ATLANTA, Feb. 13, 2012 /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 fourth quarter and year ended
December 31, 2011.
Consolidated Results
Full year consolidated revenues before reimbursements totaled a
record of more than $1.125 billion
for 2011, increasing $94.9 million
from 2010. Net income attributable to shareholders of
Crawford & Company in 2011 was $45.4
million, increasing 60% over net income in 2010 of
$28.3 million. Full year 2011 diluted
earnings per share were $0.85 for
CRDA and $0.83 for CRDB,
respectively, compared with diluted earnings per share for each
class of $0.53 in the prior year.
The 2011 difference in earnings per share between CRDA and CRDB
is due to the payment of a higher per share dividend on CRDA than
CRDB beginning in the third quarter of 2011, and the impact that
has on the earnings per share calculation according to generally
accepted accounting principles. Further references in this release
will generally be only to CRDB, as that presents a more dilutive
measure.
Fourth quarter 2011 consolidated revenues before reimbursements
totaled $265.6 million, a decrease of
12% from $301.5 million in the 2010
fourth quarter. Fourth quarter 2011 net income attributable
to shareholders of Crawford & Company was $4.5 million, decreasing 70% from $14.8 million in the 2010 fourth quarter. Fourth
quarter 2011 diluted earnings per CRDB share was $0.08 compared with diluted earnings per share of
$0.28 in the prior-year quarter.
During the 2011 fourth quarter, the Company recorded
$4.6 million in special charges,
consisting of a $3.4 million
write-off of deferred financing costs related to the repayment of
its then-outstanding Term Loan B and $1.2
million in severance expense related to the Broadspire
segment. The Company also recorded a tax benefit of $5.5 million related to a change in the valuation
allowance for foreign tax credits. In the third quarter of 2011,
the Company recorded a gain of $7.0
million ($5.9 million net of
tax) related to the final settlement of a previously disclosed
arbitration award. Excluding the arbitration award, tax adjustment,
and other special charges, 2011 fourth quarter and full-year net
income attributable to shareholders of Crawford & Company would
have been $1.9 million and
$37.0 million, respectively, and
diluted earnings per CRDB share would have been $0.03 and $0.67,
respectively.
During the 2010 fourth quarter, the Company recorded a net
$3.5 million goodwill impairment
charge related in part to additional consideration paid for the
purchase of its Broadspire business. This was in addition to the
$7.3 million goodwill impairment
charge recorded in the 2010 second quarter for related matters. The
Company recorded special charges in early 2010 of $2.0 million related to severance costs and
$2.7 million for a loss on a
sublease. Excluding these impairment charges and other special
charges, 2010 fourth quarter and full-year net income attributable
to shareholders of Crawford & Company would have been
$17.8 million and $43.4 million, respectively, and diluted earnings
per CRDB share would have been $0.33
and $0.81, respectively.
Diluted earnings per CRDB share and the related non-GAAP
adjusted diluted earnings per CRDB share, including the
reconciliation for the impact of the arbitration award, tax
adjustments, special charges and credits, and goodwill impairment
charges, are set out in the table below:
|
|
|
Fourth
Quarter
|
Fourth
Quarter
|
|
Full
Year
|
Full
Year
|
|
|
2011
|
2010
|
|
2011
|
2010
|
|
Reported diluted earnings per
CRDB share
|
$
|
0.08
|
$
|
0.28
|
|
$
|
0.83
|
$
|
0.53
|
|
Add (deduct):
|
|
|
|
|
|
|
Arbitration award
|
—
|
—
|
|
(0.11)
|
—
|
|
Tax adjustments
|
(0.10)
|
—
|
|
(0.10)
|
0.04
|
|
Special charges and
credits
|
0.05
|
—
|
|
0.05
|
0.05
|
|
Goodwill impairment
charges
|
—
|
0.05
|
|
—
|
0.19
|
|
Adjusted diluted earnings per
CRDB share on a non-GAAP basis
|
$
|
0.03
|
$
|
0.33
|
|
$
|
0.67
|
$
|
0.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet and Cash Flow
Crawford & Company's consolidated cash and cash equivalents
position as of December 31, 2011 totaled $77.6 million compared with $93.5 million at December 31, 2010.
The Company generated $36.7
million of cash from operations during 2011, compared with
$26.2 million during 2010. As
previously announced, in December
2011 we entered into a new five-year $325.0 million senior secured revolving credit
facility with a syndicate of banks, replacing a $100.0 million revolving credit facility and
repaying $218.6 million
outstanding under a syndicated Term Loan B.
