ATLANTA, Aug. 8, 2011 /PRNewswire/ -- Crawford &
Company (www.crawfordandcompany.com) (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 second quarter ended June 30, 2011.
Consolidated Results
Second quarter 2011 consolidated revenues before reimbursements
totaled $291.7 million, up 22% over
$238.2 million in the 2010 second
quarter. Second quarter 2011 net income attributable to
Crawford & Company was $13.5
million, compared with a net loss of $2.5 million recorded in the 2010 second quarter.
Second quarter 2011 diluted earnings per share were $0.25 compared with the loss per share of
$(0.05) reported in the prior-year
quarter.
|
|
|
Quarter
Ended
June
30,
|
Quarter
Ended
June
30,
|
|
|
2011
|
2010
|
|
Reported income (loss) per
share
|
$
|
0.25
|
$
|
(0.05)
|
|
Add:
|
|
|
|
Goodwill impairment
charge
|
--
|
0.13
|
|
Restructuring and other
costs
|
--
|
0.02
|
|
Adjusted diluted earnings
per share on a non-GAAP basis
|
$
|
0.25
|
$
|
0.10
|
|
|
|
|
|
|
|
|
During the 2010 second quarter, the Company recorded a goodwill
impairment charge of $7.3 million, or
($0.13) per share. Also during the
2010 second quarter, the Company incurred severance costs of
$1.2 million after related income
taxes, or ($0.02) per share. Earnings
per share, and the related non-GAAP adjusted diluted earnings per
share, including a reconciliation for the impact of the special
items in the 2010 period, are set out in the table above.
The Company's consolidated cash and cash equivalents position as
of June 30, 2011 totaled $37.2 million, compared with $38.2 million at June 30,
2010 and $93.5 million at
December 31, 2010. Crawford used $33.2
million of cash in operations during the 2011 year-to-date
period, compared with $29.6 million
during the comparable 2010 period. The $3.6
million increase in cash used in operations was due to
increases in unbilled revenues and accounts receivable, and
increased contributions to the Company's frozen U.S. defined
benefit pension plan, which were partially offset by higher net
income.
Results by Segment
Americas
Americas revenues before reimbursements were $95.7 million in the second quarter of 2011,
increasing 16% from $82.3 million in
the 2010 second quarter. During the 2011 second quarter compared
with the 2010 second quarter, the U.S. dollar weakened against
foreign currencies in the segment, resulting in a positive exchange
rate impact to revenues of $2.9
million. Excluding the positive impact of exchange rate
changes, Americas revenues would have been $92.9 million in the 2011 second quarter.
Revenues generated by the Company's catastrophe adjuster group in
the U.S. were $10.0 million in the
2011 second quarter, increasing from $3.6
million in the 2010 period. Americas operating
expenses for the 2011 second quarter increased by $8.5 million in U.S. dollars, an 11% increase,
and increased by 8% on a constant dollar basis, compared with the
comparable 2010 period. Operating earnings in the 2011 second
quarter in the segment increased to $10.2
million, or an operating margin of 11%, compared with
operating earnings of $5.3 million,
or 6% of revenues in the 2010 second quarter.
EMEA/AP
Second quarter 2011 revenues before reimbursements for the
EMEA/AP segment increased 24% to $87.3
million from $70.4 million for
the same period in 2010. During the 2011 second quarter compared
with the 2010 second quarter, the U.S. dollar weakened against most
major foreign currencies, resulting in a positive exchange rate
impact to revenues of $5.8 million.
Excluding the positive impact of exchange rate changes, EMEA/AP
revenues would have been $81.5
million in the 2011 second quarter. EMEA/AP operating
expenses for the 2011 second quarter increased by $14.5 million in U.S. dollars, a 22% increase,
and increased by 14% on a constant dollar basis, compared with the
comparable 2010 period. Operating earnings increased to
$7.6 million in the 2011 second
quarter, up 45% from 2010 second quarter operating earnings of
$5.3 million. The related operating
margin was 9% for the second quarter of 2011 and 7% in the
comparable 2010 period.
