Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 02, 2021 | Oct. 29, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Oct. 2, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-24049 | |
Entity Registrant Name | CRA International, Inc. | |
Entity Incorporation, State or Country Code | MA | |
Entity Tax Identification Number | 04-2372210 | |
Entity Address, Address Line One | 200 Clarendon Street | |
Entity Address, City or Town | Boston | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 02116-5092 | |
City Area Code | 617 | |
Local Phone Number | 425-3000 | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | CRAI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 7,427,079 | |
Entity Central Index Key | 0001053706 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-01 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Income Statement [Abstract] | ||||
Revenues | $ 136,412 | $ 121,762 | $ 431,167 | $ 370,951 |
Costs of services (exclusive of depreciation and amortization) | 95,980 | 88,304 | 306,396 | 269,462 |
Selling, general and administrative expenses | 24,490 | 22,194 | 71,740 | 67,742 |
Depreciation and amortization | 3,141 | 3,244 | 9,657 | 9,293 |
Income from operations | 12,801 | 8,020 | 43,374 | 24,454 |
Interest expense, net | (183) | (277) | (791) | (1,011) |
Foreign currency gains (losses), net | 235 | (217) | (253) | 1,103 |
Income before provision for income taxes | 12,853 | 7,526 | 42,330 | 24,546 |
Provision for income taxes | 1,908 | 2,123 | 9,318 | 6,744 |
Net income | $ 10,945 | $ 5,403 | $ 33,012 | $ 17,802 |
Net income per share: | ||||
Basic (in dollars per share) | $ 1.48 | $ 0.69 | $ 4.42 | $ 2.28 |
Diluted (in dollars per share) | $ 1.44 | $ 0.68 | $ 4.31 | $ 2.23 |
Weighted average number of shares outstanding: | ||||
Basic (in shares) | 7,375 | 7,771 | 7,440 | 7,780 |
Diluted (in shares) | 7,560 | 7,934 | 7,643 | 7,964 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 10,945 | $ 5,403 | $ 33,012 | $ 17,802 |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustments, net of tax | (1,028) | 1,589 | (1,275) | (302) |
Comprehensive income | $ 9,917 | $ 6,992 | $ 31,737 | $ 17,500 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Oct. 02, 2021 | Jan. 02, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 19,665 | $ 45,677 |
Accounts receivable, net of allowances of $3,915 at October 2, 2021 and $3,595 at January 2, 2021 | 108,035 | 111,595 |
Unbilled services, net of allowances of $1,204 at October 2, 2021 and $1,000 at January 2, 2021 | 65,799 | 40,881 |
Prepaid expenses and other current assets | 10,740 | 7,068 |
Forgivable loans | 9,662 | 14,749 |
Total current assets | 213,901 | 219,970 |
Property and equipment, net | 55,577 | 62,878 |
Goodwill | 88,966 | 89,187 |
Intangible assets, net | 4,400 | 5,108 |
Right-of-use assets | 113,759 | 122,144 |
Deferred income taxes | 11,125 | 9,667 |
Forgivable loans, net of current portion | 40,387 | 46,864 |
Other assets | 1,792 | 2,692 |
Total assets | 529,907 | 558,510 |
Current liabilities: | ||
Accounts payable | 22,916 | 19,430 |
Accrued expenses | 128,701 | 136,376 |
Deferred revenue and other liabilities | 5,826 | 9,866 |
Current portion of lease liabilities | 14,188 | 13,557 |
Current portion of deferred compensation | 4,439 | 20,902 |
Revolving line of credit | 6,000 | 0 |
Total current liabilities | 182,070 | 200,131 |
Non-current liabilities: | ||
Deferred compensation and other non-current liabilities | 14,074 | 9,188 |
Non-current portion of lease liabilities | 128,565 | 139,447 |
Deferred income taxes | 913 | 725 |
Total non-current liabilities | 143,552 | 149,360 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Preferred stock, no par value; 1,000,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock, no par value; 25,000,000 shares authorized; 7,396,296 and 7,693,497 shares issued and outstanding at October 2, 2021 and January 2, 2021, respectively | 676 | 503 |
Retained earnings | 213,367 | 216,999 |
Accumulated other comprehensive loss | (9,758) | (8,483) |
Total shareholders’ equity | 204,285 | 209,019 |
Total liabilities and shareholders’ equity | $ 529,907 | $ 558,510 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands | Oct. 02, 2021 | Jan. 02, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for accounts receivable | $ 3,915 | $ 3,595 |
Allowance for unbilled services | $ 1,204 | $ 1,000 |
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value ( in dollars per share ) | $ 0 | $ 0 |
Common stock, shares authorized (shares) | 25,000,000 | 25,000,000 |
Common stock, shares issued (shares) | 7,396,296 | 7,693,497 |
Common stock, shares outstanding (shares) | 7,396,296 | 7,693,497 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 02, 2021 | Sep. 26, 2020 | |
OPERATING ACTIVITIES: | ||
Net income | $ 33,012 | $ 17,802 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 9,657 | 9,293 |
Right-of-use asset amortization | 9,711 | 8,900 |
Deferred income taxes | (1,357) | 496 |
Share-based compensation expense | 2,830 | 2,357 |
Accounts receivable allowances | 327 | (894) |
Unrealized foreign currency remeasurement (gains) losses, net | (220) | 129 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,889 | 1,952 |
Unbilled services, net | (25,213) | (14,994) |
Prepaid expenses and other current assets, and other assets | (2,850) | (979) |
Forgivable loans | 9,304 | (18,963) |
Incentive cash awards | 5,030 | 4,862 |
Accounts payable, accrued expenses, and other liabilities | (17,668) | (15,087) |
Lease liabilities | (11,549) | (5,526) |
Net cash provided by (used in) operating activities | 13,903 | (10,652) |
INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (1,730) | (15,742) |
Net cash used in investing activities | (1,730) | (15,742) |
FINANCING ACTIVITIES: | ||
Issuance of common stock, principally stock option exercises | 5,005 | 1,667 |
Borrowings under revolving line of credit | 72,000 | 77,000 |
Repayments under revolving line of credit | (66,000) | (39,000) |
Tax withholding payments reimbursed by shares | (588) | (390) |
Cash paid for contingent consideration | (2,357) | 0 |
Cash dividends paid | (5,903) | (5,412) |
Repurchase of common stock | (39,977) | (8,807) |
Net cash provided by (used in) financing activities | (37,820) | 25,058 |
Effect of foreign exchange rates on cash and cash equivalents | (365) | (195) |
Net decrease in cash and cash equivalents | (26,012) | (1,531) |
Cash and cash equivalents at beginning of period | 45,677 | 25,639 |
Cash and cash equivalents at end of period | 19,665 | 24,108 |
Noncash investing and financing activities: | ||
Purchases of property and equipment not yet paid for | 7 | 3,923 |
Asset retirement obligations | 0 | 155 |
