On November 4, 2024, Crawford & Co (CRD.A, Financial) released its 8-K filing detailing the financial results for the third quarter ended September 30, 2024. The company, a leading provider of claims and outsourcing solutions to the risk management and insurance industry, reported revenues before reimbursements of $329.4 million, slightly below the analyst estimate of $335.74 million. This performance reflects a marginal decline from the $330.1 million reported in the same quarter last year.
Company Overview
Crawford & Co operates through several segments, including North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions. The company generates the majority of its revenue from the International Operations segment, which provides claims management and adjusting services related to property and casualty insurance claims.
Performance and Challenges
The third quarter results highlight Crawford & Co's ability to maintain steady revenue despite challenges. The company faced a benign weather environment, which impacted growth in its North America Loss Adjusting and Platform Solutions segments. This was compounded by decreased revenues in U.S. Field Operations and Canada, leading to a decline in operating earnings for these segments.
Financial Achievements
Despite these challenges, Crawford & Co achieved record quarterly revenue in its Broadspire segment, driven by increases in medical case management and casualty claims revenues. The International Operations segment also saw revenue growth and improved margins, particularly in the U.K. and Europe. These achievements underscore the company's diversified business model, which helps mitigate challenges in one area with growth in others.
Income Statement and Key Metrics
For the third quarter of 2024, Crawford & Co reported a net income attributable to shareholders of $9.5 million, down from $12.3 million in the same period last year. Diluted earnings per share were $0.19 for both CRD-A and CRD-B, compared to $0.25 in the prior year. On a non-GAAP basis, diluted earnings per share were $0.22, down from $0.35 for CRD-A and $0.36 for CRD-B in the previous year.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenues before reimbursements | $329.4 million | $330.1 million |
| Net Income | $9.5 million | $12.3 million |
| Diluted EPS (GAAP) | $0.19 | $0.25 |
| Adjusted EBITDA | $29.6 million | $38.6 million |
Analysis and Commentary
Mr. Rohit Verma, CEO of Crawford & Co, noted,
Consolidated third quarter revenues were consistent with the previous year, reflecting our ability to drive continued momentum in our core non-weather-dependent businesses."This statement highlights the company's strategic focus on diversifying its revenue streams to reduce dependency on weather-related claims.
Balance Sheet and Cash Flow
As of September 30, 2024, Crawford & Co reported cash and cash equivalents of $52.3 million, down from $58.4 million at the end of 2023. Total debt increased to $238.4 million from $209.1 million. The company's operations provided $11.1 million of cash during the first nine months of 2024, a significant decrease from $68.1 million in the same period last year, primarily due to lower operating earnings and changes in working capital.
Conclusion
Crawford & Co's third quarter results reflect the company's resilience in maintaining revenue levels amidst challenging conditions. While the decline in net income and earnings per share indicates some financial pressure, the growth in the Broadspire and International Operations segments demonstrates the effectiveness of its diversified business strategy. As the company continues to navigate the current economic landscape, its focus on operational excellence and strategic partnerships will be crucial in driving future growth.
Explore the complete 8-K earnings release (here) from Crawford & Co for further details.
