November 5, 2008
Miami, FL - November 5, 2008 - The Hackett Group, Inc. (NASDAQ: HCKT), a global strategic advisory firm, today announced its financial results for the third quarter, which ended September 26, 2008.
Third quarter 2008 revenue was $50.4 million, an 8% increase (9%, adjusting for currency) from the same period in 2007, driven by an 11% growth (13%, adjusting for currency) in The Hackett Group (excluding Technology Solutions). Pro forma diluted earnings per share were $0.09, up 29% in the third quarter of 2008, as compared to $0.07 in the third 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 $0.11 in the third quarter of 2008, up 38% as compared to $0.08 in the third quarter of 2007.
At the end of the third quarter of 2008, the Company's cash balances were $26.7 million, including marketable investments and restricted cash. During the third quarter of 2008, the Company repurchased approximately 1.1 million shares of its common stock at an average price of $6.02, for a total cost of approximately $6.5 million. For the nine months ended September 26, 2008, the Company repurchased approximately 3.5 million shares of its common stock at an average price of $4.59, for a total cost of approximately $16.2 million.
"We continue to be pleased with our strong operating results, especially given the increasing demands placed on our clients from the global economic turmoil," stated Ted A. Fernandez, Chairman & CEO of The Hackett Group, Inc. "We must continue to ensure that our clients understand how our unique intellectual capital and implementation expertise help them affect change in a targeted and timely manner."
Based on the current economic outlook, the Company estimates total revenue for the fourth quarter of 2008 to be in the range of $46.0 million to $48.0 million and estimates pro forma diluted earnings per share to be in the range of $0.07 to $0.10. Incorporated in our guidance is the unfavorable impact from the recent decline in foreign currencies which will reduce quarterly revenues by approximately 4% and pro forma diluted earnings per share by $0.01. Additionally, the holiday season will result in an approximate 7% decrease in available billing days which will also negatively impact our fourth quarter results on a sequential basis.
Globalization Study - The Hackett Group released results from a new study showing that globalization of key business processes in finance and other back-office areas is expected to continue to see strong growth over the next three years, with companies increasing their use of offshore resources by over 50%. Hackett's 2008 Globalization Performance study confirmed that companies can generate fairly comparable cost savings either by using a Business Process Outsourcer (BPO) or captive shared service center approach to globalization, with most companies driving cost reductions of 25-50%.
Procurement Book of Numbers Released - In October, Hackett released findings from its new Procurement Book of Numbers research, including a detailed Procurement Capabilities Model describing the specific changes companies need to make as they mature and seek to extend their value proposition from simply assuring supply to truly harnessing the power of supply markets and influencing business strategy and tactics. Hackett's 2008 Procurement Book of Numbers research also reported that world-class organizations now spend 22% less than typical companies on procurement operations (.64% of spend for world-class companies versus .82% for typical companies), and operate with 37% fewer staff (49 per billion of US$ spend for world-class companies versus 76 for typical companies).
Expansion in Asia-Pacific Region - In early October, Hackett announced plans to extend its global reach and enhance its ability to offer industry-leading benchmarking, business advisory, and transformation services in Australia, Singapore, New Zealand and South Korea. For the South Korean market, Hackett signed an alliance agreement allowing LNH, Inc. to market Hackett's offerings.
European Best Practices Conference - In October, more than 120 senior-level executives from the world's largest companies attended Hackett's Fourth Annual European Best Practices Conference in London. At the conference, Hackett featured findings from its 2008 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 16 of the world's most successful companies, including: Airbus, AREVA, Axa, Britvic, Canon Europe, Covidien, Daimler AG, Henkel, Intercontinental Hotels, Level 3, Nokia, Renault, SAP, Serco, Target Corp., and Vodafone.
Answerthink Business Milestones - Answerthink, a division of Hackett focused on providing, implementing and supporting SAP® solutions, announced several business milestones, including: the expansion of territory beyond the US by signing a partnership with SAP Canada, Inc.
At 5:00 P.M. ET on Wednesday, November 5, 2008, the senior management of The Hackett Group, Inc. (NASDAQ:HCKT - News), formerly known as Answerthink, Inc., will host a conference call to discuss third quarter earnings results for the period ending September 26, 2008.
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 Wednesday, November 5, 2008 and will run through 5:00 P.M. ET on Wednesday, November 19, 2008. To access the rebroadcast, please dial (866) 417-5768. For International callers, please dial (203) 369-0736.
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 Wednesday, November 5, 2008 and will run through 5:00 P.M. ET on Wednesday, November 19, 2008. To access the replay of the call, visit https://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., 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.