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CRA International (CRAI) Misses Q4 Earnings by a Whisker
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Management services provider CRA International, Inc. (CRAI - Free Report) reported solid fourth-quarter 2016 results with significant year-over-year improvement in revenues and earnings. GAAP earnings for the reported quarter were $2.1 million or 24 cents per share as against a net loss of $1.3 million or loss of 15 cents per share in the year-earlier quarter. The year-over-year increase in earnings was primarily due to higher revenues during the reported quarter and goodwill impairment charges in the year-ago quarter.
Non-GAAP earnings in the reported quarter were $2.1 million or 24 cents per share compared with $0.2 million or 3 cents per share in the year-ago quarter. Non-GAAP earnings marginally missed the Zacks Consensus Estimate by a penny.
For full-year 2016, GAAP earnings improved to $12.9 million or $1.49 per share from $7.7 million or 83 cents per share in 2015. Non-GAAP earnings for 2016 were $11.5 million or $1.33 per share compared with $10.1 million or $1.10 per share in 2015.
Quarter Highlights
Non-GAAP revenues in the fourth quarter increased 11.2% year over year to $79.6 million. This performance was a result of broad-based growth in legal regulatory and management consulting lines of businesses. International operations also continued to deliver solid results, led by Antitrust & Competition Economics and Marakon practices. The reported revenues exceeded the Zacks Consensus Estimate of $76 million. For 2016, CRA International recorded non-GAAP revenues of $324 million compared with $299.8 million in 2015.
GAAP gross profit in the reported quarter was $23.5 million compared with $21.3 million in the year-ago quarter, with the respective margins being 29.5% and 29.4%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter increased 30.7% year over year to $12.9 million. Company-wide utilization in the quarter improved to 71% from 68% in the prior-year quarter, while headcount grew 5.7% year over year.
Acquisition
Subsequent to the end of the quarter, CRA International acquired C1 Consulting, a life sciences strategy consulting firm that helps pharmaceutical and biotech clients maximize their business potential through advanced analytics, customer insights, and therapy area expertise. The successful integration of the acquired firm will extend its capabilities in advanced analytics and market research as well as broaden its commercialization strategy offering, particularly relating to rare and orphan diseases. The transaction will also enable it to extend its geographic footprint with new offices in San Francisco, California, New Jersey and Lucerne, Switzerland. The deal is likely to be accretive to earnings in 2017.
CRA International,Inc. Price, Consensus and EPS Surprise
At year-end 2016, CRA International had cash and cash equivalents of $53.5 million, while its long-term liabilities were $21.7 million compared with the respective tallies of $38.1 million and $16.2 million in the year-ago period.
Cash from operating activities for 2016 was $48.2 million compared with $20.4 million in 2015. During 2016, the company returned over $20 million to shareholders through share repurchases and dividends. This included $1.2 million in dividend payments and $19.1 million of repurchases of approximately 784,000 shares.
Outlook
For 2017, CRA International expects non-GAAP revenues of $350–$360 million on favorable growth dynamics. Non-GAAP adjusted EBITDA margin is expected in a 15.8–16.6% band.
Although CRA International recorded healthy demand, soft economic conditions and macroeconomic uncertainties continued to be headwinds. Proper integration of new hires remains an additional concern for the company.
CBIZ has beaten earnings estimates twice in the trailing four quarters for a positive surprise of 21.45%.
NV5 Global has a long-term earnings growth expectation of 20%.
The Hackett Group has a long-term earnings growth expectation of 17.3%.
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CRA International (CRAI) Misses Q4 Earnings by a Whisker
Management services provider CRA International, Inc. (CRAI - Free Report) reported solid fourth-quarter 2016 results with significant year-over-year improvement in revenues and earnings. GAAP earnings for the reported quarter were $2.1 million or 24 cents per share as against a net loss of $1.3 million or loss of 15 cents per share in the year-earlier quarter. The year-over-year increase in earnings was primarily due to higher revenues during the reported quarter and goodwill impairment charges in the year-ago quarter.
Non-GAAP earnings in the reported quarter were $2.1 million or 24 cents per share compared with $0.2 million or 3 cents per share in the year-ago quarter. Non-GAAP earnings marginally missed the Zacks Consensus Estimate by a penny.
For full-year 2016, GAAP earnings improved to $12.9 million or $1.49 per share from $7.7 million or 83 cents per share in 2015. Non-GAAP earnings for 2016 were $11.5 million or $1.33 per share compared with $10.1 million or $1.10 per share in 2015.
Quarter Highlights
Non-GAAP revenues in the fourth quarter increased 11.2% year over year to $79.6 million. This performance was a result of broad-based growth in legal regulatory and management consulting lines of businesses. International operations also continued to deliver solid results, led by Antitrust & Competition Economics and Marakon practices. The reported revenues exceeded the Zacks Consensus Estimate of $76 million. For 2016, CRA International recorded non-GAAP revenues of $324 million compared with $299.8 million in 2015.
GAAP gross profit in the reported quarter was $23.5 million compared with $21.3 million in the year-ago quarter, with the respective margins being 29.5% and 29.4%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter increased 30.7% year over year to $12.9 million. Company-wide utilization in the quarter improved to 71% from 68% in the prior-year quarter, while headcount grew 5.7% year over year.
Acquisition
Subsequent to the end of the quarter, CRA International acquired C1 Consulting, a life sciences strategy consulting firm that helps pharmaceutical and biotech clients maximize their business potential through advanced analytics, customer insights, and therapy area expertise. The successful integration of the acquired firm will extend its capabilities in advanced analytics and market research as well as broaden its commercialization strategy offering, particularly relating to rare and orphan diseases. The transaction will also enable it to extend its geographic footprint with new offices in San Francisco, California, New Jersey and Lucerne, Switzerland. The deal is likely to be accretive to earnings in 2017.
CRA International,Inc. Price, Consensus and EPS Surprise
CRA International,Inc. Price, Consensus and EPS Surprise | CRA International,Inc. Quote
Balance Sheet
At year-end 2016, CRA International had cash and cash equivalents of $53.5 million, while its long-term liabilities were $21.7 million compared with the respective tallies of $38.1 million and $16.2 million in the year-ago period.
Cash from operating activities for 2016 was $48.2 million compared with $20.4 million in 2015. During 2016, the company returned over $20 million to shareholders through share repurchases and dividends. This included $1.2 million in dividend payments and $19.1 million of repurchases of approximately 784,000 shares.
Outlook
For 2017, CRA International expects non-GAAP revenues of $350–$360 million on favorable growth dynamics. Non-GAAP adjusted EBITDA margin is expected in a 15.8–16.6% band.
Although CRA International recorded healthy demand, soft economic conditions and macroeconomic uncertainties continued to be headwinds. Proper integration of new hires remains an additional concern for the company.
CRA International currently has a Zacks Rank #2 (Buy). Some other favorably ranked stocks in the industry include CBIZ, Inc. (CBZ - Free Report) , NV5 Global, Inc. (NVEE - Free Report) and The Hackett Group, Inc. (HCKT - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CBIZ has beaten earnings estimates twice in the trailing four quarters for a positive surprise of 21.45%.
NV5 Global has a long-term earnings growth expectation of 20%.
The Hackett Group has a long-term earnings growth expectation of 17.3%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>