EX-99.1 2 exhibit991110716q3pressrel.htm EXHIBIT 99.1 Exhibit


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

ATLANTA, GA. (November 7, 2016) -- Crawford & Company (www.crawfordandcompany.com) (NYSE: CRD-A and CRD-B), 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 third quarter ended September 30, 2016, and increased and updated its full year 2016 guidance.

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.

Third Quarter 2016 Summary

•
Revenues before reimbursements of $277.3 million, compared with $293.3 million for the third quarter of 2015
•
Net income attributable to shareholders of $10.9 million compared to a net loss of $(0.9) million in the same period last year
•
Diluted earnings per share of $0.20 for CRD-A and $0.18 for CRD-B, compared with $(0.01) for CRD-A and $(0.03) for CRD-B in the prior year quarter
•
Diluted earnings per share of $0.22 for CRD-A and $0.20 for CRD-B on a non-GAAP basis in the 2016 quarter, before restructuring and special charges, compared to $0.14 for CRD-A and $0.12 for CRD-B in the prior year quarter
•
All four business segments achieved double digit operating margins this quarter
•
Consolidated operating earnings, a non-GAAP financial measure, were $26.3 million in the 2016 third quarter, compared with $23.1 million in the 2015 period
•
Consolidated adjusted EBITDA, a non-GAAP financial measure, was $34.7 million in the 2016 third quarter, compared with $32.8 million in the 2015 period.

Mr. Harsha V. Agadi, chief executive officer of Crawford & Company, stated, "Our third quarter results are a clear indication that the strategic initiatives implemented beginning over a year ago are unlocking the potential that exists at Crawford as we strive to deliver more predictable financial results regardless of the market backdrop. While the environment remained challenging once again this quarter, we achieved our best performance of the year as operating earnings grew 14%, year over year, driven by 160 basis points of margin expansion. Importantly, all four of our business segments generated double digit operating margins this quarter.


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


"Looking at our 2016 third quarter results in more detail, our International segment showed significant improvement, as operating earnings in all of our major operating regions were up over the prior year. Broadspire delivered another strong quarter with growing operating margins and steady, consistent operating performance. The U.S. Services segment saw revenue declines related to a large outsourced services project that is transitioning down this year, partially offset by continued growth in our Contractor Connection service line. Lastly, the new GCG leadership team is delivering strong results as operating earnings doubled year over year, and new business win rates remained robust."

Mr. Agadi concluded, "While our operating earnings have expanded by 40% year to date, we believe significant untapped potential remains across our global operations. We will continue to evaluate our business segments as we strive to deliver revenue growth and further operational improvements in order to remain competitive and relevant in this ever changing world. To that end, it is critical that we continue to transform our business as we must move faster than our competitors, new market entrants and clients to ensure that we deliver results for all of our stakeholders not only today but also in the future."

Segment Results for the Third Quarter

U.S. Services

U.S. Services revenues before reimbursements were $56.5 million in the third quarter of 2016, decreasing 9% from $62.1 million in the third quarter of 2015. The revenue decrease was primarily due to a reduction in U.S. Catastrophe Services, partially offset by an increase in U.S. Contractor Connection revenues. Operating earnings were $9.4 million in the 2016 third quarter, compared with $10.8 million in the third quarter of 2015, representing operating margins of 17% in both the 2016 and 2015 periods.

International

Third quarter 2016 revenues before reimbursements for the International segment totaled $121.6 million, compared with $128.2 million in the 2015 third 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 third quarter compared with the prior year period. International segment operating earnings were $13.2 million in the 2016 third quarter, compared with $8.0 million in the 2015 third quarter. The segment's operating margin was 11% in the 2016 period as compared to 6% in the 2015 period. The increase in operating margin for the 2016 quarter was a result of improvements in all of our major operating regions and the benefits of cost reduction initiatives implemented in 2015.

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



Broadspire

Broadspire segment revenues before reimbursements were $76.7 million in the 2016 third quarter, up from $74.2 million in the 2015 third quarter. The revenue increase was due to increased claims and medical management revenues and higher average case values when compared with the 2015 period. Broadspire recorded operating earnings of $8.3 million in the third quarter of 2016, representing an operating margin of 11%, compared with $7.4 million, or 10% of revenues, in the 2015 third quarter.

