8-K
CRAWFORD & CO (CRD-A)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 5, 2025
CRAWFORD & COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Georgia
(State or Other Jurisdiction of Incorporation)
| 1-10356 | 58-0506554 |
|---|---|
| (Commission File Number) | (IRS Employer Identification No.) |
| 5335 Triangle Parkway, Peachtree Corners, Georgia | 30092 |
| (Address of Principal Executive Offices) | (Zip Code) |
(404) 300-1000
(Registrant's Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities Registered Pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class A Common Stock — $1.00 Par Value | CRD-A | New York Stock Exchange, Inc. |
| Class B Common Stock — $1.00 Par Value | CRD-B | New York Stock Exchange, Inc. |
Item 2.02. Results of Operations and Financial Condition
On May 5, 2025, Crawford & Company (the "Company") issued a press release containing information about the Company's financial results for the first quarter 2025. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by this reference.
Item 7.01. Regulation FD Disclosure
The Company has made available on the Company's website at https://ir.crawco.com a presentation designed to enhance the information presented at its quarterly earnings conference call on Tuesday, May 6, 2025 at 8:30 a.m. Eastern Time. A copy of the presentation is attached hereto as Exhibit 99.2 and is incorporated herein by this reference.
Item 9.01. Financial Statements and Exhibits
(d) The following exhibits are being filed herewith:
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated May 5, 2025 |
| 99.2 | Slide Presentation |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
The information contained in this current report on Form 8-K and in the accompanying exhibits shall not be incorporated by reference into any filing of the Company with the SEC, whether made before or after the date hereof, regardless of any general incorporation by reference language in such filing, unless expressly incorporated by specific reference to such filing. The information, including the exhibits hereto, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CRAWFORD & COMPANY | ||
|---|---|---|
| (Registrant) | ||
| By: | /s/ W. BRUCE SWAIN | |
| W. Bruce Swain | ||
| Executive Vice President - | ||
| Chief Financial Officer | ||
| Dated: May 5, 2025 |
EX-99.1
Exhibit 99.1
Crawford & Company®
5335 Triangle Parkway
Peachtree Corners, GA 30092
FOR IMMEDIATE RELEASE
CRAWFORD & COMPANY REPORTS 2025 FIRST QUARTER RESULTS
Growth and profitability momentum continues in the first quarter
ATLANTA, (May 5, 2025) -- Crawford & Company® (NYSE: CRD-A and CRD-B), is pleased to announce its financial results for the first quarter ended March 31, 2025.
Revenues before reimbursements increased 3% to $312.0 million in the 2025 first quarter from $301.7 million in the 2024 first quarter. First quarter net income was $6.7 million, or $0.13 per diluted share for CRD-A and CRD-B, compared to $2.8 million, or $0.06 per diluted share for CRD-A and CRD-B in the prior year quarter.
| GAAP Consolidated Results | |||
|---|---|---|---|
| Three Months Ended<br>March 31, | |||
| (in millions, except per share amounts) | 2025 | 2024 | Change |
| Revenues before reimbursements | $312.0 | $301.7 | 3% |
| Net income attributable to shareholders | 6.7 | 2.8 | 139% |
| Diluted earnings per share CRD-A | 0.13 | 0.06 | 117% |
| Diluted earnings per share CRD-B | 0.13 | 0.06 | 117% |
| Non-GAAP Consolidated Results | |||
| --- | --- | --- | --- |
| Three Months Ended<br>March 31, | |||
| (in millions, except per share amounts) | 2025 | 2024 | Change |
| Revenues before reimbursements <br>on constant dollar basis | $316.5 | $301.7 | 5% |
| Consolidated adjusted operating earnings | 17.8 | 12.1 | 47% |
| Consolidated adjusted EBITDA | 26.8 | 20.6 | 30% |
| Non-GAAP net income attributable to shareholders | 10.3 | 6.5 | 58% |
| Non-GAAP diluted earnings per share CRD-A | 0.21 | 0.13 | 62% |
| Non-GAAP diluted earnings per share CRD-B | 0.21 | 0.13 | 62% |
Mr. Rohit Verma, president and chief executive officer of Crawford & Company, commented, “In the first quarter of 2025 we continued the growth and profitability momentum that we built in 2024, delivering solid year-over-year revenue growth of 3.4%. Our consolidated operating earnings increased 47% with margin improvement across three of our business segments driven by our diversified model and disciplined execution."
Mr. Verma continued, “Each of our segments contributed to a solid first quarter. North America Loss Adjusting delivered revenue growth and increased operating earnings, supported by continued strength in U.S. GTS. Our International Operations segment achieved revenue growth of 6% and a gain of 105% in operating earnings year-over-year. Broadspire saw modest revenue growth with strong client retention as well as new business adds, and we continue to invest in adjuster talent to position the business for future expansion. While Platform Solutions revenue was slightly lower than the first quarter of last year, the division delivered improved profitability, reflecting enhanced operating efficiency and the value of our strong carrier partnerships. We’re pleased with our first quarter progress, and we are focused on building upon this momentum as we execute our strategy to invest in the business, enhance liquidity, and continue to strengthen our balance sheet in the months ahead.”
Segment Results for the First Quarter
North America Loss Adjusting
North America Loss Adjusting revenues before reimbursements were $79.7 million in the first quarter of 2025, up 3.1% from $77.4 million in the first quarter of 2024, driven by growth in U.S. Global Technical Services. Absent foreign exchange rate decreases of $1.4 million, revenues would have been $81.2 million for the 2025 first quarter.
The segment had operating earnings of $5.5 million in the 2025 first quarter, increasing from $4.5 million in the first quarter of 2024. The operating margin increased to 6.9% in the 2025 quarter, compared with 5.8% in the 2024 quarter, driven by growth in U.S Global Technical Services and lower costs in U.S field operations compared to the prior year quarter.
International Operations
International Operations revenues before reimbursements were $104.4 million in the first quarter of 2025, up 6.4% from $98.1 million in the same period of 2024 driven by growth in the U.K. and Europe. Absent foreign exchange rate decreases of $3.0 million, revenues would have been $107.4 million for the 2025 first quarter.
Operating earnings were $3.5 million in the 2025 first quarter, increasing from $1.7 million in the 2024 period. The segment’s operating margin for the 2025 quarter increased to 3.3% compared with 1.7% in the 2024 quarter driven by the U.K. and Asia.
Broadspire
Broadspire segment revenues before reimbursements were $96.4 million in the 2025 first quarter, increasing 2.2% from $94.3 million in the 2024 first quarter driven by increases in medical case management and casualty claims revenues.
