-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Qffa5IrsU94CHkCFjKbmqkajRh4RiP1hjSYrghTIulSw5rGuD0OoTITlap5iGM3Z tnVlND8ZQfq/u2h5JC5mxA== 0000950144-05-004286.txt : 20050425 0000950144-05-004286.hdr.sgml : 20050425 20050425134337 ACCESSION NUMBER: 0000950144-05-004286 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050425 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050425 DATE AS OF CHANGE: 20050425 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10356 FILM NUMBER: 05769555 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 8-K 1 g94743e8vk.txt CRAWFORD & 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): April 25, 2005 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.) 5620 Glenridge Drive, N.E., Atlanta, Georgia 30342 ---------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (404) 256-0830 ---------------------------------------------------------------- (Registrant's telephone number, including area code) 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)) ================================================================================ ITEM 2.02. Results of Operations and Financial Condition On April 25, 2005, Crawford & Company (the "Company") issued a press release containing information about the Company's financial condition, results of operations, and cash flows for the first quarter of 2005. A copy of the press release is attached hereto as Exhibit 99.1. The press release contains non-GAAP financial measures and a reconciliation to the related GAAP measure is included. Operating earnings is one of the key performance measures used by the Company's senior management to evaluate the performance of its business and make resource allocation decisions. The Company believes this measure is useful to investors in that it allows them to evaluate its performance using the same criteria that management uses. ITEM 9.01. Financial Statements, Pro Forma Financial Statements and Exhibits (c) Exhibits
Exhibit No. Description - ----------- ---------------------------------- 99.1 Press Release dated April 25, 2005
2 SIGNATURES 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/ JOHN F. GIBLIN ------------------------------------ John F. Giblin Executive Vice President and Chief Financial Officer Dated: April 25, 2005 3 EXHIBIT INDEX
Number Descriptions - -------- ----------------------------------- 99.1 Press Release issued April 25, 2005
4 EX-99.1 2 g94743exv99w1.txt EX-99.1 PRESS RELEASE, DATED 4/25/05 Exhibit 99.1 [CRDA LOGO] [CRDB LOGO] [CRAWFORD LOGO] PRESS RELEASE CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830 FOR IMMEDIATE RELEASE DATE: APRIL 25, 2005 FROM: THOMAS W. CRAWFORD CHIEF EXECUTIVE OFFICER CRAWFORD REPORTS FIRST QUARTER 2005 RESULTS Crawford & Company (NYSE: CRDA and CRDB), the world's largest independent provider of claims management solutions to insurance companies and self-insured entities, today announced its financial results for the first quarter ended March 31, 2005. First quarter 2005 revenues before reimbursements totaled $184.3 million, up 8.5% over the $169.9 million reported in the 2004 first quarter. First quarter 2005 net income was $2.4 million, equaling net income for the 2004 first quarter. Net income per share was $0.05 per share for both the 2005 and 2004 first quarters. U.S. revenues before reimbursements were $112.5 million in the first quarter of 2005 compared with $109.3 million in the 2004 first quarter. Revenues from the insurance company market were $54.0 million in the 2005 first quarter compared with $50.5 million in the 2004 period, reflecting a $3.9 million increase in revenues generated by the Company's catastrophe adjusters involved in finalizing claims resulting from the hurricanes which struck the U.S. during late 2004. Revenues from self-insured clients were $39.3 million in the 2005 first quarter compared with $40.4 million in the 2004 quarter, due primarily to a reduction in claim referrals from the Company's existing clients, only partially offset by new business gains. Class action services revenues, including administration and inspection services, were $19.2 million for the 2005 first quarter, compared with $18.5 million in the 2004 quarter. These revenues can fluctuate based on the timing and size of project awards. First quarter 2005 international revenues grew 