EX-99.1 2 exhibit991080816q2pressrel.htm EXHIBIT 99.1 Exhibit


Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD ATLANTA, GEORGIA 30319 (404) 300-1000
FOR IMMEDIATE RELEASE
Crawford & Company Reports 2016 Second Quarter Results
Reaffirms 2016 Guidance

ATLANTA, GA. (August 8, 2016) -- Crawford & Company (www.crawfordandcompany.com) (NYSE: CRDA and CRDB), one of the world's largest independent providers of claims management solutions to insurance companies and self-insured entities, today announced its financial results for the second quarter ended June 30, 2016.

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 non-voting Class A Common Stock (CRDA) than on the voting Class B Common Stock (CRDB), subject to certain limitations. In addition, with respect to mergers or similar transactions, holders of CRDA must receive the same type and amount of consideration as holders of CRDB, unless different consideration is approved by the holders of 75% of CRDA, voting as a class.

Second Quarter 2016 Summary

•
Revenues before reimbursements of $282.3 million, down from $304.4 million for the second quarter of 2015
•
Net income attributable to shareholders of $8.6 million, more than doubling net income of $4.1 million in the same period last year
•
Restructuring and special charges of $3.5 million pretax
•
Diluted earnings per share of $0.16 for CRDA and $0.14 for CRDB, compared with $0.08 for CRDA and $0.06 for CRDB in the prior year quarter
•
Diluted earnings per share of $0.20 for CRDA and $0.19 for CRDB on a non-GAAP basis in the 2016 period, before restructuring and special charges, compared to $0.14 for CRDA and $0.12 for CRDB in the prior year quarter
•
Consolidated operating earnings, a non-GAAP financial measure, were $23.9 million in the 2016 second quarter, compared with $17.7 million in the 2015 period
•
Consolidated adjusted EBITDA, a non-GAAP financial measure, was $32.3 million in the 2016 second quarter, compared with $26.5 million in the 2015 period.

Mr. Harsha V. Agadi, chief executive officer of Crawford & Company, stated, "I am pleased with our second quarter results as we delivered strong operating earnings growth despite a challenging market environment where revenues contracted due to the continued expected declines in our Garden City Group combined with foreign exchange headwinds from a stronger U.S. dollar. The cost reduction plan that we initiated through last year has positioned Crawford to drive margin expansion and more predictable results even in more difficult markets like what we experienced through the second quarter. In fact, operating earnings increased 35% as our consolidated operating margin expanded 260 basis points year over year to 8.5% from the 2015 second quarter’s level."

Page 1 of 12

Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD ATLANTA, GEORGIA 30319 (404) 300-1000


"Looking at our second quarter results in more detail, our International segment showed the most improved performance as we are nearly complete with the integration of the GAB Robins acquisition. Broadspire delivered another strong quarter with growing operating margins and steady, consistent operating performance. The U.S. Services segment saw revenue declines related to the large outsourced services project and a lack of weather events, partially offset by continued growth in our U.S. Contractor Connection service line. Lastly, GCG improved over 2016 first quarter results and continues to manage the runoff of two major projects very well."

Mr. Agadi concluded, "Our second quarter results clearly demonstrate that we are on the road to significant improvement given the great progress that we have made streamlining our operations as we prepare Crawford for both the opportunities and challenges that lie ahead. We plan on building upon this momentum as we focus our team on delivering top line growth while remaining vigilant on cost containment. The management team and I remain focused on driving a culture of growth within the Company and are excited by the opportunities in front of us and optimistic about where Crawford is heading. Looking forward, we are positioning our Company to create further long-term shareholder value by focusing on profitable growth and leveraging the Company’s numerous global resources."


Segment Results for the Second Quarter

U.S. Services

U.S. Services revenues before reimbursements were $58.8 million in the second quarter of 2016, decreasing 12% from $66.9 million in the second quarter of 2015. The revenue decrease was primarily due to a reduction in U.S. Catastrophe Services and a reduction of weather-related case volumes in U.S. Claims Field Operations partially offset by an increase in U.S. Contractor Connection revenues. Operating earnings were $9.6 million in the 2016 second quarter, compared with $9.8 million in the second quarter of 2015, representing operating margins of 16% and 15% in the 2016 and 2015 periods, respectively.

