UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation)
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(IRS Employer Identification No.) |
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(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:
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 |
Item 2.02. Results of Operations and Financial Condition
On November 4, 2024, Crawford & Company (the "Company") issued a press release containing information about the Company's financial results for the third quarter 2024. 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, November 5, 2024 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. |
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Description |
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99.1 |
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99.2 |
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104 |
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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.
2
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.
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CRAWFORD & COMPANY |
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(Registrant) |
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By: |
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/s/ W. BRUCE SWAIN |
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W. Bruce Swain |
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Executive Vice President - |
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Chief Financial Officer |
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Dated: November 4, 2024 |
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3
Exhibit 99.1
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Crawford & Company®
5335 Triangle Parkway
Peachtree Corners, GA 30092
FOR IMMEDIATE RELEASE
CRAWFORD & COMPANY REPORTS 2024 THIRD QUARTER RESULTS
Continued momentum in core non-weather businesses highlighted by record quarterly revenue at Broadspire; revenue growth and improved margins in International Operations
ATLANTA, (November 4, 2024) -- Crawford & Company® (NYSE: CRD-A and CRD-B), is pleased to announce its financial results for the third quarter ended September 30, 2024.
GAAP Consolidated Results
Third Quarter 2024
Non-GAAP Consolidated Results
Third Quarter 2024
Mr. Rohit Verma, president and chief executive officer of Crawford & Company, commented, “Consolidated third quarter revenues were consistent with the previous year, reflecting our ability to drive continued momentum in our core non-weather-dependent businesses. Broadspire achieved a new quarterly revenue record and our International Operations also demonstrated revenue growth and margin expansion, with growth across key markets. Our third quarter results also reflected the ongoing benign weather environment which impacted growth at our North America Loss Adjusting and Platform Solutions segments. Storm activity in the third quarter of 2024 was notably lower than historical levels, with Hurricane Helene occurring late in the quarter and Hurricane Milton following approximately two weeks later. We expect to see activity related to these two storms reflected in our fourth quarter performance."
Mr. Verma continued, “These results underscore the strength of our diversified business lines, which enable us to mitigate challenges encountered in one part of the business with growth from other segments. As we move forward, our focus remains on delivering sustainable growth, winning new customers, establishing strategic partnerships and delivering operational excellence as we continue to drive value for our stakeholders."
Segment Results for the Third Quarter
North America Loss Adjusting
North America Loss Adjusting revenues before reimbursements were $79.3 million in the third quarter of 2024, relatively consistent compared with $80.0 million in the third quarter of 2023.
The segment had operating earnings of $5.4 million in the 2024 third quarter, decreasing from $10.5 million in the third quarter of 2023. The operating margin was 6.9% in the 2024 quarter and 13.1% in the 2023 quarter driven by decreased revenues in U.S. Field Operations and Canada compared to the prior year quarter which had increased weather related activity and increased costs in U.S. Global Technical Services.
International Operations
International Operations revenues before reimbursements were $105.7 million in the third quarter of 2024, up 7.8% from $98.1 million in the same period of 2023 driven by growth in the U.K. and Europe. Absent foreign exchange rate decreases of $1.8 million, revenues would have been $107.6 million for the 2024 third quarter.
Operating earnings were $5.1 million in the 2024 third quarter, increasing from $2.2 million in the 2023 period. The segment’s operating margin for the 2024 quarter increased to 4.9% compared with 2.2% in the 2023 quarter driven by U.K. and Europe revenue growth.
Broadspire
Broadspire segment revenues before reimbursements were a new quarterly record of $99.0 million in the 2024 third quarter, increasing 7.4% from $92.2 million in the 2023 third quarter driven by increases in medical case management and casualty claims revenues.
Broadspire recorded operating earnings of $14.4 million in the third quarter of 2024, representing an operating margin of 14.5%, compared to $13.5 million, or 14.7% of revenues, in the 2023 third quarter. The Company increased staffing levels in response to revenue growth in the quarter which slightly impacted operating margin.
Platform Solutions
Platform Solutions revenues before reimbursements were $45.3 million in the third quarter of 2024, down from $59.8 million in the same period of 2023 as the Networks service line had significantly reduced weather-related claim volumes.
Operating earnings were $3.8 million in the 2024 third quarter, decreasing from the $8.5 million in the 2023 period. The segment’s operating margin for the 2024 quarter was 8.5% as compared with 14.2% in the 2023 quarter. Operating earnings were impacted by less weather-related activity and a corresponding decrease in demand for staff augmentation services in the third quarter of 2024 as compared to the third quarter of 2023.
Unallocated Corporate and Shared Costs and Credits, Net
Unallocated corporate costs were $7.0 million in the third quarter of 2024, compared with $4.8 million in the same period of 2023. The increase in the 2024 third quarter was primarily due to an increase in self-insured reserves, professional fees, and other reserves.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses (“SG&A”) decreased $2.9 million, or (3.9)%, in the three months ended September 30, 2024 as compared with the 2023 period. The decrease was primarily due to a reduction in the estimated payout for contingent earnout adjustments.
2
Other Matters
The Company recognized pretax contingent earnout benefits totaling ($2.1) million in the 2024 third quarter, compared to expenses of $2.1 million in the same period of 2023, 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 $2.4 million in the 2024 third quarter compared with $2.2 million in the 2023 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, 2024, totaled $52.3 million, compared with $58.4 million at December 31, 2023. The Company’s total debt outstanding as of September 30, 2024, totaled $238.4 million, compared with $209.1 million at December 31, 2023.
The Company’s operations provided $11.1 million of cash during the first nine months of 2024, compared with $68.1 million in 2023. The decrease in cash provided was due primarily to $21.6 million lower operating earnings, $20.6 million net change in incentive compensation, and a $11.0 million decrease in other working capital items over the prior year.
The Company made no contributions to its U.S. defined benefit pension plan and $1.9 million in contributions to its U.K. plans for the first nine months of 2024, compared with no contributions to the U.S. plan and $1.8 million to the U.K. plans in 2023.
During the first nine months of 2024 and 2023, the Company did not repurchase any shares of CRD-A. In the first nine months of 2024, the Company repurchased 385,544 shares of CRD-B at an average per share cost of $9.34, compared to 63,103 shares of CRD-B repurchased in the first nine months of 2023 at an average share cost of $9.24. The total cost of shares repurchased during 2024 was $3.6 million for the first nine months of 2024.
Conference Call
As previously announced, Crawford & Company will host a conference call on November 5, 2024, at 8:30 a.m. Eastern Time to discuss its third quarter 2024 results. The conference call can be accessed live by dialing 1-800-549-8228 and using Conference ID 04164. 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 5, 2024. You may dial 1-888-660-6264 and use passcode 04164# 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.
