Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Financial Statements:
Year-to-Date Unaudited Consolidated Statements of Income for the Six-Month
Periods ended June 30, 1997 and June 30, 1996:
(In Thousands of Dollars
Except Share and Per Share Data)
<TABLE>
<S> <C> <C>
1997 1996
Revenues $348,520 $319,192
Costs and Expenses:
Cost of services provided, less reimbursed expenses
of $18,789 in 1997 and $15,868 in 1996 249,615 229,996
Selling, general and administrative expenses 56,960 54,574
Restructuring charge 13,000 0
Total costs and expenses 319,575 284,570
Income Before Income Taxes and Minority Interest 28,945 34,622
Provision for Income Taxes 11,703 13,963
Income Before Minority Interest 17,242 20,659
Minority Interest in Loss of Joint Venture 2,505 0
Net Income $19,747 $20,659
Earnings Per Share $0.40 $0.40
Weighted Average Shares Outstanding 49,882,717 51,311,262
Declared Dividends Per Share - Class A Common Stock $0.22 $0.20
Declared Dividends Per Share - Class B Common Stock $0.22 $0.19
</TABLE>
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 3
Quarterly Unaudited Consolidated Statements of Income for the Three-Month
Periods ended June 30, 1997 and June 30, 1996:
(In Thousands of Dollars
Except Share and Per Share Data)
<TABLE>
<S> <C> <C>
1997 1996
Revenues $182,569 $157,629
Costs and Expenses:
Cost of services provided, less reimbursed expenses
of $10,214 in 1997 and $8,089 in 1996 130,021 113,192
Selling, general and administrative expenses 29,885 27,293
Total costs and expenses 159,906 140,485
Income Before Income Taxes and Minority Interest 22,663 17,144
Provision for Income Taxes 8,537 6,916
Income Before Minority Interest 14,126 10,228
Minority Interest in Income of Joint Venture (694) 0
Net Income $13,432 $10,228
Earnings Per Share $0.27 $0.20
Weighted Average Shares Outstanding 49,736,992 51,156,812
Declared Dividends Per Share - Class A Common Stock $0.11 $0.10
Declared Dividends Per Share - Class B Common Stock $0.11 $0.10
</TABLE>
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 4
Consolidated Balance Sheets as of June 30, 1997 and December 31, 1996:
(In Thousands of Dollars)
(Unaudited)
June 30 December 31
1997 1996
ASSETS
Current Assets:
Cash and cash equivalents $71,343 $55,485
Accounts receivable, less allowance for doubtful
accounts of $15,777 in 1997 and $11,692 in 1996 122,983 112,975
Unbilled revenues, at estimated billable amounts 95,886 68,593
Prepaid income taxes 5,260 2,677
Prepaid expenses and other current assets 14,656 7,166
Total current assets 310,128 246,896
Property and Equipment:
Property and equipment, at cost 152,342 123,901
Less accumulated depreciation and amortization (111,428) (92,264)
Net property and equipment 40,914 31,637
Other Assets:
Intangible assets arising from acquisitions,
less accumulated amortization of $9,625
in 1997 and $8,768 in 1996 51,479 52,266
Prepaid pension obligation 42,958 41,405
Other 7,131 5,881
Total other assets 101,568 99,552
TOTAL ASSETS $452,610 $378,085
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 5
Consolidated Balance Sheets - (Continued)
(In Thousands of Dollars)
(Unaudited)
June 30 December 31
1997 1996
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Short-term borrowings $27,015 $8,437
Accounts payable 17,426 13,329
Accrued compensation and related costs 29,245 30,811
Other accrued liabilities 59,247 32,645
Deferred revenues 16,102 16,300
Current installments of long-term debt 9,915 9,130
Total current liabilities 158,950 110,652
Noncurrent Liabilities:
Long-term debt, less current installments 3,551 376
Deferred income taxes 10,030 13,810
Deferred revenues 13,478 12,902
Postretirement medical benefit obligation 8,296 8,037
Self-insured risks 9,123 8,172
Minority interest 28,412 0
Other 4,771 2,600
Total noncurrent liabilities 77,661 45,897
Shareholders' Investment:
Class A Common Stock, $1.00 par value; 50,000,000
shares authorized; 23,909,275 and 24,392,393
shares issued in 1997 and 1996, respectively 23,909 24,392
Class B Common Stock, $1.00 par value; 50,000,000
shares authorized; 25,647,760 and 25,718,919
shares issued in 1997 and 1996, respectively 25,648 25,719
Retained earnings 173,499 173,708
Cumulative translation adjustment (7,057) (2,283)
Total shareholders' investment 215,999 221,536
TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT $452,610 $378,085
