news
View printer-friendly version < Go back
Crawford Reports 2009 Fourth Quarter and Annual Results
--Net Income Improves in 2009 Fourth Quarter --Provides Guidance for 2010
ATLANTA, Feb 08, 2010 /PRNewswire via COMTEX/ -- Crawford & Company (www.crawfordandcompany.com) (NYSE: CRDA and CRDB), the world's largest independent provider of claims management solutions to insurance companies and self-insured entities, today announced its financial results for the year and fourth quarter ended December 31, 2009.

Consolidated Results

Fourth quarter 2009 consolidated revenues before reimbursements were $238.4 million compared to $262.9 million in the 2008 fourth quarter due primarily to lower revenues in the U.S. Property & Casualty, Broadspire, and International Operations segments and the negative effect of foreign currency changes. Fourth quarter 2009 net income attributable to Crawford & Company was $8.9 million, increasing 6% over $8.3 million in the 2008 fourth quarter. Fourth quarter 2009 diluted earnings per share were $0.17 compared to diluted earnings per share of $0.16 in the prior-year quarter.

Full year 2009 consolidated revenues before reimbursements totaled $969.9 million, compared to $1.05 billion in 2008. Net loss attributable to Crawford & Company in 2009 was ($115.7) million, compared to 2008 net income of $32.3 million. Full year 2009 loss per share was ($2.23) compared to diluted earnings per share of $0.62 in the prior year. The 2009 net loss attributable to Crawford & Company includes non-cash impairment charges of $140.9 million, primarily related to goodwill in the Company's Broadspire segment. Excluding the non-cash impairment charges, 2009 net income attributable to Crawford & Company would have been $25.2 million and diluted earnings per share would have been $0.48.

Revenues, net income attributable to Crawford & Company, and earnings per share in the 2009 fourth quarter and for the full year were impacted by increased defined benefit pension expense, the impact of foreign currency changes, restructuring charges, and (solely with respect to the full-year period) the non-cash charge associated with the write-off of a portion of the Company's goodwill, offset by certain tax benefits during 2009 as outlined below:



                                 Fourth Quarter 2009
                                 -------------------

                                                           Net
                                                         Income
                                                       Attributable
    In millions, except per share   Revenues before    to Crawford   Diluted
     amounts                        Reimbursements     & Company       EPS
    -----------------------------   --------------     ------------  -------
    Fourth quarter 2008 results            $262.9           $8.3      $0.16
     (Less)/Add:
    Foreign currency impact in 2009          (1.2)          (0.1)         -
    Increase in pension expense in
     2009                                       -           (2.9)     (0.05)
    2008 sale of Dutch subsidiary               -           (2.5)     (0.05)
    2008 previously unrecognized
     tax credit                                 -           (0.9)     (0.02)
    Certain tax benefits recognized
     in 2009                                    -            4.3       0.08
    Year-over-year change in
     restructuring cost                         -             .7       0.01
    All other operating changes             (23.3)           2.0       0.04
                                           ------           ----      -----
    Fourth quarter 2009 results            $238.4           $8.9      $0.17
                                           ======           ====      =====


                                    Full Year 2009
                                    --------------

                                                            Net
                                                          Income
                                                          (Loss)
                                                       Attributable
    In millions, except per share     Revenues before   to Crawford  Diluted
     amounts                          Reimbursements    & Company      EPS
    -----------------------------     ---------------  ------------  -------
    Full year 2008 results                  $1,048.6      $32.3       $0.62
    (Less)/Add:
    Foreign currency impact in 2009            (62.5)      (3.9)      (0.08)
    Increase in pension expense in
     2009                                          -      (10.6)      (0.20)
    2008 sale of Dutch subsidiary                  -       (2.5)      (0.05)
    2008 previously unrecognized
     tax credit                                    -       (0.9)      (0.02)
    Year-over-year change in
     restructuring cost                            -       (0.4)      (0.01)
    Lower 2009 corporate interest
     expense                                       -        2.2        0.04
    Certain tax benefits recognized
     in 2009                                       -        5.7        0.11
    All other operating changes                (16.2)       3.3        0.07
                                               ------    -------     -------
      Subtotal excluding impairment
       charges                                 969.9       25.2        0.48
    Impairment charges in 2009, net
     of dilution                                   -     (140.9)      (2.71)
                                              ------     -------      ------
    Full year 2009 results                    $969.9    ($115.7)     ($2.23)
                                              ======    ========     =======

