Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Crawford & Company Reports 2023 Third Quarter Results By: Crawford & Company via Business Wire November 06, 2023 at 16:15 PM EST Record Quarterly Revenue Drives Earnings and Margin Expansion Crawford & Company® (NYSE: CRD-A and CRD-B), is pleased to announce its financial results for the third quarter ended September 30, 2023. Based in Atlanta, Crawford & Company (NYSE: CRD‐A and CRD‐B) is a leading global provider of claims management and outsourcing solutions to insurance companies and self‐insured entities with an expansive network serving clients in more than 70 countries. The Company’s two classes of stock are substantially identical, except with respect to voting rights for the Class B Common Stock (CRD-B) and protections for the non-voting Class A Common Stock (CRD-A). More information is available on the Company's website. GAAP Consolidated Results Third Quarter 2023 Revenues before reimbursements of $325.6 million, up 10% over $294.9 million for the 2022 third quarter Net income attributable to shareholders of $12.3 million, compared with a loss of $(15.1) million in the same period last year Diluted earnings per share of $0.25 for both CRD-A and CRD-B, compared with diluted loss per share of $(0.31) for both CRD-A and CRD-B in the prior year third quarter Non-GAAP Consolidated Results Third Quarter 2023 Non-GAAP consolidated results for 2023 exclude the non-cash, after-tax adjustments for amortization of intangible assets of $1.7 million, non-service related pension costs of $1.6 million, and a contingent earnout adjustment of $2.1 million. Non-GAAP consolidated results for 2022 exclude a similar adjustment for amortization of intangible assets of $1.5 million, non-service related pension credits of $(0.4) million, a contingent earnout adjustment of $0.7 million, and a goodwill impairment of $20.9 million. Foreign currency exchange rates increased revenues before reimbursements by $0.6 million or less than 1%. Presented on a constant dollar basis to the prior year, revenues before reimbursements totaled $325.0 million, increasing 10% over the 2022 third quarter Net income attributable to shareholders, on a non-GAAP basis, totaled $17.7 million in the 2023 third quarter, compared with $7.5 million in the same period last year Diluted earnings per share, on a non-GAAP basis, totaled $0.35 for CRD-A and $0.36 for CRD-B in the 2023 third quarter, compared with $0.15 for both CRD-A and CRD-B in the prior year third quarter Consolidated adjusted operating earnings, on a non-GAAP basis, were $29.9 million, or 9.2% of revenues before reimbursements in the 2023 third quarter, more than doubling the $13.7 million, or 4.6% of revenues, in the 2022 period Consolidated adjusted EBITDA, a non-GAAP measure, was $38.6 million, or 11.9% of revenues before reimbursements in the 2023 third quarter, increasing 81% over the $21.4 million, or 7.2% of revenues, in the 2022 period Management Comments “We continued our momentum of growth and profit expansion in the third quarter of 2023 delivering our twelfth consecutive quarter of growth. Revenues grew by 10% to a new quarterly record and profits more than doubled compared to last year. We have built a strong foundation focused on operational excellence at Crawford, and our technology plus people strategy is driving growth and margin improvement across the business,” commented Rohit Verma, Chief Executive Officer of Crawford & Company. “North America Loss Adjusting revenue grew more than 18% for the third quarter, driven by increased utilization, the addition of new clients, experts, and new account nominations. Broadspire saw record quarterly revenue fueled by business development efforts that have expanded our revenue base and continued growth in Medical Management services as we add workers' compensation clients. Our International segment also showed improved revenues and margins as our transformation of the international business continues. Platforms Solutions had meaningful growth in Contractor Connection and Subrogation, however there was offsetting softness in the Networks group where benign weather and a reduction in high-volume, low severity claim activity impacted results for the quarter. Platforms’ operating margin remained solid at mid-double digits. “Overall, this was a very strong quarter for Crawford with healthy cash generation and further strengthening of our balance sheet.” Mr. Verma concluded. Segment Results for the Third Quarter North America Loss Adjusting North America Loss Adjusting revenues before reimbursements were $79.4 million in the third quarter of 2023, increasing 18.8% from $66.8 million in the third quarter of 2022. Absent foreign exchange rate decreases of $(0.7) million, revenues would have been $80.1 million for the 2023 third quarter. The segment had operating earnings of $10.5 million in the 2023 third quarter, increasing from $3.8 million in the third quarter of 2022. The operating margin was 13.2% in the 2023 quarter and 5.6% in the 2022 quarter. International Operations International Operations revenues before reimbursements were $98.1 million in the third quarter of 2023, up 13.9% from $86.1 million in the same period of 2022. Absent foreign exchange rate increases of $1.3 million, revenues would have been $96.8 million for the 2023 third quarter. Operating earnings were $2.2 million in the 2023 third quarter, compared with a $(3.9) million operating loss in the 2022 period. The segment’s operating margin for the 2023 quarter was 2.2% as compared with (4.6)% in the 2022 quarter. Broadspire Broadspire segment revenues before reimbursements were $88.3 million in the 2023 third quarter, increasing 12.7% from $78.4 million in the 2022 third quarter. Broadspire recorded operating earnings of $13.5 million in the third quarter of 2023, representing an operating margin of 15.3%, increasing from $6.2 million, or 7.9% of revenues, in the 2022 third quarter. Platform Solutions Platform Solutions revenues before reimbursements were $59.8 million in the third quarter of 2023, down (6.0)% from $63.7 million in the same period of 2022. Operating earnings were $8.5 million in the 2023 third quarter, decreasing from the $10.1 million in the 2022 period. The segment’s operating margin for the 2023 quarter was 14.2% as compared with 15.8% in the 2022 quarter. Unallocated Corporate and Shared Costs and Credits, Net Unallocated corporate costs were $4.8 million in the third quarter of 2023, compared with $2.4 million in the same period of 2022. The increase in the 2023 third quarter was primarily due to increased incentive compensation and an increase in unallocated payroll tax and benefits costs. 2022 Goodwill Impairment The Company recognized a $36.8 million pre-tax non-cash goodwill impairment in the third quarter of 2022. This charge was partially offset by a $15.9 million reduction in income tax expense, for a net impact of $20.9 million, or $0.43 per share. There was no goodwill impairment in 2023. Other Matters The Company recognized pretax contingent earnout expenses totaling $2.1 million and $0.9 million in the 2023 third quarter and comparable 2022 period, respectively, related to the fair value adjustment of earnout liabilities arising from recent acquisitions. This adjustment, which is not a component of operating earnings, is based on favorable changes to projections of acquired entities over the respective earnout periods, which span multiple years. The Company recognized non-service pension costs of $2.2 million in the 2023 third quarter compared with credits of $(0.5) million in the 2022 period. Non-service pension costs represent the U.S. and U.K. non-service defined benefit pension costs, which are non-operating in nature as the U.S. plan is frozen and the U.K. plans are closed to new participants. Balance Sheet and Cash Flow The Company’s consolidated cash and cash equivalents position as of September 30, 2023, totaled $49.2 million, compared with $46.0 million at December 31, 2022. The Company’s total debt outstanding as of September 30, 2023, totaled $218.4 million, compared with $238.9 million at December 31, 2022. The Company’s operations provided $68.1 million of cash during the first nine months of 2023, compared with $(16.2) million used in 2022. The increase in cash provided was primarily driven by improved earnings, changes in working capital, including a reduction in work in process, increases in accrued incentive compensation as compared to payouts for prior year performance, and an increase in income tax refunds received. The Company made no contributions to its U.S. defined benefit pension plan and $1.8 million in contributions to its U.K. plans for the first nine months of 2023, compared with no contributions to the U.S. plan and $0.5 million to the U.K. plans in 2022. During 2023, the Company didn't repurchase any shares of CRD-A, but repurchased 63,103 shares of CRD-B at an average share cost of $9.24. During the first nine months of 2022, the Company repurchased 2,656,474 shares of CRD-A and 963,472 shares of CRD-B at an average per share cost of $7.41 and $7.32, respectively. The total cost of share repurchases during 2023 was $0.6 million through September 30, 2023. Conference Call As previously announced, Crawford & Company will host a conference call on November 7, 2023, at 8:30 a.m. Eastern Time to discuss its third quarter 2023 results. The conference call can be accessed live by dialing 1-888-259-6580 and using Conference ID 94766677. A presentation for tomorrow’s call can also be found on the investor relations portion of the Company’s website, https://ir.crawco.com. The call will be recorded and available for replay through December 7, 2023. You may dial 1-877-674-7070 and use passcode 766677# to listen to the replay. 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 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, goodwill impairment, amortization of customer-relationship intangible assets, contingent earnout adjustments, non-service pension costs and credits, income taxes and net income or loss attributable to noncontrolling interests. 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 adjustments for depreciation and amortization, net corporate interest expense, goodwill impairment, contingent earnout adjustments, non-service pension costs and credits, income taxes and stock-based compensation expense. 