Garden City Group

Garden City Group revenues before reimbursements were $22.5 million in the third quarter of 2016, compared with $28.8 million in the same period of 2015. The expected decrease in revenues was primarily due to declines in volumes associated with certain large cases which are transitioning to conclusion. Operating earnings were $2.4 million in the 2016 third quarter as compared to $1.1 million in the 2015 period. The segment's operating margin for the 2016 quarter was 10% as compared to 4% for the 2015 period as a result of the impact of cost reduction initiatives implemented earlier in 2016. At September 30, 2016 there was a backlog of projects awarded totaling approximately $94.0 million as compared to $76.0 million at September 30, 2015.

Unallocated Corporate and Shared Costs, Net

Unallocated corporate costs were $6.9 million in the third quarter of 2016, compared with $4.3 million in the same period of 2015. The increased costs for the three months of 2016 were due to an increase in professional fees and defined benefit pension expense, partially offset by a decrease in self-insured expenses.

Restructuring and Special Charges

The Company recorded restructuring and special charges of $1.5 million and $11.1 million in the 2016 and 2015 third quarters, respectively. Restructuring costs of $1.4 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 $0.1 million in 2016 were for certain legal and professional fees. Restructuring costs of $6.1 million in the third quarter of 2015 were for similar matters as in the 2016 period. Special charges of $5.0 million in 2015 were recorded for certain legal and professional fees and employee separation costs.

Balance Sheet and Cash Flow

Crawford & Company's consolidated cash and cash equivalents position as of September 30, 2016 totaled $71.7 million compared with $76.1 million at December 31, 2015.

The Company's operations provided $50.1 million of cash during the first nine months of 2016, compared with $21.1 million in the 2015 period. The improvement in cash provided by operating activities in the first nine months of 2016 compared with the 2015 period was primarily due to increased net income and a decrease in working capital requirements.

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



2016 Guidance

Crawford & Company is increasing and updating its guidance for 2016 as follows:

•
Consolidated revenues before reimbursements between $1.08 and $1.10 billion;
•
After expected restructuring and special charges, net income attributable to shareholders of Crawford & Company between $31.0 and $34.0 million, or $0.58 to $0.63 diluted earnings per CRD-A share, and $0.50 to $0.55 diluted earnings per CRD-B share;
•
Consolidated operating earnings between $85.0 and $90.0 million;
•
Consolidated adjusted EBITDA between $125.0 and $130.0 million;
•
Before expected restructuring and special charges, net income attributable to shareholders of Crawford & Company on a non-GAAP basis between $39.0 and $42.0 million, or $0.73 to $0.78 diluted earnings per CRD-A share, and $0.65 to $0.70 diluted earnings per CRD-B share.

The Company expects to incur restructuring and special charges in 2016 totaling $11.0 million pretax. This is expected to be comprised of $4.4 million related to the Centers and $6.6 million related to previously announced restructuring plans and other special charges. As a result of restructuring charges incurred related to the Centers in 2015 and 2016, the Company expects to achieve $10.3 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, November 7, 2016 at 3:00 p.m. Eastern Time to discuss its third quarter 2016 results. The conference call can be accessed live by dialing 1-800-374-2518 using passcode 90684611. 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 December 7, 2016. You may dial 1-855-859-2056 to listen to the replay. The access code is 90684611.

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.


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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.


