Part I [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Q1 2024 and 2023, including operations, balance sheets, and cash flows, reporting **$313.1 million** in revenues and **$2.8 million** net income for Q1 2024 Q1 2024 vs Q1 2023 Consolidated Statements of Operations Highlights | Metric (In thousands, except per share) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Total Revenues** | **$313,073** | **$327,938** | | Revenues before reimbursements | $301,654 | $316,334 | | Income Before Income Taxes | $3,826 | $16,001 | | **Net Income Attributable to Shareholders** | **$2,837** | **$10,681** | | **Diluted EPS (Class A & B)** | **$0.06** | **$0.22** | Consolidated Balance Sheet Highlights | Metric (In thousands) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $45,196 | $58,363 | | **Total Assets** | **$776,277** | **$799,199** | | Long-term debt and finance leases | $210,823 | $194,335 | | **Total Liabilities** | **$633,039** | **$659,368** | | **Total Shareholders' Investment** | **$143,238** | **$139,831** | Q1 2024 vs Q1 2023 Consolidated Statements of Cash Flows Highlights | Metric (In thousands) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(19,803) | $(445) | | Net cash used in investing activities | $(9,550) | $(8,641) | | Net cash provided by financing activities | $16,073 | $5,187 | | **Decrease in Cash and Cash Equivalents** | **$(12,886)** | **$(2,704)** | - The company operates through four reportable segments: North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions[32](index=32&type=chunk)[76](index=76&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2024 financial results, noting a **4.6%** revenue decrease to **$301.7 million**, mainly from Platform Solutions, and a **15.9%** rise in SG&A expenses, impacting net income and liquidity [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q1 2024 consolidated revenues before reimbursements decreased by **4.6%** to **$301.7 million**, primarily due to a **49.2%** drop in Platform Solutions, while SG&A expenses rose by **15.9%** Consolidated Revenues Before Reimbursements (Q1 2024 vs Q1 2023) | (in thousands) | Q1 2024 | Q1 2023 | % Variance | | :--- | :--- | :--- | :--- | | **Total revenues before reimbursements** | **$301,654** | **$316,334** | **(4.6)%** | - Total cases received decreased by **4.0%** in Q1 2024, primarily due to a reduction of approximately **22,100** high-frequency, low-severity cases in the North America Loss Adjusting and Platform Solutions segments that were present in Q1 2023[102](index=102&type=chunk) - Selling, general, and administrative (SG&A) expenses increased by **$10.6 million**, or **15.9%**, in Q1 2024 compared to Q1 2023, driven by higher professional fees, IT costs, bad debt expense, and compensation[105](index=105&type=chunk) [Segment Analysis](index=31&type=section&id=Segment%20Analysis) Q1 2024 segment performance varied, with Broadspire's operating earnings up **61.5%**, while Platform Solutions plummeted **88.8%** due to a **49.2%** revenue decline, and other segments also saw decreases Segment Operating Earnings (Q1 2024 vs Q1 2023) | Segment (in thousands) | Q1 2024 Operating Earnings | Q1 2023 Operating Earnings | % Variance | | :--- | :--- | :--- | :--- | | North America Loss Adjusting | $4,479 | $8,065 | (44.5)% | | International Operations | $1,690 | $3,035 | (44.3)% | | Broadspire | $12,804 | $7,927 | 61.5% | | Platform Solutions | $1,115 | $9,966 | (88.8)% | | **Total segment operating earnings** | **$20,088** | **$28,993** | **(30.7)%** | [Liquidity, Capital Resources, and Financial Condition](index=35&type=section&id=Liquidity%2C%20Capital%20Resources%2C%20and%20Financial%20Condition) As of March 31, 2024, working capital was **$81.7 million** and cash **$45.2 million**, with cash used in operations increasing to **$19.8 million**, leading to **$21.0 million** in net borrowings and total liquidity of **$253.9 million** - Cash used in operating activities was **$19.8 million** for Q1 2024, a significant increase from **$0.4 million** used in Q1 2023, primarily driven by lower earnings and higher incentive compensation payments[170](index=170&type=chunk) - Cash provided by financing activities was **$16.1 million**, largely due to a net increase of **$21.0 million** in borrowings from the revolving credit facility to cover lower cash flows from operations[172](index=172&type=chunk) - Total liquidity at March 31, 2024, was **$253.9 million**, consisting of **$45.2 million** in cash and **$208.7 million** in additional borrowing capacity under the Credit Facility[174](index=174&type=chunk) - The company paid **$3.4 million** in dividends during Q1 2024, an increase from **$2.9 million** in Q1 2023[172](index=172&type=chunk)[178](index=178&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its market risk exposures since December 31, 2023, referring to its Annual Report on Form 10-K for further details - The company's exposures to market risk have not changed materially since December 31, 2023[185](index=185&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2024, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[188](index=188&type=chunk) - There were no material changes in the company's internal control over financial reporting during the first quarter of 2024[189](index=189&type=chunk) Part II [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) The company reports no material changes to previously disclosed risk factors, referring to its Annual Report on Form 10-K for a detailed discussion - The company refers to Part I, Item 1A of its Annual Report on Form 10-K for the year ended December 31, 2023, for a discussion of factors that could materially affect its business[191](index=191&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2024, the company repurchased **85,632** Class B Common Stock shares at **$8.56** per share, with **1,413,787** shares remaining authorized for repurchase until December 31, 2024 Share Repurchases in Q1 2024 | Period | Class | Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | :--- | | Jan 2024 | CRD-A / CRD-B | 0 | $ - | | Feb 2024 | CRD-A / CRD-B | 0 | $ - | | Mar 2024 | CRD-B | 85,632 | $8.56 | - As of March 31, 2024, the company was authorized to repurchase an additional **1,413,787** shares under its repurchase program, which is effective through December 31, 2024[192](index=192&type=chunk) [Other Information](index=38&type=section&id=Item%205.%20Other%20Information) During Q1 2024, no directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading plans for company securities - During Q1 2024, no directors or officers adopted or terminated any Rule 10b5-1 trading plans for the company's securities[194](index=194&type=chunk) [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications under Sarbanes-Oxley Act Sections 302 and 906, and Inline XBRL documents - The report includes certifications from the CEO and CFO as required by the Sarbanes-Oxley Act of 2002 (Sections 302 and 906) and Inline XBRL data files[196](index=196&type=chunk)

