Double Digit Revenue Growth in Quarter

Crawford & Company® (NYSE:CRD), the world's largest publicly listed independent provider of claims management and outsourcing solutions to carriers, brokers and corporations, today announced its financial results for the third quarter ended September 30, 2021.

The Company's two classes of stock are substantially identical, except with respect to voting rights and the Company's ability to pay greater cash dividends on the non-voting Class A Common Stock (CRD-A) than on the voting Class B Common Stock (CRD-B), subject to certain limitations. In addition, with respect to mergers or similar transactions, holders of CRD-A must receive the same type and amount of consideration as holders of CRD-B, unless different consideration is approved by the holders of 75% of CRD-A, voting as a class.

GAAP Consolidated Results

Third Quarter 2021

Revenues before reimbursements of $288.5 million, up 14% over $253.1 million for the 2020 third quarter
Net income attributable to shareholders of $11.2 million, compared to $24.4 million in the same period last year
Diluted earnings per share of $0.20 for CRD-A and $0.21 for CRD-B, compared with $0.46 for both CRD-A for CRD-B in the prior year third quarter

Non-GAAP Consolidated Results

Third Quarter 2021

Non-GAAP consolidated results for 2021 exclude the non-cash after-tax amortization of intangible assets of $2.2 million. Non-GAAP consolidated results for 2020 exclude a similar adjustment for amortization of intangible assets of $2.7 million, a net gain on disposition of businesses of $11.1 million, and the income tax impact of the first quarter 2020 goodwill impairment of $1.9 million, as explained further on page 3.

Foreign currency exchange rates increased revenues before reimbursements by $9.4 million or 3.7%. Presented on a constant dollar basis to the prior year, revenues before reimbursements totaled $279.1 million, increasing 10.3% over $253.1 million for the 2020 third quarter
Net income attributable to shareholders, on a non-GAAP basis, totaled $13.4 million in the 2021 third quarter, compared with $18.0 million in the same period last year
Diluted earnings per share, on a non-GAAP basis, totaled $0.24 for CRD-A and $0.25 for CRD-B in the 2021 third quarter, compared with $0.34 for both CRD-A and CRD-B in the prior year third quarter
Consolidated adjusted operating earnings, on a non-GAAP basis, were $20.8 million, or 7.2% of revenues before reimbursements in the 2021 third quarter, compared with $28.1 million, or 11.1% of revenues, in the 2020 third quarter
Consolidated adjusted EBITDA, a non-GAAP financial measure, was $29.5 million, or 10.2% of revenues before reimbursements in the 2021 third quarter, compared with $35.1 million, or 13.8% of revenues, in the 2020 third quarter

Management Comments

"Crawford delivered an outstanding third quarter revenue growth of 14% year-over-year despite ongoing headwinds presented by an uneven COVID-19 recovery. Importantly, we are continuing to enjoy success from our strategic initiatives across our Loss Adjusting and TPA segments, both of which showed strong revenue growth in the U.S. despite facing pressures internationally. In addition, our Platforms Solutions segment continued its double-digit growth as we benefitted from a deeper penetration with top 5 carriers," commented Mr. Rohit Verma, chief executive officer of Crawford & Company.

Mr. Verma continued, "We also continue to execute on our inorganic growth strategy by deepening our presence within the property claim ecosystem and building expertise through digital solutions and differentiated capabilities. We are partnering with like-minded, visionary management teams by reinforcing the perception of Crawford as an ideal long-term home for their businesses. To that end, we would like to welcome BosBoon, edjuster and Praxis employees into the Crawford family.

As we enter the fourth quarter, we continue to face an uneven global recovery, nevertheless we remain confident in our ability to capitalize on the vast opportunities ahead of us as well as deliver value for shareholders, and we look forward to continuing our pursuit of restoring and enhancing lives, businesses and communities."

Segment Results for the Third Quarter

Crawford Loss Adjusting

Crawford Loss Adjusting revenues before reimbursements were $124.0 million in the third quarter of 2021, increasing 11.8% from $110.9 million in the third quarter of 2020. Absent foreign currency rate benefits of $6.6 million, third quarter 2021 revenues would have been $117.3 million.