Broadspire
Revenues before reimbursements from the Broadspire segment were
$57.9 million in the 2011 second
quarter, down 5% from $61.2 million
in the 2010 second quarter. Broadspire had an operating loss of
$3.1 million in the 2011 second
quarter, or a negative operating margin of 5%, compared with an
operating loss of $1.8 million, or a
negative operating margin of 3%, in the prior year period. These
declines were primarily due to lower revenues from existing clients
due to a lengthening in the duration of certain workers'
compensation claims and a shift in mix to lower-margin claims,
partially as a result of a special project for one of our
clients.
Legal Settlement Administration
Legal Settlement Administration revenues before reimbursements
were $50.8 million in the 2011 second
quarter, compared with $24.3 million
in the 2010 second quarter, primarily the result of revenues from
the special project that began in the summer of 2010.
Operating earnings totaled $14.8
million in the 2011 second quarter, or 29% of revenues,
compared with $5.6 million, or 23% of
revenues, in the prior-year period. The segment's awarded project
backlog totaled approximately $75.2
million at June 30, 2011 as
compared with $56.5 million at
June 30, 2010.
Management's Comments
Mr. Jeffrey T. Bowman, chief
executive officer of Crawford & Company, stated, "We are
pleased with the improvement in our second quarter 2011 operating
results which reflect double digit revenue growth increases in the
Americas and EMEA/AP, primarily as a result of a surge in
weather-related claims activity, and the continued strong
performance in our Legal Settlement Administration segment.
"The Americas segment rebounded nicely from a slow start in the
first quarter driven by weather-related claims increases in the
U.S. and Canada. In the
U.S., our catastrophe adjuster revenues exceeded $10 million in a quarter for the first time since
the 2008 fourth quarter. The strong contribution margins from this
revenue surge helped drive the segment's operating margin to 11%
for the 2011 second quarter.
"Our EMEA/AP segment was also a solid contributor, with revenues
increasing 24% over the 2010 second quarter and operating earnings
up 45% as compared to the 2010 second quarter. This part of our
business continues to be positively impacted by a substantial
increase in weather-related claims activity in our key United Kingdom and Australian markets.
"In our Legal Settlement Administration segment, we continue to
see strong performance due to our engagement in the Gulf Coast
Claims Facility (GCCF) special project. We have a strong backlog of
awarded projects in this segment and expect the special project
activity to continue through 2011, although at a reduced pace
compared to current levels. We are excited about the
opportunities we see emerging in this and related markets.
"We continue to see persistent high levels of unemployment in
the U.S., which has put pressure on workplace-related claims
volumes affecting our Broadspire segment. In addition, we are
seeing the duration of certain workers' compensation claims
lengthening, and we are also experiencing changes in the mix of
claims we are handling, with a higher percentage of less complex
low-value claims. These factors are combining to put pressure on
the Broadspire business. We are actively addressing these issues
and focusing on business development opportunities in the
marketplace. We remain confident that we can improve the financial
profile of this operation over the remainder of 2011."
Mr. Bowman concluded, "Our overall results for the 2011 second
quarter continued to improve on our expectations. We are again
revising our guidance upward to reflect the strong second quarter
results and our increased visibility into the remainder of the
year. The Company's revised guidance includes a one-time after tax
credit of $5.8 million due to a
recovery in an arbitration from Platinum Equity Holdings related to
the acquisition of Broadspire. We are pleased all arbitration
matters related to that acquisition have now concluded, and we will
report this credit in our third quarter results. As we experienced
in the first half of the year, however, we expect industry
conditions to be challenging, particularly with employment levels
and market conditions in our Broadspire business. We will continue
to focus significant attention on this area with the goal to drive
market share expansion and operating efficiencies."
2011 Guidance
Crawford & Company revises and increases aspects of its
previously issued guidance for 2011 as follows:
- Consolidated revenues before reimbursements between
$1.07 billion and $1.10 billion.
- Consolidated operating earnings between $75.0 million and $83.0 million.
- Consolidated cash provided by operating activities between
$30.0 million and $35.0 million.
- After reflecting stock-based compensation expense, net
corporate interest expense, customer-relationship intangible asset
amortization expense, special credits, and income taxes, net income
attributable to shareholders of Crawford & Company on a GAAP
basis between $41.0 million and $46.5
million, or $0.75 to $0.85
diluted earnings per share.
