Largest Public Companies Continue to Hoard Cash at Record Levels

Large public companies in the U.S. are continuing to hoard cash at record levels, and 1000 of the largest are now holding $850 billion, according to new research from REL Consulting, a division of The Hackett Group, Inc. (NASDAQ: HCKT).

REL's research, which is based on corporate filings through June of 2011, shows that as revenues have increased over the past year, so has cash on hand, with companies now holding 11 percent more cash than they did in Q2 of 2010. Total debt also increased by 7 percent during the period, indicating that companies are taking advantage of low-cost borrowing opportunities to increase their cash on hand. REL's research also found that companies are beginning to incrementally increase the amount of cash they are putting to use for purposes such as paying dividends, making capital expenditures, and share buy-backs.

At the same time, REL's research shows that working capital performance for 1000 of the largest public companies degraded slightly. Companies are now taking 2 percent longer to collect from customers, and are holding nearly 2.5 percent more in inventory. Companies actually improved payables performance slightly, offsetting some of the losses in other areas. These companies now have nearly $800 billion unnecessarily tied up in receivables, payables, and inventory due to sub-optimized working capital management.

"Cash hoarding continues to be the trend. But high cash balances don't necessarily indicate strong performance," said REL Associate Principal Dan Ginsberg. "The working capital numbers clearly show that while companies managed to right-size their working capital in late 2009, in response to economic challenges, they quickly lost focus once revenue growth returned, and the improvements they made were not sustainable. Companies are now taking their eyes off the ball when it comes to efficiently running their business. Accounts receivables are bloated, and companies are holding more inventory for various reasons, only some of which are strategic."

Full details on REL's research findings, including information on individual company metrics and industry performance, is available at: www.relconsultancy.com/media/twc-research/q211data/.

About REL

REL, a division of The Hackett Group, Inc. (NASDAQ: HCKT), is a world-leading consulting firm dedicated to delivering sustainable cash flow improvement from working capital and across business operations. REL’s tailored working capital management solutions balance client trade-offs between working capital, operating costs, service performance and risk. REL’s expertise has helped clients free up billions of dollars in cash, creating the financial freedom to fund acquisitions, product development, debt reduction and share buy-back programs. In-depth process expertise, analytical rigor and collaborative client relationships enable REL to deliver an exceptional return on investment in a short timeframe. REL has delivered work in over 60 countries for Fortune 500 and global Fortune 500 companies.

More information on REL is available: by phone at (770) 225-7300; by e-mail at info@relconsultancy.com; or on the Web at www.relconsultancy.com.

About The Hackett Group, Inc.

The Hackett Group (NASDAQ: HCKT), a global strategic business advisory and operations improvement consulting firm, is a leader in best practice advisory, benchmarking, and transformation consulting services including strategy and operations, working capital management, and globalization advice. Utilizing best practices and implementation insights from more than 5,000 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 group, The Hackett Group offers working capital solutions focused on delivering significant cash flow improvements. Through its Archstone Consulting group, The Hackett Group offers Strategy & Operations consulting services in the Consumer and Industrial Products, Pharmaceutical, Manufacturing and Financial Services industry sectors. 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 completed benchmark studies with over 3,000 major corporations and government agencies, including 97% of the Dow Jones Industrials, 84% of the Fortune 100, 80% of the DAX 30 and 49% of the FTSE 100.

More information on The Hackett Group is available: by phone at (770) 225-7300; by e-mail at info@thehackettgroup.com.

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