The segment had operating earnings of $7.1 million in the 2021 third quarter decreasing from $14.1 million in the third quarter of 2020. The operating margin was 5.7% in the 2021 quarter and 12.7% in the 2020 quarter.

Crawford Platform Solutions

Crawford Platform Solution revenues before reimbursements were $64.3 million in the third quarter of 2021, up 20.7% from $53.3 million in the same period of 2020. Absent foreign exchange rate benefits of $0.6 million, revenues would have been $63.7 million for the 2021 third quarter.

Operating earnings were $11.0 million in the 2021 third quarter, increasing from $10.7 million in the 2020 period. The segment's operating margin for the 2021 quarter was 17.1% as compared with 20.0% in the 2020 quarter.

Crawford TPA Solutions

Crawford TPA Solutions segment revenues before reimbursements were $100.2 million in the 2021 third quarter, increasing 12.7% from $88.9 million in the 2020 third quarter. Absent foreign currency rate benefits of $2.1 million, third quarter 2021 revenues would have been $98.1 million.

Crawford TPA Solutions recorded operating earnings of $5.0 million in the third quarter of 2021, representing an operating margin of 5.0%, increasing from $4.3 million, or 4.8% of revenues, in the 2020 third quarter.

Unallocated Corporate and Shared Costs and Credits, Net

Unallocated corporate costs were $2.3 million in the third quarter of 2021, compared with $1.0 million in the same period of 2020. The increase for the three months ended September 30, 2021 was primarily due to an increase in professional fees and a reduction of the Canada Emergency Wage Subsidy ("CEWS") benefit, compared to 2020.

CEWS

During the 2021 third quarter, the Company recognized a pretax benefit from CEWS totaling $1.8 million as compared to a benefit of $4.7 million in the 2020 third quarter. Of the 2021 benefit, $0.7 million is reflected in the segment operating results with the remainder in unallocated and shared costs.

Income Tax Impact of First Quarter 2020 Goodwill Impairment

The Company recognized a non-cash goodwill impairment in the 2020 first quarter, totaling $17.7 million. Due to the non-discrete income tax treatment of the goodwill impairment, the initial income tax benefit related to the impairment normalized during the year, resulting in a lower full year income tax benefit. During the 2020 third quarter, the impact of this treatment decreased the income tax benefit by $1.9 million, or $0.04 per share. There was no goodwill impairment in 2021.

Business Acquisitions and Dispositions

On August 23, 2021, the Company acquired 100% of edjuster Inc. in Canada and its U.S. subsidiary (collectively "edjuster"). edjuster is a technology-enabled, end-to-end contents services provider and platform. This acquisition will enable the Company to expand its capability in the North American claims contents services market. The purchase price included an initial cash payment of $21.0 million, net of working capital adjustment, and a maximum $14.0 million payable in cash over the next two years based on achieving certain EBITDA performance goals.

On June 12, 2020, the Company sold its 51% interest in Lloyd Warwick International ("LWI") for cash proceeds of $19.6 million and payment of $3.6 million to settle intercompany indebtedness. In the third quarter, the Company recognized an additional $0.7 million related to net working capital adjustments under the terms of the acquisition agreement which increased the purchase price to $20.3 million. Due to the Company's two-month reporting lag for reporting its international results, this transaction was recorded in the quarter ended September 30, 2020. The Company recognized a gain of $14.7 million ($11.7 million net of tax) on the disposition. The Company recognized an additional loss on the disposal of Crawford Compliance Inc. of $0.6 million in the third quarter. Both of these disposals were in our then Crawford Specialty Solutions segment and resulted in a net gain of $0.21 per diluted share.

Subsequent Events

On October 1, 2021, the Company acquired 100% of Praxis Consulting Inc. ("Praxis"), an established subrogation claims service provider in the U.S. This acquisition allows the Company to expand its footprint in the U.S. subrogation claims market. The purchase price includes an initial cash consideration of $25.5 million, net of working capital adjustment, a deferred payment of $20.0 million in January 2022, and a maximum $10.0 million payable over the next two years based on achieving certain revenue performance goals.

