1
EXHIBIT 13.1
MANAGEMENT'S DISCUSSION AND ANALYSIS
of Financial Condition and Results of Operations
FINANCIAL CONDITION
At December 31, 1996, current assets exceeded current liabilities by
approximately $136.2 million, a decrease of $3.1 million from the working
capital balance at December 31, 1995. Cash and cash equivalents at the end of
1996 totaled $55.5 million, increasing $14.7 million from the balance at the end
of 1995. The Company held no short-term investments at December 31, 1996, as
compared to $5.6 million at December 31, 1995. During 1996, cash was generated
primarily from operating activities, while the principal uses of cash were for
repurchases of common stock, dividends paid to shareholders and acquisitions of
property and equipment. At December 31, 1996, the ratio of current assets to
current liabilities was 2.2 to 1 compared with 2.5 to 1 at the end of 1995.
During the first quarter of 1996, the Company completed its 1994 share
repurchase program and, under that program, reacquired 1,748,850 shares of its
Class A Common Stock and 1,254,750 shares of its Class B Common Stock at an
average cost of $10.51 and $10.43 per share, respectively. Additionally, during
March of 1996, the Company announced a second share repurchase program to
acquire up to an aggregate of 3,000,000 shares of its Class A or Class B Common
Stock through open market purchases. Through December 31, 1996, the Company has
reacquired 1,200,300 shares of its Class A Common Stock and 293,100 shares of
its Class B Common Stock at an average cost of $12.88 and $12.76 per share,
respectively.
On December 19, 1996, the Company and Swiss Reinsurance Company of Zurich,
Switzerland agreed to merge their existing claims service firms outside the
United States. The new entity will be a 60% owned subsidiary of the Company. The
Company also acquired 100% of Swiss Reinsurance Company's Thomas Howell Group -
Americas unit based in the United States for approximately $3.3 million.
The Company maintains credit lines with banks in order to meet seasonal working
capital requirements of its foreign subsidiaries or other financing needs that
may arise. Short-term borrowings outstanding as of December 31, 1996, totaled
$8.4 million, as compared to $10.2 million at the end of 1995. The Company
believes that its current financial resources, together with funds generated
from operations and existing and potential long-term borrowing capabilities,
will be sufficient to maintain its current operations.
The Company does not engage in any hedging activities to compensate for the
effect of exchange rate fluctuations on the operating results of its foreign
subsidiaries. Foreign currency denominated debt is maintained primarily to hedge
the currency exposure of its net investment in foreign operations.
Shareholders' investment at the end of 1996 was $221.5 million, compared with
$220.9 million at the end of 1995. Long-term debt totaled $376,000 at December
31, 1996, compared to $9.4 million at December 31, 1995.
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2
MANAGEMENT'S DISCUSSION AND ANALYSIS
of Financial Condition and Results of Operations
RESULTS OF OPERATIONS
1996 COMPARED WITH 1995
Effective January 1, 1997 the Company changed its method of reporting its
principal service categories to correspond with internal management reporting.
Accordingly, disability management services is now reported as a component of
domestic operations. Operating results for the Company's domestic and
international operations for the years ended December 31, 1996 and 1995 are as
follows:
Domestic International Total
1996 1995 1996 1995 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
In Thousands of Dollars, Except Percentages
Revenues $555,257 $523,367 $ 78,368 $ 84,210 $633,625 $607,577
Compensation & Benefits 355,110 338,221 48,251 50,752 403,361 388,973
% of Revenues 63.9% 64.6% 61.5% 60.3% 63.6% 64.0%
Expenses Other than Compensation & Benefits 130,973 127,778 27,321 30,446 158,294 158,224
% of Revenues 23.6% 24.4% 34.9% 36.1% 25.0% 26.1%
-------- -------- -------- -------- -------- --------
Pretax Income $ 69,174 $ 57,368 $ 2,796 $ 3,012 $ 71,970 $ 60,380
% of Revenues 12.5% 11.0% 3.6% 3.6% 11.4% 9.9%
======== ======== ======== ======== ======== ========
Total revenues from services provided increased by 4.3%, or $26.0 million,
during 1996. Unit volume, measured principally by chargeable hours, increased
approximately 3.3% during 1996. This increase was complemented by changes in the
mix of services provided and in the rates charged for those services, the
combined effects of which increased revenues by approximately 2%. In addition,
the Company began reporting its international results on a two-month rather than
a three-month delayed basis in 1995. Accordingly, 1995 international results
reflect thirteen months of activity as compared to twelve months in 1996. This
change in reporting reduced total revenues by approximately 1%. The effect of
this change on pretax income was not material.
Consolidated pretax income increased 19.2%, or $11.6 million, during 1996. While
revenues increased 4.3%, costs increased only 2.6% due to efficiencies achieved
in operating and support activities throughout the Company.
DOMESTIC OPERATIONS
Revenues
Domestic revenues from insurance companies and self-insured clients totaled
$555.3 million for 1996, up 6.1% from related 1995 revenues of $523.4 million.
This increase is largely due to greater claims volume from insurers who have
outsourced their claims handling functions to the Company and an increase in
weather-related claims resulting from the severe weather in the United States
during 1996. This growth offsets continued weakness in the self-insured
corporate market. Revenues from services provided to an insurance holding
company and its subsidiaries continued to decline, from 12% of total revenues in
1995 to less than 10% in 1996.
Revenues from domestic operations include $41.0 million in revenue from services
provided by the Company's "catastrophe" adjusters during 1996, principally to
clients affected by natural or man-made disasters, including hurricanes, floods,
hail storms and oil spills. During 1995, such revenue approximated $29.1
million.
Compensation and Fringe Benefits
The Company's most significant expense is the compensation of its employees,
including related payroll taxes and fringe benefits. Although increasing in the
aggregate due to increased claims volume, domestic compensation expense
decreased as a percent of revenues from 64.6% in 1995 to 63.9% in 1996. This
decrease is due primarily to a decline in administrative compensation expense,
partially offset by an increase in incentive compensation expense which is based
on growth in earnings.
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3
MANAGEMENT'S DISCUSSION AND ANALYSIS
of Financial Condition and Results of Operations
Domestic salaries and wages of personnel other than contract managers increased
by 3.6%, from $254.3 million in 1995 to $263.4 million in 1996. Contract
managers' compensation is based on the operating income of the offices which
they manage. Compensation of these managers totaled $36.5 million during 1996,
increasing 28.1% from related 1995 costs of $28.5 million.
Payroll taxes and fringe benefits for domestic operations totaled $55.2 million
in 1996, decreasing slightly from 1995 costs of $55.4 million, due primarily to
lower employee group medical costs, substantially offset by higher profit
sharing contributions.
