20th Annual Needham Growth Conference

Transcription

1 20th Annual Needham Growth Conference January 17, 2018 This presentation is subject to and should be read in conjunction with the disclaimers and other statements contained on the last page of this presentation under the heading Safe harbor disclaimer.

2 A leading global consulting firm Service offering For over 50 years, Charles River Associates (CRA) has been a premier consulting firm. In 1965, our founders envisioned a company that would bring the developing technology of academia, especially in the then-burgeoning area of quantitative methods in economics, to the real world. This vision continues to resonate strongly today as we apply universityquality quantitative tools and microeconomic analysis to practical problems. Positioning Economic Litigation and Management Consulting Boutique with Leading Positions in Antitrust & Competition Economics, Valuation, Financial Markets, and Corporate Strategy Two Lines of Business Legal, Regulatory, and Financial Consulting Cutting Edge Approaches to High Stakes Cases Management Consulting Sector Specialized Boutique Sources of Distinctiveness Leading Experts Client-Tailored Model Superior Analytics Industry Insight Senior-Led Organization/ Culture Team-Based Entrepreneurial Efficient Infrastructure 2

3 Service offering Solving complex problems with high value added expertise Antitrust & Competition Forensic Services Auctions & Competitive Bidding Intellectual Property Energy Labor & Employment Finance Life Sciences Financial Economics Marakon Each of our practices is highly regarded, and our consultants are recognized for their creative and multidisciplinary approach to solving clients complex problems in the US and throughout the world 3

4 Representative clients Service offering Corporate In the past two years, we have worked with 81 of the Fortune 100 4

5 Representative clients Service offering Law Firms In the past two years, we have worked with 98 of the top 100 law firms 5

6 Evergreen end markets and primary demand drivers Primary demand drivers Legal Spend Mergers & Acquisitions Regulatory & Public Policy Strategy & Operations Consulting 6

7 Legal spend for a typical Fortune 1000 company Primary demand drivers $40 100% $35 Total legal spend (millions) $30 $25 $20 $15 $10 $5 63.3% 65.9% 63.6% 61.6% 60.6% 59.2% 57.7% 59.2% 56.8% $12.1 $9.6 $11.7 $11.0 $12.9 $13.6 $14.6 $13.5 $15.0 $20.8 $18.5 $18.7 $19.1 $19.8 $19.7 $20.0 $19.6 $ % 50% 25% Percent of total legal spend $0 0% Outside counsel spending In-house counsel spending Outside counsel as a percent of total CRA s litigation growth has come from taking market share and successfully targeting faster growing segments Source: BTI Consulting Group, BTI Litigation Outlook 2017, Survey of Corporate Legal Spending 7

8 Worldwide mergers & acquisitions by target region Primary demand drivers $1,600 Announced deal value (billions) $1,400 $1,200 $1,000 $800 $600 $400 $200 $ Africa/Middle East Japan Asia Pacific Europe Americas Our business has continued to perform well through fluctuations in global M&A activity during the past few quarters Source: Thomson Reuters Deals Intelligence and Breakingviews, October

9 Primary demand drivers Regulatory & public policy Continuing with the theme of change, technology and innovation are constantly disrupting in mostly positive ways the manner in which markets work and investors transact. The SEC must recognize this and strive to ensure that our rules and operations reflect the realities of our capital markets. SEC Chairman Jay Clayton, Remarks at the Economic Club of New York, 12 July 2017 We must expand and reinforce the international rules, procedures and institutions we have built over the years which are the best venues where we can agree common enforcement standards. Director-General for Competition, European Commission Johannes Laitenberger, Closer together: The Case for International Cooperation, Concurrences Review event, 14 September 2017 Growing complexities in the regulatory markets have benefited both our Legal & Regulatory and Management Consulting businesses 9

