8-K

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): August 1, 2019

CRA INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Massachusetts	000-24049	04-2372210
(State or other jurisdiction	(Commission	(IRS employer
of incorporation)	file number)	identification no.)

200 Clarendon Street, Boston, Massachusetts	02116
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (617) 425-3000

Not Applicable

(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:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-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 Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, no par value	CRAI	Nasdaq 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 o

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

Item 2.02Results of Operations and Financial Condition.

On August 1, 2019, we issued a press release reporting our financial results for our fiscal quarter ended June 29, 2019. A copy of the press release is set forth as Exhibit 99.1 and is incorporated by reference herein. On August 1, 2019, 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 7.01Regulation FD Disclosure.

On August 1, 2019, we announced that our board of directors declared a quarterly cash dividend on our common stock of $0.20 per share to be paid on September 13, 2019 to all shareholders of record as of August 27, 2019. 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 9.01Financial Statements and Exhibits.

(d)  Exhibits

Number	Title
99.1	August 1, 2019 earnings press release
99.2	Supplemental financial information (prepared CFO remarks)
99.3	August 1, 2019 dividend press release

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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: August 1, 2019	By:	/s/ Chad M. Holmes
		Chad M. Holmes
		Chief Financial Officer, Executive Vice President and Treasurer

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EX-99.1

Exhibit 99.1

Contacts:
Chad Holmes	Jamie Bernard, IRC
Chief Financial Officer	Senior Associate
Charles River Associates	Sharon Merrill Associates, Inc.
312-377-2322	617-542-5300

CHARLES RIVER ASSOCIATES (CRA) REPORTS
FINANCIAL RESULTS FOR THE SECOND QUARTER OF 2019

CRA Reports Highest Q2 Revenue in Its History;

Strength Across Services and Geographies Continues to Drive Growth

BOSTON, August 1, 2019 — Charles River Associates (NASDAQ: CRAI), a worldwide leader in providing economic, financial and management consulting services, today announced financial results for the fiscal second quarter ended June 29, 2019.

Key Second-Quarter Fiscal 2019 Highlights

·Revenue grew 4.8% year over year to $110.6 million, which represents the highest second-quarter revenue in CRA’s history. On a constant currency basis relative to the second quarter of fiscal 2018 (“constant currency basis”), revenue would have been higher by $1.2 million, or $111.8 million, resulting in year-over-year revenue growth of 5.9%.

·Utilization was 77%, as quarter-end headcount increased 5.7% year over year.

·Net income was $5.6 million, or 5.0% of revenue, compared with $6.8 million, or 6.5% of revenue, in the second quarter of fiscal 2018; non-GAAP net income was $6.1 million, or 5.5% of revenue, compared with $5.8 million, or 5.5% of revenue, in the second quarter of fiscal 2018. On a constant currency basis, GAAP and non-GAAP net income would have been lower by $0.1 million.

·Earnings per diluted share were $0.68, compared with $0.79 in the second quarter of fiscal 2018; non-GAAP earnings per diluted share were $0.73, compared with $0.67 in the second quarter of fiscal 2018. On a constant currency basis, GAAP and non-GAAP earnings per diluted share would have been lower by $0.01 per diluted share.

·Non-GAAP EBITDA was $11.7 million, or 10.6% of revenue, compared with $10.7 million, or 10.2% of revenue, in the second quarter of fiscal 2018. On a constant currency basis, non-GAAP EBITDA would have been lower by $0.1 million.

·CRA returned $8.8 million of capital to its shareholders, consisting of $1.6 million of dividend payments and $7.2 million for share repurchases of approximately 177,000 shares.

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Management Commentary

“I am pleased to report a continuation of CRA’s strong performance with the highest second quarter revenue in our company history,” said Paul Maleh, CRA’s President and Chief Executive Officer. “Notably, our growth was entirely organic. Exceptional performances in the quarter were delivered by our Auctions & Competitive Bidding, Financial Economics, Forensic Services, Intellectual Property, and Life Sciences practices. The Antitrust & Competition Economics practice also reported a strong quarter. From a geographic perspective, North America was up 2% and Europe was up 16% year-over-year.”

Outlook and Financial Guidance

“We are reaffirming our guidance for full year fiscal 2019 of revenue in the range of $430 million to $445 million, and non-GAAP EBITDA margin in the range of 9.2% to 10.2%, both on a constant currency basis relative to fiscal 2018. While we are pleased with our operational performance in the first half of fiscal 2019, we remain mindful that uncertainties around global economic and political conditions can affect our business,” Maleh concluded.

CRA does not provide reconciliations of its annual non-GAAP EBITDA margin guidance to GAAP net income margin because CRA is unable to estimate with reasonable certainty the revaluation of contingent consideration liabilities, unusual gains or charges, foreign currency exchange rates, and the resulting effect of these items, and of equity awards, on CRA’s taxes without unreasonable effort. These items are uncertain, depend on various factors, and may have a material effect on CRA’s results computed in accordance with GAAP. A reconciliation between the historical GAAP and non-GAAP financial measures presented in this release is provided in the financial tables at the end of this release.

