0001053706-23-000006.txt : 20230302 0001053706-23-000006.hdr.sgml : 20230302 20230302081034 ACCESSION NUMBER: 0001053706-23-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 16 CONFORMED PERIOD OF REPORT: 20230302 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20230302 DATE AS OF CHANGE: 20230302 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CRA INTERNATIONAL, INC. CENTRAL INDEX KEY: 0001053706 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-LEGAL SERVICES [8111] IRS NUMBER: 042372210 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-24049 FILM NUMBER: 23696491 BUSINESS ADDRESS: STREET 1: 200 CLARENDON STREET STREET 2: T-9 CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 6174253000 MAIL ADDRESS: STREET 1: 200 CLARENDON STREET STREET 2: T-9 CITY: BOSTON STATE: MA ZIP: 02116 FORMER COMPANY: FORMER CONFORMED NAME: CHARLES RIVER ASSOCIATES INC DATE OF NAME CHANGE: 19980126 8-K 1 crai-20230302.htm 8-K crai-20230302
0001053706FALSE00010537062023-03-022023-03-02

UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549 
 

FORM 8-K
 

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of report (Date of earliest event reported): March 2, 2023

 
CRA INTERNATIONAL, INC.
 (Exact name of registrant as specified in its charter)

    
Massachusetts000-2404904-2372210
(State or other jurisdiction
of incorporation)
(Commission
 file number)
(IRS employer
identification no.)
 
200 Clarendon StreetBoston,Massachusetts02116
(Address of principal executive offices)(Zip code)
 
Registrant's telephone number, including area code:(617) 425-3000

(Former Name or Former Address, if Changed Since Last Report)
 

 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
 
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, no par valueCRAINasdaq Global Select Market
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company
 
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. ☐




Item 2.02 Results of Operations and Financial Condition.
 On March 2, 2023, we issued a press release reporting our financial results for our fiscal quarter and fiscal year ended December 31, 2022. A copy of the press release is set forth as Exhibit 99.1 and is incorporated by reference herein. On March 2, 2023, we also posted on our website supplemental financial information, including prepared CFO remarks. A copy of the supplemental financial information is set forth as Exhibit 99.2 and incorporated by reference herein.
 The information contained in Item 2.02 of this report and Exhibits 99.1 and 99.2 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such a filing.
Item 7.01 Regulation FD Disclosure.
On March 2, 2023, we announced that our board of directors declared a quarterly cash dividend on our common stock of $0.36 per share to be paid on March 24, 2023 to all shareholders of record as of March 14, 2023. A copy of the press release is set forth as Exhibit 99.3 and is incorporated by reference herein.
 The information contained in Item 7.01 of this report and Exhibit 99.3 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such a filing.
Item 8.01 Other Events.
On March 2, 2023, we announced that our board of directors authorized a $20.0 million expansion to our existing share repurchase program.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Number Title
   
 
   
 
   
 
   
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURES 
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 hereunto duly authorized.
CRA INTERNATIONAL, INC.
   
   
Dated: March 2, 2023
By:/s/ DANIEL K. MAHONEY
  Daniel K. Mahoney
  Chief Financial Officer, Executive Vice President and Treasurer

3
EX-99.1 2 craiq4-20228xkexx991xpress.htm EX-99.1 Document

Exhibit 99.1
Contacts:
Dan MahoneyNicholas Manganaro
Chief Financial OfficerSharon Merrill Associates, Inc.
Charles River Associates crai@investorrelations.com
617-425-3505617-542-5300

CHARLES RIVER ASSOCIATES (CRA) REPORTS
FOURTH-QUARTER AND FULL-YEAR 2022 FINANCIAL RESULTS
Broad-based Contributions Drive Record Revenue and Profits in Fiscal 2022
Fourth Quarter Revenue Increases 7.6% Year Over Year
Board Expands Share Repurchase Authorization by $20 Million
BOSTON, March 2, 2023 – 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 31, 2022.
“CRA once again set financial highs as fiscal 2022 topped a record-setting fiscal 2021,” said Paul Maleh, CRA’s President and Chief Executive Officer. “For the quarter, we continued to see broad-based strength across our portfolio. Reported revenue increased 7.6% compared with the fourth quarter of fiscal 2021 to $145.0 million. On a constant currency basis, revenue in the fourth quarter would have been higher by $4.4 million, or an additional 3.3% of year-over-year growth. Leading the way with double-digit revenue growth were six practices: Auctions & Competitive Bidding, Finance, Financial Economics, Intellectual Property, Labor & Employment, and Risk, Investigations & Analytics. Geographically, we saw balanced contributions from our North American and international operations, which grew fourth quarter revenue year over year by 8.2% and 5.4%, respectively.”

Highlights for Fourth-Quarter Fiscal 2022
Revenue grew 7.6% year over year to $145.0 million.
Utilization was 74%, and quarter-end headcount increased 9.1% year over year.
Net income increased 0.1% year over year to $8.7 million, or 6.0% of revenue, compared with $8.7 million, or 6.4% of revenue, in the fourth quarter of fiscal 2021; non-GAAP net income increased 0.7% year over year to $8.7 million, or 6.0% of revenue, compared with $8.7 million, or 6.4% of revenue, in the fourth quarter of fiscal 2021.
Earnings per diluted share increased 4.4% year over year to $1.19; non-GAAP earnings per diluted share increased 4.4% year over year to $1.19.
Non-GAAP EBITDA decreased 4.0% to $14.6 million, or 10.1% of revenue, compared with $15.2 million, or 11.3% of revenue, in the fourth quarter of fiscal 2021.
Net income, earnings per diluted share, and non-GAAP EBITDA were negatively impacted by a non-operating foreign currency loss of approximately $1.7 million related to net losses on foreign denominated transactions and the revaluation of working capital balances.
On a constant currency basis relative to the fourth quarter of fiscal 2021, revenue, GAAP net income, and earnings per diluted share would have been higher by $4.4 million, $0.8 million, and $0.11 per diluted share, respectively. Non-GAAP net income, non-GAAP earnings per diluted share, and non-GAAP EBITDA would have been higher by $0.9 million, $0.12 per diluted share, and $1.1 million, respectively.
CRA returned $2.7 million of capital to its shareholders, consisting of $2.7 million in dividend payments.

