EXHIBIT 99.1
[CRDA LOGO]
[CRDB 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: JANUARY 31, 2005
FROM: THOMAS W. CRAWFORD
CHIEF EXECUTIVE OFFICER
CRAWFORD REPORTS INCREASE IN FOURTH QUARTER 2004 REVENUES AND NET INCOME
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 fourth quarter ended
December 31, 2004.
Fourth quarter 2004 revenues before reimbursements totaled $205.8 million, up
18% over the $175.1 million reported in the 2003 fourth quarter. Fourth quarter
2004 net income grew to $7.7 million from $2.1 million in the 2003 fourth
quarter. Fourth quarter 2004 net income per share rose to $0.16 per share from
$0.04 per share in the prior-year quarter. Operating earnings (earnings before
special credit/charge, net corporate interest, and taxes) more than doubled in
the 2004 fourth quarter, to $13.2 million from $4.8 million in the prior-year
quarter.
U.S. revenues before reimbursements were $135.8 million in the fourth quarter of
2004, increasing nearly 16% over the $117.3 million reported in the 2003 fourth
quarter. Revenues from the insurance company market were $76.7 million in the
2004 fourth quarter compared with $52.1 million in the 2003 period, reflecting a
$21.0 million increase in revenues generated by the Company's catastrophe
adjusters in response to the hurricanes which struck the southeastern United
States during the 2004 third quarter. Revenues provided by the Company's
catastrophe adjusters totaled $26.3 million in the 2004 fourth quarter compared
to $5.2 million in the prior-year period. Revenues from self-insured clients
were $37.9 million in the 2004 fourth quarter compared with $42.1 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, including administration and inspection services, declined 8%
to $21.1 million during the 2004 fourth quarter, compared with $23.0 million in
the 2003 fourth quarter. Class action services revenues can fluctuate depending
on the timing of project awards.
Page 1 of 9
[CRAWFORD COMPANY LOGO]
Press Release
CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA,
GEORGIA 30302 (404) 256-0830
Fourth quarter 2004 international revenues grew to $70.1 million from $57.9
million for the same period in 2003. This growth is partially due to foreign
currency fluctuations. During the 2004 fourth 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 $65.5 million in the 2004 fourth quarter,
reflecting growth in revenues on a constant dollar basis of 13.2%. This growth
is due to an increase in revenues in the Caribbean region related to Hurricanes
Francis, Ivan and Jeanne and a substantial increase in case referrals from
recently awarded claims management agreements in the United Kingdom.
International operating expenses increased by $8.4 million in U.S. dollars, a
15.2% increase, and by 6.6% on a constant dollar basis.
Mr. Thomas W. Crawford, chief executive officer of Crawford & Company, stated,
"During the fourth quarter, we continued to benefit from the sharp increase in
property claims referred to us due to the hurricanes that hit Florida and other
southeastern states during August and September. Claim referrals from the U.S.
insurance company market were up nearly 23% during the 2004 fourth quarter. This
surge in claims drove the highest quarterly revenues from our insurance company
clients since the third quarter of 1998 and also contributed to the first
year-over-year increase in total U.S. revenues since 2001. The growth in
hurricane-related revenues helped to offset the declines in our class action and
self-insured market revenues during the quarter."
"Our U.S. operating margin improved to 5.2% in the quarter, up from 2.1% in last
year's fourth quarter, while our International operating margin surged to 8.8%
from 4.1% in the 2003 fourth quarter. Hurricane-related claims in the U.S. and
Caribbean region and strong case referrals, primarily as a result of recent
client wins in our United Kingdom operation, contributed to the margin
improvements. The substantial new business awarded to us in the United Kingdom
during 2004 should help us to maintain healthy international operating margins
in future quarters."
Total revenues before reimbursements for the year ended December 31, 2004 grew
by just over 6%, to $733.6 million from $690.9 million in 2003. Operating
earnings totaled $32.4 million, up 8% over the $30.0 million reported in 2003.
