Q2 2021 CRA International Inc Earnings Call
[music].
Good day, everyone and welcome to Charles River Associates second quarter, 2021 earnings conference call.
Today's call is being recorded the company's earnings release and prepared remarks from Cra's Chief Financial Officer are posted on the Investor Relations section of Cra's website at sea or AI Dot com.
With us today, our CRA Cra's, President and Chief Executive Officer, Paul Omalley, Chief Financial Officer, Dan Mahoney, and Chief Corporate Development Officer, Chad Holmes.
At this time I'd like to turn the call over to Mr. Mahoney for opening remarks. Please go ahead Dan.
Thank you Rob and good morning to everyone. Please note that the statements made during this conference call, including guidance on future revenue and non-GAAP EBITDA margin and any other statements concerning the future business operating results of our financial condition of CRA, including those statements using the terms expect outlook or similar terms are forward looking statements as debt.
Find in section 21 of the Exchange Act information.
Information contained in these forward looking statements is based on management's current expectations and is inherently uncertain actual performance and results may differ materially from those expressed or implied in the statements due to many important factors, including the extent and duration of the COVID-19, pandemic and any potential impact on our financial condition and results of operations.
Additional information.
Formation regarding these factors is included in today's release and in CRA is periodic reports, including our most recently filed annual report on form 10-K, and quarterly reports on form 10-Q filed with the SEC CRA undertakes no obligation to update any forward looking statements. After the date of this call.
Additionally, we will refer to some non-GAAP financial measures and certain measures presented on a constant currency basis on this call everyone.
Everyone is encouraged to refer to today's release and related CFO remarks for reconciliations of these non-GAAP financial measures to the GAAP comparable measures and descriptions of the calculation of EBITDA and measures presented on a constant currency basis, Let me now turn it over to Paul for his report Paul.
Thanks, Dan and good morning, everyone. Thank you for joining us today the <unk>.
Second quarter of fiscal 2021 demonstrated continued momentum in the business of strong demand for our services drove CRA is outstanding performance building on the impressive start of fiscal 2021, CRA again reported the highest quarterly revenue in the company's history, increasing 25 per.
<unk> year over year to $148.2 million or.
Spansion was broad based with 8 practices recording year over year revenue growth of more than 20% geographically. Our growth was also balanced with revenue from our North American and the international operations, increasing by 21, 9% and 14, 4%.
Respectively. The second quarter marked the 20 <unk> consecutive quarter of year over year revenue growth with CRA growing by more than 10% year over year and 15 of those quarters.
For a topline growth during the second quarter drove significant profit expansion, specifically non-GAAP net income earnings per diluted share and EBITDA grew year over year by 82%, 91% and 61% respectively. This growth resulted in the high.
<unk> quarterly levels for each of these profit metrics it was truly an exceptional quarter top to bottom.
I would now like to highlight some of the services provided during the quarter within legal and regulatory our antitrust and competition economics practice grew revenue by approximately 55% year over year. This growth of established a new high of new high in quarterly revenue for the practice.
As demand for antitrust and merger related services remains strong M&A markets continue to rebound from pandemic lows and reached historic highs worldwide M&A activity increased 131% during the first half of 2021 compared to year ago levels.
And represented the strongest first half of any year for mergers and acquisitions. Since records began in 1980 against this backdrop CRA worked on transactions across a range of industries and geographies. For example, a team of competition experts supported the emerging Paul.
<unk> and our recently completed transaction, combining 2 large nationwide providers of specialized truck trucks and heavy equipment.
For a analyzed competitive dynamics in the market for specialty truck rentals sales and aftermarket service CRA is analysis confirmed that the relevant markets are geographically broad and the barriers to competitive entry expansion and repositioning are minimal the transaction received unconditional.
Clearance from the U S Department of Justice.
Additionally, a team of CRA competition experts in Brussels, London, and Washington D. C supported Aercap the acquisition of GE capital Aviation services the.
