-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ouGxXUwQY1yMnVpUz8MIZn5XslGZ9gDj29b80ncsk4a/2YWDUwLHmj5a8U9AaQLH 3wjbNGJ+YAMGb6u+wz8g5Q== 0000025475-95-000005.txt : 19950814 0000025475-95-000005.hdr.sgml : 19950814 ACCESSION NUMBER: 0000025475-95-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CRAWFORD & CO CENTRAL INDEX KEY: 0000025475 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 580506554 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10356 FILM NUMBER: 95561909 BUSINESS ADDRESS: STREET 1: 5620 GLENRIDGE DR NE CITY: ATLANTA STATE: GA ZIP: 30342 BUSINESS PHONE: 4042560830 MAIL ADDRESS: STREET 1: 5620 GLENRIDE DR CITY: ATLANTA STATE: GA ZIP: 30342 10-Q 1 Form 10-Q Crawford & Company Quarter Ended June 30, 1995 Page 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements Condensed Financial Statements: Year-to-Date Unaudited Consolidated Statements of Income for the Six-Month Periods ended June 30, 1995 and June 30, 1994: (In Thousand of Dollars Except Share and Per Share Data) 1995 1994 Revenues $299,512 $296,616 Costs and Expenses: Cost of services provided, less reimbursed expenses of $17,073 in 1995 and $15,700 in 1994 205,200 203,106 Selling, general and administrative expense 67,402 59,140 Total costs and expenses 272,602 262,246 Income Before Income Taxes 26,910 34,370 Provision for Income Taxes 10,852 13,850 Net Income $16,058 $20,520 Earnings Per Share $0.46 $0.57 Weighted Average Shares Outstanding 34,889,009 36,043,364 Declared Dividends Per Share - Class A Common $0.29 $0.28 Declared Dividends Per Share - Class B Common $0.27 $0.25
(See accompanying notes to condensed financial statements) Form 10-Q Crawford & Company Quarter Ended June 30, 1995 Page 3 Quarterly Unaudited Consolidated Statements of Income for the Three-Month Periods ended June 30, 1995 and June 30, 1994: (In Thousand of Dollars Except Share and Per Share Data) 1995 1994 Revenues $150,863 $147,824 Costs and Expenses: Cost of services provided, less reimbursed expenses of $8,695 in 1995 and $7,328 in 1994 104,235 100,917 Selling, general and administrative expense 35,602 29,429 Total costs and expenses 139,837 130,346 Income Before Income Taxes 11,026 17,478 Provision for Income Taxes 4,446 7,045 Net Income $6,580 $10,433 Earnings Per Share $0.19 $0.29 Weighted Average Shares Outstanding 34,851,171 36,032,567 Declared Dividends Per Share - Class A Common $0.145 $0.140 Declared Dividends Per Share - Class B Common $0.135 $0.125
(See accompanying notes to condensed financial statements) Form 10-Q Crawford & Company Quarter Ended June 30, 1995 Page 4 Consolidated Balance Sheets as of June 30, 1995 and December 31, 1994: (In Thousands of Dollars) (Unaudited) June 30 December 31 1995 1994 ASSETS Current Assets: Cash and cash equivalents $22,649 $38,968 Short-term investments, at fair value 9,976 18,766 Accounts receivable, less allowance for doubtful accounts of $10,688 in 1995 and $10,220 in 1994 110,416 104,942 Unbilled revenues, at estimated billable amounts 60,905 59,601 Prepaid income taxes 13,110 12,147 Prepaid expenses and other current assets 12,172 9,215 Total current assets 229,228 243,639 Property and Equipment: Property and equipment, at cost: 121,186 112,513 Less accumulated depreciation and amortization (82,318) (75,065) Net property and equipment 38,868 37,448 Other Assets: Intangible assets arising from acquisitions, less accumulated amortization of $6,598 in 1995 and $5,833 in 1994 53,873 51,684 Prepaid pension obligation 35,054 23,500 Other 5,374 6,623 Total other assets 94,301 81,807 TOTAL ASSETS $362,397 $362,894
(See accompanying notes to condensed financial statements) Form 10-Q Crawford & Company Quarter Ended June 30, 1995 Page 5 Consolidated Balance Sheets - (Continued) (In Thousands of Dollars) (Unaudited) June 30 December 31 1995 1994 LIABILITIES AND SHAREHOLDERS' INVESTMENT Current Liabilities: Short-term borrowings $8,786 $9,123 Accounts payable 11,611 10,999 Accrued compensation and related costs 26,289 39,219 Other accrued liabilities 31,374 31,167 Deferred revenues 28,130 25,813 Current installments of long-term debt 1,474 1,298 Total current liabilities 107,664 117,619 Noncurrent Liabilities: Long-term debt, less current installments 10,237 9,962 Deferred income taxes 19,020 14,720 Postretirement medical benefit obligation 8,314 7,440 Total noncurrent liabilities 37,571 32,122 Shareholders' Investment: Class A Common Stock, $1.00 par value; 50,000,000 shares authorized; 17,406,248 and 17,449,130 shares issued in 1995 and 1994, respectively 17,406 17,449 Class B Common Stock, $1.00 par value; 50,000,000 shares authorized; 17,466,548 and 17,580,213 shares issued in 1995 and 1994, respectively 17,467 17,580 Retained earnings 184,424 180,772 Cumulative translation adjustment (2,135) (2,648) Total shareholders' investment 217,162 213,153 TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT $362,397 $362,894