Right-of-use assets obtained in exchange for lease obligations | 1,751 | 2,601 |
Restricted common stock issued for contingent consideration | 2,250 | 0 |
Supplemental cash flow information: | ||
Cash paid for taxes | 12,484 | 5,933 |
Cash paid for interest | 528 | 932 |
Cash paid for amounts included in operating lease liabilities | $ 15,556 | $ 13,736 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands | Total | Cumulative Effect Period of Adoption, Adjustment | Cumulative Effect Period of Adoption, Adjusted Balance | Common Stock | Common StockCumulative Effect Period of Adoption, Adjusted Balance | Retained Earnings | Retained EarningsCumulative Effect Period of Adoption, Adjustment | Retained EarningsCumulative Effect Period of Adoption, Adjusted Balance | Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive LossCumulative Effect Period of Adoption, Adjusted Balance |
Beginning balance at Dec. 28, 2019 | $ 197,751 | $ (203) | $ 197,548 | $ 9,265 | $ 9,265 | $ 200,249 | $ (203) | $ 200,046 | $ (11,763) | $ (11,763) |
Beginning balance (in shares) at Dec. 28, 2019 | 7,814,797 | 7,814,797 | ||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Net income | 6,468 | 6,468 | ||||||||
Foreign currency translation adjustment | (2,427) | (2,427) | ||||||||
Exercise of stock options | 151 | $ 151 | ||||||||
Exercise of stock options (in shares) | 8,200 | |||||||||
Share-based compensation expense | 655 | $ 655 | ||||||||
Restricted shares vesting (in shares) | 23,884 | |||||||||
Redemption of vested employee restricted shares for tax withholding | (390) | $ (390) | ||||||||
Redemption of vested employee restricted shares for tax withholding (in shares) | (7,843) | |||||||||
Shares repurchased | (3,810) | $ (3,810) | ||||||||
Shares repurchased (in shares) | (82,613) | |||||||||
Accrued dividends on unvested shares | 1 | 1 | ||||||||
Cash dividends paid (per share) | (1,836) | (1,836) | ||||||||
Ending balance at Mar. 28, 2020 | 196,360 | $ 5,871 | 204,679 | (14,190) | ||||||
Ending balance (in shares) at Mar. 28, 2020 | 7,756,425 | |||||||||
Beginning balance at Dec. 28, 2019 | 197,751 | $ (203) | $ 197,548 | $ 9,265 | $ 9,265 | 200,249 | $ (203) | $ 200,046 | (11,763) | $ (11,763) |
Beginning balance (in shares) at Dec. 28, 2019 | 7,814,797 | 7,814,797 | ||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Net income | 17,802 | |||||||||
Foreign currency translation adjustment | (302) | |||||||||
Issuance of restricted common stock for contingent consideration | 0 | |||||||||
Ending balance at Sep. 26, 2020 | 204,395 | $ 4,092 | 212,368 | (12,065) | ||||||
Ending balance (in shares) at Sep. 26, 2020 | 7,739,550 | |||||||||
Beginning balance at Mar. 28, 2020 | 196,360 | $ 5,871 | 204,679 | (14,190) | ||||||
Beginning balance (in shares) at Mar. 28, 2020 | 7,756,425 | |||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Net income | 5,931 | 5,931 | ||||||||
Foreign currency translation adjustment | 536 | 536 | ||||||||
Exercise of stock options | 418 | $ 418 | ||||||||
Exercise of stock options (in shares) | 22,611 | |||||||||
Share-based compensation expense | 796 | $ 796 | ||||||||
Restricted shares vesting (in shares) | 513 | |||||||||
Accrued dividends on unvested shares | (38) | (38) | ||||||||
Cash dividends paid (per share) | (1,788) | (1,788) | ||||||||
Ending balance at Jun. 27, 2020 | 202,215 | $ 7,085 | 208,784 | (13,654) | ||||||
Ending balance (in shares) at Jun. 27, 2020 | 7,779,549 | |||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Net income | 5,403 | 5,403 | ||||||||
Foreign currency translation adjustment | 1,589 | 1,589 | ||||||||
Exercise of stock options | 1,098 | $ 1,098 | ||||||||
Exercise of stock options (in shares) | 57,219 | |||||||||
Share-based compensation expense | 906 | $ 906 | ||||||||
Restricted shares vesting (in shares) | 12,936 | |||||||||
Shares repurchased | (4,997) | $ (4,997) | ||||||||
Shares repurchased (in shares) | (110,154) | |||||||||
Accrued dividends on unvested shares | (31) | (31) | ||||||||
Cash dividends paid (per share) | (1,788) | (1,788) | ||||||||
Ending balance at Sep. 26, 2020 | 204,395 | $ 4,092 | 212,368 | (12,065) | ||||||
Ending balance (in shares) at Sep. 26, 2020 | 7,739,550 | |||||||||
Beginning balance at Jan. 02, 2021 | $ 209,019 | $ 503 | 216,999 | (8,483) | ||||||
Beginning balance (in shares) at Jan. 02, 2021 | 7,693,497 | 7,693,497 | ||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Net income | $ 10,501 | 10,501 | ||||||||
Foreign currency translation adjustment | (111) | (111) | ||||||||
Issuance of restricted common stock for contingent consideration | 2,250 | $ 2,250 | ||||||||
Issuance of restricted common stock for contingent consideration (in shares) | 40,039 | |||||||||
Exercise of stock options | 1,113 | $ 1,113 | ||||||||
Exercise of stock options (in shares) | 41,008 | |||||||||
Share-based compensation expense | 842 | $ 842 | ||||||||
Restricted shares vesting (in shares) | 29,494 | |||||||||
Redemption of vested employee restricted shares for tax withholding | (588) | $ (588) | ||||||||
Redemption of vested employee restricted shares for tax withholding (in shares) | (9,895) | |||||||||
Shares repurchased | (9,642) | $ (4,120) | (5,522) | |||||||
Shares repurchased (in shares) | (166,552) | |||||||||
Accrued dividends on unvested shares | 5 | 5 | ||||||||
Cash dividends paid (per share) | (2,061) | (2,061) | ||||||||
Ending balance at Apr. 03, 2021 | 211,328 | $ 0 | 219,922 | (8,594) | ||||||
Ending balance (in shares) at Apr. 03, 2021 | 7,627,591 | |||||||||
Beginning balance at Jan. 02, 2021 | $ 209,019 | $ 503 | 216,999 | (8,483) | ||||||
Beginning balance (in shares) at Jan. 02, 2021 | 7,693,497 | 7,693,497 | ||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Net income | $ 33,012 | |||||||||
Foreign currency translation adjustment | (1,275) | |||||||||
Issuance of restricted common stock for contingent consideration | 2,250 | |||||||||
Ending balance at Oct. 02, 2021 | $ 204,285 | $ 676 | 213,367 | (9,758) | ||||||
Ending balance (in shares) at Oct. 02, 2021 | 7,396,296 | 7,396,296 | ||||||||
Beginning balance at Apr. 03, 2021 | $ 211,328 | $ 0 | 219,922 | (8,594) | ||||||
Beginning balance (in shares) at Apr. 03, 2021 | 7,627,591 | |||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Net income | 11,566 | 11,566 | ||||||||
Foreign currency translation adjustment | (136) | (136) | ||||||||
Exercise of stock options | 1,387 | $ 1,387 | ||||||||
Exercise of stock options (in shares) | 48,562 | |||||||||
Share-based compensation expense | 980 | $ 980 | ||||||||
Restricted shares vesting (in shares) | 1,006 | |||||||||
Shares repurchased | (25,335) | $ (382) | (24,953) | |||||||
