The Hackett Group, Inc. (NASDAQ:HCKT), a global strategic
advisory firm, today announced its financial results for the first
quarter, which ended April 3, 2009.
First quarter 2009 revenue was $39.5 million, a 10% decrease (a
7% decrease, adjusting for constant currency) from the same period
in 2008. Pro forma diluted earnings per share were $0.03 as
compared to $0.07 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
as compared to $0.09 in the same period in 2008. First quarter pro
forma and GAAP diluted earnings per share were unfavorably impacted
by approximately $0.02 as a result of the fluctuations in foreign
currencies as compared to the same period in 2008.
At the end of the first quarter of 2009, the Company�s cash
balances were $26.3 million, including marketable investments and
restricted cash. During the first quarter of 2009, the Company
repurchased approximately 1.0 million shares of its common stock at
$2.08 per share, for a total cost of $2.1 million. As of the end of
the first quarter, approximately $4.8 million remained available
under the Company�s share repurchase program.
�As expected, the global economic environment impacted client
decision-making as they attempt to reduce and closely monitor all
expenditures,� stated Ted A. Fernandez, Chairman & CEO of The
Hackett Group, Inc. �We are continuing to invest in our best
practice research and global implementation capabilities to ensure
our offerings are responsive to our clients' needs regardless of
the economic conditions that they face.�
Based on the current economic outlook, the Company estimates
total revenue for the second quarter of 2009 to be in the range of
$34.0 million to $36.0 million and estimates pro forma diluted
earnings per share to be in the range of $0.00 to $0.03.
Other Highlights
19th Annual Best Practices Conference Announced � Hackett
announced plans to hold its 19th Annual Best Practices Conference,
at the InterContinental Hotel in Atlanta on May 13-14, 2009. This
year�s Hackett conference, entitled �Business Disrupted: How
World-Class Companies Mitigate Recession Risk and Create
Competitive Advantage,� will bring together speakers from more than
a dozen of the world�s most successful companies, including Alcoa,
Caterpillar, Coca-Cola Enterprises, Renault, and Unisys. The
conference will look at how the world�s most successful companies
are reducing cost, managing working capital, and creating
competitive advantage during these challenging economic times.
Shared Services & Outsourcing Network Alliance - Hackett
announced a strategic alliance with the Shared Services &
Outsourcing Network (SSON), a global community of shared services
and outsourcing practitioners, providers and advisors. As part of
the alliance, the two organizations launched a dedicated service
center benchmark study designed to assist executives in objectively
assessing how well their global business service centers are
performing.
Ad Hoc Spending Study - Hackett launched a new open performance
study designed to help companies more effectively control spending
on ad hoc project-based purchases in IT-Telecom, HR, Sales &
Marketing, Finance & Corporate Services, and Capital Equipment
& Services. The study is designed to help participants better
understand the scope and severity of such spending. Using a
performance-based and practices-based assessment methodology, the
study aims to help firms �size the prize� and choose the best
practices to better manage this unplanned demand.
Ontario Power Generation World-Class Award - Hackett announced
that it recognized Ontario Power Generation (OPG) as a world-class
performer in finance operations. The award recognized OPG�s status
as an organization in demonstrating top quartile efficiency and
effectiveness in finance operations, based on metrics captured
during a finance functional benchmark. The company�s results were
compared with results from more than 200 recent Hackett Benchmarks
performed with Global 1000 companies, state and federal government
organizations, and academic institutions.
SAP Qualification for EzCPG� � The SAP division of The Hackett
Group, Inc., announced that its EzCPG� has been named as a
qualified SAP Business All-in-One partner solution. EzCPG� enables
consumer products enterprises to meet their fundamental business
and IT challenges. Built on the world�s leading enterprise
applications from SAP AG with best business practices built-in,
EzCPG� has been predefined to address the needs of small and
midsize consumer products companies.
At 5:00 P.M. ET on Monday, May 11, 2009 the senior management of
The Hackett Group, Inc. (NASDAQ:HCKT) will host a conference call
to discuss first quarter earnings results for the period ending
April 3, 2009.
The number for the conference call is (800) 857-9601, [Passcode:
First 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, May 11, 2009
and will run through 5:00 P.M. ET on Monday, May 25, 2009. To
access the rebroadcast, please dial (800) 568-9796. For
International callers, please dial (203) 369-3292.
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 Monday, May 11, 2009 and
will run through 5:00 P.M. ET on Monday, May 25, 2009. To access
the call, visit http://www.thehackettgroup.com or
http://www.streetevents.com.
About The Hackett Group, Inc.
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 info@thehackettgroup.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.
� �
The Hackett Group, Inc. CONSOLIDATED STATEMENTS OF
OPERATIONS (in thousands, except per share data)
(unaudited)
Quarter Ended
April 3, 2009
�
March 28, 2008
Revenue: Revenue before reimbursements $ 35,990 $ 39,268
Reimbursements � 3,526 � 4,570 Total revenue 39,516 43,838 � Costs
and expenses: Cost of service:
Personnel costs before
reimbursable expenses (includes $560 and $397 of stock compensation
expense in the quarters ended April 3, 2009 and March 28, 2008,
respectively)
22,274 22,963 Reimbursable expenses � 3,526 � 4,570
Total cost of service
25,800 27,533 �
Selling, general and
administrative costs (includes $106 and $548 of stock compensation
expense in the quarters ended April 3, 2009 and March 28, 2008,
respectively)
� 12,839 � 12,582 Total costs and operating expenses � 38,639 �
40,115 Income from operations 877 3,723 Other income: Interest
income � 25 � 167 Income before income taxes 902 3,890 Income tax
expense � 63 � 107 Net income $ 839 $ 3,783 � Basic net income per
common share: Net income per common share
$ 0.02
$
0.09 Weighted average common shares outstanding 38,443 42,755 �
Diluted net income per common share: Net income per common share
$ 0.02
$ 0.09
Weighted average common and common
equivalent shares outstanding
38,703 43,353
�
� Pro forma data (1): Income before income taxes
$ 902 $
3,890 Stock compensation expense 666 945 Amortization of intangible
assets � 160 � 197 Pro forma income before income taxes 1,728 5,032
Pro forma income tax expense � 691 � 2,013 Pro forma net income
$ 1,037 $ 3,019 � Pro forma basic net income per common
share
$ 0.03 $ 0.07 Weighted average common shares
outstanding 38,443 42,755 � Pro forma diluted net income per common
share
$ 0.03 $ 0.07
Weighted average common and common
equivalent shares outstanding
38,703 43,353 �
(1) The Company provides pro forma
earnings results (which exclude amortization of intangible assets,
stock compensation expense, and include a normalized tax rate) as a
complement to results provided in accordance with Generally
Accepted Accounting Principles (GAAP). These non-GAAP results are
provided to enhance the overall users' understanding of the
Company's current financial performance and its prospects for the
future. The Company believes the non-GAAP results provide useful
information to both management and investors by excluding certain
expenses that it believes are not indicative of its core operating
results. The non-GAAP measures are included to provide investors
and management with an alternative method for assessing operating
results in a manner that is focused on the performance of ongoing
operations and to provide a more consistent basis for comparison
between quarters. Further, these non-GAAP results are one of the
primary indicators management uses for planning and forecasting in
future periods. In addition, since the Company has historically
reported non-GAAP results to the investment community, it believes
the continued inclusion of non-GAAP results provides consistency in
its financial reporting. The presentation of this additional
information should not be considered in isolation or as a
substitute for results prepared in accordance with GAAP.
� �
The Hackett Group, Inc. CONDENSED CONSOLIDATED
BALANCE SHEETS (in thousands) (unaudited) �
April 3, 2009
January 2, 2009
ASSETS Current assets: Cash and cash equivalents $ 24,405 $
32,060 Marketable investments 1,262 1,727 Accounts receivable and
unbilled revenue, net 21,363 25,481 Prepaid expenses and other
current assets � 3,383 � 3,021 Total current assets 50,413 62,289 �
Restricted cash 600 600 Property and equipment, net 6,174 5,767
Other assets 1,225 1,392 Goodwill, net � 63,591 � 63,616 Total
assets $ 122,003 $ 133,664 �
LIABILITIES AND SHAREHOLDERS'
EQUITY Current liabilities: Accounts payable $ 3,241 $ 3,711
Accrued expenses and other liabilities � 23,824 � 34,277 Total
current liabilities 27,065 37,988 Accrued expenses and other
liabilities, non-current � 1,488 � 1,759 Total liabilities 28,553
39,747 � Shareholders' equity � 93,450 � 93,917 Total liabilities
and shareholders' equity $ 122,003 $ 133,664 � � � � �
The
Hackett Group, Inc. Supplemental Financial Data
(unaudited) �
Quarter Ended April 3, 2009
January 2, 2009 March 28, 2008 Revenue Breakdown
by Group: (in thousands) � The Hackett Group: Benchmarking and
Business Transformation (2) $ 23,784 $ 30,094 $ 25,969 Executive
Advisory Programs (3) � 3,549 � � 3,693 � � 4,012 � Total The
Hackett Group 27,333 33,787 29,981 � Hackett Technology Solutions
(4) � 12,183 � � 14,968 � � 13,857 � Total Revenue $ 39,516 � $
48,755 � $ 43,838 � � �
Revenue Concentration: (% of total
revenue) � Top customer 8 % 6 % 7 % Top 5 customers 21 % 21 % 20 %
Top 10 customers 32 % 30 % 29 % � �
Key Metrics and Other
Financial Data: �
The Hackett Group: The Hackett Group
annualized revenue per professional (in thousands) $ 357 $ 409 $
415 �
Technology Solutions: Technology Solutions consultant
utilization rate 61 % 64 % 66 % Technology Solutions gross billing
rate per hour $ 156 $ 168 $ 160 �
Total Company: Consultant
headcount 532 547 536 Total headcount 723 724 723 Days sales
outstanding (DSO) 50 51 66 Cash (used in) provided by operating
activities (in thousands) $ (5,234 ) $ 11,361 $ 4,733 Depreciation
(in thousands) $ 536 $ 512 $ 510 Amortization (in thousands) $ 160
$ 164 $ 197 �
Share Repurchase Program: Shares purchased in
the quarter (in thousands) 1,018 938 1,783 Cost of shares
repurchased in the quarter (in thousands) $ 2,117 $ 2,889 $ 6,793
Average price per share of shares purchased in the quarter $ 2.08 $
3.08 $ 3.81 Remaining authorization (in thousands) $ 4,841 $ 1,959
$ 4,266 �
(2) Comparison of a client's
demand drivers, costs and practices to a peer group in order to
empirically identify and define an organization's ability to
improve performance at a process level and to identify and compare
business practices utilized by world-class performers.
Additionally, strategic consulting support that utilizes Hackett
best practice implementation content and tools to enable clients to
accelerate transformation to world-class performance.
�
(3) Annual or multi-year contracts
that provide clients with on-demand access to world-class
performance metrics, best practice repository, best practice
research forums and conferences, and advice.
�
(4) Best Practice Implementation
of ERP Software, which is primarily Oracle and SAP, and business
performance management solutions, which is primarily Hyperion.
�
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