What changed in this filing

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Item 1. Financial Statements

2024-10-31 compared with 2024-08-01 · 93 added, 46 removed, 386 unchanged (26% of the section changed)

4 unchanged sentences

Fiscal Quarter Ended Fiscal Year-to-Date

2023 June 29,

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Revenues $ 167,748 $ 147,553 $ 510,979 $ 462,363

4 unchanged sentences

Interest expense, net ( 1,457 ) ( 1,025 ) ( 3,405 ) ( 3,212 )

Foreign currency losses, net ( 191 ) ( 686 ) ( 333 ) ( 1,214 )

Foreign currency gains (losses), net ( 904 ) 755 ( 1,236 ) ( 459 )

Income before provision for income taxes 16,030 10,523 44,657 36,729

12 unchanged sentences

Fiscal Quarter Ended Fiscal Year-to-Date

2023 June 29,

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Net income $ 11,437 $ 8,596 $ 31,666 $ 27,022

6 unchanged sentences

(in thousands, except share data)

September 28,

2024 December 30,

47 unchanged sentences

Fiscal Year-to-Date Period Ended

September 28,

2024 September 30,

OPERATING ACTIVITIES:

26 unchanged sentences

Repurchase of common stock ( 33,348 ) ( 23,577 )

Net cash provided by financing activities 45,699 49,184

Net cash provided by (used in) financing activities 15,772 ( 1,390 )

Effect of foreign exchange rates on cash and cash equivalents 344 159

3 unchanged sentences

Noncash investing and financing activities:

Increase in accounts payable and accrued expenses for property and equipment $ 553 $ 376

Increase (decrease) in accounts payable and accrued expenses for property and equipment $ 1,228 $ ( 129 )

Asset retirement obligations $ 191 $ —

Excise tax on share repurchases $ ( 284 ) $ ( 190 )

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

FOR THE FISCAL YEAR-TO-DATE PERIOD ENDED JUNE 29, 2024 (unaudited)

FOR THE FISCAL YEAR-TO-DATE PERIOD ENDED SEPTEMBER 28, 2024 (unaudited)

(in thousands, except share data)

27 unchanged sentences

BALANCE AT JUNE 29, 2024 6,752,604 — $ 205,351 $ ( 13,602 ) $ 191,749

Net income — — 11,437 — 11,437

Foreign currency translation adjustment — — — 2,895 2,895

Share-based compensation expense — 1,364 — — 1,364

Restricted shares vesting 9,272 — — — —

Redemption of vested employee restricted shares for tax withholding ( 294 ) ( 53 ) — — ( 53 )

Accrued excise tax on shares repurchased — — 16 — 16

Accrued dividends on unvested shares — — ( 21 ) — ( 21 )

Cash dividends paid ($ 0.42 per share)

— — ( 2,874 ) — ( 2,874 )

BALANCE AT SEPTEMBER 28, 2024 6,761,582 1,311 $ 213,909 $ ( 10,707 ) $ 204,513

See accompanying notes to the condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

FOR THE FISCAL YEAR-TO-DATE PERIOD ENDED July 1, 2023 (unaudited)

FOR THE FISCAL YEAR-TO-DATE PERIOD ENDED September 30, 2023 (unaudited)

(in thousands, except share data)

27 unchanged sentences

BALANCE AT JULY 1, 2023 6,969,236 $ 468 $ 215,173 $ ( 12,855 ) $ 202,786

Net income — — 8,596 — 8,596

Foreign currency translation adjustment — — — ( 1,755 ) ( 1,755 )

Share-based compensation expense — 926 — — 926

Restricted shares vesting 10,004 — — — —

Redemption of vested employee restricted shares for tax withholding ( 299 ) ( 31 ) — — ( 31 )

Accrued excise tax on shares repurchased — — 10 — 10

Accrued dividends on unvested shares — — ( 31 ) — ( 31 )

Cash dividends paid ($ 0.36 per share)

— — ( 2,543 ) — ( 2,543 )

BALANCE AT SEPTEMBER 30, 2023 6,978,941 $ 1,363 $ 221,205 $ ( 14,610 ) $ 207,958

See accompanying notes to the condensed consolidated financial statements.