3
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:
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Three Months Ended |
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Nine Months Ended |
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(in thousands) |
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September 30, |
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September 30, |
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September 30, |
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September 30, |
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Geographic Area |
Currency |
USD equivalent |
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% of total |
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USD equivalent |
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% of total |
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USD equivalent |
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% of total |
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USD equivalent |
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% of total |
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U.S. |
USD |
$ |
200,160 |
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60.8 |
% |
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$ |
207,565 |
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62.9 |
% |
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$ |
569,624 |
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60.3 |
% |
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$ |
612,276 |
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63.1 |
% |
U.K. |
GBP |
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42,265 |
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12.8 |
% |
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38,290 |
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11.6 |
% |
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123,940 |
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13.1 |
% |
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106,139 |
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10.9 |
% |
Canada |
CAD |
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23,474 |
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7.1 |
% |
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24,490 |
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7.4 |
% |
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69,516 |
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7.4 |
% |
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73,494 |
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7.6 |
% |
Australia |
AUD |
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23,530 |
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7.1 |
% |
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22,867 |
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6.9 |
% |
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65,507 |
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6.9 |
% |
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68,787 |
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7.1 |
% |
Europe |
EUR |
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15,260 |
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4.6 |
% |
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14,629 |
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4.4 |
% |
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45,806 |
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4.8 |
% |
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42,968 |
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4.4 |
% |
Rest of World |
Various |
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24,686 |
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7.6 |
% |
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22,280 |
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6.8 |
% |
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70,863 |
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7.5 |
% |
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67,347 |
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6.9 |
% |
Total Revenues, before reimbursements |
$ |
329,375 |
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100.0 |
% |
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$ |
330,121 |
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100.0 |
% |
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$ |
945,256 |
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100.0 |
% |
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$ |
971,011 |
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100.0 |
% |
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4
Following is a reconciliation of consolidated operating earnings to net income attributable to shareholders of Crawford & Company on a GAAP basis:
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Three Months Ended |
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Nine Months Ended |
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(in thousands) |
September 30, 2024 |
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September 30, 2023 |
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September 30, 2024 |
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September 30, 2023 |
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Operating earnings: |
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North America Loss Adjusting |
$ |
5,443 |
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$ |
10,468 |
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$ |
14,807 |
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$ |
22,433 |
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International Operations |
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5,136 |
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2,197 |
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12,528 |
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8,974 |
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Broadspire |
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14,402 |
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13,532 |
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42,297 |
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29,607 |
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Platform Solutions |
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3,833 |
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8,523 |
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6,417 |
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26,595 |
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Unallocated corporate and shared costs, net |
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(6,979 |
) |
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(4,781 |
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(20,065 |
) |
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(9,998 |
) |
Consolidated operating earnings |
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21,835 |
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29,939 |
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55,984 |
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77,611 |
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(Deduct) add: |
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Net corporate interest expense |
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(4,682 |
) |
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(4,556 |
) |
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(12,534 |
) |
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(13,264 |
) |
Stock option expense |
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(188 |
) |
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(145 |
) |
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(494 |
) |
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(440 |
) |
Amortization of intangible assets |
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(1,932 |
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(1,986 |
) |
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(5,656 |
) |
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(5,864 |
) |
Non-service pension costs |
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(2,441 |
) |
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(2,170 |
) |
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(7,313 |
) |
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(6,436 |
) |
Contingent earnout adjustments |
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2,128 |
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(2,127 |
) |
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1,547 |
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(3,100 |
) |
Income tax provision |
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(5,333 |
) |
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(6,781 |
) |
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(10,866 |
) |
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(17,258 |
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Net loss attributable to noncontrolling interests |
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66 |
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145 |
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206 |
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178 |
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Net income attributable to shareholders of Crawford & Company |
$ |
9,453 |
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$ |
12,319 |
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$ |
20,874 |
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$ |
31,427 |
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Following is a reconciliation of net income attributable to shareholders of Crawford & Company on a GAAP basis to non-GAAP adjusted EBITDA:
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Three Months Ended |
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Nine Months Ended |
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(in thousands) |
September 30, |
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September 30, |
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September 30, |
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September 30, |
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Net income attributable to shareholders of Crawford & Company |
$ |
9,453 |
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$ |
12,319 |
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$ |
20,874 |
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$ |
31,427 |
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Add (Deduct): |
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Depreciation and amortization |
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8,813 |
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9,115 |
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26,957 |
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27,356 |
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Stock-based compensation |
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988 |
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1,574 |
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3,819 |
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4,183 |
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Net corporate interest expense |
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4,682 |
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4,556 |
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12,534 |
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13,264 |
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Non-service pension costs |
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2,441 |
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2,170 |
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7,313 |
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6,436 |
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Contingent earnout adjustments |
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(2,128 |
) |
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2,127 |
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(1,547 |
) |
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3,100 |
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Income tax provision |
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5,333 |
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6,781 |
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10,866 |
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17,258 |
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Non-GAAP adjusted EBITDA |
$ |
29,582 |
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$ |
38,642 |
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$ |
80,816 |
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$ |
103,024 |
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Following is a reconciliation of operating cash flow to free cash flow for the nine months ended September 30, 2024 and 2023:
Nine Months Ended |
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(in thousands) |
September 30, 2024 |
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September 30, 2023 |
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Change |
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Net Cash Provided by Operating Activities |
$ |
11,093 |
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$ |
68,077 |
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$ |
(56,984 |
) |
Less: |
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Property & Equipment Purchases, net |
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(2,992 |
) |
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(3,360 |
) |
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368 |
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Capitalized Software (internal and external costs) |
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(26,453 |
) |
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(24,323 |
) |
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(2,130 |
) |
Free Cash Flow |
$ |
(18,352 |
) |
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$ |
40,394 |
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$ |
(58,746 |
) |
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Non-GAAP consolidated results for 2024 and 2023 exclude the non-cash, after-tax adjustments for amortization of intangible assets, non-service-related pension costs, and contingent earnout adjustment.