During the 2009 fourth quarter, the Company recognized a one-time $3.3 million income tax benefit for foreign tax credits as a result of a recently completed internal restructuring of certain of the Company's international businesses. In addition, during the second quarter of 2009, the Company completed an internal restructuring of certain of its international businesses that has resulted in an ongoing reduction in its effective tax rate. For the year ended December 31, 2009, the Company benefited from $2.4 million in reduced foreign taxes, as compared to 2008, as a result of this second-quarter restructuring. These tax benefits increased earnings per share by $0.08 and $0.11 for the fourth quarter and year ended December 31, 2009, respectively.

In addition, during the 2009 fourth quarter, the Company incurred restructuring and lease termination costs of $1.5 million, after related income taxes. For the year ended December 31, 2009, these costs totaled $2.6 million, after related income taxes. These costs reduced earnings per share by $0.03 and $0.05 for the 2009 fourth quarter and year ended December 31, 2009, respectively.

Net income in the 2008 fourth quarter included a $2.5 million non-taxable gain on the sale of a business in the Company's Dutch subsidiary. This gain increased diluted earnings per share by $0.05 for the year and fourth quarter ended December 31, 2008. In the 2008 fourth quarter, restructuring costs in certain operations totaled $2.2 million, after related income taxes. These restructuring costs reduced diluted earnings per share by $0.04 for both the fourth quarter and year ended December 31, 2008. In addition, during the 2008 fourth quarter the Company recognized $900,000 in net income for certain previously unrecognized foreign tax credits. These tax credits increased diluted earnings per share by $0.02 for the 2008 fourth quarter and year ended December 31, 2008.

Crawford generated $51.7 million of cash from operations during 2009, compared to the $71.6 million in cash provided by operations during 2008. The $19.9 million decrease was due primarily to lower earnings during 2009 before the impairment charges and growth in working capital requirements. The Company's consolidated cash and cash equivalent position as of December 31, 2009 totaled $70.4 million compared to $73.1 million at December 31, 2008.

International Operations

Fourth quarter 2009 revenues before reimbursements for the International Operations segment declined 5.2% to $103.9 million from $109.6 million for the same period in 2008 due to the relative strength of the U.S. dollar and lower constant dollar revenues in the Company's international business. Compared to the 2008 fourth quarter, during the 2009 fourth quarter the U.S. dollar was stronger against most major foreign currencies, resulting in a negative exchange rate impact. Excluding the negative impact of exchange rate fluctuations, International Operations revenues would have been $105.1 million in the 2009 fourth quarter, reflecting a decline in revenues from the comparable 2008 period on a constant dollar basis of 4.1%, mainly due to the UK and European operations. Segment operating expenses for the 2009 fourth quarter decreased by $5.2 million in U.S. dollars, a 5.2% decrease, and decreased by 3.9% on a constant dollar basis, compared to the 2008 period. Operating earnings were $10.4 million in U.S. dollars during the 2009 fourth quarter ($10.2 million on a constant dollar basis), down from last year's fourth quarter operating earnings of $10.9 million in U.S. dollars. The related operating margin improved to 10.0% in the 2009 fourth quarter, compared to 9.9% in the 2008 fourth quarter.

U.S. Property & Casualty

U.S. Property & Casualty revenues before reimbursements were $44.7 million in the fourth quarter of 2009, decreasing 25.2% from $59.8 million in the 2008 fourth quarter when the Company was completing claims generated by hurricanes Gustav, Dolly and Ike, and reflects overall industry-wide softness in claims during the 2009 period. Revenues generated by the Company's catastrophe adjuster group were $3.7 million in the 2009 fourth quarter, declining from the $11.3 million in the 2008 period. Operating earnings in the 2009 fourth quarter in the U.S. Property & Casualty segment were $1.6 million, or an operating margin of 3.7% of revenues, compared to operating earnings of $4.8 million, or 8.0% of revenues in the 2008 fourth quarter.

Broadspire

Revenues before reimbursements from the Broadspire segment were $70.6 million in the 2009 fourth quarter, down 6.6% from $75.6 million in the 2008 quarter. Broadspire had operating earnings of $2.1 million in the 2009 fourth quarter, or an operating margin of 3.0% of revenues, compared to an operating loss of ($1.8) million, or (2.4%) of revenues, in the prior-year period. The revenue decline was primarily due to a reduced number of workers' compensation claim referrals as a result of lower U.S. employment levels, while the improvement in operating earnings was driven by cost reduction measures implemented during 2009.