Shares repurchased (in shares) | (337,837) | |||||||||
Accrued dividends on unvested shares | (50) | (50) | ||||||||
Cash dividends paid (per share) | (1,909) | (1,909) | ||||||||
Ending balance at Jul. 03, 2021 | 197,831 | $ 1,985 | 204,576 | (8,730) | ||||||
Ending balance (in shares) at Jul. 03, 2021 | 7,339,322 | |||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||
Net income | 10,945 | 10,945 | ||||||||
Foreign currency translation adjustment | (1,028) | (1,028) | ||||||||
Exercise of stock options | 2,505 | $ 2,505 | ||||||||
Exercise of stock options (in shares) | 98,310 | |||||||||
Share-based compensation expense | 1,008 | $ 1,008 | ||||||||
Restricted shares vesting (in shares) | 11,676 | |||||||||
Shares repurchased | (5,000) | $ (4,822) | (178) | |||||||
Shares repurchased (in shares) | (53,012) | |||||||||
Accrued dividends on unvested shares | (43) | (43) | ||||||||
Cash dividends paid (per share) | (1,933) | (1,933) | ||||||||
Ending balance at Oct. 02, 2021 | $ 204,285 | $ 676 | $ 213,367 | $ (9,758) | ||||||
Ending balance (in shares) at Oct. 02, 2021 | 7,396,296 | 7,396,296 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |||||
Oct. 02, 2021 | Jul. 03, 2021 | Apr. 03, 2021 | Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Cash dividends paid to shareholders (in dollars per share) | $ 0.26 | $ 0.26 | $ 0.26 | $ 0.23 | $ 0.23 | $ 0.23 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Oct. 02, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Description of Business CRA International, Inc. (“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 International, Inc. and its wholly-owned subsidiaries (collectively the “Company”), 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 (“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 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 January 2, 2021 included in CRA’s Annual Report on Form 10-K filed with the SEC on March 4, 2021 (the “2020 Form 10-K”). Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported results of operations, financial position, or cash flows. Estimates The preparation of financial statements in conformity with GAAP requires management to make significant estimates and judgments that affect the reported amounts of assets and liabilities, as well as the related disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of consolidated revenues and expenses during the reporting period. Estimates in these condensed consolidated financial statements include, but are not limited to, allowances for accounts receivable and unbilled services, revenue recognition on fixed-price contracts, variable consideration to be included in the transaction price of revenue contracts, depreciation of property and equipment, measurement of operating lease right-of-use (“ROU”) assets and liabilities, share-based compensation, valuation of contingent consideration liabilities, valuation of acquired intangible assets, impairment of long-lived assets, goodwill, accrued and deferred income taxes, valuation allowances on deferred tax assets, accrued incentive compensation, and certain other accrued expenses. These items are monitored and analyzed by CRA for changes in facts and circumstances, and material changes in these estimates could occur in the future. Changes in estimates are recorded in the period in which they become known. CRA bases its estimates on historical experience and various other assumptions that CRA believes to be reasonable under the circumstances. Actual results may differ from those estimates if CRA’s assumptions based on past experience or other assumptions do not turn out to be substantially accurate. Common Stock and Equity Equity transactions consist primarily of the repurchase by CRA of its common stock under its share repurchase program and the recognition of compensation expense and issuance of common stock under CRA’s 2006 Equity Incentive Plan. The Company repurchases its common stock under its share repurchase program in open market purchases (including through any Rule 10b5-1 plan adopted by CRA) or in privately negotiated transactions in accordance with applicable insider trading and other securities laws and regulations. During the second fiscal quarter, CRA repurchased shares of its common stock through a modified "Dutch auction" self-tender offer, as further described in Note 11. The purchase price of common stock repurchases is first charged against available paid-in capital (“PIC”) until PIC is exhausted, after which repurchases will be charged to retained earnings. CRA’s common stock has no par value. All shares repurchased have been retired. Recent Accounting Standards Adopted Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes CRA adopted Accounting Standards Update ("ASU") No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”) on the first day of fiscal 2021. ASU 2019-12 simplifies or clarifies accounting for income taxes by changing prior guidance related to accounting for year-to-date losses in interim periods, accounting for tax law changes in interim periods, determining when a deferred tax liability is recognized for foreign subsidiaries that transition to or from being accounted for as equity method investments, application of income tax guidance to franchise taxes that are partially based on income, and making an intra-period allocation in situations where there is a loss in continuing operations and income or gain from other items. ASU 2019-12 also introduces new guidance to evaluate whether a step up in the tax basis of goodwill relates to a business combination or a separate transaction and provides a policy election to not allocate consolidated income taxes when a member of a consolidated tax return is not subject to income tax. The adoption of the new standard did not have a material impact on CRA's financial position, results of operations, cash flows, or disclosures on the date of transition. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Oct. 02, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments As of October 2, 2021, CRA did not have any financial instruments measured at fair value on a recurring basis. The following table presents CRA’s financial instruments recorded in the condensed consolidated financial statements at January 2, 2021, which are measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): January 2, 2021 Level 1 Level 2 Level 3 Assets: Money market mutual funds $ 150 $ — $ — Total Assets $ 150 $ — $ — Liabilities: Contingent consideration liability $ — $ — $ 14,620 Total Liabilities $ — $ — $ 14,620 As of January 2, 2021, the fair value of CRA’s money market mutual fund share holdings was $1.00 per share. The contingent consideration liability pertained to estimated future contingent consideration payments related to the acquisition of C1 Consulting, LLC, an independent consulting firm, and its wholly-owned subsidiary C1 Associates (collectively, “C1”). The following table summarizes the changes in the contingent consideration liabilities (in thousands): Fiscal Year-to-Date Period Ended Fiscal Year Ended October 2, January 2, Beginning balance $ 14,620 $ 11,579 Remeasurement of acquisition-related contingent consideration — 1,156 Accretion 380 1,885 Payment of contingent consideration (15,000) — Ending balance $ — $ 14,620 |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Oct. 02, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition 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 Fiscal Year-to-Date Type of Contract October 2, September 26, October 2, September 26, Consulting services revenues: Fixed-price $ 31,741 $ 26,197 $ 101,419 $ 85,968 Time-and-materials 104,671 95,565 329,748 284,983 Total $ 136,412 $ 121,762 $ 431,167 $ 370,951 Fiscal Quarter Ended Fiscal Year-to-Date Geographic Breakdown October 2, September 26, October 2, September 26, Consulting services revenues: United States $ 109,387 $ 96,117 $ 347,444 $ 296,273 United Kingdom 20,177 20,358 63,203 57,355 Other 6,848 5,287 20,520 17,323 Total $ 136,412 $ 121,762 $ 431,167 $ 370,951 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. CRA adopted ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASC 326") on the first day of fiscal 2020, which changed the method CRA utilizes to estimate reserves related to credit risk. As a result of the adoption, CRA recognized a $0.2 million cumulative-effect increase to allowances for accounts receivable and unbilled services and a reduction to the fiscal 2020 opening balance of retained earnings. The following table presents CRA's bad debt expense, net of recoveries of previously written off allowances (in thousands): Fiscal Quarter Ended Fiscal Year-to-Date October 2, September 26, October 2, September 26, Bad debt expense (recovery), net $ 55 $ 271 $ 44 $ 228 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 Fiscal Year-to-Date October 2, September 26, October 2, September 26, Reimbursable expenses $ 15,727 $ 13,150 $ 49,382 $ 44,395 Contract Balances from Contracts with Customers 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 October 2, 2021 and January 2, 2021. 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. The following table presents the closing balances of CRA's contract liabilities (in thousands): October 2, January 2, Contract liabilities $ 2,189 $ 5,527 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 Fiscal Year-to-Date October 2, September 26, October 2, September 26, Amounts included in contract liabilities at the beginning of the period $ 1,603 $ 1,766 $ 5,051 $ 3,262 Performance obligations satisfied in previous periods $ 3,925 $ 3,987 $ 2,805 $ 4,363 |
Forgivable Loans
Forgivable Loans | 9 Months Ended |
Oct. 02, 2021 | |
Forgivable Loans | |
Forgivable Loans | 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 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. The expense associated with the forgiveness of the principal amount of the loans is recorded as compensation expense 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 Year-to-Date Fiscal Year Ended October 2, January 2, Beginning balance $ 61,613 $ 55,141 Advances 9,635 42,418 Reclassifications from accrued expenses or to other assets (1) (2,229) (9,713) Amortization (18,909) (26,628) Effects of foreign currency translation (61) 395 Ending balance $ 50,049 $ 61,613 Current portion of forgivable loans $ 9,662 $ 14,749 Non-current portion of forgivable loans $ 40,387 $ 46,864 _______________________________ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Oct. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The changes in the carrying amount of goodwill for the fiscal year-to-date period ended October 2, 2021 are summarized as follows (in thousands): Goodwill $ 161,080 Accumulated goodwill impairment (71,893) Goodwill, net at January 2, 2021 89,187 Foreign currency translation adjustment (221) Goodwill, net at October 2, 2021 (1) $ 88,966 _______________________________ (1) Goodwill, net at October 2, 2021, is comprised of goodwill of $160.9 million and accumulated impairment of $71.9 million. 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. The components of acquired identifiable intangible assets are as follows (in thousands): October 2, 2021 January 2, 2021 Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Non-competition agreements 5 $ 280 $ (262) $ 18 $ 280 $ (219) $ 61 Customer relationships 8 to 10 8,220 (3,838) 4,382 12,120 (7,073) 5,047 Total $ 8,500 $ (4,100) $ 4,400 $ 12,400 $ (7,292) $ 5,108 Amortization expense related to intangible assets was $0.2 million and $0.7 million for the fiscal quarter and fiscal year-to-date period ended October 2, 2021, respectively, and $0.3 million and $1.0 million for the fiscal quarter and fiscal year-to-date period ended September 26, 2020, respectively. There were no impairment losses related to intangible assets during the fiscal year-to-date period ended October 2, 2021 or during the fiscal year ended January 2, 2021. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Oct. 02, 2021 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses consist of the following (in thousands): October 2, January 2, Compensation and related expenses $ 119,394 $ 123,540 Income taxes payable 655 1,927 Performance awards 571 2,176 Other professional fees 1,677 1,541 Direct project accruals 3,012 3,988 Accrued leasehold improvements 39 52 Other 3,353 3,152 Total accrued expenses $ 128,701 $ 136,376 As of October 2, 2021 and January 2, 2021, approximately $93.5 million and $102.6 million, respectively, of accrued bonuses were included above in “Compensation and related expenses.” |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 02, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the fiscal quarters ended October 2, 2021 and September 26, 2020, CRA’s effective income tax rate (“ETR”) was 14.8% and 28.2%, respectively. The ETR for the third quarter of fiscal 2021 was lower than the third quarter of fiscal 2020 primarily due to an increase in the tax benefit related to the accounting for stock-based compensation. For the fiscal year-to-date periods ended October 2, 2021 and September 26, 2020, CRA's ETR was 22.0% and 27.5%, respectively. The ETR for the current fiscal year-to-date period was lower than the prior year-to-date period primarily due to an increase in the tax benefit related to the accounting for stock-based compensation, partially offset by the enactment of the U.K. statutory tax rate increase during the second fiscal quarter whereby the U.K.'s long-term deferred tax liabilities were remeasured. |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Oct. 02, 2021 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | 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 and fiscal year-to-date periods ended October 2, 2021 and September 26, 2020. 