5
Following are the reconciliations of GAAP Pretax Earnings, Net Income and Earnings Per Share to related non-GAAP Adjusted figures, which reflect each of 2024 and 2023 before amortization of intangible assets, non-service related pension costs and contingent earnout adjustments:
Three Months Ended September 30, 2024 |
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(in thousands) |
Pretax earnings |
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Net income |
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Diluted earnings per |
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Diluted earnings per |
|
||||
GAAP |
$ |
14,720 |
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$ |
9,453 |
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$ |
0.19 |
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$ |
0.19 |
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Adjustments: |
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Amortization of intangible assets |
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1,932 |
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|
1,668 |
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|
0.03 |
|
|
0.03 |
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Non-service related pension costs |
|
2,441 |
|
|
1,910 |
|
|
0.04 |
|
|
0.04 |
|
Contingent earnout adjustments |
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(2,128 |
) |
|
(2,179 |
) |
|
(0.04 |
) |
|
(0.04 |
) |
Non-GAAP Adjusted |
$ |
16,965 |
|
$ |
10,852 |
|
$ |
0.22 |
|
$ |
0.22 |
|
|
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|
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|
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Three Months Ended September 30, 2023 |
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(in thousands) |
Pretax earnings |
|
Net income |
|
Diluted earnings per |
|
Diluted earnings per |
|
||||
GAAP |
$ |
18,955 |
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$ |
12,319 |
|
$ |
0.25 |
|
$ |
0.25 |
|
Adjustments: |
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|
|
|
|
|
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|
||||
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 |
|
|
|
|
|
|
|
|
|
|
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Nine Months Ended September 30, 2024 |
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|||||||||||
(in thousands) |
Pretax earnings |
|
Net income |
|
Diluted earnings per |
|
Diluted earnings per |
|
||||
GAAP |
$ |
31,534 |
|
$ |
20,874 |
|
$ |
0.42 |
|
$ |
0.42 |
|
Adjustments: |
|
|
|
|
|
|
|
|
||||
Amortization of intangible assets |
|
5,656 |
|
|
4,807 |
|
|
0.10 |
|
|
0.10 |
|
Non-service related pension costs |
|
7,313 |
|
|
5,714 |
|
|
0.11 |
|
|
0.11 |
|
Contingent earnout adjustments |
|
(1,547 |
) |
|
(1,605 |
) |
|
(0.03 |
) |
|
(0.03 |
) |
Non-GAAP Adjusted |
$ |
42,956 |
|
$ |
29,790 |
|
$ |
0.60 |
|
$ |
0.60 |
|
|
|
|
|
|
|
|
|
|
||||
Nine Months Ended September 30, 2023 |
|
|||||||||||
(in thousands) |
Pretax earnings |
|
Net income |
|
Diluted |
|
Diluted |
|
||||
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 |
|
|
|
|
|
|
|
|
|
|
||||
(1) Sum of reconciling items may differ from total due to rounding of individual components.
6
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, 2024 |
|
September 30, 2023 |
|
September 30, 2024 |
|
September 30, 2023 |
|
||||
Weighted-Average Shares Used to Compute Basic Earnings Per Share: |
|
|
|
|
|
|
|
|
||||
Class A Common Stock |
|
29,880 |
|
|
29,140 |
|
|
29,732 |
|
|
28,980 |
|
Class B Common Stock |
|
19,255 |
|
|
19,837 |
|
|
19,390 |
|
|
19,845 |
|
Weighted-Average Shares Used to Compute Diluted Earnings Per Share: |
|
|
|
|
|
|
|
|
||||
Class A Common Stock |
|
30,472 |
|
|
30,063 |
|
|
30,308 |
|
|
29,659 |
|
Class B Common Stock |
|
19,255 |
|
|
19,837 |
|
|
19,390 |
|
|
19,845 |
|
|
|
|
|
|
|
|
|
|
||||
Further information regarding the Company’s operating results for the three and nine months ended September 30, 2024, financial position as of September 30, 2024, and cash flows for the nine months ended September 30, 2024 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. |
7
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In Thousands, Except Per Share Amounts and Percentages)
Three Months Ended September 30, |
|
2024 |
|
|
2023 |
|
|
% Change |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Revenues: |
|
|
|
|
|
|
|
|
|
|||
Revenues Before Reimbursements |
|
$ |
329,375 |
|
|
$ |
330,121 |
|
|
|
(0 |
)% |
Reimbursements |
|
|
13,351 |
|
|
|
12,066 |
|
|
|
11 |
% |
Total Revenues |
|
|
342,726 |
|
|
|
342,187 |
|
|
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Costs and Expenses: |
|
|
|
|
|
|
|
|
|
|||
Costs of Services Provided, Before Reimbursements |
|
|
235,957 |
|
|
|
229,969 |
|
|
|
3 |
% |
Reimbursements |
|
|
13,351 |
|
|
|
12,066 |
|
|
|
11 |
% |
Total Costs of Services |
|
|
249,308 |
|
|
|
242,035 |
|
|
|
3 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Selling, General, and Administrative Expenses |
|
|
71,526 |
|
|
|
74,447 |
|
|
|
(4 |
)% |
Corporate Interest Expense, Net |
|
|
4,682 |
|
|
|
4,556 |
|
|
|
3 |
% |
Total Costs and Expenses |
|
|
325,516 |
|
|
|
321,038 |
|
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Other Loss, Net |
|
|
(2,490 |
) |
|
|
(2,194 |
) |
|
|
13 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Income Before Income Taxes |
|
|
14,720 |
|
|
|
18,955 |
|
|
|
(22 |
)% |
Provision for Income Taxes |
|
|
5,333 |
|
|
|
6,781 |
|
|
|
(21 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Net Income |
|
|
9,387 |
|
|
|
12,174 |
|
|
|
(23 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Net Loss Attributable to Noncontrolling Interests |
|
|
66 |
|
|
|
145 |
|
|
|
