Crawford & Company : Crawford & Company Reports Record 2012 Fourth Quarter and Annual Results

Crawford & Company : Crawford & Company Reports Record 2012 Fourth Quarter and
                                Annual Results



    CRAWFORD & COMPANY 1001 SUMMIT BOULEVARD ATLANTA, GEORGIA 30319 (404)
                                   300-1000

                                                    Date: February 13, 2013
                                                      From: Jeffrey T. Bowman
                                                  Chief Executive Officer

                Revenues Reach Annual Record of $1.177 Billion
                  Full Year Operating Earnings Increase 40%

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 fourth quarter and year ended December31, 2012.

Consolidated Results
Full year consolidated revenues before reimbursements totaled a record  $1.177 
billion  for  2012,  compared  with  $1.125  billion  for  2011.  Net   income 
attributable to shareholders of Crawford & Company in 2012 was $52.6 million,
compared with net  income in  2011 of $45.4  million. Full  year 2012  diluted 
earnings per  share were  $0.97 for  CRDA and  $0.94 for  CRDB, compared  with 
diluted earnings per share of $0.85 for  CRDA and $0.83 for CRDB in the  prior 
year.

Fourth quarter  2012 consolidated  revenues  before reimbursements  totaled  a 
record $313.0 million,  an increase  of 18% from  $265.6 million  in the  2011 
fourth quarter. Fourth quarter 2012 net income attributable to shareholders of
Crawford & Company was $17.9 million, increasing 299% from $4.5 million in the
2011 fourth quarter. Fourth quarter 2012 diluted earnings per share were $0.33
for CRDA and $0.32 for CRDB, compared with diluted earnings per share of $0.09
for CRDA and $0.08 for CRDB, in the prior-year quarter.

Consolidated operating  earnings, a  non-GAAP financial  measure, grew  to  an 
annual record of $110.2 million in 2012, increasing 40% from $78.6 million  in 
2011. For the  2012 fourth  quarter, consolidated  operating earnings  totaled 
$38.9 million,  a  quarterly record,  more  than tripling  the  $10.0  million 
reported in the 2011 fourth quarter.

During the 2012 fourth quarter, the  Company recorded $8.5 million in  special 
charges, consisting of a  $4.3 million loss on  a property sublease and  $4.2 
million for severance  costs, primarily  related to the  restructuring of  our 
North American  operations. In  the second  and third  quarters of  2012,  the 
Company incurred  pretax special  charges of  $2.8 million  for a  project  to 
outsource certain aspects of our U.S. technology infrastructure. Excluding the
special charges, 2012 fourth quarter and full-year net income attributable  to 
shareholders of Crawford  & Company would  have been $23.2  million and  $59.6 
million, respectively, and  diluted earnings  per CRDB share  would have  been 
$0.42 and $1.07, respectively.

During the 2011  fourth quarter, the  Company recorded a  net $4.6 million  in 
special charges  and  credits,  consisting  of a  $3.4  million  write-off  of 
deferred financing costs related to the repayment of its then-outstanding Term
Loan B  and  $1.2 million  in  severance  expense related  to  the  Broadspire 
segment. The Company also recorded a tax benefit of $5.5 million related to  a 
change in  the valuation  allowance  for foreign  tax  credits. In  the  third 
quarter of 2011, the Company recorded a gain of $7.0 million ($5.9 million net
of tax) related to the final settlement of an arbitration award. Excluding the
arbitration award,  tax adjustment,  and other  special charges,  2011  fourth 
quarter and full-year net  income attributable to  shareholders of Crawford  & 
Company would have  been $1.9  million and $37.0  million, respectively,  and 
diluted earnings per CRDB share would have been $0.03 and $0.67, respectively.

Balance Sheet and Cash Flow

Crawford & Company's  consolidated cash  and cash equivalents  position as  of 
December31, 2012  totaled  $71.2  million  compared  with  $77.6  million  at 
December31, 2011.

The Company  generated $92.9  million  of cash  from operations  during  2012, 
compared with $36.7 million during 2011.  The $56.2 million increase in  cash 
provided by operations was largely due  to an increase in operating  earnings, 
lower cash  payments for  accounts payable,  accrued liabilities  and  accrued 
compensation in 2012  compared with  2011, and reductions  in defined  benefit 
pension contributions and taxes paid.

Management's Comments

Mr. Jeffrey T. Bowman, chief executive officer of Crawford & Company,  stated, 
"Our fourth quarter  2012 consolidated  operating earnings  more than  tripled 
last year's fourth quarter figures and  were partly driven by our handling  of 
claims from superstorm  Sandy and  very strong  results from  our EMEA/AP  and 
Legal Settlement Administration segments. During  the 2012 fourth quarter  and 
full year,  we  set financial  records  for consolidated  revenues,  operating 
earnings, and operating cash flow.

