CRA INTERNATIONAL, INC.

Previous wording

Our costs of services include the salaries, bonuses, share-based compensation expense, forgivable loan amortization, and benefits of our employee consultants. Our bonus program awards discretionary bonuses based on our revenues and profitability and individual performance. Costs of services also include out-of-pocket and other third-party vendor expenses, and the salaries of support staff whose time is billed directly to clients, such as librarians, editors, and programmers, as well as the amounts billed to us by our outside consultants for services rendered while completing a project. Selling, general and administrative expenses include salaries, bonuses, share-based compensation expense, and benefits of our administrative and support staff, fees to non-employee experts for generating new business, office rent, marketing, and other costs.

Current wording

Our costs of services include the salaries, bonuses, share-based compensation expense, forgivable loan amortization, and benefits of our employee consultants. Our bonus program awards discretionary bonuses based on our revenues and profitability and individual performance. Costs of services also include out-of-pocket and other third-party vendor expenses, and the salaries of support staff whose time is billed directly to clients, such as librarians, editors, and programmers, as well as the amounts billed to us by our outside consultants for services rendered while completing a project. Costs of services does not include depreciation and amortization. Selling, general and administrative expenses include salaries, bonuses, share-based compensation expense, and benefits of our administrative and support staff, commissions to non-employee experts for generating new business, office rent, marketing, and other operating costs.

Previous wording

We derive the majority of our revenues from the number of hours worked by our employee consultants. Our utilization of those employee consultants is one key indicator that we use to measure our operating performance. We calculate utilization by dividing the total hours worked by our employee consultants on engagements during the measurement period by the total number of hours that our employee consultants were available to work during that period. Utilization was 75%, 70%, and 75% for fiscal 2024, fiscal 2023, and fiscal 2022, respectively.

Current wording

We derive the majority of our revenues from the number of hours worked by our employee consultants. Our utilization of those employee consultants is one key indicator that we use to measure our operating performance. We calculate utilization by dividing the total hours worked by our employee consultants on engagements during the measurement period by the total number of hours that our employee consultants were available to work during that period. Utilization was 77%, 75%, and 70% for fiscal 2025, fiscal 2024, and fiscal 2023, respectively.

Previous wording

Revenues outside of the U.S. accounted for approximately 19% of our total revenues in fiscal 2024, 21% of our total revenues in fiscal 2023, and 20% of our total revenues in fiscal 2022. Revenue by country is detailed in Note 2 to our Notes to Consolidated Financial Statements.

Current wording

Revenues outside of the U.S. accounted for approximately 20% of our total revenues in fiscal 2025, 19% of our total revenues in fiscal 2024, and 21% of our total revenues in fiscal 2023. Revenue by country is detailed in Note 2 to our Notes to Consolidated Financial Statements.

Previous wording

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets and liabilities, as well as related disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates are monitored and analyzed by management for changes in facts and circumstances, and material changes in these estimates could occur in the future. Changes in estimates are recorded in the period in which they become known. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from our estimates if our assumptions based on past experience or our other assumptions do not turn out to be substantially accurate.

Current wording

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets and liabilities, as well as related disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates are monitored and analyzed by management for changes in facts and circumstances, and material changes in these estimates could occur in the future. Changes in estimates are recorded in the period in which they become known. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from our estimates if our assumptions based on past experience or our other assumptions do not turn out to be substantially accurate.

Previous wording

Deferred Compensation. We account for performance-based and service-based cash awards using an accrual method where changes in estimates are accounted for prospectively over the remaining service period. To the extent the terms of an award attribute all or a portion of the expected future benefits to a period of service greater than one year, the cost of those benefits is accrued over the employee's or non-employee's requisite service period in a systematic and rational manner.

Current wording

Deferred Compensation. We account for performance-based and service-based cash awards using an accrual method where changes in estimates or the forgiveness of the principal amount of loans are recorded as compensation expense over the remaining service period. To the extent the terms of an award attribute all or a portion of the expected future benefits to a period of service greater than one year, the cost of those benefits is accrued over the employee's or non-employee's requisite service period in a systematic and rational manner.

