Crawford & Company Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Crawford & Company on March 31, 2021. The filing discloses a material change in the company's organizational structure and financial reporting methodology effective subsequent to December 31, 2020.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures for the current period. Instead, it focuses on the restructuring of reportable segments and the revision of historical financial data for 2019 and 2020 to align with the new structure. Detailed historical results are referenced in Exhibit 99.1.
Material Changes Versus Prior Period
- Segment Realignment: The company reorganized its global service lines into three new reportable segments:
- Crawford Loss Adjusting: Services the global property and casualty market, combining previous Claims Solutions (excluding Networks and Legal Services) and Global Technical Services.
- Crawford TPA Solutions: Broadspire: Provides third-party administration for workers' compensation, auto, liability, and health. This combines the previous TPA Solutions segment with Crawford Legal Services.
- Crawford Platform Solutions: Consists of Contractor Connection and Networks (including Catastrophe operations and WeGoLook).
- Expense Classification: Costs for certain administrative functions (e.g., IT and Finance) previously recorded as indirect costs are now included as direct costs within each operating segment. This will increase direct expenses and lower gross profit but is expected to have minimal impact on segment operating earnings.
- Non-GAAP Adjustments:
- Non-GAAP EPS will now exclude after-tax acquisition-related intangible amortization expense.
- The impact of foreign exchange movements will no longer be reported in non-GAAP earnings or EPS reconciliations, though it will remain in revenue disclosures.
Guidance, Outlook, and Management Commentary
Management states that the transfer of administrative functions to operating segments will improve management and performance delivery. The company believes the updated non-GAAP EPS presentation better reflects core operating results and offers greater consistency with other non-GAAP measures. Financial statements for succeeding interim and annual periods will disclose results under the new basis with prior periods restated.
Investor Verification Checklist
- Review Exhibit 99.1 for the schedule of revised reportable segment data for 2019 and 2020.
- Review Exhibit 99.2 for the full reconciliation between GAAP and non-GAAP EPS.
- Verify the impact of the new expense classification on gross profit versus operating earnings in future quarterly reports.
- Confirm how the exclusion of foreign exchange impacts from non-GAAP reconciliations affects period-over-period comparisons.