International

Second quarter 2016 revenues before reimbursements for the International segment totaled $123.2 million, compared with $129.5 million in the 2015 second quarter. This decrease was primarily due to changes in foreign exchange rates which negatively impacted revenues by approximately 5%, or $6.1 million, in the second quarter compared with the prior year period. International segment operating earnings were $11.0 million in the 2016 second quarter, compared with $1.2 million in the 2015 second quarter. The segment's operating margin was 9% in the 2016 period as compared to 1% in the 2015 period. The increase in operating margin for the 2016 quarter was a result of an improvement in U.K. operating results and the benefits of cost reduction initiatives implemented in 2015.

Page 2 of 12

Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD ATLANTA, GEORGIA 30319 (404) 300-1000



Broadspire

Broadspire segment revenues before reimbursements were $75.1 million in the 2016 second quarter, up from $73.7 million in the 2015 second quarter. The revenue increase was due to increased claims management revenues and higher average case values when compared with the 2015 period. Broadspire recorded operating earnings of $6.5 million in the second quarter of 2016, representing an operating margin of 9%, compared with $6.0 million, or 8% of revenues, in the 2015 second quarter.

Garden City Group

Garden City Group revenues before reimbursements were $25.2 million in the second quarter of 2016, compared with $34.3 million in the same period of 2015. The expected decrease in revenues was primarily due to declines in volumes associated with certain large ongoing cases. Operating earnings were $2.7 million in the 2016 second quarter as compared to $3.7 million in the 2015 period, with the related operating margin flat at 11% for both periods. At June 30, 2016 there was a backlog of projects awarded totaling approximately $94.1 million as compared to $88.0 million at June 30, 2015.

Unallocated Corporate and Shared Costs, Net

Unallocated corporate costs were $5.9 million in the second quarter of 2016, compared with $3.0 million in the same period of 2015. The increased costs for the three months of 2016 were due to an increase in defined benefit pension expense and incentive compensation, partially offset by a decrease in unallocated professional fees.

Restructuring and Special Charges

The Company recorded restructuring and special charges of $3.5 million and $4.2 million in the 2016 and 2015 second quarters, respectively. Restructuring costs of $3.0 million in the 2016 quarter were comprised of costs associated with the ongoing implementation of the Global Business Services Center and the Global Technology Services Center (the "Centers"), integration costs related to the GAB Robins acquisition, and other restructuring costs in our operating segments and administrative areas. Special charges of $0.5 million in 2016 were for certain legal and professional fees. There were no special charges in the 2015 second quarter.

Balance Sheet and Cash Flow

Crawford & Company's consolidated cash and cash equivalents position as of June 30, 2016 totaled $59.4 million compared with $76.1 million at December 31, 2015.

The Company's operations provided $11.5 million of cash during the first half of 2016, compared with $10.2 million in the 2015 period. The improvement in cash provided by operating activities in the first half of 2016 compared with 2015 was primarily due to improved net income partially offset by an increase in working capital.

Page 3 of 12

Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD ATLANTA, GEORGIA 30319 (404) 300-1000



2016 Guidance

Crawford & Company is reaffirming guidance for 2016 as follows:

•
Consolidated revenues before reimbursements between $1.05 and $1.10 billion;
•
After expected restructuring and special charges, net income attributable to shareholders of Crawford & Company between $24.0 and $30.0 million, or $0.48 to $0.58 diluted earnings per CRDA share, and $0.40to $0.50 diluted earnings per CRDB share;
•
Consolidated operating earnings between $80.0 and $90.0 million;
•
Consolidated adjusted EBITDA between $120.0 and $130.0 million;
•
Before expected restructuring and special charges, net income attributable to shareholders of Crawford & Company on a non-GAAP basis between $36.0 and $42.0 million, or $0.67 to $0.77 diluted earnings per CRDA share, and $0.59 to $0.69 diluted earnings per CRDB share.

The Company expects to incur restructuring and special charges in 2016 totaling $15.6 million pretax. This is comprised of approximately $5.1 million related to the Centers and $10.5 million related to previously announced restructuring plans and other special charges. As a result of restructuring charges incurred for the Centers in 2015 and 2016, the Company expects to achieve $10.7 million in savings in 2016.

To a significant extent, Crawford's business depends 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.

Conference Call

As previously announced, Crawford & Company will host a conference call today, August 8, 2016 at 3:00 p.m. Eastern Time to discuss its second quarter 2016 results. The conference call can be accessed live by dialing 1-800-374-2518 using passcode 90682749. A presentation for today’s call can also be found on the investor relations portion of the Company’s website, http://www.crawfordandcompany.com. The call will be recorded and available for replay through September 8, 2016. You may dial 1-855-859-2056 to listen to the replay. The access code is 90682749.

