Crawford(CRD_A) - 2024 Q1 - Quarterly Report

Part I. Financial Information This section provides the company's unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and internal controls assessment for the period Financial Statements This section presents the unaudited condensed consolidated financial statements for Q1 2024, including statements of operations, balance sheets, and cash flows, prepared under U.S. GAAP Condensed Consolidated Statements of Operations (Unaudited) | (In thousands, except per share amounts) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Total Revenues | $313,073 | $327,938 | | Income Before Income Taxes | $3,826 | $16,001 | | Net Income Attributable to Shareholders | $2,837 | $10,681 | | Diluted EPS - Class A Common Stock | $0.06 | $0.22 | | Diluted EPS - Class B Common Stock | $0.06 | $0.22 | Condensed Consolidated Balance Sheets (Unaudited) | (In thousands) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $45,196 | $58,363 | | Total Current Assets | $345,824 | $369,346 | | TOTAL ASSETS | $776,277 | $799,199 | | Total Current Liabilities | $264,134 | $299,292 | | Long-term debt and finance leases | $210,823 | $194,335 | | TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT | $776,277 | $799,199 | Condensed Consolidated Statements of Cash Flows (Unaudited) | (In thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(19,803) | $(445) | | Net cash used in investing activities | $(9,550) | $(8,641) | | Net cash provided by financing activities | $16,073 | $5,187 | | Decrease in Cash, Cash Equivalents, and Restricted Cash | $(12,886) | $(2,704) | - The company operates through four reportable segments: North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions[32] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) This section analyzes the company's financial performance and condition for Q1 2024, highlighting revenue declines, segment performance, and liquidity Consolidated Results of Operations Consolidated revenues decreased by 4.6% in Q1 2024, primarily due to declines in the Platform Solutions segment, impacting overall operating income Consolidated Revenues Before Reimbursements (Q1 2024 vs Q1 2023) | (in thousands) | Q1 2024 | Q1 2023 | % Variance | | :--- | :--- | :--- | :--- | | North America Loss Adjusting | $77,365 | $77,597 | (0.3)% | | International Operations | $98,092 | $91,863 | 6.8% | | Broadspire | $94,298 | $84,054 | 12.2% | | Platform Solutions | $31,899 | $62,820 | (49.2)% | | Total | $301,654 | $316,334 | (4.6)% | - Total cases received decreased by 4.0% in Q1 2024, mainly due to a reduction of approximately 22,100 high-frequency, low-severity cases in the North America Loss Adjusting and Platform Solutions segments that were present in Q1 2023[102][103] - Selling, general, and administrative (SG&A) expenses increased by $10.6 million (15.9%) in Q1 2024 compared to Q1 2023, primarily due to higher professional fees, IT costs, bad debt expense, and compensation[105] Segment Analysis Segment performance varied, with Broadspire showing strong operating earnings growth while Platform Solutions experienced a significant decline Segment Operating Earnings (Q1 2024 vs Q1 2023) | (in thousands) | Q1 2024 | Q1 2023 | % Variance | | :--- | :--- | :--- | :--- | | North America Loss Adjusting | $4,479 | $8,065 | (44.5)% | | International Operations | $1,690 | $3,035 | (44.3)% | | Broadspire | $12,804 | $7,927 | 61.5% | | Platform Solutions | $1,115 | $9,966 | (88.8)% | | Total Segment Operating Earnings | $20,088 | $28,993 | (30.7)% | Liquidity, Capital Resources, and Financial Condition The company's liquidity remains strong at $253.9 million, despite increased cash used in operating activities due to lower earnings - Cash used in operating activities was $19.8 million for Q1 2024, a significant increase from $0.4 million used in Q1 2023, primarily driven by lower earnings and higher incentive compensation payments[170] - Total liquidity at March 31, 2024, was $253.9 million, comprising $45.2 million in cash and $208.7 million in additional borrowing capacity under the Credit Facility[174] - Long- and short-term borrowings increased to $230.2 million as of March 31, 2024, from $209.1 million at December 31, 2023[173] Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes to its market risk exposures since the prior fiscal year-end - There have been no material changes in the company's market risk exposures since December 31, 2023[185] Controls and Procedures The company's disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal controls - The Registrant's Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of March 31, 2024[188] - No changes in internal control over financial reporting occurred during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, internal controls[189] Part II. Other Information This section provides updates on risk factors, equity sales, other relevant information, and a list of exhibits filed with the report Risk Factors The company reports no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K - The company refers to the risk factors discussed in Part I, Item 1A of its Annual Report on Form 10-K for the year ended December 31, 2023, as factors that could materially affect its business[191] Unregistered Sales of Equity Securities and Use of Proceeds The company repurchased 85,632 shares of Class B Common Stock in Q1 2024, with 1.4 million shares remaining under authorization Share Repurchases in Q1 2024 | Period | Class | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | :--- | | Jan 2024 | CRD-A / CRD-B | 0 | $ - | | Feb 2024 | CRD-A / CRD-B | 0 | $ - | | Mar 2024 | CRD-B | 85,632 | $8.56 | | Total Q1 2024 | CRD-B | 85,632 | $8.56 | - As of March 31, 2024, the company was authorized to repurchase an additional 1,413,787 shares under its repurchase program, which is effective through December 31, 2024[192] Other Information No directors or officers adopted or terminated Rule 10b5-1 trading plans during the first quarter of 2024 - During Q1 2024, no directors or officers adopted or terminated any Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements[194] Exhibits This section lists the exhibits filed, including CEO/CFO certifications and Inline XBRL interactive data files - The report includes several exhibits, notably: - Certifications by the CEO and CFO pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act - Inline XBRL Instance Document and related taxonomy files[196]