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CRA International Inc. (CRAI - Analyst Report) recently expanded its share repurchase program to $7.5 million in an effort to optimize shareholders’ return. Previously in July 2010, the company’s board of directors authorized a share repurchase program of up to $5 million of its common stock.

As of August 2011, CRA International repurchased 165,311 shares at a cost of approximately $4.2 million under the existing plan. The company is open to repurchase shares in the open market or in privately negotiated transactions.

The company’s balance sheet continues to remain strong, allowing it to fund the buyback with excess cash flow. At the end of second quarter 2011, CRA International had cash and cash equivalents including short-term investments of $51.6 million and shareholder’s equity of $267.9 million. CRA International has no long-term debt liability with the retirement of the remaining $21.9 million senior subordinated debentures during the quarter. Moreover, the bond buyback would reduce the company’s interest burden going forward. The company also has a $60 million credit facility that provides it with additional flexibility.

Share repurchases imply that the company is standing on a sound financial footing and is poised for future growth. The program also enhances shareholders’ return even in the back drop of slowing economic growth, a move that we find commendable. At the same time, it also boosts the market value of the stock. The increased buyback program also depicts an optimistic business outlook including an active pipeline for both litigation and management consulting businesses.

CRA International currently retains a Zacks #1 Rank, which translates into a short-term Strong-Buy rating. We are also maintaining our long-term Neutral recommendation on the stock. One of CRA International’s peers, Navigant Consulting Inc. (NCI - Analyst Report) also retains the Zacks #1 Rank.

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