Acquisitions may disrupt our operations or adversely affect our results

        We regularly evaluate opportunities to acquire other businesses. The expenses we incur evaluating and pursuing acquisitions could adversely affect our results of operations. If we acquire a business we may be unable to manage it profitably or successfully integrate its operations with our own. Moreover, we may be unable to realize the financial, operational, and other benefits we anticipate from these acquisitions or any other acquisition. Many potential acquisition targets do not meet our criteria, and, for those that do, we face significant competition for these acquisitions from our direct competitors, private equity funds, and other enterprises. Competition for future acquisition opportunities in our markets could increase the price we pay for businesses we acquire and could reduce the number of

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potential acquisition targets. Further, acquisitions may involve a number of special financial and business risks, such as:

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diversion of our management's time, attention, and resources;



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decreased utilization during the integration process;



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loss of key acquired personnel;



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increased costs to improve or coordinate managerial, operational, financial, and administrative systems, including compliance with the Sarbanes-Oxley Act of 2002;



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dilutive issuances of equity securities, including convertible debt securities;



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the assumption of legal liabilities;



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amortization of acquired intangible assets;



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potential write-offs related to the impairment of goodwill, including if our enterprise value declines below certain levels;



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difficulties in integrating diverse corporate cultures; and



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additional conflicts of interests.

Our clients may be unable or unwilling to pay us for our services

        Our clients include some companies that may from time to time encounter financial difficulties, particularly during a downward trend in the economy, or may dispute the services we provide. If a client's financial difficulties become severe or a dispute arises, the client may be unwilling or unable to pay our invoices in the ordinary course of business, which could adversely affect collections of both our accounts receivable and unbilled services. On occasion, some of our clients have entered bankruptcy, which has prevented us from collecting amounts owed to us. The bankruptcy of a client with a substantial accounts receivable could have a material adverse effect on our financial condition and results of operations. Historically, a small number of clients who have paid sizable invoices have later declared bankruptcy, and a court determination that we were not properly entitled to any of those payments may result in repayment by us of some or all of them, which could adversely affect our financial condition and results of operations.

        Additionally, from time to time, we may derive a significant amount of revenue from contracts with government agencies in the United States. Because of this, changes in federal government budgetary priorities could directly affect our financial performance. This could result in the cancellation of contracts and/or the incurrence of substantial costs without reimbursement under our contracts with the federal government, which could have a negative effect on our business, financial condition, results of operations and cash flows.

The market price of our common stock may be volatile

        The market price of our common stock has fluctuated widely and may continue to do so. Many factors could cause the market price of our common stock to rise and fall. Some of these factors are:

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variations in our quarterly results of operations;



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changes in quarterly dividends;



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the hiring or departure of key personnel or non-employee experts;



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changes in our professional reputation;



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the introduction of new services by us or our competitors;



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acquisitions or strategic alliances involving us or our competitors;

statement of operations.

capital for such period.

        We are responsible for establishingfluctuations of revenue and maintaining adequate internal control over our financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act. As disclosed in Item 9A, we identified material weaknesses in our internal control over financial reporting. A material weakness is defined as a deficiency, or combinationresults of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. As a result of these material weaknesses, we concluded that our internal control over financial reporting was not effective based on criteria set forth by the Committee of Sponsoring Organization of the Treadway Commission in Internal Control—An Integrated Framework (2013).

        To implement remedial measures, we may need to commit additional resources, hire additional staff, and provide additional management oversight. If our remedial measures are insufficient to address the material weaknesses, or if additional material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain material misstatements, and we could be required to restate our financial results.operations. In addition, if we are unablefail to successfully remediate these material weaknessesaccurately estimate third-party vendor expenses and ifthe resources required for a fixed-price project or fail to satisfy our contractual obligations in a manner consistent with the project budget, we are unable to produce accurate and timely financial statements,might generate a smaller profit or incur a loss on the project. Revenue generated from fixed-price contracts was approximately 18% of our stock price may be adversely

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insurance with a licensed insurance carrierscarrier to limit our ultimate risk exposure for any one case and for our total liability.

world, including Boston, San Francisco, Oakland, New York, Chicago, London, and Washington, D.C.

fiscal 2021, respectively.

In addition, much of our junior staff hiring occurs in our fiscal third quarter during which our new colleagues receive training and become acclimated to the organization. As a result, utilization may be impacted for the latter half of the year.

Noncontrolling Interest

        Please refer to the section captioned "Principles of Consolidation" and "GNU Interest" in note 1 of our Notes to Consolidated Financial Statements contained in this Form 10-K.

