Second Quarter 2024 Revenue of $171.4 Million
Up 5.9% Year Over Year
Company Raises Both Revenue and Profit Guidance
for Full-Year Fiscal 2024
Charles River Associates (NASDAQ: CRAI), a worldwide leader in
providing economic, financial and management consulting services,
today announced financial results for the fiscal second quarter
ended June 29, 2024.
“CRA continued its run of strong performance into the second
quarter as revenue increased 5.9% year over year to $171.4
million,” said Paul Maleh, CRA’s President and Chief Executive
Officer. “Broad-based contributions drove our results, with five
practices growing revenue year over year—Antitrust &
Competition Economics, Financial Economics, Intellectual Property,
Labor & Employment, and Life Sciences. From this position of
strength, we took steps during the quarter to further enhance the
performance of our service portfolio as reflected in our increased
financial guidance.”
Highlights for Second Quarter Fiscal 2024
- Revenue grew 5.9% year over year to $171.4 million.
- Utilization was 74%, and quarter-end headcount decreased 0.3%
year over year.
- Restructuring expense associated with portfolio optimization
actions of $8.2 million, consisting of cash severance of $2.5
million and non-cash charges of $5.7 million.
- Net income decreased 31.2% year over year to $6.5 million, or
3.8% of revenue, compared with $9.5 million, or 5.9% of revenue, in
the second quarter of fiscal 2023; non-GAAP net income increased
26.4% year over year to $12.7 million, or 7.4% of revenue, compared
with $10.0 million, or 6.2% of revenue, in the second quarter of
fiscal 2023.
- Earnings per diluted share decreased 29.9% year over year to
$0.94 from $1.34 in the second quarter of fiscal 2023; non-GAAP
earnings per diluted share increased 28.9% year over year to $1.83
from $1.42 in the second quarter of fiscal 2023.
- Non-GAAP EBITDA increased 18.5% to $22.3 million, or 13.0% of
revenue, compared with $18.8 million, or 11.6% of revenue, in the
second quarter of fiscal 2023.
- On a constant currency basis relative to the second quarter of
fiscal 2023, revenue, GAAP net income, and earnings per diluted
share would have remained unchanged. Non-GAAP net income would have
been lower by $0.1 million, while earnings per diluted share and
non-GAAP EBITDA would have been lower by $0.01 per diluted share
and $0.1 million, respectively.
- CRA returned $27.0 million of capital to its shareholders,
consisting of $2.9 million of dividend payments and $24.1 million
for share repurchases of approximately 140,000 shares.
Management Commentary and Financial Guidance
“Through the first two quarters of fiscal 2024, on a constant
currency basis relative to fiscal 2023, CRA generated total revenue
of $342.2 million, the highest first-half revenue in CRA’s history,
and non-GAAP EBITDA of $44.5 million, achieving a margin of 13.0%,”
continued Maleh. “Reflecting the strong start to the year, we are
increasing our revenue and profit guidance. For full-year fiscal
2024, on a constant currency basis relative to fiscal 2023, we
expect revenue in the range of $670.0 million to $685.0 million and
non-GAAP EBITDA margin in the range of 12.2% to 13.0%. This new
guidance compares with a prior revenue range of $645.0 million to
$675.0 million and a prior non-GAAP EBITDA margin range of 10.8% to
11.5%. While we are pleased with CRA’s performance through the
first half of the year, we remain mindful that uncertainties around
global economic, business, health, and geopolitical 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 and without
unreasonable effort: (A) unusual gains or charges, foreign currency
exchange rates, and the resulting effect of these items on CRA’s
taxes and (B) the impact of equity awards on CRA’s taxes. 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 August 1, 2024, CRA announced a quarterly cash dividend of
$0.42 per common share, payable on September 13, 2024 to
shareholders of record as of August 27, 2024. 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 second-quarter 2024 financial results. To listen to the
live call, please visit the “Investor Relations” section of CRA’s
website at http://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 “Quarterly Earnings” in the
“Investor Relations” section on CRA’s website at
http://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, Instagram, 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 earnings per diluted 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.
As used herein, CRA defines non-GAAP EBITDA as net income before
interest expense (net), provision for 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, acquisition-related
costs, foreign currency losses, net, restructuring costs and
related tax effects. Non-GAAP net income and non-GAAP earnings per
diluted share also exclude non-cash amounts relating to valuation
changes in contingent consideration, acquisition-related costs,
foreign currency losses, net, restructuring costs 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. On a constant
currency basis for the fiscal year-to-date period ended June 29,
2024 relative to the fiscal year-to-date period ended July 1, 2023,
revenue and non-GAAP EBITDA would have been lower by $1.0 million
and $0.2 million, respectively.
