Crawford Reports 2009 Second Quarter Results

Monitor this Company

ATLANTA, Aug. 10 /-/ -- Crawford & Company (www.crawfordandcompany.com) (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 second quarter ended June 30, 2009.

Consolidated Results

Second quarter 2009 consolidated revenues before reimbursements decreased to $249.7 million compared to $263.3 million in the 2008 second quarter due primarily to the negative effect of foreign currency changes. The second quarter 2009 net loss attributable to Crawford & Company was ($88.1) million, including a preliminary non-cash goodwill impairment charge of $94.0 million, compared to net income attributable to Crawford & Company of $7.9 million in the 2008 second quarter. The second quarter 2009 loss per share was ($1.70) compared to earnings per share of $0.16 in the prior-year quarter. Excluding the preliminary non-cash goodwill impairment charge, second quarter 2009 net income attributable to Crawford & Company was $5.9 million and earnings per share were $0.11.

During the 2009 second quarter, the Company recorded a preliminary non-cash goodwill impairment charge of $94.0 million, or $1.81 per share. This charge is not deductible for tax purposes. This charge was primarily related to declines in the Broadspire segment's current and forecasted operating results, the impact of declining U.S. employment levels on Broadspire's current and projected claims volume, and declines in the Company's stock prices. This impairment charge does not affect the Company's liquidity or cash flows and has no effect on the Company's credit agreement or its compliance with the financial covenants under the credit agreement.

Revenues, net income and earnings per share in the 2009 second quarter were negatively impacted by increased defined benefit pension expense, the impact of foreign currency changes, and the non-cash charge associated with the write-off of a portion of the Company's goodwill as outlined below:



     Net

     Income

     (Loss)

     Attributable

     Revenues before to Crawford

    In millions, except per Reimbursements & Company EPS

     share amounts -------------- --------- ---

    2nd quarter 2008 results $263.3 $7.9 $0.16

     (Less)/Add:

    Foreign currency impact

     in 2009 (24.3) (1.5) (0.03)

    Increase in pension

     expense in 2009 - (3.0) (0.06)

    Preliminary goodwill

     impairment charge in 2009 - (94.0) (1.81)

    All other operating

     changes 10.7 2.5 0.04

    2nd quarter 2009 results $249.7 ($88.1) ($1.70)

Crawford generated $3.7 million of cash from operations during the 2009 year-to-date period, compared to the $11.1 million in cash provided by operations during the 2008 period. The $7.4 million decrease was due primarily to lower earnings during 2009 before the goodwill impairment charge. The Company's consolidated cash and cash equivalent position as of June 30, 2009 totaled $58.1 million compared to $48.3 million at June 30, 2008 and $73.1 million at December 31, 2008.

International Operations

Second quarter 2009 revenues before reimbursements for the International Operations segment declined 15.3% to $96.1 million from $113.4 million for the same period in 2008 due to the strength of the U.S. dollar. Compared to the 2008 second quarter, during the 2009 second quarter the U.S. dollar strengthened against most major foreign currencies, resulting in a negative exchange rate impact. Excluding the negative impact of exchange rate fluctuations, International revenues would have been $120.4 million in the 2009 second quarter, reflecting growth in revenues on a constant dollar basis of 6.1%. International operating expenses for the 2009 second quarter decreased by $15.1 million in U.S. dollars, a 14.6% decrease, but increased by 6.7% on a constant dollar basis, compared to the 2008 period. Operating earnings declined to $8.2 million in the 2009 second quarter, down from last year's second quarter operating earnings of $10.4 million. The related operating margin was 8.6% in the 2009 second quarter, compared to a 9.2% operating margin in the 2008 second quarter.

U.S. Property & Casualty

U.S. Property & Casualty revenues before reimbursements were $54.5 million in the second quarter of 2009, increasing 6.5% from $51.2 million in the 2008 second quarter. Revenues generated by the Company's catastrophe adjuster group were $7.2 million in the 2009 second quarter, compared to $3.5 million in the 2008 period. Operating earnings in the 2009 second quarter in the U.S. Property & Casualty segment improved to $6.2 million, or an operating margin of 11.4% of revenues, compared to operating earnings of $5.1 million, or 9.9% of revenues in the 2008 second quarter. This operating earnings improvement reflected the benefits of increased catastrophe-related claims.

