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

6 Months Ended

Jun. 30, 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								Six months ended
	June 30, 2023				June 30, 2022				June 30, 2023				June 30, 2022
(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	$	3,262	$	2,236	$	1,717	$	1,193	$	7,857	$	5,397	$	2,906	$	1,986
Dividends paid		1,738		1,191		1,721		1,199		3,472		2,382		3,586		2,448
Net income attributable to common shareholders, basic	$	5,000	$	3,427	$	3,438	$	2,392	$	11,329	$	7,779	$	6,492	$	4,434

Denominator:
Weighted-average common shares outstanding, basic		28,956		19,848		28,757		19,987		28,899		19,848		29,827		20,381
Earnings per share - basic	$	0.17	$	0.17	$	0.12	$	0.12	$	0.39	$	0.39	$	0.22	$	0.22

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, 2023				June 30, 2022				June 30, 2023				June 30, 2022
(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	$	3,299	$	2,199	$	1,726	$	1,184	$	7,918	$	5,336	$	2,919	$	1,973
Dividends paid		1,738		1,191		1,721		1,199		3,472		2,382		3,586		2,448
Net income attributable to common shareholders, diluted	$	5,037	$	3,390	$	3,447	$	2,383	$	11,390	$	7,718	$	6,505	$	4,421

Denominator:
Weighted-average common shares outstanding, basic		28,956		19,848		28,757		19,987		28,899		19,848		29,827		20,381
Weighted-average effect of dilutive securities		814		—		388		—		557		—		324		—
Weighted-average common shares outstanding, diluted		29,770		19,848		29,145		19,987		29,456		19,848		30,151		20,381
Earnings per share - diluted	$	0.17	$	0.17	$	0.12	$	0.12	$	0.39	$	0.39	$	0.22	$	0.22

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, 2023	June 30, 2022	June 30, 2023	June 30, 2022
Shares underlying stock options excluded	456	1,530	1,482	1,530
Performance stock grants excluded because performance conditions have not been met (1)	1,059	836	908	730

(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, 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				Six Months Ended
(in thousands)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
CRD-A issued under the Non-Employee Director Stock Plan		—		—		134		94
CRD-A issued under the U.K. ShareSave Scheme		52		—		52		—
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 on December 31, 2021. Under the 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 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, 2023, there were 1,793,371 remaining shares authorized to repurchase under the 2021 Repurchase Authorization.

During the six months ended June 30, 2023, the Company did not repurchase any shares of CRD-A or CRD-B. During the six months ended June 30, 2022, the Company repurchased 2,656,474 shares of CRD-A and 963,472 shares of CRD-B at an average cost of $7.41 and $7.32, respectively.