Financial Performance - Revenues before reimbursements for Q1 2024 were $301.7 million, down 5% from $316.3 million in Q1 2023[4] - Net income attributable to shareholders decreased to $2.8 million in Q1 2024 from $10.7 million in the same period last year[4] - Diluted earnings per share for both CRD-A and CRD-B were $0.06, compared to $0.22 in Q1 2023[4] - Consolidated adjusted EBITDA was $20.6 million, or 6.8% of revenues, down from $32.8 million, or 10.4% of revenues, in Q1 2023[5] - Total revenues for the three months ended March 31, 2024, decreased by 5% to $313,073 million compared to $327,938 million in the same period of 2023[22] - Net income attributable to shareholders decreased by 73% to $2,837 million from $10,681 million year-over-year[22] - Operating earnings for North America decreased by 44.5% to $4,479 million compared to $8,065 million in the prior year[24] - Net income for Q1 2024 was $6.5 million, down 53.3% from $13.9 million in Q1 2023[28] - Diluted earnings per share (EPS) on a non-GAAP basis decreased to $0.13 in Q1 2024 from $0.28 in Q1 2023, representing a 53.6% decline[28] - Operating earnings for Q1 2024 were $12.1 million, or 4.0% of revenues, down from $24.9 million, or 7.9% of revenues, in Q1 2023[28] Revenue Breakdown - North America Loss Adjusting revenues were $77.4 million, a decrease of 0.3% from $77.6 million in Q1 2023[6] - International Operations revenues increased by 6.8% to $98.1 million, with operating earnings of $1.7 million[7] - Broadspire segment achieved a record revenue of $94.3 million, up 12.2% from $84.1 million in Q1 2023[8] - Platform Solutions revenues fell 49.2% to $31.9 million, down from $62.8 million in Q1 2023[9] - The absence of catastrophic weather events resulted in a $30 million decline in revenues from the Platform Solutions segment compared to the previous year[27] - The U.S. market accounted for 59.6% of total revenues in Q1 2024, down from 63.2% in Q1 2023[35] Expenses and Costs - Selling, General, and Administrative expenses increased by 16% to $77,320 million compared to $66,711 million in the prior year[22] - Total costs and expenses for the three months ended March 31, 2024, decreased by 1% to $306,724 million compared to $309,792 million in the same period of 2023[22] - Unallocated corporate costs rose to $8.0 million in Q1 2024, compared to $4.1 million in Q1 2023[10] Cash and Assets - Cash and cash equivalents as of March 31, 2024, totaled $45.2 million, down from $58.4 million at the end of 2023[13] - Total current assets decreased to $345,824 million from $369,346 million as of December 31, 2023[23] - Total liabilities decreased to $776,277 million from $799,199 million as of December 31, 2023[23] - Long-term debt and finance leases increased to $210,823 million from $194,335 million as of December 31, 2023[23] - Total assets decreased to $776,277 million from $799,199 million as of December 31, 2023[23] Shareholder Returns - Cash dividends per share for Class A and Class B common stock increased by 17% to $0.07 from $0.06 year-over-year[22] - The company repurchased 85,632 shares of CRD-B at an average cost of $8.56 per share, totaling $0.7 million in Q1 2024[32] Financing Activities - The company reported a net cash provided by financing activities of $16.1 million in Q1 2024, compared to $5.2 million in Q1 2023[32] Financial Position - The balance sheet remains strong with ample liquidity and conservatively managed debt, positioning the company for growth opportunities in 2024[29] - Crawford & Company reported a beginning restricted cash of $1,182,000 at December 31, 2023, and an ending restricted cash of $1,463,000 at March 31, 2024[50] - The company’s financial statements are unaudited and presented in thousands, except for per share amounts and percentages[46] - The financial results include a non-GAAP measurement representing net income attributable to the applicable reporting segment, excluding various expenses[49]

[PART I](index=4&type=section&id=PART%20I) [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Crawford & Company is the world's largest publicly listed independent provider of claims management and outsourcing solutions, operating globally through four segments - Crawford & Company is the world's largest publicly listed independent provider of claims management and outsourcing solutions, reporting total revenues before reimbursements of **$1.267 billion** for the year ended December 31, 2023[124](index=124&type=chunk) - The company's business is highly competitive and demand is largely dependent on industry-wide claims volumes, which are affected by unpredictable factors like weather events, economic activity, and client outsourcing decisions[132](index=132&type=chunk) - As of December 31, 2023, the company had approximately **10,200 employees**, with women comprising **57%** of the global workforce. The company has implemented various employee development programs, including the Manager Acceleration Program (MAP) and the Crawford Emerging Leaders Program[140](index=140&type=chunk)[171](index=171&type=chunk)[535](index=535&type=chunk) Operating Segments and 2023 Revenue Contribution | Segment | Description | 2023 Revenue % | | :--- | :--- | :--- | | **North America Loss Adjusting** | Claims management for property & casualty in the U.S. and Canada | 23.9% | | **International Operations** | Claims management for property & casualty outside North America | 30.2% | | **Broadspire** | Third-party administration for casualty, disability, and self-insured markets in the U.S. | 28.1% | | **Platform Solutions** | Services including Contractor Connection, Networks, and Subrogation in the U.S. | 17.8% | [Item 1A. Risk Factors](index=10&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from unpredictable claim volumes, cybersecurity threats, international operations, underfunded pension plans, and intense competition for skilled employees - A significant portion of revenue depends on claim volumes, which are not accurately forecastable and can be affected by weather, economic conditions, and client outsourcing decisions[144](index=144&type=chunk)[174](index=174&type=chunk) - The company faces cybersecurity risks from increasingly sophisticated attacks. A security breach could compromise sensitive consumer information, leading to business loss, legal liability, and reputational damage[148](index=148&type=chunk)[177](index=177&type=chunk)[207](index=207&type=chunk) - International operations expose the company to political, legal, and exchange rate risks. These operations are subject to numerous laws, and violations could lead to significant penalties[182](index=182&type=chunk)[183](index=183&type=chunk)[212](index=212&type=chunk) - The U.S. qualified defined benefit pension plan is underfunded by **$22.3 million**. Future funding requirements could restrict cash available for operations and investments[190](index=190&type=chunk)[220](index=220&type=chunk) - The company must comply with financial covenants in its credit facility, such as a maximum leverage ratio and a minimum interest coverage ratio. Failure to comply could result in the acceleration of outstanding debt[191](index=191&type=chunk)[222](index=222&type=chunk) - The business is highly competitive, and failure to attract and retain skilled employees, particularly in response to catastrophic events or an aging workforce, could harm operations[198](index=198&type=chunk)[226](index=226&type=chunk)[259](index=259&type=chunk) [Item 1C. Cybersecurity](index=19&type=section&id=Item%201C.%20Cybersecurity) The company maintains a global cybersecurity and privacy program aligned with NIST and ERM, overseen by the Audit Committee, with no material incidents reported in the last three fiscal years - The company has a global cybersecurity program to assess, identify, and manage threats, utilizing the NIST Cybersecurity Framework and integrating risks into its overall ERM program[202](index=202&type=chunk)[262](index=262&type=chunk) - Cybersecurity governance is managed by the CISO, CIO, and CPO, with oversight from the Audit Committee of the Board of Directors, which receives quarterly updates[236](index=236&type=chunk)[265](index=265&type=chunk) - The company employs various measures to manage cybersecurity risks, including ongoing employee awareness training, periodic phishing tests, and annual external evaluations of its program[203](index=203&type=chunk) - In the last three fiscal years, the company has not experienced any material cybersecurity incidents, and related expenses have been immaterial[235](index=235&type=chunk) [Item 2. Properties](index=21&type=section&id=Item%202.%20Properties) As of December 31, 2023, the company leased 206 office locations globally, deemed sufficient for current operations - The company leases **206 office locations** globally under various terms and believes these facilities are sufficient for its operational needs[239](index=239&type=chunk) [Item 3. Legal Proceedings](index=21&type=section&id=Item%203.