Strong Fourth Quarter Caps Record Year as All
Practices Grow Year Over Year
Charles River Associates (NASDAQ: CRAI), a worldwide leader in
providing economic, financial and management consulting services,
today announced financial results for the fiscal year ended January
2, 2021.
“CRA’s fiscal 2020 topped a record-setting fiscal 2019 as
revenue increased year over year by 12.6%,” said Paul Maleh, CRA’s
President and Chief Executive Officer. “During the fourth quarter,
we experienced strong demand across our portfolio of services and
geographies. Notably, every practice grew year over year,
contributing to the firm’s 15.2% quarterly revenue growth. We also
achieved double-digit revenue growth across both our North American
and international operations. Most importantly, CRA’s net income,
earnings per diluted share and EBITDA all grew at rates faster than
revenue during the fourth quarter.”
Key Fourth-Quarter Fiscal 2020 Highlights
- Revenue grew 15.2% year over year to $137.4 million.
- Utilization was 70%, and quarter-end headcount increased 6.7%
year over year.
- Net income increased 40.8% year over year to $6.7 million, or
4.9% of revenue, compared with $4.8 million, or 4.0% of revenue, in
the fourth quarter of fiscal 2019; non-GAAP net income increased
21.9% year over year to $7.5 million, or 5.5% of revenue, compared
with $6.2 million, or 5.2% of revenue, in the fourth quarter of
fiscal 2019.
- Earnings per diluted share increased 44.1% year over year to
$0.85; non-GAAP earnings per diluted share increased 23.4% year
over year to $0.95.
- Non-GAAP EBITDA increased 24.1% to $14.0 million, or 10.2% of
revenue, compared with $11.3 million, or 9.4% of revenue, in the
fourth quarter of fiscal 2019.
- On a constant currency basis relative to the fourth quarter of
fiscal 2019, revenue would have been lower by $0.7 million, while
GAAP and non-GAAP net income would have remained unchanged. GAAP
earnings per diluted share would have decreased by $0.01 per share,
while non-GAAP earnings per diluted share would have remained
unchanged. Non-GAAP EBITDA would have decreased by $0.1
million.
- CRA returned $6.7 million of capital to its shareholders,
consisting of $2.1 million of dividend payments and $4.6 million
for share repurchases of approximately 91,000 shares.
Key Full-Year Fiscal 2020 Highlights
- Revenue grew 12.6% year over year to $508.4 million with
company-wide utilization of 69%.
- GAAP net income increased 18.1% year over year to $24.5
million, or 4.8% of revenue, or $3.07 per diluted share, compared
with $20.7 million, or 4.6% of revenue, or $2.53 per diluted share
for the full year fiscal 2019. Non-GAAP net income increased 8.4%
year over year to $26.7 million, or 5.3% of revenue, or $3.35 per
diluted share, compared with $24.7 million, or 5.5% of revenue, or
$3.01 per diluted share for the full year fiscal 2019.
- Non-GAAP EBITDA grew 15.1% to $50.7 million, or 10.0% of
revenue, compared with $44.1 million, or 9.8% of revenue, in fiscal
year 2019.
- On a constant currency basis relative to fiscal 2019, revenue
would have been lower by $0.5 million, while GAAP and non-GAAP net
income, GAAP and non-GAAP earnings per diluted share, and non-GAAP
EBITDA all would have remained unchanged.
- For fiscal 2020, CRA returned $20.9 million of capital to its
shareholders, consisting of $7.5 million of dividend payments and
$13.4 million for share repurchases of approximately 284,000
shares.
Management Commentary and Financial Guidance
“In 2020, with the hard work and dedication of my colleagues,
CRA delivered record-setting results,” said Maleh. “For the full
year, on a constant currency basis, we exceeded our revenue
guidance of $498 million to $504 million and achieved the upper
half of our non-GAAP EBITDA margin guidance range of 9.7% to 10.2%.
To elaborate, fiscal year 2020 revenue on a constant currency basis
was $507.9 million, consisting of $508.4 million of reported
results less a $0.5 million adjustment for currency tailwinds.