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 6
Unaudited Consolidated Statements of Cash Flows for the Six-Month Periods Ended
June 30, 1997 and June 30, 1996:
(In Thousands of Dollars)
1997 1996
Cash Flows From Operating Activities:
Net income $19,747 $20,659
Reconciliation of net income to net cash
provided by operating activities:
Minority interest in loss of joint venture (2,505) 0
Depreciation and amortization 8,028 8,341
Deferred income taxes (6,363) 1,214
Loss on sales of property and equipment 907 90
Changes in operating assets and liabilities:
Short-term investments 0 3,336
Accounts receivable, net 6,509 (2,761)
Unbilled revenues 2,583 (4,728)
Prepaid or accrued income taxes (1,900) 252
Accounts payable and accrued liabilities 12,931 11,672
Deferred revenues 393 1,130
Prepaid expenses and other assets (9,775) (12,011)
Net cash provided by operating activities 30,555 27,194
Cash Flows From Investing Activities:
Acquisitions of property and equipment (6,293) (4,371)
Sales of property and equipment 179 115
Net cash used in investing activities (6,114) (4,256)
Cash Flows From Financing Activities:
Dividends paid (10,977) (10,117)
Repurchase of common stock (11,265) (7,604)
Issuance of common stock 1,733 330
Increase/(decrease) in short-term borrowings 9,740 (525)
(Decrease)/increase in long-term debt (1,167) 121
Net cash used in financing activities (11,936) (17,795)
Effect of exchange rate changes on cash
and cash equivalents 3,353 (129)
Increase in cash and cash equivalents 15,858 5,014
Cash and cash equivalents at beginning of period 55,485 40,802
Cash and cash equivalents at end of period $71,343 $45,816
Cash payments for income taxes $14,260 $13,026
(See accompanying notes to condensed financial statements)
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 7
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. The condensed financial statements included herein have been prepared by
the Registrant, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. These condensed financial statements
should be read in conjunction with the financial statements and related notes
contained in the Registrant's annual report on Form 10-K for the fiscal year
ended December 31, 1996.
In the opinion of management, the condensed financial statements included
herein contain all adjustments (consisting of normal recurring accruals)
necessary to present fairly the financial position of the Registrant as of
June 30, 1997, and the results of its operations and cash flows for the
three- and six-month periods then ended.
2. The results of operations for the six-month period ended June 30, 1997,
are not necessarily indicative of the results to be expected during the
balance of the year ending December 31, 1997.
3. The Company completed the agreement signed December 19, 1996, with Swiss
Reinsurance Company (Swiss Re) to merge both companies' claims services firms
outside the United States into Crawford-THG Limited, in which the Company has
a 60% controlling interest. The merger was accounted for as a partial sale of
the Company's 100% owned subsidiary, Crawford & Company International (CCI),
to Swiss Re and a partial acquisition of Swiss Re's 100% owned subsidiary,
Thomas Howell Group (THG), by the Company. Swiss Re's 40% interest in the
equity and net income/loss of the joint venture is reflected in the
accompanying financial statements as minority interest.
4. Net income per share is computed by dividing net income by the weighted
average number of shares outstanding during the respective periods. The
effect of common stock equivalents was less than 3% dilutive in both 1997 and
1996 and, therefore, the effect on primary earnings per share has not been
shown.
The Company plans to adopt Statement of Financial Standards ("SFAS") No.
128, "Earnings per Share," effective December 15, 1997. This statement will
require dual presentation of basic and diluted EPS on the face of the income
statement for all entities with complex capital structures and will require
restatement of all prior-period EPS data presented. If this statement had
been effective January 1, 1997, the basic EPS would be $0.40 per share and
the diluted EPS would be $0.39 per share for the six-month period ended
June 30, 1997, compared to basic EPS and diluted EPS of $0.40 per share for
the first six months of 1996.