%20Legal%20Proceedings) The company is periodically involved in lawsuits related to claims administration, with most claims covered by insurance and adequate provisions made - The company is periodically named as a defendant in lawsuits arising from its claims administration services. Management believes adequate provisions have been made for these known risks, most of which are covered by insurance[240](index=240&type=chunk) [PART II](index=22&type=section&id=PART%20II) [Item 5. Market for Registrant's Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity Securities](index=22&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Shareholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A and B common stocks trade on the NYSE, with an authorized share repurchase program and performance compared to market indices - The company's two classes of common stock, **CRD-A** (non-voting) and **CRD-B** (voting), are traded on the New York Stock Exchange (NYSE)[273](index=273&type=chunk) - A share repurchase program is authorized through December 31, 2024. As of December 31, 2023, there was remaining authorization to repurchase **1,499,419 shares**[274](index=274&type=chunk) Indexed Returns (Value of $100 Investment on Dec 31, 2018) | Company / Index | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Crawford & Co (Class A)** | 100.00 | 132.56 | 87.61 | 91.11 | 69.89 | 170.78 | | **Crawford & Co (Class B)** | 100.00 | 115.15 | 83.62 | 89.32 | 65.60 | 167.05 | | **S&P 500 Index** | 100.00 | 131.49 | 155.68 | 200.38 | 164.09 | 207.23 | | **S&P Property-Casualty Ins. Index** | 100.00 | 125.87 | 133.84 | 157.27 | 186.95 | 207.05 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2023, consolidated revenues grew **6.5%** to **$1.267 billion**, with net income recovering to **$30.6 million** from a 2022 loss, driven by segment growth and improved liquidity, while critical accounting policies include revenue recognition and goodwill impairment - The increase in 2023 revenue was driven by new client growth in North America Loss Adjusting, International Operations, and Broadspire, along with pricing increases across all segments. This was partially offset by a weather-related revenue reduction in the Platform Solutions segment[253](index=253&type=chunk)[254](index=254&type=chunk) - The significant improvement in net income for 2023 compared to 2022 is largely due to the absence of the **$36.8 million** non-cash goodwill impairment charge and **$11.8 million** in income tax reserves that were recorded in 2022[283](index=283&type=chunk)[290](index=290&type=chunk) - The company's liquidity at December 31, 2023, was **$290.5 million**, consisting of **$58.4 million** in cash and **$232.1 million** in additional borrowing capacity. Management believes this is sufficient to maintain operations for the next 12 months[473](index=473&type=chunk)[525](index=525&type=chunk) Consolidated Financial Highlights (2023 vs. 2022) | Metric | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | Revenues before reimbursements | $1,267.1M | $1,189.5M | 6.5% | | Net Income (Loss) Attributable to Shareholders | $30.6M | ($18.3M) | 267.2% | [Results of Operations](index=26&type=section&id=Results%20of%20Operations) In 2023, revenues grew **6.5%** driven by strong segment performance, though Platform Solutions declined, while operating earnings improved significantly, contrasting with a **$36.8 million** goodwill impairment in 2022 - A non-cash goodwill impairment of **$36.8 million** was recorded in Q3 2022, impacting North America Loss Adjusting (**$3.4M**), International Operations (**$22.7M**), and Platform Solutions (**$10.7M**). No goodwill impairment occurred in 2023[290](index=290&type=chunk) - Selling, general, and administrative (SG&A) expenses increased by **12.0%** in 2023 due to higher compensation, self-insurance costs, professional fees, contingent earnout adjustments, and the absence of a 2022 gain on the sale of the Canadian head office[257](index=257&type=chunk) Revenues Before Reimbursements by Segment (2023 vs. 2022) | Segment | 2023 (in thousands) | 2022 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | North America Loss Adjusting | $303,629 | $274,755 | 10.5% | | International Operations | $382,393 | $357,452 | 7.0% | | Broadspire | $355,650 | $313,564 | 13.4% | | Platform Solutions | $225,459 | $243,711 | (7.5)% | | **Total** | **$1,267,131** | **$1,189,482** | **6.5%** | Segment Operating Earnings (Loss) (2023 vs. 2022) | Segment | 2023 (in thousands) | 2022 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | North America Loss Adjusting | $23,185 | $19,108 | 21.3% | | International Operations | $11,181 | ($12,946) | 186.4% | | Broadspire | $41,873 | $27,021 | 55.0% | | Platform Solutions | $28,541 | $35,746 | (20.2)% | [Liquidity, Capital Resources, and Financial Condition](index=60&type=section&id=Liquidity%2C%20Capital%20Resources%2C%20and%20Financial%20Condition) The company's liquidity, primarily from operations and a **$450 million** credit facility, significantly improved in 2023, with cash from operations reaching **$103.8 million**, and the company remained compliant with all debt covenants - The company's primary sources of liquidity are cash from operations and a **$450 million** revolving credit facility that matures in November 2026[461](index=461&type=chunk)[462](index=462&type=chunk) - At December 31, 2023, the company had **$209.1 million** of debt outstanding and **$232.1 million** of available borrowing capacity under its Credit Facility[463](index=463&type=chunk) Cash Flow Summary (in millions) | Cash Flow Activity | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Net cash provided by operating activities** | $103.8 | $27.6 | $54.3 | | **Net cash used in investing activities** | ($36.6) | ($57.9) | ($70.8) | | **Net cash (used in) provided by financing activities** | ($54.7) | $25.9 | $24.7 | Debt Covenant Compliance | Covenant | Requirement | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | :--- | | **Leverage Ratio** | Not > 4.50 to 1.00 | 1.60 | 2.16 | | **Interest Coverage Ratio** | Not < 2.50 to 1.00 | 5.99 | 9.70 | [Critical Accounting Policies and Estimates](index=66&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant judgment in revenue recognition for lifetime claims, annual impairment testing of goodwill, assumptions for defined benefit pension plans, and estimating liabilities for self-insured risks - Deferred revenues, primarily in the Broadspire segment for lifetime claim handling, are sensitive to historical claim closing rates. A **1.0% decrease** in these rates would have resulted in an additional revenue deferral of approximately **$0.5 million** in 2023[94](index=94&type=chunk)[95](index=95&type=chunk)[97](index=97&type=chunk) - Goodwill and indefinite-lived intangible assets are tested for impairment annually (or more frequently if indicators exist) by comparing the carrying value of reporting units to their estimated fair values, determined through income and market approaches[71](index=71&type=chunk)[135](index=135&type=chunk) - In 2023, goodwill impairment testing was performed, and the estimated fair value of each reporting unit exceeded its carrying value. Key assumptions included discount rates of **12.0%-13.5%** and a terminal growth rate of **2.0%**[73](index=73&type=chunk) - Accounting for defined benefit pension plans requires significant assumptions for discount rates and expected long-term return on assets. A **0.50% change** in the expected return on plan assets would have impacted 2023 pretax income by approximately **$2.2 million**[111](index=111&type=chunk)[516](index=516&type=chunk)[544](index=544&type=chunk) - The company self-insures certain risks like professional liability and workers' compensation. Estimated liabilities for these risks totaled **$51.7 million** as of December 31, 2023[550](index=550&type=chunk)[562](index=562&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=76&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2021-2023, including statements of operations, balance sheets, cash flows, and comprehensive notes detailing accounting policies, debt, and retirement plans, along with the independent auditor's report [Consolidated Financial Statements](index=77&type=section&id=Consolidated%20Financial%20Statements) For 2023, total revenues reached **$1.317 billion**, with net income attributable to shareholders at **$30.6 million**, a significant recovery from a **$18.3 million** net loss in 2022, and operating cash flow substantially increased to **$103.8 