10 CRA management consulting has benefitted from growing demand in the marketplace and continued focus on its differentiated offering Management Consulting Market Size and Growth Forecast Primary demand drivers Key Trends in Management Consulting Consolidation from largest players expected to continue $ % annual growth % annual growth expected for Value of sector expertise continues to increase (billions) $200 $100 $208 $211 $220 $229 $234 $238 $242 $246 $253 Financial services sector needs to improve efficiency, manage regulatory burden, and adopt new technologies Acclimation to new pricing realities in energy Increased demand for healthcare, digital and organizational design consulting Acquisition of smaller cloud consulting, design labs and data analytics companies $ Increasing overlap between Management and IT Consulting In light of recent trends, increasing our sector focus and analytical capabilities position CRA for future growth Source: Management Consulting in the US, IBIS, October 2017; 7 Predictions for the Consulting Industry in 2016, Lexis Nexis; Source Global Research,

11 Operating metrics What we have delivered YTD Q3 Fiscal 2017 Headcount year-over-year growth: 18% Utilization: 74% Revenue year-over-year growth: 12% Adjusted EBITDA year-over-year growth: 8% LTM adjusted cash flow from operations: 14% of revenues Stock repurchases: $20 million at an average price of $35.23 per share Increased quarterly cash dividend in Q by more than 20% to $0.17 per share Fiscal 2013 through Fiscal 2016 Headcount growth: 22% Utilization: 74% Revenue growth: 18% Adjusted EBITDA growth: 27% Adjusted cash flow from operations: 16% of revenues Stock repurchases: $60 million at an average price of $25.35 per share Initiated quarterly cash dividend in Q of $0.14 per share 11

12 Operating metrics Capital allocation philosophy Portfolio of investments include organic growth pursuits, talent acquisitions and the redistribution of capital to shareholders Redistribution of capital to shareholders Share repurchases historically have been our method of returning capital to shareholders The initiation of a quarterly cash dividend in Q4 of 2016 provides another avenue by which we can return capital to shareholders Seek to deliver returns well above our cost of capital We aim to achieve adjusted cash flow from operations as a percentage of revenues greater than our historical average of 12% 12

13 Operating metrics Talent acquisition strategy Historically, our growth has been balanced between organic and inorganic opportunities Going forward, our goal is to have a growth engine tilted toward organic initiatives and supplemented by inorganic pursuits to address gaps in our capabilities or to more rapidly build scale Talent investments will be focused on service offerings within our existing lines of business All investment decisions regarding talent pursuits will be made with a value-based orientation (i.e., earning more than our cost of capital) 13

14 Operating metrics CRA consulting headcount has grown by nearly 10% per annum since Q Officers Other Senior Staff Junior Staff 14

15 Utilization has held steady through the expansion of consulting headcount Operating metrics 100% 90% 80% 70% 67% 67% 78% 80% 78% 78% 75% 75% 78% 75% 73% 68% 75% 76% 73% 71% 72% 76% 74% 60% 50% 40% 30% 20% 10% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q

16 Operating metrics Revenues* $350 $324 Revenues (millions) $300 $250 $273 $302 $300 $273 $200 ** *** *** YTD Q *** *Presented on a non-gaap basis **FY 2014 reflects 53 weeks of operating results vs. 52 weeks for all other fiscal years presented ***On a constant currency basis relative to FY 2014, FY 2015 revenue would have been $306 million; on a constant currency basis relative to FY 2015, FY 2016 revenue would have been $331 million; and on a constant currency basis relative to YTD Q3 2016, YTD Q revenue would have been $277 million 16

17 Operating metrics Given the headcount growth and steady utilization, why are profitability measures declining? 20% 15% Percent of revenues 10% 5% 8.9% 6.5% 0% YTD Q Operating Income EBITDA *Presented on a non-gaap basis 17