Broadspire

Revenues before reimbursements from the Broadspire segment were $73.1 million in the 2009 second quarter, down 7.6% from $79.1 million in the 2008 quarter. Broadspire had an operating loss of ($606,000) in the 2009 second quarter, or an operating margin of (0.8%) of revenues, compared to operating earnings of $2.5 million, or 3.2% of revenues, in the prior-year period. This decline was primarily due to lower workers' compensation claim referrals as a result of lower U.S. employment levels. The Company's preliminary goodwill impairment charge did not affect the segment operating results of Broadspire.

Legal Settlement Administration

Legal Settlement Administration revenues before reimbursements were $25.9 million in the 2009 second quarter, up 32.5% from $19.6 million in the 2008 quarter, reflecting the positive impact of several major bankruptcy and securities class action administration projects awarded to the Company during the 2009 second quarter. Operating earnings totaled $4.3 million in the 2009 second quarter, or an operating margin of 16.5% of revenues, compared to $3.1 million, or 16.1% of revenues, in the prior-year period. The segment's awarded project backlog totaled a record of approximately $62.8 million at June 30, 2009.

Management's Comments

Mr. Jeffrey T. Bowman, chief executive officer of Crawford & Company, stated, "Our second quarter 2009 operating results continue to be reflective of current global economic conditions. We, like other businesses, expect to face continued near-term macroeconomic challenges. While our reported consolidated revenues and earnings are down year-over-year, due primarily to the previously mentioned goodwill impairment charge, defined benefit pension expense increase, and negative impact of a stronger U.S. dollar in 2009, there are several encouraging areas within our businesses.

"In our U.S. Property & Casualty segment, we generated solid revenue gains and our operating margins were at double-digit levels. The performance of our core property & casualty business in the U.S. was enhanced by incremental catastrophe-related business due to severe weather in the 2009 six-month period. Our International Operations segment continued to exhibit organic growth as revenues were up over 6% on a constant dollar basis, led by our Canadian and Asia-Pacific regions.

"We saw the benefits of our investments in the bankruptcy processing capabilities within Legal Settlement Administration as we were awarded several bankruptcy administration projects in the 2009 second quarter. Our performance in this segment was also aided by a large securities class action case which began in the current quarter. While still a challenging market for us, we are actively pursuing emerging opportunities in both the securities and bankruptcy sectors of the market and are optimistic about our future prospects.

"Our Broadspire segment primarily handles workers' compensation claims, and as a result, has been most affected by the current economic downturn. The current level of unemployment is resulting in significantly lower workplace-related claim volumes in the U.S. We are targeting our sales and marketing efforts in this segment to drive market share gains to counteract the industry-wide claims decline. Despite the impairment charge taken in the second quarter, we remain very optimistic about the future of this business.

"Operating cash flow for the year-to-date period turned positive in the second quarter. Historically, our cash requirements are highest in the first quarter and cash balances replenish over the course of the year. We are continuing to drive our Company to improve its working capital profile, primarily by focusing on better management of processes related to unbilled revenues and accounts receivable and we expect improvement in this area over the balance of the year."

Mr. Bowman concluded, "Before the impairment charge, our operating results for the 2009 second quarter showed improvement over our first quarter results, even as the global economy remained weak. We remain committed to managing our operations toward improved operating performance and market share expansion, and are focusing significant attention on our cost base across the entire organization to ensure we are operating as efficiently as possible."

2009 Guidance

Crawford & Company updated the components of its previously issued guidance for 2009, added guidance for consolidated cash provided by operating activities, and reaffirmed its earnings per share guidance as follows:



        
  • Consolidated revenues before reimbursements between $960 million and $980 million.


  •     
  • Consolidated operating earnings between $52.5 million and $57.8 million.


