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Published: 2023-08-03 00:00:00 ET

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EX-99.2 3 craiq2-20238xkexx992xcfore.htm EX-99.2 Document

Exhibit 99.2

CHARLES RIVER ASSOCIATES (CRA)

SECOND QUARTER FISCAL YEAR 2023

EARNINGS ANNOUNCEMENT

PREPARED CFO REMARKS

CRA is providing these prepared remarks by CFO Dan Mahoney in combination with its press release. These remarks are offered to provide the investment community with additional information on CRA’s financial results prior to the start of the conference call.

As previously announced, the conference call will be held August 3, 2023 at 10:00 a.m. ET. These prepared remarks will not be read on the call.

Q2 Fiscal 2023 Summary (Quarter ended July 1, 2023)

•Revenue: $162.0 million

•Net income: $9.5 million, or 5.9% of revenue; non-GAAP net income: $10.0 million, or 6.2% of revenue

•Net income per diluted share: $1.34; non-GAAP net income per diluted share: $1.42

•Operating margin and non-GAAP operating margin: 9.8%

•Non-GAAP EBITDA: $18.8 million, or 11.6% of revenue

•Effective tax rate: 30.1%; non-GAAP effective tax rate: 29.8%

•Utilization: 72%

•Consultant headcount at the end of Q2 of fiscal 2023: 971, which consists of 156 officers, 522 other senior staff and 293 junior staff

•Cash and cash equivalents: $14.3 million at July 1, 2023

•Revolving credit facility borrowing capacity: $115.6 million at July 1, 2023

Revenue

For Q2 of fiscal 2023, revenue was $162.0 million, compared with revenue of $149.1 million for Q2 of fiscal 2022.

Headcount

The following table outlines CRA’s consultant headcount at the end of the stated quarters:


	Q2 2023	Q1 2023	Q4 2022	Q3 2022	Q2 2022
Officers	156	158	149	146	145
Other Senior Staff	522	535	496	481	475
Junior Staff	293	279	294	284	243
Total	971	972	939	911	863

Utilization

For Q2 of fiscal 2023, companywide utilization was 72%, compared with 77% for Q2 of fiscal 2022.

Client Reimbursables

For Q2 of fiscal 2023, client reimbursables were $17.3 million, or 10.7% of revenue, compared with $16.4 million, or 11.0% of revenue, for Q2 of fiscal 2022.

Selling, General and Administrative (SG&A) Expenses

For Q2 of fiscal 2023, SG&A expenses were $29.8 million, or 18.4% of revenue, compared with $28.0 million, or 18.8% of revenue, for Q2 of fiscal 2022. Commissions to non-employee experts are included in SG&A expenses. These commissions represented approximately 2.3% of revenue for Q2 of fiscal 2023, compared with 3.5% in Q2 of fiscal 2022. Excluding these commissions, SG&A expenses were 16.1% of revenue for Q2 of fiscal 2023, compared with 15.3% in Q2 of fiscal 2022.


	Fiscal Quarter Ended
$ in 000’s	July 1, 2023		As a % of Revenue		July 2, 2022		As a % of Revenue
SG&A expenses	$	29,846	18.4	%	$	27,963	18.8	%
Less: commissions to non-employee experts	3,798		2.3	%	5,218		3.5	%
SG&A expenses excluding commissions	$	26,048	16.1	%	$	22,745	15.3	%

Depreciation & Amortization

For Q2 of fiscal 2023, depreciation and amortization expenses amounted to $2.9 million, or 1.8% of revenue, compared with $3.1 million, or 2.0% of revenue, for Q2 of fiscal 2022.

Forgivable Loan Amortization

For Q2 of fiscal 2023, forgivable loan amortization was $9.7 million, or 6.0% of revenue, compared with $9.0 million, or 6.0% of revenue, for Q2 of fiscal 2022.

Share-Based Compensation Expense

For Q2 of fiscal 2023, share-based compensation expense was approximately $1.2 million, or 0.7% of revenue, compared with $1.0 million, or 0.7% of revenue, for Q2 of fiscal 2022.