Expenses Other than Compensation and Fringe Benefits
Domestic expenses other than compensation and related payroll taxes and fringe
benefits approximated 23.6% of revenues for 1996, down from 24.4% of revenues
for 1995. This decline is due largely to lower automobile fleet and data
processing costs.
INTERNATIONAL OPERATIONS
Revenues
Revenues from the Company's international operations declined to $78.4 million
in 1996, from $84.2 million in 1995. This decline results primarily from the
Company's 1995 reporting change when the delay in reporting international
results was reduced from three to two months. Accordingly, 1995 international
results reflect thirteen months of activity as compared to twelve months in
1996.
Compensation and Fringe Benefits
Compensation expense, including related payroll taxes and fringe benefits, was
also affected by the 1995 change in reporting, since 1995 results include
thirteen months of expense as compared to twelve months in 1996. However, as a
percent of revenues, such expense increased from 60.3% in 1995 to 61.5% in 1996.
Salaries and wages of international personnel increased from 52.5% of revenues
in 1995 to 53.6% in 1996. Payroll taxes and fringe benefits also increased
slightly as a percent of revenues, from 7.8% in 1995 to 7.9% in 1996.
Expenses Other than Compensation and Fringe Benefits
Expenses other than compensation and related payroll taxes and fringe benefits
approximated 34.9% of international revenues for 1996, compared to 36.1% of 1995
revenues. This decline reflects efficiencies gained through integration of the
Company's late 1994 acquisitions in the United Kingdom. These expenses comprise
a higher percentage of revenues than the Company's domestic operations due
primarily to amortization of intangible assets and higher automobile, occupancy
and interest costs.
RESULTS OF OPERATIONS
1995 COMPARED WITH 1994
Operating results for the Company's domestic and international operations for
the years ended December 31, 1995 and 1994 are as follows:
Domestic International Total
1995 1994 1995 1994 1995 1994
- -------------------------------------------------------------------------------------------------------------------------------
In Thousands of Dollars, Except Percentages
Revenues $523,367 $541,969 $ 84,210 $ 45,812 $607,577 $587,781
Compensation & Benefits 338,221 352,376 50,752 28,506 388,973 380,882
% of Revenues 64.6% 65.0% 60.3% 62.2% 64.0% 64.8%
Expenses Other than Compensation & Benefits 127,778 122,844 30,446 16,004 158,224 138,848
% of Revenues 24.4% 22.7% 36.1% 35.0% 26.1% 23.6%
-------- -------- -------- -------- -------- --------
Pretax Income $ 57,368 $ 66,749 $ 3,012 $ 1,302 $ 60,380 $ 68,051
% of Revenues 11.0% 12.3% 3.6% 2.8% 9.9% 11.6%
======== ======== ======== ======== ======== ========
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20
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4
MANAGEMENT'S DISCUSSION AND ANALYSIS
of Financial Condition and Results of Operations
Total revenues from services provided increased by 3.4%, or $19.8 million,
during 1995. Unit volume, measured principally by chargeable hours and excluding
acquisitions, decreased approximately 5.8% during 1995. This decrease was
partially offset by changes in the mix of services provided and in the rates
charged for those services, the combined effects of which increased revenues by
approximately 2.4% during 1995. Revenues from services provided to an insurance
holding company and its subsidiaries continued to decline, from 14% of total
revenues in 1994 to 12% in 1995. The Company's fourth quarter 1994 acquisitions
of the Brocklehurst Group and Arnold & Green Ltd., two loss adjusting firms
based in the United Kingdom, and the acquisition of Finnamore & Partners Ltd., a
Canadian loss adjusting firm, in the second quarter of 1994, increased revenues
by 6.8% during 1995.
Consolidated pretax income declined 11.3%, or $7.7 million, during 1995. While
revenues increased 3.4%, costs increased 5.3% due to increased systems
development costs and higher costs related to the Company's late 1994
acquisitions in the United Kingdom.
DOMESTIC OPERATIONS
Revenues
Domestic revenues from insurance companies and self-insured clients totaled
$523.4 million for 1995, down 3.4% from related 1994 revenues of $542.0 million.
This decline reflects lower claims frequency throughout the property and
casualty insurance industry and increased competition in the self-insured
corporate market.
Domestic revenues include $29.1 million in revenues from services provided by
the Company's "catastrophe" adjusters during 1995, principally to clients
affected by natural or man-made disasters, including hurricanes, floods, hail
storms, oil spills and chemical-related incidents. During 1994, such revenues
approximated $35.0 million.
Compensation and Fringe Benefits
The Company's most significant expense is the compensation of its employees,
including related payroll taxes and fringe benefits. Domestic compensation
expense decreased from 65.0% of revenues in 1994 to 64.6% in 1995. This decrease
is primarily due to lower employee group medical and workers compensation costs
and reduced incentive compensation expense, which is based on growth in
earnings.
Domestic salaries and wages of personnel other than contract managers decreased
slightly, from $255.5 million in 1994 to $254.3 million in 1995. Contract
managers' compensation is based on the operating income of the offices which
they manage. Compensation of these managers totaled $28.5 million during 1995,
declining 25.4% from related 1994 costs of $38.2 million.
Domestic payroll taxes and fringe benefits totaled $55.4 million in 1995,
decreasing 5.6% from 1994 costs of $58.7 million, due primarily to lower
employee group medical, workers compensation and profit sharing costs.
Expenses Other than Compensation and Fringe Benefits
Domestic expenses other than compensation and related payroll taxes and fringe
benefits approximated 24.4% of revenues for 1995, compared to 22.7% of revenues
for 1994. These increases resulted principally from an increase in systems
development costs and higher automobile fleet costs.
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21
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5
MANAGEMENTS DISCUSSION AND ANALYSIS
of Financial Condition and Results of Operations
INTERNATIONAL OPERATIONS
Revenues
Revenues from the Company's international operations increased to $84.2 million
in 1995, from $45.8 million in 1994. This increase resulted primarily from the
Company's late 1994 acquisitions in the United Kingdom and strong Canadian
growth.
Compensation and Fringe Benefits
Compensation expense, including related payroll taxes and fringe benefits, also
increased significantly, from $28.5 million in 1994 to $50.8 million in 1995.
However, as a percent of revenues, such expense declined from 62.2% of revenues
in 1994 to 60.3% in 1995. Salaries and wages of international personnel declined
from 54.7% of revenues in 1994 to 52.5% in 1995, reflecting the integration of
the United Kingdom acquisitions with Crawford's operations in that country.