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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
 
Nine months ended
 
Full Year
(in thousands)
September 30, 2016
September 30, 2015
 
September 30, 2016
September 30, 2015
 
Guidance 2016
Operating earnings:
 
 
 
 
 
 
 
U.S. Services
$
9,379

$
10,841

 
$
28,012

$
24,837

 
 
International
13,236

7,974

 
31,243

11,484

 
 
Broadspire
8,263

7,435

 
23,497

16,981

 
 
Garden City Group
2,351

1,141

 
6,537

9,813

 
 
Unallocated corporate and shared costs, net
(6,947
)
(4,303
)
 
(17,454
)
(11,648
)
 
 
Consolidated operating earnings
26,282

23,088

 
71,835

51,467

 
$
87,500

(Deduct) add:
 
 
 
 
 
 
 
Net corporate interest expense
(2,262
)
(2,332
)
 
(7,553
)
(6,238
)
 
(10,700
)
Stock option expense
(176
)
(30
)
 
(403
)
(357
)
 
(500
)
Amortization expense
(2,401
)
(2,350
)
 
(7,280
)
(6,782
)
 
(9,200
)
Restructuring and special charges
(1,488
)
(11,078
)
 
(7,431
)
(16,383
)
 
(11,000
)
Income taxes
(8,606
)
(8,385
)
 
(20,029
)
(15,335
)
 
(24,500
)
Net (income) loss attributable to non-controlling interests
(404
)
230

 
(937
)
(189
)
 
700

Net income (loss) attributable to shareholders of Crawford & Company
$
10,945

$
(857
)
 
$
28,202

$
6,183

 
$
32,300

 
 
 
 
 
 
 
 

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
 
Nine months ended
 
Full Year
(in thousands)
September 30, 2016
September 30, 2015
 
September 30, 2016
September 30, 2015
 
Guidance 2016
Net income (loss) attributable to shareholders of Crawford & Company
$
10,945

$
(857
)
 
$
28,202

$
6,183

 
$
32,300

Add:
 
 
 
 
 
 
 
Depreciation and amortization
10,085

10,812

 
30,643

32,219

 
45,000

Stock-based compensation
1,289

1,089

 
3,246

2,369

 
4,000

Net corporate interest expense
2,262

2,332

 
7,553

6,238

 
10,700

Restructuring and special charges
1,488

11,078

 
7,431

16,383

 
11,000

Income taxes
8,606

8,385

 
20,029

15,335

 
24,500

Adjusted EBITDA
$
34,675

$
32,839

 
$
97,104

$
78,727

 
$
127,500

 
 
 
 
 
 
 
 


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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 nine months ended September 30, 2016, financial position as of September 30, 2016, and cash flows for the nine months ended September 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 Solution® 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 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.

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.

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.



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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 September 30,
2016
 
2015
 
% Change
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 

 
 

 
 
Revenues Before Reimbursements
$
277,286

 
$
293,335

 
(5
)%
Reimbursements
18,101

 
16,649

 
9
 %
Total Revenues
295,387

 
309,984

 
(5
)%
 
 
 
 
 
 
Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Costs of Services Provided, Before Reimbursements
193,453

 
211,106

 
(8
)%
Reimbursements
18,101

 
16,649

 
9
 %
Total Costs of Services
211,554

 
227,755

 
(7
)%
 
 
 
 
 
 
Selling, General, and Administrative Expenses
60,325

 
61,738

 
(2
)%
Corporate Interest Expense, Net
2,262

 
2,332

 
(3
)%
Restructuring and Special Charges
1,488

 
11,078

 
(87
)%
Total Costs and Expenses
275,629

 
302,903

 
(9
)%
 
 
 
 
 
 
Other Income
197

 
217

 
(9
)%
 
 
 
 
 
 
Income Before Income Taxes
19,955

 
7,298

 
173
 %
Provision for Income Taxes
8,606

 
8,385

 
3
 %
 
 
 
 
 
 
Net Income (Loss)
11,349

 
(1,087
)
 
(1,144
)%
 
 
 
 
 
 
Net (Income) Loss Attributable to Noncontrolling Interests
(404
)
 
230

 
(276
)%
 
 
 
 
 
 
Net Income (Loss) Attributable to Shareholders of Crawford & Company
$
10,945

 
$
(857
)
 
(1,377
)%
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (Loss) Per Share - Basic:
 
 
 
 
 
Class A Common Stock
$
0.21

 
$
(0.01
)
 
2,200
 %
Class B Common Stock
$
0.19

 
$
(0.03
)
 
733
 %
 
 
 
 
 