On October 4, 2021, the Company acquired BosBoon Expertise Group B.V. ("BosBoon"), a Netherlands-based specialist loss adjusting company. The acquisition supports Crawford's strategic aim of strengthening its expertise in all key territories in which it operates. BosBoon offers a specialist range of loss adjusting services which will be added to the existing Crawford Global Technical Services proposition in The Netherlands and internationally.

On November 5, 2021, the Company, along with certain of our subsidiaries as co-borrowers, entered into a Credit Agreement with Bank of America, N.A. as Administrative Agent and lender, among other lenders party thereto. The Credit Agreement replaces our Amended and Restated Credit Agreement dated October 11, 2017. Proceeds from borrowings under the Credit Agreement were used to repay all amounts outstanding under the Prior Credit Agreement.

Under the Credit Agreement, the lenders have agreed, subject to certain terms and conditions, to (i) provide to the Company a $450 million multicurrency revolving credit facility maturing in November 2026, (ii) permit additional incremental borrowing capacity, subject to conditions stated therein, (iii) replace the existing fixed charge coverage ratio with an interest coverage ratio with a minimum of 2.50 to 1.00, and (iv) replace the existing leverage ratios with a single leverage ratio test of 4.50 to 1.00.

On November 4, 2021, the Company's Board of Directors, authorized the repurchase up to 2,000,000 shares of CRD-A or CRD-B (or a combination of the two) through December 31, 2023. Under the new repurchase program, repurchases may be made in the open market or privately negotiated transactions at such times and for such prices as management deems appropriate, subject to applicable regulatory guidelines. The new authorization does not obligate Crawford to acquire any stock, and purchases may be commenced or suspended at any time based on market conditions and other factors that the Company deems appropriate.

COVID-19

The Company has experienced continued recovery from the negative economic impact of COVID-19 in recent months, particularly in the U.S., compared to the significant reductions experienced in the prior year. Due to continued negative impacts in multiple regions, it is uncertain whether such recovery can be sustained and continue. The economic impact from COVID-19 could have a material impact to our results of operations, financial condition, and cash flows in one or more future quarters. In addition, it is possible that changes in economic conditions and steps taken by international, federal, state and/or local governments in response to COVID-19 could have negative impacts, including labor shortages which could increase compensation costs and other expenses, unless mitigated by government assistance programs to corporations.

Balance Sheet and Cash Flow

The Company's consolidated cash and cash equivalents position as of September 30, 2021, totaled $36.9 million, compared with $44.7 million at December 31, 2020. The Company's total debt outstanding as of September 30, 2021, totaled $140.6 million, compared with $113.6 million at December 31, 2020.

The Company's operations provided $20.0 million of cash during 2021, compared with $57.3 million in 2020. The decrease in cash provided by operating activities was primarily due to a $21.0 million increase in receivables as a result of Hurricane Ida, $6.0 million higher pension contributions and an $11.2 million impact from the CARES Act and CEWS.

The Company made $9.0 million in contributions to its U.S. defined benefit pension plan and $0.5 million to its U.K. plans for 2021, compared with $3.0 million in contributions to the U.S. plan and $0.5 million to the U.K. plans in 2020.

During 2021, the Company repurchased 530,598 shares of CRD-A and 111,499 shares of CRD-B at an average per share cost of $9.63 and $8.68, respectively. The total cost of share repurchases during 2021 was $6.1 million.

Conference Call

As previously announced, Crawford & Company will host a conference call on November 9, 2021, at 8:30 a.m. Eastern Time to discuss its third quarter 2021 results. The conference call can be accessed live by dialing 1-833-900-2283 and using Conference ID 5484757. A presentation for tomorrow's call can also be found on the investor relations portion of the Company's website, https://ir.crawco.com. The call will be recorded and available for replay through December 9, 2021. You may dial 1-800-585-8367 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 customer-relationship intangible assets, goodwill impairment, restructuring costs, gain on disposition of businesses, income taxes and net income or loss attributable to noncontrolling interests and redeemable 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 recurring adjustments for depreciation and amortization, net corporate interest expense, income taxes and stock-based compensation expense. Additionally, adjustments for non-recurring expenses for goodwill impairment, restructuring costs and gain on disposition of business have been included in the calculation of adjusted EBITDA.

