CRA International,Inc.

Good day, everyone, and welcome to Charles River Associates' first quarter 2021 earnings conference call. Today's call is being recorded. The company's earning 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 to 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 at 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 in descriptions of the calculation of EBITDA in 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 you are staying safe and healthy. The first quarter of fiscal 2021 demonstrated our resiliency and continued momentum in the business as broad-based demand for our services drove CRA's strong performance. Building on a record-setting fiscal 2020, CRA reported the highest quarterly revenue in the company's history, increasing 16.1% year-over-year to $146.5 million. Fueling this growth was a combination of headcount expansion and improved utilizations. During the first quarter, we welcomed more than 30 new colleagues, increasing quarter end consulting headcount by 4.8% year over year. At the same time, we saw utilization increase to 76% from the 71% observed in the first quarter of fiscal 2020 and up from 70% in the fourth quarter of 2020, as weekly utilization trended upward over the course of the first quarter. CRA's top-line expansion during the first quarter resulted in accelerating profit growth. Specifically, profit measures increased year-over-year at rates more than double the growth in revenue as non-GAAP net income, earnings per diluted share, and EBITDA grew year-over-year by 59%, 63%, and 38%, respectively. This growth resulted in the highest quarterly levels for each of these three profit metrics. It was truly an exceptional quarter from top to bottom. I would now like to highlight some of the services provided during the quarter. Within legal and regulatory, our antitrust and competition economics practice grew revenue by approximately 30% year over year. The practice established its new high for quarterly revenue as demand for antitrust and merger-related services remained strong. M&A markets continued to rebound from pandemic lows. Worldwide M&A activity increased 94% during the first quarter of 2021 compared to year-ago levels and represented the strongest first quarter period for M&A since records began in 1980. Against this backdrop, CRA worked on transactions across a range of industries and geographies. For example, during the first quarter, the competition practice provided economic advice to a U.S. regulatory agency regarding likely economic effects arising from the merger of two multinational industrial parts manufacturers and the impact on multimillion-dollar bid markets. Additionally, Colleagues from our European competition practice advised Microsoft in a successful $7.5 billion acquisition of ZeniMax, a video game publisher. Looking more broadly at the legal market, total case filings continue to rebound but have not yet returned to pre-pandemic levels. For the first quarter of 2021, total case filings were down 3% year-over-year. Focusing on a subset of litigation matters that are more closely aligned with CRA services, case filings were essentially flat compared to the first quarter of 2020. A similar rebound pattern can be seen within the courtroom. The number of total court judgments during the first quarter was down approximately 7% relative to the year-ago period. This represented improvements from the double digit declines observed during much of 2020, but indicates that the pandemic's effects continue to limit courtrooms and their ability to handle normal litigation caseloads. In light of these market conditions, I'm especially pleased with a strong growth in our legal and regulatory services. For the first quarter, every practice within legal and regulatory increased its revenue year over year, with double-digit growth observed in our antitrust and competition economics, financial economics, forensic services, intellectual property, labor and employment, and risk investigations and analytics practices. During the quarter, CRA's financial economics practice assisted numerous financial institutions in conducting bias testing of artificial intelligence and machine learning models used to underwrite and price consumer credit across a broad base of markets and products. In addition, the practice provided support to clients in the retail banking space with deposit account transactional analysis in response to state and federal financial regulators. Our forensic services practice continues to experience strong demand from boards and companies that need help responding to allegations of fraud, cybercrime, noncompliance, and misconduct. For example, in connection with information security and cybercrime matters, on behalf of two international financial services firms, the practice was retained to provide cyber incident response services as well as assistance with cyber insurance claims. The practice is also increasingly being called upon to assist with litigation related to special purpose acquisition companies or SPACs. For example, we have been retained on behalf of a former board member of a company that had been acquired by a SPAC and which shortly thereafter discovered widespread embezzlement by management. During the first quarter, the intellectual property practice advised on multiple high stakes matters involving patents and trade secrets in a variety of forms, including federal and state courts, international arbitration tribunals, and the U.S. International Trade Commission. For example, a CRA expert provided testimony in a patent infringement matter on behalf of the world's leading provider of breathing circuits used in respiratory therapy for critical care patients. CRA's analysis of economic damages addressed supply and demand issues during a period of significantly increased worldwide demand for the patented breathing circuits during the pandemic. During the first quarter, the risk investigations and analytics practice continued to perform multi-jurisdictional investigative and compliance-related assignments in the United States, Brazil, the United Kingdom, and the European Union. More broadly, the practice executed a large internal investigation regarding potential violations of the Foreign Corrupt Practices Act by a U.S. government supplier in multiple foreign jurisdictions. The team also conducted numerous transaction related due diligence assignments for underwriter councils related to both traditional and SPAC IPOs. Next, I would like to turn to our management consulting services. After posting its largest quarterly revenue in the fourth quarter of fiscal 2020, the life sciences practice was slightly down during the first quarter relative to the year-ago period. Continuing CRA's long history of helping companies launch life sciences products, the practice recently assisted a global manufacturer in developing a commercialization strategy for a newly acquired hepatitis D treatment. Our efforts included conducting foundational research into the hepatitis D market, mapping the current treatment approach, identifying potential business limiting challenges, and guiding resource allocation to support a successful launch. The practice also recently leveraged its commercial strategy expertise for a client involved in a business dispute. The client sought to renegotiate the terms of an asset purchase following worse-than-expected clinical trial outcomes, compounded by a challenging commercial environment, resulting from the COVID-19 pandemic. CRA developed an independent sales forecast reflecting the new business realities, which helped inform commercialization decisions as well as the renegotiation efforts. CRA's energy practice continues to drive performance as it integrates the London-based team that joined CRA in the second half of 2020. During the first quarter, the practice enjoyed near double-digit revenue growth as it continued to support the post-merger integration of two major energy suppliers in the UK. As a result of our work, the program is on track to create one of the largest energy retailers in the UK with a significantly improved cost base. Additionally, CRA is supporting a large asset manager with the acquisition of a group of energy assets in Eastern Europe. I'm grateful to all of my colleagues for their hard work as we helped our clients address their most important challenges as we continue to adapt to a COVID-19 altered environment. As our first quarter demonstrate, our portfolio of services is highly valued by our clients. Moreover, we are well positioned to maintain the momentum in the business. During the first quarter, we saw both project lead flow and new project originations increase by more than 25%, compared to the first quarter of 2020, which was largely unaffected by the global pandemic. While we remain mindful that uncertainties around global economic, business, health, and political conditions can affect our business, we are raising both our revenue and EBITDA guidance to reflect the strong start of the year and the broad-based demand across our service portfolio. For the full year fiscal 2021 on a constant currency basis relative to fiscal 2020, we now expect revenue in the range of $550 million to $570 million and non-GAAP EBITDA margin in the range of 10.0% to 10.5%. Before I turn the call over to Chad and then Dan for a few additional comments, I have one more topic to cover. As we announced yesterday, I'm excited to welcome Raquel Tamez as CRA's first ever Chief Inclusion and Engagement Officer. Since its inception in 1965, CRA has strived to create a dynamic and inclusive culture. The importance of diversity, equity, and inclusion cannot be overstated as it is essential to fostering an engaged and empowered workforce. In her new role, Raquel will help integrate diversity, equity, and inclusion into everything we do and further align CRA to better serve our clients, stakeholders, and communities. And with that, I'll turn things over to Chad. Chad?