- Before reflecting the special credit of $5.8 million net of tax, or $0.11 per share, related to an arbitration award,
net income attributable to shareholders of Crawford & Company
on a non-GAAP basis between $35.5 million
and $41.0 million, or $0.65 to
$0.75 diluted earnings per share.
Crawford & Company's management will host a conference call
with investors on Monday, August 8,
2011 at 3:00 p.m. EDT to
discuss earnings and other developments. The call will be recorded
and available for replay through August 15,
2011. You may dial 1-855-859-2056 (404-537-3406
international) to listen to the replay. The access code is
86077611. Alternatively, please visit our web site at
www.crawfordandcompany.com for a live audio web cast and related
financial presentation.
Further information regarding the Company's financial position,
operating results, and cash flows for the quarter and year-to-date
period ended June 30, 2011 is shown
on the attached unaudited condensed consolidated financial
statements.
In the normal course of business, our operating segments incur
certain out-of-pocket expenses that are thereafter reimbursed by
our clients. Under GAAP, these out-of-pocket expenses and
associated reimbursements are reported as revenues and expenses,
respectively, in our consolidated results of operations. In the
foregoing discussion and analysis of segment results of operations,
we do not include a gross up of segment revenues and expenses for
these pass-through reimbursed expenses. The amounts of reimbursed
expenses and related revenues offset each other in our results of
operations with no impact to our net income (loss) or operating
earnings (loss). A reconciliation of revenues before reimbursements
to consolidated revenues determined in accordance with GAAP is
self-evident from the face of the accompanying unaudited condensed
consolidated statements of operations.
Operating earnings is the primary financial performance measure
used by our senior management and chief operating decision maker
("CODM") to evaluate the financial performance of our operating
segments and make resource allocation decisions. Unlike net income,
our operating earnings measure is not a standard performance
measure found in GAAP. However, since it is our segment measure of
profitability presented in conformity with the Financial Accounting
Standards Board's ("FASB") Accounting Standards Codification
("ASC") Topic 280 "Segment Reporting," it is not considered a
non-GAAP financial measure requiring reconciliation pursuant to
Securities and Exchange Commission ("SEC") guidance contained in
Regulation G and Item 10(e) of Regulation S-K. We believe this
measure is useful to others in that it allows them to evaluate
segment operating performance using the same criteria our
management and CODM use. Operating earnings represent segment
earnings excluding income tax expense, net corporate interest
expense, amortization of customer-relationship intangible assets,
stock option expense, certain other gains and expenses, and certain
unallocated corporate and shared costs. Net income or loss
attributable to noncontrolling interests has also been removed from
operating earnings.
Income tax expense, net corporate interest expense, amortization
of customer-relationship intangible assets, and stock option
expense are recurring components of our net income or loss, but
they are not considered part of our segment operating earnings
because they are managed on a corporate-wide basis. Income tax
expense is based on statutory rates in effect in each of the
jurisdictions where we provide services, and vary throughout the
world. Net corporate interest expense results from capital
structure decisions made by management and affecting the Company as
a whole. Amortization expense relates to non-cash amortization
expense of customer-relationship intangible assets resulting from
business combinations. Stock option expense represents the non-cash
costs generally related to stock options and employee stock
purchase plan expenses which are not allocated to our operating
segments. None of these costs relate directly to the performance of
our services or operating activities and, therefore, are excluded
from segment operating earnings in order to better assess the
results of each segment's operating activities on a consistent
basis.
Certain other gains and expenses may arise from events (such as
expenses related to restructurings, losses on subleases, and
goodwill impairment charges) that are not allocated to any
particular segment since they historically have not regularly
impacted our performance and are not expected to impact our future
performance on a regular basis.