Previous wording

The requisite service period typically ranges from two to seven years starting with the employee's employment date or non-employee's affiliation date. For an employee or non-employee consultant currently affiliated with us, the requisite service period generally begins at the start of the award's measurement period. A recipient of such an award is expected to be employed by or affiliated with us for the entire measurement period. If the recipient's employment or affiliation with us terminates during the measurement period, the amount paid will be determined in accordance with the recipient's specific contract provisions.

Current wording

The requisite service period ranges from two to eight years starting with the employee's employment date or non-employee's affiliation date. For an employee or non-employee consultant currently affiliated with us, the requisite service period generally begins at the start of the award's measurement period and when compliance is met with certain contractual requirements. A recipient of such an award is expected to be employed by or affiliated with us for the entire measurement period. If the recipient's employment or affiliation with us terminates during the measurement period, the amount paid will be determined in accordance with the recipient's specific contract provisions.

Previous wording

The terms of award agreements may include the achievement of minimum required financial targets over the award's measurement period. These financial targets may include a measure of revenue generation, profitability, or both. The amount of the liability of the award agreements is estimated based on internally generated financial projections. The process of projecting these financial targets over the measurement period is highly subjective and requires significant judgment and estimates. There can be no assurance that the estimates and assumptions used in preparing these projections will prove to be accurate.

Current wording

The terms of award agreements may include the achievement of minimum required financial targets over the award's measurement period. These financial targets may include a measure of revenue generation, profitability, or both. The amount of the liability of the award agreements is estimated based on internally generated financial projections or sourced revenue. The process of projecting these financial targets over the measurement period is highly subjective and requires significant judgment and estimates. There can be no assurance that the estimates and assumptions used in preparing these projections will prove to be accurate.

Previous wording

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations in several different tax jurisdictions. We are periodically reviewed by domestic and foreign tax authorities. These reviews include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. We account for uncertainties in income tax positions in accordance with Topic 740, Income Taxes ("ASC Topic 740"). The number of years with open tax audits varies depending on the tax jurisdiction.

Current wording

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations in several different tax jurisdictions. We are periodically reviewed by domestic and foreign tax authorities. These reviews include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. We account for uncertainties in income tax positions in accordance with Topic 740, Income Taxes. The number of years with open tax audits varies depending on the tax jurisdiction.

Previous wording

Please refer to the section captioned "Recent Accounting Standards" in Note 1 of our Notes to Consolidated Financial Statements contained in this Form 10-K.

Current wording

CRA adopted Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures("ASU 2023-07") during fiscal 2024 and ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures("ASU 2023-09") during fiscal 2025. Please refer to the section captioned "Recent Accounting Standards" in Note 1 of our Notes to Consolidated Financial Statements contained in this Form 10-K.

Previous wording

Our fiscal year end is the Saturday nearest December 31 of each year. Our fiscal years periodically contain 53 weeks rather than 52 weeks. Fiscal 2024 and fiscal 2023 were both 52-week years.

Current wording

Our fiscal year end is the Saturday nearest December 31 of each year. Our fiscal years periodically contain 53 weeks rather than 52 weeks. Fiscal 2025 was a 53-week year, and fiscal 2024 was a 52-week year.

Previous wording

Revenues. Revenues increased by $63.4 million, or 10.2%, to $687.4 million for fiscal 2024 from $624.0 million for fiscal 2023. Utilization increased to 75% for fiscal 2024 from 70% for fiscal 2023, while consultant headcount decreased by 58 consultants during fiscal 2024. Billable hours remained relatively flat for fiscal 2024 when compared to fiscal 2023.

Current wording

Revenues. Revenues increased by $64.2 million, or 9.3%, to $751.6 million for fiscal 2025 from $687.4 million for fiscal 2024. Utilization increased to 77% for fiscal 2025 from 75% for fiscal 2024, while consultant headcount increased by 13 consultants during fiscal 2025. Billable hours increased by 6.0% for fiscal 2025 when compared to fiscal 2024.

