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Segment Information
 9 Months Ended
Sep. 30, 2022
Segment Reporting [Abstract]  
Segment Information

10. Segment Information

As of January 1, 2022, the Company has realigned its operating segments by moving to a geographic reporting structure consisting of North America Loss Adjusting, International Operations, Broadspire, and Platform Solutions. The Company's revised reportable segments are comprised of the following:

•
North America Loss Adjusting, which services the North American property and casualty market. This is comprised of the previously reported Crawford Loss Adjusting segment in the U.S. and Canada, including Global Technical Services and edjuster. The Canadian operations include all operations within that country, including those previously reported within the Crawford TPA Solutions and Crawford Platform Solutions segments.
•
International Operations, which services the global property and casualty market outside North America. This is comprised of the previously reported Crawford Loss Adjusting segment outside of North America, including Crawford Legal Services which was previously within the Crawford TPA Solutions segment. The International Operations include all operations within the respective countries, including those previously reported within the Crawford TPA Solutions and Crawford Platform Solutions segments.
•
Broadspire, which provides third party administration for workers' compensation, auto and liability, disability absence management, medical management, and accident and health to corporations, brokers and insurers in the U.S.
•
Platform Solutions, which consists of the Contractor Connection, Networks, and Subrogation service lines in the U.S. The Networks service line includes Catastrophe operations and WeGoLook.

 

Financial information for the three and nine months ended September 30, 2022 and 2021 related to the Company's reportable segments, including a reconciliation from segment operating earnings to income before income taxes, the most directly comparable GAAP financial measure, is presented below:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

(in thousands)

 

September 30,
2022

 

 

September 30,
2021

 

 

September 30,
2022

 

 

September 30,
2021

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

North America Loss Adjusting

 

$

66,822

 

 

$

64,334

 

 

$

197,035

 

 

$

176,844

 

International Operations

 

 

86,066

 

 

 

91,888

 

 

 

269,048

 

 

 

269,624

 

Broadspire

 

 

78,381

 

 

 

75,804

 

 

 

234,949

 

 

 

225,982

 

Platform Solutions

 

 

63,655

 

 

 

56,474

 

 

 

166,262

 

 

 

136,688

 

Total segment revenues before reimbursements

 

 

294,924

 

 

 

288,500

 

 

 

867,294

 

 

 

809,138

 

Reimbursements

 

 

11,493

 

 

 

9,062

 

 

 

30,564

 

 

 

27,124

 

Total revenues

 

$

306,417

 

 

$

297,562

 

 

$

897,858

 

 

$

836,262

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Operating Earnings (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

North America Loss Adjusting

 

$

3,678

 

 

$

4,362

 

 

$

10,508

 

 

$

11,804

 

International Operations

 

 

(3,849

)

 

 

1,947

 

 

 

(7,623

)

 

 

3,400

 

Broadspire

 

 

6,198

 

 

 

6,939

 

 

 

20,299

 

 

 

20,243

 

Platform Solutions

 

 

10,080

 

 

 

9,724

 

 

 

22,714

 

 

 

22,833

 

Total segment operating earnings

 

 

16,107

 

 

 

22,972

 

 

 

45,898

 

 

 

58,280

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deduct:

 

 

 

 

 

 

 

 

 

 

 

 

Unallocated corporate and shared costs, net

 

 

(1,907

)

 

 

(2,173

)

 

 

(5,732

)

 

 

(4,835

)

Net corporate interest expense

 

 

(2,903

)

 

 

(1,648

)

 

 

(6,201

)

 

 

(4,443

)

Stock option expense

 

 

(142

)

 

 

(296

)

 

 

(478

)

 

 

(700

)

Amortization of customer-relationship intangible assets

 

 

(1,998

)

 

 

(2,877

)

 

 

(5,784

)

 

 

(8,426

)

Contingent earnout adjustments

 

 

(887

)

 

 

—

 

 

 

(3,246

)

 

 

—

 

Goodwill impairment

 

 

(36,808

)

 

 

—

 

 

 

(36,808

)

 

 

—

 

(Loss) income before income taxes

 

$

(28,538

)

 

$

15,978

 

 

$

(12,351

)

 

$

39,876

 

 

Operating earnings is the primary financial performance measure used by the Company's senior management and chief operating decision maker ("CODM") to evaluate the financial performance of the Company's operating segments and make resource allocation and certain compensation decisions. The Company believes this measure is useful to investors in that it allows them to evaluate segment operating performance using the same criteria used by the Company's senior management and CODM. Operating earnings will differ from net income computed in accordance with GAAP since operating earnings represents segment earnings before certain unallocated corporate and shared costs and credits, net corporate interest expense, stock option expense, amortization of customer-relationship intangible assets, contingent earnout adjustments, goodwill impairments, income taxes, and net income or loss attributable to noncontrolling interests.

Segment operating earnings includes allocations of certain corporate and shared costs. If the Company changes its allocation methods or changes the types of costs that are allocated to its four operating segments, prior period amounts presented in the current period financial statements are adjusted to conform to the current allocation process.

Intersegment transactions are not material for any period presented. Certain of the Company’s reportable segments represent the aggregation of certain business units which represent separate operating segments.

Revenues before reimbursements by major service line in the International Operations, Broadspire and Platform Solutions segments are shown in the following table. The Company considers all North America Loss Adjusting revenues to be primarily derived from one service line.

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

(in thousands)

 

September 30,
2022

 

 

September 30,
2021

 

 

September 30,
2022

 

 

September 30,
2021

 

International Operations

 

 

 

 

 

 

 

 

 

 

 

 

International Loss Adjusting

 

$

82,157

 

 

$

84,653

 

 

$

252,092

 

 

$

249,955

 

Crawford Legal Services

 

 

3,909

 

 

 

7,235

 

 

 

16,956

 

 

 

19,669

 

Total Revenues before Reimbursements--International Operations

 

$

86,066

 

 

$

91,888

 

 

$

269,048

 

 

$

269,624

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broadspire

 

 

 

 

 

 

 

 

 

 

 

 

Claims Management

 

$

40,275

 

 

$

38,326

 

 

$

120,252

 

 

$

114,028

 

Medical Management

 

 

38,106

 

 

 

37,478

 

 

 

114,697

 

 

 

111,954

 

Total Revenues before Reimbursements--Broadspire

 

$

78,381

 

 

$

75,804

 

 

$

234,949

 

 

$

225,982

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Platform Solutions

 

 

 

 

 

 

 

 

 

 

 

 

Contractor Connection

 

$

17,453

 

 

$

18,592

 

 

$

50,112

 

 

$

54,643

 

Networks

 

 

40,809

 

 

 

37,882

 

 

 

100,840

 

 

 

82,045

 

Subrogation

 

 

5,393

 

 

 

—

 

 

 

15,310

 

 

 

—

 

Total Revenues before Reimbursements--Platform Solutions

 

$

63,655

 

 

$

56,474

 

 

$

166,262

 

 

$

136,688