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Crawford(CRD_A) - 2025 Q1 - Quarterly Report
CrawfordCrawford(US:CRD_A)2025-05-05 20:28

Revenue Growth - Consolidated revenues before reimbursements increased by $10.4 million, or 3.4%, for the three months ended March 31, 2025, compared to the same period in 2024 [94]. - Revenues from the North America Loss Adjusting segment increased by 3.1% to $79.74 million, while International Operations revenues rose by 6.4% to $104.39 million [95]. - Total revenues, including reimbursements, reached $323.34 million, reflecting a 3.3% increase compared to $313.07 million in the prior year [95]. - Excluding foreign currency impacts, consolidated revenues before reimbursements increased by $14.8 million, or 4.9% [94]. - Total revenues for the three months ended March 31, 2025, were $323.3 million, an increase from $313.1 million in the same period of 2024, representing a growth of 3.9% [113]. - North America Loss Adjusting segment revenues before reimbursements increased to $79.7 million in Q1 2025 from $77.4 million in Q1 2024, reflecting a growth of 3.1% [117]. - International Operations segment revenues before reimbursements increased to $104.4 million in Q1 2025, a 6.4% increase from $98.1 million in Q1 2024 [125]. - Broadspire revenues before reimbursements increased by 2.2% to $96.4 million for the three months ended March 31, 2025, compared to $94.3 million in 2024 [135]. Expense Management - Costs of services provided increased by $7.5 million, or 3.5%, for the three months ended March 31, 2025, consistent with revenue growth [97]. - Selling, general, and administrative expenses decreased by $2.7 million, or 3.5%, primarily due to reduced professional fees and self-insurance reserves [98]. - Direct Compensation, Fringe Benefits & Non-Employee Labor expenses for the North America Loss Adjusting segment were $56.0 million, representing 70.3% of related revenues before reimbursements [113]. - Total expenses for the North America Loss Adjusting segment, including reimbursements, were $96.3 million, which is 29.8% of total revenues [113]. - Direct compensation expenses in the International Operations segment totaled $70.6 million, representing 67.6% of revenues before reimbursements, up from 66.2% in the previous year [130]. - Indirect expenses in the International Operations segment were $15.5 million, representing 14.8% of revenues before reimbursements, compared to 14.6% in Q1 2024 [124]. - Expenses other than reimbursements for Broadspire increased to $25.8 million, representing 26.8% of revenues before reimbursements, up from 25.7% in 2024 [140]. Case Volume and Operations - Total cases received decreased by 5.6% to 385,519 for the three months ended March 31, 2025, with notable declines in International Operations [96]. - North America Loss Adjusting segment saw a significant increase in cases received, up 44.1% to 89,265, while Platform Solutions experienced a 44.6% decline [97]. - The volume of cases received in the North America Loss Adjusting segment increased by 44.1% year-over-year, with U.S. cases rising by 80.5% while Canadian cases decreased by 7.5% [120]. - Total International Operations cases received decreased by 13.5% to 117,305 in Q1 2025, with significant declines in the U.K. and Australia [129]. - Total case volumes for Broadspire increased by 1.3% to 137,463 cases, driven primarily by new disability clients in Claims Management [138]. - Platform Solutions segment revenues before reimbursements decreased by 1.2% to $31.5 million, with a significant drop in case volumes of 44.6% to 41,486 cases [144]. Profitability and Earnings - Operating earnings for the North America Loss Adjusting segment rose to $5.5 million, or 6.9% of revenues before reimbursements, compared to $4.5 million, or 5.8%, in the prior year, marking a 22.3% increase [114]. - Operating earnings in the International Operations segment rose to $3.5 million, or 3.3% of revenues before reimbursements, compared to $1.7 million, or 1.7% in the prior year [123]. - Gross profit for the North America Loss Adjusting segment increased to $15.8 million, or 19.8% of revenues before reimbursements, up from $14.5 million, or 18.8%, in the previous year [115]. - Gross profit in the International Operations segment increased from $16.0 million (16.3% margin) in Q1 2024 to $18.9 million (18.1% margin) in Q1 2025 [124]. - Operating earnings for the Platform Solutions segment surged by 162.5% to $2.9 million, with an operating margin increase from 3.5% to 9.3% [141]. Financial Position and Cash Flow - Cash used in operating activities improved to $13.9 million in Q1 2025 from $19.8 million in Q1 2024, driven by higher earnings and changes in working capital [162]. - Cash provided by financing activities increased to $25.0 million in Q1 2025 compared to $16.1 million in Q1 2024, with a net borrowing increase of $28.5 million from the revolving credit facility [164]. - Working capital increased by $12.1 million to approximately $86.6 million as of March 31, 2025, compared to December 31, 2024 [159]. - Cash and cash equivalents rose to $57.4 million as of March 31, 2025, up from $55.4 million at December 31, 2024 [160]. - Total liquidity was reported at $255.9 million as of March 31, 2025, reflecting cash on hand and borrowing capacity [166]. Corporate Governance and Taxation - The effective income tax rate for the company decreased to 26.9% for the three months ended March 31, 2025, compared to 27.4% in 2024 [151]. - Net corporate interest expense rose to $4.8 million for the three months ended March 31, 2025, compared to $4.5 million in 2024 [152]. - Amortization of acquisition-related intangible assets was $1.8 million for the three months ended March 31, 2025, down from $1.9 million in 2024 [154]. - Unallocated corporate and shared costs decreased to $6.2 million in Q1 2025 from $8.0 million in Q1 2024, primarily due to lower professional fees and bad debt expenses [156]. - The company expects to make payments totaling $1.5 million in the next twelve months for contingent earnouts related to previous acquisitions [167]. Dividends and Pension Plans - The company paid $3.5 million in dividends in Q1 2025, slightly up from $3.4 million in Q1 2024 [170]. - Defined benefit pension plans were underfunded by $19.0 million in the U.S. and overfunded by $9.2 million in the U.K. as of December 31, 2024 [168].