Quarterly Dividend

On August 1, 2019, CRA’s Board of Directors declared a quarterly cash dividend of $0.20 per common share, payable on September 13, 2019 to shareholders of record as of August 27, 2019. CRA expects to continue paying quarterly dividends, the declaration, timing and amounts of which remain subject to the discretion of CRA’s Board of Directors.

Conference Call Information and Prepared CFO Remarks

CRA will host a conference call today at 10:00 a.m. ET to discuss its second-quarter 2019 financial results. To listen to the live call, please visit the “Investor Relations” section of CRA’s website at

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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 Chad Holmes under “Conference Call Materials” in the “Investor Relations” section on CRA’s website at http://www.crai.com. These remarks are offered to provide the investment community with additional background on CRA’s financial results prior to the start of the conference call.

About Charles River Associates (CRA)

Charles River Associates® is a leading global consulting firm specializing in economic, financial, and management consulting services. CRA advises clients on economic and financial matters pertaining to litigation and regulatory proceedings, and guides corporations through critical business strategy and performance-related issues. Since 1965, clients have engaged CRA for its unique combination of functional expertise and industry knowledge, and for its objective solutions to complex problems. Headquartered in Boston, CRA has offices throughout the world. Detailed information about Charles River Associates, a registered trade name of CRA International, Inc., is available at www.crai.com. Follow us on LinkedIn, 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 financial measures that were not calculated in accordance with GAAP. 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 described below are made to the performance measures for some of CRA’s performance-based compensation.

The adjustments made to the financial measures identified in this release as “non-GAAP” are as follows: for all periods presented, the adjustments exclude non-cash amounts relating to valuation changes in contingent consideration and related tax effects; for the year to date period ended June 30, 2018, the adjustments also exclude net costs related to lease recapture 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

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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. Finally, this release also presents the non-GAAP financial metric EBITDA.

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, the continuation of or building on any trend or momentum, our expectations regarding the payment of any future quarterly dividends, 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 2019 on a constant currency basis relative to fiscal 2018 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 other forward-looking statements made herein, due to many important factors. These factors include, but are not limited to, the possibility that the demand for our services may decline as a result of changes in general and industry specific economic conditions; the timing of engagements for our services; the effects of competitive services and pricing; our ability to attract and retain key employee or non-employee experts; the inability to integrate and utilize existing consultants and personnel; the decline or reduction in project work or activity; global economic conditions including less stable political and economic environments; foreign currency exchange rate fluctuations; unanticipated expenses and liabilities; risks inherent in international operations;

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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.

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CRA INTERNATIONAL, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE FISCAL QUARTERS AND FISCAL YEAR-TO-DATE PERIODS ENDED

JUNE 29, 2019 COMPARED TO JUNE 30, 2018

(IN THOUSANDS, EXCEPT PER SHARE DATA)

	Fiscal Quarter Ended									Fiscal Year-to-Date Period Ended
	June 29, 2019			As a % of Revenue		June 30, 2018		As a % of Revenue		June 29, 2019			As a % of Revenue		June 30, 2018			As a % of Revenue
Revenues	$	110,573		100.0	%	$	105,538	100.0	%	$	216,422		100.0	%	$	205,014		100.0	%
Cost of services (exclusive of depreciation and amortization)	75,972			68.7	%	69,705		66.0	%	149,607			69.1	%	139,096			67.8	%
Selling, general and administrative expenses	23,737			21.5	%	23,739		22.5	%	46,480			21.5	%	45,389			22.1	%
Depreciation and amortization	2,553			2.3	%	2,433		2.3	%	5,169			2.4	%	4,664			2.3	%
Income from operations	8,311			7.5	%	9,661		9.2	%	15,166			7.0	%	15,865			7.7	%
Interest and other income (expense), net	(364		)	-0.3	%	76		0.1	%	(1,119		)	-0.5	%	(202		)	-0.1	%
Income before provision for income taxes	7,947			7.2	%	9,737		9.2	%	14,047			6.5	%	15,663			7.6	%
Provision for income taxes	2,367			2.1	%	2,898		2.7	%	3,802			1.8	%	3,938			1.9	%
Net income	$	5,580		5.0	%	$	6,839	6.5	%	$	10,245		4.7	%	$	11,725		5.7	%
Net Income per share:
Basic	$	0.70				$	0.84			$	1.28				$	1.43
Diluted	$	0.68				$	0.79			$	1.23				$	1.35
Weighted average number of shares outstanding:
Basic	7,925					8,053				7,970					8,169
Diluted	8,218					8,550				8,282					8,649

CRA INTERNATIONAL, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

FOR THE FISCAL QUARTERS AND FISCAL YEAR-TO-DATE PERIODS ENDED

JUNE 29, 2019 COMPARED TO JUNE 30, 2018

(IN THOUSANDS, EXCEPT PER SHARE DATA)

