Crawford & Co. 10-Q Summary: Quarter Ended September 30, 1995
Business Context and Reporting Period
This filing covers the unaudited financial results for Crawford & Co. for the quarter ended September 30, 1995, and the nine-month period ended on that date. The company operates in the services sector, with revenue derived from services provided and reimbursed expenses.
Key Financial Metrics
| Metric (Nine Months Ended Sep 30) | 1995 ($000s) | 1994 ($000s) |
|---|---|---|
| Revenues | 450,466 | 445,667 |
| Net Income | 25,488 | 31,296 |
| Earnings Per Share | $0.73 | $0.87 |
| Operating Cash Flow | 27,915 | 44,284 |
| Cash and Equivalents (Sep 30, 1995) | 34,737 | 38,968 (Dec 31, 1994) |
| Total Debt (Short-term + Long-term) | 19,321 | 19,085 (Dec 31, 1994) |
Quarterly Results (Three Months Ended Sep 30): Revenues were $150,954,000 compared to $149,051,000 in the prior year. Net income was $9,431,000 ($0.27 per share) versus $10,776,000 ($0.30 per share) in 1994.
Material Changes vs. Prior Period
- Profitability Decline: Net income for the nine-month period decreased by approximately 18.6% year-over-year, driven by a 19.7% drop in pre-tax income despite a 1.1% increase in revenue.
- Expense Growth: Selling, general, and administrative (SG&A) expenses rose 11.8% to $97,631,000, outpacing revenue growth. Cost of services increased 1.6%.
- Cash Flow Contraction: Net cash provided by operating activities fell significantly to $27,915,000 from $44,284,000 in the prior year, largely due to increased working capital requirements (specifically a $16.2 million increase in prepaid expenses and other assets).
- Share Count Reduction: Weighted average shares outstanding decreased to 34.9 million from 35.9 million, reflecting stock repurchases of $3.7 million during the period.
Outlook, Risks, and Management Commentary
The filing text provided contains unaudited financial statements but does not include a Management's Discussion and Analysis (MD&A) section, forward-looking guidance, or specific commentary on risks and contingencies. The company maintained dividend payments, declaring $0.145 per share for Class A and $0.135 per share for Class B common stock for the quarter.
Investor Verification Checklist
- Verify the drivers behind the 11.8% increase in SG&A expenses relative to flat revenue growth.
- Investigate the $16.2 million increase in "Prepaid expenses and other assets" which significantly impacted operating cash flow.
- Confirm the sustainability of the dividend payout given the 18.6% decline in net income.
- Review the details of the $4.2 million in net assets acquired during the period to assess integration costs.