0001053706-22-000022 | 10-Q | XBRL Viewer

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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jul. 02, 2022	Jul. 29, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 02, 2022
Document Transition Report	false
Entity File Number	000-24049
Entity Registrant Name	CRA International, Inc.
Entity Incorporation, State or Country Code	MA
Entity Tax Identification Number	04-2372210
Entity Address, Address Line One	200 Clarendon Street
Entity Address, City or Town	Boston
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02116-5092
City Area Code	617
Local Phone Number	425-3000
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	CRAI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,166,227
Entity Central Index Key	0001053706
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Income Statement [Abstract]
Revenues	$ 149,102	$ 148,237	$ 297,484	$ 294,755
Costs of services (exclusive of depreciation and amortization)	103,076	105,042	207,136	210,416
Selling, general and administrative expenses	27,963	24,043	53,780	47,250
Depreciation and amortization	3,050	3,215	6,026	6,516
Income from operations	15,013	15,937	30,542	30,573
Interest expense, net	(468)	(409)	(676)	(608)
Foreign currency gains (losses), net	1,700	63	1,899	(488)
Income before provision for income taxes	16,245	15,591	31,765	29,477
Provision for income taxes	4,602	4,025	8,696	7,410
Net income	$ 11,643	$ 11,566	$ 23,069	$ 22,067
Net income per share:
Basic (in dollars per share)	$ 1.60	$ 1.57	$ 3.15	$ 2.94
Diluted (in dollars per share)	$ 1.57	$ 1.53	$ 3.09	$ 2.86
Weighted average number of shares outstanding:
Basic (in shares)	7,263	7,320	7,311	7,473
Diluted (in shares)	7,380	7,539	7,442	7,685

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Statement of Comprehensive Income [Abstract]
Net income	$ 11,643	$ 11,566	$ 23,069	$ 22,067
Other comprehensive income (loss)
Foreign currency translation adjustments, net of tax	(3,860)	(136)	(5,032)	(247)
Comprehensive income	$ 7,783	$ 11,430	$ 18,037	$ 21,820

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands	Jul. 02, 2022	Jan. 01, 2022
Current assets:
Cash and cash equivalents	$ 15,621	$ 66,130
Accounts receivable, net of allowances of $3,282 and $3,256, respectively	131,339	116,962
Unbilled services, net of allowances of $1,388 and $1,364, respectively	68,376	45,095
Prepaid expenses and other current assets	13,456	10,589
Forgivable loans	11,731	10,571
Total current assets	240,523	249,347
Property and equipment, net	49,294	53,612
Goodwill	89,963	88,936
Intangible assets, net	7,777	4,181
Right-of-use assets	103,284	110,475
Deferred income taxes	9,471	9,319
Forgivable loans, net of current portion	45,095	38,020
Other assets	1,626	1,470
Total assets	547,033	555,360
Current liabilities:
Accounts payable	25,082	23,511
Accrued expenses	102,081	156,314
Deferred revenue and other liabilities	6,851	12,821
Current portion of lease liabilities	15,207	14,337
Current portion of deferred compensation	2,674	6,103
Revolving line of credit	70,000	0
Total current liabilities	221,895	213,086
Non-current liabilities:
Deferred compensation and other non-current liabilities	11,426	10,947
Non-current portion of lease liabilities	114,806	124,464
Deferred income taxes	920	1,029
Total non-current liabilities	127,152	136,440
Commitments and contingencies (Note 11)
Shareholders’ equity:
Preferred stock, no par value; 1,000,000 shares authorized; none issued and outstanding	0	0
Common stock, no par value; 25,000,000 shares authorized; 7,131,349 and 7,362,703 shares issued and outstanding, respectively	0	0
Retained earnings	212,968	215,784
Accumulated other comprehensive loss	(14,982)	(9,950)
Total shareholders’ equity	197,986	205,834
Total liabilities and shareholders’ equity	$ 547,033	$ 555,360

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Thousands	Jul. 02, 2022	Jan. 01, 2022
Statement of Financial Position [Abstract]
Allowance for accounts receivable	$ 3,282	$ 3,256
Allowance for unbilled services	$ 1,388	$ 1,364
Preferred stock, par value (in dollars per share)	$ 0	$ 0
Preferred stock, shares authorized (shares)	1,000,000	1,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0
Common stock, par value ( in dollars per share )	$ 0	$ 0
Common stock, shares authorized (shares)	25,000,000	25,000,000
Common stock, shares issued (shares)	7,131,349	7,362,703
Common stock, shares outstanding (shares)	7,131,349	7,362,703

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021
OPERATING ACTIVITIES:
Net income	$ 23,069	$ 22,067
Adjustments to reconcile net income to net cash used in operating activities, net of effect of acquired business:
Depreciation and amortization	6,026	6,516
Right-of-use asset amortization	6,825	6,437
Deferred income taxes	(165)	(1,203)
Share-based compensation expense	2,078	1,822
Bad debt expense (recovery)	(262)	(11)
Unrealized foreign currency remeasurement (gains) losses, net	(309)	(160)
Changes in operating assets and liabilities:
Accounts receivable	(13,435)	(1,373)
Unbilled services	(23,114)	(19,913)
Prepaid expenses and other current assets, and other assets	(1,572)	(4,061)
Forgivable loans	(9,992)	8,133
Incentive cash awards	3,271	3,329
Accounts payable, accrued expenses, and other liabilities	(63,093)	(50,181)
Lease liabilities	(8,139)	(7,625)
Net cash used in operating activities	(78,812)	(36,223)
INVESTING ACTIVITIES:
Purchases of property and equipment	(2,067)	(1,170)
Consideration paid for acquisition, net	(10,185)	0
Net cash used in investing activities	(12,252)	(1,170)
FINANCING ACTIVITIES:
Issuance of common stock, principally stock option exercises	341	2,500
Borrowings under revolving line of credit	70,000	70,000
Repayments under revolving line of credit	0	(25,000)
Tax withholding payments reimbursed by shares	(975)	(588)
Cash paid for contingent consideration	0	(2,357)
Cash dividends paid	(4,636)	(3,970)
Repurchase of common stock	(22,630)	(34,977)
Net cash provided by financing activities	42,100	5,608
Effect of foreign exchange rates on cash and cash equivalents	(1,545)	85
Net decrease in cash and cash equivalents	(50,509)	(31,700)
Cash and cash equivalents at beginning of period	66,130	45,677
Cash and cash equivalents at end of period	15,621	13,977
Noncash investing and financing activities:
Increase (decrease) in accounts payable and accrued expenses for property and equipment	(184)	(124)
Right-of-use assets obtained in exchange for lease obligations	2,020	1,070
Restricted common stock issued for contingent consideration	0	2,250
Supplemental cash flow information:
Cash paid for taxes	7,532	10,494
Cash paid for interest	452	379
Cash paid for amounts included in operating lease liabilities	$ 10,584	$ 10,325