million** Consolidated Statement of Operations Highlights (in thousands) | Metric | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Total Revenues** | $1,316,919 | $1,231,226 | $1,139,231 | | **Income Before Income Taxes** | $47,357 | $5,046 | $43,864 | | **Net Income (Loss) Attributable to Shareholders** | $30,609 | ($18,305) | $30,692 | | **Diluted EPS (Class A)** | $0.61 | ($0.37) | $0.57 | Consolidated Balance Sheet Highlights (in thousands) | Metric | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $58,363 | $46,007 | | Total Current Assets | $369,346 | $351,267 | | Goodwill | $76,724 | $76,622 | | **Total Assets** | **$799,199** | **$791,507** | | Total Current Liabilities | $299,292 | $279,487 | | Long-term debt, less current installments | $194,335 | $211,810 | | **Total Shareholders' Investment** | **$139,831** | **$123,378** | Consolidated Statement of Cash Flows Highlights (in thousands) | Metric | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $103,790 | $27,634 | $54,321 | | Net cash used in investing activities | ($36,596) | ($57,876) | ($70,826) | | Net cash (used in) provided by financing activities | ($54,680) | $25,940 | $24,657 | [Notes to Consolidated Financial Statements](index=84&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail accounting policies, including revenue recognition, business acquisitions, goodwill impairment, debt facilities, lease commitments, tax rates, and defined benefit pension plan assumptions - **Revenue Recognition**: Revenue is recognized over time as services are performed. For fixed-fee claims, revenue is recognized utilizing a portfolio approach based on historical claim closure rates. For time and expense claims, revenue is recognized as the company has the right to invoice[37](index=37&type=chunk)[51](index=51&type=chunk) - **Business Acquisitions**: The company completed several acquisitions, including **edjuster Inc.** (2021), **Praxis Consulting** (2021), and **R.P. van Dijk B.V.** (2022), which expanded its capabilities in contents services, subrogation, and bodily injury loss adjusting, respectively[45](index=45&type=chunk)[81](index=81&type=chunk)[647](index=647&type=chunk) - **Goodwill Impairment**: In 2022, the company recognized a non-cash pretax goodwill impairment of **$36.8 million** due to reduced forecasts and higher interest rates. No impairment was recorded in 2023[86](index=86&type=chunk) - **Debt**: The company has a **$450 million** revolving credit facility maturing in 2026. At year-end 2023, **$209 million** was outstanding, with a weighted average interest rate of **6.6%**[839](index=839&type=chunk)[864](index=864&type=chunk) - **Retirement Plans**: The U.S. Qualified Pension Plan was underfunded by **$22.3 million** at year-end 2023. The U.K. plans were overfunded by **$10.9 million**. Key assumptions for 2023 benefit obligations were discount rates of **4.94%** (U.S.) and **5.78%** (U.K.)[505](index=505&type=chunk)[530](index=530&type=chunk)[682](index=682&type=chunk) [Item 9A. Controls and Procedures](index=143&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of December 31, 2023, having remediated a material weakness in IT general controls identified in 2022, with the independent auditor issuing an unqualified opinion - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[805](index=805&type=chunk) - A material weakness related to IT general controls in the United Kingdom, which was identified as of December 31, 2022, was successfully remediated during 2023[784](index=784&type=chunk)[809](index=809&type=chunk) - Based on its assessment using the COSO framework, management determined that the company's internal control over financial reporting was effective as of December 31, 2023[783](index=783&type=chunk) [PART III](index=146&type=section&id=PART%20III) [Items 10, 11, 12, 13, and 14](index=146&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) Information for Items 10 through 14, covering directors, executive compensation, security ownership, and related matters, is incorporated by reference from the forthcoming 2024 Proxy Statement - Information regarding Directors, Executive Officers, Corporate Governance, Executive Compensation, Security Ownership, and Principal Accountant Fees and Services is incorporated by reference from the company's forthcoming 2024 Proxy Statement[792](index=792&type=chunk)[794](index=794&type=chunk)[830](index=830&type=chunk) [PART IV](index=147&type=section&id=PART%20IV) [Item 15. Exhibits, Financial Statement Schedules](index=147&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all financial statements and exhibits filed with the Form 10-K, including corporate governance documents, material contracts, and certifications - This section lists all financial statements and exhibits filed with the Form 10-K, including the consolidated financial statements from Item 8[797](index=797&type=chunk) - Filed exhibits include key documents such as the Restated Articles of Incorporation, By-laws, various employee compensation plans, the Credit Agreement, and CEO/CFO certifications[798](index=798&type=chunk)[823](index=823&type=chunk)

[Financial Highlights](index=1&type=section&id=CRAWFORD%20%26%20COMPANY%20REPORTS%202023%20FOURTH%20QUARTER%20AND%20FULL%20YEAR%20RESULTS) [Fourth Quarter 2023 Performance](index=1&type=section&id=GAAP%20Consolidated%20Results%20Fourth%20Quarter%202023) In Q4 2023, Crawford & Company reported decreased revenues to **$296.1 million**, with GAAP net loss narrowing to **$(0.8) million** while non-GAAP net income and adjusted operating earnings declined Q4 2023 GAAP Consolidated Results | Metric | Q4 2023 | Q4 2022 | | :--- | :--- | :--- | | Revenues before reimbursements (in millions) | $296.1 | $322.2 | | Net loss attributable to shareholders (in millions) | $(0.8) | $(14.1) | | Diluted loss per share (CRD-A & CRD-B) | $(0.02) | $(0.29) | Q4 2023 Non-GAAP Consolidated Results | Metric | Q4 2023 | Q4 2022 | | :--- | :--- | :--- | | Net income attributable to shareholders (in millions) | $3.3 | $11.4 | | Diluted earnings per share (CRD-A/CRD-B) | $0.06/$0.07 | $0.23/$0.23 | | Consolidated adjusted operating earnings (in millions) | $7.8 | $23.4 | | Consolidated adjusted EBITDA (in millions) | $15.7 | $30.8 | - On a constant dollar basis, Q4 2023 revenues before reimbursements decreased by **9%** compared to the prior-year quarter[4](index=4&type=chunk) [Full Year 2023 Performance](index=3&type=section&id=GAAP%20Consolidated%20Results%20Full%20Year%202023) Full year 2023 saw record revenues of **$1.267 billion**, a **7%** increase, with GAAP net income turning profitable at **$30.6 million** and non-GAAP results showing strong growth Full Year 2023 GAAP Consolidated Results | Metric | Full Year 2023 | Full Year 2022 | | :--- | :--- | :--- | | Revenues before reimbursements (in billions) | $1.267 | $1.189 | | Net income (loss) attributable to shareholders (in millions) | $30.6 | $(18.3) | | Diluted earnings (loss) per share (CRD-A/CRD-B) | $0.61/$0.62 | $(0.37)/$(0.37) | Full Year 2023 Non-GAAP Consolidated Results | Metric | Full Year 2023 | Full Year 2022 | | :--- | :--- | :--- | | Net income attributable to shareholders (in millions) | $47.0 | $33.4 | | Diluted earnings per share (CRD-A & CRD-B) | $0.95 | $0.67 | | Consolidated adjusted operating earnings (in millions) | $85.4 | $61.9 | | Consolidated adjusted EBITDA (in millions) | $118.7 | $94.7 | - On a constant dollar basis, full-year 2023 revenues before reimbursements increased by **8%** over 2022[6](index=6&type=chunk) [Management Commentary](index=3&type=section&id=Management%20Comments) Management highlighted 2023 as a strong year with record consolidated revenue of **$1.27 billion** and enhanced margins, despite Q4 being impacted by benign weather, while expressing optimism for 2024 market share expansion - 2023 was a record-setting year with consolidated revenue of **$1.27 billion** and a **38%** increase in operating earnings from 2022[7](index=7&type=chunk) - Fourth-quarter performance was impacted by benign weather activity, leading to lower weather-related revenue compared to Q4 2022, which had several severe weather events[7](index=7&type=chunk) - Despite the weather impact, both