Company Quick10K Filing
CRA
Price42.75 EPS3
Shares8 P/E15
MCap351 P/FCF-18
Net Debt-20 EBIT31
TEV331 TEV/EBIT11
TTM 2019-09-28, in MM, except price, ratios
10-Q 2020-09-26 Filed 2020-10-29
10-Q 2020-06-27 Filed 2020-07-30
10-Q 2020-03-28 Filed 2020-04-30
10-K 2019-12-28 Filed 2020-02-27
10-Q 2019-09-28 Filed 2019-10-31
10-Q 2019-06-29 Filed 2019-08-01
10-Q 2019-03-30 Filed 2019-05-02
10-K 2018-12-29 Filed 2019-02-28
10-Q 2018-09-29 Filed 2018-11-01
10-Q 2018-06-30 Filed 2018-08-02
10-Q 2018-03-31 Filed 2018-05-08
10-K 2017-12-30 Filed 2018-03-12
10-Q 2017-09-30 Filed 2017-10-31
10-Q 2017-07-01 Filed 2017-08-04
10-Q 2017-04-01 Filed 2017-05-11
10-K 2016-12-31 Filed 2017-03-15
10-Q 2016-10-01 Filed 2016-11-03
10-Q 2016-07-02 Filed 2016-08-04
10-Q 2016-04-02 Filed 2016-05-05
10-K 2016-01-02 Filed 2016-03-04
10-Q 2015-10-03 Filed 2015-11-03
10-Q 2015-07-04 Filed 2015-08-04
10-Q 2015-04-04 Filed 2015-05-06
10-K 2015-01-03 Filed 2015-03-17
10-Q 2014-09-27 Filed 2014-10-27
10-Q 2014-06-28 Filed 2014-08-01
10-K 2013-12-28 Filed 2014-03-13
10-Q 2013-09-28 Filed 2013-10-28
10-Q 2013-06-29 Filed 2013-08-08
10-Q 2013-03-30 Filed 2013-05-09
10-Q 2013-03-29 Filed 2014-04-28
10-K 2012-12-29 Filed 2013-03-08
10-Q 2012-09-29 Filed 2012-11-08
10-Q 2012-06-30 Filed 2012-08-08
10-Q 2012-03-31 Filed 2012-05-09
10-K 2011-12-31 Filed 2012-03-02
10-Q 2011-10-01 Filed 2011-11-08
10-Q 2011-07-02 Filed 2011-08-09
10-Q 2011-04-02 Filed 2011-05-10
10-K 2010-11-27 Filed 2011-02-10
10-Q 2010-09-03 Filed 2010-10-12
10-Q 2010-05-14 Filed 2010-06-21
10-Q 2010-02-19 Filed 2010-03-29
10-K 2009-11-28 Filed 2010-01-29
8-K 2021-02-10 Regulation FD, Other Events, Exhibits
8-K 2021-01-12 Enter Agreement, Earnings, Off-BS Arrangement, Exhibits
8-K 2020-10-29
8-K 2020-10-14
8-K 2020-07-30
8-K 2020-07-08
8-K 2020-04-30
8-K 2020-03-17
8-K 2020-03-17
8-K 2020-03-04
8-K 2020-03-03
8-K 2020-02-27
8-K 2019-10-31
8-K 2019-08-01
8-K 2019-07-10
8-K 2019-06-18
8-K 2019-05-02
8-K 2019-03-28
8-K 2019-02-28
8-K 2018-11-01
8-K 2018-08-02
8-K 2018-07-11
8-K 2018-05-08
8-K 2018-04-26
8-K 2018-04-02
8-K 2018-02-15

CRAI 10Q Quarterly Report

Part I. Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibit Index
EX-31.1 craiq3-2020exx311.htm
EX-31.2 craiq3-2020exx312.htm
EX-32.1 craiq3-2020exx321.htm
EX-32.2 craiq3-2020exx322.htm

CRA Earnings 2020-09-26

Balance SheetIncome StatementCash Flow
51040830620410202012201420172020
Assets, Equity
12095704621-22012201420172020
Rev, G Profit, Net Income
40200-20-40-602012201420172020
Ops, Inv, Fin

