CRD.B Crawford and Company

 

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): August 5, 2024

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 August 5, 2024, Crawford & Company (the "Company") issued a press release containing information about the Company's financial results for the second 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, August 6, 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.		Description
99.1		Press Release dated August 5, 2024
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: August 5, 2024

 

---

Exhibit 99.1

Crawford & Company®

5335 Triangle Parkway

Peachtree Corners, GA 30092

FOR IMMEDIATE RELEASE

 

CRAWFORD & COMPANY REPORTS 2024 SECOND QUARTER RESULTS

ATLANTA, (August 5, 2024) -- Crawford & Company® (NYSE: CRD-A and CRD-B), is pleased to announce its financial results for the second quarter ended June 30, 2024. Based in Atlanta, Crawford & Company (NYSE: CRD‐A and CRD‐B) is a leading global provider of claims management and outsourcing solutions to insurance companies and self‐insured entities with an expansive network serving clients in more than 70 countries. Refer to the Company's website (www.crawco.com) for more information.

Rohit Verma, president and chief executive officer of Crawford & Company, commented, “Our growth strategy and initiatives are yielding results. Despite a difficult comparison due to weather events last year, three of our four business segments showed operating earnings growth with improved margins in the quarter. This enabled us to achieve consolidated earnings consistent with last year and reflects Crawford’s diversified revenue model with a healthy balance between weather and non-weather dependent businesses. We added $23 million in new and enhanced business in the quarter, and our pipeline remains robust. As we move through the back half of 2024, I am optimistic about the overall direction of the Company and believe we are well-positioned to drive enhanced value for customers and shareholders."

GAAP Consolidated Results

Second Quarter 2024

Non-GAAP Consolidated Results

Second Quarter 2024

---

Mr. Verma continued, “Our second quarter performance was highlighted by strong revenue growth and margin improvement at Broadspire, resulting in another record quarter for this business. Additionally, we achieved continued improvement over the prior year period in our International Operations segment. Our North American Loss Adjusting business achieved improved margin performance and consistent revenues quarter over quarter, despite a decline in extreme weather events, reflecting the segment’s increased market share in the industry. The absence of severe weather continued to impact weather-related demand for our Platform Solutions business as carriers have capacity to meet current volumes. However, we remain well positioned to respond to seasonal storm activity. Our balance sheet remains strong, providing us flexibility to execute our strategic growth strategy.”

Segment Results for the Second Quarter

North America Loss Adjusting

North America Loss Adjusting revenues before reimbursements were $76.0 million in the second quarter of 2024, decreasing (0.4)% from $76.4 million in the second quarter of 2023.

The segment had operating earnings of $4.9 million in the 2024 second quarter, increasing from $3.9 million in the second quarter of 2023. The operating margin was 6.4% in the 2024 quarter and 5.1% in the 2023 quarter.

International Operations

International Operations revenues before reimbursements were $102.3 million in the second quarter of 2024, up 7.3% from $95.3 million in the same period of 2023. Absent foreign exchange rate decreases of $1.5 million, revenues would have been $103.7 million for the 2024 second quarter.

Operating earnings were $5.7 million in the 2024 second quarter, increasing from $3.7 million in the 2023 period. The segment’s operating margin for the 2024 quarter was 5.6% as compared with 3.9% in the 2023 quarter.

Broadspire

Broadspire segment revenues before reimbursements were a new quarterly record of $97.1 million in the 2024 second quarter, increasing 11.3% from $87.2 million in the 2023 second quarter.

Broadspire recorded operating earnings of $15.1 million in the second quarter of 2024, representing an operating margin of 15.5%, increasing from $8.1 million, or 9.3% of revenues, in the 2023 second quarter.

Platform Solutions

Platform Solutions revenues before reimbursements were $38.8 million in the second quarter of 2024, down (40.8)% from $65.6 million in the same period of 2023 as the Networks service line had significantly reduced weather related claim volumes.

Operating earnings were $1.5 million in the 2024 second quarter, decreasing from the $8.1 million in the 2023 period. The segment’s operating margin for the 2024 quarter was 3.8% as compared with 12.3% in the 2023 quarter.

Unallocated Corporate and Shared Costs and Credits, Net

Unallocated corporate costs were $5.1 million in the second quarter of 2024, compared with $1.1 million in the same period of 2023. The increase in the 2024 second quarter was primarily due to an increase in professional fees and other reserves.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses (“SG&A”) increased $1.8 million, or 2.6%, in the three months ended June 30, 2024 as compared with the 2023 period. The increase was primarily due to professional fees, IT costs, and compensation expense, including taxes and benefits.

---

Other Matters

The Company recognized pretax contingent earnout expenses totaling $0.4 million in the 2024 second quarter, compared to $0.7 million in the same period of 2023, related to the fair value adjustment of earnout liabilities arising from recent acquisitions. This adjustment, which is not a component of operating earnings, is based on favorable changes to projections of acquired entities over the respective earnout periods, which span multiple years.

The Company recognized non-service pension costs of $2.4 million in the 2024 second quarter compared with $2.1 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 June 30, 2024, totaled $46.7 million, compared with $58.4 million at December 31, 2023. The Company’s total debt outstanding as of June 30, 2024, totaled $233.8 million, compared with $209.1 million at December 31, 2023.

The Company’s operations used $8.3 million of cash during the first six months of 2024, compared with $27.2 million provided in 2023. The increase in cash used was due primarily to $13.5 million lower operating earnings, $16.7 million net change in incentive compensation, and a $5.9 million increase in other working capital items over the prior year.