Broadspire recorded operating earnings of $12.2 million in the first quarter of 2025, representing an operating margin of 12.7%, compared to $12.8 million, or 13.6% of revenues, in the 2024 first quarter. An increase in centralized indirect support costs in the quarter impacted the operating margin.
Platform Solutions
Platform Solutions revenues before reimbursements were $31.5 million in the first quarter of 2025, down slightly from $31.9 million in the same period of 2024.
Operating earnings were $2.9 million in the 2025 first quarter, increasing from the $1.1 million in the 2024 period. The segment’s operating margin for the 2025 quarter was 9.3% as compared with 3.5% in the 2024 quarter. Operating earnings benefited from an increase in staff augmentation revenues and a reduction in costs in the Networks service line and an increase in average rates in Contractor Connection.
Unallocated Corporate and Shared Costs and Credits, Net
Unallocated corporate costs were $6.2 million in the first quarter of 2025, compared with $8.0 million in the same period of 2024. The decrease in the 2025 first quarter was primarily due to decreases in professional fees, self-insured reserves, and bad debt expense, partially offset by an increase in administrative compensation expenses.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses (“SG&A”) decreased $2.7 million, or (3.5)%, in the three months ended March 31, 2025 as compared with the 2024 period. The decrease was primarily due to a reduction in professional fees and self-insurance reserves, partially offset by increases in administrative compensation expenses.
Other Matters
The Company recognized a pretax contingent earnout expense of $0.4 million in the 2025 first quarter, compared to an expense of $0.2 million in the same period of 2024, related to the fair value adjustment of earnout liabilities arising from acquisitions. These adjustments, which are not a component of operating earnings, are based on changes to projections of acquired entities over the respective earnout periods, which span multiple years.
The Company recognized non-service pension costs of $2.3 million in the 2025 first quarter compared with $2.5 million in the 2024 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.
Subsequent Event
Following the end of the first quarter for the Company’s International Operations segment, a foreign tax authority issued new administrative guidance requiring the Company to reassess certain income and other non-income tax related positions. The Company’s evaluation of the potential financial impact of the new administrative guidance is ongoing and could result in a change in its prior conclusions. The Company estimates this change could have an approximately $5.0 million negative impact on its financial condition and results of operations.
Balance Sheet and Cash Flow
The Company’s consolidated cash and cash equivalents position as of March 31, 2025, totaled $57.4 million, compared with $55.4 million at December 31, 2024. The Company’s total debt outstanding as of March 31, 2025, totaled $246.6 million, compared with $218.1 million at December 31, 2024.
The Company’s operations used $13.9 million of cash during the first three months of 2025, compared with $19.8 million used in 2024. The decrease in cash used was due primarily to $5.8 million higher operating earnings.
The Company made no contributions to its U.S. defined benefit pension plan and $0.8 million in contributions to its U.K. plans for the first three months of 2025, compared with no contributions to the U.S. plan and $0.6 million to the U.K. plans in 2024.
During the three months of 2025, the Company did not repurchase any shares of CRD-A or CRD-B. In the first three months of 2024, the Company did not repurchase any shares of CRD-A but repurchased 85,632 shares of CRD-B at an average per share cost of $8.56.
Conference Call
As previously announced, Crawford & Company will host a conference call on May 6, 2025, at 8:30 a.m. Eastern Time to discuss its first quarter 2025 results. The conference call can be accessed live by dialing 1-800-549-8228 and using Conference ID 27578. 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 May 13, 2025. You may dial 1-888-660-6264 and use passcode 27578# 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, amortization of acquisition-related intangible assets, contingent earnout adjustments, non-service pension costs, 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, contingent earnout adjustments, non-service pension costs, 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 acquisition-related intangible assets, contingent earnout adjustments, and non-service pension costs 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 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.
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:
| (in thousands) | March 31,2024 | |||||||
| Geographic Area | Currency | % of total | equivalent | % of total | ||||
| U.S. | 59.6 | % | 59.6 | % | ||||
| U.K. | 14.2 | % | 13.4 | % | ||||
| Canada | CAD | 7.0 | % | 7.9 | % | |||
| Australia | AUD | 6.1 | % | 6.5 | % | |||
| Europe | 5.1 | % | 4.9 | % | ||||
| Rest of World | Various | 8.0 | % | 7.7 | % | |||
| Total Revenues, before reimbursements | 100.0 | % | 100.0 | % |
All values are in British Pounds.
Following is a reconciliation of consolidated operating earnings to net income attributable to shareholders of Crawford & Company on a GAAP basis:
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| (in thousands) | March 31, 2025 | March 31, 2024 | ||||
| Operating earnings: | ||||||
| North America Loss Adjusting | $ | 5,476 | $ | 4,479 | ||
| International Operations | 3,456 | 1,690 | ||||
| Broadspire | 12,203 | 12,804 | ||||
| Platform Solutions | 2,927 | 1,115 | ||||
| Unallocated corporate and shared costs, net | (6,218 | ) | (8,007 | ) | ||
| Consolidated operating earnings | 17,844 | 12,081 | ||||
| (Deduct) add: | ||||||
| Net corporate interest expense | (3,944 | ) | (3,596 | ) | ||
| Stock option expense | (184 | ) | (167 | ) | ||
| Amortization of intangible assets | (1,800 | ) | (1,868 | ) | ||
| Non-service pension costs | (2,333 | ) | (2,473 | ) | ||
| Contingent earnout adjustments | (363 | ) | (151 | ) | ||
| Income tax provision | (2,480 | ) | (1,047 | ) | ||
| Net (income) loss attributable to noncontrolling interests | (56 | ) | 58 | |||
| Net income attributable to shareholders of Crawford & Company | $ | 6,684 | $ | 2,837 |
Following is a reconciliation of net income attributable to shareholders of Crawford & Company on a GAAP basis to non-GAAP adjusted EBITDA:
| Three Months Ended | ||||
|---|---|---|---|---|
| (in thousands) | March 31,<br>2025 | March 31,<br>2024 | ||
| Net income attributable to shareholders of Crawford & Company | $ | 6,684 | $ | 2,837 |
| Add (Deduct): | ||||
| Depreciation and amortization | 9,647 | 9,299 | ||
| Stock-based compensation | 1,390 | 1,218 | ||
| Net corporate interest expense | 3,944 | 3,596 | ||
| Non-service pension costs | 2,333 | 2,473 | ||
| Contingent earnout adjustments | 363 | 151 | ||
| Income tax provision | 2,480 | 1,047 | ||
| Non-GAAP adjusted EBITDA | $ | 26,841 | $ | 20,621 |
Following is a reconciliation of operating cash flow to free cash flow for the three months ended March 31, 2025 and 2024:
| Three Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | March 31, 2025 | March 31, 2024 | Change | ||||||
| Net Cash Used in Operating Activities | $ | (13,923 | ) | $ | (19,803 | ) | $ | 5,880 | |
| Less: | |||||||||
| Property & Equipment Purchases, net | (994 | ) | (1,541 | ) | 547 | ||||
| Capitalized Software (internal and external costs) | (8,329 | ) | (8,009 | ) | (320 | ) | |||
| Free Cash Flow | $ | (23,246 | ) | $ | (29,353 | ) | $ | 6,107 |
Non-GAAP consolidated results for 2025 and 2024 exclude the non-cash, after-tax adjustments for amortization of intangible assets, non-service-related pension costs, and contingent earnout adjustment.