Legal Settlement Administration

Legal Settlement Administration revenues before reimbursements were $19.2 million in the 2009 fourth quarter, up 6.8% from $18.0 million in the 2008 quarter, reflecting the positive impact of several major bankruptcy and securities class action administration projects awarded to the Company during 2009. Operating earnings totaled $3.2 million in the 2009 fourth quarter, or an operating margin of 16.8% of revenues, compared to $2.3 million, or 12.9% of revenues, in the prior-year period. The segment's awarded project backlog totaled approximately $55.0 million at December 31, 2009, compared to $42.0 million at December 31, 2008.

Management's Comments

Mr. Jeffrey T. Bowman, president and chief executive officer of Crawford & Company, stated, "Despite overall weakness in the global economy, our reported operating results for the 2009 fourth quarter were at the highest level in all of 2009 and exceeded our expectations. We performed well in our International Operations segment with no significant catastrophic activity, which reflects the leadership position we have earned in this market. Legal Settlement Administration had a good fourth quarter and we were particularly pleased with our performance in the bankruptcy administration market.

"Operating cash flow during the 2009 fourth quarter improved substantially over the 2009 third quarter, reflecting some of the seasonality we experience in our cash receipts. We continue to drive our company to improve its working capital profile, by focusing on better management of processes related to unbilled revenues and accounts receivable and by linking our incentive compensation programs to increased performance in this area. This focus will continue in the upcoming year."

Mr. Bowman concluded, "While we are pleased with our improved fourth quarter results, we expect global economic conditions to continue to be challenging, particularly in employment levels in the U.S. We are focusing significant attention on our administrative cost base across the entire organization to ensure we are operating more efficiently during 2010. We were successful during 2009 in reducing our selling, general and administrative costs, particularly in the fourth quarter, and our efforts in this regard will continue. While we remain confident in our long-term business model and especially the Crawford System of Claims Solutions, we have a cautionary economic outlook for 2010 which is reflected in our guidance for the coming year."

2010 Guidance

Crawford & Company is providing initial guidance for 2010 as follows:

  • Consolidated revenues before reimbursements between $970 million and $990 million.
  • Consolidated operating earnings between $54.3 million and $60.3 million.
  • Consolidated cash provided by operating activities between $30.0 million and $35.0 million.
  • After reflecting stock-based compensation expense, net corporate interest expense, customer-relationship intangible asset amortization expense, special charges, and income taxes, net income attributable to Crawford & Company on a GAAP basis between $23.5 million and $26.5 million, or $0.44 to $0.50 diluted earnings per share.

Crawford & Company's management will host a conference call with investors on Monday, February 8, 2010 at 3:00 p.m. EST to discuss earnings and other developments. The call will be recorded and available for replay through February 15, 2010. You may dial 1-800-642-1687 (706-645-9291 international) to listen to the replay. The access code is 53036043. Alternatively, please visit our web site at www.crawfordandcompany.com for a live audio web cast and related financial presentation.

Further information regarding the Company's financial position, operating results, and cash flows for the quarter and year ended December 31, 2009 is shown on the attached condensed consolidated unaudited financial statements. Operating earnings (a non-GAAP financial measure) is the key financial performance measure used by the Company's senior management to evaluate the performance of its operating segments and make resource allocation decisions. The Company believes this measure is useful to investors in that it allows them to evaluate operating performance using the same criteria that management uses. Operating earnings represents net income (loss) attributable to Crawford & Company excluding net corporate interest expense, stock option expense, income tax expense, amortization of customer relationship intangible assets, unallocated corporate and shared costs, and certain other charges and credits. Net corporate interest expense, stock option expense and income taxes are recurring components of the Company's net income (loss), but they are not considered part of operating earnings since they are managed on a corporate-wide basis. Net corporate interest expense results from capital structure decisions made by and effecting the Company as a whole, stock option expense relates to stock options and employee stock purchase plan expenses which are not allocated to operating segments, and income taxes are based on statutory rates in effect in each of the locations where the Company provides services, and vary throughout the world. Amortization expense relates to non-cash amortization of customer relationship intangible assets resulting from business combinations. These costs are not allocated to the operating segments for assessing performance. None of the aforementioned costs relate directly to the Company's products or the performance of the Company's services and are therefore excluded in order to more accurately assess the results of segment operating activities on a consistent basis. Certain other credits and charges represent events (gains on disposal of assets, restructuring activities, goodwill impairment, etc.) that are not considered part of segment operating earnings since they historically have not regularly impacted the Company's operating performance and are not expected to regularly impact future performance. Following is a reconciliation of segment operating earnings (loss) to net income (loss) attributable to Crawford & Company on a GAAP basis and the related margins as a percentage of revenues before reimbursements for all periods presented:



