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FOR IMMEDIATE RELEASE
Contact:
| Wayne Mackie | Jim Buckley | |
| Vice President, Chief Financial Officer | Executive Vice President | |
| CRA International | Sharon Merrill Associates, Inc. | |
| 617-425-3700 | 617-542-5300 |
CRA INTERNATIONAL REPORTS THIRD-QUARTER
FISCAL 2005 FINANCIAL RESULTS
Company Achieves Revenue Growth of 25 Percent; Net Income Increases Nearly 47 Percent
BOSTON, September 29, 2005—CRA International, Inc. (Nasdaq: CRAI), an internationally known leader in providing economic, financial, and management consulting services, today reported financial results for its third quarter of fiscal 2005, the sixteen weeks ended September 2, 2005.
Third-quarter fiscal 2005 revenue increased 25 percent to $92.5 million from $74.2 million for the third quarter of fiscal 2004. Net income for the third quarter of fiscal 2005 increased approximately 47 percent to $7.9 million, or $0.66 per diluted share, from $5.4 million, or $0.52 per diluted share, in the third quarter of fiscal 2004. CRA International's effective tax rate for the third quarter of fiscal 2005 was 40.5 percent, compared with 51.5 percent in the third quarter of fiscal 2004. Weighted average diluted shares outstanding used to calculate earnings per share in the third quarter of fiscal 2005 were 12.0 million, versus 10.4 million in the third quarter of fiscal 2004.
Revenue for the first three quarters of fiscal 2005 was $221.7 million, a 40 percent increase from $158.4 million in the same period a year earlier. Net income for the first three quarters of fiscal 2005 was $18.0 million, a 50 percent increase from $12.0 million in the first three quarters of fiscal 2004. Earnings per diluted share were $1.58 in the first three quarters of fiscal 2005 compared with $1.13 in the first three quarters of fiscal 2004. Weighted average diluted shares outstanding used to calculate earnings per share in the first three quarters of fiscal 2005 were 11.4 million, versus 10.6 million in the first three quarters of fiscal 2004.
Comments on the Third Quarter
James C. Burrows, CRA International's President and CEO, said, "Our third-quarter results reflect a combination of acquisition and organic growth stemming in part from merger-driven activity in our global competition practice and from continued growth in our European and Middle East consulting business."
"The steps we took to bolster our London operation are reflected in our international results in the third quarter," continued Burrows. "The acquisitions of Lee & Allen and the former Lexecon Ltd business expanded our overseas consulting roster and greatly expanded our capabilities. This contributed to the improved performance of our London office, which coincided with positive contributions from our other international locations. The improved international performance directly impacted our tax rate, resulting in an effective tax rate for the quarter of 40.5 percent, which lowers our year-to-date tax rate to 43.3 percent."
Outlook and Financial Guidance
Burrows concluded, "Based on year-to-date results and the acquisitions made during the year, we currently expect full-year 2005 revenue growth to be at the low end of the 35-40 percent range. In addition, taking into account the June stock offering, we anticipate full-year EPS growth in the 32-40 percent range. This is based on an average diluted share count of approximately 12.2 million
shares for the fourth quarter and assumes a stock price of approximately $47.18, which was the average closing price of the 10 trading days through September 27, 2005. Deviations from this stock price will cause our earnings per share to vary based on share dilution from our stock options and convertible bonds. The above estimates are based on full year utilization at the low end of our 78-80 percent guidance range, a tax rate of approximately 43 percent for the year, and annual organic headcount growth of approximately 10 percent."
Conference Call/Webcast Information
CRA International will host a conference call this morning at 11:00 a.m. ET to discuss its third-quarter fiscal 2005 financial results. To listen to a live webcast of the conference call, please visit the Investor Relations section of CRA's website, www.crai.com. CRA's third-quarter fiscal 2005 conference call also can be heard live by dialing (913) 981-5558 or (800) 478-6251 prior to the start of the call. Please refer to confirmation code 4550244. A replay of the call also will be available on the Company's website.