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, defined benefit pension costs or credits for our frozen U.S. pension plan, 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 and amortization of customer-relationship intangible assets 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. 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										Nine Months Ended
(in thousands)		September 30, 2021					September 30, 2020					September 30, 2021					September 30, 2020
Geographic Area	Currency	USD equivalent		% of total			USD equivalent		% of total			USD equivalent		% of total			USD equivalent		% of total
U.S.	USD	$	175,554		60.9	%	$	152,720		60.3	%	$	476,670		58.9	%	$	419,055		57.8	%
U.K.	GBP		35,764		12.4	%		30,067		11.9	%		102,267		12.6	%		95,009		13.1	%
Canada	CAD		21,038		7.3	%		22,266		8.8	%		62,609		7.7	%		68,339		9.4	%
Australia	AUD		27,705		9.6	%		21,197		8.4	%		79,412		9.8	%		58,410		8.1	%
Europe	EUR		14,007		4.9	%		12,730		5.0	%		41,416		5.1	%		40,137		5.5	%
Rest of World	Various		14,432		4.9	%		14,144		5.6	%		46,764		5.9	%		44,121		6.1	%
Total Revenues, before reimbursements		$	288,500		100.0	%	$	253,124		100.0	%	$	809,138		100.0	%	$	725,071		100.0	%

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

	Three Months Ended						Nine Months Ended
(in thousands)	September 30, 2021			September 30, 2020			September 30, 2021			September 30, 2020
Operating earnings:
Crawford Loss Adjusting	$	7,063		$	14,139		$	18,124		$	24,854
Crawford Platform Solutions		10,968			10,655			25,937			20,939
Crawford TPA Solutions		5,034			4,288			14,465			13,708
Unallocated corporate and shared costs, net		(2,266	)		(1,027	)		(5,081	)		(6,189	)
Consolidated operating earnings		20,799			28,055			53,445			53,312
(Deduct) add:
Net corporate interest expense		(1,648	)		(1,599	)		(4,443	)		(6,275	)
Stock option expense		(296	)		(457	)		(700	)		(1,033	)
Amortization expense		(2,877	)		(3,665	)		(8,426	)		(9,153	)
Goodwill impairment		—			—			—			(17,674	)
Restructuring costs		—			—			—			(5,714	)
Gain on disposition of businesses, net		—			14,104			—			13,763
Income tax provision		(4,866	)		(11,729	)		(10,927	)		(9,554	)
Net loss (income) attributable to noncontrolling interests and redeemable noncontrolling interests		83			(312	)		90			1,224
Net income attributable to shareholders of Crawford & Company	$	11,195		$	24,397		$	29,039		$	18,896

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					Nine Months Ended
(in thousands)	September 30, 2021		September 30, 2020			September 30, 2021		September 30, 2020
Net income attributable to shareholders of Crawford & Company	$	11,195	$	24,397		$	29,039	$	18,896
Add (Deduct):
Depreciation and amortization		9,826		10,700			30,768		30,150
Stock-based compensation		2,001		734			5,564		2,732
Net corporate interest expense		1,648		1,599			4,443		6,275
Goodwill impairment		—		—			—		17,674
Restructuring costs		—		—			—		5,714
Gain on disposition of businesses, net		—		(14,104	)		—		(13,763	)
Income tax provision		4,866		11,729			10,927		9,554
Non-GAAP adjusted EBITDA	$	29,536	$	35,055		$	80,741	$	77,232

Following is a reconciliation of operating cash flow to free cash flow for the nine months ended September 30, 2021 and 2020:

Nine Months Ended
(in thousands)	September 30, 2021			September 30, 2020			Change
Net Cash Provided by Operating Activities	$	20,043		$	57,316		$	(37,273	)
Less:
Property & Equipment Purchases, net		(5,251	)		(10,850	)		5,599
Capitalized Software (internal and external costs)		(15,372	)		(12,793	)		(2,579	)
Free Cash Flow	$	(580	)	$	33,673		$	(34,253	)