Management's Comments
Mr. Jeffrey T. Bowman, chief
executive officer of Crawford & Company, stated, "We are very
pleased to report record revenues of $1.125
billion for the full year and a 60% increase in our
earnings. We saw revenue growth in three of our four segments
driven by an increase in overall claims received during the
year.
"Our fourth quarter 2011 operating results reflect an expected
decline in our Legal Settlement Administration segment and weakness
in the Americas segment. These were partially offset by a
sequential improvement in our Broadspire and EMEA/AP segments over
2011's third quarter.
"As previously announced, during the 2011 fourth quarter we
entered into a new revolving credit facility which provides us with
numerous benefits, including the financial flexibility to pursue
our strategic plans. We believe this agreement is a reflection of
our solid operational performance.
"In our Legal Settlement Administration segment, we saw a
decline in work required to support the Gulf Coast Claims Facility
(GCCF) special project. This project continues to wind down and we
expect activity to decline significantly through the first half of
2012. However, we still have a healthy backlog of awarded projects
in this segment and are confident in the future of this business.
"The Americas segment saw a sharp decline in case referrals
during the 2011 fourth quarter as relatively mild weather in the
U.S. and Canada reduced
industry-wide claim volumes and our related revenues. This drop in
new cases and related revenues offset increased catastrophe
revenues from the completion of Hurricane Irene claims in the 2011
fourth quarter.
"Our EMEA/AP segment turned in its best performance of the year
during the fourth quarter. As reported previously, this part
of our business continued to be positively impacted by revenues
from an increase in weather-related claims activity in our
Australian market throughout 2011. We expect the recent
catastrophic flooding and related events in Thailand to benefit this segment in 2012.
"In Broadspire we were keenly focused on business development
execution and cost control measures during the quarter. We saw
continuing progress on both fronts and were successful in narrowing
our operating loss during the 2011 fourth quarter. We continue to
focus on driving operating improvement during 2012. The turnaround
of Broadspire is one of the key objectives for our management
team."
Mr. Bowman concluded, "As we enter 2012, we are capitalizing on
the strength of our global footprint and increasing technological
integration and innovation. We expect to expand market share, to
drive efficiencies in all our operations and to deliver sequential
quarterly operating improvement in our Broadspire operation as we
seek to return it to profitability."
2011 Segment Results For the Fourth Quarter and Full
Year
Americas
Americas revenues before reimbursements were $82.0 million in the fourth quarter of 2011,
substantially unchanged from $82.1
million in the 2010 fourth quarter. During the 2011 fourth
quarter compared with the 2010 fourth quarter, the impact of
changes in foreign exchange rates for this segment was
insignificant. Operating earnings in the 2011 fourth quarter in the
segment were nearly break-even, compared with $2.4 million,
or 3% of revenues in the 2010 fourth quarter.
For the year, Americas revenues before reimbursements increased
7% to $357.7 million compared with
$334.9 million in 2010. During 2011,
the U.S. dollar weakened against foreign currencies in the
segment, resulting in a positive exchange rate impact to revenues
of $7.8 million on this segment's
revenues from 2010 to 2011. Operating earnings decreased from
$20.7 million in 2010 to $19.9 million in 2011, representing an operating
margin of 6% in both 2010 and 2011.
EMEA/AP
Fourth quarter 2011 revenues before reimbursements for the
EMEA/AP segment increased 11% to $86.2
million from $77.9 million for
the same period of 2010. During the 2011 fourth quarter compared
with the 2010 fourth quarter, the U.S. dollar weakened against most
major foreign currencies, resulting in a positive exchange rate
impact to revenues of $3.8 million in
this segment. Operating earnings decreased to $8.0 million in the 2011 fourth quarter, down 17%
from last year's fourth quarter operating earnings of $9.6 million. The related operating margin was 9%
in the 2011 fourth quarter, decreasing from 12% in the 2010
fourth quarter.
For the year, revenues before reimbursements from our EMEA/AP
segment totaled $340.2 million, a 19%
increase from $285.8 million in 2010.
During 2011, the U.S. dollar weakened against most major
foreign currencies, resulting in a positive exchange rate impact to
revenues of $19.5 million on
this segment's revenues from 2010 to 2011. EMEA/AP operating
earnings increased to $28.4 million
in 2011, an increase of 14% from 2010 operating earnings of
$24.8 million. The operating margin
declined from 9% in 2010 to 8% in 2011.
Broadspire
Revenues before reimbursements from the Broadspire segment were
$58.2 million in the 2011 fourth
quarter, down 4% from $60.7 million
in the 2010 quarter. Broadspire had an operating loss of
$2.3 million in the 2011 fourth
quarter, or a negative operating margin of 4%, compared with an
operating loss of $6.9 million, or a
negative operating margin of 11%, in the prior-year period.