Previous wording

Overall, revenues outside of the U.S. decreased to 19% of net revenues for fiscal 2024 from 21% for fiscal 2023. Revenues derived from fixed-price engagements remained at 18% of net revenues for fiscal 2024 from fiscal 2023. Revenues derived from time-and-materials engagements remained unchanged at 82% of net revenues for fiscal 2024 from fiscal 2023. The percentages of revenue derived from fixed-price engagements depends largely on the proportion of our revenues derived from our management consulting business, which typically has a higher concentration of fixed-price service engagements.

Current wording

Overall, revenues outside of the U.S. increased to 20% of net revenues for fiscal 2025 from 19% for fiscal 2024. Revenues derived from fixed-price engagements decreased to 17% of net revenues for fiscal 2025 from 18% for fiscal 2024. Revenues derived from time-and-materials engagements increased to 83% of net revenues for fiscal 2025 from 82% for fiscal 2024. The percentages of revenue derived from fixed-price engagements depends largely on the proportion of our revenues derived from our management consulting business, which typically has a higher concentration of fixed-price service engagements.

Previous wording

Costs of Services (exclusive of depreciation and amortization). Costs of services (exclusive of depreciation and amortization) increased by $40.1 million, or 9.1%, to $479.9 million for fiscal 2024 from $439.8 million for fiscal 2023. The increase in costs of services was due primarily to an increase of $33.5 million in employee compensation and fringe benefit costs, an increase in forgivable loan amortization of $4.6 million, and an increase of $2.3 million of client reimbursable expenses in fiscal 2024 compared to fiscal 2023. These increases were partially offset by a decrease of $0.2 million in expense related to contingent consideration in fiscal 2024 compared to fiscal 2023. As a percentage of net revenue, costs of services decreased to 69.8% for fiscal 2024 as compared to 70.5% for fiscal 2023.

Current wording

Costs of Services (exclusive of depreciation and amortization). Costs of services (exclusive of depreciation and amortization) increased by $39.4 million, or 8.2%, to $519.3 million for fiscal 2025 from $479.9 million for fiscal 2024. The increase in costs of services was due primarily to an increase of $35.8 million in employee compensation and fringe benefit costs, and an increase of $6.3 million of client reimbursable indirect project expenses in fiscal 2025 compared to fiscal 2024. These increases were partially offset by a decrease in forgivable loan amortization of $2.6 million and a decrease of $0.1 million in expense related to miscellaneous and other expenses in fiscal 2025 compared to fiscal 2024. As a percentage of net revenue, costs of services decreased to 69.1% for fiscal 2025 as compared to 69.8% for fiscal 2024.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $10.0 million, or 8.6%, to $125.1 million for fiscal 2024 from $115.1 million for fiscal 2023. This increase was due primarily to a $4.6 million increase in employee compensation and fringe benefit costs, a $2.0 million increase in legal and professional services, a $1.6 million increase in rent expense, a $1.5 million increase in software subscription and data services, a $0.7 million increase in commissions to our non-employee experts, and $0.3 million increase in travel and entertainment expenses. These increases were partially offset by a $0.7 million decrease in other operating expenses.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $9.9 million, or 7.9%, to $135.0 million for fiscal 2025 from $125.1 million for fiscal 2024. This increase was due primarily to a $3.5 million increase in legal and professional services, a $2.4 million increase in employee compensation and fringe benefit costs, a $1.5 million increase in rent expense, a $1.5 million increase in travel and entertainment expenses, a $1.1 million increase in other operating expenses, and a $0.8 million increase in software subscription and data services. These increases were partially offset by a $0.9 million decrease in commissions to our non-employee experts.

Previous wording

As a percentage of revenues, selling, general and administrative expenses decreased to 18.2% for fiscal 2024 from 18.4% for fiscal 2023. Commissions to non-employee experts decreased to 2.1% of revenue in fiscal 2024 compared to 2.2% of revenues in fiscal 2023.