        Revenues also include reimbursements, which include reimbursement for travel, and other out-of-pocket expenses, outside consultants and other third-party vendor expenses, are generally included in revenues, and an equivalent amount of reimbursable expenses. We maintain accounts receivable allowances for estimated losses resulting from disputed amounts orexpenses is included in costs of services in the inability of our

        Our Amended and Restated 2006 Equity Incentive Plan, as amended (the "2006 Equity Plan"), authorizes the grant of a variety of incentive and performance equity awards to our directors, employees and independent contractors, including stock options, shares of restricted stock, restricted stock units, and other equity awards. The 2006 Equity Plan has used standard "fungibility ratios" to count grants of full-share awards (such as shares of restricted stock and restricted stock units) against the maximum number shares issuableobligations under the plan. The current fungibility ratio, applicable to full-share grants made oncontract and when the customer pays is one year or after April 30, 2010, is 1.83. The fungibility ratio applicable to full-share grants made before March 12, 2008 was 1.8, and the fungibility ratio applicable to full-share grants made from March 12, 2008 and before April 30, 2010 was 2.2. The fungibility ratio does not apply to grants of stock options. The maximum number of shares issuable under the 2006 Equity Plan is 5,274,000, consisting of (1) 500,000 shares initially reserved for issuance under the 2006 Equity Plan, (2) 1,000,000 shares that either remained for future awards under our 1998 Incentive and Nonqualified Stock Option Plan (the "1998 Option Plan") on April 21, 2006, the date our shareholders initially approved the 2006 Equity Plan, or were subject to stock options issued under the 1998 Option Plan that were forfeited or terminated after April 21, 2006, (3) 210,000 shares approved by our shareholders in 2008, (4) 1,464,000 shares approved by our shareholders in 2010, and (5) the 2,500,000 shares approved by our shareholders in 2012 reduced by the 800,000 shares cancelled by our board of directors in fiscal 2016, and (6) the 400,000 shares approved by CRA's shareholders on July 12, 2017.

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        As of December 30, 2017, there were 434,374 shares of our common stock available for award grants under the 2006 Equity Incentive plan, calculated as follows:

Deferred Compensation.    We account for performanceperformance-based and service basedservice-based cash awards using a prospectivean accrual method. Undermethod where changes in estimates are accounted for prospectively over the requirements of ASC Topic 710, "Compensation General" ("ASC Topic 710") toremaining service period. To the extent the terms of the contractan award attribute all or a portion of the expected future benefits to a period of service greater than one year, the cost of those benefits areis accrued over the period of the employeeemployee's or non-employee's requisite service period in a systematic and rational manner. We have implemented a process that requires the liability to be re-evaluated on a quarterly basis.

        Valuation

        In accordance with ASC Topic 350, "Intangibles—Goodwill and Other" ("ASC Topic 350"), goodwill and intangible assets with indefinite lives are not subject to amortization, but are monitored annually as of October 15th for impairment, or more frequently, as necessary, if events or circumstances exist that would more likely than not reduce the fair value of the reporting unit below its carrying amount. For our fiscal 2017 goodwill impairment analysis, we operate under one reporting unit, which is consulting services. Prior to April 13, 2016, we operated under two reporting units, which were consulting services and GNU.

        Under ASC Topic 350, in performing the first step of the goodwill impairment testing and measurement process, we compare the estimated value of each of our reporting units to its net book value to identify potential impairment. We estimate the fair value of our consulting business utilizing our market capitalization, plus an appropriate control premium, less prior to fiscal 2016, the estimated fair value of GNU. Market capitalization is determined by multiplying our shares outstanding on the test date by the market price of our common stock on that date. We determine the control premium

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utilizing data from publicly available premium studies for the trailing four quarters for public company transactions in our industry group. If the estimated fair value of a reporting unit is less than its net book value, the second step is performed to determine if goodwill is impaired. If through the impairment evaluation process a reporting unit determines that goodwill has been impaired, an impairment charge would be recorded in our consolidated income statement.

        GNU incurred an impairment loss during the fourth quarter of fiscal 2015. CRA's consulting services did not incur an impairment loss related to goodwill during fiscal 2017, fiscal 2016 or fiscal 2015. The estimated fair value of CRA's consulting services was greater than its carrying value as of October 15^th in each of these fiscal years.

        The re-measurement of a reporting unit's fair value and that of its underlying assets and liabilities is classified as a Level 3 fair value assessment due to the significance of unobservable inputs developed using specific information from the reporting units. The fair value adjustment to goodwill, which resulted in GNU's impairment charge in the fourth quarter of fiscal 2015, was computed as the difference between its fair value and the fair value of its underlying assets and liabilities. The unobservable inputs used to determine the fair value of the underlying assets and liabilities are based on our specific information such asassumptions, including estimates of revenue and cost growth rates, profit margins, discount rates, and estimated costs. See Note 3, "Goodwill and Intangible Assets," for further details.

        We assess the impairment of amortizable intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors we consider important that could trigger an impairment review include the following:

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a significant underperformance relative to expected historical or projected future operating results;



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a significant change in the manner of our use of the acquired asset or the strategy for our overall business; and



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a significant negative industry or economic trend.

        If we were to determine that an impairment evaluation is required, we would review the expected future undiscounted cash flows to be generated by the assets. Ifacquired assets, discount rates that we determine thatbelieve reflect the carrying valuerisk factors associated with the related cash flows, and estimates of useful lives. The useful lives of identifiable intangible assets may not be recoverable, we measure any impairmentacquired in a business acquisition are estimated based on athe expected period that we will receive substantially all of the projected discounted cash flow method using a discount rate determined by our management to be commensurate withfuture benefits from the risk inherent in our current business model.

intangible asset.

