February 19, 2019
The Hackett Group Announces Fourth Quarter and Fiscal 2018 Results
- Q4 2018 net revenue from continuing operations of $61.6 million, and pro forma EPS of $0.26, both within guidance range
- Q4 2018 GAAP EPS of $0.00 as compared to GAAP EPS of $0.29 in the same period in the prior year. Q4 2018 GAAP EPS include the discontinued operations for REL Working Capital group and the write-off of the investment for the HPE software offering.
- Fiscal 2018 net revenue from continuing operations of $264.5 million, pro forma EPS of $1.06, and GAAP EPS of $0.74.
- Company announces annual dividend increase of 6% from $0.34 to $0.36
MIAMI, FL – February 19, 2019 – The Hackett Group, Inc. (NASDAQ: HCKT), a global intellectual property-based strategic consultancy and leading enterprise benchmarking and best practices digital transformation firm, today announced its financial results for the fourth quarter, which ended on December 28, 2018.
Q4 2018 net revenue (gross revenue less reimbursable expenses) from continuing operations was $61.6 million, down 1% as compared to the same period in the prior year. Q4 2018 gross revenue from continuing operations was $66.5 million, down 1% from the same period in the prior year. Fiscal year 2018 net revenue (gross revenue less reimbursable expenses) from continuing operations was $264.5 million, up 4% from prior year.
GAAP diluted losses per share were $0.00 for the fourth quarter of 2018, compared to earnings of $0.29 in the fourth quarter of 2017. GAAP diluted earnings per share were $0.74 for fiscal year 2018, compared to earnings of $0.85 for the fiscal year 2017. During the fourth quarter of 2018, the Company recorded a $6.3 million write-off of its investments in HPE software and Working Capital and recorded discontinued operations of its REL working capital group, all of which negatively impacted earnings per share by $0.23. During the fourth quarter of 2017, the adoption of the new tax pronouncements and tax legislation favorably impacted GAAP diluted earnings per share by $0.12.
Q4 2018 pro forma diluted earnings per share were $0.26, up 4% when compared to $0.25 for the same period in the prior year. Fiscal 2018 pro forma diluted earnings per share were $1.06, up 12% when compared to $0.95
for the prior year. 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 fourth quarter of 2018, the Company’s cash balances were $13.8 million. During the quarter, the Company repurchased 15 thousand shares under its stock repurchase program. As of the end of the fourth quarter of 2018, the Company’s remaining stock repurchase program authorization was $6.9 million.
“In Q4 we took several actions that reinforced our focus on our growing digital transformation groups and strengthened our organization as we head into 2019,” stated Ted A. Fernandez, Chairman and CEO of The Hackett Group. “Although the decline in our on premise implementation revenues unfavorably impacted our Q4 results and the start of 2019, as we decrease our exposure to our legacy on premise revenue, we expect to continue to get closer to realizing the revenue growth of our digital transformation focus.”
Based on the current economic outlook, the Company estimates total net revenue for the first quarter of 2019 to be in the range of $61.5 million and $63.0 million or gross revenue (inclusive of reimbursable expenses) to be in the range of $66.5 million and $68.0 million. The Company estimates pro forma diluted earnings per share for the first quarter of 2019 to be in the range of $0.21 and $0.23.
European Best Practices Conference – Nearly 200 business executives from over 134 companies attended The Hackett Group’s 2018 European Best Practices Conference “Unlocking Digital Value” in London from October 9thto October 11th. Speakers included leaders in finance, procurement, HR, IT, global business services and working capital from over a dozen of Europe’s largest and most successful companies, including: Agrekko, AstraZeneca,Cisco, HP Inc., IBM, Nokia,Robert Bosch GmbH, Rolls-Royce, Pearson Plc, Redwood Software, SAP, Shell Smith & Nephew, Tungsten Network, Wiproand Vodafone.
UiPath Alliance –The Hackett Group, Inc. announced that it has been named a Recommended Partner by UiPath, the leading enterprise Robotic Process Automation (RPA) software company. The partnership will enable The Hackett Group to further expand its ability to offer UiPath solutions to clients.
Oracle Excellence Award – Oracle awarded The Hackett Group with its 2018 Oracle Excellence Award for Specialized Partner of the Year –SaaS Innovation Solution of the Year. The award recognizes The Hackett Group for its commitment to delivering innovative, specialized solutions and services using Oracle Cloud software and hardware.
CASME Alliance – The Hackett Group, Inc. and CASME launched an alliance that will provide procurement clients of both companies with access to additional insights, research assets and networking opportunities. Through the reciprocal alliance, members of The Hackett Group’s Procurement Advisory Programs will benefit from access to CASME’s extensive spend category-specific market intelligence and indirect spending expertise, as well as selected Webcasts, RoundTables, virtual events and other peer networking opportunities. CASME clients will gain access to select research insights from The Hackett Group’s procurement membership advisory teams. The Hackett Group will also host Webcasts and provide seats at selected virtual events for CASME members.
On Tuesday, February 19, 2019 senior management will discuss fourth quarter results in a conference call at 5:00 P.M. ET. The number for the conference call is (800) 593-0486, [Passcode: Fourth Quarter]. For International callers, please dial (517) 308-9371.
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 19, 2019 and will run through 5:00 P.M. ET on Tuesday, March 5, 2019. To access the rebroadcast, please dial (866) 458-4758. For International callers, please dial (203) 369-1315.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 19, 2019 and will run through 5:00 P.M. ET on Tuesday, March 5, 2019. To access the replay, visit www.thehackettgroup.com or http://www.streetevents.com.
We look forward to your participation.
Earnings Call Documents
- Consolidated Statements of Operations – Q4 2018
- Supplemental Data discussed during earnings call – Q4 2018
- Discontinued Operations 2018 by Quarter
- Discontinued Operations 2017 by Quarter
SEC XBRL Filings
- XBRL Calculation – Q4 2018
- XBRL Definition – Q4 2018
- XBRL Label – Q4 2018
- XBRL Presentation – Q4 2018
- XBRL Instance – Q4 2018
- XBRL Schema – Q4 2018
About The Hackett Group, Inc.
The Hackett Group (NASDAQ: HCKT) is an intellectual property-based strategic consultancy and leading enterprise benchmarking and best practices digital transformation firm to global companies, offering digital transformation including robotic process automation and enterprise cloud application implementation. Services include business transformation, enterprise analytics and global business services. The Hackett Group also provides dedicated expertise in business strategy, operations, finance, human capital management, strategic sourcing, procurement and information technology, including its award-winning Oracle and SAP practices.
The Hackett Group has completed more than 17,850 benchmarking and performance studies with major corporations and government agencies, including 93% of the Dow Jones Industrials, 90% of the Fortune 100, 80% of the DAX 30 and 57% of the FTSE 100. These studies drive Hackett’s Digital Transformation Platform which includes the firm’s benchmarking metrics, best practices repository and best practice configuration guides and process flows, which enable The Hackett Group’s clients and partners to achieve world-class performance.
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 offerings 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, including those referenced above, the timing of projects and the potential for contract cancellations by our customers, changes in expectations regarding the business consulting and information technology industries, our ability to attract and retain skilled employees, possible changes in collections of accounts receivable due to the bankruptcy or financial difficulties of our customers, risks of competition, price and margin trends, foreign currency fluctuations, changes in general economic conditions and interest rates, our ability to obtain debt financing through additional borrowings under an amendment to our existing credit facility 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.