(See accompanying notes to condensed financial statements) Form 10-Q Crawford & Company Quarter Ended June 30, 1995 Page 6 Unaudited Consolidated Statements of Cash Flows for the Six-Month Periods Ended June 30, 1995 and June 30, 1994: (In Thousands of Dollars) 1995 1994 Cash Flows From Operating Activities: Net income $16,058 $20,520 Reconciliation of net income to net cash provided by operating activities: Depreciation and amortization 8,450 7,489 Deferred income taxes 4,159 (433) Loss on sales of property and equipment 246 44 Changes in operating assets and liabilities: Short-term investments 8,790 2,409 Accounts receivable, net (4,913) (9,579) Unbilled revenues (817) (2,791) Prepaid or accrued income taxes (1,672) 4,581 Accounts payable and accrued liabilities (9,411) 223 Deferred revenues 2,317 3,285 Prepaid expenses and other assets (18,782) (6,653) Net cash provided by operating activities 4,425 19,095 Cash Flows From Investing Activities: Acquisitions of property and equipment (8,004) (5,201) Net assets of companies acquired 0 (2,350) Sales of property and equipment 92 128 Net cash used in investing activities (7,912) (7,423) Cash Flows From Financing Activities: Dividends paid (9,774) (9,559) Repurchase of common stock (3,512) (3,147) Issuance of common stock 724 417 Increase (Decrease) in short-term borrowings (775) 642 Increase (Decrease) in long-term debt 336 (40) Net cash used in financing activities (13,001) (11,687) Effect of exchange rate changes on cash and cash equivalents 169 (205) Decrease in cash and cash equivalents (16,319) (220) Cash and cash equivalents at beginning of period 38,968 40,111 Cash and cash equivalents at end of period $22,649 $39,891 Cash payments for income taxes $8,209 $9,565
(See accompanying notes to condensed financial statements) EX-99 2 Form 10-Q Crawford & Company Quarter Ended June 30, 1995 Page 7 NOTES TO CONDENSED FINANCIAL STATEMENTS 1. The condensed financial statements included herein have been prepared by the Registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These condensed financial statements should be read in conjunction with the financial statements and related notes contained in the Registrant's annual report on Form 10-K for the fiscal year ended December 31, 1994. In the opinion of management, the condensed financial statements included herein contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position of the Registrant as of June 30, 1995, and the results of its operations and cash flows for the three and six-month periods then ended. 2. The results of operations for the six-month period ended June 30, 1995, are not necessarily indicative of the results to be expected during the balance of the year ending December 31, 1995. 3. Net income per share is computed by dividing net income by the weighted average number of shares outstanding during the respective periods. The effect of common stock equivalents was less than 3% dilutive in both 1995 and 1994 and, therefore, the effect on primary earnings per share has not been shown. 4. The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents for purposes of the Statements of Cash Flows. Form 10-Q Crawford & Company Quarter Ended June 30, 1995 Page 8 PART 1 - FINANCIAL INFORMATION - (Continued) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Financial Condition The Company's current assets at June 30, 1995, exceeded current liabilities by $121.6 million, a decrease of $4.5 million from the working capital balance at December 31, 1994. Cash and cash equivalents at June 30, 1995, totaled $22.6 million, a decrease of $16.3 million from the balance at the end of 1994. Short-term investments totaled $10.0 million at June 30, 1995, decreasing from $18.8 million at December 31, 1994. Cash was generated primarily from operating activities, while the principal uses of cash were for dividends paid to shareholders, acquisitions of property and equipment and repurchases of common stock. At June 30, 1995 and December 31, 1994, the ratio of current assets to current liabilities was 2.1 to 1. During 1994, the Company announced that it may, from time to time, purchase up to an aggregate of 2,000,000 shares of its Class A and Class B Common Stock through open market purchases. Through June 30, 1995, the Company has reacquired 691,900 shares of its Class A Common Stock and 625,100 shares of its Class B Common Stock at an average cost of $15.43 and $15.62 per share, respectively. The Company maintains credit lines with banks in order to meet seasonal working capital requirements of its foreign subsidiaries or other financing needs that may arise. Short-term