	Fiscal Quarter Ended										Fiscal Year-to-Date Period Ended
	June 29, 2019			As a % of Revenue		June 30, 2018			As a % of Revenue		June 29, 2019			As a % of Revenue		June 30, 2018			As a % of Revenue
Revenues	$	110,573		100.0	%	$	105,538		100.0	%	$	216,422		100.0	%	$	205,014		100.0	%
Net income	$	5,580		5.0	%	$	6,839		6.5	%	$	10,245		4.7	%	$	11,725		5.7	%
Adjustments needed to reconcile GAAP net income to non-GAAP net income:
Non-cash valuation change in contingent consideration	651			0.6	%	(1,739		)	-1.6	%	434			0.2	%	(1,846		)	-0.9	%
Net costs related to lease recapture	—			—		—			—		—			—		555			0.3	%
Tax effect on adjustments	(174		)	-0.2	%	701			0.7	%	(116		)	-0.1	%	633			0.3	%
Non-GAAP net income	$	6,057		5.5	%	$	5,801		5.5	%	$	10,563		4.9	%	$	11,067		5.4	%
Non-GAAP net Income per share:
Basic	$	0.76				$	0.72				$	1.32				$	1.35
Diluted	$	0.73				$	0.67				$	1.27				$	1.27
Weighted average number of shares outstanding:
Basic	7,925					8,053					7,970					8,169
Diluted	8,218					8,550					8,282					8,649

CRA INTERNATIONAL, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

FOR THE FISCAL QUARTERS AND FISCAL YEAR-TO-DATE PERIODS ENDED

JUNE 29, 2019 COMPARED TO JUNE 30, 2018

(IN THOUSANDS)

	Fiscal Quarter Ended										Fiscal Year-to-Date Period Ended
	June 29, 2019			As a % of Revenue		June 30, 2018			As a % of Revenue		June 29, 2019			As a % of Revenue		June 30, 2018			As a % of Revenue
Revenues	$	110,573		100.0	%	$	105,538		100.0	%	$	216,422		100.0	%	$	205,014		100.0	%
Net Income	$	5,580		5.0	%	$	6,839		6.5	%	$	10,245		4.7	%	$	11,725		5.7	%
Adjustments needed to reconcile GAAP net income to non-GAAP net income:
Non-cash valuation change in contingent consideration	651			0.6	%	(1,739		)	-1.6	%	434			0.2	%	(1,846		)	-0.9	%
Net costs related to lease recapture	—			—		—			—		—			—		555			0.3	%
Tax effect on adjustments	(174		)	-0.2	%	701			0.7	%	(116		)	-0.1	%	633			0.3	%
Non-GAAP net income	$	6,057		5.5	%	$	5,801		5.5	%	$	10,563		4.9	%	$	11,067		5.4	%
Adjustments needed to reconcile non-GAAP net income to non-GAAP EBITDA:
Interest expense, net	519			0.5	%	301			0.3	%	530			0.2	%	338			0.2	%
Provision for income taxes	2,541			2.3	%	2,197			2.1	%	3,918			1.8	%	3,305			1.6	%
Depreciation and amortization	2,553			2.3	%	2,433			2.3	%	5,169			2.4	%	4,664			2.3	%
Non-GAAP EBITDA	$	11,670		10.6	%	$	10,732		10.2	%	$	20,180		9.3	%	$	19,374		9.5	%

CRA INTERNATIONAL, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	June 29,		December 29,
	2019		2018
Assets
Cash and cash equivalents	$	15,588	$	38,028
Accounts receivable and unbilled services, net	132,097		130,585
Other current assets	17,773		12,527
Total current assets	165,458		181,140
Property and equipment, net	52,003		48,088
Goodwill and intangible assets, net	95,369		96,054
Right-of-use assets	114,704		—
Other assets	58,393		45,564
Total assets	$	485,927	$	370,846
Liabilities and shareholders’ equity
Accounts payable	$	21,486	$	21,938
Accrued expenses	72,394		108,233
Revolving line of credit	41,000		—
Current portion of lease liabilities	10,898		—
Other current liabilities	7,015		12,326
Total current liabilities	152,793		142,497
Non-current portion of lease liabilities	127,281		—
Other non-current liabilities	10,973		31,877
Total liabilities	291,047		174,374
Total shareholders’ equity	194,880		196,472
Total liabilities and shareholders’ equity	$	485,927	$	370,846

CRA INTERNATIONAL, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Fiscal Year-to-Date Period Ended
	June 29,			June 30,
	2019			2018
Operating activities:
Net income	$	10,245		$	11,725
Adjustments to reconcile net income to net cash used in operating activities:
Non-cash items, net	11,611			11,090
Accounts receivable and unbilled services	(1,068		)	(14,179		)
Working capital items, net	(66,897		)	(41,437		)
Net cash used in operating activities	(46,109		)	(32,801		)
Investing activities:
Purchases of property and equipment	(3,904		)	(8,939		)
Net cash used in investing activities	(3,904		)	(8,939		)
Financing activities:
Issuance of common stock, principally stock option exercises	1,526			916
Borrowings under revolving line of credit	50,000			30,161
Repayments under line of credit	(9,000		)	(8,802		)
Tax withholding payments reimbursed by shares	(388		)	(1,783		)
Cash paid on dividend equivalents	(35		)	(98		)
Cash dividend paid to shareholders	(3,196		)	(2,795		)
Repurchases of common stock	(11,510		)	(20,389		)
Net cash provided by (used in) financing activities	27,397			(2,790		)
Effect of foreign exchange rates on cash and cash equivalents	176			(480		)
Net decrease in cash and cash equivalents	(22,440		)	(45,010		)
Cash and cash equivalents at beginning of period	38,028			54,035
Cash and cash equivalents at end of period	$	15,588		$	9,025
Noncash investing and financing activities:
Purchases of property and equipment not yet paid for	$	4,053		$	4,704
Purchases of property and equipment by a third party	$	62		$	—
Asset retirement obligations	$	335		$	220
Right-of-use assets obtained in exchange for lease obligations	$	37,284		$	—
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	$	3,583		$	1,158
Cash paid for interest	$	510		$	273

