Exhibit 99.1 (CRAWFORD(R) 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 24, 2005 FROM: THOMAS W. CRAWFORD CHIEF EXECUTIVE OFFICER CRAWFORD REPORTS THIRD 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 third quarter ended September 30, 2005. Third quarter 2005 revenues before reimbursements totaled $184.7 million compared with $185.9 million in the 2004 third quarter. Third quarter 2005 net income was $1.9 million compared to $9.5 million for the 2004 third quarter. Third quarter 2005 net income per diluted share was $0.04 per share compared to $0.20 in the prior-year quarter. Third quarter 2005 pre-tax income was reduced by approximately $750,000, or $0.01 per share, due to deployment costs associated with hurricanes Katrina and Rita. Net income in the 2004 third quarter included 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. Operating earnings (earnings before special credit, net corporate interest expense and income taxes) in the 2005 third quarter totaled $4.5 million compared with $8.4 million in the prior year quarter. U.S. revenues before reimbursements were $114.5 million in the third quarter of 2005 compared with $123.5 million in the 2004 third quarter. Revenues from the insurance company market were $50.3 million in the 2005 third quarter compared with $58.0 million in the 2004 period, which reflects a $5.7 million decline in catastrophe-related revenues from the 2004 period when the Company was responding to the hurricanes which struck the southeastern United States. Revenues from self-insured clients were $37.6 million in the 2005 third quarter compared with $39.5 million in the 2004 quarter, due primarily to a reduction in claim referrals from the Company's existing clients, only partially offset by net new business gains. Class action services revenues were $26.6 million for the 2005 third quarter, compared with $26.0 million in the comparable year-ago quarter. These revenues can fluctuate based on the timing and size of project awards. Third quarter 2005 international revenues grew to $70.2 million from $62.4 million for the same period in 2004. During the 2005 third quarter, Page 1 of 9 (CRAWFORD(R) LOGO) Press Release CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830 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 $67.7 million in the 2005 third quarter, reflecting growth in revenues on a constant dollar basis of 8.4%. This growth reflects increased case referrals in our United Kingdom and European operations resulting from claims management agreements entered into during 2004 and 2005, as well as revenues from flood losses in Canada. International operating expenses increased by $6.2 million in U.S. dollars, a 10.1% increase, and by 6.4% on a constant dollar basis. Mr. Thomas W. Crawford, chief executive officer of Crawford & Company, stated, "Our third quarter 2005 results in the U.S. reflect a continued strong performance by our class action services unit. However, these results were offset by revenue declines within our U.S. catastrophe unit which benefited from hurricane-related claims in the 2004 third quarter. We are in the early stages of assessing the massive devastation caused by hurricanes Katrina and Rita in the gulf coast region, and the full impact of these events will not be reflected in our results until the 2005 fourth quarter." "We continue to face challenges in the U.S. property and casualty market, as reflected by a decline in our U.S. operating margin from 5.7% in last year's third quarter to 1.3% in the current quarter. This decrease is due to declining claim referrals in the current quarter and our decision to maintain our existing service capabilities in our U.S. field operations as we focus on improving our work product, investing in the training and development of our employees, and growing our market share. By maintaining our service capabilities, we are now able to provide our clients with the resources they require to adjust the influx of claims resulting from the recent hurricanes. We have over 300 catastrophe adjusters and scores of branch adjusters from all over the country deployed in response to approximately 25,000 claims that have been referred to us. These claims have in excess of $3.0 billion in insured value associated with them and both the claim counts and associated insured values continue to grow on a daily basis, as the full impact of the devastation