CRA INTERNATIONAL, INC. 10-Q

ITEM 1. Financial Statements CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share data) Fiscal Quarter Ended March 29, 2025 March 30, 2024 Revenues $ 181,851 $ 171,789 Costs of services (exclusive of depreciation and amortization) 120,354 118,880 Selling, general and administrative expenses 32,538 30,499 Depreciation and amortization 3,411 2,792 Income from operations 25,548 19,618 Interest expense, net ( 429 ) ( 464 ) Foreign currency gains (losses), net ( 474 ) ( 142 ) Income before provision for income taxes 24,645 19,012 Provision for income taxes 6,643 5,321 Net income $ 18,002 $ 13,691 Net income per share: Basic $ 2.65 $ 1.97 Diluted $ 2.62 $ 1.95 Weighted average number of shares outstanding: Basic 6,775 6,926 Diluted 6,862 7,011 See accompanying notes to the condensed consolidated financial statements. 3 Table of Contents CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) (in thousands) Fiscal Quarter Ended March 29, 2025 March 30, 2024 Net income $ 18,002 $ 13,691 Other comprehensive income (loss) Foreign currency translation adjustments, net of tax 1,743 ( 1,105 ) Comprehensive income $ 19,745 $ 12,586 See accompanying notes to the condensed consolidated financial statements. 4 Table of Contents CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands, except share data) March 29, 2025 December 28, 2024 ASSETS Current assets: Cash and cash equivalents $ 25,598 $ 26,711 Accounts receivable, net of allowances of $ 5,896 and $ 5,659 , respectively 140,326 162,293 Unbilled services, net of allowances of $ 1,382 and $ 1,411 , respectively 82,925 57,255 Prepaid expenses and other current assets 17,744 16,569 Forgivable loans 11,527 6,535 Total current assets 278,120 269,363 Property and equipment, net 42,785 45,205 Goodwill, net 94,139 93,737 Intangible assets, net 6,834 7,216 Right-of-use assets 78,653 81,157 Deferred income taxes 17,736 16,648 Forgivable loans, net of current portion 64,339 48,957 Other assets 7,836 9,156 Total assets $ 590,442 $ 571,439 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 19,703 $ 28,155 Accrued expenses 134,439 181,413 Deferred revenue and other liabilities 10,379 14,130 Current portion of lease liabilities 18,986 18,696 Current portion of deferred compensation 1,996 8,915 Revolving line of credit 85,000 — Total current liabilities 270,503 251,309 Non-current liabilities: Deferred compensation and other non-current liabilities 10,440 22,329 Non-current portion of lease liabilities 80,954 84,541 Deferred income taxes 1,226 1,187 Total non-current liabilities 92,620 108,057 Commitments and contingencies (Note 10) Shareholders’ equity: Preferred stock, no par value; 1,000,000 shares authorized; none issued and outstanding — — Common stock, no par value; 25,000,000 shares authorized; 6,789,893 and 6,768,575 shares issued and outstanding, respectively 599 1,663 Retained earnings 240,028 225,461 Accumulated other comprehensive loss ( 13,308 ) ( 15,051 ) Total shareholders’ equity 227,319 212,073 Total liabilities and shareholders’ equity $ 590,442 $ 571,439 See accompanying notes to the condensed consolidated financial statements. 5 Table of Contents CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) Fiscal Quarter Ended March 29, 2025 March 30, 2024 OPERATING ACTIVITIES: Net income $ 18,002 $ 13,691 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 3,411 2,792 Right-of-use asset amortization 3,851 3,565 Deferred income taxes ( 1,025 ) ( 157 ) Share-based compensation expense 1,390 1,039 Bad debt expense (recovery) 433 663 Unrealized foreign currency remeasurement (gains) losses, net 52 ( 208 ) Changes in operating assets and liabilities: Accounts receivable 22,456 2,529 Unbilled services ( 25,202 ) ( 13,623 ) Prepaid expenses and other current assets, and other assets 294 ( 2,552 ) Forgivable loans ( 20,219 ) 523 Incentive cash awards payable 2,834 2,383 Accounts payable, accrued expenses, and other liabilities ( 81,579 ) ( 69,302 ) Lease liabilities ( 4,692 ) ( 4,423 ) Net cash used in operating activities ( 79,994 ) ( 63,080 ) INVESTING ACTIVITIES: Purchases of property and equipment ( 974 ) ( 730 ) Net cash used in investing activities ( 974 ) ( 730 ) FINANCING ACTIVITIES: Borrowings under revolving line of credit 90,000 70,000 Repayments under revolving line of credit ( 5,000 ) — Tax withholding payments reimbursed by shares ( 2,454 ) ( 1,631 ) Cash dividends paid ( 3,488 ) ( 3,075 ) Repurchase