Current wording

As a percentage of revenues, selling, general and administrative expenses decreased to 18.0% for fiscal 2025 from 18.2% for fiscal 2024. Commissions to non-employee experts decreased to 1.8% of revenue in fiscal 2025 compared to 2.1% of revenues in fiscal 2024.

Previous wording

Provision for Income Taxes. For fiscal 2024, our income tax provision was $19.6 million and the effective tax rate ("ETR") was 29.6%, as compared to a provision of $13.8 million and an effective tax rate of 26.4% for fiscal 2023. The ETR for fiscal 2024 was higher than the prior year primarily due to the release of a valuation allowance in a foreign jurisdiction in the prior year that was nonrecurring in the current year, the impact of the jurisdictional mix of earnings, the remeasurement of our current-year deferred tax assets as a result of changes in tax laws, and a decrease in the tax benefit related to share-based compensation. The ETR for fiscal 2024 was higher than our combined federal and state statutory rate primarily due to non-deductible meals and entertainment, non-deductible compensation paid to executive officers, the remeasurement of current year deferred tax assets, partially offset by the tax benefit related to share-based compensation. The ETR for fiscal 2023 was approximately the same as our combined federal and state statutory rate and included offsetting items stemming from the release of a valuation allowance in a foreign jurisdiction and tax benefits related to share-based compensation offset by non-deductible meals, entertainment and compensation paid to executive officers.

Current wording

Provision for Income Taxes. For fiscal 2025, our income tax provision was $21.8 million and the effective tax rate ("ETR") was 28.5%, as compared to a provision of $19.6 million and an effective tax rate of 29.6% for fiscal 2024. The ETR for fiscal 2025 was lower than the prior year primarily due to the impact of state legislative changes in the prior year that was nonrecurring in the current year and the impact of jurisdictional mix of earnings, partially offset by increases in executive compensation and the remeasurement of our current-year deferred tax assets as a result of changes in state apportionment. The ETR for fiscal 2025 was higher than our combined federal and state statutory rate primarily due to non-deductible meals and entertainment, non-deductible compensation paid to executive officers, the remeasurement of current year deferred tax assets, partially offset by the tax benefit related to share-based compensation. The ETR for fiscal 2024 was higher than our combined federal and state statutory rate for the same reason noted for fiscal 2025.

Previous wording

Net Income. Net income increased by $8.2 million to $46.7 million for fiscal 2024 from $38.5 million for fiscal 2023. The diluted net income per share was $6.74 per share for fiscal 2024, compared to diluted net income per share of $5.39 per share for fiscal 2023. Diluted weighted average shares outstanding decreased by approximately 210,000 shares to approximately 6,908,000 shares for fiscal 2024 from approximately 7,118,000 shares for fiscal 2023. The decrease in diluted weighted average shares outstanding was primarily due to the repurchase of shares of our common stock since December 30, 2023, offset in part by the issuance or vesting of shares of restricted stock and time-vesting restricted stock units.

Current wording

Net Income. Net income increased by $8.1 million to $54.8 million for fiscal 2025 from $46.7 million for fiscal 2024. The diluted net income per share was $8.14 per share for fiscal 2025, compared to diluted net income per share of $6.74 per share for fiscal 2024. Diluted weighted average shares outstanding decreased by approximately 194,000 shares to approximately 6,714,000 shares for fiscal 2025 from approximately 6,908,000 shares for fiscal 2024. The decrease in diluted weighted average shares outstanding was primarily due to the repurchase of shares of our common stock since December 28, 2024, offset in part by the issuance or vesting of shares of restricted stock and time-vesting restricted stock units.

Previous wording

We believe that current cash, cash equivalents, cash generated from operations, and amounts available under our revolving credit facility will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months. As of December 28, 2024, we have $26.7 million of cash and cash equivalents and $196.0 million of borrowing capacity under our revolving credit facility.