                                            Quarter ended
                                            -------------
                                December      %     December      %
                                31, 2009   Margin   31, 2008   Margin
                               ---------  -------  ---------  -------
    Operating Earnings (Loss):
    U.S. property & casualty      $1,642      3.7%    $4,792      8.0%
    International operations      10,364     10.0     10,866      9.9
    Broadspire                     2,129      3.0     (1,840)    (2.4)
    Legal settlement
     administration                3,219     16.8      2,322     12.9
    Unallocated corporate
     and shared costs             (2,566)    (1.1)    (1,581)    (0.6)
    Add/(Deduct):
       Restructuring/other
        charges                   (2,244)    (0.9)    (3,300)    (1.3)
       Gain on sale of business        -        -      2,512      1.0
       Impairment charge               -        -          -        -
       Stock option expense         (218)    (0.1)      (144)    (0.1)
       Amortization expense       (1,500)    (0.6)    (1,504)    (0.6)
       Net corporate interest
        expense                   (3,915)    (1.6)    (4,216)    (1.6)
                                 -------             -------
    Pretax income (loss)           6,911      2.9      7,907      3.0
       Income taxes                1,958      0.8        430      0.2
                                  ------              ------
    Net income (loss)
     attributable to
     Crawford & Company           $8,869      3.7     $8,337      3.2
                                  ======              ======



                                              Year ended
                                              ----------
                                 December       %     December    %
                                 31, 2009    Margin   31, 2008  Margin
                                ---------   -------  ---------  ------
    Operating Earnings (Loss):
    U.S. property & casualty       $18,892      9.1%   $22,614    10.4%
    International operations        33,307      8.5     38,893     8.7
    Broadspire                      (1,602)    (0.6)     3,526     1.1
    Legal settlement
     administration                 13,130     16.0     10,814    14.4
    Unallocated corporate
     and shared costs              (10,714)    (1.1)    (6,728)   (0.6)
    Add/(Deduct):
       Restructuring/other
        charges                     (4,059)    (0.4)    (3,300)   (0.3)
       Gain on sale of
        business                         -        -      2,512     0.2
       Impairment charge          (140,945)   (14.5)         -       -
       Stock option expense           (914)    (0.1)      (861)   (0.1)
       Amortization expense         (5,994)    (0.6)    (6,025)   (0.6)
       Net corporate interest
        expense                    (14,166)    (1.5)   (17,622)   (1.7)
                                  --------            --------
    Pretax income (loss)          (113,065)   (11.6)    43,823     4.2
       Income taxes                 (2,618)    (0.3)   (11,564)   (1.1)
                                   -------            --------
    Net income (loss)
     attributable to
     Crawford & Company          ($115,683)   (11.9)   $32,259     3.1
                                ==========             =======

Based in Atlanta, Georgia, Crawford & Company (www.crawfordandcompany.com) is the world's largest independent provider of claims management solutions to the risk management and insurance industry as well as self-insured entities, with a global network of more than 700 locations in 63 countries. The Crawford System of Claims Solutions(SM) offers comprehensive, integrated claims services, business process outsourcing and consulting services for major product lines including property and casualty claims management; workers' compensation claims and medical management, and legal settlement administration. The Company's shares are traded on the NYSE under the symbols CRDA and CRDB.

This press release contains forward-looking statements, including statements about the financial condition, results of operations and earnings outlook of Crawford & Company. Statements, both qualitative and quantitative, that are not historical facts may be "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from historical experience or Crawford & Company's present expectations. Accordingly, no one should place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Crawford & Company does not undertake to update forward-looking statements to reflect the impact of circumstances or events that may arise or not arise after the date the forward-looking statements are made. For further information regarding Crawford & Company, including factors that could cause our actual financial condition, results or earnings to differ from those described in any forward-looking statements, please read Crawford & Company's reports filed with the United States Securities and Exchange Commission from time to time and available at www.sec.gov or in the Investor Relations section of Crawford & Company's website at www.crawfordandcompany.com.



