CRA International, Inc.
(Exact name of registrant as specified in its charter)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

CRA INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)

	Fiscal Quarter Ended

	March 28, 2020			March 30, 2019
Revenues	$	126,158		$	105,849
Costs of services (exclusive of depreciation and amortization)		90,997			73,635
Selling, general and administrative expenses		24,123			22,743
Depreciation and amortization		2,943			2,616

Income from operations		8,095			6,855
Interest expense, net		(362	)		(11	)
Foreign currency gains (losses), net		1,422			(744	)

Income before provision for income taxes		9,155			6,100
Provision for income taxes		2,687			1,435

Net income	$	6,468		$	4,665



Net income per share:
Basic	$	0.83		$	0.58



Diluted	$	0.80		$	0.56



Weighted average number of shares outstanding:
Basic		7,805			8,015



Diluted		8,037			8,346

CRA INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

(in thousands)

CRA INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share data)

	March 28, 2020			December 28, 2019

ASSETS
Current assets:
Cash and cash equivalents	$	15,818		$	25,639
Accounts receivable, net of allowances of $4,046 at March 28, 2020 and $3,838 at December 28, 2019		104,886			107,841
Unbilled services, net of allowances of $1,422 at March 28, 2020 and $1,503 at December 28, 2019		44,377			36,569
Prepaid expenses and other current assets		12,181			7,277
Forgivable loans		14,177			6,751

Total current assets		191,439			184,077
Property and equipment, net		66,626			61,295
Goodwill		87,827			88,504
Intangible assets, net		6,133			6,476
Right-of-use assets		125,688			130,173
Deferred income taxes		10,622			10,670
Forgivable loans, net of current portion		57,868			48,390
Other assets		4,005			3,658

Total assets	$	550,208		$	533,243



LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	23,668		$	26,069
Accrued expenses		77,714			121,301
Deferred revenue and other liabilities		6,509			6,723
Current portion of lease liabilities		12,432			12,847
Current portion of deferred compensation		1,000			4,470
Revolving line of credit		70,000			—

Total current liabilities		191,323			171,410
Non-current liabilities:
Deferred compensation and other non-current liabilities		15,911			15,071
Facility-related non-current liabilities		2,060			1,956
Non-current portion of lease liabilities		144,079			146,551
Deferred income taxes		475			504

Total non-current liabilities		162,525			164,082
Commitments and contingencies (Note 10)
Shareholders' equity:
Preferred stock, no par value; 1,000,000 shares authorized; none issued and outstanding		—			—
Common stock, no par value; 25,000,000 shares authorized; 7,756,425 and 7,814,797 shares issued and outstanding at March 28, 2020 and December 28, 2019, respectively		5,871			9,265
Retained earnings		204,679			200,249
Accumulated other comprehensive loss		(14,190	)		(11,763	)

Total shareholders' equity		196,360			197,751

Total liabilities and shareholders' equity	$	550,208		$	533,243

CRA INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands)

	Fiscal Quarter Ended

	March 28, 2020			March 30, 2019
OPERATING ACTIVITIES:
Net income	$	6,468		$	4,665
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		2,943			2,616
Facility-related liabilities		35			35
Right-of-use asset amortization		2,994			2,209
Deferred income taxes		23			21
Share-based compensation expenses		655			911
Accounts receivable allowances		62			48
Unrealized foreign currency remeasurement gains, net		(398	)		—
Changes in operating assets and liabilities:
Accounts receivable		1,388			5,742
Unbilled services, net		(8,217	)		(8,666	)
Prepaid expenses and other current assets, and other assets		(5,327	)		(2,162	)
Forgivable loans		(27,139	)		(16,957	)
Incentive cash awards		1,423			1,214
Accounts payable, accrued expenses, and other liabilities		(39,121	)		(42,489	)
Lease liabilities		(1,164	)		(3,754	)

Net cash used in operating activities		(65,375	)		(56,567	)
INVESTING ACTIVITIES:
Purchase of property and equipment		(7,949	)		(774	)

Net cash used in investing activities		(7,949	)		(774	)
FINANCING ACTIVITIES:
Issuance of common stock, principally stock options exercises		151			1,526
Borrowings under revolving line of credit		70,000			39,000
Tax withholding payments reimbursed by shares		(390	)		(388	)
Cash paid on dividend equivalents		(40	)		(35	)
Cash dividends paid to shareholders		(1,796	)		(1,616	)
Repurchase of common stock		(3,810	)		(4,349	)

Net cash provided by financing activities		64,115			34,138
Effect of foreign exchange rates on cash and cash equivalents		(612	)		133

Net decrease in cash and cash equivalents		(9,821	)		(23,070	)
Cash and cash equivalents at beginning of period		25,639			38,028

Cash and cash equivalents at end of period	$	15,818		$	14,958



Noncash investing and financing activities:
Purchases of property and equipment not yet paid for	$	370		$	1,906



Asset retirement obligations	$	155		$	—



Right-of-use assets obtained in exchange for lease obligations	$	—		$	713



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	$	695		$	298



Cash paid for interest	$	245		$	59



Cash paid for amounts included in operating lease liabilities	$	5,039		$	4,627

CRA INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

FOR THE FISCAL QUARTER ENDED MARCH 28, 2020 (unaudited)

(in thousands, except share data)

	Common Stock

	Common Stock									Accumulated Other Comprehensive Loss
	Shares Issued			Amount			Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders' Equity
BALANCE AT DECEMBER 28, 2019		7,814,797		$	9,265		$	200,249		$	(11,763	)	$	197,751

Balance at December 29, 2019, as previously reported		7,814,797		$	9,265		$	200,249		$	(11,763	)	$	197,751
Cumulative effect of a change in accounting principle related to ASC 326		—			—			(203	)		—			(203	)

Balance at December 29, 2019, as adjusted		7,814,797		$	9,265		$	200,046		$	(11,763	)	$	197,548

Net income		—			—			6,468			—			6,468
Foreign currency translation adjustment		—			—			—			(2,427	)		(2,427	)
Exercise of stock options		8,200			151			—			—			151
Share-based compensation expense		—			655			—			—			655
Restricted shares vestings		23,884			—			—			—			—
Redemption of vested employee restricted shares for tax withholding		(7,843	)		(390	)		—			—			(390	)
Shares repurchased		(82,613	)		(3,810	)		—			—			(3,810	)
Accrued dividends on unvested shares		—			—			1			—			1
Cash paid on dividend equivalents		—			—			(40	)		—			(40	)
Cash dividends paid to shareholders ($0.23 per share)		—			—			(1,796	)		—			(1,796	)

BALANCE AT MARCH 28, 2020		7,756,425		$	5,871		$	204,679		$	(14,190	)	$	196,360

CRA INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

FOR THE FISCAL QUARTER ENDED MARCH 30, 2019 (unaudited)

(in thousands, except share data)

	Common Stock

	Common Stock									Accumulated Other Comprehensive Loss
	Shares Issued			Amount			Retained Earnings			Accumulated Other Comprehensive Loss			Total Shareholders' Equity
BALANCE AT DECEMBER 29, 2018		8,010,480		$	22,837		$	186,229		$	(12,594	)	$	196,472
Net income		—			—			4,665			—			4,665
Foreign currency translation adjustment		—			—			—			712			712
Exercise of stock options		64,700			1,526			—			—			1,526
Share-based compensation expense		—			911			—			—			911
Restricted shares vestings		25,484			—			—			—			—
Redemption of vested employee restricted shares for tax withholding		(8,157	)		(388	)		—			—			(388	)
Shares repurchased		(86,609	)		(4,349	)		—			—			(4,349	)
Accrued dividends on unvested shares		—			—			(8	)		—			(8	)
Cash paid on dividend equivalents		—			—			(35	)		—			(35	)
Cash dividends paid to shareholders ($0.20 per share)		—			—			(1,616	)		—			(1,616	)

BALANCE AT MARCH 30, 2019		8,005,898		$	20,537		$	189,235		$	(11,882	)	$	197,890

CRA INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

CRA International, Inc. ("CRA" or the "Company") is a worldwide leading consulting services firm that applies advanced analytic techniques and in-depth industry knowledge to complex engagements for a broad range of clients. CRA offers services in two broad areas: litigation, regulatory, and financial consulting and management consulting. CRA operates in one business segment. CRA operates its business under its registered trade name, Charles River Associates.