"The Americas segment saw a surge  in activity during the 2012 fourth  quarter 
resulting from superstorm Sandy  in the northeastern  U.S. which exceeded  our 
initial  expectations  heading   into  the  quarter.   This  helped   generate 
improvement in this segment over the  2011 fourth quarter, and should  provide 
us with a good start to 2013.

"Our EMEA/AP segment  results during the  quarter were largely  driven by  the 
ongoing handling of catastrophic  flood losses in  Thailand, although we  also 
saw improvements in  our core U.K.  and CEMEA operations.  This segment was  a 
very important performer for us during 2012.

"During the 2012  fourth quarter our  Legal Settlement Administration  segment 
was engaged in  handling the Deep  Water Horizon class  action settlement,  as 
well as a number of other meaningful class action and bankruptcy matters.  We 
expect operating activity  in this  segment to  be significant  for us  during 
2013, although at a reduced rate as compared to 2012.

"In the Broadspire segment, we recorded a slight operating profit for the 2012
fourth quarter  and  full  year.  We remain  focused  on  delivering  stronger 
operating performance in this business and we are optimistic that we will show
continued improvement in the upcoming year."

Mr. Bowman concluded, "I  am pleased that our  results reflect the  management 
team's focus on  our core  strategic and operational  goals and  we expect  to 
continue to  expand market  share, drive  efficiencies and  capitalize on  the 
opportunities that present themselves in  2013. We are enthusiastic about  our 
business and are  very focused  on delivering shareholder  value. The  initial 
guidance we are providing today for 2013 reflects the strength of our position
in the markets that we serve around the world."

Segment Results For the Fourth Quarter and Full Year

Americas

Americas revenues  before  reimbursements were  $93.5  million in  the  fourth 
quarter of 2012, an  increase of 14%  over $82.0 million  in the 2011  fourth 
quarter. This increase was primarily due  to superstorm Sandy. The impact  of 
changes in foreign exchange rates for this segment for the 2012 fourth quarter
was insignificant.  Operating  earnings in  the  2012 fourth  quarter  in  the 
segment were $4.4 million, or 5% of revenues, compared with a small  operating 
loss in the 2011 fourth quarter.

For the year, Americas revenues  before reimbursements decreased 7% to  $334.4 
millioncompared with  $357.7 millionin  2011. During  2012, the  U.S.dollar 
strengthened against  foreign  currencies  in  the  segment,  resulting  in  a 
negative exchange rate impact to segment revenues of $3.0 million from 2011 to
2012. Operating earnings decreased from $19.9 million in 2011 to $11.9 million
in 2012, representing  an operating  margin of  6% and  4% in  2011 and  2012, 
respectively.

EMEA/AP

Fourth quarter 2012  revenues before  reimbursements for  the EMEA/AP  segment 
increased 10% to $95.2 million from $86.2 million for the same period of 2011.
This increase was primarily  due to the continued  handling of cases from  the 
2011 flooding in Thailand.  During the 2012 fourth  quarter compared with  the 
2011 fourth quarter, the U.S.  dollar strengthened against most major  foreign 
currencies, resulting in a negative exchange  rate impact to revenues of  $2.1 
million in this segment. Operating earnings increased to $18.2 million in  the 
2012 fourth  quarter, an  increase of  129% over  last year's  fourth  quarter 
operating earnings of $8.0  million. The related operating  margin was 19%  in 
the 2012 fourth quarter, increasing from 9% in the 2011 fourth quarter.

For the year, revenues before reimbursements from our EMEA/AP segment  totaled 
$366.7 million, an 8% increase from  $340.2 million in 2011. During 2012,  the 
U.S.dollar strengthened against most major foreign currencies, resulting in a
negative exchange rate impact  to revenues of  $10.3million in 2012  compared 
with 2011. EMEA/AP operating earnings increased  to $48.6 million in 2012,  an 
increase of 71% from 2011 operating  earnings of $28.4 million. The  operating 
margin increased from 8% in 2011 to 13% in 2012.

Broadspire

Revenues before reimbursements from the Broadspire segment were $58.8  million 
in the 2012  fourth quarter,  slightly above the  $58.2 million  for the  2011 
quarter. Operating earnings totaled $0.4  million in the 2012 fourth  quarter, 
or 1% of  revenues, compared  with an  operating loss  of $2.3  million, or  a 
negative operating margin of 4%, in the prior-year period.

For the year, Broadspire segment  revenues before reimbursements increased  2% 
to $239.0 million compared  with $234.8 million  in 2011. Broadspire  recorded 
break-even operating results for the year, compared with an operating loss  of 
$11.4 million, or a negative operating margin of 5% in 2011.

