[CRDA LOGO] [CRDB LOGO] 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 25, 2004 FROM: THOMAS W. CRAWFORD CHIEF EXECUTIVE OFFICER - -------------------------------------------------------------------------------- Crawford Reports Improved Third Quarter 2004 Results Crawford & Company (NYSE: CRDA and CRDB), the world's leading 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, 2004. Third quarter 2004 revenues before reimbursements totaled $185.9 million, up 8% over the $172.2 million reported in the 2003 third quarter. Third quarter 2004 net income was $9.5 million compared to a net loss of ($3.7) million for the 2003 third quarter. Third quarter 2004 net income per share was $0.20 per share compared to a net loss per share of ($0.08) in the prior-year quarter. Net income in the 2004 third quarter includes a special credit of $5.2 million, net of related income taxes, or $0.11 per share, resulting from the sale of an undeveloped parcel of real estate during the quarter. Net income 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 an investigation of the Company's billing practices. Operating earnings (earnings before special credit/charge, net corporate interest, and taxes) in the 2004 third quarter totaled $8.4 million, up 3% over the $8.1 million reported in the prior year quarter. U.S. revenues before reimbursements were $123.5 million in the third quarter of 2004, increasing nearly 5% over the $117.7 million in the 2003 third quarter. Revenues from the insurance company market were $58.0 million in the 2004 third quarter compared with $56.9 million in the 2003 period, reflecting a $4.0 million increase in revenues generated by the Company's catastrophe adjusters in response to the recent hurricanes which struck the southeastern United States during the third quarter. Revenues from self-insured clients were $39.5 million in the 2004 third quarter compared with $40.9 million in the 2003 quarter, due primarily to a reduction in claim referrals from the Company's existing clients, only partially offset by new business gains. Class action services revenues grew to a new quarterly record of $26.0 million during the 2004 third quarter, compared with $19.9 million in the 2003 third quarter. This increase is primarily the result of work commenced on several new projects awarded during 2004. Page 1 of 9 [CRAWFORD LOGO] PRESS RELEASE CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830 Third quarter 2004 international revenues grew to $62.4 million from $54.6 million for the same period in 2003. This growth is partially due to foreign currency fluctuations. During the 2004 third 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 $58.5 million in the 2004 third quarter, reflecting growth in revenues on a constant dollar basis of 7.0%. In addition, during the 2004 third quarter, international operating expenses increased by $8.0 million in U.S. dollars, a 15.0% increase, and by 7.7% on a constant dollar basis. Mr. Thomas W. Crawford, chief executive officer of Crawford & Company, stated, "Our third quarter results reflect a sharp increase in property claims referred to us due to the four hurricanes that hit Florida and other southeastern states during August and September. Industry-wide, approximately two million claims have been incurred as a result of these storms. This influx in claims helped to drive the first quarter-to-quarter increase in revenues from our insurance company clients since the fourth quarter of 2001, and has generated a strong backlog of cases which we will handle in the 2004 fourth quarter and the first half of 2005. The surge in our catastrophe related revenues complemented the strong growth we enjoyed in our class action services unit during the current quarter, as our class action unit recorded record quarterly revenues, and led to the first increase in overall U.S. revenues since the 2001 fourth quarter." "Although we enjoyed a rebound in claims from our core U.S. market, we continue to endure challenging industry circumstances. However, we do expect the declining claims frequency trends we have experienced over the past several years to begin to reverse as a result of an emerging softening of market