Broad-based Contributions Drive Record Revenue
in Fiscal 2023
Fourth Quarter Revenue Increases 11.5% Year
Over Year
Board Expands Share Repurchase Authorization by
$35 million
Charles River Associates (NASDAQ: CRAI), a worldwide leader in
providing economic, financial and management consulting services,
today announced financial results for the fourth quarter and fiscal
year ended December 30, 2023.
“CRA once again set a new financial high as fiscal 2023 revenue
topped a record-setting fiscal 2022,” said Paul Maleh, CRA’s
President and Chief Executive Officer. “For the fourth quarter, we
continued to see strength across our portfolio of services.
Reported revenue increased 11.5% compared with the fourth quarter
of fiscal 2022 to $161.6 million. Leading the way were three
practices—Antitrust & Competition Economics, Energy, and
Forensic Services—that each generated double-digit revenue growth,
while our Labor & Employment and Life Sciences practices
enjoyed year-over-year growth. Geographically, our North American
operations led the way by expanding 17.4% relative to the fourth
quarter of fiscal 2022.”
Highlights for Fourth Quarter Fiscal 2023
- Revenue grew 11.5% year over year to $161.6 million.
- Utilization was 73% and quarter-end headcount increased 6.9%
year over year.
- Net income increased 32.1% year over year to $11.5 million, or
7.1% of revenue, compared with $8.7 million, or 6.0% of revenue, in
the fourth quarter of fiscal 2022; non-GAAP net income increased
14.8% year over year to $11.5 million, or 7.1% of revenue, compared
with $10.1 million, or 6.9% of revenue, in the fourth quarter of
fiscal 2022.
- Earnings per diluted share increased 36.1% year over year to
$1.62 from $1.19 in the fourth quarter of fiscal 2022; non-GAAP
earnings per diluted share increased 19.0% year over year to $1.63
from $1.37 in the fourth quarter of fiscal 2022.
- Non-GAAP EBITDA increased 16.7% to $19.0 million, or 11.8% of
revenue, compared with $16.3 million, or 11.2% of revenue, in the
fourth quarter of fiscal 2022.
- On a constant currency basis relative to the fourth quarter of
fiscal 2022, revenue, GAAP net income, and earnings per diluted
share would have been lower by $1.3 million, $0.1 million, and
$0.01 per diluted share, respectively. Non-GAAP net income would
have remained unchanged. Non-GAAP 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 $10.8 million of capital to its shareholders,
consisting of $3.0 million of dividend payments and $7.8 million
for share repurchases of approximately 84,000 shares.
Highlights for Full-Year Fiscal 2023
- Revenue grew 5.6% year over year to $624.0 million with
company-wide utilization of 70%.
- GAAP net income decreased 11.8% year over year to $38.5
million, or 6.2% of revenue, or $5.39 per diluted share, compared
with $43.6 million, or 7.4% of revenue, or $5.91 per diluted share
for the full year fiscal 2022. Non-GAAP net income decreased 7.9%
year over year to $39.0 million, or 6.2% of revenue, or $5.46 per
diluted share, compared with $42.3 million, or 7.2% of revenue, or
$5.74 per diluted share for the full year fiscal 2022.
- Non-GAAP EBITDA declined 3.9% to $68.3 million, or 10.9% of
revenue, compared with $71.0 million, or 12.0% of revenue, in
fiscal 2022.
- On a constant currency basis relative to fiscal 2022, revenue,
GAAP net income, and earnings per diluted share would have been
higher by $0.1 million, $0.5 million, and $0.08 per diluted share,
respectively. Non-GAAP net income, non-GAAP earnings per diluted
share, and non-GAAP EBITDA would have been higher by $0.5 million,
$0.08 per diluted share, and $0.6 million, respectively.
- For fiscal 2023, CRA returned $42.2 million of capital to its
shareholders, consisting of $10.8 million in dividend payments and
$31.4 million in share repurchases of approximately 296,000
shares.
Management Commentary and Financial Guidance
“CRA reported revenue for fiscal 2023 of $624.0 million, or
$624.1 million on a constant currency basis after adjusting for
$0.1 million of currency headwinds,” said Maleh. “Full-year,
non-GAAP EBITDA was $68.3 million, or $68.9 million on a constant
currency basis after adjusting for $0.6 million of currency
headwinds. Non-GAAP EBITDA margin was 11.0% on a constant currency
basis.
“Our fiscal 2023 financial performance demonstrates our
continued strength in the marketplace. For full-year fiscal 2024,
on a constant currency basis relative to fiscal 2023, we expect
revenue in the range of $645 million to $675 million, and non-GAAP
EBITDA margin in the range of 10.8% to 11.5%. While we are pleased
with CRA’s strong performance in 2023, we remain mindful that
uncertain global macroeconomic, business, 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.