                                CRAWFORD & COMPANY
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                    Unaudited
        (In Thousands, Except Earnings Per Share Amounts and Percentages)

    Year Ended December 31                   2009            2008  % Change
    ----------------------                   ----            ----  --------

    Revenues:

        Revenues Before Reimbursements   $969,868      $1,048,582       -8%
        Reimbursements                     78,334          87,334      -10%
                                        ---------       ---------
    Total Revenues                      1,048,202       1,135,916       -8%

    Costs and Expenses:

             Costs of Services Before     713,991         767,093      -7%
              Reimbursements
             Reimbursements                78,334          87,334      -10%
                                          -------         -------
        Total Cost of Services            792,325         854,427       -7%

        Selling, General, and
         Administrative                   209,458         218,632       -4%
        Corporate Interest Expense, Net    14,166          17,622      -20%
        Restructuring and Other Costs       4,059           3,300       23%
        Goodwill and Intangible
         Asset Impairment Charges         140,945               -        nm
                                        ---------       ---------
    Total Costs and Expenses            1,160,953       1,093,981        6%
                                        ---------       ---------

        Gain on Sale of Business                -           2,512        nm

    (Loss) Income Before Income Taxes    (112,751)         44,447        nm
    Provision for Income Taxes              2,618          11,564      -77%
                                            -----          ------
    Net (Loss) Income                    (115,369)         32,883        nm
    Less:  Net Income Attributable to        (314)           (624)      -50%
     Noncontrolling Interests               -----           -----
    Net (Loss) Income Attributable
     to Crawford & Company              ($115,683)        $32,259        nm
                                       ==========         =======

    (Loss) Earnings Per Share - Basic      ($2.23)          $0.63        nm
                                          -------           -----
    (Loss) Earnings Per Share - Diluted    ($2.23)          $0.62        nm
                                          -------           -----

    Weighted-Average Shares Used For:
       Basic (Loss) Earnings Per Share     51,830          50,958
                                           ------          ------
       Diluted (Loss) Earnings
        Per Share                          51,830          52,342
                                           ------          ------

    nm = not meaningful


                                CRAWFORD & COMPANY
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                    Unaudited
        (In Thousands, Except Earnings Per Share Amounts and Percentages)

    Three Months Ended December 31           2009           2008   % Change
    ------------------------------           ----           ----   --------

    Revenues:

        Revenues Before Reimbursements   $238,369       $262,889        -9%
        Reimbursements                     19,050         17,756         7%
                                         --------       --------
    Total Revenues                        257,419        280,645        -8%

    Costs and Expenses:
             Costs of Services Before     175,540        194,350       -10%
              Reimbursements
             Reimbursements                19,050         17,756         7%
                                          -------        -------
        Total Cost of Services            194,590        212,106        -8%

        Selling, General, and
         Administrative                    49,721         55,319       -10%
        Corporate Interest Expense, Net     3,915          4,216        -7%
        Restructuring  and Other Costs      2,244          3,300       -32%
                                          -------        -------
    Total Costs and Expenses              250,470        274,941        -9%
                                          -------        -------

        Gain on Sale of Business                -          2,512         nm

    Income Before Income Taxes              6,949          8,216       -15%
    Benefit for Income Taxes               (1,958)          (430)       355%
                                          -------          -----
    Net Income                              8,907          8,646         3%
    Less:  Net Income Attributable
     to Noncontrolling Interests              (38)          (309)       -88%
                                             ----          -----
    Net Income Attributable                $8,869         $8,337         6%
     to Crawford & Company                 ======         ======

    Earnings Per Share:
       Basic                                $0.17          $0.16         6%
                                            -----          -----
       Diluted                              $0.17          $0.16         6%
                                            -----          -----

    Weighted-Average Shares Used For:
       Basic Earnings Per Share            52,053         51,219
                                           ------         ------
       Diluted Earnings Per Share          52,902         53,028
                                           ------         ------

    nm = not meaningful


                               CRAWFORD & COMPANY
                      SUMMARY RESULTS BY OPERATING SEGMENT

                              Year Ended December 31
                                    Unaudited
                        (In Thousands, Except Percentages)