the Broadspire and International businesses achieved **double-digit** revenue growth in Q4 2023[7](index=7&type=chunk) [Segment Performance](index=3&type=section&id=Segment%20Results%20for%20the%20Fourth%20Quarter%20and%20Full%20Year) [North America Loss Adjusting](index=3&type=section&id=North%20America%20Loss%20Adjusting) The North America Loss Adjusting segment experienced a **10.3%** revenue decrease in Q4 2023 with operating earnings falling to **$0.8 million**, but full-year revenue increased by **10.5%** to **$303.6 million** with improved operating margin North America Loss Adjusting Performance | Period | Revenues (in millions) | Operating Earnings (in millions) | Operating Margin | | :--- | :--- | :--- | :--- | | Q4 2023 | $69.7 | $0.8 | 1.1% | | Q4 2022 | $77.7 | $8.6 | 11.0% | | FY 2023 | $303.6 | $23.2 | 7.6% | | FY 2022 | $274.8 | $19.1 | 7.0% | [International Operations](index=4&type=section&id=International%20Operations) International Operations showed significant improvement, with Q4 2023 revenues growing **9.9%** to **$97.2 million** and achieving an operating profit of **$2.2 million**, while full-year revenues increased **7.0%** to **$382.4 million** with a **$11.2 million** operating profit International Operations Performance | Period | Revenues (in millions) | Operating Earnings (Loss) (in millions) | Operating Margin | | :--- | :--- | :--- | :--- | | Q4 2023 | $97.2 | $2.2 | 2.3% | | Q4 2022 | $88.4 | $(5.3) | (6.0)% | | FY 2023 | $382.4 | $11.2 | 2.9% | | FY 2022 | $357.5 | $(12.9) | (3.6)% | [Broadspire](index=4&type=section&id=Broadspire) Broadspire delivered strong results, with Q4 2023 revenues increasing **17.2%** to **$92.1 million** and operating earnings nearly doubling to **$12.3 million**, contributing to full-year revenue growth of **13.4%** to **$355.7 million** and a **55%** rise in operating earnings Broadspire Performance | Period | Revenues (in millions) | Operating Earnings (in millions) | Operating Margin | | :--- | :--- | :--- | :--- | | Q4 2023 | $92.1 | $12.3 | 13.3% | | Q4 2022 | $78.6 | $6.7 | 8.6% | | FY 2023 | $355.7 | $41.9 | 11.8% | | FY 2022 | $313.6 | $27.0 | 8.6% | [Platform Solutions](index=4&type=section&id=Platform%20Solutions) Platform Solutions faced challenges, with Q4 2023 revenues declining **52.0%** to **$37.2 million** and operating earnings dropping to **$1.9 million**, leading to full-year revenue down **7.5%** to **$225.5 million** and decreased operating earnings Platform Solutions Performance | Period | Revenues (in millions) | Operating Earnings (in millions) | Operating Margin | | :--- | :--- | :--- | :--- | | Q4 2023 | $37.2 | $1.9 | 5.2% | | Q4 2022 | $77.4 | $13.0 | 16.8% | | FY 2023 | $225.5 | $28.5 | 12.7% | | FY 2022 | $243.7 | $35.7 | 14.7% | [Unallocated Corporate and Shared Costs](index=4&type=section&id=Unallocated%20Corporate%20and%20Shared%20Costs%20and%20Credits%2C%20Net) Unallocated corporate costs significantly increased in 2023, reaching **$9.4 million** in Q4 and **$19.4 million** for the full year, primarily due to higher self-insurance, compensation, and professional fees - Fourth-quarter unallocated costs increased to **$9.4 million**, primarily due to higher self-insurance, compensation, professional fees, and support costs[13](index=13&type=chunk) - Full-year unallocated costs rose to **$19.4 million** in 2023 from **$7.1 million** in 2022, impacted by similar cost increases as the fourth quarter and a gain on a building sale in 2022 that did not recur[13](index=13&type=chunk) [Financial Condition and Cash Flow](index=5&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) [Balance Sheet Analysis](index=5&type=section&id=Balance%20Sheet) As of December 31, 2023, the company strengthened its balance sheet by increasing cash to **$58.4 million** and reducing total debt to **$209.1 million** Key Balance Sheet Items | Metric | Dec 31, 2023 (in millions) | Dec 31, 2022 (in millions) | | :--- | :--- | :--- | | Cash and cash equivalents | $58.4 | $46.0 | | Total debt outstanding | $209.1 | $238.9 | [Cash Flow Analysis](index=5&type=section&id=Cash%20Flow) The company significantly increased cash from operations to **$103.8 million** in 2023, driven by improved accounts receivables and higher earnings, and repurchased **$2.7 million** in shares - Cash provided by operating activities increased to **$103.8 million** in 2023 from **$27.6 million** in 2022, mainly due to a **$58.4 million** improvement in accounts receivables and higher earnings[18](index=18&type=chunk) - In 2023, the company repurchased **293,952** shares of CRD-B stock for a total of **$2.7 million**[18](index=18&type=chunk) [Other Financial Information](index=5&type=section&id=Other%20Financial%20Information) [2022 Goodwill Impairment](index=5&type=section&id=2022%20Goodwill%20Impairment) No goodwill impairment was recorded in 2023, contrasting with a **$36.8 million** pre-tax non-cash impairment recognized in 2022, which had a **$33.3 million** after-tax impact - There was no goodwill impairment in 2023. In 2022, the company recognized a pre-tax non-cash goodwill impairment of **$36.8 million**, with an after-tax impact of **$33.3 million** for that year[14](index=14&type=chunk) [Presentation Revision of 2023 Quarters](index=5&type=section&id=Presentation%20Revision%20of%202023%20Quarters) An immaterial revision to 2023 interim financial statements reclassified certain income from SG&A reduction to 'Revenues before reimbursements', increasing both revenue and SG&A by identical amounts with no impact on operating earnings or net income - The company revised its interim 2023 financial presentation, increasing 'Revenues before reimbursements' and 'Selling, general, and administrative expenses' by corresponding amounts, with no impact on operating earnings or net income[15](index=15&type=chunk) [Other Matters](index=5&type=section&id=Other%20Matters) Other financial matters include a pretax contingent earnout expense of **$0.9 million** in Q4 2023 and **$4.0 million** for the full year, along with non-service pension costs of **$2.2 million** in Q4 and **$8.6 million** for the year - Recognized a pretax contingent earnout expense of **$0.9 million** in Q4 2023 and **$4.0 million** for the full year 2023 related to fair value adjustments of acquisition-related liabilities[16](index=16&type=chunk) - Non-service pension costs totaled **$2.2 million** in Q4 2023 and **$8.6 million** for the full year 2023[16](index=16&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=7&type=section&id=Non-GAAP%20Presentation) This section details the company's use of non-GAAP financial measures like Operating Earnings and Adjusted EBITDA, which provide a clearer view of operational performance by excluding specific items, and includes comprehensive reconciliations to GAAP counterparts - The company uses Operating Earnings as its primary measure for evaluating segment performance, which excludes items like net corporate interest expense, stock option expense, amortization, and goodwill impairment[20](index=20&type=chunk) - Adjusted EBITDA is used by management to evaluate and benchmark operational results and is defined as net income adjusted for depreciation, amortization, interest, taxes, stock-based compensation, and other specific non-operating items[20](index=20&type=chunk) Full Year 2023 GAAP to Non-GAAP Reconciliation Summary | Metric (in thousands) | GAAP | Adjustments | Non-GAAP Adjusted | | :--- | :--- | :--- | :--- | | Pretax earnings | $47,357 | $20,416 | $67,773 | | Net income attributable to Crawford & Co. | $30,609 | $16,410 | $47,019 | | Diluted EPS (CRD-A/CRD-B) | $0.61/$0.62 | $0.33/$0.33 | $0.95/$0.95 | [Condensed Consolidated Financial Statements](index=13&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) [Condensed Consolidated Statements of Operations](index=13&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For full year 2023, total revenues increased by **7%** to **$1.317 billion**, with the company achieving a net income of **$30.3 million**, a significant improvement from a **$(18.5) million** net loss in 2022 Full Year Statement of Operations Summary | Metric (in thousands) | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Total