Following are the reconciliations of GAAP Pretax Earnings, Net Income and Earnings Per Share to related non-GAAP Adjusted figures, which reflect each of 2025 and 2024 before amortization of intangible assets, non-service related pension costs and contingent earnout adjustments:
| Three Months Ended March 31, 2025 | ||||||||
|---|---|---|---|---|---|---|---|---|
| (in thousands) | Pretax earnings | Net income <br>attributable to Crawford & Company | Diluted earnings per <br>CRD-A <br>share | Diluted earnings per <br>CRD-B <br>share | ||||
| GAAP | $ | 9,220 | $ | 6,684 | $ | 0.13 | $ | 0.13 |
| Adjustments: | ||||||||
| Amortization of intangible assets | 1,800 | 1,489 | 0.03 | 0.03 | ||||
| Non-service related pension costs | 2,333 | 1,803 | 0.04 | 0.04 | ||||
| Contingent earnout adjustments | 363 | 363 | 0.01 | 0.01 | ||||
| Non-GAAP Adjusted | $ | 13,716 | $ | 10,339 | $ | 0.21 | $ | 0.21 |
| Three Months Ended March 31, 2024 | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (in thousands) | Pretax earnings | Net income <br>attributable to Crawford & Company | Diluted earnings per <br>CRD-A <br>share | Diluted earnings per <br>CRD-B <br>share | ||||
| GAAP | $ | 3,826 | $ | 2,837 | $ | 0.06 | $ | 0.06 |
| Adjustments: | ||||||||
| Amortization of intangible assets | 1,868 | 1,575 | 0.03 | 0.03 | ||||
| Non-service related pension costs | 2,473 | 1,929 | 0.04 | 0.04 | ||||
| Contingent earnout adjustments | 151 | 151 | - | - | ||||
| Non-GAAP Adjusted | $ | 8,318 | $ | 6,492 | $ | 0.13 | $ | 0.13 |
Following is information regarding the weighted average shares used in the computation of basic and diluted earnings per share:
| Three Months Ended | ||||
|---|---|---|---|---|
| (in thousands) | March 31, 2025 | March 31, 2024 | ||
| Weighted-Average Shares Used to Compute Basic Earnings Per Share: | ||||
| Class A Common Stock | 30,175 | 29,586 | ||
| Class B Common Stock | 19,145 | 19,542 | ||
| Weighted-Average Shares Used to Compute Diluted Earnings Per Share: | ||||
| Class A Common Stock | 30,706 | 30,279 | ||
| Class B Common Stock | 19,145 | 19,542 |
Further information regarding the Company’s operating results for the three months ended March 31, 2025, financial position as of March 31, 2025, and cash flows for the three months ended March 31, 2025 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 March 31, | 2025 | 2024 | % Change | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Revenues: | |||||||||
| Revenues Before Reimbursements | $ | 312,032 | $ | 301,654 | 3 | % | |||
| Reimbursements | 11,307 | 11,419 | (1 | )% | |||||
| Total Revenues | 323,339 | 313,073 | 3 | % | |||||
| Costs and Expenses: | |||||||||
| Costs of Services Provided, Before Reimbursements | 221,893 | 214,389 | 4 | % | |||||
| Reimbursements | 11,307 | 11,419 | (1 | )% | |||||
| Total Costs of Services | 233,200 | 225,808 | 3 | % | |||||
| Selling, General, and Administrative Expenses | 74,587 | 77,320 | (4 | )% | |||||
| Corporate Interest Expense, Net | 3,944 | 3,596 | 10 | % | |||||
| Total Costs and Expenses | 311,731 | 306,724 | 2 | % | |||||
| Other Loss, Net | (2,388 | ) | (2,523 | ) | (5 | )% | |||
| Income Before Income Taxes | 9,220 | 3,826 | 141 | % | |||||
| Provision for Income Taxes | 2,480 | 1,047 | 137 | % | |||||
| Net Income | 6,740 | 2,779 | 143 | % | |||||
| Net (Income) Loss Attributable to Noncontrolling Interests | (56 | ) | 58 | (197 | )% | ||||
| Net Income Attributable to Shareholders of Crawford & Company | $ | 6,684 | $ | 2,837 | 136 | % | |||
| Earnings Per Share - Basic: | |||||||||
| Class A Common Stock | $ | 0.14 | $ | 0.06 | 133 | % | |||
| Class B Common Stock | $ | 0.14 | $ | 0.06 | 133 | % | |||
| Earnings Per Share - Diluted: | |||||||||
| Class A Common Stock | $ | 0.13 | $ | 0.06 | 117 | % | |||
| Class B Common Stock | $ | 0.13 | $ | 0.06 | 117 | % | |||
| Cash Dividends Per Share: | |||||||||
| Class A Common Stock | $ | 0.07 | $ | 0.07 | — | ||||
| Class B Common Stock | $ | 0.07 | $ | 0.07 | — |
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
As of March 31, 2025 and December 31, 2024
Unaudited
(In Thousands, Except Par Values)
| December 31, | |||||
|---|---|---|---|---|---|
| 2024 | |||||
| ASSETS | |||||
| Current Assets: | |||||
| Cash and Cash Equivalents | 57,367 | $ | 55,412 | ||
| Accounts Receivable, Net | 134,140 | 142,064 | |||
| Unbilled Revenues, at Estimated Billable Amounts | 136,596 | 131,080 | |||
| Income Taxes Receivable | 4,803 | 5,337 | |||
| Prepaid Expenses and Other Current Assets | 39,931 | 40,334 | |||
| Total Current Assets | 372,837 | 374,227 | |||
| Net Property and Equipment | 19,040 | 20,554 | |||
| Other Assets: | |||||
| Operating Lease Right-of-Use Asset, Net | 72,419 | 78,808 | |||
| Goodwill | 76,374 | 76,368 | |||
| Intangible Assets Arising from Business Acquisitions, Net | 72,023 | 74,545 | |||
| Capitalized Software Costs, Net | 113,530 | 111,854 | |||
| Deferred Income Tax Assets | 23,962 | 25,305 | |||
| Other Noncurrent Assets | 42,074 | 42,094 | |||
| Total Other Assets | 400,382 | 408,974 | |||
| Total Assets | 792,259 | $ | 803,755 | ||
| LIABILITIES AND SHAREHOLDERS’ INVESTMENT | |||||
| Current Liabilities: | |||||
| Short-Term Borrowings | 41,295 | $ | 17,822 | ||
| Accounts Payable | 44,590 | 50,605 | |||
| Accrued Compensation and Related Costs | 72,597 | 101,371 | |||
| Self-Insured Risks | 21,332 | 27,813 | |||
| Income Taxes Payable | 3,718 | 3,343 | |||
| Operating Lease Liability | 23,648 | 24,541 | |||
| Other Accrued Liabilities | 43,297 | 38,103 | |||
| Deferred Revenues | 35,724 | 36,129 | |||
