November 4, 2014
MIAMI, FL - November 4, 2014 - 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, which ended September 26, 2014.
Third quarter 2014 revenue was $60.4 million, as compared to $57.9 million for the same period in 2013. Pro forma diluted earnings per share were $0.16 for the third quarter of 2014, an increase of 33%, as compared to $0.12 for the same period in 2013. 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 $0.12 for the third quarter of 2014, an increase of 50%, as compared to GAAP diluted earnings per share of $0.08 in the third quarter of 2013.
In its recent meeting, the Company's Board of Directors declared the payment of a dividend of $0.12 for holders of record on December 10, 2014. This dividend will be paid on December 22, 2014.
During the third quarter, the Company utilized cash to repurchase approximately 485 thousand shares of the Company's common stock at an average price of $6.13 per share for a total cost of $3.0 million. As of the end of the third quarter of 2014, the Company's remaining stock repurchase authorization was $4.3 million.
"We reported strong quarterly earnings driven by solid US demand and improving European results," stated Ted A. Fernandez, Chairman & CEO of The Hackett Group, Inc. "We also expect this momentum to continue into the fourth quarter which would allow us to finish the year strongly."
Based on current economic outlook, the Company estimates total revenue for the fourth quarter of 2014 to be in the range of $57.5 million to $59.5 million, and estimates pro forma diluted earnings per share to be in the range of $0.14 and $0.16. At the mid point of the guidance this would represent 11% year over year total revenue growth in the quarter.
European Best Practices Conference — Nearly 200 attendees joined The Hackett Group in Berlin for the 2014 European Best Practices Conference held on October 7-9. The event included presentations by senior executives from nearly a dozen leading companies including: BASF; BUPA; Heineken International B.V., Lantiq Deutschland GmbH; Oracle; SAP; Schlumberger; Shell; Siemens; SITA; Société Générale; Statoil; Tetra Pak International S.A. and Vodafone.
REL Working Capital Survey — The 16th annual working capital survey from REL, a division of The Hackett Group, and CFO Magazine found that U.S. companies made only marginal improvements in their ability to collect from customers and pay suppliers in 2013, while showing no improvement in how well they managed inventory. The amount tied up in excess working capital at nearly 1,000 of the largest public companies in the U.S. is over a trillion dollars, according to the REL/CFO research. In Europe, the survey found that the largest listed companies are starting to see the fruits of an increased focus on working capital as costs and debt start to decrease and cash on hand and free cash flow increase.
Finance World-Class Performance Advantage Research — World-class finance organizations continue to outperform their peers by delivering high-value services at about half the cost of typical companies, according to new research from The Hackett Group. The research found that to achieve these results world-class organizations realign their finance talent, rearchitect their service delivery model, and retool with more effective technology capabilities. The Hackett Group's research estimates that a typical large company (with $10 billion in revenue) could save up to $51 million by achieving world-class performance levels in finance, freeing resources to focus on higher-value activity and innovation.
IT World-Class Performance Advantage Research — New research from The Hackett Group found that world-class IT organizations now deliver services at 22% lower cost than typical companies, and operate with 9% fewer staff, in part by reducing technology complexity and realigning talent. The research estimates that a typical large company (with $10 billion in revenue and about 21,500 end-user equivalents) could save up to $36 million annually by achieving world-class performance levels in IT, freeing resources to focus on higher-value activity and innovation. The research also found that talent is emerging as a major challenge to improved IT performance. Offshoring and other factors are causing limited availability of staff with skills that are in high demand, and are likely to create a bottleneck to raising the value contribution for many IT organizations.
Procurement World-Class Performance Advantage Research — The Hackett Group's research found that world-class procurement organizations outperform their peers by striving to provide unique value beyond cost reduction; including becoming a trusted advisor to the business, driving supplier innovation, and focusing on risk management. According to The Hackett Group's research, world-class procurement organizations now operate at nearly 20% lower cost as a percentage of spending than typical companies. They also have 27% fewer employees. However world-class procurement organizations may have reached the limit of their ability to reduce costs, according to The Hackett Group's forecasts. World-class procurement organizations now generate purchased cost savings equal to more than 9 times the cost of procurement, according to The Hackett Group's research. This is more than double the return on investment generated by typical companies.
On Tuesday, November 4, 2014, 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 4, 2014 and will run through 5:00 P.M. ET on Tuesday, November 18, 2014. To access the rebroadcast, please dial (888) 566-0411. For International callers, please dial (203) 369-3041.
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 4, 2014 and will run through 5:00 P.M. ET on Tuesday, November 18, 2014. 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, offering digital transformation and enterprise application approaches including a robotic process automation and cloud computing. 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 13,000 benchmarking studies with major corporations and government agencies, including 93% of the Dow Jones Industrials, 87% of the Fortune 100, 87% of the DAX 30 and 58% 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.