EX-99.2

Exhibit 99.2

CHARLES RIVER ASSOCIATES (CRA)

SECOND QUARTER FISCAL YEAR 2019

EARNINGS ANNOUNCEMENT

PREPARED CFO REMARKS

CRA is providing these prepared remarks by CFO Chad Holmes 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 August 1, 2019 at 10:00 a.m. ET. These prepared remarks will not be read on the call.

Q2 Fiscal 2019 Summary (Quarter ended June 29, 2019)

·Revenue: $110.6 million

·Net income: $5.6 million, or 5.0% of revenue; non-GAAP net income: $6.1 million, or 5.5% of revenue

·Net income per diluted share: $0.68; non-GAAP net income per diluted share: $0.73

·Operating margin: 7.5%; non-GAAP operating margin: 8.1%

·Non-GAAP EBITDA: $11.7 million, or 10.6% of revenue

·Effective tax rate: 29.8%; non-GAAP effective tax rate: 29.6%

·Utilization: 77%

·Consultant headcount at the end of Q2 of fiscal 2019: 664, which consists of 123 officers, 378 other senior staff and 163 junior staff

·Cash and cash equivalents: $15.6 million at June 29, 2019

Revenue

For Q2 of fiscal 2019, revenue was $110.6 million, compared with revenue of $105.5 million for Q2 of fiscal 2018.

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Headcount

The following table outlines CRA’s consultant headcount at the end of the stated quarters:

	Q2 2019	Q1 2019	Q4 2018	Q3 2018	Q2 2018
Officers	123	123	124	125	127
Other Senior Staff	378	387	375	367	343
Junior Staff	163	177	188	193	158
Total	664	687	687	685	628

Utilization

For Q2 of fiscal 2019, companywide utilization was 77%, compared with 79% for Q2 of fiscal 2018.

Client Reimbursables

For Q2 of fiscal 2019, on a GAAP and non-GAAP basis, client reimbursables were $12.5 million, or approximately 11.3% of revenue, compared with $12.1 million, or 11.5% of revenue, for Q2 of fiscal 2018.

Contingent Liability

For Q2 of fiscal 2019, the estimated value of the contingent consideration obligation increased by $0.7 million to $6.6 million at June 29, 2019, which is reported as a component of cost of services for Q2 of fiscal 2019.  For Q2 of fiscal 2018, the estimated value of the contingent consideration obligation decreased by $1.7 million to $3.3 million at June 30, 2018, which was recorded as a reduction of cost of services for Q2 of fiscal 2018.

Selling, General and Administrative (SG&A) Expenses

For Q2 of fiscal 2019, on a GAAP and non-GAAP basis, SG&A expenses were $23.7 million, or 21.5% of revenue, compared with $23.7 million, or 22.5% of revenue, for Q2 of fiscal 2018.  Commissions to non-employee experts are included in SG&A expenses. On a GAAP and non-GAAP basis, these commissions represented approximately 2.9% of revenue for Q2 of fiscal 2019, compared with 3.3% in Q2 of fiscal 2018. Excluding these commissions, on a GAAP and non-GAAP basis, SG&A expenses were 18.6% of revenue for Q2 of fiscal 2019, compared with 19.2% in Q2 of fiscal 2018.

Depreciation & Amortization

For Q2 of fiscal 2019, on a GAAP and non-GAAP basis, depreciation and amortization expenses amounted to $2.6 million, or 2.3% of revenue, compared with $2.4 million, or 2.3% of revenue, for Q2 of fiscal 2018.

Forgivable Loan Amortization

For Q2 of fiscal 2019, on a GAAP and non-GAAP basis, forgivable loan amortization was $6.5 million, or 5.9% of revenue, compared with $6.3 million, or 6.0% of revenue, for Q2 of fiscal 2018.

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Share-Based Compensation Expense

For Q2 of fiscal 2019, on a GAAP and non-GAAP basis, share-based compensation expense was approximately $0.8 million, or 0.8% of revenue, compared with $1.1 million, or 1.1% of revenue, for Q2 of fiscal 2018.

Operating Income

For Q2 of fiscal 2019, operating income was $8.3 million, or 7.5% of revenue, compared with operating income of $9.7 million, or 9.2% of revenue, for Q2 of fiscal 2018. Non-GAAP operating income was $9.0 million, or 8.1% of revenue, for Q2 of fiscal 2019, compared with $7.9 million, or 7.5% of revenue, for Q2 of fiscal 2018.