The Company made no contributions to its U.S. defined benefit pension plan and $1.2 million in contributions to its U.K. plans for the first half of 2024, compared with no contributions to the U.S. plan and $1.0 million to the U.K. plans in 2023.

During the first six months of 2024, the Company didn't repurchase any shares of CRD-A, but repurchased 230,861 shares of CRD-B at an average per share cost of $8.98. There were no shares repurchased during the first six months of 2023. The total cost of share repurchases during 2024 was $2.1 million.

Conference Call

As previously announced, Crawford & Company will host a conference call on August 6, 2024, at 8:30 a.m. Eastern Time to discuss its second quarter 2024 results. The conference call can be accessed live by dialing 1-888-259-6580 and using Conference ID 95332233. 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 September 5, 2024. You may dial 1-877-674-7070 and use passcode 332233# 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:

 

		Three Months Ended														Six Months Ended
(in thousands)		June 30, 2024							June 30, 2023							June 30, 2024							June 30, 2023
Geographic Area	Currency	USD equivalent			% of total				USD equivalent			% of total				USD equivalent			% of total				USD equivalent			% of total
U.S.	USD	$	189,743			60.4	%		$	204,854			63.1	%		$	369,464			60.0	%		$	404,711			63.1	%
U.K.	GBP		41,420			13.2	%			34,725			10.7	%			81,675			13.3	%			67,849			10.6	%
Canada	CAD		22,201			7.1	%			24,390			7.5	%			46,042			7.5	%			49,004			7.6	%
Australia	AUD		22,316			7.1	%			22,926			7.1	%			41,977			6.8	%			45,920			7.2	%
Europe	EUR		15,661			5.0	%			14,301			4.4	%			30,546			5.0	%			28,339			4.4	%
Rest of World	Various		22,886			7.2	%			23,360			7.2	%			46,177			7.4	%			45,067			7.1	%
Total Revenues, before reimbursements		$	314,227			100.0	%		$	324,556			100.0	%		$	615,881			100.0	%		$	640,890			100.0	%

 

---

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

 

	Three Months Ended							Six Months Ended
(in thousands)	June 30, 2024			June 30, 2023				June 30, 2024			June 30, 2023
Operating earnings:
North America Loss Adjusting	$	4,885		$	3,900			$	9,364		$	11,965
International Operations		5,702			3,742				7,392			6,777
Broadspire		15,091			8,148				27,895			16,075
Platform Solutions		1,469			8,106				2,584			18,072
Unallocated corporate and shared costs, net		(5,079	)		(1,098	)			(13,086	)		(5,217	)
Consolidated operating earnings		22,068			22,798				34,149			47,672
(Deduct) add:
Net corporate interest expense		(4,256	)		(4,309	)			(7,852	)		(8,708	)
Stock option expense		(139	)		(139	)			(306	)		(295	)
Amortization of intangible assets		(1,856	)		(1,979	)			(3,724	)		(3,878	)
Non-service pension costs		(2,399	)		(2,095	)			(4,872	)		(4,266	)
Contingent earnout adjustments		(430	)		(725	)			(581	)		(973	)
Income tax provision		(4,486	)		(5,206	)			(5,533	)		(10,477	)
Net loss attributable to noncontrolling interests		82			82				140			33
Net income attributable to shareholders of Crawford & Company	$	8,584		$	8,427			$	11,421		$	19,108

 

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							Six Months Ended
(in thousands)	June 30, 2024			June 30, 2023				June 30, 2024			June 30, 2023
Net income attributable to shareholders of Crawford & Company	$	8,584		$	8,427			$	11,421		$	19,108
Add:
Depreciation and amortization		8,845			9,191				18,144			18,241
Stock-based compensation		1,613			1,586				2,831			2,609
Net corporate interest expense		4,256			4,309				7,852			8,708
Non-service pension costs		2,399			2,095				4,872			4,266
Contingent earnout adjustments		430			725				581			973
Income tax provision		4,486			5,206				5,533			10,477
Non-GAAP adjusted EBITDA	$	30,613		$	31,539			$	51,234		$	64,382

 

Following is a reconciliation of operating cash flow to free cash flow for the six months ended June 30, 2024 and 2023:

 

Six Months Ended
(in thousands)	June 30, 2024				June 30, 2023				Change
Net Cash (Used in) Provided by Operating Activities	$	(8,253	)		$	27,169			$	(35,422	)
Less:
Property & Equipment Purchases, net		(1,418	)			(1,914	)			496
Capitalized Software (internal and external costs)		(17,031	)			(16,031	)			(1,000	)
Free Cash Flow	$	(26,702	)		$	9,224			$	(35,926	)

 

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.

