Exhibit 99.1
[CRDA LOGO] [CRDB LOGO]
[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: APRIL 25, 2005
FROM: THOMAS W. CRAWFORD
CHIEF EXECUTIVE OFFICER
CRAWFORD REPORTS FIRST QUARTER 2005 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 first quarter ended
March 31, 2005.
First quarter 2005 revenues before reimbursements totaled $184.3 million, up
8.5% over the $169.9 million reported in the 2004 first quarter. First quarter
2005 net income was $2.4 million, equaling net income for the 2004 first
quarter. Net income per share was $0.05 per share for both the 2005 and 2004
first quarters.
U.S. revenues before reimbursements were $112.5 million in the first quarter of
2005 compared with $109.3 million in the 2004 first quarter. Revenues from the
insurance company market were $54.0 million in the 2005 first quarter compared
with $50.5 million in the 2004 period, reflecting a $3.9 million increase in
revenues generated by the Company's catastrophe adjusters involved in finalizing
claims resulting from the hurricanes which struck the U.S. during late 2004.
Revenues from self-insured clients were $39.3 million in the 2005 first quarter
compared with $40.4 million in the 2004 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, were $19.2 million for the 2005 first quarter, compared
with $18.5 million in the 2004 quarter. These revenues can fluctuate based on
the timing and size of project awards.
First quarter 2005 international revenues grew 18.6%, to $71.8 million from
$60.5 million for the same period in 2004. This growth is partially due to
foreign currency fluctuations. As compared to the 2004 first quarter, during the
2005 period 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 $67.4
million in the 2005 first quarter, reflecting growth on a constant dollar basis
of 11.4%. This growth reflects increased case referrals in our United
1
[CRAWFORD LOGO]
PRESS RELEASE
CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA,
GEORGIA 30302 (404) 256-0830
Kingdom and European operations resulting from claims management agreements
entered into during 2004, as well as hurricane-related revenues from Hurricanes
Frances and Jeanne claims. International operating expenses increased by $10.1
million in U.S. dollars, a 17.4% increase, and by 10.0% on a constant dollar
basis.
Mr. Thomas W. Crawford, chief executive officer of Crawford & Company, stated,
"During the first quarter, we continued to see an increase in property claims
referred to us due to the hurricanes that hit Florida and other southeastern
states during late 2004. Property claim referrals from the U.S. insurance
company market were up nearly 19% during the 2005 first quarter as compared to
the 2004 period. However, this increase in property claims was partially offset
by continued weakness in casualty and workers' compensation claims referrals
during the current quarter."
"We were disappointed by our U.S. operating margin of 1.6% in the quarter, down
from 2.6% in last year's first quarter. Despite the increase in
catastrophe-related revenues during the quarter, we experienced downward
pressure on our margins as many of these claims involved re-inspections and
supplemental damage appraisals on previously handled claims, due to delays in
damage repairs, and the associated fees only covered our direct costs of
finalizing the claims. In addition, we have substantially increased the
operating capacity in our class action services unit in order to administer the
large backlog of projects that exists as of the end of the quarter. This record
backlog, totaling $35.3 million, should provide strong growth in revenues and
operating earnings for this unit during future quarters. Our U.S. margin was
also impacted by higher legal expenses related to audits of workers'
compensation claims handled on behalf of clients in the State of California and
our response to a subpoena received in December 2004 from the New York Attorney
General's office."
"Our international operating margin grew to 4.7% from 3.6% in the 2004 first
quarter. Strong case referrals, primarily as a result of recent client wins in
our United Kingdom and Europe operations and hurricane-related claims in the
Caribbean, contributed to the margin improvement. We remain confident that the
substantial new business awarded to us during 2004 will provide healthy
international operating margins throughout 2005."
Mr. Crawford concluded, "Our operating cash flows in the 2005 first quarter
reflected an $11.8 million use of cash. This use of cash was expected and
primarily due to an increase in our U.S. income tax payments during the quarter,
annual contributions made to our U.S. defined contribution pension plan,
incentive compensation payments, and a lag in collecting receivables generated
from hurricane-related claims handled in 2004 and 2005."
