CRA International,Inc.

Good day, everyone, and welcome to Charles River Associates' third quarter 2021 earnings conference call. Please note that today's call is being recorded. The company's earnings 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. Dan, please go ahead.

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 COVID-19 pandemic and any potential impact 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. The third quarter of fiscal 2021 demonstrated continued momentum in our business and strong demand for CRA services. Building on the impressive first half of fiscal 2021, CRA extended its run of year-over-year revenue growth as a top-line increase 12% relative to the third quarter of 2020. This marked the 23rd consecutive quarter of year-over-year revenue growth. Furthermore, we have recorded double-digit growth in 16 of those 23 quarters, including each of the past four quarters through Q3. Our expansion was broad-based. with six practices producing year-over-year revenue growth of more than 10%. Geographically, both our North American and international operations contribute to the quarter's growth. To support this performance, we welcomed nearly 100 new colleagues during the quarter as we increased headcount by 6.8% year-over-year. CRA's top-line growth drove significant profit expansion during the third quarter, specifically Non-GAAP net income grew year-over-year by 80%. Earnings per diluted share grew by 89%. And EBITDA grew by 35%. It was truly an outstanding quarter. I would now like to highlight some of the services provided during the quarter. Within legal and regulatory, our antitrust and competition economics practice continued its strong performance as it grew revenue by approximately 25%. year over year. This growth was fueled by continued demand for antitrust and merger-related services. Worldwide M&A activity totaled $4.4 trillion during the first nine months of 2021, an increase of 92% compared to year-ago levels, and the strongest first three quarters of M&A activity since records began in 1980. The first nine months of 2021 have already surpassed the full year M&A record set in 2015 of $4.3 trillion. The third quarter of 2021 set an all-time high single quarter record with $1.6 trillion in worldwide M&A and was the fifth consecutive quarter to surpass $1 trillion. Against this backdrop, CRA worked on transactions across a range of industries and geographies. For example, CRA assisted a major building supplies distributor in winning unconditional antitrust clearance for acquisitions of distribution assets in different parts of the country. The CRA team demonstrated the presence of substantial competition across multiple product and geographic areas. Additionally, on August 10th, The Competition and Markets Authority in the U.K. unconditionally cleared NCR's $2.5 billion acquisition of Cartronics after a Phase I review. CRA teams advised NCR during the merger proceedings in both the U.K. and the U.S. Looking more broadly at the legal markets, trends in activity levels were mixed. Total case filings during the third quarter of 2021 were down 3% year over year. However, courtrooms continue their rebound in activity as the number of total court judgments during the third quarter increased by approximately 20% relative to the year-ago period. In light of these conditions, I'm especially pleased with the strong growth in our legal and regulatory services, which saw every practice grow year over year. Our antitrust and competition economics, financial economics, forensic services, and risk investigation and analytics practices led the way as each increased revenue by more than 20% year over year. During the quarter, CRA experts in our financial economics practice were engaged to consult and testify on matters involving mortgage loan servicing and property maintenance after foreclosures. Additionally, CRA has been retained by multiple clients to provide consulting services with respect to recent enforcement matters brought by the Consumer Financial Protections Bureau and the Department of Justice involving allegations of mortgage redlining, where either mortgage applications or origination activity were alleged to lag that of comparable peers in particular metropolitan areas. The forensic services practice continues to experience strong demand from companies across all major industries that need help responding to allegations of fraud, cybercrime, noncompliance, and misconduct. For example, drawing upon CRA's deep forensic accounting competencies and energy industry knowledge, the practice was retained to investigate and then testify against on both damages and liability in a complex dispute between a global oil company and its franchisor in North America of automotive maintenance and quick-loop services. Leveraging our deep cyber incident response and e-discovery competencies, the practice helped numerous clients respond to information security incidents. One was for a nonprofit hospital system that was victimized by a ransomware attack which forced the hospital to shut down IT systems, cancel surgeries, and divert emergency patients in order to ensure adequate patient safety. Our team helped investigate how hackers gained access to its systems and the actions they took once access was gained, as well as in assisting with reports to the FBI and the Department of Homeland Security. During the third quarter, the risk investigations and analytics team continued its solid growth, winning in executing several large multidisciplinary investigations requiring the investigation of analytic accounting and investigative skill sets in the U.S. and overseas. The risk team provided on-the-ground investigative support, asset tracing, and political background and context to plaintiff's counsel in litigation involving individuals and ongoing theft of trade secrets. In another matter, the team aided external counsel and a sophisticated vendor fraud scheme by uncovering a web of related party transactions by analyzing the flow of payments and modeling financial harm to the clients. Although not enjoying year-over-year growth relative to an extremely strong third quarter of 2020, our management consulting services continue to focus on our clients' most critical issues. For several pharmaceutical companies, CRA's life sciences practice has been developing patient flow models and demand forecasts for new product opportunities, probing key sources of business and competitive dynamics. These clients are expecting to launch their therapies globally, and the patient journey of information and related demand forecasts are critical to inform launch investment decisions and refined resourcing in the countries of interest. CRA's energy practice is supporting AEP, one of the largest electric utilities in the U.S., with the integrated resource plans for its Oklahoma and Arkansas utilities. These resource plans contemplate a shift away from fossil fuel power plants towards more renewable and storage to support AEP's clean energy goals. During the third quarter, the practice also supported a major infrastructure investor in a complete reorganization of a Romanian utility, including the strategy, finance, IT, and trading functions. CRA also assisted the client in the carve-out of the retail business and strategic planning for management and growth of the company. Our AmeriCon practice continues to work with a wide variety of CEOs and their executive teams to ensure discipline around strategic resource allocations as a means to drive performance and accelerate major strategic priorities. As an example, Mericon has been supporting the development strategy and economics modeling and funding campaign for PNW Hydrogen, which recently won a $20 million grant from the Department of Energy for the production of green hydrogen, a significant milestone of that work in our effort to support our clients in the transition to green energy. I'm grateful to all my colleagues for the hard work as we continue to help our clients address their most important challenges. Through the first three quarters of fiscal 2021, on a constant currency basis relative to fiscal 2020, we have increased revenue by 14.6% to $425.1 million, and non-GAAP EBITDA by 43% to $52.6 million, achieving a margin of 12.4%. These results demonstrate the strength and quality of our business, as does the 13% year-over-year increase in new project originations experienced during the third quarter. While the business continues to deliver strong results, our performance could have been even better. Revenue in the third quarter was below our expectations as we experienced a rate of employee vacation time that was more than 20% higher than in the year-ago period and was the highest rate for a third quarter over the prior five years. Although helpful for the health and well-being of our colleagues, the heightened vacation time acted as a headwind to our top-line growth, which may continue during the November and December holidays. As a result, we are lowering our full-year revenue guidance while maintaining our EBITDA margin guidance. For full-year fiscal 2021, on a constant currency basis relative to 2020, we now expect revenue in the range of $560 million to $570 million, and non-GAAP EBITDA margin to exceed the upper end of the range of 11.2% to 11.7%. With that, I'll turn the call over to Chad and then Dan for a few additional comments. Chad?