largely due to foreign currency fluctuations. During the 2004 second quarter, the U.S. dollar weakened 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 $56.2 million in the 2004 second quarter, reflecting growth in revenues on a constant dollar basis of 3.4%. In addition, during the 2004 second quarter, international operating expenses increased by $6.6 million in U.S. dollars, a 12.2% increase, and by 1.4% on a constant dollar basis. Mr. Marshall G. Long, chief executive officer of Crawford & Company, stated, "Our second quarter results reflect the ongoing industry-wide contraction in U.S. claims frequency, as we experienced volume declines in both the insurance company and self-insured markets. These declines more than offset the growth we enjoyed in our class action services unit during the current quarter." "While we continue to endure challenging industry circumstances, we were pleased that we successfully reduced our U.S. operating expenses, excluding severence costs, by 6.4% in the current quarter as compared to the prior year period in response to the decline in claims volume and improved our U.S. operating margin to 3.5% as compared to 2.6% for the 2004 first quarter. Excluding severance costs of $1.2 million recognized in the 2004 second quarter, our U.S. operating margin would have been 4.6%. The second quarter 2004 operating margin in our international operations of 3.1% declined as compared to the 2004 first quarter, but has grown significantly over the operating margin of 1.0% in the 2003 second quarter. Our expectations for the insurance industry in 2004 remain cautious, but we believe we are well positioned to grow our margins, both in the U.S. and internationally, when claim frequencies begin to grow." Total revenues before reimbursements for the six months ended June 30, 2004 were $341.9 million compared with $343.6 million in 2003. Operating earnings totaled $10.8 million compared with $17.1 million in 2003. Net income for the current six-month period totaled $7.9 million, or $0.16 per share, compared with $9.3 million, or $0.19 per share, reported in the prior year. U.S. revenues before reimbursements for the 2004 six-month period were $218.9 million compared with $236.9 million in 2003. International revenues before reimbursements were $123.0 million in the 2004 year-to-date period compared with $106.6 million during 2003. Excluding the benefit of exchange rate fluctuations, international revenues would have been $109.3 million in the current year-to-date period, reflecting growth in revenues on a constant dollar basis of 2.6%. In addition, during the 2004 six-month period, international operating expenses increased by $15.1 million in U.S. dollars, a 14.7% increase and by 2.0% on a constant dollar basis. Page 2 of 9 Mr. Long concluded, "We are pleased with the growth in our class action services business this year. We benefited from the award of several new contracts during the second quarter and have a strong backlog of cases, which will contribute to revenues during the balance of the year. In addition, we have signed a letter of intent to sell an undeveloped parcel of real estate for a sales price of $10.4 million in cash. This sale is subject to certain contingencies but we expect to close this transaction in the third quarter, recognizing a gain of approximately $9.4 million." Crawford & Company's management will host a conference call with analysts on Monday, July 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 August 2, 2004. You may dial 1-800-428-6051 (973-709-2089 international) to listen to the replay. The access code is 366662. 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 June 30, 2004 is shown on the attached statements. 