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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 26, 2020
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 000-24049
________________________________________________________________________________________
CRA International, Inc.
(Exact name of registrant as specified in its charter)​
Massachusetts04-2372210
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
200 Clarendon Street, Boston, MA
02116-5092
(Address of principal executive offices)(Zip Code)
(617425-3000
(Registrant’s telephone number, including area code)
________________________________________________________________________________________​
Securities registered pursuant to Section 12(b) of the Act:​
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, no par valueCRAINasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
ClassOutstanding at October 23, 2020
Common Stock, no par value per share7,776,333 shares




Table of Contents
CRA International, Inc.
INDEX
2


Table of Contents
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
Fiscal Quarter EndedFiscal Year-to-Date
Period Ended
September 26,
2020
September 28,
2019
September 26,
2020
September 28,
2019
Revenues$121,762 $115,686 $370,951 $332,108 
Costs of services (exclusive of depreciation and amortization)88,304 83,805 269,462 233,412 
Selling, general and administrative expenses22,194 22,449 67,742 68,929 
Depreciation and amortization3,244 2,527 9,293 7,696 
Income from operations8,020 6,905 24,454 22,071 
Interest expense, net(277)(424)(1,011)(954)
Foreign currency gains (losses), net(217)210 1,103 (379)
Income before provision for income taxes7,526 6,691 24,546 20,738 
Provision for income taxes2,123 952 6,744 4,754 
Net income$5,403 $5,739 $17,802 $15,984 
Net income per share:
Basic$0.69 $0.74 $2.28 $2.02 
Diluted$0.68 $0.71 $2.23 $1.94 
Weighted average number of shares outstanding:
Basic7,771 7,769 7,780 7,903 
Diluted7,934 8,050 7,964 8,205 
See accompanying notes to the condensed consolidated financial statements.
3


Table of Contents
CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
(in thousands)
Fiscal Quarter EndedFiscal Year-to-Date
Period Ended
September 26,
2020
September 28,
2019
September 26,
2020
September 28,
2019
Net income$5,403 $5,739 $17,802 $15,984 
Other comprehensive income (loss)
Foreign currency translation adjustments1,589 (1,488)(302)(1,429)
Comprehensive income$6,992 $4,251 $17,500 $14,555 
See accompanying notes to the condensed consolidated financial statements.
4


Table of Contents
CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except share data)
September 26,
2020
December 28,
2019
ASSETS
Current assets:
Cash and cash equivalents$24,108 $25,639 
Accounts receivable, net of allowances of $3,126 at September 26, 2020 and $3,838 at December 28, 2019
106,175 107,841 
Unbilled services, net of allowances of $942 at September 26, 2020 and $1,503 at December 28, 2019
51,509 36,569 
Prepaid expenses and other current assets8,832 7,277 
Forgivable loans6,037 6,751 
Total current assets196,661 184,077 
Property and equipment, net64,886 61,295 
Goodwill88,290 88,504 
Intangible assets, net5,449 6,476 
Right-of-use assets123,390 130,173 
Deferred income taxes10,241 10,670 
Forgivable loans, net of current portion58,138 48,390 
Other assets3,122 3,658 
Total assets$550,177 $533,243 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable$16,574 $26,069 
Accrued expenses103,952 121,301 
Deferred revenue and other liabilities6,368 6,723 
Current portion of lease liabilities14,551 12,847 
Current portion of deferred compensation17,737 4,470 
Revolving line of credit38,000  
Total current liabilities197,182 171,410 
Non-current liabilities:
Deferred compensation and other non-current liabilities4,759 15,071 
Facility-related non-current liabilities1,962 1,956 
Non-current portion of lease liabilities141,331 146,551 
Deferred income taxes548 504 
Total non-current liabilities148,600 164,082 
Commitments and contingencies (Note 10)
Shareholders’ equity:
Preferred stock, no par value; 1,000,000 shares authorized; none issued and outstanding
  
Common stock, no par value; 25,000,000 shares authorized; 7,739,550 and 7,814,797 shares issued and outstanding at September 26, 2020 and December 28, 2019, respectively
4,092 9,265 
Retained earnings212,368 200,249 
Accumulated other comprehensive loss(12,065)(11,763)
Total shareholders’ equity204,395 197,751 
Total liabilities and shareholders’ equity$550,177 $533,243 
See accompanying notes to the condensed consolidated financial statements.
5