Crawford & Company's management will host a conference call with analysts on
Monday, April 25, 2005 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 2, 2005. You may dial 1-800-642-1687 (706-645-9291 international) to listen
to the replay. The conference identification number is 5558282. Alternatively,
please visit our web site at www.crawfordandcompany.com for a live audio web
cast.
2
[CRAWFORD LOGO]
PRESS RELEASE
CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA,
GEORGIA 30302 (404) 256-0830
Further information regarding the Company's financial position, operating
results, and cash flows for the quarter ended March 31, 2005 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
margin as a percentage of revenues before reimbursements:
Quarter Ended Quarter Ended
March 31, Margin March 31, Margin
(in thousands) 2005 % 2004 %
- --------------------------- ------------- ------ ------------- ------
Net income $2,361 1.3% $2,389 1.4%
Add:
Net corporate interest 1,527 .8 1,337 .8
Income taxes 1,293 .7 1,368 .8
------ --- ------ ---
Operating earnings $5,181 2.8% $5,094 3.0%
====== === ====== ===
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 63 countries. Major service lines include workers'
compensation claims administration and managed care 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, 2005 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, 2004 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.
3
[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 INCOME
Unaudited
(In Thousands Except Per Share Data)
QUARTER ENDED MARCH 31 2005 2004 % Change
- --------------------------------------- -------- -------- --------
Revenues:
Revenues Before Reimbursements $184,334 $169,855 9%
Reimbursements 15,309 14,881 3%
-------- --------
Total Revenues 199,643 184,736 8%
Costs and Expenses:
Cost of Services Before Reimbursements 144,919 131,125 11%
Reimbursements 15,309 14,881 3%
-------- --------
Cost of Services 160,228 146,006 10%
Selling, General, and Administrative 34,234 33,636 2%
Corporate Interest Expense, Net 1,527 1,337 14%
-------- --------
Total Costs and Expenses 195,989 180,979 8%
-------- --------
Income Before Income Taxes 3,654 3,757 -3%
Income Taxes 1,293 1,368 -5%
-------- --------
Net Income $ 2,361 $ 2,389 -1%
======== ========
Net Income Per Share:
Basic $ 0.05 $ 0.05 0%
-------- --------
Diluted $ 0.05 $ 0.05 0%
-------- --------
Weighted Average Shares Outstanding:
Basic 48,872 48,724
-------- --------
Diluted 49,381 48,869
-------- --------
4
[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
QUARTER ENDED MARCH 31
Unaudited
(In Thousands Except Percentages)
U.S. International Total
--------------------- --------------------- ---------------------
2005 2004 2005 2004 2005 2004
-------- -------- -------- -------- -------- --------
Revenues Before Reimbursements $112,507 $109,313 $ 71,827 $ 60,542 $184,334 $169,855
Compensation & Benefits 72,116 69,367 50,545 42,420 122,661 111,787
% of Revenues 64.1% 63.5% 70.3% 70.1% 66.6% 65.8%
Expenses Other than Reimbursements,
Compensation & Benefits 38,555 37,054 17,937 15,920 56,492 52,974
% of Revenues 34.3% 33.9% 25.0% 26.3% 30.6% 31.2%
-------- -------- -------- -------- -------- --------
Operating Earnings (1) $ 1,836 $ 2,892 $ 3,345 $ 2,202 $ 5,181 $ 5,094
% of Revenues 1.6% 2.6% 4.7% 3.6% 2.8% 3.0%
======== ======== ======== ======== ======== ========
(1) Earnings before net corporate interest expense and income taxes
5
[CRAWFORD LOGO]
PRESS RELEASE
CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA,
GEORGIA 30302 (404)256-0830
CRAWFORD & COMPANY
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2005 AND DECEMBER 31, 2004
(In Thousands)
Unaudited
MARCH 31 December 31
2005 2004