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, 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, amortization of customer-relationship intangible assets, contingent earnout adjustments, and non-service pension costs and credits 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. Contingent earnout adjustments relate to changes in the fair value of earnouts associated with our recent acquisitions. Non-service pension costs and credits represent the U.S. and U.K. non-service defined benefit pension costs, which are non-operating in nature as the U.S. plan was frozen in 2002 and the U.K. plans are closed to new participants. None of these costs relate directly to the performance of our services or operating activities and, therefore, are excluded from segment operating earnings to better assess the results of each segment's operating activities on a consistent basis. Goodwill impairments arise from time to time due to various factors, but are not allocated to our operating segments since they historically have not regularly impacted our performance and are not expected to impact our future performance on a regular 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 Nine Months Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Geographic Area Currency USD equivalent % of total USD equivalent % of total USD equivalent % of total USD equivalent % of total U.S. USD $ 203,340 62.5 % $ 183,197 62.1 % $ 601,354 62.7 % $ 523,650 60.4 % U.K. GBP 38,290 11.8 % 25,352 8.6 % 106,139 11.0 % 92,837 10.7 % Canada CAD 24,188 7.4 % 25,661 8.7 % 72,656 7.6 % 74,597 8.6 % Australia AUD 22,867 7.0 % 27,434 9.3 % 68,787 7.2 % 69,794 8.1 % Europe EUR 14,629 4.5 % 13,063 4.4 % 42,968 4.5 % 41,973 4.8 % Rest of World Various 22,280 6.8 % 20,217 6.9 % 67,347 7.0 % 64,443 7.4 % Total Revenues, before reimbursements $ 325,594 100.0 % $ 294,924 100.0 % $ 959,251 100.0 % $ 867,294 100.0 % Following is a reconciliation of consolidated operating earnings to net income (loss) attributable to shareholders of Crawford & Company on a GAAP basis: Three Months Ended Nine Months Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Operating earnings (loss): North America Loss Adjusting $ 10,468 $ 3,750 $ 22,433 $ 10,533 International Operations 2,197 (3,922 ) 8,974 (7,648 ) Broadspire 13,532 6,198 29,607 20,299 Platform Solutions 8,523 10,080 26,595 22,714 Unallocated corporate and shared costs, net (4,781 ) (2,438 ) (9,998 ) (7,378 ) Consolidated operating earnings 29,939 13,668 77,611 38,520 (Deduct) add: Net corporate interest expense (4,556 ) (2,903 ) (13,264 ) (6,201 ) Stock option expense (145 ) (142 ) (440 ) (478 ) Amortization of intangible assets (1,986 ) (1,998 ) (5,864 ) (5,784 ) Non-service pension costs and credits (2,170 ) 532 (6,436 ) 1,646 Goodwill impairment — (36,808 ) — (36,808 ) Contingent earnout adjustments (2,127 ) (887 ) (3,100 ) (3,246 ) Income tax (provision) benefit (6,781 ) 13,286 (17,258 ) 8,092 Net loss attributable to noncontrolling interests 145 108 178 41 Net income (loss) attributable to shareholders of Crawford & Company $ 12,319 $ (15,144 ) $ 31,427 $ (4,218 ) 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 Nine Months Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Net income (loss) attributable to shareholders of Crawford & Company $ 12,319 $ (15,144 ) $ 31,427 $ (4,218 ) Add (Deduct): Depreciation and amortization 9,115 8,924 27,356 27,379 Stock-based compensation 1,574 808 4,183 4,218 Net corporate interest expense 4,556 2,903 13,264 6,201 Non-service pension costs and credits 2,170 (532 ) 6,436 (1,646 ) Goodwill impairment — 36,808 — 36,808 Contingent earnout adjustments 2,127 887 3,100 3,246 Income tax provision (benefit) 6,781 (13,286 ) 17,258 (8,092 ) Non-GAAP adjusted EBITDA $ 38,642 $ 21,368 $ 103,024 $ 63,896 Following is a reconciliation of operating cash flow to free cash flow for the nine months ended September 30, 2023 and 2022: Nine Months Ended (in thousands) September 30, 2023 September 30, 2022 Change Net Cash Provided by (Used in) Operating Activities $ 68,077 $ (16,195 ) $ 84,272 Less: Property & Equipment Purchases, net (3,360 ) (4,983 ) 1,623 Capitalized Software (internal and external costs) (24,323 ) (19,933 ) (4,390 ) Free Cash Flow $ 40,394 $ (41,111 ) $ 81,505 Following are the reconciliations of GAAP Pretax Earnings (Loss), Net Income (Loss) and Earnings (Loss) Per Share to related non-GAAP Adjusted figures, which reflect each of 2023 and 2022 before amortization of intangible assets, goodwill impairments, non-service related pension costs (credits) and contingent earnout adjustments: Three Months Ended September 30, 2023 (in thousands) Pretax earnings Net income attributable to Crawford & Company Diluted earnings per CRD-A share Diluted earnings per CRD-B share(1) GAAP $ 18,955 $ 12,319 $ 0.25 $ 0.25 Adjustments: Amortization of intangible assets 1,986 1,711 0.03 0.03 Non-service related pension costs 2,170 1,612 0.03 0.03 Contingent earnout adjustments 2,127 2,101 0.04 0.04 Non-GAAP Adjusted $ 25,238 $ 17,743 $ 0.35 $ 0.36 Three Months Ended September 30, 2022 (in thousands) Pretax (loss) earnings Net (loss) income attributable to Crawford & Company Diluted (loss) earnings per CRD-A share Diluted (loss) earnings per CRD-B share GAAP $ (28,538 ) $ (15,144 ) $ (0.31 ) $ (0.31 ) Adjustments: Amortization of intangible assets 1,998 1,499 0.03 0.03 Goodwill impairment 36,808 20,908 0.43 0.43 Non-service related pension credits (532 ) (412 ) (0.01 ) (0.01 ) Contingent earnout adjustments 887 657 0.01 0.01 Non-GAAP Adjusted $ 10,623 $ 7,508 $ 0.15 $ 0.15 Nine Months Ended September 30, 2023 (in thousands) Pretax earnings Net income attributable to Crawford & Company Diluted earnings per CRD-A share Diluted earnings per CRD-B share GAAP $ 48,507 $ 31,427 $ 0.63 $ 0.64 Adjustments: Amortization of intangible assets 5,864 5,039 0.10 0.10 Non-service related pension costs 6,436 4,782 0.10 0.10 Contingent earnout adjustments 3,100 2,503 0.05 0.05 Non-GAAP Adjusted $ 63,907 $ 43,751 $ 0.88 $ 0.89 Nine Months Ended September 30, 2022 (in thousands) Pretax (loss) earnings Net (loss) income attributable to Crawford & Company Diluted (loss) earnings per CRD-A share(1) Diluted (loss) earnings per CRD-B share GAAP $ (12,351 ) $ (4,218 ) $ (0.08 ) $ (0.09 ) Adjustments: Amortization of intangible assets 5,784 4,338 0.09 0.09 Goodwill impairment 36,808 20,908 0.42 0.42 Non-service related pension credits (1,646 ) (1,277 ) (0.03 ) (0.03 ) Contingent earnout adjustments 3,246 2,403 0.05 0.05 Non-GAAP Adjusted $ 31,841 $ 22,154 $ 0.44 $ 0.44 (1) Sum of reconciling items may differ from total due to rounding of individual components. Following is information regarding the weighted average shares used in the computation of basic and diluted earnings per share: Three Months Ended Nine Months Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Weighted-Average Shares Used to Compute Basic Earnings Per Share: Class A Common Stock 29,140 28,553 28,980 29,397 Class B Common Stock 19,837 19,848 19,845 20,202 Weighted-Average Shares Used to Compute Diluted Earnings Per Share: Class A Common Stock 30,063 28,553 29,659 29,397 Class B Common Stock 19,837 19,848 19,845 20,202 Non-GAAP (1) Weighted-Average Shares Used to Compute Diluted Earnings Per Share: Class A Common Stock 30,063 28,930 29,659 29,754 Class B Common Stock 19,837 19,848 19,845 20,202 (1) The Company had a net loss for GAAP reporting during the three and nine months ended September 30, 2022, 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 three and nine months ended September 30, 2022, these dilutive securities were added back to calculate Non-GAAP earnings per share. Further information regarding the Company’s operating results for the three and nine months ended September 30, 2023, financial position as of September 30, 2023, and cash flows for the nine months ended September 30, 2023 is shown on the attached unaudited condensed consolidated financial statements. About Crawford & Company Based in Atlanta, Crawford & Company (NYSE: CRD-A and CRD-B) is a leading provider of claims management and outsourcing solutions to insurance companies and self-insured entities with an expansive network serving clients in more than 70 countries. The Company's two classes of stock are substantially identical, except with respect to voting rights for the Class B Common Stock (CRD-B) and protections for the non-voting Class A Common Stock (CRD-A). More information is available at www.crawco.com. TAG: Crawford-Financial, Crawford-Investor-News-and-Events 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 and in the Investor Relations section of Crawford & Company’s website at www.crawco.com. CRAWFORD & COMPANY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (In Thousands, Except Per Share Amounts and Percentages) Three Months Ended September 30, 2023 2022 % Change Revenues: Revenues Before Reimbursements $ 325,594 $ 294,924 10 % Reimbursements 12,066 11,493 5 % Total Revenues 337,660 306,417 10 % Costs and Expenses: Costs of Services Provided, Before Reimbursements 229,969 221,233 4 % Reimbursements 12,066 11,493 5 % Total Costs of Services 242,035 232,726 4 % Selling, General, and Administrative Expenses 69,920 62,983 11 % Corporate Interest Expense, Net 4,556 2,903 57 % Goodwill Impairment - 36,808 (100 )% Total Costs and Expenses 316,511 335,420 (6 )% Other (Loss) Income, Net (2,194 ) 465 (572 )% Income (Loss) Before Income Taxes 18,955 (28,538 ) 166 % Provision (Benefit) for Income Taxes 6,781 (13,286 ) 151 % Net Income (Loss) 12,174 (15,252 ) 180 % Net Loss Attributable to Noncontrolling Interests 145 108 34 % Net Income (Loss) Attributable to Shareholders of Crawford & Company $ 12,319 $ (15,144 ) 181 % Earnings (Loss) Per Share - Basic: Class A Common Stock $ 0.25 $ (0.31 ) 181 % Class B Common Stock $ 0.25 $ (0.31 ) 181 % Earnings (Loss) Per Share - Diluted: Class A Common Stock $ 0.25 $ (0.31 ) 181 % Class B Common Stock $ 0.25 $ (0.31 ) 181 % Cash Dividends Per Share: Class A Common Stock $ 0.07 $ 0.06 17 % Class B Common Stock $ 0.07 $ 0.06 17 % CRAWFORD & COMPANY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (In Thousands, Except Per Share Amounts and Percentages) Nine Months Ended September 30, 2023 2022 % Change Revenues: Revenues Before Reimbursements $ 959,251 $ 867,294 11 % Reimbursements 36,743 30,564 20 % Total Revenues 995,994 897,858 11 % Costs and Expenses: Costs of Services Provided, Before Reimbursements 691,078 644,948 7 % Reimbursements 36,743 30,564 20 % Total Costs of Services 727,821 675,512 8 % Selling, General, and Administrative Expenses 199,871 193,222 3 % Corporate Interest Expense, Net 13,264 6,201 114 % Goodwill Impairment - 36,808 (100 )% Total Costs and Expenses 940,956 911,743 3 % Other (Loss) Income, Net (6,531 ) 1,534 (526 )% Income (Loss) Before Income Taxes 48,507 (12,351 ) 493 % Provision (Benefit) for Income Taxes 17,258 (8,092 ) 313 % Net Income (Loss) 31,249 (4,259 ) 834 % Net Loss Attributable to Noncontrolling Interests 178 41 334 % Net Income (Loss) Attributable to Shareholders of Crawford & Company $ 31,427 $ (4,218 ) 845 % Earnings (Loss) Per Share - Basic: Class A Common Stock $ 0.64 $ (0.08 ) 900 % Class B Common Stock $ 0.64 $ (0.09 ) 811 % Earnings (Loss) Per Share - Diluted: Class A Common Stock $ 0.63 $ (0.08 ) 888 % Class B Common Stock $ 0.64 $ (0.09 ) 811 % Cash Dividends Per Share: Class A Common Stock $ 0.19 $ 0.18 6 % Class B Common Stock $ 0.19 $ 0.18 6 % CRAWFORD & COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS As of September 30, 2023 and December 31, 2022 Unaudited (In Thousands, Except Par