Revenues | $1,316,919 | $1,231,226 | | Total Costs and Expenses | $1,261,389 | $1,227,741 | | Net Income (Loss) | $30,260 | $(18,532) | | Diluted EPS (Class A) | $0.61 | $(0.37) | [Condensed Consolidated Balance Sheets](index=15&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of December 31, 2023, total assets slightly increased to **$799.2 million**, total liabilities decreased to **$659.4 million**, and total shareholders' investment rose to **$139.8 million** Balance Sheet Summary | Metric (in thousands) | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Current Assets | $369,346 | $351,267 | | Total Assets | $799,199 | $791,507 | | Total Current Liabilities | $299,292 | $279,487 | | Total Liabilities | $659,368 | $668,129 | | Total Shareholders' Investment | $139,831 | $123,378 | [Condensed Consolidated Statements of Cash Flows](index=17&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For 2023, net cash from operating activities significantly increased to **$103.8 million**, with net cash used in investing activities at **$36.6 million** and financing activities at **$54.7 million**, resulting in a **$12.9 million** increase in cash and cash equivalents Cash Flow Summary | Metric (in thousands) | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $103,790 | $27,634 | | Net cash used in investing activities | $(36,596) | $(57,876) | | Net cash (used in) provided by financing activities | $(54,680) | $25,940 | | Increase (decrease) in cash | $12,900 | $(7,044) |

Part I. Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial statements for the period ended September 30, 2023, reflect a significant turnaround from a net loss to a net income, with increased revenues, higher total assets, and improved operating cash flow Condensed Consolidated Statements of Operations Highlights (In thousands) | Indicator (In thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Revenues before reimbursements** | $325,594 | $294,924 | $959,251 | $867,294 | | **Total Revenues** | $337,660 | $306,417 | $995,994 | $897,858 | | **Goodwill impairment** | $0 | $36,808 | $0 | $36,808 | | **Income (Loss) Before Income Taxes** | $18,955 | $(28,538) | $48,507 | $(12,351) | | **Net Income (Loss) Attributable to Shareholders** | $12,319 | $(15,144) | $31,427 | $(4,218) | | **Diluted EPS (Class A)** | $0.25 | $(0.31) | $0.63 | $(0.08) | Condensed Consolidated Balance Sheet Highlights (In thousands) | Indicator (In thousands) | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $379,991 | $351,267 | | **Goodwill** | $76,637 | $76,622 | | **TOTAL ASSETS** | $827,191 | $791,507 | | **Total Current Liabilities** | $290,681 | $279,487 | | **Long-term debt and finance leases** | $201,487 | $211,810 | | **Total Shareholders' Investment** | $162,970 | $123,378 | | **TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT** | $827,191 | $791,507 | Condensed Consolidated Statements of Cash Flows Highlights (In thousands) | Indicator (In thousands) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $68,077 | $(16,195) | | **Net cash used in investing activities** | $(27,683) | $(48,193) | | **Net cash (used in) provided by financing activities** | $(38,070) | $46,931 | - The company operates through four reportable segments: North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions[31](index=31&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported robust revenue growth and substantial operating earnings improvement across most segments, with strong liquidity and significantly improved cash flow from operations [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Consolidated revenues before reimbursements increased significantly in Q3 and YTD 2023, driven by segment growth and the absence of prior-year goodwill impairment Consolidated Revenues Before Reimbursements (in thousands) | Period | 2023 | 2022 | % Variance | % Variance (Constant Currency) | | :--- | :--- | :--- | :--- | :--- | | **Three Months Ended Sep 30** | $325,594 | $294,924 | 10.4% | 10.2% | | **Nine Months Ended Sep 30** | $959,251 | $867,294 | 10.6% | 12.5% | - A pretax non-cash goodwill impairment of **$36.8 million** was recognized in Q3 2022, impacting the North America Loss Adjusting (**$3.4 million**), International Operations (**$22.7 million**), and Platform Solutions (**$10.7 million**) segments, with no such impairment occurring in 2023[119](index=119&type=chunk)[196](index=196&type=chunk) Segment Operating Earnings (in thousands) | Segment | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | **North America Loss Adjusting** | $10,468 | $3,750 | $22,433 | $10,533 | | **International Operations** | $2,197 | $(3,922) | $8,974 | $(7,648) | | **Broadspire** | $13,532 | $6,198 | $29,607 | $20,299 | | **Platform Solutions** | $8,523 | $10,080 | $26,595 | $22,714 | [Segment Performance](index=32&type=section&id=Segment%20Performance) North America Loss Adjusting, International Operations, and Broadspire segments showed strong revenue growth and improved operating earnings, while Platform Solutions experienced a decline - **North America Loss Adjusting:** Q3 revenue grew **18.8%** to **$79.4 million**, driven by a **34.1%** increase in U.S. revenues from new and existing clients, with operating margin improving significantly from **5.6%** to **13.2%**[137](index=137&type=chunk)[140](index=140&type=chunk) - **International Operations:** Q3 revenue increased **13.9%** to **$98.1 million**, with the U.K. showing strong **51.0%** growth, and the segment returned to profitability with a **2.2%** operating margin, a sharp recovery from a **(4.6)%** margin in Q3 2022[149](index=149&type=chunk)[152](index=152&type=chunk) - **Broadspire:** Q3 revenue rose **12.7%** to **$88.3 million**, with strong growth in both Claims Management (**+9.2%**) and Medical Management (**+16.3%**), and operating margin nearly doubled from **7.9%** to **15.3%**[161](index=161&type=chunk)[165](index=165&type=chunk) - **Platform Solutions:** Q3 revenue decreased **6.0%** to **$59.8 million**, primarily due to a **16.3%** decline in the Networks service line, leading to a contraction in operating margin from **15.8%** to **14.2%**[172](index=172&type=chunk)[175](index=175&type=chunk) [Liquidity, Capital Resources, and Financial Condition](index=48&type=section&id=Liquidity%2C%20Capital%20Resources%2C%20and%20Financial%20Condition) The company's financial position strengthened with increased working capital, robust operating cash flow, and strong total liquidity, while net borrowings decreased - Cash provided by operating activities was **$68.1 million** for the nine months ended Sep 30, 2023, a stark contrast to the **$16.2 million** used in the same period of 2022[200](index=200&type=chunk) - Total liquidity was **$281.2 million** at September 30, 2023, consisting of **$49.2 million** in cash and **$232.0 million** in additional borrowing capacity under the credit facility[205](index=205&type=chunk) - Net borrowings from the revolving credit facility decreased by **$22.8 million** in the first nine months of 2023, compared to a net increase of **$84.8 million** in the prior-year period[202](index=202&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in its market risk exposures since the disclosures in its 2022 Annual Report on Form 10-K - There have been no material changes in the company's market risk exposures since December 31, 2022[216](index=216&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective due to a material weakness in IT general controls within U.K. operations, with remediation underway - A material weakness in internal control over financial reporting persists, related to ineffective IT general controls (ITGCs) in the areas of change management and logical access within the U.K. operations[219](index=219&type=chunk) - Due to this material weakness, the CEO and CFO concluded that disclosure controls and procedures were not effective as of September 30, 2023[218](index=218&type=chunk) - Management is implementing a remediation plan involving improved documentation, enhanced training, and new automated tools, with an expected completion date during fiscal year 2023[222](index=222&type=chunk)[223](index=223&type=chunk) [Item 5. Other Information](index=51&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading plans during the third quarter of 2023 - No directors or officers adopted or terminated Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during the three months ended September 30, 2023[225](index=225&type=chunk) Part II. Other Information [Item 1A. Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) The company refers to its 2022 Form 10-K for risk factors, indicating no new material risks in this quarterly report - The company directs stakeholders to the risk factors detailed in its 2022 Form 10-K, suggesting no new material risks have been identified in this quarter[227](index=227&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company continued its share repurchase program in Q3 2023, repurchasing 63,103 shares, with 1,730,268 shares remaining authorized Share Repurchases in Q3 2023 | Period | Class | Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | :--- | | **July 2023** | CRD-A / CRD-B | 0 | N/A | | **August 2023** | CRD-B | 9,637 | $9.14 | | **September 2023** | CRD-B | 53,466 | $9.25 | | **Total Q3 2023** | **CRD-B** | **63,103** | N/A | - As of September 30, 2023, the company had authorization to repurchase an additional **1,730,268 shares** under its program, which is effective through December 31, 2024[228](index=228&type=chunk)[229](index=229&type=chunk) [Item 6. Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including officer certifications and Inline XBRL data files - The exhibits filed with this report include required CEO and CFO certifications and interactive data files (XBRL)[231](index=231&type=chunk)

Revenue Growth - Consolidated revenues before reimbursements increased by $27.3 million, or 9.3%, for the three months ended June 30, 2023, and $61.3 million, or 10.7% for the six months ended June 30, 2023 compared to the same periods in 2022[53]. - Excluding foreign currency impacts, consolidated revenues before reimbursements increased by $34.8 million, or 11.9%, for the three months ended June 30, 2023, and $78.2 million, or 13.7% for the six months ended June 30, 2023 compared to the same periods in 2022[54]. - Total revenues for the three months ended June 30, 2023, increased by 11.3% to $658,334,000 compared to $591,440,000 for the same period in 2022[84]. - Total revenues before reimbursements for the six months ended June 30, 2023, were $633,657,000, up from $572,370,000 in the same period of 2022[86]. - Total revenues for the six months ended June 30, 2023, were $658,334,000, an increase from $591,440,000 in the same period of 2022[91]. Segment Performance - North America Loss Adjusting segment revenues increased by 17.5% for the six months ended June 30, 2023 compared to the same period in 2022[63]. - Gross profit for the North America Loss Adjusting segment increased by 35.6% for the six months ended June 30, 2023 compared to the same period in 2022[63]. - Revenues from the Broadspire segment increased for the quarter and year-to-date due to an increase in Medical Management revenues[54]. - The International Operations segment experienced a revenue decrease of 22.6% for the three months ended June 30, 2023 compared to the same period in 2022[55]. - North America Loss Adjusting segment revenues rose by 17.5% to $152,954,000, while International Operations saw a modest increase of 2.3% to $187,175,000[84]. Profitability Metrics - The company reported a gross profit margin of 17.5% for the six months ended June 30, 2023, compared to 12.6% in the same period of 2022, reflecting a 4.9% increase[70]. - Operating earnings for International Operations improved to $6.8 million for the six months ended June 30, 2023, compared to a loss of $3.7 million in the same period of 2022[70]. - North America Loss Adjusting segment operating earnings were $3,900,000, or 5.1% of revenues before reimbursements, compared to $2,649,000, or 4.0% in 2022[92]. - International Operations reported operating earnings of $3,742,000 for the three months ended June 30, 2023, a significant improvement from a loss of $661,000 in 2022, representing a 666.1% increase[97]. - The gross profit margin for International Operations improved to 17.9% in the three months ended June 30, 2023, compared to 14.3% in 2022[97]. Expense Management - Costs of services provided increased by $15.9 million, or 7.3%, for the three months ended June 30, 2023, and $37.4 million, or 8.8% for the six months ended June 30, 2023 compared to the 2022 periods[56]. - Selling, general, and administrative expenses increased by $1.2 million, or 1.8%, in the three months ended June 30, 2023, but decreased by $0.3 million, or (0.2)%, in the six months ended June 30, 2023 compared to the 2022 period[56]. - Direct compensation, fringe benefits, and non-employee labor expenses in North America Loss Adjusting segment were 72.0% of revenues before reimbursements for Q2 2023, down from 73.5% in Q2 2022, with total expenses increasing to $54.6 million from $48.3 million[68]. - Direct expenses for International Operations decreased by 2.5% to $78,281,000 in the three months ended June 30, 2023, from $80,297,000 in 2022[97]. - Direct compensation, fringe benefits, and non-employee labor as a percentage of revenues before reimbursements decreased to 65.4% for the three months ended June 30, 2023, compared to 69.7% in the same period of 2022[117]. Case Volume Trends - Total Crawford cases received decreased by 6.9% for both the three and six months ended June 30, 2023 compared to the same periods in 2022[54]. - The company experienced a decrease in cases received of 22.6% for Q2 2023 compared to Q2 2022, primarily due to reduced high-frequency, low-severity weather-related activity[74]. - Total international operations cases received decreased by 22.6% to 114,073 for the three months ended June 30, 2023, compared to 147,297 in the same period of 2022[101]. - Broadspire cases received increased by 3.1% to 143,448 for the three months ended June 30, 2023, compared to 139,123 in the same period of 2022[106]. - The total number of cases received in the Platform Solutions segment decreased by 1.5% in Q2 2023 compared to Q2 2022, with a total of 116,131 cases[129]. Financial Position - As of June 30, 2023, the company's working capital balance was approximately $85.8 million, an increase of $14.0 million from December 31, 2022[141]. - Cash and cash equivalents were $47.5 million at June 30, 2023, compared to $46.0 million at December 31, 2022[141]. - The cash and cash equivalents included $22.0 million held in the U.S. and $25.5 million held in foreign subsidiaries[141]. - The company maintains a permanent reinvestment assertion on a portion of prior year undistributed earnings for certain foreign operations[141]. - Future foreign earnings are expected to remain permanently reinvested to fund working capital, pension obligations, non-U.S. debt repayment, capital improvements, and future acquisitions[141]. Tax and Interest Expenses - The effective income tax rate increased to 38.4% for Q2 2023, up from 32.2% in Q2 2022, primarily due to losses in certain international operations[131]. - Corporate interest expense totaled $5.0 million for Q2 2023, compared to $2.1 million in Q2 2022, reflecting higher interest costs due to changes in interest rates[139]. Employee Metrics - The average number of full-time equivalent employees in North America Loss Adjusting segment increased to 2,073 for the six months ended June 30, 2023, from 1,963 in the same period of 2022[68]. - Average full-time equivalent employees in the Broadspire segment increased to 2,602 in the first half of 2023, compared to 2,442 in the same period of 2022[122].

| --- | --- | --- | --- | --- | |---------------------------------------------------------------------------------------------------|-------|-------------------------------------|-------------|------------------------------| | (In thousands, except per share amounts) \nRevenues: \nRevenues before reimbursements | $ | Three Months \n2023 \n312,992 | Ended \n$ | March 31, \n2022 \n279,025 | | Reimbursements | | 11,604 | | 8,764 | | Total Revenues | | 324,596 | | 287,789 | | | | | | | | Costs and Expenses: | | ...