18 Operating metrics Sources and uses of capital FY2013 FY2016 Forgivable Loans, $72 Predominantly used as a talent-acquisition tool (in millions) Total Sources Adjusted cash flow from operations $57 $41 $35 $55 $189 Reduction of cash balance 2 Total sources $57 $41 $35 $55 $191 Adjusted Cash Flow from Operations Acquisitions, $17 CapEx, $38 Share Repurchases, $60 Uses Forgivable loans $39 $11 $15 $7 $72 Acquisitions CapEx Share repurchases Dividend payments Other 2 2 (0) (0) 3 Total uses $61 $44 $45 $40 $191 Reduction of Cash Balance Sources Dividend Payments, $1 Other, $3 Uses Largely driven by FY real estate outlays ($26) $191 million of investments during the period FY2013 FY2016 have been selffunded without reliance on any debt 18

19 Operating metrics Why forgivable loans make sense Talent Acquisition Approaches Traditional M&A Hire Revenue Generators Objective Acquire talent collectively Acquire talent individually Upfront payment Yes Yes Form of transaction consideration Effects on Income Statement Effects on Statement of Cash Flows Tax treatment Need to renew Purchase price to/for LLC, C-Corp, etc. Amortize only value of identified intangibles; amounts added back when computing EBITDA Cash Flow from Investing Activities Slower amortization (up to 15 years) Potentially, depending on individual circumstances Forgivable loan(s) Expense 100% of upfront payment over period of loan forgiveness, reflected in Cost of Services; amounts not added back when computing EBITDA Cash Flow from Operating Activities Faster amortization (3-8 years) Potentially, depending on individual circumstances CRA issues loans to revenue generators as an acquisition and retention tool. As long as the consultant remains affiliated with CRA, the loan will be forgiven ; otherwise, the loan must be repaid 19

20 Operating metrics Profitability measures* 20% 15% 16.1% Percent of revenues 10% 5% 8.9% 6.5% 0% YTD Q (EBITDA plus share-based compensation, amortization Operating Income EBITDA Adjusted EBITDA of forgivable loans, and other (income) expense, net) *Presented on a non-gaap basis 20

21 Year-over-year growth for key performance metrics Operating metrics 20% 19% 18% Year-over-year growth 15% 10% 5% 0% 15% 15% 13% 12% 10% 8% 8% 6% 3% 2% -1% Q % -10% -5% -6% Headcount Revenue* Adjusted EBITDA* 21 *Presented on a non-gaap basis

22 Operating metrics Adjusted cash flow from operations FY2013 FY2016 (million) Average Cash flow from operating activities $ 18.4 $ 30.2 $ 20.4 $ 48.2 $ 29.3 Add: forgivable loan issuances $ 38.8 $ 10.9 $ 15.0 $ 6.9 $ 17.9 Adjusted cash flow from operations* $ 57.2 $ 41.1 $ 35.4 $ 55.1 $ 47.2 Total revenues $278.4 $306.4 $303.6 $324.8 $303.3 Total assets $320.1 $313.5 $313.7 $323.6 $317.7 Total shareholders' equity $224.6 $214.7 $211.1 $207.9 $214.6 Percent of revenues* 20.5% 13.4% 11.7% 17.0% 15.6% Return on assets* 17.9% 13.1% 11.3% 17.0% 14.9% Return on shareholders' equity* 25.5% 19.1% 16.8% 26.5% 22.0% *Presented on a non-gaap basis Forgivable loans are primarily used to acquire revenue generators and their associated profit stream, but unlike traditional acquisition consideration are reflected in cash flow from operating activities 22

23 Adjusted cash flow from operations FY2007 FY2016 Operating metrics Adjusted cash flow from operations (millions) $70 $60 $50 $40 $30 $20 $10 $0 FY2007 FY2016 average = 12% $57 $55 $47 21% $41 17% $35 $36 $35 13% $29 13% 12% 12% 9% 10% $18 $12 6% 5% % 20% 15% 10% 5% 0% Percent of revenues Adjusted cash flow from operations* Adjusted cash flow from operations as a percent of revenues* 23 *Presented on a non-gaap basis

24 Operating metrics Repurchase activity has significantly reduced our shares outstanding 11.0 Period-end shares outstanding (millions) Q Since FY2013, we have repurchased 2.9 million shares at an average cost of $27.23 per share 24