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 8
5. In July 1997, the Financial Accounting Standards Board issued two new
statements. SFAS No. 130, "Reporting Comprehensive Income," establishes
standards for reporting and display of "comprehensive income," which is the
total of net income and all other non-owner changes in stockholders' equity,
and its components. The Company is in the process of evaluating SFAS No. 130
and its impact and will adopt the standard in the first quarter of its 1998
fiscal year.
SFAS No. 131, "Disclosures About Segments of an Enterprise and Related
Information," supersedes SFAS Nos. 14, 18, 24 and 30 and establishes new
standards for segment reporting, using the "management approach," in which
reportable segments are based on the same criteria on which management
disaggregates a business for making operating decisions and assessing
performance. The Company is in the process of evaluating SFAS No. 131 and
its impact and will adopt the standard for its 1998 fiscal year.
6. The Company considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents for purposes of the
Statements of Cash Flows.
7. On February 4, 1997, the Board of Directors declared a three-for-two
stock split on both the Class A Common Stock and Class B Common Stock. The
split was effected in the form of a 50% stock dividend on the outstanding
shares of each class, paid on March 25, 1997 to stockholders of record on
March 11, 1997. All share and per share amounts in the accompanying financial
statements have been restated to give retroactive effect to the stock split.
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Financial Condition
At June 30, 1997, current assets exceeded current liabilities by approximately
$151.2 million, an increase of $14.9 million from the working capital balance
at December 31, 1996. Cash and cash equivalents at June 30, 1997 totaled
$71.3 million, increasing $15.9 million from the balance at the end of 1996.
The Company held no short-term investments at June 30, 1997 or December 31,
1996. Cash was generated primarily from operating activities, while the
principal uses of cash were for repurchases of common stock, dividends paid
to shareholders, and acquisitions of property and equipment. At June 30, 1997,
the ratio of current assets to current liabilities was 2.0 to 1 compared with
2.2 to 1 at the end of 1996.
During 1996, the Company announced a share repurchase program to acquire up to
an aggregate of 3,000,000 shares of its Class A or Class B Common Stock through
open market purchases. Through June 30, 1997, the Company has reacquired
1,851,200 shares of its Class A Common Stock and 409,850 shares of its Class B
Common Stock at an average cost of $13.48 and $13.43 per share, respectively.
The Company maintains credit lines with banks in order to meet seasonal
working capital requirements of its foreign subsidiaries or other financing
needs that may arise. Short-term borrowings outstanding as of June 30, 1997,
totaled $27.0 million, as compared to $8.4 million at the end of 1996, due to
the acquisition of THG. Since the acquisition, short term borrowings have
increased $9.7 million, as the Company's foreign operations have expended cash
for the costs accrued in the first quarter restructuring charge. The Company
believes that its current financial resources, together with funds generated
from operations and existing and potential long-term borrowing capabilities,
will be sufficient to maintain its current operations.
The Company does not engage in any hedging activities to compensate for the
effect of exchange rate fluctuations on the operating results of its foreign
subsidiaries. Foreign currency denominated debt is maintained primarily to
hedge the currency exposure of its net investment in foreign operations.
Shareholders' investment at June 30, 1997 was $216.0 million, compared with
$221.5 million at the end of 1996. Long-term debt totaled $3.6 million at
June 30, 1997, or approximately 1.6% of shareholders' investment.