 
Earnings (Loss) Per Share - Diluted:
 
 
 
 
 
Class A Common Stock
$
0.20

 
$
(0.01
)
 
2,100
 %
Class B Common Stock
$
0.18

 
$
(0.03
)
 
700
 %
 
 
 
 
 
 
Cash Dividends Per Share:
 
 
 
 
 
Class A Common Stock
$
0.07

 
$
0.07

 
—
 %
Class B Common Stock
$
0.05

 
$
0.05

 
—
 %
 
 
 
 
 
 
 
 
 
 
 
 

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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)
 
 
 
 
 
 
Nine Months Ended September 30,
2016
 
2015
 
% Change
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 

 
 

 
 
Revenues Before Reimbursements
$
836,863

 
$
885,510

 
(5
)%
Reimbursements
47,101

 
55,506

 
(15
)%
Total Revenues
883,964

 
941,016

 
(6
)%
 
 
 
 
 
 
Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
Costs of Services Provided, Before Reimbursements
595,248

 
662,537

 
(10
)%
Reimbursements
47,101

 
55,506

 
(15
)%
Total Costs of Services
642,349

 
718,043

 
(11
)%
 
 
 
 
 
 
Selling, General, and Administrative Expenses
178,182

 
179,346

 
(1
)%
Corporate Interest Expense, Net
7,553

 
6,238

 
21
 %
Restructuring and Special Charges
7,431

 
16,383

 
(55
)%
Total Costs and Expenses
835,515

 
920,010

 
(9
)%
 
 
 
 
 
 
Other Income
719

 
701

 
3
 %
 
 
 
 
 
 
Income Before Income Taxes
49,168

 
21,707

 
127
 %
Provision for Income Taxes
20,029

 
15,335

 
31
 %
 
 
 
 
 
 
Net Income
29,139

 
6,372

 
357
 %
 
 
 
 
 
 
Net Income Attributable to Noncontrolling Interests
(937
)
 
(189
)
 
396
 %
 
 
 
 
 
 
Net Income Attributable to Shareholders of Crawford & Company
$
28,202

 
$
6,183

 
356
 %
 
 
 
 
 
 
 
 
 
 
 
 
Earnings Per Share - Basic:
 
 
 
 
 
Class A Common Stock
$
0.54

 
$
0.14

 
286
 %
Class B Common Stock
$
0.48

 
$
0.08

 
500
 %
 
 
 
 
 
 
Earnings Per Share - Diluted:
 
 
 
 
 
Class A Common Stock
$
0.53

 
$
0.14

 
279
 %
Class B Common Stock
$
0.47

 
$
0.08

 
488
 %
 
 
 
 
 
 
Cash Dividends Per Share:
 
 
 
 
 
Class A Common Stock
$
0.21

 
$
0.21

 
—
 %
Class B Common Stock
$
0.15

 
$
0.15

 
—
 %
 
 
 
 
 
 
 
 
 
 
 
 


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CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD, ATLANTA, GEORGIA 30319 (404) 300-1000
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2016 and December 31, 2015
Unaudited
(In Thousands, Except Par Values)
 
September 30,
 
December 31,
 
2016
 
2015
ASSETS
 
 
 
 
 
 
 
Current Assets:
 
 
 
Cash and Cash Equivalents
$
71,663

 
$
76,066

Accounts Receivable, Net
166,993

 
164,596

Unbilled Revenues, at Estimated Billable Amounts
112,775

 
98,659

Income Taxes Receivable
4,255

 
4,255

Prepaid Expenses and Other Current Assets
25,319

 
26,601

Total Current Assets
381,005

 
370,177

 
 
 
 
Property and Equipment
131,939

 
140,383

Less Accumulated Depreciation
(102,649
)
 
(102,331
)
Net Property and Equipment
29,290

 
38,052

 
 
 
 
Other Assets:
 
 
 
Goodwill
92,895

 
95,616

Intangible Assets Arising from Business Acquisitions, Net
91,812

 
104,861

Capitalized Software Costs, Net
80,990

 
79,996

Deferred Income Tax Assets
43,995

 
47,371

Other Noncurrent Assets
45,844

 
47,333

Total Other Assets
355,536

 
375,177

 
 