| Total Current Liabilities | 286,201 | 299,727 | |||
| Noncurrent Liabilities: | |||||
| Long-Term Debt and Finance Leases, Less Current Installments | 205,274 | 200,315 | |||
| Operating Lease Liability | 61,192 | 66,811 | |||
| Deferred Revenues | 23,780 | 23,556 | |||
| Accrued Pension Liabilities | 20,471 | 21,084 | |||
| Other Noncurrent Liabilities | 36,318 | 36,711 | |||
| Total Noncurrent Liabilities | 347,035 | 348,477 | |||
| Shareholders’ Investment: | |||||
| Class A Common Stock, 1.00 Par Value | 30,217 | 30,124 | |||
| Class B Common Stock, 1.00 Par Value | 19,145 | 19,145 | |||
| Additional Paid-in Capital | 88,437 | 87,118 | |||
| Retained Earnings | 241,177 | 237,948 | |||
| Accumulated Other Comprehensive Loss | (218,388 | ) | (217,125 | ) | |
| Shareholders’ Investment Attributable to Shareholders of Crawford & Company | 160,588 | 157,210 | |||
| Noncontrolling Interests | (1,565 | ) | (1,659 | ) | |
| Total Shareholders’ Investment | 159,023 | 155,551 | |||
| Total Liabilities and Shareholders’ Investment | 792,259 | $ | 803,755 |
All values are in US Dollars.
CRAWFORD & COMPANY
SUMMARY RESULTS BY OPERATING SEGMENT WITH DIRECT COMPENSATION AND OTHER EXPENSES
Unaudited
(In Thousands, Except Percentages)
Three Months Ended March 31,
| North America Loss Adjusting | % | International Operations | % | Broadspire | % | Platform Solutions | % | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | Change | 2025 | 2024 | Change | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||
| Revenues Before Reimbursements | $ | 79,740 | $ | 77,365 | 3.1% | $ | 104,394 | $ | 98,092 | 6.4% | $ | 96,384 | $ | 94,298 | 2.2% | $ | 31,514 | $ | 31,899 | (1.2)% | ||||||||
| Direct Compensation, Fringe Benefits & Non-Employee Labor | 56,018 | 55,467 | 1.0% | 70,577 | 64,979 | 8.6% | 58,351 | 57,257 | 1.9% | 18,045 | 18,930 | (4.7)% | ||||||||||||||||
| % of Revenues Before Reimbursements | 70.3 | % | 71.7 | % | 67.6 | % | 66.2 | % | 60.5 | % | 60.7 | % | 57.3 | % | 59.3 | % | ||||||||||||
| Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor | 18,246 | 17,419 | 4.7% | 30,361 | 31,423 | (3.4)% | 25,830 | 24,237 | 6.6% | 10,542 | 11,854 | (11.1)% | ||||||||||||||||
| % of Revenues Before Reimbursements | 22.9 | % | 22.5 | % | 29.1 | % | 32.0 | % | 26.8 | % | 25.7 | % | 33.5 | % | 37.2 | % | ||||||||||||
| Total Operating Expenses | 74,264 | 72,886 | 1.9% | 100,938 | 96,402 | 4.7% | 84,181 | 81,494 | 3.3% | 28,587 | 30,784 | (7.1)% | ||||||||||||||||
| Operating Earnings (1) | $ | 5,476 | $ | 4,479 | 22.3% | $ | 3,456 | $ | 1,690 | 104.5% | $ | 12,203 | $ | 12,804 | (4.7)% | $ | 2,927 | $ | 1,115 | 162.5% | ||||||||
| % of Revenues Before Reimbursements | 6.9 | % | 5.8 | % | 3.3 | % | 1.7 | % | 12.7 | % | 13.6 | % | 9.3 | % | 3.5 | % |
(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 acquisition-related intangible assets, non-service pension costs, contingent earnout adjustments, 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 March 31, 2025 and March 31, 2024
Unaudited
(In Thousands)
| 2025 | 2024 | |||||
|---|---|---|---|---|---|---|
| Cash Flows From Operating Activities: | ||||||
| Net Income | $ | 6,740 | $ | 2,779 | ||
| Reconciliation of net income to net cash used in operating activities: | ||||||
| Depreciation and amortization | 9,647 | 9,299 | ||||
| Stock-based compensation | 1,390 | 1,218 | ||||
| Loss (gain) on disposal of property and equipment | 564 | (81 | ) | |||
| Contingent earnout adjustments | 363 | 151 | ||||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable, net | 6,002 | 6,312 | ||||
| Unbilled revenues, net | (8,045 | ) | (9,511 | ) | ||
| Accrued or prepaid income taxes | 229 | 942 | ||||
| Accounts payable and accrued liabilities | (25,176 | ) | (25,837 | ) | ||
| Deferred revenues | 315 | 116 | ||||
| Accrued retirement costs | (3,211 | ) | (3,546 | ) | ||
| Prepaid expenses and other operating activities | (2,741 | ) | (1,645 | ) | ||
| Net cash used in operating activities | (13,923 | ) | (19,803 | ) | ||
| Cash Flows From Investing Activities: | ||||||
| Acquisitions of property and equipment | (994 | ) | (1,541 | ) | ||
| Capitalization of computer software costs | (8,329 | ) | (8,009 | ) | ||
| Net cash used in investing activities | (9,113 | ) | (9,550 | ) | ||
| Cash Flows From Financing Activities: | ||||||
| Cash dividends paid | (3,455 | ) | (3,443 | ) | ||
| Repurchases of common stock | — | (733 | ) | |||
| Increases in short-term and revolving credit facility borrowings | 41,411 | 35,807 | ||||
| Payments on short-term and revolving credit facility borrowings | (12,901 | ) | (14,794 | ) | ||
| Payments of contingent consideration on acquisitions | — | (579 | ) | |||
| Other financing activities | (38 | ) | (185 | ) | ||
| Net cash provided by financing activities | 25,017 | 16,073 | ||||
| Effects of exchange rate changes on cash and cash equivalents | (289 | ) | 394 | |||
| Increase (Decrease) in cash, cash equivalents, and restricted cash(1) | 1,692 | (12,886 | ) | |||
| Cash, cash equivalents, and restricted cash at beginning of year(1) | 56,329 | 59,545 | ||||
| Cash, cash equivalents, and restricted cash at end of period(1) | $ | 58,021 | $ | 46,659 |
(1) The 2025 amounts include beginning restricted cash of $917 at December 31, 2024, and ending restricted cash of $654 at March 31, 2025, and the 2024 amounts include beginning restricted cash of $1,182 at December 31, 2023, and ending restricted cash of $1,463 at March 31, 2024, which we present as part of "Prepaid expenses and other current assets" on the Balance Sheets.