Highlights for Full-Year Fiscal 2022
Revenue grew 4.4% year over year to $590.9 million with company-wide utilization of 75%.
GAAP net income increased 4.7% year over year to $43.6 million, or 7.4% of revenue, or $5.91 per diluted share, compared with $41.7 million, or 7.4% of revenue, or $5.45 per diluted share for the full year fiscal 2021. Non-GAAP net income increased 4.5% year over year to $43.8 million, or 7.4% of revenue, or $5.94 per diluted share, compared with $42.0 million, or 7.4% of revenue, or $5.49 per diluted share for the full year fiscal 2021.
Non-GAAP EBITDA grew 6.6% to $72.9 million, or 12.3% of revenue, compared with $68.4 million, or 12.1% of revenue, in fiscal 2021.
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Net income, earnings per diluted share, and non-GAAP EBITDA were positively impacted by a non-operating foreign currency gain of approximately $1.9 million related to net gains on foreign denominated transactions and the revaluation of working capital balances.
On a constant currency basis relative to fiscal 2021, revenue, GAAP net income, and earnings per diluted share would have been higher by $12.6 million, $1.9 million, and $0.25 per diluted share, respectively. Non-GAAP net income, non-GAAP earnings per diluted share, and non-GAAP EBITDA would have been higher by $1.9 million, $0.25 per diluted share, and $2.4 million, respectively.
For fiscal 2022, CRA returned $37.2 million of capital to its shareholders, consisting of $9.6 million of dividend payments and $27.6 million for share repurchases of approximately 320,000 shares.

Management Commentary and Financial Guidance
“CRA reported revenue for fiscal 2022 of $590.9 million, or $603.5 million on a constant currency basis after adjusting for $12.6 million of currency headwinds,” said Maleh. “Full-year, non-GAAP EBITDA was $72.9 million, or $75.3 million on a constant currency basis after adjusting for $2.4 million of currency headwinds. Non-GAAP EBITDA margin was 12.5% on a constant currency basis.”
“Our fiscal 2022 financial performance demonstrates our continued strength in the marketplace. For full-year fiscal 2023, on a constant currency basis relative to fiscal 2022, we expect revenue in the range of $615 million to $640 million, and non-GAAP EBITDA margin in the range of 10.8% to 11.5%. Our margin guidance takes into account a refinement to our approach for the coming year. Reflecting on our investor communications and financial results over the past several years, starting in the first quarter of 2023, we will be modifying our presentation of non-GAAP EBITDA to exclude non-operating foreign currency gains and losses related to foreign denominated transactions and the revaluation of working capital balances. Under this revised definition, CRA’s non-GAAP EBITDA margin on a constant currency basis was 12.2% for each of fiscal years 2021 and 2022 . While we are pleased with CRA’s strong performance in 2022 and are confident we can maintain our current momentum, we remain mindful that uncertain global macroeconomic, business, public health, and political conditions can affect our business.”
CRA does not provide reconciliations of its annual non-GAAP EBITDA margin guidance to GAAP net income margin because the Company is unable to estimate with reasonable certainty unusual gains or charges, foreign currency exchange rates, and the resulting effect of these items, and of equity awards, on CRA’s taxes without unreasonable effort. These items are uncertain, depend on various factors, and may have a material effect on CRA’s results computed in accordance with GAAP. A reconciliation between the historical GAAP and non-GAAP financial measures presented in this release is provided in the financial tables at the end of this release.
Share Repurchase Expansion and Quarterly Dividend
On March 1, 2023, CRA’s Board of Directors authorized a $20.0 million expansion of the Company’s existing share repurchase program, in addition to the $22.9 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 $0.36 per common share, payable on March 24, 2023 to shareholders of record as of March 14, 2023. 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 2022 financial results. To listen to the live call, please visit the “Investor Relations” section of CRA’s website at http://www.crai.com, or dial (877) 709-8155 or (201) 689-8881. An archived version of the webcast will be available on CRA’s website for one year.
In combination with this press release, CRA has posted prepared remarks by its CFO Dan Mahoney under “Quarterly Earnings” in the “Investor Relations” section on CRA’s website at http://www.crai.com. These remarks are offered to provide the investment community with additional background on CRA’s financial results prior to the start of the conference call.
About Charles River Associates (CRA)
Charles River Associates® is a leading global consulting firm specializing in economic, financial, and management consulting services. CRA advises clients on economic and financial matters pertaining to litigation and regulatory proceedings, and guides corporations through critical business strategy and performance-related issues. Since 1965, clients have engaged CRA for its unique combination of functional expertise and industry knowledge, and for its objective solutions to complex problems. Headquartered in
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Boston, CRA has offices throughout the world. Detailed information about Charles River Associates, a registered trade name of CRA International, Inc., is available at www.crai.com. Follow us on LinkedIn, Twitter, and Facebook.
NON-GAAP FINANCIAL MEASURES
In this release, CRA has supplemented the presentation of its financial results calculated in accordance with U.S. generally accepted accounting principles or “GAAP” with the following financial measures that are not calculated in accordance with GAAP: non‑GAAP net income, non‑GAAP net income per share and non‑GAAP EBITDA. CRA believes that the non-GAAP financial measures described in this press release are important to management and investors because these measures supplement the understanding of CRA’s ongoing operating results and financial condition. In addition, these non-GAAP measures are used by CRA in its budgeting process, and the non-GAAP adjustments are made to the performance measures for some of CRA’s performance-based compensation.
As used herein, CRA defines non-GAAP EBITDA as net income before interest expense (net), income taxes, and depreciation and amortization further adjusted for the impact of certain items that we do not consider indicative of our core operating performance, such as non-cash amounts relating to valuation changes in contingent consideration and related tax effects. Non-GAAP net income and non-GAAP net income per share also exclude non-cash amounts relating to valuation changes in contingent consideration, acquisition-related costs, and related tax effects. This release also presents certain current fiscal period financial measures on a “constant currency” basis in order to isolate the effect that foreign currency exchange rate fluctuations can have on CRA’s financial results. These constant currency measures are determined by recalculating the current fiscal period local currency financial measure using the specified corresponding prior fiscal period’s foreign exchange rates.
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 2023 on a constant currency basis relative to fiscal 2022 could differ materially from the guidance presented herein, and our actual performance and results may differ materially from the performance and results contained in or implied by the forward-looking statements made herein, due to many important factors. These factors include, but are not limited to, the possibility that the demand for our services may decline as a result of changes in general and industry specific economic conditions; the timing of engagements for our services; the effects of competitive services and pricing; our ability to attract and retain key employee or non-employee experts; the inability to integrate and utilize existing consultants and personnel; the decline or reduction in project work or activity; global economic conditions including less stable political and economic environments; the impact of epidemics or pandemics such as the COVID-19 pandemic outbreak; 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.