conditions in the U.S. property and casualty insurance industry. In fact, exclusive of recent storm-related claims in the month of September, our 12-month moving average of claims received in the U.S. has shown the first increase in nearly three years, indicating that we may have reached the bottom of the long claims cycle we have had to endure. We were pleased with the improvement in our U.S. operating margin to 5.7% as compared to 5.6% for the 2003 third quarter, but disappointed by the third quarter 2004 operating margin in our international operations of 2.2%, which declined from 2.7% in the 2003 third quarter. Strong case referrals, primarily as a result of recent client wins in our United Kingdom operations, should help generate higher international operating margins in future quarters." Total revenues before reimbursements for the nine months ended September 30, 2004 were $527.7 million compared with $515.8 million in 2003. Operating earnings declined to $19.2 million from $25.2 million in 2003, due primarily to a decline in revenues from the U.S. insurance company market. Net income for the current nine-month period totaled $17.5 million, or $0.36 per share, compared with $5.6 million, or $0.11 per share, reported in the prior year. 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. Page 2 of 9 [CRAWFORD LOGO] PRESS RELEASE CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830 U.S. revenues before reimbursements for the 2004 nine-month period were $342.4 million compared with $354.6 million in 2003. International revenues before reimbursements were $185.4 million in the 2004 year-to-date period compared with $161.2 million during 2003. Excluding the benefit of exchange rate fluctuations, international revenues would have been $167.7 million in the current year-to-date period, reflecting growth in revenues on a constant dollar basis of 4.0%. In addition, during the 2004 nine-month period, international operating expenses increased by $23.1 million in U.S. dollars, a 14.7% increase, and by 3.8% on a constant dollar basis. Mr. Crawford concluded, "We are pleased with the growth in our class action services business this year and are delighted with the record quarterly revenues for this unit. We benefited from the award of several new contracts during the year and have a strong backlog of cases, which will contribute to revenues during the balance of 2004 and into 2005. In addition, we closed the previously announced sale of an undeveloped parcel of real estate for a sales price of $9.7 million in cash and notes, recognizing a pretax gain of approximately $8.6 million during the quarter." Crawford & Company's management will host a conference call with analysts on Monday, October 25, 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 November 1, 2004. You may dial 1-800-642-1687 (706-645-9291 international) to listen to the replay. The conference identification number is 1383360. 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 September 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 Nine months ended --------------------------------------- ---------------------------------------- September % September % September % September % 30, 2004 Margin 30, 2003 Margin 30, 2004 Margin 30, 2003 Margin --------- ------ --------- ------ --------- ------ ---------- ------ Net income $ 9,525 5.1% $ (3,726) (2.2)% $ 17,454 3.3% $ 5,574 1.1% Add/(deduct): Special credit / charge (8,573) (4.6) 8,000 4.7 (8,573) (1.6) 8,000 1.6 Net corporate interest 1,466 0.8 1,397 0.8 2,269 0.4 3,855 0.7 Income taxes 5,953 3.2 2,447 1.4 8,046 1.5 7,769 1.5 -------- --- -------- --- -------- --- -------- --- Operating earnings $ 8,371 4.5% $ 8,118 4.7% $ 19,196 3.6% $ 25,198 4.9% ======== === ======== === ======== === ======== === Page 3 of 9 [CRAWFORD LOGO] PRESS RELEASE CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830 Based in Atlanta, Georgia, Crawford & Company (www.crawfordandcompany.com) is the world's leading 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, 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/A 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 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) NINE