  •     
  • Consolidated cash provided by operating activities between $35.0 million and $40.0 million.


  •     
  • After reflecting stock-based compensation expense, net corporate interest expense, customer-relationship intangible asset amortization expense, special charges and credits, and income taxes, net loss attributable to Crawford & Company on a GAAP basis between ($72.0) million and ($69.0) million, or ($1.40) to ($1.34) loss per share.


  •     
  • Before reflecting the special charge related to the preliminary goodwill impairment, net income attributable to Crawford & Company on a non-GAAP basis between $22.0 million and $25.0 million, or $0.41 to $0.47 diluted earnings per share.

Crawford & Company's management will host a conference call with investors on Monday, August 10, 2009 at 3:00 P.M. EDT to discuss earnings and other developments. The call will be recorded and available for replay through August 18, 2009. You may dial 1-800-642-1687 (706-645-9291 international) to listen to the replay. The access code is 21519530. Alternatively, please visit our web site at www.crawfordandcompany.com for a live audio web cast and related financial presentation.

Further information regarding the Company's financial position, operating results, and cash flows for the quarter and six-month periods ended June 30, 2009 is shown on the attached condensed consolidated unaudited financial statements. Operating earnings (a non-GAAP financial measure) is the key financial performance measure used by the Company's senior management to evaluate the performance of its segments and make resource allocation decisions. The Company believes this measure is useful to investors in that it allows them to evaluate operating performance using the same criteria that management uses. Operating earnings represent net income (loss) attributable to Crawford & Company excluding net corporate interest expense, stock option expense, income tax expense, amortization of customer relationship intangible assets, unallocated corporate and shared costs, and certain other charges and credits. Net corporate interest expense, stock option expense and income taxes are recurring components of the Company's net income (loss), but they are not considered part of operating earnings since they are managed on a corporate-wide basis. Net corporate interest expense results from capital structure decisions made by the Company, stock option expense relates to historically granted stock options and employee stock purchase plan expenses which are not allocated to operating segments, and income taxes are based on statutory rates in effect in each of the locations where the Company provides services, and vary throughout the world. Amortization expense relates to non-cash amortization of customer relationship intangible assets resulting from business combinations. These costs are not allocated to the segments for assessing performance. None of the aforementioned costs relate directly to the Company's products or the performance of the Company's services and are therefore excluded in order to accurately assess the results of segment operating activities on a consistent basis. Certain other credits and charges represent events (gains on disposal of assets, restructuring activities, goodwill impairment, etc.) that are not considered part of segment operating earnings since they historically have not regularly impacted the Company's operating performance and are not expected to regularly impact future performance. Following is a reconciliation of segment operating earnings (loss) to net income (loss) attributable to Crawford & Company on a GAAP basis and the related margins as a percentage of revenues before reimbursements for all periods presented:



     Quarter ended

     -------------

     June 30, % June 30, %

     2009 Margin 2008 Margin

     -------- ------- -------- -------

    Operating Earnings

     (Loss):

    U.S. property &

     casualty $6,218 11.4% $5,092 9.9%

    International

     operations 8,220 8.6 10,446 9.2

    Broadspire (606) (0.8) 2,540 3.2

    Legal settlement

     administration 4,287 16.5 3,142 16.1

    Unallocated corporate

     and shared costs (5,295) (2.1) (2,061) (0.8)

    Add/(Deduct):

     Other charges - - - -

     Goodwill impairment (94,000) (37.7) - -

     Stock option expense (197) (0.1) (279) (0.1)

     Amortization expense (1,496) (0.6) (1,506) (0.6)

     Net corporate interest

     expense (3,640) (1.5) (4,656) (1.8)

     Income taxes (1,615) (0.6) (4,786) (1.8)

     ------- -------

    Net income (loss)

     attributable to

     Crawford & Company ($88,124) (35.3) $7,932 3.0

     ========= ======

     Year-to-date period ended

     -------------------------

     June 30, % June 30, %

     2009 Margin 2008 Margin

     -------- -------- -------- --------

    Operating Earnings

     (Loss):

