crda-ex991

ATLANTA, (August 3, 2020) -- Crawford & Company® (NYSE: CRD-A and CRD-B), the world’s largest publicly listed independent provider of claims management and outsourcing solutions to carriers, brokers and corporates, today announced its financial results for the second quarter ended June 30, 2020.

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

Non-GAAP results for the 2020 second quarter have been presented on a constant dollar basis to 2019 and exclude the non-cash income tax impact of the first quarter 2020 goodwill impairment of $2.2 million and the loss on disposition of business of $0.3 million. Non-GAAP consolidated results for the 2019 quarter exclude arbitration and claim settlements of $11.4 million.

Mr. Rohit Verma, chief executive officer of Crawford & Company, stated, “Our second quarter 2020 operating results were below 2019 levels, however, we consider the operating earnings of $18.7 million generated for the quarter to be a strong result considering the current global economic backdrop. These operating earnings represent a significant improvement over the $7.0 million we reported in this year’s first quarter. While we saw weakness in our Broadspire business due to the economic downturn, our loss adjusting businesses capitalized on the new business wins over the last two years which had been suppressed due to lack of weather activity. Our momentum is strong, but could be dampened by the increasing COVID-19 infection rate in the U.S. and the possibility of future waves globally.”

Mr. Verma concluded, “I would like to thank all our employees and our customers. Our employees have demonstrated strong commitment to our purpose, enabling the highest level of service even in these difficult times. I am thankful to our customers who continue to place their confidence and trust in us, giving us the opportunity to live our purpose of restoring and enhancing, lives businesses and communities.”

Crawford TPA Solutions segment revenues before reimbursements were $86.7 million in the 2020 second quarter, decreasing from $99.5 million in the 2019 second quarter. Absent foreign currency rate fluctuations of $(0.9) million, second quarter 2020 revenues would have been $87.6 million, down 12.0% from prior year second quarter.

Excluding centralized indirect support costs, gross profit decreased to $19.8 million, or a gross margin of 22.8% in 2020 from $23.7 million, or a gross margin of 23.8% in 2019. After allocation of indirect costs, Crawford TPA Solutions recorded operating earnings of $3.2 million in the second quarter of 2020 representing an operating margin of 3.7% compared with $5.0 million, or 5.1% of revenues, in the 2019 second quarter.

Crawford Claims Solutions revenues before reimbursements were $81.5 million in the second quarter of 2020, decreasing from $86.0 million in the second quarter of 2019. Absent foreign currency rate fluctuations of $(2.8) million, second quarter 2020 revenues would have been $84.3 million, down 2.0% from the prior year second quarter.

Excluding centralized indirect support costs, gross profit decreased to $19.0 million, or a gross margin of 23.3% in 2020 from $19.6 million, or a gross margin of 22.7% in 2019. After the allocation of indirect costs, the segment had operating earnings of $2.8 million in the 2020 second quarter increasing over the $1.7 million in the second quarter of 2019. The operating margin was 3.4% in the 2020 quarter and 2.0% in the 2019 quarter.

Crawford Specialty Solutions revenues before reimbursements were $66.2 million in the second quarter of 2020, down from $71.4 million in the same period of 2019. Absent foreign exchange rate fluctuations of $(2.2) million, revenues would have been $68.4 million for the three months ended June 30, 2020, decreasing 4.2% compared with prior year second quarter revenues.

Excluding indirect support costs, gross profit decreased to $25.1 million, or a gross margin of 37.9% in the 2020 quarter, from $25.2 million, or a gross margin of 35.3%, in the 2019 period. After allocation of indirect costs, operating earnings were $14.0 million in the 2020 second quarter increasing over the $12.6 million in the 2019 period. The segment’s operating margin for the 2020 quarter was 21.1% as compared with 17.7% in the 2019 quarter.

Unallocated corporate costs were $1.7 million in the second quarter of 2020, compared with credits of $3.2 million in the same period of 2019. The increase for the three months ended June 30, 2020 was due to CEO transition costs, severance costs, and an increase in self-insurance expenses, partially offset by a credit from the Canada Emergency Wage Subsidy and a decrease in defined benefit pension expense.