is still being realized. We are currently projecting incremental revenues related to hurricanes Katrina and Rita of approximately $30 million, of which $15 million is expected to be realized during the fourth quarter of 2005. Within our class action services unit, we continue to have a strong backlog of projects, totaling approximately $38.0 million at quarter end, which should provide growth in revenues and operating earnings in future quarters." "Operating earnings in our international segment more than doubled, to $3.0 million, reflecting an improvement in our operating margin from 2.2% in the 2004 third quarter to 4.3% in the 2005 quarter. This growth reflects increased case referrals in our United Kingdom and European operations resulting from claims management agreements entered into during 2004 and 2005. In addition, flood losses in Canada contributed to our margin improvement during the current quarter. We have been very pleased with the operating results generated by our international segment this year and expect continued strong performance from this unit in the future." Page 2 of 9 (CRAWFORD(R) LOGO) Press Release CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830 Total revenues before reimbursements for the nine months ended September 30, 2005 were $555.1 million compared with $527.7 million in 2004. Operating earnings totaled $15.2 million in the 2005 period compared with $19.2 million in 2004. Net income for the current nine-month period totaled $6.9 million, or $0.14 per share, compared with $17.5 million, or $0.36 per share, reported in the prior year. U.S. revenues before reimbursements for the 2005 nine-month period were $341.3 million compared with $342.4 million in 2004. International revenues before reimbursements were $213.7 million in the 2005 year-to-date period compared with $185.4 million during 2004. Excluding the benefit of exchange rate fluctuations, international revenues would have been $203.3 million in the current year-to-date period, reflecting growth in revenues on a constant dollar basis of 9.7%. International operating expenses increased by $23.7 million in U.S. dollars, a 13.2% increase, and by 7.6% on a constant dollar basis. Mr. Crawford concluded, "Our operating cash flows for the 2005 nine-month period reflect an improvement of $2.1 million as compared to the prior-year period. This improvement is primarily due to the collection of accounts receivable generated from the hurricane-related claims administered in 2004 and 2005. Overall, our consolidated cash position as of September 30, 2005 is sound, totaling $36.2 million, up $8.3 million from the $27.9 million reported at September 30, 2004." Crawford & Company's management will host a conference call with analysts on Monday, October 24, 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 October 31, 2005. You may dial 1-800-642-1687 (706-645-9291 international) to listen to the replay. The access code is 1305843. 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, 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. Net corporate interest expense and income taxes are recurring components of our net income, but they are not considered part of our operating earnings since they are managed on a corporate-wide basis. Net corporate interest expense results from capital structure decisions and income taxes are based on statutory rates in effect in each of the locations where we provide services and vary throughout the world. Neither of these costs relates directly to the performance of our services and are therefore excluded in order to accurately assess the results of our operating activities on a consistent basis. Special credits and charges represent nonrecurring events that are not considered part of our operating earnings since they historically have not impacted our performance and are not expected to impact our performance within the next two years. Following is a reconciliation of Page 3 of 9 (CRAWFORD(R) LOGO) Press Release CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830 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, % 30, % 30, % 30, % 2005 Margin 2004 Margin 2005 Margin 2004 Margin --------- ------ --------- ------ --------- ------ --------- ------ Net income $1,887 1.0% $ 9,525 5.1% $ 6,929 1.2% $17,454 3.3% Add/(deduct): Special credit -- -- (8,573) (4.6) -- -- (8,573) (1.6) Net corporate interest 1,589 0.8 1,466 