                                     U.S. Property & Casualty         %
                                         2009      2008            Change
                                     ====================================


    Revenues Before Reimbursements   $206,598  $216,753             -4.7%
    Compensation & Benefits           125,939   133,933             -6.0%
    % of Revenues Before
     Reimbursements                     61.0%     61.8%

    Expenses Other than
     Reimbursements, Compensation
     & Benefits                        61,767    60,206              2.6%
    % of Revenues Before
     Reimbursements                     29.9%     27.8%
                                     ------------------------------------

    Total Operating Expenses          187,706   194,139             -3.3%
                                     ------------------------------------

    Operating Earnings (Loss) (1)     $18,892   $22,614            -16.5%
    % of Revenues Before
     Reimbursements                      9.1%     10.4%
                                     ------------------------------------


                                    International Operations          %
                                         2009       2008           Change
                                     ====================================


    Revenues Before Reimbursements   $392,601   $445,056           -11.8%
    Compensation & Benefits           270,637    303,197           -10.7%
    % of Revenues Before
     Reimbursements                     68.9%      68.1%

    Expenses Other than
     Reimbursements, Compensation
     & Benefits                        88,657    102,966           -13.9%
    % of Revenues Before
     Reimbursements                     22.6%      23.2%
                                     ------------------------------------

    Total Operating Expenses          359,294    406,163           -11.5%
                                     ------------------------------------

    Operating Earnings (Loss) (1)     $33,307    $38,893           -14.4%
    % of Revenues Before
     Reimbursements                      8.5%       8.7%
                                     ------------------------------------


                                           Broadspire                 %
                                         2009      2008            Change
                                     ====================================


    Revenues Before Reimbursements   $288,650  $311,841             -7.4%
    Compensation & Benefits           161,786   175,412             -7.8%
    % of Revenues Before
     Reimbursements                     56.0%     56.3%

    Expenses Other than
     Reimbursements, Compensation
     & Benefits                       128,466   132,903             -3.3%
    % of Revenues Before
     Reimbursements                     44.6%     42.6%
                                     ------------------------------------

    Total Operating Expenses          290,252   308,315             -5.9%
                                     ------------------------------------

    Operating Earnings (Loss) (1)    ($1,602)    $3,526           -145.4%
    % of Revenues Before
     Reimbursements                     -0.6%      1.1%
                                     ------------------------------------


                                        Legal Settlement
                                         Administration               %
                                         2009      2008            Change
                                      ===================================
    Revenues Before Reimbursements    $82,019   $74,932              9.5%
    Compensation & Benefits            35,859    35,359              1.4%
    % of Revenues Before
     Reimbursements                     43.7%     47.2%

    Expenses Other than
     Reimbursements, Compensation
     & Benefits                        33,030    28,759             14.9%
    % of Revenues Before
     Reimbursements                     40.3%     38.4%
                                      -----------------------------------

    Total Operating Expenses           68,889    64,118              7.4%
                                      -----------------------------------

    Operating Earnings (Loss) (1)     $13,130   $10,814             21.4%
    % of Revenues Before
     Reimbursements                     16.0%     14.4%
                                      -----------------------------------




                          Three Months Ended December 31
                                    Unaudited
                        (In Thousands, Except Percentages)


                                    U.S. Property & Casualty           %
                                         2009      2008            Change
                                    =====================================


    Revenues Before Reimbursements    $44,746   $59,818            -25.2%
    Compensation & Benefits            28,971    37,656            -23.1%
    % of Revenues Before
     Reimbursements                     64.7%     63.0%

    Expenses Other than
     Reimbursements, Compensation
     & Benefits                        14,133    17,370            -18.6%
    % of Revenues Before
     Reimbursements                     31.6%     29.0%
                                        -----     -----

    Total Operating Expenses           43,104    55,026            -21.7%
                                       ------    ------            ------

    Operating Earnings (Loss) (1)      $1,642    $4,792            -65.7%
    % of Revenues Before
     Reimbursements                      3.7%      8.0%
                                         ----      ----


                                    International Operations          %
                                        2009       2008            Change
                                    =====================================
    Revenues Before Reimbursements  $103,877   $109,551             -5.2%
    Compensation & Benefits           70,127     73,205             -4.2%
    % of Revenues Before
     Reimbursements                    67.5%      66.8%