Values) September 30, December 31, 2023 2022 ASSETS Current Assets: Cash and Cash Equivalents $ 49,208 $ 46,007 Accounts Receivable, Net 151,142 141,106 Unbilled Revenues, at Estimated Billable Amounts 131,251 126,274 Income Taxes Receivable 4,245 9,098 Prepaid Expenses and Other Current Assets 44,145 28,782 Total Current Assets 379,991 351,267 Net Property and Equipment 24,322 27,809 Other Assets: Operating Lease Right-of-Use Asset, Net 91,364 93,334 Goodwill 76,637 76,622 Intangible Assets Arising from Business Acquisitions, Net 84,960 88,039 Capitalized Software Costs, Net 93,370 82,975 Deferred Income Tax Assets 18,142 19,573 Other Noncurrent Assets 58,405 51,888 Total Other Assets 422,878 412,431 Total Assets $ 827,191 $ 791,507 LIABILITIES AND SHAREHOLDERS’ INVESTMENT Current Liabilities: Short-Term Borrowings $ 16,955 $ 27,048 Accounts Payable 44,473 50,847 Accrued Compensation and Related Costs 81,579 79,285 Self-Insured Risks 22,545 12,614 Income Taxes Payable 632 1,208 Operating Lease Liability 24,766 22,910 Other Accrued Liabilities 65,219 56,293 Deferred Revenues 34,512 29,282 Total Current Liabilities 290,681 279,487 Noncurrent Liabilities: Long-Term Debt and Finance Leases, Less Current Installments 201,487 211,810 Operating Lease Liability 80,411 84,628 Deferred Revenues 25,535 24,737 Accrued Pension Liabilities 24,969 25,914 Other Noncurrent Liabilities 41,138 41,553 Total Noncurrent Liabilities 373,540 388,642 Shareholders’ Investment: Class A Common Stock, $1.00 Par Value 29,148 28,764 Class B Common Stock, $1.00 Par Value 19,785 19,848 Additional Paid-in Capital 83,548 78,158 Retained Earnings 234,718 213,094 Accumulated Other Comprehensive Loss (202,577 ) (215,321 ) Shareholders’ Investment Attributable to Shareholders of Crawford & Company 164,622 124,543 Noncontrolling Interests (1,652 ) (1,165 ) Total Shareholders’ Investment 162,970 123,378 Total Liabilities and Shareholders’ Investment $ 827,191 $ 791,507 CRAWFORD & COMPANY SUMMARY RESULTS BY OPERATING SEGMENT WITH DIRECT COMPENSATION AND OTHER EXPENSES Unaudited (In Thousands, Except Percentages) Three Months Ended September 30, North America Loss Adjusting % International Operations % Broadspire % Platform Solutions % 2023 2022 Change 2023 2022 Change 2023 2022 Change 2023 2022 Change Revenues Before Reimbursements $ 79,390 $ 66,822 18.8 % $ 98,066 $ 86,066 13.9 % $ 88,299 $ 78,381 12.7 % $ 59,839 $ 63,655 (6.0 )% Direct Compensation, Fringe Benefits & Non-Employee Labor 53,635 48,331 11.0 % 66,426 61,666 7.7 % 54,310 49,863 8.9 % 39,638 42,106 (5.9 )% % of Revenues Before Reimbursements 67.6 % 72.3 % 67.7 % 71.6 % 61.5 % 63.6 % 66.2 % 66.1 % Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor 15,287 14,741 3.7 % 29,443 28,322 4.0 % 20,457 22,320 (8.3 )% 11,678 11,469 1.8 % % of Revenues Before Reimbursements 19.3 % 22.1 % 30.0 % 32.9 % 23.2 % 28.5 % 19.5 % 18.0 % Total Operating Expenses 68,922 63,072 9.3 % 95,869 89,988 6.5 % 74,767 72,183 3.6 % 51,316 53,575 (4.2 )% Operating Earnings (Loss) (1) $ 10,468 $ 3,750 179.1 % $ 2,197 $ (3,922 ) nm $ 13,532 $ 6,198 118.3 % $ 8,523 $ 10,080 (15.4 )% % of Revenues Before Reimbursements 13.2 % 5.6 % 2.2 % (4.6 )% 15.3 % 7.9 % 14.2 % 15.8 % Nine Months Ended September 30, North America Loss Adjusting % International Operations % Broadspire % Platforms Solutions % 2023 2022 Change 2023 2022 Change 2023 2022 Change 2023 2022 Change Revenues Before Reimbursements $ 232,344 $ 197,035 17.9 % $ 285,241 $ 269,048 6.0 % $ 253,369 $ 234,949 7.8 % $ 188,297 $ 166,262 13.3 % \ Direct Compensation, Fringe Benefits & Non-Employee Labor 162,418 142,937 13.6 % 190,178 190,273 (0.0 )% 161,451 147,611 9.4 % 124,238 110,424 12.5 % % of Revenues Before Reimbursements 69.9 % 72.5 % 66.7 % 70.7 % 63.7 % 62.8 % 66.0 % 66.4 % Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor 47,493 43,565 9.0 % 86,089 86,423 (0.4 )% 62,311 67,039 (7.1 )% 37,464 33,124 13.1 % % of Revenues Before Reimbursements 20.4 % 22.1 % 30.2 % 32.1 % 24.6 % 28.5 % 19.9 % 19.9 % Total Operating Expenses 209,911 186,502 12.6 % 276,267 276,696 (0.2 )% 223,762 214,650 4.2 % 161,702 143,548 12.6 % Operating Earnings (Loss)(1) $ 22,433 $ 10,533 113.0 % $ 8,974 $ (7,648 ) nm $ 29,607 $ 20,299 45.9 % $ 26,595 $ 22,714 17.1 % % of Revenues Before Reimbursements 9.7 % 5.3 % 3.1 % (2.8 )% 11.7 % 8.6 % 14.1 % 13.7 % (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, non-service pension costs and credits, contingent earnout adjustments, goodwill impairments, and certain unallocated corporate and shared costs and credits. See pages 3 and 4 for additional information about segment operating earnings. CRAWFORD & COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Year to Date Period Ended September 30, 2023 and September 30, 2022 Unaudited (In Thousands) 2023 2022 Cash Flows From Operating Activities: Net income (loss) $ 31,249 $ (4,259 ) Reconciliation of net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 27,355 27,379 Goodwill impairment — 36,808 Stock-based compensation 4,183 4,218 Loss (gain) on disposal of property and equipment 96 (1,562 ) Contingent earnout adjustments 3,100 3,246 Changes in operating assets and liabilities: Accounts receivable, net (6,309 ) (9,329 ) Unbilled revenues, net 419 (23,537 ) Accrued or prepaid income taxes 5,306 (23,162 ) Accounts payable and accrued liabilities (1,437 ) (20,612 ) Deferred revenues 4,869 (191 ) Accrued retirement costs 4,818 (1,684 ) Prepaid expenses and other operating activities (5,572 ) (3,510 ) Net cash provided by (used in) operating activities 68,077 (16,195 ) Cash Flows From Investing Activities: Acquisitions of property and equipment (3,360 ) (4,983 ) Capitalization of computer software costs (24,323 ) (19,933 ) Payments for business acquisitions, net of cash acquired — (26,309 ) Cash proceeds from sale of property and equipment — 3,032 Net cash used in investing activities (27,683 ) (48,193 ) Cash Flows From Financing Activities: Cash dividends paid (9,284 ) (8,938 ) Repurchases of common stock (582 ) (26,749 ) Increases in short-term and revolving credit facility borrowings 20,958 99,952 Payments on short-term and revolving credit facility borrowings (43,719 ) (15,129 ) Payments of contingent consideration on acquisitions (6,760 ) (2,118 ) Other financing activities 1,317 (87 ) Net cash (used in) provided by financing activities (38,070 ) 46,931 Effects of exchange rate changes on cash and cash equivalents 1,313 (2,351 ) Increase (Decrease) in cash, cash equivalents, and restricted cash(1) 3,637 (19,808 ) Cash, cash equivalents, and restricted cash at beginning of year(1) 46,645 53,689 Cash, cash equivalents, and restricted cash at end of period(1) $ 50,282 $ 33,881 (1) The 2023 amounts include beginning restricted cash of $638 at December 31, 2022, and ending restricted cash of $1,074 at September 30, 2023, and the 2022 amounts include beginning restricted cash of $461 at December 31, 2021, and ending restricted cash of $782 at September 30, 2022, which we present as part of "Prepaid expenses and other current assets" on the Balance Sheets. View source version on businesswire.com: https://www.businesswire.com/news/home/20231106660057/en/Contacts Media Contacts: mediarelations@us.crawco.com Lynn Cufley +44 7585 901936 Lynn.Cufley@crawco.uk Katie Cline +1 470 792 5678 katie.cline@us.crawco.com Investor Contact: Jennifer Belodeau/Rosalyn Christian IMS Investor Relations +1 203 972 9200 crawford@imsinvestorrelations.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Crawford & Company Reports 2023 Third Quarter Results By: Crawford & Company via Business Wire November 06, 2023 at 16:15 PM EST Record Quarterly Revenue Drives Earnings and Margin Expansion Crawford & Company® (NYSE: CRD-A and CRD-B), is pleased to announce its financial results for the third quarter ended September 30, 2023. Based in Atlanta, Crawford & Company (NYSE: CRD‐A and CRD‐B) is a leading global provider of claims management and outsourcing solutions to insurance companies and self‐insured entities with an expansive network serving clients in more than 70 countries. The Company’s two classes of stock are substantially identical, except with respect to voting rights for the Class B Common Stock (CRD-B) and protections for the non-voting Class A Common Stock (CRD-A). More information is available on the Company's website. GAAP Consolidated Results Third Quarter 2023 Revenues before reimbursements of $325.6 million, up 10% over $294.9 million for the 2022 third quarter Net income attributable to shareholders of $12.3 million, compared with a loss of $(15.1) million in the same period last year Diluted earnings per share of $0.25 for both CRD-A and CRD-B, compared with diluted loss per share of $(0.31) for both CRD-A and CRD-B in the prior year third quarter Non-GAAP Consolidated Results Third Quarter 2023 Non-GAAP consolidated results for 2023 exclude the non-cash, after-tax adjustments for amortization of intangible assets of $1.7 million, non-service related pension costs of $1.6 million, and a contingent earnout adjustment of $2.1 million. Non-GAAP consolidated results for 2022 exclude a similar adjustment for amortization of intangible assets of $1.5 million, non-service related pension credits of $(0.4) million, a contingent earnout adjustment of $0.7 million, and a goodwill impairment of $20.9 million. Foreign currency exchange rates increased revenues before reimbursements by $0.6 million or less than 1%. Presented on a constant dollar basis to the prior year, revenues before reimbursements totaled $325.0 million, increasing 10% over the 2022 third quarter Net income attributable to shareholders, on a non-GAAP basis, totaled $17.7 million in the 2023 third quarter, compared with $7.5 million in the same period last year Diluted earnings per share, on a non-GAAP basis, totaled $0.35 for CRD-A and $0.36 for CRD-B in the 2023 third quarter, compared with $0.15 for both CRD-A and CRD-B in the prior year third quarter Consolidated adjusted operating earnings, on a non-GAAP basis, were $29.9 million, or 9.2% of revenues before reimbursements in the 2023 third quarter, more than doubling the $13.7 million, or 4.6% of revenues, in the 2022 period Consolidated adjusted EBITDA, a non-GAAP measure, was $38.6 million, or 11.9% of revenues before reimbursements in the 2023 third quarter, increasing 81% over the $21.4 million, or 7.2% of revenues, in the 2022 period Management Comments “We continued our momentum of growth and profit expansion in the third quarter of 2023 delivering our twelfth consecutive quarter of growth. Revenues grew by 10% to a new quarterly record and profits more than doubled compared to last year. We have built a strong foundation focused on operational excellence at Crawford, and our technology plus people strategy is driving growth and margin improvement across the business,” commented Rohit Verma, Chief Executive Officer of Crawford & Company. “North America Loss Adjusting revenue grew more than 18% for the third quarter, driven by increased