of common stock — ( 9,242 ) Net cash provided by financing activities 79,058 56,052 Effect of foreign exchange rates on cash and cash equivalents 797 ( 706 ) Net decrease in cash and cash equivalents ( 1,113 ) ( 8,464 ) Cash and cash equivalents at beginning of period 26,711 45,586 Cash and cash equivalents at end of period $ 25,598 $ 37,122 Noncash investing and financing activities: Increase (decrease) in accounts payable and accrued expenses for property and equipment $ ( 596 ) $ 454 Excise tax on share repurchases $ 39 $ ( 65 ) Right-of-use assets obtained in exchange for lease obligations $ 701 $ 1,955 Supplemental cash flow information: Cash paid for taxes $ 3,181 $ 1,534 Cash paid for interest $ 131 $ 91 Cash paid for amounts included in operating lease liabilities $ 5,714 $ 5,569 See accompanying notes to the condensed consolidated financial statements. 6 Table of Contents CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY FOR THE FISCAL QUARTER ENDED March 29, 2025 (unaudited) (in thousands, except share data) Common Stock Retained Earnings Accumulated Other Comprehensive Loss Total Shareholders’ Equity Shares Issued Amount BALANCE AT DECEMBER 28, 2024 6,768,575 $ 1,663 $ 225,461 $ ( 15,051 ) $ 212,073 Net income — — 18,002 — 18,002 Foreign currency translation adjustment — — — 1,743 1,743 Share-based compensation expense — 1,390 — — 1,390 Restricted shares vesting 34,780 — — — — Redemption of vested employee restricted shares for tax withholding ( 13,462 ) ( 2,454 ) — — ( 2,454 ) Shares repurchased — — — — — Accrued excise tax on shares repurchased — — 39 — 39 Accrued dividends on unvested shares — — 14 — 14 Cash dividends paid ($ 0.49 per share) — — ( 3,488 ) — ( 3,488 ) BALANCE AT MARCH 29, 2025 6,789,893 599 $ 240,028 $ ( 13,308 ) $ 227,319 See accompanying notes to the condensed consolidated financial statements. 7 Table of Contents CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY FOR THE FISCAL QUARTER ENDED March 30, 2024 (unaudited) (in thousands, except share data) Common Stock Retained Earnings Accumulated Other Comprehensive Loss Total Shareholders’ Equity Shares Issued Amount BALANCE AT DECEMBER 30, 2023 6,934,265 $ — $ 224,283 $ ( 12,182 ) $ 212,101 Net income — — 13,691 — 13,691 Foreign currency translation adjustment — — — ( 1,105 ) ( 1,105 ) Share-based compensation expense — 1,039 — — 1,039 Restricted shares vesting 33,441 — — — — Redemption of vested employee restricted shares for tax withholding ( 12,526 ) ( 1,631 ) — — ( 1,631 ) Shares repurchased ( 65,882 ) 592 ( 9,834 ) — ( 9,242 ) Accrued excise tax on shares repurchased — — ( 65 ) — ( 65 ) Accrued dividends on unvested shares — — 77 — 77 Cash dividends paid ($ 0.42 per share) — — ( 3,075 ) — ( 3,075 ) BALANCE AT MARCH 30, 2024 6,889,298 $ — $ 225,077 $ ( 13,287 ) $ 211,790 See accompanying notes to the condensed consolidated financial statements. 8 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Summary of Significant Accounting Policies Description of Business CRA International, Inc. 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: litigation, regulatory, and financial consulting and management consulting. CRA operates in one business segment. CRA operates its business under its registered trade name, Charles River Associates. Basis of Presentation 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. Securities and Exchange Commission (“SEC”) for Quarterly Reports on Form 10-Q. Accordingly, these financial statements do not include all the information and note disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for annual financial statements. In the opinion of management, these financial statements reflect all adjustments of a normal, recurring nature necessary for the fair presentation of CRA’s results of operations, financial position, cash flows, and shareholders’ equity for the interim periods presented in conformity with U.S. GAAP. Results of operations for the interim periods presented herein are not necessarily indicative of results of operations for a full year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 28, 2024 included in CRA’s Annual Report on Form 10-K filed with the SEC on February 20, 2025. Note 1 to the Consolidated Financial Statements included in Part II, Item 8, on Form 10-K for the fiscal year ended December 28, 2024 describes the significant accounting policies and methods used in preparation of the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q. Recent