(54 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Net Income Attributable to Shareholders of Crawford & Company |
|
$ |
9,453 |
|
|
$ |
12,319 |
|
|
|
(23 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Earnings Per Share - Basic: |
|
|
|
|
|
|
|
|
|
|||
Class A Common Stock |
|
$ |
0.19 |
|
|
$ |
0.25 |
|
|
|
(24 |
)% |
Class B Common Stock |
|
$ |
0.19 |
|
|
$ |
0.25 |
|
|
|
(24 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Earnings Per Share - Diluted: |
|
|
|
|
|
|
|
|
|
|||
Class A Common Stock |
|
$ |
0.19 |
|
|
$ |
0.25 |
|
|
|
(24 |
)% |
Class B Common Stock |
|
$ |
0.19 |
|
|
$ |
0.25 |
|
|
|
(24 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Cash Dividends Per Share: |
|
|
|
|
|
|
|
|
|
|||
Class A Common Stock |
|
$ |
0.07 |
|
|
$ |
0.06 |
|
|
|
17 |
% |
Class B Common Stock |
|
$ |
0.07 |
|
|
$ |
0.06 |
|
|
|
17 |
% |
8
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In Thousands, Except Per Share Amounts and Percentages)
Nine Months Ended September 30, |
|
2024 |
|
|
2023 |
|
|
% Change |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Revenues: |
|
|
|
|
|
|
|
|
|
|||
Revenues Before Reimbursements |
|
$ |
945,256 |
|
|
$ |
971,011 |
|
|
|
(3 |
)% |
Reimbursements |
|
|
37,396 |
|
|
|
36,743 |
|
|
|
2 |
% |
Total Revenues |
|
|
982,652 |
|
|
|
1,007,754 |
|
|
|
(2 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Costs and Expenses: |
|
|
|
|
|
|
|
|
|
|||
Costs of Services Provided, Before Reimbursements |
|
|
672,611 |
|
|
|
691,078 |
|
|
|
(3 |
)% |
Reimbursements |
|
|
37,396 |
|
|
|
36,743 |
|
|
|
2 |
% |
Total Costs of Services |
|
|
710,007 |
|
|
|
727,821 |
|
|
|
(2 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Selling, General, and Administrative Expenses |
|
|
221,116 |
|
|
|
211,631 |
|
|
|
4 |
% |
Corporate Interest Expense, Net |
|
|
12,534 |
|
|
|
13,264 |
|
|
|
(6 |
)% |
Total Costs and Expenses |
|
|
943,657 |
|
|
|
952,716 |
|
|
|
(1 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Other Loss, Net |
|
|
(7,461 |
) |
|
|
(6,531 |
) |
|
|
14 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Income Before Income Taxes |
|
|
31,534 |
|
|
|
48,507 |
|
|
|
(35 |
)% |
Provision for Income Taxes |
|
|
10,866 |
|
|
|
17,258 |
|
|
|
(37 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Net Income |
|
|
20,668 |
|
|
|
31,249 |
|
|
|
(34 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Net Loss Attributable to Noncontrolling Interests |
|
|
206 |
|
|
|
178 |
|
|
|
16 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Net Income Attributable to Shareholders of Crawford & Company |
|
$ |
20,874 |
|
|
$ |
31,427 |
|
|
|
(34 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Earnings Per Share - Basic: |
|
|
|
|
|
|
|
|
|
|||
Class A Common Stock |
|
$ |
0.42 |
|
|
$ |
0.64 |
|
|
|
(34 |
)% |
Class B Common Stock |
|
$ |
0.42 |
|
|
$ |
0.64 |
|
|
|
(34 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Earnings Per Share - Diluted: |
|
|
|
|
|
|
|
|
|
|||
Class A Common Stock |
|
$ |
0.42 |
|
|
$ |
0.63 |
|
|
|
(33 |
)% |
Class B Common Stock |
|
$ |
0.42 |
|
|
$ |
0.64 |
|
|
|
(34 |
)% |
|
|
|
|
|
|
|
|
|
|
|||
Cash Dividends Per Share: |
|
|
|
|
|
|
|
|
|
|||
Class A Common Stock |
|
$ |
0.21 |
|
|
$ |
0.19 |
|
|
|
11 |
% |
Class B Common Stock |
|
$ |
0.21 |
|
|
$ |
0.19 |
|
|
|
11 |
% |
9
CRAWFORD & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2024 and December 31, 2023
Unaudited
(In Thousands, Except Par Values)
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
ASSETS |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Current Assets: |
|
|
|
|
|
|
||
Cash and Cash Equivalents |
|
$ |
52,340 |
|
|
$ |
58,363 |
|
Accounts Receivable, Net |
|
|
131,352 |
|
|
|
131,362 |
|
Unbilled Revenues, at Estimated Billable Amounts |
|
|
134,998 |
|
|
|
116,611 |
|
Income Taxes Receivable |
|
|
4,108 |
|
|
|
4,842 |
|
Prepaid Expenses and Other Current Assets |
|
|
39,570 |
|
|
|
58,168 |
|
Total Current Assets |
|
|
362,368 |
|
|
|
369,346 |
|
|
|
|
|
|
|
|
||
Net Property and Equipment |
|
|
19,921 |
|
|
|
22,742 |
|
|
|
|
|
|
|
|
||
Other Assets: |
|
|
|
|
|
|
||
Operating Lease Right-of-Use Asset, Net |
|
|
83,637 |
|
|
|
88,615 |
|
Goodwill |
|
|
76,631 |
|
|
|
76,724 |
|
Intangible Assets Arising from Business Acquisitions, Net |
|
|
76,607 |
|
|
|
81,786 |
|
Capitalized Software Costs, Net |
|
|
108,791 |
|
|
|
96,770 |
|
Deferred Income Tax Assets |
|
|
24,618 |
|
|
|
26,247 |
|
Other Noncurrent Assets |
|
|
48,221 |
|
|
|
36,969 |
|
Total Other Assets |
|
|
418,505 |
|
|
|
407,111 |
|
|
|
|
|
|
|
|
||
Total Assets |
|
$ |
800,794 |
|
|
$ |
799,199 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND SHAREHOLDERS’ INVESTMENT |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Current Liabilities: |
|
|
|
|
|
|
||
Short-Term Borrowings |
|
$ |
32,440 |
|
|
$ |
14,813 |
|
Accounts Payable |
|
|
43,738 |
|
|
|
45,107 |
|
Accrued Compensation and Related Costs |
|
|
78,897 |
|
|
|
97,842 |
|
Self-Insured Risks |
|
|
24,096 |
|
|
|
33,238 |
|
Income Taxes Payable |
|
|
— |
|
|
|
6,130 |
|
Operating Lease Liability |
|
|
24,998 |
|
|
|
24,351 |
|
Other Accrued Liabilities |
|
|
43,756 |
|
|
|
42,271 |
|
Deferred Revenues |
|
|
35,441 |
|
|
|
35,540 |
|
Total Current Liabilities |
|
|
283,366 |
|
|
|
299,292 |
|
|
|
|
|
|
|
|
||
Noncurrent Liabilities: |
|
|
|
|
|
|
||
Long-Term Debt and Finance Leases, Less Current Installments |
|
|
205,918 |
|
|
|
194,335 |
|
Operating Lease Liability |
|
|
70,492 |
|
|
|
78,029 |
|
Deferred Revenues |
|
|
23,779 |
|
|
|
24,871 |
|
Accrued Pension Liabilities |
|
|
23,064 |
|
|
|
24,006 |
|
Other Noncurrent Liabilities |
|
|
34,985 |
|
|
|
38,835 |
|
Total Noncurrent Liabilities |
|
|
358,238 |
|
|
|
360,076 |
|
|
|
|
|
|
|
|
||
Shareholders’ Investment: |
|
|
|
|
|
|
||
Class A Common Stock, $1.00 Par Value |
|
|
29,890 |
|
|
|
29,525 |