The Company recognized a non-cash goodwill impairment in the 2020 first quarter, totaling $17.7 million, related to its Crawford Claims Solutions segment. Due to the non-discrete income tax treatment of the goodwill impairment, the initial income tax benefit related to the impairment will normalize during the remainder of the year, resulting in a lower full year income tax benefit. During the 2020 second quarter, the impact of this treatment decreased the income tax benefit by $2.2 million, or $0.04 per share.

On June 12, 2020, the Company sold its 51% interest in Lloyd Warwick International for cash proceeds of $19.6 million and payment of $3.6 million intercompany indebtedness. Due to the two-month reporting lag for reporting its international results, this transaction will be recognized in the 2020 third quarter. Based on preliminary analysis we estimate this transaction will result in a gain between $10.0 to $12.0 million in the third quarter, or $0.19 to $0.23 per diluted share.

The Company estimates that COVID-19 negatively impacted its revenues in the range of $22.0 to $26.0 million for the three months ended June 30, 2020, and negatively impacted its revenues in the range of $25.0 to $29.0 million for the six months ended June 30, 2020. The Company expects the ongoing global economic slowdown resulting from COVID-19 could have a material impact to its results of operations, financial condition, and cash flow in one or more future quarters.

The Company’s consolidated cash and cash equivalents position as of June 30, 2020, totaled $60.0 million, compared with $51.8 million at December 31, 2019. The Company’s total debt outstanding as of June 30, 2020, totaled $195.6 million, compared with $177.0 million at December 31, 2019.

The Company’s operations provided $12.0 million of cash during 2020, compared with $8.7 million provided in 2019. The increase in cash provided by operating activities was primarily due to improved collections in billed and unbilled receivables offset by an increase in pension contributions and lower operating earnings. Free cash flow decreased by $2.9 million compared with 2019, reflecting higher software development and capital expenditures in 2020 compared with 2019.

The Company made $3.0 million in contributions to its U.S. defined benefit pension plan and $0.3 million to its U.K. plans for 2020, compared with no contributions to the U.S. plan and $0.3 million to the U.K. plans in 2019.

During 2020, the Company repurchased 155,351 shares of CRD-A and 161,459 of CRD-B at an average cost of $8.42 per share. The total cost of share repurchases during 2020 was $2.7 million. The Company has placed a hold on its current share repurchase plan and did not repurchase any shares during the 2020 second quarter.

As previously announced, Crawford & Company will host a conference call on August 4, 2020 at 8:30 a.m. Eastern Time to discuss its second quarter 2020 results. The conference call can be accessed live by dialing 1-800-374-2518 and using Conference ID 3377243. A presentation for tomorrow’s call can also be found on the investor relations portion of the Company’s website, http://www.crawco.com. The call will be recorded and available for replay through September 4, 2020. You may dial 1-855-859-2056 to listen to the replay.

In the normal course of business, our operating segments incur certain out-of-pocket expenses that are thereafter reimbursed by our clients. Under U.S. generally accepted accounting principles (“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.

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, goodwill impairment, restructuring costs, arbitration and claims settlement, loss on disposition of business, income taxes, and net income or loss attributable to noncontrolling interests and redeemable noncontrolling interests.

Gross profit is defined as revenues less direct expenses which exclude indirect overhead expenses allocated to the business. Indirect expenses consist of centralized administrative support costs, regional and local shared services that are allocated to each segment based on usage.

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. 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 the Company with recurring adjustments for depreciation and amortization, net corporate interest expense, income taxes, stock-based compensation expense and foreign exchange fluctuations. Additionally, adjustments for non-recurring expenses for goodwill impairment, restructuring costs, arbitration and claim settlements and loss on disposition of business have been included in the calculation of adjusted EBITDA.

Unallocated corporate and shared costs and credits include expenses and credits 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 unallocated professional fees, and certain self-insurance costs and recoveries that are not allocated to our individual operating segments.