3


CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE FISCAL QUARTERS AND FISCAL YEAR-TO-DATE PERIODS ENDED
DECEMBER 31, 2022 COMPARED TO JANUARY 1, 2022
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Fiscal Quarter EndedFiscal Year-to-Date Period Ended
December 31,
2022
As a % of
Revenue
January 1,
2022
As a % of
Revenue
December 31,
2022
As a % of
Revenue
January 1,
2022
As a % of
Revenue
Revenues$144,976 100.0 %$134,766 100.0 %$590,901 100.0 %$565,933 100.0 %
Cost of services (exclusive of depreciation and amortization)100,678 69.4 %93,658 69.5 %410,081 69.4 %400,054 70.7 %
Selling, general and administrative expenses28,060 19.4 %25,633 19.0 %110,087 18.6 %97,372 17.2 %
Depreciation and amortization2,936 2.0 %3,111 2.3 %11,996 2.0 %12,768 2.3 %
Income from operations13,302 9.2 %12,364 9.2 %58,737 9.9 %55,739 9.8 %
Interest expense, net(484)-0.3 %(179)-0.1 %(1,826)-0.3 %(970)-0.2 %
Foreign currency gains (losses), net(1,677)-1.2 %(241)-0.2 %1,889 0.3 %(494)-0.1 %
Income before provision for income taxes11,141 7.7 %11,944 8.9 %58,800 10.0 %54,275 9.6 %
Provision for income taxes2,468 1.7 %3,277 2.4 %15,181 2.6 %12,596 2.2 %
Net income$8,673 6.0 %$8,667 6.4 %$43,619 7.4 %$41,679 7.4 %
Net income per share:
Basic$1.21 $1.17 $6.02 $5.59 
Diluted$1.19 $1.14 $5.91 $5.45 
Weighted average number of shares outstanding:
Basic7,129 7,373 7,218 7,423 
Diluted7,293 7,555 7,355 7,621 

4


CRA INTERNATIONAL, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE FISCAL QUARTERS AND FISCAL YEAR-TO-DATE PERIODS ENDED
DECEMBER 31, 2022 COMPARED TO JANUARY 1, 2022
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Fiscal Quarter EndedFiscal Year-to-Date Period Ended
December 31,
2022
As a % of
 Revenue
January 1,
2022
As a % of
 Revenue
December 31,
2022
As a % of
 Revenue
January 1,
2022
As a % of
 Revenue
Revenues$144,976 100.0 %$134,766 100.0 %$590,901 100.0 %$565,933 100.0 %
Net income$8,673 6.0 %$8,667 6.4 %$43,619 7.4 %$41,679 7.4 %
Adjustments needed to reconcile GAAP net income to non-GAAP net income:
Non-cash valuation change in contingent consideration — — %— — %— — %380 0.1 %
Acquisition-related costs69 — %— — %302 0.1 %— — %
Tax effect on adjustments(18)— %— — %(80)— %(103)— %
Non-GAAP net income$8,724 6.0 %$8,667 6.4 %$43,841 7.4 %$41,956 7.4 %
Non-GAAP net income per share:
Basic$1.22 $1.17 $6.05 $5.63 
Diluted$1.19 $1.14 $5.94 $5.49 
Weighted average number of shares outstanding:
Basic7,129 7,373 7,218 7,423 
Diluted7,293 7,555 7,355 7,621 

5


CRA INTERNATIONAL, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE FISCAL QUARTERS AND FISCAL YEAR-TO-DATE PERIODS ENDED
DECEMBER 31, 2022 COMPARED TO JANUARY 1, 2022
(IN THOUSANDS)

Fiscal Quarter EndedFiscal Year-to-Date Period Ended
December 31,
2022
As a % of
 Revenue
January 1,
2022
As a % of
 Revenue
December 31,
2022
As a % of
 Revenue
January 1,
2022
As a % of
 Revenue
Revenues$144,976 100.0 %$134,766 100.0 %$590,901 100.0 %$565,933 100.0 %
Net income$8,673 6.0 %$8,667 6.4 %$43,619 7.4 %$41,679 7.4 %
Adjustments needed to reconcile GAAP net income to non-GAAP net income:
Non-cash valuation change in contingent consideration — — %— — %— — %380 0.1 %
Acquisition-related costs69 — %— — %302 0.1 %— — %
Tax effect on adjustments(18)— %— — %(80)— %(103)— %
Non-GAAP net income$8,724 6.0 %$8,667 6.4 %$43,841 7.4 %$41,956 7.4 %
Adjustments needed to reconcile non-GAAP net income to non-GAAP EBITDA:
Interest expense, net484 0.3 %179 0.1 %1,826 0.3 %970 0.2 %
Provision for income taxes2,486 1.7 %3,277 2.4 %15,261 2.6 %12,699 2.2 %
Depreciation and amortization2,936 2.0 %3,111 2.3 %11,996 2.0 %12,768 2.3 %
Non-GAAP EBITDA$14,630 10.1 %$15,234 11.3 %$72,924 12.3 %$68,393 12.1 %

6


CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

December 31,
2022
January 1,
2022
Assets
Cash and cash equivalents$31,447 $66,130 
Accounts receivable and unbilled services, net194,987 162,057 
Other current assets22,426 21,160 
Total current assets248,860 249,347 
Property and equipment, net45,582 53,612 
Goodwill and intangible assets, net101,510 93,117 
Right-of-use assets96,725 110,475 
Other assets58,240 48,809 
Total assets$550,917 $555,360 
Liabilities and Shareholders’ Equity
Accounts payable$27,584 $23,511 
Accrued expenses155,864 156,314 
Current portion of lease liabilities15,972 14,337 
Other current liabilities17,705 18,924 
Total current liabilities217,125 213,086 
Non-current portion of lease liabilities106,008 124,464 
Other non-current liabilities16,630 11,976 
Total liabilities339,763 349,526 
Total shareholders’ equity211,154 205,834 
Total liabilities and shareholders’ equity$550,917 $555,360 

7


CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

Year Ended
December 31,
2022
January 1,
2022
Operating activities:
Net income $43,619 $41,679 
Adjustments to reconcile net income to net cash provided by operating activities, net of effect of acquired businesses:
Non-cash items, net30,490 30,044 
Accounts receivable and unbilled services(30,311)(10,452)
Working capital items, net(18,677)14,427 
Net cash provided by operating activities25,121 75,698 
Investing activities:
Purchases of property and equipment(3,813)(2,623)
Consideration paid for acquisitions, net(14,352)— 
Net cash used in investing activities(18,165)(2,623)
Financing activities:
Issuance of common stock, principally stock options exercises1,411 5,157 
Borrowings under revolving line of credit126,000 74,000 
Repayments under revolving line of credit(126,000)(74,000)
Payments for debt issuance costs(1,008)— 
Tax withholding payments reimbursed by shares(2,145)(1,528)
Cash paid for contingent consideration— (2,357)
Cash dividends paid(9,580)(8,289)
Repurchase of common stock(27,630)(44,976)
Net cash used in financing activities(38,952)(51,993)
Effect of foreign exchange rates on cash and cash equivalents(2,687)(629)
Net increase (decrease) in cash and cash equivalents(34,683)20,453 
Cash and cash equivalents at beginning of period66,130 45,677 
Cash and cash equivalents at end of period$31,447 $66,130 
Noncash investing and financing activities:
Increase (decrease) in accounts payable and accrued expenses for property and equipment$(268)$
Right-of-use assets obtained in exchange for lease obligations$2,436 $1,751 
Restricted common stock issued for contingent consideration$— $2,250 
Supplemental cash flow information:
Cash paid for taxes$15,646 $14,953 
Cash paid for interest$1,579 $727 
Cash paid for amounts included in operating lease liabilities$21,306 $20,823 
8
EX-99.2 3 craiq4-20228xkexx992xcfore.htm EX-99.2 Document

