Good morning, and welcome to the Noble Capital Markets Virtual Equity Conference. I am Joe Gomes, Managing Director and Senior Analyst at Noble Capital. Today, I have the pleasure of introducing CRA International or Charles River Associates. Following the presentation, we will have some time for Q&A. Feel free to submit questions using the Submit a Question function. With us today from the company is Paul Maleh, CEO, Chad Holmes, Chief Development Officer, and Daniel Mahoney, CFO. With that, I'm going to turn it over to the company. The floor is yours, Paul.
Great. No, thank you, and good morning, everyone. I really appreciate you joining us, today. I've been at CRA for 35 years, so clearly this firm is very special to me, and I feel privileged, being able to share, what makes us unique as a firm and what has contributed to the exceptional performance now for extended period of time. So let me get going here. I was told that I no longer can talk about the Boston Celtics. That's old news. But if this starts going poorly, we will jump back, to their successes here. We have plenty of our own to talk about. CRA has been around a while. 1965 was founded, and the core principles, that the firm was started with still preside today.
And that's really bringing quantitative methods and economics to the business world to help leaders make more informed decisions. Our portfolio has evolved through the years, and it resides right now along two main lines of business, what I would call legal and regulatory consulting, which makes up roughly about 80% of the firm's total revenue, and probably more traditional management consulting that everyone is probably familiar with. So let's get into talking about each of these components here. We're a professional services firm. As a professional services firm, things start and end with our people. We are an exceptional company because we have the privilege and luxury of having exceptional colleagues.
About three-quarters of all my senior colleagues have advanced degrees, and over 40%, have PhDs, so we are not lacking in any kind of academic acumen at the firm here. We are a very selective company in who we hire. Even though we take resumes from the top universities across the world, at the end of the day, we're only accepting roughly about 2% of all applicants. You know, I'm impressed and proud of that statistic, but even more impressive is what you find in the far top right-hand corner there. And that's less than 10% voluntary turnover among CRA's top revenue generators over the past five years. So let me explain that to you.
Every year I share with the board, our top 25 revenue generators, and we discuss their composition, where they reside in our portfolio. If I look at the top 25, the union of that over a 5-year period of time, I probably have over 50, of colleagues that make up that union. So the 10% is not an annual turnover. It's 10% in its totality. So we have lost about three or four people, you know, of our top revenue generators over that window of time. The reason I highlight that is these individuals can go anywhere they want, probably even get a premium, in compensation, along the move, but they're electing to stay at CRA.
So it's the environment, it's the rewards, both, intellectually and financially, that have them staying here, that also contribute to the consistency of results. So when we're adding colleagues, and we're having inorganic pursuits, they all contribute, to driving the financial performance. We're not filling any holes, that are created with the departure of senior colleagues. We talked about the two lines of business. The businesses that make up our management consulting, segment is the life sciences, business, energy, auctions, and competitive bidding. Everyone else is in the legal regulatory realm. The life sciences is, I believe, second or third largest practice at CRA. And the energy practices we're quite excited about, is they've been growing quite aggressively, and we think there's really opportunities for step change growth along that segment.
Within the legal regulatory side, our antitrust and competition economics practice is the largest practice at CRA. It probably makes up 40%-45% of the firm's total revenue, not just the portion of the 80%. So it's a large practice. It serves as the foundation for the firm and the brand foundation for our legal regulatory services. Okay, so who are our clients? Particularly as we talk about work in the legal regulatory realm, everyone right away thinks, "Oh, you're working for attorneys." Yes, the attorneys oftentimes act as the middleman in our retention in order to maintain confidentiality and privilege on these kind of engagements. But ultimately, we're working for the largest companies in the world. Here is just in the past two years, we have worked with 82 of the Fortune 100 companies on that.