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 10
Results of Operations
Operating results for the Company's domestic and international operations for
the six- and three-month periods ended June 30, 1997 and 1996 are as follows:
Six-Month Period Ended June 30, 1997
Domestic International Total
1997 1996 1997 1996 1997 1996
(In thousands of dollars, except percentages)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Revenues $280,939 $278,668 $ 67,581 $ 40,524 $348,520 $319,192
Compensation
& Benefits 176,404 179,186 43,056 24,305 219,460 203,491
% of Revenues 62.8% 64.3% 63.7% 60.0% 63.0% 63.8%
Expenses Other
than Compensation
& Benefits 64,938 67,657 22,177 13,422 87,115 81,079
% of Revenues 23.1% 24.3% 32.8% 33.1% 25.0% 25.4%
Pretax Income Before
Restructuring
Charge and
Minority Interest $ 39,597 $ 31,825 $ 2,348 $ 2,797 $ 41,945 $ 34,622
% of Revenues 14.1% 11.4% 3.5% 6.9% 12.0% 10.8%
</TABLE>
Three-Month Period Ended June 30, 1997
Domestic International Total
1997 1996 1997 1996 1997 1996
(In thousands of dollars, except percentages)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Revenues $141,032 $137,556 $ 41,537 $ 20,073 $182,569 $157,629
Compensation
& Benefits 86,971 86,435 26,632 12,139 113,603 98,574
% of Revenues 61.7% 62.8% 64.1% 60.5% 62.2% 62.5%
Expenses Other
than Compensation
& Benefits 33,285 34,787 13,018 7,124 46,303 41,911
% of Revenues 23.6% 25.3% 31.3% 35.5% 25.4% 26.6%
Pretax Income Before
Restructuring
Charge and
Minority Interest $ 20,776 $ 16,334 $ 1,887 $ 810 $ 22,663 $ 17,144
% of Revenues 14.7% 11.9% 4.5% 4.0% 12.4% 10.9%
</TABLE>
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 11
Revenues for the first six months and second quarter of 1997 were $348.5
million and $182.6 million, respectively, up 9.2% and 15.9% from the $319.2
million and $157.6 million for the same periods in 1996. Consolidated pretax
income before restructuring charge and minority interest increased 21.2% and
32.2%, to $41.9 million and $22.7 million in the first six months and second
quarter of 1997 compared to the same periods in 1996. While revenues increased
9.2% and 15.9% in the six- and three-month periods ended June 30, 1997,
corresponding expenses increased only 7.7% and 13.8% due to efficiencies
achieved in operating and support activities throughout the Company.
DOMESTIC OPERATIONS
Revenues
Domestic revenues from insurance companies and self-insured entities totaled
$280.9 million for the six months ended June 30, 1997, an increase of .8% over
the comparable period in 1996. Second quarter 1997 revenues totaled $141.0
million, an increase of 2.5% over related 1996 revenues of $137.6 million.
Domestic unit volume, measured principally by chargeable hours and excluding
acquisitions, decreased approximately 2.6% and 1.7% in the first six months
and second quarter of 1997, respectively, compared to the same periods in 1996.
This decrease was partially offset by changes in the mix of services provided
and in the rates charged for those services, the combined effects of which
increased revenues by approximately 1.9% and 2.7% in the first six months and
second quarter of 1997, respectively, compared to the comparable periods in
1996. The Company's acquisition of the Thomas Howell Group - Americas unit
based in the United States increased domestic revenues by 1.5% in the first
six months and second quarter of 1997 compared to 1996.
Revenues from domestic operations include $13.2 million in revenue from
services provided by the Company's catastrophe adjusters during the first six
months of 1997, principally to clients affected by natural or man-made
disasters, including hurricanes, floods, hail storms and oil spills. During
the same period in 1996, such revenue approximated $17.4 million. This
decrease was due to a decrease in weather-related claims in the first half of
1997 compared to the first half of 1996. In the second quarter of 1997,
revenues produced by the Company's catastrophe adjusters totaled $6.5 million,
as compared to $9.0 million in the 1996 second quarter.
Compensation and Fringe Benefits
The Company's most significant expense is the compensation of its employees,
including related payroll taxes and fringe benefits. Domestic compensation
expense decreased as a percent of revenues from 64.3% in the six months ended
June 30, 1996 to 62.8% in the same period in 1997,
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 12
and from 62.8% for the second quarter of 1996 to 61.7% for the second quarter
in 1997. This decrease is due primarily to a decline in administrative
compensation expense, resulting from a consolidation of administrative support
functions.
Domestic salaries and wages of personnel other than contract managers decreased
by 3.2% and 2.6%, from $131.3 million and $65.3 million in the first half and
second quarter of 1996, respectively, to $127.1 million and $63.6 million in
the comparable periods in 1997. Contract managers' compensation is based on
the operating income of the offices which they manage. Compensation of these
managers totaled $21.0 million and $10.6 million in the six- and three-month
periods ended June 30, 1997, increasing 11.1% and 19.1% from related 1996
costs of $18.9 million and $8.9 million.
Payroll taxes and fringe benefits for domestic operations totaled $28.3 million
in the first half of 1997, decreasing 2.4% from 1996 costs of $29.0 million,
due primarily to lower employee group medical costs. Second quarter 1997
payroll taxes and fringe benefits totaled $12.8 million, an increase of 4.9%
from second quarter 1996 costs of $12.2 million, due to higher workers'
compensation costs.