Thanks, Paul. I want to provide a few comments about our capital deployment during the quarter. CRA remains committed to maximizing 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. Against a challenging economic backdrop, CRA continues to generate strong cash flows. For the trailing 12 months through the first quarter of fiscal 2021, CRA's adjusted net cash flows from operations were $101.7 million, or 19.2% of trailing 12 months revenue. These adjusted net cash flows from operations were 57% higher than the $64.9 million observed a year ago, driven primarily by the growth in our business and reduced SG&A spending. As Dan will describe in greater detail, we concluded the quarter with $31.6 million of cash and $40.0 million of borrowings under our revolving credit facility, resulting in a net debt position of $8.4 million. This compares to the first quarter of 2020 when CRA had $70 million of outstanding borrowings and $15.8 million of cash. for a net debt position of $54.2 million. The borrowings during the first quarter were primarily to fund bonus payments, which is consistent with our practice in prior years. As discussed in previous earnings calls, CRA's first quarter is typically a period of lower cash levels, as it coincides with the timing of a significant portion of our annual bonus payments. Once bonuses are fully paid in Q2, we typically spend the remainder of the year repaying our borrowings and replenishing our cash balance. In addition to the normal bonus cycle, the first quarter of 2021 also saw cash outlays of $14.9 million for talent and $700,000 on capital expenditures. We also returned $11.7 million of capital to our shareholders during the first quarter, consisting of $2.1 million of dividend payments and $9.6 million for share repurchases of approximately 167,000 shares at an average price of approximately $58 per share. Following the end of the first quarter, as previously announced, we completed the modified Dutch auction self-tender offer that resulted in the repurchase of an additional 337,837 shares for $25 million, demonstrating our confidence in our long-term outlook and our commitment to returning capital to shareholders. And now, I'll turn the call over to Dan for a few final comments. Dan?