---

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 June 30, 2024
(in thousands)	Pretax earnings			Net income attributable to Crawford & Company			Diluted earnings per CRD-A share			Diluted earnings per CRD-B share
GAAP	$	12,988		$	8,584		$	0.17		$	0.17
Adjustments:
Amortization of intangible assets		1,856			1,565			0.03			0.03
Non-service related pension costs		2,399			1,876			0.04			0.04
Contingent earnout adjustments		430			423			0.01			0.01
Non-GAAP Adjusted	$	17,673		$	12,448		$	0.25		$	0.25

 

Three Months Ended June 30, 2023
(in thousands)	Pretax earnings			Net income attributable to Crawford & Company			Diluted earnings per CRD-A share			Diluted earnings per CRD-B share
GAAP	$	13,551		$	8,427		$	0.17		$	0.17
Adjustments:
Amortization of intangible assets		1,979			1,484			0.03			0.03
Non-service related pension costs		2,095			1,557			0.03			0.03
Contingent earnout adjustments		725			537			0.01			0.01
Non-GAAP Adjusted	$	18,350		$	12,005		$	0.24		$	0.24

 

Six Months Ended June 30, 2024
(in thousands)	Pretax earnings			Net income attributable to Crawford & Company			Diluted earnings per CRD-A share			Diluted earnings per CRD-B share
GAAP	$	16,814		$	11,421		$	0.23		$	0.23
Adjustments:
Amortization of intangible assets		3,724			3,139			0.06			0.06
Non-service related pension costs		4,872			3,805			0.08			0.08
Contingent earnout adjustments		581			574			0.01			0.01
Non-GAAP Adjusted	$	25,991		$	18,939		$	0.38		$	0.38

 

Six Months Ended June 30, 2023
(in thousands)	Pretax earnings			Net income attributable to Crawford & Company			Diluted earnings per CRD-A share(1)			Diluted earnings per CRD-B share
GAAP	$	29,552		$	19,108		$	0.39		$	0.39
Adjustments:
Amortization of intangible assets		3,878			2,909			0.06			0.06
Non-service related pension costs		4,266			3,170			0.06			0.06
Contingent earnout adjustments		973			720			0.02			0.02
Non-GAAP Adjusted	$	38,669		$	25,907		$	0.52		$	0.53

 

(1) Sum of reconciling items may differ from total due to rounding of individual components.

 

 

 

---

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

 

	Three Months Ended						Six Months Ended
(in thousands)	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Weighted-Average Shares Used to Compute Basic Earnings Per Share:
Class A Common Stock		29,728			28,956			29,657			28,899
Class B Common Stock		19,374			19,848			19,458			19,848
Weighted-Average Shares Used to Compute Diluted Earnings Per Share:
Class A Common Stock		30,171			29,770			30,225			29,456
Class B Common Stock		19,374			19,848			19,458			19,848

 

Further information regarding the Company’s operating results for the three and six months ended June 30, 2024, financial position as of June 30, 2024, and cash flows for the six months ended June 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.

 

---

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(In Thousands, Except Per Share Amounts and Percentages)

 

Three Months Ended June 30,		2024				2023				% Change
Revenues:
Revenues Before Reimbursements		$	314,227			$	324,556				(3	)%
Reimbursements			12,626				13,073				(3	)%
Total Revenues			326,853				337,629				(3	)%
Costs and Expenses:
Costs of Services Provided, Before Reimbursements			222,265				234,031				(5	)%
Reimbursements			12,626				13,073				(3	)%
Total Costs of Services			234,891				247,104				(5	)%
Selling, General, and Administrative Expenses			72,270				70,473				3	%
Corporate Interest Expense, Net			4,256				4,309				(1	)%
Total Costs and Expenses			311,417				321,886				(3	)%
Other Loss, Net			(2,448	)			(2,192	)			12	%
Income Before Income Taxes			12,988				13,551				(4	)%
Provision for Income Taxes			4,486				5,206				(14	)%
Net Income			8,502				8,345				2	%
Net Loss Attributable to Noncontrolling Interests			82				82				—
Net Income Attributable to Shareholders of Crawford & Company		$	8,584			$	8,427				2	%
Earnings Per Share - Basic:
Class A Common Stock		$	0.17			$	0.17				—
Class B Common Stock		$	0.17			$	0.17				—
Earnings Per Share - Diluted:
Class A Common Stock		$	0.17			$	0.17				—
Class B Common Stock		$	0.17			$	0.17				—
Cash Dividends Per Share:
Class A Common Stock		$	0.07			$	0.06				17	%
Class B Common Stock		$	0.07			$	0.06				17	%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

---

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(In Thousands, Except Per Share Amounts and Percentages)

 

Six Months Ended June 30,		2024				2023				% Change
Revenues:
Revenues Before Reimbursements		$	615,881			$	640,890				(4	)%
Reimbursements			24,045				24,677				(3	)%
Total Revenues			639,926				665,567				(4	)%
Costs and Expenses:
Costs of Services Provided, Before Reimbursements			436,654				461,109				(5	)%
Reimbursements			24,045				24,677				(3	)%
Total Costs of Services			460,699				485,786				(5	)%
Selling, General, and Administrative Expenses			149,590				137,184				9	%
Corporate Interest Expense, Net			7,852				8,708				(10	)%
Total Costs and Expenses			618,141				631,678				(2	)%
Other Loss, Net			(4,971	)			(4,337	)			15	%
Income Before Income Taxes			16,814				29,552				(43	)%
Provision for Income Taxes			5,533				10,477				(47	)%
Net Income			11,281				19,075				(41	)%
Net Loss Attributable to Noncontrolling Interests			140				33				324	%
Net Income Attributable to Shareholders of Crawford & Company		$	11,421			$	19,108				(40	)%
Earnings Per Share - Basic:
Class A Common Stock		$	0.23			$	0.39				(41	)%
Class B Common Stock		$	0.23			$	0.39				(41	)%
Earnings Per Share - Diluted:
Class A Common Stock		$	0.23			$	0.39				(41	)%
Class B Common Stock		$	0.23			$	0.39				(41	)%
Cash Dividends Per Share:
Class A Common Stock		$	0.14			$	0.12				17	%
Class B Common Stock		$	0.14			$	0.12				17	%