    Expenses Other than
     Reimbursements, Compensation
     & Benefits                       23,386     25,480             -8.2%
    % of Revenues Before
     Reimbursements                    22.5%      23.3%
                                       -----      -----

    Total Operating Expenses          93,513     98,685             -5.2%
                                      ------     ------             -----

    Operating Earnings (Loss) (1)    $10,364    $10,866             -4.6%
    % of Revenues Before
     Reimbursements                    10.0%       9.9%
                                   --------------------------------------

                                           Broadspire                 %
                                        2009       2008            Change
                                     ====================================
    Revenues Before Reimbursements   $70,563    $75,552             -6.6%
    Compensation & Benefits           38,722     42,740             -9.4%
    % of Revenues Before
     Reimbursements                    54.9%      56.6%

    Expenses Other than
     Reimbursements, Compensation
     & Benefits                       29,712     34,652            -14.3%
    % of Revenues Before
     Reimbursements                    42.1%      45.8%
                                     ------------------------------------

    Total Operating Expenses          68,434     77,392            -11.6%
                                     ------------------------------------

    Operating Earnings (Loss) (1)     $2,129   ($1,840)           -215.7%
    % of Revenues Before
     Reimbursements                     3.0%      -2.4%
                                     ------------------------------------

                                        Legal Settlement
                                         Administration               %
                                         2009      2008            Change
                                      ===================================
    Revenues Before Reimbursements    $19,183   $17,968              6.8%
    Compensation & Benefits             8,597     8,788             -2.2%
    % of Revenues Before
     Reimbursements                     44.8%     48.9%

    Expenses Other than
     Reimbursements, Compensation
     & Benefits                         7,367     6,858              7.4%
    % of Revenues Before
     Reimbursements                     38.4%     38.2%
                                      -----------------------------------

    Total Operating Expenses           15,964    15,646              2.0%
                                      -----------------------------------

    Operating Earnings (Loss) (1)      $3,219    $2,322             38.6%
    % of Revenues Before
     Reimbursements                     16.8%     12.9%
                                      -----------------------------------

    (1) A non-GAAP financial measurement which represents net income
    attributable to Crawford & Company excluding net corporate interest
    expense, amortization of customer-relationship intangible assets, stock
    option expense, income tax expense, unallocated corporate and shared
    costs, restructuring costs, and goodwill and intangible asset impairment
    charges. See page 7 for a reconciliation of Operating Earnings to Net
    (Loss) Income computed in accordance with GAAP.


                                 CRAWFORD & COMPANY
                         CONDENSED CONSOLIDATED BALANCE SHEETS
                      As of December 31, 2009 and December 31, 2008
                           (In Thousands, Except Par Values)

                                              Unaudited                *
                                              December 31         December 31
    Assets                                       2009                2008
    ------------------------------------         ----                ----
      Current Assets:
        Cash and Cash Equivalents                 $70,354             $73,124
        Accounts Receivable, Net                  139,215             157,430
        Unbilled Revenues, Net                     93,796              99,115
        Prepaid Expenses and Other                 22,350              18,688
        Current Assets                          ---------           ---------

      Total Current Assets                        325,715             348,357
                                                ---------           ---------

        Property and Equipment                    144,254             140,399
        Less Accumulated Depreciation            (102,108)            (95,785)
                                                ---------           ---------

      Net Property and Equipment                   42,146              44,614
                                                ---------           ---------

      Other Assets:
        Goodwill                                  123,169             251,897
        Intangible Assets Arising from
         Business Acquisitions, Net               104,409             111,389
        Capitalized Software Costs, Net            50,463              46,296
        Deferred Income Tax Asset                  69,504              67,695
        Other Noncurrent Assets                    27,499              25,000
                                                 --------            --------
      Total Other Assets                          375,044             502,277
                                                 --------            --------

      Total Assets                               $742,905            $895,248
                                                 ========            ========

    Liabilities and Shareholders' Investment
    ----------------------------------------
      Current Liabilities:
        Short-Term Borrowings                         $32             $13,366
        Accounts Payable                           35,449              40,711
        Accrued Compensation and Related Costs     70,871              77,802
        Other Accrued Current Liabilities          47,318              56,978
        Self-Insured Risks                         18,475              17,939
        Accrued Income Taxes                            -               9,937
        Deferred Revenues                          53,664              59,679
        Current Installments of Long-Term
         Debt and Capital Leases                    2,314               2,284
                                                 --------            --------