Payroll taxes and fringe benefits increased as a percentage of revenues, from
7.5% in 1994 to 7.8% in 1995, due to more generous retirement programs
maintained by the acquired entities.
Expenses Other than Compensation and Fringe Benefits
Expenses other than compensation and related payroll taxes and fringe benefits
approximated 36.1% of revenues for 1995 compared to 35.0% of revenues for 1994,
primarily due to higher amortization of intangible assets arising from the
Company's United Kingdom acquisitions. These expenses comprise a higher
percentage of revenues than the Company's domestic operations due primarily to
amortization of intangible assets and higher automobile, occupancy and interest
costs.
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6
CONSOLIDATED STATEMENTS OF INCOME
Crawford & Company
IN THOUSANDS
OF $ EXCEPT
For the years ended December 31, 1996, 1995 and 1994 1996 1995 1994 SHARE AND PER
- ---------------------------------------------------------------------------------------------------------- SHARE DATA
Revenues $ 633,625 $ 607,577 $ 587,781
-------------------------------------------
Costs and Expenses:
Costs of services provided, less
reimbursed expenses of $33,218
in 1996, $34,025 in 1995 and
$31,751 in 1994 451,512 439,029 421,047
Selling, general and
administrative expenses 110,143 108,168 98,683
-------------------------------------------
561,655 547,197 519,730
-------------------------------------------
Income Before Income Taxes 71,970 60,380 68,051
Income Taxes 29,160 24,360 27,450
-------------------------------------------
Net Income $ 42,810 $ 36,020 $ 40,601
-------------------------------------------
Per Share Amounts:
Net income $ 0.84 $ 0.69 $ 0.76
-------------------------------------------
Cash Dividends Per Share:
Class A Common Stock $ 0.40 $ 0.39 $ 0.37
-------------------------------------------
Class B Common Stock $ 0.39 $ 0.36 $ 0.33
-------------------------------------------
Weighted Average
Shares Outstanding 51,032,111 52,277,138 53,585,244
-------------------------------------------
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23
-
The accompanying notes are an integral part of these statements.
7
CONSOLIDATED BALANCE SHEETS
Crawford & Company
December 31, 1996 and 1995 1996 1995
- ----------------------------------------------------------------------------------------------- IN THOUSANDS
ASSETS OF $
Current Assets:
Cash and cash equivalents $ 55,485 $ 40,802
Short-term investments, at fair value - 5,596
Accounts receivable, less allowance for doubtful
accounts of $11,692 in 1996 and $10,303 in 1995 112,975 111,636
Unbilled revenues, at estimated billable amounts 68,593 60,486
Prepaid income taxes 2,677 6,115
Prepaid expenses and other current assets 7,166 9,745
----------------------------------
Total current assets 246,896 234,380
----------------------------------
Property and Equipment, at cost:
Furniture and fixtures 52,123 52,504
Data processing equipment 51,368 48,607
Automobiles 2,332 2,169
Buildings and improvements 15,979 15,928
Land 2,099 2,099
----------------------------------
123,901 121,307
Less accumulated depreciation and amortization (92,264) (84,859)
----------------------------------
Net property and equipment 31,637 36,448
----------------------------------
Other Assets:
Intangible assets arising from acquisitions,
less accumulated amortization of $8,768 in
1996 and $7,596 in 1995 52,266 55,731
Prepaid pension obligation 41,405 34,243
Other 5,881 6,181
----------------------------------
Total other assets 99,552 96,155
----------------------------------
$378,085 $366,983
==================================
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24
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The accompanying notes are an integral part of these balance sheets.
8
CONSOLIDATED BALANCE SHEETS
Crawford & Company
December 31, 1996 and 1995 1996 1995
- ------------------------------------------------------------------------------------------------ IN THOUSANDS
OF $
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Short-term borrowings $ 8,437 $ 10,154
Accounts payable 13,329 12,366
Accrued compensation and related costs 30,811 26,764
Other accrued liabilities 32,645 29,394
Deferred revenues 16,300 15,504
Current installments of long-term debt 9,130 872
----------------------------------------
Total current liabilities 110,652 95,054
----------------------------------------
Noncurrent Liabilities:
Long-term debt, less current installments 376 9,412
Deferred income taxes 13,810 14,854
Deferred revenues 12,902 10,498
Postretirement medical benefit obligation 8,037 7,938
Self-insured risks 8,172 7,347
Other 2,600 1,020
----------------------------------------
Total noncurrent liabilities 45,897 51,069
----------------------------------------
Shareholders' Investment:
Class A Common Stock, $1.00 par value;
50,000,000 shares authorized; 24,392,393 and
25,844,979 shares issued in 1996 and 1995,
respectively 24,392 25,845
Class B Common Stock, $1.00 par value;
50,000,000 shares authorized; 25,718,919 and
25,946,595 shares issued in 1996 and 1995,
respectively 25,719 25,947
Retained earnings 173,708 172,030
Cumulative translation adjustment (2,283) (2,962)
----------------------------------------
Total shareholders' investment 221,536 220,860
----------------------------------------
$ 378,085 $ 366,983
----------------------------------------
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9
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
Crawford & Company
IN THOUSANDS
For the years ended December 31, 1996, 1995 and 1994 OF $
- -----------------------------------------------------------------------------------------------------
Common Stock Additional Cumulative
Class A Class B Paid-In Retained Translation
Non-voting Voting Capital Earnings Adjustment
Balance at 12/31/93
as originally reported $18,015 $18,015 $5,445 $168,944 $(2,606)
Restatement for stock
split in 1997 9,008 9,008 (18,016)
-------------------------------------------------------------------
Balance at 12/31/93
as restated 27,023 27,023 5,445 150,928 (2,606)
Net income 40,601
Translation adjustment (42)
Cash dividends paid (18,941)
Shares repurchased (911) (713) (5,969) (9,331)
Stock options
exercised, net 62 60 524
-------------------------------------------------------------------
Balance at 12/31/94 26,174 26,370 -- 163,257 (2,648)
Net income 36,020
Translation adjustment (314)
Cash dividends paid (19,541)
Shares repurchased (416) (501) (793) (7,706)
Stock options
exercised, net 87 78 793
-------------------------------------------------------------------
Balance at 12/31/95 25,845 25,947 -- 172,030 (2,962)
Net income 42,810
Translation adjustment 679
Cash dividends paid (20,095)
Shares repurchased (1,623) (335) (1,323) (21,037)
Stock options
exercised, net 170 107 1,323
-------------------------------------------------------------------
Balance at 12/31/96 $24,392 $25,719 -- $173,708 $(2,283)
===================================================================
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26
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The accompanying notes are an integral part of these statements.