 

---

CRAWFORD & COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

As of June 30, 2024 and December 31, 2023

Unaudited

(In Thousands, Except Par Values)

		June 30,				December 31,
		2024				2023
ASSETS
Current Assets:
Cash and Cash Equivalents		$	46,742			$	58,363
Accounts Receivable, Net			133,847				131,362
Unbilled Revenues, at Estimated Billable Amounts			131,119				116,611
Income Taxes Receivable			4,894				4,842
Prepaid Expenses and Other Current Assets			35,393				58,168
Total Current Assets			351,995				369,346
Net Property and Equipment			20,365				22,742
Other Assets:
Operating Lease Right-of-Use Asset, Net			83,175				88,615
Goodwill			76,572				76,724
Intangible Assets Arising from Business Acquisitions, Net			78,127				81,786
Capitalized Software Costs, Net			103,884				96,770
Deferred Income Tax Assets			25,456				26,247
Other Noncurrent Assets			46,238				36,969
Total Other Assets			413,452				407,111
Total Assets		$	785,812			$	799,199
LIABILITIES AND SHAREHOLDERS’ INVESTMENT
Current Liabilities:
Short-Term Borrowings		$	24,425			$	14,813
Accounts Payable			43,378				45,107
Accrued Compensation and Related Costs			77,828				97,842
Self-Insured Risks			19,332				33,238
Income Taxes Payable			—				6,130
Operating Lease Liability			24,411				24,351
Other Accrued Liabilities			46,657				42,271
Deferred Revenues			36,193				35,540
Total Current Liabilities			272,224				299,292
Noncurrent Liabilities:
Long-Term Debt and Finance Leases, Less Current Installments			209,410				194,335
Operating Lease Liability			70,888				78,029
Deferred Revenues			23,768				24,871
Accrued Pension Liabilities			23,221				24,006
Other Noncurrent Liabilities			36,594				38,835
Total Noncurrent Liabilities			363,881				360,076
Shareholders’ Investment:
Class A Common Stock, $1.00 Par Value			29,743				29,525
Class B Common Stock, $1.00 Par Value			19,324				19,555
Additional Paid-in Capital			85,461				82,589
Retained Earnings			231,263				228,564
Accumulated Other Comprehensive Loss			(214,402	)			(218,615	)
Shareholders’ Investment Attributable to Shareholders of Crawford & Company			151,389				141,618
Noncontrolling Interests			(1,682	)			(1,787	)
Total Shareholders’ Investment			149,707				139,831
Total Liabilities and Shareholders’ Investment		$	785,812			$	799,199

 

---

CRAWFORD & COMPANY

SUMMARY RESULTS BY OPERATING SEGMENT WITH DIRECT COMPENSATION AND OTHER EXPENSES

Unaudited

(In Thousands, Except Percentages)

Three Months Ended June 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		$	76,030		$	76,362		(0.4)%		$	102,283		$	95,312		7.3%		$	97,087		$	87,244		11.3%		$	38,827		$	65,638		(40.8)%
Direct Compensation, Fringe Benefits & Non-Employee Labor			54,708			54,619		0.2%			66,047			62,331		6.0%			58,162			54,500		6.7%			23,404			43,689		(46.4)%
% of Revenues Before Reimbursements			72.0	%		71.5	%				64.6	%		65.4	%				59.9	%		62.5	%				60.3	%		66.6	%
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor			16,437			17,843		(7.9)%			30,534			29,239		4.4%			23,834			24,596		(3.1)%			13,954			13,843		0.8%
% of Revenues Before Reimbursements			21.6	%		23.4	%				29.9	%		30.7	%				24.5	%		28.2	%				35.9	%		21.1	%
Total Operating Expenses			71,145			72,462		(1.8)%			96,581			91,570		5.5%			81,996			79,096		3.7%			37,358			57,532		(35.1)%
Operating Earnings (1)		$	4,885		$	3,900		25.3%		$	5,702		$	3,742		52.4%		$	15,091		$	8,148		85.2%		$	1,469		$	8,106		(81.9)%
% of Revenues Before Reimbursements			6.4	%		5.1	%				5.6	%		3.9	%				15.5	%		9.3	%				3.8	%		12.3	%

Six Months Ended June 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		$	153,395			$	153,959			(0.4)%		$	200,375			$	187,175			7.1%		$	191,385			$	171,298			11.7%		$	70,726			$	128,458			(44.9)%
Direct Compensation, Fringe Benefits & Non-Employee Labor			110,175				108,783			1.3%			131,026				123,752			5.9%			115,419				107,141			7.7%			42,334				84,600			(50.0)%
% of Revenues Before Reimbursements			71.8	%			70.7	%					65.4	%			66.1	%					60.3	%			62.5	%					59.9	%			65.9	%
Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor			33,856				33,211			1.9%			61,957				56,646			9.4%			48,071				48,082			(0.0)%			25,808				25,786			0.1%
% of Revenues Before Reimbursements			22.1	%			21.6	%					30.9	%			30.3	%					25.1	%			28.1	%					36.5	%			20.1	%
Total Operating Expenses			144,031				141,994			1.4%			192,983				180,398			7.0%			163,490				155,223			5.3%			68,142				110,386			(38.3)%
Operating Earnings(1)		$	9,364			$	11,965			(21.7)%		$	7,392			$	6,777			9.1%		$	27,895			$	16,075			73.5%		$	2,584			$	18,072			(85.7)%
% of Revenues Before Reimbursements			6.1	%			7.8	%					3.7	%			3.6	%					14.6	%			9.4	%					3.7	%			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 June 30, 2024 and June 30, 2023