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 expanded 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 2024 on a constant currency basis
relative to fiscal 2023 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; 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
JUNE 29, 2024 COMPARED TO JULY
1, 2023
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
Fiscal Quarter Ended Fiscal Year-to-Date Period
Ended June 29,2024 As a % ofRevenue July
1,2023 As a % ofRevenue June 29,2024 As a %
ofRevenue July 1,2023 As a % ofRevenue Revenues
$
171,442
100.0
%
$
161,965
100.0
%
$
343,230
100.0
%
$
314,810
100.0
%
Costs of services (exclusive of depreciation and amortization)
125,327
73.1
%
113,333
70.0
%
244,206
71.1
%
221,170
70.3
%
Selling, general and administrative expenses
32,016
18.7
%
29,846
18.4
%
62,514
18.2
%
58,218
18.5
%
Depreciation and amortization
2,811
1.6
%
2,872
1.8
%
5,603
1.6
%
5,815
1.8
%
Income from operations
11,288
6.6
%
15,914
9.8
%
30,907
9.0
%
29,607
9.4
%
Interest expense, net
(1,483
)
-0.9
%
(1,616
)
-1.0
%
(1,948
)
-0.6
%
(2,187
)
-0.7
%
Foreign currency losses, net
(191
)
-0.1
%
(686
)
-0.4
%
(333
)
-0.1
%
(1,214
)
-0.4
%
Income before provision for income taxes
9,614
5.6
%
13,612
8.4
%
28,626
8.3
%
26,206
8.3
%
Provision for income taxes
3,076
1.8
%
4,104
2.5
%
8,397
2.4
%
7,780
2.5
%
Net income
$
6,538
3.8
%
$
9,508
5.9
%
$
20,229
5.9
%
$
18,426
5.9
%
Net income per share: Basic
$
0.96
$
1.36
$
2.93
$
2.61
Diluted
$
0.94
$
1.34
$
2.90
$
2.56
Weighted average number of shares outstanding: Basic
6,834
6,983
6,880
7,051
Diluted
6,911
7,080
6,961
7,166
CRA INTERNATIONAL,
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
FOR THE FISCAL QUARTERS AND
FISCAL YEAR-TO-DATE PERIODS ENDED
JUNE 29, 2024 COMPARED TO JULY
1, 2023
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
Fiscal Quarter Ended Fiscal Year-to-Date Period
Ended June 29,2024 As a % ofRevenue July
1,2023 As a % ofRevenue June 29,2024 As a %
ofRevenue July 1,2023 As a % ofRevenue Revenues
$
171,442
100.0
%
$
161,965
100.0
%
$
343,230
100.0
%
$
314,810
100.0
%
Net income
$
6,538
3.8
%
$
9,508
5.9
%
$
20,229
5.9
%
$
18,426
5.9
%
Adjustments needed to reconcile GAAP net income to non-GAAP net
income: Non-cash valuation change in contingent consideration
-
-
%
16
-
%
-
-
%
36
-
%
Restructuring (1)
8,176
4.8
%
-
-
%
8,176
2.4
%
-
-
%
Acquisition-related costs
-
-
%
-
-
%
-
-
%
22
-
%
Foreign currency losses, net
190
0.1
%
686
0.4
%
332
0.1
%
1,214
0.4
%
Tax effect on adjustments
(2,205
)
-1.3
%
(165
)
-0.1
%
(2,239
)
-0.7
%
(304
)
-0.1
%
Non-GAAP net income
$
12,699
7.4
%
$
10,045
6.2
%
$
26,498
7.7
%
$
19,394
6.2
%
Non-GAAP net income per share: Basic
$
1.85
$
1.44
$
3.84
$
2.75
Diluted
$
1.83
$
1.42
$
3.80
$
2.70
Weighted average number of shares outstanding: Basic
6,834
6,983
6,880
7,051
Diluted
6,911
7,080
6,961
7,166
(1) Includes cash severance of $2.5M and non-cash charges of
$5.7M associated with portfolio optimization actions.