Exhibit 99.2
cralogo.jpg

CHARLES RIVER ASSOCIATES (CRA)
FOURTH QUARTER AND FISCAL YEAR 2022
EARNINGS ANNOUNCEMENT
PREPARED CFO REMARKS
CRA is providing these prepared remarks by CFO Dan Mahoney in combination with its press release. These remarks are offered to provide the investment community with additional information on CRA’s financial results prior to the start of the conference call.
As previously announced, the conference call will be held March 2, 2023 at 10:00 a.m. ET. These prepared remarks will not be read on the call.
Q4 Fiscal 2022 Summary (Quarter ended December 31, 2022)
Revenue: $145.0 million
Net income and non-GAAP net income: $8.7 million, or 6.0% of revenue
Net income per diluted share and non-GAAP net income per diluted share: $1.19
Operating margin and non-GAAP operating margin: 9.2%
Non-GAAP EBITDA: $14.6 million, or 10.1% of revenue
Effective tax rate and non-GAAP effective tax rate: 22.2%
Utilization: 74%
Consultant headcount at the end of Q4 of fiscal 2022: 939, which consists of 149 officers, 496 other senior staff and 294 junior staff
Cash and cash equivalents: $31.4 million at December 31, 2022
Revolving credit facility borrowing capacity: $195.6 million at December 31, 2022

Fiscal Year 2022 Summary (Fiscal Year ended December 31, 2022)
Revenue: $590.9 million
Net income: $43.6 million, or 7.4% of revenue; non-GAAP net income: $43.8 million, or 7.4% of revenue
Net income per diluted share: $5.91; non-GAAP net income per diluted share: $5.94
Operating margin: 9.9%; non-GAAP operating margin: 10.0%
Non-GAAP EBITDA: $72.9 million, or 12.3% of revenue
Effective tax rate and non-GAAP effective tax rate: 25.8%
Utilization: 75%

Revenue
For Q4 of fiscal 2022, revenue was $145.0 million, compared with $134.8 million for Q4 of fiscal 2021.
For the full year fiscal 2022, revenue was $590.9 million, compared with $565.9 million for the full year fiscal 2021.
1


Headcount
The following table outlines CRA’s consultant headcount at the end of the stated quarters:
Q4
2022
Q3
2022
Q2
2022
Q1
2022
Q4
2021
Officers149146145146140
Other Senior Staff496481475505477
Junior Staff294284243227244
Total939911863878861
Utilization
For Q4 of fiscal 2022, company-wide utilization was 74%, compared with 72% for Q4 fiscal 2021.
For the full year fiscal 2022, company-wide utilization was 75%, compared with 74% for the full year fiscal 2021.
Client Reimbursables
For Q4 of fiscal 2022, client reimbursables were $15.7 million, or 10.8% of revenue, compared with $15.2 million, or 11.2% of revenue, for Q4 of fiscal 2021.
For the full year fiscal 2022, client reimbursables were $63.3 million, or 10.7% of revenue, compared with $64.5 million, or 11.4% of revenue, for the full year fiscal 2021.
Contingent Liability
CRA recorded a contingent consideration obligation during Q4 of fiscal 2022 of $1.1 million. A change in the value of the contingent liability is recorded as an adjustment to cost of services (exclusive of depreciation and amortization) in the period reported.
Selling, General and Administrative (SG&A) Expenses
For Q4 of fiscal 2022, SG&A expenses were $28.1 million, or 19.4% of revenue, compared with $25.6 million, or 19.0% of revenue, for Q4 of fiscal 2021. Commissions to non-employee experts are included in SG&A expenses. These commissions represented approximately 2.6% of revenue for Q4 of fiscal 2022, compared with 2.9% in Q4 of fiscal 2021. Excluding these commissions, SG&A expenses were 16.7% of revenue for Q4 of fiscal 2022, compared with 16.1% in Q4 of fiscal 2021.
Fiscal Quarter Ended
$ in 000’sDecember 31,
2022
As a % of RevenueJanuary 1,
2022
As a % of Revenue
SG&A expenses$28,060 19.4 %$25,633 19.0 %
Less: commissions to non-employee experts3,809 2.6 %3,880 2.9 %
SG&A expenses excluding commissions$24,251 16.7 %$21,753 16.1 %
For the full year fiscal 2022, SG&A expenses were $110.1 million, or 18.6% of revenue, compared with $97.4 million, or 17.2% of revenue, for the full year fiscal 2021. Commissions to non-employee experts are included in SG&A expenses. These commissions represented approximately 3.1% of revenue for fiscal year 2022, compared with 3.0% in fiscal year 2021. Excluding these commissions, SG&A expenses were 15.5% of revenue for the full year fiscal 2022, compared with 14.2% for the full year fiscal 2021.
Fiscal Year Ended
$ in 000’sDecember 31,
2022
As a % of RevenueJanuary 1,
2022
As a % of Revenue
SG&A expenses$110,087 18.6 %$97,372 17.2 %
Less: commissions to non-employee experts18,295 3.1 %16,803 3.0 %
SG&A expenses excluding commissions$91,792 15.5 %$80,569 14.2 %
Depreciation & Amortization
For Q4 of fiscal 2022, depreciation and amortization expenses amounted to $2.9 million, or 2.0% of revenue, compared with $3.1 million, or 2.3% of revenue, for Q4 of fiscal 2021.
For the full year fiscal 2022, depreciation and amortization expenses amounted to $12.0 million, or 2.0% of revenue, compared with $12.8 million, or 2.3% of revenue, for the full year fiscal 2021.
Forgivable Loan Amortization
For Q4 of fiscal 2022, forgivable loan amortization was $9.3 million, or 6.4% of revenue, compared with $8.5 million, or 6.3% of revenue, for Q4 of fiscal 2021.
2