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 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 vary significantly by jurisdiction. Net corporate interest expense results from capital structure decisions made by senior management and the Board of Directors, 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.

A significant portion of our operations are international. These international operations subject us to foreign exchange fluctuations. The following table illustrates revenue as a percentage of total revenue for the major currencies of the geographic areas that Crawford does business:

		Three Months Ended										Six Months Ended
(in thousands)		June 30, 2020					June 30, 2019					June 30, 2020					June 30, 2019
Geographic Area	Currency	USD equivalent		% of total			USD equivalent		% of total			USD equivalent		% of total			USD equivalent		% of total
U.S.	USD	$	131,888		56.3	%	$	146,525		57.0	%	$	266,336		56.4	%	$	286,115		56.5	%
U.K.	GBP		32,561		13.9	%		31,534		12.3	%		64,943		13.8	%		63,123		12.8	%
Canada	CAD		20,852		8.9	%		28,803		11.2	%		46,072		9.8	%		58,687		12.1	%
Australia	AUD		18,779		8.0	%		19,319		7.5	%		34,324		7.3	%		35,574		6.6	%
Europe	EUR		14,019		6.0	%		13,320		5.2	%		27,408		5.8	%		26,185		5.2	%
Rest of World	Various		16,317		6.9	%		17,380		6.8	%		32,864		6.9	%		34,255		6.8	%
Total Revenues, before reimbursements		$	234,416		100.0	%	$	256,881		100.0	%	$	471,947		100.0	%	$	503,939		100.0	%

Following is a reconciliation of segment and consolidated operating earnings to net income (loss) attributable to shareholders of Crawford & Company on a GAAP basis:

	Three months ended						Six months ended
(in thousands)	June 30, 2020			June 30, 2019			June 30, 2020			June 30, 2019
Operating earnings:
Crawford TPA Solutions	$	3,171		$	5,026		$	9,456		$	11,759
Crawford Claims Solutions		2,789			1,710			(890	)		1,397
Crawford Specialty Solutions		13,993			12,612			20,950			24,807
Unallocated corporate and shared costs, net		(1,709	)		3,170			(4,259	)		(744	)
Consolidated operating earnings		18,244			22,518			25,257			37,219
(Deduct) add:
Net corporate interest expense		(2,452	)		(2,468	)		(4,676	)		(5,184	)
Stock option expense		(286	)		(413	)		(576	)		(898	)
Amortization expense		(2,732	)		(2,802	)		(5,488	)		(5,600	)
Goodwill impairment		—			—			(17,674	)		—
Restructuring costs		—			—			(5,714	)		—
Arbitration and claim settlements		—			(11,352	)		—			(11,352	)
Loss on disposition of business		(341	)		—			(341	)		—
Income tax (provision) benefit		(6,311	)		(2,859	)		2,175			(5,792	)
Net (income) loss attributable to noncontrolling interests and redeemable noncontrolling interests		(224	)		18			1,536			358
Net income (loss) attributable to shareholders of Crawford & Company	$	5,898		$	2,642		$	(5,501	)	$	8,751

Following is a reconciliation of net income (loss) attributable to shareholders of Crawford & Company on a GAAP basis to non-GAAP adjusted EBITDA:

	Three months ended				Six months ended
(in thousands)	June 30, 2020		June 30, 2019		June 30, 2020			June 30, 2019
Net income (loss) attributable to shareholders of Crawford & Company	$	5,898	$	2,642	$	(5,501	)	$	8,751
Add (Deduct):
Depreciation and amortization		9,390		10,226		19,450			19,850
Stock-based compensation		1,118		1,646		1,998			1,399
Net corporate interest expense		2,452		2,468		4,676			5,184
Goodwill impairment		—		—		17,674			—
Restructuring costs		—		—		5,714			—
Arbitration and claim settlements		—		11,352		—			11,352
Loss on disposition of business		341		—		341			—
Income tax provision (benefit)		6,311		2,859		(2,175	)		5,792
Foreign exchange fluctuations		358		—		374			—
Non-GAAP adjusted EBITDA	$	25,868	$	31,193	$	42,551		$	52,328