Net income totaled $25.2 million, or $0.51 per share, compared with $7.7
million, or $0.16 per share in 2003. 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. 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.
Page 2 of 9
[CRAWFORD COMPANY 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 full year 2004 were $478.1 million, just
over the $471.8 million reported in 2003. Class action services revenues grew
16%, to a record $86.4 million in 2004 from $74.5 million reported in 2003.
International revenues before reimbursements grew nearly 17%, to $255.4 million
in 2004 from $219.1 million in 2003. Excluding the benefit of exchange rate
fluctuations, international revenues would have been $233.3 million in the
current year, reflecting growth in revenues on a constant dollar basis of 6.5%.
International operating expenses increased by $31.5 million in U.S. dollars, a
14.8% increase, and by 4.5% on a constant dollar basis.
Mr. Crawford concluded, "We are very pleased with the growth in U.S. revenues
during 2004, helped by the contribution of our catastrophe adjusters and record
revenues in our class action services unit. But we know we have hard work in
front of us to return the Company to a sustainable growth track. We have spent
the last few months strengthening our leadership team and improving the quality
of our service delivery. Our outlook for 2005 remains cautious, but we believe
our continued focus on excellence in everything we do will ultimately pay off
for us in top-line growth and improved operating margins. We've defined our
critical objectives for 2005, largely focused on enhancing client satisfaction,
and installed a management control program designed to improve our business
planning process and management accountability throughout the Company."
The Company also announced that it is continuing to cooperate with the Office of
the Attorney General of the State of New York in response to the subpoena
received during the fourth quarter of 2004. The subpoena seeks various documents
relating to the operations of the Company. At this point, the Company does not
know the full scope or subject matter of the subpoena or any related
investigation.
Crawford & Company's management will host a conference call with analysts on
Monday, January 31, 2005 at 3:00 P.M. EST, to discuss its quarterly earnings and
other developments. The call will be recorded and available for replay through
February 7, 2005. You may dial 1-800-642-1687 (706-645-9291 international) to
listen to the replay. The conference identification number is 3519958.
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 and year ended December 31, 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
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
operating earnings and the related margins as a percentage of revenues before
reimbursements for all periods presented:
Quarter ended Year ended
--------------------------------------- ---------------------------------------
December % December % December % December %
31, 2004 Margin 31, 2003 Margin 31, 2004 Margin 31, 2003 Margin
-------- -------- -------- ------ -------- -------- -------- ------
Net income $ 7,718 3.8% $ 2,088 1.2% $ 25,172 3.4% $ 7,662 1.1%
Add/(deduct):
Special credit / charge - - - - (8,573) (1.2) 8,000 1.1
Net corporate interest 1,267 0.6 1,559 0.9 3,536 0.5 5,414 0.8
Income taxes 4,205 2.0 1,195 0.7 12,251 1.7 8,964 1.3
-------- -------- -------- ------ -------- -------- -------- ------
Operating earnings $ 13,190 6.4% $ 4,842 2.8% $ 32,386 4.4% $ 30,040 4.3%
======== ======== ======== ====== ======== ======== ======== ======
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 63 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 December 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/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)
YEAR ENDED DECEMBER 31 2004 2003 % Change