|
Class B Common Stock, $1.00 Par Value |
|
|
19,169 |
|
|
|
19,555 |
|
Additional Paid-in Capital |
|
|
87,338 |
|
|
|
82,589 |
|
Retained Earnings |
|
|
235,900 |
|
|
|
228,564 |
|
Accumulated Other Comprehensive Loss |
|
|
(211,370 |
) |
|
|
(218,615 |
) |
Shareholders’ Investment Attributable to Shareholders of Crawford & Company |
|
|
160,927 |
|
|
|
141,618 |
|
Noncontrolling Interests |
|
|
(1,737 |
) |
|
|
(1,787 |
) |
Total Shareholders’ Investment |
|
|
159,190 |
|
|
|
139,831 |
|
|
|
|
|
|
|
|
||
Total Liabilities and Shareholders’ Investment |
|
$ |
800,794 |
|
|
$ |
799,199 |
|
10
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 |
|
% |
||||||||||||||||
|
|
2024 |
|
2023 |
|
Change |
|
2024 |
|
2023 |
|
Change |
|
2024 |
|
2023 |
|
Change |
|
2024 |
|
2023 |
|
Change |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues Before Reimbursements |
|
$ |
79,329 |
|
$ |
79,987 |
|
(0.8)% |
|
$ |
105,741 |
|
$ |
98,066 |
|
7.8% |
|
$ |
99,009 |
|
$ |
92,229 |
|
7.4% |
|
$ |
45,296 |
|
$ |
59,839 |
|
(24.3)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Direct Compensation, Fringe Benefits & Non-Employee Labor |
|
|
57,055 |
|
|
53,635 |
|
6.4% |
|
|
69,395 |
|
|
66,426 |
|
4.5% |
|
|
59,680 |
|
|
54,310 |
|
9.9% |
|
|
28,976 |
|
|
39,638 |
|
(26.9)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
% of Revenues Before Reimbursements |
|
|
71.9 |
% |
|
67.1 |
% |
|
|
|
65.6 |
% |
|
67.7 |
% |
|
|
|
60.3 |
% |
|
58.9 |
% |
|
|
|
64.0 |
% |
|
66.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor |
|
|
16,831 |
|
|
15,884 |
|
6.0% |
|
|
31,210 |
|
|
29,443 |
|
6.0% |
|
|
24,927 |
|
|
24,387 |
|
2.2% |
|
|
12,487 |
|
|
11,678 |
|
6.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
% of Revenues Before Reimbursements |
|
|
21.2 |
% |
|
19.9 |
% |
|
|
|
29.5 |
% |
|
30.0 |
% |
|
|
|
25.2 |
% |
|
26.4 |
% |
|
|
|
27.6 |
% |
|
19.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Operating Expenses |
|
|
73,886 |
|
|
69,519 |
|
6.3% |
|
|
100,605 |
|
|
95,869 |
|
4.9% |
|
|
84,607 |
|
|
78,697 |
|
7.5% |
|
|
41,463 |
|
|
51,316 |
|
(19.2)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Earnings (1) |
|
$ |
5,443 |
|
$ |
10,468 |
|
(48.0)% |
|
$ |
5,136 |
|
$ |
2,197 |
|
133.8% |
|
$ |
14,402 |
|
$ |
13,532 |
|
6.4% |
|
$ |
3,833 |
|
$ |
8,523 |
|
(55.0)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
% of Revenues Before Reimbursements |
|
|
6.9 |
% |
|
13.1 |
% |
|
|
|
4.9 |
% |
|
2.2 |
% |
|
|
|
14.5 |
% |
|
14.7 |
% |
|
|
|
8.5 |
% |
|
14.2 |
% |
|
Nine Months Ended September 30,
|
|
North America Loss Adjusting |
|
|
% |
International Operations |
% |
|
Broadspire |
|
|
% |
|
Platforms Solutions |
|
|
% |
|||||||||||||||||||||||
|
|
2024 |
|
|
2023 |
|
|
Change |
|
2024 |
|
|
2023 |
|
|
Change |
|
2024 |
|
|
2023 |
|
|
Change |
|
2024 |
|
|
2023 |
|
|
Change |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues Before Reimbursements |
|
$ |
232,724 |
|
|
$ |
233,946 |
|
|
(0.5)% |
|
$ |
306,116 |
|
|
$ |
285,241 |
|
|
7.3% |
|
$ |
290,394 |
|
|
$ |
263,527 |
|
|
10.2% |
|
$ |
116,022 |
|
|
$ |
188,297 |
|
|
(38.4)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
\ |
|
|
|
||||||||
Direct Compensation, Fringe Benefits & Non-Employee Labor |
|
|
167,230 |
|
|
|
162,418 |
|
|
3.0% |
|
|
200,421 |
|
|
|
190,178 |
|
|
5.4% |
|
|
175,099 |
|
|
|
161,451 |
|
|
8.5% |
|
|
71,310 |
|
|
|
124,238 |
|
|
(42.6)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
% of Revenues Before Reimbursements |
|
|
71.9 |
% |
|
|
69.4 |
% |
|
|
|
|
65.5 |
% |
|
|
66.7 |
% |
|
|
|
|
60.3 |
% |
|
|
61.3 |
% |
|
|
|
|
61.5 |
% |
|
|
66.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor |
|
|
50,687 |
|
|
|
49,095 |
|
|
3.2% |
|
|
93,167 |
|
|
|
86,089 |
|
|
8.2% |
|
|
72,998 |
|
|
|
72,469 |
|
|
0.7% |
|
|
38,295 |
|
|
|
37,464 |
|
|
2.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
% of Revenues Before Reimbursements |
|
|
21.8 |
% |
|
|
21.0 |
% |
|
|
|
|
30.4 |
% |
|
|
30.2 |
% |
|
|
|
|
25.1 |
% |
|
|
27.5 |
% |
|
|
|
|
33.0 |
% |
|
|
19.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total Operating Expenses |
|
|
217,917 |
|
|
|
211,513 |
|
|
3.0% |
|
|
293,588 |
|
|
|
276,267 |
|
|
6.3% |
|
|
248,097 |
|
|
|
233,920 |
|
|
6.1% |
|
|
109,605 |
|
|
|
161,702 |
|
|
(32.2)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Earnings(1) |
|
$ |
14,807 |
|
|
$ |
22,433 |
|
|
(34.0)% |
|
$ |
12,528 |
|
|
$ |
8,974 |
|
|
39.6% |
|
$ |
42,297 |
|
|
$ |
29,607 |
|
|
42.9% |
|
$ |
6,417 |
|
|
$ |
26,595 |
|
|
(75.9)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
% of Revenues Before Reimbursements |
|
|
6.4 |
% |
|
|
9.6 |
% |
|
|
|
|
4.1 |
% |
|
|
3.1 |
% |
|
|
|
|
14.6 |
% |
|
|
11.2 |
% |
|
|
|
|
5.5 |
% |
|
|
14.1 |
% |
|
|
(1) A non-GAAP financial measurement which represents net income attributable to the applicable reporting segment excluding income taxes, net corporate interest expense, stock option expense, amortization of 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 September 30, 2024 and September 30, 2023
Unaudited
(In Thousands)
|
|
2024 |
|
|
2023 |
|
||
Cash Flows From Operating Activities: |
|
|
|
|
|
|
||
Net Income |
|
$ |
20,668 |
|
|
$ |
31,249 |
|
Reconciliation of net income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
26,957 |
|
|
|
27,355 |
|
Stock-based compensation |
|
|
3,819 |
|
|
|
4,183 |
|
(Gain) loss on disposal of property and equipment |
|
|
(93 |
) |
|
|
96 |
|
Contingent earnout adjustments |
|
|
(1,547 |
) |
|
|
3,100 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
751 |
|
|
|
(6,309 |
) |
Unbilled revenues, net |
|
|
(17,263 |
) |
|
|
419 |
|
Accrued or prepaid income taxes |
|
|
(5,520 |
) |
|
|
5,306 |
|
Accounts payable and accrued liabilities |
|
|
(17,141 |
) |
|
|
(1,437 |
) |
Deferred revenues |
|
|
(1,819 |
) |