The $30 billion transactions brought together aircraft engine and helicopter portfolios to create a leading aviation leasing company. CRA is work included addressing regulatory questions about potential horizontal and vertical merger of effects, including those associated with.
Ge's post transaction minority ownership interest in the combined company. The transaction has received regulatory clearance from the U S Department of Justice and the European Commission. The Global project team continues to work to secure regulatory clearance in additional jurisdictions worldwide.
Looking more broadly at the legal market total case filings continue to rebound and approach.
Pandemic levels for the second quarter of 2021 total case filings were up approximately 10% year over year, a rebound can also be seen within the courtroom as the number of total court judgments during the second quarter increased approximately 20% relative to the year ago Pierre.
Should the metrics are consistent with the experience of our experts who continue to draft reports and deliver testimony on matters that had been delayed by the pandemic as well as new matters as they arise.
In light of these market conditions on the especially pleased with the strong growth in our legal and regulatory services, which grew by more than 30% in the second quarter within this service area every practice expanded year over year.
Notably, our antitrust and competition economics financial economics, intellectual property labor and employment and risk investigations and analytics practices. Each addressed each increased revenue by more than 20% year over year.
During the quarter CRA financial economics practice, the assisted to depository institutions with review of overdraft practices and fees at of consumer account level. In addition, the practice supported to testifying experts and a series of litigations involving maintenance and servicing for properties that.
For closed a growing focus of the practice is to provide more validation and model risk management support for several fintech clients using a range of machine learning techniques to underwrite and price loans.
Also during the second quarter, the intellectual property practice advised on multiple high Stakes patent trademark and copyright and trade.
Grid matters, and a variety of forms, including federal and state courts International arbitration tribunals and U S International Trade Commission.
These matters covered a wide range of industries and technologies, including <unk>.
Cloud computing communication networks of luxury brands mobile devices medical devices pharmaceuticals, and oil and gas extraction, notably of CRA expert determine damages on behalf of the world's leading luxury brands regarding copyright trademark and trade dress infringement claims.
Against the competitor that sold products through E Commerce platform, reaching multiple geographic markets CRA as damage analysis address profit disgorgement and royalty damages associated with the defendants infringing activities the labor and employment practice recently supported CRA.
A senior consultant.
The and rebutting the expert report.
The plaintiffs and the class action matter of alleging age discrimination among those selected for termination through a reduction.
In force action. Additionally, the labor and employment and antitrust and competition economics practice continued to combine these respective expertise by assisting clients facing alleged noncompetitive employment agreements the plaintiffs allege result, and wage suppression.
During the second quarter of the risk of investigations and analytics practice continued to perform multi jurisdictional investigative assignments in the United States, Brazil, and the United Kingdom. For example, the practice executed a large fraud investigation with the transportation sector examining payment.
Among various related parties over a 10 year period, our life Sciences practice was down approximately 10% relative to an extremely strong second quarter in 2020, while we continue to see good opportunities in the space as our consultants address challenging and important topics for our clients.
During the second quarter CRA helped of top 10 pharmaceutical company determine how best to communicate complex ideas around the future of health care with the global audience and of projects spanning 6 countries. The CRA team collected feedback from audiences across the entire healthcare spectrum.
Including patients payers administrators policymakers technology companies and positions in order to maximize.
<unk> optimized strategy and communications.
CRA is life Sciences practice is also helping a pre IPO digital therapeutics company developed commercial strategies and support.
To support its growing portfolio CRA contributions have included identifying infrastructure needs to support healthy market growth analyzing direct to consumer versus employer provided benefit strategies identifying appropriate roles for distribution and promotional partnerships in developing launch.
Plans for portfolio assets.
Continuing with our other practices, we saw strong performance by our auctions <unk> competitive bidding energy and marathon practices each of which increased revenue in the second quarter by 20% year over year as the independent trading manager of the global dairy trade CRA auctions and competitive bidding.
