November 10, 2009
Miami, FL - November 10, 2009 - The Hackett Group, Inc. (NASDAQ: HCKT), a global strategic advisory firm, today announced its financial results for the third quarter, which ended October 2, 2009. Hackett also announced the acquisition of Archstone Consulting, LLC, ("Archstone") a leading strategy, operations and CFO advisory consultancy based in Stamford, Connecticut.
Third quarter 2009 revenue was $34.0 million, a 33% decrease from the same period in 2008. Pro forma diluted earnings per share were $0.03 for the third quarter of 2009, as compared to $0.09 in the same period in 2008. 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 $0.02 for the third quarter of 2009, as compared to $0.11 in the same period in 2008.
At the end of the third quarter of 2009, the Company's cash balances were $23.8 million, including restricted cash. During the third quarter of 2009, the Company repurchased 391 thousand shares of its common stock at $2.53 per share, for a total cost of approximately $1.0 million. As of the end of the third quarter, approximately $3.5 million remained available under the Company's share repurchase program.
Under the terms of the Archstone acquisition agreement, Hackett will issue 5.2 million shares, of which 1.6 million shares are subject to an earn-out based on revenue achieved in 2010. Additionally, Hackett will issue approximately 950 thousand shares to Archstone executives that will vest over a two to five year period. In conjunction with the acquisition, Hackett plans to reduce the scale of selected lease facilities and incur severance and other acquisition- related expenses, primarily attributed with the integration of the back office infrastructure which will result in a restructuring charge of $3.0 million to $4.0 million. The Archstone acquisition is expected to add $35.0 million to $40.0 million in annualized revenue in 2010 to The Hackett Group and be increasingly accretive as the year progresses starting with Q1.
"Our focus has been to play offense during this challenging economic period", stated Ted A. Fernandez, Chairman & CEO of The Hackett Group. "We have been aggressively looking for alliance and acquisition opportunities that would strongly position our organization for growth as demand re-emerges. By adding a talented group of senior executives and associates who share our values in areas that will significantly broaden and complement our value proposition to clients is exactly what we were looking for."
Based on the current economic outlook, the Company estimates total revenue for the fourth quarter of 2009 to be in the range of $34.0 million to $36.0 million and estimates pro forma diluted earnings (loss) per share to be in the range of ($0.01) to $0.03. The holiday season will result in an approximate 12% decrease in available billing days which will negatively impact our fourth quarter results on a sequential basis. The acquisition of Archstone is expected to add $4.0 million to $5.0 million in revenue and be ($0.02) dilutive to pro forma earnings per share in the fourth quarter.
IQ Solutions Alliance - In mid-October, Hackett announced a strategic alliance with South Africa's IQ Business Group. The alliance extends Hackett's global reach to cover South Africa and all of the Sub-Saharan region, and enhance its ability to offer industry-leading benchmarking and business advisory programs to organizations in these markets.
Cash Flow Forecasting Research - Hackett and REL released research done in conjunction with the National Association of Corporate Treasurers showing that four out of five of the world's largest companies are unable to accurately forecast mid-term cash flow. This uncertainty, when combined with lower revenue, reduced margins, and limited availability of credit and cash from other external sources in many industries, was especially newsworthy.
Fifth Annual European Best Practices Conference - Hackett's Fifth Annual European Best Practices Conference took place in London October 15-16. The conference, entitled "Survival of the Fittest: How World-Class Companies Weather a Recession and Position for Recovery and Growth," drew a sell-out crowd from over a dozen countries for presentations by many of the leading companies in Europe. Nearly half of the attendees were C-level executives or vice presidents. Attendees expressed particular satisfaction with the detailed best practices information that was offered, the thought- provoking nature of presentations, and the value of the more than 40 one-on-one briefings hosted by Hackett.
Agility Test Research - Hackett issued new research detailing how the world's largest companies have for the most part failed in their efforts to reduce the cost of functions such as Finance, IT, HR, and Procurement over the past year, exacerbating the impact of dramatic declines in revenue, profits, and earnings. Hackett's analysis showed that only one company in four was able to manage their Selling, General, & Administrative costs in line with revenue reductions over the past 12 months.
At 5:00 P.M. ET on Tuesday, November 10, 2009, the senior management of The Hackett Group, Inc. will host a conference call to discuss third quarter earnings results for the period ending October 2, 2009 and the acquisition of Archstone Consulting.
The number for the conference call is (800) 857-9601, [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, November 10, 2009 and will run through 5:00 P.M. ET on Tuesday, November 24, 2009. To access the rebroadcast, please dial (866) 447-7326. For International callers, please dial (203) 369-1159.
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 10, 2009 and will run through 5:00 P.M. ET on Tuesday, November 24, 2009. 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 implement 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. in 1997. Answerthink was renamed The Hackett Group, Inc. in 2008. The Hackett Group has global offices in the United States, Europe and Asia/Pacific.
More information on The Hackett Group is available: by phone at (770) 225-7300; by e-mail at email@example.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.
More information on The Hackett Group is available: by phone at +1 770 225 7300; by e-mail at firstname.lastname@example.org.