CRA International,Inc.

Charles River Associates second quarter 2022 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 sections 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 level of demand for our services as a result of changes in general and industry-specific economic conditions. 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. I will now turn it over to Paul for his report.

Paul? Thanks, Dan, and good morning, everyone. Thank you for joining us today. Continued momentum in the business and demand for our services supported headcount expansion of 3.6% year-over-year and utilization of 77% for the second quarter. The hard work of my colleagues drove CRA's revenue to $149.1 million, which is the highest quarterly revenue in the company's history. This record was achieved despite currency headwinds associated with the strong U.S. dollar that shaped $3 million or 2% year-over-year growth from our reported revenue on a constant currency basis. Our performance was broad-based with four practices, antitrust and competition economics, energy, intellectual property, and labor and employment, delivering double-digit revenue growth year over year. We also saw solid contributions from our international operations, which posted growth of 6% year over year. We continue to effectively manage the business, mitigating the pressure of cost inflation and converting CRA's top-line performance into strong profitability. For the quarter, CRA set new quarterly records for EBITDA, net income, and earnings per diluted share. I will now highlight some of the services we provided during the second quarter. Despite a 21% decrease year-over-year, worldwide M&A transactions totaled $1.1 trillion during the second quarter of 2022, marking the eighth consecutive quarter of $1 trillion or more. Looking at transactions in excess of $10 billion, which tend to represent the types of transactions on which our economists are engaged, the value of M&A transactions totaled more than $600 billion during the first half of 2022, a decline of only 5% compared with the second quarter of 2021. Against this backdrop, our antitrust and competition economics practice once again established a new high-water mark for performance as it recorded its highest quarterly revenue ever. During the second quarter, the practice continued to support private parties and regulators on a variety of new and continuing M&A-related engagements in North America and Europe, The engagements span a broad range of industries, including technology, transportation, telecommunications, industrial manufacturing, and chemicals, and require our experts to assess the characteristics of product and geographic markets, among other considerations. This work involves the application of cutting-edge economic theory, empirical analysis, and computing infrastructure. Turning to the legal market, CRA's revenue from legal and regulatory offerings during the second quarter grew 4% year over year. The team achieved this growth despite the fact that both total case filings and total court judgments during the second quarter of 2022 were down 8% year over year. CRA's antitrust and competition economics practice continued to support clients in the context of legal disputes. in addition to their merger review work. For example, during the second quarter, Cere was hired by Agway Energy Services, the defendant in a consumer class action matter in which the plaintiff alleged that Agway engaged in deceptive pricing practices by charging low introductory rates and then switching customers to higher monthly prices that were allegedly more than the rates charged by competing electric utilities. and competing energy supply companies. The CRA expert analyzed the market and the relevant regulatory structure and concluded that in the significant majority of market quarters, Agway prices were in fact below the median. Counsel for Agway relied upon CRA's expert's opinion and analysis in a series of motions that ultimately resulted in the exclusion of the plaintiff expert and led to summary judgment dismissals. Our intellectual property practice advised on multiple high-stake litigation matters covering a broad range of industries. For example, a CRA expert testified at trial in a patent infringement matter between two major suppliers of offshore wind turbines. The jury returned a verdict awarding our client a $30,000 per megawatt royalty based on the CRA expert's testimony. The case presented unique economic issues given the early stage nature of the wind farm projects at issue in this case, requiring CRA to carefully craft damage theory that allowed the jury to determine the appropriate reasonable royalty rate for turbines that the defendant plans to install in the future. The IP practice also continued its work in International Trade Commission investigations and testified at trial on the issues of commercial success and domestic industry in an ITC investigation involving health monitoring technology used in smartwatches. Within our labor and employment practice, CRA continues to assist clients in responding to charges filed by federal agencies, including the EEOC and state agencies, such as the California Department of Fair Employment and Housing. Our work over this period was fundamental to the initial phase of data collection, early assessment and data production, as well as later phases of expert testimony and court-ordered monitoring. In addition, the practice continues to provide proactive employment audits that benchmark workforce composition and hiring decisions, along with compensation analysis to support clients' diversity, equity and inclusion efforts. These audits are primarily focused on the U.S. operations of our clients who span industries ranging from automotive, food and pharmaceutical manufacturing, to legal and financial services. The practice continues to benefit from the contributions of our new colleagues who joined CRA by way of our acquisition of Welch Consulting. Integration efforts are ongoing and tracking to plan. The labor and employment practice has seen an increase in cross-office staff utilization and is expanding joint marketing efforts corresponding with the return to in-person conference participations, such as the National Industry Liaison Group Conference that took place in Boston last week and an upcoming American Bar Association event in Washington, D.C. We expect to see continued benefits from these efforts in the quarters ahead. Within our management consulting offering, the energy practice remained engaged with a number of major civil litigation cases and regulatory proceedings, this including providing written testimony to the Federal Energy Regulatory Commission on behalf of a North Dakota cooperative utility that was seeking to block the cost of a large unrelated coal gasification plant from being included in the rates charged to it under a FERC-regulated wholesale contract. In addition, CRA's energy practice increasingly has been asked by its gas and electric utility clients to develop decarbonization plans. For numerous utilities, CRA's energy practice has evaluated alternative pathways to reaching net zero goals, such as through energy efficiency, the retirement of fossil plants, electrification, and the usage of renewable natural gas. The team also often helps with the stakeholder communication process and in regulatory proceedings. Finally, the practice continued to work with the energy investment community and expanded services into water as we assisted a European investor with the transformation of a recently acquired water system. I'm grateful to all of my colleagues for their hard work in helping our clients address their most important challenges. As our second quarter results demonstrate, our portfolio of services remains highly valued by our clients. Moreover, we are well positioned to maintain the momentum in the business as we continue to replenish our sales pipeline. In the second quarter, project lead flow grew by 3% year over year. Through the first two quarters of fiscal 2022, on a constant currency basis relative to fiscal 2021, we generated total revenue of $301.5 million and non-GAAP EBITDA of 39.1 million, achieving a margin of 13.0%. Reflecting the continued strength of our business, we are reaffirming our revenue guidance and raising our EBITDA guidance. For full year fiscal 2022, on a constant currency basis relative to fiscal 2021, We expect revenue in the range of $585 to $605 million and non-GAAP EBITDA margin in the range of 11.3 to 12.0%. This new profit guidance compares with the prior non-GAAP EBITDA margin range of 10.8 to 11.5%. With that, I'll turn the call over to Chad and then Dan for additional comments. Chad?