Unaudited

(In Thousands)

		2024				2023
Cash Flows From Operating Activities:
Net Income		$	11,281			$	19,075
Reconciliation of net income to net cash (used in) provided by operating activities:
Depreciation and amortization			18,145				18,241
Stock-based compensation			2,831				2,609
(Gain) loss on disposal of property and equipment			(80	)			116
Contingent earnout adjustments			581				973
Changes in operating assets and liabilities:
Accounts receivable, net			(2,537	)			(15,107	)
Unbilled revenues, net			(14,234	)			1,828
Accrued or prepaid income taxes			(6,652	)			(1,217	)
Accounts payable and accrued liabilities			(22,336	)			(3,928	)
Deferred revenues			(798	)			4,529
Accrued retirement costs			1,581				750
Prepaid expenses and other operating activities			3,965				(700	)
Net cash (used in) provided by operating activities			(8,253	)			27,169
Cash Flows From Investing Activities:
Acquisitions of property and equipment			(1,418	)			(1,914	)
Capitalization of computer software costs			(17,031	)			(16,031	)
Net cash used in investing activities			(18,449	)			(17,945	)
Cash Flows From Financing Activities:
Cash dividends paid			(6,880	)			(5,854	)
Repurchases of common stock			(2,073	)		—
Increases in short-term and revolving credit facility borrowings			48,592				20,958
Payments on short-term and revolving credit facility borrowings			(23,769	)			(18,879	)
Payments of contingent consideration on acquisitions			(579	)			(4,916	)
Other financing activities			364				213
Net cash provided by (used in) financing activities			15,655				(8,478	)
Effects of exchange rate changes on cash and cash equivalents			(155	)			1,062
(Decrease) Increase in cash, cash equivalents, and restricted cash(1)			(11,202	)			1,808
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)		$	48,343			$	48,453

(1) The 2024 amounts include beginning restricted cash of $1,182 at December 31, 2023, and ending restricted cash of $1,601 at June 30, 2024, and the 2023 amounts include beginning restricted cash of $638 at December 31, 2022, and ending restricted cash of $974 at June 30, 2023, which we present as part of "Prepaid expenses and other current assets" on the Balance Sheets.

---

Second Quarter 2024 Financial Results CRD-A & CRD-B (NYSE) ® Crawford & Company

---

Forward-Looking Statements & Additional Information Q2 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 Q2 2024 FINANCIAL RESULTS

---

Countries 70 Employees 10,000+ 50,000+ Field Resources $20B+ Claims Managed Annually Global Reach; Trusted Partner Q2 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 Q2 2024 FINANCIAL RESULTS

---

Second Quarter 2024 Summary Q2 consolidated revenue and operating earnings down 3% as expected due to benign weather activity as compared to significant CAT activity in Q2 ’23 Non-weather businesses continue to demonstrate solid growth Record quarterly revenue and operating earnings in Broadspire segment Strong YoY revenue and earnings growth in International Operations Record revenue quarter for US GTS Operating earnings growth in 3 segments Added $23 million in new and enhanced business Strong balance sheet and liquidity Leverage ratio remains low at 2.09x EBITDA Revenue Adjusted Operating Earnings* $314.2M $324.6M $22.8M $22.1M 6 * See Appendix for non-GAAP explanation and reconciliation Q2 ‘23 Q2 ‘24 Q2 ‘23 Q2 ‘24 Q2 2024 FINANCIAL RESULTS

---

Weather-Related Business Performance Impacted By Benign Weather Trend Decrease in weather-related business consistent with reduction in insured losses from US severe convective storms Consolidated Weather-Related vs. Non-Weather-Related Revenue Networks Revenue1 Insured Losses from US Severe Convective Storms2 1Networks service line generates revenues through deployment of adjusters primarily related to property, casualty, and catastrophic losses 2Gallagher Re Natural Catastrophe and Climate Report: First Half 2024 Non-weather-related business grew 6% YoY Significant decrease reflects absence of extreme weather events Q2 2024 FINANCIAL RESULTS Q2 ’23 Q2 ‘24 -65.2% 1H ‘23 1H ‘24 -21.3% $47B $37B Q2 ‘23 Q2 ‘24 $324.6M $314.2M -3.2% Non-weather-related revenue Weather-related revenue (US CAT, USLA, Australia) +6% -21%

---

Our Capital Allocation Strategy Investing in long-term growth through Cap Ex and M&A  Strong liquidity Leverage ratio below industry average at 2.09x EBITDA Paid quarterly dividend of $0.07 per share  for CRD-A and CRD-B Q2 2024 FINANCIAL RESULTS Committed to Industry Leading Financial Strength and Employing a Disciplined Approach to Capital Allocation

---

OPERATIONAL UPDATE Bruce Swain, Chief Financial Officer Q2 2024 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 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 (US-only) 31% Platform Solutions (US-only) 12% Second Quarter 2024 Revenue Contribution Q2 2024 FINANCIAL RESULTS

---

Q2 revenue essentially flat reflecting continued benign weather patterns Q2 operating earnings increased 25% driven by strong growth in GTS Q2 operating margin expanded 132 bps Record quarter for GTS revenues driven by new business wins and continued talent acquisition Continue to be a destination for specialized insurance adjusting talent North America Loss Adjusting Second Quarter 2024 Results Revenues $76.0M Operating Earnings $4.9M 11 Q2 2024 FINANCIAL RESULTS