The practice continues to manage the twice monthly multi seller multi by our auctions with participation from around the world. Additionally, the auctions practices working with CRA as the energy practice to support and Midwestern utilities long term and medium term resource planning CRA is cross functional team.
<unk> is helping the clients select new wind solar and thermal generating projects and energy storage options that will combine to replace several coal units scheduled to retire over the coming years.
Elsewhere within the energy practice Cra's team worked with an infrastructure investment firm to carve out of large European utility from its parent company. The team is working on devising the corporate strategy for the group as a whole as well as well as for each of the individual.
Mrs under new ownership. Additionally, the energy practice assisted of large natural gas utility with the preparation of long term strategic resource planning process that will focus on key investment initiatives and decarbonization of approaches for the utilities in the Midwest CRA will be <unk>.
<unk> to assist them as they implement this approach over the coming year.
Our American practices working with the childcare provider to build a robust demand model for 1 of its service offerings, including the impact of utilization price and mix at the intersection of the type of care and geography. Additionally, the team is partnering with the leading consumer packaged goods provider.
On the strategic transformation of its portfolio. These actions have resulted in the sale of underperforming products and assets investment in high value growth businesses at a more than twofold increase in market valuations since the start of the project.
I am grateful to all of my colleagues for their hard work as we continue to help our clients address their most important challenges as our second quarter.
Quarter results demonstrate our portfolio of services is highly valued by our clients. Moreover, we are well positioned to maintain the momentum in our business. During the second quarter. We saw our project lead flow and new project originations grow by nearly 20% and 40 per.
<unk>, respectively compared to the second quarter of 2020, while we remain mindful that uncertainties around global economic business and business health and political conditions can affect our business.
We are again, raising both our revenue and EBIT guidance to reflect the continued strength in the business.
Okay.
For the full year of fiscal 2021 on a constant currency basis relative to fiscal 2020, we now expect revenue in the range of 565 million to $575 million, which is an increased.
And narrowed range relative to our prior revenue guidance of $550 million to $570 million.
Excuse me.
We are also raising our non-GAAP EBITDA margin range to 11, 2%.
2 of 11, 7%. This compares with the range of 10, 8% the 10, 5% previously.
With that I'll turn the call over to Chad and then Dan for a few additional comments Chad.
Thanks, Paul and Hello, everyone I want to provide a few comments about our capital generation and deployment during the quarter.
CRA remains committed to maximizing long term value per share through the prudent deployment of capital given CRA strong cash flow generation, we expect to invest in the business for profitable growth, while simultaneously returning meaningful capital to our shareholders.
Against the backdrop of the pandemic CRA continues to generate strong cash flows for the trailing 12 months through the second quarter of fiscal 2021 CRA is adjusted net cash flows from operations were $81.7 million or 14, 8% of trailing 12 months revenue.
As previously announced we completed a modified Dutch auction self tender offer in the second quarter that resulted in the repurchase of 337837 shares at $74 per share for a total of $25 million.
Demonstrating both our confidence in our long term outlook and our commitment to returning capital to shareholders.
When these repurchases are combined with the $1.9 million of dividend payments, we returned $26.9 million of capital to our shareholders during the second quarter.
Through the first 6 months of fiscal 'twenty, 1 we have returned $38.6 million of capital to our shareholders through a combination of share repurchases and dividend payments as referenced in prior earnings calls we continue to aim to return of half of our adjusted net cash flows from operations.
To our shareholders, while still investing in the growth of CRA.
And now I'll turn the call over to Dan for a few final comments Dan.
Thanks, Chad as a reminder, more expansive commentary on our financial results is available on the Investor Relations section of our website under prepared CFO remarks, before we get the questions. Let me provide a few additional metrics related to our performance in the second quarter of fiscal 2021.
In terms of consultant head count we ended the second quarter of fiscal 2021 at 833, which consisted of 141 officers 483, other senior staff and 209 Junior staff. This represents a 3.9% increase compared with the 802 consultant head count reported at the end of Q2 fiscal <unk>.
