Charles River Associates (NASDAQ: CRAI) reported Q3 EPS of $0.76, $0.22 better than the analyst estimate of $0.54. Revenue for the quarter came in at $121.8 million versus the consensus estimate of $119.75 million.

Key Third-Quarter Fiscal 2020 Highlights

• Revenue grew 5.3% year over year to $121.8 million.
• Utilization was 69%, while quarter-end headcount increased 11.5% year over year.
• Net income was $5.4 million, or 4.4% of revenue, compared with $5.7 million, or 5.0% of revenue, in the third quarter of fiscal 2019; non-GAAP net income was $6.1 million, or 5.0% of revenue, compared with $7.9 million, or 6.9% of revenue, in the third quarter of fiscal 2019.
• Earnings per diluted share were $0.68, compared with $0.71 in the third quarter of fiscal 2019; non-GAAP earnings per diluted share were $0.76, compared with $0.98 in the third quarter of fiscal 2019.
• Non-GAAP EBITDA was $12.0 million, or 9.8% of revenue, compared with $12.6 million, or 10.9% of revenue, in the third quarter of fiscal 2019.
• On a constant currency basis relative to the third quarter of fiscal 2019, revenue would have been lower by $0.9 million, GAAP net income and earnings per diluted share would have been lower by $0.2 million and $0.02, respectively. Non-GAAP net income, earnings per diluted share and EBITDA would have been lower by $0.2 million, $0.02 per diluted share, $0.2 million, respectively.
• CRA returned $6.8 million of capital to its shareholders, consisting of $1.8 million of dividend payments and $5.0 million for share repurchases of approximately 110,000 shares.

Management Commentary and Financial Guidance

“Against a challenging economic backdrop, CRA again demonstrated its ability to generate strong cash flows, providing funds to support the growth of the business and return capital to shareholders,” said Paul Maleh, CRA’s President and Chief Executive Officer. “Highlighting the resiliency of our company, CRA delivered year-over-year revenue growth for the 19th consecutive quarter. CRA continued to invest in our practices by increasing headcount by 11.5% year over year, while at the same time reducing its borrowings by $21.0 million and increasing its cash balance by 28% compared to the second quarter of fiscal 2020. CRA also repurchased 110,000 shares of its common stock during the third quarter and today announced a 13% increase in its quarterly cash dividend.”

“Building on a record fiscal 2019 and first half of fiscal 2020, CRA produced growth across both the legal & regulatory and management consulting lines of business. Many of our practices generated revenue growth year over year, led by double-digit growth in each of our Energy, Finance, Forensic Services, and Risk, Investigations & Analytics practices. Geographically, we experienced balanced growth across our North American and international operations.”

“Through the first three quarters of fiscal 2020, on a constant currency basis relative to fiscal 2019, we have increased revenue by 11.8% to $371.1 million and non-GAAP EBITDA by 12.2% to $36.8 million, achieving a margin of 9.9%. Given the strength of our year-to-date performance and the growing momentum across our service portfolio, we are reinstating financial guidance for full-year fiscal 2020. On a constant currency basis relative to fiscal 2019, we expect revenue in the range of $498 million to $504 million and non-GAAP EBITDA margin in the range of 9.7% to 10.2%,” Maleh concluded.

For earnings history and earnings-related data on Charles River Associates (CRAI) click here.