For the year, Broadspire segment revenues before reimbursements
decreased 4% to $234.8 million
compared with $245.5 million in 2010.
Broadspire recorded an operating loss of $11.4 million in 2011, or a negative operating
margin of 5%, compared with an operating loss of $11.7 million, or a negative operating margin of
5% in 2010.
Legal Settlement Administration
Legal Settlement Administration revenues before reimbursements
were $39.2 million in the 2011 fourth
quarter, compared with $80.8 million
in the 2010 fourth quarter. Operating earnings totaled
$8.8 million in the 2011 fourth
quarter, or 22% of revenues, compared with $27.8 million, or 34% of revenues, in the
prior-year period.
For the year, Legal Settlement Administration revenues before
reimbursements were $192.6 million,
compared with $164.2 million in 2010.
Operating earnings were $51.3
million, increasing 8% from $47.7
million in 2010, with the related operating margin
decreasing from 29% in 2010 to 27% in 2011.
2012 Guidance
Crawford's business is
dependent, to a significant extent, on case volumes. The Company
cannot predict the future trend of case volumes for a number of
reasons, including the fact that the frequency and severity of
weather-related claims and the occurrence of natural and man-made
disasters, which are a significant source of claims and revenue for
the Company, are generally not subject to accurate forecasting.
Notwithstanding the foregoing, however, Crawford &
Company is providing initial guidance for 2012 as follows:
- Consolidated revenues before reimbursements between
$990 million and $1.03 billion.
- Consolidated operating earnings between $63.0 million and $70.0 million.
- Consolidated cash provided by operating activities between
$30.0 and $35.0 million.
- After reflecting stock-based compensation expense, net
corporate interest expense, customer-relationship intangible asset
amortization expense, and income taxes, net income attributable to
shareholders of Crawford & Company on a GAAP basis between
$30.5 million and $35.5 million, or
$0.52 to $0.62 diluted earnings per
CRDB share.
Crawford & Company's management will host a conference call
with investors on Monday, February 13,
2012 at 3:00 p.m. EST to
discuss earnings and other developments. The call will be recorded
and available for replay through February
28, 2012. You may dial 1-855-859-2056 (404-537-3406
international) to listen to the replay. The access code is
47598056. 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 ended
December 31, 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 required to be included when
reporting expenses and revenues, 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 expenses and revenues 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, special charges and credits, 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, 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 in which
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 is a non-cash expense for 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.
Special charges and credits may arise from events (such as
expenses related to restructurings, losses on subleases,
arbitration awards, 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 (loss)
earnings to net income attributable to shareholders of 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
ended
|
|
|
December
31, 2011
|
%
Margin
|
December
31, 2010
|
%
Margin
|
|
December
31, 2011
|
%
Margin
|
December
31, 2010
|
%
Margin
|
|
Operating (Loss)
Earnings:
|
|
|
|
|
|
|
|
|
|
|
Americas
|
$
|
(238)
|
—%
|
$
|
2,416
|
3%
|
|
$
|
19,851
|
6%
|
$
|
20,748
|
6%
|
|
EMEA/AP
|
7,956
|
9%
|
9,619
|
12%
|
|
28,421
|
8%
|
24,828
|
9%
|
|
Broadspire
|
(2,250)
|
(4)%
|
(6,948)
|
(11)%
|
|
(11,434)
|
(5)%
|
(11,712)
|
(5)%
|
|
Legal Settlement
Administration
|
8,770
|
22%
|
27,844
|
34%
|
|
51,307
|
27%
|
47,661
|
29%
|
|
Unallocated corporate and shared
costs
|
(4,206)
|
(2)%
|
(3,597)
|
(1)%
|
|
(9,555)
|
(1)%
|
(5,841)
|
(1)%
|
|
(Deduct) Add:
|
|
|
|
|
|
|
|
|
|
|
Special charges and
credits
|
(4,613)
|
(2)%
|
—
|
—%
|
|
2,379
|
—%
|
(4,650)
|
—%
|
|
Goodwill impairment
charge
|
—
|
—%
|
(3,485)
|
(1)%
|
|
—
|
—%
|
(10,788)
|
(1)%
|
|
Stock option expense
|
(75)
|
—%
|
(175)
|
—%
|
|
(450)
|
—%
|
(761)
|
—%
|
|
Amortization expense
|
(1,646)
|
(1)%
|
(1,499)
|
—%
|
|
(6,177)
|
(1)%
|
(5,995)
|
(1)%
|
|
Net corporate interest
expense
|
(3,515)
|
(1)%
|
(3,270)
|
(1)%
|
|
(15,911)
|
(1)%
|
(15,002)
|
(1)%
|
|
Income taxes
|
4,598
|
2%
|
(5,774)
|
(2)%
|
|
(12,739)
|
(1)%
|
(9,712)
|
(1)%
|
|
Net income attributable to
non-controlling interests
|
(289)
|
—%
|
(320)
|
—%
|
|
(288)
|
—%
|
(448)
|
—%
|
|
Net income attributable to
shareholders of Crawford & Company
|
$
|
4,492
|
2%
|
$
|
14,811
|
5%
|
|
$
|
45,404
|
4%
|
$
|
28,328
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
The Company's two classes of stock are substantially identical,
except with respect to voting rights and the Company's ability to
pay greater cash dividends on the Class A Common Stock than on the
Class B Common Stock, subject to certain limitations. 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 and other federal securities laws.