First Quarter 2025 Financial Results CRD-A & CRD-B (NYSE) ® Crawford & Company
Forward-Looking Statements & Additional Information Q1 2025 FINANCIAL RESULTS Forward-Looking Statements This presentation 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 statements of historical fact may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 and other 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. Results for any interim period presented herein are not necessarily indicative of results to be expected for the full year or for any other future period. For further information regarding Crawford & Company, and the risks and uncertainties involved in forward-looking statements, please read Crawford & Company's reports filed with the Securities and Exchange Commission and available at www.sec.gov or in the Investor Relations portion of Crawford & Company's website at https://ir.crawco.com. Crawford's business is dependent, to a significant extent, on case volumes. The Company cannot predict the future trend of case volumes for a number of reasons, including the fact that the frequency and severity of weather-related claims and the occurrence of natural and man-made disasters, which are a significant source of cases and revenue for the Company, are generally not subject to accurate forecasting. Revenues Before Reimbursements ("Revenues") Revenues Before Reimbursements are referred to as "Revenues" in both consolidated and segment charts, bullets and tables throughout this presentation. Segment and Consolidated Operating Earnings Under the Financial Accounting Standards Board's Accounting Standards Codification ("ASC") Topic 280, "Segment Reporting," the Company has defined segment operating earnings as the primary measure used by the Company to evaluate the results of each of its four operating segments. Segment operating earnings represent segment earnings, including the direct and indirect costs of certain administrative functions required to operate our business, but excludes unallocated corporate and shared costs and credits, net corporate interest expense, stock option expense, amortization of acquisition-related intangible assets, contingent earnout adjustments, non-service pension costs, income taxes and net income or loss attributable to noncontrolling interests. Earnings Per Share 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 available on the Company’s website. The two-class method is an earnings allocation method under which earnings per share ("EPS") is calculated for each class of common stock considering both dividends declared and participation rights in undistributed earnings as if all such earnings had been distributed during the period. As a result, the Company may report different EPS for each class of stock due to the two-class method of computing EPS as required by ASC Topic 260 - "Earnings Per Share". Segment Gross Profit Segment gross profit is defined as revenues, less direct costs, which exclude indirect centralized administrative support costs allocated to the business. Indirect expenses consist of centralized administrative support costs, regional and local shared services that are allocated to each segment based on usage. Non-GAAP Financial Information For additional information about certain non-GAAP financial information presented herein, see the Appendix following this presentation.
STRATEGIC UPDATE Rohit Verma President & Chief Executive Officer 3 Q1 2025 FINANCIAL RESULTS
Countries 70 Employees 10,000+ 50,000+ Field Resources $20B+ Claims Managed Annually Global Reach; Trusted Partner Q1 2025 FINANCIAL RESULTS
Increasing weather volatility continues to drive global demand in weather-related claims Gaining market share within fragmented U.S. independent loss adjusting market Industry-leading expertise and technology capabilities enhancing market share Growing and strengthening strategic partnerships across business segments Increased presence in rapidly growing P&C insurance markets with strong outsourced claims processing tailwinds Multiple Growth Drivers Benefitting Crawford Q1 2025 FINANCIAL RESULTS
First Quarter 2025 Highlights Consolidated revenue growth of 3.4% YoY Revenue growth in North America Loss Adjusting, International Operations and Broadspire segments Margin expansion and improved profitability in North America Loss Adjusting, International Operations, and Platform Solutions Consolidated operating margin improved by 170 bps Gross profit increased in all segments Operating earnings increase of 47% YoY International Operations and Platform Solutions operating earnings more than doubled reflecting increased storm activity and operating leverage Paid quarterly dividend of $0.07 per share Strong balance sheet and liquidity Leverage ratio remains low at 1.90x EBITDA YoY Revenue Growth YoY Adjusted Operating Earnings* $301.7M $12.1M 6 * See Appendix for non-GAAP explanation and reconciliation Q1 ‘24 Q1 ‘25 Q1 ‘24 Q1 ‘25 Q1 2025 FINANCIAL RESULTS $312.0 $17.8M
Q1 ‘24 Q1 ‘25 Non-weather-related revenue Weather-related revenue (US CAT, USLA, Australia) Balanced Revenue Model with Weather and Non-Weather Growth Drivers U.S. Severe Storm Reports1,2 1 National Oceanic and Atmospheric Administration (NOAA) Storm Prediction Database, May 2, 2025 2 Preliminary data Q1 2025 FINANCIAL RESULTS Q1 ‘24 Q1 ‘25 +74% 2,048 3,569 Consolidated Weather-Related vs. Non-Weather-Related Revenue $301.7M $312.0M +3.4% +2.5% +5.9%
Our Capital Allocation Strategy Investing in long-term growth through Cap Ex and M&A Strong liquidity Leverage ratio significantly below industry average at 1.90x EBITDA Paid quarterly dividend of $0.07 per share for CRD-A and CRD-B Q1 2025 FINANCIAL RESULTS Committed to Industry-Leading Financial Strength and Employing a Disciplined Approach to Capital Allocation
OPERATIONAL UPDATE Bruce Swain, Chief Financial Officer Q1 2025 FINANCIAL RESULTS 9