25 Operating metrics Dividend payments $0.50 $0.44 $0.40 $0.38 $0.33 $0.30 $0.24 $0.20 $0.10 $0.14 $0.14 $0.14 $0.14 $0.00 Q Q Q Q Payout Ratio 58% 42% 32% 37% Dividend Per Share Diluted Non-GAAP EPS Increased quarterly dividend payment by more than 20% to $0.17 per share (1.5% yield currently) starting in Q4 of Source: Dividend yield sourced from Capital IQ as of January 11, 2018

26 Operating metrics CRA s revenue and profit growth is even more attractive when viewed in parallel with shareholder distributions (million) YTD Q Average Share repurchases $2.2 $25.5 $12.8 $19.0 $19.5 $15.8 Dividend payments $1.2 $3.5 $0.9 Capital returned to shareholders $2.2 $25.5 $12.8 $20.2 $23.0 $16.7 Average market capitalization $197.7 $242.1 $240.8 $214.8 $315.4 $242.2 Shareholder yield 1.1% 10.5% 5.3% 9.4% 7.3% 6.9% Source: Market capitalization sourced from Capital IQ 26

27 Source: Capital IQ Cumulative Total Stock Returns (relative to 1/11/2018) Operating metrics Being good stewards of our capital has propelled CRA s stock performance 1 Year 2 Years 3 Years 5 Years CRA 40% 157% 74% 161% S&P % 49% 45% 109% NASDAQ Composite 31% 58% 60% 145% CRA has been rewarded for its ability to support the business through prudent investments while at the same time returning capital to shareholders 27

28 Operating metrics Over the next several years and consistent with past performance, we intend to continue targeting the following metrics: Average annual revenue growth in the mid-single digits driven primarily from organic pursuits Utilization in the mid-70s Non-GAAP adjusted EBITDA margin of 16% - 17% Adjusted cash flow from operations as a percentage of revenues greater than our historical average of 12% 28

29 Representative client matters 29

30 Legal, regulatory, and financial consulting Counsel to an international pharmaceutical company turned to CRA for advice throughout reviews of its multi-billion dollar merger in Europe and the US. We provided analysis demonstrating to the European Commission and Federal Trade Commission that the divestment of certain drugs would not hinder innovation and the development of new drugs. 30

31 Legal, regulatory, and financial consulting When a nationwide financial services company was hit by a targeted phishing campaign, thousands of customers became victims of wire fraud. Our cyber response experts traced the unauthorized network intrusions and identified impacted customers for timely notification. We helped the company assess its disclosure and regulatory reporting obligations, and prepare an insurance claim to recover costs and damages. 31

32 Legal, regulatory, and financial consulting CRA was retained to testify in an action involving the trading of interest rate futures. Our expert submitted a declaration in US federal court describing issues of market impact and price discovery related to Eurodollar futures trades by the defendant in an action launched by the Commodity Futures Trading Commission. 32

33 Management consulting When a leading provider of electronic payments needed assistance in evaluating its overall business strategy, the company turned to Marakon. We helped management assess their operating model and sales channel mix in an effort to build brand loyalty. 33

34 Management consulting Faced with low usage growth and rising retail rates, a large US utility retained CRA to help them develop a capital allocation strategy. Our team developed a first-of-its-kind rate benchmarking model that enabled the client to analyze their planned spending and rate growth against a peer set and optimize their strategic decisions. 34

35 Management consulting When Fonterra Co-operative Group, the world s leading dairy exporter, wanted to enhance price transparency, price risk management, and forward price information, they turned to CRA. We pioneered an Internet-based trading platform for commodity dairy products, and we independently manage the trading events. Cumulative sales of dairy product traded on this platform now with multiple sellers and buyers have surpassed US$20 billion. 35