- ----------------------------------------------- --------- -------- --------
Revenues:
Revenues Before Reimbursements $ 733,567 $690,933 6%
Reimbursements 78,095 77,077 1%
--------- --------
Total Revenues 811,662 768,010 6%
Costs and Expenses:
Cost of Services Before Reimbursements 565,863 530,362 7%
Reimbursements 78,095 77,077 1%
--------- --------
Cost of Services 643,958 607,439 6%
Selling, General, and Administrative 135,318 130,531 4%
Special (Credit)/Charge (1) (8,573) 8,000 nm
Corporate Interest, Net 3,536 5,414 -35%
--------- --------
Total Costs and Expenses 774,239 751,384 3%
--------- --------
Income Before Income Taxes 37,423 16,626 125%
Income Taxes 12,251 8,964 37%
--------- --------
Net Income $ 25,172 $ 7,662 229%
========= ========
Net Income Per Share:
Basic $ 0.52 $ 0.16 225%
--------- --------
Diluted $ 0.51 $ 0.16 219%
--------- --------
Weighted Average Shares Outstanding:
Basic 48,773 48,668
--------- --------
Diluted 48,996 48,776
--------- --------
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 DECEMBER 31 2004 2003 % Change
- ------------------------------------------------ --------- -------- --------
Revenues:
Revenues Before Reimbursements $ 205,826 $175,131 18%
Reimbursements 17,059 21,399 -20%
--------- --------
Total Revenues 222,885 196,530 13%
Costs and Expenses:
Cost of Services Before Reimbursements 158,264 135,090 17%
Reimbursements 17,059 21,399 -20%
--------- --------
Cost of Services 175,323 156,489 12%
Selling, General, and Administrative 34,372 35,199 -2%
Corporate Interest, Net 1,267 1,559 -19%
--------- --------
Total Costs and Expenses 210,962 193,247 9%
--------- --------
Income Before Income Taxes 11,923 3,283 263%
Income Taxes 4,205 1,195 252%
--------- --------
Net Income $ 7,718 $ 2,088 270%
========= ========
Net Income Per Share:
Basic $ 0.16 $ 0.04 300%
--------- --------
Diluted $ 0.16 $ 0.04 300%
--------- --------
Weighted Average Shares Outstanding:
Basic 48,848 48,724
--------- --------
Diluted 49,274 48,966
--------- --------
- ----------
nm = not meaningful
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
YEAR ENDED DECEMBER 31, 2004
(In Thousands Except Percentages)
U.S. International Total
---------------------- ---------------------- ----------------------
2004 2003 2004 2003 2004 2003
-------- -------- -------- -------- -------- --------
Revenues Before Reimbursements $478,137 $471,847 $255,430 $219,086 $733,567 $690,933
Compensation & Benefits 295,152 292,357 177,159 152,950 472,311 445,307
% of Revenues 61.7% 62.0% 69.4% 69.8% 64.4% 64.5%
Expenses Other than Reimbursements,
Compensation & Benefits 162,185 156,201 66,685 59,385 228,870 215,586
% of Revenues 33.9% 33.1% 26.1% 27.1% 31.2% 31.2%
-------- -------- -------- -------- -------- --------
Operating Earnings (1) $ 20,800 $ 23,289 $ 11,586 $ 6,751 $ 32,386 $ 30,040
% of Revenues 4.4% 4.9% 4.5% 3.1% 4.4% 4.3%
======== ======== ======== ======== ======== ========
QUARTER ENDED DECEMBER 31, 2004
(In Thousands Except Percentages)
U.S. International Total
---------------------- ---------------------- ------------------------
2004 2003 2004 2003 2004 2003
-------- -------- ------- --------- ---------- ----------
Revenues Before Reimbursements $135,765 $117,263 $70,061 $ 57,868 $ 205,826 $ 175,131
Compensation & Benefits 85,742 70,986 47,396 40,055 133,138 111,041
% of Revenues 63.2% 60.5% 67.6% 69.2% 64.7% 63.4%
Expenses Other than Reimbursements,
Compensation & Benefits 42,964 43,806 16,534 15,442 59,498 59,248
% of Revenues 31.6% 37.4% 23.6% 26.7% 28.9% 33.8%
-------- -------- ------- --------- ---------- ----------
Operating Earnings (1) $ 7,059 $ 2,471 $ 6,131 $ 2,371 $ 13,190 $ 4,842
% of Revenues 5.2% 2.1% 8.8% 4.1% 6.4% 2.8%
======== ======== ======= ========= ========== ==========
(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
DECEMBER 31, 2004 AND DECEMBER 31, 2003