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 Per Share Amounts and Percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December
31,
|
2011
|
|
2010
|
% Change
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues Before
Reimbursements
|
$ 265,637
|
|
$ 301,477
|
(12)%
|
|
|
Reimbursements
|
19,316
|
|
23,175
|
(17)%
|
|
|
Total Revenues
|
284,953
|
|
324,652
|
(12)%
|
|
|
|
|
|
|
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of Services
Provided, Before Reimbursements
|
202,630
|
|
220,721
|
(8)%
|
|
|
Reimbursements
|
19,316
|
|
23,175
|
(17)%
|
|
|
Total Costs of
Services
|
221,946
|
|
243,896
|
(9)%
|
|
|
|
|
|
|
|
|
|
Selling, General, and
Administrative Expenses
|
54,696
|
|
53,096
|
3%
|
|
|
Corporate Interest
Expense, Net
|
3,515
|
|
3,270
|
7%
|
|
|
Special Charges and
Credits
|
4,613
|
|
-
|
Nm
|
|
|
Goodwill Impairment
Charge
|
-
|
|
3,485
|
Nm
|
|
|
Total Costs and
Expenses
|
284,770
|
|
303,747
|
(6)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income
Taxes
|
183
|
|
20,905
|
(99)%
|
|
|
(Benefit) Provision for Income
Taxes
|
(4,598)
|
|
5,774
|
(180)%
|
|
|
Net Income
|
4,781
|
|
15,131
|
(68)%
|
|
|
Less: Net Income
Attributable to Noncontrolling Interests
|
289
|
|
320
|
(10)%
|
|
|
Net Income Attributable to
Shareholders of Crawford & Company
|
$
4,492
|
|
$ 14,811
|
(70)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share -
Basic:
|
|
|
|
|
|
|
Class A Common
Stock
|
$
0.09
|
|
$
0.28
|
(68)%
|
|
|
Class B Common
Stock
|
$
0.08
|
|
$
0.28
|
(71)%
|
|
|
|
|
|
|
|
|
|
Earnings Per Share -
Diluted:
|
|
|
|
|
|
|
Class A Common
Stock
|
$
0.09
|
|
$
0.28
|
(68)%
|
|
|
Class B Common
Stock
|
$
0.08
|
|
$
0.28
|
(71)%
|
|
|
|
|
|
|
|
|
|
Cash Dividends Per
Share:
|
|
|
|
|
|
|
Class A Common
Stock
|
$
0.03
|
|
$
-
|
nm
|
|
|
Class B Common
Stock
|
$
0.02
|
|
$
-
|
nm
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
nm = not meaningful
|
|
|
|
|
|
|
|
CRAWFORD
& COMPANY
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
Unaudited
|
|
(In
Thousands, Except Per Share Amounts and Percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December
31,
|
2011
|
|
2010
|
% Change
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues Before
Reimbursements
|
$ 1,125,355
|
|
$ 1,030,417
|
9%
|
|
|
Reimbursements
|
86,007
|
|
80,384
|
7%
|
|
|
Total Revenues
|
1,211,362
|
|
1,110,801
|
9%
|
|
|
|
|
|
|
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of Services
Provided, Before Reimbursements
|
831,922
|
|
758,863
|
10%
|
|
|
Reimbursements
|
86,007
|
|
80,384
|
7%
|
|
|
Total Costs of
Services
|
917,929
|
|
839,247
|
9%
|
|
|
|
|
|
|
|
|
|
Selling, General, and
Administrative Expenses
|
221,470
|
|
202,626
|
9%
|
|
|
Corporate Interest
Expense, Net
|
15,911
|
|
15,002
|
6%
|
|
|
Special Charges and
Credits
|
(2,379)
|
|
4,650
|
(151)%
|
|
|
Goodwill Impairment
Charge
|
-
|
|
10,788
|
Nm
|
|
|
Total Costs and
Expenses
|
1,152,931
|
|
1,072,313
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income
Taxes
|
58,431
|
|
38,488
|
52%
|
|
|
Provision for Income
Taxes
|
12,739
|
|
9,712
|
31%
|
|
|
Net Income
|
45,692
|
|
28,776
|
59%
|
|
|
Less: Net Income
Attributable to Noncontrolling Interests