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 and fiscal year-to-date periods ended October 2, 2021 and September 26, 2020. The following table presents a reconciliation from net income to the net income available to common shareholders (in thousands): Fiscal Quarter Ended Fiscal Year-to-Date October 2, September 26, October 2, September 26, Net income, as reported $ 10,945 $ 5,403 $ 33,012 $ 17,802 Less: net income attributable to participating shares 43 22 128 53 Net income available to common shareholders $ 10,902 $ 5,381 $ 32,884 $ 17,749 The following table presents a reconciliation of basic to diluted weighted average shares of common stock outstanding (in thousands): Fiscal Quarter Ended Fiscal Year-to-Date October 2, September 26, October 2, September 26, Basic weighted average shares outstanding 7,375 7,771 7,440 7,780 Dilutive stock options and restricted stock units 185 163 203 184 Diluted weighted average shares outstanding 7,560 7,934 7,643 7,964 The following table presents the anti-dilutive share-based awards that were excluded from the calculation of common stock equivalents for purposes of computing diluted weighted average shares outstanding. For the fiscal quarter and fiscal year-to-date period ended September 26, 2020, the share-based awards each period were anti-dilutive because their exercise price exceeded the average market price over the respective period. There were no anti-dilutive shares for the fiscal quarter and fiscal year-to-date period ended October 2, 2021. Fiscal Quarter Ended Fiscal Year-to-Date October 2, September 26, October 2, September 26, Anti-dilutive share-based awards excluded — 76,399 — 62,808 |
Credit Agreement
Credit Agreement | 9 Months Ended |
Oct. 02, 2021 | |
Debt Disclosure [Abstract] | |
Credit Agreement | Credit Agreement CRA is party to an amended and restated credit agreement that provides the Company with a $175.0 million revolving credit facility, which reflects an increase to the capacity by $50.0 million per an amendment to the credit agreement on January 12, 2021, and includes a $15.0 million sublimit for the issuance of letters of credit. CRA may use the proceeds of the revolving credit facility to provide working capital and for other general corporate purposes. CRA may repay any borrowings under the revolving credit facility at any time, but any borrowings must be repaid no later than October 24, 2022. There was $6.0 million in borrowings outstanding under this revolving credit facility as of October 2, 2021. There were no borrowings outstanding under this facility as of January 2, 2021. As of October 2, 2021, the amount available under this revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $4.2 million. Under the credit agreement, CRA must comply with various financial and non- |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 02, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies As described in the previous note, CRA is party to standby letters of credit with its bank 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. |
Self-Tender Offer
Self-Tender Offer | 9 Months Ended |
Oct. 02, 2021 | |
Equity [Abstract] | |
Self-Tender Offer | Self-Tender OfferOn March 8, 2021, CRA commenced a modified "Dutch auction" self-tender offer to purchase up to $25.0 million in value of shares of its common stock at a price of not less than $66.25 per share nor greater than $76.00 per share. The self-tender offer expired on April 5, 2021. On April 8, 2021, CRA paid $25.3 million, including transaction costs, to repurchase 337,837 shares at a purchase price of $74.00 per share. The purchase price and transaction costs were funded from the revolving credit facility and cash on hand. The repurchased shares were retired. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Oct. 02, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn November 4, 2021, CRA announced that its Board of Directors declared a quarterly cash dividend of $0.31 per common share, payable on December 10, 2021 to shareholders of record as of November 30, 2021. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 02, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of CRA International, Inc. and its wholly-owned subsidiaries (collectively the “Company”), 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 (“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 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 January 2, 2021 included in CRA’s Annual Report on Form 10-K filed with the SEC on March 4, 2021 (the “2020 Form 10-K”). Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported results of operations, financial position, or cash flows. |
Estimates | Estimates The preparation of financial statements in conformity with GAAP requires management to make significant estimates and judgments that affect the reported amounts of assets and liabilities, as well as the related disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of consolidated revenues and expenses during the reporting period. Estimates in these condensed consolidated financial statements include, but are not limited to, allowances for accounts receivable and unbilled services, revenue recognition on fixed-price contracts, variable consideration to be included in the transaction price of revenue contracts, depreciation of property and equipment, measurement of operating lease right-of-use (“ROU”) assets and liabilities, share-based compensation, valuation of contingent consideration liabilities, valuation of acquired intangible assets, impairment of long-lived assets, goodwill, accrued and deferred income taxes, valuation allowances on deferred tax assets, accrued incentive compensation, and certain other accrued expenses. These items are monitored and analyzed by CRA for changes in facts and circumstances, and material changes in these estimates could occur in the future. Changes in estimates are recorded in the period in which they become known. CRA bases its estimates on historical experience and various other assumptions that CRA believes to be reasonable under the circumstances. Actual results may differ from those estimates if CRA’s assumptions based on past experience or other assumptions do not turn out to be substantially accurate. |
