Crawford & Company revenues US$304.4 million in Q2 2015, up from US$288.2 in Q2 2014

Revenues before reimbursements for claims management solutions firm Crawford & Company were US$304.4 million in the second quarter of 2015, up from US$288.2 million for the second quarter of 2014, the company reported this week.

The Atlanta, Georgia-based firm said in a press release that net income attributable to shareholders of Crawford & Company was US$4.1 million for the second quarter of 2015, ending June 30, compared with net income of US$10.5 million in the second quarter of 2014.

Overall corporate results were also negatively impacted in the 2015 period by a lack of weather-related claims in the U.S. and EMEA/AP, the expected runoff of certain large projects in Legal Settlement Administration, and an increase in the company’s effective tax rate, the company said in a press release. During the 2015 second quarter, the company further recorded special charges of US$4.2 million, associated with the ongoing implementation of its Global Business Services Center in Manila, Philippines, integration costs of the GAB Robins acquisition and restructuring activities in the Americas and EMEA/AP segments.

“The market backdrop continued to be challenging through the second quarter given the persistent absence of claim volumes in the global property and casualty insurance industry, driven in part from a lack of severe weather,” said Jeffrey T. Bowman, CEO of Crawford & Company, in a press release. “This environment has driven a further shift in our business to lower margin, high volume claims in the U.S., and has had a pronounced negative impact on our EMEA/AP operations.”

For Crawford & Company’s America segment, revenues before reimbursements were US$99.2 million in the second quarter of 2015, increasing from US$93.6 million in the second quarter of 2014. Changes in foreign exchange rates reduced the Americas revenues by approximately 5% for the three months ending June 30. Operating earnings were US$9.9 million in the 2015 second quarter, compared with US$8.1 million in the second quarter of 2014, representing an operating margin of 10% and 9% in the 2015 and 2014 periods, respectively, the release noted. [click image below to enlarge]

Revenues before reimbursements for the company’s Broadspire segment – an international third party administrator that offers auto and general liability claims, workers’ compensation, medical management and absence and care management – were US$73.7 million in the 2015 second quarter, up from US$66.7 million in the 2014 second quarter, Crawford & Company reported.

Broadspire recorded operating earnings of US$6million in the second quarter of 2015, representing an operating margin of 8%, compared with US$2.7 million, or 4% of revenues, in the 2014 second quarter. “The overall increase in 2015 revenues was primarily due to organic growth, new clients, higher client retention, the transfer of accident and health cases from our U.S. Claims Services service line in the Americas segment, and increased medical management services referrals,” the company said in the release.

Crawford & Company also said it is revising its guidance for 2015 as follows:

– Consolidated revenues before reimbursements between US$1.16 and US$1.18 billion;

– Consolidated operating earnings between US$70 and US$80 million;

– Consolidated cash provided by operating activities between US$30 and US$40 million;

– After special charges, net income attributable to shareholders of Crawford & Company between US$20 and $25 million; and

– Before special charges, net income attributable to shareholders of Crawford & Company between US$34.5 and US$39.5 million.

The company expects to incur pretax special charges in 2015, currently estimated at approximately US$7 million for the integration of GAB Robins and US$9 million related to the establishment of the Global Business Services Center in Manila. In addition, the company expects to incur an additional special charge in 2015, currently estimated at US$4 million, related to restructuring activities in the EMEA/AP and Americas segments.