Following are the reconciliations of GAAP Revenue, Operating Earnings, Pretax Earnings, Net Income and Earnings Per Share to related non-GAAP Adjusted figures, which reflect 2021 before amortization of intangible assets, and for 2020 exclude the amortization of intangible assets, goodwill impairment, gain on disposition of businesses and restructuring costs:

Three Months Ended September 30, 2021
(in thousands)	Revenues		Non-GAAP Operating earnings		Pretax earnings		Net income attributable to Crawford & Company		Diluted earnings per CRD-A share		Diluted earnings per CRD-B share
GAAP	$	288,500	$	20,799	$	15,978	$	11,195	$	0.20	$	0.21
Adjustments:
Amortizaton of intangible assets		—		—		2,877		2,158		0.04		0.04
Non-GAAP Adjusted	$	288,500	$	20,799	$	18,855	$	13,353	$	0.24	$	0.25

Three Months Ended September 30, 2020
(in thousands)	Revenues		Non-GAAP Operating earnings		Pretax earnings			Net income attributable to Crawford & Company⁽²⁾			Diluted earnings per CRD-A share⁽²⁾			Diluted earnings per CRD-B share⁽²⁾
GAAP	$	253,124	$	28,055	$	36,438		$	24,397		$	0.46		$	0.46
Adjustments:
Amortization of intangible assets		—		—		3,665			2,749			0.05			0.05
Income tax impact of first quarter goodwill impairment		—		—		—			1,935			0.04			0.04
Gain on disposition of business		—		—		(14,104	)		(11,072	)		(0.21	)		(0.21	)
Non-GAAP Adjusted	$	253,124	$	28,055	$	25,999		$	18,009		$	0.34		$	0.34

Nine Months Ended September 30, 2021
(in thousands)	Revenues		Non-GAAP Operating earnings		Pretax income		Net income attributable to Crawford & Company		Diluted earnings per CRD-A share		Diluted earnings per CRD-B share⁽¹⁾
GAAP	$	809,138	$	53,445	$	39,876	$	29,039	$	0.53	$	0.54
Adjustments:
Amortization of intangible assets		—		—		8,426		6,320		0.12		0.12
Non-GAAP Adjusted	$	809,138	$	53,445	$	48,302	$	35,359	$	0.65	$	0.65

Nine Months Ended September 30, 2020
(in thousands)	Revenues		Non-GAAP Operating earnings		Pretax earnings			Net income attributable to Crawford & Company⁽²⁾			Diluted earnings per CRD-A share⁽²⁾			Diluted earnings per CRD-B share⁽²⁾
GAAP	$	725,071	$	53,312	$	27,226		$	18,896		$	0.36		$	0.34
Adjustments:
Goodwill impairment		—		—		17,674			13,274			0.25			0.25
Restructuring costs		—		—		5,714			3,263			0.06			0.06
Gain on disposition of businesses, net		—		—		(13,763	)		(10,807	)		(0.20	)		(0.20	)
Amortization of intangible assets		—		—		9,153			6,865			0.13			0.13
Non-GAAP Adjusted	$	725,071	$	53,312	$	46,004		$	31,491		$	0.60		$	0.58

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

⁽²⁾ The income tax impact of goodwill impairment was based on the estimated annual effective income tax rate. Due to the non-discrete income tax treatment of the first quarter 2020 goodwill impairment, the income tax benefit normalized as income was earned during the remainder of the year, resulting in a lower full year income tax benefit during 2020.

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

	Three Months Ended				Nine Months Ended
(in thousands)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Weighted-Average Shares Used to Compute Basic Earnings Per Share:
Class A Common Stock		30,711		30,643		30,786		30,575
Class B Common Stock		22,407		22,510		22,438		22,533
Weighted-Average Shares Used to Compute Diluted Earnings Per Share:
Class A Common Stock		31,954		30,937		31,916		30,810
Class B Common Stock		22,407		22,510		22,438		22,533

Further information regarding the Company's operating results for the quarter and nine months ended September 30, 2021, financial position as of September 30, 2021, and cash flows for the nine months ended September 30, 2021 is shown on the attached unaudited condensed consolidated financial statements.