Comprised of All Service Lines Outside of North America: UK Europe Australia Asia Latin America Legal Services International Operations 33% Third Party Administration for: Workers' Compensation Auto and Liability Claims Medical Management Disability Technology Services Accident and Health Comprised of the Following Service Lines: Contractor Connection Networks Catastrophe Subrogation (Praxis) Comprised of the Following North American Service Lines: USLA US GTS US Field Ops Canada Loss Adjusting Canada TPA Canada Contractor Connection Edjuster Alternative Inspection Solutions North America Loss Adjusting 26% Broadspire (U.S.-only) 31% Platform Solutions (US-only) 10% First Quarter 2025 Revenue Contribution Q1 2025 FINANCIAL RESULTS
Revenue increased 3% U.S. GTS revenues increased 12% YoY U.S. Field Ops revenues increased 3% YoY Operating earnings increased by 22% YoY Operating margin expanded 108 bps Destination for high caliber and specialized insurance adjusting talent North America Loss Adjusting First Quarter 2025 Results Revenues $79.7M Operating Earnings $5.5M 11 Q1 2025 FINANCIAL RESULTS
Revenue growth of 6% or 9% when measured in constant currency Strong performance with revenues increasing more than 10% in UK, Europe and Asia Operating earnings more than doubled YoY Operating margin expanded 159 bps Segment turnaround continues driven by strategy to improve pricing, productivity, and new business growth International Operations First Quarter 2025 Results Revenues $104.4M Operating Earnings $3.5M 12 Q1 2025 FINANCIAL RESULTS
Broadspire First Quarter 2025 Results Revenues $96.4M $12.2M Operating Earnings 13 Q1 2025 FINANCIAL RESULTS Revenue growth of 2.2% with growth across all service lines driven by new business growth and pricing Operating earnings decreased YoY related to increased expenses associated with intentional staffing additions to support expected revenue growth Significant new client wins Retention rate of 97.5%
Platform Solutions First Quarter 2025 Results Revenues $31.5M Operating Earnings $2.9M 14 Q1 2025 FINANCIAL RESULTS Revenue down slightly YoY Increased storm activity occurred late in the quarter Operating earnings growth of 163% YoY Driven by improved flow-through in Networks line Operating margin expansion of 579 bps Reflects effective cost management and improved operational efficiency
FINANCIAL UPDATE Bruce Swain, Chief Financial Officer Q1 2025 FINANCIAL RESULTS 15
Q1 2025 Financial Summary (1) See Appendix for non-GAAP explanation and reconciliation Quarter Ended Unaudited ($ in millions, except per share amounts) March 31, 2025 March 31, 2024 % Change Revenues $312.0 $301.7 3% Non-GAAP Revenues excluding foreign exchange fluctuations(1) $316.5 $301.7 5% Net Income Attributable to Shareholders of Crawford & Company $6.7 $2.8 139% Diluted Earnings per Share CRD-A $0.13 $0.06 117% CRD-B $0.13 $0.06 117% Non-GAAP Diluted Earnings per Share (1) CRD-A $0.21 $0.13 62% CRD-B $0.21 $0.13 62% Adjusted Operating Earnings (1) $17.8 $12.1 47% Adjusted Operating Margin (1) 5.7% 4.0% 170 bps Adjusted EBITDA (1) $26.8 $20.6 30% Adjusted EBITDA Margin (1) 8.6% 6.8% 176 bps Q1 2025 FINANCIAL RESULTS
Balance Sheet Highlights (1) See Appendix for non-GAAP explanation and reconciliation Unaudited ($ in thousands) Mar 31, 2025 December 31, 2019 Dec 31, 2024 December 31, 2018 Change Change Cash and cash equivalents $ 57,367 $ 55,412 $ 1,955 Accounts receivable, net 134,140 142,064 (7,924 ) Unbilled revenues, net 136,596 131,080 5,516 Total receivables 270,736 273,144 (2,408 ) Goodwill 76,374 76,368 6 Intangible assets arising from business acquisitions, net 72,023 74,545 (2,522 ) Deferred revenues 59,504 59,685 (181) Pension liabilities 20,471 21,084 (613 ) Short-term borrowings and current portion of finance leases 41,295 17,822 23,473 Long-term debt, less current portion 205,274 200,315 4,959 Total debt 246,569 218,137 28,432 Total stockholders' equity attributable to Crawford & Company 160,588 157,210 3,378 Net debt (1) 189,202 162,725 26,477 Q1 2025 FINANCIAL RESULTS
Net Debt and Pension Liability $189.2M Net debt at $189.2 million $137.3M Leverage Ratio of 1.90x EBITDA at end of Q1 ‘25 $20.5M Pension liability at $20.5 million $74.3M Funded Ratio of US pension plan is 92.2% at end of Q1 ‘25 Q1 2025 FINANCIAL RESULTS
Operating and Free Cash Flow (1) See Appendix for non-GAAP explanation and reconciliation Unaudited ($ in thousands) 2025 2019 2024 2018 Change Change Net Income Attributable to Shareholders of Crawford & Company $ 6,684 $ 2,837 $ 3,847 Depreciation and Other Non-Cash Operating Items 11,657 10,378 1,279 Contingent Earnout Adjustments 363 151 212 Billed Receivables Change 6,002 6,312 (310 ) Unbilled Receivables Change (8,045 ) (9,511 ) 1,466 Change in Accrued Compensation, 401K, and Other Payroll (25,913 ) (31,987 ) 6,074 Other Working Capital Changes (4,671 ) 2,017 (6,688 ) Cash Flows from Operating Activities (13,923 ) (19,803 ) 5,880 Property & Equipment Purchases, net (994 ) (1,541 ) 547 Capitalized Software (internal and external costs) (8,329 ) (8,009 ) (320 ) Free Cash Flow(1) $ (23,246 ) $ (29,353 ) $ 6,107 Q1 2025 FINANCIAL RESULTS
Additional Financial Matters Unallocated Corporate and Shared Costs and Credits Unallocated corporate costs of $6.2 million in Q1 ‘25 compared to corporate costs of $8.0 million in Q1 ‘24 Variance was primarily due to decreases in self-insurance expense and professional fees. Non-service Pension Costs During Q1 ‘25 non-service pension costs were $2.3 million compared to $2.5 million in Q1 ’24 These costs are not a component of operating earnings and are added back for non-GAAP earnings and EPS Contingent Earnout Adjustment Recognized pre-tax contingent earnout cost totaling $0.4 million for Q1 ’25 compared to $0.2 million in Q1 ‘24 These costs are not a component of operating earnings and are added back for non-GAAP earnings and EPS Quarterly Dividend In Q1 ‘25 Crawford paid a $0.07 dividend per share for CRD-A and CRD-B Share Repurchases No shares were repurchased in Q1 ‘25 Approximately 1.1 million shares are eligible to be repurchased under our 2021 Share Repurchase Authorization Q1 2025 FINANCIAL RESULTS
Financial strength and liquidity provide flexibility to pursue market opportunities Capitalizing on the changing landscape due to climate change and demographic shifts Leading the industry with next generation Insurtech capabilities Leveraging strong relationships to enhance market position Summary Q1 2025 FINANCIAL RESULTS