    U.S. property &

     casualty $12,388 11.3% $11,041 11.0%

    International

     operations 15,685 8.4 19,433 8.8

    Broadspire (2,560) (1.7) 4,287 2.7

    Legal settlement

     administration 5,814 14.0 5,639 14.6

    Unallocated corporate

     and shared costs

     (7,270) (1.5) (1,410) (0.3)

    Add/(Deduct):

     Other charges (1,815) (0.4) - -

     Goodwill impairment (94,000) (19.4) - -

     Stock option expense (430) (0.1) (474) (0.1)

     Amortization expense (2,994) (0.6) (3,014) (0.6)

     Net corporate interest

     expense (7,125) (1.5) (9,072) (1.7)

     Income taxes (2,735) (0.6) (9,430) (1.8)

     ------- -------

    Net income (loss)

     attributable to

     Crawford & Company

     ($85,042) (17.5) $17,000 3.3

     ========= =======

Based in Atlanta, Georgia, Crawford & Company (www.crawfordandcompany.com) is the world's largest independent provider of claims management and related solutions to the risk management and insurance industry as well as self-insured entities, with a global network of more than 700 locations in 63 countries. Major service lines include property and casualty claims management; warranty inspections; integrated claims and medical management for workers' compensation; legal settlement administration, including class action and bankruptcy claims administration; and risk management information services. The Company's shares are traded on the NYSE under the symbols CRDA and CRDB.

This press release contains forward-looking statements, including statements about the 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. 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 United States Securities and Exchange Commission and available at www.sec.gov or in the Investor Relations section of Crawford & Company's website at www.crawfordandcompany.com.



     CRAWFORD & COMPANY

     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

     Unaudited

     (In Thousands, Except Earnings Per Share Amounts and Percentages)

     Six Months Ended June 30 2009 2008 % Change

     ------------------------ --------- --------- ---------

     Revenues:

     Revenues Before Reimbursements $485,747 $518,777 -6%

     Reimbursements 36,179 45,162 -20%

     --------- ---------

     Total Revenues 521,926 563,939 -7%

     Costs and Expenses:

     Costs of Services Before

     Reimbursements 359,046 376,414 -5%

     Reimbursements 36,179 45,162 -20%

     --------- ---------

     Total Cost of Services 395,225 421,576 -6%

     Selling, General, and Administrative 105,902 106,707 -1%

     Corporate Interest Expense, Net 7,125 9,072 -21%

     Restructuring Costs 1,815 - nm

     Goodwill Impairment Charge 94,000 - nm

     --------- ---------

     Total Costs and Expenses 604,067 537,355 12%

     --------- ---------

     (Loss) Income Before Income Taxes (82,141) 26,584 nm

     Provision for Income Taxes 2,735 9,430 -71%

     --------- ---------

     Net (Loss) Income (84,876) 17,154 nm

     Less: Net Income Attributable to

     Noncontrolling Interests (166) (154) 8%

     --------- ---------

     Net (Loss) Income Attributable to

     Crawford & Company ($85,042) $17,000 nm

     ========= =========

     (Loss) Earnings Per Share - Basic and

     Diluted ($1.65) $0.33 nm

     --------- ---------

     Weighted-average Shares Used in Calculating:

     Basic (Loss) Earnings Per Share 51,625 50,808

     --------- ---------

     Diluted (Loss) Earnings Per Share 51,625 50,891

     --------- ---------

     ========================================================================

     nm = not meaningful

     CRAWFORD & COMPANY

     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

     Unaudited

     (In Thousands, Except Earnings Per Share Amounts and Percentages)

     Three Months Ended June 30 2009 2008 % Change

     -------------------------- --------- --------- ---------

     Revenues:

     Revenues Before Reimbursements $249,664 $263,265 -5%

     Reimbursements 21,979 26,001 -15%

     --------- ---------

     Total Revenues 271,643 289,266 -6%

     Costs and Expenses:

     Costs of Services Before

     Reimbursements 183,884 189,461 -3%

     Reimbursements 21,979 26,001 -15%

     --------- ---------

     Total Cost of Services 205,863 215,462 -4%

     Selling, General, and Administrative 54,414 56,204 -3%

     Corporate Interest Expense, Net 3,640 4,656 -22%

     Goodwill Impairment Charge 94,000 - nm

     --------- ---------

     Total Costs and Expenses 357,917 276,322 30%

     --------- ---------

     (Loss) Income Before Income Taxes (86,274) 12,944 nm

     Provision for Income Taxes 1,615 4,786 -66%

     --------- ---------

     Net (Loss) Income (87,889) 8,158 nm

     Less: Net Income Attributable to

     Noncontrolling Interests (235) (226) 4%

     --------- ---------

     Net (Loss) Income Attributable to

     Crawford & Company ($88,124) $7,932 nm

     ========= =========

     (Loss) Earnings Per Share - Basic and

     Diluted ($1.70) $0.16 nm

     --------- ---------

     Weighted-average Shares Used in Calculating:

     Basic (Loss) Earnings Per Share 51,877 50,888

     --------- ---------

     Diluted (Loss) Earnings Per Share 51,877 50,986

     --------- ---------

     ========================================================================

     nm = not meaningful

     CRAWFORD & COMPANY

     SUMMARY RESULTS BY OPERATING SEGMENT

     Six Months Ended June 30

     Unaudited

     (In Thousands, Except Percentages)

     U.S. Property

     & Casualty % International %

     2009 2008 Change 2009 2008 Change

     ======== ======== ======= ======== ======== ======

    Revenues Before

     Reimbursements $109,599 $100,708 8.8% $186,999 $220,143 -15.1%

    Compensation & Benefits 64,992 62,162 4.6% 130,090 150,336 -13.5%

    % of Revenues Before

     Reimbursements 59.3% 61.7% 69.6% 68.3%

    Expenses Other than

     Reimbursements,

     Compensation

     & Benefits 32,219 27,505 17.1% 41,224 50,374 -18.2%

    % of Revenues Before

     Reimbursements 29.4% 27.3% 22.0% 22.9%

     --------- -------- ------- -------- -------- ------

    Total Operating

     Expenses 97,211 89,667 8.4% 171,314 200,710 -14.6%

     --------- -------- ------- -------- -------- ------

    Operating Earnings

     (Loss) (1) $12,388 $11,041 12.2% $15,685 $19,433 -19.3%

    % of Revenues Before

     Reimbursements 11.3% 11.0% 8.4% 8.8%

     --------- -------- ------- -------- -------- ------

     Legal Settlement

     Broadspire % Administration %

     2009 2008 Change 2009 2008 Change

     ======== ======== ======= ======== ======== ======

    Revenues Before

     Reimbursements $147,657 $159,378 -7.4% $41,492 $38,548 7.6%

    Compensation & Benefits 83,771 89,120 -6.0% 17,836 18,077 -1.3%

    % of Revenues Before

     Reimbursements 56.7% 55.9% 43.0% 46.9%

    Expenses Other than

     Reimbursements,

     Compensation & Benefits 66,446 65,971 0.7% 17,842 14,832 20.3%

    % of Revenues Before

     Reimbursements 45.0% 41.4% 43.0% 38.5%

     --------- -------- ------- -------- -------- ------

    Total Operating

     Expenses 150,217 155,091 -3.1% 35,678 32,909 8.4%

     --------- -------- ------- -------- -------- ------

    Operating Earnings

     (Loss) (1) ($2,560) $4,287 -159.7% $5,814 $5,639 3.1%

    % of Revenues Before

     Reimbursements -1.7% 2.7% 14.0% 14.6%

     --------- -------- ------- -------- -------- ------

     Three Months Ended June 30

     Unaudited

     (In Thousands, Except Percentages)