Accounting Standards Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures On December 28, 2024, CRA adopted Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), which established reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. Recent Accounting Standards Not Yet Adopted Income Taxes (Topic 740): Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09") . The ASU expands annual disclosures in an entity’s income tax rate reconciliation table and requires annual disclosures regarding cash taxes paid both in the U.S. (federal, state and local) and foreign jurisdictions. ASU 2023-09 also requires income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. ASU 2023-09 is effective for CRA for annual periods beginning after December 15, 2024. CRA plans to adopt the amendment during the annual reporting for fiscal year 2025. CRA has begun to assess the impact of the amendment and has 9 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) modeled out the changes to its income tax disclosures. As the amendment relates solely to disclosures, the adoption is not expected to have an effect on CRA's financial results. Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03") . The ASU requires disclosure, in the notes to the financial statements, specified information about certain costs and expenses including employee compensation, depreciation, and intangible asset amortization. ASU 2024-03, further clarified in ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date is effective for CRA for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. CRA is in the process of evaluating the impact of adopting ASU 2024-03. 2. Revenues and Allowances The contracts CRA enters into and operates under specify whether the projects are billed on a time-and-materials or a fixed-price basis. Time-and-materials contracts are typically used for litigation, regulatory, and financial consulting projects while fixed-price contracts are principally used for management consulting projects. In general, project costs are classified in costs of services and are based on the direct salary of CRA’s employee consultants on the engagement, plus all direct expenses incurred to complete the project, including any amounts billed to CRA by its non-employee experts. Disaggregation of Revenue The following tables disaggregate CRA’s revenue by type of contract and geographic location (in thousands): Fiscal Quarter Ended Type of Contract March 29, 2025 March 30, 2024 Consulting services revenues: Fixed-price $ 30,329 $ 30,082 Time-and-materials 151,522 141,707 Total $ 181,851 $ 171,789 Revenues have been attributed to locations based on the location of the legal entity generating the revenues. Fiscal Quarter Ended Geographic Breakdown March 29, 2025 March 30, 2024 Consulting services revenues: United States $ 149,714 $ 142,204 United Kingdom 23,124 21,154 Other 9,013 8,431 Total $ 181,851 $ 171,789 10 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) Reserves for Variable Consideration and Credit Risk Revenues from CRA's consulting services are recorded at the net transaction price, which includes estimates of variable consideration for which reserves are established. Variable consideration reserves are based on specific price concessions and those expected to be extended to CRA customers estimated by CRA's historical realization rates. Reserves for variable consideration are recorded as a component of the allowances for accounts receivable and unbilled services on the condensed consolidated balance sheets. Adjustments to the reserves for variable consideration are included in revenues on the condensed consolidated statements of operations. CRA also maintains allowances for accounts receivable and unbilled services for estimated losses resulting from clients’ failure to make required payments. Under ASC 326, CRA estimates allowances based on historical charge-off rates, adjusted for days sales outstanding and expected changes to clients’ financial conditions during the anticipated collection period. Bad debt expense, net of recoveries of previously written off allowances, is recorded as a component of selling, general and administrative expenses on the condensed consolidated statements of operations. The following table presents CRA's bad debt expense, net of recoveries of previously written off allowances (in thousands): Fiscal Quarter Ended March 29, 2025 March 30, 2024 Bad debt expense (recovery), net $ 433 $ 663 Reimbursable Expenses Revenues also include reimbursements for costs incurred by CRA in fulfilling its performance obligations, including travel and other out-of-pocket expenses, fees for outside consultants, and other reimbursable expenses. CRA recovers substantially all of these costs. The following expenses are subject to reimbursement (in thousands): Fiscal Quarter Ended March 29, 2025 March 30, 2024 Reimbursable expenses $ 16,506 $ 17,061 Contract Balances from Contracts with Customers The timing of revenue recognition, billings, and cash collections results in accounts receivables, unbilled services, and contract liabilities on the condensed consolidated balance sheets. 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 receivable, net and unbilled services, net (in thousands): March 29, 2025 December 28, 2024 December 30, 2023 Accounts receivable, net $ 140,326 $ 162,293 $ 142,729 Unbilled services, net $ 82,925 $ 57,255 $ 56,827 CRA defines contract assets as assets for which it has recorded revenue because it determines that it is probable that it will earn a performance-based or contingent fee, but is not yet entitled to receive a fee because certain events, such as completion of the measurement period or client approval, must occur. The contract assets balance was immaterial as of March 29, 2025, December 28, 2024, and December 30, 2023. 11 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) When consideration is received, or such consideration is unconditionally due from a customer prior to transferring consulting services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after performance obligations have been satisfied and all revenue recognition criteria have been met. Contract liabilities are included in deferred revenue and other liabilities in the condensed consolidated balance sheets. The following table presents the closing balances of CRA's contract liabilities (in thousands): March 29, 2025 December 28, 2024 December 30, 2023 Contract liabilities $ 4,228 $ 7,340 $ 6,037 CRA recognized the following revenue that was included in the contract liabilities balance as of the opening of the respective period or for performance obligations satisfied in previous periods (in thousands): Fiscal Quarter Ended March 29, 2025 March 30, 2024 Amounts included in contract liabilities at the beginning of the period $ 6,290 $ 4,703 Performance obligations satisfied in previous periods $ 2,325 $ 2,847 3. Forgivable Loans In order to attract and retain highly skilled professionals, CRA may issue forgivable loans to employees and non-employee experts, certain of which may be denominated in local currencies. A portion of these loans is collateralized. The forgivable loans have terms that are generally between two and six years with interest rates currently between 0.59% and 5.12 %. The principal amount of forgivable loans and accrued interest is forgiven by CRA over the term of the loans, so long as the employee or non-employee expert continues employment or affiliation with CRA and complies with certain contractual requirements. During the fiscal quarter ended March 29, 2025 and fiscal year 2024 there were no balances due under these loans for which the full principal and interest were not forgiven or not collected upon termination of employment or affiliation with CRA. The forgiveness of the principal amount of the loans is recorded as compensation over the service period, which is consistent with the term of the loans. The following table presents forgivable loan activity for the respective periods (in thousands): Fiscal Quarter Ended Fiscal Year Ended March 29, 2025 December 28, 2024 Beginning balance $ 55,492 $ 53,941 Advances 27,431 45,494 Repayments ( 600 ) ( 2,761 ) Reclassifications from accrued expenses or to other assets (1) — ( 9,989 ) Amortization (2) ( 6,652 ) ( 31,055 ) Effects of foreign currency translation 195 ( 138 ) Ending balance $ 75,866 $ 55,492 Current portion of forgivable loans $ 11,527 $ 6,535 Non-current portion of forgivable loans $ 64,339 $ 48,957 _______________________________ (1) Relates to the reclassification of performance awards previously recorded as accrued expenses or forgivable loans that have been reclassified to other receivables. 12 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) (2) During the fiscal quarter ended March 29, 2025, approximately $ 0.04 million of amortization was accelerated due to involuntary terminations. During the fiscal year ended December 28, 2024, approximately $ 5.7 million of amortization was accelerated due to involuntary terminations. 