20 <unk>.
We expect year end head count to increase by roughly 6% relative to the end of fiscal 2020.
Non-GAAP selling general and administrative expenses, excluding the 3.2% attributable to commissions to non employee experts was 13% of revenue for the second quarter of fiscal 2021.
Paired with 15% of year ago.
This quarter's ratio was positively impacted by the strong revenue for Q2 and effective management of our overhead.
We will continue to monitor our discretionary expenses to proactively mitigate the financial impacts related to the pandemic and to efficiently manage our transition back to a more normal operating environment.
The effective tax rate for the second quarter of fiscal 2021 on a non-GAAP basis was 25, 8% compared with 24, 8% on a non-GAAP basis for the second quarter of fiscal 2020.
Turning to the balance sheet DSO at the end of the second quarter was 103 days compared with 92 days at the end of the first quarter of fiscal 2021 day.
DSO in the second quarter consisted of 66 days of billed and 37 days of Unbilled.
At the end of the second quarter. The Companys liquidity remained strong totaling approximately $144 million when taking into account the available capacity on our revolving line of credit and our cash balance looking more closely at the components at the end of the second quarter, we had $45 million of outstanding borrowings under our revolver.
<unk> credit facility.
We concluded the second quarter of fiscal 2021 with $14 million in cash and cash equivalents with the majority residing internationally.
That concludes our prepared remarks, we will now open the call for questions. Rob. Please go ahead.
Thank you at.
At this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star 1 on your telephone Keypad, Inc.
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Alright first question comes from Andrew Nicholas with William Blair. Please proceed with your question.
Hi, good morning.
First question I wanted to ask was on the antitrust.
Anecdotally it feels as though kind of review processes are taking a bit longer than usual, there's obviously here.
Ton of volume to get through so that could be 1 factor, but I'm wondering if that's in line with what youre seeing in that business are projects longer bigger.
And how would you anticipate project duration and size trending on a go forward basis, given what youre seeing in antitrust specifically.
Good morning, Andrew.
We really haven't seen a shift in the composition of makeup of the projects that the antitrust practice is experiencing or for that matter of the firm as a whole.
The size and duration of those projects are similar to what we have experienced pre pandemic.
We are seeing some.
Older projects being worked on now.
So that's a slight increase but it's well within the range of outcomes that we have experienced during the pre pandemic period of time, So I can't say I have noticed the shift in project composition that youre describing.
Great. That's helpful. And then obviously M&A activity has been at record levels. As you mentioned in your prepared remarks, just kind of wondering.
The first if there's any way to dimensionalize the impact of elevated M&A on the company as a whole in the first half of the year and then Relatedly, what what you're assuming within your guidance in terms of M&A volumes in the back half of this year.
Our antitrust and competition economics practice as well.
Was and still is the largest practice of CRA.
The large contributing factor as M&A activity, we are the leading provider of those services worldwide. So clearly we enjoy a benefit when we see a pickup in activity, but even more importantly of complex combinations of the entities.
So that has been a positive.
When we are looking at our guidance of forecast going forward, we're really looking at the inflow of matters that we have received to date.
I am not sitting here of projecting whether M&A activity.
We'll continue to rise or stay flat.
All indications are at least over the next 3 to 6 months, we shouldn't see.
A dramatic change in that activity just given the.
Of the volumes and cost of money and the desire by various firms to still seek value creating combinations. So we're not forecasting any kind of a substantive change.
Got it and.
And if you wouldn't mind me squeezing 1 more in here on the hiring environment.
Just curious how you would describe.
Recruiting right now.
The ability to add talent to the extent that you are hiring aggressively and then.
Similar theme, if you could make any comments on attrition at the firm relative to historical levels that would be appreciated. Thanks again.
Sure. Thank you.
