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

9 Months Ended

Sep. 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										Nine months ended
	September 30, 2022						September 30, 2021				September 30, 2022						September 30, 2021
(in thousands, except per share amounts)	CRD-A			CRD-B			CRD-A		CRD-B		CRD-A			CRD-B			CRD-A		CRD-B
(Loss) earnings per share - basic:
Numerator:
Allocation of undistributed (loss) earnings	$	(10,647	)	$	(7,401	)	$	4,632	$	3,380	$	(7,797	)	$	(5,359	)	$	11,257	$	8,205
Dividends paid		1,713			1,191			1,839		1,344		5,299			3,639			5,539		4,038
Net (loss) income attributable to common shareholders, basic	$	(8,934	)	$	(6,210	)	$	6,471	$	4,724	$	(2,498	)	$	(1,720	)	$	16,796	$	12,243

Denominator:
Weighted-average common shares outstanding, basic		28,553			19,848			30,711		22,407		29,397			20,202			30,786		22,438
(Loss) earnings per share - basic	$	(0.31	)	$	(0.31	)	$	0.21	$	0.21	$	(0.08	)	$	(0.09	)	$	0.55	$	0.55

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


	Three Months Ended										Nine Months Ended
	September 30, 2022						September 30, 2021				September 30, 2022						September 30, 2021
(in thousands, except per share amounts)	CRD-A			CRD-B			CRD-A		CRD-B		CRD-A			CRD-B			CRD-A		CRD-B
(Loss) earnings per share - diluted:
Numerator:
Allocation of undistributed (loss) earnings	$	(10,647	)	$	(7,401	)	$	4,710	$	3,302	$	(7,797	)	$	(5,359	)	$	11,428	$	8,034
Dividends paid		1,713			1,191			1,839		1,344		5,299			3,639			5,539		4,038
Net (loss) income attributable to common shareholders, diluted	$	(8,934	)	$	(6,210	)	$	6,549	$	4,646	$	(2,498	)	$	(1,720	)	$	16,967	$	12,072

Denominator:
Weighted-average common shares outstanding, basic		28,553			19,848			30,711		22,407		29,397			20,202			30,786		22,438
Weighted-average effect of dilutive securities		—			—			1,243		—		—			—			1,130		—
Weighted-average common shares outstanding, diluted		28,553			19,848			31,954		22,407		29,397			20,202			31,916		22,438
(Loss) earnings per share - diluted	$	(0.31	)	$	(0.31	)	$	0.20	$	0.21	$	(0.08	)	$	(0.09	)	$	0.53	$	0.54

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		Nine Months Ended
(in thousands)	September 30, 2022	September 30, 2021	September 30, 2022	September 30, 2021
Shares underlying stock options excluded	1,542	352	1,542	706
Performance stock grants excluded because performance conditions have not been met (1)	816	396	759	318

(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 nine months ended September 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				Nine Months Ended
(in thousands)	September 30, 2022		September 30, 2021		September 30, 2022			September 30, 2021
CRD-A issued under the Non-Employee Director Stock Plan		5		—		99			67
CRD-A issued under the U.K. ShareSave Scheme		—		5		—			70
CRD-A issued under the Employee Stock Purchase Plan		124		159		124			159
CRD-A issued under the 2016 Omnibus Stock and Incentive Plan		—		—		(6	)		—

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 September 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 September 30, 2022, there were 1,793,371 remaining shares authorized to repurchase under the 2021 Repurchase Authorization.

During the nine months ended September 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 nine months ended September 30, 2021, the Company repurchased 530,598 shares of CRD-A and 111,499 shares of CRD-B at an average cost of $9.63 and $8.68, respectively.