Financial Performance - Consolidated revenues before reimbursements were $1.102 billion in 2021, an increase of 12.2% compared to $982.5 million in 2020[136] - Net income attributable to Crawford & Company was $30.7 million in 2021, compared to $28.3 million in 2020[136] - Total revenues for the year ended December 31, 2021, were $1,139.2 million, a 12.1% increase from $1,016.2 million in 2020[178] - Revenues from Crawford Loss Adjusting increased by 8.5% to $475.6 million, while Crawford TPA Solutions grew by 7.2% to $398.0 million, and Crawford Platform Solutions surged by 32.4% to $228.5 million[138] - The company recognized a pretax gain on disposal of $13.8 million related to the sale of the Lloyd Warwick International business in 2020[158] - Net income attributable to shareholders of Crawford & Company was $30.7 million, an 8.5% increase from $28.3 million in 2020[180] Operating Earnings - Operating earnings in Crawford Loss Adjusting decreased to $23.0 million, or 4.8% of revenues, primarily due to losses in international operations and increased compensation expenses[145] - Operating earnings in Crawford TPA Solutions decreased to $17.6 million, or 4.4% of revenues, impacted by the ongoing effects of COVID-19 in Canada and Europe[146] - Operating earnings in Crawford Platform Solutions increased to $36.3 million, or 15.9% of revenues, due to revenue growth[147] - Operating earnings for the Crawford Loss Adjusting segment decreased to $23.0 million, or 4.8% of revenues before reimbursements, compared to $41.1 million, or 9.4% in 2020, due to losses in international operations and increased compensation expenses[181] - Operating earnings for Crawford TPA Solutions decreased to $17.6 million in 2021, or 4.4% of revenues before reimbursements, down from $20.5 million, or 5.5%, in 2020[194] - Operating earnings for Crawford Platform Solutions were $36.3 million in 2021, representing 15.9% of revenues before reimbursements, compared to $27.7 million or 16.0% in 2020[211] Expenses - Cost of services provided increased by $106.6 million, or 15.2%, primarily due to higher compensation expenses and recent acquisitions[148] - Selling, general, and administrative expenses rose by $25.9 million, or 11.8%, attributed to increased compensation and centralized data processing costs[149] - Direct compensation, fringe benefits, and non-employee labor expenses increased from $269.8 million in 2020 to $315.2 million in 2021, representing 66.3% of segment revenues before reimbursements[192] - Total expenses other than reimbursements in Crawford TPA Solutions increased from $116.7 million in 2020 to $123.6 million in 2021, but decreased as a percentage of revenues from 31.5% to 31.0%[207] Acquisitions - The company acquired BosBoon Expertise Group B.V. for an initial cash consideration of $2.1 million, with a potential maximum of $1.9 million based on performance goals over two years[151] - The acquisition of Praxis Consulting, Inc. was completed for a total purchase price of $21.5 million, including a deferred payment of $20.0 million due in February 2022, and a maximum of $10.0 million based on revenue performance goals[152] - The company acquired edjuster Inc. for an initial cash payment of $20.9 million, with an earn-out potential of up to $13.3 million based on EBITDA performance goals over two years[154] - The acquisition of HBA Group was for an initial cash payment of $4.0 million, with a maximum of $3.2 million payable over four years based on revenue and EBITDA performance goals[155] - The acquisition of Crawford Carvallo included an initial cash payment of $11.6 million, with a maximum of $11.7 million payable over six years based on EBITDA performance goals[156] Cash Flow and Liquidity - Cash provided by operating activities decreased to $54.3 million in 2021 from $93.2 million in 2020, primarily due to increased accounts receivable and higher tax payments[290] - Cash used in investing activities increased to $70.8 million in 2021 from $27.0 million in 2020, driven by acquisitions including HBA Group for $3.8 million and Praxis for $22.2 million[292] - As of December 31, 2021, the company had a working capital balance of approximately $42.1 million, down from $59.2 million in 2020, attributed to increased short-term borrowings and accrued compensation[287] - The company had total outstanding debt of $175.0 million as of December 31, 2021, with an available borrowing capacity of $260.2 million under its Credit Facility[278] - Total liquidity at December 31, 2021, was $313.5 million, consisting of $53.2 million in cash on hand and $260.2 million in additional borrowing capacity based on trailing twelve month EBITDA[298] Case Volumes and Market Activity - Total cases received increased by 5.8% in 2021, totaling 1,653,050 cases, driven by Hurricane Ida activity in the U.S.[140] - The U.S. market contributed $158.5 million to Crawford Loss Adjusting revenues, reflecting a 23.5% increase from $128.3 million in 2020[185] - Case volumes increased by 18.9% in 2021, with the U.S. seeing a 17.9% rise in cases received[217] - Total Crawford Loss Adjusting cases received increased by 7.0% in 2021, with U.S. case volumes rising by 3.1% and U.K. case volumes increasing by 21.2%[188][190] Tax and Compliance - The effective income tax rate for the company was 30.7% in 2020, with an anticipated range of 29% to 31% for 2022[261] - The company expects to remain in compliance with all required covenants throughout 2022, with sensitivity to changes in EBITDA affecting compliance[299] Deferred Revenues and Claims - As of December 31, 2021, deferred revenues related to lifetime claim handling arrangements approximated $38.0 million[324] - The company closes approximately 99% of all cases referred under lifetime claim service arrangements within five years[323] - A 1.0% decrease in claim closing rates for lifetime claims would have resulted in the deferral of additional revenues of approximately $1.3 million for the years ended December 31, 2021, 2020, and 2019[324] - The competitive environment may limit the company's ability to raise prices to offset expenses associated with handling longer-lived claims[324]
Crawford(CRD_B) - 2021 Q4 - Annual Report