utilization, the addition of new clients, experts, and new account nominations. Broadspire saw record quarterly revenue fueled by business development efforts that have expanded our revenue base and continued growth in Medical Management services as we add workers' compensation clients. Our International segment also showed improved revenues and margins as our transformation of the international business continues. Platforms Solutions had meaningful growth in Contractor Connection and Subrogation, however there was offsetting softness in the Networks group where benign weather and a reduction in high-volume, low severity claim activity impacted results for the quarter. Platforms’ operating margin remained solid at mid-double digits. “Overall, this was a very strong quarter for Crawford with healthy cash generation and further strengthening of our balance sheet.” Mr. Verma concluded. Segment Results for the Third Quarter North America Loss Adjusting North America Loss Adjusting revenues before reimbursements were $79.4 million in the third quarter of 2023, increasing 18.8% from $66.8 million in the third quarter of 2022. Absent foreign exchange rate decreases of $(0.7) million, revenues would have been $80.1 million for the 2023 third quarter. The segment had operating earnings of $10.5 million in the 2023 third quarter, increasing from $3.8 million in the third quarter of 2022. The operating margin was 13.2% in the 2023 quarter and 5.6% in the 2022 quarter. International Operations International Operations revenues before reimbursements were $98.1 million in the third quarter of 2023, up 13.9% from $86.1 million in the same period of 2022. Absent foreign exchange rate increases of $1.3 million, revenues would have been $96.8 million for the 2023 third quarter. Operating earnings were $2.2 million in the 2023 third quarter, compared with a $(3.9) million operating loss in the 2022 period. The segment’s operating margin for the 2023 quarter was 2.2% as compared with (4.6)% in the 2022 quarter. Broadspire Broadspire segment revenues before reimbursements were $88.3 million in the 2023 third quarter, increasing 12.7% from $78.4 million in the 2022 third quarter. Broadspire recorded operating earnings of $13.5 million in the third quarter of 2023, representing an operating margin of 15.3%, increasing from $6.2 million, or 7.9% of revenues, in the 2022 third quarter. Platform Solutions Platform Solutions revenues before reimbursements were $59.8 million in the third quarter of 2023, down (6.0)% from $63.7 million in the same period of 2022. Operating earnings were $8.5 million in the 2023 third quarter, decreasing from the $10.1 million in the 2022 period. The segment’s operating margin for the 2023 quarter was 14.2% as compared with 15.8% in the 2022 quarter. Unallocated Corporate and Shared Costs and Credits, Net Unallocated corporate costs were $4.8 million in the third quarter of 2023, compared with $2.4 million in the same period of 2022. The increase in the 2023 third quarter was primarily due to increased incentive compensation and an increase in unallocated payroll tax and benefits costs. 2022 Goodwill Impairment The Company recognized a $36.8 million pre-tax non-cash goodwill impairment in the third quarter of 2022. This charge was partially offset by a $15.9 million reduction in income tax expense, for a net impact of $20.9 million, or $0.43 per share. There was no goodwill impairment in 2023. Other Matters The Company recognized pretax contingent earnout expenses totaling $2.1 million and $0.9 million in the 2023 third quarter and comparable 2022 period, respectively, related to the fair value adjustment of earnout liabilities arising from recent acquisitions. This adjustment, which is not a component of operating earnings, is based on favorable changes to projections of acquired entities over the respective earnout periods, which span multiple years. The Company recognized non-service pension costs of $2.2 million in the 2023 third quarter compared with credits of $(0.5) million in the 2022 period. Non-service pension costs represent the U.S. and U.K. non-service defined benefit pension costs, which are non-operating in nature as the U.S. plan is frozen and the U.K. plans are closed to new participants. Balance Sheet and Cash Flow The Company’s consolidated cash and cash equivalents position as of September 30, 2023, totaled $49.2 million, compared with $46.0 million at December 31, 2022. The Company’s total debt outstanding as of September 30, 2023, totaled $218.4 million, compared with $238.9 million at December 31, 2022. The Company’s operations provided $68.1 million of cash during the first nine months of 2023, compared with $(16.2) million used in 2022. The increase in cash provided was primarily driven by improved earnings, changes in working capital, including a reduction in work in process, increases in accrued incentive compensation as compared to payouts for prior year performance, and an increase in income tax refunds received. The Company made no contributions to its U.S. defined benefit pension plan and $1.8 million in contributions to its U.K. plans for the first nine months of 2023, compared with no contributions to the U.S. plan and $0.5 million to the U.K. plans in 2022. During 2023, the Company didn't repurchase any shares of CRD-A, but repurchased 63,103 shares of CRD-B at an average share cost of $9.24. During the first nine months of 2022, the Company repurchased 2,656,474 shares of CRD-A and 963,472 shares of CRD-B at an average per share cost of $7.41 and $7.32, respectively. The total cost of share repurchases during 2023 was $0.6 million through September 30, 2023. Conference Call As previously announced, Crawford & Company will host a conference call on November 7, 2023, at 8:30 a.m. Eastern Time to discuss its third quarter 2023 results. The conference call can be accessed live by dialing 1-888-259-6580 and using Conference ID 94766677. A presentation for tomorrow’s call can also be found on the investor relations portion of the Company’s website, https://ir.crawco.com. The call will be recorded and available for replay through December 7, 2023. You may dial 1-877-674-7070 and use passcode 766677# to listen to the replay. 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 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, goodwill impairment, amortization of customer-relationship intangible assets, contingent earnout adjustments, non-service pension costs and credits, income taxes and net income or loss attributable to noncontrolling interests. 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 adjustments for depreciation and amortization, net corporate interest expense, goodwill impairment, contingent earnout adjustments, non-service pension costs and credits, income taxes and stock-based compensation expense. 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, 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, amortization of customer-relationship intangible assets, contingent earnout adjustments, and non-service pension costs and credits 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. Contingent earnout adjustments relate to changes in the fair value of earnouts associated with our recent acquisitions. Non-service pension costs and credits represent the U.S. and U.K. non-service defined benefit pension costs, which are non-operating in nature as the U.S. plan was frozen in 2002 and the U.K. plans are closed to new participants. None of these costs relate directly to the performance of our services or operating activities and, therefore, are excluded from segment operating earnings to better assess the results of each segment's operating activities on a consistent basis. Goodwill impairments arise from time to time due to various factors, but are not allocated to our operating segments since they historically have not regularly impacted our performance and are not expected to impact our future performance on a regular 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 Nine Months Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Geographic Area Currency USD equivalent % of total USD equivalent % of total USD equivalent % of total USD equivalent % of total U.S. USD $ 203,340 62.5 % $ 183,197 62.1 % $ 601,354 62.7 % $ 523,650 60.4 % U.K. GBP 38,290 11.8 % 25,352 8.6 % 106,139 11.0 % 92,837 10.7 % Canada CAD 24,188 7.4 % 25,661 8.7 % 72,656 7.6 % 74,597 8.6 % Australia AUD 22,867 7.0 % 27,434 9.3 % 68,787 7.2 % 69,794 8.1 % Europe EUR 14,629 4.5 % 13,063 4.4 % 42,968 4.5 % 41,973 4.8 % Rest of World Various 22,280 6.8 % 20,217 6.9 % 67,347 7.0 % 64,443 7.4 % Total Revenues, before reimbursements $ 325,594 100.0 % $ 294,924 100.0 % $ 959,251 100.0 % $ 867,294 100.0 % Following is a reconciliation of consolidated operating earnings to net income (loss) attributable to shareholders of Crawford & Company on a GAAP basis: Three Months Ended Nine Months Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Operating earnings (loss): North America Loss Adjusting $ 10,468 $ 3,750 $ 22,433 $ 10,533 International Operations 2,197 (3,922 ) 8,974 (7,648 ) Broadspire 13,532 6,198 29,607 20,299 Platform Solutions 8,523 10,080 26,595 22,714 Unallocated corporate and shared costs, net (4,781 ) (2,438 ) (9,998 ) (7,378 ) Consolidated operating earnings 29,939 13,668 77,611 38,520 (Deduct) add: Net corporate interest expense (4,556 ) (2,903 ) (13,264 ) (6,201 ) Stock option expense (145 ) (142 ) (440 ) (478 ) Amortization of intangible assets (1,986 ) (1,998 ) (5,864 ) (5,784 ) Non-service pension costs and credits (2,170 ) 532 (6,436 ) 1,646 Goodwill impairment — (36,808 ) — (36,808 ) Contingent earnout adjustments (2,127 ) (887 ) (3,100 ) (3,246 ) Income tax (provision) benefit (6,781 ) 13,286 (17,258 ) 8,092 Net loss attributable to noncontrolling interests 145 108 178 41 Net income (loss) attributable to shareholders of Crawford & Company $ 12,319 $ (15,144 ) $ 31,427 $ (4,218 ) 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 Nine Months Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Net income (loss) attributable to shareholders of Crawford & Company $ 12,319 $ (15,144 ) $ 31,427 $ (4,218 ) Add (Deduct): Depreciation and amortization 9,115 8,924 27,356 27,379 Stock-based compensation 1,574 808 4,183 4,218 Net corporate interest expense 4,556 2,903 13,264 6,201 Non-service pension costs and credits 2,170 (532 ) 6,436 (1,646 ) Goodwill impairment — 36,808 — 36,808 Contingent earnout adjustments 2,127 887 3,100 3,246 Income tax provision (benefit) 6,781 (13,286 ) 17,258 (8,092 ) Non-GAAP adjusted EBITDA $ 38,642 $ 21,368 $ 103,024 $ 63,896 Following is a reconciliation of operating cash flow to free cash flow for the nine months ended September 30, 2023 and 2022: Nine Months Ended (in thousands) September 30, 2023 September 30, 2022 Change Net Cash Provided by (Used in) Operating Activities $ 68,077 $ (16,195 ) $ 84,272 Less: Property & Equipment Purchases, net (3,360 ) (4,983 ) 1,623 Capitalized Software (internal and