The unaudited condensed consolidated financial statements include the accounts of CRA International, Inc. and its wholly-owned subsidiaries (collectively the "Company"), which require consolidation after the elimination of intercompany accounts and transactions. These financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") for Quarterly Reports on Form 10-Q. Accordingly, these financial statements do not include all the information and note disclosures required by accounting principles generally accepted in the United States of America ("GAAP") for annual financial statements. In the opinion of management, these financial statements reflect all adjustments of a normal, recurring nature necessary for the fair presentation of CRA's results of operations, financial position, cash flows, and shareholders' equity for the interim periods presented in conformity with GAAP. Results of operations for the interim periods presented herein are not necessarily indicative of results of operations for a full year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 28, 2019 included in CRA's Annual Report on Form 10-K filed with the SEC on February 27, 2020 (the "2019 Form 10-K"). Certain prior year amounts have been reclassified to conform to current year presentation. These reclassifications had no effect on previously reported results of operations, financial position, or cash flows.

The preparation of financial statements in conformity with GAAP requires management to make significant estimates and judgments that affect the reported amounts of assets and liabilities, as well as the related disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of consolidated revenues and expenses during the reporting period. Estimates in these condensed consolidated financial statements include, but are not limited to, allowances for accounts receivable and unbilled services, revenue recognition on fixed price contracts, variable consideration to be included in the transaction price of revenue contracts, depreciation of property and equipment, measurement of operating lease right-of-use ("ROU") assets and liabilities, share-based compensation, valuation of the contingent consideration liability, valuation of acquired intangible assets, impairment of long-lived assets, goodwill, accrued and deferred income taxes, valuation allowances on deferred tax assets, accrued incentive compensation, and certain other accrued expenses. These items are monitored and analyzed by CRA for changes in facts and circumstances, and material changes in these estimates could occur in the future. Changes in estimates are recorded in the period in which they become known. CRA bases its estimates on historical experience and various other assumptions that CRA believes to be reasonable under the circumstances. Actual results may differ from those

estimates if CRA's assumptions based on past experience or other assumptions do not turn out to be substantially accurate.

Equity transactions consist primarily of the repurchase by CRA of its common stock under its share repurchase program and the recognition of compensation expense and issuance of common stock under CRA's 2006 Equity Incentive Plan. Under CRA's share repurchase program, the Company repurchases its common stock in open market purchases (including through any Rule 10b5-1 plan adopted by CRA) or in privately negotiated transactions in accordance with applicable insider trading and other securities laws and regulations. The purchase price is first charged against available paid in capital ("PIC"), and once PIC is exhausted, any future purchases will be charged to retained earnings. CRA's common stock has no par value. All shares repurchased have been retired.

CRA adopted Accounting Standards Codification ("ASC") Topic 842, Leases ("ASC 842"), which supersedes ASC Topic 840, Leases ("ASC 840"), on December 30, 2018, using the modified retrospective transition method. The cumulative effect of the transition adjustments was recognized as of the date of adoption.

CRA elected the package of practical expedients provided by ASC 842, which allowed CRA to forgo reassessing the following upon adoption of the new standard: (1) whether contracts contain leases for any expired or existing contracts, (2) the lease classification for any expired or existing leases, and (3) initial direct costs for any existing or expired leases. In addition, CRA elected an accounting policy to exclude from the consolidated balance sheets the ROU assets and lease liabilities related to short-term leases, which are those leases with an initial lease term of twelve months or less that do not include an option to purchase the underlying asset that CRA is reasonably certain to exercise.

As a result of adopting the new standard, CRA recognized ROU assets of $82.3 million and lease liabilities of $106.8 million on December 30, 2018. The difference between the amount of ROU assets and lease liabilities recognized was an adjustment to deferred rent. There was no change to net deferred tax assets as a result of CRA's adoption of ASC 842. The adoption of ASC 842 did not have a material impact on CRA's results of operations or cash flows, nor did it have an impact on any of CRA's existing debt covenants.

Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting

CRA adopted ASU No. 2018-07, Compensation—Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting (Topic 718) ("ASU 2018-07") on December 30, 2018. ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments in this update specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor's own operations by issuing share-based payment awards. The amendments also

clarify that Topic 718 does not apply to share-based payments used effectively to provide financing to the issuer or awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. The new guidance requires a remeasurement of nonemployee awards at fair value as of the adoption date. The adoption of ASU 2018-07 did not have a material impact on CRA's financial position, results of operations, cash flows, or disclosures.

Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments

CRA adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASC 326") on December 29, 2019. ASC 326 replaces the methodology that recognizes impairment of financial instruments when losses have been incurred with a methodology that recognizes impairment of financial instruments when losses are expected. The amendment requires entities to use a forward-looking "expected loss" model for most financial instruments, including accounts receivable, unbilled services, and loans, that is based on historical information, current information, and reasonable and supportable forecasts.

As a result of adopting the new standard, CRA recognized a cumulative increase to allowances for accounts receivable and unbilled services and a reduction to the fiscal 2020 opening balance of retained earnings of $0.2 million. Comparative periods prior to the adoption of ASC 326 and their respective disclosures have not been adjusted. The adoption of ASC 326 did not have a material impact on CRA's results of operations or cash flows on the date of transition.

CRA adopted ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ("ASU No. 2018-13") on December 29, 2019. The ASU eliminates, adds, and modifies certain disclosure requirements for fair value measurements from ASC 820. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurement. The adoption of the new standard did not have a material impact on CRA's financial position, results of operations, cash flows, or disclosures on the date of transition.

CRA adopted ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15") on December 29, 2019. ASU 2018-15 clarifies the accounting for implementation costs in a cloud computing arrangement that is a service contract and aligns the requirements for capitalizing those costs with the capitalization requirements for costs incurred to develop or obtain internal-use software. CRA adopted the ASU using the prospective transition approach, as permitted under the new guidance. The adoption of the new standard did not have a material impact on CRA's financial position, results of operations, cash flows, or disclosures on the date of transition.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 simplifies or clarifies accounting for income taxes by changing the following current guidance: accounting for year-to-date losses in interim periods, accounting for tax law changes in interim periods, determining when a deferred tax liability is recognized for foreign subsidiaries that transition to or from being accounted for as equity method investments, application of income tax guidance to franchise taxes that are partially based on income, and making an intra-period allocation in situations where there is a loss in continuing operations and income or gain from other items. ASU 2019-12 also introduces new guidance to evaluate whether a step up in the tax basis of goodwill relates to a business combination or a separate transaction and provides a policy election to not allocate consolidated income taxes when a member of a consolidated tax return is not subject to income tax.

