August 4, 2008
Miami, FL - August 4, 2008 - The Hackett Group, Inc. (NASDAQ: HCKT), a global strategic advisory firm, today announced its financial results for the second quarter, which ended June 27, 2008.
Second quarter 2008 total revenue was $49.1 million, an 8% increase from the second quarter of 2007 driven by a 23% growth in The Hackett Group (excluding Technology Solutions). Pro forma diluted earnings per share were $0.08 in the second quarter of 2008, as compared to $0.04 in the second quarter of 2007. 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 $0.10 in the second quarter of 2008, as compared to $0.03 in the second quarter of 2007.
At the end of the second quarter of 2008, the Company's cash balances were $20.3 million, including marketable investments and restricted cash. During the second quarter, the Company repurchased 675 thousand shares of its common stock at an average price of $4.39, for a total cost of approximately $3.0 million. Subsequent to the end of the quarter, the Board of Directors authorized a $5.0 million increase to the share buyback program, which brings the current remaining authorization in the share buyback program to approximately $11.1 million.
"We are pleased to see our operating results continue to significantly improve especially given the weakening macro-economic backdrop," stated Ted A. Fernandez, Chairman & CEO of The Hackett Group, Inc. "Our unique ability to help clients quickly address ever increasing organizational effectiveness concerns is core to our success."
Based on the current economic outlook, the Company estimates total revenue for the third quarter of 2008 to be in the range of $49.0 million to $51.0 million and estimates pro forma diluted earnings per share to be in the range of $0.08 to $0.10.
Hackett's 18th Annual Best Practices Conference - Nearly 500 senior-level executives from the world's largest companies attended Hackett's 18th Annual Best Practices Conference, "20/20 Vision: Are You on the Right Path to World-Class?" in Atlanta in May. At the conference, Hackett previewed findings from its Book of Numbers™ research series, which quantifies spending, staffing, economic return, and other key efficiency and effectiveness metrics of world-class performance in finance, IT, HR, procurement and other Selling, General, & Administrative (SG&A) areas. The event also featured presentations by senior executives from more than 20 of the world's most successful companies, including Alcoa, Caterpillar, Corning, Dow Chemical, Hewlett-Packard, and Phillips.
Recession Survival Guide Research - According to The Hackett Group, typical Global 1000 companies (with $23.4 billion in annual revenue) can generate $200-$400 million per year in savings through targeted General & Administrative (G&A) cuts, an amount that represents up to 45% of the potential decline in pre-tax profit due to a recession. As the recession looms, many companies are reacting by mandating across the board cuts in key G&A areas such as IT, finance, HR, and procurement. But new research from The Hackett Group offers an alternative approach - targeted, strategic reductions that can offset up to almost half of the profitability impact of a potential recession while minimally affecting service delivery and the ability to provide strategic value.
REL/CFO Europe Research Tracks Working Capital Performance - REL, a division of The Hackett Group, Inc. and CFO Europe Magazine released findings from their 10th annual joint study tracking working capital performance of Europe's largest public companies. The research showed the impact of the global credit turmoil in Europe, with DWC (Days of Working Capital) for the 1,000 largest publicly-traded European companies deteriorating year-over-year to 47.3 days from 46.8 days. An overall improvement in DPO (Days Payables Outstanding) was offset by a slight deterioration in DSO (Days Sales Outstanding) and a significant increase in DIO (Days Inventory On-Hand).
Alcoa Recognized for World-Class Finance and IT Performance - The Hackett Group recognized Alcoa, Inc. as a world-class performer in finance and IT. Alcoa received its World-Class Awards at Hackett's 18th Annual Best Practices Conference. The awards recognize Alcoa's status as a company demonstrating top quartile efficiency and effectiveness in these two key SG&A functions, based on metrics captured during Hackett benchmarks.
SG&A Transformation for International Mining Group - This client selected The Hackett Group to support the design and implementation of a new service delivery model for finance, HR, procurement, and select IT operations. The new global services business unit, which Hackett is helping to create, will be designed to further improve efficiency, will handle back-office functions using an integrated mix of captive shared service centers, outsourcing, and some limited decentralization of business functions. This new contract comes on the heels of a long-time relationship with The Hackett Group that has included benchmarking, advisory services, and transformation support.
Finance Transformation Engagement for Engineered Rubber Products Manufacturer - This company engaged The Hackett Group to assist in overall finance transformation and design, and implement a U.S. Finance Shared Services Center. The Hackett Group has already completed a baseline of their finance function, and based on the performance gaps, the company decided to move forward with a shared services strategy with the goals of improving service levels and reducing cost.
Customer-to-Cash Transformation for Global Oil and Gas Development Equipment and Services Provider - This client selected REL to assist in transformation of customer-to-cash, order processing, and invoicing functions. The company has grown by acquisition and seen dramatic increases in revenue over the past few years. In addition, an extensive array of product and service offerings has led to complex invoicing, driving payment errors. As a result, DSO has increased. REL will help the client standardize its practices in these areas in an effort to reduce DSO.
Supply Chain Optimization for Global Marine Coatings Company - This long-standing REL client extended its contract to complete a 9-month supply chain optimization project integrating both supply and distribution across three manufacturing facilities and 160 owned distribution shops. With REL's help, the company has generated an initial 25% reduction of inventory days coverage, accounting for a 17% reduction in inventory value.
Oracle Implementation for Not-For-Profit Organization - This organization selected Hackett Technology Solutions for a reimplementation of its Oracle financials platform. The organization's goal is to drive down business and technology costs in the face of challenging economic factors. Hackett was selected based on its Best Practice Implementation approach, which will enable the implementation to integrate extensive process transformation design to improve efficiency and effectiveness of back-office operations.
At 5:00 P.M. ET on Monday, August 4, 2008 the senior management of The Hackett Group, Inc., formerly known as Answerthink, Inc., will host a conference call to discuss second quarter earnings results for the period ending June 27, 2008.
The number for the conference call is (800) 857-9601, [Passcode: Second 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 Monday, August 4, 2008 and will run through 5:00 P.M. ET on Monday, August 18, 2008. To access the rebroadcast, please dial (800) 839-1169. For International callers, please dial (203) 369-3036.
In addition, The Hackett Group, Inc. 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 Monday, August 4, 2008 and will run through 5:00 P.M. ET on Monday, August 18, 2008. To access the call, visit http://www.thehackettgroup.com or http://www.streetevents.com.
The Hackett Group, Inc. (NASDAQ: HCKT), a global strategic advisory firm, is a leader in best practice advisory, benchmarking, and transformation consulting services, including shared services, offshoring and outsourcing advice. Utilizing best practices and implementation insights from more than 4,000 benchmarking engagements, executives use The Hackett Group's empirically-based approach to quickly define and prioritize initiatives to enable world-class performance. Through its REL brand, The Hackett Group offers working capital solutions focused on delivering significant cash flow improvements. Through its Hackett Technology Solutions group, The Hackett Group offers business application consulting services that help maximize returns on IT investments. The Hackett Group has worked with 2,700 major corporations and government agencies, including 97% of the Dow Jones Industrials, 73% of the Fortune 100, 73% of the DAX 30 and 50% of the FTSE 100.
Founded in 1991, The Hackett Group was acquired by Answerthink, Inc. which was renamed The Hackett Group, Inc. in 2008. The Hackett Group has global offices in the United States, Europe and India.
More information on The Hackett Group is available: by phone at (770) 225-7300; by e-mail at email@example.com; or on the Web at www.thehackettgroup.com.
Book of Numbers is a trademark of The Hackett Group.
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.