Current wording

We believe that current cash, cash equivalents, cash generated from operations, and amounts available under our revolving credit facility will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months. As of January 3, 2026, we have $18.2 million of cash and cash equivalents and $162.2 million of borrowing capacity under our revolving credit facility.

Previous wording

General. In fiscal 2024, our cash and cash equivalents decreased by $18.9 million, completing the year with cash and cash equivalents of $26.7 million. The principal drivers of the decrease of cash and cash equivalents were the payment of a significant portion of our fiscal 2023 performance bonuses in the first half of fiscal 2024, forgivable loan advances, purchases of property and equipment, the repurchase and retirement of shares of our common stock throughout the year under our share repurchase program and the payment of dividends.

Current wording

General. In fiscal 2025, our cash and cash equivalents decreased by $8.5 million, completing the year with cash and cash equivalents of $18.2 million. The principal drivers of the decrease of cash and cash equivalents were the payment of a significant portion of our fiscal 2024 performance bonuses in the first half of fiscal 2025, forgivable loan advances, purchases of property and equipment, the repurchase and retirement of shares of our common stock throughout the year under our share repurchase program and the payment of dividends.

Previous wording

At December 28, 2024, $0.4 million of our cash and cash equivalents were held within the U.S. We have sufficient sources of liquidity in the U.S., including cash flow from operations and availability on our revolving credit facility, to fund U.S. operations over the next 12 months without the need to repatriate funds from our foreign subsidiaries.

Current wording

At January 3, 2026, $2.9 million of our cash and cash equivalents were held within the U.S. We have sufficient sources of liquidity in the U.S., including cash flow from operations and availability on our revolving credit facility, to fund U.S. operations over the next 12 months without the need to repatriate funds from our foreign subsidiaries.

Previous wording

Sources and Uses of Cash. During fiscal 2024, net cash provided by operating activities was $49.7 million. Net income was $46.7 million for fiscal 2024. Sources of cash for operating activities included a $23.2 million increase in accounts payable, accrued expenses, and other liabilities and a $9.8 million increase in incentive cash awards payable. Offsetting these sources of cash for operating activities included, a $22.2 million increase in accounts receivable and unbilled receivables, a $14.9 million decrease in lease liabilities, a $11.8 million increase in forgivable loans, (comprised of $42.8 million of forgivable loan issuances, net of repayments, offset by $31.0 million of forgivable loan amortization), and a $10.4 million increase in prepaid expenses and other current assets.

Current wording

Sources and Uses of Cash. During fiscal 2025, net cash provided by operating activities was $22.4 million. Net income was $54.8 million for fiscal 2025. Sources of cash for operating activities included a $15.9 million increase in accounts payable, accrued expenses and other liabilities and a $11.9 million increase in incentive cash awards payable. Offsetting these sources of cash for operating activities included, a $25.7 million increase in accounts receivable and unbilled receivables, a $20.5 million decrease in lease liabilities, a $53.4 million increase in forgivable loans, (comprised of $86.0 million of forgivable loan issuances, net of repayments, offset by $32.6 million of forgivable loan amortization), and a $4.4 million decrease in prepaid expenses and other current assets.

Previous wording

Cash provided by operating activities included the non-cash items of right-of-use asset amortization of $15.1 million, depreciation and amortization expense of $11.7 million, share-based compensation expenses of $5.3 million, and deferred income taxes of $2.9 million.

Current wording

Cash provided by operating activities included the non-cash items of right-of-use asset amortization of $15.4 million, depreciation and amortization expense of $14.1 million, share-based compensation expenses of $5.9 million, and offset by deferred income taxes of $1.7 million.

Previous wording

During fiscal 2024, net cash used in investing activities was $18.1 million, which included capital expenditures primarily related to furniture, leasehold improvements, and funding investments related to our IT infrastructure.

Current wording

During fiscal 2025, net cash used in investing activities was $3.9 million, which included capital expenditures primarily related to furniture and leasehold improvements.