36 36 Appendix: Supplemental Financial Disclosures and Safe Harbor Disclaimer

37 Reconciliation of non-gaap financial measures ($ in millions, except per share data) GAAP Adjustments for GNU and Other Non-GAAP GAAP Adjustments for GNU and Other Non-GAAP GAAP Adjustments for GNU and Other Non-GAAP GAAP Adjustments for GNU and Other Non-GAAP Revenues $394.6 $0.0 $394.6 $376.8 $0.8 $376.0 $301.6 $8.9 $292.8 $287.4 $6.4 $281.0 Income (loss) from operations (14.9) (6.9) (9.4) 19.8 Operating margin (%) 11.7% 11.7% 5.3% 9.3% 5.7% 8.2% 3.6% 7.1% Net income (loss) attributable to CRA International, Inc (10.1) (5.2) (6.8) 9.4 Net income (loss) attributable to noncontrolling interest, net of tax (0.6) (0.6) 0.0 (0.6) (0.6) 0.0 Net income (loss) $30.2 $3.6 $26.6 $6.2 ($10.1) $16.3 $5.7 ($5.8) $11.5 $2.0 ($7.4) $9.4 Net income margin (%) 7.7% 6.7% 1.7% 4.3% 1.9% 3.9% 0.7% 3.3% Interest expense (income), net (0.5) 0.0 (0.5) Provision (benefit) for income taxes 18.0 (1.8) (4.4) (1.8) (2.8) 7.1 Depreciation and amortization EBITDA ($) $57.4 $1.8 $55.6 $34.0 ($10.6) $44.6 $25.5 ($5.9) $31.5 $15.2 ($9.6) $24.8 EBITDA (%) 14.5% 14.1% 9.0% 11.9% 8.5% 10.7% 5.3% 8.8% Share-based compensation expenses Amortization of forgivable loans Other expense (income), net (1.4) (1.8) 0.4 (1.5) (0.5) (1.0) (0.3) Adjusted EBITDA ($) $64.7 $0.0 $64.7 $43.5 ($11.1) $54.6 $35.7 ($5.5) $41.3 $27.4 ($8.9) $36.3 Adjusted EBITDA (%) 16.4% 16.4% 11.5% 14.5% 11.8% 14.1% 9.5% 12.9% Shares outstanding (diluted) Diluted earnings per share $2.48 $2.20 $0.57 $1.50 $0.59 $1.07 $0.24 $

38 Reconciliation of non-gaap financial measures ($ in millions, except per share data) GAAP Adjustments for GNU and Other Non-GAAP GAAP Adjustments for GNU and Other Non-GAAP GAAP Adjustments for GNU and Other Non-GAAP GAAP Adjustments for GNU and Other Non-GAAP Revenues $305.2 $6.2 $299.1 $270.4 $5.5 $264.9 $278.4 $5.1 $273.4 $306.4 $4.8 $301.6 Income (loss) from operations 29.1 (0.2) 29.2 (57.8) (77.5) (0.3) 24.3 Operating margin (%) 9.5% 9.8% (21.4%) 7.4% 6.7% 6.7% 7.9% 8.1% Net income (loss) attributable to CRA International, Inc (0.2) 17.0 (53.0) (63.1) (0.1) (0.3) 13.9 Net income (loss) attributable to noncontrolling interest, net of tax (0.0) (0.1) (0.1) 0.0 (0.2) (0.2) 0.0 Net income (loss) $16.9 ($0.1) $17.0 ($52.8) ($63.0) $10.1 $11.2 ($0.3) $11.5 $13.4 ($0.5) $13.9 Net income margin (%) 5.6% 5.7% (19.5%) 3.8% 4.0% 4.2% 4.5% 4.7% Interest expense (income), net (0.1) Provision (benefit) for income taxes 11.1 (0.1) 11.3 (5.2) (14.7) Depreciation and amortization EBITDA ($) $33.7 ($0.0) $33.7 ($50.8) ($76.1) $25.3 $24.7 $0.1 $24.7 $30.2 ($0.3) $30.5 EBITDA (%) 11.0% 11.3% (18.8%) 9.6% 8.9% 9.0% 9.9% 10.1% Share-based compensation expenses Amortization of forgivable loans Other expense (income), net Adjusted EBITDA ($) $44.6 ($0.0) $44.7 $32.0 ($4.5) $36.6 $42.2 $0.1 $42.1 $49.6 ($0.3) $49.9 Adjusted EBITDA (%) 14.6% 14.9% 11.8% 13.8% 15.1% 15.4% 16.2% 16.5% Shares outstanding (diluted) Diluted earnings per share $1.57 $1.60 ($5.21) $0.98 $1.12 $1.13 $1.38 $