Table of Contents
CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(in thousands)​
Fiscal Year-to-Date
Period Ended
September 26,
2020
September 28,
2019
OPERATING ACTIVITIES:
Net income$17,802 $15,984 
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization9,293 7,701 
Facility-related liabilities104 83 
Right-of-use asset amortization8,900 7,832 
Deferred income taxes496 117 
Share-based compensation expense2,357 2,641 
Accounts receivable allowances(894)(160)
Unrealized foreign currency remeasurement losses, net129  
Changes in operating assets and liabilities:
Accounts receivable1,952 3,626 
Unbilled services, net(14,994)(14,582)
Prepaid expenses and other current assets, and other assets(979)(5,735)
Forgivable loans(18,963)(18,942)
Incentive cash awards4,862 3,628 
Accounts payable, accrued expenses, and other liabilities(15,191)(16,274)
Lease liabilities(5,526)(5,826)
Net cash used in operating activities(10,652)(19,907)
INVESTING ACTIVITIES:
Purchases of property and equipment(15,742)(12,548)
Net cash used in investing activities(15,742)(12,548)
FINANCING ACTIVITIES:
Issuance of common stock, principally stock option exercises1,667 2,006 
Borrowings under revolving line of credit77,000 54,000 
Repayments under revolving line of credit(39,000)(18,000)
Tax withholding payments reimbursed by shares(390)(388)
Cash paid on dividend equivalents(40)(35)
Cash dividends paid to shareholders(5,372)(4,742)
Repurchase of common stock(8,807)(18,068)
Net cash provided by financing activities25,058 14,773 
Effect of foreign exchange rates on cash and cash equivalents(195)(513)
Net decrease in cash and cash equivalents(1,531)(18,195)
Cash and cash equivalents at beginning of period25,639 38,028 
Cash and cash equivalents at end of period$24,108 $19,833 
Noncash investing and financing activities:
Purchases of property and equipment not yet paid for$3,923 $3,461 
Purchases of property and equipment paid by a third party$ $126 
Asset retirement obligations$155 $427 
Right-of-use assets obtained in exchange for lease obligations$2,601 $37,298 
Right-of-use assets related to the adoption of ASC 842$ $82,329 
Lease liabilities related to the adoption of ASC 842$ $106,765 
Supplemental cash flow information:
Cash paid for taxes$5,933 $6,078 
Cash paid for interest$932 $848 
Cash paid for amounts included in operating lease liabilities$13,736 $12,053 
See accompanying notes to the condensed consolidated financial statements.
6


Table of Contents
CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
FOR THE FISCAL YEAR-TO-DATE PERIOD ENDED SEPTEMBER 26, 2020 (unaudited)
(in thousands, except share data)​
Common StockRetained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Shareholders’
Equity
Shares
Issued
Amount
BALANCE AT DECEMBER 28, 20197,814,797 $9,265 $200,249 $(11,763)$197,751 
Balance at December 29, 2019, as previously reported7,814,797 $9,265 $200,249 $(11,763)$197,751 
Cumulative effect of a change in accounting principle related to ASC 326— — (203)— (203)
Balance at December 29, 2019, as adjusted7,814,797 $9,265 $200,046 $(11,763)$197,548 
Net income— — 6,468 — 6,468 
Foreign currency translation adjustment— — — (2,427)(2,427)
Exercise of stock options8,200 151 — — 151 
Share-based compensation expense— 655 — — 655 
Restricted shares vestings23,884 — — — — 
Redemption of vested employee restricted shares for tax withholding(7,843)(390)— — (390)
Shares repurchased(82,613)(3,810)— — (3,810)
Accrued dividends on unvested shares— — 1 — 1 
Cash paid on dividend equivalents— — (40)— (40)
Cash dividends paid to shareholders ($0.23 per share)
— — (1,796)— (1,796)
BALANCE AT MARCH 28, 20207,756,425 $5,871 $204,679 $(14,190)$196,360 
Net income— — 5,931 — 5,931 
Foreign currency translation adjustment— — — 536 536 
Exercise of stock options22,611 418 — — 418 
Share-based compensation expense— 796 — — 796 
Restricted shares vestings513 — — — — 
Accrued dividends on unvested shares— — (38)— (38)
Cash dividends paid to shareholders ($0.23 per share)
— — (1,788)— (1,788)
BALANCE AT JUNE 27, 20207,779,549 $7,085 $208,784 $(13,654)$202,215 
Net income— — 5,403 — 5,403 
Foreign currency translation adjustment— — — 1,589 1,589 
Exercise of stock options57,219 1,098 — — 1,098 
Share-based compensation expense— 906 — — 906 
Restricted shares vestings12,936 — — — — 
Shares repurchased(110,154)(4,997)— — (4,997)
Accrued dividends on unvested shares— — (31)— (31)
Cash dividends paid to shareholders ($0.23 per share)
— — (1,788)— (1,788)
BALANCE AT SEPTEMBER 26, 20207,739,550 $4,092 $212,368 $(12,065)$204,395 
See accompanying notes to the condensed consolidated financial statements.
7