About Crawford®

Based in Atlanta, Crawford & Company (NYSE:CRD) is the world's largest publicly listed independent provider of claims management and outsourcing solutions to carriers, brokers and corporations with an expansive global network serving clients in more than 70 countries. The Company's two classes of stock are substantially identical, except with respect to voting rights and the Company's ability to pay greater cash dividends on the non-voting Class A Common Stock (CRD-A) than on the voting Class B Common Stock (CRD-B), subject to certain limitations. In addition, with respect to mergers or similar transactions, holders of CRD-A must receive the same type and amount of consideration as holders of CRD-B, unless different consideration is approved by the holders of 75 percent of CRD-A, voting as a class. More information is available at www.crawco.com.

Earnings per share may be different between CRD-A and CRD-B due to the payment of a higher per share dividend on CRD-A than CRD-B, and the impact that has on the earnings per share calculation according to generally accepted accounting principles.

For further information regarding this press release, please call Bruce Swain at (404) 300-1051.

Tag: Crawford-Investor-News-and-Events, Crawford-Financial

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 September 30,	2021		2020			% Change

Revenues:
Revenues Before Reimbursements	$	288,500	$	253,124			14	%
Reimbursements		9,062		8,545			6	%
Total Revenues		297,562		261,669			14	%

Costs and Expenses:
Costs of Services Provided, Before Reimbursements		211,017		177,061			19	%
Reimbursements		9,062		8,545			6	%
Total Costs of Services		220,079		185,606			19	%

Selling, General, and Administrative Expenses		60,759		52,065			17	%
Corporate Interest Expense, Net		1,648		1,599			3	%
Gain on disposition of business		-		(14,104	)	nm
Total Costs and Expenses		282,486		225,166			25	%

Other Income (Expense), Net		902		(65	)	nm

Income Before Income Taxes		15,978		36,438			(56	)%
Provision for Income Taxes		4,866		11,729			(59	)%

Net Income		11,112		24,709			(55	)%

Net Loss (Income) Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests		83		(312	)		(127	)%

Net Income Attributable to Shareholders of Crawford & Company	$	11,195	$	24,397			(54	)%

Earnings Per Share - Basic:
Class A Common Stock	$	0.21	$	0.46			(54	)%
Class B Common Stock	$	0.21	$	0.46			(54	)%

Earnings Per Share - Diluted:
Class A Common Stock	$	0.20	$	0.46			(57	)%
Class B Common Stock	$	0.21	$	0.46			(54	)%

Cash Dividends Per Share:
Class A Common Stock	$	0.06	$	0.04			50	%
Class B Common Stock	$	0.06	$	0.04			50	%

CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(In Thousands, Except Per Share Amounts and Percentages)

Nine Months Ended September 30,	2021		2020			% Change

Revenues:
Revenues Before Reimbursements	$	809,138	$	725,071			12	%
Reimbursements		27,124		25,519			6	%
Total Revenues		836,262		750,590			11	%

Costs and Expenses:
Costs of Services Provided, Before Reimbursements		589,375		518,263			14	%
Reimbursements		27,124		25,519			6	%
Total Costs of Services		616,499		543,782			13	%

Selling, General, and Administrative Expenses		178,120		163,327			9	%
Corporate Interest Expense, Net		4,443		6,275			(29	)%
Goodwill Impairment		-		17,674		nm
Restructuring Costs		-		5,714		nm
Gain on Disposition of Businesses, Net		-		(13,763	)	nm
Total Costs and Expenses		799,062		723,009			11	%

Other Income (Expense), Net		2,676		(355	)	nm

Income Before Income Taxes		39,876		27,226			46	%
Provision for Income Taxes		10,927		9,554			14	%

Net Income		28,949		17,672			64	%

Net Loss Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests		90		1,224			(93	)%

Net Income Attributable to Shareholders of Crawford & Company	$	29,039	$	18,896			54	%

Earnings Per Share - Basic:
Class A Common Stock	$	0.55	$	0.36			53	%
Class B Common Stock	$	0.55	$	0.34			62	%