Hiring the best and brightest always takes a lot of effort. So I would say that it is never an easy undertaking what I can say is if I'm looking at university level hires.
Our current.
No.
Our acceptance rate that we've experienced during the pandemic months.
Has not differed significantly from that was from that what we experienced during pre pandemic times, if anything the acceptance rates of us.
Slightly during the pandemic relative to pre pandemic.
The wages that is required to secure the top talent. We also have not seen any kind of a substantive change.
Over these last 6 quarters of the pandemic relative to pre pandemic levels. What I can say is if you're looking at more senior hires maybe the hiring timeline has lengthened just a bit because it's a little more challenging and difficult to get to know the candidate and for them to know us and determine whether there is the.
<unk>.
But there too.
The expected conversion of those opportunities is not differed significantly it just may be taking a little longer.
Great color. Thank you.
Sure.
Our next question comes from Kevin Steinke with Barrington Research. Please proceed with your question.
Good morning.
I wanted to start off by talking about.
The legal and regulatory consulting and the strong growth there.
You, obviously highlighted the.
Rebound in growth in the case filings and judgments.
I'm wondering if maybe there is a significant.
The backlog of pent up demand.
That's now coming through in legal and regulatory with things starting to move forward a little bit more in the court systems.
I also wanted to tie the related to the metrics you gave on project originations up 40%.
Does that indicate some projects that maybe you were on hold now starting to ramp up or am I.
Off base there so any comments on that would be helpful. Thanks.
Sure.
On the start by saying, although the pandemic has been challenging for so many reasons for the world for this corporation.
We've actually of fare pretty well so we haven't seen the contraction of the business in fact in the 6 quarters that have been impacted by this pandemic I believe that we have grown top line revenue.
More than 10% and 5 of those 6 quarters. So the portfolio has performed exceptionally well throughout this process.
Which means that not only are we have demonstrated an ability to service projects already in the portfolio. We have also demonstrated the ability to generate new lead opportunities throughout these past 6 quarters in the second quarter was no different with respect to.
<unk>.
Are we seeing necessarily.
<unk>.
I don't know what to call. It here a little surge in demand associated with the filing pick up in the court pick up.
That's hard to say, but I will break that up into 2 pieces..1 is are we working on older projects, maybe projects that had been stalled.
During the pandemic is now the courts are opening up are we seeing more revenue generated from those projects as I mentioned to Andrew.
What we have observed across the project portfolio doesn't look discernably different than what we were used to pre pandemic. So I would add that secondly, the.
The pace of new matters.
Debt, we're bringing in.
We're really pleased to be able to announce that we grew new project.
Opportunities by 20% of new project originations by 40%. So we're going to welcome those kind of numbers any day of the week, but then again we were also enjoying.
Healthy levels in the proceeding.
The quarters, leading up to Q2.
So more to come small sample set to observe.
Whether we are seeing a surge in demand associated with the courts, starting to open up but standing right here I would say it looks very similar to the strong performance we had seen previously.
Okay. Thanks, that's helpful and just wondering.
With the change in the presidential administration have you seen any.
Notable differ.
A difference in the level of.
And I trust, the enforcement or scrutiny of M&A transactions.
Yes, there is clearly a lot of dialogue coming out of the administration about their desire for increased enforcement of.
I would say, it's probably a little too early.
To comment on whether we have seen the direct impact.
On that demand environment, what I can say.
If the actions are consistent with the words coming out of the administration 1 would definitely expect.
And the increase in the demand environment for services like.
Of those provided by CRA.
Okay, Yeah that makes sense.
Just wanted to ask.
About the margin guidance.
And the increase there.
Similar question last quarter, but just maybe can you discuss some factors the high end.
The increase in the margin guidance in terms of the stronger revenue growth.
Maybe.
The delays in travel and entertainment expenses versus.
Some of those sustainable cost savings that you thought you might be able to realize.
Based on your learnings from operating during the pandemic.
Yeah.