For the full year fiscal 2022, forgivable loan amortization was $34.9 million, or 5.9% of revenue, compared with $32.8 million, or 5.8% of revenue, for the full year fiscal 2021.
Share-Based Compensation Expense
For Q4 of fiscal 2022, share-based compensation expense was approximately $1.2 million, or 0.8% of revenue, compared with $1.3 million, or 0.9% of revenue, for Q4 of fiscal 2021.
For the full year fiscal 2022, share-based compensation expense was approximately $4.8 million, or 0.8% of revenue, compared with $4.1 million, or 0.7% of revenue, for the full year fiscal 2021.
Operating Income
For Q4 of fiscal 2022, operating income was $13.3 million, or 9.2% of revenue, compared with operating income of $12.4 million, or 9.2% of revenue, for Q4 of fiscal 2021. Non-GAAP operating income was $13.4 million, or 9.2% of revenue, for Q4 of fiscal 2022, compared with $12.4 million, or 9.2% of revenue, for Q4 of fiscal 2021.
Fiscal Quarter Ended
$ in 000’sDecember 31,
2022
As a % of
 Revenue
January 1,
2022
As a % of
 Revenue
Income from operations$13,302 9.2 %$12,364 9.2 %
Adjustments needed to reconcile GAAP income from operations to non-GAAP income from operations:
Acquisition-related costs69 — %— — %
Non-GAAP income from operations$13,371 9.2 %$12,364 9.2 %
For the full year fiscal 2022, operating income was $58.7 million, or 9.9% of revenue, compared with operating income of $55.7 million, or 9.8% of revenue, for the full year fiscal 2021. Non-GAAP operating income was $59.0 million, or 10.0% of revenue, for the full year fiscal 2022, compared with $56.1 million, or 9.9% of revenue, for the full year fiscal 2021.
Fiscal Year Ended
$ in 000’sDecember 31,
2022
As a % of
 Revenue
January 1,
2022
As a % of
 Revenue
Income from operations$58,737 9.9 %$55,739 9.8 %
Adjustments needed to reconcile GAAP income from operations to non-GAAP income from operations:
Non-cash valuation change in contingent consideration— — %380 0.1 %
Acquisition-related costs302 0.1 %— — %
Non-GAAP income from operations$59,039 10.0 %$56,119 9.9 %
Interest Income (Expense), net
For Q4 of fiscal 2022, net interest expense was $0.5 million, or 0.3% of revenue, compared with net interest expense of $0.2 million, or 0.1% of revenue, for Q4 of fiscal 2021.
For the full year fiscal 2022, net interest expense was $1.8 million, or 0.3% of revenue, compared with net interest expense of $1.0 million, or 0.2% of revenue, for the full year fiscal 2021.
Foreign Currency Gains (Losses), net
For Q4 of fiscal 2022, net foreign currency losses were $1.7 million, or 1.2% of revenue, compared with net foreign currency losses, of $0.2 million, or 0.2% of revenue, for Q4 of fiscal 2021.
For the full year fiscal 2022, net foreign currency gains were $1.9 million, or 0.3% of revenue, compared with net foreign currency losses of $0.5 million, or 0.1% of revenue, for the full year fiscal 2021.
Foreign currency gains (losses), net, is comprised of net gains and losses on foreign denominated transactions and the revaluation of working capital balances.



3


Income Taxes
The following table outlines CRA’s income tax provision recorded and the resulting effective tax rates:
GAAPNon-GAAP
Fiscal Quarter EndedFiscal Quarter Ended
$ in 000’sDecember 31,
2022
January 1,
2022
December 31,
2022
January 1,
2022
Tax Provision$2,468 $3,277 $2,486 $3,277 
Effective Tax Rate22.2 %27.4 %22.2 %27.4 %
GAAPNon-GAAP
Fiscal Year EndedFiscal Year Ended
$ in 000’sDecember 31,
2022
January 1,
2022
December 31,
2022
January 1,
2022
Tax Provision$15,181 $12,596 $15,261 $12,699 
Effective Tax Rate25.8 %23.2 %25.8 %23.2 %
Fiscal Quarter Ended
$ in 000’sDecember 31,
2022
As a % of
 Revenue
January 1,
2022
As a % of
 Revenue
Income before provision for income taxes$11,141 7.7 %$11,944 8.9 %
Adjustments needed to reconcile GAAP income before provision for income taxes to non-GAAP income before provision for income taxes
Acquisition-related costs69 — %— — %
Non-GAAP income before provision for income taxes$11,210 7.7 %$11,944 8.9 %
GAAP provision for income taxes$2,468 $3,277 
Tax effect on non-GAAP adjustments18 — 
Non-GAAP provision for income taxes$2,486 $3,277 
Fiscal Year Ended
$ in 000’sDecember 31,
2022
As a % of
 Revenue
January 1,
2022
As a % of
 Revenue
Income before provision for income taxes$58,800 10.0 %$54,275 9.6 %
Adjustments needed to reconcile GAAP income before provision for income taxes to non-GAAP income before provision for income taxes
Non-cash valuation change in contingent consideration— — %380 0.1 %
Acquisition-related costs302 0.1 %— — %
Non-GAAP income before provision for income taxes$59,102 10.0 %$54,655 9.7 %
GAAP provision for income taxes$15,181 $12,596 
Tax effect on non-GAAP adjustments80 103 
Non-GAAP provision for income taxes$15,261 $12,699 
Net Income
For Q4 of fiscal 2022, net income was $8.7 million, or 6.0% of revenue, or $1.19 per diluted share, compared with net income of $8.7 million, or 6.4% of revenue, or $1.14 per diluted share, for Q4 of fiscal 2021. Non-GAAP net income for Q4 of fiscal 2022 was $8.7 million, or 6.0% of revenue, or $1.19 per diluted share, compared with $8.7 million, or 6.4% of revenue, or $1.14 per diluted share, for Q4 of fiscal 2021.
For the full year fiscal 2022, net income was $43.6 million, or 7.4% of revenue, or $5.91 per diluted share, compared with net income of $41.7 million, or 7.4% of revenue, or $5.45 per diluted share, for the full year fiscal 2021. Non-GAAP net income for the full year fiscal 2022 was $43.8 million, or 7.4% of revenue, or $5.94 per diluted share, compared with $42.0 million, or 7.4% of revenue, or $5.49 per diluted share, for the full year fiscal 2021.
Non-GAAP EBITDA
For Q4 of fiscal 2022, non-GAAP EBITDA was $14.6 million, or 10.1% of revenue, compared with $15.2 million, or 11.3% of revenue, for Q4 of fiscal 2021.
For the full year fiscal 2022, non-GAAP EBITDA was $72.9 million, or 12.3% of revenue, compared with $68.4 million, or 12.1% of revenue, for the full year fiscal 2021.
4