     U.S. Property

     & Casualty % International %

     2009 2008 Change 2009 2008 Change

     ======== ======== ======= ======== ======== ======

    Revenues Before

     Reimbursements $54,547 $51,198 6.5% $96,127 $113,433 -15.3%

    Compensation & Benefits 32,561 31,585 3.1% 65,582 76,479 -14.2%

    % of Revenues Before

     Reimbursements 59.7% 61.7% 68.2% 67.4%

    Expenses Other than

     Reimbursements,

     Compensation & Benefits 15,768 14,521 8.6% 22,325 26,508 -15.8%

    % of Revenues Before

     Reimbursements 28.9% 28.4% 23.2% 23.4%

     --------- -------- ------- -------- -------- ------

    Total Operating

     Expenses 48,329 46,106 4.8% 87,907 102,987 -14.6%

     --------- -------- ------- -------- -------- ------

    Operating Earnings

     (Loss) (1) $6,218 $5,092 22.1% $8,220 $10,446 -21.3%

    % of Revenues Before

     Reimbursements 11.4% 9.9% 8.6% 9.2%

     --------- -------- ------- -------- -------- ------

     Legal Settlement

     Broadspire % Administration %

     2009 2008 Change 2009 2008 Change

     ======== ======== ======= ======== ======== ======

    Revenues Before

     Reimbursements $73,056 $79,065 -7.6% $25,934 $19,569 32.5%

    Compensation & Benefits 40,950 43,706 -6.3% 9,821 8,808 11.5%

    % of Revenues Before

     Reimbursements 56.1% 55.3% 37.9% 45.0%

    Expenses Other than

     Reimbursements,

     Compensation & Benefits 32,712 32,819 -0.3% 11,826 7,619 55.2%

    % of Revenues Before

     Reimbursements 44.7% 41.5% 45.6% 38.9%

     --------- -------- ------- -------- -------- ------

    Total Operating

     Expenses 73,662 76,525 -3.7% 21,647 16,427 31.8%

     --------- -------- ------- -------- -------- ------

    Operating Earnings

     (Loss) (1) ($606) $2,540 -123.9% $4,287 $3,142 36.4%

    % of Revenues Before

     Reimbursements -0.8% 3.2% 16.5% 16.1%

     --------- -------- ------- -------- -------- ------

    (1) A non-GAAP financial measurement which represents net income

    attributable to Crawford & Company excluding net corporate interest

    expense, amortization of customer-relationship intangible assets, stock

    option expense, income tax expense, unallocated corporate and shared

    costs, restructuring costs, and preliminary goodwill impairment charge.

    See page 5 for a reconciliation of Operating Earnings to Net (Loss) Income

    computed in accordance with GAAP.

     CRAWFORD & COMPANY

     CONDENSED CONSOLIDATED BALANCE SHEETS

     As of June 30, 2009 and December 31, 2008

     (In Thousands)

     Unaudited *

     June 30 December 31

     Assets 2009 2008

    --------------------------------------------------- ---- ----

     Current Assets:

     Cash and Cash Equivalents $58,100 $73,124

     Accounts Receivable, Net 149,099 157,430

     Unbilled Revenues, Net 101,393 99,115

     Prepaid Expenses and Other Current Assets 17,912 18,688

     ---------- ----------

     Total Current Assets 326,504 348,357

     ---------- ----------

     Property and Equipment 142,021 140,399

     Less Accumulated Depreciation (99,267) (95,785)

     ---------- ----------

     Net Property and Equipment 42,754 44,614

     ---------- ----------

     Other Assets:

     Goodwill 161,016 251,897

     Intangible Assets Arising from Business

     Acquisitions, Net 107,902 111,389

     Capitalized Software Costs, Net 46,921 46,296

     Deferred Income Tax Assets, Net 66,627 67,695

     Other Noncurrent Assets 25,593 25,000

     ---------- ----------

     Total Other Assets 408,059 502,277

     ---------- ----------

     Total Assets $777,317 $895,248

     ======== ========

     Liabilities and Shareholders' Investment

    ---------------------------------------------------

     Current Liabilities:

