Charles River Associates (NASDAQ:CRAI), a worldwide leader in providing economic, financial, and management consulting services, today announced financial results for the fiscal third quarter ended October 1, 2016 and the initiation of a quarterly cash dividend.
Key Financial Results
- Revenue up 6.8% year over year to $81.7 million; non-GAAP revenue up 8.2% year over year to $81.7 million.
- Net income up 11.6% year over year to $3.2 million; non-GAAP net income up 11.2% year over year to $3.2 million.
- Earnings per diluted share increased 22.6% year over year to $0.38; non-GAAP earnings per diluted share increased 21.9% year over year to $0.39.
- Non-GAAP Adjusted EBITDA grew 16.7% year over year to $13.8 million.
- On a constant currency basis relative to the third quarter of fiscal 2015, GAAP and non-GAAP revenue would have increased by approximately $2.2 million, resulting in year-over-year growth of 9.6% and 11.2%, respectively, whereas foreign currency headwinds had a de minimis impact on GAAP and non-GAAP net income, earnings per diluted share, and Adjusted EBITDA.
- On October 26, 2016, CRA’s Board of Directors declared a quarterly cash dividend of $0.14 per common share, payable on December 16, 2016 to shareholders of record as of November 20, 2016. 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.
Management Commentary
“Consistent with the first half of the year, CRA delivered strong financial results in the third quarter of fiscal 2016,” said Paul Maleh, CRA’s President and Chief Executive Officer. “Continued broad-based demand for our services provided CRA the opportunity to welcome more than 70 new colleagues, increasing quarter-end headcount by 7% compared with a year ago, while also achieving companywide quarterly utilization of 73%. We grew non-GAAP revenue by 8.2% to $81.7 million with double-digit revenue growth year over year in Energy; Finance, including legacy operations and our new colleagues in Forensic & Cyber Investigations; Labor & Employment; Life Sciences; and Marakon. International operations experienced more than 20% revenue growth year over year, led by our Antitrust & Competition Economics, Life Sciences, and Marakon practices, which would have been even stronger if adjusted for foreign currency headwinds.”
“Given the strength of our firm and its ability to generate strong cash flows, we can both invest in the business and return capital to shareholders,” said Maleh. “Our profitable growth and the initiation of a quarterly dividend, combined with our stock repurchase activity, demonstrate CRA’s continued commitment to deliver value to shareholders. During the third quarter, we repurchased approximately 111,000 shares of common stock for $2.9 million, bringing our year-to-date repurchases to approximately 784,000 shares for $19.1 million lowering our shares outstanding by 7.4% to 8.2 million shares.”
Outlook and Financial Guidance
“Looking ahead, we are positioned to build on the strong momentum seen year to date across our portfolio,” Maleh said. “On a constant currency basis relative to fiscal 2015, we expect to exceed our previously announced fiscal 2016 guidance for non-GAAP revenue of $312 million to $322 million and to be in the upper half of our non-GAAP Adjusted EBITDA margin range of 15.8% to 16.6%. While we are encouraged by CRA’s solid performance through the first three quarters of fiscal 2016, we remain mindful of short-term challenges arising from the integration of newly hired professionals, the potential impact of seasonality, and uncertainties around global economic conditions.”
CRA does not provide reconciliations of its non-GAAP revenue and Adjusted EBITDA margin guidance to the GAAP comparable financial measures because CRA is unable to estimate with reasonable certainty the financial results of its former NeuCo subsidiary, now known as GNU123 Liquidating Corporation (“GNU”), the timing and amount of forgivable loans issued for talent acquisition, share-based compensation expense, unusual gains or charges, foreign exchange rates, and the resulting effect of these items 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, and further information regarding the non-GAAP measures presented in this release is provided below under the heading “Non-GAAP Financial Measures.”
Conference Call Information and Prepared CFO Remarks
CRA will host a conference call this morning at 10:00 a.m. ET to discuss its third quarter 2016 financial results. To listen to the live call, please visit the “Investor Relations” section of CRA’s website at http://www.crai.com, or dial (877) 709-8155 or (201) 689-8881. An archived version of the webcast will be available on CRA’s website for one year.
In combination with this press release, CRA has posted prepared remarks by its CFO 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 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 and celebrated its 50th anniversary in 2015. Detailed information about Charles River Associates, a registered trade name of CRA International, Inc., is available at www.crai.com.