Table of Contents
CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
FOR THE FISCAL YEAR-TO-DATE PERIOD ENDED SEPTEMBER 28, 2019 (unaudited)
(in thousands, except share data)
Common StockRetained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Shareholders’
Equity
Shares
Issued
Amount
BALANCE AT DECEMBER 29, 20188,010,480 $22,837 $186,229 $(12,594)$196,472 
Net income— — 4,665 — 4,665 
Foreign currency translation adjustment— — — 712 712 
Exercise of stock options64,700 1,526 — — 1,526 
Share-based compensation expense— 911 — — 911 
Restricted shares vestings25,484 — — — — 
Redemption of vested employee restricted shares for tax withholding(8,157)(388)— — (388)
Shares repurchased(86,609)(4,349)— — (4,349)
Accrued dividends on unvested shares— — (8)— (8)
Cash paid on dividend equivalents— — (35)— (35)
Cash dividends paid to shareholder ($0.20 per share)
— — (1,616)— (1,616)
BALANCE AT MARCH 30, 20198,005,898 $20,537 $189,235 $(11,882)$197,890 
Net income— — 5,580 — 5,580 
Foreign currency translation adjustment— — — (653)(653)
Share-based compensation expense— 848 — — 848 
Restricted shares vestings513 — — — — 
Shares repurchased(177,101)(7,161)— — (7,161)
Accrued dividends on unvested shares— — (44)— (44)
Cash dividends paid to shareholders ($0.20 per share)
— — (1,580)— (1,580)
BALANCE AT JUNE 29, 20197,829,310 $14,224 $193,191 $(12,535)$194,880 
Net income— — 5,739 — 5,739 
Foreign currency translation adjustment— — — (1,488)(1,488)
Exercise of stock options21,224 480 — — 480 
Share-based compensation expense— 882 — — 882 
Restricted shares vestings14,754 — — — — 
Shares repurchased(157,402)(6,558)— — (6,558)
Accrued dividends on unvested shares— — (37)— (37)
Cash dividends paid to shareholders ($0.20 per share)
— — (1,546)— (1,546)
BALANCE AT SEPTEMBER 28, 20197,707,886 $9,028 $197,347 $(14,023)$192,352 
See accompanying notes to the condensed consolidated financial statements.
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CRA INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


1. Summary of Significant Accounting Policies
Description of Business
CRA International, Inc. (“CRA” or the “Company”) is a worldwide leading consulting services firm that applies advanced analytic techniques and in-depth industry knowledge to complex engagements for a broad range of clients. CRA offers services in two broad areas: litigation, regulatory, and financial consulting and management consulting. CRA operates in one business segment. CRA operates its business under its registered trade name, Charles River Associates.
Basis of Presentation
The unaudited condensed consolidated financial statements include the accounts of CRA International, Inc. and its wholly-owned subsidiaries (collectively the “Company”), which require consolidation after the elimination of intercompany accounts and transactions. These financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for Quarterly Reports on Form 10-Q. Accordingly, these financial statements do not include all the information and note disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for annual financial statements. In the opinion of management, these financial statements reflect all adjustments of a normal, recurring nature necessary for the fair presentation of CRA’s results of operations, financial position, cash flows, and shareholders’ equity for the interim periods presented in conformity with GAAP. Results of operations for the interim periods presented herein are not necessarily indicative of results of operations for a full year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 28, 2019 included in CRA’s Annual Report on Form 10-K filed with the SEC on February 27, 2020 (the “2019 Form 10-K”). Certain prior year amounts have been reclassified to conform to current year presentation. These reclassifications had no effect on previously reported results of operations, financial position, or cash flows.
Estimates
The preparation of financial statements in conformity with GAAP requires management to make significant estimates and judgments that affect the reported amounts of assets and liabilities, as well as the related disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of consolidated revenues and expenses during the reporting period. Estimates in these condensed consolidated financial statements include, but are not limited to, allowances for accounts receivable and unbilled services, revenue recognition on fixed price contracts, variable consideration to be included in the transaction price of revenue contracts, depreciation of property and equipment, measurement of operating lease right-of-use (“ROU”) assets and liabilities, share-based compensation, valuation of contingent consideration liabilities, valuation of acquired intangible assets, impairment of long-lived assets and goodwill, accrued and deferred income taxes, valuation allowances on deferred tax assets, accrued incentive compensation, and certain other accrued expenses. These items are monitored and analyzed by CRA for changes in facts and circumstances. Material changes in these estimates could occur in the future. Changes in estimates are recorded in the period in which they become known. CRA bases its estimates on historical experience and various other assumptions that CRA believes to be reasonable under the circumstances. Actual results may differ from those estimates if CRA’s assumptions based on past experience or other assumptions do not turn out to be substantially accurate.
Common Stock and Equity
Equity transactions consist primarily of the repurchase by CRA of its common stock under its share repurchase program and the recognition of compensation expense and issuance of common stock under CRA’s 2006 Equity Incentive Plan. Under CRA’s share repurchase program, the Company repurchases its common stock in open market purchases (including through any Rule 10b5-1 plan adopted by CRA) or in privately negotiated transactions in accordance with applicable insider trading and other securities laws and regulations. The purchase price is first charged against available paid-in capital (“PIC”) until PIC is exhausted, wherein purchases will be charged to retained earnings. CRA’s common stock has no par value. All shares repurchased have been retired.
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CRA INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