Operating Income

For Q2 of fiscal 2023, operating income was $15.9 million, or 9.8% of revenue, compared with operating income of $15.0 million, or 10.1% of revenue, for Q2 of fiscal 2022. Non-GAAP operating income was $15.9 million, or 9.8% of revenue, for Q2 of fiscal 2023, compared with $15.0 million, or 10.1% of revenue, for Q2 of fiscal 2022.


	Fiscal Quarter Ended
$ in 000’s	July 1, 2023		As a % of Revenue		July 2, 2022		As a % of Revenue
Income from operations	$	15,914	9.8	%	$	15,013	10.1	%
Adjustments needed to reconcile GAAP income from operations to non-GAAP income from operations:
Non-cash valuation change in contingent consideration	16		—	%	—		—	%
Acquisition-related costs	—		—	%	32		—	%
Non-GAAP income from operations	$	15,930	9.8	%	$	15,045	10.1	%

Interest Income (Expense), net

For Q2 of fiscal 2023, net interest expense was $1.6 million, or 1.0% of revenue, compared with net interest expense of $0.5 million, or 0.3% of revenue, for Q2 of fiscal 2022.

Foreign Currency Gains (Losses), net

For Q2 of fiscal 2023, net foreign currency losses were $0.7 million, or 0.4% of revenue, compared with net foreign currency gains of $1.7 million, or 1.1% of revenue, for Q2 of fiscal 2022.

Foreign currency gains (losses), net, is comprised of net gains and losses on foreign denominated transactions and the revaluation of working capital balances.

Income Taxes

The following table outlines CRA’s income tax provision recorded and the resulting effective tax rates:


	GAAP						Non-GAAP
	Fiscal Quarter Ended						Fiscal Quarter Ended
$ in 000’s	July 1, 2023			July 2, 2022			July 1, 2023			July 2, 2022
Tax Provision	$	4,104		$	4,602		$	4,269		$	4,278
Effective Tax Rate	30.1		%	28.3		%	29.8		%	29.3		%


	Fiscal Quarter Ended
$ in 000’s	July 1, 2023		As a % of Revenue		July 2, 2022		As a % of Revenue
Income before provision for income taxes	$	13,612	8.4	%	$	16,245	10.9	%
Adjustments needed to reconcile GAAP income before provision for income taxes to non-GAAP income before provision for income taxes
Non-cash valuation change in contingent consideration	16		—	%	—		—	%
Acquisition-related costs	—		—	%	32		—	%
Foreign currency (gains) losses, net	686		0.4	%	(1,700)		(1.1)	%
Non-GAAP income before provision for income taxes	$	14,314	8.8	%	$	14,577	9.8	%

GAAP provision for income taxes	$	4,104			$	4,602
Tax effect on non-GAAP adjustments	165				(324)
Non-GAAP provision for income taxes	$	4,269			$	4,278

Net Income

For Q2 of fiscal 2023, net income was $9.5 million, or 5.9% of revenue, or $1.34 per diluted share, compared with net income of $11.6 million, or 7.8% of revenue, or $1.57 per diluted share, for Q2 of fiscal 2022. Non-GAAP net income for Q2 of fiscal 2023 was $10.0 million, or 6.2% of revenue, or $1.42 per diluted share, compared with $10.3 million, or 6.9% of revenue, or $1.39 per diluted share, for Q2 of fiscal 2022.

Non-GAAP EBITDA

For Q2 of fiscal 2023, non-GAAP EBITDA was $18.8 million, or 11.6% of revenue, compared with $18.1 million, or 12.1% of revenue, for Q2 of fiscal 2022.

Constant Currency Basis

For Q2 of fiscal 2023, revenue was $162.0 million, and net income was $9.5 million, or 5.9% of revenue, or $1.34 per diluted share. On a constant currency basis relative to Q2 of fiscal 2022, Q2 of fiscal 2023 revenue would have been higher by $0.1 million to $162.1 million, GAAP net income would have remained unchanged at $9.5 million, or 5.9% of revenue, and earnings per diluted share would have remained unchanged at $1.34 per diluted share.

For Q2 of fiscal 2023, revenue was $162.0 million, and non-GAAP net income was $10.0 million, or 6.2% of revenue, or $1.42 per diluted share. On a constant currency basis relative to Q2 of fiscal 2022, Q2 of fiscal 2023 revenue would have been higher by $0.1 million to $162.1 million, non-GAAP net income would have remained unchanged at $10.0 million, or 6.2% of revenue, non-GAAP earnings per diluted share would have remained unchanged at $1.42 per diluted share, and non-GAAP EBITDA would have remained unchanged at $18.8 million, or 11.6% of revenue.