ASU 2019-12 is effective for CRA for interim and annual periods beginning after December 15, 2020. Early adoption is permitted. CRA is in the process of determining the effects, if any, the adoption of the ASU may have on its financial position, results of operations, cash flows, or disclosures. CRA plans to adopt the amendments during the first fiscal quarter of 2021.

The following tables show CRA's financial instruments as of March 28, 2020 and December 28, 2019 that are measured and recorded in the condensed consolidated financial statements at fair value on a recurring basis (in thousands):

The fair value of CRA's money market mutual fund share holdings is $1.00 per share.

The contingent consideration liability in the table above is for estimated future contingent consideration payments related to the acquisition of C1 Consulting, LLC, an independent consulting firm, and its wholly-owned subsidiary C1 Associates (collectively, "C1"). The fair value measurement of the liability is based on significant inputs not observed in the market and thus represents a Level 3 measurement. The significant unobservable inputs used in the fair value measurement of the contingent consideration liability are CRA's measures of the estimated payouts based on internally generated revenue projections, expected volatility of the revenue projections, and discount rates. The fair value of the contingent consideration liability was determined using a Monte Carlo simulation. The fair value of the contingent consideration liability is reassessed on a quarterly basis by CRA using additional information as it becomes available, and any change in the fair value estimates are recorded in costs of services (exclusive of depreciation and amortization) on the condensed consolidated statements of operations. The contingent consideration is required to be paid prior to the end of the second quarter of fiscal 2021.

The following table summarizes the changes in the contingent consideration liability over the fiscal quarter ended March 28, 2020 and the fiscal year ended December 28, 2019 (in thousands):

The contracts CRA enters into and operates under specify whether the engagements are billed on a time-and-materials or a fixed-price basis. Time-and-materials contracts are typically used for litigation, regulatory, and financial consulting projects while fixed-price contracts are principally used for management consulting projects. In general, project costs are classified in costs of services and are based on the direct salary of CRA's employee consultants on the engagement plus all direct expenses incurred to complete the engagement, including any amounts billed to CRA by its non-employee experts.

The following tables disaggregate CRA's revenue by type of contract and geographic location (in thousands):

Revenues from CRA's consulting services are recorded at the net transaction price, which includes estimates of variable consideration for which reserves are established. Variable consideration reserves are based on actual price concessions and those expected to be extended to CRA customers as well as CRA's historical realization rates and are recorded as a component of the allowances for accounts receivable and unbilled services.

CRA's accounts receivable and unbilled services consist of receivables from a broad range of clients in a variety of industries located through the U.S. and other countries. CRA performs a credit evaluation of its clients to minimize its collectability risk. Periodically, CRA will require advance payment from certain clients. However, CRA does not require collateral or other security.

CRA adopted ASC 326 on December 29, 2019, which changed the method CRA estimated reserves related to credit risk. As a result of the adoption, CRA recognized a cumulative-effect

adjustment of $0.2 million to retained earnings and allowances for accounts receivable and unbilled services. Comparative periods and their respective disclosures prior to the adoption of ASC 326 have not been adjusted.

Under ASC 326, CRA maintains allowances for accounts receivable and unbilled services for estimated losses resulting from clients' failure to make required payments. CRA estimates these allowances based on historical charge-off rates, adjusted for days of sales outstanding and expected changes to clients' financial conditions during the anticipated collection period. CRA writes off allowances when management determines the balance is uncollectible and all efforts of collection have been exhausted. Bad debt expense, net of recoveries of previously written off allowances, is reported as a component of selling, general and administrative expenses.

Prior to adopting ASC 326 in fiscal 2020, CRA determined allowances for accounts receivable and unbilled services for specific customer accounts based on the financial condition of the customer and related facts and circumstances. Expenses associated with these allowances were reported as a component of selling, general and administrative expenses.

Adjustments to the allowances for accounts receivable and unbilled services related to reserves for variable consideration are as follows (in thousands):

Adjustments to the allowances for accounts receivable and unbilled services related to reserves for credit risk are as follows (in thousands):

Revenues also include reimbursements for costs incurred by CRA in fulfilling its performance obligations, including travel and other out-of-pocket expenses, fees for outside consultants and other

reimbursable expenses. CRA recovers substantially all of these costs. The following expenses are subject to reimbursement (in thousands):

CRA defines contract assets as assets for which it has recorded revenue because it determines that it is probable that it will earn a performance-based or contingent fee, but is not yet entitled to receive a fee, because certain events, such as completion of the measurement period or client approval, must occur. The contract assets balance was immaterial as of March 28, 2020 and December 28, 2019.

CRA defines contract liabilities as advance payments from or billings to its clients for services that have not yet been performed or earned and retainers. These liabilities are recorded within deferred revenues and are recognized as services are provided. When consideration is received, or such consideration is unconditionally due from a customer prior to transferring consulting services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after performance obligations have been satisfied and all revenue recognition criteria have been met.

The following table presents the opening and closing balances of CRA's contract liability (in thousands):

During the fiscal quarter ended March 28, 2020, CRA recognized the following revenue as a result of changes in the contract liability balance or performance obligations satisfied in previous years (in thousands):

The timing of revenue recognition, billings and cash collections results in billed receivables, unbilled services and contract liabilities on the condensed consolidated balance sheets.

Forgivable loan activity for the fiscal quarter ended March 28, 2020 and the fiscal year ended December 28, 2019 is as follows (in thousands):

	Fiscal Quarter Ended			Fiscal Year Ended

	March 28, 2020			December 28, 2019
Beginning balance	$	55,141		$	40,294
Advances		33,442			35,166
Repayments		—			(1,173	)
Reclassification from accrued expenses / to other assets		(9,713	)		(1,734	)
Amortization		(6,285	)		(17,700	)
Effects of foreign currency translation		(540	)		288

Ending balance	$	72,045		$	55,141



Current portion of forgivable loans	$	14,177		$	6,751



Non-current portion of forgivable loans	$	57,868		$	48,390

At March 28, 2020 and December 28, 2019, CRA had no other loans to current or former employees included in other assets on the consolidated balance sheet.

The principal amount of forgivable loans and accrued interest is forgiven by CRA over the term of the loans, provided that the employee or non-employee expert continues employment or affiliation with CRA and complies with certain contractual requirements. Under ASC 326, CRA maintains an allowance for doubtful accounts for amounts not expected to be collected, which is initially assessed when the employee or non-employee fails to comply with contractual requirements or ceases employment or affiliation with CRA. The allowances are determined per specific borrower and are based on their financial condition and related facts and circumstances, including consideration of collateral.

For the fiscal quarter ended March 28, 2020 and the fiscal year ended December 28, 2019, no allowances for or write-offs of these loans were recorded.

The changes in the carrying amount of goodwill during the fiscal quarter ended March 28, 2020 and the fiscal year ended December 28, 2019, are as follows (in thousands):

Intangible assets that are separable from goodwill and have determinable useful lives are valued separately and amortized over their expected useful lives. There were no impairment losses related to intangible assets during the fiscal quarter ended March 28, 2020 or during the fiscal year ended December 28, 2019.