Constant Currency Basis
For Q4 of fiscal 2022, revenue was $145.0 million, and net income was $8.7 million, or 6.0% of revenue, or $1.19 per diluted share. On a constant currency basis relative to Q4 of fiscal 2021, Q4 of fiscal 2022 revenue would have been higher by $4.4 million to $149.4 million; GAAP net income would have increased by $0.8 million to $9.5 million, or 6.4% of revenue; and earnings per diluted share would have increased by $0.11 to $1.30 per diluted share.
For Q4 of fiscal 2022, revenue was $145.0 million and non-GAAP net income was $8.7 million, or 6.0% of revenue, or $1.19 per diluted share. On a constant currency basis relative to Q4 of fiscal 2021, Q4 of fiscal 2022 revenue would have been higher by $4.4 million to $149.4 million, non-GAAP net income would have increased by $0.9 million to $9.6 million, or 6.4% of revenue; non-GAAP earnings per diluted share would have increased by $0.12 to $1.31 per diluted share; and non-GAAP EBITDA would have increased by $1.1 million to $15.7 million, or 10.5% of revenue.
Full year fiscal 2022, revenue was $590.9 million, and net income was $43.6 million, or 7.4% of revenue, or $5.91 per diluted share. On a constant currency basis relative to full year fiscal 2021, full year fiscal 2022 revenue would have been higher by $12.6 million to $603.5 million; GAAP net income would have increased by $1.9 million to $45.5 million, or 7.5% of revenue; and earnings per diluted share would have increased by $0.25 to $6.16 per diluted share.
Full year fiscal 2022, revenue was $590.9 million and non-GAAP net income was $43.8 million, or 7.4% of revenue, or $5.94 per diluted share. On a constant currency basis relative to full year fiscal 2021, full year fiscal 2022 revenue would have been higher by $12.6 million to $603.5 million; non-GAAP net income would have increased by $1.9 million to $45.7 million, or 7.6% of revenue; non-GAAP earnings per diluted share would have increased by $0.25 to $6.19 per diluted share; and non-GAAP EBITDA would have increased by $2.4 million to $75.3 million, or 12.5% of revenue.
A description of the process for calculating the measures presented on a constant currency basis is contained under the heading “Non-GAAP Financial Measures” below.
Key Balance Sheet Metrics
Billed and unbilled receivables at December 31, 2022 were $195.0 million, compared with $162.1 million at January 1, 2022. Current liabilities at December 31, 2022 were $217.1 million, compared with $213.1 million at January 1, 2022.
Total Days Sales Outstanding, or DSO, for Q4 of fiscal 2022 was 114 days, consisting of 82 days of billed and 32 days of unbilled. This compares with 101 days reported for Q4 of fiscal 2021, consisting of 70 days of billed and 31 days of unbilled.
Cash and Cash Flow
Cash and cash equivalents were $31.4 million at December 31, 2022, compared with $66.1 million at January 1, 2022.
Net cash provided by operating activities for Q4 of fiscal 2022 was $60.1 million, compared with net cash provided by operating activities of $61.8 million for Q4 of fiscal 2021. For the full year fiscal 2022, net cash provided by operating activities was $25.1 million, compared with $75.7 million for the full year 2021.
As of December 31, 2022, and January 1, 2022, there were no outstanding borrowings under CRA’s revolving credit facility.
Capital expenditures totaled $0.8 million for Q4 of fiscal 2022, compared with $0.9 million for Q4 of fiscal 2021. Capital expenditures totaled $3.8 million during full year fiscal 2022, compared with $2.6 million during full year fiscal 2021.
During the full year fiscal 2022, approximately 320,000 shares of common stock were repurchased for $27.6 million, compared with the full year fiscal 2021 when approximately 609,000 shares of common stock repurchased for $45.0 million, including transaction costs.
A quarterly cash dividend of $0.36 per common share, for total dividends and dividend equivalents of $2.7 million was paid in Q4 of fiscal 2022, compared with a quarterly cash dividend of $0.31 per common share, for total dividends and dividend equivalents of $2.4 million paid in Q4 of fiscal 2021. During the full year fiscal 2022, $9.6 million of dividends and dividend equivalents were paid, compared with $8.3 million paid during the full year fiscal 2021.
GAAP Condensed Consolidated Statement of Cash Flows
CRA has derived the condensed consolidated statement of cash flow data for the fourth quarters and the years ended December 31, 2022 and January 1, 2022 from its audited financial statements appearing on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on March 2, 2023. The condensed consolidated statement of cash flow data for the first, second and third quarters of fiscal years 2022 and 2021 have been derived from CRA’s unaudited financial statements appearing on Form 10-Q for each of the respective fiscal quarters, as well as the consolidated statements of cash flows appearing on Form 10-K for the fiscal years ended December 31, 2022 and January 1, 2022, and have been prepared on the same basis as CRA’s audited financial statements.
5


GAAP Condensed Consolidated Statement of Cash Flows
FY
Q4
Q3
Q2
Q1
($ in 000’s)
2022
2022
2022
2022
2022
Net cash provided by (used in) operating activities$25,121 $60,136 $43,797 $(16,974)$(61,838)
Net cash used in investing activities(18,165)(4,981)(932)(267)(11,985)
Net cash provided by (used in) financing activities(38,952)(48,212)(32,840)(10,011)52,111 
Effect of foreign exchange rates on cash and cash equivalents(2,687)411 (1,553)(829)(716)
Net increase (decrease) in cash and cash equivalents$(34,683)$7,354 $8,472 $(28,081)$(22,428)
Cash and cash equivalents at beginning of period66,130 24,093 15,621 43,702 66,130 
Cash and cash equivalents at end of period$31,447 $31,447 $24,093 $15,621 $43,702 
GAAP Condensed Consolidated Statement of Cash Flows
FY
Q4
Q3
Q2
Q1
($ in 000’s)
2021
2021
2021
2021
2021
Net cash provided by (used in) operating activities$75,698 $61,795 $50,126 $3,625 $(39,848)
Net cash used in investing activities(2,623)(893)(560)(478)(692)
Net cash provided by (used in) financing activities(51,993)(14,173)(43,428)(20,857)26,465 
Effect of foreign exchange rates on cash and cash equivalents(629)(264)(450)58 27 
Net increase (decrease) in cash and cash equivalents$20,453 $46,465 $5,688 $(17,652)$(14,048)
Cash and cash equivalents at beginning of period45,677 19,665 13,977 31,629 45,677 
Cash and cash equivalents at end of period$66,130 $66,130 $19,665 $13,977 $31,629 