Thanks, Chad. As a reminder, more expansive commentary on our financial results is available on the investor relations section of our website under prepared CFO remarks. Before we get to questions, let me provide a few additional metrics related to our performance in the first quarter of fiscal 2021. In terms of consultant headcount, we ended the first quarter of fiscal 2021 at 837, which consisted of 145 officers, 497 other senior staff, and 195 junior staff. This represents a 4.8% increase compared with the 799 consultant headcount reported at the end of Q1 fiscal 2020. Non-GAAP selling general and administrative expenses, excluding the 2.6% attributable to commissions to non-employee experts, was 13.2% of revenue for the first quarter of fiscal 2021, compared with 16.9% a year ago. This quarter's ratio was positively impacted by the strong revenue for Q1 and effective management of our overhead. Additionally, travel and entertainment expenses were significantly lower year over year, primarily due to ongoing travel restrictions in various jurisdictions and work-from-home policies. We will continue to monitor our discretionary expenses to proactively mitigate the financial impacts related to the pandemic and to efficiently manage our transition back to a more normal operating environment. The effective tax rate for the first quarter of fiscal 2021 on a non-GAAP basis was 24.5% compared with 29.3% on a non-GAAP basis for the first quarter of fiscal 2020. The lower rate in the first quarter of 2021 was primarily attributable to a greater benefit arising from the accounting for stock-based compensation. Turning to the balance sheet, DSO at the end of the first quarter was 92 days compared with 102 days at the end of the fourth quarter of fiscal 2020. DSO in the first quarter consisted of 52 days of build and 40 days of unbuild. At the end of the first quarter, the company's liquidity remained strong, totaling approximately $167 million when taking into account the available capacity on our revolving line of credit and our cash balance. Looking more closely at the components, during the first quarter, we borrowed $40 million under our revolving credit facility, primarily to fund annual bonuses. We concluded the first quarter of fiscal 2021 with $31.6 million in cash and cash equivalents, with the majority residing internationally. That concludes our prepared remarks. We will now open the call for questions.

Rob, please go ahead. Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. As a reminder, for participants using speaker equipment, it is necessary to pick up your handset before pressing the star keys to enter the queue. One moment please while we poll for questions. Our first question comes from Andrew Nicholas with William Blair. Please proceed with your question.

Hi, good morning. Thanks for taking my questions. The first one was just on utilization. I think you mentioned it trending upward throughout the quarter seemingly would imply, you know, near record level utilization in March. So with that in mind, how do you think about the upper limit of utilization and the sustainability of those levels? And then as an offshoot to that, how are you considering those factors as you think about hiring expectations through the remainder of this year?

Thank you, Andrew, and good morning. So we saw strong lead flow and new project originations during Q4, and that trend continued during Q1. And with those increase of flow of new projects, we also saw the activity of our consultants steadily improve to where I think it's safe to assume that the utilization we observed in March is north of the average of 76% that we reported for the quarter. Going forward, I think steady state in a normal world, we would like to operate CRA in the mid-70s on a utilization mark. We think as it goes higher, yes, we enjoy a short-term boost to profitability when you're operating near 80% utilization, but I think you risk jeopardizing the quality of the overall services you're delivering to clients and also foregoing all the revenue opportunities that exist in the marketplace. So we are going to continue to strive for the mid-70 utilization. So what does that mean with respect to headcount growth in 2021? We are trying to as closely match the demand for the services and the supply that we have to deliver on those services. and that's a challenge given the uncertainty that we are observing in the overall market. We expect by year-end to have year-over-year headcount growth to be in the mid-single digits, but if we see demand start to continue to rise, we will just increase our hiring in the secondary market going forward.

