November 5, 2013
MIAMI, FL - November 5, 2013 - The Hackett Group, Inc. (NASDAQ: HCKT), a global strategic advisory and business transformation and technology consulting firm, today announced its financial results for the third quarter of 2013, which ended September 27, 2013.
Third quarter 2013 revenue was $57.9 million, up 4% from prior year. Pro forma diluted earnings per share were $0.12, up 9% when compared to $0.11 for the same period in 2012. 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 both the third quarter of 2013 and 2012.
At the end of the third quarter of 2013, the Company's cash balances were $15.4 million and the Company had $15.0 million outstanding on its credit facility.
Subsequent to September 27, 2013, the Company completed its tender offer through which it bought back approximately 1.0 million shares at a purchase price of $7.00 per share for an aggregate cost of approximately $6.9 million, excluding fees and expenses. The tender offer was funded by drawing $7.0 million on the Company's amended and restated credit agreement, which brings the current outstanding balance on the credit facility to $22.0 million.
In its recent meeting, the Company's Board of Directors declared the payment of a dividend of $0.10 for holders of record on December 10, 2013. This dividend will be paid on December 20, 2013. Additionally, the Board of Directors approved to increase the stock repurchase program authorization by an additional $5.0 million. This brings the Company's remaining stock repurchase authorization to $10.0 million.
"We reported solid quarterly results driven by strong US demand which was somewhat offset by weaker than expected results in Europe and Australia," stated Ted A. Fernandez, Chairman & CEO of The Hackett Group, Inc. "We now expect continuing deterioration in both Europe and Australia to more than offset continued year on year US improvements in the fourth quarter. However, as we enter the new year, we expect our increased investment in EPM capabilities in Europe to strengthen our overall market offering and performance in 2014."
Based on the current economic outlook, the Company estimates total revenue for the fourth quarter of 2013 to be in the range of $51.0 million to $53.0 million, and estimates pro forma diluted earnings per share to be in the range of $0.07 to $0.09.
Offshoring Research Update - New research from The Hackett Group found that large companies in North America and Europe are now losing over 250,000 jobs each year in IT, finance, and other key business services areas, due to the combined impact of offshoring, technology-driven productivity improvements, and the low-growth business environment. While the number of jobs being lost annually will decline over the next few years, The Hackett Group now estimates that by 2017 nearly half of all back office jobs at these companies that existed in North America and Europe in 2002 will have disappeared -- a total loss of 3.7 million jobs.
Global Operating Model Research - New research from The Hackett Group found that while many large companies are aggressively pursuing globalization of their products and brands, the large majority are flying blind, without the ability to truly see what is happening globally or make adjustments. Hackett's new "Global Operating Model" Book of Numbers research, which looks at the performance of more than 100 companies, found a strong acceleration of the trend towards globalization of business, with most companies moving toward high levels of globalization for their products and services lines and expanding the globalization of delivery of business services over the next few years. In large part these trends are being driven by high growth rates in China and other emerging markets combined with stagnation in developed markets.
European Best Practices Conference - The Hackett Group held its 2013 European Best Practices Conference in Berlin October 30-31 for over 200 attendees. The theme was "Borderless Business: Integrating the Enterprise for Sustainable Success," and the conference featured presentations by senior executives from more than 15 global companies, including: ABB Switzerland, Airbus/EADS, Amway, Antalis, Atos, Bayer, Coca-Cola Enterprises, Deutsche Bank, Glaxo SmithKline, National Grid, Nestlé, OC Oerlikon Management, Rio Tinto, Tetra Pak International, and Unilever.
Category Insight Research - In early October, The Hackett Group announced a significant new capability as part of its services for Procurement leaders, a series of Category Insight Reports. Each report offers empirical analysis to streamline the market research and intelligence efforts of procurement professionals. Initial reports will cover an array of indirect spend areas, including: commercial printing, maintenance, repair, and operations suppliers, temporary labor, and facilities management. The Category Insight Reports are designed to complement the operational research, advisory, procurement strategy and insights, benchmarks, consulting expertise, and other research and transformation capabilities The Hackett Group offers.
On Tuesday, November 5, 2013, 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 Tuesday, November 5, 2013 and will run through 5:00 P.M. ET on Tuesday, November 19, 2013. To access the rebroadcast, please dial (866) 411-8824. For International callers, please dial (203) 369-0662.
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 5, 2013 and will run through 5:00 P.M. ET on Tuesday, November 19, 2013. 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" and involves 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 business consulting and information technology industries, our ability to attract and retain skilled employees, possible changes in collections of accounts receivable due to the bankruptcy or financial difficulties of our customers, risks of competition, price and margin trends, foreign currency fluctuations, changes in general economic conditions and interest rates and our ability to obtain debt financing through additional borrowings under an amendment to our existing credit facility, as well as other risks detailed in our reports filed with the SEC. 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.