Crawford(CRD_B) - 2023 Q2 - Quarterly Report

Revenue Growth - Consolidated revenues before reimbursements increased by $27.3 million, or 9.3$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$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$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$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$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$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].