Following is a reconciliation of segment operating earnings
(loss) to net income (loss) attributable to Crawford & Company
on a GAAP basis and the related margins as a percentage of revenues
before reimbursements for all periods presented (in thousands,
except percentages):
|
|
|
Quarter
ended
|
|
Year-to-date
period ended
|
|
|
June
30,
2011
|
%
Margin
|
June
30,
2010
|
%
Margin
|
|
June
30,
2011
|
%
Margin
|
June
30,
2010
|
%
Margin
|
|
Operating Earnings
(Loss):
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$
|
10,195
|
11%
|
$
|
5,251
|
6%
|
|
$
|
13,309
|
7%
|
$
|
12,100
|
7%
|
|
EMEA/AP
|
7,627
|
9%
|
5,263
|
7%
|
|
14,779
|
9%
|
10,076
|
7%
|
|
Broadspire
|
(3,099)
|
(5)%
|
(1,772)
|
(3)%
|
|
(6,259)
|
(5)%
|
(4,105)
|
(3)%
|
|
Legal Settlement
Administration
|
14,758
|
29%
|
5,566
|
23%
|
|
31,756
|
29%
|
8,849
|
20%
|
|
Unallocated corporate and shared
costs
|
(4,043)
|
(1)%
|
(1,306)
|
(1)%
|
|
(4,393)
|
(1)%
|
(1,461)
|
--%
|
|
Deduct:
|
|
|
|
|
|
|
|
|
|
|
Restructuring and other
costs
|
--
|
--%
|
(1,987)
|
(1)%
|
|
--
|
--%
|
(4,650)
|
(1)%
|
|
Goodwill
impairment
|
--
|
--%
|
(7,303)
|
(3)%
|
|
--
|
--%
|
(7,303)
|
(2)%
|
|
Stock option
expense
|
(142)
|
--%
|
(187)
|
--%
|
|
(297)
|
--%
|
(391)
|
--%
|
|
Amortization
expense
|
(1,519)
|
(1)%
|
(1,499)
|
(1)%
|
|
(3,018)
|
(1)%
|
(2,999)
|
(1)%
|
|
Net corporate interest
expense
|
(4,118)
|
(1)%
|
(3,672)
|
(2)%
|
|
(8,254)
|
(1)%
|
(7,809)
|
(2)%
|
|
Provision for income
taxes
|
(6,005)
|
(2)%
|
(865)
|
--%
|
|
(12,042)
|
(2)%
|
(1,758)
|
--%
|
|
Net (income) loss
attributable to non-controlling interests
|
(185)
|
--%
|
(16)
|
--%
|
|
35
|
--%
|
(22)
|
--%
|
|
Net income (loss) attributable
to Crawford & Company
|
$
|
13,469
|
5%
|
$
|
(2,527)
|
(1)%
|
|
$
|
25,616
|
4%
|
$
|
527
|
--%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based in Atlanta, Georgia,
Crawford & Company (www.crawfordandcompany.com) is the world's
largest independent provider of claims management solutions to the
risk management and insurance industry as well as self-insured
entities, with an expansive global network serving clients in more
than 70 countries. The Crawford System of Claims Solutions(SM)
offers comprehensive, integrated claims services, business process
outsourcing and consulting services for major product lines
including property and casualty claims management, workers'
compensation claims and medical management, and legal settlement
administration. The Company's shares are traded on the NYSE under
the symbols CRDA and CRDB.
Other than voting rights, the Company's two classes of stock
have essentially identical rights, except that the Board of
Directors may pay greater or equal (but not lesser) cash dividends
on the Class A Common Stock than on the Class B Common Stock. In
addition, with respect to mergers or similar transactions, holders
of Class A Common Stock must receive the same type and amount of
consideration as holders of Class B Common Stock, unless approved
by the holders of 75% of the Class A Common Stock, voting as a
class.
This press release contains forward-looking statements,
including statements about the financial condition, results of
operations and earnings outlook of Crawford & Company.
Statements, both qualitative and quantitative, that are not
historical facts may be "forward-looking" statements as defined in
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve a number of risks and
uncertainties that could cause actual results to differ materially
from historical experience or Crawford & Company's present
expectations. Accordingly, no one should place undue reliance
on forward-looking statements, which speak only as of the date on
which they are made. Crawford & Company does not
undertake to update forward-looking statements to reflect the
impact of circumstances or events that may arise or not arise after
the date the forward-looking statements are made. For further
information regarding Crawford & Company, including factors
that could cause our actual financial condition, results or
earnings to differ from those described in any forward-looking
statements, please read Crawford & Company's reports filed with
the SEC and available at www.sec.gov or in the Investor Relations
section of Crawford & Company's website at
www.crawfordandcompany.com.