4. Goodwill and Intangible Assets The changes in the carrying amount of goodwill for the fiscal quarter ended March 29, 2025 are summarized as follows (in thousands): Goodwill, at December 28, 2024 $ 165,630 Accumulated goodwill impairment ( 71,893 ) Goodwill, net at December 28, 2024 93,737 Foreign currency translation adjustment 402 Goodwill, net at March 29, 2025 $ 94,139 Goodwill, net at March 29, 2025 is comprised of g oodwill of $ 166.0 million and accumulated impairment of $ 71.9 million. There were no impairment losses related to goodwill during the fiscal quarter ended March 29, 2025 or during the fiscal ye ar ended December 28, 2024. 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. There were no impairment losses related to intangible assets during the fiscal quarter ended March 29, 2025 or during the fiscal year ended December 28, 2024. The components of acquired identifiable intangible assets are as follows (in thousands): March 29, 2025 December 28, 2024 Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships 10 $ 15,300 $ ( 8,466 ) $ 6,834 $ 15,300 $ ( 8,084 ) $ 7,216 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 second quarter of fiscal 2024. Amortization expense related to intangible asset s was $ 0.4 million and $ 0.3 million for the fiscal quarters ended March 29, 2025 and March 30, 2024, respectively. 5. Accrued Expenses Accrued expenses consist of the following (in thousands): March 29, 2025 December 28, 2024 Compensation and related expenses $ 106,520 $ 167,899 Performance awards 9,196 159 Direct project accruals 2,959 2,236 Other 15,764 11,119 Total accrued expenses $ 134,439 $ 181,413 As of March 29, 2025 and December 28, 2024, approximate ly $ 66.7 million and $ 144.2 million, respectively, of accrued bonuses were included above in “Compensation and related expenses.” 13 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) 6. Income Taxes For the fiscal quarters ended March 29, 2025 and March 30, 2024, CRA’s effective income tax rate (“ETR” ) was 27.0 % and 28.0 %, respectively. The ETR for the first quarter of fiscal 2025 wa s lower than the first quarter of fiscal 2024 primarily due to the impact of state tax law changes effective for the 2025 tax year and an increase in the tax benefit related to share-based compensation. 7. Net Income Per Share CRA calculates basic earnings per share using the two-class method. 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 ended March 29, 2025 and March 30, 2024. 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 ended March 29, 2025 and March 30, 2024. The following table presents the calculation of basic and diluted net income per share (in thousands, except per share data): Fiscal Quarter Ended March 29, 2025 March 30, 2024 Numerator: Net income — basic $ 18,002 $ 13,691 Less: net income attributable to participating shares 47 46 Net income — diluted $ 17,955 $ 13,645 Denominator: Weighted average shares outstanding — basic 6,775 6,926 Effect of dilutive stock options and restricted stock units 87 85 Weighted average shares outstanding — diluted 6,862 7,011 Net income per share: Basic $ 2.65 $ 1.97 Diluted $ 2.62 $ 1.95 Anti-dilutive share-based awards are excluded from the calculation of common stock equivalents for purposes of computing diluted weighted average shares outstanding. There were no anti-dilutive share-based awards for the fiscal quarters ended March 29, 2025 and March 30, 2024. 8. Fair Value of Financial Instruments As of March 29, 2025 and December 28, 2024, CRA did not have any financial instruments measured at fair value on a recurring basis. The contingent consideration liability pertained to estimated future contingent consideration payments related to the acquisition of bioStrategies Group, Inc. during fiscal 2022. CRA had no contingent consideration obligation during the fiscal 14 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) quarter ended March 29, 2025. The following table summarizes the changes in the contingent consideration liability for the fiscal year ended December 28, 2024 (in thousands): Fiscal Year Ended December 28, 2024 Beginning balance $ 190 Remeasurement of acquisition-related contingent consideration ( 190 ) Accretion — Ending balance $ — 9. Credit Agreement CRA is party to a Credit Agreement, dated as