Appendix: Segment Results and Non-GAAP Financial Information Q1 2025 FINANCIAL RESULTS 22
North America Loss Adjusting Three months ended Unaudited (in thousands, except percentages) March 31, 2025 March 31, 2024 Variance Revenues $79,740 $77,365 3.1% Direct expenses 63,913 62,853 1.7% Gross profit 15,827 14,512 9.1% Indirect expenses 10,351 10,033 3.2% Operating earnings $5,476 $4,479 22.3% Gross profit margin 19.8% 18.8% 1.0% Operating margin 6.9% 5.8% 1.1% Total cases received 89,265 61,937 44.1% Full time equivalent employees 2,078 2,046 1.6% Q1 2025 FINANCIAL RESULTS
International Operations Three months ended Unaudited (in thousands, except percentages) March 31, 2025 March 31, 2024 Variance Revenues $104,394 $98,092 6.4% Direct expenses 85,473 82,111 4.1% Gross profit 18,921 15,981 18.4% Indirect expenses 15,465 14,291 8.2% Operating earnings $3,456 $1,690 104.5% Gross profit margin 18.1% 16.3% 1.8% Operating margin 3.3% 1.7% 1.6% Total cases received 117,305 135,652 (13.5)% Full time equivalent employees 3,539 3,611 (2.0)% Q1 2025 FINANCIAL RESULTS
Broadspire Three months ended Unaudited (in thousands, except percentages) March 31, 2025 March 31, 2024 Variance Revenues $96,384 $94,298 2.2% Direct expenses 71,885 69,993 2.7% Gross profit 24,499 24,305 0.8% Indirect expenses 12,296 11,501 6.9% Operating earnings $12,203 $12,804 (4.7)% Gross profit margin 25.4% 25.8% (0.4)% Operating margin 12.7% 13.6% (0.9)% Total cases received 137,463 135,698 1.3% Full time equivalent employees 2,764 2,669 3.6% Q1 2025 FINANCIAL RESULTS
Platform Solutions Three months ended Unaudited (in thousands, except percentages) March 31, 2025 March 31, 2024 Variance Revenues $31,514 $31,899 (1.2)% Direct expenses 23,696 24,668 (3.9)% Gross profit 7,818 7,231 8.1% Indirect expenses 4,891 6,116 (20.0)% Operating earnings $2,927 $1,115 162.5% Gross profit margin 24.8% 22.7% 2.1% Operating margin 9.3% 3.5% 5.8% Total cases received 41,486 74,902 (44.6)% Full time equivalent employees 753 842 (10.6)% Q1 2025 FINANCIAL RESULTS
Non-GAAP Financial Information Measurements of financial performance not calculated in accordance with GAAP should be considered as supplements to, and not substitutes for, performance measurements calculated or derived in accordance with GAAP. Any such measures are not necessarily comparable to other similarly-titled measurements employed by other companies. Reimbursements for Out-of-Pocket Expenses In the normal course of our business, our operating segments incur certain out-of-pocket expenses that are thereafter reimbursed by our clients. Under GAAP, these out-of-pocket expenses and associated reimbursements are required to be included when reporting expenses and revenues, respectively, in our consolidated results of operations. In this presentation, we do not believe it is informative to include in reported revenues the amounts of reimbursed expenses and related revenues, as they offset each other in our consolidated results of operations with no impact to our net income or operating earnings. As a result, unless noted in this presentation, revenue and expense amounts exclude reimbursements for out-of-pocket expenses. Net Debt Net debt is computed as the sum of long-term debt, capital leases and short-term borrowings less cash and cash equivalents. Management believes that net debt is useful because it provides investors with an estimate of what the Company's debt would be if all available cash was used to pay down the debt of the Company. The measure is not meant to imply that management plans to use all available cash to pay down debt. Free Cash Flow Management believes free cash flow is useful to investors as it presents the amount of cash the Company has generated that can be used for other purposes, including additional contributions to the Company's defined benefit pension plans, discretionary prepayments of outstanding borrowings under our credit agreement, and return of capital to shareholders, among other purposes. It does not represent the residual cash flow of the Company available for discretionary expenditures. Q1 2025 FINANCIAL RESULTS
Non-GAAP Financial Information (cont.) Segment and Consolidated Operating Earnings Operating earnings is the primary financial performance measure used by our senior management and chief operating decision maker to evaluate the financial performance of our Company and operating segments and make resource allocation and certain compensation decisions. Management believes operating earnings is useful to others in that it allows them to evaluate segment and consolidated operating performance using the same criteria our management and chief operating decision maker use. Consolidated operating earnings represent segment earnings including certain unallocated corporate and shared costs and credits, but before net corporate interest expense, stock option expense, amortization of acquisition-related intangible assets, contingent earnout adjustments, non-service pension costs, income taxes and net income or loss attributable to noncontrolling interests. Segment and Consolidated Gross Profit Gross profit is defined as revenues less direct expenses which exclude indirect overhead expenses allocated to the business. Indirect expenses consist of centralized administrative support costs, regional and local shared services that are allocated to each segment based on usage. Adjusted EBITDA Adjusted EBITDA is used by management to evaluate, assess and benchmark our operational results and the Company believes that adjusted EBITDA is relevant and useful information widely used by analysts, investors and other interested parties. Adjusted EBITDA is defined as net income attributable to shareholders of the Company with recurring adjustments for depreciation and amortization, net corporate interest expense, contingent earnout adjustments, non-service pension costs, income taxes and stock-based compensation expense. 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. Adjusted Pretax Earnings, Net Income, and Diluted Earnings per Share Included in non-GAAP adjusted measurements as an add back or subtraction to GAAP measurements, are impacts of amortization of acquisition-related intangible assets, contingent earnout adjustments, and non-service pension costs which arise from non-core items not directly related to our normal business or operations, or our future performance. Management believes it is useful to exclude these charges when comparing net income and diluted earnings per share across periods, as these charges are not from ordinary operations. Q1 2025 FINANCIAL RESULTS