CRAWFORD
& COMPANY
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
Unaudited
|
|
(In
Thousands, Except Earnings Per Share Amounts and
Percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30,
|
2011
|
|
2010
|
% Change
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues Before
Reimbursements
|
$ 291,713
|
|
$ 238,151
|
22%
|
|
|
Reimbursements
|
22,369
|
|
17,835
|
25%
|
|
|
Total Revenues
|
314,082
|
|
255,986
|
23%
|
|
|
|
|
|
|
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of Services
Provided, Before Reimbursements
|
210,773
|
|
176,424
|
19%
|
|
|
Reimbursements
|
22,369
|
|
17,835
|
25%
|
|
|
Total Costs of
Services
|
233,142
|
|
194,259
|
20%
|
|
|
|
|
|
|
|
|
|
Selling, General, and
Administrative Expenses
|
57,163
|
|
50,411
|
13%
|
|
|
Corporate Interest
Expense, Net
|
4,118
|
|
3,672
|
12%
|
|
|
Restructuring and Other
Costs
|
-
|
|
1,987
|
nm
|
|
|
Goodwill Impairment
Charge
|
-
|
|
7,303
|
nm
|
|
|
Total Costs and
Expenses
|
294,423
|
|
257,632
|
14%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) before Income
Taxes
|
19,659
|
|
(1,646)
|
1,294%
|
|
|
Provision for Income
Taxes
|
6,005
|
|
865
|
594%
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
13,654
|
|
(2,511)
|
644%
|
|
|
Less: Net Income
Attributable to Noncontrolling Interests
|
185
|
|
16
|
1,056%
|
|
|
Net Income (Loss) Attributable
to Shareholders of Crawford & Company
|
$ 13,469
|
|
$ (2,527)
|
633%
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per Share -
Basic
|
$
0.25
|
|
$
(0.05)
|
600%
|
|
|
Earnings (Loss) Per Share -
Diluted
|
$
0.25
|
|
$
(0.05)
|
600%
|
|
|
|
|
|
|
|
|
|
Weighted-Average Shares Used to
Compute:
|
|
|
|
|
|
|
Basic Earnings (Loss) Per
Share
|
53,485
|
|
52,619
|
|
|
|
Diluted Earnings (Loss)
Per Share
|
53,940
|
|
52,619
|
|
|
|
|
|
|
|
|
|
|
Cash Dividends Per
Share
|
|
|
|
|
|
|
Class A and Class B Common
Stock
|
$
0.02
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
nm = not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
CRAWFORD
& COMPANY
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
Unaudited
|
|
(In
Thousands, Except Earnings Per Share Amounts and
Percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June
30,
|
2011
|
|
2010
|
% Change
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues Before
Reimbursements
|
$ 576,751
|
|
$ 474,417
|
22%
|
|
|
Reimbursements
|
41,439
|
|
33,622
|
23%
|
|
|
Total Revenues
|
618,190
|
|
508,039
|
22%
|
|
|
|
|
|
|
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of Services
Provided, Before Reimbursements
|
417,715
|
|
352,970
|
18%
|
|
|
Reimbursements
|
41,439
|
|
33,622
|
23%
|
|
|
Total Costs of
Services
|
459,154
|
|
386,592
|
19%
|
|
|
|
|
|
|
|
|
|
Selling, General, and
Administrative Expenses
|
113,159
|
|
99,378
|
14%
|
|
|
Corporate Interest
Expense, Net
|
8,254
|
|
7,809
|
6%
|
|
|
Restructuring and Other
Costs
|
-
|
|
4,650
|
nm
|
|
|
Goodwill Impairment
Charge
|
-
|
|
7,303
|
nm
|
|
|
Total Costs and
Expenses
|
580,567
|
|
505,732
|
15%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before Income
Taxes
|
37,623
|
|
2,307
|
1,531%
|
|
|
Provision for Income
Taxes
|
12,042
|
|
1,758
|
585%
|
|
|
|
|
|
|
|
|
|
Net Income
|
25,581
|
|
549
|
4,560%
|
|
|
Less: Net (Loss) Income