external costs) (24,323 ) (19,933 ) (4,390 ) Free Cash Flow $ 40,394 $ (41,111 ) $ 81,505 Following are the reconciliations of GAAP Pretax Earnings (Loss), Net Income (Loss) and Earnings (Loss) Per Share to related non-GAAP Adjusted figures, which reflect each of 2023 and 2022 before amortization of intangible assets, goodwill impairments, non-service related pension costs (credits) and contingent earnout adjustments: Three Months Ended September 30, 2023 (in thousands) Pretax earnings Net income attributable to Crawford & Company Diluted earnings per CRD-A share Diluted earnings per CRD-B share(1) GAAP $ 18,955 $ 12,319 $ 0.25 $ 0.25 Adjustments: Amortization of intangible assets 1,986 1,711 0.03 0.03 Non-service related pension costs 2,170 1,612 0.03 0.03 Contingent earnout adjustments 2,127 2,101 0.04 0.04 Non-GAAP Adjusted $ 25,238 $ 17,743 $ 0.35 $ 0.36 Three Months Ended September 30, 2022 (in thousands) Pretax (loss) earnings Net (loss) income attributable to Crawford & Company Diluted (loss) earnings per CRD-A share Diluted (loss) earnings per CRD-B share GAAP $ (28,538 ) $ (15,144 ) $ (0.31 ) $ (0.31 ) Adjustments: Amortization of intangible assets 1,998 1,499 0.03 0.03 Goodwill impairment 36,808 20,908 0.43 0.43 Non-service related pension credits (532 ) (412 ) (0.01 ) (0.01 ) Contingent earnout adjustments 887 657 0.01 0.01 Non-GAAP Adjusted $ 10,623 $ 7,508 $ 0.15 $ 0.15 Nine Months Ended September 30, 2023 (in thousands) Pretax earnings Net income attributable to Crawford & Company Diluted earnings per CRD-A share Diluted earnings per CRD-B share GAAP $ 48,507 $ 31,427 $ 0.63 $ 0.64 Adjustments: Amortization of intangible assets 5,864 5,039 0.10 0.10 Non-service related pension costs 6,436 4,782 0.10 0.10 Contingent earnout adjustments 3,100 2,503 0.05 0.05 Non-GAAP Adjusted $ 63,907 $ 43,751 $ 0.88 $ 0.89 Nine Months Ended September 30, 2022 (in thousands) Pretax (loss) earnings Net (loss) income attributable to Crawford & Company Diluted (loss) earnings per CRD-A share(1) Diluted (loss) earnings per CRD-B share GAAP $ (12,351 ) $ (4,218 ) $ (0.08 ) $ (0.09 ) Adjustments: Amortization of intangible assets 5,784 4,338 0.09 0.09 Goodwill impairment 36,808 20,908 0.42 0.42 Non-service related pension credits (1,646 ) (1,277 ) (0.03 ) (0.03 ) Contingent earnout adjustments 3,246 2,403 0.05 0.05 Non-GAAP Adjusted $ 31,841 $ 22,154 $ 0.44 $ 0.44 (1) Sum of reconciling items may differ from total due to rounding of individual components. Following is information regarding the weighted average shares used in the computation of basic and diluted earnings per share: Three Months Ended Nine Months Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Weighted-Average Shares Used to Compute Basic Earnings Per Share: Class A Common Stock 29,140 28,553 28,980 29,397 Class B Common Stock 19,837 19,848 19,845 20,202 Weighted-Average Shares Used to Compute Diluted Earnings Per Share: Class A Common Stock 30,063 28,553 29,659 29,397 Class B Common Stock 19,837 19,848 19,845 20,202 Non-GAAP (1) Weighted-Average Shares Used to Compute Diluted Earnings Per Share: Class A Common Stock 30,063 28,930 29,659 29,754 Class B Common Stock 19,837 19,848 19,845 20,202 (1) The Company had a net loss for GAAP reporting during the three and nine months ended September 30, 2022, 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 three and nine months ended September 30, 2022, these dilutive securities were added back to calculate Non-GAAP earnings per share. Further information regarding the Company’s operating results for the three and nine months ended September 30, 2023, financial position as of September 30, 2023, and cash flows for the nine months ended September 30, 2023 is shown on the attached unaudited condensed consolidated financial statements. About Crawford & Company Based in Atlanta, Crawford & Company (NYSE: CRD-A and CRD-B) is a leading provider of claims management and outsourcing solutions to insurance companies and self-insured entities with an expansive network serving clients in more than 70 countries. The Company's two classes of stock are substantially identical, except with respect to voting rights for the Class B Common Stock (CRD-B) and protections for the non-voting Class A Common Stock (CRD-A). More information is available at www.crawco.com. TAG: Crawford-Financial, Crawford-Investor-News-and-Events 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 and in the Investor Relations section of Crawford & Company’s website at www.crawco.com. CRAWFORD & COMPANY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (In Thousands, Except Per Share Amounts and Percentages) Three Months Ended September 30, 2023 2022 % Change Revenues: Revenues Before Reimbursements $ 325,594 $ 294,924 10 % Reimbursements 12,066 11,493 5 % Total Revenues 337,660 306,417 10 % Costs and Expenses: Costs of Services Provided, Before Reimbursements 229,969 221,233 4 % Reimbursements 12,066 11,493 5 % Total Costs of Services 242,035 232,726 4 % Selling, General, and Administrative Expenses 69,920 62,983 11 % Corporate Interest Expense, Net 4,556 2,903 57 % Goodwill Impairment - 36,808 (100 )% Total Costs and Expenses 316,511 335,420 (6 )% Other (Loss) Income, Net (2,194 ) 465 (572 )% Income (Loss) Before Income Taxes 18,955 (28,538 ) 166 % Provision (Benefit) for Income Taxes 6,781 (13,286 ) 151 % Net Income (Loss) 12,174 (15,252 ) 180 % Net Loss Attributable to Noncontrolling Interests 145 108 34 % Net Income (Loss) Attributable to Shareholders of Crawford & Company $ 12,319 $ (15,144 ) 181 % Earnings (Loss) Per Share - Basic: Class A Common Stock $ 0.25 $ (0.31 ) 181 % Class B Common Stock $ 0.25 $ (0.31 ) 181 % Earnings (Loss) Per Share - Diluted: Class A Common Stock $ 0.25 $ (0.31 ) 181 % Class B Common Stock $ 0.25 $ (0.31 ) 181 % Cash Dividends Per Share: Class A Common Stock $ 0.07 $ 0.06 17 % Class B Common Stock $ 0.07 $ 0.06 17 % CRAWFORD & COMPANY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (In Thousands, Except Per Share Amounts and Percentages) Nine Months Ended September 30, 2023 2022 % Change Revenues: Revenues Before Reimbursements $ 959,251 $ 867,294 11 % Reimbursements 36,743 30,564 20 % Total Revenues 995,994 897,858 11 % Costs and Expenses: Costs of Services Provided, Before Reimbursements 691,078 644,948 7 % Reimbursements 36,743 30,564 20 % Total Costs of Services 727,821 675,512 8 % Selling, General, and Administrative Expenses 199,871 193,222 3 % Corporate Interest Expense, Net 13,264 6,201 114 % Goodwill Impairment - 36,808 (100 )% Total Costs and Expenses 940,956 911,743 3 % Other (Loss) Income, Net (6,531 ) 1,534 (526 )% Income (Loss) Before Income Taxes 48,507 (12,351 ) 493 % Provision (Benefit) for Income Taxes 17,258 (8,092 ) 313 % Net Income (Loss) 31,249 (4,259 ) 834 % Net Loss Attributable to Noncontrolling Interests 178 41 334 % Net Income (Loss) Attributable to Shareholders of Crawford & Company $ 31,427 $ (4,218 ) 845 % Earnings (Loss) Per Share - Basic: Class A Common Stock $ 0.64 $ (0.08 ) 900 % Class B Common Stock $ 0.64 $ (0.09 ) 811 % Earnings (Loss) Per Share - Diluted: Class A Common Stock $ 0.63 $ (0.08 ) 888 % Class B Common Stock $ 0.64 $ (0.09 ) 811 % Cash Dividends Per Share: Class A Common Stock $ 0.19 $ 0.18 6 % Class B Common Stock $ 0.19 $ 0.18 6 % CRAWFORD & COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS As of September 30, 2023 and December 31, 2022 Unaudited (In Thousands, Except Par Values) September 30, December 31, 2023 2022 ASSETS Current Assets: Cash and Cash Equivalents $ 49,208 $ 46,007 Accounts Receivable, Net 151,142 141,106 Unbilled Revenues, at Estimated Billable Amounts 131,251 126,274 Income Taxes Receivable 4,245 9,098 Prepaid Expenses and Other Current Assets 44,145 28,782 Total Current Assets 379,991 351,267 Net Property and Equipment 24,322 27,809 Other Assets: Operating Lease Right-of-Use Asset, Net 91,364 93,334 Goodwill 76,637 76,622 Intangible Assets Arising from Business Acquisitions, Net 84,960 88,039 Capitalized Software Costs, Net 93,370 82,975 Deferred Income Tax Assets 18,142 19,573 Other Noncurrent Assets 58,405 51,888 Total Other Assets 422,878 412,431 Total Assets $ 827,191 $ 791,507 LIABILITIES AND SHAREHOLDERS’ INVESTMENT Current Liabilities: Short-Term Borrowings $ 16,955 $ 27,048 Accounts Payable 44,473 50,847 Accrued Compensation and Related Costs 81,579 79,285 Self-Insured Risks 22,545 12,614 Income Taxes Payable 632 1,208 Operating Lease Liability 24,766 22,910 Other Accrued Liabilities 65,219 56,293 Deferred Revenues 34,512 29,282 Total Current Liabilities 290,681 279,487 Noncurrent Liabilities: Long-Term Debt and Finance Leases, Less Current Installments 201,487 211,810 Operating Lease Liability 80,411 84,628 Deferred Revenues 25,535 24,737 Accrued Pension Liabilities 24,969 25,914 Other Noncurrent Liabilities 41,138 41,553 Total Noncurrent Liabilities 373,540 388,642 Shareholders’ Investment: Class A Common Stock, $1.00 Par Value 29,148 28,764 Class B Common Stock, $1.00 Par Value 19,785 19,848 Additional Paid-in Capital 83,548 78,158 Retained Earnings 234,718 213,094 Accumulated Other Comprehensive Loss (202,577 ) (215,321 ) Shareholders’ Investment Attributable to Shareholders of Crawford & Company 164,622 124,543 Noncontrolling Interests (1,652 ) (1,165 ) Total Shareholders’ Investment 162,970 123,378 Total Liabilities and Shareholders’ Investment $ 827,191 $ 791,507 CRAWFORD & COMPANY SUMMARY RESULTS BY OPERATING SEGMENT WITH DIRECT COMPENSATION AND OTHER EXPENSES Unaudited (In Thousands, Except Percentages) Three Months Ended September 30, North America Loss Adjusting % International Operations % Broadspire % Platform Solutions % 2023 2022 Change 2023 2022 Change 2023 2022 Change 2023 2022 Change Revenues Before Reimbursements $ 79,390 $ 66,822 18.8 % $ 98,066 $ 86,066 13.9 % $ 88,299 $ 78,381 12.7 % $ 59,839 $ 63,655 (6.0 )% Direct Compensation, Fringe Benefits & Non-Employee Labor 53,635 48,331 11.0 % 66,426 61,666 7.7 % 54,310 49,863 8.9 % 39,638 42,106 (5.9 )% % of Revenues Before Reimbursements 67.6 % 72.3 % 67.7 % 71.6 % 61.5 % 63.6 % 66.2 % 66.1 % Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor 15,287 14,741 3.7 % 29,443 28,322 4.0 % 20,457 22,320 (8.3 )% 11,678 11,469 1.8 % % of Revenues Before Reimbursements 19.3 % 22.1 % 30.0 % 32.9 % 23.2 % 28.5 % 19.5 % 18.0 % Total Operating Expenses 68,922 63,072 9.3 % 95,869 89,988 6.5 % 74,767 72,183 3.6 % 51,316 53,575 (4.2 )% Operating Earnings (Loss) (1) $ 10,468 $ 3,750 179.1 % $ 2,197 $ (3,922 ) nm $ 13,532 $ 6,198 118.3 % $ 8,523 $ 10,080 (15.4 )% % of Revenues Before Reimbursements 13.2 % 5.6 % 2.2 % (4.6 )% 15.3 % 7.9 % 14.2 % 15.8 % Nine Months Ended September 30, North America Loss Adjusting % International Operations % Broadspire % Platforms Solutions % 2023 2022 Change 2023 2022 Change 2023 2022 Change 2023 2022 Change Revenues Before Reimbursements $ 232,344 $ 197,035 17.9 % $ 285,241 $ 269,048 6.0 % $ 253,369 $ 234,949 7.8 % $ 188,297 $ 166,262 13.3 % \ Direct Compensation, Fringe Benefits & Non-Employee