Share Repurchase Expansion and Quarterly Dividend
On February 29, 2024, CRA’s Board of Directors authorized a
$35.0 million expansion of the Company’s existing share repurchase
program, in addition to the $11.4 million currently remaining under
the program. CRA may repurchase shares of its common stock in the
open market or in privately negotiated transactions in accordance
with applicable insider trading and other securities laws and
regulations. The timing, amount and extent to which CRA repurchases
shares will depend upon market conditions and other factors it may
consider in its sole discretion.
The Board of Directors also authorized a quarterly cash dividend
of $0.42 per common share, payable on March 22, 2024 to
shareholders of record as of March 12, 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 fourth-quarter and fiscal-year 2023 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 “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 (gains) losses, net 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 (gains) losses, net 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 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 DECEMBER 30,
2023 COMPARED TO DECEMBER 31, 2022 (IN THOUSANDS, EXCEPT PER
SHARE DATA) Fiscal Quarter Ended Fiscal
Year-to-Date Period Ended December 30,2023 As a %
ofRevenue December 31,2022 As a % ofRevenue
December 30,2023 As a % ofRevenue December
31,2022 As a % ofRevenue Revenues
$
161,613
100.0
%
$
144,976
100.0
%
$
623,976
100.0
%
$
590,901
100.0
%
Cost of services (exclusive of depreciation and amortization)
112,688
69.7
%
100,678
69.4
%
439,751
70.5
%
410,081
69.4
%
Selling, general and administrative expenses
28,979
17.9
%
28,060
19.4
%
115,116
18.4
%
110,087
18.6
%
Depreciation and amortization
2,801
1.7
%
2,936
2.0
%
11,564
1.9
%
11,996
2.0
%
Income from operations
17,145
10.6
%
13,302
9.2
%
57,545
9.2
%
58,737
9.9
%
Interest expense, net
(600
)
-0.4
%
(484
)
-0.3
%
(3,812
)
-0.6
%
(1,826
)
-0.3
%
Foreign currency gains (losses), net
(987
)
-0.6
%
(1,677
)
-1.2
%
(1,445
)
-0.2
%
1,889
0.3
%
Income before provision for income taxes
15,558
9.6
%
11,141
7.7
%
52,288
8.4
%
58,800
10.0
%
Provision for income taxes
4,099
2.5
%
2,468
1.7
%
13,807
2.2
%
15,181
2.6
%
Net income
$
11,459
7.1
%
$
8,673
6.0
%
$
38,481
6.2
%
$
43,619
7.4
%
Net income per share: Basic
$
1.65
$
1.21
$
5.48
$
6.02
Diluted
$
1.62
$
1.19
$
5.39
$
5.91
Weighted average number of shares outstanding: Basic
6,954
7,129
7,008
7,218
Diluted
7,057
7,293
7,118
7,355
CRA INTERNATIONAL, INC. RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES FOR THE FISCAL QUARTERS AND FISCAL
YEAR-TO-DATE PERIODS ENDED DECEMBER 30, 2023 COMPARED TO
DECEMBER 31, 2022 (IN THOUSANDS, EXCEPT PER SHARE DATA)
Fiscal Quarter Ended Fiscal Year-to-Date Period
Ended December 30,2023 As a % ofRevenue
December 31,2022 As a % ofRevenue December
30,2023 As a % ofRevenue December 31,2022 As a
% ofRevenue Revenues
$
161,613
100.0
%
$
144,976
100.0
%
$
623,976
100.0
%
$
590,901
100.0
%
Net income
$
11,459
7.1
%
$
8,673
6.0
%
$
38,481
6.2
%
$
43,619
7.4
%
Adjustments needed to reconcile GAAP net income to non-GAAP net
income: Non-cash valuation change in contingent consideration
(918
)
-0.6
%
-
-
%
(866
)
-0.1
%
-
-
%
Acquisition-related costs
-
-
%
69
-
%
22
-
%
302
0.1
%
Foreign currency (gains) losses, net
987
0.6
%
1,677
1.2
%
1,445
0.2
%
(1,889
)
-0.3
%
Tax effect on adjustments
13
-
%
(369
)
-0.3
%
(125
)
-
%
279
-
%
Non-GAAP net income
$
11,541
7.1
%
$
10,050
6.9
%
$
38,957
6.2
%
$
42,311
7.2
%
Non-GAAP net income per share: Basic
$
1.66
$
1.41
$
5.54
$
5.84
Diluted
$
1.63
$
1.37
$
5.46
$
5.74
Weighted average number of shares outstanding: Basic
6,954
7,129
7,008
7,218
Diluted
7,057
7,293
7,118
7,355
CRA INTERNATIONAL, INC. RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES FOR THE FISCAL QUARTERS AND FISCAL
YEAR-TO-DATE PERIODS ENDED DECEMBER 30, 2023 COMPARED TO
DECEMBER 31, 2022 (IN THOUSANDS) Fiscal
Quarter Ended Fiscal Year-to-Date Period Ended
December 30,2023 As a % ofRevenue December