	Quarter ended
	June 29, 2019		As a % of Revenue		June 30, 2018			As a % of Revenue
Income from Operations	$	8,311	7.5	%	$	9,661		9.2	%
Adjustments needed to reconcile GAAP income from operations to non-GAAP income from operations:
Non-cash valuation change in contingent consideration	651		0.6	%	(1,739		)	-1.6	%
Non-GAAP Income from Operations	$	8,962	8.1	%	$	7,922		7.5	%

Interest and Other Expense, net

For Q2 of fiscal 2019, interest and other expense, net was ($0.4) million on a GAAP basis and non-GAAP basis. This compares with interest and other expense, net of $0.1 million on a GAAP and non-GAAP basis for Q2 of fiscal 2018.

Income Taxes

The following table outlines CRA’s income tax provision recorded (in $000) and the resulting effective tax rates:

	GAAP						NON-GAAP
	Q2						Q2
	2019			2018			2019			2018
Tax Provision	$	2,367		$	2,898		$	2,541		$	2,197
Effective Tax Rate	29.8		%	29.8		%	29.6		%	27.5		%

Net Income

For Q2 of fiscal 2019, net income was $5.6 million, or 5.0% of revenue, or $0.68 per diluted share, compared with net income of $6.8 million, or 6.5% of revenue, or $0.79 per diluted share, for Q2 of fiscal 2018. Non-GAAP net income for Q2 of fiscal 2019 was $6.1 million, or 5.5% of non-GAAP revenue, or $0.73 per diluted share, compared with $5.8 million, or 5.5% of non-GAAP revenue, or $0.67 per diluted share, for Q2 of fiscal 2018.

Non-GAAP EBITDA

For Q2 of fiscal 2019, non-GAAP EBITDA was $11.7 million, or 10.6% of revenue, compared with $10.7 million, or 10.2% of revenue, for Q2 of fiscal 2018.

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Constant Currency Basis

For Q2 of fiscal 2019 revenue was $110.6 million, and net income was $5.6 million, or 5.0% of revenue, or $0.68 per diluted share. On a constant currency basis relative to Q2 of fiscal 2018, Q2 of fiscal 2019 revenue would have increased by approximately $1.2 million to $111.8 million, net income would have decreased by $0.1 million to $5.5 million and earnings per diluted share would have decreased by approximately $0.01 to $0.67.

For Q2 of fiscal 2019, revenue was $110.6 million, and non-GAAP net income was $6.1 million, or 5.5% of revenue, or $0.73 per diluted share, and non-GAAP EBITDA was $11.7 million, or 10.6% of non-GAAP revenue. On a constant currency basis relative to Q2 of fiscal 2018, Q2 of fiscal 2019 non-GAAP revenue would have increased by approximately $1.2 million to $111.8 million, while non-GAAP net income would have decreased by $0.1 million to $6.0 million, earnings per diluted share would have decreased by approximately $0.01 to $0.72, and non-GAAP EBITDA would have decreased by $0.1 million to $11.6 million.

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 June 29, 2019 were $132.1 million, compared with $127.2 million at June 30, 2018. Current liabilities at June 29, 2019 were $152.8 million, compared with $117.0 million at June 30, 2018.

Total DSO for Q2 of fiscal 2019 were 105 days, consisting of 68 days of billed and 37 days of unbilled. This compares with 107 days reported for Q2 of fiscal 2018, consisting of 74 days of billed and 33 days of unbilled.

Cash and Cash Flow

Cash and cash equivalents were $15.6 million at June 29, 2019, compared with $9.0 million at June 30, 2018.

Net cash provided by operating activities for Q2 of fiscal 2019 was $10.5 million, compared with $7.7 million for Q2 of fiscal 2018.

As of June 29, 2019, there was $41.0 million of borrowings in the U.S. and no outstanding borrowings in the U.K., compared with $17.5 million of borrowings in the U.S. and £2.5 million of borrowings in the U.K. outstanding at June 30, 2018.

Capital expenditures totaled approximately $3.1 million for Q2 of fiscal 2019, compared with $5.7 million for Q2 of fiscal 2018.

During Q2 of fiscal 2019, approximately 177,000 shares of common stock were repurchased for approximately $7.2 million, compared with Q2 of fiscal 2018, approximately 216,000 shares of common stock were repurchased for approximately $12.1 million.

A quarterly cash dividend of $0.20 per common share, for total dividends and dividend equivalents of $1.6 million, was paid in Q2 of fiscal 2019, compared with a quarterly cash

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dividend of $0.17 per common share, for total dividends and dividend equivalents of $1.4 million, which was paid in Q2 of fiscal 2018.

GAAP Condensed Consolidated Statement of Cash Flows

CRA has derived the condensed consolidated statement of cash flow data for the years ended December 29, 2018 and December 30, 2017 from its audited financial statements appearing on Form 10-K for fiscal year ended December 29, 2018, filed with the Securities and Exchange Commission on February 28, 2019.  The condensed consolidated statement of cash flow data for the fiscal third and fourth quarters of fiscal year 2017, each of the fiscal quarters of fiscal year 2018, and the first and second quarters of fiscal year 2019 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 year ended December 29, 2018 and December 30, 2017 and have been prepared on the same basis as CRA’s audited financial statements.