Labor 162,418 142,937 13.6 % 190,178 190,273 (0.0 )% 161,451 147,611 9.4 % 124,238 110,424 12.5 % % of Revenues Before Reimbursements 69.9 % 72.5 % 66.7 % 70.7 % 63.7 % 62.8 % 66.0 % 66.4 % Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor 47,493 43,565 9.0 % 86,089 86,423 (0.4 )% 62,311 67,039 (7.1 )% 37,464 33,124 13.1 % % of Revenues Before Reimbursements 20.4 % 22.1 % 30.2 % 32.1 % 24.6 % 28.5 % 19.9 % 19.9 % Total Operating Expenses 209,911 186,502 12.6 % 276,267 276,696 (0.2 )% 223,762 214,650 4.2 % 161,702 143,548 12.6 % Operating Earnings (Loss)(1) $ 22,433 $ 10,533 113.0 % $ 8,974 $ (7,648 ) nm $ 29,607 $ 20,299 45.9 % $ 26,595 $ 22,714 17.1 % % of Revenues Before Reimbursements 9.7 % 5.3 % 3.1 % (2.8 )% 11.7 % 8.6 % 14.1 % 13.7 % (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, non-service pension costs and credits, contingent earnout adjustments, goodwill impairments, and certain unallocated corporate and shared costs and credits. See pages 3 and 4 for additional information about segment operating earnings. CRAWFORD & COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Year to Date Period Ended September 30, 2023 and September 30, 2022 Unaudited (In Thousands) 2023 2022 Cash Flows From Operating Activities: Net income (loss) $ 31,249 $ (4,259 ) Reconciliation of net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 27,355 27,379 Goodwill impairment — 36,808 Stock-based compensation 4,183 4,218 Loss (gain) on disposal of property and equipment 96 (1,562 ) Contingent earnout adjustments 3,100 3,246 Changes in operating assets and liabilities: Accounts receivable, net (6,309 ) (9,329 ) Unbilled revenues, net 419 (23,537 ) Accrued or prepaid income taxes 5,306 (23,162 ) Accounts payable and accrued liabilities (1,437 ) (20,612 ) Deferred revenues 4,869 (191 ) Accrued retirement costs 4,818 (1,684 ) Prepaid expenses and other operating activities (5,572 ) (3,510 ) Net cash provided by (used in) operating activities 68,077 (16,195 ) Cash Flows From Investing Activities: Acquisitions of property and equipment (3,360 ) (4,983 ) Capitalization of computer software costs (24,323 ) (19,933 ) Payments for business acquisitions, net of cash acquired — (26,309 ) Cash proceeds from sale of property and equipment — 3,032 Net cash used in investing activities (27,683 ) (48,193 ) Cash Flows From Financing Activities: Cash dividends paid (9,284 ) (8,938 ) Repurchases of common stock (582 ) (26,749 ) Increases in short-term and revolving credit facility borrowings 20,958 99,952 Payments on short-term and revolving credit facility borrowings (43,719 ) (15,129 ) Payments of contingent consideration on acquisitions (6,760 ) (2,118 ) Other financing activities 1,317 (87 ) Net cash (used in) provided by financing activities (38,070 ) 46,931 Effects of exchange rate changes on cash and cash equivalents 1,313 (2,351 ) Increase (Decrease) in cash, cash equivalents, and restricted cash(1) 3,637 (19,808 ) Cash, cash equivalents, and restricted cash at beginning of year(1) 46,645 53,689 Cash, cash equivalents, and restricted cash at end of period(1) $ 50,282 $ 33,881 (1) The 2023 amounts include beginning restricted cash of $638 at December 31, 2022, and ending restricted cash of $1,074 at September 30, 2023, and the 2022 amounts include beginning restricted cash of $461 at December 31, 2021, and ending restricted cash of $782 at September 30, 2022, which we present as part of "Prepaid expenses and other current assets" on the Balance Sheets. View source version on businesswire.com: https://www.businesswire.com/news/home/20231106660057/en/Contacts Media Contacts: mediarelations@us.crawco.com Lynn Cufley +44 7585 901936 Lynn.Cufley@crawco.uk Katie Cline +1 470 792 5678 katie.cline@us.crawco.com Investor Contact: Jennifer Belodeau/Rosalyn Christian IMS Investor Relations +1 203 972 9200 crawford@imsinvestorrelations.com
Crawford & Company® (NYSE: CRD-A and CRD-B), is pleased to announce its financial results for the third quarter ended September 30, 2023. Based in Atlanta, Crawford & Company (NYSE: CRD‐A and CRD‐B) is a leading global provider of claims management and outsourcing solutions to insurance companies and self‐insured entities with an expansive network serving clients in more than 70 countries. The Company’s two classes of stock are substantially identical, except with respect to voting rights for the Class B Common Stock (CRD-B) and protections for the non-voting Class A Common Stock (CRD-A). More information is available on the Company's website. GAAP Consolidated Results Third Quarter 2023 Revenues before reimbursements of $325.6 million, up 10% over $294.9 million for the 2022 third quarter Net income attributable to shareholders of $12.3 million, compared with a loss of $(15.1) million in the same period last year Diluted earnings per share of $0.25 for both CRD-A and CRD-B, compared with diluted loss per share of $(0.31) for both CRD-A and CRD-B in the prior year third quarter Non-GAAP Consolidated Results Third Quarter 2023 Non-GAAP consolidated results for 2023 exclude the non-cash, after-tax adjustments for amortization of intangible assets of $1.7 million, non-service related pension costs of $1.6 million, and a contingent earnout adjustment of $2.1 million. Non-GAAP consolidated results for 2022 exclude a similar adjustment for amortization of intangible assets of $1.5 million, non-service related pension credits of $(0.4) million, a contingent earnout adjustment of $0.7 million, and a goodwill impairment of $20.9 million. Foreign currency exchange rates increased revenues before reimbursements by $0.6 million or less than 1%. Presented on a constant dollar basis to the prior year, revenues before reimbursements totaled $325.0 million, increasing 10% over the 2022 third quarter Net income attributable to shareholders, on a non-GAAP basis, totaled $17.7 million in the 2023 third quarter, compared with $7.5 million in the same period last year Diluted earnings per share, on a non-GAAP basis, totaled $0.35 for CRD-A and $0.36 for CRD-B in the 2023 third quarter, compared with $0.15 for both CRD-A and CRD-B in the prior year third quarter Consolidated adjusted operating earnings, on a non-GAAP basis, were $29.9 million, or 9.2% of revenues before reimbursements in the 2023 third quarter, more than doubling the $13.7 million, or 4.6% of revenues, in the 2022 period Consolidated adjusted EBITDA, a non-GAAP measure, was $38.6 million, or 11.9% of revenues before reimbursements in the 2023 third quarter, increasing 81% over the $21.4 million, or 7.2% of revenues, in the 2022 period Management Comments “We continued our momentum of growth and profit expansion in the third quarter of 2023 delivering our twelfth consecutive quarter of growth. Revenues grew by 10% to a new quarterly record and profits more than doubled compared to last year. We have built a strong foundation focused on operational excellence at Crawford, and our technology plus people strategy is driving growth and margin improvement across the business,” commented Rohit Verma, Chief Executive Officer of Crawford & Company. “North America Loss Adjusting revenue grew more than 18% for the third quarter, driven by increased utilization, the addition of new clients, experts, and new account nominations. Broadspire saw record quarterly revenue fueled by business development efforts that have expanded our revenue base and continued growth in Medical Management services as we add workers' compensation clients. Our International segment also showed improved revenues and margins as our transformation of the international business continues. Platforms Solutions had meaningful growth in Contractor Connection and Subrogation, however there was offsetting softness in the Networks group where benign weather and a reduction in high-volume, low severity claim activity impacted results for the quarter. Platforms’ operating margin remained solid at mid-double digits. “Overall, this was a very strong quarter for Crawford with healthy cash generation and further strengthening of our balance sheet.” Mr. Verma concluded. Segment Results for the Third Quarter North America Loss Adjusting North America Loss Adjusting revenues before reimbursements were $79.4 million in the third quarter of 2023, increasing 18.8% from $66.8 million in the third quarter of 2022. Absent foreign exchange rate decreases of $(0.7) million, revenues would have been $80.1 million for the 2023 third quarter. The segment had operating earnings of $10.5 million in the 2023 third quarter, increasing from $3.8 million in the third quarter of 2022. The operating margin was 13.2% in the 2023 quarter and 5.6% in the 2022 quarter. International Operations International Operations revenues before reimbursements were $98.1 million in the third quarter of 2023, up 13.9% from $86.1 million in the same period of 2022. Absent foreign exchange rate increases of $1.3 million, revenues would have been $96.8 million for the 2023 third quarter. Operating earnings were $2.2 million in the 2023 third quarter, compared with a $(3.9) million operating loss in the 2022 period. The segment’s operating margin for the 2023 quarter was 2.2% as compared with (4.6)% in the 2022 quarter. Broadspire Broadspire segment revenues before reimbursements were $88.3 million in the 2023 third quarter, increasing 12.7% from $78.4 million in the 2022 third quarter. Broadspire recorded operating earnings of $13.5 million in the third quarter of 2023, representing an operating margin of 15.3%, increasing from $6.2 million, or 7.9% of revenues, in the 2022 third quarter. Platform Solutions Platform Solutions revenues before reimbursements were $59.8 million in the third quarter of 2023, down (6.0)% from $63.7 million in the same period of 2022. Operating earnings were $8.5 million in the 2023 third quarter, decreasing from the $10.1 million in the 2022 period. The segment’s operating margin for the 2023 quarter was 14.2% as compared with 15.8% in the 2022 quarter. Unallocated Corporate and Shared Costs and Credits, Net Unallocated corporate costs were $4.8 million in the third quarter of 2023, compared with $2.4 million in the same period of 2022. The increase in the 2023 third quarter was primarily due to increased incentive compensation and an increase in unallocated payroll tax and benefits costs. 