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands	Total	Common Stock	Retained Earnings	Accumulated Other Comprehensive Loss
Beginning balance at Jan. 02, 2021	$ 209,019	$ 503	$ 216,999	$ (8,483)
Beginning balance (in shares) at Jan. 02, 2021		7,693,497
Increase (Decrease) in Shareholders' Equity
Net income	10,501		10,501
Foreign currency translation adjustment	(111)			(111)
Issuance of restricted common stock for contingent consideration	2,250	$ 2,250
Issuance of restricted common stock for contingent consideration (in shares)		40,039
Exercise of stock options	1,113	$ 1,113
Exercise of stock options (in shares)		41,008
Share-based compensation expense	842	$ 842
Restricted shares vesting (in shares)		29,494
Redemption of vested employee restricted shares for tax withholding	(588)	$ (588)
Redemption of vested employee restricted shares for tax withholding (in shares)		(9,895)
Shares repurchased	(9,642)	$ (4,120)	(5,522)
Shares repurchased (in shares)		(166,552)
Accrued dividends on unvested shares	5		5
Cash dividends paid (per share)	(2,061)		(2,061)
Ending balance at Apr. 03, 2021	211,328	$ 0	219,922	(8,594)
Ending balance (in shares) at Apr. 03, 2021		7,627,591
Beginning balance at Jan. 02, 2021	209,019	$ 503	216,999	(8,483)
Beginning balance (in shares) at Jan. 02, 2021		7,693,497
Increase (Decrease) in Shareholders' Equity
Net income	22,067
Foreign currency translation adjustment	(247)
Issuance of restricted common stock for contingent consideration	2,250
Ending balance at Jul. 03, 2021	197,831	$ 1,985	204,576	(8,730)
Ending balance (in shares) at Jul. 03, 2021		7,339,322
Beginning balance at Apr. 03, 2021	211,328	$ 0	219,922	(8,594)
Beginning balance (in shares) at Apr. 03, 2021		7,627,591
Increase (Decrease) in Shareholders' Equity
Net income	11,566		11,566
Foreign currency translation adjustment	(136)			(136)
Exercise of stock options	1,387	$ 1,387
Exercise of stock options (in shares)		48,562
Share-based compensation expense	980	$ 980
Restricted shares vesting (in shares)		1,006
Shares repurchased	(25,335)	$ (382)	(24,953)
Shares repurchased (in shares)		(337,837)
Accrued dividends on unvested shares	(50)		(50)
Cash dividends paid (per share)	(1,909)		(1,909)
Ending balance at Jul. 03, 2021	197,831	$ 1,985	204,576	(8,730)
Ending balance (in shares) at Jul. 03, 2021		7,339,322
Beginning balance at Jan. 01, 2022	$ 205,834	$ 0	215,784	(9,950)
Beginning balance (in shares) at Jan. 01, 2022	7,362,703	7,362,703
Increase (Decrease) in Shareholders' Equity
Net income	$ 11,426		11,426
Foreign currency translation adjustment	(1,172)			(1,172)
Exercise of stock options	341	$ 341
Exercise of stock options (in shares)		14,552
Share-based compensation expense	1,037	$ 1,037
Restricted shares vesting (in shares)		29,558
Redemption of vested employee restricted shares for tax withholding	(897)	$ (897)
Redemption of vested employee restricted shares for tax withholding (in shares)		(10,163)
Shares repurchased	(4,956)	$ (481)	(4,475)
Shares repurchased (in shares)		(56,665)
Accrued dividends on unvested shares	(11)		(11)
Cash dividends paid (per share)	(2,377)		(2,377)
Ending balance at Apr. 02, 2022	209,225	$ 0	220,347	(11,122)
Ending balance (in shares) at Apr. 02, 2022		7,339,985
Beginning balance at Jan. 01, 2022	$ 205,834	$ 0	215,784	(9,950)
Beginning balance (in shares) at Jan. 01, 2022	7,362,703	7,362,703
Increase (Decrease) in Shareholders' Equity
Net income	$ 23,069
Foreign currency translation adjustment	(5,032)
Issuance of restricted common stock for contingent consideration	0
Ending balance at Jul. 02, 2022	$ 197,986	$ 0	212,968	(14,982)
Ending balance (in shares) at Jul. 02, 2022	7,131,349	7,131,349
Beginning balance at Apr. 02, 2022	$ 209,225	$ 0	220,347	(11,122)
Beginning balance (in shares) at Apr. 02, 2022		7,339,985
Increase (Decrease) in Shareholders' Equity
Net income	11,643		11,643
Foreign currency translation adjustment	(3,860)			(3,860)
Share-based compensation expense	1,041	$ 1,041
Restricted shares vesting (in shares)		3,630
Redemption of vested employee restricted shares for tax withholding	(78)	$ (78)
Redemption of vested employee restricted shares for tax withholding (in shares)		(921)
Shares repurchased	(17,674)	$ (963)	(16,711)
Shares repurchased (in shares)		(211,345)
Accrued dividends on unvested shares	(52)		(52)
Cash dividends paid (per share)	(2,259)		(2,259)
Ending balance at Jul. 02, 2022	$ 197,986	$ 0	$ 212,968	$ (14,982)
Ending balance (in shares) at Jul. 02, 2022	7,131,349	7,131,349

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Jul. 02, 2022	Apr. 02, 2022	Jul. 03, 2021	Apr. 03, 2021
Statement of Stockholders' Equity [Abstract]
Cash dividends paid to shareholders (in dollars per share)	$ 0.31	$ 0.31	$ 0.26	$ 0.26

