Management services provider CRA International Inc CRAI reported GAAP net income of $3.3 million or 36 cents per share in the second quarter fiscal 2015 (ended Jul 4, 2015) versus $3.2 million or 32 cents per share in the year-ago quarter. The increase in earnings was driven by lower operating costs. The share price increased marginally to $24.33 as on Jul 30, 2015.
The company reported non-GAAP net income of $3.5 million or 38 cents per share in the reported quarter compared with $3.2 million or 32 cents per share. The adjusted earnings missed the Zacks Consensus Estimate by 2 cents.
Quarter Highlights
Revenues for second-quarter 2015 decreased to $76.5 million from $78.2 million in the prior-year quarter. The decrease in revenues was driven by continuous currency pressure. During the reported quarter, the company witnessed solid contributions throughout its portfolio and growth in the Antitrust & Competition Economics practice, with strong contributions across both North America and Europe. Additionally, the Financial Economics and Auctions & Competitive Bidding practices generated double-digit year-over-year growth. Company-wide utilization stood at 75% in the reported quarter.
Non-GAAP revenues for second-quarter 2015 decreased to $75.6 million from $76.9 million in the prior-year quarter. Quarterly adjusted revenues missed the Zacks Consensus Estimate of $81.0 million.
Gross profit stood at $25.9 million in the reported quarter compared with $25.5 million in the year-ago quarter. Selling, general and administrative expenses stood at $18.7 million versus $17.5 million in the prior-year quarter.
GAAP earnings before interest, taxes, depreciation and amortization (EBITDA) were $12.5 million in the reported quarter compared with $12.9 million in the year-ago quarter.
Financial Position
As of Jul 4, 2015, cash and cash equivalents were $15.8 million while long-term liabilities stood at $15.8 million.
The company used $16.6 million cash in operating activities versus $15.2 million of cash utilization in the prior-year period.
Outlook
CRA International reaffirmed its full-year 2015 non-GAAP revenue guidance in the range of $312 million to $320 million. Non-GAAP adjusted EBITDA margin is expected to be in the range of 16.3%–16.7%.
CRA International is encouraged by the strong momentum in its operations. Going forward, the company is well positioned to deliver profits through organic and inorganic growth and aims to deepen its client relationships and create new revenue generating opportunities via natural extension of its current offerings.
The company expects the overall headcount to increase by approximately 8% to 10% by the end of the third quarter of fiscal 2015.These new hires are likely to generate revenue expansion, with a significant portion of the hiring directed towards Antitrust & Competition Economics practice.
CRA International currently has a Zacks Rank # 3 (Hold). Other stocks that look promising and are worth a look now include CEB Inc CEB, Gartner Inc IT and Towers Watson & Co ITW carrying a Zacks Rank #2 (Buy).
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