(In Thousands)
DECEMBER 31 December 31
2004 2003
------------ ------------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 43,571 $ 45,805
Accounts Receivable, Net 176,187 142,273
Unbilled Revenues 103,586 101,557
Prepaid Expenses and Other Current Assets 21,363 13,028
------------ ------------
Total Current Assets 344,707 302,663
------------ ------------
Property and Equipment, at Cost 154,922 154,786
Less Accumulated Depreciation (120,079) (117,618)
------------ ------------
Net Property and Equipment 34,843 37,168
------------ ------------
Other Assets:
Intangible Assets Arising from Acquisitions, Net 109,410 104,523
Capitalized Software Costs, Net 32,550 31,540
Deferred Income Tax Asset 32,172 28,505
Other 17,578 12,840
------------ ------------
Total Other Assets 191,710 177,408
------------ ------------
Total Assets $ 571,260 $ 517,239
============ ============
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Short-Term Borrowings $ 37,401 $ 43,007
Accounts Payable 41,730 36,152
Accrued Liabilities 110,610 85,734
Deferred Revenues 22,682 19,172
Current Installments of Long-Term Debt 1,776 3,106
------------ ------------
Total Current Liabilities 214,199 187,171
------------ ------------
Noncurrent Liabilities:
Long-Term Debt, Less Current Installments 50,999 50,664
Deferred Revenues 10,179 10,559
Self-Insured Risks 10,958 11,920
Postretirement Medical Benefit Obligation 5,544 6,077
Minimum Pension Liability 73,893 67,846
Other 10,655 10,408
------------ ------------
Total Noncurrent Liabilities 162,228 157,474
------------ ------------
Shareholders' Investment:
Class A Common Stock, $1.00 Par Value 24,157 24,027
Class B Common Stock, $1.00 Par Value 24,697 24,697
Additional Paid-in Capital 1,441 840
Retained Earnings 201,213 187,747
Accumulated Other Comprehensive Loss (56,675) (64,717)
------------ ------------
Total Shareholders' Investment 194,833 172,594
------------ ------------
Total Liabilities and Shareholders' Investment $ 571,260 $ 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
DECEMBER 31, 2004 AND DECEMBER 31, 2003
(In Thousands)
2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 25,172 $ 7,662
Reconciliation of Net Income to Net Cash Provided by
Operating Activities:
Depreciation and Amortization 18,177 16,642
Deferred Income Taxes (2,304) 1,603
(Gain) Loss on Sales of Land, Property and Equipment (7,800) 54
Changes in Operating Assets and Liabilities, Net of Effects
of Acquisitions:
Accounts Receivable, Net (30,726) 18
Unbilled Revenues 3,191 1,042
Accrued or Prepaid Income Taxes 15,111 (4,640)
Accounts Payable and Accrued Liabilities 13,837 1,383
Deferred Revenues 2,947 345
Prepaid and Accrued Pension Costs 1,647 5,600
Prepaid Expenses and Other Assets (3,531) 7,766
------------ ------------
Net Cash Provided by Operating Activities 35,721 37,475
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of Property and Equipment, Net (10,416) (10,763)
Capitalization of Computer Software Costs (7,574) (12,681)
Proceeds from Sale of Undeveloped Land 2,028 -
Acquisitions of Businesses, Net of Cash Acquired (617) (551)
------------ ------------
Net Cash Used in Investing Activities (16,579) (23,995)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends Paid (11,708) (11,682)
Proceeds from Exercise of Stock Options 731 419
(Decrease) Increase in Short-Term Borrowings (9,946) 6,696
Decrease in Long-Term Debt (1,346) (701)
Capitalized Loan Costs 61 891
------------ ------------
Net Cash Used in Financing Activities (22,208) (4,377)
------------ ------------
Effect of Exchange Rate Changes on Cash and Cash Equivalents 832 1,768
------------ ------------
(Decrease) Increase in Cash and Cash Equivalents (2,234) 10,871
Cash and Cash Equivalents at Beginning of Period 45,805 34,934
------------ ------------
Cash and Cash Equivalents at End of Period $ 43,571 $ 45,805
============ ============
Page 9 of 9