borrowings outstanding as of June 30, 1995, totaled $8.8 million, as compared to $9.1 million at the end of 1994. Results of Operations Revenues for the first half of 1995 were $299.5 million, compared with $296.6 million for the same period in 1994. For the second quarter of 1995, revenues were $150.9 million, an increase of 2.1% compared with $147.8 million for the same period in 1994. Unit volume, measured principally by chargeable hours and excluding acquisitions, decreased 5.8% and 6.2%, during the first six months and second quarter of 1995, respectively, as compared to related 1994 periods. But these decreases were partially offset by changes in the mix of services and in the rates charged for those services, the combined effects of which increased revenues by approximately 1.2% in the first half of 1995 and .9% in the second quarter. The Company's fourth quarter 1994 acquisitions of the Brocklehurst Group and Arnold & Green Ltd., two loss adjusting firms based in the United Kingdom, and the acquisition of Finnamore & Partners, Ltd., a Canadian loss adjusting firm, in the second quarter of 1994, increased revenues by 5.6% and 7.4%, during the first six months and second quarter of 1995, respectively. Form 10-Q Crawford & Company Quarter Ended June 30, 1995 Page 9 PART 1 - FINANCIAL INFORMATION - (Continued) Domestic revenues from Claims Services to insurance companies and Risk Management Services to self-insured clients totaled $200.2 million for the first half of 1995, down 1.1% from related 1994 revenues of $202.4 million. Second quarter 1995 revenues totaled $98.4 million, a decrease of 1.6% from the same period in 1994. These declines reflect lower claims frequency throughout the property and casualty insurance industry and increased competition in the self-insured corporate market. Revenues produced in the first six months of 1995 by the Company's catastrophe adjusters were $15.3 million. This was approximately $5.6 million less than catastrophe revenues reported in the first half of 1994, when the Company was involved in completing major projects, including the Los Angeles earthquake and the handling of winter storm losses in the Northeast. In the second quarter of 1995, revenues produced by the Company's catastrophe adjusters totaled $9.1 million, as compared to $11.6 million in the 1994 second quarter. Domestic revenues from HealthCare Management Services, which serves both the insurance company and self-insured markets, totaled $48.2 million for the first half of 1995, a decrease of 6.9% from the first half of 1994. For the second quarter these revenues were $23.5 million, decreasing from the $25.3 million reported in 1994. The demand for these services continues to be affected by regulatory changes and other medical cost containment alternatives such as health maintenance organizations. Revenues from the Company's international operations increased to $35.8 million in the first half of 1995, from $21.6 million for the same period in 1994. Second quarter 1995 revenues totaled $19.9 million, an increase of 82.6% over related 1994 revenues of $10.9 million. These increases result primarily from the Company's late 1994 acquisitions in the United Kingdom and strong Canadian growth. The percentage of revenue derived from each of the Company's principal service categories is shown in the following schedule: Six-Month Period Three-Month Period Ended June 30 Ended June 30 1995 1994 1995 1994 Domestic Claims Services (including Risk Management Services) 71.9% 75.3% 71.4% 75.5% Domestic HealthCare Management Services 16.1 17.4 15.4 17.1 International Operations 12.0 7.3 13.2 7.4 100.0% 100.0% 100.0% 100.0%
Form 10-Q Crawford & Company Quarter Ended June 30, 1995 Page 10 PART 1 - FINANCIAL INFORMATION - (Continued) Results of Operations (continued) Effective January 1, 1995, the Company changed its method of reporting its principal service categories to correspond with internal management reporting. Accordingly, risk control and information consulting services, previously disclosed as other risk management services, are now reported as a component of domestic claims services, along with certain healthcare management services which are closely aligned with the Company's risk management services. International claims and healthcare management services, previously reported as components of claims services and healthcare management services, are now reported as international operations. The Company's most significant expense is the compensation of its employees, including related payroll taxes and fringe benefits. Such expense approximated 63.8% of revenues in the first half of 1995, compared to 64.7% for the first six months of 1994, and 64.4% of revenues in the current quarter, unchanged as