Summary of Significant Accounting Policies	6 Months Ended
Summary of Significant Accounting Policies	Jul. 02, 2022
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies Description of Business CRA International, Inc. (“CRA” or the “Company”) is a worldwide leading consulting services firm that applies advanced analytic techniques and in-depth industry knowledge to complex engagements for a broad range of clients. CRA offers services in two broad areas: litigation, regulatory, and financial consulting and management consulting. CRA operates in one business segment. CRA operates its business under its registered trade name, Charles River Associates. Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of CRA International, Inc. and its wholly-owned subsidiaries (collectively the “Company”), which require consolidation after the elimination of intercompany accounts and transactions. These financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for Quarterly Reports on Form 10-Q. Accordingly, these financial statements do not include all the information and note disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for annual financial statements. In the opinion of management, these financial statements reflect all adjustments of a normal, recurring nature necessary for the fair presentation of CRA’s results of operations, financial position, cash flows, and shareholders’ equity for the interim periods presented in conformity with GAAP. Results of operations for the interim periods presented herein are not necessarily indicative of results of operations for a full year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended January 1, 2022 included in CRA’s Annual Report on Form 10-K filed with the SEC on March 3, 2022 (the “2021 Form 10-K”). Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported results of operations, financial position, or cash flows. Estimates The preparation of financial statements in conformity with GAAP requires management to make significant estimates and judgments that affect the reported amounts of assets and liabilities, as well as the related disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of consolidated revenues and expenses during the reporting period. Estimates in these condensed consolidated financial statements include, but are not limited to, allowances for accounts receivable and unbilled services, revenue recognition on fixed-price contracts, variable consideration to be included in the transaction price of revenue contracts, the useful life of long-lived assets, measurement of operating lease right-of-use (“ROU”) assets and liabilities, share-based compensation, valuation of acquired intangible assets, goodwill, accrued and deferred income taxes, valuation allowances on deferred tax assets, accrued incentive compensation, and certain other accrued expenses. These items are monitored and analyzed by CRA 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. CRA bases its estimates on historical experience and various other assumptions that CRA believes to be reasonable under the circumstances. Actual results may differ from those estimates if CRA’s assumptions based on past experience or other assumptions do not turn out to be substantially accurate. Business Combinations CRA accounts for business acquisitions using the acquisition method of accounting, which requires assets acquired and liabilities assumed to be measured and recorded at their estimated fair values as of the acquisition date, with certain exceptions. The purchase price is determined as the fair value of consideration transferred. Goodwill is recognized for the excess of consideration transferred over the net value of assets acquired and liabilities assumed. The operating results of each acquired company is included in CRA's consolidated financial statements beginning on the date of acquisition. Fair value measurements require extensive use of estimates and assumptions, including estimates of future cash flows to be generated by the acquired assets. The useful lives of identifiable intangible assets acquired in a business acquisition are estimated based on the expected period that the Company will receive substantially all projected future benefits from the intangible asset. Transaction expenses directly related to acquisitions are expensed as incurred and are included in selling, general and administrative expenses on the condensed consolidated statements of operations. Recent Accounting Standards Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In October 2021, the FASB issued Accounting Standards Update ("ASU") No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). The ASU requires that an acquirer recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers ("ASC 606") at the acquisition date as if the acquirer had originated the contracts rather than adjust them to fair value. CRA elected to early adopt ASU 2021-08 on the first day of fiscal 2022. The adoption of the new standard had no impact on CRA's financial position, results of operations, cash flows, or disclosures on the date of transition.

Business Acquisition

6 Months Ended

Jul. 02, 2022

Business Combination and Asset Acquisition [Abstract]

Business Acquisition

On February 28, 2022, CRA acquired substantially all business assets and assumed certain liabilities of Welch Consulting, Ltd. (“Welch Consulting”), a Texas limited partnership. Welch Consulting provided economic, business, and strategic consulting services principally involving labor and employment issues. The acquisition expands CRA’s business opportunities, expertise, and market presence with the addition of 45 colleagues and offices in Bryan, Texas; Los Angeles, California; and Washington, D.C. A non-employee expert of CRA served as an agent and attorney-in-fact on behalf of Welch Consulting. The non-employee expert did not and will not receive compensation or a portion of the purchase price as part of the transaction.

The acquisition has been accounted for as a business combination, and the results of operations have been included in the accompanying condensed consolidated financial statements from the date of acquisition. On the date of acquisition, right-of-use assets and lease liabilities were recorded in accordance with ASC Topic 842, Leases. In addition, contract assets and contract liabilities were recorded in accordance with ASC 606, as CRA adopted ASU 2021-08 on the first day of fiscal 2022. All other tangible assets and identifiable intangible assets acquired and liabilities assumed were recorded at their fair value as of the date of acquisition.

The current values of assets acquired and liabilities assumed are preliminary and based on the best available information. Certain items, such as the working capital adjustments, intangible assets, and goodwill, may be subject to change as additional information is received. The allocation of the purchase price will be finalized as soon as practicable, but not later than one year from the date of acquisition. The final purchase price allocation may be different from the preliminary estimate reported as CRA receives additional information and completes its analysis of transaction-related activities, the impact of which is not expected to be material to CRA’s results of operations for fiscal 2022. The following table presents the preliminary assets acquired and liabilities assumed as of July 2, 2022 (in thousands):


Assets Acquired
Current assets:
Accounts receivable	$	3,778
Unbilled services	1,507
Prepaid expenses and other current assets	100
Total current assets	5,385
Property and equipment	141
Goodwill	2,409
Intangible assets	4,150
Right-of-use assets	1,210
Other assets	41
Total assets acquired	$	13,336

Liabilities Assumed
Current liabilities:
Accrued expenses	$	1,280
Deferred revenue and other liabilities	161
Current portion of lease liabilities	549
Total current liabilities	1,990
Non-current portion of lease liabilities	661
Total liabilities assumed	$	2,651
Net assets acquired	$	10,685

For the acquired assets and assumed liabilities, CRA has paid $10.2 million, net, as of July 2, 2022, the amount of which was based on adjusted estimates of certain net working capital items. Additional adjustments to the purchase consideration may be due to or from Welch Consulting. Per the terms of the Asset Purchase Agreement, $0.5 million was withheld from the closing payment and will be paid to Welch Consulting within one year of the date of acquisition, subject to the satisfaction of certain assurances provided by Welch Consulting. In addition, CRA issued $7.9 million of forgivable loans and agreed to provide other deferred compensation to key employees and a non-employee expert, which will be treated as post-transaction compensation expense as incurred.

