News Release Details

BOSTON--(BUSINESS WIRE)--Sept. 26, 2001--Charles River Associates Incorporated (Nasdaq: CRAI), a leading provider of economic, financial, and business strategy consulting, today reported financial results for the third fiscal quarter ended August 31, 2001.

Revenues for the third quarter increased 46 percent to a record $34.9 million, compared with revenues of $24.0 million for the third quarter of fiscal 2000. Net income for the third quarter of fiscal 2001 was $2.4 million, or $0.26 per share on a diluted basis, compared with net income of $2.9 million, or $0.34 per share on a diluted basis, for the third quarter a year earlier. CRA's third quarter consists of 16 weeks; its other three quarters consist of 12 weeks each.

Comments on the Third Quarter

"Strong performance in all of our practice groups produced the best top-line results in the Company's history," said James C. Burrows, CRA's president and CEO. "In addition, we saw a sequential improvement in margins this year as we began to realize growing benefits from the initiatives we have undertaken over the past year."

"During the third quarter we continued to execute our strategy to aggressively recruit leading experts in their respective fields to strengthen our cadre of professional staff," continued Burrows. "In the PA Consulting transaction we announced in August, we acquired certain individuals with specific and valuable expertise in utility and regulatory consulting. In addition, we resumed our hiring efforts at the junior level to support the growth of many of CRA's practice areas, bringing our total billable headcount at quarter end to 275."

CRA's NeuCo subsidiary also posted a strong third quarter, with record revenue of nearly $2.0 million.

Year-to-Date Results

Revenues increased 29 percent to $80.6 million during the first three quarters of fiscal 2001, from $62.7 million during the same period in the previous year. Net income for the first three quarters of fiscal 2001 was $5.5 million, or $0.60 per share on diluted basis, compared with net income of $8.0 million, or $0.91 per share on a diluted basis, for the prior year.

To listen to a live audio Webcast of CRA's third-quarter fiscal 2001 financial results conference call, visit the Company's Web page at www.crai.com. The conference call begins at 10:00 a.m. ET today.

About CRA

Founded in 1965, CRA, an economics, finance, and business consulting firm, works with businesses, law firms, accounting firms, and governments, in providing a wide range of services. CRA combines economic and financial analysis with expertise in litigation and regulatory support, business strategy and planning, market and demand forecasting, policy analysis, and engineering and technology management. In thousands of engagements, CRA has distinguished itself by its corporate philosophy of providing responsive, top-quality consulting; an interdisciplinary team approach; unsurpassed economic, financial, and other analytic skills; and pragmatic business insights. In addition to its corporate headquarters in Boston and international offices in London, Melbourne, Mexico City, Toronto, and Wellington, CRA also has U.S. offices in Berkeley/Oakland, College Station, Los Angeles, Palo Alto, Salt Lake City, and Washington, D.C. More information about the Company can be found on its Web site at www.crai.com.

Statements in this press release concerning the future business, operating results, and financial condition of the Company and statements using the terms "anticipates," "believes," "expects," "should," or similar expressions, are "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements are based upon management's current expectations and are subject to a number of factors and uncertainties. Information contained in these forward-looking statements is inherently uncertain and actual performance and results may differ materially due to many important factors. Such factors that could cause actual results to differ materially from any forward-looking statements made by the Company include, among others, dependence on key personnel, attracting and retaining qualified consultants, dependence on outside experts, utilization rates, risks inherent in international operations, NeuCo's performance, management of new offices, dependence on growth of the Company's business consulting practice, the ability of the Company to successfully integrate new consultants into its practice, intense competition, and professional liability. Further information on these and other potential factors that could affect the Company's financial results is included in the Company's filings with the Securities and Exchange Commission. The Company cannot guarantee any future results, levels of activity, performance or achievement. The Company undertakes no obligation to update any of its forward-looking statements after the date of this press release.

The consolidated statements of income and consolidated balance sheets are attached.

                 Charles River Associates Incorporated
                   Consolidated Statements of Income
            (In thousands, except share and per share data)


                         Sixteen Weeks Ended     Forty Weeks Ended

                     September 1,  August 31, September 1, August 31,
                         2000         2001       2000         2001

Revenues             $    23,953 $    34,914 $   62,667    $   80,625

Costs of services         13,056      20,926     34,709        48,117
Gross profit              10,897      13,988     27,958        32,508

General and
 administrative            6,621       9,809     15,807        23,707
Income from
 operations                4,276       4,179     12,151         8,801

Interest income, net         538         308      1,177           923
Income before
 provision for
 income taxes              4,814       4,487     13,328         9,724
 and minority
 interest

Provision for
 income taxes             (1,987)     (1,894)    (5,502)       (4,104)
Income before
 minority interest         2,827       2,593      7,826         5,620

Minority interest            117        (186)       163           (96)
Net income           $     2,944 $     2,407 $    7,989    $    5,524

Net income per
share:
                     $      0.34 $      0.26 $     0.92    $     0.61
Basic
Diluted              $      0.34 $      0.26 $     0.91    $     0.60

Weighted average
 number of shares
 outstanding:
Basic                  8,685,661   9,107,529  8,685,235     9,106,611
Diluted                8,685,661   9,286,514  8,743,730     9,181,589



                 Charles River Associates Incorporated
                      Consolidated Balance Sheets
                   (In thousands, except share data)
                                           November 25,   August 31,
                                               2000        2001
Assets
Current assets:
Cash and cash equivalents                   $ 20,305    $ 19,901
Available-for-sale securities                  5,758       4,382
Accounts receivable, net of
 allowances of $1,321
 in 2000 and $1,203 in
 2001 for doubtful accounts                   18,338      20,880
Unbilled services                             11,162      14,446
Refundable income taxes                          419         344
Prepaid expenses                                 602         763
Deferred income taxes                            636         636

Total current assets                          57,220      61,352

Property and equipment, net                    5,942       7,031
Goodwill, net of
 accumulated amortization
 of $1,089 in 2000 and
 $1,763 in 2001                               14,845      18,075
Intangible assets, net
 of accumulated amortization
 of $337 in 2000 and $505 in 2001              1,170       1,109
Other assets                                   1,103       3,484
Total assets                                $ 80,280    $ 91,051

Liabilities and stockholders' equity 
Current liabilities:
Accounts payable                            $  3,978    $  4,754
Accrued expenses                              10,113      10,820
Deferred revenue and
 other liabilities                               105         125
Current portion of notes
 payable to former stockholders                  177         103
Current portion of notes payable                --         2,350

Total current liabilities                     14,373      18,152

Notes payable to former
 stockholders, net of
 current portion                                 102        --
Notes payable, net of
 current portion                                --         1,220

Deferred rent                                  1,640       1,544
Minority interest                              1,827       1,923

Commitments and contingencies

Stockholders' equity:
Preferred stock, no par
 value; 1,000,000 shares
 authorized; none issued
 and outstanding                                --          --
Common stock, no par value;
 25,000,000 shares
 authorized; 9,091,523
 shares in 2000 and
 9,107,529 shares in 2001
 issued and outstanding                       45,737      45,992
Receivable from stockholder                   (4,500)     (4,500)
Deferred compensation                           (112)       (111)
Retained earnings                             21,362      26,886
Foreign currency translation                    (149)        (55)

Total stockholders' equity                    62,338      68,212
Total liabilities and
 stockholders' equity                       $ 80,280    $ 91,051