39 Reconciliation of non-gaap financial measures YTD Q ($ in millions, except per share data) GAAP Adjustments for GNU and Other Non-GAAP GAAP Adjustments for GNU and Other Non-GAAP GAAP Adjustments for GNU and Other Non-GAAP Revenues $303.6 $3.8 $299.8 $324.8 $0.8 $324.0 $273.1 $0.0 $273.1 Income (loss) from operations 12.4 (5.9) (0.8) (1.4) 17.8 Operating margin (%) 4.0% 6.1% 5.8% 6.1% 6.0% 6.5% Net income (loss) attributable to CRA International, Inc. 7.7 (2.5) (0.6) 10.5 Net income (loss) attributable to noncontrolling interest, net of tax (1.3) (1.3) Net income (loss) $6.3 ($3.8) $10.1 $14.2 $2.7 $11.5 $10.0 ($0.5) $10.5 Net income margin (%) 2.1% 3.3% 4.4% 3.6% 3.6% 3.8% Interest expense (income), net Provision (benefit) for income taxes 5.5 (1.6) (0.6) 6.7 Depreciation and amortization EBITDA ($) $18.9 ($5.3) $24.2 $30.3 $3.0 $27.2 $23.1 ($1.1) $24.2 EBITDA (%) 6.2% 8.1% 9.3% 8.4% 8.5% 8.9% Share-based compensation expenses Amortization of forgivable loans Other expense (income), net (3.4) (3.8) 0.4 (0.0) (0.3) 0.2 Adjusted EBITDA ($) $45.4 ($1.4) $46.8 $52.8 ($0.8) $53.6 $42.7 ($1.4) $44.0 Adjusted EBITDA (%) 15.0% 15.6% 16.3% 16.6% 15.6% 16.1% Weight average shares outstanding (diluted) Diluted earnings per share $0.83 $1.10 $1.49 $1.33 $1.15 $

40 Reconciliation of non-gaap financial measures Adjusted Cash Flow from Operations ($ million) Average Cash flow from operating activities $25.9 $45.4 $21.7 $13.6 $30.0 ($8.5) $18.4 $30.2 $20.4 $48.2 $24.5 Add: forgivable loan issuances $8.7 $2.0 $7.2 $4.8 $5.5 $20.7 $38.8 $10.9 $15.0 $6.9 $12.1 Adjusted cash flow from operations $34.6 $47.4 $28.9 $18.4 $35.5 $12.2 $57.2 $41.1 $35.4 $55.1 $36.6 Total revenues $394.6 $376.8 $301.6 $287.4 $305.2 $270.4 $278.4 $306.4 $303.6 $324.8 $314.9 Total assets $451.4 $444.5 $422.1 $373.7 $364.5 $290.9 $320.1 $313.5 $313.7 $323.6 $361.8 Total shareholders' equity $252.7 $239.0 $255.7 $256.4 $268.4 $212.2 $224.6 $214.7 $211.1 $207.9 $234.3 Cash flow from operating activities Percent of revenues 6.6% 12.0% 7.2% 4.7% 9.8% -3.2% 6.6% 9.8% 6.7% 14.8% 7.8% Return on assets 5.7% 10.2% 5.1% 3.6% 8.2% -2.9% 5.7% 9.6% 6.5% 14.9% 6.8% Return on shareholders' equity 10.2% 19.0% 8.5% 5.3% 11.2% -4.0% 8.2% 14.0% 9.7% 23.2% 10.5% Adjusted cash flow from operations Percent of revenues 8.8% 12.6% 9.6% 6.4% 11.6% 4.5% 20.5% 13.4% 11.7% 17.0% 11.6% Return on assets 7.7% 10.7% 6.9% 4.9% 9.7% 4.2% 17.9% 13.1% 11.3% 17.0% 10.1% Return on shareholders' equity 13.7% 19.8% 11.3% 7.2% 13.2% 5.7% 25.5% 19.1% 16.8% 26.5% 15.6% 40

