United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the transition period from ____ to ____
Commission file number
(Exact name of Registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
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(Registrant's telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
The number of shares outstanding of each class of the Registrant's common stock, as of July 29, 2024, was as follows:
Class A Common Stock, $1.00 par value:
Class B Common Stock, $1.00 par value:
CRAWFORD & COMPANY
Quarterly Report on Form 10-Q
Quarter Ended June 30, 2024
Table of Contents
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Item 1. |
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3 |
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3 |
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4 |
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Condensed Consolidated Statements of Comprehensive Income (unaudited) for the three and six months ended June 30, 2024 and 2023 |
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Condensed Consolidated Balance Sheets (unaudited) as of June 30, 2024 and December 31, 2023 |
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9 |
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Notes to Condensed Consolidated Financial Statements (unaudited) |
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24 |
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Item 2. |
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Management's Discussion and Analysis of Financial Condition and Results of Operations |
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25 |
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Item 3. |
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45 |
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Item 4. |
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45 |
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Item 1A. |
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Item 2. |
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Item 5. |
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Other Information |
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46 |
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Item 6. |
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47 |
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48 |
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2
Part I — Financial Information
Item 1. Financial Statements
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
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Three Months Ended June 30, |
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(In thousands, except per share amounts) |
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2024 |
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2023 |
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Revenues: |
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Revenues before reimbursements |
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$ |
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$ |
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Reimbursements |
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Total Revenues |
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Costs and Expenses: |
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Costs of services provided, before reimbursements |
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Reimbursements |
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Total costs of services |
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Selling, general, and administrative expenses |
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Corporate interest expense, net of interest income of $ |
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Total Costs and Expenses |
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Other Loss, net |
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Income Before Income Taxes |
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Provision for Income Taxes |
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Net Income |
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Net Loss Attributable to Noncontrolling Interests |
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Net Income Attributable to Shareholders of Crawford & Company |
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$ |
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$ |
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Earnings Per Share - Basic: |
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Class A Common Stock |
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$ |
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$ |
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Class B Common Stock |
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$ |
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$ |
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Earnings Per Share - Diluted: |
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Class A Common Stock |
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$ |
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$ |
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Class B Common Stock |
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$ |
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$ |
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Weighted-Average Shares Used to Compute Basic Earnings Per Share: |
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Class A Common Stock |
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Class B Common Stock |
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Weighted-Average Shares Used to Compute Diluted Earnings Per Share: |
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Class A Common Stock |
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Class B Common Stock |
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(The accompanying notes are an integral part of these condensed consolidated financial statements)
3
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
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Six Months Ended June 30, |
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(In thousands, except per share amounts) |
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2024 |
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2023 |
Revenues: |
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Revenues before reimbursements |
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$ |
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$ |
Reimbursements |
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Total Revenues |
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Costs and Expenses: |
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Costs of services provided, before reimbursements |
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Reimbursements |
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Total costs of services |
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Selling, general, and administrative expenses |
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Corporate interest expense, net of interest income of $ |
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Total Costs and Expenses |
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Other Loss, net |
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Income Before Income Taxes |
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Provision for Income Taxes |
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Net Income |
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Net Loss Attributable to Noncontrolling Interests |
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Net Income Attributable to Shareholders of Crawford & Company |
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$ |
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$ |
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Earnings Per Share - Basic: |
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Class A Common Stock |
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$ |
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$ |
Class B Common Stock |
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$ |
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$ |
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Earnings Per Share - Diluted: |
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Class A Common Stock |
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$ |
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$ |
Class B Common Stock |
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$ |
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$ |
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Weighted-Average Shares Used to Compute Basic Earnings Per Share: |
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Class A Common Stock |
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Class B Common Stock |
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Weighted-Average Shares Used to Compute Diluted Earnings Per Share: |
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Class A Common Stock |
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Class B Common Stock |
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(The accompanying notes are an integral part of these condensed consolidated financial statements)
4
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited
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Three Months Ended June 30, |
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(In thousands) |
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2024 |
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2023 |
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Net Income |
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$ |
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$ |
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Other Comprehensive (Loss) Income: |
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Net foreign currency translation loss, net of tax of $ |
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Amortization of actuarial losses for retirement plans included in net periodic pension cost, net of tax of $ |
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Other Comprehensive Income |
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Comprehensive Income |
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Comprehensive loss attributable to noncontrolling interests |
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Comprehensive Income Attributable to Shareholders of Crawford & Company |
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$ |
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$ |
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Six Months Ended June 30, |
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(In thousands) |
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2024 |
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2023 |
Net Income |
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$ |
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$ |
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Other Comprehensive (Loss) Income: |
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Net foreign currency translation (loss) gain, net of tax of $ |
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( |
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Amortization of actuarial losses for retirement plans included in net periodic pension cost, net of tax of $ |
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Other Comprehensive Income |
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Comprehensive Income |
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Comprehensive loss attributable to noncontrolling interests |
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Comprehensive Income Attributable to Shareholders of Crawford & Company |
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$ |
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$ |
(The accompanying notes are an integral part of these condensed consolidated financial statements)
5
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
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* |
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(In thousands) |
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June 30, |
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December 31, |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, less allowance for expected credit losses of $ |
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Unbilled revenues, at estimated billable amounts |