Recent Accounting Standards Adopted
Leases (Topic 842)
CRA adopted Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”), which supersedes ASC Topic 840, Leases (“ASC 840”), on December 30, 2018, using the modified retrospective transition method. The cumulative effect of the transition adjustments was recognized as of the date of adoption.
CRA elected the package of practical expedients provided by ASC 842, which allowed CRA to forgo reassessing the following upon adoption of the new standard: (1) whether contracts contain leases for any expired or existing contracts, (2) the lease classification for any expired or existing leases, and (3) initial direct costs for any existing or expired leases. In addition, CRA elected an accounting policy to exclude from the consolidated balance sheets the ROU assets and lease liabilities related to short-term leases, which are those leases with an initial lease term of twelve months or less that do not include an option to purchase the underlying asset that CRA is reasonably certain to exercise.
As a result of adopting the new standard, CRA recognized ROU assets of $82.3 million and lease liabilities of $106.8 million on December 30, 2018. The difference between the amount of ROU assets and lease liabilities recognized was an adjustment to deferred rent. There was no change to net deferred tax assets as a result of CRA’s adoption of ASC 842. The adoption of ASC 842 did not have a material impact on CRA’s results of operations or cash flows, nor did it have an impact on any of CRA’s existing debt covenants.
Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting
CRA adopted Accounting Standards Update (“ASU”) No. 2018-7, Compensation–Stock Compensation: Improvements to Nonemployee Share-Based Payment Accounting (Topic 718) (“ASU 2018-7”) on December 30, 2018. ASU 2018-7 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments in this update specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used effectively to provide financing to the issuer or awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606, Revenue from Contracts with Customers. The new guidance requires a remeasurement of nonemployee awards at fair value as of the adoption date. The adoption of ASU 2018-7 did not have a material impact on CRA’s financial position, results of operations, cash flows, or disclosures.
Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments
CRA adopted ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”) on December 29, 2019. ASC 326 replaces the methodology that recognizes impairment of financial instruments when losses have been incurred with a methodology that recognizes impairment of financial instruments when losses are expected. The amendment requires entities to use a forward-looking “expected loss” model for most financial instruments, including accounts receivable, unbilled services, and loans, that is based on historical information, current information, and reasonable and supportable forecasts.
As a result of adopting the new standard, CRA recognized a cumulative increase to allowances for accounts receivable and unbilled services and a reduction to the fiscal 2020 opening balance of retained earnings of $0.2 million. Comparative periods prior to the adoption of ASC 326 and their respective disclosures have not been adjusted. The adoption of ASC 326 did not have a material impact on CRA’s results of operations or cash flows on the date of transition.
Fair Value Measurements (Topic 820)
CRA adopted ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (“ASU No. 2018-13”) on December 29, 2019. The ASU eliminates,
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