10
CONSOLIDATED STATEMENTS OF CASH FLOWS
Crawford & Company
For the years ended December 31, 1996, 1995 and 1994 1996 1995 1994 IN THOUSANDS
- ------------------------------------------------------------------------------------------------------------------ OF $
Cash Flows From Operating Activities:
Net income $ 42,810 $ 36,020 $ 40,601
Reconciliation of net income to net cash
provided by operating activities:
Depreciation and amortization 15,716 16,865 14,912
Deferred income taxes 2,394 5,205 210
Loss on disposal of risk control unit 1,560 -- --
Loss on sales of property and equipment 434 928 179
Changes in operating assets and liabilities,
net of effects of acquisitions:
Short-term investments 5,596 13,170 10,414
Accounts receivable, net 5,231 (6,392) (8,028)
Unbilled revenues (4,586) (1,172) 1,967
Prepaid or accrued income taxes (1,124) (462) 4,038
Accounts payable and accrued liabilities 10,383 (2,368) 7,006
Deferred revenues 1,897 188 2,767
Prepaid expenses and other (9,328) (14,681) (1,929)
-------------------------------------------------
Net cash provided by operating activities 70,983 47,301 72,137
-------------------------------------------------
Cash Flows From Investing Activities:
Acquisitions of property and equipment (7,473) (12,575) (11,769)
Net assets of companies acquired, excluding cash (3,329) (4,998) (24,918)
Proceeds from sales of property and equipment 350 137 241
-------------------------------------------------
Net cash used in investing activities (10,452) (17,436) (36,446)
-------------------------------------------------
Cash Flows From Financing Activities:
Dividends paid (20,095) (19,541) (18,941)
Repurchase of common stock (24,318) (9,416) (16,924)
Issuance of common stock 1,600 958 646
Increase (decrease) in short-term borrowings (2,340) 684 704
Decrease in long-term debt (677) (827) (2,170)
-------------------------------------------------
Net cash used in financing activities (45,830) (28,142) (36,685)
-------------------------------------------------
Effect of exchange rate changes on cash and cash
equivalents (18) 111 (149)
-------------------------------------------------
Increase (Decrease) in Cash and Cash Equivalents 14,683 1,834 (1,143)
Cash and Cash Equivalents at Beginning of Year 40,802 38,968 40,111
-------------------------------------------------
Cash and Cash Equivalents at End of Year $ 55,485 $ 40,802 $ 38,968
=================================================
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27
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The accompanying notes are an integral part of these statements.
11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31,1996, 1995 and 1994
1. SUMMARY OF MAJOR ACCOUNTING AND REPORTING POLICIES
Nature of Operations
The Company is a worldwide diversified service firm which provides claims
services and risk management information services to insurance companies,
self-insured corporations and governmental entities. The majority of the
Company's revenues are derived from domestic claims services.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the
Company and its subsidiaries after elimination of all significant intercompany
transactions.
The financial statements of the Company's international claims adjusting firm,
Crawford & Company International, Inc. (CCI), are included in the Company's
consolidated financial statements on a delayed basis in order to provide
sufficient time for accumulation of CCI's worldwide results. This reporting
delay, previously three months, was changed to two months during 1995.
Accordingly, the Company's December 31, 1996 and 1995 consolidated financial
statements reflect the financial position of CCI as of October 31, 1996 and
1995, respectively, and the results of CCI's operations and cash flows for the
twelve-month period ended October 31, 1996, the thirteen-month period ended
October 31, 1995, and the twelve-month period ended September 30, 1994. This
change had no material effect on the Company's financial position, results of
operations or cash flows.
Foreign Currency Translation
The financial statements of the Company's foreign subsidiaries are translated
into U.S. dollars at current exchange rates. Resulting translation adjustments
are accumulated as a component of shareholders' investment and excluded from net
income.
Cash Flows
The Company considers all highly liquid investments purchased with a maturity of
three months or less to be cash equivalents for purposes of the statements of
cash flows.
Income Taxes
The Company accounts for certain income and expense items differently for
financial reporting and income tax purposes. Provisions for deferred taxes are
made in recognition of these temporary differences. The most significant
differences result from prepayment of pension costs, the use of accelerated
depreciation methods, and deferred recognition of unbilled revenues for income
tax purposes; and deferred revenue, self-insurance, employee compensation, and
receivables valuation reserves provided for financial reporting purposes.
Net Income Per Share
Net income per share is computed based on the weighted average number of total
common shares outstanding of Class A and Class B during the respective years.
The effect of common stock equivalents is less than 3% dilutive and, therefore,
is not included in the computation.
Fair Value of Financial Instruments
The fair value of financial instruments classified as current assets or
liabilities including cash and cash equivalents, receivables and accounts
payable approximate carrying value due to the short-term maturity of the
instruments. The fair value of short-term and long-term debt approximates
carrying value based on their effective interest rates compared to current
market rates.
Short-Term Investments
The Company generally invests its excess cash in short-term debt securities.
These securities are reported at their estimated fair value in the accompanying
financial statements, with unrealized holding gains and losses included in
earnings. Investments with maturities greater than three months are classified
as short-term investments. Net unrealized holding gains of $11,000 and $277,000
and net unrealized holding losses of $288,000 were recognized during 1996, 1995
and 1994, respectively.
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28
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12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31,1996, 1995 and 1994
Property and Depreciation
The Company depreciates the cost of property and equipment over the estimated
useful lives of the related assets. The estimated useful lives and depreciation
methods for the principal property and equipment classifications are as follows:
Estimated
Classification Useful Lives Method
- -----------------------------------------------------------------------------
Straight-line
Furniture and and double-
fixtures 3-10 years declining balance
Data processing
equipment 3-5 years Straight-line
Automobiles 3-4 years Straight-line
Buildings and
improvements 7-40 years Straight-line
Maintenance and repairs are charged to expense as incurred. Renewals and
betterments are capitalized. The cost of property retired or sold and the
related accumulated depreciation are removed from the applicable accounts, and
the resulting gains and losses are reflected in the consolidated statements of
income.
Revenue Recognition
Revenue is recognized in unbilled revenues as services are provided. Deferred
revenues represent the unearned portion of fees derived from certain annual
fixed-rate claim service agreements.
Management's Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Self-Insured Risks
The Company self-insures certain insurable risks consisting primarily of
professional liability, employee medical and disability, workers compensation
and auto liability.
Insurance coverage is obtained for catastrophic property and casualty exposures
(including professional liability on a claims-made basis), as well as those
risks required to be insured by law or contract. Provision for claims under the
self-insured program is recorded based on the Company's estimate of the
aggregate liability for claims incurred. At December 31, 1996 and 1995, accrued
self-insured risks totaled $16,305,000 and $15,185,000, respectively, including
current liabilities of $8,133,000 and $7,838,000, respectively.
Industry Concentration and Major Customer
Substantial portions of the Company's revenues and accounts receivable are
derived from the property and casualty insurance industry. Revenues from
services provided to an insurance holding company and its subsidiaries
approximated 12% of consolidated revenues in 1995 and 14% in 1994. Such revenues
were less than 10% in 1996.
Reclassification
Costs associated with the Company's distributed branch computer network totaling
$19,843,000 were reclassified from selling, general and administrative expenses
to costs of services provided in the 1994 consolidated statement of income.
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29
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13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31,1996, 1995 and 1994
2. RETIREMENT PLANS
The Company and its subsidiaries sponsor various defined contribution and
defined benefit retirement plans covering substantially all employees. Employer
contributions under the Company's defined contribution plans are determined
annually, based on employee contributions, a percentage of each covered
employee's compensation, and the profitability of the Company. The cost of these
plans totaled $5,900,000, $3,493,000 and $4,216,000 in 1996, 1995 and 1994,
respectively.
Benefits payable under the Company's defined benefit plans are generally based
on career compensation. The Company's funding policy is to make cash
contributions in amounts sufficient to maintain the plans on an actuarially
sound basis, but not in excess of deductible amounts permitted under federal
income tax regulations. Plan assets are invested primarily in equity and fixed
income securities.
Pension expense related to the defined benefit plans in 1996, 1995 and 1994
included the following components:
1996 1995 1994
- -----------------------------------------------------------------------------------------------------
in thousands of dollars
Service costs of benefits $ 10,118 $ 9,160 $ 8,832
Interest costs on projected benefit obligations 16,111 14,673 12,711
Actual return on plan assets (17,914) (24,183) 4,211
Net amortization and deferrals 1,351 10,572 (16,749)
-------------------------------------------
Pension expense $ 9,666 $ 10,222 $ 9,005
===========================================
The following schedule reconciles the funded status of the plans with amounts
reported in the Company's balance sheets at December 31, 1996 and 1995:
1996 1995
- -----------------------------------------------------------------------------------------
in thousands of dollars
Accumulated benefit obligation at September 30:
Vested portion $183,423 $167,527
Nonvested portion 12,174 12,607
-------------------------
195,597 180,134
Effect of projected future compensation levels 26,443 27,360
-------------------------
Projected benefit obligation at September 30 222,040 207,494
Less fair market value of plan assets at September 30 (222,533) (199,680)
-------------------------
Unfunded projected benefit obligation (493) 7,814
Contributions made in fourth quarter (2,000) (2,300)
Unrecognized net transition asset 397 477
Unrecognized net loss (36,393) (37,420)
-------------------------
Net prepaid pension cost (38,489) (31,429)
Less pension obligation included in other accrued liabilities (2,916) (2,814)
Prepaid pension included in other assets $(41,405) $(34,243)
=========================
The discount rate and rate of increase in future compensation levels used in
determining the projected benefit obligations ranged from 7.5% to 8% and 5% to
5.5%, respectively, at September 30, 1996 and 1995. The expected long-term rate
of return on plan assets used in determining net periodic pension costs ranged
from 8% to 9.25% in both years.
- -
30
- -
14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31,1996, 1995 and 1994
3. POSTRETIREMENT MEDICAL BENEFITS
Certain retirees and a fixed number of long-term employees are entitled to
receive postretirement medical benefits under the Company's various medical
benefit plans. Net postretirement medical benefit expense for 1996 and 1995
includes the following components:
1996 1995
- ------------------------------------------------------------------------------------------------
in thousands of dollars
Service cost of benefits $ 40 $ 40
Interest cost on Accumulated Postretirement Benefit Obligation (APBO) 594 594
-----------------
$ 634 $634
=================
The APBO at December 31, 1996 and 1995 was comprised of the following:
1996 1995
- ------------------------------------------------------------------------------------------------
in thousands of dollars
Retirees $4,925 $5,099
Eligible active participants 1,197 1,466
Other active participants 579 1,491
------------------
6,701 8,056
Unrecognized net gain (loss) 1,336 (118)
------------------
Postretirement Medical Benefit Obligation recognized in balance sheets $8,037 $7,938
==================
The discount rate used in determining the APBO was 7.5% for 1996 and 1995. The
assumed rate of increase in the per capita costs of covered healthcare benefits
(the healthcare cost trend rate) was 8.5% in 1996, decreasing gradually to 5.0%
by the year 2003; and 12% in 1995, decreasing gradually to 6% by the year 2004.
The effect of increasing the healthcare cost trend rate by one percentage point
in each year would increase the APBO, which is unfunded, by approximately
$781,000 and the total service and interest cost components of the 1996 and 1995
net postretirement benefit cost by approximately $60,000 and $76,000,
respectively.
4. INTANGIBLE ASSETS
Other assets include the following intangible assets (net of amortization)
arising from acquisitions:
1996 1995
- -------------------------------------------------------------------------------------------
in thousands of dollars
Amortized over fifteen years $ 969 $ 1,050
Amortized over twenty years 2,484 4,460
Amortized over forty years 48,813 50,221
--------------------
$ 52,266 $ 55,731
====================
Goodwill in excess of associated expected operating cash flows is considered to
be impaired and is written down to fair value.
-
31
-
15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31,1996, 1995 and 1994
5. INCOME TAXES
The provisions for income taxes consist of the following:
1996 1995 1994
- ------------------------------------------------------------------------------------------
in thousands of dollars
Currently payable $26,766 $19,155 $27,240
Current deferred 3,471 (1,442) 703
Noncurrent deferred (1,077) 6,647 (493)
----------------------------------------
$29,160 $24,360 $27,450
========================================
Cash payments for income taxes were $28,195,000 in 1996, $18,571,000 in 1995 and
$22,796,000 in 1994.
The provisions for income taxes are reconciled to the federal statutory rate of
35% in 1996, 1995 and 1994, as follows:
1996 1995 1994
- ------------------------------------------------------------------------------------------
in thousands of dollars
Federal income taxes at statutory rate $25,190 $21,133 $23,818
State income taxes, net of federal benefit 2,807 2,512 3,079
Other 1,163 715 553
-----------------------------------------
$29,160 $24,360 $27,450
=========================================
The provisions for income taxes include foreign income taxes of $1,641,000 in
1996, $2,541,000 in 1995 and $1,831,000 in 1994. The Company does not provide
for additional U.S. and foreign income taxes on undistributed earnings
considered to be permanently reinvested in its foreign subsidiaries. At December
31, 1996, such undistributed earnings totaled $14,424,000.
Deferred income taxes consist of the following at December 31, 1996 and 1995:
1996 1995
- -----------------------------------------------------------------------------------------
in thousands of dollars
Accounts receivable reserves $ 1,019 $ 884
Accrued compensation 4,844 4,040
Self-insured risks 5,648 6,901
Deferred revenues 11,159 10,401
Postretirement benefits 3,215 3,175
Other 3,965 2,427
-------------------------
Gross deferred tax assets 29,850 27,828
-------------------------
Unbilled revenues 13,967 10,862
Depreciation and amortization 6,908 7,820
Prepaid pension obligation 19,714 17,706
Other 394 179
-------------------------
Gross deferred tax liabilities 40,983 36,567
-------------------------
Net deferred tax liability (11,133) (8,739)
Less noncurrent net deferred tax liability (13,810) (14,854)
-------------------------
Current net deferred tax asset $ 2,677 $ 6,115
=========================
- -
32
- -
16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31,1996, 1995 and 1994
6. LEASE COMMITMENTS AND OBLIGATIONS
The Company and its subsidiaries lease office space and certain computer
equipment under operating leases. In addition, the Company leases a major
portion of its automobile fleet under twelve-month operating leases that require
the Company to guarantee specified residual values and monthly rental payments
for up to two months after the end of the lease term. License and maintenance
costs related to the leased vehicles are paid by the Company. Rental expense for
all operating leases was $47,119,000 in 1996, $49,122,000 in 1995 and
$46,512,000 in 1994, including rental expense for automobile leases of
$11,551,000 in 1996, $13,531,000 in 1995 and $12,474,000 in 1994.
The Company also leases certain computer and office equipment under capital
leases with terms ranging from 24 to 60 months. The Company incurred $162,000 of
such capital lease obligations in 1996, none in 1995 and $60,000 in 1994. These
transactions represent noncash investing and financing activities and
consequently have been excluded from the accompanying consolidated statements of
cash flows. At December 31, 1996, future minimum payments under capital leases
and non-cancellable operating leases with remaining terms of more than 12 months
were as follows:
Capital Operating
Leases Leases
- ----------------------------------------------------------------------------------
in thousands of dollars
1997 $ 93 $25,219
1998 69 15,862
1999 51 10,529
2000 24 4,767
2001 -- 3,084
Subsequent to 2001 -- 8,027
------------------
Total minimum lease payments 237 $67,488
=======
Less amounts representing interest (33)
----
Present value of future minimum lease payments (See Note 9) $204
====
7. FOREIGN OPERATIONS
The Company provides claims services through branch offices located in
approximately 51 countries outside the United States. Selected financial
information as of December 31, 1996, 1995 and 1994 covering the Company's
foreign operations is presented below:
U.S. Foreign Consolidated
Operations Operations Totals
- ------------------------------------------------------------------------------
in thousands of dollars
1996
Revenues $555,257 $78,368 $633,625
Pretax Income 69,174 2,796 71,970
Total Assets 263,349 114,736 378,085
1995
Revenues $523,367 $84,210 $607,577
Pretax Income 57,368 3,012 60,380
Total Assets 256,417 110,566 366,983
1994
Revenues $541,969 $45,812 $587,781
Pretax Income 66,749 1,302 68,051
Total Assets 250,923 105,458 356,381
-
33
-
17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31,1996, 1995 and 1994
8. ACQUISITIONS AND DISPOSITIONS
On December 19, 1996, the Company entered into an agreement with Swiss
Reinsurance Company (Swiss Re) to merge both companies' claims services firms
outside the United States. Following the merger, the new entity was named
Crawford-THG Limited. The Company contributed its 100% owned subsidiary,
Crawford & Company International (CCI), with a net tangible book value of
approximately $38 million, and a fair market value of approximately $77.5
million, in exchange for a 60% controlling interest in Crawford-THG Limited.
Swiss Re contributed the non-U.S. operations of its 100% owned subsidiary,
Thomas Howell Group (THG), with a net tangible book value of approximately $25
million, and a fair market value of approximately $51.7 million, in exchange for
a 40% minority interest.
The merger was accounted for under the purchase method of accounting as a
partial sale of CCI to Swiss Re, and a partial acquisition of THG by the
Company. No gain or loss was recognized on the partial sale. The accompanying
consolidated financial statements exclude the financial position and operating
results of the Company's interest in THG at December 31,1996 due to the
two-month lag in reporting international results.
The Company also acquired 100% of Swiss Re's THG-Americas unit based in the
United States for approximately $3.3 million. The Company acquired assets with a
fair market value of approximately $13.7 million and assumed liabilities of
$10.4 million. This transaction was accounted for by the purchase method of
accounting. The December 31, 1996 consolidated financial statements reflect the
financial position of THG-Americas as of that date, but do not include any
revenues or expenses related to THG-Americas' operations.
The following table presents unaudited pro forma operating results as if these
acquisitions had occurred on January 1, 1995. The pro forma information is based
on historical information and does not necessarily reflect the actual results
that would have occurred nor is it necessarily indicative of future results of
operations of the combined enterprises.
1996 1995
- ----------------------------------------------------------------------------
Unaudited
(in thousands of dollars,
except per share data)
Revenues $757,335 $727,526
=====================
Net income before minority interest $ 44,764 $ 33,103
Minority interest in net (income) loss (2,717) 1,279
---------------------
Net income $ 42,047 $ 34,382
=====================
Net income per share $ 0.82 $ 0.66
=====================
The operating results of the acquired entities include certain non-recurring
expenses and restructuring charges. Had these charges not been incurred, pro
forma net income per share would have been $0.87 and $0.68 for 1996 and 1995,
respectively.
On January 31, 1997, the Company entered into an agreement to dispose of its
risk control unit. The 1996 consolidated statement of income includes a pre-tax
charge of $1,560,000 ($928,200 after tax or $.02 per share) related to this
transaction.