Common Stock and Equity | Common Stock and Equity Equity transactions consist primarily of the repurchase by CRA of its common stock under its share repurchase program and the recognition of compensation expense and issuance of common stock under CRA’s 2006 Equity Incentive Plan. The Company repurchases its common stock under its share repurchase program in open market purchases (including through any Rule 10b5-1 plan adopted by CRA) or in privately negotiated transactions in accordance with applicable insider trading and other securities laws and regulations. During the second fiscal quarter, CRA repurchased shares of its common stock through a modified "Dutch auction" self-tender offer, as further described in Note 11. |
Recent Accounting Standards Adopted | Recent Accounting Standards Adopted Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes CRA adopted Accounting Standards Update ("ASU") No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”) on the first day of fiscal 2021. ASU 2019-12 simplifies or clarifies accounting for income taxes by changing prior guidance related to accounting for year-to-date losses in interim periods, accounting for tax law changes in interim periods, determining when a deferred tax liability is recognized for foreign subsidiaries that transition to or from being accounted for as equity method investments, application of income tax guidance to franchise taxes that are partially based on income, and making an intra-period allocation in situations where there is a loss in continuing operations and income or gain from other items. ASU 2019-12 also introduces new guidance to evaluate whether a step up in the tax basis of goodwill relates to a business combination or a separate transaction and provides a policy election to not allocate consolidated income taxes when a member of a consolidated tax return is not subject to income tax. The adoption of the new standard did not have a material impact on CRA's financial position, results of operations, cash flows, or disclosures on the date of transition. |
Fair value of Financial Instr_2
Fair value of Financial Instruments (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets that are measured and recorded at fair value on a recurring basis | The following table presents CRA’s financial instruments recorded in the condensed consolidated financial statements at January 2, 2021, which are measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): January 2, 2021 Level 1 Level 2 Level 3 Assets: Money market mutual funds $ 150 $ — $ — Total Assets $ 150 $ — $ — Liabilities: Contingent consideration liability $ — $ — $ 14,620 Total Liabilities $ — $ — $ 14,620 |
Schedule of liabilities that are measured and recorded at fair value on a recurring basis | The following table presents CRA’s financial instruments recorded in the condensed consolidated financial statements at January 2, 2021, which are measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): January 2, 2021 Level 1 Level 2 Level 3 Assets: Money market mutual funds $ 150 $ — $ — Total Assets $ 150 $ — $ — Liabilities: Contingent consideration liability $ — $ — $ 14,620 Total Liabilities $ — $ — $ 14,620 |
Summary of the changes in the contingent consideration liabilities | The following table summarizes the changes in the contingent consideration liabilities (in thousands): Fiscal Year-to-Date Period Ended Fiscal Year Ended October 2, January 2, Beginning balance $ 14,620 $ 11,579 Remeasurement of acquisition-related contingent consideration — 1,156 Accretion 380 1,885 Payment of contingent consideration (15,000) — Ending balance $ — $ 14,620 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregate CRA's revenue by type of contract and geographic location | The following tables disaggregate CRA’s revenue by type of contract and geographic location (in thousands): Fiscal Quarter Ended Fiscal Year-to-Date Type of Contract October 2, September 26, October 2, September 26, Consulting services revenues: Fixed-price $ 31,741 $ 26,197 $ 101,419 $ 85,968 Time-and-materials 104,671 95,565 329,748 284,983 Total $ 136,412 $ 121,762 $ 431,167 $ 370,951 Fiscal Quarter Ended Fiscal Year-to-Date Geographic Breakdown October 2, September 26, October 2, September 26, Consulting services revenues: United States $ 109,387 $ 96,117 $ 347,444 $ 296,273 United Kingdom 20,177 20,358 63,203 57,355 Other 6,848 5,287 20,520 17,323 Total $ 136,412 $ 121,762 $ 431,167 $ 370,951 |
Schedule of bad debt expense, net of recoveries | The following table presents CRA's bad debt expense, net of recoveries of previously written off allowances (in thousands): Fiscal Quarter Ended Fiscal Year-to-Date October 2, September 26, October 2, September 26, Bad debt expense (recovery), net $ 55 $ 271 $ 44 $ 228 |
Schedule of expenses are subject to reimbursement | The following expenses are subject to reimbursement (in thousands): Fiscal Quarter Ended Fiscal Year-to-Date October 2, September 26, October 2, September 26, Reimbursable expenses $ 15,727 $ 13,150 $ 49,382 $ 44,395 |
Schedule of opening and closing balances and result of changes in contract liability balance (in thousands) | The following table presents the closing balances of CRA's contract liabilities (in thousands): October 2, January 2, Contract liabilities $ 2,189 $ 5,527 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 Fiscal Year-to-Date October 2, September 26, October 2, September 26, Amounts included in contract liabilities at the beginning of the period $ 1,603 $ 1,766 $ 5,051 $ 3,262 Performance obligations satisfied in previous periods $ 3,925 $ 3,987 $ 2,805 $ 4,363 |
Forgivable Loans (Tables)
Forgivable Loans (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Forgivable Loans | |
Schedule of forgivable loan activity | The following table presents forgivable loan activity for the respective periods (in thousands): Fiscal Year-to-Date Fiscal Year Ended October 2, January 2, Beginning balance $ 61,613 $ 55,141 Advances 9,635 42,418 Reclassifications from accrued expenses or to other assets (1) (2,229) (9,713) Amortization (18,909) (26,628) Effects of foreign currency translation (61) 395 Ending balance $ 50,049 $ 61,613 Current portion of forgivable loans $ 9,662 $ 14,749 Non-current portion of forgivable loans $ 40,387 $ 46,864 _______________________________ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in the carrying amount of goodwill | The changes in the carrying amount of goodwill for the fiscal year-to-date period ended October 2, 2021 are summarized as follows (in thousands): Goodwill $ 161,080 Accumulated goodwill impairment (71,893) Goodwill, net at January 2, 2021 89,187 Foreign currency translation adjustment (221) Goodwill, net at October 2, 2021 (1) $ 88,966 _______________________________ (1) Goodwill, net at October 2, 2021, is comprised of goodwill of $160.9 million and accumulated impairment of $71.9 million. |