A description of the process for calculating the measures presented on a constant currency basis is contained under the heading “Non-GAAP Financial Measures” below.

Key Balance Sheet Metrics

Billed and unbilled receivables at July 1, 2023 were $213.1 million, compared with $199.7 million at July 2, 2022. Current liabilities at July 1, 2023 were $239.0 million, compared with $221.9 million at July 2, 2022.

Total Days Sales Outstanding, or DSO, for Q2 of fiscal 2023 was 115 days, consisting of 74 days of billed and 41 days of unbilled. This compares with 117 days reported for Q2 of fiscal 2022, consisting of 76 days of billed and 41 days of unbilled.

Cash and Cash Flow

Cash and cash equivalents was $14.3 million at July 1, 2023, compared with $15.6 million at July 2, 2022.

Net cash provided by operating activities for Q2 of fiscal 2023 was $5.1 million, compared with net cash used in operating activities of $17.0 million for Q2 of fiscal 2022.

As of July 1, 2023, outstanding borrowings under CRA’s revolving credit facility amounted to $80.0 million. At July 2, 2022, outstanding borrowings under CRA’s revolving credit facility amounted to $70.0 million.

Capital expenditures totaled $0.7 million for Q2 of fiscal 2023, compared with $0.3 million for Q2 of fiscal 2022.

CRA repurchased approximately 31,000 shares of its common stock during Q2 of fiscal 2023 for $3.0 million, compared with Q2 of fiscal 2022, when approximately 211,000 shares of common stock were repurchased for $17.7 million.

A quarterly cash dividend of $0.36 per common share, for total dividends and dividend equivalents of $2.5 million was paid in Q2 of fiscal 2023, compared with a quarterly cash dividend of $0.31 per common share, for total dividends and dividend equivalents of $2.3 million paid in Q2 of fiscal 2022.

GAAP Condensed Consolidated Statement of Cash Flows

CRA has derived the condensed consolidated statement of cash flow data for the years ended December 31, 2022 and January 1, 2022 from its audited financial statements appearing on Form 10-K for the fiscal year ended December 31, 2022, filed with the Securities and Exchange Commission on March 2, 2023. The condensed consolidated statement of cash flow data for the third quarter of fiscal year 2021 and the first, second, and third quarters of fiscal year 2022 and the first and second quarters of fiscal year 2023 have been derived from CRA’s unaudited financial statements appearing on Form 10-Q for each of the respective fiscal quarters as well as the consolidated statements of cash flows appearing on Form 10-K for the fiscal years ended December 31, 2022 and January 1, 2022 and have been prepared on the same basis as CRA’s audited financial statements.


GAAP Condensed Consolidated Statement of Cash Flows	LTM		Q2		Q1		Q4		Q3
($ in 000’s)	Q2 2023		2023		2023		2022		2022
Net cash provided by (used in) operating activities	$	38,954	$	5,072	$	(70,051)	$	60,136	$	43,797
Net cash used in investing activities	(7,765)		(720)		(1,132)		(4,981)		(932)
Net cash provided by (used in) financing activities	(31,868)		(25,664)		74,848		(48,212)		(32,840)
Effect of foreign exchange rates on cash and cash equivalents	(671)		64		407		411		(1,553)
Net increase (decrease) in cash and cash equivalents	$	(1,350)	$	(21,248)	$	4,072	$	7,354	$	8,472
Cash and cash equivalents at beginning of period	15,621		35,519		31,447		24,093		15,621
Cash and cash equivalents at end of period	$	14,271	$	14,271	$	35,519	$	31,447	$	24,093