- -
34
- -
18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31,1996, 1995 and 1994
9. LONG-TERM DEBT AND SHORT-TERM BORROWINGS
Long-term debt at December 31, 1996 and 1995 consists of the following:
1996 1995
- -----------------------------------------------------------------------------------------------------
in thousands of dollars
Unsecured convertible loan notes issued in connection with
acquisition of foreign subsidiary; non interest bearing; due November 1997 $8,188 $ 7,900
6% loan notes issued in connection with acquisition of foreign subsidiary;
due October 1997 780 1,464
Loan note issued in connection with acquisition of foreign subsidiary;
non-interest bearing; due January 1997 57 526
Mortgage payable, secured by building 277 277
Capital leases (See Note 6) 204 117
--------------------
9,506 10,284
Less current installments (9,130) (872)
--------------------
$ 376 $ 9,412
====================
The convertible loan notes are convertible into Crawford Class A Common Stock
based on certain factors, including the market price of the stock and currency
exchange (approximately 810,000 and 775,000 shares based on the market price and
currency exchange at December 31, 1996 and 1995, respectively).
The Company maintains credit lines with banks in order to meet seasonal working
capital requirements or other financing needs that may arise. Short-term
borrowings totaled $8.4 million and $10.2 million at December 31, 1996 and 1995,
respectively. The weighted average interest rate on short-term borrowings during
1996 and 1995 was 5.6% and 6.9%, respectively.
10. COMMON STOCK
The Company has two classes of Common Stock outstanding, Class A Common Stock
and Class B Common Stock. These two classes of stock have essentially identical
rights, except that shares of Class A Common Stock generally do not have any
voting rights. Under the Company's Articles of Incorporation, amended as of July
24, 1990, the Board of Directors may pay higher (but not lower) cash dividends
on the non-voting Class A Common Stock than on the voting Class B Common Stock.
On February 4, 1997, the Board of Directors declared a three-for-two stock split
on both the Class A Common Stock and Class B Common Stock. The split is to be
effected in the form of a 50% stock dividend on the outstanding shares of each
Class, payable on March 25, 1997 to stockholders of record on March 11, 1997.
Had this action occurred on December 31, 1996, it would have resulted in the
issuance of 8,130,798 shares of Class A Common Stock and 8,572,973 shares of
Class B CommonStock, and the transfer of the par value of the additional shares
($8,130,798 for Class A shares and $8,572,973 for Class B shares) from retained
earnings to common stock. All share and per share amounts in the accompanying
financial statements and related notes have been restated to give retroactive
effect to this stock split.
-
35
-
19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31,1996, 1995 and 1994
Stock Compensation Plans
At December 31, 1996, the Company had four stock-based compensation plans which
are described below. The Company applies APB Opinion 25 and related
Interpretations in accounting for its plans. Accordingly, no compensation cost
has been recognized for its fixed stock option plans and its employee stock
purchase plan. Had compensation cost for these stock-based compensation plans
been determined based on the fair value at the grant dates for awards under
those plans consistent with Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation," the Company's net income and earnings per share
would have been reduced to the pro forma amounts indicated below:
1996 1995
- ---------------------------------------------------------------------
(in thousands of dollars,
except per share data)
Net Income As Reported $42,810 $36,020
Pro Forma 42,209 35,869
Earnings Per Share As Reported $0.84 $0.69
Pro Forma 0.83 0.69
Employee Stock Purchase Plan
Under the 1996 Employee Stock Purchase Plan, the Company is authorized to issue
up to 1,500,000 shares of its Class A Common Stock to its full time employees,
nearly all of whom are eligible to participate. Under the terms of the Plan,
employees can choose each year to have up to $21,000 of their annual earnings
withheld to purchase the Company's Class A Common Stock. The purchase price of
the stock is 85% of the lesser of the closing price for a share of stock on the
first day of the purchase period or the last day of the purchase period.
The fair value of each employee purchase right was estimated using the
Black-Scholes option pricing model with the following assumptions: dividend
yield of 2.6%; expected life of one year; expected volatility of 20%; and
risk-free interest rate of 5.0%. The weighted-average fair value of the purchase
rights granted in 1996 was $5.
Fixed Stock Option Plans
The Company has three fixed Employee Stock Option Plans. Under these plans which
were established in 1990, 1987, and 1981, the Company may grant options for up
to 2,857,500 shares, 675,000 shares, and 450,000 shares, respectively, of common
stock to key employees. The exercise price of each option equals the market
price of the Company's stock on the date of grant and an option's maximum term
is 10 years. Options are granted throughout the year under the 1990 Plan and
become exercisable according to provisions outlined in the Plan's terms and
conditions. The 1990 Plan includes options granted as incentive stock options
(ISO) and non-incentive stock options (Non-ISO). During 1996, 1,095,000 Non-ISOs
were granted to certain key executives. These options vest in full if the
Company's stock price closes above $17.73 for ten consecutive trading days and
expire in seven years. As of December 31, 1996, all options under the 1987 and
1981 Plans have been granted.
Options granted prior to the July 24, 1990 amendment to the Articles of
Incorporation are exercisable for one share of Class A Common Stock and one
share of Class B Common Stock. Options granted after July 24, 1990 are
exercisable for one share of Class A Common Stock.
The fair value of each option granted in 1996 and 1995 under the 1990 Plan is
estimated on the date of grant using the Black-Scholes option pricing model with
the following weighted-average assumptions: dividend yield of 2.6% for both
years; expected volatility of 20% for both years; risk-free interest rates of
5.6% (ISO) and 5.4% (Non-ISO) in 1996, and 7.6% (ISO) in 1995; and expected
option lives of 8.3 years (ISO) and 6.5 years (Non-ISO) in 1996, and 8.3 years
(ISO) in 1995.