Attributable to Noncontrolling Interests
|
(35)
|
|
22
|
(259%)
|
|
|
Net Income Attributable to
Shareholders of Crawford & Company
|
$ 25,616
|
|
$
527
|
4,761%
|
|
|
|
|
|
|
|
|
|
Earnings Per Share -
Basic
|
$
0.48
|
|
$
0.01
|
4,700%
|
|
|
Earnings Per Share -
Diluted
|
$
0.48
|
|
$
0.01
|
4,700%
|
|
|
|
|
|
|
|
|
|
Weighted-Average Shares Used to
Compute:
|
|
|
|
|
|
|
Basic Earnings Per
Share
|
53,284
|
|
52,504
|
|
|
|
Diluted Earnings Per
Share
|
53,764
|
|
52,949
|
|
|
|
|
|
|
|
|
|
|
Cash Dividends Per
Share
|
|
|
|
|
|
|
Class A and Class B Common
Stock
|
$
0.04
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
nm = not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
CRAWFORD
& COMPANY
|
|
SUMMARY
RESULTS BY OPERATING SEGMENT
|
|
Three Months
Ended June 30,
|
|
Unaudited
|
|
(In
Thousands, Except Percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
%
|
EMEA/AP
|
%
|
Broadspire
|
%
|
Legal
Settlement Administration
|
%
|
|
|
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues Before
Reimbursements
|
$
95,732
|
$
82,299
|
16%
|
$
87,271
|
$
70,406
|
24%
|
$
57,910
|
$
61,180
|
(5)%
|
$
50,800
|
$
24,266
|
109%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation &
Benefits
|
57,844
|
52,640
|
10%
|
57,491
|
47,976
|
20%
|
34,396
|
35,396
|
(3)%
|
19,017
|
10,740
|
77%
|
|
% of Revenues Before
Reimbursements
|
60%
|
64%
|
|
66%
|
68%
|
|
59%
|
58%
|
|
37%
|
44%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Other than
Reimbursements,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation &
Benefits
|
27,693
|
24,408
|
13%
|
22,153
|
17,167
|
29%
|
26,613
|
27,556
|
(3)%
|
17,025
|
7,960
|
114%
|
|
% of Revenues Before
Reimbursements
|
29%
|
30%
|
|
25%
|
25%
|
|
46%
|
45%
|
|
34%
|
33%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating
Expenses
|
85,537
|
77,048
|
11%
|
79,644
|
65,143
|
22%
|
61,009
|
62,952
|
(3)%
|
36,042
|
18,700
|
93%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings (Loss)
(1)
|
$
10,195
|
$
5,251
|
94%
|
$
7,627
|
$
5,263
|
45%
|
$
(3,099)
|
$
(1,772)
|
(75)%
|
$
14,758
|
$
5,566
|
165%
|
|
% of Revenues Before
Reimbursements
|
11%
|
6%
|
|
9%
|
7%
|
|
(5)%
|
(3)%
|
|
29%
|
23%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended June 30,
|
|
Unaudited
|
|
(In
Thousands, Except Percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas
|
%
|
EMEA/AP
|
%
|
Broadspire
|
%
|
Legal
Settlement Administration
|
%
|
|
|
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
2011
|
2010
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues Before
Reimbursements
|
$
181,049
|
$
167,168
|
8%
|
$
167,046
|
$
139,182
|
20%
|
$
117,706
|
$
123,143
|
(4)%
|
$
110,950
|
$
44,924
|
147%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation &
Benefits
|
113,850
|
106,609
|
7%
|
110,108
|
96,027
|
15%
|
69,110
|
72,575
|
(5)%
|
38,661
|
20,816
|
86%
|
|
% of Revenues Before
Reimbursements
|
63%
|
64%
|
|
66%
|
69%
|
|
59%
|
59%
|
|
35%
|
46%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Other than
Reimbursements,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation &
Benefits
|
53,890
|
48,459
|
11%
|
42,159
|
33,079
|
27%
|
54,855
|
54,673
|
0%
|
40,533
|
15,259
|
166%
|
|
% of Revenues Before
Reimbursements
|
30%
|
29%
|
|
25%
|
24%
|
|
46%
|
44%
|
|
36%
|
34%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating
Expenses
|
167,740
|
155,068
|
8%
|
152,267
|
129,106
|
18%
|
123,965
|
127,248
|
(3)%
|
79,194
|
36,075
|
120%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings (Loss)
(1)
|
$
13,309
|
$
12,100
|
10%
|
$
14,779
|
$
10,076
|
47%
|
$
(6,259)
|
$
(4,105)
|
(52)%
|
$
31,756
|
$
8,849
|
259%
|
|
% of Revenues Before
Reimbursements
|
7%
|
7%
|
|
9%
|
7%
|
|
(5)%
|
(3)%
|
|
29%
|
20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This is a segment financial
measure representing earnings (loss) before income tax expense, net
corporate interest expense, amortization of customer-relationship
intangible assets, stock option expense, certain other gains and
expenses and certain unallocated overhead corporate and shared
costs. See page 5 for a reconciliation of Operating
Earnings to Net Income computed in accordance with GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CRAWFORD
& COMPANY
CONDENSED
CONSOLIDATED BALANCE SHEETS
As of June
30, 2011 and December 31, 2010
(In
Thousands, Except Par Values)
|
|
|
|
|
|
Unaudited
|
|
*
|
|
|
|
June
30,
|
|
December
31,
|
|
ASSETS
|
2011
|
|
2010
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
Cash and Cash
Equivalents
|
$
37,206
|
|
$
93,540
|
|
|
Accounts Receivable,
Net
|
185,026
|
|
142,521
|
|
|
Unbilled Revenues, at Estimated
Billable Amounts
|
136,726
|
|
122,933
|
|
|
Prepaid Expenses and Other
Current Assets
|
21,363
|
|
20,411
|
|
|
|
|
|
|
|
Total Current Assets
|
380,321
|
|
379,405
|
|
|
|
|
|
|
|
|
Property and
Equipment
|
155,994
|
|
149,444
|
|
|
Less Accumulated
Depreciation
|
(111,944)
|
|
(106,073)
|
|
Net Property and
Equipment
|
44,050
|
|
43,371
|
|
|
|
|
|
|
|
Other Assets:
|
|
|
|
|
|
Goodwill
|
129,872
|
|
125,764
|
|
|
Intangible Assets Arising from
Business Acquisitions, Net
|
97,180
|
|
97,881
|
|
|
Capitalized Software Costs,
Net
|
56,056
|
|
55,204
|
|
|
Deferred Income Tax
Assets
|
90,022
|
|
91,930
|
|
|
Other Noncurrent
Assets
|
25,962
|
|
27,119
|
|
Total Other Assets
|
399,092
|
|
397,898
|
|
|
|
|
|
|
|
Total Assets
|
$
823,463
|
|
$
820,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
INVESTMENT
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
Short-Term Borrowings
|
$
484
|
|
$
-
|
|
|
Accounts Payable
|
42,958
|
|
53,517
|
|
|
Accrued Compensation and Related
Costs
|
83,683
|
|
90,590
|
|
|
Self-Insured Risks
|
16,943
|
|
15,094
|
|
|
Income Taxes Payable
|
8,976
|
|
2,558
|
|
|
Deferred Income Taxes
|
17,212
|
|
17,146
|
|
|
Deferred Rent
|
15,292
|
|
15,750
|
|
|
Other Accrued
Liabilities
|
36,660
|
|
31,097
|
|
|
Deferred Revenues
|
51,605
|
|
48,198
|
|
|
Mandatory Contributions due to
Pension Plan
|
4,200
|
|
20,000
|
|
|
Current Installments of
Long-Term Debt and Capital Leases
|
2,942
|
|
2,891
|
|
|
|
|
|
|
|
Total Current
Liabilities
|
280,955
|
|
296,841
|
|
|
|
|
|
|
|
Noncurrent
Liabilities:
|
|
|
|
|
|
Long-Term Debt and Capital
Leases, Less Current Installments
|
217,589
|
|
220,437
|
|
|
Deferred Revenues
|
29,098
|
|
30,048
|
|
|
Self-Insured Risks
|
13,491
|
|
18,274
|
|
|
Accrued Pension Liabilities,
Less Current Mandatory Contributions
|
134,845
|
|
145,030
|
|
|
Other Noncurrent
Liabilities
|
15,906
|
|
14,813
|
|
Total Noncurrent