Following is a reconciliation of operating cash flow to free cash flow for the six months ended June 30, 2020 and 2019:

Following are the reconciliations of GAAP Revenue, Operating Earnings, Pretax Earnings (Loss), Net Income (Loss) and Earnings (Loss) Per Share to related non-GAAP Adjusted figures, which reflect 2020 on a constant dollar basis before goodwill impairment, restructuring costs, and loss on disposition of business and for 2019 exclude the results of the arbitration and claim settlements:

Three Months Ended June 30, 2020
(in thousands)	Revenues		Non-GAAP Operating earnings		Pretax earnings		Net income attributable to Crawford & Company⁽¹⁾		Diluted earnings per CRD-A share⁽¹⁾		Diluted earnings per CRD-B share⁽¹⁾
GAAP	$	234,416	$	18,244	$	12,433	$	5,898	$	0.11	$	0.11
Adjustments:
Income tax impact of first quarter goodwill impairment		—		—		—		2,206		0.04		0.04
Loss on disposition of business		—		—		341		265		—		—
Foreign exchange fluctuations		5,832		407		358		384		0.01		0.01
Non-GAAP Adjusted	$	240,248	$	18,651	$	13,132	$	8,753	$	0.16	$	0.16

Six Months Ended June 30, 2020
(in thousands)	Revenues		Non-GAAP Operating earnings		Pretax (loss) income			Net (loss) income attributable to Crawford & Company⁽¹⁾			Diluted (loss) earnings per CRD-A share⁽¹⁾			Diluted (loss) earnings per CRD-B share⁽¹⁾
GAAP	$	471,947	$	25,257	$	(9,212	)	$	(5,501	)	$	(0.10	)	$	(0.12	)
Adjustments:
Goodwill impairment		—		—		17,674			11,339			0.21			0.21
Restructuring costs		—		—		5,714			3,263			0.06			0.06
Loss on disposition of business		—		—		341			265			0.01			0.01
Foreign exchange fluctuations		7,100		416		374			374			0.01			0.01
Non-GAAP Adjusted	$	479,047	$	25,673	$	14,891		$	9,740		$	0.19		$	0.17

⁽¹⁾ The income tax impact of goodwill impairment is based on the estimated annual effective income tax rate. Due to the non-discrete income tax treatment of the first quarter goodwill impairment, the income tax benefit will normalize as income is earned during the remainder of the year, resulting in a lower full year income tax benefit.

Following is information regarding the weighted average shares used in the computation of basic and diluted earnings (loss) per share:

	Three months ended				Six months ended
(in thousands)	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
GAAP
Weighted-Average Shares Used to Compute Basic Earnings (Loss) Per Share:
Class A Common Stock		30,521		30,799		30,541		30,729
Class B Common Stock		22,510		23,021		22,544		23,193
Weighted-Average Shares Used to Compute Diluted Earnings (Loss) Per Share:
Class A Common Stock		30,690		31,113		30,541		31,110
Class B Common Stock		22,510		23,021		22,544		23,193

Non-GAAP⁽²⁾
Weighted-Average Shares Used to Compute Diluted Earnings Per Share:
Class A Common Stock		30,690		31,113		30,747		31,110
Class B Common Stock		22,510		23,021		22,544		23,193

⁽²⁾ The Company had a net loss for GAAP reporting for the six months ended June 30, 2020, resulting in no additional dilutive securities added to the basic weighted average shares in calculating diluted weighted average shares for GAAP reporting as their impact would be anti-dilutive. As the Company has Non-GAAP positive net income for the six months ended June 30, 2020, these dilutive securities were added back to calculate Non-GAAP earnings per share.

Further information regarding the Company’s operating results for the quarter ended June 30, 2020, financial position as of June 30, 2020, and cash flows for the quarter ended June 30, 2020, is shown on the attached unaudited condensed consolidated financial statements.