|
|
4,869 |
|
Accrued retirement costs |
|
|
4,993 |
|
|
|
4,818 |
|
Prepaid expenses and other operating activities |
|
|
(2,712 |
) |
|
|
(5,572 |
) |
Net cash provided by operating activities |
|
|
11,093 |
|
|
|
68,077 |
|
|
|
|
|
|
|
|
||
Cash Flows From Investing Activities: |
|
|
|
|
|
|
||
Acquisitions of property and equipment |
|
|
(2,992 |
) |
|
|
(3,360 |
) |
Capitalization of computer software costs |
|
|
(26,453 |
) |
|
|
(24,323 |
) |
Net cash used in investing activities |
|
|
(29,445 |
) |
|
|
(27,683 |
) |
|
|
|
|
|
|
|
||
Cash Flows From Financing Activities: |
|
|
|
|
|
|
||
Cash dividends paid |
|
|
(10,320 |
) |
|
|
(9,284 |
) |
Repurchases of common stock |
|
|
(3,604 |
) |
|
|
(582 |
) |
Increases in short-term and revolving credit facility borrowings |
|
|
61,612 |
|
|
|
20,958 |
|
Payments on short-term and revolving credit facility borrowings |
|
|
(32,606 |
) |
|
|
(43,719 |
) |
Payments of contingent consideration on acquisitions |
|
|
(3,183 |
) |
|
|
(6,760 |
) |
Other financing activities |
|
|
1,410 |
|
|
|
1,317 |
|
Net cash provided by (used in) financing activities |
|
|
13,309 |
|
|
|
(38,070 |
) |
|
|
|
|
|
|
|
||
Effects of exchange rate changes on cash and cash equivalents |
|
|
181 |
|
|
|
1,313 |
|
(Decrease) Increase in cash, cash equivalents, and restricted cash(1) |
|
|
(4,862 |
) |
|
|
3,637 |
|
Cash, cash equivalents, and restricted cash at beginning of year(1) |
|
|
59,545 |
|
|
|
46,645 |
|
Cash, cash equivalents, and restricted cash at end of period(1) |
|
$ |
54,683 |
|
|
$ |
50,282 |
|
(1) The 2024 amounts include beginning restricted cash of $1,182 at December 31, 2023, and ending restricted cash of $2,343 at September 30, 2024, and the 2023 amounts include beginning restricted cash of $638 at December 31, 2022, and ending restricted cash of $1,074 at September 30, 2023, which we present as part of "Prepaid expenses and other current assets" on the Balance Sheets.
Third Quarter 2024 Financial Results CRD-A & CRD-B (NYSE) ® Crawford & Company
Forward-Looking Statements & Additional Information Q3 2024 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 Q3 2024 FINANCIAL RESULTS
Countries 70 Employees 10,000+ 50,000+ Field Resources $20B+ Claims Managed Annually Global Reach; Trusted Partner Q3 2024 FINANCIAL RESULTS
Climate change continues to drive global demand in weather-related claims Gaining market share within fragmented U.S. independent loss adjusting market Industry-leading Insurtech 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 Q3 2024 FINANCIAL RESULTS
Third Quarter 2024 Summary Q3 consolidated revenue consistent YoY Q3 operating earnings decrease related to reduced storm activity and increased corporate unallocated costs as compared to previous year Revenue and operating earnings growth in 2 segments Record quarterly revenue in Broadspire segment and U.S. GTS service line Strong YoY revenue and earnings growth in International Operations Added $24.4 million in new and enhanced business Strong balance sheet and liquidity Leverage ratio remains low at 2.22x EBITDA Revenue Adjusted Operating Earnings* $329.4M $21.8M 6 * See Appendix for non-GAAP explanation and reconciliation Q3 ‘24 Q3 ‘23 Q3 ‘24 Q3 ‘23 Q3 2024 FINANCIAL RESULTS $330.1M $29.9M
Occurrence of Severe Storms in the U.S. Decreased Year Over Year Decrease in weather-related business consistent with reduction in U.S. severe storms Networks Revenue2 U.S. Severe Storm Reports1 1 National Oceanic and Atmospheric Administration (NOAA) Storm Prediction Database, October 2024 2Networks service line generates revenues through deployment of adjusters primarily related to property, casualty, and catastrophic losses Significant decrease reflects reduced frequency of storm activity Q3 2024 FINANCIAL RESULTS Q3 ’23 Q3 ‘24 -39.1% Q3 ‘23 Q3 ‘24 -48.1% 15,596 8,093 Consolidated Weather-Related vs. Non-Weather-Related Revenue Non-weather-related business grew 5% YoY Q3 ‘23 Q3 ‘24 $330.1M $329.4M -0.2% Non-weather-related revenue Weather-related revenue (US CAT, USLA, Australia) +5% -11%
Our Capital Allocation Strategy Investing in long-term growth through Cap Ex and M&A Strong liquidity Leverage ratio below industry average at 2.22x EBITDA Paid quarterly dividend of $0.07 per share for CRD-A and CRD-B Q3 2024 FINANCIAL RESULTS Committed to Industry Leading Financial Strength and Employing a Disciplined Approach to Capital Allocation
OPERATIONAL UPDATE Bruce Swain, Chief Financial Officer Q3 2024 FINANCIAL RESULTS 9
Comprised of All Service Lines Outside of North America: UK Europe Australia Asia Latin America Legal Services International Operations 32% 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 WeGoLook 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 North America Loss Adjusting 24% Broadspire (U.S.-only) 30% Platform Solutions (US-only) 14% Third Quarter 2024 Revenue Contribution Q3 2024 FINANCIAL RESULTS
Q3 revenue consistent YoY U.S. GTS achieved record quarterly revenues with 19% growth driven by new business wins Q3 operating earnings decreased by 48% U.S. Field Ops and Canada revenue reduction Increased investment in U.S. GTS talent to support growth Destination for specialized insurance adjusting talent North America Loss Adjusting Third Quarter 2024 Results Revenues $79.3M Operating Earnings $5.4M 11 Q3 2024 FINANCIAL RESULTS
YoY revenue growth of 8%; Growth of 10% when measured in constant currency Operating earnings more than doubled YoY Operating margin expanded 262 bps Segment turnaround continues driven by strategy to improve pricing, productivity, and new business growth International Operations Third Quarter 2024 Results Revenues $105.7M Operating Earnings $5.1M 12 Q3 2024 FINANCIAL RESULTS