      Total Current Liabilities                   228,123             278,696
                                                 --------            --------

      Noncurrent Liabilities:
        Long-Term Debt and Capital Leases,
         Less Current Installments                178,936             181,206
        Deferred Revenues                          33,524              42,795
        Self-Insured Risks                         14,824              18,531
        Accrued Pension Liabilities               212,507             179,542
        Other Noncurrent Liabilities               13,705              14,119
                                                 --------            --------
      Total Noncurrent Liabilities                453,496             436,193
                                                 --------            --------

      Shareholders' Investment:
        Class A Common Stock, $1.00 Par Value      27,355              26,523
        Class B Common Stock, $1.00 Par Value      24,697              24,697
        Additional Paid-in Capital                 29,570              26,342
        Retained Earnings                         140,464             256,146
        Accumulated Other Comprehensive Loss     (165,404)           (158,157)
                                                ---------           ---------
          Total Crawford & Company Shareholders'
           Investment                              56,682             175,551

      Noncontrolling Interests                      4,604               4,808
                                                 --------            --------

      Total Shareholders' Investment               61,286             180,359
                                                 --------            --------

      Total Liabilities and Shareholders'
       Investment                                $742,905            $895,248
                                                 ========            ========

    * Derived from the audited Consolidated Balance Sheet


                                   CRAWFORD & COMPANY
                     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                         Years Ended December 31, 2009 and 2008
                                       Unaudited
                                    (In Thousands)

                                                               2009      2008
                                                               ----      ----
    Cash Flows From Operating Activities:
    -------------------------------------
      Net (Loss) Income                                   ($115,369)  $32,883
      Reconciliation of Net (Loss) Income to
       Net Cash Provided By
        Operating Activities:
            Depreciation and Amortization                    31,010    30,331
            Goodwill and Intangible Asset Impairment
             Charges                                        140,945
            Stock-Based Compensation                          5,510     5,858
            Deferred income tax provision                       463       247
            Loss on Sales of Property and Equipment,
             Net                                                117       195
            Gain on Sale of Business                              -    (2,512)
           Changes in Operating Assets and
            Liabilities, Net of Effects of Acquisition
             and Disposition:
                 Accounts Receivable                         27,193     6,785
                 Unbilled Revenues                           12,481    22,093
                 Accrued Income Taxes                        (7,782)    3,077
                 Accounts Payable and Accrued Liabilities   (16,749)   20,493
                 Deferred Revenues                          (15,827)  (19,024)
                 Retirement Plan Liabilities                 (7,844)  (25,416)
                 Prepaid Expenses and Other Operating
                  Activities, net                            (2,484)   (3,425)
                                                            -------   -------
    Net Cash Provided By Operating Activities                51,664    71,585
                                                            -------   -------

    Cash Flows From Investing Activities:
    -------------------------------------
      Acquisitions of Property and Equipment,
       net                                                   (9,751)  (14,552)
      Capitalization of Computer Software Costs             (14,823)  (16,797)
      Other Investing Activities                             (6,595)    3,313
                                                           --------  --------
    Net Cash Used In Investing Activities                   (31,169)  (28,036)
                                                           --------  --------

    Cash Flows From Financing Activities:
    -------------------------------------
      Shares used to settle withholding taxes
       under stock-based compensation plans                  (1,903)      (20)
      Proceeds from exercises of stock options/
       ESPP plans                                               453     2,036
      Decrease in Short-Term Borrowings, net                (18,286)  (11,752)
      Payments on Long-Term Debt and Capital
       Lease Obligations                                     (2,400)   (2,484)
      Capitalized Loan Costs                                 (4,145)        -
      Other Financing Activities                               (274)     (610)
                                                           --------  --------
    Net Cash Used In Financing Activities                   (26,555)  (12,830)
                                                           --------  --------

    Effect of Exchange Rate Changes on Cash
     and Cash Equivalents                                     3,290    (8,450)
                                                            -------    ------
    Change in Cash and Cash Equivalents                      (2,770)   22,269
    Cash and Cash Equivalents at Beginning of Year           73,124    50,855
                                                            -------   -------
    Cash and Cash Equivalents at End of Year                $70,354   $73,124
                                                            =======   =======


SOURCE Crawford & Company