Full-year non-GAAP EBITDA and non-GAAP EBITDA margin were unchanged
on a constant currency basis at $50.7 million and 10.0%,
respectively.”
“Going forward, we look to build on our trend of broad-based,
profitable growth while striving to be the firm of choice for our
clients’ most important litigation, regulatory, and strategic
challenges,” continued Maleh. “For the full-year fiscal 2021, on a
constant currency basis relative to fiscal 2020, we expect revenue
in the range of $530 million to $550 million, and non-GAAP EBITDA
margin in the range of 9.5% to 10.2%. While we are pleased with
CRA’s strong performance in 2020, we remain mindful that
uncertainties around global economic, business, health, and
political conditions can affect our business.”
CRA does not provide reconciliations of its annual non-GAAP
EBITDA margin guidance to GAAP net income margin because the
Company is unable to estimate with reasonable certainty unusual
gains or charges, foreign currency exchange rates, and the
resulting effect of these items, and of equity awards, on CRA’s
taxes without unreasonable effort. These items are uncertain,
depend on various factors, and may have a material effect on CRA’s
results computed in accordance with GAAP. A reconciliation between
the historical GAAP and non-GAAP financial measures presented in
this release is provided in the financial tables at the end of this
release.
Quarterly Dividend
On March 4, 2021, CRA’s Board of Directors announced a quarterly
cash dividend of $0.26 per common share, payable on March 26, 2021
to shareholders of record as of March 16, 2021. CRA expects to
continue paying quarterly dividends, the declaration, timing and
amounts of which remain subject to the discretion of CRA’s Board of
Directors.
Conference Call Information and Prepared CFO Remarks
CRA will host a conference call today at 10:00 a.m. ET to
discuss its fourth-quarter and fiscal-year 2020 financial results.
To listen to the live call, please visit the “Investor Relations”
section of CRA’s website at https://www.crai.com/, or dial (877)
709-8155 or (201) 689-8881. An archived version of the webcast will
be available on CRA’s website for one year.
In combination with this press release, CRA has posted prepared
remarks by its CFO Dan Mahoney under “Conference Call Materials” in
the “Investor Relations” section on CRA’s website at
https://www.crai.com/. These remarks are offered to provide the
investment community with additional background on CRA’s financial
results prior to the start of the conference call.
About Charles River Associates (CRA)
Charles River Associates® is a leading global consulting firm
specializing in economic, financial, and management consulting
services. CRA advises clients on economic and financial matters
pertaining to litigation and regulatory proceedings, and guides
corporations through critical business strategy and
performance-related issues. Since 1965, clients have engaged CRA
for its unique combination of functional expertise and industry
knowledge, and for its objective solutions to complex problems.
Headquartered in Boston, CRA has offices throughout the world.
Detailed information about Charles River Associates, a registered
trade name of CRA International, Inc., is available at
www.crai.com. Follow us on LinkedIn, Twitter, and Facebook.
NON-GAAP FINANCIAL MEASURES
In this release, CRA has supplemented the presentation of its
financial results calculated in accordance with U.S. generally
accepted accounting principles or “GAAP” with the following
financial measures that are not calculated in accordance with GAAP:
non-GAAP net income, non‑GAAP net income per share and non‑GAAP
EBITDA. CRA believes that the non-GAAP financial measures described
in this press release are important to management and investors
because these measures supplement the understanding of CRA’s
ongoing operating results and financial condition. In addition,
these non-GAAP measures are used by CRA in its budgeting process,
and the non-GAAP adjustments are made to the performance measures
for some of CRA’s performance-based compensation.
CRA defines non-GAAP EBITDA as net income before interest
expense (net), income taxes, and depreciation and amortization
further adjusted for the impact of certain items that we do not
consider indicative of our core operating performance, such as
non-cash amounts relating to valuation changes in contingent
consideration and related tax effects. Non-GAAP net income and
non-GAAP net income per share also exclude non-cash amounts
relating to valuation changes in contingent consideration and
related tax effects. This release also presents certain current
fiscal period financial measures on a “constant currency” basis in
order to isolate the effect that foreign currency exchange rate
fluctuations can have on CRA’s financial results. These constant
currency measures are determined by recalculating the current
fiscal period local currency financial measure using the specified
corresponding prior fiscal period’s foreign exchange rates.