18.6%, to $71.8 million from $60.5 million for the same period in 2004. This growth is partially due to foreign currency fluctuations. As compared to the 2004 first quarter, during the 2005 period the U.S. dollar weakened against the British Pound and the euro, resulting in a net exchange rate benefit in the quarter. Excluding the benefit of exchange rate fluctuations, international revenues would have been $67.4 million in the 2005 first quarter, reflecting growth on a constant dollar basis of 11.4%. This growth reflects increased case referrals in our United 1 [CRAWFORD LOGO] PRESS RELEASE CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830 Kingdom and European operations resulting from claims management agreements entered into during 2004, as well as hurricane-related revenues from Hurricanes Frances and Jeanne claims. International operating expenses increased by $10.1 million in U.S. dollars, a 17.4% increase, and by 10.0% on a constant dollar basis. Mr. Thomas W. Crawford, chief executive officer of Crawford & Company, stated, "During the first quarter, we continued to see an increase in property claims referred to us due to the hurricanes that hit Florida and other southeastern states during late 2004. Property claim referrals from the U.S. insurance company market were up nearly 19% during the 2005 first quarter as compared to the 2004 period. However, this increase in property claims was partially offset by continued weakness in casualty and workers' compensation claims referrals during the current quarter." "We were disappointed by our U.S. operating margin of 1.6% in the quarter, down from 2.6% in last year's first quarter. Despite the increase in catastrophe-related revenues during the quarter, we experienced downward pressure on our margins as many of these claims involved re-inspections and supplemental damage appraisals on previously handled claims, due to delays in damage repairs, and the associated fees only covered our direct costs of finalizing the claims. In addition, we have substantially increased the operating capacity in our class action services unit in order to administer the large backlog of projects that exists as of the end of the quarter. This record backlog, totaling $35.3 million, should provide strong growth in revenues and operating earnings for this unit during future quarters. Our U.S. margin was also impacted by higher legal expenses related to audits of workers' compensation claims handled on behalf of clients in the State of California and our response to a subpoena received in December 2004 from the New York Attorney General's office." "Our international operating margin grew to 4.7% from 3.6% in the 2004 first quarter. Strong case referrals, primarily as a result of recent client wins in our United Kingdom and Europe operations and hurricane-related claims in the Caribbean, contributed to the margin improvement. We remain confident that the substantial new business awarded to us during 2004 will provide healthy international operating margins throughout 2005." Mr. Crawford concluded, "Our operating cash flows in the 2005 first quarter reflected an $11.8 million use of cash. This use of cash was expected and primarily due to an increase in our U.S. income tax payments during the quarter, annual contributions made to our U.S. defined contribution pension plan, incentive compensation payments, and a lag in collecting receivables generated from hurricane-related claims handled in 2004 and 2005." Crawford & Company's management will host a conference call with analysts on Monday, April 25, 2005 at 3:00 P.M. EDT, to discuss its quarterly earnings and other developments. The call will be recorded and available for replay through May 2, 2005. You may dial 1-800-642-1687 (706-645-9291 international) to listen to the replay. The conference identification number is 5558282. Alternatively, please visit our web site at www.crawfordandcompany.com for a live audio web cast. 2 [CRAWFORD LOGO] PRESS RELEASE CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404) 256-0830 Further information regarding the Company's financial position, operating results, and cash flows for the quarter ended March 31, 2005 is shown on the attached statements. Operating earnings is one of the key performance measures used by the Company's senior management to evaluate the performance of its business and make resource allocation decisions. The Company believes this measure is useful to investors in that it allows them to evaluate its performance using the same criteria that management uses. Following is a reconciliation of consolidated net income to operating earnings and the related margin as a percentage of revenues before reimbursements:
Quarter Ended Quarter Ended March 31, Margin March 31, Margin (in thousands) 2005 % 2004 % - --------------------------- ------------- ------ ------------- ------ Net income $2,361 1.3% $2,389 1.4% Add: Net corporate interest 1,527 .8 1,337 .8 Income taxes 1,293 .7 1,368 .8 ------ --- ------ --- Operating earnings $5,181 2.8% $5,094 3.0% ====== === ====== ===
Based in Atlanta, Georgia, Crawford & Company (www.crawfordandcompany.com) is the world's largest independent provider of claims management solutions to insurance companies and self-insured entities, with a global network of more than 700 offices in 63 countries. Major service lines include workers' compensation claims administration and managed care services, property and casualty claims management, class action services and risk management information services. The Company's shares are traded on the NYSE under the symbols CRDA and CRDB. Except for historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties. The results achieved in the quarter ended March 31, 2005 are not necessarily indicative of future prospects for the Company. Actual results in future quarters may differ materially. For a complete discussion regarding factors which could affect the Company's financial performance, see the Company's Form 10-K for the year ended December 31, 2004 filed with the Securities and Exchange Commission, in particular the information under the headings "Business", "Legal Proceedings" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." The Company undertakes no obligation to publicly release any revisions to any forward-looking statements contained herein to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. The Company's actual results may differ materially from those projected in forward-looking statements made by, or on behalf of, the Company. FOR FURTHER INFORMATION REGARDING THIS PRESS RELEASE, PLEASE CALL JOHN GIBLIN AT (404) 847-4571. 3 [CRAWFORD LOGO] PRESS RELEASE CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404)256-0830 CRAWFORD & COMPANY CONSOLIDATED STATEMENTS OF INCOME Unaudited (In Thousands Except Per Share Data)
QUARTER ENDED MARCH 31 2005 2004 % Change - --------------------------------------- -------- -------- -------- Revenues: Revenues Before Reimbursements $184,334 $169,855 9% Reimbursements 15,309 14,881 3% -------- -------- Total Revenues 199,643 184,736 8% Costs and Expenses: Cost of Services Before Reimbursements 144,919 131,125 11% Reimbursements 15,309 14,881 3% -------- -------- Cost of Services 160,228 146,006 10% Selling, General, and Administrative 34,234 33,636 2% Corporate Interest Expense, Net 1,527 1,337 14% -------- -------- Total Costs and Expenses 195,989 180,979 8% -------- -------- Income Before Income Taxes 3,654 3,757 -3% Income Taxes 1,293 1,368 -5% -------- -------- Net Income $ 2,361 $ 2,389 -1% ======== ======== Net Income Per Share: Basic $ 0.05 $ 0.05 0% -------- -------- Diluted $ 0.05 $ 0.05 0% -------- -------- Weighted Average Shares Outstanding: Basic 48,872 48,724 -------- -------- Diluted 49,381 48,869 -------- --------
4 [CRAWFORD LOGO] PRESS RELEASE CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404)256-0830 CRAWFORD & COMPANY SUMMARY RESULTS BY OPERATING SEGMENT QUARTER ENDED MARCH 31 Unaudited (In Thousands Except Percentages)
U.S. International Total --------------------- --------------------- --------------------- 2005 2004 2005 2004 2005 2004 -------- -------- -------- -------- -------- -------- Revenues Before Reimbursements $112,507 $109,313 $ 71,827 $ 60,542 $184,334 $169,855 Compensation & Benefits 72,116 69,367 50,545 42,420 122,661 111,787 % of Revenues 64.1% 63.5% 70.3% 70.1% 66.6% 65.8% Expenses Other than Reimbursements, Compensation & Benefits 38,555 37,054 17,937 15,920 56,492 52,974 % of Revenues 34.3% 33.9% 25.0% 26.3% 30.6% 31.2% -------- -------- -------- -------- -------- -------- Operating Earnings (1) $ 1,836 $ 2,892 $ 3,345 $ 2,202 $ 5,181 $ 5,094 % of Revenues 1.6% 2.6% 4.7% 3.6% 2.8% 3.0% ======== ======== ======== ======== ======== ========