Non-GAAP Presentation

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 or operating earnings. 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.


Page 4 of 12

Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD ATLANTA, GEORGIA 30319 (404) 300-1000


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 Company and operating segments, and make resource allocation and certain compensation decisions. Unlike net income, segment operating earnings is not a standard performance measure found in GAAP. We believe this measure is useful to others in that it allows them to evaluate segment and consolidated operating performance using the same criteria used by our senior management and CODM. Consolidated operating earnings represent segment earnings including certain unallocated corporate and shared costs, but before net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, restructuring and special charges, income taxes, and net income or loss attributable to noncontrolling interests. The reconciliation of operating earnings to net income attributable to shareholders of Crawford & Company on a GAAP basis is presented below.

Adjusted EBITDA is not a term defined by GAAP and as a result our measure of adjusted EBITDA might not be comparable to similarly titled measures used by other companies. However, adjusted EBITDA is used by management to evaluate, assess and benchmark our operational results and the Company believes that adjusted EBITDA is relevant and useful information widely used by analysts, investors and other interested parties. Adjusted EBITDA is defined as net income attributable to shareholders of Crawford & Company with adjustments for depreciation and amortization, net corporate interest expense, income taxes, restructuring and special charges, and stock-based compensation expense.

Unallocated corporate and shared costs represent expenses related to our chief executive officer and Board of Directors, certain provisions for bad debt allowances or subsequent recoveries such as those related to bankrupt clients, defined benefit pension costs or credits for our frozen U.S. pension plan, certain self-insurance costs and recoveries, and professional fees for corporate level projects that are not allocated to our individual operating segments but are included in our financial performance measure of consolidated operating earnings. Restructuring and special charges are non-core items not directly related to our normal business or operations, or our future performance.

Income taxes, net corporate interest expense, stock option expense, and amortization of customer-relationship intangible assets are recurring components of our net income, but they are not considered part of our consolidated or segment operating earnings because they are managed on a corporate-wide basis. Income taxes are calculated for the Company on a consolidated basis based on statutory rates in effect in the various jurisdictions in which we provide services, and varies significantly by jurisdiction. Net corporate interest expense results from capital structure decisions made by senior management and the Board of Directors and affecting the Company as a whole. 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. Amortization expense is a non-cash expense for finite-lived customer-relationship and trade name intangible assets acquired in business combinations. 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.

Income taxes are calculated for the non-GAAP presentation of net income before restructuring and special charges based on statutory rates in effect in the various jurisdictions in which charges exist, and vary by jurisdiction.


Page 5 of 12

Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD ATLANTA, GEORGIA 30319 (404) 300-1000


Following is a reconciliation of segment and consolidated operating earnings to net income attributable to shareholders of Crawford & Company on a GAAP basis. The reconciliation of 2016 guidance is to the midpoint of the guidance range.

 
Three months ended
 
Six months ended
 
Full Year
(in thousands)
June 30, 2016
June 30, 2015
 
June 30, 2016
June 30, 2015
 
Guidance 2016
Operating earnings:
 
 
 
 
 
 
 
U.S. Services
$
9,579

$
9,835

 
$
18,633

$
13,996

 
 
International
10,973

1,167

 
18,007

3,510

 
 
Broadspire
6,529

6,003

 
15,234

9,546

 
 
Garden City Group
2,691

3,721

 
4,186

8,672

 
 
Unallocated corporate and shared costs, net
(5,889
)
(3,043
)
 
(10,507
)
(7,345
)
 
 
Consolidated operating earnings
23,883

17,683

 
45,553

28,379

 
$
85,000

(Deduct) add:
 
 
 
 
 
 
 
Net corporate interest expense
(2,523
)
(2,042
)
 
(5,291
)
(3,906
)
 
(10,700
)
Stock option expense
(137
)
(178
)
 
(227
)
(327
)
 
(500
)
Amortization expense
(2,420
)
(2,334
)
 
(4,879
)
(4,432
)
 
(9,200
)
Restructuring and special charges
(3,526
)
(4,242
)
 
(5,943
)
(5,305
)
 
(15,600
)
Income taxes
(6,116
)
(4,709
)
 
(11,423
)
(6,950
)
 
(22,700
)
Net (income) loss attributable to non-controlling interests
(534
)
(124
)
 
(533
)
(419
)
 
700

Net income attributable to shareholders of Crawford & Company
$
8,627

$
4,054

 
$
17,257

$
7,040

 
$
27,000

 
 
 
 
 
 
 
 

Following is a reconciliation of net income attributable to shareholders of Crawford & Company on a GAAP basis to adjusted EBITDA. The reconciliation of 2016 guidance is to the midpoint of the guidance range.
 