Based in Atlanta, Crawford & Company (NYSE: CRD-A and CRD-B) is the world's largest publicly listed independent provider of claims management and outsourcing solutions to carriers, brokers and corporates with an expansive global network serving clients in more than 70 countries. The Company’s shares are traded on the NYSE under the symbols CRD-A and CRD-B. 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. More information is available at www.crawco.com.

Earnings per share may be different between CRD-A and CRD-B due to the payment of a higher per share dividend on CRD-A than CRD-B, 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.

Three Months Ended June 30,	2020			2019			% Change

Revenues:
Revenues Before Reimbursements	$	234,416		$	256,881			(9	)%
Reimbursements		8,459			10,965			(23	)%
Total Revenues		242,875			267,846			(9	)%

Costs and Expenses:
Costs of Services Provided, Before Reimbursements		163,598			174,927			(6	)%
Reimbursements		8,459			10,965			(23	)%
Total Costs of Services		172,057			185,892			(7	)%

Selling, General, and Administrative Expenses		55,508			60,184			(8	)%
Corporate Interest Expense, Net		2,452			2,468			(1	)%
Arbitration and Claim Settlements		—			11,352		nm
Loss on Disposition of Business		341			—		nm
Total Costs and Expenses		230,358			259,896			(11	)%

Other Expense, net		(84	)		(2,467	)		(97	)%

Income Before Income Taxes		12,433			5,483			127	%
Provision for Income Taxes		6,311			2,859			121	%

Net Income		6,122			2,624			133	%

Net (Income) Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests		(224	)		18			(1344	)%

Net Income Attributable to Shareholders of Crawford & Company	$	5,898		$	2,642			123	%

Earnings Per Share - Basic:
Class A Common Stock	$	0.11		$	0.06			83	%
Class B Common Stock	$	0.11		$	0.04			175	%

Earnings Per Share - Diluted:
Class A Common Stock	$	0.11		$	0.06			83	%
Class B Common Stock	$	0.11		$	0.04			175	%

Cash Dividends Per Share:
Class A Common Stock	$	0.03		$	0.07			(57	)%
Class B Common Stock	$	0.03		$	0.05			(40	)%

Six Months Ended June 30,	2020			2019			% Change

Revenues:
Revenues Before Reimbursements	$	471,947		$	503,939			(6	)%
Reimbursements		16,974			20,284			(16	)%
Total Revenues		488,921			524,223			(7	)%

Costs and Expenses:
Costs of Services Provided, Before Reimbursements		341,202			352,815			(3	)%
Reimbursements		16,974			20,284			(16	)%
Total Costs of Services		358,176			373,099			(4	)%

Selling, General, and Administrative Expenses		111,262			118,843			(6	)%
Corporate Interest Expense, Net		4,676			5,184			(10	)%
Goodwill Impairment		17,674			—		nm
Restructuring Costs		5,714			—		nm
Arbitration and Claim Settlements		—			11,352		nm
Loss on Disposition of Business		341			—		nm
Total Costs and Expenses		497,843			508,478			(2	)%

Other Expense, net		(290	)		(1,560	)		(81	)%

(Loss) Income Before Income Taxes		(9,212	)		14,185			(165	)%
(Benefit) Provision for Income Taxes		(2,175	)		5,792			(138	)%

Net (Loss) Income		(7,037	)		8,393			(184	)%

Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests		1,536			358			329	%

Net (Loss) Income Attributable to Shareholders of Crawford & Company	$	(5,501	)	$	8,751			(163	)%

(Loss) Earnings Per Share - Basic:
Class A Common Stock	$	(0.10	)	$	0.18			(156	)%
Class B Common Stock	$	(0.12	)	$	0.14			(186	)%

(Loss) Earnings Per Share - Diluted:
Class A Common Stock	$	(0.10	)	$	0.18			(156	)%
Class B Common Stock	$	(0.12	)	$	0.14			(186	)%

Cash Dividends Per Share:
Class A Common Stock	$	0.10		$	0.14			(29	)%
Class B Common Stock	$	0.08		$	0.10			(20	)%