Great. That's helpful. And then maybe as a follow-up to that, Is there anything you could say about the recruiting environment broadly right now? Obviously, it seems like there's a lot of opportunity and demand to try and capture and you're leaning into that. But how easy is it to bring on new talent right now, given what I expect is a pretty competitive market?

I think the market is getting tighter. I would break up my response to your question, Andrew, with respect to the hiring we do at the university level, both undergraduate and graduate level students, and then what we experience in the secondary market for talent. On the university level, we have kept open our university recruiting throughout the year. So we typically focus primarily in the fall months But we did that in 2020, but we've kept our university recruiting open all the way through the spring. Our quality of the candidates we're getting still remains very high, and the yield with respect to the offers we're making and the acceptances we're getting are consistent with what we've enjoyed in years past. So we haven't seen any diminution in that. On the secondary market, you have to work a little harder. because everything is done in a virtual world with respect to the recruitment of senior level candidates. But we are still enjoying that success of hiring people on that market. It just takes some more effort from our human capital department and from Chad Holmes and his team.

Understood. And if you wouldn't mind me squeezing one more in, just on kind of the differences in growth by geography or different market environments in the U.S. versus international. If you could just speak to that and how you're thinking about COVID and some of the different dynamics around recovery between those two regions impacting your business.

Thank you.

I think the growth has been pretty balanced across our geographies. So our legal regulatory services has done well both in North America and in Europe, and we highlighted some of the cases on the management consulting side, particularly our energy practice on how it's performed. But they both enjoyed double-digit revenue growth with respect to North America and the international operations. The rate... or the pace for what we all hope is a return to normalcy differs, not just by domestic or international, but by every city that we operate in. So we're closely monitoring that. Europe, particularly the UK, may be a little ahead of North America as to their return to the office, but more to come on that topic.

All right, great. Thanks. Thank you, Andrew.

Our next question comes from the line of Mark Riddick with Sedodian Company. Please proceed with your question.

Hi, good morning.

Good morning, Mark. So clearly very strong results across multiple areas. And I did want to sort of touch a little bit on, first of all, I really appreciated the commentary around around multiple areas that we're gaining. I wanted to touch a bit on market share gains because clearly that's been taking place in many practice areas, including M&A related. I wondered if you could spend a little bit of time on some of the efforts that are taking place there and maybe what you're seeing from competitors that may be allowing the opportunity to gain in such market share in multiple practice areas simultaneously.

Sure. There's a lot of really formidable competitors out there in the legal regulatory space and also in the management consulting space. It's hard to have a precise estimate of what your market share is in the markets for which we operate. What I can say is if you look at any broad-based measures, either for demand in our overall industry or for what we can observe from peers in that space. I think CRA's growth rates over an extended window of time exceeds both. Thus, I would say it's pretty safe to assume that we are taking share, both from organic expansion and also from the addition of new revenue generating resources there. So we're pretty pleased with that. Well, in the recruitment and in the execution of our performance, we try to just focus on CRA and what we do best. I can't really control what our competitors are doing in this space. So when we go out to recruit or we go to sell our services, we focus on the attributes of this company. And success has really made that quite easy. for us in that there's a lot going on both for new individuals entering the organization and for legacy individuals that are still enjoying expansion of their portfolios.

Okay, great. And then I was wondering if you could talk a little bit about the reduced expenses that you see. There was the mentioning as far as balancing. you know, travel and entertainment costs being down, but certainly we expect them to come back over time. So why don't you talk maybe a little bit about, first of all, the magnitude, if you can quantify the travel and overall entertainment savings, I guess, maybe relative to where maybe it would have been or was a year ago, and then sort of as you begin to layer that in, do you think that there will be much in the way of a difference as to how that's thought of going forward, or is that sort of something that you'd be kind of working with your customers to kind of gain a sense of kind of where, how they want to sort of function as they go forward?