---

YoY revenue growth of 7%; Growth of 9% when measured in constant currency Operating earnings increased 52% YoY Notable strength in UK and Europe Segment recovery continues driven by strategy to improve pricing, productivity, and new business growth International Operations  Second Quarter 2024 Results Revenues $102.3M Operating Earnings $5.7M 12 Q2 2024 FINANCIAL RESULTS

---

Record quarter for Broadspire: Revenues increased 11% YoY to new quarterly record Operating earnings increased 85% YoY Operating margin expanded 620 bps Results driven by client wins and pricing improvements Medical Management and Claims Management revenues each grew 11% 95% of Broadspire business renewed YTD Broadspire Second Quarter 2024 Results Revenues $97.1M $15.1M Operating Earnings 13 Q2 2024 FINANCIAL RESULTS

---

Platform Solutions Second Quarter 2024 Results Revenues $38.8M Operating Earnings $1.5M 14 Q2 2024 FINANCIAL RESULTS Revenue decreased by 41% Q2 ‘23 results included higher revenue from severe convective storms, whereas Q2 ’24 had lower storm damage and carriers maintained capacity due to benign weather Contractor Connection and Networks revenues decreased due to reduced weather activity and low utilization Continue to add new clients and grow services with existing clients in both Contractor Connection and Networks Subrogation revenues steady YoY

---

FINANCIAL UPDATE Bruce Swain, Chief Financial Officer Q2 2024 FINANCIAL RESULTS 15

---

Q2 2024 Financial Summary (1) See Appendix for non-GAAP explanation and reconciliation Quarter Ended Unaudited ($ in millions, except per share amounts) June 30, 2024 June 30, 2023 % Change Revenues $314.2 $324.6 (3)% Non-GAAP Revenues excluding foreign exchange fluctuations(1) $316.1 $324.6 (3)% Net Income Attributable to Shareholders of Crawford & Company $8.6 $8.4 2% Diluted Earnings per Share CRD-A $0.17 $0.17 0% CRD-B $0.17 $0.17 0% Non-GAAP Diluted Earnings per Share (1) CRD-A $0.25 $0.24 4% CRD-B $0.25 $0.24 4% Adjusted Operating Earnings (1) $22.1 $22.8 (3)% Adjusted Operating Margin (1) 7.0% 7.0% 0 bps Adjusted EBITDA (1) $30.6 $31.5 (3)% Adjusted EBITDA Margin (1) 9.7% 9.7% 0 bps Q2 2024 FINANCIAL RESULTS

---

Balance Sheet Highlights (1) See Appendix for non-GAAP explanation and reconciliation Unaudited ($ in thousands) June 30, 2024 December 31, 2019 Dec 31, 2023 December 31, 2018 Change Change Cash and cash equivalents $ 46,742 $ 58,363 $ (11,621 ) Accounts receivable, net 133,847 131,362 2,485 Unbilled revenues, net 131,119 116,611 14,508 Total receivables 264,966 247,973 16,993 Goodwill 76,572 76,724 (152 ) Intangible assets arising from business acquisitions, net 78,127 81,786 (3,659 ) Deferred revenues 59,961 60,411 (450 ) Pension liabilities 23,221 24,006 (785 ) Short-term borrowings and current portion of finance leases 24,425 14,813 9,612 Long-term debt, less current portion 209,410 194,335 15,075 Total debt 233,835 209,148 24,687 Total stockholders' equity attributable to Crawford & Company 151,389 141,618 9,771 Net debt (1) 187,093 150,785 36,308 Q2 2024 FINANCIAL RESULTS

---

Net Debt and Pension Liability $187.1M Net debt at $187.1 million $137.3M Leverage Ratio of 2.09x EBITDA at end of Q2 ‘24 $23.2M Pension liability at $23.2 million $74.3M Funded Ratio of US pension plan is 92.6% at end of Q2 ‘24 Q2 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 $ 11,421 $ 19,108 $ (7,687 ) Depreciation and Other Non-Cash Operating Items 20,836 20,817 19 Contingent Earnout Adjustments 581 973 (392 ) Billed Receivables Change (2,537 ) (15,107 ) 12,570 Unbilled Receivables Change (14,234 ) 1,828 (16,062 ) Change in Accrued Compensation, 401K, and Other Payroll (21,290 ) (5,563 ) (15,727 ) Other Working Capital Changes (3,030 ) 5,113 (8,143 ) Cash Flows from Operating Activities (8,253 ) 27,169 (35,422 ) Property & Equipment Purchases, net (1,418 ) (1,914 ) 496 Capitalized Software (internal and external costs) (17,031 ) (16,031 ) (1,000 ) Free Cash Flow(1) $ (26,702 ) $ 9,224 $ (35,926 ) Q2 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 Q2 2024 FINANCIAL RESULTS

---

Appendix: Segment Results and Non-GAAP Financial Information Q2 2024 FINANCIAL RESULTS 21

---

North America Loss Adjusting Three months ended Unaudited (in thousands, except percentages) June 30, 2024 June 30, 2023 Variance Revenues $76,030 $76,362 (0.4)% Direct expenses 61,473 63,004 (2.4)% Gross profit 14,557 13,358 9.0% Indirect expenses 9,672 9,458 2.3% Operating earnings $4,885 $3,900 25.3% Gross profit margin 19.1% 17.5% 1.6% Operating margin 6.4% 5.1% 1.3% Total cases received 59,544 73,685 (19.2)% Full time equivalent employees 2,011 2,055 (2.1)% Q2 2024 FINANCIAL RESULTS

