February 26, 2008
Miami, FL - February 26, 2008 - The Hackett Group, Inc. (NASDAQ: HCKT), a global strategic advisory firm, today announced its financial results for the fourth quarter and fiscal year, which ended December 28, 2007. In January of 2008, Answerthink, Inc. was renamed The Hackett Group, Inc. and the Answerthink technology practices were renamed Hackett Technology Solutions.
Fourth quarter 2007 revenue was $44.9 million, an 18% increase from the same period in 2006. Excluding revenues from the Lawson and SAP staff augmentation practices exited in the fourth quarter of 2006, fourth quarter revenues increased 21% from the same period in 2006.
Pro forma diluted earnings per share were $0.08 in the fourth quarter of 2007, as compared to $0.01 in the fourth 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.
Diluted earnings per share were $0.14 in the fourth quarter of 2007, as compared to a diluted loss per share of $0.03 in the fourth quarter of 2006. Diluted earnings per share for the fourth quarter of 2007 benefitted by $2.2 million from the recovery of funds resulting from the previously disclosed UK misappropriation.
Fiscal year revenue was $177.0 million, a 2% decrease from the previous fiscal year. Diluted earnings per share were $0.20 in fiscal year 2007, as compared to a diluted loss per share of $0.11 for the previous fiscal year. Pro forma diluted earnings per share were $0.17 for fiscal year 2007, as compared to $0.13 for the previous fiscal year.
At the end of the fourth quarter of 2007, the Company's cash balances were $27.7 million, including $7.0 million in Bank of America's Columbia Strategic Cash Portfolio, of which $2.5 million was redeemed after year-end. During the quarter, the Company used $4.2 million to repurchase 1.03 million shares of the Company's common stock. As of the end of the fourth quarter, $6.1 million remained available under the Company's share repurchase program authorization. On February 22, 2008, the Board of Directors authorized an additional $5.0 million increase to the share buyback program.
"We are pleased to see the strong client reaction to our Hackett Group business model and value proposition reflected in our quarterly and year-end results," stated Ted A. Fernandez, Chairman & CEO of The Hackett Group. "We expect to carry this momentum into 2008, as clients continue to seek our advice and implementation assistance as they evaluate their organizational effectiveness in a slowing economy."
Based on the current economic outlook, the Company estimates total revenues for the first quarter of 2008 to be in the range of $42.0 million to $44.0 million and estimates pro forma diluted earnings per share to be in the range of $0.04 to $0.06. At the midpoint of the revenue guidance, Hackett Group revenue (excluding Hackett Technology Solutions) would be up approximately 30% on a year over year basis.
Cash Masters U.S. Study - REL (Hackett's Total Working Capital Management Group) and CFO Magazine released research showing that despite a growing economy and impressive sales growth, the top 1,000 public companies in the U.S. lost ground in the battle to generate and manage cash. The new study found that U.S. companies are leaving $858 billion of cash on the table which could be used to fund acquisitions, pay down debt, invest in R&D, or fund share buy-back programs.
Compliance Cost Research - The Hackett Group issued 2007 Finance Book of NumbersTM research showing that compliance-related activities continue to prevent CFOs at typical companies from resuming more than a decade of cost reduction efforts. Hackett's research found that the typical Global 1000 company saw the cost of finance increase slightly over the past year, and is now spending 12% more than it did three years ago, in part due to increased focus and spending on compliance-related activities. World-class finance organizations, which have continued to reduce costs over Hackett's 15-year research history, are now spending less than half what typical companies do.
Evolving the Procurement Value Proposition Research - The Hackett Group issued research detailing how procurement organizations evolve from a traditional tactical sourcing focus to a comprehensive position of value management, moving through five discrete stages which help them develop new skill sets and operating models enabling them to eventually reach a point where procurement's sole agenda is to advance and support business strategy.
HR Transformation Blueprint for Oilfield Services Company - This client selected The Hackett Group to develop an HR organizational blueprint as a follow-on to transformational benchmarks in HR and Finance. The project is part of an overall effort to reduce G&A costs while improving service levels. The Hackett Group will help the client create a common HR platform and standardize HR processes used by seven corporate divisions, while streamlining transactional activities.
Global Customer-to-Cash Process Design for International Security Solutions Company - This company selected REL to implement a global redesign of its customer-to-cash processes. The goal is to increase the company's Cash Conversion Efficiency by standardizing activities in more than 100 countries and rolling out a single toolkit for all receivables processes.
Hyperion Business Intelligence Implementation for University Medical Center - This client selected the Hackett Technology Solutions Group to complete a Hyperion Business Intelligence implementation, including design and configuration of systems for data warehousing and financial operational reporting. The organization's goal is to enable more detailed reporting of business unit activity, driving insights into opportunities to improve profitability, enhance overall performance, and reduce costs.
PeopleSoft Implementation for a Global Footwear & Accessories Company - This client selected the Hackett Technology Solutions group to implement their PeopleSoft eProcurement applications. The eProcurement implementation will enable their distributed users to enter online requisitions and provide integration into their Purchasing and Inventory applications.
At 5:00 P.M. ET on Tuesday, February 26, 2008, the senior management of The Hackett Group will host a conference call to discuss fourth quarter earnings results for the period ending December 28, 2007.
The number for the conference call is (800) 779-0375, (Passcode: Fourth 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, February 26, 2008 and will run through 5:00 P.M. ET on Tuesday, March 11, 2008. To access the rebroadcast, please dial (866) 365-4119. For International callers, please dial (203) 369-0221.
In addition, The Hackett Group will also be webcasting this conference call live through the StreetEvents.com service. To participate, simply visit https://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 26, 2008 and will run through 5:00 P.M. ET on Tuesday, March 11, 2008. To access the call, visit https://www.thehackettgroup.com or http://www.streetevents.com.
The Hackett Group (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 helps 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 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.
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.