Sure. There's a lot of pieces to that, so let me try to break it down. First, let me try to introduce a couple of cost benchmarks here. Pre-pandemic, if I looked at SG&A excluding performance payments, it hovered right between 17% to 18% of net revenue. During the pandemic, we have operated right in the 13 to 14% of net revenue range. So it is a 400 to 500 basis point margin enhancement due to the lower SG&A over this period of time. There's a lot of learnings, right? A lot of pain, but there also has been a lot of learnings over these past 15 months. I think some of those learnings relate to how you can just operate more efficiently as an enterprise, how you can deliver services to clients more expeditiously and with more of a cost consciousness there. We hope to take some of these learnings back to the office when that time comes. I don't believe CRA will operate at 13% to 14% when we return to the office. But I do think there are opportunities for margin enhancement, the degree by which it's harder to estimate and even harder to estimate the timing by which we will return to more steady state levels for the firm. But I do believe there's opportunities for margin enhancement tied to the more efficient delivery of SG&A services.

Okay, great. And then you touched on this a little bit in your prepared for March, but I was wondering if you could expand a little bit about it. You made commentary around some new business wins and some assignment work that you're doing around SPACs. And I was wondering if you could sort of maybe broaden that a little bit and sort of talk about what that opportunity set may, you know, looks like compared to traditional, maybe what the traditional M&A mix might be for CRA. Thank you.

Sure. A lot of times with respect to what drives our business, it's oftentimes removed from what the funding source is of these acquisitions. It has a lot more to do with the complexity of the mergers or acquisitions being discussed and what may gain the eyes of the various regulators. If it is just the accumulation of assets, like sometimes you see in the private equity space, or sometimes you see now what we're seeing the SPAC capital being used for, that normally will just have minimal impact for CRA. But as we're starting to see, just like not all IPOs go well or not all acquisitions go well, we're starting to see litigation arise and investigations arise out of some of these SPAC transactions. But I don't think I would necessarily tie it to the vehicle itself, but just more that there's increased activity going on in both the generation of capital and the use of that capital in the market space.

Okay, great. Thank you very much. Thank you, Mark.

Our next question comes from Kevin Sankey with Barrington Research Associates. Please proceed with your question.

Hey, good morning. I wanted to start off by talking about consultant utilization a bit more. I think on the last call we talked about, you know, just assuming a fairly gradual increase in utilization as the year progressed. Did utilization step up in the first quarter maybe a little more quickly than you had originally anticipated, just based on the strong demand you're seeing?

Yeah. First, good morning, Kevin. Thanks for the question. So, as I mentioned earlier, we saw a strong lead flow in new project originations during Q4, and that trend sort of continued during Q1. New project originations were up a little less than 10% in Q4, but we saw that jump to more than 25% in Q1. So that is all positive. The uncertainty in this environment is, of course, whether the new demand will materialize immediately into project billings. So we're getting the new cases coming in, our project inventory is growing, but the uncertainty because of all the court statistics that we've been citing now for several quarters, is how quickly these new matters translate into new revenue generating projects. What we enjoyed during Q1 is that many of these matters quickly moved, particularly on the M&A side, to revenue generating projects, and thus we saw Just steady improvement from January to February, February to March on the utilization front.

Okay, got it.

You talked about the project lead flow and new project originations, utilization. I guess all of these things would be informing you and enabling you to increase your guidance for the year after just one quarter, but could you maybe talk a little bit about what's giving you the confidence to increase that guidance after just one quarter and maybe the kind of visibility you feel like you have for the remainder of the year as it progresses?

Sure. What I can say is for the last several months we have just seen a steady improvement in our operations. So one, there's been a trend. I know there could be volatility in what we're experiencing, but we've seen a steady trend of improvement over six plus months or so at CRA. So that is a positive. The other positive is that We're talking about a lot of practices in each of these calls, which means I'm getting broad-based contributions, which should also yield more predictability and what the future may hold. It is not one practice that is driving performance in any one quarter. I think a year ago, as an example, we had our competition practice was flat and our life sciences, forensics, finance practice had stellar Q1s in fiscal 2020. Here we are a year later, the portfolio is working with the competition practice, growing 30% year over year to its best quarter ever, and life sciences is relatively flat. I think that is not a new story, right? We've been growing quarter year over year for five plus years now. And it's because of the quality of the overall portfolio that we're enjoying. So that definitely plays into the decision making. And lastly, the project inventory is continuing to grow. Is it possible that they go dormant and revenue doesn't materialize immediately? Absolutely. Absolutely possible. But that is just a timing issue. aspect with respect to the revenue. The revenue hasn't disappeared unless the value to the firm hasn't disappeared. It's just when it will come due. But I have not seen any indicators of those revenue flows going dormant. So I know I'm four months into the year, but so far it's been a pretty good four months.