GAAP Condensed Consolidated Statement of Cash Flows	LTM		Q2		Q1		Q4		Q3
($ in 000’s)	Q2 2022		2022		2022		2021		2021
Net cash provided by (used in) operating activities	$	33,109	$	(16,974)	$	(61,838)	$	61,795	$	50,126
Net cash used in investing activities	(13,705)		(267)		(11,985)		(893)		(560)
Net cash provided by (used in) financing activities	(15,501)		(10,011)		52,111		(14,173)		(43,428)
Effect of foreign exchange rates on cash and cash equivalents	(2,259)		(829)		(716)		(264)		(450)
Net increase (decrease) in cash and cash equivalents	$	1,644	$	(28,081)	$	(22,428)	$	46,465	$	5,688
Cash and cash equivalents at beginning of period	13,977		43,702		66,130		19,665		13,977
Cash and cash equivalents at end of period	$	15,621	$	15,621	$	43,702	$	66,130	$	19,665

Adjusted Net Cash Flows from Operations

Below are the quarterly and last twelve-month reconciliations of GAAP net cash provided by (used in) operating activities for each of the periods presented to non-GAAP adjusted net cash flows from operations. The reconciling items are forgivable loan advances and repayments for each period, which are reported as a component of GAAP net cash provided by (used in) operating activities, along with other non-recurring cash items.


Adjusted Net Cash Flows from Operations	LTM			Q2			Q1			Q4			Q3
($ in 000’s)	Q2 2023			2023			2023			2022			2022
GAAP net cash provided by (used in) operating activities	$	38,954		$	5,072		$	(70,051)		$	60,136		$	43,797
Forgivable loan advances	30,422			750			16,842			9,517			3,313
Forgivable loan repayments	(616)			—			(616)			—			—
Other non-recurring cash items (1)	121			—			22			69			30
Adjusted net cash flows from operations	$	68,881		$	5,822		$	(53,803)		$	69,722		$	47,140

Net revenue	$	608,227		$	161,965		$	152,845		$	144,976		$	148,441

GAAP net cash provided by (used in) operating activities as a percentage of net revenue	6.4		%	3.1		%	(45.8)		%	41.5		%	29.5		%
Adjusted net cash flows from operations as a percentage of net revenue	11.3		%	3.6		%	(35.2)		%	48.1		%	31.8		%


Adjusted Net Cash Flows from Operations	LTM			Q2			Q1			Q4			Q3
($ in 000’s)	Q2 2022			2022			2022			2021			2021
GAAP net cash provided by (used in) operating activities	$	33,109		$	(16,974)		$	(61,838)		$	61,795		$	50,126
Forgivable loan advances	32,152			13,354			8,800			4,893			5,105
Forgivable loan repayments	(94)			(25)			—			(69)			—
Other non-recurring cash items (1)	203			92			111			—			—
Adjusted net cash flows from operations	$	65,370		$	(3,553)		$	(52,927)		$	66,619		$	55,231

Net revenue	$	568,662		$	149,102		$	148,382		$	134,766		$	136,412

GAAP net cash provided by (used in) operating activities as a percentage of net revenue	5.8		%	(11.4)		%	(41.7)		%	45.9		%	36.7		%
Adjusted net cash flows from operations as a percentage of net revenue	11.5		%	(2.4)		%	(35.7)		%	49.4		%	40.5		%

(1) Other non-recurring cash items includes acquisition-related costs.

NON-GAAP FINANCIAL MEASURES

In these remarks, CRA has supplemented the presentation of its financial results calculated in accordance with U.S. generally accepted accounting principles or “GAAP” with the following financial measures that were not calculated in accordance with GAAP: non-GAAP net income, non-GAAP net income per share, non-GAAP EBITDA, non-GAAP income from operations, non-GAAP provision for income taxes, SG&A expenses excluding commissions and adjusted net cash flows from operations. CRA believes that these non-GAAP financial measures are important to management and investors because these measures supplement the understanding of CRA’s ongoing operating results, financial condition and cash flows. Non-GAAP adjusted net cash flows from operations is used by management to assess CRA’s ability to fund items such as the acquisition of talent, office expansions, debt repayment and distributions to shareholders. In addition, non-GAAP net income and non-GAAP EBITDA are used by CRA in its budgeting process, and the non-GAAP adjustments described below are made to the performance measures for some of CRA’s performance-based compensation.