4 unchanged sentences

CRA International, Inc.

is a worldwide leading consulting services firm that applies advanced analytic techniques and in-depth industry knowledge to complex engagements for a broad range of clients.

and its wholly-owned subsidiaries (collectively, "CRA" or the "Company") is a worldwide leading consulting services firm that applies advanced analytic techniques and in-depth industry knowledge to complex engagements for a broad range of clients.

CRA offers services in two broad areas:

3 unchanged sentences

Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of CRA International, Inc.

and its wholly-owned subsidiaries (collectively the, "CRA" or "Company") which require consolidation after the elimination of intercompany accounts and transactions.

The unaudited condensed consolidated financial statements include the accounts of CRA which require consolidation after the elimination of intercompany accounts and transactions.

These financial statements have been prepared in accordance with the rules and regulations of the U.S.

40 unchanged sentences

Fiscal Quarter Ended Fiscal Year-to-Date

Type of Contract June 29,

2023 June 29,

Type of Contract September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Consulting services revenues:

4 unchanged sentences

Fiscal Quarter Ended Fiscal Year-to-Date

Geographic Breakdown June 29,

2023 June 29,

Geographic Breakdown September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Consulting services revenues:

12 unchanged sentences

Fiscal Quarter Ended Fiscal Year-to-Date

2023 June 29,

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Bad debt expense (recovery), net $ ( 94 ) $ 131 $ 587 $ 523

4 unchanged sentences

Fiscal Quarter Ended Fiscal Year-to-Date

2023 June 29,

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Reimbursable expenses $ 16,107 $ 17,932 $ 49,530 $ 49,165

2 unchanged sentences

Revenues recognized for services performed, but not yet billed to clients, are recorded as unbilled services.

The following table presents the open and closing balances of CRA's accounts receivables, net and unbilled services, net (in thousands):

The following table presents the open and closing balances of CRA's accounts receivable, net and unbilled services, net (in thousands):

September 28,

2024 December 30,

3 unchanged sentences

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

The contract assets balance was immaterial as of June 29, 2024, December 30, 2023, and December 31, 2022.

The contract assets balance was immaterial as of September 28, 2024, December 30, 2023, and December 31, 2022.

When consideration is received, or such consideration is unconditionally due from a customer prior to transferring consulting services to the customer under the terms of a contract, a contract liability is recorded.

1 unchanged sentence

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

September 28,

2024 December 30,

5 unchanged sentences

Fiscal Quarter Ended Fiscal Year-to-Date

2023 June 29,

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Amounts included in contract liabilities at the beginning of the period $ 1,656 $ 2,580 $ 5,686 $ 6,619

7 unchanged sentences

The following table presents forgivable loan activity for the respective periods (in thousands):

September 28,

2024 December 30,

12 unchanged sentences

(2) During the quarter ended June 29, 2024, approximately $ 5.7 million of amortization was accelerated due to involuntary terminations.

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the fiscal year-to-date period ended June 29, 2024 are summarized as follows (in thousands):

CRA INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the fiscal year-to-date period ended September 28, 2024 are summarized as follows (in thousands):

Goodwill, at December 30, 2023 $ 165,882

1 unchanged sentence

Goodwill, net at December 30, 2023 93,989

Additions due to acquisitions —

Foreign currency translation adjustment 588

Goodwill, net at June 29, 2024 $ 93,855

Goodwill, net at June 29, 2024 of $ 93.9 million, is comprised of goodwill of $ 165.7 million and accumulated impairment of $ 71.9 million.

There were no impairment losses related to goodwill during the fiscal-year-to-date period ended June 29, 2024 or during the fiscal year ended December 30, 2023.