Revenue Segments - North America Loss Adjusting segment accounted for 23.1% of the Company's revenues before reimbursements in 2022[24] - International Operations segment accounted for 30.0% of the Company's revenues before reimbursements in 2022[27] - Broadspire segment accounted for 26.4% of the Company's revenues before reimbursements in 2022[29] - Platform Solutions segment accounted for 20.5% of the Company's revenues before reimbursements in 2022[31] - Revenues from international operations accounted for 38.3%, 40.2%, and 41.9% of consolidated revenues before reimbursements for 2022, 2021, and 2020, respectively[164] - Total International Operations Revenues before Reimbursements amounted to $357,452 thousand in 2022, slightly down from $357,909 thousand in 2021, representing a decrease of approximately 0.13%[219] - The International Loss Adjusting segment generated $335,575 thousand in revenue for 2022, compared to $331,110 thousand in 2021, indicating a growth of about 1.4%[219] Employee and Workforce - The Company operates in 70 countries with approximately 10,400 employees, of which 92% are full-time[39] - Women comprise 56% of the global workforce, with 29% in country-president roles and 28% in senior management[39] - The Company emphasizes employee wellness with comprehensive benefit programs, including fitness challenges and telemedicine services[42] - The Company received high scores in employee engagement, with 88% believing they do not face bias due to personal identity[46] Financial Performance - Consolidated revenues before reimbursements were $1.189 billion in 2022, an increase of 7.9% compared to $1.102 billion in 2021[140] - Net loss attributable to Crawford & Company was $(18.3) million in 2022, compared to net income of $30.7 million in 2021[140] - U.S. revenues increased by 23.5% to $158.5 million in 2021, driven by weather-related cases and new client growth[83] - Canadian revenues decreased by 4.4% to $85.3 million in 2021, primarily due to the pandemic's negative economic impact[84] - Total North America Loss Adjusting revenues rose by 12.0% to $243.8 million in 2021[83] - International Operations segment revenues increased by 11.0% to $357.9 million in 2021, with a 7.7% boost from foreign exchange rates[89] Expenses and Liabilities - Corporate interest expense totaled $11.0 million in 2022, up from $7.0 million in 2021, with a weighted average interest rate of 3.3%[100] - The estimated liabilities for self-insured risks totaled $24.3 million as of December 31, 2022, down from $26.2 million in 2021, with a sensitivity of approximately $0.4 million for a 1.0% change in the discount rate[162] - The accrued liabilities for self-insured risks totaled $24,270,000 as of December 31, 2022, down from $26,226,000 in 2021[214] Cash Flow and Investments - Cash provided by operating activities totaled $54.3 million in 2021, a decrease of $38.9 million from $93.2 million in 2020[112] - Cash used in investing activities increased by $43.8 million in 2021, totaling $70.8 million, primarily for acquisitions and capital expenditures[113] - The company acquired HBA Group for $3.8 million, edjuster for $19.0 million, and an initial payment for the Praxis acquisition for $21.5 million in 2021[113] - Net cash provided by operating activities decreased to $27,634 million in 2022 from $54,321 million in 2021, reflecting a decline of approximately 49%[201] - Cash used in investing activities was $57,876 million in 2022, down from $70,826 million in 2021, indicating a reduction of about 18%[201] Goodwill and Impairment - In Q3 2022, the company recognized a pretax goodwill impairment of $36.8 million due to indicators in its International Operations and Crawford Legal Services reporting units, with specific impairments of $19.6 million and $3.2 million respectively[182] - The company identified goodwill impairment indicators in its North America Loss Adjusting and Platform Solutions segments, leading to a quantitative analysis and subsequent impairment recognition[182] - The company incurred goodwill impairment of $36,808 million in 2022, while there was no such impairment recorded in 2021[201] Revenue Recognition - The Company recognizes revenue over time for claims management services as performance obligations are satisfied, ensuring accurate revenue depiction[218] - Revenue for claims billed on a time and expense incurred basis is recognized at the amount the Company has the right to invoice for services performed, reflecting variable consideration[218] - The Contractor Connection service line generates revenue by charging a fee for each project sold by its network of contractors, with revenue recognized at the point of consumer acceptance of the contractor's proposal[220] Market Risks and Taxation - The company’s operations are exposed to market risks from foreign currency exchange rates and interest rates, with strategies in place to manage these risks[193] - Future changes in tax laws could significantly impact the company, although specific effects cannot be predicted at this time[189] - The effective income tax rate for 2021 was 30.4%, with an anticipated range of 33% to 35% for 2023[99]

United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ____ to ____ Commission file number 1-10356 CRAWFORD & COMPANY (Exact name of Registrant as specified in its charter) Georgia 58-0506554 (State or other jurisdiction ...

Revenue Growth - Consolidated revenues before reimbursements increased by $25.9 million, or 9.7%, for the three months ended June 30, 2022, and $51.7 million, or 9.9%, for the six months ended June 30, 2022, compared to the same periods in 2021 [112]. - Total revenues, including reimbursements, reached $303.7 million for the three months ended June 30, 2022, reflecting a 9.8% increase compared to $276.5 million in the same period of 2021 [113]. - Revenues before reimbursements for the three months ended June 30, 2022, were $293,345,000, up from $267,457,000 in 2021, representing a growth of 9.7% [115]. - Total revenues for the three months ended June 30, 2022, were $303.7 million, an increase of 9.8% from $276.5 million in the same period of 2021 [131]. - Revenues before reimbursements for the six months ended June 30, 2022, totaled $130.2 million, a 15.7% increase from $112.5 million in the same period of 2021 [137]. - For the six months ended June 30, 2022, revenues before reimbursements totaled $183.0 million, a 3.0% increase from $177.7 million in the same period of 2021 [149]. Segment Performance - Revenues from the North America Loss Adjusting segment increased by 17.0% to $65.8 million for the three months ended June 30, 2022, and by 15.7% to $130.2 million for the six months ended June 30, 2022 [113]. - International Operations segment revenues increased by 2.7% to $93.7 million for the three months ended June 30, 2022, and by 3.0% to $183.0 million for the six months ended June 30, 2022 [113]. - Broadspire segment revenues rose by 5.5% to $80.1 million for the three months ended June 30, 2022, and by 4.3% to $156.6 million for the six months ended June 30, 2022 [113]. - Platform Solutions segment revenues increased by 21.9% to $53.7 million for the three months ended June 30, 2022, and by 27.9% to $102.6 million for the six months ended June 30, 2022 [113]. - The International Operations segment reported an operating loss of $0.7 million, or (0.8%) of revenues before reimbursements, for Q2 2022, compared to operating earnings of $2.1 million, or 2.3% in Q2 2021 [144]. Case Volume and Activity - The company experienced a 15.5% increase in cases received for the three months ended June 30, 2022, and a 16.4% increase for the six months ended June 30, 2022, compared to the prior year [112]. - Total Crawford cases received increased by 15.5% to 480,706 for the three months ended June 30, 2022, compared to 416,207 in the same period of 2021 [115]. - The North America Loss Adjusting segment experienced a 19.7% increase in case volumes for Q2 2022, with a total of 76,419 cases received compared to 63,818 in Q2 2021 [139]. - The International Operations segment experienced an 18.6% increase in unit volume, measured by cases received, for Q2 2022 compared to Q2 2021 [151]. - Cases received increased by 18.6% and 24.2% for the three and six months ended June 30, 2022, compared to the same periods in 2021 [154]. Expenses and Profitability - Costs of services provided increased by $25.0 million, or 12.9%, for the three months ended June 30, 2022, compared to the same period in 2021 [115]. - SG&A expenses rose by $6.7 million, or 11.5%, for the three months ended June 30, 2022, compared to the prior year [115]. - Direct expenses for Q2 2022 were $54.6 million, up 21.5% from $44.9 million in Q2 2021, leading to a gross profit of $11.2 million, a slight decrease of 0.7% [134]. - The gross profit margin for Q2 2022 was 17.0%, down from 20.0% in Q2 2021, while the operating margin decreased to 4.1% from 5.5% [134]. - The company reported a net income of $5.8 million for the three months ended June 30, 2022, compared to $11.8 million in the same period of 2021 [131]. Foreign Exchange Impact - Changes in foreign exchange rates negatively impacted consolidated revenues by $6.2 million, or 2.3%, for the three months ended June 30, 2022, and $9.1 million, or 1.8%, for the six months ended June 30, 2022 [112]. - The change in exchange rates negatively impacted revenues by approximately 5.8%, or $5.3 million, for Q2 2022 compared to Q2 2021 [149]. Corporate and Financial Metrics - The effective income tax rate for the three months ended June 30, 2022, increased to 32.2% compared to 23.3% for the same period in 2021, primarily due to losses in certain international operations [178]. - Corporate interest expense for the three months ended June 30, 2022, totaled $2.1 million, up from $1.5 million in the same period of 2021 [179]. - Cash used in operating activities was $12.8 million for the six months ended June 30, 2022, compared to $10.5 million provided by operating activities in the same period of 2021 [187]. - Cash used in investing activities was $38.6 million for the six months ended June 30, 2022, compared to $11.8 million in the same period of 2021 [188]. - At June 30, 2022, the working capital balance was approximately $64.9 million, an increase of $22.8 million from December 31, 2021 [185].