Sure.
The the strong profit margins are driven by 2 main drivers here 1 it's driven by really strong revenue, we got back to what we would consider to be our desired utilization rate much faster than was anticipated at the beginning of the year.
<unk> with Q1 being at 76% utilization in Q2 at 75% utilization.
So we've been able to deliver services in an optimal manner. So that's clearly going to contribute to strong profitability.
With the strong revenue levels, we have been able to really leverage low SG&A expenditures I believe this quarter, we excluding perf payments were around 13% of net revenue.
The <unk>.
Driver of that is we're not traveling as a firm BC.
Besides the occasional business trip or consultants or still working almost entirely on a virtual basis. So not we're not incurring those kind of indirect expenses.
We have previously.
We are looking at.
Through the first 6 months I believe a EBITDA margin basis of around 12, 6% if I'm not mistaken.
On that so it was a very strong start.
And given that.
The return to some kind of pre pandemic levels of travel is still probably 3 to 6 months off at best.
We felt pretty comfortable on increasing the profit margin range.
2 the 11, 2% to 11.7 quoted as part of our guidance how the.
That is impacted in the future is really going to depend on a return to some kind of normal levels.
We've learned a lot.
Over these past 6 quarters of how to run our operations more efficiently. So I do think there will be sort of of structural step change down in SG&A levels as we return to some level of normalcy.
Whenever that happens, but I have not and I repeat I am not.
Saying that the new level will be 13% I think pre pandemic, we are operating right around 18% to 18, 5%.
Net revenue for SG&A, excluding perps.
I would love to see us operating.
Once we return to more of the steady state normal world somewhere in the 16% to 17% range.
Okay. Thanks for the insight.
I also wanted to ask about.
The press release the ahead in July.
And your new hydrogen service offering.
And adding a couple of senior consultants to lead that effort effort.
Just first wanted to ask about the opportunity that you see there and secondly, just mechanically why that is within the American practice and not the energy practice.
Sure both marathon and our energy practice are continually working with energy providers on how best to optimize their generating portfolio.
As you know there is a strong movement towards clean energy, so introducing clean energy alternatives to our clients having the expertise.
To discuss those alternatives with them is imperative on delivering those services. So we were seeing more requests by our clients in terms of knowledge and services related to hydrogen.
And we thought that here's an opportunity to raise our game so to speak.
By adding these resources the resource and the team delivering those service is a combined effort between marathon and the energy practice those 2 practices regularly work together.
And the other thing we were trying to highlight during the.
Directed comments on this call many of our practices work together, we are organized by practice largely internally to help us manage our consulting staff.
To best staff them, but when we go to market we go to market.
The configuration that best addresses our client needs.
So having the <unk>.
Value perspective that marathon brings to the game and the industry expertise that the energy practice brings has been a nice match.
Okay. Thanks for that commentary and I just wanted to ask lastly ask just about.
Yeah.
The balance sheet and cash flow.
Moving to be a little more sequential buildup in accounts receivable.
Normal non office is related to the <unk>.
Strong demand or Dan anything.
Going on from that perspective with.
Receivables in the.
Cash flow.
Yeah, I'll start and then I'll kick it over to Dan.
Growth takes some capital, okay, and we've been growing.
Pretty substantially now over the last several quarters. So that's clearly.
Consuming some of our working capital what I can tell you is that the quality.
Of those receivables really has not.
Changed.
During this time period of Dan if you of any other color to add yes, yes, exactly so I would agree with that.
Kevin and I think if you look at.
The carry on that point, you look at our DSO stats.
In the first quarter, our DSO is I think.
Unusually low as we had.
We collected on some longer dated items, and so that was down and sort of that 92 day level and.
In this quarter. So it came back in.
Our picked up quarter over quarter like you pointed out, but it's still below the DSO metric still below our historical average for the second quarter. So.
As we grow we would expect to see that nothing unusual like Paul said with our collection activities or the.