 
 
Total Assets
$
765,831

 
$
783,406

 
 
 
 
LIABILITIES AND SHAREHOLDERS' INVESTMENT
 
 
 
 
 
 
 
Current Liabilities:
 
 
 
Short-Term Borrowings
$
8,007

 
$
19,958

Accounts Payable
47,634

 
44,615

Accrued Compensation and Related Costs
71,180

 
68,843

Self-Insured Risks
14,020

 
14,122

Income Taxes Payable
12,170

 
4,419

Deferred Rent
12,408

 
13,303

Other Accrued Liabilities
39,806

 
44,577

Deferred Revenues
42,180

 
46,552

Current Installments of Capital Leases
1,327

 
1,959

Total Current Liabilities
248,732

 
258,348

 
 
 
 
Noncurrent Liabilities:
 
 
 
Long-Term Debt and Capital Leases, Less Current Installments
205,248

 
225,365

Deferred Revenues
26,231

 
26,592

Self-Insured Risks
8,844

 
9,354

Accrued Pension Liabilities
110,722

 
121,732

Other Noncurrent Liabilities
16,663

 
17,664

Total Noncurrent Liabilities
367,708

 
400,707

 
 
 
 
Shareholders' Investment:
 
 
 
Class A Common Stock, $1.00 Par Value
30,952

 
30,537

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

 
24,690

Additional Paid-in Capital
47,248

 
41,936

Retained Earnings
257,201

 
239,161

Accumulated Other Comprehensive Loss
(215,842
)
 
(222,631
)
Shareholders' Investment Attributable to Shareholders of Crawford & Company
144,249

 
113,693

Noncontrolling Interests
5,142

 
10,658

Total Shareholders' Investment
149,391

 
124,351

 
 
 
 
Total Liabilities and Shareholders' Investment
$
765,831

 
$
783,406


Page 10 of 12


image7a10.jpg
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 September 30,

 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Services
%
International
%
Broadspire
%
Garden City Group
%
 
2016
2015
Change
2016
2015
Change
2016
2015
Change
2016
2015
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues Before Reimbursements
$
56,470

$
62,080

(9
)%
$
121,644

$
128,198

(5
)%
$
76,676

$
74,225

3
 %
$
22,496

$
28,832

(22
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Direct Compensation, Fringe Benefits & Non-Employee Labor
32,574

36,746

(11
)%
76,126

82,836

(8
)%
41,891

39,144

7
 %
14,712

21,448

(31
)%
% of Revenues Before Reimbursements
58
%
59
%
 
63
%
65
%
 
55
%
53
%
 
65
%
74
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor
14,517

14,493

—
 %
32,282

37,388

(14
)%
26,522

27,646

(4
)%
5,433

6,243

(13
)%
% of Revenues Before Reimbursements
26
%
23
%
 
27
%
29
%
 
35
%
37
%
 
24
%
22
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Operating Expenses
47,091

51,239

(8
)%
108,408

120,224

(10
)%
68,413

66,790

2
 %
20,145

27,691

(27
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings (1)
$
9,379

$
10,841

(13
)%
$
13,236

$
7,974

66
 %
$
8,263

$
7,435

11
 %
$
2,351

$
1,141

106
 %
% of Revenues Before Reimbursements
17
%
17
%
 
11
%
6
%
 
11
%
10
%
 
10
%
4
%
 

Nine Months Ended September 30,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Services
%
International
%
Broadspire
%
Garden City Group
%
 
2016
2015
Change
2016
2015
Change
2016
2015
Change
2016
2015
Change
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues Before Reimbursements
$
173,813

$
185,683

(6
)%
$
362,401

$
381,706

(5
)%
$
227,975

$
217,590

5
 %
$
72,674

$
100,531

(28
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Direct Compensation, Fringe Benefits & Non-Employee Labor
100,518