Previous wording

We used $48.8 million of net cash in financing activities during fiscal 2024, primarily as a result of $33.3 million of repurchases of our common stock, payment of $12.3 million of cash dividends and dividend equivalents, and tax withholding payments reimbursed by restricted shares of $3.2 million.

Current wording

We used $29.8 million of net cash in financing activities during fiscal 2025, primarily as a result of $47.1 million of repurchases of our common stock, net borrowings of $34.0 million on our revolving credit facility, $13.8 million of cash dividends and dividend equivalents, and tax withholding payments reimbursed by restricted shares of $2.9 million.

Previous wording

We are a lessee under certain operating leases for office space and equipment, which have remaining lease terms between one and eleven years, many of which include one or more options to extend the term for periods of up to five years for each option. The maturities of lease liabilities, as of December 28, 2024, related to office space and equipment are discussed in Note 4 in our Notes to Consolidated Financial Statements. We have no additional significant operating leases we have committed to that have not yet commenced.

Current wording

We are a lessee under certain operating leases for office space and equipment, which have remaining lease terms between one and nine years, many of which include one or more options to extend the term for periods of up to five years for each option. The maturities of lease liabilities, as of January 3, 2026, related to office space and equipment are discussed in Note 4 in our Notes to Consolidated Financial Statements. We have no additional significant operating leases we have committed to that have not yet commenced.

Previous wording

Certain of our operating leases have terms that impose asset retirement obligations due to office modifications or the periodic redecoration of the premises, which are included in accrued expenses and deferred compensation and other non-current liabilities in our consolidated balance sheets and are recorded at a value based on their estimated discounted cash flows. At December 28, 2024, we expect to incur asset retirement obligation or redecoration obligation costs over the next twelve months of $0.1 million. The remainder of our asset retirement obligations and redecoration obligations are approximately $3.1 million and are expected to be settled between fiscal 2026 and fiscal 2035 when the underlying leases terminate. We expect to satisfy these lease and related obligations, as they become due, from cash generated from operations.

Current wording

Certain of our operating leases have terms that impose asset retirement obligations due to office modifications or the periodic redecoration of the premises, which are included in accrued expenses and deferred compensation and other non-current liabilities in our consolidated balance sheet and are recorded at a value based on their estimated discounted cash flows. At January 3, 2026, we expect to incur asset retirement obligation or redecoration obligation costs over the next twelve months of $0.2 million. The remainder of our asset retirement obligations and redecoration obligations are approximately $3.0 million and are expected to be settled between fiscal 2027 and fiscal 2035 when the underlying leases terminate. We expect to satisfy these lease and related obligations, as they become due, from cash generated from operations.

Previous wording

CRA is party to a Credit Agreement, dated as of August 19, 2022 (as amended, the "Credit Agreement") with Bank of America, N.A., as swingline lender, a letter of credit issuing bank and administrative agent, and with Citizens Bank, N.A., as a letter of credit issuing bank. The Credit Agreement provides us a $250.0 million revolving credit facility, which may be decreased at CRA's option to $200.0 million during the period from July 16 in a year through January 15 in the next year. Additionally, for the period from January 16 to July 15 of each calendar year, CRA may elect to not increase the revolving credit facility to $250.0 million. The revolving credit facility includes a $25.0 million sublimit for the issuance of letters of credit.

Current wording

CRA is party to a Credit Agreement, dated as of August 19, 2022 (as amended, the "Credit Agreement") with Bank of America, N.A., as swingline lender, a letter of credit issuing bank and administrative agent, and with Citizens Bank, N.A., as a letter of credit issuing bank. The Credit Agreement provides CRA with a $250.0 million revolving credit facility, which may be decreased at CRA's option to $200.0 million during the period from July 16 in a year through January 15 in the next year. Additionally, for the period from January 16 to July 15 of each calendar year, CRA may elect to not increase the revolving credit facility to $250.0 million. The revolving credit facility includes a $25.0 million sublimit for the issuance of letters of credit.