Record quarterly revenue reflected increase of 7% YoY Company leading operating margin of 14.5% Client wins and pricing improvements drove strong performance 94% of Broadspire business renewed YTD Broadspire Third Quarter 2024 Results Revenues $99.0M $14.4M Operating Earnings 13 Q3 2024 FINANCIAL RESULTS
Platform Solutions Third Quarter 2024 Results Revenues $45.3M Operating Earnings $3.8M 14 Q3 2024 FINANCIAL RESULTS Revenue decreased by 24% Decrease in weather-related business consistent with reduction in U.S. severe storms We continue to add new clients and grow services – creating greater potential for revenue growth in periods of extreme weather Insurance carrier capacity led to reduced utilization of Contractor Connection and Networks services Subrogation revenues grew 12% YoY
FINANCIAL UPDATE Bruce Swain, Chief Financial Officer Q3 2024 FINANCIAL RESULTS 15
Q3 2024 Financial Summary (1) See Appendix for non-GAAP explanation and reconciliation Quarter Ended Unaudited ($ in millions, except per share amounts) September 30, 2024 September 30, 2023 % Change Revenues $329.4 $330.1 (0)% Non-GAAP Revenues excluding foreign exchange fluctuations(1) $331.6 $330.1 0% Net Income Attributable to Shareholders of Crawford & Company $9.5 $12.3 (23)% Diluted Earnings per Share CRD-A $0.19 $0.25 (24)% CRD-B $0.19 $0.25 (24)% Non-GAAP Diluted Earnings per Share (1) CRD-A $0.22 $0.35 (37)% CRD-B $0.22 $0.36 (39)% Adjusted Operating Earnings (1) $21.8 $29.9 (27)% Adjusted Operating Margin (1) 6.6% 9.1% (250) bps Adjusted EBITDA (1) $29.6 $38.6 (23)% Adjusted EBITDA Margin (1) 9.0% 11.7% (270) bps Q3 2024 FINANCIAL RESULTS
Balance Sheet Highlights (1) See Appendix for non-GAAP explanation and reconciliation Unaudited ($ in thousands) Sept 30, 2024 December 31, 2019 Dec 31, 2023 December 31, 2018 Change Change Cash and cash equivalents $ 52,340 $ 58,363 $ (6,023 ) Accounts receivable, net 131,352 131,362 (10) Unbilled revenues, net 134,998 116,611 18,387 Total receivables 266,350 247,973 18,377 Goodwill 76,631 76,724 (93 ) Intangible assets arising from business acquisitions, net 76,607 81,786 (5,179 ) Deferred revenues 59,220 60,411 (1,191 ) Pension liabilities 23,064 24,006 (942 ) Short-term borrowings and current portion of finance leases 32,440 14,813 17,627 Long-term debt, less current portion 205,918 194,335 11,583 Total debt 238,358 209,148 29,210 Total stockholders' equity attributable to Crawford & Company 160,927 141,618 19,309 Net debt (1) 186,018 150,785 35,233 Q3 2024 FINANCIAL RESULTS
Net Debt and Pension Liability $186.0M Net debt at $186.0 million $137.3M Leverage Ratio of 2.22x EBITDA at end of Q3 ‘24 $23.1M Pension liability at $23.1 million $74.3M Funded Ratio of US pension plan is 93.6% at end of Q3 ‘24 Q3 2024 FINANCIAL RESULTS
Operating and Free Cash Flow (1) See Appendix for non-GAAP explanation and reconciliation Unaudited ($ in thousands) 2024 2019 2023 2018 Change Change Net Income Attributable to Shareholders of Crawford & Company $ 20,874 $ 31,427 $ (10,553 ) Depreciation and Other Non-Cash Operating Items 30,477 31,456 (979 ) Contingent Earnout Adjustments (1,547 ) 3,100 (4,647 ) Billed Receivables Change 751 (6,309 ) 7,060 Unbilled Receivables Change (17,263 ) 419 (17,682 ) Change in Accrued Compensation, 401K, and Other Payroll (19,643 ) (735 ) (18,908 ) Other Working Capital Changes (2,556 ) 8,719 (11,275 ) Cash Flows from Operating Activities 11,093 68,077 (56,984 ) Property & Equipment Purchases, net (2,992 ) (3,360 ) 368 Capitalized Software (internal and external costs) (26,453 ) (24,323 ) (2,130 ) Free Cash Flow(1) $ (18,352 ) $ 40,394 $ (58,746 ) Q3 2024 FINANCIAL RESULTS
Additional Financial Matters Unallocated Corporate and Shared Costs and Credits Unallocated corporate costs of $7.0 million in Q3 ‘24 compared to corporate costs of $4.8 million in Q3 ‘23 Variance was primarily due to increases in self-insured expense, professional fees, and other reserves Non-service Pension Costs During Q3 ‘24 non-service pension costs were $2.4 million compared to $2.2 million in Q3 ’23 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 credit totaling $2.1 million for Q3 ’24 compared to an earnout cost of $2.1 million in Q3 ‘23 These credits and costs are not a component of operating earnings and are added back for non-GAAP earnings and EPS Quarterly Dividend In Q3 ‘24 Crawford paid a $0.07 dividend per share for CRD-A and CRD-B Share Repurchases In Q3 ‘24 Crawford repurchased 155,000 shares of CRD-B Approximately 1.1 million shares are eligible to be repurchased under our 2021 Share Repurchase Authorization Q3 2024 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 Q3 2024 FINANCIAL RESULTS
Appendix: Segment Results and Non-GAAP Financial Information Q3 2024 FINANCIAL RESULTS 21
North America Loss Adjusting Three months ended Unaudited (in thousands, except percentages) September 30, 2024 September 30, 2023 Variance Revenues $79,329 $79,987 (0.8)% Direct expenses 64,572 60,250 7.2% Gross profit 14,757 19,737 (25.2)% Indirect expenses 9,314 9,269 0.5% Operating earnings $5,443 $10,468 (48.0)% Gross profit margin 18.6% 24.7% (6.1)% Operating margin 6.9% 13.1% (6.2)% Total cases received 65,702 78,434 (16.2)% Full time equivalent employees 1,951 2,029 (3.8)% Q3 2024 FINANCIAL RESULTS
International Operations Three months ended Unaudited (in thousands, except percentages) September 30, 2024 September 30, 2023 Variance Revenues $105,741 $98,066 7.8% Direct expenses 87,198 83,592 4.3% Gross profit 18,543 14,474 28.1% Indirect expenses 13,407 12,277 9.2% Operating earnings $5,136 $2,197 133.8% Gross profit margin 17.5% 14.8% 2.7% Operating margin 4.9% 2.2% 2.7% Total cases received 112,818 121,074 (6.8)% Full time equivalent employees 3,668 3,645 0.6% Q3 2024 FINANCIAL RESULTS
