CRA International,Inc.

Good day, everyone, and welcome to Charles River Associates' fourth quarter and fiscal year 2020 conference call. Today's call is being recorded. Today's release and prepared remarks from CRA's Chief Financial Officer are posted on the Investor Relations section of CRA's website at crai.com. With us today are CRA's President and Chief Executive Officer, Paul Malley, Chief Financial Officer, Dan Mahoney, and Chief Corporate Development Officer, Chad Holmes. At this time, I'd like to turn the call over to Mr. Mahoney for opening remarks. Please go ahead, Dan.

Thank you, Rob, and good morning, everyone. Please note that the statements made during this conference call, including guidance on future revenue and non-GAAP EBITDA margin, and any other statements concerning the future business, operating results, or financial condition of CRA, including those statements using the terms expect, outlook, or similar terms are forward-looking statements as defined in Section 21 of the Exchange Act. Information contained in these forward-looking statements is based on management's current expectations and is inherently uncertain. Actual performance and results may differ materially from those expressed or implied in these statements due to many important factors, including the extent and duration of the impact of the COVID-19 pandemic on our financial condition and results of operations. Additional information regarding these factors is included in today's release and in CRA's periodic reports, including our most recently filed annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC. CRA undertakes no obligation to update any forward-looking statements after the date of this call. Additionally, we will refer to some non-GAAP financial measures and certain measures presented on a constant currency basis on this call. Everyone is encouraged to refer to today's release and related CFO remarks for reconciliations of these non-GAAP financial measures to their GAAP comparable measures and descriptions of the calculation of EBITDA and measures presented on a constant currency basis. Let me now turn it over to Paul for his report. Paul?