Three months ended
 
Six months ended
 
Full Year
(in thousands)
June 30, 2016
June 30, 2015
 
June 30, 2016
June 30, 2015
 
Guidance 2016
Net income attributable to shareholders of Crawford & Company
$
8,627

$
4,054

 
$
17,257

$
7,040

 
$
27,000

Add:
 
 
 
 
 
 
 
Depreciation and amortization
10,264

10,592

 
20,558

21,407

 
45,000

Stock-based compensation
1,228

876

 
1,957

1,280

 
4,000

Net corporate interest expense
2,523

2,042

 
5,291

3,906

 
10,700

Restructuring and special charges
3,526

4,242

 
5,943

5,305

 
15,600

Income taxes
6,116

4,709

 
11,423

6,950

 
22,700

Adjusted EBITDA
$
32,284

$
26,515

 
$
62,429

$
45,888

 
$
125,000

 
 
 
 
 
 
 
 


Page 6 of 12

Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD ATLANTA, GEORGIA 30319 (404) 300-1000


Further information regarding the Company's operating results for the three months and six months ended June 30, 2016, financial position as of June 30, 2016, and cash flows for the six months ended June 30, 2016 is shown on the attached unaudited condensed consolidated financial statements.

About Crawford & Company

Based in Atlanta, Georgia, Crawford & Company (www.crawfordandcompany.com) is one of the world's largest independent providers of claims management solutions to the risk management and insurance industry, as well as to self-insured entities, with an expansive global network serving clients in more than 70 countries. The Crawford SolutionSM 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 non-voting Class A Common Stock than on the voting 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 different consideration is approved by the holders of 75% of the Class A Common Stock, voting as a class.

Earnings per share may be different between CRDA and CRDB due to the payment of a higher per share dividend on CRDA than CRDB, and the impact that has on the earnings per share calculation according to generally accepted accounting principles.

FOR FURTHER INFORMATION REGARDING THIS PRESS RELEASE, PLEASE CALL BRUCE SWAIN AT (404) 300-1051.

This press release contains forward-looking statements, including statements about the expected future 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.



Page 7 of 12


Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD, ATLANTA, GEORGIA 30319 (404) 300-1000

CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In Thousands, Except Per Share Amounts and Percentages)
 
 
 
 
 
 
Three Months Ended June 30,
2016
 
2015
 
% Change
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 

 
 

 
 
Revenues Before Reimbursements
$
282,343

 
$
304,398

 
(7
)%
Reimbursements
15,326

 
20,018

 
(23
)%
Total Revenues
297,669

 
324,416

 
(8
)%
 
 
 
 
 
 
Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Costs of Services Provided, Before Reimbursements
200,362

 
232,108

 
(14
)%
Reimbursements
15,326

 
20,018

 
(23
)%
Total Costs of Services
215,688

 
252,126

 
(14
)%
 
 
 
 
 
 
Selling, General, and Administrative Expenses
61,060

 
57,221

 
7
 %
Corporate Interest Expense, Net
2,523

 
2,042

 
24
 %
Restructuring and Special Charges
3,526

 
4,242

 
(17
)%
Total Costs and Expenses
282,797

 
315,631

 
(10
)%
 
 
 
 
 
 
Other Income
405

 
102

 
297
 %
 
 
 
 
 
 
Income Before Income Taxes
15,277

 
8,887

 
72
 %
Provision for Income Taxes
6,116

 
4,709

 
30
 %
 
 
 
 
 
 
Net Income
9,161

 
4,178

 
119
 %
 
 
 
 
 
 
Net Income Attributable to Noncontrolling Interests
(534
)
 
(124
)
 
331
 %
 
 
 
 
 
 
Net Income Attributable to Shareholders of Crawford & Company
$
8,627

 
$
4,054

 
113
 %
 
 
 
 
 
 
 
 
 
 
 
 
Earnings Per Share - Basic:
 
 
 
 
 
Class A Common Stock
$
0.16

 
$
0.08

 
100
 %
Class B Common Stock
$
0.14

 
$
0.06

 
133
 %
 
 
 
 
 
 
Earnings Per Share - Diluted:
 
 
 
 
 
Class A Common Stock
$
0.16

 
$
0.08

 
100
 %
Class B Common Stock
$
0.14

 
$
0.06

 
133
 %
 
 
 
 
 
 
Cash Dividends Per Share:
 
 
 
 
 
Class A Common Stock
$
0.07

 
$
0.07

 
—
 %
Class B Common Stock
$
0.05

 
$
0.05

 
—
 %
 
 
 
 
 
 
 
 
 
 
 
 

Page 8 of 12


Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD, ATLANTA, GEORGIA 30319 (404) 300-1000

CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In Thousands, Except Per Share Amounts and Percentages)
 
 
 
 
 
 
Six Months Ended June 30,
2016
 
2015
 
% Change
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 

 
 

 
 
Revenues Before Reimbursements
$
559,577

 
$
592,175

 
(6
)%
Reimbursements
29,000

 
38,857

 
(25
)%
Total Revenues
588,577

 
631,032

 
(7
)%
 
 
 
 
 
 
Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Costs of Services Provided, Before Reimbursements
401,795

 
451,431

 
(11
)%
Reimbursements
29,000

 
38,857

 
(25
)%
Total Costs of Services
430,795

 
490,288

 
(12
)%
 
 
 
 
 
 
Selling, General, and Administrative Expenses
117,857

 
117,608

 
—
 %
Corporate Interest Expense, Net
5,291

 
3,906

 
35
 %
Restructuring and Special Charges
5,943

 
5,305

 
12
 %
Total Costs and Expenses
559,886

 
617,107

 
(9
)%
 
 
 
 
 
 
Other Income
522

 
484

 
8
 %
 
 
 
 
 
 
Income Before Income Taxes
29,213

 
14,409

 
103
 %
Provision for Income Taxes
11,423

 
6,950

 
64
 %
 
 
 
 
 
 
Net Income
17,790

 
7,459

 
139
 %
 
 
 
 
 
 
Net Income Attributable to Noncontrolling Interests
(533
)
 
(419
)
 
27
 %
 
 
 
 
 
 
Net Income Attributable to Shareholders of Crawford & Company
$
17,257

 
$
7,040

 
145
 %
 
 
 
 
 
 
 
 
 
 
 
 
Earnings Per Share - Basic:
 
 
 
 
 
Class A Common Stock
$
0.33

 
$
0.15

 
120
 %
Class B Common Stock
$
0.29

 
$
0.11

 
164
 %
 
 
 
 
 
 
Earnings Per Share - Diluted:
 
 
 
 
 
Class A Common Stock
$
0.33

 
$
0.14

 
136
 %
Class B Common Stock
$
0.29

 
$
0.11

 
164
 %
 
 
 
 
 
 
Cash Dividends Per Share:
 
 
 
 
 
Class A Common Stock
$
0.14

 
$
0.14

 
—
 %
Class B Common Stock
$
0.10

 
$
0.10

 
—
 %
 
 
 
 
 
 
 
 
 
 
 
 


Page 9 of 12


Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD, ATLANTA, GEORGIA 30319 (404) 300-1000
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2016 and December 31, 2015
Unaudited
(In Thousands, Except Par Values)
 
June 30,
 
December 31,
 
2016
 
2015
ASSETS
 
 
 
 
 
 
 
Current Assets:
 
 
 
Cash and Cash Equivalents
$
59,365

 
$
76,066

Accounts Receivable, Net
170,178

 
164,596

Unbilled Revenues, at Estimated Billable Amounts
113,027

 
98,659

Income Taxes Receivable
4,255

 
4,255

Prepaid Expenses and Other Current Assets
32,031

 
26,601

Total Current Assets
378,856

 
370,177

 
 
 
 
Property and Equipment
134,390

 
140,383

Less Accumulated Depreciation
(102,077
)
 
(102,331
)
Net Property and Equipment
32,313

 
38,052

 
 
 
 
Other Assets:
 
 
 
Goodwill
94,681

 
95,616

Intangible Assets Arising from Business Acquisitions, Net
97,666

 
104,861

Capitalized Software Costs, Net
80,913

 
79,996

Deferred Income Tax Assets
45,728

 
47,371

Other Noncurrent Assets
51,702

 
47,333

Total Other Assets
370,690

 
375,177

 
 
 
 
Total Assets
$
781,859

 
$
783,406

 
 
 
 
LIABILITIES AND SHAREHOLDERS' INVESTMENT
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
Short-Term Borrowings
$
19,371

 
$
19,958

Accounts Payable
44,993

 
44,615

Accrued Compensation and Related Costs
68,151

 
68,843

Self-Insured Risks
14,244

 
14,122

Income Taxes Payable
6,441

 
4,419

Deferred Rent
13,229

 
13,303

Other Accrued Liabilities
44,649

 
44,577

Deferred Revenues
43,136

 
46,552

Current Installments of Capital Leases
1,757

 
1,959

Total Current Liabilities
255,971

 
258,348

 
 
 
 
Noncurrent Liabilities:
 
 
 
Long-Term Debt and Capital Leases, Less Current Installments
216,944

 
225,365

Deferred Revenues
25,936

 
26,592

Self-Insured Risks
9,897

 
9,354

Accrued Pension Liabilities
114,510

 
121,732

Other Noncurrent Liabilities
17,100

 
17,664

Total Noncurrent Liabilities
384,387

 
400,707

 
 
 
 
Shareholders' Investment:
 
 
 
Class A Common Stock, $1.00 Par Value
30,801

 
30,537

Class B Common Stock, $1.00 Par Value
24,690

 
24,690

Additional Paid-in Capital
45,153

 
41,936

Retained Earnings
249,656

 
239,161

Accumulated Other Comprehensive Loss
(213,819
)
 
(222,631
)
Shareholders' Investment Attributable to Shareholders of Crawford & Company
136,481

 
113,693

Noncontrolling Interests
5,020

 
10,658

Total Shareholders' Investment
141,501

 
124,351

 
 
 
 
Total Liabilities and Shareholders' Investment
$
781,859

 
$
783,406


Page 10 of 12


Press Release
`CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD, ATLANTA, GEORGIA 30319 (404) 300-1000
CRAWFORD & COMPANY
SUMMARY RESULTS BY OPERATING SEGMENT
Unaudited
(In Thousands, Except Percentages)

Three Months Ended June 30,

 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Services
%
International
%
Broadspire
%
Garden City Group
%
 
2016
2015
Change
2016
2015
Change
2016
2015
Change
2016
2015
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues Before Reimbursements
$
58,839

$
66,898

(12
)%
$
123,235

$
129,483

(5
)%
$
75,099

$
73,693

2
 %
$
25,170

$
34,324

(27
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Direct Compensation, Fringe Benefits & Non-Employee Labor
32,498

40,155

(19
)%
77,567

88,116

(12
)%
42,240

39,595

7
 %
16,202

23,923

(32
)%
% of Revenues Before Reimbursements
55
%
60
%
 
63
%
68
%
 
56
%
54
%
 
64
%
70
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor
16,762

16,908

(1
)%
34,695

40,200

(14
)%
26,330

28,095

(6
)%
6,277

6,680

(6
)%
% of Revenues Before Reimbursements
28
%
25
%
 
28
%
31
%
 
35
%
38
%
 
25
%
19
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Operating Expenses
49,260

57,063

(14
)%
112,262

128,316

(13
)%
68,570

67,690

1
 %
22,479

30,603

(27
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings (1)
$
9,579

$
9,835

(3
)%
$
10,973

$
1,167

840
 %
$
6,529

$
6,003

9
 %
$
2,691

$
3,721

(28
)%
% of Revenues Before Reimbursements
16
%
15
%
 
9
%
1
%
 
9
%
8
%
 
11
%
11
%
 

Six Months Ended June 30,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Services
%
International
%
Broadspire
%
Garden City Group
%
 
2016
2015
Change
2016
2015
Change
2016
2015
Change
2016
2015
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues Before Reimbursements
$
117,343

$
123,603

(5
)%
$
240,757

$
253,508

(5
)%
$
151,299

$
143,365

6
 %
$
50,178

$
71,699

(30
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Direct Compensation, Fringe Benefits & Non-Employee Labor
67,944

78,001

(13
)%
154,237

174,010

(11
)%
83,862

79,119

6
 %
33,211

49,325

(33
)%
% of Revenues Before Reimbursements
58
%
63
%
 
64
%
69
%
 
55
%
55
%
 
66
%
69
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor
30,766

31,606

(3
)%
68,513

75,988

(10
)%
52,203

54,700

(5
)%
12,781

13,702

(7
)%
% of Revenues Before Reimbursements
26
%
26
%
 
28
%
30
%
 
35
%
38
%
 
25
%
19
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Operating Expenses
98,710

109,607

(10
)%
222,750

249,998

(11
)%
136,065

133,819

2
 %
45,992

63,027

(27
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings (1)
$
18,633

$
13,996

33
 %
$
18,007

$
3,510

413
 %
$
15,234

$
9,546

60
 %
$
4,186

$
8,672

(52
)%
% of Revenues Before Reimbursements
16
%
11
%
 
7
%
1
%
 
10
%
7
%
 
8
%
12
%
 
NOTE: "Direct Compensation, Fringe Benefits & Non-Employee Labor" and "Expenses Other Than Direct Compensation, Fringe Benefits & Non-Employee Labor" components are not comparable across
segments, but are comparable within each segment across periods.

(1) A non-GAAP financial measurement which represents net income attributable to the applicable reporting segment excluding income taxes, net corporate interest expense, stock option expense, amortization
of customer-relationship intangible assets, restructuring and special charges, and certain unallocated corporate and shared costs. See pages 5-6 for additional information about segment operating earnings.


Page 11 of 12


Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD, ATLANTA, GEORGIA 30319 (404) 300-1000

CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 2016 and June 30, 2015
Unaudited
(In Thousands)
 
 
2016
 
2015
Cash Flows From Operating Activities:
 
 
 
 
Net Income
 
$
17,790

 
$
7,459

Reconciliation of Net Income to Net Cash Provided by Operating Activities:
 
 
 
 
Depreciation and Amortization
 
20,558

 
21,407

Stock-Based Compensation
 
1,957

 
1,280

(Gain) Loss on Disposals of Property and Equipment, Net
 
(8
)
 
33

Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions and Dispositions:
 
 
 
 
Accounts Receivable, Net
 
(7,437
)
 
13,338

Unbilled Revenues, Net
 
(13,306
)
 
(11,507
)
Accrued or Prepaid Income Taxes
 
3,224

 
2,371

Accounts Payable and Accrued Liabilities
 
1,949

 
(16,777
)
Deferred Revenues
 
(4,084
)
 
(308
)
Accrued Retirement Costs
 
(5,247
)
 
(12,794
)
Prepaid Expenses and Other Operating Activities
 
(3,937
)
 
5,718

Net Cash Provided by Operating Activities
 
11,459

 
10,220

 
 
 
 
 
Cash Flows From Investing Activities:
 
 
 
 
Acquisitions of Property and Equipment
 
(4,588
)
 
(5,333
)
Capitalization of Computer Software Costs
 
(8,749
)
 
(10,871
)
Payments for Acquisitions, Net of Cash Acquired
 
(3,672
)
 
(66,077
)
Other Investing Activities
 
(95
)
 
—

Net Cash Used In Investing Activities
 
(17,104
)
 
(82,281
)
 
 
 
 
 
Cash Flows From Financing Activities:
 
 
 
 
Cash Dividends Paid
 
(6,762
)
 
(6,757
)
Payments Related to Shares Received for Withholding Taxes Under Stock-Based Compensation Plans
 
(4
)
 
(2
)
Proceeds from Shares Purchased Under Employee Stock-Based Compensation Plans
 
449

 
444

Repurchases of Common Stock
 
—

 
(137
)
Increases in Short-Term and Revolving Credit Facility Borrowings
 
51,471

 
117,672

Payments on Short-Term and Revolving Credit Facility Borrowings
 
(52,825
)
 
(24,951
)
Decrease in Note Payable for Stock Repurchase
 
(2,206
)
 
—

Payments on Capital Lease Obligations
 
(935
)
 
(1,072
)
Dividends Paid to Noncontrolling Interests
 
(210
)
 
—

Other Financing Activities
 
(12
)
 
(2
)
Net Cash (Used In) Provided By Financing Activities
 
(11,034
)
 
85,195

 
 
 
 
 
Effects of Exchange Rate Changes on Cash and Cash Equivalents
 
(22
)
 
(3,136
)
(Decrease) Increase in Cash and Cash Equivalents
 
(16,701
)
 
9,998

Cash and Cash Equivalents at Beginning of Year
 
76,066

 
52,456

Cash and Cash Equivalents at End of Period
 
$
59,365

 
$
62,454


Page 12 of 12