Yes, certainly. Do you try to build, I assume you do, but some of that uncertainty around just the timing of when leads might materialize into revenue, into your guidance, and maybe have you lessened that conservatism a little bit now that you've got more evidence of things moving forward, or how are you trying to factor that uncertain environment into the outlook you're providing?

It's more of a feel. We have lots of different models that try to estimate the expected revenue flow coming from the leads we're getting and the types of projects we're getting. But the truth is that the error bands around those estimates are really quite large. So, you know, I could be enjoying one 46.5 or I could be enjoying 135.6 the estimators aren't going to give me that level of precision so I'm looking much more at the micro factors that we observe during the quarter in terms of making these decisions what the trends have been how broad based the contributions are and whether I've seen any indicators of slowing performance there

Okay that's helpful and I want to talk to you about specifically the increase in margin guidance. It sounds like you haven't yet nailed down some of these efficiency gains that you're from the learnings that you got during the pandemic and you haven't necessarily been able to quantify what those might be. So is the margin guidance increase just being driven more by the higher revenue outlook and the operating leverage that's going to create?

There's a number of factors that go into that estimation. One, we just produced a very strong first quarter that was very profitable. which is clearly going to contribute to the annual numbers that we're expecting for fiscal 2021. Secondly, that a return to normalcy is probably still, you know, six-plus months out. As companies are starting to return this spring, and we could see that increasing over the summer months into the fall, But there's still a leap from returning to the office to beginning travel and normal business activity. So I could see SG&A excluding PERFs as a percent of net revenue still being below, considerably below historical levels, you know, for the next two or three quarters. And lastly, the other thing that we're going to be welcoming a new class of incoming consultants during the summer months into the fall, which also drives down utilization a bit as these people become integrated into the firm. And as utilization dips, so will profit margins be impacted. But this is more the normal seasonality of our business as opposed to anything permanent on the profitability outlook. With respect to nailing things down we have a model of what the SG&A improvements may look like but we need to actually you know put them into play and see how they work as we start traveling again as we start attending conferences and marketing but you know more to come on that I'm just not comfortable at this stage to give you what I would call a new target SG&A range for our operations.

Okay, that's fair. That's helpful. Lastly, I wanted to ask about your goal of returning 50% of cash to shareholders and how that – your plans on how you're going to accomplish that going forward and just the – your take on the outcome of the Dutch auction tender offer and how that also played into that 50% cash return to shareholders.

Sure. The goal of returning 50% of our adjusted cash flow from operations back to shareholders is aspirational and it's not necessarily something you're going to achieve every single quarter, right? The goal is over the long term that that will be the steady state of capital given back to our shareholders. We're off to a pretty good start in fiscal 2021. We purchased about $10 million of equity, repurchased about $10 million of equity during Q1. And as you highlighted, also completed a Dutch auction which brings in-house more than $25 million of additional repurchases. So that's up to $35 million. If I build in the anticipated dividend payments for the remainder of the year, we're already over $40 million in total returns. So we'll see how the operations continue to materialize and what other reinvestment opportunities there are. to see whether we will increase our repurchase activity later in the year. But it's off to a pretty good start, not just with the repurchase, but the other important part of the Dutch auction was to make sure we are being heard by our current shareholders and prospective shareholders with respect to what we believe the intrinsic value of this enterprise is. So we're not there yet, still trading at a discount, but a lot closer than where we were three months ago, Kevin.

Great, fantastic. Well, thanks for taking all the questions, and again, congratulations on the strong results.

No, thank you to everyone for the questions and for the support. And thank you for everyone who's joining us on today's call. We appreciate your time and interest in CRA. We'll be participating in virtual meetings with investors in the coming months, and we look forward to updating you on our progress on our second quarter call. Be safe, everyone. And with that, that concludes today's call. Thank you.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.