Schedule of components of acquired identifiable intangible assets | The components of acquired identifiable intangible assets are as follows (in thousands): October 2, 2021 January 2, 2021 Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Non-competition agreements 5 $ 280 $ (262) $ 18 $ 280 $ (219) $ 61 Customer relationships 8 to 10 8,220 (3,838) 4,382 12,120 (7,073) 5,047 Total $ 8,500 $ (4,100) $ 4,400 $ 12,400 $ (7,292) $ 5,108 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of accrued expenses | Accrued expenses consist of the following (in thousands): October 2, January 2, Compensation and related expenses $ 119,394 $ 123,540 Income taxes payable 655 1,927 Performance awards 571 2,176 Other professional fees 1,677 1,541 Direct project accruals 3,012 3,988 Accrued leasehold improvements 39 52 Other 3,353 3,152 Total accrued expenses $ 128,701 $ 136,376 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Oct. 02, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation from net income to the net income available to common shareholders | The following table presents a reconciliation from net income to the net income available to common shareholders (in thousands): Fiscal Quarter Ended Fiscal Year-to-Date October 2, September 26, October 2, September 26, Net income, as reported $ 10,945 $ 5,403 $ 33,012 $ 17,802 Less: net income attributable to participating shares 43 22 128 53 Net income available to common shareholders $ 10,902 $ 5,381 $ 32,884 $ 17,749 |
Schedule of reconciliation of basic to diluted weighted average shares of common stock outstanding | The following table presents a reconciliation of basic to diluted weighted average shares of common stock outstanding (in thousands): Fiscal Quarter Ended Fiscal Year-to-Date October 2, September 26, October 2, September 26, Basic weighted average shares outstanding 7,375 7,771 7,440 7,780 Dilutive stock options and restricted stock units 185 163 203 184 Diluted weighted average shares outstanding 7,560 7,934 7,643 7,964 |
Schedule of anti-dilutive share-based awards excluded from common stock equivalents | The following table presents the anti-dilutive share-based awards that were excluded from the calculation of common stock equivalents for purposes of computing diluted weighted average shares outstanding. For the fiscal quarter and fiscal year-to-date period ended September 26, 2020, the share-based awards each period were anti-dilutive because their exercise price exceeded the average market price over the respective period. There were no anti-dilutive shares for the fiscal quarter and fiscal year-to-date period ended October 2, 2021. Fiscal Quarter Ended Fiscal Year-to-Date October 2, September 26, October 2, September 26, Anti-dilutive share-based awards excluded — 76,399 — 62,808 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Description of Business and Fiscal Year (Details) | 9 Months Ended |
Oct. 02, 2021areasegment | |
Accounting Policies [Abstract] | |
Number of broad areas of consulting services | area | 2 |
Number of business segment | segment | 1 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Jan. 02, 2021 | |
Money market mutual funds | ||
Liabilities: | ||
Fair value per share of CRA's money market mutual fund share holdings (in dollars per share) | $ 1 | |
Recurring | ||
Summary of changes in contingent consideration liability | ||
Beginning balance | $ 14,620 | $ 11,579 |
Remeasurement of acquisition-related contingent consideration | 0 | 1,156 |
Accretion | 380 | 1,885 |
Payment of contingent consideration | (15,000) | 0 |
Ending balance | $ 0 | 14,620 |
Recurring | Level 1 | ||
Assets: | ||
Total Assets | 150 | |
Liabilities: | ||
Contingent consideration liability | 0 | |
Total Liabilities | 0 | |
Recurring | Level 1 | Money market mutual funds | ||
Assets: | ||
Cash and cash equivalents | 150 | |
Recurring | Level 2 | ||
Assets: | ||
Total Assets | 0 | |
Liabilities: | ||
Contingent consideration liability | 0 | |
Total Liabilities | 0 | |
Recurring | Level 2 | Money market mutual funds | ||
Assets: | ||
Cash and cash equivalents | 0 | |
Recurring | Level 3 | ||
Assets: | ||
Total Assets | 0 | |
Liabilities: | ||
Contingent consideration liability | 14,620 | |
Total Liabilities | 14,620 | |
Recurring | Level 3 | Money market mutual funds | ||
Assets: | ||
Cash and cash equivalents | $ 0 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Disaggregation of Revenue | ||||
Consulting services revenues | $ 136,412 | $ 121,762 | $ 431,167 | $ 370,951 |
United States | ||||
Disaggregation of Revenue | ||||
Consulting services revenues | 109,387 | 96,117 | 347,444 | 296,273 |
United Kingdom | ||||
Disaggregation of Revenue | ||||
Consulting services revenues | 20,177 | 20,358 | 63,203 | 57,355 |
Other | ||||
Disaggregation of Revenue | ||||
Consulting services revenues | 6,848 | 5,287 | 20,520 | 17,323 |
Fixed-price | ||||
Disaggregation of Revenue | ||||
Consulting services revenues | 31,741 | 26,197 | 101,419 | 85,968 |
Time-and-materials | ||||
Disaggregation of Revenue | ||||
Consulting services revenues | $ 104,671 | $ 95,565 | $ 329,748 | $ 284,983 |
Revenue Recognition - Reserves
Revenue Recognition - Reserves for Variable Consideration and Credit Risk (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Jul. 03, 2021 | Apr. 03, 2021 | Jan. 02, 2021 | Jun. 27, 2020 | Mar. 28, 2020 | Dec. 28, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||
Cumulative effect of a change in accounting principle | $ 204,285 | $ 204,395 | $ 204,285 | $ 204,395 | $ 197,831 | $ 211,328 | $ 209,019 | $ 202,215 | $ 196,360 | $ 197,751 |
Bad debt expense (recovery), net | 55 | 271 | 44 | 228 | ||||||
Reimbursable expenses | 15,727 | 13,150 | 49,382 | 44,395 | ||||||
Retained Earnings | ||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||
Cumulative effect of a change in accounting principle | $ 213,367 | $ 212,368 | $ 213,367 | $ 212,368 | $ 204,576 | $ 219,922 | $ 216,999 | $ 208,784 | $ 204,679 | 200,249 |
Cumulative Effect Period of Adoption, Adjustment | ||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||
Cumulative effect of a change in accounting principle | (203) | |||||||||
Cumulative Effect Period of Adoption, Adjustment | Retained Earnings | ||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||
Cumulative effect of a change in accounting principle | (203) | |||||||||
ASC 326 | Cumulative Effect Period of Adoption, Adjustment | Retained Earnings | ||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||||||||
Cumulative effect of a change in accounting principle | $ (200) |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Jan. 02, 2021 | |
