Crawford Reports 140 Percent Increase in Q1 Earnings Per Share

May 2, 2006

Atlanta-based Crawford & Company, an independent provider of claims management solutions to insurance companies and self-insured entities, has a 140 percent increase in first quarter earnings per share in its financial results for the first quarter ended March 31.

First quarter 2006 revenues before reimbursements grew to $201.6 million from $184.3 million in the 2005 first quarter. First quarter 2006 net income more than doubled to $5.8 million compared to $2.4 million for the 2005 first quarter. First quarter 2006 earnings per share were $0.12 per share, up 140 percent compared to $0.05 in the 2005 quarter.

“Our U.S. operations benefited from the continued strong performance of our legal settlement administration unit and considerable improvement in our U.S. property and casualty operations,” Thomas W. Crawford, Crawford chief executive officer, said. “Revenues produced by our catastrophe adjusters in the quarter grew by $4.8 million to $11.4 million, as we continued to handle claims associated with hurricanes Katrina, Rita and Wilma. Our solid results in these areas helped us achieve a 500 basis point improvement in our U.S. operating margin during the 2006 first quarter, from 1.6 percent in the 2005 first quarter to 6.6 percent in 2006.

“Operating earnings in our international segment declined to $1.7 million in the current quarter, reflecting a decrease in our operating margin from 4.7 percent in the 2005 first quarter to 2.4 percent in the 2006 quarter,” Crawford said. “This decline is primarily due to a lower level of storm-related claim activity in our Caribbean and Asia-Pacific regions during the 2006 quarter as compared to the 2005 period. For the balance of 2006, as we move past the weather-related surge in international claims activity in 2005, we expect to see continued growth and margin improvement in our international division.”

“Our operating cash flows for the 2006 first quarter reflect a substantial improvement of $18.0 million as compared to the 2005 period,” Crawford concluded. “This improvement is primarily due to improved collections within our legal settlement administration unit, the collection of accounts receivable generated from the hurricane-related claims administered in the 2005 fourth quarter and lower tax payments during the 2006 quarter. Overall, our consolidated cash position as of March 31, 2006 is very strong, totaling $50.2 million, up over $24 million from the $25.6 million reported at March 31, 2005.”

U.S. revenues before reimbursements were $131.1 million in the first quarter of 2006, increasing 16.5 percent over the $112.5 million reported in the 2005 first quarter.

Revenues from the insurance company market grew 14 percent in the 2006 quarter, to $61.5 million, due to an increase in storm-related revenues in the company’s catastrophe, property central and technical services units.

Revenues from self-insured clients were $36.8 million in the 2006 first quarter, declining 6.4 percent from $39.3 million in the 2005 quarter. Legal settlement administration revenues were $32.8 million for the 2006 first quarter, increasing 70.7 percent as compared with $19.2 million in the comparable year-ago quarter.

Crawford’s legal settlement administration revenues are project-based and can fluctuate significantly. However, the company continues to enjoy a strong backlog of projects awarded, totaling approximately $35.6 million at quarter end.

First quarter 2006 international revenues before reimbursements declined to $70.5 million from $71.8 million for the same period in 2005. During the 2006 first quarter, the U.S. dollar strengthened against the British pound and the euro, resulting in a net exchange rate decline in the quarter. Excluding the negative effect of exchange rate fluctuations, international revenues would have been $73.6 million in the 2006 first quarter, reflecting growth in revenues on a constant dollar basis of 2.4 percent. This growth reflects increased revenues in European and United Kingdom operations resulting from claims management agreements entered into during 2005, partially offset by lower storm-related revenues in the Caribbean and Asia-Pacific regions during the 2006 period. International operating expenses increased by $332,000 in U.S. dollars, a 0.5 percent increase, and increased by 4.2 percent on a constant dollar basis.

Source: PR Newswire

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