Goodwill, net at September 28, 2024 $ 94,577

Goodwill, net at September 28, 2024 of $ 94.6 million, is comprised of goodwill of $ 166.5 million and accumulated impairment of $ 71.9 million.

There were no impairment losses related to goodwill during the fiscal-year-to-date period ended September 28, 2024 or during the fiscal year ended December 30, 2023.

Intangible assets that are separable from goodwill and have determinable useful lives are valued separately and amortized using the straight-line method over their expected useful lives.

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

June 29, 2024 December 30, 2023

September 28, 2024 December 30, 2023

(in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount

1 unchanged sentence

$ 15,300 $ ( 7,701 ) $ 7,599 $ 13,800 $ ( 6,604 ) $ 7,196

There were no impairment losses related to intangible assets during the fiscal year-to-date period ended June 29, 2024 or during the fiscal year ended December 30, 2023.

As a result of an asset acquisition in CRA's Intellectual Property Practice, CRA recognized $ 1.5 million of intangible assets related to customer relationships during the fiscal quarter ended June 29, 2024.

Amortization expense related to intangible assets was $ 0.4 million and $ 0.7 million for the fiscal quarter and fiscal year-to-date period ended June 29, 2024, respectively, $ 0.3 million and $ 0.7 million for the fiscal quarter and fiscal year-to-date period ended July 1, 2023, respectively.

There were no impairment losses related to intangible assets during the fiscal year-to-date period ended September 28, 2024 or during the fiscal year ended December 30, 2023.

Amortization expense related to intangible assets was $ 0.4 million and $ 1.1 million for the fiscal quarter and fiscal year-to-date period ended September 28, 2024, respectively, and $ 0.3 million and $ 1.0 million for the fiscal quarter and fiscal year-to-date period ended September 30, 2023, respectively.

Accrued Expenses

Accrued expenses consist of the following (in thousands):

September 28,

2024 December 30,

4 unchanged sentences

Total accrued expenses $ 146,284 $ 171,040

As of June 29, 2024 and December 30, 2023, approximately $ 75.6 million and $ 121.2 million, respectively, of accrued bonuses were included above in “Compensation and related expenses.”

For the fiscal quarters ended June 29, 2024 and July 1, 2023, CRA’s effective income tax rate (“ETR”) was 32.0 % and 30.1 %, respectively.

The ETR for the second quarter of fiscal 2024 was higher than the second quarter of fiscal 2023 primarily due to increases in estimated state apportionment and nondeductible executive compensation and a decrease in the U.S.

As of September 28, 2024 and December 30, 2023, approximately $ 109.5 million and $ 121.2 million, respectively, of accrued bonuses were included above in “Compensation and related expenses.”

For the fiscal quarters ended September 28, 2024 and September 30, 2023, CRA’s effective income tax rate (“ETR”) was 28.7 % and 18.3 %, respectively.

The ETR for the third quarter of fiscal 2024 was higher than the third quarter of fiscal 2023

CRA INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

associated with the foreign-derived intangible income deduction, partially offset by having had a valuation allowance in the prior year that has now reversed.

For the fiscal year-to-date periods ended June 29, 2024 and July 1, 2023, CRA's ETR was 29.3 % and 29.7 %.

primarily due to the release of a valuation allowance in the third quarter of fiscal 2023, partially offset by an increase in the tax benefit related to share-based compensation.

For the fiscal year-to-date periods ended September 28, 2024 and September 30, 2023, CRA's ETR was 29.1 % and 26.4 %.

respectively.

The ETR for the current fiscal year-to-date period was lower than the prior year-to-date period primarily due to having had a valuation allowance in the prior year that has now reversed.

The ETR for the fiscal year-to-date period ended September 28, 2024 was higher than the fiscal year-to-date period ended September 30, 2023, primarily due to the same items noted above.

Net Income Per Share

1 unchanged sentence

CRA calculates diluted earnings per share using the more dilutive of either the two-class method or treasury stock method.