|
288
|
|
448
|
(36)%
|
|
|
Net Income Attributable to
Shareholders of Crawford & Company
|
$
45,404
|
|
$
28,328
|
60%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share -
Basic:
|
|
|
|
|
|
|
Class A Common
Stock
|
$
0.86
|
|
$
0.54
|
59%
|
|
|
Class B Common
Stock
|
$
0.84
|
|
$
0.54
|
56%
|
|
|
|
|
|
|
|
|
|
Earnings Per Share -
Diluted:
|
|
|
|
|
|
|
Class A Common
Stock
|
$
0.85
|
|
$
0.53
|
60%
|
|
|
Class B Common
Stock
|
$
0.83
|
|
$
0.53
|
57%
|
|
|
|
|
|
|
|
|
|
Cash Dividends Per
Share:
|
|
|
|
|
|
|
Class A Common
Stock
|
$
0.10
|
|
$
-
|
nm
|
|
|
Class B Common
Stock
|
$
0.08
|
|
$
-
|
nm
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
nm = not
meaningful
|
|
|
|
|
|
|
|
CRAWFORD
& COMPANY
|
|
SUMMARY
RESULTS BY OPERATING SEGMENT
|
|
Three Months
Ended December 31,
|
|
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
|
$ 82,016
|
$ 82,099
|
(0)%
|
$ 86,230
|
$ 77,891
|
11%
|
$ 58,214
|
$ 60,670
|
(4)%
|
$ 39,177
|
$ 80,817
|
(52)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation &
Benefits
|
54,725
|
53,165
|
3%
|
55,188
|
49,389
|
12%
|
33,010
|
37,719
|
(12)%
|
16,373
|
20,149
|
(19)%
|
|
% of Revenues Before
Reimbursements
|
67%
|
65%
|
|
64%
|
63%
|
|
57%
|
62%
|
|
42%
|
25%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Other than
Reimbursements,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation &
Benefits
|
27,529
|
26,518
|
4%
|
23,086
|
18,883
|
22%
|
27,454
|
29,899
|
(8)%
|
14,034
|
32,824
|
(57)%
|
|
% of Revenues Before
Reimbursements
|
34%
|
32%
|
|
27%
|
25%
|
|
47%
|
49%
|
|
36%
|
41%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating
Expenses
|
82,254
|
79,683
|
3%
|
78,274
|
68,272
|
15%
|
60,464
|
67,618
|
(11)%
|
30,407
|
52,973
|
(43)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (Loss) Earnings
(1)
|
$
(238)
|
$ 2,416
|
(110)%
|
$
7,956
|
$ 9,619
|
(17)%
|
$ (2,250)
|
$ (6,948)
|
68%
|
$
8,770
|
$ 27,844
|
(69)%
|
|
% of Revenues Before
Reimbursements
|
(0)%
|
3%
|
|
9%
|
12%
|
|
(4)%
|
(11)%
|
|
22%
|
34%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
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
|
$ 357,716
|
$ 334,940
|
7%
|
$ 340,246
|
$ 285,798
|
19%
|
$ 234,775
|
$ 245,496
|
(4)%
|
$ 192,618
|
$ 164,183
|
17%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation &
Benefits
|
227,099
|
213,598
|
6%
|
222,236
|
191,435
|
16%
|
136,235
|
145,685
|
(6)%
|
72,010
|
54,596
|
32%
|
|
% of Revenues Before
Reimbursements
|
63%
|
64%
|
|
65%
|
67%
|
|
58%
|
59%
|
|
37%
|
33%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses Other than
Reimbursements,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation &
Benefits
|
110,766
|
100,594
|
10%
|
89,589
|
69,535
|
29%
|
109,974
|
111,523
|
(1)%
|
69,301
|
61,926
|
12%
|
|
% of Revenues Before
Reimbursements
|
31%
|
30%
|
|
27%
|
24%
|
|
47%
|
46%
|
|
36%
|
38%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating
Expenses
|
337,865
|
314,192
|
8%
|
311,825
|
260,970
|
19%
|
246,209
|
257,208
|
(4)%
|
141,311
|
116,522
|
21%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Earnings (Loss)
(1)
|
$ 19,851
|
$ 20,748
|
(4)%
|
$ 28,421
|
$ 24,828
|
14%
|
$ (11,434)
|