The.
The.
The the structure of the day.
Our collections that were receiving and we tend to see an uptick of that in the in the summer months for Q3, and then it tends to come down again later in the year. So.
Pretty consistent pattern with what we've seen historically.
And Thats, what we would expect going forward.
Okay. Thank you and congratulations on the very strong results.
Thank you thank you Kevin.
Our next question comes from Marc Riddick with Sidoti <unk> Company. Please proceed with your question.
Good morning, everyone.
<unk>.
So I wanted to start with.
Just sort of the sort of the.
Quick observation I was sort of curious as to if you could talk a little bit about the complexity of the work that youre seeing because of.
As I sort of sort of go through the numbers and play with the couple of things it seems as though.
Don't know if its a matter of maybe bill rates or higher pricing is higher or if it's a matter of the mix of business things being more complex and thereby maybe some more senior folks are quite but just wonder if you could talk a little bit about a little bit about that and if that's any different than maybe what you may have been expecting or what you've seen in the past.
So let me try to address the.
Your question I'm, not quite sure I fully understood it.
But as I commented, both with Andrew and with Kevin.
We haven't seen any kind of market shift in the composition of cases and the complexity of cases.
That we've been addressing what we know as a firm.
Is that if we can keep SG&A of 13% and we're operating in the mid Seventy's of utilization, we will enjoy really really strong profitability like that that has been delivered now over the last several quarters, but I can't say that we're doing anything different.
The 1 thing that the virtual World has introduced and we're really quite excited about it continuing.
I think we're working across borders by that I mean offices.
Geographies.
More efficiently during this pandemic period than we ever have as an enterprise. So I think that provides real exciting revenue opportunities profit enhancing opportunities going forward.
And the reason its profit enhancing is that we are seamlessly using capacity irrespective of where it exists.
The capacity I mean consulting capacity within the organization irrespective of whether I am sitting here in Boston today, whether that is residing in our San Francisco of Berkeley office, or whether it's residing in a practice other than the 1 situated and so all of these kind of.
Of efforts does create for a more optimal delivery model, but that is really the only positive progression.
To speak of other than that it's been business as usual, which is pretty damn good.
Okay excellent and then I guess, maybe the way I was trying to sort of get to what is a little bit of along the lines of the pricing dynamic and maybe from an inflationary standpoint or.
If you're if you're sort of putting through price increases. If you were talking about sort of year over year similar services and it seems as though if so.
Price increases would be received.
Without much of the way of pushback, but if I look at it if I look at the last half dozen years or so we have been increasing.
Rates about 2% to 4% per annum.
Those rates have stuck in terms of our ability to deliver.
At those rates, while still creating value for our clients.
That experience Hasnt really changed over these past 18 months.
At CRA.
Okay, Great and then.
Shifting gears over to.
Of bringing folks on I think what was mentioned was you were looking at bringing head count up.
In the year of by 6% per annum, if I heard that correctly. So I was wondering if that gets.
Would that be sort of more of.
Our normalized seasonal back half adding of.
Junior talent is that's kind of what we should be thinking of for the remainder of this year.
For the remainder of the year right now the 6% in terms of year end head count growth is our best guess of where we will where we will be.
By the end of the year Okay.
So thats, taking incineration, our incoming hires in high end likelihood hires that we are expecting over these next.
For months or so.
With respect to the outlook beyond that we're just trying to keep a close eye on.
On the demand environment to do as good of job as we can on matching the supply.
Being our consulting work force of the demand for those services so more to come on that as we see the year unfold.
And as we start thinking about guidance for 2022.
Are there any and certainly the the growth has been very broad based which has been clearly communicated I wanted to get a sense of are there. Some practice areas that you'd think of maybe accelerated at a faster pace due to the challenges of the pandemic or and the response to the client activity that is true.
<unk> specific as to whether or not it's.
The types of opportunities that means just simply been enhanced due to changing dynamics of.