Adjusted Net Cash Flows from Operations
Below are the quarterly and last twelve-month reconciliations of GAAP net cash provided by (used in) operating activities for each of the periods presented to non-GAAP adjusted net cash flows from operations. The reconciling items are forgivable loan advances and repayments for each period, which are reported as a component of GAAP net cash provided by (used in) operating activities, along with other non-recurring items.
Adjusted Net Cash Flows from Operations
FY
Q4
Q3
Q2
Q1
($ in 000’s)
2022
2022
2022
2022
2022
GAAP net cash provided by (used in) operating activities$25,121 $60,136 $43,797 $(16,974)$(61,838)
Forgivable loan advances34,984 9,517 3,313 13,354 8,800 
Forgivable loan repayments(25)— — (25)— 
Other non-recurring cash items (1)302 69 30 92 111 
Adjusted net cash flows from operations$60,382 $69,722 $47,140 $(3,553)$(52,927)
Net revenue$590,901 $144,976 $148,441 $149,102 $148,382 
GAAP net cash provided by (used in) operating activities as a percentage of net revenue4.3 %41.5 %29.5 %(11.4)%(41.7)%
Adjusted net cash flows from operations as a percentage of net revenue10.2 %48.1 %31.8 %(2.4)%(35.7)%
Adjusted Net Cash Flows from Operations
FY
Q4
Q3
Q2
Q1
($ in 000’s)
2021
2021
2021
2021
2021
GAAP net cash provided by (used in) operating activities$75,698 $61,795 $50,126 $3,625 $(39,848)
Forgivable loan advances14,528 4,893 5,105 2,380 2,150 
Forgivable loan repayments(69)(69)— — — 
Other non-recurring cash items (1)10,393 — — — 10,393 
Adjusted net cash flows from operations$100,550 $66,619 $55,231 $6,005 $(27,305)
Net revenue$565,933 $134,766 $136,412 $148,237 $146,518 
GAAP net cash provided by (used in) operating activities as a percentage of net revenue13.4 %45.9 %36.7 %2.4 %(27.2)%
Adjusted net cash flows from operations as a percentage of net revenue17.8 %49.4 %40.5 %4.1 %(18.6)%
(1) Other non-recurring cash items includes acquisition-related costs in Q1, Q2, Q3 and Q4 of fiscal 2022 and a portion of the cash paid to settle a contingent consideration obligation in Q1 of fiscal 2021.
6



NON-GAAP FINANCIAL MEASURES
In these remarks, 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 were not calculated in accordance with GAAP: non-GAAP net income, non-GAAP net income per share, non-GAAP EBITDA, non-GAAP income from operations, non-GAAP provision for income taxes, SG&A expenses excluding commissions and adjusted net cash flows from operations. CRA believes that these non-GAAP financial measures are important to management and investors because these measures supplement the understanding of CRA’s ongoing operating results, financial condition and cash flows. Non-GAAP adjusted net cash flows from operations is used by management to assess CRA’s ability to fund items such as the acquisition of talent, office expansions, debt repayment and distributions to shareholders. In addition, non-GAAP net income and non-GAAP EBITDA are used by CRA in its budgeting process, and the non-GAAP adjustments described below 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), income taxes, and depreciation and amortization further adjusted for the impact of certain items that it does not consider indicative of its core operating performance, such as non-cash amounts relating to valuation changes in contingent consideration, acquisition-related costs, and related tax effects. Non-GAAP net income, non-GAAP income from operations and non-GAAP provision for income taxes also exclude non-cash amounts relating to valuation changes in contingent consideration, acquisition-related costs, and related tax effects. The adjustments made to non-GAAP adjusted net cash flows from operations add back forgivable loan issuances, net of repayments, along with other non-recurring cash items. These remarks also present 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 these remarks. EBITDA and the financial measures identified in these remarks as “non-GAAP” are reconciled to their GAAP comparable measures either in these remarks or in the attached financial tables. 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.
7


CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE FISCAL QUARTERS AND FISCAL YEAR-TO-DATE PERIODS ENDED
DECEMBER 31, 2022 COMPARED TO JANUARY 1, 2022
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Fiscal Quarter EndedFiscal Year-to-Date Period Ended
December 31,
2022
As a % of
Revenue
January 1,
2022
As a % of
Revenue
December 31,
2022
As a % of
Revenue
January 1,
2022
As a % of
Revenue
Revenues$144,976 100.0 %$134,766 100.0 %$590,901 100.0 %$565,933 100.0 %
Cost of services (exclusive of depreciation and amortization)100,678 69.4 %93,658 69.5 %410,081 69.4 %400,054 70.7 %
Selling, general and administrative expenses28,060 19.4 %25,633 19.0 %110,087 18.6 %97,372 17.2 %
Depreciation and amortization2,936 2.0 %3,111 2.3 %11,996 2.0 %12,768 2.3 %
Income from operations13,302 9.2 %12,364 9.2 %58,737 9.9 %55,739 9.8 %
Interest expense, net(484)-0.3 %(179)-0.1 %(1,826)-0.3 %(970)-0.2 %
Foreign currency gains (losses), net(1,677)-1.2 %(241)-0.2 %1,889 0.3 %(494)-0.1 %
Income before provision for income taxes11,141 7.7 %11,944 8.9 %58,800 10.0 %54,275 9.6 %
Provision for income taxes2,468 1.7 %3,277 2.4 %15,181 2.6 %12,596 2.2 %
Net income$8,673 6.0 %$8,667 6.4 %$43,619 7.4 %$41,679 7.4 %
Net income per share:
Basic$1.21 $1.17 $6.02 $5.59 
Diluted$1.19 $1.14 $5.91 $5.45 
Weighted average number of shares outstanding:
Basic7,129 7,373 7,218 7,423 
Diluted7,293 7,555 7,355 7,621 
8


CRA INTERNATIONAL, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE FISCAL QUARTERS AND FISCAL YEAR-TO-DATE PERIODS ENDED
DECEMBER 31, 2022 COMPARED TO JANUARY 1, 2022
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Fiscal Quarter EndedFiscal Year-to-Date Period Ended
December 31,
2022
As a % of
Revenue
January 1,
2022
As a % of
Revenue
December 31,
2022
As a % of
Revenue
January 1,
2022
As a % of
Revenue
Revenues$144,976 100.0 %$134,766 100.0 %$590,901 100.0 %$565,933 100.0 %
Net income$8,673 6.0 %$8,667 6.4 %$43,619 7.4 %$41,679 7.4 %
Adjustments needed to reconcile GAAP net income to non-GAAP net income:
Non-cash valuation change in contingent consideration — — %— — %— — %380 0.1 %
Acquisition-related costs69 — %— — %302 0.1 %— — %
Tax effect on adjustments(18)— %— — %(80)— %(103)— %
Non-GAAP net income$8,724 6.0 %$8,667 6.4 %$43,841 7.4 %$41,956 7.4 %
Non-GAAP net income per share:
Basic$1.22 $1.17 $6.05 $5.63 
Diluted$1.19 $1.14 $5.94 $5.49 
Weighted average number of shares outstanding:
Basic7,129 7,373 7,218 7,423 
Diluted7,293 7,555 7,355 7,621 


9


CRA INTERNATIONAL, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FOR THE FISCAL QUARTERS AND FISCAL YEAR-TO-DATE PERIODS ENDED
DECEMBER 31, 2022 COMPARED TO JANUARY 1, 2022
(IN THOUSANDS)