Earnings Per Share - Diluted:
Class A Common Stock	$	0.53	$	0.36			47	%
Class B Common Stock	$	0.54	$	0.34			59	%

Cash Dividends Per Share:
Class A Common Stock	$	0.18	$	0.14			29	%
Class B Common Stock	$	0.18	$	0.12			50	%

CRAWFORD & COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2021 and December 31, 2020
Unaudited
(In Thousands, Except Par Values)

	September 30,			December 31,
	2021			2020
ASSETS

Current Assets:
Cash and Cash Equivalents	$	36,929		$	44,656
Accounts Receivable, Net		136,729			123,060
Unbilled Revenues, at Estimated Billable Amounts		127,510			103,528
Income Taxes Receivable		2,311			1,269
Prepaid Expenses and Other Current Assets		37,002			29,490
Total Current Assets		340,481			302,003

Net Property and Equipment		34,015			36,402

Other Assets:
Operating Lease Right-of-Use Asset, Net		100,895			109,315
Goodwill		85,696			66,537
Intangible Assets Arising from Business Acquisitions, Net		75,613			71,176
Capitalized Software Costs, Net		73,418			71,021
Deferred Income Tax Assets		25,003			25,595
Other Noncurrent Assets		71,375			70,935
Total Other Assets		432,000			414,579

Total Assets	$	806,496		$	752,984

LIABILITIES AND SHAREHOLDERS' INVESTMENT

Current Liabilities:
Short-Term Borrowings	$	1,582		$	1,837
Accounts Payable		38,658			41,544
Accrued Compensation and Related Costs		93,334			81,848
Self-Insured Risks		10,514			11,390
Income Taxes Payable		—			5,822
Operating Lease Liability		26,029			32,745
Other Accrued Liabilities		48,617			40,375
Deferred Revenues		30,545			27,233
Total Current Liabilities		249,279			242,794

Noncurrent Liabilities:
Long-Term Debt and Finance Leases, Less Current Installments		139,028			111,758
Operating Lease Liability		89,324			93,228
Deferred Revenues		24,035			24,136
Accrued Pension Liabilities		36,884			53,886
Other Noncurrent Liabilities		48,239			40,254
Total Noncurrent Liabilities		337,510			323,262

Shareholders' Investment:
Class A Common Stock, $1.00 Par Value		30,613			30,847
Class B Common Stock, $1.00 Par Value		22,399			22,510
Additional Paid-in Capital		73,768			67,193
Retained Earnings		279,273			265,245
Accumulated Other Comprehensive Loss		(185,657	)		(198,856	)
Shareholders' Investment Attributable to Shareholders of Crawford & Company		220,396			186,939
Noncontrolling Interests		(689	)		(11	)
Total Shareholders' Investment		219,707			186,928

Total Liabilities and Shareholders' Investment	$	806,496		$	752,984

CRAWFORD & COMPANY
SUMMARY RESULTS BY OPERATING SEGMENT WITH DIRECT COMPENSATION AND OTHER EXPENSES
Unaudited
(In Thousands, Except Percentages)

Three Months Ended September 30,
	Crawford Loss Adjusting						%	Crawford Platform Solutions							%	Crawford TPA Solutions						%
	2021			2020			Change		2021			2020			Change	2021			2020			Change

Revenues Before Reimbursements	$	123,965		$	110,929		11.8%		$	64,314		$	53,287		20.7%	$	100,221		$	88,908		12.7%

Direct Compensation, Fringe Benefits & Non-Employee Labor		80,961			66,155		22.4%			42,267			33,516		26.1%		64,573			56,703		13.9%

% of Revenues Before Reimbursements		*65.3*	%		59.6	%				*65.7*	%		62.9	%			*64.4*	%		63.8	%

Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor		35,941			30,635		17.3%			11,079			9,116		21.5%		30,614			27,917		9.7%

% of Revenues Before Reimbursements		*29.0*	%		27.6	%				*17.2*	%		17.1	%			*30.5*	%		31.4	%

Total Operating Expenses		116,902			96,790		20.8%			53,346			42,632		25.1%		95,187			84,620		12.5%