---

International Operations Three months ended Unaudited (in thousands, except percentages) June 30, 2024 June 30, 2023 Variance Revenues $102,283 $95,312 7.3% Direct expenses 83,096 78,281 6.2% Gross profit 19,187 17,031 12.7% Indirect expenses 13,485 13,289 1.5% Operating earnings $5,702 $3,742 52.4% Gross profit margin 18.8% 17.9% 0.9% Operating margin 5.6% 3.9% 1.7% Total cases received 121,280 114,073 6.3% Full time equivalent employees 3,636 3,643 (0.2)% Q2 2024 FINANCIAL RESULTS

---

Broadspire Three months ended Unaudited (in thousands, except percentages) June 30, 2024 June 30, 2023 Variance Revenues $97,087 $87,244 11.3% Direct expenses 70,744 67,484 4.8% Gross profit 26,343 19,760 33.3% Indirect expenses 11,252 11,612 (3.1)% Operating earnings $15,091 $8,148 85.2% Gross profit margin 27.1% 22.6% 4.5% Operating margin 15.5% 9.3% 6.2% Total cases received 138,567 143,448 (3.4)% Full time equivalent employees 2,679 2,614 2.5% Q2 2024 FINANCIAL RESULTS

---

Platform Solutions Three months ended Unaudited (in thousands, except percentages) June 30, 2024 June 30, 2023 Variance Revenues $38,827 $65,638 (40.8)% Direct expenses 31,511 51,726 (39.1)% Gross profit 7,316 13,912 (47.4)% Indirect expenses 5,847 5,806 0.7% Operating earnings $1,469 $8,106 (81.9)% Gross profit margin 18.8% 21.2% (2.4)% Operating margin 3.8% 12.3% (8.5)% Total cases received 76,172 116,131 (34.4)% Full time equivalent employees 954 1,473 (35.2)% Q2 2024 FINANCIAL RESULTS

---

Additional Financial Matters Unallocated Corporate and Shared Costs and Credits Unallocated corporate costs of $5.1 million in Q2 ‘24 compared to corporate costs of $1.1 million in Q2 ‘23 Variance was primarily due to increases in professional fees and other reserves Non-service Pension Costs During Q2 ‘24 non-service pension costs were $2.4 million compared to $2.1 million in Q2 ’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 expense totaling $0.4 million for Q2 ’24 compared to $0.7 million in Q2 ‘23 These costs are not a component of operating earnings and are added back for non-GAAP earnings and EPS Quarterly Dividend In Q2 ‘24 Crawford paid a $0.07 dividend per share for CRD-A and CRD-B Share Repurchases In Q2 ‘24 Crawford repurchased 145,229 shares of CRD-B Approximately 1.3 million shares are eligible to be repurchased under our 2021 Share Repurchase Authorization Q2 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. Q2 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. Q2 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) June 30, 2024   June 30, 2023   Geographic Area Currency USD equivalent % of total   USD equivalent % of total   U.S. USD $ 189,743 60.4% $ 204,854 63.1%   U.K. GBP 41,420 13.2% 34,725 10.7%   Canada CAD 22,201 7.1% 24,390 7.5%   Australia AUD 22,316 7.1% 22,926 7.1%   Europe EUR 15,661 5.0% 14,301 4.4%   Rest of World Various 22,886 7.2%   23,360 7.2%   Total Revenues, before reimbursements $ 314,227 100.0% $ 324,556 100.0%                   Q2 2024 FINANCIAL RESULTS

---

Revenues and Costs of Services Provided Reconciliation of Non-GAAP Items Quarter Ended Quarter Ended Quarter Ended Quarter Ended Unaudited ($ in thousands) June 30, 2024 December 31, June 30, 2023 December 31, 2019 2018 Revenues Before Reimbursements Total Revenues $ 326,853 $ 337,629 Reimbursements (12,626 ) (13,073 ) Revenues Before Reimbursements 314,227 324,556 Costs of Services Provided, Before Reimbursements Total Costs of Services 234,891 247,104 Reimbursements (12,626 ) (13,073 ) Costs of Services Provided, Before Reimbursements $ 222,265 $ 234,031 Q2 2024 FINANCIAL RESULTS

---

Operating Earnings Reconciliation of Non-GAAP Items (cont.) Quarter Ended Quarter Ended Quarter Ended Quarter Ended June 30, 2024 December 31, June 30,2023 December 31, Unaudited ($ in thousands) 2019 2018 North America Loss Adjusting $ 4,885 $ 3,900 International Operations 5,702 3,742 Broadspire 15,091 8,148 Platform Solutions 1,469 8,106 Unallocated corporate and shared costs, net (5,079 ) (1,098 ) Consolidated Operating Earnings 22,068 22,798 (Deduct) Add: Net corporate interest expense (4,256 ) (4,309 ) Stock option expense (139 ) (139 ) Amortization expense (1,856 ) (1,979 ) Non-service pension costs (2,399 ) (2,095 ) Contingent earnout adjustments (430 ) (725 ) Income tax provision (4,486 ) (5,206 ) Net loss attributable to noncontrolling interests 82 82 Net Income Attributable to Shareholders of Crawford & Company $ 8,584 $ 8,427 Q2 2024 FINANCIAL RESULTS

