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 28, 2014.
Revenue for the second quarter of fiscal 2014 increased to $78.2
million, compared with $65.2 million for the fiscal second quarter ended
June 29, 2013. Non-GAAP revenue for the second quarter of fiscal 2014
increased to $76.9 million, compared with $64.1 million for the second
quarter of fiscal 2013.
Net income for the second quarter of fiscal 2014 was $3.2 million, or
$0.32 per diluted share, compared with $1.4 million, or $0.14 per
diluted share, for the second quarter of fiscal 2013. Non-GAAP net
income for the second quarter of fiscal 2014 was $3.2 million, or $0.32
per diluted share, compared with $1.5 million, or $0.15 per
diluted share, for the second quarter of fiscal 2013. GAAP and
non-GAAP net income and earnings per share for the second quarter of
fiscal 2014 reflect a non-cash tax expense of $750,000, or $0.07 and
$0.08 per diluted share, respectively, relating to the correction of an
error in the valuation of deferred tax assets in CRA's historical
financial statements, which is unrelated to current operations.
Adjusted EBITDA for the second quarter of fiscal 2014 was $12.9 million,
or 16.5% of revenue, compared with $8.9 million, or 13.6% of revenue,
for the second quarter of fiscal 2013. On a non-GAAP basis, the Adjusted
EBITDA for the second quarter of fiscal 2014 was $12.9 million, or 16.8%
of revenue, compared with $9.0 million, or 14.0% of revenue, for the
second quarter of fiscal 2013.
A complete reconciliation between revenue, net income and net income per
diluted share, and the calculation of Adjusted EBITDA, on a GAAP and
non-GAAP basis, for the second quarters of fiscal 2014 and fiscal 2013,
and the year to date periods ended as of the end of these quarters, are
provided in the financial tables at the end of this release.
"Our second quarter fiscal 2014 results reflect strong contributions
from across our portfolio," said Paul
Maleh, CRA's President and Chief Executive Officer. "On a non-GAAP
basis, our portfolio delivered 20.0% revenue growth compared with a weak
second quarter last year, and 2.4% revenue growth compared with a strong
sequential first quarter."
"During the second quarter, the performances of our Litigation &
Regulatory and Management Consulting businesses were led by solid
contributions in many practices. For example, the Antitrust &
Competition Economics practice and Marakon worked on several large
engagements and delivered strong results, both sequentially and
year-over-year. Companywide utilization for the quarter was 78%,
consistent with the sequential first quarter and up significantly from
the 67% in the same period last year."
"Non-GAAP SG&A expenses for the second quarter of fiscal 2014, after
adjusting for commissions to non-employee experts of $2.7 million,
decreased to 18.0% of revenue, compared with 19.6% of revenue in the
second quarter last year. The decrease in non-GAAP SG&A as a percentage
of revenue was primarily due to our ability to continue leveraging our
cost structure during revenue growth."
"As of June 28, 2014, cash and cash equivalents were $27.6 million, down
from $32.5 million at the end of the first quarter of fiscal 2014. The
repurchase of 157,000 shares of our common stock, the payment of 2013
bonuses, and an increase of eight days in our DSO were the principal
factors driving the reduction in the cash balance."
"Our portfolio quality is high, project lead flow is strong, and project
conversion rates continue to improve. CRA's financial position is
healthy, and we expect to actively pursue new hires and select
acquisitions that support our core offerings. Through a balanced
approach of organic investments and strategic acquisitions, and assuming
a stable economy, our long-term goal is to profitably deliver top-line
growth in the mid-to-high single digits on an annualized basis,"
Conference Call Information and Prepared CFO Remarks
CRA will host a conference call this morning at 9:00 a.m. ET to discuss
its second-quarter 2014 financial results. To listen to the live call,
please visit the "Investor
Relations" section of the Company'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 Wayne Mackie under "Conference
Call Materials" in the investor relations section on the Company'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 litigation,
regulatory, and financial consulting, and management consulting. 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 http://www.crai.com.
NON-GAAP FINANCIAL MEASURES
In addition to reporting its financial results in accordance with U.S.
generally accepted accounting principles, or GAAP, the Company has also
provided in this release non-GAAP financial information. The Company
believes the use of non-GAAP measures in addition to GAAP measures is an
additional useful method of evaluating its results of operations. The
Company believes that presenting its financial results excluding certain
non-cash expenses and the results of the Company's NeuCo subsidiary, and
excluding commissions to non-employee experts from SG&A, is important to
investors and management because it is more indicative of the Company's
ongoing operating results and financial condition. These non-GAAP
financial measures should be considered in conjunction with, but not as
a substitute for, the financial information presented in accordance with
GAAP, and the expected results calculated in accordance with GAAP and
reconciliations to those expected results should be carefully evaluated.
The non-GAAP financial measures used by the Company may be calculated
differently from, and therefore may not be comparable to, similarly
titled measures used by other companies. Specifically, for the second
quarters of fiscal 2013 and 2014, and the year to date periods ended as
of the end of these quarters, the Company has excluded NeuCo's results.
Also, in calculating "Adjusted EBITDA," the Company has excluded the
following non-cash expenses: depreciation and amortization, share-based
compensation expenses, and amortization of forgivable loans.
SAFE HARBOR STATEMENT
Statements in this press release concerning the future business,
operating results and financial condition of the Company, including
statements regarding the quality of its portfolio, its project lead
flow, its conversion rates and its financial position, and statements
using the terms "expect," "balanced approach," "long-term goal," or
similar expressions are "forward-looking" statements as defined in the
Private Securities Litigation Reform Act of 1995. These
statements are based upon management's current expectations and are
subject to a number of factors and uncertainties. Information
contained in these forward-looking statements is inherently uncertain,
and actual performance and results may differ materially due to many
important factors. Such factors that could cause actual
performance or results to differ materially from any forward-looking
statements made by the Company include, among others, the Company's
restructuring costs and attributable annual cost savings, changes in the
Company's effective tax rate, share dilution from the Company's
stock-based compensation, dependence on key personnel, attracting,
recruiting and retaining qualified consultants, dependence on outside
experts, utilization rates, completing acquisitions and factors related
to its completed acquisitions, including integration of personnel,
clients and offices, and unanticipated expenses and liabilities, the
risk of impairment write downs to the Company's intangible assets,
including goodwill, if the Company's enterprise value declines below
certain levels, risks associated with acquisitions it may make in the
future, risks inherent in international operations, the performance of
NeuCo, changes in accounting standards, rules and regulations, changes
in the law that affect the Company's practice areas, management of new
offices, the potential loss of clients, the ability of customers to
terminate the Company's engagements on short notice, dependence on the
growth of the Company's management consulting practice, the
unpredictable nature of litigation-related projects, the ability of the
Company to integrate successfully new consultants into its practice, the
Company's ability to collect on forgivable loans should any become due,
general economic conditions, intense competition, risks inherent in
litigation, and professional liability. Further information on
these and other potential factors that could affect the Company's
financial results is included in the Company's periodic filings with the
Securities and Exchange Commission. The Company cannot guarantee
any future results, levels of activity, performance or achievement. The
Company undertakes no obligation to update any of its forward-looking
statements after the date of this press release.
Fiscal Year to DatePeriod Ended
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