The two-class method was more dilutive for the fiscal quarters and fiscal year-to-date periods ended June 29, 2024 and July 1, 2023.

The two-class method was more dilutive for the fiscal quarters and fiscal year-to-date periods ended September 28, 2024 and September 30, 2023.

Under the two-class method, net earnings are allocated to each class of common stock and participating security as if all the net earnings for the period had been distributed.

CRA's participating securities consist of unvested share-based payment awards that contain a nonforfeitable right to receive dividends and therefore are considered to participate in undistributed earnings with common shareholders.

Net earnings allocable to these participating securities were not material for the fiscal quarters and fiscal year-to-date periods ended June 29, 2024 and July 1, 2023.

Net earnings allocable to these participating securities were not material for the fiscal quarters and fiscal year-to-date periods ended September 28, 2024 and September 30, 2023.

The following table presents the calculation of basic and diluted net income per share (in thousands, except per share data):

Fiscal Quarter Ended Fiscal Year-to-Date

2023 June 29,

September 28,

2024 September 30,

2023 September 28,

2024 September 30,

Net income — basic $ 11,437 $ 8,596 $ 31,666 $ 27,022

7 unchanged sentences

Diluted $ 1.67 $ 1.21 $ 4.57 $ 3.78

For the fiscal quarter and fiscal year-to-date period ended June 29, 2024, there were no anti-dilutive share-based awards that were excluded from the calculation of common stock equivalents for purposes of computing diluted weighted average outstanding shares.

For the fiscal quarter and fiscal-year-to-date ended July 1, 2023, the anti-dilutive share-based awards that were excluded from the calculation of common stock equivalents for purposes of computing diluted weighted average shares outstanding amounted to 17,120 and 4,329 shares, respectively.

For the fiscal quarter and fiscal year-to-date period ended September 28, 2024, the anti-dilutive share-based awards that were excluded from the calculation of common stock equivalents for purposes of computing diluted weighted average outstanding shares amounted to 4,900 and 1,225 shares, respectively.

For the fiscal quarter and fiscal-year-to-date period ended September 30, 2023, the anti-dilutive share-based awards that were excluded from the calculation of common stock equivalents for purposes of computing diluted weighted average shares outstanding amounted to 6,185 and 5,875 shares, respectively.

Fair Value of Financial Instruments

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

June 29, 2024

September 28, 2024

Level 1 Level 2 Level 3

13 unchanged sentences

Fiscal Year-to-Date Period Ended Fiscal Year Ended

June 29, 2024 December 30, 2023

September 28, 2024 December 30, 2023

Beginning balance $ 190 $ 1,056

14 unchanged sentences

Any indebtedness outstanding under the revolving credit facility may become immediately due upon the occurrence of stated events of default, including CRA's failure to pay principal, interest or fees, or upon the breach of any covenant.

As of June 29, 2024, CRA was in compliance with the covenants of the Credit Agreement.

There were $ 87.0 million in borrowings outstanding under the revolving credit facility as of June 29, 2024 and no borrowings outstanding as of December 30, 2023.

As of June 29, 2024, the amount available under the revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $ 4.5 million.

As of September 28, 2024, CRA was in compliance with the covenants of the Credit Agreement.

There were $ 60.0 million in borrowings outstanding under the revolving credit facility as of September 28, 2024 and no borrowings outstanding as of December 30, 2023.

As of September 28, 2024, the amount available under the revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $ 4.1 million.

Commitments and Contingencies

5 unchanged sentences

Subsequent Events

On August 1, 2024, CRA announced that its Board of Directors declared a quarterly cash dividend of $ 0.42 per common share, payable on September 13, 2024 to shareholders of record as of August 27, 2024.

On October 31, 2024, CRA announced that its Board of Directors declared a quarterly cash dividend of $ 0.49 per common share, payable on December 13, 2024 to shareholders of record as of November 26, 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements