Company: CRD-A
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0000950170-25-030894
Chunk: 234

Company: CRAWFORD & CO
Filing Date: 2025-03-03
Form: 10-K
Item: Item 7
Chunk 234
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, was $17.7 million and $14.8 million at December 31, 2024 and 2023, respectively. The balance in short-term borrowings at December 31, 2024 primarily represents amounts under our revolving Credit Facility that we expect, but are not required, to repay in the next twelve months. We have historically used the proceeds from our long-term borrowings to finance, among other things, business acquisitions.

Our liquidity is defined as cash on hand and borrowing capacity under our Credit Facility. Borrowing capacity under our Credit Facility is defined as the lesser $450.0 million less the unutilized credit facility or 4.5 times trailing twelve month EBITDA less funded debt, as defined under our Credit Facility. Excluding restricted cash, at December 31, 2024, we had $55.4 million of cash on hand and, based on trailing twelve month EBITDA, additional borrowing capacity of $219.4 million resulting in total liquidity of $273.7 million at December 31, 2024. 

Based on our financial plans, we expect to be able to remain in compliance with all required covenants throughout 2025. Our compliance with the consolidated total leverage ratio and consolidated interest coverage ratio is particularly sensitive to changes in our EBITDA, and if our financial plans for 2025 or other future periods do not meet our current projections, we could fail to remain in compliance with these financial covenants in our Credit Facility.

Our compliance with the consolidated total leverage ratio covenant is also sensitive to changes in our level of consolidated total funded debt, as defined in our Credit Facility. In addition to short- and long-term borrowings, capital leases, and bank overdrafts, among other things, consolidated total funded debt includes letters of credit, the need for which can fluctuate based on our business requirements. An increase in borrowings under our Credit Facility could negatively impact our leverage ratio, unless those increased borrowings are offset by a corresponding increase in our EBITDA. In addition, a reduction in EBITDA in the future could limit our ability to utilize available credit under the Credit Facility, which could negatively impact our ability to fund our current operations or make needed capital investments.

Our compliance with the consolidated interest ratio covenant, which measures our ability to pay interest expense is also sensitive to the level of debt outstanding and interest rates. A decrease in EBITDA could negatively impact our interest coverage ratio, as could increases in our interest expense. If we do