Expenses Other than Compensation and Fringe Benefits
Domestic expenses other than compensation and related payroll taxes and fringe
benefits approximated 23.1% and 23.6% of revenues for the six and three months
ended June 30, 1997, respectively, down from 24.3% and 25.3% of revenues for
the same periods in 1996. This decline is largely due to lower rent and
occupancy costs, as branch locations have been consolidated into campus
environments and excess space has been released.
INTERNATIONAL OPERATIONS
Revenues
Revenues from the Company's international operations totaled $67.6 million
and $41.5 million for the first half and second quarter of 1997, respectively,
a 66.9% and 106.5% increase from $40.5 million and $20.1 million for the same
periods in 1996. This increase is primarily due to the acquisition of THG,
with four month's results included in the first half of 1997, due to an
acquisition effective date of January 1, 1997 and a two-month delay in
reporting international results.
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 13
Compensation and Fringe Benefits
As a percent of revenues, compensation expense, including related payroll taxes
and fringe benefits, increased from 60.0% and 60.5% in the six- and three-
month periods ended June 30, 1996, to 63.7% and 64.1% in the comparable periods
in 1997. Salaries and wages of international personnel increased from 52.4%
and 52.7% of revenues in 1996 to 54.0% and 54.1% for the comparable periods in
1997. Payroll taxes and fringe benefits also increased as a percent of
revenues, from 7.6% and 7.8% in the six- and three-month periods ended June 30,
1996, to 9.8% and 10.0% for the same periods in 1997, due primarily to more
generous retirement programs maintained by the acquired THG entities.
Expenses Other than Compensation and Fringe Benefits
Expenses other than compensation and related payroll taxes and fringe benefits
approximated 32.8% of international revenues for the first six months of 1997,
compared to 33.1% of revenues for the same period in 1996. Second quarter
expenses were 31.3% and 35.5% of international revenues for 1997 and 1996,
respectively, with the decline due primarily to lower rent and occupancy costs
through the integration of former Crawford and former THG operations. These
expenses comprise a higher percentage of revenues than the Company's domestic
operations due primarily to amortization of intangible assets and higher
automobile, occupancy and interest costs.
Restructuring Charge
In connection with the acquisition of Thomas Howell Group, the Company recorded
a pretax charge of $13 million for personnel, facilities and other costs
associated with integration of the Company's international businesses. This
one-time charge will be recovered through lower operating costs within a year
after the restructuring is completed. After reflecting income tax benefits of
$4.3 million and minority interest share of $3.5 million, this charge reduced
Crawford's net income for the six months ended June 30, 1997 by $5.2 million,
or $0.10 per share.
Minority Interest
Minority interest benefit of $2.5 million and minority interest expense of $.7
million was recorded in the first six and three months of 1997, respectively,
reflecting Swiss Re's 40% minority interest in Crawford-THG Limited.
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 14
FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company expects to incur significant costs during the next two to three
years to address the impact of the so-called Year 2000 problem on its
information systems. The Year 2000 problem, which is common to most
organizations, concerns the inability of information systems, primarily
computer software programs, to properly recognize and process date sensitive
information as the year 2000 approaches. The Company is in the process of
assessing its systems and developing a specific work plan to address this
issue. The Company believes it will be able to modify or replace its affected
systems in time to minimize any detrimental effects on operations. While it is
not yet possible to give an accurate estimate of the cost of this work, the
Company expects that such costs may be material to the Company's results of
operations in one or more fiscal quarters or years but will not have a material
adverse impact on the long-term results of operations, liquidity or
consolidated financial position of the Company.
Certain information discussed in the Management's Discussion and Analysis of
Financial Condition and Results of Operations may include forward-looking
statements, the accuracy of which is subject to a number of risks and
assumptions. The Company's Form 10-K for the fiscal year ended December 31,
1996, discusses such risks and assumptions and other key factors that could
cause actual results to differ materially from those expressed in such
forward-looking statements. An additional risk factor is the Company's
ability to timely and efficiently address the Year 2000 problem.
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 15
Review by Independent Public Accountants.
Arthur Andersen LLP, independent public accountants, has performed a review of
the interim financial information contained herein in accordance with
established professional standards and procedures for such a review and has
issued its report with respect thereto (see page 16).