$ (11,712)
|
2%
|
$ 51,307
|
$ 47,661
|
8%
|
|
% of Revenues Before
Reimbursements
|
6%
|
6%
|
|
8%
|
9%
|
|
(5)%
|
(5)%
|
|
27%
|
29%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) A non-GAAP financial
measurement which represents net income attributable to the
applicable reporting segment excluding income tax expense, net
corporate interest expense,
|
|
amortization of
customer-relationship intangible assets, stock option expense,
special charges and credits, and certain unallocated corporate and
shared costs. See page 6 for
|
|
additional
information about segment operating earnings (loss).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CRAWFORD
& COMPANY
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
As of
December 31, 2011 and December 31, 2010
|
|
(In
Thousands, Except Par Values)
|
|
|
|
|
|
|
|
Unaudited
|
|
*
|
|
|
|
December
31,
|
|
December
31,
|
|
ASSETS
|
2011
|
|
2010
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
Cash and Cash
Equivalents
|
$
77,613
|
|
$
93,540
|
|
|
Accounts Receivable,
Net
|
161,543
|
|
142,521
|
|
|
Unbilled Revenues, at Estimated
Billable Amounts
|
107,494
|
|
122,933
|
|
|
Income Taxes
Receivable
|
1,584
|
|
|
|
|
Prepaid Expenses and Other
Current Assets
|
22,836
|
|
20,411
|
|
|
|
|
|
|
|
Total Current Assets
|
371,070
|
|
379,405
|
|
|
|
|
|
|
|
|
Property and
Equipment
|
156,349
|
|
149,444
|
|
|
Less Accumulated
Depreciation
|
(112,465)
|
|
(106,073)
|
|
Net Property and
Equipment
|
43,884
|
|
43,371
|
|
|
|
|
|
|
|
Other Assets:
|
|
|
|
|
|
Goodwill
|
131,246
|
|
125,764
|
|
|
Intangible Assets Arising from
Business Acquisitions, Net
|
96,392
|
|
97,881
|
|
|
Capitalized Software Costs,
Net
|
60,332
|
|
55,204
|
|
|
Deferred Income Tax
Assets
|
96,982
|
|
91,930
|
|
|
Other Noncurrent
Assets
|
25,864
|
|
27,119
|
|
Total Other Assets
|
410,816
|
|
397,898
|
|
|
|
|
|
|
|
Total Assets
|
$
825,770
|
|
$
820,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
INVESTMENT
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
Short-Term Borrowings
|
$
1,794
|
|
$
-
|
|
|
Accounts Payable
|
41,806
|
|
53,517
|
|
|
Accrued Compensation and Related
Costs
|
96,440
|
|
90,590
|
|
|
Self-Insured Risks
|
18,817
|
|
15,094
|
|
|
Income Taxes Payable
|
-
|
|
2,558
|
|
|
Deferred Income Taxes
|
7,287
|
|
17,146
|
|
|
Deferred Rent
|
15,820
|
|
15,750
|
|
|
Other Accrued
Liabilities
|
36,104
|
|
31,097
|
|
|
Deferred Revenues
|
53,844
|
|
48,198
|
|
|
Mandatory Contributions Due to
Pension Plan
|
13,800
|
|
20,000
|
|
|
Current Installments of
Long-Term Debt and Capital Leases
|
410
|
|
2,891
|
|
|
|
|
|
|
|
Total Current
Liabilities
|
286,122
|
|
296,841
|
|
|
|
|
|
|
|
Noncurrent
Liabilities:
|
|
|
|
|
|
Long-Term Debt and Capital
Leases, Less Current Installments
|
211,983
|
|
220,437
|
|
|
Deferred Revenues
|
27,856
|
|
30,048
|
|
|
Self-Insured Risks
|
10,114
|
|
18,274
|
|
|
Deferred Income Taxes
|
12,528
|
|
-
|
|
|
Accrued Pension Liabilities,
Less Current Mandatory Contributions
|
120,195
|
|
145,030
|
|
|
Other Noncurrent
Liabilities
|
16,808
|
|
14,813
|
|
Total Noncurrent
Liabilities
|
399,484
|
|
428,602
|
|
|
|
|
|
|
|
Shareholders'
Investment:
|
|
|
|
|
|