	LTM			Q2			Q1			Q4			Q3			FY
(In thousands)	Q2 2019			2019			2019			2018			2018			2018
Net cash provided by (used in) operating activities	$	22,881		$	10,458		$	(56,567	)	$	44,583		$	24,407		$	36,189
Net cash used in investing activities	(10,412		)	(3,130		)	(774		)	(2,068		)	(4,440		)	(15,447		)
Net cash used in financing activities	(5,560		)	(6,741		)	34,138			(16,217		)	(16,740		)	(35,747		)
Effect of FX rates on cash and cash equivalents	(346		)	43			133			(133		)	(389		)	(1,002		)
Net increase (decrease) in cash and cash equivalents	$	6,563		$	630		$	(23,070	)	$	26,165		$	2,838		$	(16,007	)
Cash and cash equivalents at beginning of period	9,025			14,958			38,028			11,863			9,025			54,035
Cash and cash equivalents at end of period	$	15,588		$	15,588		$	14,958		$	38,028		$	11,863		$	38,028

	LTM			Q2			Q1			Q4			Q3			FY
	Q2 2018			2018			2018			2017			2017			2017
Net cash provided by (used in) operating activities	$	21,540		$	7,738		$	(40,539	)	$	38,067		$	16,274		$	45,858
Net cash used in investing activities	(16,046		)	(5,691		)	(3,248		)	(4,391		)	(2,716		)	(25,670		)
Net cash used in financing activities	(11,818		)	(2,791		)	1			(1,016		)	(8,012		)	(21,851		)
Effect of FX rates on cash and cash equivalents	681			(1,083		)	603			476			685			2,168
Net increase (decrease) in cash and cash equivalents	$	(5,643	)	$	(1,827	)	$	(43,183	)	$	33,136		$	6,231		$	505
Cash and cash equivalents at beginning of period	14,668			10,852			54,035			20,899			14,668			53,530
Cash and cash equivalents at end of period	$	9,025		$	9,025		$	10,852		$	54,035		$	20,899		$	54,035

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Adjusted Net Cash Provided by (Used in) Operating Activities

Below are the annual, 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 provided by (used in) operating activities.  The reconciling items are forgivable loan issuances and repayments for each period which are reported as a component of GAAP net cash provided by (used in) operating activities.

	LTM			Q2			Q1			Q4			Q3			FY
(In thousands)	Q2 2019			2019			2019			2018			2018			2018
Net cash provided by (used in) operating activities	$	22,881		$	10,458		$	(56,567	)	$	44,583		$	24,407		$	36,189
Forgivable loan issuances	31,806			1,953			21,930			1,219			6,704			30,572
Forgivable loan repayments	(763		)	(300		)	(400		)	3			(66		)	(3,396		)
Adjusted net cash provided by (used in) operating activities	$	53,924		$	12,111		$	(35,037	)	$	45,805		$	31,045		$	63,365
Net Revenue	$	429,056		$	110,573		$	105,849		$	108,763		$	103,871		$	417,648
GAAP net cash provided by (used in) operating activities as a percentage of net revenue	5.3		%	9.5		%	-53.4		%	41.0		%	23.5		%	8.7		%
Adjusted net cash provided by (used in) operating activities as a percentage of net revenue	12.6		%	11.0		%	-33.1		%	42.1		%	29.9		%	15.2		%

	LTM			Q2			Q1			Q4			Q3			FY
	Q2 2018			2018			2018			2017			2017			2017
Net cash provided by (used in) operating activities	$	21,540		$	7,738		$	(40,539	)	$	38,067		$	16,274		$	45,858
Forgivable loan issuances	30,116			(379		)	23,028			1,538			5,929			11,672
Forgivable loan repayments	(5,338		)	—			(3,333		)	(251		)	(1,754		)	(2,135		)
Adjusted net cash provided by (used in) operating activities	$	46,318		$	7,359		$	(20,844	)	$	39,354		$	20,449		$	55,395
Net Revenue	$	393,355		$	105,538		$	99,476		$	97,016		$	91,325		$	370,075
GAAP net cash provided by (used in) operating activities as a percentage of net revenue	5.5		%	7.3		%	-40.8		%	39.2		%	17.8		%	12.4		%
Adjusted net cash provided by (used in) operating activities as a percentage of net revenue	11.8		%	7.0		%	-21.0		%	40.6		%	22.4		%	15.0		%

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 financial measures that were not calculated in accordance with GAAP. CRA believes that the non-GAAP financial measures described below 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 provided by (used in) operating activities is also

6

used by management to assess CRA’s ability to fund items such as the acquisition of talent, office expansions 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.