Previous wording

Under the Credit Agreement, we must comply with various financial and non-financial covenants. The primary financial covenants consist of a maximum consolidated net leverage ratio and a minimum consolidated interest coverage ratio. The primary non-financial covenants include, but are not limited to, restrictions on our ability to incur future indebtedness, engage in acquisitions or dispositions, pay dividends or repurchase capital stock, and enter into business combinations. Any indebtedness outstanding under the revolving credit facility may become immediately due upon the occurrence of stated events of default, including our failure to pay principal, interest or fees, or upon the breach of any covenant. As of December 28, 2024, we were in compliance with the covenants of the Credit Agreement.

Current wording

Under the Credit Agreement, we must comply with various financial and non-financial covenants. The primary financial covenants consist of a maximum consolidated net leverage ratio of 3.0 to 1.0 and a minimum consolidated interest coverage ratio of 2.5 to 1.0. The primary non-financial covenants include, but are not limited to, restrictions on our ability to incur future indebtedness, engage in acquisitions or dispositions, pay dividends or repurchase capital stock, and enter into business combinations. Any indebtedness outstanding under the revolving credit facility may become immediately due upon the occurrence of stated events of default, including our failure to pay principal, interest or fees, or upon the breach of any covenant. As of January 3, 2026, we were in compliance with the covenants of the Credit Agreement.

Previous wording

There were no borrowings outstanding under the revolving credit facility as of December 28, 2024. As of December 28, 2024, the amount available under the revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $4.0 million.

Current wording

There was $34.0 million in borrowings outstanding under the revolving credit facility as of January 3, 2026. As of January 3, 2026, the amount available under the revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $3.8 million. CRA has chosen to classify the revolving credit facility as a current liability in its consolidated balance sheet, as CRA has the intent to repay the amount within 12 months after the balance sheet date.

Previous wording

In order to attract and retain highly skilled professionals, we may issue forgivable loans or term loans to employees and non-employee experts. A portion of these loans is collateralized by key person life insurance. The forgivable loans have terms that are generally between two and six years. The principal amount of forgivable loans and accrued interest is forgiven by us over the term of the loans, so long as the employee or non-employee expert continues employment or affiliation with us and complies with certain contractual requirements. The forgiveness of the principal amount of the loans is recorded as compensation over the service period, which is consistent with the term of the loans.

Current wording

In order to attract and retain highly skilled professionals, we may issue forgivable loans or term loans to employees and non-employee experts. A portion of these loans is collateralized by key person life insurance. The forgivable loans have terms that are generally between two and eight years. The principal amount of forgivable loans and accrued interest is forgiven by us over the term of the loans, so long as the employee or non-employee expert continues employment or affiliation with us and complies with certain contractual requirements. The forgiveness of the principal amount of the loans is recorded as compensation over the service period, which is consistent with the term of the loans.

Previous wording

Our Amended and Restated 2006 Equity Incentive Plan, as amended (the "2006 Equity Plan"), authorizes the grant of a variety of incentive and performance equity awards to our directors, employees and non-employee experts, including stock options, shares of restricted stock, restricted stock units, and other equity awards.

Current wording

Our 2006 Equity Plan, authorizes the grant of a variety of incentive and performance equity awards to our directors, employees and non-employee experts, including stock options, shares of restricted stock, restricted stock units, and other equity awards.

Previous wording

Our long-term incentive program, or "LTIP," as a framework for equity grants made under our 2006 equity incentive plan to our senior corporate leaders, practice leaders, and key revenue generators. The equity awards granted under the LTIP include stock options, time-vesting restricted stock units, and performance-vesting restricted stock units.

Current wording

Our long-term incentive program LTIP serves as a framework for equity grants made under our 2006 Equity Plan to our senior corporate leaders, practice leaders, and key revenue generators. The equity awards granted under the LTIP include stock options, time-vesting restricted stock units, and performance-vesting restricted stock units.