Class A Common Stock, $1.00 Par
Value
|
29,086
|
|
28,002
|
|
|
Class B Common Stock, $1.00 Par
Value
|
24,697
|
|
24,697
|
|
|
Additional Paid-in
Capital
|
33,969
|
|
32,348
|
|
|
Retained Earnings
|
209,323
|
|
168,791
|
|
|
Accumulated Other Comprehensive
Loss
|
(161,727)
|
|
(164,322)
|
|
Shareholders' Investment
Attributable to Shareholders of Crawford & Company
|
135,348
|
|
89,516
|
|
Noncontrolling
Interests
|
4,816
|
|
5,715
|
|
Total Shareholders'
Investment
|
140,164
|
|
95,231
|
|
|
|
|
|
|
|
Total Liabilities and
Shareholders' Investment
|
$
825,770
|
|
$
820,674
|
|
|
|
|
|
* derived from the audited
Consolidated Balance Sheet
|
|
|
|
|
|
|
CRAWFORD
& COMPANY
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
Years Ended
December 31, 2011 and December 31, 2010
|
|
Unaudited
|
|
(In
Thousands)
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
Cash Flows From Operating
Activities:
|
|
|
|
|
|
|
Net Income
|
$ 45,692
|
|
$ 28,776
|
|
|
|
Reconciliation of Net Income to
Net Cash Provided by Operating Activities:
|
|
|
|
|
|
|
Depreciation
and Amortization
|
31,878
|
|
30,599
|
|
|
|
Goodwill
Impairment Charge
|
-
|
|
10,788
|
|
|
|
Arbitration
Award
|
(6,992)
|
|
-
|
|
|
|
Write-off of
Loan Costs on Previous Term Loan
|
3,415
|
|
-
|
|
|
|
Deferred
Income Taxes
|
(2,058)
|
|
2,710
|
|
|
|
Stock-Based
Compensation
|
3,756
|
|
3,651
|
|
|
|
(Gain) Loss
on Disposals of Property and Equipment, Net
|
(143)
|
|
449
|
|
|
|
Changes in
Operating Assets and Liabilities, Net of Effects of Acquisitions
and Dispositions:
|
|
|
|
|
|
|
Accounts Receivable, Net
|
(13,594)
|
|
(372)
|
|
|
|
Unbilled Revenues, Net
|
18,099
|
|
(28,384)
|
|
|
|
Accrued or Prepaid Income Taxes
|
284
|
|
963
|
|
|
|
Accounts Payable and Accrued Liabilities
|
(6,583)
|
|
35,861
|
|
|
|
Deferred Revenues
|
1,443
|
|
(8,830)
|
|
|
|
Accrued Retirement Costs
|
(36,633)
|
|
(47,844)
|
|
|
|
Prepaid Expenses and Other Operating Activities
|
(1,888)
|
|
(2,200)
|
|
|
Net Cash Provided By Operating
Activities
|
36,676
|
|
26,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Investing
Activities:
|
|
|
|
|
|
|
Acquisitions of Property and
Equipment
|
(14,221)
|
|
(13,473)
|
|
|
|
Proceeds from Disposals of
Property and Equipment
|
417
|
|
51
|
|
|
|
Capitalization of Computer
Software Costs
|
(15,677)
|
|
(14,306)
|
|
|
|
Additional Purchase Price
Consideration for Previous Acquisition
|
-
|
|
(14,803)
|
|
|
|
Cash Received in Arbitration
Award
|
4,913
|
|
-
|
|
|
|
Payments for Business
Acquisitions, Net of Cash Acquired
|
(10,365)
|
|
-
|
|
|
Net Cash Used In Investing
Activities
|
(34,933)
|
|
(42,531)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Financing
Activities:
|
|
|
|
|
|
|
Cash Dividends Paid
|
(4,872)
|
|
-
|
|
|
|
Shares Used to Settle
Withholding Taxes Under Stock-Based Compensation Plans
|
(1,653)
|
|
(703)
|
|
|
|
Proceeds from Employee
Stock-Based Compensation Plans
|
602
|
|
477
|
|
|
|
Increases in Short-Term
Borrowings
|
59,753
|
|
33,965
|
|
|
|
Payments on Short-Term
Borrowings
|
(55,951)
|
|
(33,960)
|
|
|
|
Proceeds from Long-Term
Borrowings
|
248,254
|
|
50,575
|
|
|
|
Payments on Long-Term Debt and
Capital Lease Obligations
|
(260,004)