(1) Earnings before net corporate interest expense and income taxes 5 [CRAWFORD LOGO] PRESS RELEASE CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404)256-0830 CRAWFORD & COMPANY CONSOLIDATED BALANCE SHEETS MARCH 31, 2005 AND DECEMBER 31, 2004 (In Thousands)
Unaudited MARCH 31 December 31 2005 2004 --------- ----------- ASSETS Current Assets: Cash and Cash Equivalents $ 25,638 $ 43,571 Accounts Receivable, Net 178,531 176,187 Unbilled Revenues 102,076 103,586 Prepaid Expenses and Other Current Assets 19,678 21,363 --------- ----------- Total Current Assets 325,923 344,707 --------- ----------- Property and Equipment, at Cost 154,783 154,922 Less Accumulated Depreciation (119,938) (120,079) --------- ----------- Net Property and Equipment 34,845 34,843 --------- ----------- Other Assets: Intangible Assets Arising from Acquisitions, Net 110,233 109,410 Capitalized Software Costs, Net 32,476 32,550 Deferred Income Tax Asset, Net 32,191 32,172 Other 19,252 17,578 --------- ----------- Total Other Assets 194,152 191,710 --------- ----------- Total Assets $ 554,920 $ 571,260 ========= =========== LIABILITIES AND SHAREHOLDERS' INVESTMENT Current Liabilities: Short-Term Borrowings $ 39,915 $ 37,401 Accounts Payable 39,303 41,730 Accrued Liabilities 94,067 110,610 Deferred Revenues 23,418 22,682 Current Installments of Long-Term Debt and Capital Leases 1,787 1,900 --------- ----------- Total Current Liabilities 198,490 214,323 --------- ----------- Noncurrent Liabilities: Long-Term Debt and Capital Leases, Less Current Installments 50,564 50,875 Deferred Revenues 10,081 10,179 Self-Insured Risks 8,386 10,958 Postretirement Medical Benefit Obligation 5,544 5,544 Minimum Pension Liabilities 75,230 73,893 Other 10,119 10,655 --------- ----------- Total Noncurrent Liabilities 159,924 162,104 --------- ----------- Shareholders' Investment: Class A Common Stock, $1.00 Par Value 24,186 24,157 Class B Common Stock, $1.00 Par Value 24,697 24,697 Additional Paid-in Capital 1,673 1,441 Retained Earnings 200,641 201,213 Accumulated Other Comprehensive Loss (54,691) (56,675) --------- ----------- Total Shareholders' Investment 196,506 194,833 --------- ----------- Total Liabilities and Shareholders' Investment $ 554,920 $ 571,260 ========= ===========
6 [CRAWFORD LOGO] PRESS RELEASE CRAWFORD & COMPANY 5620 GLENRIDGE DRIVE, N.E. P.O. BOX 5047 ATLANTA, GEORGIA 30302 (404)256-0830 CRAWFORD & COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS QUARTER ENDED MARCH 31, 2005 AND MARCH 31, 2004 Unaudited (In Thousands)
2005 2004 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 2,361 $ 2,389 Reconciliation of Net Income to Net Cash Used in Operating Activities: Depreciation and Amortization 4,801 4,377 Deferred Income Taxes 26 (107) Loss on Sales of Property and Equipment 31 19 Stock-Based Compensation 63 - Changes in Operating Assets and Liabilities: Accounts Receivable, Net (785) (2,723) Unbilled Revenues 2,954 (3,600) Accrued or Prepaid Income Taxes (5,705) 1,241 Accounts Payable and Accrued Liabilities (12,435) (6,581) Deferred Revenues 499 776 Accrued Pension Costs (3,903) (3,717) Prepaid Expenses and Other Assets 291 (589) -------- -------- Net Cash Used in Operating Activities (11,802) (8,515) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions of Property and Equipment, Net (2,862) (2,132) Capitalization of Computer Software Costs (1,508) (1,649) Additional Payment for Prior Acquisition (90) (106) -------- -------- Net Cash Used in Investing Activities (4,460) (3,887) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Dividends Paid (2,933) (2,923) Proceeds from Exercise of Stock Options 261 - Increase in Short-Term Borrowings, Net 1,070 142 Decrease in Long-Term Debt and Capital Lease Obligations, Net (513) (342) Capitalized Loan Costs - 33 -------- -------- Net Cash Used in Financing Activities (2,115) (3,090) -------- -------- Effect of Exchange Rate Changes on Cash and Cash Equivalents 444 852 -------- -------- Decrease in Cash and Cash Equivalents (17,933) (14,640) Cash and Cash Equivalents at Beginning of Period 43,571 45,805 -------- -------- Cash and Cash Equivalents at End of Period $ 25,638 $ 31,165 ======== ========
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