As used herein, CRA defines non-GAAP EBITDA as net income before interest expense (net), income taxes, and depreciation and amortization further adjusted for the impact of certain items that we do not consider indicative of its core operating performance, such as non-cash amounts relating to valuation changes in contingent consideration, acquisition-related costs, foreign currency (gains) losses, net and related tax effects. Non-GAAP net income, non-GAAP income from operations and non-GAAP provision for income taxes also exclude non-cash amounts relating to valuation changes in contingent consideration, acquisition-related costs, foreign currency (gains) losses, net and related tax effects. The adjustments made to non-GAAP adjusted net cash flows from operations add back forgivable loan issuances, net of repayments, along with other non-recurring cash items. These remarks also present certain current fiscal period financial measures on a “constant currency” basis in order to isolate the effect that foreign currency exchange rate fluctuations can have on CRA’s financial results. These constant currency measures are determined by recalculating the current fiscal period local currency financial measure using the specified corresponding prior fiscal period’s foreign exchange rates.

All of the non-GAAP financial measures referred to above should be considered in conjunction with, and not as a substitute for, the GAAP financial information presented in these remarks. EBITDA and the financial measures identified in these remarks as “non-GAAP” are reconciled to their GAAP comparable measures either in these remarks or in the attached financial tables. In evaluating these non-GAAP financial measures, note that the non-GAAP financial measures used by CRA may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

CRA INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE FISCAL QUARTERS AND FISCAL YEAR-TO-DATE PERIODS ENDED

JULY 1, 2023 COMPARED TO JULY 2, 2022

(IN THOUSANDS, EXCEPT PER SHARE DATA)


	Fiscal Quarter Ended								Fiscal Year-to-Date Period Ended
	July 1, 2023		As a % of Revenue		July 2, 2022		As a % of Revenue		July 1, 2023		As a % of Revenue		July 2, 2022		As a % of Revenue
Revenues	$	161,965	100.0	%	$	149,102	100.0	%	$	314,810	100.0	%	$	297,484	100.0	%
Costs of services (exclusive of depreciation and amortization)	113,333		70.0	%	103,076		69.1	%	221,170		70.3	%	207,136		69.6	%
Selling, general and administrative expenses	29,846		18.4	%	27,963		18.8	%	58,218		18.5	%	53,780		18.1	%
Depreciation and amortization	2,872		1.8	%	3,050		2.0	%	5,815		1.8	%	6,026		2.0	%
Income from operations	15,914		9.8	%	15,013		10.1	%	29,607		9.4	%	30,542		10.3	%

Interest expense, net	(1,616)		-1.0	%	(468)		-0.3	%	(2,187)		-0.7	%	(676)		-0.2	%
Foreign currency gains (losses), net	(686)		-0.4	%	1,700		1.1	%	(1,214)		-0.4	%	1,899		0.6	%
Income before provision for income taxes	13,612		8.4	%	16,245		10.9	%	26,206		8.3	%	31,765		10.7	%
Provision for income taxes	4,104		2.5	%	4,602		3.1	%	7,780		2.5	%	8,696		2.9	%
Net income	$	9,508	5.9	%	$	11,643	7.8	%	$	18,426	5.9	%	$	23,069	7.8	%

Net income per share:
Basic	$	1.36			$	1.60			$	2.61			$	3.15
Diluted	$	1.34			$	1.57			$	2.56			$	3.09

Weighted average number of shares outstanding:
Basic	6,983				7,263				7,051				7,311
Diluted	7,080				7,380				7,166				7,442

CRA INTERNATIONAL, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

FOR THE FISCAL QUARTERS AND FISCAL YEAR-TO-DATE PERIODS ENDED

JULY 1, 2023 COMPARED TO JULY 2, 2022

(IN THOUSANDS, EXCEPT PER SHARE DATA)


	Fiscal Quarter Ended								Fiscal Year-to-Date Period Ended
	July 1, 2023		As a % of Revenue		July 2, 2022		As a % of Revenue		July 1, 2023		As a % of Revenue		July 2, 2022		As a % of Revenue
Revenues	$	161,965	100.0	%	$	149,102	100.0	%	$	314,810	100.0	%	$	297,484	100.0	%

