EX-99.2 3 a19-16406_1ex99d2.htm 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.

 

1


 

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.

 

2


 

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.

 

3


 

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

 

4


 

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

 

 

5


 

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.

 

7


 

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