of August 19, 2022 (as amended, the "Credit Agreement") with Bank of America, N.A., as swingline lender, a letter of credit issuing bank and administrative agent, and with Citizens Bank, N.A., as a letter of credit issuing bank. The Credit Agreement provides CRA with a $ 250.0 million revolving credit facility, which may be decreased at CRA's option to $ 200.0 million during the period from July 16 in a year through January 15 in the next year. Additionally, for the period from January 16 to July 15 of each calendar year, CRA may elect to not increase the revolving credit facility to $ 250.0 million. The revolving credit facility includes a $ 25.0 million sublimit for the issuance of letters of credit. Under the Credit Agreement, CRA must comply with various financial and non-financial covenants. The primary financial covenants consist of a maximum consolidated net leverage ratio of 3.0 to 1 and a minimum consolidated interest coverage ratio of 2.5 to 1. The primary non-financial covenants include, but are not limited to, restrictions on CRA's ability to incur future indebtedness, engage in acquisitions or dispositions, pay dividends or repurchase capital stock, and enter into business combinations. 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 March 29, 2025, CRA was in compliance with the covenants of the Credit Agreement. There were $ 85.0 million in borrowings outstanding under the revolving credit facility as of March 29, 2025 and no borrowings outstanding as of December 28, 2024. As of March 29, 2025, the amount available under the revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $ 3.9 million. 10. Commitments and Contingencies As described in Note 9, CRA is party to standby letters of credit with its banks in support of minimum future lease payments under certain operating leases for office space. CRA is subject to legal actions arising in the ordinary course of business. In management’s opinion, based on current knowledge, CRA believes it has adequate legal defenses or insurance coverage, or both, with respect to the eventuality of such actions. CRA does not believe any settlement or judgment relating to any pending legal action would materially affect its financial position or results of operations . However, the outcome of such legal actions is inherently unpredictable and subject to inherent uncertainties. 15 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) 11. Segment Reporting CRA manages its business globally within one operating segment, professional and consulting services, in accordance with ASC Topic 280, Segment Reporting (“ASC 280”). The accounting policies of the professional and consulting services segment are the same as those described in Note 1 of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024, filed with the SEC on February 20, 2025. The chief operating decision maker, which is our Chief Executive Officer, assesses performance for the professional and consulting services segment and decides how to allocate resources based on consolidated net income that is also reported in the condensed consolidated statements of operations as net income. The measure of segment assets is reported in the condensed consolidated balance sheets as total assets. The following table represents consolidated net income reported by segment revenue, segment profit or loss, and significant segment expenses (in thousands): Fiscal Quarter Ended March 29, 2025 March 30, 2024 Revenues $ 181,851 $ 171,789 Employee compensation and fringe benefit costs 112,798 105,149 Forgivable loan amortization 6,652 5,772 Client reimbursable expenses 16,506 17,061 Other segment expense (1) 21,250 24,795 Provision for income taxes 6,643 5,321 Segment net income 18,002 13,691 Reconciliation of profit or loss Adjustments and reconciling items — — Consolidated net income $ 18,002 $ 13,691 1 Other segment expenses included in segment net income includes, rent, commissions to non-employee experts, legal and professional services, software subscription and data services, travel and entertainment expenses, training and marketing expenses, other operating expenses, depreciation and amortization, interest expense, net, and foreign currency gains (losses), net. 12. Subsequent Events On May 1, 2025, CRA announced that its Board of Directors declared a quarterly cash dividend of $ 0.49 per common share, payable on June 13, 2025 to shareholders of record as of May 27, 2025. 16 Table of Contents