If you go back in time to last year's investor presentation or the year before, what you'll find is it's always 80, 85 of these firms. That is also contributing to the consistency of results. We are a go-to provider for these companies as they face their most important legal and regulatory questions. With respect to the law firms that retain us on these engagements, the share or the proportion of the Am Law 100 law firms, we've worked with 97 of those law firms in the past two years. Again, if you go back year after year, you'll see similar kind of numbers. Our presence in the market is sort of undeniable. The quality of the portfolio is undeniable. That's the only way you get this kind of depth across the portfolio.
So what does that mean in terms of financial results? We have been performing, if I do say so myself, exceptionally well for the last dozen years or so. We've been having top-line growth in that past dozen years of probably 8%-9% a year, and we've been able to grow profits at an even faster rate. If you start breaking up that dozen years into smaller segments, what you find is the performance is pretty impressive, irrespective of how you want to slice up the dozen years, whether it's Q1 of fiscal 2024 or the last five years of 2019 to 2023. We experienced some volatility of financial performance in 2023 that I believe, and I think the data supports that, that was more market specific as opposed to CRA specific.
But even with that, we were still able to grow top-line 6%. We were still able to return substantive amount of capital back to our shareholders. So even in a period of time of 2023 in which we experienced volatility, we returned over $40 million of capital back to our shareholders, and the share repurchases was at an average price of $106. I think, you know, we're bouncing around 170, 175 over the last few days. So 106 sort of seems like a pretty good investment. If you go further in the deck, what you find is we're buying back our shares, and we're driving value. It's not a just a share count reduction, it's because it's a good investment.
Even if you look at Q1 of 2024, average share price of $140 on the repurchases. So we continue to drive the business forward and remain bullish about what the quarters and years ahead will bring to CRA. So with this capital, we're driving revenue, we're growing profits, we're returning money back to our shareholders. What's the investment thesis? The most simple way for us to put it is our objective is to maximize CRA's long-term value per share. If I have opportunities to invest back in the business for value-creating growth, I'm gonna take them every time, because the market for talent is episodic. It's not... You know, if I pass on a group hire opportunity today, it's not gonna be available in six months. So we always will take the talent and company reinvestment opportunities.
If those opportunities are not present, I'm gonna give the money back to my shareholders. And that's what you see. Our yield, for now, an extended window of time, has bounced around the 6%-8% range shareholder yield. So, and we are operating with no debt. So everything we're doing, the driving of revenue, the driving of profits, the returning of capital, is 100% financed by the operations of the company. We have a line of credit that we access for working capital, but not to drive the business and not for any kind of investments. Here just, well, just shows a little bit of the snapshot of the revenue growth. If you extend that back to 2014 or 2012, you're gonna get a very similar pattern. Every year is a record for CRA.
So it's not like we are operating in a world of good, year-over-year comparables. Our year-over-year comps are record levels. 2022 was a record, 2023 was a record, and guess what? Q1 of 2024, that was also a record. So we're proud of this performance, and again, as I said, bullish about the future there. I'm not gonna get into, this as a measure of what I would call an Adjusted EBITDA, but within our income statement, our GAAP financials has a large non-cash item, of amortization of forgivable loans. This non-cash item has to do with the investments we make for individual talent acquisition, for group hires, talent pursuits that do not meet traditional acquisition accounting, I'm sorry.
So I'm not saying that the proceeds that we pay to bring on individuals or group hires don't represent true cash outlays, but unless you make an adjustment to our financials or our cash flow statements, you're gonna double count the impact for it. So that's the only thing we're trying to get across on this slide here. And the next handful of slides, what they are is just trying to demonstrate it's not smoke and mirrors, okay? This is true cash in and cash out. So we look at what the uses of capital were from 2019 to 2023. Our aim is to return about half of our adjusted cash flow from operations back to our shareholders.
As you see, about an equal proportion is being invested back in the business and pretty minimal CapEx in terms of money we need to spend for real estate, money we need to spend to keep our systems operating at high levels of efficiency. All of these outlays, all of these uses have been funded by internal operations, right? We'll access that line of credit during the year, but as far back as I can remember, during my tenure as CEO, which has been about 15 years now, at the end of the year, we end that period of time with 0 debt balances. All of this is with cash flow from ops on that. Just going quickly through it, we're spending money inorganically to bring talent aboard to CRA.
