November 5, 2012
MIAMI, FL - November 5, 2012 - The Hackett Group, Inc. (NASDAQ: HCKT), a global strategic advisory and operations improvement consulting firm, today announced its financial results for the third quarter of 2012, which ended September 28, 2012.
Third quarter 2012 revenue was $58.6 million, a 1% increase (3% on a constant currency basis) from the same period in 2011. Pro forma diluted earnings per share were $0.11 for the third quarter of 2012, as compared to $0.09 for the same period in 2011. 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 $0.08 for the third quarter of 2012, as compared to $0.10 from the same period in 2011. For comparison purposes, GAAP earnings per share for the third quarter of 2012 were unfavorably impacted by U.S. federal income tax expense of approximately $0.05 per diluted share, resulting from the release of tax valuation reserves and recognition of the corresponding deferred tax assets at the end of 2011.
"We reported solid operating results in spite of the volatility we experienced in Europe as we entered the quarter," stated Ted A. Fernandez, Chairman and CEO of The Hackett Group. "We continue to believe our offerings are well aligned with the complexities of the global economy and provide us with opportunities to continue to improve our financial performance."
At the end of the third quarter of 2012, the Company's cash balances were $15.2 million. During the third quarter of 2012, the Company repaid $4.0 million of its new credit facility, leaving a $28.0 million balance at quarter end. Subsequent to quarter end, the Company repaid an additional $3.0 million.
Based on the current economic outlook, the Company estimates total revenue for the fourth quarter of 2012 to be in the range of $54.0 million to $56.0 million, and estimates pro forma diluted earnings per share to be in the range of $0.09 to $0.11.
European Best Practices Conference - Over 125 executives from Europe's largest companies attended The Hackett Group's 2012 European Best Practices Conference in London in early October. Attendees heard presentations by executives from more than a dozen of the world's most successful companies, including Bayer, BSkyB, First Data, Henkel, Lafarge, Nedbank, Rio Tinto, Royal FrieslandCampina, and Vodafone.
REL 1000 Working Capital Research Results - The ability of the largest U.S. companies to collect from customers and manage inventory improved just slightly in 2011, while payables performance worsened, according to the 14th annual working capital survey from REL, a division of The Hackett Group, and CFO Magazine. Overall, working capital performance improved slightly for 1000 of the largest U.S. public companies in the REL/CFO analysis. The study found a tremendous improvement opportunity in working capital management. Companies in the study now have over $900 billion in excess working capital, a figure that represents nearly 7% of the U.S. Gross Domestic Product and is the largest opportunity in this area in the past five years.
Economic Uncertainty Research - In the face of increasing business volatility and shrinking GDP growth projections, The Hackett Group issued research detailing six operational imperatives designed to help companies combat economic uncertainty by enhancing the efficiency and effectiveness of their operations, including the finance, human resource, information technology, procurement, and supply chain areas. According to The Hackett Group's research, by focusing on six imperatives and making significant process improvements and other changes to various elements of their Service Delivery Model for back-office services, a typical global company (with $33.4 billion in revenue) could cut the cost of these services by up to $302 million, or more than 25%. At the same time, companies can improve the quality and timeliness of performance information and decision-making processes, and also enhance business agility and responsiveness.
Talent Management Book of Numbers™ Findings - New Book of Numbers research from The Hackett Group found that finance, information technology, procurement, and other business service areas are in the midst of a growing talent crisis, and the failure of human resource and business service leaders to effectively collaborate is in large part to blame. According to the research, business service organizations are seeing dangerous deficits in talent and skills, and are highly dissatisfied with the level of support they receive from human resources on talent issues. This dissatisfaction is primarily being driven by the extremely low levels of service that human resources is providing, and lack of effective communication and collaboration between business service leaders and human resources.
On Monday, November 5, 2012,senior management will discuss third quarter results in a conference call at 5:00 P.M. ET. 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 Monday, November 5, 2012 and will run through 5:00 P.M. ET on Monday, November 19, 2012. To access the rebroadcast, please dial (800) 551-8152. For International callers, please dial (203) 369-3810.
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 Monday, November 5, 2012 and will run through 5:00 P.M. ET on Monday, November 19, 2012. 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.