114,747

(12
)%
230,363

256,846

(10
)%
125,753

118,263

6
 %
47,923

70,773

(32
)%
% of Revenues Before Reimbursements
58
%
62
%
 
64
%
67
%
 
55
%
54
%
 
66
%
70
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor
45,283

46,099

(2
)%
100,795

113,376

(11
)%
78,725

82,346

(4
)%
18,214

19,945

(9
)%
% of Revenues Before Reimbursements
26
%
25
%
 
28
%
30
%
 
35
%
38
%
 
25
%
20
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Operating Expenses
145,801

160,846

(9
)%
331,158

370,222

(11
)%
204,478

200,609

2
 %
66,137

90,718

(27
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Earnings (1)
$
28,012

$
24,837

13
 %
$
31,243

$
11,484

172
 %
$
23,497

$
16,981

38
 %
$
6,537

$
9,813

(33
)%
% of Revenues Before Reimbursements
16
%
13
%
 
9
%
3
%
 
10
%
8
%
 
9
%
10
%
 
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


image7a10.jpg
Press Release
CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD, ATLANTA, GEORGIA 30319 (404) 300-1000

CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2016 and September 30, 2015
Unaudited
(In Thousands)
 
 
2016
 
2015
Cash Flows From Operating Activities:
 
 
 
 
Net Income
 
$
29,139

 
$
6,372

Reconciliation of Net Income to Net Cash Provided by Operating Activities:
 
 
 
 
Depreciation and Amortization
 
30,643

 
32,219

Stock-Based Compensation
 
3,246

 
2,369

Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions and Dispositions:
 
 
 
 
Accounts Receivable, Net
 
(7,628
)
 
14,190

Unbilled Revenues, Net
 
(16,118
)
 
(8,604
)
Accrued or Prepaid Income Taxes
 
9,067

 
9,838

Accounts Payable and Accrued Liabilities
 
5,410

 
(31,247
)
Deferred Revenues
 
(4,153
)
 
1,064

Accrued Retirement Costs
 
(7,128
)
 
(14,952
)
Prepaid Expenses and Other Operating Activities
 
7,605

 
9,890

Net Cash Provided by Operating Activities
 
50,083

 
21,139

 
 
 
 
 
Cash Flows From Investing Activities:
 
 
 
 
Acquisitions of Property and Equipment
 
(5,782
)
 
(10,296
)
Capitalization of Computer Software Costs
 
(13,653
)
 
(16,182
)
Payments for Acquisitions, Net of Cash Acquired
 
(3,672
)
 
(68,259
)
Other Investing Activities
 
(95
)
 
—

Net Cash Used In Investing Activities
 
(23,202
)
 
(94,737
)
 
 
 
 
 
Cash Flows From Financing Activities:
 
 
 
 
Cash Dividends Paid
 
(10,162
)
 
(10,151
)
Payments Related to Shares Received for Withholding Taxes Under Stock-Based Compensation Plans
 
(15
)
 
(2
)
Proceeds from Shares Purchased Under Employee Stock-Based Compensation Plans
 
1,208

 
1,196

Repurchases of Common Stock
 
—

 
(137
)
Increases in Short-Term and Revolving Credit Facility Borrowings
 
79,664

 
126,032

Payments on Short-Term and Revolving Credit Facility Borrowings
 
(95,855
)
 
(31,645
)
Decrease in Note Payable for Stock Repurchase
 
(2,206
)
 
—

Payments on Capital Lease Obligations
 
(1,119
)
 
(1,586
)
Dividends Paid to Noncontrolling Interests
 
(381
)
 
(186
)
Other Financing Activities
 
(12
)
 
(4
)
Net Cash (Used In) Provided By Financing Activities
 
(28,878
)
 
83,517

 
 
 
 
 
Effects of Exchange Rate Changes on Cash and Cash Equivalents
 
(2,406
)
 
(4,046
)
(Decrease) Increase in Cash and Cash Equivalents
 
(4,403
)
 
5,873

Cash and Cash Equivalents at Beginning of Year
 
76,066

 
52,456

Cash and Cash Equivalents at End of Period
 
$
71,663

 
$
58,329


Page 12 of 12