--------- -----------
ASSETS
Current Assets:
Cash and Cash Equivalents $ 25,638 $ 43,571
Accounts Receivable, Net 178,531 176,187
Unbilled Revenues 102,076 103,586
Prepaid Expenses and Other Current Assets 19,678 21,363
--------- -----------
Total Current Assets 325,923 344,707
--------- -----------
Property and Equipment, at Cost 154,783 154,922
Less Accumulated Depreciation (119,938) (120,079)
--------- -----------
Net Property and Equipment 34,845 34,843
--------- -----------
Other Assets:
Intangible Assets Arising from Acquisitions, Net 110,233 109,410
Capitalized Software Costs, Net 32,476 32,550
Deferred Income Tax Asset, Net 32,191 32,172
Other 19,252 17,578
--------- -----------
Total Other Assets 194,152 191,710
--------- -----------
Total Assets $ 554,920 $ 571,260
========= ===========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Short-Term Borrowings $ 39,915 $ 37,401
Accounts Payable 39,303 41,730
Accrued Liabilities 94,067 110,610
Deferred Revenues 23,418 22,682
Current Installments of Long-Term Debt and Capital Leases 1,787 1,900
--------- -----------
Total Current Liabilities 198,490 214,323
--------- -----------
Noncurrent Liabilities:
Long-Term Debt and Capital Leases, Less Current Installments 50,564 50,875
Deferred Revenues 10,081 10,179
Self-Insured Risks 8,386 10,958
Postretirement Medical Benefit Obligation 5,544 5,544
Minimum Pension Liabilities 75,230 73,893
Other 10,119 10,655
--------- -----------
Total Noncurrent Liabilities 159,924 162,104
--------- -----------
Shareholders' Investment:
Class A Common Stock, $1.00 Par Value 24,186 24,157
Class B Common Stock, $1.00 Par Value 24,697 24,697
Additional Paid-in Capital 1,673 1,441
Retained Earnings 200,641 201,213
Accumulated Other Comprehensive Loss (54,691) (56,675)
--------- -----------
Total Shareholders' Investment 196,506 194,833
--------- -----------
Total Liabilities and Shareholders' Investment $ 554,920 $ 571,260
========= ===========
6
[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
QUARTER ENDED MARCH 31, 2005 AND MARCH 31, 2004
Unaudited
(In Thousands)
2005 2004
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 2,361 $ 2,389
Reconciliation of Net Income to Net Cash Used in
Operating Activities:
Depreciation and Amortization 4,801 4,377
Deferred Income Taxes 26 (107)
Loss on Sales of Property and Equipment 31 19
Stock-Based Compensation 63 -
Changes in Operating Assets and Liabilities:
Accounts Receivable, Net (785) (2,723)
Unbilled Revenues 2,954 (3,600)
Accrued or Prepaid Income Taxes (5,705) 1,241
Accounts Payable and Accrued Liabilities (12,435) (6,581)
Deferred Revenues 499 776
Accrued Pension Costs (3,903) (3,717)
Prepaid Expenses and Other Assets 291 (589)
-------- --------
Net Cash Used in Operating Activities (11,802) (8,515)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of Property and Equipment, Net (2,862) (2,132)
Capitalization of Computer Software Costs (1,508) (1,649)
Additional Payment for Prior Acquisition (90) (106)
-------- --------
Net Cash Used in Investing Activities (4,460) (3,887)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends Paid (2,933) (2,923)
Proceeds from Exercise of Stock Options 261 -
Increase in Short-Term Borrowings, Net 1,070 142
Decrease in Long-Term Debt and Capital Lease Obligations, Net (513) (342)
Capitalized Loan Costs - 33
-------- --------
Net Cash Used in Financing Activities (2,115) (3,090)
-------- --------
Effect of Exchange Rate Changes on Cash and Cash Equivalents 444 852
-------- --------
Decrease in Cash and Cash Equivalents (17,933) (14,640)
Cash and Cash Equivalents at Beginning of Period 43,571 45,805
-------- --------
Cash and Cash Equivalents at End of Period $ 25,638 $ 31,165
======== ========
7