The intangible assets acquired are comprised of customer relationships, the fair value of which was determined using a multi-period excess earning method. The customer relationships intangible is being amortized over a ten-year life on a straight-line basis, which approximates the expected pattern of economic benefit from this asset. The Company also recorded $2.4 million of goodwill, all of which is expected to be deductible for tax purposes.

Transaction related expenses, which are principally legal and accounting service fees, amounted to $0.2 million for the fiscal year-to-date period ended July 2, 2022 and are included in selling, general and administrative expenses on the condensed consolidated statements of operations.

Fair Value of Financial Instruments

6 Months Ended

Jul. 02, 2022

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

As of July 2, 2022 and January 1, 2022, CRA did not have any financial instruments measured at fair value on a recurring basis.

The contingent consideration liability pertained to estimated future contingent consideration payments related to the acquisition of C1 Consulting, LLC, an independent consulting firm, and its wholly-owned subsidiary C1 Associates. CRA had no contingent consideration obligation during the fiscal year-to-date period ended July 2, 2022. CRA paid the contingent consideration liability in the second quarter of fiscal 2021. The following table summarizes the changes in the contingent consideration liability for the fiscal year ended January 1, 2022 (in thousands):


	Fiscal Year Ended
	January 1, 2022
Beginning balance	$	14,620
Accretion	380
Payment of contingent consideration	(15,000)
Ending balance	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Revenue Recognition

6 Months Ended

Jul. 02, 2022

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenues and AllowancesThe contracts CRA enters into and operates under specify whether the projects are billed on a time-and-materials or a fixed-price basis. Time-and-materials contracts are typically used for litigation, regulatory, and financial consulting projects while fixed-price contracts are principally used for management consulting projects. In general, project costs are classified in

costs of services and are based on the direct salary of CRA’s employee consultants on the engagement, plus all direct expenses incurred to complete the project, including any amounts billed to CRA by its non-employee experts.

Disaggregation of Revenue

The following tables disaggregate CRA’s revenue by type of contract and geographic location (in thousands):


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
Type of Contract	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Consulting services revenues:
Fixed-price	$	27,541	$	36,245	$	56,314	$	69,678
Time-and-materials	121,561		111,992		241,170		225,077
Total	$	149,102	$	148,237	$	297,484	$	294,755


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
Geographic Breakdown	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Consulting services revenues:
United States	$	120,168	$	120,810	$	237,087	$	238,057
United Kingdom	20,843		19,740		43,253		43,026
Other	8,091		7,687		17,144		13,672
Total	$	149,102	$	148,237	$	297,484	$	294,755

Reserves for Variable Consideration and Credit Risk

Revenues from CRA's consulting services are recorded at the net transaction price, which includes estimates of variable consideration for which reserves are established. Variable consideration reserves are based on specific price concessions and those expected to be extended to CRA customers estimated by CRA's historical realization rates. Reserves for variable consideration are recorded as a component of the allowances for accounts receivable and unbilled services on the condensed consolidated balance sheets. Adjustments to the reserves for variable consideration are included in revenues on the condensed consolidated statements of operations.

CRA also maintains allowances for accounts receivable and unbilled services for estimated losses resulting from clients’ failure to make required payments. The following table presents CRA's bad debt expense, net of recoveries of previously written off allowances (in thousands):


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Bad debt expense (recovery), net	$	(141)	$	2	$	(262)	$	(11)

Reimbursable Expenses

Revenues also include reimbursements for costs incurred by CRA in fulfilling its performance obligations, including travel and other out-of-pocket expenses, fees for outside consultants, and other reimbursable expenses. CRA recovers substantially all of these costs. The following expenses are subject to reimbursement (in thousands):


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Reimbursable expenses	$	16,441	$	17,176	$	32,645	$	33,655

Contract Balances from Contracts with Customers

CRA defines contract assets as assets for which it has recorded revenue because it determines that it is probable that it will earn a performance-based or contingent fee, but is not yet entitled to receive a fee because certain events, such as completion of the measurement period or client approval, must occur. The contract assets balance was immaterial as of July 2, 2022 and January 1, 2022.

When consideration is received, or such consideration is unconditionally due from a customer prior to transferring consulting services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after performance obligations have been satisfied and all revenue recognition criteria have been met. The following table presents the closing balances of CRA's contract liabilities (in thousands):


	July 2, 2022		January 1, 2022
Contract liabilities	$	2,634	$	8,811

CRA recognized the following revenue that was included in the contract liabilities balance as of the opening of the respective period or for performance obligations satisfied in previous periods (in thousands):


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Amounts included in contract liabilities at the beginning of the period	$	3,331	$	2,220	$	7,656	$	5,057
Performance obligations satisfied in previous periods	$	2,628	$	4,471	$	2,150	$	2,684

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Forgivable Loans

6 Months Ended

Jul. 02, 2022

Forgivable Loans

Forgivable Loans

In order to attract and retain highly skilled professionals, CRA may issue forgivable loans to employees and non-employee experts, certain of which may be denominated in local currencies. A portion of these loans is collateralized. The principal amount of forgivable loans and accrued interest is forgiven by CRA over the term of the loans, so long as the employee or non-employee expert continues employment or affiliation with CRA and complies with certain contractual requirements. The expense associated with the forgiveness of the principal amount of the loans is recorded as compensation expense over the service period, which is consistent with the term of the loans.

The following table presents forgivable loan activity for the respective periods (in thousands):


	Fiscal Year-to-Date Period Ended		Fiscal Year Ended
	July 2, 2022		January 1, 2022
Beginning balance	$	48,591	$	61,613
Advances	22,154		14,528
Repayments	(25)		(69)
Reclassifications from accrued expenses or to other assets (1)	(1,411)		(2,229)
Amortization	(12,096)		(25,187)
Effects of foreign currency translation	(387)		(65)
Ending balance	$	56,826	$	48,591
Current portion of forgivable loans	$	11,731	$	10,571
Non-current portion of forgivable loans	$	45,095	$	38,020

_______________________________

(1)Relates to the reclassification of performance awards previously recorded as accrued expenses or forgivable loans that have been reclassified to other receivables.