2022 Goodwill Impairment The Company recognized a $36.8 million pre-tax non-cash goodwill impairment in the third quarter of 2022. This charge was partially offset by a $15.9 million reduction in income tax expense, for a net impact of $20.9 million, or $0.43 per share. There was no goodwill impairment in 2023. Other Matters The Company recognized pretax contingent earnout expenses totaling $2.1 million and $0.9 million in the 2023 third quarter and comparable 2022 period, respectively, related to the fair value adjustment of earnout liabilities arising from recent acquisitions. This adjustment, which is not a component of operating earnings, is based on favorable changes to projections of acquired entities over the respective earnout periods, which span multiple years. The Company recognized non-service pension costs of $2.2 million in the 2023 third quarter compared with credits of $(0.5) million in the 2022 period. Non-service pension costs represent the U.S. and U.K. non-service defined benefit pension costs, which are non-operating in nature as the U.S. plan is frozen and the U.K. plans are closed to new participants. Balance Sheet and Cash Flow The Company’s consolidated cash and cash equivalents position as of September 30, 2023, totaled $49.2 million, compared with $46.0 million at December 31, 2022. The Company’s total debt outstanding as of September 30, 2023, totaled $218.4 million, compared with $238.9 million at December 31, 2022. The Company’s operations provided $68.1 million of cash during the first nine months of 2023, compared with $(16.2) million used in 2022. The increase in cash provided was primarily driven by improved earnings, changes in working capital, including a reduction in work in process, increases in accrued incentive compensation as compared to payouts for prior year performance, and an increase in income tax refunds received. The Company made no contributions to its U.S. defined benefit pension plan and $1.8 million in contributions to its U.K. plans for the first nine months of 2023, compared with no contributions to the U.S. plan and $0.5 million to the U.K. plans in 2022. During 2023, the Company didn't repurchase any shares of CRD-A, but repurchased 63,103 shares of CRD-B at an average share cost of $9.24. During the first nine months of 2022, the Company repurchased 2,656,474 shares of CRD-A and 963,472 shares of CRD-B at an average per share cost of $7.41 and $7.32, respectively. The total cost of share repurchases during 2023 was $0.6 million through September 30, 2023. Conference Call As previously announced, Crawford & Company will host a conference call on November 7, 2023, at 8:30 a.m. Eastern Time to discuss its third quarter 2023 results. The conference call can be accessed live by dialing 1-888-259-6580 and using Conference ID 94766677. A presentation for tomorrow’s call can also be found on the investor relations portion of the Company’s website, https://ir.crawco.com. The call will be recorded and available for replay through December 7, 2023. You may dial 1-877-674-7070 and use passcode 766677# to listen to the replay. 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 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, goodwill impairment, amortization of customer-relationship intangible assets, contingent earnout adjustments, non-service pension costs and credits, income taxes and net income or loss attributable to noncontrolling interests. 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 adjustments for depreciation and amortization, net corporate interest expense, goodwill impairment, contingent earnout adjustments, non-service pension costs and credits, income taxes and stock-based compensation expense. 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, 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, amortization of customer-relationship intangible assets, contingent earnout adjustments, and non-service pension costs and credits 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. Contingent earnout adjustments relate to changes in the fair value of earnouts associated with our recent acquisitions. Non-service pension costs and credits represent the U.S. and U.K. non-service defined benefit pension costs, which are non-operating in nature as the U.S. plan was frozen in 2002 and the U.K. plans are closed to new participants. None of these costs relate directly to the performance of our services or operating activities and, therefore, are excluded from segment operating earnings to better assess the results of each segment's operating activities on a consistent basis. Goodwill impairments arise from time to time due to various factors, but are not allocated to our operating segments since they historically have not regularly impacted our performance and are not expected to impact our future performance on a regular 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 Nine Months Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Geographic Area Currency USD equivalent % of total USD equivalent % of total USD equivalent % of total USD equivalent % of total U.S. USD $ 203,340 62.5 % $ 183,197 62.1 % $ 601,354 62.7 % $ 523,650 60.4 % U.K. GBP 38,290 11.8 % 25,352 8.6 % 106,139 11.0 % 92,837 10.7 % Canada CAD 24,188 7.4 % 25,661 8.7 % 72,656 7.6 % 74,597 8.6 % Australia AUD 22,867 7.0 % 27,434 9.3 % 68,787 7.2 % 69,794 8.1 % Europe EUR 14,629 4.5 % 13,063 4.4 % 42,968 4.5 % 41,973 4.8 % Rest of World Various 22,280 6.8 % 20,217 6.9 % 67,347 7.0 % 64,443 7.4 % Total Revenues, before reimbursements $ 325,594 100.0 % $ 294,924 100.0 % $ 959,251 100.0 % $ 867,294 100.0 % Following is a reconciliation of consolidated operating earnings to net income (loss) attributable to shareholders of Crawford & Company on a GAAP basis: Three Months Ended Nine Months Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Operating earnings (loss): North America Loss Adjusting $ 10,468 $ 3,750 $ 22,433 $ 10,533 International Operations 2,197 (3,922 ) 8,974 (7,648 ) Broadspire 13,532 6,198 29,607 20,299 Platform Solutions 8,523 10,080 26,595 22,714 Unallocated corporate and shared costs, net (4,781 ) (2,438 ) (9,998 ) (7,378 ) Consolidated operating earnings 29,939 13,668 77,611 38,520 (Deduct) add: Net corporate interest expense (4,556 ) (2,903 ) (13,264 ) (6,201 ) Stock option expense (145 ) (142 ) (440 ) (478 ) Amortization of intangible assets (1,986 ) (1,998 ) (5,864 ) (5,784 ) Non-service pension costs and credits (2,170 ) 532 (6,436 ) 1,646 Goodwill impairment — (36,808 ) — (36,808 ) Contingent earnout adjustments (2,127 ) (887 ) (3,100 ) (3,246 ) Income tax (provision) benefit (6,781 ) 13,286 (17,258 ) 8,092 Net loss attributable to noncontrolling interests 145 108 178 41 Net income (loss) attributable to shareholders of Crawford & Company $ 12,319 $ (15,144 ) $ 31,427 $ (4,218 ) 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 Nine Months Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Net income (loss) attributable to shareholders of Crawford & Company $ 12,319 $ (15,144 ) $ 31,427 $ (4,218 ) Add (Deduct): Depreciation and amortization 9,115 8,924 27,356 27,379 Stock-based compensation 1,574 808 4,183 4,218 Net corporate interest expense 4,556 2,903 13,264 6,201 Non-service pension costs and credits 2,170 (532 ) 6,436 (1,646 ) Goodwill impairment — 36,808 — 36,808 Contingent earnout adjustments 2,127 887 3,100 3,246 Income tax provision (benefit) 6,781 (13,286 ) 17,258 (8,092 ) Non-GAAP adjusted EBITDA $ 38,642 $ 21,368 $ 103,024 $ 63,896 Following is a reconciliation of operating cash flow to free cash flow for the nine months ended September 30, 2023 and 2022: Nine Months Ended (in thousands) September 30, 2023 September 30, 2022 Change Net Cash Provided by (Used in) Operating Activities $ 68,077 $ (16,195 ) $ 84,272 Less: Property & Equipment Purchases, net (3,360 ) (4,983 ) 1,623 Capitalized Software (internal and external costs) (24,323 ) (19,933 ) (4,390 ) Free Cash Flow $ 40,394 $ (41,111 ) $ 81,505 Following are the reconciliations of GAAP Pretax Earnings (Loss), Net Income (Loss) and Earnings (Loss) Per Share to related non-GAAP Adjusted figures, which reflect each of 2023 and 2022 before amortization of intangible assets, goodwill impairments, non-service related pension costs (credits) and contingent earnout adjustments: Three Months Ended September 30, 2023 (in thousands) Pretax earnings Net income attributable to Crawford & Company Diluted earnings per CRD-A share Diluted earnings per CRD-B share(1) GAAP $ 18,955 $ 12,319 $ 0.25 $ 0.25 Adjustments: Amortization of intangible assets 1,986 1,711 0.03 0.03 Non-service related pension costs 2,170 1,612 0.03 0.03 Contingent earnout adjustments 2,127 2,101 0.04 0.04 Non-GAAP Adjusted $ 25,238 $ 17,743 $ 0.35 $ 0.36 Three Months Ended September 30, 2022 (in thousands) Pretax (loss) earnings Net (loss) income attributable to Crawford & Company Diluted (loss) earnings per CRD-A share Diluted (loss) earnings per CRD-B share GAAP $ (28,538 ) $ (15,144 ) $ (0.31 ) $ (0.31 ) Adjustments: Amortization of intangible assets 1,998 1,499 0.03 0.03 Goodwill impairment 36,808 20,908 0.43 0.43 Non-service related pension credits (532 ) (412 ) (0.01 ) (0.01 ) Contingent earnout adjustments 887 657 0.01 0.01 Non-GAAP Adjusted $ 10,623 $ 7,508 $ 0.15 $ 0.15 Nine Months Ended September 30, 2023 (in thousands) Pretax earnings Net income attributable to Crawford & Company Diluted earnings per CRD-A share Diluted earnings per CRD-B share GAAP $ 48,507 $ 31,427 $ 0.63 $ 0.64 Adjustments: Amortization of intangible assets 5,864 5,039 0.10 0.10 Non-service related pension costs 6,436 4,782 0.10 0.10 Contingent earnout adjustments 3,100 2,503 0.05 0.05 Non-GAAP Adjusted $ 63,907 $ 43,751 $ 0.88 $ 0.89 Nine Months Ended September 30, 2022 (in thousands) Pretax (loss) earnings Net (loss) income attributable to Crawford & Company Diluted (loss) earnings per CRD-A share(1) Diluted (loss) earnings per CRD-B share GAAP $ (12,351 ) $ (4,218 ) $ (0.08 ) $ (0.09 ) Adjustments: Amortization of intangible assets 5,784 4,338 0.09 0.09 Goodwill impairment 36,808 20,908 0.42 0.42 Non-service related pension credits (1,646 ) (1,277 ) (0.03 ) (0.03 ) Contingent earnout adjustments 3,246 2,403 0.05 0.05 Non-GAAP Adjusted $ 31,841 $ 22,154 $ 0.44 $ 0.44 (1) Sum of reconciling items may differ from total due to rounding of individual components. Following is information regarding the weighted average shares used in the computation of basic and diluted earnings per share: Three Months Ended Nine Months Ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Weighted-Average Shares Used to Compute Basic Earnings Per Share: Class A Common Stock 29,140 28,553 28,980 29,397 Class B Common Stock 19,837 19,848 19,845 20,202 Weighted-Average Shares Used to Compute Diluted Earnings Per Share: Class A Common Stock 30,063 28,553 29,659 29,397 Class B Common Stock 19,837 19,848 19,845 20,202 Non-GAAP (1) Weighted-Average Shares Used to Compute Diluted Earnings Per Share: Class A Common Stock 30,063 28,930 29,659 29,754 Class B Common Stock 19,837 19,848 19,845 20,202 (1) The Company had a net loss for GAAP reporting during the three and nine months ended September 30, 2022, 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 three and nine months ended September 30, 2022, these dilutive securities were added back to calculate Non-GAAP earnings per share. Further information regarding the Company’s operating results for the three and nine months ended September 30, 2023, financial position as of September 30, 2023, and cash flows for the nine months ended September 30, 2023 is shown on the attached unaudited condensed consolidated financial statements. About Crawford & Company Based