Legal Settlement Administration

Legal Settlement  Administration  revenues before  reimbursements  were  $65.4 
million in the 2012  fourth quarter, compared with  $39.2 million in the  2011 
fourth quarter. Operating earnings totaled  $18.2 million in the 2012  fourth 
quarter, or 28% of revenues, compared  with $8.8 million, or 22% of  revenues, 
in the prior-year period.

For the year, Legal  Settlement Administration revenues before  reimbursements 
were $236.6 million, compared with $192.6 million in 2011. Operating  earnings 
were $60.3  million, increasing  17%  from $51.3  million  in 2011,  with  the 
related operating margin decreasing slightly from 27% in 2011 to 25% in 2012.
The  segment's  awarded  project   backlog  approximated  $151.9  million   at 
December31, 2012, compared with $64.0 million at December31, 2011.

2013 Guidance

Crawford & Company is providing initial guidance for 2013 as follows:

  oConsolidated revenues before reimbursements between $1.05 and $1.08
    billion.
    
  oConsolidated operating earnings between $85.0 and $93.0 million.
    
  oConsolidated cash provided by operating activities between $65.0 and $70.0
    million.
    
  oAfter reflecting stock option expense, net corporate interest expense,
    customer-relationship intangible asset amortization expense, and income
    taxes, net income attributable to shareholders of Crawford & Company on a
    GAAP basis between $49.0 and $54.0 million, or $0.85 to $0.95 diluted
    earnings per CRDB share.

Crawford's business is dependent,  to a significant  extent, on case  volumes. 
The Company cannot predict the  future trend of case  volumes for a number  of 
reasons, including the fact that the frequency and severity of weather-related
claims and  the occurrence  of natural  and man-made  disasters, which  are  a 
significant source of claims  and revenue for the  Company, are generally  not 
subject to accurate forecasting.

Earnings per share may be different between  CRDA and CRDB due to the  payment 
of a higher per share dividend on CRDA  than CRDB, and the impact that has  on 
the earnings per share calculation according to generally accepted  accounting 
principles. References in  this release are  generally only to  CRDB, as  that 
presents a more dilutive measure.

Crawford & Company's management will host a conference call with investors  on 
Wednesday, February13, 2013  at 3:00 p.m.  EST to discuss  2012 results.  The 
call will be recorded and available for replay through February 27, 2013.  You 
may dial 1-855-859-2056 (404-537-3406 international) to listen to the  replay. 
The access  code is  94597751. 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 December31, 2012  is 
shown on the attached unaudited condensed consolidated financial statements.

Non-GAAP Presentation

In the  normal  course  of  business, our  operating  segments  incur  certain 
out-of-pocket expenses that  are thereafter reimbursed  by our clients.  Under 
GAAP, these out-of-pocket expenses and associated reimbursements are  required 
to be  included when  reporting expenses  and revenues,  respectively, in  our 
consolidated results of operations. In  the foregoing discussion and  analysis 
of segment results  of operations, we  do not  include a gross  up of  segment 
expenses and revenues for these pass-through reimbursed expenses. The  amounts 
of reimbursed expenses and related revenues  offset each other in our  results 
of operations with no  impact to our net  income (loss) or operating  earnings 
(loss). A  reconciliation of  revenues before  reimbursements to  consolidated 
revenues determined in accordance with GAAP  is self-evident from the face  of 
the accompanying unaudited condensed consolidated statements of income.

Operating earnings is the  primary financial performance  measure used by  our 
senior management and chief operating decision maker ("CODM") to evaluate  the 
financial performance of our Company and operating segments, and make resource
allocation and  certain compensation  decisions.  Unlike net  income,  segment 
operating earnings is not  a standard performance measure  found in GAAP.  We 
believe this measure is useful  to others in that  it allows them to  evaluate 
segment and consolidated  operating performance  using the  same criteria  our 
management and  CODM use.  Consolidated  operating earnings  (loss)  represent 
segment earnings  (loss) including  certain unallocated  corporate and  shared 
costs and credits,  but before  net corporate interest  expense, stock  option 
expense, amortization  of  customer-relationship  intangible  assets,  special 
charges and credits,  income taxes,  and net  income or  loss attributable  to 
noncontrolling interests. The reconciliation  of operating earnings (loss)  to 
net income attributable to shareholders of Crawford & Company on a GAAP  basis 
is presented on page 6 below.

Unallocated corporate  and shared  costs and  credits represent  expenses  and 
credits related to our chief executive officer and Board of Directors, certain
provisions for  bad debt  allowances or  subsequent recoveries  such as  those 
related to bankrupt clients, defined benefit pension costs or credits for  our 
frozen U.S. pension plan, and certain self-insurance costs and recoveries that
are not allocated to our individual operating segments but are included in our
financial performance measure of consolidated operating earnings.