adds, and modifies certain disclosure requirements for fair value measurements from ASC 820. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurement. The adoption of the new standard did not have a material impact on CRA’s financial position, results of operations, cash flows, or disclosures on the date of transition.
Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement
CRA adopted ASU No. 2018-15, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”) on December 29, 2019. ASU 2018-15 clarifies the accounting for implementation costs in a cloud computing arrangement that is a service contract and aligns the requirements for capitalizing those costs with the capitalization requirements for costs incurred to develop or obtain internal-use software. CRA adopted the ASU using the prospective transition approach, as permitted under the new guidance. The adoption of the new standard did not have a material impact on CRA’s financial position, results of operations, cash flows, or disclosures on the date of transition.
Recent Accounting Standards Not Yet Adopted
Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies or clarifies accounting for income taxes by changing the following current guidance: accounting for year-to-date losses in interim periods, accounting for tax law changes in interim periods, determining when a deferred tax liability is recognized for foreign subsidiaries that transition to or from being accounted for as equity method investments, application of income tax guidance to franchise taxes that are partially based on income, and making an intra-period allocation in situations where there is a loss in continuing operations and income or gain from other items. ASU 2019-12 also introduces new guidance to evaluate whether a step up in the tax basis of goodwill relates to a business combination or a separate transaction and provides a policy election to not allocate consolidated income taxes when a member of a consolidated tax return is not subject to income tax.
ASU 2019-12 is effective for CRA for interim and annual periods beginning after December 15, 2020. Early adoption is permitted. CRA is in the process of determining the effects, if any, the adoption of the ASU may have on its financial position, results of operations, cash flows, or disclosures. CRA plans to adopt the amendments during the first fiscal quarter of 2021.
2. Fair Value of Financial Instruments
The following tables show CRA’s financial instruments as of September 26, 2020 and December 28, 2019 that are measured and recorded in the condensed consolidated financial statements at fair value on a recurring basis (in thousands):
September 26, 2020
Quoted Prices in Active
Markets for Identical
Assets or Liabilities
Significant Other
Observable Inputs
Significant Unobservable
Inputs
Level 1Level 2Level 3
Assets:
Money market mutual funds$150 $ $ 
Total Assets$150 $ $ 
Liabilities:
Contingent consideration liability$ $ $13,480 
Total Liabilities$ $ $13,480 
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CRA INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

December 28, 2019
Quoted Prices in Active
Markets for Identical
Assets or Liabilities
Significant Other
Observable Inputs
Significant Unobservable
Inputs
Level 1Level 2Level 3
Assets:
Money market mutual funds$150 $ $ 
Total Assets$150 $ $ 
Liabilities:
Contingent consideration liability$ $ $11,579 
Total Liabilities$ $ $11,579 
The fair value of CRA’s money market mutual fund share holdings is $1.00 per share.
The contingent consideration liability in the table above is for estimated future contingent consideration payments related to the acquisition of C1 Consulting, LLC, an independent consulting firm, and its wholly-owned subsidiary C1 Associates (collectively, “C1”). The fair value measurement of the liability is based on significant inputs not observed in the market and thus represents a Level 3 measurement. The significant unobservable inputs used in the fair value measurement of the contingent consideration liability are CRA’s measures of the estimated payouts based on internally generated revenue projections, expected volatility of the revenue projections, and discount rates. The fair value of the contingent consideration liability had been determined using a Monte Carlo simulation in prior fiscal quarters. In the current fiscal quarter, the fair value was estimated using an accrual method that approximates the fair value, as the end of the measurement period occurs during the first quarter of fiscal 2021. The fair value of the contingent consideration liability is reassessed on a quarterly basis by CRA using additional information as it becomes available, and any change in the fair value estimates are recorded in costs of services (exclusive of depreciation and amortization) on the condensed consolidated statements of operations. The contingent consideration is required to be paid prior to the end of the second quarter of fiscal 2021.
The following table summarizes the changes in the contingent consideration liabilities (in thousands):
Fiscal Year-to-Date
Period Ended
Fiscal Year Ended
September 26, 2020December 28, 2019
Beginning balance$11,579 $6,197 
Remeasurement of acquisition-related contingent consideration921 3,285 
Accretion980 2,097 
Ending balance$13,480 $11,579 
3. Revenue Recognition
The contracts CRA enters into and operates under specify whether the projects are billed on a time-and-materials or a fixed-price basis. Time-and-materials contracts are typically used for litigation, regulatory, and financial consulting projects while fixed-price contracts are principally used for management consulting projects. In general, project costs are classified in costs of services and are based on the direct salary of CRA’s employee consultants on the engagement, plus all direct expenses incurred to complete the project, including any amounts billed to CRA by its non-employee experts.
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CRA INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