The components of acquired identifiable intangible assets are as follows (in thousands):

As of March 28, 2020 and December 28, 2019, approximately $37.1 million and $81.2 million, respectively, of accrued bonuses for the fiscal quarter ended March 28, 2020 and the fiscal year ended December 28, 2019 were included above in "Compensation and related expenses."

CRA's effective income tax rates were 29.4% and 23.5% for the fiscal quarters ended March 28, 2020 and March 30, 2019, respectively. The effective tax rate for the first quarter of fiscal 2020 was higher than the prior year primarily due to a decrease in the tax benefit related to the accounting for stock-based compensation, partially offset by a decrease in meals and entertainment. The effective tax rate for the first quarter of fiscal 2020 was higher than the combined federal and state statutory tax rate primarily due to non-deductible items resulting from limitations on the deductibility of compensation paid to executive officers and the deductibility of meals and entertainment. The effective tax rate for the first quarter of fiscal 2019 was lower than the combined federal and state statutory tax rate primarily due to the tax benefit related to the accounting for stock-based compensation, partially offset by non-deductible items resulting from limitations on the deductibility of compensation paid to executive officers and the deductibility of meals and entertainment.

CRA has not provided for deferred income taxes or foreign withholding taxes on undistributed earnings and other basis differences that may exist from its foreign subsidiaries as of March 28, 2020, because such earnings are considered to be indefinitely reinvested. CRA does not rely on these unremitted earnings as a source of funds for its domestic business as it expects to have sufficient cash flow in the U.S. to fund its U.S. operational and strategic needs. If CRA were to repatriate its foreign earnings that are indefinitely reinvested, it would accrue substantially no additional tax expense.

CRA calculates basic and diluted earnings per common share using the two-class method. Under the two-class method, net earnings are allocated to each class of common stock and participating security as if all of the net earnings for the period had been distributed. CRA's participating securities consist of unvested share-based payment awards that contain a nonforfeitable right to receive dividends and therefore are considered to participate in undistributed earnings with common shareholders. Basic

earnings per common share excludes dilution and is calculated by dividing net earnings allocable to common shares by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net earnings allocable to common shares by the weighted-average number of common shares outstanding for the period, as adjusted for the potential dilutive effect of non-participating share-based awards. Net earnings allocable to participating securities were not material for the first quarter of fiscal 2020 or the first quarter of fiscal 2019.

The following table presents a reconciliation from net income to the net income available to common shareholders (in thousands):

The following table presents a reconciliation of basic to diluted weighted average shares of common stock outstanding (in thousands):

For the fiscal quarter ended March 28, 2020, the anti-dilutive share-based awards that were excluded from the calculation of common stock equivalents for purposes of computing diluted weighted average shares outstanding amounted to 73,647 shares. For the fiscal quarter ended March 30, 2019, the anti-dilutive share-based awards that were excluded from the calculation of common stock equivalents for purposes of computing diluted weighted average shares outstanding amounted to 20,078 shares. These share-based awards each period were anti-dilutive because their exercise price exceeded the average market price over the respective period.

CRA is party to a credit agreement that provides CRA with a $125.0 million revolving credit facility and a $15.0 million sublimit for the issuance of letters of credit. CRA may use the proceeds of the revolving credit facility to provide working capital and for other general corporate purposes. CRA may repay any borrowings under the revolving credit facility at any time, but any borrowings must be repaid no later than October 24, 2022. There were $70.0 million in borrowings outstanding under this revolving credit facility as of March 28, 2020. There were no outstanding borrowings under this facility as of December 28, 2019.

As of March 28, 2020, the amount available under this revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $4.4 million. Under the credit agreement, CRA must comply with various financial and non-financial covenants. Compliance with these financial covenants is tested on a fiscal quarterly basis. As of March 28, 2020 and December 28, 2019, CRA was in compliance with the covenants of its credit agreement.

CRA is subject to legal actions arising in the ordinary course of business. In management's opinion, based on current knowledge, CRA has adequate legal defenses and/or insurance coverage with respect to the eventuality of such actions. CRA does not believe any settlement or judgment relating to any pending legal action would materially affect its financial position or results of operations. However, the outcome of such legal actions is inherently unpredictable and subject to inherent uncertainties.

While CRA has not experienced a material adverse impact to its business, financial condition or results of operations from the COVID-19 pandemic to date, there is uncertainty about client demand for the Company's services, the worldwide economy and consequently, the financial results for the current quarter may not be indicative of the results to be expected for the full fiscal year. The timing of ongoing projects and new project originations may be delayed or otherwise disrupted due to the length and severity of current business closures and other restrictions implemented in response to COVID-19, which may impact the timing and amount of future revenues. The magnitude of any impact on CRA's business and its duration is uncertain and cannot currently be reasonably estimated at this time. CRA is not aware of any specific events or circumstances that would require an update to its estimates or adjustments to the carrying value of its assets and liabilities as of April 30, 2020, the issuance date of this Quarterly Report on Form 10-Q.

On April 30, 2020, CRA announced that its Board of Directors declared a quarterly cash dividend of $0.23 per common share, payable on June 12, 2020 to shareholders of record as of May 26, 2020.

ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Except for historical facts, the statements in this quarterly report are forward-looking statements. Forward-looking statements are merely our current predictions of future events. These statements are inherently uncertain, and actual events could differ materially from our predictions. Important factors that could cause actual events to vary from our predictions include those discussed below under the heading "Risk Factors." We assume no obligation to update our forward-looking statements to reflect new information or developments. We urge readers to review carefully the risk factors described in the other documents that we file with the Securities and Exchange Commission, or SEC. You can read these documents at www.sec.gov.

Our principal Internet address is www.crai.com. Our website provides a link to a third-party website through which our annual, quarterly, and current reports, and amendments to those reports, are available free of charge. We believe these reports are made available as soon as reasonably practicable after we file them electronically with, or furnish them to, the SEC. We do not maintain or provide any information directly to the third-party website, and we do not check its accuracy.

Our website also includes information about our corporate governance practices. The Investor Relations page of our website provides a link to a web page where you can obtain a copy of our code of business conduct and ethics applicable to our principal executive officer, principal financial officer, and principal accounting officer.

While the COVID-19 pandemic did not materially adversely affect the Company's financial results and business operations in the Company's first fiscal quarter ended March 28, 2020, the COVID-19 pandemic may pose significant risks to our business. It is too early to quantify the impact, if any, this situation will have on revenue for the remainder of our fiscal year ended January 2, 2021 or beyond, but the public health actions being undertaken to reduce the spread of the virus may create significant disruptions with respect to the demand for our services and impact our ability to conduct business activities in the ordinary course for an indefinite period. Since March 16, 2020, when we implemented our stay-at-home policy and successfully transitioned to a virtual work environment, we have been closely monitoring the COVID-19 pandemic and its impacts and potential impacts on our business. However, because developments with respect to the spread of COVID-19 and its impacts have been occurring so rapidly and because of the unprecedented nature of the pandemic, we are unable to predict the extent of any adverse financial impact of COVID-19 on our business, financial condition, results of operations and cash flows. Due to the above circumstances and as described generally in this Form 10-Q, the Company's results of operations for the three-month period ended March 28, 2020 are not necessarily indicative of the results to be expected for the full fiscal year.

As of March 28, 2020, our cash and cash equivalents, were $15.9 million, and we had access to $50.6 million of borrowing capacity under our $125.0 million revolving credit facility, which when combined with our ongoing operating cash flows, will help us manage the impacts of the COVID-19 pandemic on our business and address related liquidity needs.