Liabilities
|
410,929
|
|
428,602
|
|
|
|
|
|
|
|
Shareholders'
Investment:
|
|
|
|
|
|
Class A Common Stock, $1.00 Par
Value
|
28,795
|
|
28,002
|
|
|
Class B Common Stock, $1.00 Par
Value
|
24,697
|
|
24,697
|
|
|
Additional Paid-in
Capital
|
31,419
|
|
32,348
|
|
|
Retained Earnings
|
192,268
|
|
168,791
|
|
|
Accumulated Other Comprehensive
Loss
|
(150,862)
|
|
(164,322)
|
|
Shareholders' Investment
Attributable to Shareholders of Crawford & Company
|
126,317
|
|
89,516
|
|
|
|
|
|
|
|
Noncontrolling
Interests
|
5,262
|
|
5,715
|
|
|
|
|
|
|
|
Total Shareholders'
Investment
|
131,579
|
|
95,231
|
|
|
|
|
|
|
|
Total Liabilities and
Shareholders' Investment
|
$
823,463
|
|
$
820,674
|
|
|
|
|
|
* derived from the audited
Consolidated Balance Sheet
|
|
|
|
|
|
|
CRAWFORD
& COMPANY
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months
Ended June 30, 2011 and June 30, 2010
Unaudited
(In
Thousands)
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
Cash Flows From Operating
Activities:
|
|
|
|
|
|
Net Income
|
$ 25,581
|
|
$
549
|
|
|
Reconciliation of Net Income to
Net Cash Used In Operating Activities:
|
|
|
|
|
|
Depreciation
and Amortization
|
15,856
|
|
15,155
|
|
|
Goodwill
Impairment Charge
|
-
|
|
7,303
|
|
|
Stock-Based
Compensation
|
1,483
|
|
1,436
|
|
|
Loss on
Disposals of Property and Equipment, Net
|
4
|
|
137
|
|
|
Changes in
Operating Assets and Liabilities, Net of Effects of Acquisitions
and Dispositions:
|
|
|
|
|
|
Accounts Receivable, Net
|
(33,696)
|
|
(12,753)
|
|
|
Unbilled Revenues, Net
|
(7,564)
|
|
(12,600)
|
|
|
Accrued or Prepaid Income Taxes
|
5,604
|
|
(837)
|
|
|
Accounts Payable and Accrued Liabilities
|
(17,780)
|
|
(6,617)
|
|
|
Deferred Revenues
|
1,996
|
|
(4,826)
|
|
|
Accrued Retirement Costs
|
(22,985)
|
|
(14,311)
|
|
|
Prepaid Expenses and Other Operating Activities
|
(1,705)
|
|
(2,268)
|
|
Net Cash Used In Operating
Activities
|
(33,206)
|
|
(29,632)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Investing
Activities:
|
|
|
|
|
|
Acquisitions of Property and
Equipment
|
(6,175)
|
|
(4,973)
|
|
|
Proceeds from Disposals of
Property and Equipment
|
40
|
|
31
|
|
|
Capitalization of Computer
Software Costs
|
(5,766)
|
|
(7,249)
|
|
|
Payments for Business
Acquisitions, Net of Cash Acquired
|
(6,874)
|
|
-
|
|
Net Cash Used In Investing
Activities
|
(18,775)
|
|
(12,191)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Financing
Activities:
|
|
|
|
|
|
Cash Dividends Paid
|
(2,139)
|
|
-
|
|
|
Shares Used to Settle
Withholding Taxes Under Stock-Based Compensation Plans
|
(1,645)
|
|
(703)
|
|
|
Increases in Short-Term
Borrowings
|
15,268
|
|
22,108
|
|
|
Payments on Short-Term
Borrowings
|
(14,144)
|
|
(2,688)
|
|
|
Payments on Long-Term Debt and
Capital Lease Obligations
|
(3,422)
|
|
(7,053)
|
|
|
Other Financing
Activities
|
20
|
|
(39)
|
|
Net Cash (Used In) Provided by
Financing Activities
|
(6,062)
|
|
11,625
|
|
|
|
|
|
|
|
Effects of Exchange Rate Changes
on Cash and Cash Equivalents
|
1,709
|
|
(1,922)
|
|
|
|
|
|
|
|
Decrease in Cash and Cash
Equivalents
|
(56,334)
|
|
(32,120)
|
|
Cash and Cash Equivalents at
Beginning of Year
|
93,540
|
|
70,354
|
|
Cash and Cash Equivalents at End
of Period
|
$ 37,206
|
|
$ 38,234
|
|
|
|
|
|
|
|
SOURCE Crawford & Company