Disaggregation of Revenue
The following tables disaggregate CRA’s revenue by type of contract and geographic location (in thousands):
Fiscal Quarter EndedFiscal Year-to-Date
Period Ended
Type of ContractSeptember 26,
2020
September 28,
2019
September 26,
2020
September 28,
2019
Consulting services revenues:
Fixed Price$26,197 $30,057 $85,968 $76,622 
Time-and-materials95,565 85,629 284,983 255,486 
Total$121,762 $115,686 $370,951 $332,108 
Fiscal Quarter EndedFiscal Year-to-Date
Period Ended
Geographic BreakdownSeptember 26,
2020
September 28,
2019
September 26,
2020
September 28,
2019
Consulting services revenues:
United States$96,117 $92,217 $296,273 $263,221 
United Kingdom20,358 17,116 57,355 53,027 
Other5,287 6,353 17,323 15,860 
Total$121,762 $115,686 $370,951 $332,108 
Reserves for Variable Consideration and Credit Risk
Revenues from CRA's consulting services are recorded at the net transaction price, which includes estimates of variable consideration for which reserves are established. Variable consideration reserves are based on actual price concessions and those expected to be extended to CRA customers estimated by CRA's historical realization rates. Reserves for variable consideration are recorded as a component of the allowances for accounts receivable and unbilled services on the condensed consolidated balance sheets.
CRA’s accounts receivable and unbilled services consist of receivables from a broad range of clients in a variety of industries located throughout the U.S. and other countries. CRA performs a credit evaluation of its clients to minimize its collectability risk. Periodically, CRA will require advance payment from certain clients. However, CRA does not require collateral or other security.
CRA adopted ASC 326 on December 29, 2019, which changed the method CRA utilizes to estimate reserves related to credit risk. As a result of the adoption, CRA recognized a cumulative-effect adjustment of $0.2 million to retained earnings and allowances for accounts receivable and unbilled services. Comparative periods and their respective disclosures prior to the adoption of ASC 326 have not been adjusted.
Under ASC 326, CRA maintains allowances for accounts receivable and unbilled services for estimated losses resulting from clients’ failure to make required payments. CRA estimates these allowances based on historical charge-off rates, adjusted for days of sales outstanding and expected changes to clients’ financial conditions during the anticipated collection period. CRA writes off allowances when management determines the balance is uncollectible and all efforts of collection have been exhausted. Bad debt expense, net of recoveries of previously written off allowances, is reported as a component of selling, general and administrative expenses on the condensed consolidated statements of operations.
Prior to adopting ASC 326 in fiscal 2020, CRA determined allowances for accounts receivable and unbilled services for specific customer accounts based on the financial condition of the customer and related facts and circumstances. Expenses associated with these allowances were reported as a component of selling, general and administrative expenses on the condensed consolidated statements of operations.
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CRA INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

Adjustments to the allowances for accounts receivable and unbilled services related to reserves for credit risk are as follows (in thousands):
Fiscal Year-to-Date
Period Ended
Fiscal Year Ended
September 26, 2020December 28, 2019
Beginning balance$370 $639 
Cumulative effect of a change in accounting principle related to ASC 326203  
Provision for credit loss expense, net of recoveries228 173 
Amounts written off(128)(442)
Ending balance$673 $370 
The following table presents CRA's bad debt expense, net of recoveries of previously written off allowances (in thousands):
Fiscal Quarter EndedFiscal Year-to-Date
Period Ended
September 26,
2020
September 28,
2019
September 26,
2020
September 28,
2019
Bad debt expense (recovery), net$271 $142 $228 $173 
Reimbursable Expenses
Revenues also include reimbursements for costs incurred by CRA in fulfilling its performance obligations, including travel and other out-of-pocket expenses, fees for outside consultants and other reimbursable expenses. CRA recovers substantially all of these costs. The following expenses are subject to reimbursement (in thousands):
Fiscal Quarter EndedFiscal Year-to-Date
Period Ended
September 26,
2020
September 28,
2019
September 26,
2020
September 28,
2019
Reimbursable expenses$13,150 $13,978 $44,395 $38,991 
Contract Balances from Contracts with Customers
CRA defines contract assets as assets for which it has recorded revenue because it determines that it is probable that it will earn a performance-based or contingent fee, but is not yet entitled to receive a fee, because certain events, such as completion of the measurement period or client approval, must occur. The contract assets balance was immaterial as of September 26, 2020 and December 28, 2019.
The timing of revenue recognition, billings, and cash collections results in billed receivables, unbilled services and contract liabilities on the condensed consolidated balance sheet. CRA defines contract liabilities as advance payments from or billings to its clients for services that have not yet been performed or earned and retainers. These liabilities are recorded within deferred revenues and are recognized as services are provided. When consideration is received, or such consideration is unconditionally due from a customer prior to transferring consulting services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after performance obligations have been satisfied and all revenue recognition criteria have been met. Contract liabilities are included in deferred revenue and other liabilities on the condensed consolidated balance sheet.
The following table presents the closing balances of CRA’s contract liabilities (in thousands):
September 26, 2020December 28, 2019
Balance at the end of the period$2,201 $4,007 
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CRA INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