Fiscal Quarter EndedFiscal Year-to-Date Period Ended
December 31,
2022
As a % of
 Revenue
January 1,
2022
As a % of
 Revenue
December 31,
2022
As a % of
 Revenue
January 1,
2022
As a % of
 Revenue
Revenues$144,976 100.0 %$134,766 100.0 %$590,901 100.0 %$565,933 100.0 %
Net income$8,673 6.0 %$8,667 6.4 %$43,619 7.4 %$41,679 7.4 %
Adjustments needed to reconcile GAAP net income to non-GAAP net income:
Non-cash valuation change in contingent consideration — — %— — %— — %380 0.1 %
Acquisition-related costs69 — %— — %302 0.1 %— — %
Tax effect on adjustments(18)— %— — %(80)— %(103)— %
Non-GAAP net income$8,724 6.0 %$8,667 6.4 %$43,841 7.4 %$41,956 7.4 %
Adjustments needed to reconcile non-GAAP net income to non-GAAP EBITDA:
Interest expense, net484 0.3 %179 0.1 %1,826 0.3 %970 0.2 %
Provision for income taxes2,486 1.7 %3,277 2.4 %15,261 2.6 %12,699 2.2 %
Depreciation and amortization2,936 2.0 %3,111 2.3 %11,996 2.0 %12,768 2.3 %
Non-GAAP EBITDA$14,630 10.1 %$15,234 11.3 %$72,924 12.3 %$68,393 12.1 %
10


CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

December 31,
2022
January 1,
2022
Assets
Cash and cash equivalents$31,447 $66,130 
Accounts receivable and unbilled services, net194,987 162,057 
Other current assets22,426 21,160 
Total current assets248,860 249,347 
Property and equipment, net45,582 53,612 
Goodwill and intangible assets, net101,510 93,117 
Right-of-use assets96,725 110,475 
Other assets58,240 48,809 
Total assets$550,917 $555,360 
Liabilities and Shareholders’ Equity
Accounts payable$27,584 $23,511 
Accrued expenses155,864 156,314 
Current portion of lease liabilities15,972 14,337 
Other current liabilities17,705 18,924 
Total current liabilities217,125 213,086 
Non-current portion of lease liabilities106,008 124,464 
Other non-current liabilities16,630 11,976 
Total liabilities339,763 349,526 
Total shareholders’ equity211,154 205,834 
Total liabilities and shareholders’ equity$550,917 $555,360 
11


CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

Year Ended
December 31,
2022
January 1,
2022
Operating activities:
Net income $43,619 $41,679 
Adjustments to reconcile net income to net cash provided by operating activities, net of effect of acquired businesses:
Non-cash items, net30,490 30,044 
Accounts receivable and unbilled services(30,311)(10,452)
Working capital items, net(18,677)14,427 
Net cash provided by operating activities25,121 75,698 
Investing activities:
Purchases of property and equipment(3,813)(2,623)
Consideration paid for acquisitions, net(14,352)— 
Net cash used in investing activities(18,165)(2,623)
Financing activities:
Issuance of common stock, principally stock options exercises1,411 5,157 
Borrowings under revolving line of credit126,000 74,000 
Repayments under revolving line of credit(126,000)(74,000)
Payments for debt issuance costs(1,008)— 
Tax withholding payments reimbursed by shares(2,145)(1,528)
Cash paid for contingent consideration— (2,357)
Cash dividends paid(9,580)(8,289)
Repurchase of common stock(27,630)(44,976)
Net cash used in financing activities(38,952)(51,993)
Effect of foreign exchange rates on cash and cash equivalents(2,687)(629)
Net increase (decrease) in cash and cash equivalents(34,683)20,453 
Cash and cash equivalents at beginning of period66,130 45,677 
Cash and cash equivalents at end of period$31,447 $66,130 
Noncash investing and financing activities:
Increase (decrease) in accounts payable and accrued expenses for property and equipment$(268)$
Right-of-use assets obtained in exchange for lease obligations$2,436 $1,751 
Restricted common stock issued for contingent consideration$— $2,250 
Supplemental cash flow information:
Cash paid for taxes$15,646 $14,953 
Cash paid for interest$1,579 $727 
Cash paid for amounts included in operating lease liabilities$21,306 $20,823 
12
EX-99.3 4 craiq4-20228xkexx993xdivid.htm EX-99.3 Document

Exhibit 99.3

Contacts:
Dan MahoneyNicholas Manganaro
Chief Financial OfficerSharon Merrill Associates, Inc.
Charles River Associatescrai@investorrelations.com
617-425-3505617-542-5300

CHARLES RIVER ASSOCIATES (CRA) DECLARES QUARTERLY CASH DIVIDEND OF $0.36 PER COMMON SHARE

BOSTON, March 2, 2023 – Charles River Associates (NASDAQ: CRAI), a worldwide leader in providing economic, financial and management consulting services, today announced that its Board of Directors has declared a quarterly cash dividend of $0.36 per common share to be paid on March 24, 2023 to shareholders of record of CRA’s common stock as of the close of business on March 14, 2023. The Company expects to continue paying quarterly dividends, the declaration, timing and amounts of which remain subject to the discretion of CRA’s Board of Directors.

About Charles River Associates (CRA)
Charles River Associates® is a leading global consulting firm specializing in economic, financial and management consulting services. CRA advises clients on economic and financial matters pertaining to litigation and regulatory proceedings, and guides corporations through critical business strategy and performance-related issues. Since 1965, clients have engaged CRA for its unique combination of functional expertise and industry knowledge, and for its objective solutions to complex problems. Headquartered in Boston, CRA has offices throughout the world. Detailed information about Charles River Associates, a registered trade name of CRA International, Inc., is available at www.crai.com. Follow us on LinkedIn, Twitter, and Facebook.

SAFE HARBOR STATEMENT
Statements in this press release concerning our expectations regarding the payment of future quarterly dividends 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. These factors include, but are not limited to, the possibility that the demand for our services may decline as a result of changes in general and industry specific economic conditions; the timing of engagements for our services; the effects of competitive services and pricing; our ability to attract and retain key employee or non-employee experts; the inability to integrate and utilize existing consultants and personnel; the decline or reduction in project work or activity; global economic conditions including less stable political and economic environments; the impact of epidemics or pandemics such as the COVID-19 pandemic outbreak; 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.

1
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Cover
Mar. 02, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Mar. 02, 2023
Entity Registrant Name CRA INTERNATIONAL, INC.
Entity Incorporation, State or Country Code MA
Entity File Number 000-24049
Entity Tax Identification Number 04-2372210
Entity Address, Address Line One 200 Clarendon Street
Entity Address, City or Town Boston,
Entity Address, State or Province MA
Entity Address, Postal Zip Code 02116
City Area Code (617)
Local Phone Number 425-3000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, no par value
Trading Symbol CRAI
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001053706
Amendment Flag false
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