November 8, 2011
MIAMI, FL - November 8, 2011 - The Hackett Group, Inc. (NASDAQ: HCKT), a global strategic advisory and operations improvement consulting firm, today announced its financial results for the third quarter, which ended September 30, 2011.
Third quarter 2011 revenue was $57.9 million, an 11% increase from the same period in 2010. Pro forma diluted earnings per share were $0.09 for the third quarter of 2011, as compared to $0.08 for the same period in 2010. Pro forma information is provided to enhance the understanding of the Company's financial performance and is reconciled to the Company's GAAP information in the accompanying tables. GAAP diluted earnings per share were $0.10 for both the third quarter of 2011 and 2010.
"The complexity and volatility of the global economy requires organizations to remain focused on operational excellence," stated Ted A. Fernandez, Chairman and CEO of The Hackett Group, Inc. "Our strong operating results demonstrate that our offerings are well aligned with these market conditions and keep us on course to reach our annual objectives."
At the end of the third quarter of 2011, the Company's cash balances were $19.6 million. During the quarter ended September 30, 2011, the Company repurchased 269 thousand shares of its common stock at an average cost of $3.59 per share, for a total cost of $967 thousand. The Company's remaining authorization at the end of the third quarter of 2011 was approximately $2.5 million.
Based on the current economic outlook, the Company estimates total revenue for the fourth quarter of 2011 to be in the range of $53.0 million to $55.0 million, and estimates pro forma diluted earnings per share to be in the range of $0.07 to $0.09. At the mid-point of the fourth quarter guidance, 2011 pro forma EPS would be up approximately 20% from the prior year.
European Best Practices Conference - In mid-October, The Hackett Group held its 2011 European Best Practices Conference, "Managing Global Growth and Economic Uncertainty." The invitation-only event in London was attended by nearly 150 senior-level executives from the world's most respected brands. It featured speakers from 12 of the world's most successful companies, including leaders in Finance, Information Technology, Human Resources, Procurement, and Global Shared Services from BASF SE, Bayer MaterialScience AG, Deutsche Bank AG, Network Rail, Royal Dutch Shell Group and Statoil.
Inflation Research - New research from The Hackett Group found that rising prices and other inflationary pressures could reduce corporate profits by up to 9% in 2011 and 2012. For a typical Global 1000 company with $27.8 billion in revenue, the study estimated that commodity and offshore labor inflation could drive a $150 million per year impact to the bottom line. The Hackett Group's research also found that world-class companies can not only mitigate the effects of inflationary pressures by enhancing their operating platforms but can take advantage of productivity improvement opportunities.
Working Capital Research - New research from REL Consulting, a division of The Hackett Group, and CFO Magazine, found that the largest U.S. companies are currently holding vast amounts of cash, in many cases borrowing to do so, while smaller companies remain starved for capital. According to the REL/CFO research, the 1,000 largest public companies in the U.S. had $853 billion of cash reserves at the end of 2010. Cash reserves have risen over 6% since 2009, 33% since 2008, and nearly 75% since 2005. High cash levels are being driven in part by lack of confidence in the market, and concerns over market and demand volatility as the global economy continues to recover. Surprisingly, it appears that borrowing is also a significant factor behind the high cash reserves, particularly for AAA-rated companies.
At 5:00 pm ET on Tuesday, November 8, 2011, the senior management of The Hackett Group will host a conference call to discuss its third quarter financial results for the period ended September 30, 2011. The number for the conference call is (800) 779-3138, [Passcode: Third Quarter, Leader: Ted A. Fernandez]. For International callers, please dial (517) 308-9381.
Please dial in at least 5-10 minutes prior to start time. If you are unable to participate on the conference call, a rebroadcast will be available beginning at 8:00 P.M. ET on Tuesday, November 8, 2011 and will run through 5:00 P.M. ET on Tuesday, November 22, 2011. To access the rebroadcast, please dial (866) 420-4824. For International callers, please dial (203) 369-0786.
In addition, The Hackett Group will also be webcasting this conference call live through the StreetEvents.com service. To participate, simply visit http://www.thehackettgroup.com approximately 10 minutes prior to the start of the call and click on the conference call link provided. An online replay of the call will be available after 8:00 P.M. ET on Tuesday, November 8, 2011 and will run through 5:00 P.M. ET on Tuesday, November 22, 2011. To access the replay, visit http://www.thehackettgroup.com or http://www.streetevents.com.
The Hackett Group (NASDAQ: HCKT) is an intellectual property-based strategic consultancy and leading enterprise benchmarking and best practices implementation firm to global companies. Services include business transformation, enterprise performance management, working capital management, and global business services. The Hackett Group also provides dedicated expertise in business strategy, operations, finance, human capital management, strategic sourcing, procurement, and information technology, including its award-winning Oracle EPM and SAP practices.
The Hackett Group has completed more than 11,000 benchmarking studies with major corporations and government agencies, including 93% of the Dow Jones Industrials, 86% of the Fortune 100, 87% of the DAX 30 and 52% of the FTSE 100. These studies drive its Best Practice Intelligence Center™ which includes the firm's benchmarking metrics, best practices repository, and best practice configuration guides and process flows, which enable The Hackett Group's clients and partners to achieve world-class performance.
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks, uncertainties and other factors that may cause The Hackett Group's actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. Factors that impact such forward-looking statements include, among others, the ability of our products, services, or practices mentioned in this release to deliver the desired effect, our ability to effectively integrate acquisitions into our operations, our ability to retain existing business, our ability to attract additional business, our ability to effectively market and sell our product offerings and other services, the timing of projects and the potential for contract cancellations by our customers, changes in expectations regarding the information technology industry, our ability to attract and retain skilled employees, possible changes in collections of accounts receivable, risks of competition, price and margin trends, foreign currency fluctuations, changes in general economic conditions and interest rates as well as other risks detailed in our Company's Annual Report on Form 10-K for the most recent fiscal year filed with the Securities and Exchange Commission. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
More information on The Hackett Group is available: by phone at +1 770 225 7300; by e-mail at email@example.com.