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 16
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders and
Board of Directors of
Crawford & Company:
We have made a review of the accompanying condensed consolidated balance sheet
of CRAWFORD & COMPANY (a Georgia corporation) AND SUBSIDIARIES as of June 30,
1997 and the related condensed consolidated statements of income for the three-
month and six-month periods ended June 30, 1997 and 1996 and the related
condensed consolidated statements of cash flows for the six-month periods ended
June 30, 1997 and 1996. These financial statements are the responsibility of
the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of obtaining an understanding of
the system for the preparation of interim financial information, applying
analytical procedures to financial data and making inquiries of persons
responsible for financial and accounting matters. It is substantially less in
scope than an audit in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Crawford & Company and
subsidiaries as of December 31, 1996, and the related consolidated statements
of income, shareholders' investment and cash flows for the year then ended (not
presented separately herein), and in our report dated January 28, 1997, we
expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the accompanying condensed consolidated
balance sheet as of December 31, 1996 is fairly stated, in all material
respects, in relation to the consolidated balance sheet from which it has
been derived.
/s/Arthur Andersen LLP
Atlanta, Georgia
August 7, 1997
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 17
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On April 22, 1997, the Registrant held its Annual Meeting of
Shareholders. At the Annual Meeting, the Class B Shareholders, the
only class entitled to vote at the meeting, voted on (i) the election
of nine (9) directors for a one year term; (ii) the approval of the
adoption of the 1997 Key Employee Stock Option Plan; (iii) the
approval of the adoption of the 1997 Non-Employee Director Stock
Option Plan; and (iv) ratification of the selection of Arthur Andersen
LLP as the Registrant's auditor for the year ending December 31, 1997.
The results of that voting are as follows:
Election of Directors
Name Votes For Votes Withheld
Dennis A. Smith 15,530,017 67,358
Forrest L. Minix 15,529,717 67,658
J. Hicks Lanier 15,530,510 66,865
Charles Flather 15,530,510 66,865
Linda K. Crawford 15,519,034 78,341
Jesse C. Crawford 15,530,509 66,866
Larry L. Prince 15,528,945 68,430
John A. Williams 15,529,145 68,230
E. Jenner Wood, III 15,529,189 68,186
Approval of the Adoption of the 1997 Key Employee Stock Option Plan
Votes For Votes Against Abstain Broker No Vote
14,240,034 254,609 60,309 1,042,423
Approval of the Adoption of the 1997 Non-Employee Director Stock
Option Plan
Votes For Votes Against Abstain Broker No Vote
14,229,224 266,511 59,217 1,042,423
Ratification of Appointment of Auditors
Votes For Votes Against Abstain
15,586,087 7,738 3,550
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 18
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
15.1 Letter from Arthur Andersen LLP
27.1 Financial Data Schedule
(b) Reports on Form 8-K
Registrant filed no reports on Form 8-K during the period
covered by this report.
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Crawford & Company
(Registrant)
Date: August 7, 1997 /s/D. A. Smith
D. A. Smith
Chairman of the Board and
Chief Executive Officer
Date: August 7, 1997 /s/D. R. Chapman
D. R. Chapman
Executive Vice President - Finance
(Principal Financial Officer)
Date: August 7, 1997 /s/J. F. Giblin
J. F. Giblin
Vice President and Controller
(Principal Accounting Officer)
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 20
INDEX TO EXHIBITS
Exhibit No. Description Sequential Page No.
15.1 Letter from Arthur Andersen LLP 21
27.1 Financial Data Schedule (for SEC use only)
Form 10-Q Crawford & Company
Quarter Ended June 30, 1997 Page 21
Exhibit 15.1
To the Stockholders and
Board of Directors of
Crawford & Company:
We are aware that Crawford & Company has incorporated by reference in its
previously filed Registration Statement File No. 2-78989, Registration
Statement File No. 33-22595, Registration Statement File No. 33-47536,
Registration Statement File No. 33-36116, Registration Statement File No.
333-2051, Registration Statement File No. 333-24425, and Registration Statement
File No. 333-24427, its Form 10-Q for the quarter ended June 30, 1997, which
includes our report dated August 7, 1997 covering the unaudited interim
financial information contained therein. Pursuant to Regulation C of the
Securities Act of 1933 (the "Act"), that report is not considered a part of the
Registration Statement prepared or certified by our firm or a report prepared
or certified by our firm within the meaning of Sections 7 and 11 of the Act.
/s/Arthur Andersen LLP
Atlanta, Georgia
August 7, 1997
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