But if I look at that, say, the last dozen years in which I said our top line growth is 8% or 9%, inorganic pursuits account for roughly 40%-45% of that revenue growth. So we have a nice balanced portfolio of growth happening at CRA. Yes, we pursue talent inorganically, but we are more than holding our own with what I would call same-store sale expansion in our portfolio. The CapEx, as I mentioned, minimal amount of money for non-real estate expenditures, and our real estate outlays over the past few years and going forward is gonna be targeted at particular offices in which we are reaching capacity there. And then the redistribution to our shareholders.
So yes, we're returning a lot of capital back to our shareholders, and it is largely dominated by the share repurchases. Main reason for that is we're undervalued, and it's a good investment, and we're gonna take advantage of those good investments on that. So until I start seeing that the share price, our intrinsic valuation, is not surpassing the share price that we observe in the marketplace, you can expect a similar split in the redistribution of capital between share repurchases and dividend payments. And we've been making some headway in terms of the share reduction. I think over the last decade or so, we've reduced our share count by about 30%-35%.
Even in this period of time, the last five, six years, you see about a 10% reduction in our share count, and that goes to the overall investment thesis, which is maximize the long-term value per share. Ultimately, what I'm worried about is the return of my shareholders, not just being a bigger organization. Being bigger doesn't necessarily translate into higher returns. So, I think, Joe, I'm gonna probably end there. I could go into a little more detail. We'll see what the questions are, and maybe decide whether to pursue that or not.
Okay, great. Sounds good, Paul. Thanks for that presentation. So let me start off the Q&A. The first one, you mentioned some volatility in 2023. You thought it was more market specific than CRA specific. Still, you mentioned you had a record year. Maybe give a little more color as to what was some of that volatility in the market that... and how you were able to avoid that or deal with that.
Sure. So 2023 was a record year in terms of leads coming into CRA. We'll oftentimes talk to our shareholders in during our quarterly calls, and talk about the business opportunities that are present to CRA, direct business opportunities. That went pretty much according to plan, in 2023. What was not according to plan is the conversion of those business opportunities to revenue-generating projects, on that. And the lower new project starts, contributed to the quarter-to-quarter volatility. The other thing it contributed to, even though we had record revenue, we expected even better results. And with revenue more in line, with our expectations in 2023, the profits would have followed suit... So the reason you see, lukewarm, profit measures in 2023 is we were built to deliver more.
We had more consulting headcount, we had more infrastructure that we expected, higher financial results on. And the good news is that we started seeing more normal conversion of those business opportunities into revenue-generating projects in Q4. We saw the same kind of pattern heading into Q1. And again, these patterns are not what I would call at record levels in terms of the conversion rates. Those conversion rates were just consistent with what our historical norms are. So if we just have a, you know, the remainder of 2024, consistent with that, our historical norms, I think we're all gonna be pretty pleased, with the financial results.
Okay. And you mentioned increased headcount. Now, what kind of utilization for your consultants are you currently at, and what's kind of, you know, where you would hope that number to go to?
Sure. As you see on this slide, we wanna be in the mid-70s on utilization, right? So our goal is to try to match supply of our labor and the demand for that labor to produce a utilization in the mid-70s. I think we can achieve a lot of our goals at that level, not just the financial goals, but also the goals to pursue the business opportunities that are present in the marketplace, and also, at the same time, deliver the highest quality services to our clients. We ended 2023 at a 70% mark, so we definitely had upside room to grow there. We saw some improvement in Q4 at, I believe, 73%, and I think that continued into Q1. So heading in the right direction, not necessarily where we want to be just yet.
Do you think you're going to look at further expansion of the consultant base? Do you have any view on, you know, adding more? And-
Sure
... how do you, how do you kinda go about not only attracting them, but retaining them? I know you touched a little bit about it earlier in the presentation, but maybe a little more color on that would be appreciated.