MONTHS ENDED SEPTEMBER 30 2004 2003 % Change ------------------------------ --------- --------- --------- Revenues: Revenues Before Reimbursements $ 527,741 $ 515,802 2% Reimbursements 61,036 55,677 10% --------- --------- Total Revenues 588,777 571,479 3% Costs and Expenses: Cost of Services Before Reimbursements 407,599 395,272 3% Reimbursements 61,036 55,677 10% --------- --------- Cost of Services 468,635 450,949 4% Selling, General, and Administrative 100,946 95,332 6% Special (Credit)/Charge (1) (8,573) 8,000 nm Corporate Interest, Net 2,269 3,855 -41% --------- --------- Total Costs and Expenses 563,277 558,136 1% --------- --------- Income Before Income Taxes 25,500 13,343 91% Income Taxes 8,046 7,769 4% --------- --------- Net Income $ 17,454 $ 5,574 213% ========= ========= Net Income Per Share: Basic $ 0.36 $ 0.11 227% --------- --------- Diluted $ 0.36 $ 0.11 227% --------- --------- Weighted Average Shares Outstanding: Basic 48,748 48,649 --------- --------- Diluted 48,829 48,701 --------- --------- ================================================================================ nm = not meaningful (1) Special credit is a pretax gain related to the sale of an undeveloped parcel of real estate. Special charge is an after-tax fine related to the settlement of a Department of Justice investigation. Page 5 of 9 [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 SEPTEMBER 30 2004 2003 % Change -------------------------- --------- --------- --------- Revenues: Revenues Before Reimbursements $ 185,870 $172,234 8% Reimbursements 31,638 27,075 17% --------- --------- Total Revenues 217,508 199,309 9% Costs and Expenses: Cost of Services Before Reimbursements 144,339 133,958 8% Reimbursements 31,638 27,075 17% --------- --------- Cost of Services 175,977 161,033 9% Selling, General, and Administrative 33,160 30,158 10% Special (Credit)/Charge (1) (8,573) 8,000 nm Corporate Interest, Net 1,466 1,397 5% --------- --------- Total Costs and Expenses 202,030 200,588 1% --------- --------- Income (Loss) Before Income Taxes 15,478 (1,279) 1310% Income Taxes 5,953 2,447 143% --------- --------- Net Income (Loss) $ 9,525 ($ 3,726) 356% --------- --------- Net Income (Loss) Per Share: Basic $ 0.20 ($ 0.08) 350% --------- --------- Diluted $ 0.20 ($ 0.08) 350% --------- --------- Weighted Average Shares Outstanding: Basic 48,796 48,700 --------- --------- Diluted 48,917 48,844 --------- --------- ================================================================================ nm = not meaningful (1) Special credit is a pretax gain related to the sale of an undeveloped parcel of real estate. Special charge is an after-tax fine related to the settlement of a Department of Justice investigation. Page 6 of 9 [CRAWFORD LOGO] 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 NINE MONTHS ENDED SEPTEMBER 30, 2004 (In Thousands Except Percentages) U.S. International Total 2004 2003 2004 2003 2004 2003 -------- -------- -------- -------- -------- -------- Revenues Before Reimbursements $342,372 $354,584 $185,369 $161,218 $527,741 $515,802 Compensation & Benefits 209,410 221,371 129,763 112,895 339,173 334,266 % of Revenues 61.2% 62.4% 70.0% 70.0% 64.3% 64.8% Expenses Other than Reimbursements, Compensation & Benefits 119,221 112,395 50,151 43,943 169,372 156,338 % of Revenues 34.8% 31.7% 27.1% 27.3% 32.1% 30.3% -------- -------- -------- -------- -------- -------- Operating Earnings (1) $ 13,741 $ 20,818 $ 5,455 $ 4,380 $ 19,196 $ 25,198 % of Revenues 4.0% 5.9% 2.9% 2.7% 3.6% 4.9% -------- -------- -------- -------- -------- -------- QUARTER ENDED SEPTEMBER 30, 2004 (In Thousands Except Percentages) U.S. International Total 2004 2003 2004 2003 2004 2003 -------- -------- -------- -------- -------- -------- Revenues Before Reimbursements $123,466 $117,653 $ 62,404 $ 54,581 $185,870 $172,234 Compensation & Benefits 72,209 71,725 44,494 39,078 116,703 110,803 % of Revenues 58.5% 61.0% 71.3% 71.6% 62.8% 64.3% Expenses Other than Reimbursements, Compensation & Benefits 44,234 39,290 16,562 14,023 60,796 53,313 % of Revenues 35.8% 33.4% 26.5% 25.7% 32.7% 31.0% -------- -------- -------- -------- -------- -------- Operating Earnings (1) $ 7,023 $ 6,638 $ 1,348 $ 1,480 $ 8,371 $ 8,118 % of Revenues 5.7% 5.6% 2.2% 2.7% 4.5% 4.7% -------- -------- -------- -------- -------- -------- (1) Earnings before special credit/charge, net corporate interest, and taxes. Page 7 of 9 [CRAWFORD LOGO] PRESS RELEASE CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404)256-0830 CRAWFORD & COMPANY CONSOLIDATED COMPARATIVE BALANCE SHEETS SEPTEMBER 30, 2004 AND DECEMBER 31, 2003 (In Thousands) SEPTEMBER 30 December 31 2004 2003 ------------ ----------- ASSETS Current Assets: Cash and Cash Equivalents $ 27,888 $ 45,805 Accounts Receivable, Net 172,735 142,273 Unbilled Revenues 108,772 101,557 Prepaid Expenses and Other Current Assets 20,410 13,028 --------- --------- Total Current Assets 329,805 302,663 --------- --------- Property and Equipment, at Cost 154,344 154,786 Less Accumulated Depreciation (119,500) (117,618) --------- --------- Net Property and Equipment 34,844 37,168 --------- --------- Other Assets: Intangible Assets Arising from Acquisitions, Net 107,409 104,523 Capitalized Software Costs, Net 32,569 31,540 Deferred Income Tax Asset 28,750 28,505 Other 11,708 12,840 --------- --------- Total Other Assets 180,436 177,408 --------- --------- Total Assets $ 545,085 $ 517,239 ========= ========= LIABILITIES AND SHAREHOLDERS' INVESTMENT Current Liabilities: Short-Term Borrowings $ 38,012 $ 43,007 Accounts Payable 37,015 36,152 Accrued Liabilities 98,591 85,734 Deferred Revenues 26,817 19,172 Current Installments of Long-Term Debt 2,313 3,106 --------- --------- Total Current Liabilities 202,748 187,171 --------- --------- Noncurrent Liabilities: Long-Term Debt, Less Current Installments 50,830 50,664 Deferred Revenues 10,291 10,559 Self-Insured Risks 8,604 11,920 Postretirement Medical Benefit Obligation 5,913 6,077 Minimum Pension Liability 70,306 67,846 Other 10,611 10,408 --------- --------- Total Noncurrent Liabilities 156,555 157,474 --------- --------- Shareholders' Investment: Class A Common Stock, $1.00 Par Value 24,147 24,027 Class B Common Stock, $1.00 Par Value 24,697 24,697 Additional Paid-in Capital 1,403 840 Retained Earnings 196,425 187,747 Accumulated Other Comprehensive Loss (60,890) (64,717) --------- --------- Total Shareholders' Investment 185,782 172,594 --------- --------- Total Liabilities and Shareholders' Investment $ 545,085 $ 517,239 ========= ========= Page 8 of 9 [CRAWFORD LOGO] 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 NINE MONTHS ENDED SEPTEMBER 30, 2004 AND SEPTEMBER 30, 2003 (In Thousands) 2004 2003 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 17,454 $ 5,574 Reconciliation of Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 13,512 12,290 Deferred Income Taxes (28) 271 (Gain) Loss on Sales of Land, Property and Equipment (8,472) 100 Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions: Accounts Receivable, Net (28,984) (1,246) Unbilled Revenues (3,655) 603 Accrued or Prepaid Income Taxes 9,827 3,017 Accounts Payable and Accrued Liabilities (118) 10,203 Deferred Revenues 7,160 1,302 Prepaid and Accrued Pension Costs (1) 1,788 Prepaid Expenses and Other Assets 3,114 (3,314) -------- -------- Net Cash Provided by Operating Activities 9,809 30,588 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions of Property and Equipment, Net (7,404) (7,954) Capitalization of Computer Software Costs (5,946) (9,390) Proceeds from Sale of Undeveloped Land 2,028 - Acquisitions of Businesses, Net of Cash Acquired (576) (412) -------- -------- Net Cash Used in Investing Activities (11,898) (17,756) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Dividends Paid (8,776) (8,760) Proceeds from Exercise of Stock Options 683 419 Decrease) Increase in Short-Term Borrowings (7,399) 1,629 Decrease in Long-Term Debt (841) (1,076) Capitalized Loan Costs 61 - -------- -------- Net Cash Used in Financing Activities (16,272) (7,788) -------- -------- Effect of Exchange Rate Changes on Cash and Cash Equivalents 444 1,269 -------- -------- (Decrease) Increase in Cash and Cash Equivalents (17,917) 6,313 Cash and Cash Equivalents at Beginning of Period 45,805 34,934 -------- -------- Cash and Cash Equivalents at End of Period $ 27,888 $ 41,247 ======== ======== Page 9 of 9