CRA INTERNATIONAL,
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
FOR THE FISCAL QUARTERS AND
FISCAL YEAR-TO-DATE PERIODS ENDED
JUNE 29, 2024 COMPARED TO JULY
1, 2023
(IN THOUSANDS)
Fiscal Quarter Ended Fiscal Year-to-Date Period
Ended June 29,2024 As a % ofRevenue July
1,2023 As a % ofRevenue June 29,2024 As a %
ofRevenue July 1,2023 As a % ofRevenue Revenues
$
171,442
100.0
%
$
161,965
100.0
%
$
343,230
100.0
%
$
314,810
100.0
%
Net income
$
6,538
3.8
%
$
9,508
5.9
%
$
20,229
5.9
%
$
18,426
5.9
%
Adjustments needed to reconcile GAAP net income to non-GAAP net
income: Non-cash valuation change in contingent consideration
-
-
%
16
-
%
-
-
%
36
-
%
Restructuring (1)
8,176
4.8
%
-
-
%
8,176
2.4
%
-
-
%
Acquisition-related costs
-
-
%
-
-
%
-
-
%
22
-
%
Foreign currency losses, net
190
0.1
%
686
0.4
%
332
0.1
%
1,214
0.4
%
Tax effect on adjustments
(2,205
)
-1.3
%
(165
)
-0.1
%
(2,239
)
-0.7
%
(304
)
-0.1
%
Non-GAAP net income
$
12,699
7.4
%
$
10,045
6.2
%
$
26,498
7.7
%
$
19,394
6.2
%
Adjustments needed to reconcile non-GAAP net income to non-GAAP
EBITDA: Interest expense, net
1,483
0.9
%
1,616
1.0
%
1,948
0.6
%
2,187
0.7
%
Provision for income taxes
5,281
3.1
%
4,269
2.6
%
10,636
3.1
%
8,084
2.6
%
Depreciation and amortization
2,811
1.6
%
2,872
1.8
%
5,603
1.6
%
5,815
1.8
%
Non-GAAP EBITDA
$
22,274
13.0
%
$
18,802
11.6
%
$
44,685
13.0
%
$
35,480
11.3
%
(1) Includes cash severance of $2.5M and non-cash charges of
$5.7M associated with portfolio optimization actions.
CRA
INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (IN THOUSANDS) June 29,2024
December 30,2023 Assets Cash and cash
equivalents
$
24,649
$
45,586
Accounts receivable and unbilled services, net
216,570
199,556
Other current assets
29,961
20,334
Total current assets
271,180
265,476
Property and equipment, net
36,817
38,176
Goodwill and intangible assets, net
101,836
101,185
Right-of-use assets
81,338
86,887
Other assets
54,841
61,487
Total assets
$
546,012
$
553,211
Liabilities and Shareholders’ Equity Accounts payable
$
22,997
$
28,701
Accrued expenses
113,252
171,040
Current portion of lease liabilities
16,966
16,475
Revolving line of credit
87,000
-
Other current liabilities
12,456
19,871
Total current liabilities
252,671
236,087
Non-current portion of lease liabilities
84,492
92,280
Other non-current liabilities
17,100
12,743
Total liabilities
354,263
341,110
Total shareholders’ equity
191,749
212,101
Total liabilities and shareholders’ equity
$
546,012
$
553,211
CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS (IN THOUSANDS) Fiscal
Year-to-Date Period Ended June 29,2024 July
1,2023 Operating activities: Net income
$
20,229
$
18,426
Adjustments to reconcile net income to net cash used in operating
activities: Non-cash items, net
15,769
15,200
Accounts receivable and unbilled services
(18,476
)
(16,415
)
Working capital items, net
(78,795
)
(82,190
)
Net cash used in operating activities
(61,273
)
(64,979
)
Investing activities: Purchases of property and equipment,
net
(3,046
)
(1,282
)
Consideration paid for acquisition, net
(1,500
)
(570
)
Net cash used in investing activities
(4,546
)
(1,852
)
Financing activities: Borrowings under revolving line of
credit
93,000
105,000
Repayments under revolving line of credit
(6,000
)
(25,000
)
Tax withholding payments reimbursed by shares
(1,977
)
(2,009
)
Cash dividends paid
(5,976
)
(5,230
)
Repurchase of common stock
(33,348
)
(23,577
)
Net cash provided by financing activities
45,699
49,184
Effect of foreign exchange rates on cash and cash
equivalents
(817
)
471
Net decrease in cash and cash equivalents
(20,937
)
(17,176
)
Cash and cash equivalents at beginning of period
45,586
31,447
Cash and cash equivalents at end of period
$
24,649
$
14,271
Noncash investing and financing activities: Increase
in accounts payable and accrued expenses for property and equipment
$
553
$
376
Excise tax on share repurchases
$
(300
)
$
(200
)
Right-of-use assets obtained in exchange for lease obligations
$
2,329
$
190
Supplemental cash flow information: Cash paid for taxes
$
12,681
$
6,218
Cash paid for interest
$
1,533
$
2,178
Cash paid for amounts included in operating lease liabilities
$
11,163
$
11,077
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240801315702/en/
Dan Mahoney Chief Financial Officer Charles River Associates
617-425-3505 Nicholas Manganaro Sharon Merrill Advisors
crai@investorrelations.com 617-542-5300
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