     Short-Term Borrowings $12,732 $13,366

     Accounts Payable 39,882 40,711

     Accrued Compensation and Related Costs 56,996 77,802

     Other Accrued Current Liabilities 58,368 56,978

     Self-Insured Risks 18,884 17,939

     Accrued Income Taxes 8,061 9,937

     Deferred Revenues 58,647 59,679

     Current Installments of Long-Term Debt and

     Capital Leases 2,289 2,284

     ---------- ----------

     Total Current Liabilities 255,859 278,696

     ---------- ----------

     Noncurrent Liabilities:

     Long-Term Debt and Capital Leases, Less

     Current Installments 180,066 181,206

     Deferred Revenues 37,405 42,795

     Self-Insured Risks 18,814 18,531

     Accrued Pension Liabilities 176,150 179,542

     Other Noncurrent Liabilities 13,464 14,119

     ---------- ----------

     Total Noncurrent Liabilities 425,899 436,193

     ---------- ----------

     Shareholders' Investment:

     Class A Common Stock, $1.00 Par Value 27,219 26,523

     Class B Common Stock, $1.00 Par Value 24,697 24,697

     Additional Paid-in Capital 26,612 26,342

     Retained Earnings 171,104 256,146

     Accumulated Other Comprehensive Loss (158,622) (158,157)

     ---------- ----------

     Total Crawford & Company Shareholders'

     Investment 91,010 175,551

     Noncontrolling Interests 4,549 4,808

     ---------- ----------

     Total Shareholders' Investment 95,559 180,359

     ---------- ----------

     Total Liabilities and Shareholders' Investment $777,317 $895,248

     ======== ========

     * Derived from the audited Consolidated Balance Sheet

     CRAWFORD & COMPANY

     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

     Six Months Ended June 30, 2009 and June 30, 2008

     Unaudited

     (In Thousands)

     2009 2008

     ---- ----

     Cash Flows From Operating Activities:

    ---------------------------------------------------

     Net (Loss) Income ($84,876) $17,154

     Reconciliation of Net (Loss) Income

     to Net Cash Provided By

     Operating Activities:

     Depreciation and Amortization 15,568 14,837

     Goodwill Impairment Charge 94,000 -

     Stock-Based Compensation 2,841 2,834

     Loss on Sales of Property and

     Equipment, Net 40 20

     Changes in Operating Assets and

     Liabilities, Net of Effects of

     Acquisitions and Dispositions:

     Accounts Receivable, net 8,645 (11,438)

     Unbilled Revenues, net (2,593) 4,393

     Accrued Income Taxes (2,723) 6,591

     Accounts Payable and Accrued

     Liabilities (13,409) (471)

     Deferred Revenues (6,189) (9,274)

     Retirement Plan Liabilities (6,124) (11,841)

     Prepaid Expenses and Other

     Operating Activities (1,504) (1,740)

     ---------- ----------

     Net Cash Provided By Operating Activities 3,676 11,065

     ---------- ----------

     Cash Flows From Investing Activities:

    ---------------------------------------------------

     Acquisitions of Property and

     Equipment, net (4,614) (4,994)

     Capitalization of Computer

     Software Costs (6,780) (8,028)

     Other Investing Activities (1,089) (204)

     ---------- ----------

     Net Cash Used In Investing Activities (12,483) (13,226)

     ---------- ----------

     Cash Flows From Financing Activities:

    ---------------------------------------------------

     Shares used to settle withholding taxes under

     stock-based compensation plans (1,888) (20)

     (Decrease) Increase in Short-Term

     Borrowings, net (358) 757

     Payments on Long-Term Debt and

     Capital Lease Obligations (1,213) (1,331)

     Capitalized Loan Costs (944) -

     Other Financing Activities 26 (84)

     ---------- ----------

     Net Cash Used In Financing Activities (4,377) (678)

     ---------- ----------

     Effect of Exchange Rate Changes

     on Cash and Cash Equivalents (1,840) 330

     ---------- ----------

     Decrease in Cash and Cash Equivalents (15,024) (2,509)

     Cash and Cash Equivalents at Beginning of

     Period 73,124 50,855

     ---------- ----------

     Cash and Cash Equivalents at End of Period $58,100 $48,346

     ========== ==========

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