February 24, 2015

The Hackett Group Announces Fourth Quarter and Fiscal 2014 Results

  • Q4 2014 revenue of $60.3 million, up 15%, and pro forma EPS of $0.17, up 113%, both exceeding high end of guidance
  • Fiscal 2014 revenue of $236.7 million, up 6%, pro forma EPS of $0.56 up 37%, and pro forma EBITDA of $27.7 million, up 13%
  • Company announces 2015 annual dividend increase of 17% from 12 cents to 14 cents to be paid semi-annually

MIAMI, FL - February 24, 2015 - The Hackett Group, Inc. (NASDAQ: HCKT), a global strategic advisory and business transformation and technology consulting firm, today announced its financial results for the fourth quarter and fiscal year, which ended January 2, 2015.

Fourth quarter 2014 revenue was $60.3 million, up 15% from prior year. Pro forma diluted earnings per share were $0.17, up 113% when compared to $0.08 for the same period in 2013. Fiscal year 2014 revenue was $236.7 million, up 6% from fiscal year 2013 revenue of $223.8 million. Fiscal year pro forma diluted earnings per share were $0.56, up 37%, as compared to $0.41 in fiscal year 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 was $0.16 for the fourth quarter of 2014, as compared to $0.04 in the same period in 2013. GAAP diluted earnings per share in fiscal 2014 was $0.33, as compared to $0.27 in the previous fiscal year. At the end of the fourth quarter of 2014, the Company's cash balances were $14.6 million. During the quarter the Company utilized cash to pay down $8.8 million of its debt facility, leaving a balance of $18.3 million at year end. Additionally, the Company paid its annual dividend of $0.12 per share, an increase from $0.10 per share in the prior year, totaling $3.5 million.

The Company also repurchased 108 thousand shares in the fourth quarter of 2014 at an average cost of $6.08 per share, for a total cost of $657 thousand. As of fiscal year end, the Company's remaining stock repurchase program authorization was $3.7 million.

"We reported strong quarterly and annual results driven by solid North American demand and improving European performance," stated Ted A. Fernandez, Chairman & CEO of The Hackett Group, Inc. "More importantly, I believe this momentum has carried over into the new year, which bodes well for our prospects."

Based on the current economic outlook, the Company estimates total revenue for the first quarter of 2015 to be in the range of $58.5 million to $60.5 million, and estimates pro forma diluted earnings per share to be in the range of $0.13 to $0.15.

Other Highlights

World-Class HR Research – World-class HR organizations continue to outperform their peers, according to new research from The Hackett Group, delivering a greater focus on strategic workforce planning and other high-value activities while operating at 23% lower cost per employee than typical companies and functioning with 32% fewer staff.

The Hackett Group's research found that a well-designed service delivery model (SDM) focusing on operational excellence is one key to how world-class HR organizations achieve greater agility and better understanding of business needs. These companies also turn to HR metrics and analytics to provide better data on their human capital and more effectively quantify the value HR brings to the enterprise. By contrast, half of all typical HR organizations do not even measure the result of change initiatives or produce any type of functional scorecard.

Credit Card Burden Research – Credit card processing fees present a growing burden for many U.S. business-to-business (B2B) companies, according to new research from REL Consulting, a division of The Hackett Group, and that companies can significantly improve their profit margin by changing acceptance policies for credit cards.

REL's research estimates that B2B companies in the U.S. now incur an average of $2.2 million in credit card processing fees per billion of revenue. Credit cards usage for B2B payments has increased dramatically over the past few years, and are expected to represent 10% of all payments in 2014. REL estimates that approximately 60% to 85% of credit card fees can be avoided by making changes to credit card acceptance policies keyed to the organization's business model, customer base, customer risk, and competitive landscape.

On Tuesday, February 24, 2015, senior management will discuss fourth quarter results in a conference call at 5:00 P.M. ET.

The number for the conference call is (800) 779-3138, [Passcode: Fourth 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, February 24, 2015 and will run through 5:00 P.M. ET on Tuesday, March 10, 2015. To access the rebroadcast, please dial (866) 419-2885. For International callers, please dial (203) 369-0765.

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, February 24, 2015 and will run through 5:00 P.M. ET on Tuesday, March 10, 2015. To access the replay, visit http://www.thehackettgroup.com or http://www.streetevents.com.


About The Hackett Group, Inc.

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.