in Atlanta, Crawford & Company (NYSE: CRD-A and CRD-B) is a leading provider of claims management and outsourcing solutions to insurance companies and self-insured entities with an expansive network serving clients in more than 70 countries. The Company's two classes of stock are substantially identical, except with respect to voting rights for the Class B Common Stock (CRD-B) and protections for the non-voting Class A Common Stock (CRD-A). More information is available at www.crawco.com. TAG: Crawford-Financial, Crawford-Investor-News-and-Events 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 and in the Investor Relations section of Crawford & Company’s website at www.crawco.com. CRAWFORD & COMPANY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (In Thousands, Except Per Share Amounts and Percentages) Three Months Ended September 30, 2023 2022 % Change Revenues: Revenues Before Reimbursements $ 325,594 $ 294,924 10 % Reimbursements 12,066 11,493 5 % Total Revenues 337,660 306,417 10 % Costs and Expenses: Costs of Services Provided, Before Reimbursements 229,969 221,233 4 % Reimbursements 12,066 11,493 5 % Total Costs of Services 242,035 232,726 4 % Selling, General, and Administrative Expenses 69,920 62,983 11 % Corporate Interest Expense, Net 4,556 2,903 57 % Goodwill Impairment - 36,808 (100 )% Total Costs and Expenses 316,511 335,420 (6 )% Other (Loss) Income, Net (2,194 ) 465 (572 )% Income (Loss) Before Income Taxes 18,955 (28,538 ) 166 % Provision (Benefit) for Income Taxes 6,781 (13,286 ) 151 % Net Income (Loss) 12,174 (15,252 ) 180 % Net Loss Attributable to Noncontrolling Interests 145 108 34 % Net Income (Loss) Attributable to Shareholders of Crawford & Company $ 12,319 $ (15,144 ) 181 % Earnings (Loss) Per Share - Basic: Class A Common Stock $ 0.25 $ (0.31 ) 181 % Class B Common Stock $ 0.25 $ (0.31 ) 181 % Earnings (Loss) Per Share - Diluted: Class A Common Stock $ 0.25 $ (0.31 ) 181 % Class B Common Stock $ 0.25 $ (0.31 ) 181 % Cash Dividends Per Share: Class A Common Stock $ 0.07 $ 0.06 17 % Class B Common Stock $ 0.07 $ 0.06 17 % CRAWFORD & COMPANY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (In Thousands, Except Per Share Amounts and Percentages) Nine Months Ended September 30, 2023 2022 % Change Revenues: Revenues Before Reimbursements $ 959,251 $ 867,294 11 % Reimbursements 36,743 30,564 20 % Total Revenues 995,994 897,858 11 % Costs and Expenses: Costs of Services Provided, Before Reimbursements 691,078 644,948 7 % Reimbursements 36,743 30,564 20 % Total Costs of Services 727,821 675,512 8 % Selling, General, and Administrative Expenses 199,871 193,222 3 % Corporate Interest Expense, Net 13,264 6,201 114 % Goodwill Impairment - 36,808 (100 )% Total Costs and Expenses 940,956 911,743 3 % Other (Loss) Income, Net (6,531 ) 1,534 (526 )% Income (Loss) Before Income Taxes 48,507 (12,351 ) 493 % Provision (Benefit) for Income Taxes 17,258 (8,092 ) 313 % Net Income (Loss) 31,249 (4,259 ) 834 % Net Loss Attributable to Noncontrolling Interests 178 41 334 % Net Income (Loss) Attributable to Shareholders of Crawford & Company $ 31,427 $ (4,218 ) 845 % Earnings (Loss) Per Share - Basic: Class A Common Stock $ 0.64 $ (0.08 ) 900 % Class B Common Stock $ 0.64 $ (0.09 ) 811 % Earnings (Loss) Per Share - Diluted: Class A Common Stock $ 0.63 $ (0.08 ) 888 % Class B Common Stock $ 0.64 $ (0.09 ) 811 % Cash Dividends Per Share: Class A Common Stock $ 0.19 $ 0.18 6 % Class B Common Stock $ 0.19 $ 0.18 6 % CRAWFORD & COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS As of September 30, 2023 and December 31, 2022 Unaudited (In Thousands, Except Par Values) September 30, December 31, 2023 2022 ASSETS Current Assets: Cash and Cash Equivalents $ 49,208 $ 46,007 Accounts Receivable, Net 151,142 141,106 Unbilled Revenues, at Estimated Billable Amounts 131,251 126,274 Income Taxes Receivable 4,245 9,098 Prepaid Expenses and Other Current Assets 44,145 28,782 Total Current Assets 379,991 351,267 Net Property and Equipment 24,322 27,809 Other Assets: Operating Lease Right-of-Use Asset, Net 91,364 93,334 Goodwill 76,637 76,622 Intangible Assets Arising from Business Acquisitions, Net 84,960 88,039 Capitalized Software Costs, Net 93,370 82,975 Deferred Income Tax Assets 18,142 19,573 Other Noncurrent Assets 58,405 51,888 Total Other Assets 422,878 412,431 Total Assets $ 827,191 $ 791,507 LIABILITIES AND SHAREHOLDERS’ INVESTMENT Current Liabilities: Short-Term Borrowings $ 16,955 $ 27,048 Accounts Payable 44,473 50,847 Accrued Compensation and Related Costs 81,579 79,285 Self-Insured Risks 22,545 12,614 Income Taxes Payable 632 1,208 Operating Lease Liability 24,766 22,910 Other Accrued Liabilities 65,219 56,293 Deferred Revenues 34,512 29,282 Total Current Liabilities 290,681 279,487 Noncurrent Liabilities: Long-Term Debt and Finance Leases, Less Current Installments 201,487 211,810 Operating Lease Liability 80,411 84,628 Deferred Revenues 25,535 24,737 Accrued Pension Liabilities 24,969 25,914 Other Noncurrent Liabilities 41,138 41,553 Total Noncurrent Liabilities 373,540 388,642 Shareholders’ Investment: Class A Common Stock, $1.00 Par Value 29,148 28,764 Class B Common Stock, $1.00 Par Value 19,785 19,848 Additional Paid-in Capital 83,548 78,158 Retained Earnings 234,718 213,094 Accumulated Other Comprehensive Loss (202,577 ) (215,321 ) Shareholders’ Investment Attributable to Shareholders of Crawford & Company 164,622 124,543 Noncontrolling Interests (1,652 ) (1,165 ) Total Shareholders’ Investment 162,970 123,378 Total Liabilities and Shareholders’ Investment $ 827,191 $ 791,507 CRAWFORD & COMPANY SUMMARY RESULTS BY OPERATING SEGMENT WITH DIRECT COMPENSATION AND OTHER EXPENSES Unaudited (In Thousands, Except Percentages) Three Months Ended September 30, North America Loss Adjusting % International Operations % Broadspire % Platform Solutions % 2023 2022 Change 2023 2022 Change 2023 2022 Change 2023 2022 Change Revenues Before Reimbursements $ 79,390 $ 66,822 18.8 % $ 98,066 $ 86,066 13.9 % $ 88,299 $ 78,381 12.7 % $ 59,839 $ 63,655 (6.0 )% Direct Compensation, Fringe Benefits & Non-Employee Labor 53,635 48,331 11.0 % 66,426 61,666 7.7 % 54,310 49,863 8.9 % 39,638 42,106 (5.9 )% % of Revenues Before Reimbursements 67.6 % 72.3 % 67.7 % 71.6 % 61.5 % 63.6 % 66.2 % 66.1 % Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor 15,287 14,741 3.7 % 29,443 28,322 4.0 % 20,457 22,320 (8.3 )% 11,678 11,469 1.8 % % of Revenues Before Reimbursements 19.3 % 22.1 % 30.0 % 32.9 % 23.2 % 28.5 % 19.5 % 18.0 % Total Operating Expenses 68,922 63,072 9.3 % 95,869 89,988 6.5 % 74,767 72,183 3.6 % 51,316 53,575 (4.2 )% Operating Earnings (Loss) (1) $ 10,468 $ 3,750 179.1 % $ 2,197 $ (3,922 ) nm $ 13,532 $ 6,198 118.3 % $ 8,523 $ 10,080 (15.4 )% % of Revenues Before Reimbursements 13.2 % 5.6 % 2.2 % (4.6 )% 15.3 % 7.9 % 14.2 % 15.8 % Nine Months Ended September 30, North America Loss Adjusting % International Operations % Broadspire % Platforms Solutions % 2023 2022 Change 2023 2022 Change 2023 2022 Change 2023 2022 Change Revenues Before Reimbursements $ 232,344 $ 197,035 17.9 % $ 285,241 $ 269,048 6.0 % $ 253,369 $ 234,949 7.8 % $ 188,297 $ 166,262 13.3 % \ Direct Compensation, Fringe Benefits & Non-Employee Labor 162,418 142,937 13.6 % 190,178 190,273 (0.0 )% 161,451 147,611 9.4 % 124,238 110,424 12.5 % % of Revenues Before Reimbursements 69.9 % 72.5 % 66.7 % 70.7 % 63.7 % 62.8 % 66.0 % 66.4 % Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor 47,493 43,565 9.0 % 86,089 86,423 (0.4 )% 62,311 67,039 (7.1 )% 37,464 33,124 13.1 % % of Revenues Before Reimbursements 20.4 % 22.1 % 30.2 % 32.1 % 24.6 % 28.5 % 19.9 % 19.9 % Total Operating Expenses 209,911 186,502 12.6 % 276,267 276,696 (0.2 )% 223,762 214,650 4.2 % 161,702 143,548 12.6 % Operating Earnings (Loss)(1) $ 22,433 $ 10,533 113.0 % $ 8,974 $ (7,648 ) nm $ 29,607 $ 20,299 45.9 % $ 26,595 $ 22,714 17.1 % % of Revenues Before Reimbursements 9.7 % 5.3 % 3.1 % (2.8 )% 11.7 % 8.6 % 14.1 % 13.7 % (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, non-service pension costs and credits, contingent earnout adjustments, goodwill impairments, and certain unallocated corporate and shared costs and credits. See pages 3 and 4 for additional information about segment operating earnings. CRAWFORD & COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Year to Date Period Ended September 30, 2023 and September 30, 2022 Unaudited (In Thousands) 2023 2022 Cash Flows From Operating Activities: Net income (loss) $ 31,249 $ (4,259 ) Reconciliation of net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 27,355 27,379 Goodwill impairment — 36,808 Stock-based compensation 4,183 4,218 Loss (gain) on disposal of property and equipment 96 (1,562 ) Contingent earnout adjustments 3,100 3,246 Changes in operating assets and liabilities: Accounts receivable, net (6,309 ) (9,329 ) Unbilled revenues, net 419 (23,537 ) Accrued or prepaid income taxes 5,306 (23,162 ) Accounts payable and accrued liabilities (1,437 ) (20,612 ) Deferred revenues 4,869 (191 ) Accrued retirement costs 4,818 (1,684 ) Prepaid expenses and other operating activities (5,572 ) (3,510 ) Net cash provided by (used in) operating activities 68,077 (16,195 ) Cash Flows From Investing Activities: Acquisitions of property and equipment (3,360 ) (4,983 ) Capitalization of computer software costs (24,323 ) (19,933 ) Payments for business acquisitions, net of cash acquired — (26,309 ) Cash proceeds from sale of property and equipment — 3,032 Net cash used in investing activities (27,683 ) (48,193 ) Cash Flows From Financing Activities: Cash dividends paid (9,284 ) (8,938 ) Repurchases of common stock (582 ) (26,749 ) Increases in short-term and revolving credit facility borrowings 20,958 99,952 Payments on short-term and revolving credit facility borrowings (43,719 ) (15,129 ) Payments of contingent consideration on acquisitions (6,760 ) (2,118 ) Other financing activities 1,317 (87 ) Net cash (used in) provided by financing activities (38,070 ) 46,931 Effects of exchange rate changes on cash and cash equivalents 1,313 (2,351 ) Increase (Decrease) in cash, cash equivalents, and restricted cash(1) 3,637 (19,808 ) Cash, cash equivalents, and restricted cash at beginning of year(1) 46,645 53,689 Cash, cash equivalents, and restricted cash at end of period(1) $ 50,282 $ 33,881 (1) The 2023 amounts include beginning restricted cash of $638 at December 31, 2022, and ending restricted cash of $1,074 at September 30, 2023, and the 2022 amounts include beginning restricted cash of $461 at December 31, 2021, and ending restricted cash of $782 at September 30, 2022, which we present as part of "Prepaid expenses and other current assets" on the Balance Sheets. 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Media Contacts: mediarelations@us.crawco.com Lynn Cufley +44 7585 901936 Lynn.Cufley@crawco.uk Katie Cline +1 470 792 5678 katie.cline@us.crawco.com Investor Contact: Jennifer Belodeau/Rosalyn Christian IMS Investor Relations +1 203 972 9200 crawford@imsinvestorrelations.com