compared to the percentage of second quarter 1994 revenues. The decrease for the first half of 1995 is due primarily to reduced incentive compensation and group medical expenses. Expenses other than compensation and related payroll taxes and fringe benefits approximated 27.2% of revenues for the first six months of 1995, compared to 23.7% of revenues for the same period in 1994, and 28.3% of second quarter 1995 revenues, as compared to 23.8% of related 1994 revenues. These increases resulted principally from an increase in systems development costs associated with the development of systems designed to enhance the Company's service delivery to its clients and increases in other operating costs related to the Company's late 1994 acquisitions in the United Kingdom. Form 10-Q Crawford & Company Quarter Ended June 30, 1995 Page 11 Review by Independent Public Accountants. Arthur Andersen LLP, independent public accountants, has performed a review of the interim financial information contained herein in accordance with established professional standards and procedures for such a review and has issued its report with respect thereto (see page 12). Form 10-Q Crawford & Company Quarter Ended June 30, 1995 Page 12 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders and Board of Directors of Crawford & Company: We have reviewed the accompanying condensed consolidated balance sheet of CRAWFORD & COMPANY (a Georgia corporation) AND SUBSIDIARIES as of June 30, 1995 and the related condensed consolidated statements of income for the three and six-month periods ended June 30, 1995 and the related condensed consolidated statements of cash flows for the six-month periods ended June 30, 1995 and 1994. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Crawford & Company and subsidiaries as of December 31, 1994 (not presented herein), and in our report dated January 31, 1995, we expressed an unqualified opinion on that statement. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1994 is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. Arthur Andersen LLP Atlanta, Georgia August 11, 1995 Form 10-Q Crawford & Company Quarter Ended June 30, 1995 Page 13 PART II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders On April 25, 1995, the Registrant held its Annual Meeting of Shareholders. At the Annual Meeting, the Class B Shareholders, the only class entitled to vote at the meeting, voted on the election of ten (10) directors for a one year term. The results of that voting are as follows: Election of Directors Name Votes For Votes Withheld Virginia C. Crawford 16,904,428 12,594 Forrest L. Minix 16,904,717 12,305 J. Hicks Lanier 16,905,329 11,693 Charles Flather 16,905,329 11,693 Jesse S. Hall 16,905,229 11,793 Linda K. Crawford 16,903,805 13,217 Jesse C. Crawford 16,904,005 13,017 Larry L. Prince 16,902,064 14,958 William R. Goodell 16,901,314 15,708 Dennis A. Smith 16,904,447 12,575 Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 23.1 Consent of Arthur Andersen LLP 27.1 Financial Data Schedule (b) Reports on Form 8-K Registrant filed no reports on Form 8-K during the period covered by this report. Form 10-Q Crawford & Company Quarter Ended June 30, 1995 Page 14 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Crawford & Company (Registrant) Date: August 11, 1995 F. L. Minix Chairman of the Board and Chief Executive Officer Date: August 11, 1995 D. R. Chapman Executive Vice President - Finance (Principal Financial Officer) Date: August 11, 1995 J. F. Giblin Vice President and Controller (Principal Accounting Officer) EX-27 3
5 0000025475 CRAWFORD & COMPANY 1,000 6-MOS DEC-31-1995 JAN-01-1995 JUN-30-1995 22,649 9,976 171,321 10,688 0 229,228 121,186 82,318 362,397 107,664 10,237 34,873 0 0 182,289 362,397 0 299,512 0 205,200 67,402 0 0 26,910 10,852 16,058 0 0 0 16,058 .46 0
EX-23 4 Form 10-Q Crawford & Company Quarter Ended June 30, 1995 Page 15 To the Stockholders and Board of Directors of Crawford & Company: We are aware that Crawford & Company has incorporated by reference in its previously filed Registration Statement File No. 2-78989, Registration Statement File No. 33-22595, Registration Statement File No. 33-47536, and Registration Statement File No. 33-36116 its Form 10-Q for the quarter ended June 30, 1995, which includes our report dated August 11, 1995 covering the unaudited interim financial information contained therein. Pursuant to Regulation C of the Securities Act of 1933 (the "Act"), that report is not considered a part of the Registration Statement prepared or certified by our firm or a report prepared or certified by our firm within the meaning of Sections 7 and 11 of the Act. Arthur Andersen LLP Atlanta, Georgia August 11, 1995 Exhibit 23.1 -----END PRIVACY-ENHANCED MESSAGE-----