All of the non-GAAP financial measures referred to above should
be considered in conjunction with, and not as a substitute for, the
GAAP financial information presented in this release. EBITDA and
the financial measures identified in this release as “non-GAAP” are
reconciled to their GAAP comparable measures in the financial
tables appended to the end of this press release. In evaluating
these non-GAAP financial measures, note that the non-GAAP financial
measures used by CRA may be calculated differently from, and
therefore may not be comparable to, similarly titled measures used
by other companies.
SAFE HARBOR STATEMENT
Statements in this press release concerning our future business,
operating results and financial condition, including those
concerning guidance on future revenue and non-GAAP EBITDA margin,
the impact of exchange rate fluctuations on our financial results,
our expectations regarding continued growth, our expectations
regarding the payment of any future quarterly dividends and the
level and extent of any purchases under our share repurchase
program, and statements using the terms “outlook,” “expect,” or
similar expressions, are “forward-looking” statements as defined in
Section 21 of the Exchange Act. These statements are based upon our
current expectations and various underlying assumptions. Although
we believe there is a reasonable basis for these statements and
assumptions, and these statements are expressed in good faith,
these statements are subject to a number of additional factors and
uncertainties. Our actual revenue and non-GAAP EBITDA margin in
fiscal 2021 on a constant currency basis relative to fiscal 2020
could differ materially from the guidance presented herein, and our
actual performance and results may differ materially from the
performance and results contained in or implied by the
forward-looking statements made herein, due to many important
factors. These factors include, but are not limited to, the
possibility that the demand for our services may decline as a
result of changes in general and industry specific economic
conditions; the timing of engagements for our services; the effects
of competitive services and pricing; our ability to attract and
retain key employee or non-employee experts; the inability to
integrate and utilize existing consultants and personnel; the
decline or reduction in project work or activity; global economic
conditions including less stable political and economic
environments; the impact of the COVID-19 pandemic; foreign currency
exchange rate fluctuations; unanticipated expenses and liabilities;
risks inherent in international operations; changes in tax law or
accounting standards, rules, and regulations; our ability to
collect on forgivable loans should any become due; and professional
and other legal liability or settlements. Additional risks and
uncertainties are discussed in our periodic filings with the
Securities and Exchange Commission under the heading “Risk
Factors.” The inclusion of such forward-looking information should
not be regarded as our representation that the future events,
plans, or expectations contemplated will be achieved. Except as may
be required by law, we undertake no obligation to update any
forward-looking statements after the date of this press release,
and we do not intend to do so.
CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS FOR THE FISCAL QUARTERS AND FISCAL
YEAR-TO-DATE PERIODS ENDED JANUARY 2, 2021 COMPARED TO
DECEMBER 28, 2019 (IN THOUSANDS, EXCEPT PER SHARE DATA)
Fiscal Quarter Ended Fiscal Year-to-Date Period
Ended January 2,2021 As a % ofRevenue December
28,2019 As a % ofRevenue January 2,2021 As a %
ofRevenue December 28,2019 As a % ofRevenue
Revenues
$
137,422
100.0
%
$
119,262
100.0
%
$
508,373
100.0
%
$
451,370
100.0
%
Cost of services (exclusive of depreciation and amortization)
101,247
73.7
%
84,349
70.7
%
370,709
72.9
%
317,761
70.4
%
Selling, general and administrative expenses
22,286
16.2
%
24,684
20.7
%
90,028
17.7
%
93,613
20.7
%
Depreciation and amortization
3,547
2.6
%
2,952
2.5
%
12,840
2.5
%
10,648
2.4
%
Income from operations
10,342
7.5
%
7,277
6.1
%
34,796
6.8
%
29,348
6.5
%
Interest expense, net
(205
)
-0.1
%
(300
)
-0.3
%
(1,216
)
-0.2
%
(1,254
)
-0.3
%
Foreign currency gains (losses), net
(1,061
)
-0.8
%
(918
)
-0.8
%
42
-
%
(1,297
)
-0.3
%
Income before provision for income taxes
9,076
6.6
%
6,059
5.1
%
33,622
6.6
%
26,797
5.9
%
Provision for income taxes
2,371
1.7
%
1,296
1.1
%
9,115
1.8
%
6,050
1.3
%
Net income
$
6,705
4.9
%
$
4,763
4.0
%
$
24,507
4.8
%
$
20,747
4.6
%
Net income per share: Basic
$
0.86
$
0.61
$
3.14
$
2.63
Diluted
$
0.85
$
0.59
$
3.07
$
2.53
Weighted average number of shares outstanding: Basic
7,735
7,757
7,768
7,866
Diluted
7,905
8,053
7,948
8,167
CRA INTERNATIONAL, INC. RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES FOR THE FISCAL QUARTERS AND
FISCAL YEAR-TO-DATE PERIODS ENDED JANUARY 2, 2021 COMPARED
TO DECEMBER 28, 2019 (IN THOUSANDS, EXCEPT PER SHARE
DATA) Fiscal Quarter Ended Fiscal Year-to-Date
Period Ended January 2,2021 As a % ofRevenue
December 28,2019 As a % ofRevenue January
2,2021 As a % ofRevenue December 28,2019 As a
% ofRevenue Revenues
$
137,422
100.0
%
$
119,262
100.0
%
$
508,373
100.0
%
$
451,370
100.0
%
Net income
$
6,705
4.9
%
$
4,763
4.0
%
$
24,507
4.8
%
$
20,747
4.6
%
Adjustments needed to reconcile GAAP net income to non-GAAP net
income: Non-cash valuation change in contingent consideration
1,140
0.8
%
1,947
1.6
%
3,041
0.6
%
5,382
1.2
%
Tax effect on adjustments
(308
)
-0.2
%
(527
)
-0.4
%
(816
)
-0.2
%
(1,458
)
-0.3
%
Non-GAAP net income
$
7,537
5.5
%
$
6,183
5.2
%
$
26,732
5.3
%
$
24,671
5.5
%
Non-GAAP net income per share: Basic
$
0.97
$
0.79
$
3.43
$
3.13
Diluted
$
0.95
$
0.77
$
3.35
$
3.01
Weighted average number of shares outstanding: Basic
7,735
7,757
7,768
7,866
Diluted
7,905
8,053
7,948
8,167
CRA INTERNATIONAL, INC. RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES FOR THE FISCAL QUARTERS AND
FISCAL YEAR-TO-DATE PERIODS ENDED JANUARY 2, 2021 COMPARED
TO DECEMBER 28, 2019 (IN THOUSANDS) Fiscal
Quarter Ended Fiscal Year-to-Date Period Ended
January 2,2021 As a % ofRevenue December
28,2019 As a % ofRevenue January 2,2021 As a %
ofRevenue December 28,2019 As a % ofRevenue
Revenues
$
137,422
100.0
%
$
119,262
100.0
%
$
508,373
100.0
%
$
451,370
100.0
%
Net income
$
6,705
4.9
%
$
4,763
4.0
%
$
24,507
4.8
%
$
20,747
4.6
%
Adjustments needed to reconcile GAAP net income to non-GAAP net
income: Non-cash valuation change in contingent consideration
1,140
0.8
%
1,947
1.6
%
3,041
0.6
%
5,382
1.2
%
Tax effect on adjustments
(308
)
-0.2
%
(527
)
-0.4
%
(816
)
-0.2
%
(1,458
)
-0.3
%
Non-GAAP net income
$
7,537
5.5
%
$
6,183
5.2
%
$
26,732
5.3
%
$
24,671
5.5
%
Adjustments needed to reconcile non-GAAP net income to non-GAAP
EBITDA: Interest expense, net
205
0.1
%
300
0.3
%
