Charles River Associates Announces Fourth-Quarter and Fiscal 2001 Financial Results; Company Achieves Annual Revenue Growth of 33% in Fiscal 2001.

Business Editors

BOSTON--(BUSINESS WIRE)--Jan. 8, 2002

Charles River Associates Incorporated (Nasdaq: CRAI), a leading provider of economic, financial, and business strategy consulting, today reported financial results for the fourth quarter and fiscal year ended November 24, 2001.

Revenues for the fourth quarter of fiscal 2001 increased 47 percent to $29.2 million, compared with revenues of $19.9 million for the fourth quarter of fiscal 2000. Net income for the fourth quarter of fiscal 2001 was $1.9 million, or $0.21 per share on a diluted basis, compared with net income of $850,000, or $0.10 per share on a diluted basis, for the fourth quarter of fiscal 2000.

Revenues for the fiscal year 2001 increased 33% to $109.8 million from $82.5 million in fiscal 2000. Net income for the fiscal year 2001 was $7.4 million, or $0.81 per share on a diluted basis, versus $8.8 million, or $1.01 per share on a diluted basis, for fiscal 2000.

Comments on the Fourth Quarter

"We are pleased with CRA's strong top-line performance," said James C. Burrows, CRA's president and CEO. "Revenue growth of 47 percent in the fourth quarter was driven by strength in several practice areas, particularly energy and finance, as well as another solid contribution from our NeuCo subsidiary, which recorded its second consecutive quarter of record revenue. In addition, as a result of our efforts to reduce operating expenses, we experienced another sequential increase in operating margins to 13.2%.

"Even though we posted strong results for the fourth quarter, the events of September 11th and the general economic slowdown which followed did have a dampening effect on our utilization," stated Burrows.

Comments on Fiscal Year 2001

"CRA posted another banner year in fiscal 2001, with revenue growth of 33 percent surpassing our expectation of 20-25 percent growth," continued Burrows. "Our performance in 2001 is a direct result of our initiatives to realign CRA's existing staff during the year, while adding highly qualified personnel to accelerate growth in both emerging and established practices. Headcount growth of fifteen percent in fiscal 2001 was led by senior-staff additions in CRA's fastest growing practice -- electric power consulting. In addition, we opened a number of new office locations in 2001, greatly expanding CRA's geographic reach and positioning us well for growth domestically and overseas in the coming quarters."

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

About CRA

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

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

                 CHARLES RIVER ASSOCIATES INCORPORATED
                   CONSOLIDATED STATEMENTS OF INCOME
                 (In thousands, except per share data)

                     Twelve Weeks Ended        Fifty-two Weeks Ended
                 November 25,  November 24,  November 25, November 24,
                       2000         2001           2000        2001

Revenues             $ 19,880     $ 29,179       $ 82,547   $ 109,804
Costs of services      11,730       17,473         46,439      65,590
Gross profit            8,150       11,706         36,108      44,214

General and
 administrative         6,030        7,849         21,837      31,556
Special charge            878           --            878          --
Income from operations  1,242        3,857         13,393      12,658

Interest income, net      365          122          1,542       1,045
Income before provision
 for income taxes and
 minority interest      1,607        3,979         14,935      13,703
Provision for
 income taxes            (664)      (1,744)        (6,166)     (5,848)
Net income before
 minority interest        943        2,235          8,769       7,855
Minority interest         (93)        (320)            70        (416)
Net income              $ 850      $ 1,915        $ 8,839     $ 7,439
Net income per share:
  Basic                $ 0.10       $ 0.21         $ 1.01      $ 0.82
  Diluted              $ 0.10       $ 0.21         $ 1.01      $ 0.81

Weighted average number
of shares outstanding:
  Basic                 8,867        9,108          8,728       9,107
  Diluted               8,878        9,336          8,774       9,218


                 CHARLES RIVER ASSOCIATES INCORPORATED
                      CONSOLIDATED BALANCE SHEETS
                            (In thousands)

                                         November 25,     November 24,
                                             2000            2001

Assets
Cash, cash equivalents and
 short term investments                      $  26,063      $  23,628
Accounts receivable and unbilled, net           29,500         37,265
Other current assets                             1,657          2,286
    Total current assets                        57,220         63,179

Property and equipment, net                      5,942          7,569
Goodwill and intangible assets, net             16,015         18,966
Long-term investments                               --          3,433
Other assets                                     1,103          3,743
Total assets                                  $ 80,280       $ 96,890

Liabilities and stockholders' equity
Current liabilities                           $ 14,373       $ 22,070
Long term liabilities                            3,569          4,818
    Total liabilities                           17,942         26,888

Total stockholders' equity                      62,338         70,002
Total liabilities and stockholders' equity   $  80,280      $  96,890