Net income	$	9,508	5.9	%	$	11,643	7.8	%	$	18,426	5.9	%	$	23,069	7.8	%
Adjustments needed to reconcile GAAP net income to non-GAAP net income:
Non-cash valuation change in contingent consideration	16		—	%	—		—	%	36		—	%	—		—	%
Acquisition-related costs	—		—	%	32		—	%	22		—	%	203		0.1	%
Foreign currency (gains) losses, net	686		0.4	%	(1,700)		-1.1	%	1,214		0.4	%	(1,899)		-0.6	%
Tax effect on adjustments	(165)		-0.1	%	324		0.2	%	(304)		-0.1	%	319		0.1	%
Non-GAAP net income	$	10,045	6.2	%	$	10,299	6.9	%	$	19,394	6.2	%	$	21,692	7.3	%

Non-GAAP net income per share:
Basic	$	1.44			$	1.41			$	2.75			$	2.96
Diluted	$	1.42			$	1.39			$	2.70			$	2.91

Weighted average number of shares outstanding:
Basic	6,983				7,263				7,051				7,311
Diluted	7,080				7,380				7,166				7,442

CRA INTERNATIONAL, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

FOR THE FISCAL QUARTERS AND FISCAL YEAR-TO-DATE PERIODS ENDED

JULY 1, 2023 COMPARED TO JULY 2, 2022

(IN THOUSANDS)


	Fiscal Quarter Ended								Fiscal Year-to-Date Period Ended
	July 1, 2023		As a % of Revenue		July 2, 2022		As a % of Revenue		July 1, 2023		As a % of Revenue		July 2, 2022		As a % of Revenue
Revenues	$	161,965	100.0	%	$	149,102	100.0	%	$	314,810	100.0	%	$	297,484	100.0	%

Net income	$	9,508	5.9	%	$	11,643	7.8	%	$	18,426	5.9	%	$	23,069	7.8	%
Adjustments needed to reconcile GAAP net income to non-GAAP net income:
Non-cash valuation change in contingent consideration	16		—	%	—		—	%	36		—	%	—		—	%
Acquisition-related costs	—		—	%	32		—	%	22		—	%	203		0.1	%
Foreign currency (gains) losses, net	686		0.4	%	(1,700)		-1.1	%	1,214		0.4	%	(1,899)		-0.6	%
Tax effect on adjustments	(165)		-0.1	%	324		0.2	%	(304)		-0.1	%	319		0.1	%
Non-GAAP net income	$	10,045	6.2	%	$	10,299	6.9	%	$	19,394	6.2	%	$	21,692	7.3	%
Adjustments needed to reconcile non-GAAP net income to non-GAAP EBITDA:
Interest expense, net	1,616		1.0	%	468		0.3	%	2,187		0.7	%	676		0.2	%
Provision for income taxes	4,269		2.6	%	4,278		2.9	%	8,084		2.6	%	8,377		2.8	%
Depreciation and amortization	2,872		1.8	%	3,050		2.0	%	5,815		1.8	%	6,026		2.0	%
Non-GAAP EBITDA	$	18,802	11.6	%	$	18,095	12.1	%	$	35,480	11.3	%	$	36,771	12.4	%

CRA INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)


	July 1, 2023		December 31, 2022
Assets
Cash and cash equivalents	$	14,271	$	31,447
Accounts receivable and unbilled services, net	213,095		194,987
Other current assets	27,352		22,426
Total current assets	254,718		248,860

Property and equipment, net	42,443		45,582
Goodwill and intangible assets, net	101,785		101,510
Right-of-use assets	90,627		96,725
Other assets	61,485		58,240
Total assets	$	551,058	$	550,917

Liabilities and Shareholders’ Equity
Accounts payable	$	22,909	$	27,584
Accrued expenses	107,173		155,864
Current portion of lease liabilities	16,386		15,972
Revolving line of credit	80,000		—
Other current liabilities	12,522		17,705
Total current liabilities	238,990		217,125
Non-current portion of lease liabilities	97,938		106,008
Other non-current liabilities	11,344		16,630
Total liabilities	348,272		339,763

Total shareholders’ equity	202,786		211,154
Total liabilities and shareholders’ equity	$	551,058	$	550,917

CRA INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)


	Fiscal Year-to-Date Period Ended
	July 1, 2023		July 2, 2022
Operating activities:
Net income	$	18,426	$	23,069
Adjustments to reconcile net income to net cash used in operating activities, net of effect of acquired businesses:
Non-cash items, net	15,200		14,193
Accounts receivable and unbilled services	(16,415)		(36,549)
Working capital items, net	(82,190)		(79,525)
Net cash used in operating activities	(64,979)		(78,812)