31,2022 As a % ofRevenue December 30,2023 As a
% ofRevenue December 31,2022 As a % ofRevenue
Revenues
$
161,613
100.0
%
$
144,976
100.0
%
$
623,976
100.0
%
$
590,901
100.0
%
Net income
$
11,459
7.1
%
$
8,673
6.0
%
$
38,481
6.2
%
$
43,619
7.4
%
Adjustments needed to reconcile GAAP net income to non-GAAP net
income: Non-cash valuation change in contingent consideration
(918
)
-0.6
%
-
-
%
(866
)
-0.1
%
-
-
%
Acquisition-related costs
-
-
%
69
-
%
22
-
%
302
0.1
%
Foreign currency (gains) losses, net
987
0.6
%
1,677
1.2
%
1,445
0.2
%
(1,889
)
-0.3
%
Tax effect on adjustments
13
-
%
(369
)
-0.3
%
(125
)
-
%
279
-
%
Non-GAAP net income
$
11,541
7.1
%
$
10,050
6.9
%
$
38,957
6.2
%
$
42,311
7.2
%
Adjustments needed to reconcile non-GAAP net income to non-GAAP
EBITDA: Interest expense, net
600
0.4
%
484
0.3
%
3,812
0.6
%
1,826
0.3
%
Provision for income taxes
4,086
2.5
%
2,837
2.0
%
13,932
2.2
%
14,902
2.5
%
Depreciation and amortization
2,801
1.7
%
2,936
2.0
%
11,564
1.9
%
11,996
2.0
%
Non-GAAP EBITDA
$
19,028
11.8
%
$
16,307
11.2
%
$
68,265
10.9
%
$
71,035
12.0
%
CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS (IN THOUSANDS) December
30,2023 December 31,2022 Assets Cash and
cash equivalents
$
45,586
$
31,447
Accounts receivable and unbilled services, net
199,556
194,987
Other current assets
20,334
22,426
Total current assets
265,476
248,860
Property and equipment, net
38,176
45,582
Goodwill and intangible assets, net
101,185
101,510
Right-of-use assets
86,887
96,725
Other assets
61,487
58,240
Total assets
$
553,211
$
550,917
Liabilities and Shareholders’ Equity Accounts payable
$
28,701
$
27,584
Accrued expenses
171,040
155,864
Current portion of lease liabilities
16,475
15,972
Other current liabilities
19,871
17,705
Total current liabilities
236,087
217,125
Non-current portion of lease liabilities
92,280
106,008
Other non-current liabilities
12,743
16,630
Total liabilities
341,110
339,763
Total shareholders’ equity
212,101
211,154
Total liabilities and shareholders’ equity
$
553,211
$
550,917
CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (IN THOUSANDS) Year
Ended December 30,2023 December 31,2022
Operating activities: Net income
$
38,481
$
43,619
Adjustments to reconcile net income to net cash provided by
operating activities, net of effect of acquired businesses:
Non-cash items, net
26,197
30,490
Accounts receivable and unbilled services
(2,860
)
(30,311
)
Working capital items, net
(1,746
)
(18,677
)
Net cash provided by operating activities
60,072
25,121
Investing activities: Purchases of property and equipment
(2,366
)
(3,813
)
Consideration paid for acquisitions, net
(577
)
(14,352
)
Net cash used in investing activities
(2,943
)
(18,165
)
Financing activities: Issuance of common stock, principally
stock options exercises
805
1,411
Borrowings under revolving line of credit
105,000
126,000
Repayments under revolving line of credit
(105,000
)
(126,000
)
Payments for debt issuance costs
-
(1,008
)
Tax withholding payments reimbursed by shares
(3,063
)
(2,145
)
Cash dividends paid
(10,807
)
(9,580
)
Repurchase of common stock
(31,417
)
(27,630
)
Net cash used in financing activities
(44,482
)
(38,952
)
Effect of foreign exchange rates on cash and cash
equivalents
1,492
(2,687
)
Net increase (decrease) in cash and cash equivalents
14,139
(34,683
)
Cash and cash equivalents at beginning of period
31,447
66,130
Cash and cash equivalents at end of period
$
45,586
$
31,447
Noncash investing and financing activities: Increase
(decrease) in accounts payable and accrued expenses for property
and equipment
$
(91
)
$
(268
)
Excise tax on share repurchases
$
(247
)
$
-
Right-of-use assets obtained in exchange for lease obligations
$
3,198
$
2,436
Supplemental cash flow information: Cash paid for taxes
$
14,011
$
15,646
Cash paid for interest
$
3,539
$
1,579
Cash paid for amounts included in operating lease liabilities
$
22,272
$
21,306
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240229154069/en/
Daniel 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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