1,216
0.2
%
1,254
0.3
%
Provision for income taxes
2,679
1.9
%
1,823
1.5
%
9,931
2.0
%
7,508
1.7
%
Depreciation and amortization
3,547
2.6
%
2,952
2.5
%
12,840
2.5
%
10,648
2.4
%
Non-GAAP EBITDA
$
13,968
10.2
%
$
11,258
9.4
%
$
50,719
10.0
%
$
44,081
9.8
%
CRA INTERNATIONAL, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)
January 2,2021 December 28,2019 Assets
Cash and cash equivalents
$
45,677
$
25,639
Accounts receivable and unbilled services, net
152,476
144,410
Other current assets
21,817
14,028
Total current assets
219,970
184,077
Property and equipment, net
62,878
61,295
Goodwill and intangible assets, net
94,295
94,980
Right-of-use assets
122,144
130,173
Other assets
59,223
62,718
Total assets
$
558,510
$
533,243
Liabilities and Shareholders’ Equity Accounts payable
$
19,430
$
26,069
Accrued expenses
136,376
121,301
Current portion of lease liabilities
13,557
12,847
Other current liabilities
30,768
11,193
Total current liabilities
200,131
171,410
Non-current portion of lease liabilities
139,447
146,551
Other non-current liabilities
9,913
17,531
Total liabilities
349,491
335,492
Total shareholders’ equity
209,019
197,751
Total liabilities and shareholders’ equity
$
558,510
$
533,243
CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (IN THOUSANDS) Fiscal
Year-to-Date Period Ended January 2,2021 December
28,2019 Operating activities: Net income
$
24,507
$
20,747
Adjustments to reconcile net income to net cash provided by
operating activities: Non-cash items, net
29,136
23,776
Accounts receivable and unbilled services
(5,888
)
(13,111
)
Working capital items, net
6,908
(3,580
)
Net cash provided by operating activities
54,663
27,832
Investing activities: Purchases of property and equipment
(17,094
)
(16,693
)
Net cash used in investing activities
(17,094
)
(16,693
)
Financing activities: Issuance of common stock, principally
stock options exercises
2,236
3,211
Borrowings under revolving line of credit
77,000
54,000
Repayments under revolving line of credit
(77,000
)
(54,000
)
Tax withholding payments reimbursed by shares
(862
)
(2,176
)
Cash paid on dividend equivalents
(108
)
(246
)
Cash dividends paid to shareholders
(7,395
)
(6,539
)
Repurchase of common stock
(13,371
)
(18,068
)
Net cash used in financing activities
(19,500
)
(23,818
)
Effect of foreign exchange rates on cash and cash
equivalents
1,969
290
Net increase (decrease) in cash and cash equivalents
20,038
(12,389
)
Cash and cash equivalents at beginning of period
25,639
38,028
Cash and cash equivalents at end of period
$
45,677
$
25,639
Noncash investing and financing activities: Purchases
of property and equipment not yet paid for
$
4,749
$
4,914
Purchases of property and equipment paid by a third party
$
-
$
156
Asset retirement obligations
$
155
$
428
Right-of-use assets obtained in exchange for lease obligations
$
2,640
$
57,827
Right-of-use assets related to the adoption of ASC 842
$
-
$
82,329
Lease liabilities related to the adoption of ASC 842
$
-
$
106,765
Supplemental cash flow information: Cash paid for taxes
$
6,535
$
7,590
Cash paid for interest
$
1,162
$
1,157
Cash paid for amounts included in operating lease liabilities
$
20,436
$
14,620
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210304005270/en/
Dan Mahoney Chief Financial Officer Charles River Associates
617-425-3505
Nicholas Manganaro Sharon Merrill Associates, Inc.
crai@investorrelations.com 617-542-5300
CRA (NASDAQ:CRAI)
Historical Stock Chart
From Mar 2024 to Apr 2024
CRA (NASDAQ:CRAI)
Historical Stock Chart
From Apr 2023 to Apr 2024