Net Income Attributable to Shareholders of Crawford & Company per Common Share

6 Months Ended

Jun. 30, 2022

Net Income Attributable to Shareholders of Crawford & Company per Common Share

7. Net Income Attributable to Shareholders of Crawford & Company per Common Share

The Company computes earnings per share of its non-voting Class A Common Stock ("CRD-A") and voting Class B Common Stock ("CRD-B") using the two-class method, which allocates the undistributed earnings in each period to each class on a proportionate basis. The Company's Board of Directors has the right, but not the obligation, to declare higher dividends on the CRD-A shares than on the CRD-B shares, subject to certain limitations. In periods when the dividend is the same for CRD-A and CRD-B or when no dividends are declared or paid to either class, the two-class method generally will yield the same earnings per share for CRD-A and CRD-B. During 2021 and 2022, the Board of Directors has declared the same dividend on CRD-A and CRD-B.

The computations of basic net income attributable to shareholders of Crawford & Company per common share were as follows:


	Three Months Ended								Six months ended
	June 30, 2022				June 30, 2021				June 30, 2022				June 30, 2021
(in thousands, except per share amounts)	CRD-A		CRD-B		CRD-A		CRD-B		CRD-A		CRD-B		CRD-A		CRD-B
Earnings per share - basic:
Numerator:
Allocation of undistributed earnings	$	1,717	$	1,193	$	4,967	$	3,617	$	2,906	$	1,986	$	6,625	$	4,825
Dividends paid		1,721		1,199		1,849		1,347		3,586		2,448		3,700		2,694
Net income attributable to common shareholders, basic	$	3,438	$	2,392	$	6,816	$	4,964	$	6,492	$	4,434	$	10,325	$	7,519

Denominator:
Weighted-average common shares outstanding, basic		28,757		19,987		30,826		22,445		29,827		20,381		30,825		22,454
Earnings per share - basic	$	0.12	$	0.12	$	0.22	$	0.22	$	0.22	$	0.22	$	0.33	$	0.33

The computations of diluted net income attributable to shareholders of Crawford & Company per common share were as follows:


	Three Months Ended								Six Months Ended
	June 30, 2022				June 30, 2021				June 30, 2022				June 30, 2021
(in thousands, except per share amounts)	CRD-A		CRD-B		CRD-A		CRD-B		CRD-A		CRD-B		CRD-A		CRD-B
Earnings per share - diluted:
Numerator:
Allocation of undistributed earnings	$	1,726	$	1,184	$	5,045	$	3,539	$	2,919	$	1,973	$	6,720	$	4,730
Dividends paid		1,721		1,199		1,849		1,347		3,586		2,448		3,700		2,694
Net income attributable to common shareholders, diluted	$	3,447	$	2,383	$	6,894	$	4,886	$	6,505	$	4,421	$	10,420	$	7,424

Denominator:
Weighted-average common shares outstanding, basic		28,757		19,987		30,826		22,445		29,827		20,381		30,825		22,454
Weighted-average effect of dilutive securities		388		—		1,171		—		324		—		1,072		—
Weighted-average common shares outstanding, diluted		29,145		19,987		31,997		22,445		30,151		20,381		31,897		22,454
Earnings per share - diluted	$	0.12	$	0.12	$	0.22	$	0.22	$	0.22	$	0.22	$	0.33	$	0.33

Listed below are the shares excluded from the denominator in the preceding computation of diluted earnings per share for CRD-A because their inclusion would have been antidilutive:


	Three Months Ended		Six Months Ended
(in thousands)	June 30, 2022	June 30, 2021	June 30, 2022	June 30, 2021
Shares underlying stock options excluded	1,530	353	1,530	724
Performance stock grants excluded because performance conditions have not been met (1)	836	398	730	284

(1) Compensation cost is recognized for these performance stock grants based on expected achievement rates; however, no consideration is given to these performance stock grants when calculating diluted earnings per share until the performance measurements have been achieved.

The following table details shares issued during the three and six months ended June 30, 2022 and 2021, including restricted shares that were returned prior to vesting. These shares are included from their dates of issuance in the weighted-average common shares used to compute basic and diluted earnings per share for CRD-A in the table above. There were no shares of CRD-B issued during any of these periods.


	Three Months Ended					Six Months Ended
(in thousands)	June 30, 2022		June 30, 2021			June 30, 2022			June 30, 2021
CRD-A issued under the Non-Employee Director Stock Plan		—		(7	)		94			85
CRD-A issued under the U.K. ShareSave Scheme		—		64			—			65
CRD-A issued under the 2016 Omnibus Stock and Incentive Plan		—		(18	)		(6	)		(18	)

Effective May 9, 2019, the Company's Board of Directors authorized the repurchase of up to 2,000,000 shares of CRD-A or CRD-B (or a combination of the two) through December 31, 2020 (the "2019 Repurchase Authorization"). The Company’s Board of Directors subsequently amended this authorization to allow for repurchases through December 31, 2021. Under the 2019 Repurchase Authorization, repurchases may be made for cash, in the open market or privately negotiated transactions at such times and for such prices as management deems appropriate, subject to applicable contractual and regulatory restrictions. At June 30, 2022, there were no remaining shares authorized to repurchase under the 2019 Repurchase Authorization.

Effective November 4, 2021, the Company’s Board of Directors authorized the repurchase of up to 2,000,000 shares of CRD-A or CRD-B (or a combination of the two) through December 31, 2023 (the “2021 Repurchase Authorization”). On February 10, 2022, the Company's Board of Directors authorized the addition of 5,000,000 shares of CRD-A or CRD-B (or a combination of the two) to its 2021 Repurchase Authorization which had a remaining authorization to purchase 413,317 shares at December 31, 2021. Under the new repurchase program, repurchases may be made through December 31, 2023 in the open market or privately negotiated transactions at such times and for such prices as management deems appropriate, subject to applicable regulatory guidelines. The new authorization does not obligate Crawford to acquire any stock, and purchases may be commenced or suspended at any time based on market conditions and other factors that the Company deems appropriate. At June 30, 2022, there were 1,793,371 remaining shares authorized to repurchase under the 2021 Repurchase Authorization.

During the six months ended June 30, 2022, the Company repurchased 2,656,474 shares of CRD-A and 963,472 shares CRD-B at an average cost of $7.41 and $7.32, respectively. During the six months ended June 30, 2021, the Company repurchased 256,213 shares of CRD-A and 80,952 shares of CRD-B at an average cost of $9.09 and $8.28, respectively.