Please see "Item 1A. Risk Factors" in this Quarterly Report on Form 10-Q for an additional discussion of risks and potential risks of the COVID-19 pandemic on our business, financial condition and results of operations.

Our critical accounting policies involving the more significant estimates and judgments used in the preparation of our financial statements as of March 28, 2020 remain unchanged from December 28,

2019. Please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the fiscal year ended December 28, 2019, filed with the Securities and Exchange Commission on February 27, 2020, for details on these critical accounting policies. Except as noted below, there have been no material changes to these critical accounting policies and significant estimates during the fiscal quarter ended March 28, 2020.

Please refer to the sections captioned "Recent Accounting Standards Adopted" and "Recent Accounting Standards Not Yet Adopted" included in Note 1, "Summary of Significant Accounting Policies" in Part I, Item I, "Financial Statements" of this report.

Results of Operations—For the Fiscal Quarter Ended March 28, 2020, Compared to the Fiscal Quarter Ended March 30, 2019

The following table provides operating information as a percentage of revenues for the periods indicated:

	Fiscal Quarter Ended

	March 28, 2020			March 30, 2019
Revenues		100.0	%		100.0	%
Costs of services (exclusive of depreciation and amortization)		72.1			69.6
Selling, general and administrative expenses		19.1			21.5
Depreciation and amortization		2.3			2.5

Income from operations		6.4			6.5
Interest expense, net		(0.3	)		—
Foreign currency gains (losses), net		1.1			(0.7	)

Income before provision for income taxes		7.3			5.8
Provision for income taxes		2.1			1.4

Net income		5.1	%		4.4	%

Fiscal Quarter Ended March 28, 2020, Compared to the Fiscal Quarter Ended March 30, 2019

Revenues. Revenues increased by $20.4 million, or 19.2%, to $126.2 million for the first quarter of fiscal 2020 from $105.8 million for the first quarter of fiscal 2019. The increase in net revenue was a result of an increase in gross revenues of $19.7 million as compared to the first quarter of fiscal 2019, and a decrease in write-offs and reserves of $0.7 million compared to the first quarter of fiscal 2019. Utilization decreased to 71% for the first quarter of fiscal 2020 from 75% for the first quarter of fiscal 2019, while consultant headcount grew 16.3% from 687 at the end of the first quarter of fiscal 2019 to 799 at the end of the first quarter of fiscal 2020. Included in revenues are the effect of changes in currency exchange rates resulting in a decrease to revenue of $0.4 million for the fiscal quarter ended March 28, 2020, and a decrease of $1.5 million for the fiscal quarter ended March 30, 2019.

Overall, revenues outside of the U.S. represented approximately 20% and 21% of total revenues for the first quarter of fiscal 2020 and fiscal 2019, respectively. Revenues derived from fixed-price engagements increased to 23% of total revenues for the first quarter of fiscal 2020 compared with 20% of total revenues for the first quarter of fiscal 2019. These percentages of revenue derived from fixed-price engagements depend largely on the proportion of our revenues derived from our management consulting business, which typically has a higher concentration of fixed-price service contracts.

Costs of Services (exclusive of depreciation and amortization). Costs of services (exclusive of depreciation and amortization) increased by $17.4 million, or 23.6%, to $91.0 million for the first quarter of fiscal 2020 from $73.6 million for the first quarter of fiscal 2019. The increase in costs of services was due primarily to an increase of $4.9 million in employee compensation and fringe benefit costs attributable to our increased consultant headcount, an increase in incentive and retention compensation costs of $6.3 million, an increase in forgivable loan and incentive awards amortization of $0.9 million, an increase in expense related to the net change in contingent consideration valuation of $0.6 million and an increase in other compensation of $1.3 million. Additionally, client reimbursable expenses increased by $3.6 million in the first quarter of fiscal 2020 compared to the first quarter of fiscal 2019. These increased expenses were partially offset by a decrease in stock compensation of $0.2 million. As a percentage of revenues, costs of services (exclusive of depreciation and amortization) increased to 72.1% for the first quarter of fiscal 2020 from 69.6% for the first quarter of fiscal 2019.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $1.4 million, or 6.1%, to $24.1 million for the first quarter of fiscal 2020 from $22.7 million for the first quarter of fiscal 2019. Within this category of expenses, there was a $0.2 million increase in employee compensation and fringe benefit costs and a $2.0 million increase in rent expense primarily due to additional space in our Boston and Oakland offices for the first quarter of fiscal 2020 as compared to the first quarter of fiscal 2019. Partially offsetting these increased expenses was a $0.3 million decrease in other operating expenses primarily due to a decrease in legal and other professional fees and a $0.5 million decrease in commissions to our nonemployee experts.

As a percentage of revenues, selling, general and administrative expenses decreased to 19.1% for the first quarter of fiscal 2020 from 21.5% for the first quarter of fiscal 2019. Commissions to our nonemployee experts decreased to 2.2% of revenues for the first quarter of fiscal 2020 compared to 3.2% of revenues for the first quarter of fiscal 2019.

Provision for Income Taxes. The income tax provision was $2.7 million and the effective tax rate was 29.4% for the first quarter of fiscal 2020 compared to $1.4 million and 23.5% for the first quarter of fiscal 2019. The effective tax rate for the first quarter of fiscal 2020 was higher than the prior year primarily due to a decrease in the tax benefit related to the accounting for stock-based compensation, partially offset by a decrease in meals and entertainment. The effective tax rate for the first quarter of fiscal 2020 was higher than the combined federal and state statutory tax rate primarily due to non-deductible items resulting from limitations on the deductibility of compensation paid to executive officers and the deductibility of meals and entertainment. The effective tax rate for the first quarter of fiscal 2019 was lower than the combined federal and state statutory tax rate primarily due to the tax benefit related to the accounting for stock-based compensation, partially offset by non-deductible items resulting from limitations on the deductibility of compensation paid to executive officers and the deductibility of meals and entertainment.

Net Income. Net income increased by $1.8 million to $6.5 million for the first quarter of fiscal 2020 from $4.7 million for the first quarter of fiscal 2019. The net income per diluted share was $0.80 per share for the first quarter of fiscal 2020, compared to $0.56 of net income per diluted share for the first quarter of fiscal 2019. Weighted average diluted shares outstanding decreased by approximately 309,000 shares to approximately 8,037,000 shares for the first quarter of fiscal 2020 from approximately 8,346,000 shares for the first quarter of fiscal 2019. The decrease in weighted average diluted shares outstanding was primarily due to the repurchase of shares of our common stock since the quarter period ended March 30, 2019, offset in part by the issuance or vesting of shares of restricted stock and time-vesting restricted stock units, and the exercise of stock options, since the first quarter of fiscal 2019.

We believe that our current cash, cash equivalents, cash generated from operations, and amounts available under our revolving credit facility will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months.

General. During the fiscal quarter ended March 28, 2020, cash and cash equivalents decreased by $9.8 million. We completed the period with cash and cash equivalents of $15.8 million. The principal drivers of the reduction of cash were payments of a significant portion of our fiscal 2019 performance bonuses, the funding of forgivable loans, the repurchase of shares, and capital expenditures related to the buildout of the expanded New York and Toronto office space, as well as the Oakland office space, offset by net borrowings of $70.0 million under our revolving credit facility.

During the fiscal quarter ended March 28, 2020, working capital (defined as current assets less current liabilities) decreased by $12.6 million to $0.1 million. In addition to the reduction in cash balances noted above, the reduction in working capital is due to the $70.0 million of borrowings during the quarter, a portion of the proceeds from which were used to fund forgivable loan issuances and leasehold improvements, much of which are classified as non-current assets.

Of the total cash and cash equivalents held at March 28, 2020, $7.1 million was held within the U.S. We have sufficient sources of liquidity in the U.S., including cash from operations and availability under our revolving credit facility, to fund U.S. activities for the next 12 months.

Sources and Uses of Cash. During the fiscal quarter ended March 28, 2020, net cash used in operating activities was $65.4 million. Net income was $6.5 million for the fiscal quarter ended March 28, 2020. The primary factor in cash used in operations was a decrease in the accounts payable, accrued expenses, and other liabilities of $39.1 million. Other uses of cash included an increase of $8.2 million in unbilled receivables, a $5.3 million increase in prepaid expenses and other current assets, $0.4 million unrealized foreign currency exchange gains, net, and a $1.2 million decrease in lease liabilities. The change in forgivable loans for the period of $27.1 million was primarily driven by $33.4 million of forgivable loan issuances, net of repayments, offset by $6.3 million of forgivable loan amortization. Offsetting these uses of cash was a $1.4 million decrease in accounts receivable, net, as well as a decrease in incentive cash awards expense of $1.4 million. Cash provided by operations included non-cash depreciation and amortization expense of $2.9 million, share-based compensation expenses of $0.7 million, and $3.0 million in ROU asset amortization.

During the fiscal quarter ended March 28, 2020, net cash used in investing activities was $7.9 million for capital expenditures primarily related to the buildout of the New York, Toronto, and Oakland office space.

During the fiscal quarter ended March 28, 2020, net cash provided by financing activities was $64.1 million, primarily as a result of borrowings under the revolving credit facility of $70.0 million, and $0.2 million received upon the issuance of shares of common stock related to the exercise of stock options. Offsetting these increases in cash were the tax withholding payments reimbursed by restricted shares of $0.4 million, payment of $1.8 million of cash dividends to shareholders, and $3.8 million of repurchases of common stock.

We are party to a credit agreement that provides us with a $125.0 million revolving credit facility and a $15.0 million sublimit for the issuance of letters of credit. We may use the proceeds of the revolving credit facility to provide working capital and for other general corporate purposes. Generally, we may repay any borrowings under the revolving credit facility at any time, but we must repay any outstanding borrowings no later than October 24, 2022. There was $70.0 million in outstanding borrowings under this revolving credit facility as of March 28, 2020.

The amount available under this revolving credit facility is reduced by certain letters of credit outstanding, which amounted to $4.4 million as of March 28, 2020. Borrowings under the revolving credit facility bear interest at a rate per annum, at our election, of either (i) the adjusted base rate, as defined in the credit agreement, plus an applicable margin, which varies between 0.25% and 1.25% depending on our total leverage ratio as determined under the credit agreement, or (ii) the adjusted eurocurrency rate, as defined in the credit agreement, plus an applicable margin, which varies between 1.25% and 2.25% depending on our total leverage ratio. We are required to pay a fee on the unused portion of the revolving credit facility at a rate per annum that varies between 0.20% and 0.35% depending on our total leverage ratio. Borrowings under the revolving credit facility are secured by 100% of the stock of certain of our U.S. subsidiaries and 65% of the stock of certain of our foreign subsidiaries, which represent approximately $32.9 million in net assets as of March 28, 2020.

Under the credit agreement, we must comply with various financial and non-financial covenants. Compliance with these financial covenants is tested on a fiscal quarterly basis. Any indebtedness outstanding under the revolving credit facility may become immediately due and payable upon the occurrence of stated events of default, including our failure to pay principal, interest or fees or a violation of any financial covenant. The financial covenants require us to maintain an adjusted consolidated EBITDA to consolidated interest expense ratio of more than 2.5:1.0 and to comply with a consolidated debt to adjusted consolidated EBITDA ratio of not more than 3.0:1.0. The non-financial covenant restrictions of the credit agreement include, but are not limited to, our ability to incur additional indebtedness, engage in acquisitions or dispositions, and enter into business combinations.

In order to attract and retain highly skilled professionals, we may issue forgivable loans or term loans to employees and non-employee experts. A portion of these loans is collateralized by key person life insurance. The forgivable loans have terms that are generally between two and eight years. The principal amount of forgivable loans and accrued interest is forgiven by us over the term of the loans, so long as the employee or non-employee expert continues employment or affiliation with us and complies with certain contractual requirements. The expense associated with the forgiveness of the principal amount of the loans is recorded as compensation expense over the service period, which is consistent with the term of the loans.

We have entered into compensation arrangements for the payment of incentive performance awards to certain of our employees and non-employee experts if specific performance targets are met. The amounts of the awards to be paid under these compensation arrangements could fluctuate depending on future performance through the respective measurement periods. Increases in estimated awards are expensed prospectively over the remaining service period. Decreases in estimated awards are recorded in the period incurred. We believe that we will have sufficient funds to satisfy any obligations related to the incentive performance awards. We expect to fund these payments, if any, from existing cash resources, cash generated from operations, or borrowings on our revolving credit facility.

As part of our business, we regularly evaluate opportunities to acquire other consulting firms, practices or groups or other businesses. In recent years, we have typically paid for acquisitions with cash, or a combination of cash and our common stock, and we may continue to do so in the future. To pay for an acquisition, we may use cash on hand, cash generated from our operations, borrowings under our revolving credit facility, or we may pursue other forms of financing. Our ability to secure short-term and long-term debt or equity financing in the future will depend on several factors,

including our future profitability, the levels of our debt and equity, restrictions under our revolving credit facility, and the overall credit and equity market environments.

In February 2020, our Board of Directors authorized an expansion to our existing share repurchase program, authorizing the purchase of an additional $20.0 million of our common stock. We may repurchase shares under this program in open market purchases (including through any Rule 10b5-1 plan adopted by us) or in privately negotiated transactions in accordance with applicable insider trading and other securities laws and regulations. During the fiscal quarter ended March 28, 2020, we repurchased and retired 82,613 shares, under our share repurchase program at an average price per share of $46.15. During the fiscal quarter ended March 30, 2019, we repurchased and retired 86,609 shares, under our share repurchase program at an average price per share of $50.25. As of March 28, 2020, we had approximately $19.7 million available for future repurchases under our share repurchase program. We plan to finance future repurchases with available cash, cash from future operations and funds from our revolving credit facility.

We anticipate paying regular quarterly dividends each year. These dividends are anticipated to be funded through cash flow from operations, available cash on hand, and/or borrowings under our revolving credit facility. Although we anticipate paying regular quarterly dividends on our common stock for the foreseeable future, the declaration of any future dividends is subject to the discretion of our Board of Directors. During the fiscal quarters ended March 28, 2020 and March 30, 2019, we paid dividends and dividend equivalents of $1.8 million and $1.7 million, respectively, to our shareholders.

To date, inflation has not had a material impact on our financial results. There can be no assurance, however, that inflation will not adversely affect our financial results in the future.

We anticipate that our future capital and liquidity needs will principally consist of funds required for:

The hiring of individuals to replenish and expand our employee base is an essential part of our business operations and has historically been funded principally from operations. Many of the other above activities are discretionary in nature. For example, capital expenditures can be deferred, acquisitions can be forgone, and share repurchase programs and regular dividends can be suspended. As such, our operating model provides flexibility with respect to the deployment of cash flow from operations. Given this flexibility, we believe that our cash flows from operations, supplemented by cash on hand and borrowings under our revolving credit facility (as necessary), will provide adequate cash to fund our long-term cash needs from normal operations for at least the next twelve months.

Our conclusion that we will be able to fund our cash requirements by using existing capital resources and cash generated from operations does not take into account the impact of any future acquisition transactions or any unexpected significant changes in the number of employees or other expenditures that are currently not contemplated. The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, if economic conditions change from those currently prevailing or from those now anticipated (including in connection with the COVID-19 pandemic), or if other unexpected circumstances arise that have a material effect on the cash flow or profitability of our business. Any of these events or circumstances, including any new business opportunities or the length and severity of the COVID-19 pandemic, could involve or result in significant additional funding needs in excess of the identified currently available sources and could require us to raise additional debt or equity funding to meet those needs on terms that may be less favorable compared to our current sources of capital. Our ability to raise additional capital over the next 12 months, if necessary, is subject to a variety of factors that we cannot predict with certainty, including:

Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this Quarterly Report on Form 10-Q, as well as a description of material risks we face, are set forth below under the heading "Risk Factors" and included in Part I—Item 1A "Risk Factors" of the 2019 Form 10-K. If any of these risks, or any risks not presently known to us or that we currently believe are not significant, develops into an actual event, then our business, financial condition, and results of operations could be adversely affected.

For information regarding our exposure to certain market risks see "Item 7A. Quantitative and Qualitative Disclosures about Market Risk," in the 2019 Form 10-K. Additionally, please see "ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations: COVID-19 Assessment" in this Quarterly Report on Form 10-Q for an additional discussion on the COVID-19 pandemic and the potential impact it may have on our business, financial condition and results of operations.

Under the supervision and with the participation of our management, including our President and Chief Executive Officer and our Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. This is done in order to ensure that information we are required to disclose in the reports that are filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Based upon that evaluation, our President and Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of March 28, 2020, due to the material weaknesses in internal control over financial reporting related to the inadequate design or execution of internal controls over: 1) our incentive-based compensation liabilities, as it relates to our internal controls over the review of the completeness and accuracy of key inputs into the computation of these liabilities; 2) certain aspects of accounting for revenue and related accounts; and 3) the completeness of certain accounts payable and expense accruals described in Item 9A of the 2019 Form 10-K.

Notwithstanding these material weaknesses, management has concluded that the condensed consolidated financial statements included in this quarterly report on Form 10-Q present fairly, in all material aspects, our financial position at the end of, and the results of operations and cash flows for, the periods presented in conformity with accounting principles generally accepted in the United States.

Under the supervision and with the participation of our management, including our President and Chief Executive Officer and Chief Financial Officer, we evaluated whether there were any changes in our internal control over financial reporting during the first quarter of fiscal 2020, including any changes related to COVID-19 and the transition to our remote working environment. Except for the ongoing remediation of the material weaknesses in internal controls over financial reporting noted above pursuant to the plan described in Item 9A of the 2019 Form 10-K, there were no changes in our internal control over financial reporting identified in connection with the above evaluation that occurred during the first quarter of fiscal 2020, that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

We are committed to remediating the control deficiencies that gave rise to the material weaknesses described above. Management is responsible for implementing changes and improvements to our internal control over financial reporting and for remediating the control deficiencies that gave rise to these material weaknesses. During fiscal 2020, we are enhancing our system of internal controls over financial reporting by implementing the plan of remediation described in Item 9A of the 2019 Form 10-K.

The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to various inherent limitations, including judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time. Because of these limitations, there can be no assurance that any system of disclosure controls and procedures or internal control over financial reporting will be successful in preventing all errors or

fraud or in making all material information known in a timely manner to the appropriate levels of management.

There are many risks and uncertainties that can affect our future business, financial performance or results of operations. In addition to the other information set forth in this report, please review and consider the information regarding certain factors that could materially affect our business, financial condition or future results set forth under Part I, Item 1A "Risk Factors" in our 2019 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2020. Except as noted below, there have been no material changes to these risk factors during the quarter ended March 28, 2020.

The COVID-19 pandemic and resulting adverse economic conditions could have a material adverse impact on our business, financial condition and results of operations.

In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic, and the United States government-imposed travel restrictions on travel between the United States, Europe and other countries. In addition, the states and countries in which our offices are located have implemented stay-at-home orders requiring everyone to stay-at-home, except to obtain or provide essential services. Many businesses, including those of our clients, have responded with their own work-from-home policies and/or indefinite closures.

We intend to continue to provide our services to our clients for the duration of these orders and closures. However, the timing of projects may be delayed or otherwise disrupted due to the length and severity of the current closures and any other restrictions or limitations implemented in the future. The COVID-19 virus poses the risk that we or our employees, our non-employee experts, governmental agencies, clients, and parties otherwise engaged in the delivery of our services may be prevented from conducting business activities in the ordinary course for an indefinite period. Extended shutdowns or other restrictions could also adversely limit our business operations or increase our costs.

The spread of COVID-19, which has caused a broad impact globally, may materially affect us economically. While the potential economic impact brought by the duration of COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and value of our common stock.

The global pandemic of COVID-19 continues to evolve rapidly. The ultimate impact of COVID-19 or a similar health epidemic or pandemic is highly uncertain and subject to change. We do not yet know the full extent of potential delays or impacts on our business or the global economy. As a result, the COVID-19 pandemic may affect our operating and financial results in a manner that is not presently known to us.

(c) The following table provides information about our repurchases of shares of our common stock during the fiscal quarter ended March 28, 2020. During that period, we did not act in concert with any affiliate or any other person to acquire any of our common stock and, accordingly, we do not believe that purchases by any such affiliate or other person (if any) are reportable in the following table. For purposes of this table, we have divided the fiscal quarter into three periods of four weeks, four weeks, and five weeks, respectively, to coincide with our reporting periods during the first quarter of fiscal 2020.

(1): During the four weeks ended February 22, 2020 we accepted 3,658 shares of our common stock as a tax withholding from certain of our employees, in connection with the vesting of shares of restricted stock that occurred during the indicated period, pursuant to the terms of our 2006 equity incentive plan, at the average price of $53.39. During the five weeks ended March 28, 2020 we accepted 4,185 shares of our common stock as a tax withholding from certain of our employees, in connection with the vesting of shares of restricted stock and restricted stock units that occurred during the indicated period, pursuant to the terms of our 2006 equity incentive plan, at the average price per share of $46.52.
(2): On February 7, 2020, our Board of Directors authorized an expansion to our existing share repurchase program of an additional $20.0 million of outstanding shares of our common stock. We may repurchase shares under this program in open market purchases (including through any Rule 10b5-1 plan adopted by us) or in privately negotiated transactions in accordance with applicable insider trading and other securities laws and regulations. During the five weeks ended March 28, 2020, we repurchased and retired 82,613 shares under this program at an average price per share of $46.15. Approximately $19.7 million was available for future repurchases under this program as of March 28, 2020.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 28, 2020
or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Massachusetts		04-2372210
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
200 Clarendon Street, Boston, MA		02116-5092
(Address of principal executive offices)		(Zip Code)

Title of Each Class		Trading Symbol		Name of Each Exchange on Which Registered

Common Stock, no par value		CRAI		Nasdaq Global Select Market


	Large accelerated filer o		Accelerated filer ý		Non-accelerated filer o		Smaller reporting company o Emerging growth company o

Class		Outstanding at April 24, 2020

Common Stock, no par value per share		7,789,227 shares


PART I. FINANCIAL INFORMATION
ITEM 1.	Financial Statements	1
	Condensed Consolidated Statements of Operations (unaudited)—Fiscal Quarters Ended March 28, 2020 and March 30, 2019	1
	Condensed Consolidated Statements of Comprehensive Income (unaudited)—Fiscal Quarters Ended March 28, 2020 and March 30, 2019	2
	Condensed Consolidated Balance Sheets (unaudited)—March 28, 2020 and December 28, 2019	3
	Condensed Consolidated Statements of Cash Flows (unaudited)—Fiscal Quarters Ended March 28, 2020 and March 30, 2019	4
	Condensed Consolidated Statements of Shareholders' Equity (unaudited)—Fiscal Quarters Ended March 28, 2020 and March 30, 2019	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	26
ITEM 4.	Controls and Procedures	27
PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	28
ITEM 1A.	Risk Factors	28
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
ITEM 3.	Defaults Upon Senior Securities	29
ITEM 4.	Mine Safety Disclosures	29
ITEM 5.	Other Information	29
ITEM 6.	Exhibits	30
Signatures		31

	March 28, 2020

	Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3
Assets:
Money market mutual funds	$	150	$	—	$	—

Total Assets	$	150	$	—	$	—



Liabilities:
Contingent consideration liability	$	—	$	—	$	12,009

Total Liabilities	$	—	$	—	$	12,009

	Fiscal Quarter Ended

Type of Contract	March 28, 2020		March 30, 2019
Consulting services revenues
Fixed Price	$	28,988	$	21,386
Time-and-materials		97,170		84,463

Total	$	126,158	$	105,849

	Fiscal Quarter Ended

Geographic Breakdown	March 28, 2020		March 30, 2019
Consulting services revenues
United States	$	100,740	$	83,529
United Kingdom		19,066		18,507
Other		6,352		3,813

Total	$	126,158	$	105,849

	Fiscal Quarter Ended

	March 28, 2020		March 30, 2019
Additions to reserves for variable consideration	$	1,414	$	1,443

	Fiscal Quarter Ended

	March 28, 2020		March 30, 2019
Reimbursable expenses	$	16,430	$	12,835

	Fiscal Quarter Ended

	March 28, 2020
Amounts included in contract liabilities at the beginning of the period	$	2,906
Performance obligations satisfied in previous periods	$	3,257


Balance at December 28, 2019
Goodwill	$	164,921
Accumulated goodwill impairment		(76,417	)

Goodwill, net at December 28, 2019		88,504
Foreign currency translation adjustment and other(1)		(677	)

Balance at March 28, 2020
Goodwill		159,720
Accumulated goodwill impairment		(71,893	)

Goodwill, net at March 28, 2020	$	87,827

	March 28, 2020			December 28, 2019

Non-competition agreements	$	324		$	324
Customer relationships		12,120			12,120

Total cost		12,444			12,444
Accumulated amortization		(6,311	)		(5,968	)

Total intangible assets, net	$	6,133		$	6,476

	March 28, 2020		December 28, 2019

Compensation and related expenses	$	63,462	$	99,993
Income taxes payable		1,879		430
Commissions due to senior consultants		339		9,961
Other professional fees		2,230		2,077
Direct project accruals		3,820		3,201
Accrued leasehold improvements		2,189		2,166
Other		3,795		3,473

Total	$	77,714	$	121,301


	CRA INTERNATIONAL, INC.
Date: April 30, 2020	By:	/s/ PAUL A. MALEH Paul A. Maleh President and Chief Executive Officer
Date: April 30, 2020	By:	/s/ DANIEL K. MAHONEY Daniel K. Mahoney Chief Financial Officer, Executive Vice President and Treasurer
Date: April 30, 2020	By	/s/ DOUGLAS C. MILLER Douglas C. Miller Vice President and Chief Accounting Officer

	Fiscal Quarter Ended

	March 28, 2020		March 30, 2019
Net income, as reported	$	6,468	$	4,665
Less: net income attributable to participating shares		26		16

Net income available to common shareholders	$	6,442	$	4,649



Basic weighted average shares outstanding	7,805	8,015
Dilutive stock options and restricted stock units	232	331

Diluted weighted average shares outstanding	8,037	8,346

Period		(b) Average Price Paid per Share(1)(2)			(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs(2)

December 29, 2019 to January 25, 2020	—		—	—	$	23,512,496
January 26, 2020 to February 22, 2020	3,658	$	53.39	—	$	23,512,496
February 23, 2020 to March 28, 2020	86,798	$	46.17	82,613	$	19,699,613

		Description

3.1		Amended and Restated Articles of Organization, as amended by the Articles of Amendment to our Articles of Organization filed on May 6, 2005 (incorporated by reference to Exhibit 3.1 to our annual report on Form 10-K filed on February 27, 2020).

3.2		Amended and Restated By-Laws, as amended (incorporated by reference to Exhibit 3.2 to our current report on Form 8-K filed on January 31, 2011).

10.1	#	Offer Letter between CRA International, Inc. and Daniel Mahoney effective March 17, 2020 (incorporated by reference to Exhibit 10.1 to our current report on Form 8-K filed on March 20, 2020).

10.2	#	Severance Agreement between CRA International, Inc. and Paul A. Maleh dated March 17, 2020. (incorporated by reference to Exhibit 10.2 to our current report on Form 8-K filed on March 20, 2020).

10.3	#	Severance Agreement between CRA International, Inc. and Chad M. Holmes dated March 17, 2020. (incorporated by reference to Exhibit 10.3 to our current report on Form 8-K filed on March 20, 2020).

10.4	#	Severance Agreement between CRA International, Inc. and Jonathan Yellin dated March 17, 2020. (incorporated by reference to Exhibit 10.4 to our current report on Form 8-K filed on March 20, 2020).

10.5	#	Severance Agreement between CRA International, Inc. and Daniel Mahoney dated March 17, 2020. (incorporated by reference to Exhibit 10.5 to our current report on Form 8-K filed on March 20, 2020).

31.1		Certification of Principal Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Principal Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101		The following financial statements from CRA International, Inc.'s Quarterly Report on Form 10-Q for the fiscal quarter ended March 28, 2020, formatted in XBRL (eXtensible Business Reporting Language), as follows: (i) Condensed Consolidated Statements of Operations (unaudited) for the fiscal quarters ended March 28, 2020 and March 30, 2019, (ii) Condensed Consolidated Statements of Comprehensive Income (unaudited) for the fiscal quarters ended March 28, 2020 and March 30, 2019, (iii) Condensed Consolidated Balance Sheets (unaudited) as at March 28, 2020 and December 30, 2019, (iv) Condensed Consolidated Statements of Cash Flows (unaudited) for the fiscal quarters ended March 28, 2020 and March 30, 2019, (v) Condensed Consolidated Statement of Shareholders' Equity (unaudited) for the fiscal quarters ended March 28, 2020 and March 30, 2019, and (vi) Notes to Condensed Consolidated Financial Statements (Unaudited).