A summary of the status of the Company's fixed stock option plans as of December
31, 1996, 1995, and 1994, and changes during the years ending on those dates is
as follows (in thousands of shares):
- -
36
- -
20
Notes to Consolidated Financial Statements
December 31,1996, 1995 and 1994
1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------------
Weighted- Weighted- Weighted-
Shares Average Shares Average Shares Average
Exercise Price Exercise Price Exercise Price
------------------------- -------------------------- ---------------------------
Class A Common Stock (Non-voting) Options
Outstanding, beginning of year 1,592 $11 1,536 $11 1,393 $12
Options granted 1,489 12 346 10 366 11
Options exercised (275) 9 (91) 6 (69) 6
Options forfeited (216) 11 (199) 12 (154) 14
----- ----- -----
Outstanding, end of year 2,590 12 1,592 11 1,536 12
===== ===== =====
Exercisable, end of year 560 647 709
===== ===== =====
Weighted-average fair value of options granted during the year
Incentive stock options $ 3 $ 3 --
Nonincentive stock options 3 -- --
Class B Common Stock (Voting) Options
Outstanding, beginning of year 344 $ 9 451 $ 8 538 $ 8
Options granted - - - - - -
Options exercised (206) 9 (80) 6 (65) 6
Options forfeited (6) 10 (27) 9 (22) 10
----- ----- -----
Outstanding, end of year 132 9 344 9 451 8
===== ===== =====
Exercisable, end of year 132 344 416
===== ===== =====
The following table summarizes information about fixed stock options outstanding
at December 31, 1996:
Options Outstanding Options Exercisable
- -------------------------------------------------------------------------------------------------------
Range of Number Weighted- Weighted- Number Weighted-
Exercise Outstanding Average Average Exercisable Average
Prices at 12/31/96 Remaining Exercise at 12/31/96 Exercise
Contractual Life Price Price
- ------------ -------------------------------------------------- ------------------------------
Class A Common Stock (Non-voting) Options
$ 4 to 8 49 2.1 years $ 6 48 $ 6
9 to 12 1,230 7.4 11 392 11
13 to 17 1,311 6.6 13 120 14
------ ----
$ 4 to 17 2,590 6.9 12 560 11
====== ====
Class B Common Stock (Voting) Options
$ 4 to 8 43 1.8 years $ 5 43 $ 5
9 to 11 89 3.1 10 89 10
---- ----
$ 4 to 11 132 2.7 9 132 9
==== ====
-
37
-
21
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders of Crawford & Company: [ARTHUR ANDERSON LOGO]
We have audited the consolidated balance sheets of CRAWFORD & COMPANY (a Georgia
corporation) and subsidiaries as of December 31, 1996 and 1995 and the related
consolidated statements of income, shareholders' investment, and cash flows for
each of the three years in the period ended December 31, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We did not audit the 1994 financial statements of certain foreign
operations, which statements reflect approximately 4% of consolidated revenues
in 1994. Those statements were audited by other auditors whose report has been
furnished to us, and our opinion, in so far as it relates to the amounts
included for those entities, is based solely on the report of other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Crawford & Company and
subsidiaries as of December 31, 1996 and 1995 and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1996 in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Atlanta, Georgia /S/ ARTHUR ANDERSON LLP
January 28, 1997
- -
38
- -
22
SELECTED FINANCIAL DATA
Crawford & Company
For the years ended December 31, 1996, 1995, 1994, 1993 and 1992
IN THOUSANDS
OF $ EXCEPT
1996 1995 1994 1993 1992 SHARE AND PER
- -------------------------------------------------------------------------------------------------------------- SHARE DATA
Revenues $ 633,625 $ 607,577 $ 587,781 $ 576,298 $ 597,745
Income Before
Accounting Changes 42,810 36,020 40,601 38,050 40,417
Income Per Share Before
Accounting Changes 0.84 0.69 0.76 0.71 0.75
Total Assets 378,085 366,983 356,381 326,263 316,889
Long-Term Debt 376 9,412 9,962 734 1,806
Cash Dividends Per Share:
Class A Common Stock 0.40 0.39 0.37 0.35 0.31
Class B Common Stock 0.39 0.36 0.33 0.29 0.27
Weighted Average
Shares Outstanding 51,032,111 52,277,138 53,585,244 53,976,672 53,753,102
-
39
-
Note: All shares and per share amounts have been restated to reflect the
three-for-two stock split in 1997 (See Note 10).
Effective January 1, 1993, the Company adopted new accounting standards for
postretirement benefits other than pensions, other postemployment benefits,
and income taxes, by reflecting the cumulative effects of the changes in
income upon adoption.
23
QUARTERLY FINANCIAL DATA
Crawford & Company
Quarterly Financial Data (Unaudited), Dividend Information and Common Stock
Quotations
IN THOUSANDS
1996 1995 1994 OF $ EXCEPT
- ----------------------------------------------------------------------------------------- PER SHARE DATA
First Quarter:
Revenues $ 161,563 $ 148,649 $ 148,792
Income before income taxes 17,478 15,884 16,892
Net income 10,431 9,478 10,087
Net income per share 0.20 0.18 0.19
Cash dividends per share:
Class A Common Stock 0.1000 0.0967 0.0933
Class B Common Stock 0.0967 0.0900 0.0833
Common stock quotations:
Class A - High 11.09 10.50 11.83
Class A - Low 9.67 9.67 10.50
Class B - High 11.42 10.67 11.17
Class B - Low 10.00 9.75 10.09
Second Quarter:
Revenues $ 157,629 $ 150,863 $ 147,824
Income before income taxes 17,144 11,026 17,478
Net income 10,228 6,580 10,433
Net income per share 0.20 0.13 0.19
Cash dividends per share:
Class A Common Stock 0.1000 0.0967 0.0933
Class B Common Stock 0.0967 0.0900 0.0833
Common stock quotations:
Class A - High 11.42 11.67 11.42
Class A - Low 10.17 10.33 10.42
Class B - High 11.59 11.83 11.17
Class B - Low 10.33 10.50 9.92
- -
40
- -
The quotations listed in this table set forth the high and low closing prices
per share of Crawford & Company Class A Common Stock and Class B Common Stock,
respectively, as reported on the NYSE Composite Tape. All per share amounts and
common stock quotations have been restated to reflect the three-for-two stock
split in 1997 (See Note 10).
24
QUARTERLY FINANCIAL DATA
Crawford & Company
IN THOUSANDS
1996 1995 1994 OF $ EXCEPT
- ------------------------------------------------------------------------------------------ PER SHARE DATA
Third Quarter:
Revenues $154,897 $150,954 $149,051
Income before income taxes 18,189 15,806 18,806
Net income 10,855 9,431 10,776
Net income per share 0.22 0.18 0.20
Cash dividends per share:
Class A Common Stock 0.1000 0.0967 0.0933
Class B Common Stock 0.0967 0.0900 0.0833
Common stock quotations:
Class A - High 14.09 11.50 11.17
Class A - Low 11.00 9.83 10.33
Class B - High 14.09 11.75 10.92
Class B - Low 11.00 9.92 10.33
Fourth Quarter:
Revenues $159,536 $157,111 $142,114
Income before income taxes 19,159 17,664 14,875
Net income 11,296 10,531 9,305
Net income per share 0.22 0.20 0.18
Cash dividends per share:
Class A Common Stock 0.1000 0.0967 0.0933
Class B Common Stock 0.0967 0.0900 0.0833
Common stock quotations:
Class A - High 14.50 10.75 10.50
Class A - Low 13.09 10.17 9.67
Class B - High 15.83 11.09 10.67
Class B - Low 13.17 10.17 9.67
-
41
-
The approximate number of record holders of the Company's stock as of February
3, 1997: Class A -- 1,453 and Class B -- 1,121.