The adjustments made to non-GAAP net income and non-GAAP EBITDA in these remarks are as follows: for all periods presented, the adjustments exclude non-cash amounts relating to valuation changes in contingent consideration and related tax effects; for the year to date period ended June 30, 2018, the adjustments also exclude net costs related to a lease recapture, related tax effects.  The adjustments made to non-GAAP adjusted net cash provided by (used in) operating activities add back forgivable loan issuances, net of repayments. 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. Finally, these remarks also present the non-GAAP financial metric EBITDA.

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.

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CRA INTERNATIONAL, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE FISCAL QUARTERS AND FISCAL YEAR-TO-DATE PERIODS ENDED

JUNE 29, 2019 COMPARED TO JUNE 30, 2018

(IN THOUSANDS, EXCEPT PER SHARE DATA)

	Fiscal Quarter Ended									Fiscal Year-to-Date Period Ended
	June 29, 2019			As a % of Revenue		June 30, 2018		As a % of Revenue		June 29, 2019			As a % of Revenue		June 30, 2018			As a % of Revenue
Revenues	$	110,573		100.0	%	$	105,538	100.0	%	$	216,422		100.0	%	$	205,014		100.0	%
Cost of services (exclusive of depreciation and amortization)	75,972			68.7	%	69,705		66.0	%	149,607			69.1	%	139,096			67.8	%
Selling, general and administrative expenses	23,737			21.5	%	23,739		22.5	%	46,480			21.5	%	45,389			22.1	%
Depreciation and amortization	2,553			2.3	%	2,433		2.3	%	5,169			2.4	%	4,664			2.3	%
Income from operations	8,311			7.5	%	9,661		9.2	%	15,166			7.0	%	15,865			7.7	%
Interest and other income (expense), net	(364		)	-0.3	%	76		0.1	%	(1,119		)	-0.5	%	(202		)	-0.1	%
Income before provision for income taxes	7,947			7.2	%	9,737		9.2	%	14,047			6.5	%	15,663			7.6	%
Provision for income taxes	2,367			2.1	%	2,898		2.7	%	3,802			1.8	%	3,938			1.9	%
Net income	$	5,580		5.0	%	$	6,839	6.5	%	$	10,245		4.7	%	$	11,725		5.7	%
Net Income per share:
Basic	$	0.70				$	0.84			$	1.28				$	1.43
Diluted	$	0.68				$	0.79			$	1.23				$	1.35
Weighted average number of shares outstanding:
Basic	7,925					8,053				7,970					8,169
Diluted	8,218					8,550				8,282					8,649

CRA INTERNATIONAL, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

FOR THE FISCAL QUARTERS AND FISCAL YEAR-TO-DATE PERIODS ENDED

JUNE 29, 2019 COMPARED TO JUNE 30, 2018

(IN THOUSANDS, EXCEPT PER SHARE DATA)

	Fiscal Quarter Ended										Fiscal Year-to-Date Period Ended
	June 29, 2019			As a % of Revenue		June 30, 2018			As a % of Revenue		June 29, 2019			As a % of Revenue		June 30, 2018			As a % of Revenue
Revenues	$	110,573		100.0	%	$	105,538		100.0	%	$	216,422		100.0	%	$	205,014		100.0	%
Net income	$	5,580		5.0	%	$	6,839		6.5	%	$	10,245		4.7	%	$	11,725		5.7	%
Adjustments needed to reconcile GAAP net income to non-GAAP net income:
Non-cash valuation change in contingent consideration	651			0.6	%	(1,739		)	-1.6	%	434			0.2	%	(1,846		)	-0.9	%
Net costs related to lease recapture	—			—		—			—		—			—		555			0.3	%
Tax effect on adjustments	(174		)	-0.2	%	701			0.7	%	(116		)	-0.1	%	633			0.3	%
Non-GAAP net income	$	6,057		5.5	%	$	5,801		5.5	%	$	10,563		4.9	%	$	11,067		5.4	%
Non-GAAP net Income per share:
Basic	$	0.76				$	0.72				$	1.32				$	1.35
Diluted	$	0.73				$	0.67				$	1.27				$	1.27
Weighted average number of shares outstanding:
Basic	7,925					8,053					7,970					8,169
Diluted	8,218					8,550					8,282					8,649

CRA INTERNATIONAL, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

FOR THE FISCAL QUARTERS AND FISCAL YEAR-TO-DATE PERIODS ENDED

JUNE 29, 2019 COMPARED TO JUNE 30, 2018

(IN THOUSANDS)

	Fiscal Quarter Ended										Fiscal Year-to-Date Period Ended
	June 29, 2019			As a % of Revenue		June 30, 2018			As a % of Revenue		June 29, 2019			As a % of Revenue		June 30, 2018			As a % of Revenue
Revenues	$	110,573		100.0	%	$	105,538		100.0	%	$	216,422		100.0	%	$	205,014		100.0	%
Net Income	$	5,580		5.0	%	$	6,839		6.5	%	$	10,245		4.7	%	$	11,725		5.7	%
Adjustments needed to reconcile GAAP net income to non-GAAP net income:
Non-cash valuation change in contingent consideration	651			0.6	%	(1,739		)	-1.6	%	434			0.2	%	(1,846		)	-0.9	%
Net costs related to lease recapture	—			—		—			—		—			—		555			0.3	%
Tax effect on adjustments	(174		)	-0.2	%	701			0.7	%	(116		)	-0.1	%	633			0.3	%
Non-GAAP net income	$	6,057		5.5	%	$	5,801		5.5	%	$	10,563		4.9	%	$	11,067		5.4	%
Adjustments needed to reconcile non-GAAP net income to non-GAAP EBITDA:
Interest expense, net	519			0.5	%	301			0.3	%	530			0.2	%	338			0.2	%
Provision for income taxes	2,541			2.3	%	2,197			2.1	%	3,918			1.8	%	3,305			1.6	%
Depreciation and amortization	2,553			2.3	%	2,433			2.3	%	5,169			2.4	%	4,664			2.3	%
Non-GAAP EBITDA	$	11,670		10.6	%	$	10,732		10.2	%	$	20,180		9.3	%	$	19,374		9.5	%

CRA INTERNATIONAL, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	June 29, 2019		December 29, 2018
Assets
Cash and cash equivalents	$	15,588	$	38,028
Accounts receivable and unbilled services, net	132,097		130,585
Other current assets	17,773		12,527
Total current assets	165,458		181,140
Property and equipment, net	52,003		48,088
Goodwill and intangible assets, net	95,369		96,054
Right-of-use assets	114,704		—
Other assets	58,393		45,564
Total assets	$	485,927	$	370,846
Liabilities and shareholders’ equity
Accounts payable	$	21,486	$	21,938
Accrued expenses	72,394		108,233
Revolving line of credit	41,000		—
Current portion of lease liabilities	10,898		—
Other current liabilities	7,015		12,326
Total current liabilities	152,793		142,497
Non-current portion of lease liabilities	127,281		—
Other non-current liabilities	10,973		31,877
Total liabilities	291,047		174,374
Total shareholders’ equity	194,880		196,472
Total liabilities and shareholders’ equity	$	485,927	$	370,846

CRA INTERNATIONAL, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Fiscal Year-to-Date Period Ended
	June 29,			June 30,
	2019			2018
Operating activities:
Net income	$	10,245		$	11,725
Adjustments to reconcile net income to net cash used in operating activities:
Non-cash items, net	11,611			11,090
Accounts receivable and unbilled services	(1,068		)	(14,179		)
Working capital items, net	(66,897		)	(41,437		)
Net cash used in operating activities	(46,109		)	(32,801		)
Investing activities:
Purchases of property and equipment	(3,904		)	(8,939		)
Net cash used in investing activities	(3,904		)	(8,939		)
Financing activities:
Issuance of common stock, principally stock option exercises	1,526			916
Borrowings under revolving line of credit	50,000			30,161
Repayments under line of credit	(9,000		)	(8,802		)
Tax withholding payments reimbursed by shares	(388		)	(1,783		)
Cash paid on dividend equivalents	(35		)	(98		)
Cash dividend paid to shareholders	(3,196		)	(2,795		)
Repurchases of common stock	(11,510		)	(20,389		)
Net cash provided by (used in) financing activities	27,397			(2,790		)
Effect of foreign exchange rates on cash and cash equivalents	176			(480		)
Net decrease in cash and cash equivalents	(22,440		)	(45,010		)
Cash and cash equivalents at beginning of period	38,028			54,035
Cash and cash equivalents at end of period	$	15,588		$	9,025
Noncash investing and financing activities:
Purchases of property and equipment not yet paid for	$	4,053		$	4,704
Purchases of property and equipment by a third party	$	62		$	—
Asset retirement obligations	$	335		$	220
Right-of-use assets obtained in exchange for lease obligations	$	37,284		$	—
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	$	3,583		$	1,158
Cash paid for interest	$	510		$	273

EX-99.3

Exhibit 99.3

Contacts:
Chad Holmes	Jamie Bernard, IRC
Chief Financial Officer	Senior Associate
Charles River Associates	Sharon Merrill Associates, Inc.
312-377-2322	617-542-5300

CHARLES RIVER ASSOCIATES (CRA) DECLARES REGULAR QUARTERLY DIVIDEND

BOSTON, August 1, 2019 — 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 $0.20 per share to be paid on September 13, 2019 to shareholders of record of CRA’s common stock as of the close of business on August 27, 2019. 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

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economic conditions; the timing of engagements for our services; the effects of competitive services and pricing; our ability to attract and retain key employee or non-employee experts; the inability to integrate and utilize existing consultants and personnel; the decline or reduction in project work or activity; global economic conditions including less stable political and economic environments; foreign currency exchange rate fluctuations; unanticipated expenses and liabilities; risks inherent in international operations; changes in tax law or accounting standards, rules, and regulations; our ability to collect on forgivable loans should any become due; and professional and other legal liability or settlements. Additional risks and uncertainties are discussed in our periodic filings with the Securities and Exchange Commission under the heading “Risk Factors.” The inclusion of such forward-looking information should not be regarded as our representation that the future events, plans, or expectations contemplated will be achieved. Except as may be required by law, we undertake no obligation to update any forward-looking statements after the date of this press release, and we do not intend to do so.

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