Revenue Performance - Consolidated revenues before reimbursements increased by $6.4 million, or 2.2%, for the three months ended September 30, 2022, and $58.2 million, or 7.2%, for the nine months ended September 30, 2022, compared to the same periods in 2021 [109]. - North America Loss Adjusting segment revenues were $66.8 million for the three months ended September 30, 2022, reflecting a 3.9% increase compared to the previous year [110]. - International Operations segment revenues decreased by 6.3% to $86.1 million for the three months ended September 30, 2022, compared to $91.9 million in the same period of 2021 [110]. - Broadspire segment revenues increased by 3.4% to $78.4 million for the three months ended September 30, 2022, compared to $75.8 million in the same period of 2021 [110]. - Platform Solutions segment revenues grew by 12.7% to $63.7 million for the three months ended September 30, 2022, compared to $56.5 million in the same period of 2021 [110]. - Total revenues, including reimbursements, reached $306.4 million for the three months ended September 30, 2022, a 3.0% increase from $297.6 million in the same period of 2021 [110]. - For the nine months ended September 30, 2022, total revenues before reimbursements were $867.3 million, reflecting a 7.2% increase from $809.1 million in the same period of 2021 [110]. - The company reported a 21.6% increase in Platform Solutions revenues for the nine months ended September 30, 2022, totaling $166.3 million compared to $136.7 million in the same period of 2021 [110]. - Reimbursements increased by 26.8% to $11.5 million for the three months ended September 30, 2022, compared to $9.1 million in the same period of 2021 [110]. Impact of Foreign Exchange - The company experienced a negative impact of $11.0 million, or 3.9%, on consolidated revenues due to changes in foreign exchange rates for the three months ended September 30, 2022 [109]. - The change in foreign exchange rates decreased International Operations revenues by approximately 11.0%, or $10.1 million, for the three months ended September 30, 2022 [150]. - For the nine months ended September 30, 2022, revenues totaled $269.0 million, a slight decrease of 0.2% from $269.6 million in 2021, again primarily due to foreign exchange impacts [150]. Operating Performance - North America Loss Adjusting segment operating earnings decreased to $3.7 million, or 5.5% of revenues, down from $4.4 million, or 6.8% in Q3 2021 [128]. - Gross profit in North America Loss Adjusting segment decreased to $12.2 million, or 18.2% of revenues, in Q3 2022 from $12.6 million, or 19.6% in Q3 2021 [128]. - Gross profit margin for the three months ended September 30, 2022 was 18.2%, down from 19.6% in 2021, while the operating margin decreased to 5.5% from 6.8% [129]. - Operating loss in the International Operations segment was ($3.8) million for the three months ended September 30, 2022, compared to operating earnings of $1.9 million in 2021 [142]. - Broadspire operating earnings decreased to $6.2 million, or 7.9% of revenues before reimbursements, for the three months ended September 30, 2022, down from $6.9 million, or 9.2% in 2021 [157]. Expenses and Costs - Costs of services provided increased by $10.2 million, or 4.8%, for the three months ended September 30, 2022, and by $55.6 million, or 9.4%, for the nine months ended September 30, 2022, mainly due to higher compensation expenses [114]. - Selling, general, and administrative (SG&A) expenses rose by $2.2 million, or 3.7%, in the third quarter of 2022, and by $15.1 million, or 8.5%, year-to-date, attributed to increased compensation and the impact of recent acquisitions [114]. - Direct expenses for the three months ended September 30, 2022 were $54.7 million, representing a 5.7% increase from $51.7 million in 2021 [129]. - Total expenses other than reimbursements, direct compensation, and fringe benefits were $28.4 million for the three months ended September 30, 2022, compared to $27.4 million in 2021 [155]. Goodwill Impairment - A pretax non-cash goodwill impairment of $36.8 million was recognized in the third quarter of 2022, affecting multiple reportable segments [114]. - Goodwill impairment charge of $36.8 million recognized in Q3 2022, impacting International Operations and Crawford Legal Services segments [124]. - Anticipated full-year income tax benefit expected to normalize to $3.4 million due to non-discrete income tax treatment of goodwill impairment [124]. Cash Flow and Liquidity - Cash used in operating activities was $16.2 million for the nine months ended September 30, 2022, compared to $20.0 million provided in the same period of 2021 [187]. - Cash used in investing activities increased to $48.2 million for the nine months ended September 30, 2022, from $38.8 million in the prior year, driven by deferred payments related to acquisitions [189]. - Cash provided by financing activities was $46.9 million for the nine months ended September 30, 2022, compared to $9.9 million in 2021, with net borrowing from the revolving credit facility increasing by $84.8 million [190]. - Total liquidity at September 30, 2022, was $142.4 million, consisting of $33.1 million in cash and additional borrowing capacity of $109.3 million [191]. Employee Metrics - The average number of full-time equivalent employees in the International Operations segment increased to 3,631 for the nine months ended September 30, 2022, from 3,512 in 2021 [154]. - The average full-time equivalent employees in the Broadspire segment increased to 2,473 in the first nine months of 2022, compared to 2,235 in the same period of 2021 [163].
Crawford(CRD_A) - 2022 Q3 - Quarterly Report