41 Reconciliation of non-gaap financial measures Notes: 1) Adjustments for GNU and Other These adjustments arise from activity related to GNU, CRA s majority owned subsidiary, formerly known as NeuCo, in the Company's GAAP results. In April 2016, substantially all of GNU's assets were sold. Additional adjustments referred to as Other include goodwill and intangible impairment charges, restructuring charges, revaluation changes of contingent consideration liabilities associated with prior acquisitions, and certain other unusual charges. 2) Other (income) expense, net For all fiscal years, "other (income) expense, net" includes unusual expense and income items such as goodwill impairment charges, restructuring, and certain other unusual charges. 3) Constant Currency Calculations CRA believes that fluctuations in foreign currency exchange rates can significantly affect CRA's financial results. Therefore, CRA provides a constant currency presentation to supplement disclosures regarding its results of operations and performance. CRA calculates constant currency amounts by converting its applicable fiscal period local currency financial results using the prior fiscal year s corresponding period exchange rates. 41

42 Safe harbor disclaimer Statements included in this presentation which are not historical in nature, are forward-looking statements as defined in the Private Securities Litigation Reform Act of Forward looking statements may include statements concerning our plans, objectives, goals, strategies, and future events, including, but not limited to, future revenues, growth, profitability, performance and expectations such as non-gaap revenue and non-gaap Adjusted EBITDA margin, the declaration of future quarterly dividends and capital allocation strategies. These statements that are not historical may be reflected in words, graphs or diagrams. When used in this presentation, words such as believe, seek, aim, going forward, achieve, committed, pursuits, target, continue and variations of such words or similar expressions are intended to identify forward-looking statements. These statements are based upon management s current expectations and speak only as of the date of this presentation. Charles River Associates ( CRA ) cautions readers that there may be events in the future that CRA is not able to accurately predict or control, and the information contained in the forward-looking statements is inherently uncertain and subject to a number of risks that could cause actual results to differ materially from those contained in or implied by the forward-looking statements or by the historical references. These risks include, but are not limited to, the possibility that the demand for our services may decline as a result of changes in general and industry specific economic conditions, the timing of engagements for our services, the effects of competitive services and pricing, our ability to attract and retain key employee or non-employee experts; the inability to integrate and utilize existing consultants and personnel; the decline or reduction in project work or activity; global economic conditions including less stable political and economic environments; foreign exchange rate fluctuations; unanticipated expenses and liabilities; risks inherent in international operations; changes in accounting standards, rules, and regulations; our ability to collect on forgivable loans should any become due; and professional and other legal liability. Further information on various potential factors and risks that could affect CRA s financial results are included under the heading Risk Factors in the annual and quarterly reports we file with the Securities and Exchange Commission (SEC), as well as in the other documents we file with the SEC, which are available on the SEC s website or in the Investor Relations section of CRA s website at The inclusion of such forward-looking information should not be regarded as our representation that the future events, plans, or expectations contemplated will be achieved. CRA cannot guarantee any future results, levels of activity, performance, or achievement and undertakes no obligation to update any of its forwardlooking statements, nor does it assume any liability for any investment decisions made or not made as a result of this presentation. 42

43 Investor Relations Charles River Associates 200 Clarendon Street Boston, MA Follow Us linkedin.com/company/charles-river-associates twitter.com/news_cra facebook.com/charlesriverassociates