Sure. So with respect to the growing of the consulting base, not every part of my portfolio is experiencing the same opportunities or the same kind of obstacles in the marketplace. So we're growing headcount selectively across the portfolio. In aggregate, we have a lot of room to grow from 70% to 75%. Once I start seeing us approach that targeted midpoint, I'm gonna feel a lot more comfortable expanding our headcount there. With respect to how do we recruit top talent, it's not easy. It's not easy. It takes a lot of effort, both at the university level and also what I would call on the secondary market. Because when you're hiring the best and brightest, they have options.
They have a lot of choices, so you have to try to convey to them the qualities of our environment, the opportunities that will be present for them. So it's a continuous effort, because when you get them here, you have to keep them here. And I think our statistics speak for themselves in that we enjoy lower than industry average attrition rates, across the board, and even better statistics when you get to our most senior, revenue-generating ranks.
Okay. And you talked about, you know, 2023, there was a little bit of a lag in our clients taking a longer time than normal to begin projects. Are you starting to see some turns in that, where it's turning back to a more normal rate? I was just wondering, you know, obviously, a lot of companies brought about the uncertain economy in 2023. We still haven't seen any reductions in interest rates yet. You know, last things I've seen is they're probably talking about not now until after the election. So it still seem to be that economy is somewhat uncertain. Do you think companies are just getting to that point that they can't put these projects off anymore, and that's why they're starting to see that timeline get back to more normal? Is there anything else that-
I-
point...
I think, yeah, I think in some aspects of our demand, yes, that I believe that is true. In other parts, even though we keep hearing, "Hey, this quarter or this year, M&A activity is gonna pick up," the fact is, it really hasn't yet. So we're still in the hopes and dreams kind of phase of that. We haven't seen any substantive change from the lower M&A levels, both here in the States and globally, with that. So, I think we still need some macroeconomic factors, some geopolitical factors, to try to begin resolving themselves, before we get there. But we're pretty pleased the fact that we're performing as well as we are, even with a sluggish M&A environment as a backdrop.
Okay. And then one more on the share repurchases. You know, you did a great job of going over that and, you know, just kind of how do you or what models are you using to, A, determine your intrinsic value of the company? And then, B, how do you balance repurchasing shares versus the need for investor liquidity in the stock?
Sure. So I use every kind of valuation model or piece of information that I have available. We have our own discounted cash flow model. I test that with respect to observed market valuations of CRA, market valuations of that, of our competitors with that, so we're tracking it. And I think what history has shown is our investment decision framework seems to be working because when we're buying back shares in any one period of time, it's not that long a period of time before we get prices that exceed the share repurchase levels. So we feel good with our models and the accuracy that they are providing. And I'm sorry, Joe, can you remind me of the second part of the question again?
Sure. How do you balance the need for investor liquidity?
Fine. Thank you. So if you look at CRA, we've addressed this kind of question, too. Our liquidity has actually increased over the last decade. If you look at the dollar value of our shares traded, it has gone steadily up. So our continued driving of performance, driving of the aggregate value, has actually improved liquidity in the past decade, even though our share count is down 30%. So and I was told long ago that my job is to properly allocate the capital and let investors worry about getting in and out of our stock, and that's been our, you know, marching orders there that we've embraced.
Great. That's all the questions we have. We're kind of running up against the time limit, but any final words?
No. It was a great NBA season. We're looking to repeat next year. But this firm is near and dear to all of us here, to all the executive team, to all my colleagues, and we're proud of what we are doing. This is a true value creation exercise that we've been able to grow attractively and grow profitably at the same time. We're not going into areas that we don't have a comparative advantage in. So that's what makes us bullish about the future, is that we're just looking to do more of the same in which we have demonstrated success in.
Well, Paul, great presentation. Appreciate you guys taking the time. Great Q&A. Look forward to continuing to follow CRA in the future. Thank you very much.
Thank you, Joe. Thank you, everyone. Thank you.