Thanks, Dan. And good morning, everyone. Thank you for joining us today. I hope everyone is staying safe and healthy. CRA's fiscal 2020 topped a record-setting fiscal 2019 as revenue increased by 13%. This growth was balanced across our lines of business with legal and regulatory expanding by 15% and management consulting increasing by 7%. This balance was also observed geographically as our North American operations grew 14% and our international operations increased by 7%. In addition, CRA continued to grow profits with non-GAAP net income, earnings per diluted share, and EBITDA growing by 8%, 11%, and 15%, respectively. During the fourth quarter, we experienced strong demand across our portfolio of services as every practice grew year over year, contributing to the firm's 15% year-over-year revenue growth. We also achieved double-digit revenue growth across both our North American and international operations. For the firm as a whole, headcount increased 6.7% year-over-year, and utilization reached 70% in the fourth quarter. Most importantly, CRA's top-line expansion during the fourth quarter resulted in profits growing faster than revenue as non-GAAP net income, earnings per diluted share, and EBITDA grew year-over-year by 22%, 23%, and 24% respectively. Moreover, the fourth quarter of fiscal 2020 marked our 20th consecutive quarter of year-over-year growth. Over this five-year period, CRA's revenue has grown by 70%, with non-GAAP net income, earnings per diluted share, and EBITDA growing substantially faster at 165%, 205%, and 104% respectively. I would like to now spend a few minutes highlighting some of the services provided during the quarter. Within legal and regulatory, our antitrust and competition economics practice grew revenue by double digits and recorded its highest quarterly revenue ever as M&A markets continue to rebound from pandemic lows. Worldwide dealmaking during the second half of 2020 increased by 90% compared to the first half of the year and marks the strongest second half for deal making since records began in 1980. Against this backdrop, CRA worked on transactions across a range of industries and geographies. For example, during the fourth quarter, colleagues from a European competition practice advised Uber on its acquisition of a majority stake in Corner Shop as it received unconditional approval from the Mexican antitrust agency. Additionally, our competition antitrust economist worked for a consumer products company in its defense against claims by competitors and a class of buyers that its contracts harmed competition and allowed the company to maintain monopoly power. Looking more broadly at the legal market, total case filings continue to rebound. After year-over-year declines in Q2, and Q3 of 19 and 16% respectively. Total case filings in the fourth quarter were down only 4% year over year. Focusing on a subset of litigation matters that more closely aligns with CRA services, case filings actually increased by 2% during the fourth quarter. Within the courtroom, The number of total judgments during the fourth quarter were down approximately 14% relative to the fourth quarter of 2019. Again, this reflected improvement from the 34% year over year decline observed in Q3, but it continues to suggest that courtrooms remain constrained in their ability to handle normal litigation caseloads. In light of these market conditions, the performance of our legal and regulatory services during the fourth quarter is especially remarkable. As previously noted, every practice grew revenue year over year with our antitrust and competition economics, financial economics, forensic services, intellectual property, labor, employment, and risk investigations and analytic practices expanded by double digits. The intellectual property practice advised on multiple high-stakes patent and trade secret matters covering a broad range of industries, including homeland security, financial services, social media, medical devices, software, and computer hardware. IP experts successfully testified in multiple trials during Q3 and Q4, ranging from all of virtual proceedings to live jury trials with COVID protocols. Notably, a CRA IP expert helped secure a favorable damages verdict in a patent jury trial in the Eastern District of Texas involving voice-activated smart speaker technology enabled by a cloud-based artificial intelligence system. In another matter involving a patented drug formulation, the Court of Appeals for the Federal Circuit affirmed $100 million of damages that was awarded by the jury upon the testimony of the CRA expert. Our forensic services practice continues to experience strong demand from companies that need help responding to allegations of financial statement fraud, cybercrime, money laundering, bribery, and other types of misconduct. For example, in connection with allegations of a complex securities and accounting fraud scheme, at a publicly traded transportation company, CRA's retain was to assess claims that the books and records had been falsified. In connection with cyber incident response needs, the forensic services practice was retained by a broad range of clients, including a global insurance broker, a managed service provider, and a national healthcare organization to contain and eradicate malware. identify confidential data at risk, and respond to clients and regulator requests. The practice is also increasingly being called upon to navigate cryptocurrency and other blockchain applications as we investigate alleged misconduct. For example, when an NFL football player claimed to have lost tens of millions of dollars by trading in cryptocurrencies, the practice was retained by the bankruptcy trustee to trace these cryptocurrency investment transactions in order to assess whether recoverable assets existed. During the fourth quarter, the risk investigations and analytics team continued to build capacity and momentum, executing several multi-jurisdictional investigative assignments. We assisted a major Swiss bank in response to a multi-billion dollar DOJ Perea investigation and lawsuit related to securitization practices and conducted transaction-related due diligence for underwriters counsel related to both traditional and SPAC IPOs. Next, I'd like to turn to our management consulting services. Our life sciences practice continues to lead the way, recording double-digit revenue growth year over year. During the quarter, CRA conducted a detailed physician segmentation project for a European pharma company to support its new drug launch. Leveraging our expertise in market research, CRE provided detailed insights into physician traits, attitudes, and behaviors. Via our analytics team, these insights were subsequently transformed into key differentiators that determined that target segments and go-to market plan for the new product. Our Mericon practice is supporting a newly appointed CEO and the board of a major European insurance company to renew their enterprise strategy, align it with renewed sustainability and ESG objectives, and reshape its portfolio to ensure value maximization for the long term. Mericon continues to partner with the leadership team of a leading paper and packaging company on its annual review of portfolio strategy and priority setting. The ongoing relationship has resulted in leading business position and performance during this turbulent time for the industry. I'm grateful to all of my colleagues for their hard work as we help their clients address their most important challenges while adapting to a COVID-altered environment and still delivering strong financial results. For the full year on a constant currency basis, we exceeded our revenue guidance of $498 million to $504 million and achieved the upper half of our non-GAAP EBITDA margin guidance range of 9.7 percent to 10.2 percent. Recapping our fiscal 2020 financial performance, revenue on a constant currency basis was $507.9 million consisting of $508.4 million of reported results, less $0.5 million adjustment for currency tailwinds relative to fiscal 2019. Full-year non-GAAP EBITDA and non-GAAP EBITDA margin were unchanged on a constant currency basis at $50.7 million and 10.0% respectively. Our fiscal 2020 financial performance demonstrates our continued success in the marketplace. We will look to build on our trend of broad-based profitable growth in the years ahead. For a full year of fiscal 2021, on a constant currency basis relative to fiscal 2020, we expect revenue in the range of $530 million to $550 million and non-GAAP EBITDA margin in the range of $9.5 to 10.2%. While we are pleased with CRA's strong performance in 2020, we remain mindful that short-term challenges arising from uncertainties around global economic, business, health, and political conditions can affect our business. Before I turn the call over to Chad and Dan, I would like to provide a few thoughts on CRA's capital allocation philosophy. CRA remains committed to maximize long-term value per share through the prudent deployment of capital. Given CRA's strong cash flow generation, we expect to invest in the business for profitable growth while simultaneously returning meaningful capital to our shareholders. Annually, over the past five years, we have returned on average $25 million through a combination of share repurchases and dividend payments. This equals nearly 40 percent of our adjusted net cash flows from operations. Looking forward, we aim to increase this payout and return half of our adjusted net cash flow from operations to shareholders while still investing in the growth of CRA. With that, I'll turn the call over to Chad, and then Dan for a few additional comments. Chad?