The following table illustrates revenue as a percentage of total revenue in the major currencies of the geographic areas in which Crawford does business: Total Revenue Before Reimbursements by Major Currency Three Months Ended Unaudited (in thousands) March 31, 2025 March 31, 2024 Geographic Area Currency USD equivalent % of total USD equivalent % of total U.S. USD $ 185,862 59.6% $ 179,721 59.6% U.K. GBP 44,342 14.2% 40,255 13.4% Canada CAD 21,776 7.0% 23,841 7.9% Australia AUD 19,048 6.1% 19,661 6.5% Europe EUR 15,924 5.1% 14,885 4.9% Rest of World Various 25,080 8.0% 23,291 7.7% Total Revenues, before reimbursements $ 312,032 100.0% $ 301,654 100.0% Q1 2025 FINANCIAL RESULTS
Revenues and Costs of Services Provided Reconciliation of Non-GAAP Item Quarter Ended Quarter Ended Quarter Ended Quarter Ended Unaudited ($ in thousands) March 31, 2025 December 31, March 31, 2024 December 31, 2019 2018 Revenues Before Reimbursements Total Revenues $ 323,339 $ 313,073 Reimbursements (11,307 ) (11,419 ) Revenues Before Reimbursements 312,032 301,654 Costs of Services Provided, Before Reimbursements Total Costs of Services 233,200 225,808 Reimbursements (11,307 ) (11,419 ) Costs of Services Provided, Before Reimbursements $ 221,893 $ 214,389 Q1 2025 FINANCIAL RESULTS
Operating Earnings Reconciliation of Non-GAAP Items (cont.) Quarter Ended Quarter Ended Quarter Ended Quarter Ended March 31, 2025 December 31, March 31,2024 December 31, Unaudited ($ in thousands) 2019 2018 North America Loss Adjusting $ 5,476 $ 4,479 International Operations 3,456 1,690 Broadspire 12,203 12,804 Platform Solutions 2,927 1,115 Unallocated corporate and shared costs, net (6,218 ) (8,007 ) Consolidated Operating Earnings 17,844 12,081 (Deduct) Add: Net corporate interest expense (3,944 ) (3,596 ) Stock option expense (184 ) (167 ) Amortization expense (1,800 ) (1,868 ) Non-service pension costs (2,333 ) (2,473 ) Contingent earnout adjustments (363 ) (151 ) Income tax provision (2,480 ) (1,047 ) Net (income) loss attributable to noncontrolling interests (56 ) 58 Net Income Attributable to Shareholders of Crawford & Company $ 6,684 $ 2,837 Q1 2025 FINANCIAL RESULTS
Adjusted EBITDA Reconciliation of Non-GAAP items (cont.) Quarter Ended December 31, Quarter Ended December 31, March 31, 2025 December 31, March 31, 2024 December 31, Unaudited ($ in thousands) 2019 2018 Net Income Attributable to Shareholders of Crawford & Company $ 6,684 $ 2,837 Add: Depreciation and amortization 9,647 9,299 Stock-based compensation 1,390 1,218 Net corporate interest expense 3,944 3,596 Non-service pension costs 2,333 2,473 Contingent earnout adjustments 363 151 Income tax provision 2,480 1,047 Adjusted EBITDA $ 26,841 $ 20,621 Q1 2025 FINANCIAL RESULTS
Net Debt Non-GAAP Financial Information (cont.) March 31, 2025 December 31, December 31, 2024 December 31, Unaudited ($ in thousands) 2019 2018 Short-term borrowings $ 41,248 $ 17,750 Current installments of finance leases and other obligations 47 72 Long-term debt and finance leases, less current installments 205,274 200,315 Total debt 246,569 218,137 Less: Cash and cash equivalents 57,367 55,412 Net debt $ 189,202 $ 162,725 Q1 2025 FINANCIAL RESULTS
Segment Gross Profit Non-GAAP Financial Information (cont.) Three months ended Three months ended Unaudited ($ in thousands) March 31, 2025 December 31, 2019 March 31, 2024 December 31, 2018 North America Loss Adjusting $ 15,827 $ 14,512 International Operations 18,921 15,981 Broadspire 24,499 24,305 Platform Solutions 7,818 7,231 Segment gross profit 67,065 62,029 Segment indirect costs: North America Loss Adjusting (10,351 ) (10,033 ) International Operations (15,465 ) (14,291 ) Broadspire (12,296 ) (11,501 ) Platform Solutions (4,891 ) (6,116 ) Unallocated corporate and shared costs, net (6,218 ) (8,007 ) Consolidated operating earnings 17,844 12,081 Net corporate interest expense (3,944 ) (3,596 ) Stock option expense (184 ) (167 ) Amortization expense (1,800 ) (1,868 ) Non-service pension costs (2,333 ) (2,473 ) Contingent earnout adjustments (363 ) (151 ) Income tax provision (2,480 ) (1,047 ) Net (income) loss attributable to noncontrolling interests (56 ) 58 Net income attributable to shareholders of Crawford & Company $ 6,684 $ 2,837 Q1 2025 FINANCIAL RESULTS
Reconciliation of First Quarter Non-GAAP Results Three Months Ended March 31, 2025 Unaudited ($ in thousands) Pretax Earnings Pretax (Loss) Earnings Net Income Attributable to Crawford & Company Net (Loss) Income Attributable to Crawford & Company Diluted Earnings per CRD-A Share Diluted (Loss) Earnings per CRD-A Share Diluted Earnings per CRD-B Share Diluted (Loss) Earnings per CRD-B Share GAAP $ 9,220 $ 6,684 $ 0.13 $ 0.13 Adjustments: Amortization of intangible assets 1,800 1,489 0.03 0.03 Non-service-related pension costs 2,333 1,803 0.04 0.04 Contingent earnout adjustments 363 363 0.01 0.01 Non-GAAP Adjusted $ 13,716 $ 10,339 $ 0.21 $ 0.21 Three Months Ended March 31, 2024 Unaudited ($ in thousands) Pretax Earnings Pretax Earnings Net Income Attributable to Crawford & Company Net Income Attributable to Crawford & Company Diluted Earnings per CRD-A Share Diluted Earnings per CRD-A Share Diluted Earnings per CRD-B Share Diluted Earnings per CRD-B Share GAAP $ 3,826 $ 2,837 $ 0.06 $ 0.06 Adjustments: Amortization of intangible assets 1,868 1,575 0.03 0.03 Non-service-related pension costs 2,473 1,929 0.04 0.04 Contingent earnout adjustments 151 151 - - Non-GAAP Adjusted $ 8,318 $ 6,492 $ 0.13 $ 0.13 Q1 2025 FINANCIAL RESULTS