---

Adjusted EBITDA Reconciliation of Non-GAAP items (cont.) Quarter Ended December 31, Quarter Ended December 31, June 30, 2024 December 31, June 30, 2023 December 31, Unaudited ($ in thousands) 2019 2018 Net Income Attributable to Shareholders of Crawford & Company $ 8,584 $ 8,427 Add: Depreciation and amortization 8,845 9,191 Stock-based compensation 1,613 1,586 Net corporate interest expense 4,256 4,309 Non-service pension costs 2,399 2,095 Contingent earnout adjustments 430 725 Income tax provision 4,486 5,206 Adjusted EBITDA $ 30,613 $ 31,539 Q2 2024 FINANCIAL RESULTS

---

Net Debt Non-GAAP Financial Information (cont.) June 30, 2024 December 31, December 31, 2023 December 31, Unaudited ($ in thousands) 2019 2018 Short-term borrowings $ 24,350 $ 14,762 Current installments of finance leases and other obligations 75 51 Long-term debt and finance leases, less current installments 209,410 194,335 Total debt 233,835 209,148 Less: Cash and cash equivalents 46,742 58,363 Net debt $ 187,093 $ 150,785 Q2 2024 FINANCIAL RESULTS

---

Segment Gross Profit Non-GAAP Financial Information (cont.) Three months ended Three months ended Unaudited ($ in thousands) June 30, 2024 December 31, 2019 June 30, 2023 December 31, 2018 North America Loss Adjusting $ 14,557 $ 13,358 International Operations 19,187 17,031 Broadspire 26,343 19,760 Platform Solutions 7,316 13,912 Segment gross profit 67,403 64,061 Segment indirect costs: North America Loss Adjusting (9,672 ) (9,458 ) International Operations (13,485 ) (13,289 ) Broadspire (11,252 ) (11,612 ) Platform Solutions (5,847 ) (5,806 ) Unallocated corporate and shared costs, net (5,079 ) (1,098 ) Consolidated operating earnings 22,068 22,798 Net corporate interest expense (4,256 ) (4,309 ) Stock option expense (139 ) (139 ) Amortization expense (1,856 ) (1,979 ) Non-service pension costs (2,399 ) (2,095 ) Contingent earnout adjustments (430 ) (725 ) Income tax provision (4,486 ) (5,206 ) Net loss attributable to noncontrolling interests 82 82 Net income attributable to shareholders of Crawford & Company $ 8,584 $ 8,427 Q2 2024 FINANCIAL RESULTS

---

Reconciliation of Second Quarter Non-GAAP Results Three Months Ended June 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 $ 12,988 $ 8,584 $ 0.17 $ 0.17 Adjustments: Amortization of intangible assets 1,856 1,565 0.03 0.03 Non-service related pension costs 2,399 1,876 0.04 0.04 Contingent earnout adjustments 430 423 0.01 0.01 Non-GAAP Adjusted $ 17,673 $ 12,448 $ 0.25 $ 0.25 Three Months Ended June 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 Diluted Earnings per CRD-B Share GAAP $ 13,551 $ 8,427 $ 0.17 $ 0.17 Adjustments: Amortization of intangible assets 1,979 1,484 0.03 0.03 Non-service related pension costs 2,095 1,557 0.03 0.03 Contingent earnout adjustments 725 537 0.01 0.01 Non-GAAP Adjusted $ 18,350 $ 12,005 $ 0.24 $ 0.24 Q2 2024 FINANCIAL RESULTS

---

Reconciliation of Year to Date Non-GAAP Results Q2 2024 FINANCIAL RESULTS Six Months Ended June 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 $ 16,814 $ 11,421 $ 0.23 $ 0.23 Adjustments: Amortization of intangible assets 3,724 3,139 0.06 0.06 Non-service-related pension costs 4,872 3,805 0.08 0.08 Contingent earnout adjustments 581 574 0.01 0.01 Non-GAAP Adjusted $ 25,991 $ 18,939 $ 0.38 $ 0.38 Six Months Ended June 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(1) Diluted Earnings per CRD-A Share Diluted Earnings per CRD-B Share Diluted Earnings per CRD-B Share GAAP $ 29,552 $ 19,108 $ 0.39 $ 0.39 Adjustments: Amortization of intangible assets 3,878 2,909 0.06 0.06 Non-service-related pension costs 4,266 3,170 0.06 0.06 Contingent earnout adjustments 973 720 0.02 0.02 Non-GAAP Adjusted $ 38,669 $ 25,907 $ 0.52 $ 0.53 (1) Sum of reconciling items may differ from total due to rounding of individual components

v3.24.2.u1

Cover	Aug. 05, 2024
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 05, 2024
Entity File Number	1-10356
Entity Registrant Name	CRAWFORD & COMPANY
Entity Central Index Key	0000025475
Entity Tax Identification Number	58-0506554
Entity Incorporation, State or Country Code	GA
Entity Address, Address Line One	5335 Triangle Parkway
Entity Address, City or Town	Peachtree Corners
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30092
City Area Code	404
Local Phone Number	300-1000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Class A [Member]
Document Information [Line Items]
Title of 12(b) Security	Class A Common Stock — $1.00 Par Value
Trading Symbol	CRD-A
Security Exchange Name	NYSE
Common Class B [Member]
Document Information [Line Items]
Title of 12(b) Security	Class B Common Stock — $1.00 Par Value
Trading Symbol	CRD-B
Security Exchange Name	NYSE

---