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Income taxes receivable |
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Prepaid expenses and other current assets |
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Total Current Assets |
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Net Property and Equipment |
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Other Assets: |
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Operating lease right-of-use assets, net |
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Goodwill |
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Intangible assets arising from business acquisitions, net |
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Capitalized software costs, net |
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Deferred income tax assets |
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Other noncurrent assets |
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Total Other Assets |
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TOTAL ASSETS |
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$ |
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$ |
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* Derived from the audited Consolidated Balance Sheet
(The accompanying notes are an integral part of these condensed consolidated financial statements)
6
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS — CONTINUED
Unaudited
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* |
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(In thousands, except par value amounts) |
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June 30, |
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December 31, |
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LIABILITIES AND SHAREHOLDERS' INVESTMENT |
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Current Liabilities: |
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Short-term borrowings |
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$ |
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$ |
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Accounts payable |
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Accrued compensation and related costs |
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Self-insured risks |
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Income taxes payable |
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Operating lease liability |
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Other accrued liabilities |
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Deferred revenues |
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Total Current Liabilities |
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Noncurrent Liabilities: |
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Long-term debt and finance leases, less current installments |
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Operating lease liability |
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Deferred revenues |
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Accrued pension liabilities |
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Other noncurrent liabilities |
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Total Noncurrent Liabilities |
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Shareholders' Investment: |
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Class A common stock, $ |
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Class B common stock, $ |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive loss |
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Shareholders' Investment Attributable to Shareholders of Crawford & Company |
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Noncontrolling interests |
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( |
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( |
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Total Shareholders' Investment |
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TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT |
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$ |
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$ |
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*
(The accompanying notes are an integral part of these condensed consolidated financial statements)
7
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
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Six Months Ended June 30, |
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(In thousands) |
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2024 |
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2023 |
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Cash Flows from Operating Activities: |
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Net income |
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$ |
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$ |
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Reconciliation of net income to net cash (used in) provided by operating activities: |
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Depreciation and amortization |
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Stock-based compensation |
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(Gain) loss on disposal of property and equipment |
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( |
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Contingent earnout adjustments |
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Changes in operating assets and liabilities: |
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Accounts receivable, net |
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( |
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Unbilled revenues, net |
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( |
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Accrued or prepaid income taxes |
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( |
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( |
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Accounts payable and accrued liabilities |
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( |
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( |
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Deferred revenues |
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( |
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Accrued retirement costs |
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Prepaid expenses and other operating activities |
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( |
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Net cash (used in) provided by operating activities |
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( |
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Cash Flows from Investing Activities: |
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Acquisitions of property and equipment |
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Capitalization of computer software costs |
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( |
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( |
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Net cash used in investing activities |
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( |
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( |
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Cash Flows from Financing Activities: |
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Cash dividends paid |
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( |
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Repurchases of common stock |
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( |
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Increases in revolving credit facility borrowings |
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Payments on revolving credit facility borrowings |
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( |
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( |
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Payments of contingent consideration on acquisitions |
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( |
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( |
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Other financing activities |
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Net cash provided by (used in) financing activities |
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( |
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Effects of exchange rate changes on cash and cash equivalents |
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( |
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(Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash |
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( |
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Cash, Cash Equivalents, and Restricted Cash at Beginning of Year |
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Cash, Cash Equivalents, and Restricted Cash at End of Period |
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$ |
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$ |
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(The accompanying notes are an integral part of these condensed consolidated financial statements)
8
CRAWFORD & COMPANY
Unaudited
(In thousands, except per share amounts)
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Common Stock |
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Accumulated |
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Shareholders' |
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2024 |
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Class A |
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Class B |
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Additional |
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Retained |
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Other |
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Shareholders |
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Noncontrolling |
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Total |
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Balance at January 1, 2024 |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
( |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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( |
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Other comprehensive income (loss) |
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— |
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— |
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— |
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— |
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( |
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Cash dividends paid (Class A - $ |
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— |
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|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Repurchases of common stock |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Increase in value of noncontrolling interest due to acquisition |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
Shares issued in connection with stock-based compensation plans, net |
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Dividends paid to noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance at March 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
|||
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash dividends paid (Class A - $ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Repurchases of common stock |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Decrease in value of noncontrolling interest due to acquisition |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Shares issued in connection with stock-based compensation plans, net |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Balance at June 30, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
(The accompanying notes are an integral part of these condensed consolidated financial statements)
9
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT - CONTINUED
Unaudited
(In thousands, except per share amounts)
|
|
Common Stock |
|
|
|
|
|
|
|
|
Accumulated |
|
|
Shareholders' |
|
|
|
|
|
|
|
|||||||||||
2023 |
|
Class A |
|
|
Class B |
|
|
Additional |
|
|
Retained |
|
|
Other |
|
|
Shareholders |
|
|
Noncontrolling |
|
|
Total |
|
||||||||
Balance at January 1, 2023 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Net income |
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||||||
Cash dividends paid (Class A - $ | ||||||||||||||||||||||||||||||||