Broadspire Three months ended Unaudited (in thousands, except percentages) September 30, 2024 September 30, 2023 Variance Revenues $99,009 $92,229 7.4% Direct expenses 73,409 66,729 10.0% Gross profit 25,600 25,500 0.4% Indirect expenses 11,198 11,968 (6.4)% Operating earnings $14,402 $13,532 6.4% Gross profit margin 25.9% 27.6% (1.7)% Operating margin 14.5% 14.7% (0.2)% Total cases received 140,801 143,173 (1.7)% Full time equivalent employees 2,725 2,599 4.8% Q3 2024 FINANCIAL RESULTS
Platform Solutions Three months ended Unaudited (in thousands, except percentages) September 30, 2024 September 30, 2023 Variance Revenues $45,296 $59,839 (24.3)% Direct expenses 35,545 45,761 (22.3)% Gross profit 9,751 14,078 (30.7)% Indirect expenses 5,918 5,555 6.5% Operating earnings $3,833 $8,523 (55.0)% Gross profit margin 21.5% 23.5% (2.0)% Operating margin 8.5% 14.2% (5.7)% Total cases received 90,506 136,663 (33.8)% Full time equivalent employees 1,143 1,333 (14.3)% Q3 2024 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. Q3 2024 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. Q3 2024 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) September 30, 2024 September 30, 2023 Geographic Area Currency USD equivalent % of total USD equivalent % of total U.S. USD $ 200,160 60.8% $ 207,565 62.9% U.K. GBP 42,265 12.8% 38,290 11.6% Canada CAD 23,474 7.1% 24,490 7.4% Australia AUD 23,530 7.1% 22,867 6.9% Europe EUR 15,260 4.6% 14,629 4.4% Rest of World Various 24,686 7.6% 22,280 6.8% Total Revenues, before reimbursements $ 329,375 100.0% $ 330,121 100.0% Q3 2024 FINANCIAL RESULTS
Revenues and Costs of Services Provided Reconciliation of Non-GAAP Item Quarter Ended Quarter Ended Quarter Ended Quarter Ended Unaudited ($ in thousands) September 30, 2024 December 31, September 30, 2023 December 31, 2019 2018 Revenues Before Reimbursements Total Revenues $ 342,726 $ 342,187 Reimbursements (13,351 ) (12,066 ) Revenues Before Reimbursements 329,375 330,121 Costs of Services Provided, Before Reimbursements Total Costs of Services 249,308 242,035 Reimbursements (13,351 ) (12,066 ) Costs of Services Provided, Before Reimbursements $ 235,957 $ 229,969 Q3 2024 FINANCIAL RESULTS
Operating Earnings Reconciliation of Non-GAAP Items (cont.) Quarter Ended Quarter Ended Quarter Ended Quarter Ended September 30, 2024 December 31, September 30,2023 December 31, Unaudited ($ in thousands) 2019 2018 North America Loss Adjusting $ 5,443 $ 10,468 International Operations 5,136 2,197 Broadspire 14,402 13,532 Platform Solutions 3,833 8,523 Unallocated corporate and shared costs, net (6,979 ) (4,781 ) Consolidated Operating Earnings 21,835 29,939 (Deduct) Add: Net corporate interest expense (4,682 ) (4,556 ) Stock option expense (188 ) (145 ) Amortization expense (1,932 ) (1,986 ) Non-service pension costs (2,441 ) (2,170 ) Contingent earnout adjustments 2,128 (2,127 ) Income tax provision (5,333 ) (6,781 ) Net loss attributable to noncontrolling interests 66 145 Net Income Attributable to Shareholders of Crawford & Company $ 9,453 $ 12,319 Q3 2024 FINANCIAL RESULTS
Adjusted EBITDA Reconciliation of Non-GAAP items (cont.) Quarter Ended December 31, Quarter Ended December 31, September 30, 2024 December 31, September 30, 2023 December 31, Unaudited ($ in thousands) 2019 2018 Net Income Attributable to Shareholders of Crawford & Company $ 9,453 $ 12,319 Add (Deduct): Depreciation and amortization 8,813 9,115 Stock-based compensation 988 1,574 Net corporate interest expense 4,682 4,556 Non-service pension costs 2,441 2,170 Contingent earnout adjustments (2,128 ) 2,127 Income tax provision 5,333 6,781 Adjusted EBITDA $ 29,582 $ 38,642 Q3 2024 FINANCIAL RESULTS
Net Debt Non-GAAP Financial Information (cont.) September 30, 2024 December 31, December 31, 2023 December 31, Unaudited ($ in thousands) 2019 2018 Short-term borrowings $ 32,364 $ 14,762 Current installments of finance leases and other obligations 76 51 Long-term debt and finance leases, less current installments 205,918 194,335 Total debt 238,358 209,148 Less: Cash and cash equivalents 52,340 58,363 Net debt $ 186,018 $ 150,785 Q3 2024 FINANCIAL RESULTS
Segment Gross Profit Non-GAAP Financial Information (cont.) Three months ended Three months ended Unaudited ($ in thousands) September 30, 2024 December 31, 2019 September 30, 2023 December 31, 2018 North America Loss Adjusting $ 14,757 $ 19,737 International Operations 18,543 14,474 Broadspire 25,600 25,500 Platform Solutions 9,751 14,078 Segment gross profit 68,651 73,789 Segment indirect costs: North America Loss Adjusting (9,314 ) (9,269 ) International Operations (13,407 ) (12,277 ) Broadspire (11,198 ) (11,968 ) Platform Solutions (5,918 ) (5,555 ) Unallocated corporate and shared costs, net (6,979 ) (4,781 ) Consolidated operating earnings 21,835 29,939 Net corporate interest expense (4,682 ) (4,556 ) Stock option expense (188 ) (145 ) Amortization expense (1,932 ) (1,986 ) Non-service pension costs (2,441 ) (2,170 ) Contingent earnout adjustments 2,128 (2,127 ) Income tax provision (5,333 ) (6,781 ) Net loss attributable to noncontrolling interests 66 145 Net income attributable to shareholders of Crawford & Company $ 9,453 $ 12,319 Q3 2024 FINANCIAL RESULTS
Reconciliation of Third Quarter Non-GAAP Results Three Months Ended September 30, 2024 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 $ 14,720 $ 9,453 $ 0.19 $ 0.19 Adjustments: Amortization of intangible assets 1,932 1,668 0.03 0.03 Non-service-related pension costs 2,441 1,910 0.04 0.04 Contingent earnout adjustments (2,128 ) (2,179 ) (0.04 ) (0.04 ) Non-GAAP Adjusted $ 16,965 $ 10,852 $ 0.22 $ 0.22 Three Months Ended September 30, 2023 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(1) Diluted Earnings per CRD-B Share 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 Q3 2024 FINANCIAL RESULTS (1) Sum of reconciling items may differ from total due to rounding of individual components