Previous wording

Our LTIP allows us to grant service and performance-based cash awards in lieu of, or in addition to, equity awards to our senior corporate leaders, practice leaders, and key revenue generators. The compensation committee of our Board of Directors is responsible for approving all cash and equity awards under the LTIP. Under our cash incentive plan, we expect to pay LTIP cash awards of approximately $10.1 million over the next twelve months and $22.8 million between fiscal 2026 and fiscal 2029. We expect to fund any cash payments from existing cash resources, cash generated from operations, or borrowings on our revolving credit facility.

Current wording

Our LTIP also allows us to grant service and performance-based cash awards in lieu of, or in addition to, equity awards to our senior corporate leaders, practice leaders, and key revenue generators. The compensation committee of our Board of Directors is responsible for approving all cash and equity awards under the LTIP. Under our cash incentive plan, we expect to pay LTIP cash awards of approximately $12.0 million over the next twelve months and $26.7 million between fiscal 2027 and fiscal 2030. We expect to fund any cash payments from existing cash resources, cash generated from operations, or borrowings on our revolving credit facility.

Previous wording

In February 2025 and February 2024, our Board of Directors authorized an expansion to our existing share repurchase program, authorizing the purchase of an additional $45.0 million and $35.0 million, respectively, of our common stock. We may repurchase shares under this program in open market purchases (including through any Rule 10b5-1 plan adopted by us) or in privately negotiated transactions in accordance with applicable insider trading and other securities laws and regulations.

Current wording

In February 2026 and February 2025, our Board of Directors authorized an expansion to our existing share repurchase program, authorizing the purchase of an additional $55.0 million and $45.0 million, respectively, of our common stock. The program has no expiration date. We may repurchase shares under this program in open market purchases (including through any Rule 10b5-1 plan adopted by us) or in privately negotiated transactions in accordance with applicable insider trading and other securities laws and regulations.

Previous wording

During fiscal 2024, fiscal 2023, and fiscal 2022, we repurchased and retired 206,379 shares, 296,158 shares, and 319,534 shares, respectively, under our share repurchase program at an average price per share of $161.59, $106.08, and $86.47, respectively. We had approximately $13.1 million and $58.1 million available for future repurchases under our share repurchase program as of December 28, 2024 and February 20, 2025, respectively. We plan to finance future repurchases with available cash, cash from future operations and funds from our revolving credit facility. We expect to continue to repurchase shares under our share repurchase program.

Current wording

During fiscal 2025, fiscal 2024, and fiscal 2023, we repurchased and retired 252,205 shares, 206,379 shares, and 296,158 shares, respectively, under our share repurchase program at an average price per share of $186.95, $161.59, and $106.08, respectively. We had approximately $10.9 million and $65.9 million available for future repurchases under our share repurchase program as of January 3, 2026 and February 26, 2026, respectively. We plan to finance future repurchases with available cash, cash from future operations and funds from our revolving credit facility. We expect to continue to repurchase shares under our share repurchase program.

Previous wording

We anticipate paying regular quarterly dividends each year. These dividends are anticipated to be funded through cash flow from operations, available cash on hand, and/or borrowings under our revolving credit facility. Although we anticipate paying regular quarterly dividends on our common stock for the foreseeable future, the declaration, timing and amounts of any such dividends remain subject to the discretion of our Board of Directors. During the fiscal years ended December 28, 2024, December 30, 2023, and December 31, 2022, we paid dividends of $12.3 million, $10.8 million, and $9.6 million, respectively.

Current wording

We anticipate paying regular quarterly dividends each year. These dividends are anticipated to be funded through cash flow from operations, available cash on hand, and/or borrowings under our revolving credit facility. Although we anticipate paying regular quarterly dividends on our common stock for the foreseeable future, the declaration, timing and amounts of any such dividends remain subject to the discretion of our Board of Directors. During the fiscal years ended January 3, 2026, December 28, 2024, and December 30, 2023, we paid dividends of $13.8 million, $12.3 million, and $10.8 million, respectively.