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 consolidated net income to operating earnings and the related margins as a percentage of revenues before reimbursements for all periods presented: Quarter ended Six months ended ---------------------------------------------- -------------------------------------------- June 30, % June 30, % June 30, % June 30, % 2004 Margin 2003 Margin 2004 Margin 2003 Margin -------- ------ -------- ------ -------- ------ -------- ------ Net income $ 5,540 3.2% $ 6,051 3.4% $ 7,929 2.3% $ 9,300 2.7% Add/(deduct): Net corporate interest (534) (0.3) 1,179 0.7 803 0.3 2,458 0.7 Income taxes 725 0.4 3,463 2.0 2,093 0.6 5,322 1.6 ------- ---- ------- --- ------- --- ------- --- Operating earnings $ 5,731 3.3% $10,693 6.1% $10,825 3.2% $17,080 5.0% ======= ==== ======= === ======= === ======= === 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. Page 3 of 9 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 June 30, 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. Page 4 of 9 CRAWFORD & COMPANY COMPARATIVE STATEMENTS OF INCOME (In Thousands Except Per Share Data) SIX MONTHS ENDED JUNE 30 2004 2003 % Change -------- -------- -------- Revenues: Revenues Before Reimbursements $341,871 $343,568 0% Reimbursements 29,398 28,602 3% -------- -------- Total Revenues 371,269 372,170 0% Costs and Expenses: Cost of Services Before Reimbursements 263,260 261,314 1% Reimbursements 29,398 28,602 3% -------- -------- Cost of Services 292,658 289,916 1% Selling, General, and Administrative 67,786 65,174 4% Corporate Interest, Net 803 2,458 -67% -------- -------- Total Costs and Expenses 361,247 357,548 1% -------- -------- Income Before Income Taxes 10,022 14,622 -31% Income Taxes 2,093 5,322 -61% -------- -------- Net Income $ 7,929 $ 9,300 -15% ======== ======== Net Income Per Share: Basic $ 0.16 $ 0.19 -16% -------- -------- Diluted $ 0.16 $ 0.19 -16% -------- -------- Weighted Average Shares Outstanding: Basic 48,724 48,623 -------- -------- Diluted 48,836 48,670 -------- -------- Page 5 of 9 CRAWFORD & COMPANY COMPARATIVE STATEMENTS OF INCOME (In Thousands Except Per Share Data) QUARTER ENDED JUNE 30 2004 2003 % Change --------- --------- -------- Revenues: Revenues Before Reimbursements $ 172,016 $ 176,310 -2% Reimbursements 14,517 13,895 4% --------- --------- Total Revenues 186,533 190,205 -2% Costs and Expenses: Cost of Services Before Reimbursements 132,135 133,522 -1% Reimbursements 14,517 13,895 4% --------- --------- Cost of Services 146,652 147,417 -1% Selling, General, and Administrative 34,150 32,095 6% Corporate Interest, Net (534) 1,179 -145% --------- --------- Total Costs and Expenses 180,268 180,691 0% --------- --------- Income Before Income Taxes 6,265 9,514 -34% Income Taxes 725 3,463 -79% --------- --------- Net Income $ 5,540 $ 6,051 -8% ========= ========= Net Income Per Share: Basic $ 0.11 $ 0.12 -8% --------- --------- Diluted $ 0.11 $ 0.12 -8% --------- --------- Weighted Average Shares Outstanding: Basic 48,724 48,623 --------- --------- Diluted 48,796 48,671 --------- --------- Page 6 of 9 CRAWFORD & COMPANY SUMMARY RESULTS BY OPERATING SEGMENT SIX MONTHS ENDED JUNE 30, 2004 (In Thousands Except Percentages) U.S. International Total ----------------------- ----------------------- ----------------------- 2004 2003 2004 2003 2004 2003 -------- -------- -------- -------- -------- -------- Revenues Before Reimbursements $218,906 $236,931 $122,965 $106,637 $341,871 $343,568 Compensation & Benefits 137,201 149,646 85,269 73,817 222,470 223,463 % of Revenues 62.6% 63.1% 69.4% 69.2% 65.0% 65.0% Expenses Other than Reimbursements, Compensation & Benefits 74,987 73,105 33,589 29,920 108,576 103,025 % of Revenues 34.3% 30.9% 27.3% 28.1% 31.8% 30.0% -------- -------- -------- -------- -------- -------- Operating Earnings (1) $ 6,718 $ 14,180 $ 4,107 $ 2,900 $ 10,825 $ 17,080 % of Revenues 3.1% 6.0% 3.3% 2.7% 3.2% 5.0% -------- -------- -------- -------- -------- -------- QUARTER ENDED JUNE 30, 2004 (In Thousands Except Percentages) U.S. International Total ----------------------- ----------------------- ----------------------- 2004 2003 2004 2003 2004 2003 -------- -------- -------- -------- -------- -------- Revenues Before Reimbursements $109,593 $121,858 $ 62,423 $ 54,452 $172,016 $176,310 Compensation & Benefits 67,834 75,302 42,849 38,324 110,683 113,626 % of Revenues 61.9% 61.8% 68.6% 70.4% 64.4% 64.4% Expenses