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CRAI Surpasses Q4 Earnings Estimates

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Management services provider CRA International Inc. (CRAI - Free Report) reported GAAP net income of $3.7 million or 37 cents per share versus a net loss of $53.5 million or loss of $5.33 per share in the year-ago quarter. The GAAP loss incurred in the year-ago quarter was primarily due to a non-cash goodwill impairment charge of $57.8 million.

Non-GAAP earnings for the reported quarter decreased year over year to $3.7 million or 37 cents per share from $4.3 million or 43 cents per share in the year-earlier quarter. However, non-GAAP earnings for fourth quarter 2013 comfortably beat the Zacks Consensus Estimate of 30 cents.

For full year 2013, net income was $11.4 million or $1.12 per share versus a net loss of $53.0 million or loss of $5.21 per share in the previous year. Excluding non-recurring items, non-GAAP earnings for 2013 were $11.5 million or $1.13 per share compared with $10.1 million or 98 cents per share in 2012. Non-GAAP earnings for full year 2013 exceeded the Zacks Consensus Estimate by 6 cents.
Quarter Highlights

Revenues for fourth quarter 2013 were $75.7 million compared with $67.6 million in the year-ago quarter. The quarterly revenues beat the Zacks Consensus Estimate of $70 million. Non-GAAP revenues for fourth quarter 2013 increased to $74.3 million from $66.0 million in the prior-year quarter.

The healthy year-over-year revenue growth was attributable to solid performances in both North America and Europe. The company recorded strong revenue growth in Antitrust and Competition Economics, Auctions and Competitive Bidding, Financial Economics, Intellectual Property, Life Sciences and Transfer Pricing.

Company-wide utilization improved to 80% in fourth quarter 2013 from 68% in the year-ago period. For full year 2013, company-wide utilization increased to 73% from 68% in 2012.

Gross profit (GAAP) improved to $24.0 million from $23.3 million in the year-ago quarter. Selling, general and administrative expenses (non-GAAP), after adjusting for commissions to non-employee experts, decreased to 18.6% from 19.3% in fourth quarter 2012.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) on a GAAP basis were $11.9 million in the reported quarter compared with $11.0 million in the year-ago quarter. Adjusted EBITDA on a non-GAAP basis was $11.9 million versus $10.8 million in the year-ago quarter.

Financial Position

At year-end 2013, cash and cash equivalents were $51.3 million compared with $55.5 million at year-end 2012. Long-term liabilities stood at $7.4 million as of Dec 28, 2013 versus $10.6 million as of Dec 29, 2012.

Share Repurchase

During the quarter, CRA International approved an extended share repurchase program of up to $15.0 million, in addition to the $1.4 million remaining under its existing share repurchase program. The company will finance the share repurchase programs with available cash and will purchase shares either in the open market or in privately negotiated transactions.


CRA International is encouraged by a strong rebound in performance in the second half of 2013. Going forward, the company expects an improved cost structure and broad-based profitable growth and attractive margins. Through most of 2014, the company expects healthy lead flow and strong project conversions.

Moving Forward

The stock reacted positively on the earnings results as share prices were up 9.1% to close at $21.02 on close of trading on Feb 13.

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 - Free Report) , Accenture plc (ACN - Free Report) and Huron Consulting Group Inc. (HURN - Free Report) , each carrying a Zacks Rank #2 (Buy).

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