Contract liabilities: | |||||
Contract liabilities | $ 2,189 | $ 2,189 | $ 5,527 | ||
Revenue recognized from: | |||||
Amounts included in contract liabilities at the beginning of the period | 1,603 | $ 1,766 | 5,051 | $ 3,262 | |
Performance obligations satisfied in previous periods | $ 3,925 | $ 3,987 | $ 2,805 | $ 4,363 |
Forgivable Loans (Details)
Forgivable Loans (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Oct. 02, 2021 | Jan. 02, 2021 | |
Forgivable loan activity | ||
Beginning balance | $ 61,613 | $ 55,141 |
Advances | 9,635 | 42,418 |
Reclassifications from accrued expenses or to other assets | (2,229) | (9,713) |
Amortization | (18,909) | (26,628) |
Effects of foreign currency translation | (61) | 395 |
Ending balance | 50,049 | 61,613 |
Current portion of forgivable loans | 9,662 | 14,749 |
Non-current portion of forgivable loans | $ 40,387 | $ 46,864 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 02, 2021 | Jan. 02, 2021 | |
Changes in the carrying amount of goodwill | ||
Goodwill | $ 160,900 | $ 161,080 |
Accumulated goodwill impairment | (71,900) | $ (71,893) |
Balance at the beginning of the period, Goodwill, net | 89,187 | |
Foreign currency translation adjustment | (221) | |
Balance at the end of the period, Goodwill, net | $ 88,966 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Acquired and Amortization (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 02, 2021 | Jan. 02, 2021 | |
Acquired identifiable intangible assets | ||
Gross Carrying Amount | $ 8,500 | $ 12,400 |
Accumulated Amortization | (4,100) | (7,292) |
Net Carrying Amount | 4,400 | 5,108 |
Non-competition agreements | ||
Acquired identifiable intangible assets | ||
Gross Carrying Amount | 280 | 280 |
Accumulated Amortization | (262) | (219) |
Net Carrying Amount | $ 18 | 61 |
Useful Life (in years) | 5 years | |
Customer relationships | ||
Acquired identifiable intangible assets | ||
Gross Carrying Amount | $ 8,220 | 12,120 |
Accumulated Amortization | (3,838) | (7,073) |
Net Carrying Amount | $ 4,382 | $ 5,047 |
Customer relationships | Minimum | ||
Acquired identifiable intangible assets | ||
Useful Life (in years) | 8 years | |
Customer relationships | Maximum | ||
Acquired identifiable intangible assets | ||
Useful Life (in years) | 10 years |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Oct. 02, 2021 | Sep. 26, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | Jan. 02, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Amortization | $ 200,000 | $ 300,000 | $ 700,000 | $ 1,000,000 | |
Intangible assets impairment losses | $ 0 | $ 0 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Oct. 02, 2021 | Jan. 02, 2021 |
Accrued Liabilities, Current [Abstract] | ||
Compensation and related expenses | $ 119,394 | $ 123,540 |
Income taxes payable | 655 | 1,927 |
Performance awards | 571 | 2,176 |
Other professional fees | 1,677 | 1,541 |
Direct project accruals | 3,012 | 3,988 |
Accrued leasehold improvements | 39 | 52 |
Other | 3,353 | 3,152 |
Total accrued expenses | 128,701 | 136,376 |
Compensation and related expenses | ||
Accrued bonuses | $ 93,500 | $ 102,600 |
Income Taxes (Details)
Income Taxes (Details) £ in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2021USD ($) | Sep. 26, 2020 | Oct. 02, 2021GBP (£) | Sep. 26, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate (as a percent) | 14.80% | 28.20% | 22.00% | 27.50% |
Distributed foreign earnings | £ | £ 12 | |||
Deferred tax liability recognized, undistributed foreign earnings | $ | $ 0.3 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Oct. 02, 2021 | Jul. 03, 2021 | Apr. 03, 2021 | Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 | Oct. 02, 2021 | Sep. 26, 2020 | |
Net Income (Loss) Available to Common Stockholders, Diluted [Abstract] | ||||||||
Net income | $ 10,945 | $ 11,566 | $ 10,501 | $ 5,403 | $ 5,931 | $ 6,468 | $ 33,012 | $ 17,802 |
Less: net income attributable to participating shares | 43 | 22 | 128 | 53 | ||||
Net income available to common shareholders | $ 10,902 | $ 5,381 | $ 32,884 | $ 17,749 | ||||
Reconciliation of basic to diluted weighted average shares of common stock outstanding | ||||||||
Basic weighted average shares outstanding (in shares) | 7,375,000 | 7,771,000 | 7,440,000 | 7,780,000 | ||||
Dilutive stock options and restricted stock units (in shares) | 185,000 | 163,000 | 203,000 | 184,000 | ||||
Diluted weighted average shares outstanding (in shares) | 7,560,000 | 7,934,000 | 7,643,000 | 7,964,000 | ||||
Calculation of common stock equivalents for purposes of computing diluted weighted average shares outstanding | ||||||||
Anti-dilutive securities excluded from EPS computation (in shares) | 0 | 76,399 | 0 | 62,808 |
Credit Agreement (Details)
Credit Agreement (Details) - USD ($) | 9 Months Ended | |
Oct. 02, 2021 | Jan. 02, 2021 | |
Senior Loan Agreement | ||
Borrowings on revolving line of credit outstanding | $ 6,000,000 | $ 0 |
Revolving credit facility | ||
Senior Loan Agreement | ||
Revolving credit facility, maximum capacity | 175,000,000 | |
Increased capacity of revolving credit facility, amount | 50,000,000 | |
Borrowings on revolving line of credit outstanding | 6,000,000 | $ 0 |
Secured by letters of credit | ||
Senior Loan Agreement | ||
Revolving credit facility, maximum capacity | 15,000,000 | |
Amount available under revolving credit facility reduced | $ 4,200,000 |
Self-Tender Offer (Details)
Self-Tender Offer (Details) - Self Tender Offer - USD ($) | Apr. 08, 2021 | Mar. 08, 2021 |
Self-Tender Stock Offering [Line Items] | ||
Self-tender stock offering, authorized amount | $ 25,000,000 | |
Self-Tender stock offering, share purchase price (in dollars per share) | $ 74 | |
Payments for Self-Tender stock offering, net | $ 25,300,000 | |
Self-tender stock offering, number of shares repurchased (in shares) | 337,837 | |
Minimum | ||
Self-Tender Stock Offering [Line Items] | ||
Self-Tender stock offering, share purchase price (in dollars per share) | $ 66.25 | |
Maximum | ||
Self-Tender Stock Offering [Line Items] | ||
Self-Tender stock offering, share purchase price (in dollars per share) | $ 76 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Nov. 04, 2021 | Oct. 02, 2021 | Jul. 03, 2021 | Apr. 03, 2021 | Sep. 26, 2020 | Jun. 27, 2020 | Mar. 28, 2020 |
Subsequent Events | |||||||
Common share quarterly cash dividend declared (in dollars per share) | $ 0.26 | $ 0.26 | $ 0.26 | $ 0.23 | $ 0.23 | $ 0.23 | |
Subsequent Events | |||||||
Subsequent Events | |||||||
Common share quarterly cash dividend declared (in dollars per share) | $ 0.31 |
Uncategorized Items - crai-2021
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-13 [Member] |