May 1, 2007
Miami, FL - May 1, 2007 - Answerthink, Inc. (NASDAQ: ANSR), a strategic business advisory and technology consulting firm, today announced its financial results for the first quarter, which ended March 30, 2007.
First quarter revenue was $39.9 million, a 20% decrease from the same period in 2006, primarily as a result of the Company's exit from its Lawson and SAP staff augmentation contracts. Diluted loss per share was $0.05 compared to diluted loss per share of $0.14 in the first quarter of 2006. Pro forma diluted loss per share was $0.01, compared to pro forma diluted earnings per share of $0.04 in the first quarter of 2006. 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.
The Company's cash balances, including restricted cash, increased to $24.2 million at the end of the first quarter of 2007 from $20.2 million at the end of the fourth quarter of 2006. The increase was primarily driven by a sequential decrease in DSO of 16%. During the quarter, the Company did not repurchase any shares of the Company's common stock. As of the end of the first quarter of 2007, $6.1 million remained available under the Company's share repurchase program authorization.
"Based on the number of large deals sold in the quarter and the momentum it provides heading into the second quarter, we expect sequential growth to favorably impact results," said Ted A. Fernandez, Chairman and CEO of Answerthink. "This momentum, coupled with the record attendance of nearly 450 delegates at our U.S. Best Practice Conference, appears to indicate that clients are positively responding to our best practice intelligence and the various ways we make it available to them."
Based on the current economic outlook, the Company estimates total revenues for the second quarter of 2007 to be in the range of $42 million to $44 million. The Company also estimates pro forma diluted earnings per share to be in the range of $0.02 to $0.04.
Hackett Best Practices Conference - On April 27th and 28th, The Hackett Group previewed the findings from its 2007 Book of Numbers™ research to a record attendance of nearly 500 delegates at its 17th Annual Best Practices Conference, "Leveraging Synergies: Myth or Reality." The two-day invitation-only event featured presentations by senior executives from 24 of the world's most successful companies including: Honeywell, Abercrombie & Fitch, Citigroup, Georgia-Pacific, Dupont, and Unilever.
European Finance Shared Services Study - New Book of Numbers research from The Hackett Group found that finance shared services organizations (SSOs) have now become a proven and standard approach for most European companies, helping to cut the cost of finance operations by over 20% while enabling them to improve quality, productivity, and customer service by up to 40%. Hackett's research also predicted that the use of offshore SSOs by European companies will expand significantly over the next two years.
SAP Awards - Answerthink was named an SAP All-in-One Partner of the Year by SAP America, in recognition of the company's sales and implementation efforts with small and midsize enterprises (SMEs).
State Finance Awards - The National Association of State Auditors, Comptrollers and Treasurers (NASACT), The Hackett Group, and Accenture jointly named three states - Colorado, Massachusetts, and Mississippi - as winners of NASACT Benchmark Achievement Awards for achieving top-quartile effectiveness in finance operations. The awards were based on the results of finance benchmarks performed by The Hackett Group.
Finance Transformation for European Automotive OEM - This global company selected Hackett for a global finance benchmark and transformation effort designed to identify sustainable process improvement opportunities as part of a broad cost-cutting initiative. As part of the contract, the company has also become a member of Hackett's Enterprise Performance Management Executive Advisory Program.
Customer-to-Cash Optimization Pilot for a Global Paper and Packaging Company - This company retained REL for a customer-to-cash design and implementation pilot covering four business units. The company's goal is to improve overall cash flow and reduce Days Sales Outstanding. REL's work will include definition of company-wide customer-to-cash policies, development of a quick win program to reduce receivable balances, design and implementation of performance metrics, optimization of dispute management processes, and cross-functional staff training.
Hyperion Implementation for Managed Health Care Provider - This company selected Answerthink for a comprehensive implementation of Hyperion Financial Management and Planning systems. The new system, which will interface with the company's SAP solution, is designed to offer new levels of visibility into how to optimize pricing for their offerings to the market.
Oracle/PeopleSoft Implementation for U.S. Credit Card Issuer - Answerthink was selected by one of the fastest growing credit card issuers in the United States to assist them with their Oracle/PeopleSoft Enterprise Application implementation. Answerthink will utilize its Best Practices Implementation tools and methodology to assist this company in expanding the footprint of their existing Oracle/PeopleSoft systems into their Budget and Planning, Procurement, and Staffing Service processes.
At 5:00 P.M. ET on Tuesday, May 1, 2007, the senior management of Answerthink, Inc. will host a conference call to discuss first quarter earnings results for the period ending March 30, 2007.
The number for the conference call is 888-324-2912, (Passcode: First Quarter, Leader: Ted A. Fernandez). For International callers, please dial 210-234-0003.
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, May 1, 2007 and will run through 5:00 P.M. ET on Tuesday, May 15, 2007. To access the rebroadcast, please dial 866-452-2104. For International callers, please dial 203-369-1210.
In addition, Answerthink will also be webcasting this conference call live through the StreetEvents.com service. To participate, simply visit http://www.answerthink.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, May 1, 2007 and will run through 5:00 P.M. ET on Tuesday, May 15, 2007. To access the call, visit http://www.answerthink.com or http://www.streetevents.com.
Answerthink, Inc. (www.answerthink.com) is a leading business and technology consulting firm that enables companies to achieve world-class business performance. By leveraging the comprehensive database of The Hackett Group, Answerthink's business and technology solutions help clients significantly improve performance and maximize returns on technology investments. Answerthink's capabilities include benchmarking, business transformation, business applications, business intelligence, and offshore application development and support. Founded in 1997, Answerthink has offices throughout the United States and in Europe and India.
The Hackett Group, a strategic advisory firm, is a global leader in best practice research, benchmarking, and business transformation services that enable world-class performance across selling, general & administrative (SG&A) and supply chain activities. Hackett provides strategic insight, best practice advice and implementation services grounded in performance metrics obtained through 15 years and 3,500 benchmark studies at 2,100 of the world's leading companies. Through its sister company REL, a world leader in implementing cash flow improvement, Hackett also offers tailored solutions that generate cash flow from operations in addition to process cost savings.
Executives use Hackett's unique, empirically-based approach to prioritize initiatives, execute faster, reduce risk and deliver sustainable results. Our clients comprise 97 percent of the Dow Jones Industrials, 77 percent of the Fortune 100 and 50 percent of the FTSE 100.
REL is a world leading consulting firm dedicated to delivering sustainable cash flow improvement across business operations. REL's tailored solutions balance client trade-offs between working capital, operating costs and service performance. REL's expertise has helped clients free up billions of dollars/euros/pounds in cash, creating the financial freedom to fund acquisitions, pension liabilities, product development, debt reduction and share buy-back programs. In-depth process expertise, analytical rigor, and collaborative client relationships enable REL to deliver an exceptional return on investment in a short timeframe. REL has delivered work in over 60 countries for the Global 2000.
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.