	June 30,			December 31,
	2020			2019
ASSETS

Current Assets:
Cash and Cash Equivalents	$	59,958		$	51,802
Accounts Receivable, Net		120,941			128,217
Unbilled Revenues, at Estimated Billable Amounts		106,335			103,894
Income Taxes Receivable		9,590			7,820
Prepaid Expenses and Other Current Assets		23,470			23,476
Total Current Assets		320,294			315,209

Net Property and Equipment		30,924			31,425

Other Assets:
Operating Lease Right-of-Use Asset, Net		106,508			102,354
Goodwill		62,086			80,642
Intangible Assets Arising from Business Acquisitions, Net		68,815			75,083
Capitalized Software Costs, Net		64,000			66,445
Deferred Income Tax Assets		18,550			17,971
Other Noncurrent Assets		76,159			70,884
Total Other Assets		396,118			413,379

Total Assets	$	747,336		$	760,013

LIABILITIES AND SHAREHOLDERS’ INVESTMENT

Current Liabilities:
Short-Term Borrowings	$	39,887		$	28,531
Accounts Payable		31,446			34,377
Operating Lease Liability		30,027			30,765
Accrued Compensation and Related Costs		59,625			68,499
Self-Insured Risks		12,318			11,311
Income Taxes Payable		—			3,030
Other Accrued Liabilities		33,440			31,449
Deferred Revenues		27,871			28,288
Current Installments of Finance Leases		38			15
Total Current Liabilities		234,652			236,265

Noncurrent Liabilities:
Long-Term Debt and Finance Leases, Less Current Installments		155,649			148,408
Operating Lease Liability		93,109			87,064
Deferred Revenues		23,850			24,080
Accrued Pension Liabilities		58,388			65,909
Other Noncurrent Liabilities		31,895			33,410
Total Noncurrent Liabilities		362,891			358,871

Redeemable Noncontrolling Interests		173			2,310

Shareholders’ Investment:
Class A Common Stock, $1.00 Par Value		30,523			30,610
Class B Common Stock, $1.00 Par Value		22,510			22,671
Additional Paid-in Capital		65,063			63,392
Retained Earnings		236,234			249,551
Accumulated Other Comprehensive Loss		(208,835	)		(206,907	)
Shareholders’ Investment Attributable to Shareholders of Crawford & Company		145,495			159,317
Noncontrolling Interests		4,125			3,250
Total Shareholders’ Investment		149,620			162,567

Total Liabilities and Shareholders’ Investment	$	747,336		$	760,013

SUMMARY RESULTS BY OPERATING SEGMENT WITH DIRECT COMPENSATION AND OTHER EXPENSES

	Crawford TPA Solutions						%			Crawford Claims Solutions						%			Crawford Specialty Solutions						%
	2020			2019			Change			2020			2019			Change			2020			2019			Change

Revenues Before Reimbursements	$	86,725		$	99,518			(12.9	)%	$	81,451		$	86,003			(5.3	)%	$	66,240		$	71,360			(7.2	)%

Direct Compensation, Fringe Benefits & Non-Employee Labor		53,701			60,936			(11.9	)%		52,054			56,065			(7.2	)%		33,878			35,052			(3.3	)%

% of Revenues Before Reimbursements		61.9	%		61.2	%					63.9	%		65.2	%					51.1	%		49.1	%

Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor		29,853			33,556			(11.0	)%		26,608			28,228			(5.7	)%		18,369			23,696			(22.5	)%

% of Revenues Before Reimbursements		34.4	%		33.7	%					32.7	%		32.8	%					27.7	%		33.2	%

Total Operating Expenses		83,554			94,492			(11.6	)%		78,662			84,293			(6.7	)%		52,247			58,748			(11.1	)%

Operating Earnings ⁽¹⁾	$	3,171		$	5,026			(36.9	)%	$	2,789		$	1,710			63.1	%	$	13,993		$	12,612			10.9	%

% of Revenues Before Reimbursements		3.7	%		5.1	%					3.4	%		2.0	%					21.1	%		17.7	%

