October 30, 2007
Miami, FL - October 30, 2007 - Answerthink, Inc. (NASDAQ: ANSR), a strategic business advisory and technology consulting firm, today announced its financial results for the third quarter, which ended September 28, 2007.
Third quarter 2007 revenue was $46.7 million, a 7% increase from the same period in 2006, driven by Hackett Group revenue growth. Excluding revenues from the Lawson and SAP staff augmentation practices exited in the fourth quarter of 2006, third quarter revenues increased 14% from the same period in 2006.
Diluted earnings per share was $0.08 in the third quarter of 2007, as compared to $0.03 in the second quarter of 2007 and $0.01 in the third quarter of 2006. Pro forma diluted earnings per share were $0.07 in the third quarter of 2007, as compared to $0.04 in the second quarter of 2007 and $0.03 in the third 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.
At the end of the third quarter of 2007 the Company's cash balances were $25.6 million. During the quarter the Company used $4.1 million to repurchase 1.2 million shares of the Company's common stock. Subsequent to the end of the quarter, the Board of Directors authorized an additional $5.0 million increase to the share repurchase program. This authorization raises the amount available under the Company's repurchase program to $9.9 million.
"We are pleased to see our strong growth and operating profits emanate from our decision to aggressively expand and leverage the Hackett Group intellectual capital and brand," said Ted A. Fernandez, Chairman and Chief Executive Officer. "With 65% of our current quarter revenues now coming from The Hackett Group, we plan to rename the organization as The Hackett Group, subject to shareholder approval, by January of 2008."
Based on the current economic outlook, the Company estimates total revenues for the fourth quarter of 2007 to be in the range of $41.5 million to $43.5 million. The Company also estimates pro forma diluted earnings per share to be in the range of $0.06 to $0.08. This pro forma guidance excludes the recovery of $2.3 million misappropriated by its former UK disbursement agent that was received in October 2007.
Talent Management Research - Hackett released Book of Numbers™ research findings showing that by excelling in talent management, the average Fortune 500 company can generate a nearly 15% improvement in earnings before interest, depreciation, and amortization, netting almost $400 million annually.
Cash Masters Europe Study - REL and CFO Europe Magazine released a study showing that despite a booming economy and record sales figures, the top 1,000 public companies in Europe lost ground in the battle to generate and manage cash in 2006. According to the study, European companies could generate an additional €407 billion of cash flow annually if all companies matched the cash conversion performance of top performers in their industries.
Working Capital Asia Study - REL and CFO Asia released a study showing that Asia's 725 largest companies (excluding automakers and financial institutions) significantly improved their working capital performance in 2006, liberating $15 billion, largely through better bill collection and improved inventory management.
Business Services Transformation Effort for Specialty Materials Company - This company selected Hackett to develop and assist in the execution of a comprehensive business services transformation plan and the design of a new operating model for its North American services which include finance, IT, procurement, HR, and comprehensive Customer to Cash. To better serve a diverse and changing global portfolio of companies, the company desires to re-balance cost structures and achieve significant regional growth by leveraging services most effectively across disparate business units.
At 5:00 P.M. ET on Tuesday, October 30, 2007, the senior management of Answerthink, Inc. will host a conference call to discuss third quarter earnings results for the period ending September 28, 2007.
The number for the conference call is (800) 779-0375, (Passcode: Third Quarter, Leader: Ted A. Fernandez). For International callers, please dial (210) 234-8000.
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, October 30, 2007 and will run through 5:00 P.M. ET on Tuesday, November 13, 2007. To access the rebroadcast, please dial (866) 498-9766. For International callers, please dial (203) 369-1802.
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, October 30, 2007 and will run through 5:00 P.M. ET on Tuesday, November 13, 2007. To access the call, visit http://www.answerthink.com or http://www.streetevents.com.
The Hackett Group, a global strategic advisory firm, is a leader in best practice research and advisory programs, benchmarking and transformation consulting services, including shared services, offshoring and outsourcing advice. Utilizing best practices and implementation insight from more than 4,000 benchmarking studies, executives use Hackett's empirically based approach to quickly define and prioritize initiatives, and to leverage proven strategies that enable world-class performance. Through its sister company REL, Hackett offers working capital solutions focused on delivering significant cash flow improvements. Hackett has worked with 2,700 major corporations and government agencies, including 88% of the Dow Jones Global Titans and 73% of the Fortune 100. For more information, visit www.thehackettgroup.com.
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.