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

3 Months Ended

Mar. 31, 2023

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 2022 and 2023, 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
	March 31, 2023				March 31, 2022
(in thousands, except per share amounts)	CRD-A		CRD-B		CRD-A		CRD-B
Earnings per share - basic:
Numerator:
Allocation of undistributed earnings	$	4,594	$	3,161	$	1,185	$	797
Dividends paid		1,735		1,191		1,865		1,249
Net income attributable to common shareholders, basic	$	6,329	$	4,352	$	3,050	$	2,046

Denominator:
Weighted-average common shares outstanding, basic		28,841		19,848		30,908		20,780
Earnings per share - basic	$	0.22	$	0.22	$	0.10	$	0.10

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


	Three Months Ended
	March 31, 2023				March 31, 2022
(in thousands, except per share amounts)	CRD-A		CRD-B		CRD-A		CRD-B
Earnings per share - diluted:
Numerator:
Allocation of undistributed earnings	$	4,613	$	3,142	$	1,189	$	793
Dividends paid		1,735		1,191		1,865		1,249
Net income attributable to common shareholders, diluted	$	6,348	$	4,333	$	3,054	$	2,042

Denominator:
Weighted-average common shares outstanding, basic		28,841		19,848		30,908		20,780
Weighted-average effect of dilutive securities		300		—		260		—
Weighted-average common shares outstanding, diluted		29,141		19,848		31,168		20,780
Earnings per share - diluted	$	0.22	$	0.22	$	0.10	$	0.10

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
(in thousands)	March 31, 2023	March 31, 2022
Shares underlying stock options excluded	1,532	1,542
Performance stock grants excluded because performance conditions have not been met (1)	758	625

(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 months ended March 31, 2023 and 2022, 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
(in thousands)	March 31, 2023		March 31, 2022
CRD-A issued under the Non-Employee Director Stock Plan		134		94
CRD-A issued under the Employee Stock Purchase Plan		27		(6	)

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 March 31, 2023, there were 1,793,371 remaining shares authorized to repurchase under the 2021 Repurchase Authorization.

During the three months ended March 31, 2023, the Company did not repurchase any shares of CRD-A or CRD-B. During the three months ended March 31, 2022, the Company repurchased 1,498,084 shares of CRD-A and 719,874 shares of CRD-B at an average cost of $7.23 and $7.31, respectively.