	Crawford TPA Solutions						%			Crawford Claims Solutions						%			Crawford Specialty Solutions						%
	2020			2019			Change			2020			2019			Change			2020			2019			Change

Revenues Before Reimbursements	$	183,660		$	197,312			(6.9	)%	$	159,038		$	169,322			(6.1	)%	$	129,249		$	137,305			(5.9	)%

Direct Compensation, Fringe Benefits & Non-Employee Labor		112,630			119,317			(5.6	)%		105,434			111,966			(5.8	)%		69,749			70,010			(0.4	)%

% of Revenues Before Reimbursements		61.3	%		60.5	%					66.3	%		66.1	%					54.0	%		51.0	%

Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor		61,574			66,236			(7.0	)%		54,494			55,959			(2.6	)%		38,550			42,488			(9.3	)%

% of Revenues Before Reimbursements		33.5	%		33.6	%					34.3	%		33.0	%					29.8	%		30.9	%

Total Operating Expenses		174,204			185,553			(6.1	)%		159,928			167,925			(4.8	)%		108,299			112,498			(3.7	)%

Operating Earnings ⁽¹⁾	$	9,456		$	11,759			(19.6	)%	$	(890	)	$	1,397			(163.7	)%	$	20,950		$	24,807			(15.5	)%

% of Revenues Before Reimbursements		5.1	%		6.0	%					(0.6	)%		0.8	%					16.2	%		18.1	%

⁽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, goodwill impairment, restructuring costs, loss on disposition of business, arbitration and claim settlements, and certain unallocated corporate and shared costs and credits. See page 4-5 for additional information about segment operating earnings.

	Crawford TPA Solutions						%			Crawford Claims Solutions						%			Crawford Specialty Solutions						%
	2020			2019			Change			2020			2019			Change			2020			2019			Change

Revenues Before Reimbursements	$	86,725		$	99,518			(12.9	)%	$	81,451		$	86,003			(5.3	)%	$	66,240		$	71,360			(7.2	)%

Direct Expense		66,963			75,839			(11.7	)%		62,447			66,451			(6.0	)%		41,157			46,137			(10.8	)%

% of Revenues Before Reimbursements		77.2	%		76.2	%					76.7	%		77.3	%					62.1	%		64.7	%

Segment Gross Profit		19,762			23,679			(16.5	)%		19,004			19,552			(2.8	)%		25,083			25,223			(0.6	)%

% of Revenues Before Reimbursements		22.8	%		23.8	%					23.3	%		22.7	%					37.9	%		35.3	%

Indirect Costs		16,591			18,653			(11.1	)%		16,215			17,842			(9.1	)%		11,090			12,611			(12.1	)%

% of Revenues Before Reimbursements		19.1	%		18.7	%					19.9	%		20.7	%					16.7	%		17.7	%

Operating Earnings⁽¹⁾	$	3,171		$	5,026			(36.9	)%	$	2,789		$	1,710			63.1	%	$	13,993		$	12,612			10.9	%

% of Revenues Before Reimbursements		3.7	%		5.1	%					3.4	%		2.0	%					21.1	%		17.7	%

	Crawford TPA Solutions						%			Crawford Claims Solutions						%			Crawford Specialty Solutions						%
	2020			2019			Change			2020			2019			Change			2020			2019			Change

Revenues Before Reimbursements	$	183,660		$	197,312			(6.9	)%	$	159,038		$	169,322			(6.1	)%	$	129,249		$	137,305			(5.9	)%

Direct Expense		140,657			148,170			(5.1	)%		126,247			132,693			(4.9	)%		85,164			89,641			(5.0	)%

% of Revenues Before Reimbursements		76.6	%		75.1	%					79.4	%		78.4	%					65.9	%		65.3	%

Segment Gross Profit		43,003			49,142			(12.5	)%		32,791			36,629			(10.5	)%		44,085			47,664			(7.5	)%

% of Revenues Before Reimbursements		23.4	%		24.9	%					20.6	%		21.6	%					34.1	%		34.7	%

