Crawford(CRD_B) - 2024 Q1 - Quarterly Report

Part I Financial Statements This section presents the unaudited condensed consolidated financial statements for Q1 2024 and 2023, including operations, balance sheets, and cash flows, reporting $313.1 million in revenues and $2.8 million net income for Q1 2024 Q1 2024 vs Q1 2023 Consolidated Statements of Operations Highlights | Metric (In thousands, except per share) | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Total Revenues | $313,073 | $327,938 | | Revenues before reimbursements | $301,654 | $316,334 | | Income Before Income Taxes | $3,826 | $16,001 | | Net Income Attributable to Shareholders | $2,837 | $10,681 | | Diluted EPS (Class A & B) | $0.06 | $0.22 | Consolidated Balance Sheet Highlights | Metric (In thousands) | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $45,196 | $58,363 | | Total Assets | $776,277 | $799,199 | | Long-term debt and finance leases | $210,823 | $194,335 | | Total Liabilities | $633,039 | $659,368 | | Total Shareholders' Investment | $143,238 | $139,831 | Q1 2024 vs Q1 2023 Consolidated Statements of Cash Flows Highlights | Metric (In thousands) | Q1 2024 | Q1 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 and Cash Equivalents | $(12,886) | $(2,704) | - The company operates through four reportable segments: North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions[32][76] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2024 financial results, noting a 4.6% revenue decrease to $301.7 million, mainly from Platform Solutions, and a 15.9% rise in SG&A expenses, impacting net income and liquidity Results of Operations Q1 2024 consolidated revenues before reimbursements decreased by 4.6% to $301.7 million, primarily due to a 49.2% drop in Platform Solutions, while SG&A expenses rose by 15.9% Consolidated Revenues Before Reimbursements (Q1 2024 vs Q1 2023) | (in thousands) | Q1 2024 | Q1 2023 | % Variance | | :--- | :--- | :--- | :--- | | Total revenues before reimbursements | $301,654 | $316,334 | (4.6)% | - Total cases received decreased by 4.0% in Q1 2024, primarily 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] - Selling, general, and administrative (SG&A) expenses increased by $10.6 million, or 15.9%, in Q1 2024 compared to Q1 2023, driven by higher professional fees, IT costs, bad debt expense, and compensation[105] Segment Analysis Q1 2024 segment performance varied, with Broadspire's operating earnings up 61.5%, while Platform Solutions plummeted 88.8% due to a 49.2% revenue decline, and other segments also saw decreases Segment Operating Earnings (Q1 2024 vs Q1 2023) | Segment (in thousands) | Q1 2024 Operating Earnings | Q1 2023 Operating Earnings | % 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 As of March 31, 2024, working capital was $81.7 million and cash $45.2 million, with cash used in operations increasing to $19.8 million, leading to $21.0 million in net borrowings and total liquidity of $253.9 million - 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] - Cash provided by financing activities was $16.1 million, largely due to a net increase of $21.0 million in borrowings from the revolving credit facility to cover lower cash flows from operations[172] - Total liquidity at March 31, 2024, was $253.9 million, consisting of $45.2 million in cash and $208.7 million in additional borrowing capacity under the Credit Facility[174] - The company paid $3.4 million in dividends during Q1 2024, an increase from $2.9 million in Q1 2023[172][178] Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes to its market risk exposures since December 31, 2023, referring to its Annual Report on Form 10-K for further details - The company's exposures to market risk have not changed materially since December 31, 2023[185] Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of March 31, 2024, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[188] - There were no material changes in the company's internal control over financial reporting during the first quarter of 2024[189] Part II Risk Factors The company reports no material changes to previously disclosed risk factors, referring to its Annual Report on Form 10-K for a detailed discussion - The company refers to Part I, Item 1A of its Annual Report on Form 10-K for the year ended December 31, 2023, for a discussion of factors that could materially affect its business[191] Unregistered Sales of Equity Securities and Use of Proceeds In Q1 2024, the company repurchased 85,632 Class B Common Stock shares at $8.56 per share, with 1,413,787 shares remaining authorized for repurchase until December 31, 2024 Share Repurchases in Q1 2024 | Period | Class | 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 | - 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 During Q1 2024, no directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading plans for company securities - During Q1 2024, no directors or officers adopted or terminated any Rule 10b5-1 trading plans for the company's securities[194] Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications under Sarbanes-Oxley Act Sections 302 and 906, and Inline XBRL documents - The report includes certifications from the CEO and CFO as required by the Sarbanes-Oxley Act of 2002 (Sections 302 and 906) and Inline XBRL data files[196]