Back to top

Analyst Blog

Management services provider CRA International Inc. (CRAI - Analyst Report) reported adjusted net income of $3.5 million or 35 cents per share versus $3.1 million or 31 cents per share in the year-earlier quarter, comfortably beating the Zacks Consensus Estimate of 28 cents. The increase in net income was driven by broad-based contributions from both Litigation/Regulatory and Management Consulting segments.

For the reported quarter, GAAP net income stood at $3.4 million or 34 cents per share versus $3.0 million or 29 cents per share in the year-ago quarter.

Quarter Highlights

Revenues for first-quarter 2014 increased to $76.2 million from $63.1 million in the prior-year quarter. Quarterly revenues beat the Zacks Consensus Estimate of $68 million as well.

Healthy year-over-year revenue growth and profitability were attributable to solid performances in both North America and Europe. Its business areas such as Antitrust and Competition Economics, Financial Economics, Life Sciences, Marakon and Transfer Pricing recorded revenue growth of over 20% each.

Company-wide utilization improved to 78% in first-quarter 2014 from 67% in the year-ago period.

Adjusted gross profit improved to $23.6 million from $20.4 million in the year-ago quarter. After excluding the effects of its subsidiary NeuCo’s operations, adjusted selling, general and administrative expenses decreased to 21.6% of revenues from 24.0% in first-quarter 2013 due to sustained cost control initiatives.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) on a non-GAAP basis were $12.1 million in the reported quarter compared with $8.7 million in the year-ago quarter, driven by top line growth as well as a more streamlined cost structure.

Financial Position
    
At quarter end, cash and cash equivalents were $32.5 million compared with $51.3 million on Dec 28, 2013. The decrease in cash reserves was primarily due to $30 million bonus paid to employees. Long-term liabilities stood at $7.8 million at the end of the quarter.

The company recorded capital expenditures of around $0.4 million in the reported quarter, compared with $1.2 million in the prior-year period.

Share Repurchase

CRA International has a share repurchase program in place of up to $15.0 million, which it will finance with available cash and purchase of shares either in the open market or in privately negotiated transactions. During the quarter, the company repurchased around 96,000 shares of common stock worth approximately $2.1 million.

Outlook

CRA International is encouraged by the strong momentum in its operations. Going forward, the company expects an improved cost structure and broad-based profitable growth and attractive margins. However, macroeconomic pressures remain a cause of concern if they translate to a negative trend in client spending patterns. Through most of 2014, the company anticipates healthy lead flow activity and strong project conversions.

CRA International currently has a Zacks Rank #3 (Hold). Stocks that look promising and are worth a look in the industry include Bureau Veritas SA (BVRDF), Accenture plc (ACN - Analyst Report) and Corporate Executive Board Co. (CEB - Snapshot Report), each carrying a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%