Part I. Financial Information Item 1. Financial Statements Unaudited financial statements for H1 2024 show decreased revenues and net income, a decline in total assets, and negative operating cash flow Condensed Consolidated Statements of Operations Q2 2024 revenues slightly decreased, while H1 2024 revenues and net income significantly declined year-over-year Q2 2024 vs Q2 2023 Statement of Operations (in thousands, except EPS) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $326,853 | $337,629 | -3.2% | | Income Before Income Taxes | $12,988 | $13,551 | -4.2% | | Net Income Attributable to Shareholders | $8,584 | $8,427 | +1.9% | | Diluted EPS (Class A & B) | $0.17 | $0.17 | 0.0% | H1 2024 vs H1 2023 Statement of Operations (in thousands, except EPS) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $639,926 | $665,567 | -3.9% | | Income Before Income Taxes | $16,814 | $29,552 | -43.1% | | Net Income Attributable to Shareholders | $11,421 | $19,108 | -40.2% | | Diluted EPS (Class A & B) | $0.23 | $0.39 | -41.0% | Condensed Consolidated Balance Sheets Total assets decreased to $785.8 million by June 30, 2024, while total shareholders' investment increased to $149.7 million Balance Sheet Summary (in thousands) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $351,995 | $369,346 | | Total Assets | $785,812 | $799,199 | | Total Current Liabilities | $272,224 | $299,292 | | Total Liabilities | $636,105 | $659,368 | | Total Shareholders' Investment | $149,707 | $139,831 | Condensed Consolidated Statements of Cash Flows Operating cash flow turned negative, using $8.3 million in H1 2024, while financing activities provided $15.7 million Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(8,253) | $27,169 | | Net cash used in investing activities | $(18,449) | $(17,945) | | Net cash provided by (used in) financing activities | $15,655 | $(8,478) | | (Decrease) Increase in Cash | $(11,202) | $1,808 | Notes to Condensed Consolidated Financial Statements Notes detail accounting policies, segment information, and significant client funds held off-balance sheet in custodial accounts - The company operates through four reportable segments: North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions1850 - As of June 30, 2024, the company had $108.8 million of remaining performance obligations, with approximately 73% expected to be recognized as revenue within one year32 - Client funds held in custodial accounts, which are not on the balance sheet, totaled $554.1 million at June 30, 2024, up from $494.3 million at December 31, 202357 Management's Discussion and Analysis of Financial Condition and Results of Operations Consolidated revenues decreased 3.9% in H1 2024 due to Platform Solutions, while operating cash flow turned negative Results of Operations H1 2024 consolidated revenues decreased 3.9% due to Platform Solutions, despite growth in Broadspire and International Operations H1 2024 Segment Revenue Before Reimbursements (in thousands) | Segment | H1 2024 Revenue | H1 2023 Revenue | % Change | | :--- | :--- | :--- | :--- | | North America Loss Adjusting | $153,395 | $153,959 | (0.4)% | | International Operations | $200,375 | $187,175 | +7.1% | | Broadspire | $191,385 | $171,298 | +11.7% | | Platform Solutions | $70,726 | $128,458 | (44.9)% | | Total | $615,881 | $640,890 | (3.9)% | - Total cases received decreased by 7.9% in H1 2024, primarily driven by a 29.0% drop in the Platform Solutions segment6768 - SG&A expenses increased by $12.4 million (9.0%) in H1 2024 compared to H1 2023, mainly due to higher professional fees, IT costs, bad debt expense, and compensation69 Segment Performance Broadspire and International Operations saw earnings growth, while North America Loss Adjusting and Platform Solutions declined H1 2024 Segment Operating Earnings (in thousands) | Segment | H1 2024 Operating Earnings | H1 2023 Operating Earnings | % Change | | :--- | :--- | :--- | :--- | | North America Loss Adjusting | $9,364 | $11,965 | (21.7)% | | International Operations | $7,392 | $6,777 | +9.1% | | Broadspire | $27,895 | $16,075 | +73.5% | | Platform Solutions | $2,584 | $18,072 | (85.7)% | | Total | $47,235 | $52,889 | (10.7)% | - North America Loss Adjusting saw a 17.2% decrease in cases received in H1 2024, largely due to the loss of a high-volume, low-severity client in Canada8286 - Broadspire's revenue growth was driven by new client programs and increased medical management usage. The slight 0.8% increase in case volume masks a significant rise in Medical Management referrals, which offset a non-recurring large batch of disability claims from the prior year100103107 - Platform Solutions' revenue decline was primarily in the Networks service line, which provides staff augmentation and is sensitive to weather-related claim events, which were higher in the prior year110112113 Liquidity and Capital Resources Total liquidity was $256.7 million as of June 30, 2024, with operating activities using $8.3 million in cash - Total liquidity as of June 30, 2024, was $256.7 million, consisting of $46.7 million in cash and $210.0 million in additional borrowing capacity129 - Cash from operations was a use of $8.3 million in H1 2024, compared to a source of $27.2 million in H1 2023, attributed to lower earnings and working capital changes126 - Financing activities in H1 2024 included a net increase of $24.8 million in revolving credit facility borrowings, $2.1 million in share repurchases, and $6.9 million in dividend payments127 Quantitative and Qualitative Disclosures About Market Risk No material changes in market risk exposures have occurred since the December 31, 2023 Annual Report on Form 10-K - There have been no material changes in the Company's market risk exposures since December 31, 2023133 Controls and Procedures Disclosure controls and procedures were effective as of June 30, 2024, with no material changes to internal controls - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2024134 - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls135 Part II. Other Information Risk Factors No material updates to risk factors previously disclosed in the Annual Report on Form 10-K for December 31, 2023 - The report directs investors to the risk factors detailed in the Form 10-K for the year ended December 31, 2023135 Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 145,229 Class B shares in Q2 2024, with 1,268,558 shares remaining for repurchase Share Repurchases in Q2 2024 | Period | Class | Total Shares Purchased | Average Price Paid | | :--- | :--- | :--- | :--- | | April 2024 | CRD-B | 83,041 | $9.39 | | May 2024 | CRD-B | 35,024 | $9.23 | | June 2024 | CRD-B | 27,164 | $8.70 | | Q2 Total | CRD-B | 145,229 | - | - As of June 30, 2024, 1,268,558 shares may still be purchased under the repurchase plan, which is authorized through December 31, 2024136139 Other Information No directors or officers adopted or terminated Rule 10b5-1 trading plans during the second quarter of 2024 - No directors or officers adopted or terminated Rule 10b5-1 trading plans during the second quarter of 2024137
Crawford(CRD_B) - 2024 Q2 - Quarterly Report