On August 5, 2024, Crawford & Co (CRD.A, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. Crawford & Co provides claims and outsourcing solutions to the risk management, insurance industry, and self-insured entities. Its segments include North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions, with the International Operations segment generating the maximum revenue.
Performance Overview
Despite a challenging comparison due to last year's weather events, Crawford & Co (CRD.A, Financial) reported revenues before reimbursements of $314.2 million, which exceeded the estimated $312.28 million. This represents a decrease from $324.6 million in the same quarter last year. However, net income attributable to shareholders increased slightly to $8.6 million from $8.4 million in Q2 2023.
Segment Performance
The company's performance across its segments was mixed:
| Segment | Revenue (Q2 2024) | Revenue (Q2 2023) | Operating Earnings (Q2 2024) | Operating Earnings (Q2 2023) |
|---|---|---|---|---|
| North America Loss Adjusting | $76.0 million | $76.4 million | $4.9 million | $3.9 million |
| International Operations | $102.3 million | $95.3 million | $5.7 million | $3.7 million |
| Broadspire | $97.1 million | $87.2 million | $15.1 million | $8.1 million |
| Platform Solutions | $38.8 million | $65.6 million | $1.5 million | $8.1 million |
Financial Achievements and Challenges
Despite the revenue decline, Crawford & Co (CRD.A, Financial) achieved several financial milestones. The Broadspire segment recorded a new quarterly revenue record of $97.1 million, reflecting an 11.3% increase from the previous year. The International Operations segment also saw a 7.3% revenue increase, driven by improved market conditions.
However, the Platform Solutions segment faced significant challenges, with revenues dropping by 40.8% due to reduced weather-related claim volumes. This decline underscores the segment's vulnerability to weather events, which can impact demand unpredictably.
Key Financial Metrics
Important financial metrics from the earnings report include:
- GAAP diluted earnings per share (EPS) remained unchanged at $0.17 for both CRD-A and CRD-B.
- Non-GAAP diluted EPS increased to $0.25 from $0.24 in the prior year.
- Consolidated adjusted operating earnings were $22.1 million, or 7.0% of revenues, compared to $22.8 million, or 7.0%, in Q2 2023.
- Adjusted EBITDA was $30.6 million, or 9.7% of revenues, compared to $31.5 million, or 9.7%, in the previous year.
Balance Sheet and Cash Flow
As of June 30, 2024, Crawford & Co (CRD.A, Financial) reported consolidated cash and cash equivalents of $46.7 million, down from $58.4 million at the end of 2023. Total debt increased to $233.8 million from $209.1 million. The company used $8.3 million of cash in operations during the first half of 2024, compared to $27.2 million provided in the same period last year.
Commentary and Outlook
"Our growth strategy and initiatives are yielding results. Despite a difficult comparison due to weather events last year, three of our four business segments showed operating earnings growth with improved margins in the quarter. This enabled us to achieve consolidated earnings consistent with last year and reflects Crawford’s diversified revenue model with a healthy balance between weather and non-weather dependent businesses." - Rohit Verma, CEO
Overall, Crawford & Co (CRD.A, Financial) demonstrated resilience in a challenging environment, with notable achievements in key segments. However, the significant decline in the Platform Solutions segment highlights the ongoing challenges posed by external factors such as weather events.
Explore the complete 8-K earnings release (here) from Crawford & Co for further details.