Goodwill and Intangible Assets

6 Months Ended

Jul. 02, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the fiscal-year-to-date period ended July 2, 2022 are summarized as follows (in thousands):


Goodwill	$	160,829
Accumulated goodwill impairment	(71,893)
Goodwill, net at January 1, 2022	88,936
Additions due to acquisitions	2,409
Foreign currency translation adjustment	(1,382)
Goodwill, net at July 2, 2022	$	89,963

Goodwill at July 2, 2022, is comprised of goodwill of $161.9 million and accumulated impairment of $71.9 million. There were no impairment losses related to goodwill during the fiscal year-to-date period ended July 2, 2022 or during the fiscal year ended January 1, 2022.

Intangible assets that are separable from goodwill and have determinable useful lives are valued separately and amortized using the straight-line method over their expected useful lives. The components of acquired identifiable intangible assets are as follows (in thousands):


		July 2, 2022						January 1, 2022
	Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Non-competition agreements	5	$	—	$	—	$	—	$	280	$	(275)	$	5
Customer relationships	10	12,370		(4,593)		7,777		8,220		(4,044)		4,176
Total		$	12,370	$	(4,593)	$	7,777	$	8,500	$	(4,319)	$	4,181

There were no impairment losses related to intangible assets during the fiscal year-to-date period ended July 2, 2022 or during the fiscal year ended January 1, 2022. As a result of the Welch Consulting acquisition, CRA recognized approximately

$4.2 million of intangible assets related to customer relationships in the first quarter of fiscal 2022. Amortization expense related to intangible assets was $0.3 million and $0.6 million for the fiscal quarter and fiscal year-to-date period ended July 2, 2022, respectively, and $0.2 million and $0.5 million for the fiscal quarter and fiscal year-to-date period ended July 3, 2021, respectively.

Accrued Expenses

6 Months Ended

Jul. 02, 2022

Accrued Liabilities, Current [Abstract]

Accrued Expenses

Accrued expenses consist of the following (in thousands):


	July 2, 2022		January 1, 2022
Compensation and related expenses	$	84,193	$	143,199
Performance awards	7,433		4,603
Direct project accruals	3,216		2,833
Other	7,239		5,679
Total accrued expenses	$	102,081	$	156,314

As of July 2, 2022 and January 1, 2022, approximately $61.3 million and $118.9 million, respectively, of accrued bonuses were included above in “Compensation and related expenses.”

Income Taxes	6 Months Ended
Income Taxes	Jul. 02, 2022
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes For the fiscal quarters ended July 2, 2022 and July 3, 2021, CRA’s effective income tax rate (“ETR”) was 28.3% and 25.8%, respectively. The ETR for the second quarter of fiscal 2022 was higher than the second quarter of fiscal 2021 primarily due to a decrease in the tax benefit related to share-based compensation, an increase in the valuation allowance, and higher nondeductible compensation paid to executive officers, partially offset by the remeasurement of the U.K.'s long-term deferred tax liabilities in the second quarter of fiscal 2021 stemming from the enactment of U.K.’s statutory rate increase. For the fiscal year-to-date periods ended July 2, 2022 and July 3, 2021, CRA's ETR was 27.4% and 25.1%, respectively. The ETR for the current fiscal year-to-date period was higher than the prior year-to-date period primarily due to a decrease in the tax benefit related to share-based compensation, an increase in the valuation allowance, and higher nondeductible compensation paid to executive officers, partially offset by the impact of the U.K. statutory rate increase in the second quarter of fiscal 2021. Deferred taxes that are a consequence of foreign exchange translation resulting from earnings that are no longer considered permanently reinvested are recorded as a component of foreign currency translation adjustments on the condensed consolidated statements of comprehensive income. In fiscal 2020, as a result of both a qualitative and quantitative analysis, certain amounts of previously taxed and untaxed post fiscal 2018 U.K. earnings were no longer considered permanently reinvested. Deferred income taxes or foreign withholding taxes, estimated to be $0.4 million, have not been recorded for other jurisdictions as those earnings are considered to be permanently reinvested.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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+ Details

Net Income Per Share

6 Months Ended

Jul. 02, 2022

Earnings Per Share [Abstract]

Net Income Per Share

CRA calculates basic earnings per share using the two-class method. CRA calculates diluted earnings per share using the more dilutive of either the two-class method or treasury stock method. The two-class method was more dilutive for the fiscal quarters ended July 2, 2022 and July 3, 2021.

Under the two-class method, net earnings are allocated to each class of common stock and participating security as if all the net earnings for the period had been distributed. CRA's participating securities consist of unvested share-based payment awards that contain a nonforfeitable right to receive dividends and therefore are considered to participate in undistributed earnings with common shareholders. Net earnings allocable to these participating securities were not material for the fiscal quarters ended July 2, 2022 and July 3, 2021.

The following table presents the calculation of basic and diluted net income per share (in thousands, except per share data):


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Numerator:
Net income — basic	$	11,643	$	11,566	$	23,069	$	22,067
Less: net income attributable to participating shares	48		51		95		97
Net income — diluted	$	11,595	$	11,515	$	22,974	$	21,970
Denominator:
Weighted average shares outstanding — basic	7,263		7,320		7,311		7,473
Effect of dilutive stock options and restricted stock units	117		219		131		212
Weighted average shares outstanding — diluted	7,380		7,539		7,442		7,685
Net income per share:
Basic	$	1.60	$	1.57	$	3.15	$	2.94
Diluted	$	1.57	$	1.53	$	3.09	$	2.86

Anti-dilutive share-based awards are excluded from the calculation of common stock equivalents for purposes of computing diluted weighted average shares outstanding. There were no anti-dilutive share-based awards for the fiscal quarters and fiscal year-to-date periods ended July 2, 2022 and July 3, 2021.

Credit Agreement	6 Months Ended
Credit Agreement	Jul. 02, 2022
Debt Disclosure [Abstract]
Credit Agreement	Credit AgreementCRA is party to an amended and restated credit agreement that provides the Company with a $175.0 million revolving credit facility that includes a $15.0 million sublimit for the issuance of letters of credit. CRA may use the proceeds of the revolving credit facility to provide working capital and for other general corporate purposes. CRA may repay any borrowings under the revolving credit facility at any time, but any borrowings must be repaid no later than October 24, 2022, the maturity date. There was $70.0 million in borrowings outstanding under this revolving credit facility as of July 2, 2022. There were no borrowings outstanding under this facility as of January 1, 2022. As of July 2, 2022, the amount available under this revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $4.4 million. Under the credit agreement, CRA must comply with various financial and non-financial covenants. Compliance with these financial covenants is reviewed on a fiscal quarterly basis. As of July 2, 2022, CRA was in compliance with the covenants of its credit agreement.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jul. 02, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies As described in the previous note, CRA is party to standby letters of credit with its bank in support of minimum future lease payments under certain operating leases for office space. CRA is subject to legal actions arising in the ordinary course of business. In management’s opinion, based on current knowledge, CRA believes it has adequate legal defenses or insurance coverage, or both, with respect to the eventuality of such actions. CRA does not believe any settlement or judgment relating to any pending legal action would materially affect its financial position or results of operations. However, the outcome of such legal actions is inherently unpredictable and subject to inherent uncertainties.

Subsequent Events	6 Months Ended
Subsequent Events	Jul. 02, 2022
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsOn August 4, 2022, CRA announced that its Board of Directors declared a quarterly cash dividend of $0.31 per common share, payable on September 9, 2022 to shareholders of record as of August 30, 2022.

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jul. 02, 2022
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of CRA International, Inc. and its wholly-owned subsidiaries (collectively the “Company”), which require consolidation after the elimination of intercompany accounts and transactions. These financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for Quarterly Reports on Form 10-Q. Accordingly, these financial statements do not include all the information and note disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for annual financial statements. In the opinion of management, these financial statements reflect all adjustments of a normal, recurring nature necessary for the fair presentation of CRA’s results of operations, financial position, cash flows, and shareholders’ equity for the interim periods presented in conformity with GAAP. Results of operations for the interim periods presented herein are not necessarily indicative of results of operations for a full year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended January 1, 2022 included in CRA’s Annual Report on Form 10-K filed with the SEC on March 3, 2022 (the “2021 Form 10-K”). Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported results of operations, financial position, or cash flows.
Estimates	Estimates The preparation of financial statements in conformity with GAAP requires management to make significant estimates and judgments that affect the reported amounts of assets and liabilities, as well as the related disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of consolidated revenues and expenses during the reporting period. Estimates in these condensed consolidated financial statements include, but are not limited to, allowances for accounts receivable and unbilled services, revenue recognition on fixed-price contracts, variable consideration to be included in the transaction price of revenue contracts, the useful life of long-lived assets, measurement of operating lease right-of-use (“ROU”) assets and liabilities, share-based compensation, valuation of acquired intangible assets, goodwill, accrued and deferred income taxes, valuation allowances on deferred tax assets, accrued incentive compensation, and certain other accrued expenses. These items are monitored and analyzed by CRA 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. CRA bases its estimates on historical experience and various other assumptions that CRA believes to be reasonable under the circumstances. Actual results may differ from those estimates if CRA’s assumptions based on past experience or other assumptions do not turn out to be substantially accurate.
Business Combinations	Business Combinations CRA accounts for business acquisitions using the acquisition method of accounting, which requires assets acquired and liabilities assumed to be measured and recorded at their estimated fair values as of the acquisition date, with certain exceptions. The purchase price is determined as the fair value of consideration transferred. Goodwill is recognized for the excess of consideration transferred over the net value of assets acquired and liabilities assumed. The operating results of each acquired company is included in CRA's consolidated financial statements beginning on the date of acquisition. Fair value measurements require extensive use of estimates and assumptions, including estimates of future cash flows to be generated by the acquired assets. The useful lives of identifiable intangible assets acquired in a business acquisition are estimated based on the expected period that the Company will receive substantially all projected future benefits from the intangible asset. Transaction expenses directly related to acquisitions are expensed as incurred and are included in selling, general and administrative expenses on the condensed consolidated statements of operations.
Recent Accounting Standards	Recent Accounting Standards Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In October 2021, the FASB issued Accounting Standards Update ("ASU") No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). The ASU requires that an acquirer recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers ("ASC 606") at the acquisition date as if the acquirer had originated the contracts rather than adjust them to fair value. CRA elected to early adopt ASU 2021-08 on the first day of fiscal 2022. The adoption of the new standard had no impact on CRA's financial position, results of operations, cash flows, or disclosures on the date of transition.

Business Acquisition (Tables)

6 Months Ended

Jul. 02, 2022

Business Combination and Asset Acquisition [Abstract]

Schedule of assets acquired and liabilities assumed

The following table presents the preliminary assets acquired and liabilities assumed as of July 2, 2022 (in thousands):


Assets Acquired
Current assets:
Accounts receivable	$	3,778
Unbilled services	1,507
Prepaid expenses and other current assets	100
Total current assets	5,385
Property and equipment	141
Goodwill	2,409
Intangible assets	4,150
Right-of-use assets	1,210
Other assets	41
Total assets acquired	$	13,336

Liabilities Assumed
Current liabilities:
Accrued expenses	$	1,280
Deferred revenue and other liabilities	161
Current portion of lease liabilities	549
Total current liabilities	1,990
Non-current portion of lease liabilities	661
Total liabilities assumed	$	2,651
Net assets acquired	$	10,685

Fair value of Financial Instruments (Tables)

6 Months Ended

Jul. 02, 2022

Fair Value Disclosures [Abstract]

Summary of the changes in the contingent consideration liabilities

The following table summarizes the changes in the contingent consideration liability for the fiscal year ended January 1, 2022 (in thousands):


	Fiscal Year Ended
	January 1, 2022
Beginning balance	$	14,620
Accretion	380
Payment of contingent consideration	(15,000)
Ending balance	$	—

Revenue Recognition (Tables)

6 Months Ended

Jul. 02, 2022

Revenue from Contract with Customer [Abstract]

Schedule of disaggregate CRA's revenue by type of contract and geographic location

The following tables disaggregate CRA’s revenue by type of contract and geographic location (in thousands):


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
Type of Contract	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Consulting services revenues:
Fixed-price	$	27,541	$	36,245	$	56,314	$	69,678
Time-and-materials	121,561		111,992		241,170		225,077
Total	$	149,102	$	148,237	$	297,484	$	294,755


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
Geographic Breakdown	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Consulting services revenues:
United States	$	120,168	$	120,810	$	237,087	$	238,057
United Kingdom	20,843		19,740		43,253		43,026
Other	8,091		7,687		17,144		13,672
Total	$	149,102	$	148,237	$	297,484	$	294,755

Schedule of bad debt expense, net of recoveries

The following table presents CRA's bad debt expense, net of recoveries of previously written off allowances (in thousands):