Other than Reimbursements, Compensation & Benefits 37,933 36,425 17,669 15,566 55,602 51,991 % of Revenues 34.6% 29.9% 28.3% 28.6% 32.3% 29.5% -------- -------- -------- -------- -------- -------- Operating Earnings (1) $ 3,826 $ 10,131 $ 1,905 $ 562 $ 5,731 $ 10,693 % of Revenues 3.5% 8.3% 3.1% 1.0% 3.3% 6.1% -------- -------- -------- -------- -------- -------- (1) Earnings net corporate interest, and taxes. Page 7 of 9 CRAWFORD & COMPANY CONSOLIDATED COMPARATIVE BALANCE SHEETS JUNE 30, 2004 AND DECEMBER 31, 2003 (In Thousands) JUNE 30 December 31 2004 2003 --------- ----------- ASSETS Current Assets: Cash and Cash Equivalents $ 23,090 $ 45,805 Accounts Receivable, Net 154,806 142,273 Unbilled Revenues 105,494 101,557 Prepaid Expenses and Other Current Assets 13,761 13,028 --------- --------- Total Current Assets 297,151 302,663 --------- --------- Property and Equipment, at Cost 152,705 154,786 Less Accumulated Depreciation (117,099) (117,618) --------- --------- Net Property and Equipment 35,606 37,168 --------- --------- Other Assets: Intangible Assets Arising from Acquisitions, Net 106,383 104,523 Capitalized Software Costs, Net 31,753 31,540 Deferred Income Tax Asset 28,736 28,505 Other 12,083 12,840 --------- --------- Total Other Assets 178,955 177,408 --------- --------- Total Assets $ 511,712 $ 517,239 ========= ========= LIABILITIES AND SHAREHOLDERS' INVESTMENT Current Liabilities: Short-Term Borrowings $ 41,546 $ 43,007 Accounts Payable 32,924 36,685 Accrued Liabilities 79,564 85,734 Deferred Revenues 22,131 19,172 Current Installments of Long-Term Debt 2,620 3,106 --------- --------- Total Current Liabilities 178,785 187,704 --------- --------- Noncurrent Liabilities: Long-Term Debt, Less Current Installments 50,841 50,664 Deferred Revenues 10,403 10,559 Self-Insured Risks 10,780 11,920 Postretirement Medical Benefit Obligation 6,077 6,077 Minimum Pension Liability 70,159 67,846 Other 10,377 9,875 --------- --------- Total Noncurrent Liabilities 158,637 156,941 --------- --------- 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 189,829 187,747 Accumulated Other Comprehensive Loss (65,103) (64,717) --------- --------- Total Shareholders' Investment 174,290 172,594 --------- --------- Total Liabilities and Shareholders' Investment $ 511,712 $ 517,239 ========= ========= Page 8 of 9 CRAWFORD & COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2004 AND JUNE 30, 2003 (In Thousands) 2004 2003 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 7,929 $ 9,300 Reconciliation of Net Income to Net Cash (Used in) Provided by Operating Activities: Depreciation and Amortization 9,044 8,123 Deferred Income Taxes (90) 245 Loss on Sales of Property and Equipment 40 76 Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions: Accounts Receivable, Net (11,716) (7,215) Unbilled Revenues (4,118) (1,658) Accrued or Prepaid Income Taxes (86) 1,226 Accounts Payable and Accrued Liabilities (9,324) (64) Deferred Revenues 2,626 4,830 Prepaid and Accrued Pension Costs (1,403) 7,884 Prepaid Expenses and Other Assets 2,167 2,456 -------- -------- Net Cash (Used in) Provided by Operating Activities (4,931) 25,203 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions of Property and Equipment, Net (4,600) (5,204) Capitalization of Computer Software Costs (3,652) (6,458) Acquisitions of Businesses, Net of Cash Acquired (479) (166) -------- -------- Net Cash Used in Investing Activities (8,731) (11,828) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Dividends Paid (5,847) (5,835) (Decrease) Increase in Short-Term Borrowings (3,403) 301 Decrease in Long-Term Debt (300) (403) Capitalized Loan Costs 61 -- -------- -------- Net Cash Used in Financing Activities (9,489) (5,937) -------- -------- Effect of Exchange Rate Changes on Cash and Cash Equivalents 436 921 -------- -------- (Decrease) Increase in Cash and Cash Equivalents (22,715) 8,359 Cash and Cash Equivalents at Beginning of Period 45,805 34,934 -------- -------- Cash and Cash Equivalents at End of Period $ 23,090 $ 43,293 ======== ======== Page 9 of 9