0.8 4,471 0.8 2,269 0.4 Income taxes 1,034 0.6 5,953 3.2 3,797 0.7 8,046 1.5 ------ --- ------- ---- ------- --- ------- ---- Operating earnings $4,510 2.4% $ 8,371 4.5% $15,197 2.7% $19,196 3.6% ====== === ======= ==== ======= === ======= ==== 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 and nine month periods ended September 30, 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. Page 4 of 9 (CRAWFORD(R) LOGO) Press Release CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404)256-0830 CRAWFORD & COMPANY CONSOLIDATED COMPARATIVE STATEMENTS OF INCOME (In Thousands Except Per Share Data; Unaudited) NINE MONTHS ENDED SEPTEMBER 30 2005 2004 % CHANGE - ------------------------------ -------- -------- -------- Revenues: Revenues Before Reimbursements $555,056 $527,741 5% Reimbursements 57,588 61,036 -6% -------- -------- Total Revenues 612,644 588,777 4% Costs and Expenses: Cost of Services Before Reimbursements 438,538 407,599 8% Reimbursements 57,588 61,036 -6% -------- -------- Cost of Services 496,126 468,635 6% Selling, General, and Administrative 101,321 100,946 0% Special Credit (1) -- (8,573) nm Corporate Interest Expense, Net 4,471 2,269 97% -------- -------- Total Costs and Expenses 601,918 563,277 7% -------- -------- Income Before Income Taxes 10,726 25,500 -58% Income Taxes 3,797 8,046 -53% -------- -------- Net Income $ 6,929 $ 17,454 -60% ======== ======== Net Income Per Share: Basic $ 0.14 $ 0.36 -61% -------- -------- Diluted $ 0.14 $ 0.36 -61% -------- -------- Weighted Average Shares Outstanding: Basic 48,911 48,748 -------- -------- Diluted 49,416 48,829 -------- -------- nm = not meaningful (1) Special credit is a pretax gain related to the sale of an undeveloped parcel of real estate. Page 5 of 9 (CRAWFORD(R) LOGO) Press Release CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404)256-0830 CRAWFORD & COMPANY CONSOLIDATED COMPARATIVE STATEMENTS OF INCOME (In Thousands Except Per Share Data; Unaudited) QUARTER ENDED SEPTEMBER 30 2005 2004 % CHANGE - -------------------------- -------- -------- -------- Revenues: Revenues Before Reimbursements $184,720 $185,870 -1% Reimbursements 21,500 31,638 -32% -------- -------- Total Revenues 206,220 217,508 -5% Costs and Expenses: Cost of Services Before Reimbursements 146,284 144,339 1% Reimbursements 21,500 31,638 -32% -------- -------- Cost of Services 167,784 175,977 -5% Selling, General, and Administrative 33,926 33,160 2% Special Credit (1) -- (8,573) nm Corporate Interest Expense, Net 1,589 1,466 8% -------- -------- Total Costs and Expenses 203,299 202,030 1% -------- -------- Income Before Income Taxes 2,921 15,478 -81% Income Taxes 1,034 5,953 -83% -------- -------- Net Income $ 1,887 $ 9,525 -80% ======== ======== Net Income Per Share: Basic $ 0.04 $ 0.20 -80% -------- -------- Diluted $ 0.04 $ 0.20 -80% -------- -------- Weighted Average Shares Outstanding: Basic 48,978 48,796 -------- -------- Diluted 49,462 48,917 -------- -------- nm = not meaningful (1) Special credit is a pretax gain related to the sale of an undeveloped parcel of real estate. Page 6 of 9 (CRAWFORD(R) 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, 2005 (In Thousands Except Percentages; Unaudited) U.S. International Total ------------------- ------------------- ------------------- 2005 2004 2005 2004 2005 2004 -------- -------- -------- -------- -------- -------- Revenues Before Reimbursements $341,343 $342,372 $213,713 $185,369 $555,056 $527,741 Compensation & Benefits 218,868 208,397 149,014 129,065 367,882 337,462 % of Revenues 64.1% 60.9% 69.7% 69.6% 66.3% 64.0% Expenses Other than Reimbursements, Compensation & Benefits 117,338 120,234 54,639 50,849 171,977 171,083 % of Revenues 34.4% 35.1% 25.6% 27.5% 31.0% 32.4% -------- -------- -------- -------- -------- -------- Operating Earnings (1) $ 5,137 $ 13,741 $ 10,060 $ 5,455 $ 15,197 $ 19,196 % of Revenues 1.5% 4.0% 4.7% 2.9% 2.7% 3.6% -------- -------- -------- -------- -------- -------- QUARTER ENDED SEPTEMBER 30, 2005 (In Thousands Except Percentages; Unaudited) U.S. International Total ------------------- ----------------- ------------------- 2005 2004 2005 2004 2005 2004 -------- -------- ------- ------- -------- -------- Revenues Before Reimbursements $114,482 $123,466 $70,238 $62,404 $184,720 $185,870 Compensation & Benefits 72,552 71,922 48,547 43,829 121,099 115,751 % of Revenues 63.4% 58.2% 69.1% 70.2% 65.6% 