Of challenges as opposed to.
For for lack of better term of it folks sort of going back to the past I suppose of creating a new normal.
Yeah.
Couple of comments, there I guess the first comment.
When people believe they've heard enough about broad based contributions at the time for me to double down on that.
Even more so I don't think you can script out the way of portfolio should operate better than the way series portfolio has been operating.
It's wonderful to think like for as an example during last.
During 2020 during the first half of the year, we relied heavily on the <unk>.
Exceptional performance of the life Sciences practice, and the forensic services practice and.
In terms of leading the way with competition practice during the first half of 2020 experiencing.
The flattish type of delivery services and here, how our competition excelling.
During this first half as is a lot of other of the legal regulatory services.
So to say 1 is benefiting.
From those services as I have stated previously the only practice I can highlight on that and I'm not sure of this as pandemic related but more of the evolving nature.
Of technology in our world as our forensic services practice that has seen a market increase and work related to cyber incident response.
And work related to damage estimations associated with those breaches.
But I don't know, whether thats necessarily pandemic related mark or more a continuation of.
Of what the world has been experiencing.
No Thats understandable.
Wondering if you had touched on a little bit of about the the.
The potential acquisition pipeline and maybe some of the maybe the opportunity set that you see as far as potentially adding.
Whether it's <unk> or maybe what that might look like domestically versus internationally, maybe what the what that potential pipeline might look like today and maybe.
If there are any attractive areas or geographies that we should be thinking about.
Sure I'll, let Chad <unk>.
The address that question Hey, good morning, Mark.
Good morning, Hey.
The pipeline question.
This is of great 1 and the answer is similar to what I've shared in the past.
We're always looking to add high quality individuals to the CRA team and remain active in the market for vetting those types of opportunities.
The geographic spread and the service offerings spread I would say roughly maps to the the positioning of CRA.
We're interested in opportunities that align with our service offerings and our geographies and we're seeing good volume along all of those dimensions.
So I would say the pipeline is as Paul as it has ever been but our standards have not changed we're still looking for for fit and have a fairly high bar we've added people.
Through the pandemic.
Including in the first half of this year and expect to continue to do so as the year plays forward and we look towards 2022.
So it's more of the same we're not going to deviate, we're not looking to necessarily.
Add a third leg to the stool or a fourth leg to the stool just for diversification. We're really pleased with the portfolio of services, we have and we're just trying to find high quality performers to join in the fund.
Great and then the last 1 from me I was sort of wondering sort of how things are progressing.
For you as far as having.
Granted I think we're now about Anniversarying the period of time when everyone was working remotely and I was wondering if you get a sense of maybe what youre seeing internally as far as all of our folks occasionally in the office or how or how you might think about what youre thinking about between now and the end of the year or what.
The model might look like thank you.
Sure.
CRA went virtual and March of 2020.
And from that period of March of 2020 until the date of this call.
The vast majority of my colleagues I would say, 90% or more.
Has still been operating in a virtual basis.
People will come occasionally to the office either to meet with some colleagues.
Do you have of meeting, but it's more for that.
Interaction than anything.
That they are making their way in.
Our hopeful.
But who knows with the volatility that we're seeing in the battle against the Covid virus.
We are hopeful to return in a phased approach in the fall.
But we're also not kind of take any measures.
To put our family at risk by coming back prematurely. So.
The hope is the fall of the implementation will of course be different by geography, not just internationally of course.
But also by geography across the U S.
Okay.
Kind of along the lines of where it was was going okay. Thank you very much really appreciate it.
Thank you Mark.
And thanks again to everyone for joining us today, we appreciate your time and interest in CRA, we will be participating in a number of virtual meeting with investors in the coming months and we look forward to updating you on our progress on the Exar on the next earnings call until then please <unk>.
1 the safe stay healthy.
This concludes today's call. Thank you.
Yeah.
Thank you for your attendance you may disconnect your lines and we appreciate your participation.
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