About CRA International
Founded in 1965, CRA International is an economics, finance, and business consulting firm that works with businesses, law firms, accounting firms, and governments in providing a wide range of services. CRA combines economic and financial analysis with expertise in litigation and regulatory support, business strategy and planning, market and demand forecasting, policy analysis, and engineering and technology management. The firm is distinguished by a corporate philosophy of providing responsive, top-quality consulting; an interdisciplinary team approach; unsurpassed economic, financial, and other analytic skills; and pragmatic business insights. In addition to its corporate headquarters in Boston and international offices in Brussels, Canberra, Dubai, Hong Kong, London, Melbourne, Mexico City, Sydney, Toronto, and Wellington, CRA also has U.S. offices in Cambridge, Chicago, College Station, Dallas, Houston, New York, Oakland, Pasadena, Philadelphia, Salt Lake City, Silicon Valley, and Washington, D.C. Detailed information about CRA can be found at www.crai.com.
Statements in this press release concerning the future business, operating results, and financial condition of the Company and statements using the terms "anticipates," "believes," "expects," "should," 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 results to differ materially from any forward-looking statements made by the Company include, among others, changes in the Company's effective tax rate, share dilution from the Company's convertible debt offering, dependence on key personnel, attracting and retaining qualified consultants, dependence on outside experts, utilization rates, risks associated with acquisitions, risks inherent in international operations, NeuCo's performance, management of new offices, dependence on growth of the Company's business consulting practice, the ability of the Company to integrate successfully new consultants into its practice, intense competition, 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 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.
CRA's consolidated statements of income and consolidated balance sheet are attached.
CRA INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
| | Sixteen Weeks Ended | Sixteen Weeks Ended | Forty Weeks Ended | Forty Weeks Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | September 2, 2005 | September 3, 2004 | September 2, 2005 | September 3, 2004 | ||||||||||
| Revenues | $ | 92,515 | $ | 74,205 | $ | 221,674 | $ | 158,400 | ||||||
| Costs of services | 54,893 | 45,569 | 131,925 | 94,114 | ||||||||||
| Gross profit | 37,622 | 28,636 | 89,749 | 64,286 | ||||||||||
Selling, general and administrative | 23,865 | 17,216 | 56,583 | 41,187 | ||||||||||
| Income from operations | 13,757 | 11,420 | 33,166 | 23,099 | ||||||||||
Interest and other income (expense), net | (281 | ) | (717 | ) | (1,417 | ) | (470 | ) | ||||||
| Income before provision for income taxes and minority interest | 13,476 | 10,703 | 31,749 | 22,629 | ||||||||||
| Provision for income taxes | (5,458 | ) | (5,507 | ) | (13,752 | ) | (10,635 | ) | ||||||
| Income before minority interest | 8,018 | 5,196 | 17,997 | 11,994 | ||||||||||
| Minority interest | (132 | ) | 177 | (3 | ) | (20 | ) | |||||||
| Net income | $ | 7,886 | $ | 5,373 | $ | 17,994 | $ | 11,974 | ||||||
Net income per share: | ||||||||||||||
| Basic | $ | 0.73 | $ | 0.54 | $ | 1.75 | $ | 1.19 | ||||||
| Diluted | $ | 0.66 | $ | 0.52 | $ | 1.58 | $ | 1.13 | ||||||
Weighted average number of shares outstanding: | ||||||||||||||
| Basic | 10,782 | 9,909 | 10,308 | 10,072 | ||||||||||
| Diluted | 12,010 | 10,352 | 11,416 | 10,564 | ||||||||||
CRA INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
| | September 2, 2005 | November 27, 2004 | |||||
|---|---|---|---|---|---|---|---|
| Assets | |||||||
| Cash, cash equivalents and short-term investments | $ | 104,364 | $ | 67,811 | |||
| Accounts receivable and unbilled, net | 87,812 | 75,531 | |||||
| Other current assets | 16,734 | 19,480 | |||||
| Total current assets | 208,910 | 162,822 | |||||
Property and equipment, net | 26,192 | 18,528 | |||||
| Goodwill and intangible assets, net | 122,929 | 94,509 | |||||
| Long-term investments | — | — | |||||
| Other assets | 11,372 | 12,952 | |||||
| Total assets | $ | 369,403 | $ | 288,811 | |||
| Liabilities and stockholders' equity | |||||||
| Current liabilities | $ | 68,390 | $ | 61,503 | |||
| Long-term liabilities | 99,705 | 100,282 | |||||
| Total liabilities | 168,095 | 161,785 | |||||
Total stockholders' equity | 201,308 | 127,026 | |||||
| Total liabilities and stockholders' equity | $ | 369,403 | $ | 288,811 | |||