        On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Act") was enacted into law and the new legislation contains several key tax provisions that affected us, including a reduction of the corporate income tax rate to 21% effective JanuaryNote 1 2018, an expansion of limitations around the deductibility of meals and entertainment and compensation of our executive officers, among others. We are requiredNotes to recognize the effect of the tax law changes in the period of enactment, such as remeasuring our U.S. deferred tax assets and liabilities. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), which allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date.

        Since the Tax Act was passed late in the fourth quarter of 2017, and ongoing guidance and accounting interpretation are expected over the next 12 months, we consider the accounting to be incomplete due to the forthcoming guidance and our ongoing analysis of final year-end data and tax positions. Adjustments to these preliminary amounts identified during the measurement period, as defined, will be included as an adjustment to tax expense from continuing operations in the period the amounts are determined. We believe that we have made a good faith effort to complete the accounting under ASC 740 with respect to the Tax Act. SAB 118 provides that the measurement period is complete when a company's accounting is complete and in no circumstances, should the measurement period extend beyond one year from the enactment date of the applicable change in tax law.

        In connection with the Tax Act, we have recorded a provisional amount attributable to the remeasurement of deferred taxes assets and liabilities from a 35 percent tax rate to the new 21 percent rate. The provisional amount recorded was increase in tax expense in the amount of $3.6 million.

        Business Combinations.    We recognize and measure identifiable assets acquired, and liabilities assumed, of our acquirees as of the acquisition date at fair value. Fair value measurements require extensive use of estimates and assumptions, including estimates of future cash flows to be generated by the acquired assets. We recognize and measure contingent consideration at fair value as of the acquisition date using a monte carlo simulation. Contingent consideration obligations that are classified as liabilities are remeasured at fair value each reporting period with the changes in fair value resulting from either the passage of time, revised expectations of performance, or ultimate settlement to the amount or timing of the initial measurement recognized in the consolidated statements of comprehensive income.

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Recent Accounting Standards

Revenue from Contracts with Customers

        In August 2015,Consolidated Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2015-14,Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ("ASU 2015-14"). ASU 2015-14 defers by one year the effective date of ASU No. 2014-09,Revenue from Contracts with Customers ("ASU 2014-09"). The deferral results in ASU 2014-09 being effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The main provision of ASU 2014-09 is to recognize revenue when control of the goods or services transfers to the customer, as opposed to the existing guidance of recognizing revenue when the risks and rewards transfer to the customer. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The standard will have an impact on the amount and timing of revenue recognized and the related disclosures on our financial statements. We will adopt ASU 2014-09 effective December 31, 2017, using the modified retrospective approach. Upon adoption, we will recognize the cumulative effect of adopting this guidance as an adjustment to our opening balance of retained earnings. Prior periods will not be retrospectively adjusted. The cumulative effect adjustment will result in an increase to our opening balance of retained earnings of between approximately $0.3 million to $0.7 million, net of tax.

        All revenue derived from contracts with our customers are generated from our time-and-materials or fixed-price contracts. For our time-and-materials projects, we will use the right-to-invoice practical expedient when we have a right to consideration from a customer in an amount that corresponds directly with the value of the entity's performance completed to date. For our fixed-price arrangements, we will recognize revenue as individual performance obligations are satisfied, using a measure of progress that is based on the efforts and costs incurred (i.e. an input method measure of progress). These methods for determining the appropriate revenue recognition under ASU 2014-09 is consistent with our current revenue recognition policy.

Leases (Topic 842)

        In February 2016, the FASB issued ASU No. 2016-02,Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 establishes a comprehensive new lease accounting model. The standard clarifies the definition of a lease, requires a dual approach to lease classification similar to current lease classifications, and causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease term of more than twelve months. The standard is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. The standard requires a modified retrospective transition for capital or operating leases existing at or entered into after the beginning of the earliest comparative period presented in the financial statements, but it does not require transition accounting for leases that expire prior to the date of initial application. We have not yet determined the effects, if any, that the adoption of ASU 2016-02 may have on our financial position, results of operations, cash flows, or disclosures.

Improvements to Employee Share-Based Payment Accounting

        In March 2016, the FASB issued ASU No. 2016-09,Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 requires all of the tax effects related to share-based payments to be recorded through the income statement. The pronouncement also allows for the option of estimating awards expected to vest or accounting for forfeitures when they occur. In the statement of cash flows, cash paid by employers when withholding shares for tax withholding purposes should be classified as a financing activity whereas cash flows resulting from excess tax benefits should be reported in operating activities. The amendmentsStatements contained in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Accordingly, we adopted ASU No. 2016-09 on January 1, 2017, resulting in the recognition of a tax benefit of $0.05 million to retained earnings as of that date. We had traditionally classified employee taxes paid through employer share withholdings as financing activities, therefore no