Indirect Costs		33,547			37,383			(10.3	)%		33,681			35,232			(4.4	)%		23,135			22,857			1.2	%

% of Revenues Before Reimbursements		18.3	%		18.9	%					21.2	%		20.8	%					17.9	%		16.6	%

Operating Earnings⁽¹⁾	$	9,456		$	11,759			(19.6	)%	$	(890	)	$	1,397			(163.7	)%	$	20,950		$	24,807			(15.5	)%

% of Revenues Before Reimbursements		5.1	%		6.0	%					(0.6	)%		0.8	%					16.2	%		18.1	%

	2020			2019
Cash Flows From Operating Activities:
Net (Loss) Income	$	(7,037	)	$	8,393
Reconciliation of Net (Loss) Income to Net Cash Provided by Operating Activities:
Depreciation and Amortization		19,450			19,850
Goodwill Impairment		17,674			—
Stock-Based Compensation Costs		1,998			1,399
Loss on Disposition of Business		341			—
Arbitration and Claim Settlements		—			11,352
Changes in Operating Assets and Liabilities:
Accounts Receivable, Net		5,473			(4,086	)
Unbilled Revenues, Net		(7,000	)		(11,848	)
Accrued or Prepaid Income Taxes		(6,806	)		(563	)
Accounts Payable and Accrued Liabilities		(3,405	)		(16,048	)
Deferred Revenues		(457	)		962
Accrued Retirement Costs		(4,975	)		(343	)
Prepaid Expenses and Other Operating Activities		(3,224	)		(329	)
Net Cash Provided by Operating Activities		12,032			8,739

Cash Flows From Investing Activities:
Acquisitions of Property and Equipment		(5,476	)		(3,729	)
Capitalization of Computer Software Costs		(8,823	)		(4,369	)
Proceeds from sale of business component		(87	)		—
Net Cash Used in Investing Activities		(14,386	)		(8,098	)

Cash Flows From Financing Activities:
Cash Dividends Paid		(4,859	)		(6,595	)
Proceeds from Shares Purchased Under Employee Stock-Based Compensation Plans		10			850
Repurchases of Common Stock		(2,666	)		(19,585	)
Cash paid for equity investments		(292	)		—
Increases in Revolving Credit Facility Borrowings		73,340			51,408
Payments on Revolving Credit Facility Borrowings		(54,124	)		(40,611	)
Payments on Finance Lease Obligations		(10	)		(53	)
Capitalized Loan Costs		—			(8	)
Dividends Paid to Noncontrolling Interests		—			(280	)
Net Cash Provided by (Used In) Financing Activities		11,399			(14,874	)

Effects of Exchange Rate Changes on Cash and Cash Equivalents		(889	)		264
Increase (Decrease) in Cash and Cash Equivalents		8,156			(13,969	)
Cash and Cash Equivalents at Beginning of Year		51,802			53,119
Cash and Cash Equivalents at End of Period	$	59,958		$	39,150

Three Months Ended June 30, 2019
(in thousands)	Revenues		Non-GAAP Operating earnings		Pretax earnings		Net income attributable to Crawford & Company		Diluted earnings per CRD-A share		Diluted earnings per CRD-B share
GAAP	$	256,881	$	22,518	$	5,483	$	2,642	$	0.06	$	0.04
Adjustments:
Arbitration and claim settlements		—		—		11,352		8,389		0.15		0.15
Non-GAAP Adjusted	$	256,881	$	22,518	$	16,835	$	11,031	$	0.21	$	0.19

Six Months Ended June 30, 2019
(in thousands)	Revenues		Non-GAAP Operating earnings		Pretax earnings		Net income attributable to Crawford & Company		Diluted earnings per CRD-A share		Diluted earnings per CRD-B share
GAAP	$	503,939	$	37,219	$	8,393	$	8,751	$	0.18	$	0.14
Adjustments:
Arbitration and claim settlements		—		—		11,352		8,389		0.15		0.15
Non-GAAP Adjusted	$	503,939	$	37,219	$	19,745	$	17,140	$	0.33	$	0.29