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Bad debt expense (recovery), net	$	(141)	$	2	$	(262)	$	(11)

Schedule of expenses are subject to reimbursement

The following expenses are subject to reimbursement (in thousands):


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Reimbursable expenses	$	16,441	$	17,176	$	32,645	$	33,655

Schedule of opening and closing balances and result of changes in contract liability balance (in thousands)

The following table presents the closing balances of CRA's contract liabilities (in thousands):


	July 2, 2022		January 1, 2022
Contract liabilities	$	2,634	$	8,811


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Amounts included in contract liabilities at the beginning of the period	$	3,331	$	2,220	$	7,656	$	5,057
Performance obligations satisfied in previous periods	$	2,628	$	4,471	$	2,150	$	2,684

Forgivable Loans (Tables)

6 Months Ended

Jul. 02, 2022

Forgivable Loans

Schedule of forgivable loan activity

The following table presents forgivable loan activity for the respective periods (in thousands):


	Fiscal Year-to-Date Period Ended		Fiscal Year Ended
	July 2, 2022		January 1, 2022
Beginning balance	$	48,591	$	61,613
Advances	22,154		14,528
Repayments	(25)		(69)
Reclassifications from accrued expenses or to other assets (1)	(1,411)		(2,229)
Amortization	(12,096)		(25,187)
Effects of foreign currency translation	(387)		(65)
Ending balance	$	56,826	$	48,591
Current portion of forgivable loans	$	11,731	$	10,571
Non-current portion of forgivable loans	$	45,095	$	38,020

_______________________________

(1)Relates to the reclassification of performance awards previously recorded as accrued expenses or forgivable loans that have been reclassified to other receivables.

Goodwill and Intangible Assets (Tables)

6 Months Ended

Jul. 02, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of changes in the carrying amount of goodwill

The changes in the carrying amount of goodwill for the fiscal-year-to-date period ended July 2, 2022 are summarized as follows (in thousands):


Goodwill	$	160,829
Accumulated goodwill impairment	(71,893)
Goodwill, net at January 1, 2022	88,936
Additions due to acquisitions	2,409
Foreign currency translation adjustment	(1,382)
Goodwill, net at July 2, 2022	$	89,963

Schedule of components of acquired identifiable intangible assets

The components of acquired identifiable intangible assets are as follows (in thousands):


		July 2, 2022						January 1, 2022
	Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Non-competition agreements	5	$	—	$	—	$	—	$	280	$	(275)	$	5
Customer relationships	10	12,370		(4,593)		7,777		8,220		(4,044)		4,176
Total		$	12,370	$	(4,593)	$	7,777	$	8,500	$	(4,319)	$	4,181

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 350
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
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-URI https://asc.fasb.org/extlink&oid=121556970&loc=d3e13816-109267

+ Details

Accrued Expenses (Tables)

6 Months Ended

Jul. 02, 2022

Accrued Liabilities, Current [Abstract]

Schedule of accrued expenses

Accrued expenses consist of the following (in thousands):


	July 2, 2022		January 1, 2022
Compensation and related expenses	$	84,193	$	143,199
Performance awards	7,433		4,603
Direct project accruals	3,216		2,833
Other	7,239		5,679
Total accrued expenses	$	102,081	$	156,314

Net Income Per Share (Tables)

6 Months Ended

Jul. 02, 2022

Earnings Per Share [Abstract]

Schedule of earnings per share

The following table presents the calculation of basic and diluted net income per share (in thousands, except per share data):


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
	July 2, 2022		July 3, 2021		July 2, 2022		July 3, 2021
Numerator:
Net income — basic	$	11,643	$	11,566	$	23,069	$	22,067
Less: net income attributable to participating shares	48		51		95		97
Net income — diluted	$	11,595	$	11,515	$	22,974	$	21,970
Denominator:
Weighted average shares outstanding — basic	7,263		7,320		7,311		7,473
Effect of dilutive stock options and restricted stock units	117		219		131		212
Weighted average shares outstanding — diluted	7,380		7,539		7,442		7,685
Net income per share:
Basic	$	1.60	$	1.57	$	3.15	$	2.94
Diluted	$	1.57	$	1.53	$	3.09	$	2.86

Summary of Significant Accounting Policies - Description of Business and Fiscal Year (Details)	6 Months Ended
	Jul. 02, 2022 area segment
Accounting Policies [Abstract]
Number of broad areas of consulting services \| area	2
Number of business segment \| segment	1

Business Acquisition - Narrative (Details) $ in Thousands		6 Months Ended
Business Acquisition - Narrative (Details) $ in Thousands	Feb. 28, 2022 USD ($) colleague	Jul. 02, 2022 USD ($)	Jul. 03, 2021 USD ($)	Jan. 01, 2022 USD ($)
Business Acquisition [Line Items]
Consideration paid for acquisition, net		$ 10,185	$ 0
Goodwill		89,963		$ 88,936
Welch Consulting, Ltd.
Business Acquisition [Line Items]
Business Combination, Number of New Employees \| colleague	45
Consideration paid for acquisition, net	$ 10,200
Contingent consideration liability	500
Forgivable loans issued in transaction	$ 7,900
Acquired intangible assets, useful life	10 years
Goodwill	$ 2,409
Transaction related expenses		$ 200

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Business Acquisition - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Jul. 02, 2022	Feb. 28, 2022	Jan. 01, 2022
Current assets:
Goodwill	$ 89,963		$ 88,936
Welch Consulting, Ltd.
Current assets:
Accounts receivable		$ 3,778
Unbilled services		1,507
Prepaid expenses and other current assets		100
Total current assets		5,385
Property and equipment		141
Goodwill		2,409
Intangible assets		4,150
Right-of-use assets		1,210
Other assets		41
Total assets acquired		13,336
Current liabilities:
Accrued expenses		1,280
Deferred revenue and other liabilities		161
Current portion of lease liabilities		549
Total current liabilities		1,990
Non-current portion of lease liabilities		661
Total liabilities assumed		2,651
Net assets acquired		$ 10,685

Fair Value of Financial Instruments (Details) $ in Thousands	12 Months Ended
	Jan. 01, 2022 USD ($)
Summary of changes in contingent consideration liability
Beginning balance	$ 14,620
Accretion	380
Payment of contingent consideration	(15,000)
Ending balance	$ 0

Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Disaggregation of Revenue
Consulting services revenues	$ 149,102	$ 148,237	$ 297,484	$ 294,755
United States
Disaggregation of Revenue
Consulting services revenues	120,168	120,810	237,087	238,057
United Kingdom
Disaggregation of Revenue
Consulting services revenues	20,843	19,740	43,253	43,026
Other
Disaggregation of Revenue
Consulting services revenues	8,091	7,687	17,144	13,672
Fixed-price
Disaggregation of Revenue
Consulting services revenues	27,541	36,245	56,314	69,678
Time-and-materials
Disaggregation of Revenue
Consulting services revenues	$ 121,561	$ 111,992	$ 241,170	$ 225,077

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI https://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Revenue Recognition - Reserves for Variable Consideration and Credit Risk (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Revenue from Contract with Customer [Abstract]
Bad debt expense (recovery), net	$ (141)	$ 2	$ (262)	$ (11)
Reimbursable expenses	$ 16,441	$ 17,176	$ 32,645	$ 33,655

Revenue Recognition - Contract Balances from Contracts with Customers (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021	Jan. 01, 2022
Contract liabilities:
Contract liabilities	$ 2,634		$ 2,634		$ 8,811
Revenue recognized from:
Amounts included in contract liabilities at the beginning of the period	3,331	$ 2,220	7,656	$ 5,057
Performance obligations satisfied in previous periods	$ 2,628	$ 4,471	$ 2,150	$ 2,684

Forgivable Loans (Details) - USD ($) $ in Thousands	6 Months Ended	9 Months Ended
Forgivable Loans (Details) - USD ($) $ in Thousands	Jul. 02, 2022	Oct. 02, 2021	Jan. 01, 2022
Forgivable loan activity
Beginning balance	$ 48,591	$ 61,613
Advances	22,154	14,528
Repayments	(25)	(69)
Reclassifications from accrued expenses or to other assets	(1,411)	(2,229)
Amortization	(12,096)	(25,187)
Effects of foreign currency translation	(387)	$ (65)
Ending balance	56,826
Current portion of forgivable loans	11,731		$ 10,571
Non-current portion of forgivable loans	$ 45,095		$ 38,020

Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jul. 02, 2022	Jul. 02, 2022	Jan. 01, 2022
Changes in the carrying amount of goodwill
Goodwill	$ 161,900	$ 161,900	$ 160,829
Accumulated goodwill impairment	(71,900)	(71,900)	$ (71,893)
Balance at the beginning of the period, Goodwill, net		88,936
Additions due to acquisitions	2,409
Foreign currency translation adjustment		(1,382)
Balance at the end of the period, Goodwill, net	$ 89,963	$ 89,963

- Definition

+ References + Details

Goodwill and Intangible Assets - Acquired and Amortization (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 02, 2022	Jan. 01, 2022
Acquired identifiable intangible assets
Gross Carrying Amount	$ 12,370	$ 8,500
Accumulated Amortization	(4,593)	(4,319)
Net Carrying Amount	7,777	4,181
Non-competition agreements
Acquired identifiable intangible assets
Gross Carrying Amount	0	280
Accumulated Amortization	0	(275)
Net Carrying Amount	$ 0	5
Useful Life (in years)	5 years
Customer relationships
Acquired identifiable intangible assets
Gross Carrying Amount	$ 12,370	8,220
Accumulated Amortization	(4,593)	(4,044)
Net Carrying Amount	$ 7,777	$ 4,176
Useful Life (in years)	10 years

Goodwill and Intangible Assets - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended		9 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021	Oct. 02, 2021
Acquired identifiable intangible assets
Intangible assets impairment losses			$ 0		$ 0
Amortization	$ 300,000	$ 200,000	600,000	$ 500,000
Customer relationships
Acquired identifiable intangible assets
intangible assets acquired			$ 4,200,000

Accrued Expenses (Details) - USD ($) $ in Thousands	Jul. 02, 2022	Jan. 01, 2022
Accrued Liabilities, Current [Abstract]
Compensation and related expenses	$ 84,193	$ 143,199
Performance awards	7,433	4,603
Direct project accruals	3,216	2,833
Other	7,239	5,679
Total accrued expenses	102,081	156,314
Compensation and related expenses
Accrued bonuses	$ 61,300	$ 118,900

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Income Tax Disclosure [Abstract]
Effective tax rate (as a percent)	28.30%	25.80%	27.40%	25.10%
Deferred tax liability recognized, undistributed foreign earnings	$ 0.4		$ 0.4

Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2022	Jul. 03, 2021	Jul. 02, 2022	Jul. 03, 2021
Numerator:
Net income — basic	$ 11,643	$ 11,566	$ 23,069	$ 22,067
Less: net income attributable to participating shares	48	51	95	97
Net income — diluted	$ 11,595	$ 11,515	$ 22,974	$ 21,970
Denominator:
Weighted average shares outstanding — basic (in shares)	7,263	7,320	7,311	7,473
Effect of dilutive stock options and restricted stock units (in shares)	117	219	131	212
Weighted average shares outstanding — diluted (in shares)	7,380	7,539	7,442	7,685
Basic (in dollars per share)	$ 1.60	$ 1.57	$ 3.15	$ 2.94
Diluted (in dollars per share)	$ 1.57	$ 1.53	$ 3.09	$ 2.86

Credit Agreement (Details) - USD ($)	Jul. 02, 2022	Jan. 01, 2022
Senior Loan Agreement
Borrowings on revolving line of credit outstanding	$ 70,000,000	$ 0
Revolving credit facility
Senior Loan Agreement
Revolving credit facility, maximum capacity	175,000,000
Borrowings on revolving line of credit outstanding	70,000,000	$ 0
Secured by letters of credit
Senior Loan Agreement
Revolving credit facility, maximum capacity	15,000,000
Amount available under revolving credit facility reduced	$ 4,400,000

- Definition

The carrying value as of the balance sheet date of the current portion of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Subsequent Events (Details) - $ / shares		3 Months Ended
Subsequent Events (Details) - $ / shares	Aug. 04, 2022	Jul. 02, 2022	Apr. 02, 2022	Jul. 03, 2021	Apr. 03, 2021
Subsequent Events
Common share quarterly cash dividend declared (in dollars per share)		$ 0.31	$ 0.31	$ 0.26	$ 0.26
Subsequent Events
Subsequent Events
Common share quarterly cash dividend declared (in dollars per share)	$ 0.31