Operating Earnings ⁽¹⁾	$	7,063		$	14,139		(50.0)%		$	10,968		$	10,655		2.9%	$	5,034		$	4,288		17.4%

% of Revenues Before Reimbursements		*5.7*	%		12.7	%				*17.1*	%		20.0	%			*5.0*	%		4.8	%


Nine Months Ended September 30,
	Crawford Loss Adjusting						%	Crawford Platform Solutions							%	Crawford TPA Solutions						%
	2021			2020			Change		2021			2020			Change	2021			2020			Change

Revenues Before Reimbursements	$	352,458		$	327,095		7.8%		$	157,840		$	122,403		29.0%	$	298,840		$	275,573		8.4%

Direct Compensation, Fringe Benefits & Non-Employee Labor		230,103			202,299		13.7%			100,125			75,095		33.3%		191,408			175,040		9.4%

% of Revenues Before Reimbursements		*65.3*	%		61.8	%				*63.4*	%		61.4	%			*64.1*	%		63.5	%

Expenses Other than Reimbursements, Direct Compensation, Fringe Benefits & Non-Employee Labor		104,231			99,942		4.3%			31,778			26,369		20.5%		92,967			86,825		7.1%

% of Revenues Before Reimbursements		*29.6*	%		30.6	%				*20.1*	%		21.5	%			*31.1*	%		31.5	%

Total Operating Expenses		334,334			302,241		10.6%			131,903			101,464		30.0%		284,375			261,865		8.6%

Operating Earnings ⁽¹⁾	$	18,124		$	24,854		(27.1)%		$	25,937		$	20,939		23.9%	$	14,465		$	13,708		5.5%

% of Revenues Before Reimbursements		*5.1*	%		7.6	%				*16.4*	%		17.1	%			*4.8*	%		5.0	%

⁽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 customer-relationship intangible assets, goodwill impairment, restructuring costs, gain on disposition of businesses, and certain unallocated corporate and shared costs and credits. See pages 3 and 4 for additional information about segment operating earnings.

CRAWFORD & COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Year to Date Period Ended September 30, 2021 and September 30, 2020
Unaudited
(In Thousands)

	2021			2020
Cash Flows From Operating Activities:
Net income	$	28,949		$	17,672
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization		30,768			30,150
Goodwill impairment		—			17,674
Stock-based compensation		5,564			2,732
Gain on disposition of businesses, net		—			(13,763	)
Changes in operating assets and liabilities:
Accounts receivable, net		(7,352	)		485
Unbilled revenues, net		(18,990	)		(9,223	)
Accrued or prepaid income taxes		(8,627	)		2,462
Accounts payable and accrued liabilities		6,798			16,097
Deferred revenues		2,130			(1,491	)
Accrued retirement costs		(13,243	)		(6,101	)
Prepaid expenses and other operating activities		(5,954	)		622
Net cash provided by operating activities		20,043			57,316

Cash Flows From Investing Activities:
Acquisitions of property and equipment		(5,251	)		(10,850	)
Capitalization of computer software costs		(15,372	)		(12,793	)
Proceeds from settlement of life insurance policies		4,937			—
Payments for business acquisitions, net of cash acquired		(23,141	)		—
Cash proceeds from disposition of businesses, net of cash disposed		—			19,273
Net cash used in investing activities		(38,827	)		(4,370	)

Cash Flows From Financing Activities:
Cash dividends paid		(9,577	)		(6,986	)
Repurchases of common stock		(6,076	)		(2,666	)
Increases in short-term and revolving credit facility borrowings		58,449			76,876
Payments on short-term and revolving credit facility borrowings		(31,808	)		(124,454	)
Payments of contingent consideration on acquisitions		(1,683	)		—
Other financing activities		629			(21	)
Net cash provided by (used in) financing activities		9,934			(57,251	)

Effects of exchange rate changes on cash and cash equivalents		1,123			1,242
Decrease in cash and cash equivalents		(7,727	)		(3,063	)
Cash and cash equivalents at beginning of year		44,656			51,802
Cash and cash equivalents at end of period	$	36,929		$	48,739

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Crawford & Company Reports 2021 Third Quarter Results