CRA recognized the following revenue that was included in the contract liabilities balance as of the opening of the respective period or for performance obligations satisfied in previous periods (in thousands):
Fiscal Quarter EndedFiscal Year-to-Date
Period Ended
September 26,
2020
September 28,
2019
September 26,
2020
September 28,
2019
Revenue recognized for amounts included in contract liabilities at the beginning of the period$1,766 $2,405 $3,262 $4,900 
Revenue recognized for performance obligations satisfied in previous periods$3,987 $3,395 $4,363 $3,606 
4. Forgivable Loans
Forgivable loan activity for the fiscal year-to-date period ended September 26, 2020 and the fiscal year ended December 28, 2019 is as follows (in thousands):
Fiscal Year-to-Date
Period Ended
Fiscal Year Ended
September 26, 2020December 28, 2019
Beginning balance$55,141 $40,294 
Advances38,478 35,166 
Repayments (1,173)
Reclassification from accrued expenses / to other assets(9,713)(1,734)
Amortization(19,517)(17,700)
Effects of foreign currency translation(214)288 
Ending balance$64,175 $55,141 
Current portion of forgivable loans$6,037 $6,751 
Non-current portion of forgivable loans$58,138 $48,390 
At September 26, 2020 and December 28, 2019, CRA had no other loans to current or former employees included in other assets on the condensed consolidated balance sheet.
The principal amount of forgivable loans and accrued interest is forgiven by CRA over the term of the loans, provided that the employee or non-employee expert continues employment or affiliation with CRA and complies with certain contractual requirements. CRA maintains an allowance for doubtful accounts for amounts not expected to be collected, which is initially assessed when the employee or non-employee fails to comply with contractual requirements or ceases employment or affiliation with CRA. The allowances are determined per specific borrower and are based on their financial condition and related facts and circumstances, including consideration of collateral.
For the fiscal year-to-date period ended September 26, 2020 and the fiscal year ended December 28, 2019, no allowances or write-offs of these loans were recorded.
5. Goodwill and Intangible Assets
The changes in the carrying amount of goodwill during the fiscal year ended December 28, 2019 and the fiscal year- to-date period ended September 26, 2020, are as follows (in thousands):
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)

Balance at December 28, 2019
Goodwill$164,921 
Accumulated goodwill impairment(76,417)
Goodwill, net at December 28, 201988,504 
Foreign currency translation adjustment and other (1)(214)
Goodwill, net at September 26, 2020 (2)$88,290 
_______________________________
(1)During the fiscal quarter ended March 28, 2020, goodwill and accumulated goodwill impairment were reduced by $4.5 million as a result of the dissolution and final liquidation of GNU123 Liquidating Corporation.
(2)Goodwill, net at September 26, 2020, is comprised of goodwill of $160.2 million and accumulated impairment of $71.9 million.
Intangible assets that are separable from goodwill and have determinable useful lives are valued separately and amortized over their expected useful lives. There were no impairment losses related to intangible assets during the fiscal year-to-date periods ended September 26, 2020 or September 28, 2019.
The components of acquired identifiable intangible assets are as follows (in thousands):
September 26, 2020December 28, 2019
Non-competition agreements$280 $324 
Customer relationships12,120 12,120 
Total cost12,400 12,444 
Accumulated amortization(6,951)(5,968)
Total intangible assets, net$5,449 $6,476 
6. Accrued Expenses
Accrued expenses consist of the following (in thousands):
September 26, 2020December 28, 2019
Compensation and related expenses$92,200 $99,993 
Income taxes payable488 430