Investing activities:
Purchases of property and equipment, net	(1,282)		(2,067)
Consideration paid for acquisition, net	(570)		(10,185)
Net cash used in investing activities	(1,852)		(12,252)

Financing activities:
Issuance of common stock, principally stock options exercises	—		341
Borrowings under revolving line of credit	105,000		70,000
Repayments under revolving line of credit	(25,000)		—

Tax withholding payments reimbursed by shares	(2,009)		(975)

Cash dividends paid	(5,230)		(4,636)
Repurchase of common stock	(23,577)		(22,630)
Net cash provided by financing activities	49,184		42,100

Effect of foreign exchange rates on cash and cash equivalents	471		(1,545)

Net decrease in cash and cash equivalents	(17,176)		(50,509)
Cash and cash equivalents at beginning of period	31,447		66,130
Cash and cash equivalents at end of period	$	14,271	$	15,621

Noncash investing and financing activities:
Increase (decrease) in accounts payable and accrued expenses for property and equipment	$	376	$	(184)

Excise tax on share repurchases	$	(200)	$	—
Right-of-use assets obtained in exchange for lease obligations	$	190	$	2,020


Supplemental cash flow information:
Cash paid for taxes	$	6,218	$	7,532
Cash paid for interest	$	2,178	$	452
Cash paid for amounts included in operating lease liabilities	$	11,077	$	10,584

Enhanced Investments, Inc.
329 South Oyster Bay Road #2085
Plainview, NY 11803
team@eninvs.com

Important disclosures

Performance results were prepared by Enhanced Investments, and have not been compiled, reviewed or audited by an independent accountant. Performance estimates are subject to future adjustment and revision. Investors should be aware that a loss of investment is possible. Account holdings are for illustrative purposes only and are not investment recommendations. Additional information, including (i) the calculation methodology; and (ii) a list showing the contribution of each holding to the portfolio’s performance during the time period will be provided upon request.
All statements made via social media sites sponsored or maintained by Enhanced Investments and its affiliates are for informational purposes only and do not constitute a comprehensive description of Enhanced Investments' investment advisory services.
Certain investments are not suitable for all investors. Before investing, consider your investment objectives and applicable fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Information provided by Enhanced Investments is for informational and general educational purposes only and is not investment or financial advice.

Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities.
Past performance is no guarantee of future results. Any historical returns, expected returns [or probability projections] are hypothetical in nature and may not reflect actual future performance.
All the strategies assume investments in equity invstrumenta only and are more relevant for "agressive investment profile". Eastern European flagship strategy assumes using up to 20% leverage of total portfolio. GlobalCommodities and US Growth strategy currently assume no leverage.
Results for the Enhanced Investments strategies as compared to the performance of Illustrative Benchmarks is for informational purposes only. Our investment program does not mirror that of the Illustrative Benchmarks and the volatility may be materially different from the volatility of Illustrative Benchmarks. Reference or comparison to an Illustrative Benchmark does not imply that strategies of Enhanced Investments will be constructed in the same way as the Illustrative Benchmark or achieve returns, volatility, or other results similar to those of the Illustrative Benchmark. The S&P 500 is an unmanaged market capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance.
Performance results were prepared by Enhanced Investments, and have not been compiled, reviewed or audited by an independent accountant. Performance estimates are subject to future adjustment and revision. Investors should be aware that a loss of investment is possible. Account holdings are for illustrative purposes only and are not investment recommendations. Additional information, including (i) the calculation methodology; and (ii) a list showing the contribution of each holding to the portfolio’s performance during the time period will be provided upon request.
All statements made via social media sites sponsored or maintained by Enhanced Investments and its affiliates are for informational purposes only and do not constitute a comprehensive description of Enhanced Investments' investment advisory services.
Certain investments are not suitable for all investors. Before investing, consider your investment objectives and applicable fees. The rate of return on investments can vary widely over time, especially for long term investments. Investment losses are possible, including the potential loss of all amounts invested. Information provided by Enhanced Investments is for informational and general educational purposes only and is not investment or financial advice.