Income tax expense, net corporate interest expense, stock option expense,  and 
amortization  of   customer-relationship  intangible   assets  are   recurring 
components of  our  net  income, but  they  are  not considered  part  of  our 
consolidated or segment operating earnings (loss) because they are managed  on 
a corporate-wide basis. Income tax expense is calculated for the Company on  a 
consolidated  basis  based  on  statutory  rates  in  effect  in  the  various 
jurisdictions in  which  we  provide services,  and  varies  significantly  by 
jurisdiction. Net corporate  interest expense results  from capital  structure 
decisions made by  senior management  and affecting  the Company  as a  whole. 
Stock option expense represents the non-cash costs generally related to  stock 
options and employee stock purchase plan  expenses which are not allocated  to 
our operating  segments.  Amortization  expense  is  a  non-cash  expense  for 
finite-lived customer-relationship and trade  name intangible assets  acquired 
in  business  combinations.  None  of  these  costs  relate  directly  to  the 
performance of  our  services  or operating  activities  and,  therefore,  are 
excluded from segment operating earnings in order to better assess the results
of each segment's operating activities on a consistent basis.

Special charges and credits may arise from events (such as expenses related to
restructurings, losses  on subleases,  etc.)  that are  not allocated  to  any 
particular segment since  they historically  have not  regularly impacted  our 
performance and are not expected to impact our future performance on a regular
basis.

Following is  a reconciliation  of segment  operating earnings  (loss) to  net 
income attributable to shareholders of Crawford & Company on a GAAP basis  and 
the related margins as a percentage of revenues before reimbursements for  all 
periods presented (in thousands, except percentages):

                           Quarter ended                              Year ended
                December31,   %    December31,   %     December31,   %    December31,   %
                    2012     Margin     2011     Margin      2012     Margin     2011     Margin
Operating
Earnings
(Loss):
Americas        $    4,448     5 %  $    (238 )    -     $   11,877     4 %  $   19,851     6 %
EMEA/AP             18,232    19 %      7,956      9 %       48,585    13 %      28,421     8 %
Broadspire             444     1 %     (2,250 )   (4 )%          27     -       (11,434 )  (5 )%
Legal               18,170    28 %      8,770     22 %       60,284    25 %      51,307    27 %
Settlement
Administration
Unallocated         (2,441 )  (1 )%    (4,206 )   (2 )%     (10,613 )  (1 )%     (9,555 )  (1 )%
corporate and
shared costs
and credits
Consolidated        38,853    12 %     10,032      4 %      110,160     9 %      78,590     7 %
Operating
Earnings
(Deduct) Add:
Net corporate       (1,822 )  (1 )%    (3,515 )   (1 )%      (8,607 )  (1 )%    (15,911 )  (1 )%
interest
expense
Stock option           (86 )   -          (75 )    -           (408 )   -          (450 )   -
expense
Amortization        (1,629 )  (1 )%    (1,646 )   (1 )%      (6,373 )  (1 )%     (6,177 )  (1 )%
expense
Special charges     (8,538 )  (3 )%    (4,613 )   (2 )%     (11,332 )  (1 )%      2,379     -
and credits
Income taxes        (8,744 )  (3 )%     4,598      2 %      (29,957 )  (3 )%    (12,739 )  (1 )%
Net income            (122 )   -         (289 )    -           (866 )   -          (288 )   -
attributable to
non-controlling
interests
Net income      $   17,912     6 %  $   4,492      2 %   $   52,617     4 %  $   45,404     4 %
attributable to
shareholders of
Crawford &
Company

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 to self-insured  entities, 
with an expansive global  network serving clients in  more than 70  countries. 
The Crawford  System of  Claims Solutions^®  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.

The Company's two classes  of stock are  substantially identical, except  with 
respect to  voting  rights and  the  Company's  ability to  pay  greater  cash 
dividends on  the Class  A Common  Stock than  on the  Class B  Common  Stock, 
subject to  certain  limitations. In  addition,  with respect  to  mergers  or 
similar transactions, holders of  Class A Common Stock  must receive the  same 
type and amount of  consideration as holders of  Class B Common Stock,  unless 
approved by the holders of 75% of the Class A Common Stock, voting as a class.

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 and other federal  securities 
laws. 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 SEC and available  at 
www.sec.gov or  in the  Investor  Relations section  of Crawford  &  Company's 
website at www.crawfordandcompany.com.

FOR FURTHER INFORMATION REGARDING THIS PRESS RELEASE, PLEASE CALL BRUCE SWAIN
AT (404) 300-1051.

Q4 '12 Earnings Press Release 2.13.13 Final
Q4 '12 Earnings Release Financials 2.13.13

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Source: Crawford & Company via Thomson Reuters ONE
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