|
|
(8,760)
|
|
|
|
Capitalized Loan
Costs
|
(3,702)
|
|
(1,856)
|
|
|
|
Dividends Paid to Noncontrolling
Interests
|
(391)
|
|
(218)
|
|
|
Net Cash (Used In) Provided By
Financing Activities
|
(17,964)
|
|
39,520
|
|
|
|
|
|
|
|
|
|
Effects of Exchange Rate Changes
on Cash and Cash Equivalents
|
294
|
|
30
|
|
|
|
|
|
|
|
|
|
(Decrease) Increase in Cash and
Cash Equivalents
|
(15,927)
|
|
23,186
|
|
|
Cash and Cash Equivalents at
Beginning of Year
|
93,540
|
|
70,354
|
|
|
Cash and Cash Equivalents at End
of Year
|
$ 77,613
|
|
$ 93,540
|
|
|
|
|
|
|
|
CRAWFORD
& COMPANY
|
|
RECONCILIATION OF NET INCOME AND
EARNINGS PER SHARE (CRDB) TO
|
|
NON-GAAP
ADJUSTED NET INCOME AND EARNINGS PER SHARE (CRDB)
|
|
For the
Three Months Ended December 31,
|
|
Unaudited
|
|
(In
Thousands, Except Percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
Net
Income
|
Diluted
|
|
|
|
|
Net
Income
|
Diluted
|
|
|
|
Income
|
|
|
Attributable
to
|
Earnings
|
|
Income
|
|
|
Attributable
to
|
Earnings
|
|
|
|
Before
|
Tax
(Benefit)
|
Net
|
Shareholders
of
|
per
Share
|
|
Before
|
Tax
|
Net
|
Shareholders
of
|
per
Share
|
|
|
|
Income
Taxes
|
Provision
|
Income
|
Crawford
& Company
|
(CRDB)
|
|
Income
Taxes
|
Provision
|
Income
|
Crawford
& Company
|
(CRDB)
|
|
|
As reported
|
$
183
|
$
(4,598)
|
$ 4,781
|
$
4,492
|
$
0.08
|
|
$
20,905
|
$ 5,774
|
$ 15,131
|
$
14,811
|
$ 0.28
|
|
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax adjustments
|
-
|
5,462
|
(5,462)
|
(5,462)
|
(0.10)
|
|
-
|
-
|
-
|
-
|
-
|
|
|
Special charges and
credits
|
4,613
|
1,748
|
2,865
|
2,865
|
0.05
|
|
-
|
-
|
-
|
-
|
-
|
|
|
Goodwill impairment
charges
|
-
|
-
|
-
|
-
|
-
|
|
3,485
|
489
|
2,996
|
2,996
|
0.05
|
|
|
Non-GAAP adjusted
|
$
4,796
|
$
2,612
|
$ 2,184
|
$
1,895
|
$
0.03
|
|
$
24,390
|
$ 6,263
|
$ 18,127
|
$
17,807
|
$ 0.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year
Ended December 31,
|
|
Unaudited
|
|
(In
Thousands, Except Percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
|
|
|
|
|
Net
Income
|
Diluted
|
|
|
|
|
Net
Income
|
Diluted
|
|
|
|
Income
|
|
|
Attributable
to
|
Earnings
|
|
Income
|
|
|
Attributable
to
|
Earnings
|
|
|
|
Before
|
Tax
(Benefit)
|
Net
|
Shareholders
of
|
per
Share
|
|
Before
|
Tax
|
Net
|
Shareholders
of
|
per
Share
|
|
|
|
Income
Taxes
|
Provision
|
Income
|
Crawford
& Company
|
(CRDB)
|
|
Income
Taxes
|
Provision
|
Income
|
Crawford
& Company
|
(CRDB)
|
|
|
As reported
|
$
58,431
|
$
12,739
|
$ 45,692
|
$
45,404
|
$
0.83
|
|
$
38,488
|
$ 9,712
|
$ 28,776
|
$
28,328
|
$ 0.53
|
|
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arbitration
award
|
(6,991)
|
(1,136)
|
(5,855)
|
(5,855)
|
(0.11)
|
|
-
|
-
|
-
|
-
|
-
|
|
|
Tax adjustments
|
-
|
5,462
|
(5,462)
|
(5,462)
|
(0.10)
|
|
-
|
(2,325)
|
2,325
|
2,325
|
0.04
|
|
|
Special charges and
credits
|
4,613
|
1,748
|
2,865
|
2,865
|
0.05
|
|
4,650
|
1,773
|
2,877
|
2,877
|
0.05
|
|
|
Goodwill impairment
charges
|
-
|
-
|
-
|
-
|
-
|
|
10,788
|
954
|
9,834
|
9,834
|
0.19
|
|
|
Non-GAAP adjusted
|
$
56,053
|
$
18,813
|
$ 37,240
|
$
36,952
|
$
0.67
|
|
$
53,926
|
$ 10,114
|
$ 43,812
|
$
43,364
|
$ 0.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Crawford & Company