62.3% Expenses Other than Reimbursements, Compensation & Benefits 40,439 44,521 18,672 17,227 59,111 61,748 % of Revenues 35.3% 36.1% 26.6% 27.6% 32.0% 33.2% -------- -------- ------- ------- -------- -------- Operating Earnings (1) $ 1,491 $ 7,023 $ 3,019 $ 1,348 $ 4,510 $ 8,371 % of Revenues 1.3% 5.7% 4.3% 2.2% 2.4% 4.5% -------- -------- ------- ------- -------- -------- (1) Earnings before net corporate interest expense and income taxes. Page 7 of 9 (CRAWFORD(R) 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, 2005 AND DECEMBER 31, 2004 (In Thousands) (Unaudited) SEPTEMBER 30 December 31 2005 2004 ------------ ----------- ASSETS Current Assets: Cash and Cash Equivalents $ 36,176 $ 43,571 Accounts Receivable, Net 168,502 173,123 Unbilled Revenues 108,932 106,650 Prepaid Expenses and Other Current Assets 12,685 21,363 --------- --------- Total Current Assets 326,295 344,707 --------- --------- Property and Equipment, at Cost 151,361 154,553 Less Accumulated Depreciation (116,228) (120,054) --------- --------- Net Property and Equipment 35,133 34,499 --------- --------- Other Assets: Intangible Assets Arising from Acquisitions, Net 110,169 109,410 Capitalized Software Costs, Net 32,572 32,894 Deferred Income Tax Asset 32,150 32,172 Other 19,415 17,578 --------- --------- Total Other Assets 194,306 192,054 --------- --------- Total Assets $ 555,734 $ 571,260 ========= ========= LIABILITIES AND SHAREHOLDERS' INVESTMENT Current Liabilities: Short-Term Borrowings $ 35,968 $ 37,401 Accounts Payable 40,778 41,730 Accrued Liabilities 103,016 110,610 Deferred Revenues 20,875 22,682 Current Installments of Long-Term Debt 1,080 1,900 --------- --------- Total Current Liabilities 201,717 214,323 --------- --------- Noncurrent Liabilities: Long-Term Debt, Less Current Installments 50,972 50,875 Deferred Revenues 10,516 10,179 Self-Insured Risks 8,129 10,958 Postretirement Medical Benefit Obligation 5,213 5,544 Minimum Pension Liability 76,488 73,893 Other 10,122 10,655 --------- --------- Total Noncurrent Liabilities 161,440 162,104 --------- --------- Shareholders' Investment: Class A Common Stock, $1.00 Par Value 24,282 24,157 Class B Common Stock, $1.00 Par Value 24,697 24,697 Additional Paid-in Capital 6,255 5,606 Retained Earnings 199,337 201,213 Accumulated Other Comprehensive Loss (61,994) (60,840) --------- --------- Total Shareholders' Investment 192,577 194,833 --------- --------- Total Liabilities and Shareholders' Investment $ 555,734 $ 571,260 ========= ========= Page 8 of 9 (CRAWFORD (R) 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, 2005 AND SEPTEMBER 30, 2004 (In Thousands; Unaudited) 2005 2004 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 6,929 $ 17,454 Reconciliation of Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 14,335 13,512 Deferred Income Taxes 22 (28) Loss (Gain) on Sales of Property and Equipment, net 75 (8,435) Stock-Based Compensation 181 -- Changes in Operating Assets and Liabilities, net of effects of acquisitions: Accounts Receivable, net 3,858 (28,984) Unbilled Revenues (2,771) (3,655) Accrued or Prepaid Income Taxes (5,391) 9,827 Accounts Payable and Accrued Liabilities (3,606) 250 Deferred Revenues (1,802) 7,160 Accrued Pension Costs 386 (369) Prepaid Expenses and Other Assets (990) 2,371 -------- -------- Net Cash Provided by Operating Activities 11,226 9,103 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions of Property and Equipment, net (10,353) (7,389) Capitalization of Computer Software Costs (4,796) (5,214) Proceeds from 2004 Sale of Undeveloped Land 7,562 2,028 Additional Payments for Prior Acquisitions (121) (617) -------- -------- Net Cash Used in Investing Activities (7,708) (11,192) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Dividends Paid (8,805) (8,776) Proceeds from Exercise of Stock Options and ESPP plans 593 683 Decrease in Short-Term Borrowings, net (960) (7,399) Decrease in Long-Term Debt and Capital Lease Obligations, net (1,397) (841) Capitalized Loan Costs -- 61 -------- -------- Net Cash Used in Financing Activities (10,569) (16,272) -------- -------- Effect of Exchange Rate Changes on Cash and Cash Equivalents (344) 444 -------- -------- Decrease in Cash and Cash Equivalents (7,395) (17,917) Cash and Cash Equivalents at Beginning of Period 43,571 45,805 -------- -------- Cash and Cash Equivalents at End of Period $ 36,176 $ 27,888 ======== ======== Page 9 of 9