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 January 2, 2009.
Fourth quarter 2008 revenue was $48.8 million, a 9% increase (a
15% increase, adjusting for constant currency) from the same period
in 2007, driven by a 13% growth (a 23% increase, adjusting for
constant currency) in The Hackett Group (excluding Technology
Solutions). Pro forma diluted earnings per share were $0.10, up 25%
in the fourth quarter of 2008, as compared to $0.08 in the fourth
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 $0.14 in the fourth
quarters of 2008 and 2007. GAAP diluted earnings per share for the
fourth quarter of 2007 benefitted by $2.2 million, or $0.05 per
share, from the recovery of the previously disclosed U.K. tax
misappropriation.
Fiscal year 2008 revenue was $192.1 million, an increase of 9%
(a 10% increase, adjusting for constant currency) from the previous
fiscal year, driven by a 19% growth (a 21% increase, adjusting for
constant currency) in The Hackett Group (excluding Technology
Solutions). Pro forma diluted earnings per share were $0.33, up 94%
for the fiscal year 2008, as compared to $0.17 for the previous
fiscal year. GAAP diluted earnings per share were $0.43, up 115%
for the fiscal year 2008, as compared to $0.20 for the previous
fiscal year.
At the end of the fourth quarter of 2008, the Company�s cash
balances were $34.4 million, including marketable investments and
restricted cash. During the fourth quarter of 2008, the Company
repurchased approximately 0.9 million shares of its common stock at
$3.08, for a total cost of $2.9 million. For the fiscal year 2008,
the Company repurchased approximately 4.5 million shares of its
common stock at $4.27, for a total cost of $19.1 million. As of the
end of the fourth quarter, approximately $2.0 million remained
available under the Company�s share repurchase program. On February
19, 2009, the Board of Directors authorized an additional $5.0
million increase to the share buyback program.
�We are proud of the significant improvement in our operating
results, especially given the rapidly deteriorating economic
environment encountered in the second half�of the year,� stated Ted
Fernandez, Chairman & CEO of The Hackett Group. �We are
cognizant that 2009 will be a more volatile environment; however,
we know that we are well prepared to optimize our opportunity given
the strategic value of our offerings.�
Based on the current economic outlook, the Company estimates
total revenue for the first quarter of 2009 to be in the range of
$39.0 million to $42.0 million and estimates pro forma diluted
earnings per share to be in the range of $0.01 to $0.04.
Incorporated in our guidance is the unfavorable impact from the
recent decline in foreign currencies which will reduce quarterly
revenue in the first quarter of 2009 by approximately $2.0 million
and pro forma diluted earnings per share by $0.02, compared to the
same period in the previous year.
Other Highlights
Finance Shared Services Book of Numbers Research � New Book of
Numbers research from The Hackett Group found that Finance Shared
Service Organizations (SSOs) have achieved dramatic improvements in
cost and productivity. But while SSOs have been rewarded by these
improvements, business expectations are now forcing companies to
seek further performance improvement actions. The Hackett Group�s
research found that companies seeking to become meaningful
strategic enablers for their respective organizations are
implementing global service delivery models that incorporate
transaction processing centers in low-cost regions, centers of
excellence, and strategic onsite support functions for analysis and
decision-making.
Recession Performance Research � New research from The Hackett
Group offered companies strategic recommendations designed to
generate significant cost reductions. These savings could
potentially offset an expected drop in profit margins of 20-30% at
typical Global 1000 companies.
Offshoring Research � New research from The Hackett Group showed
that Global 1000 companies are significantly accelerating their
movement of back office jobs to other low-cost labor markets.
According to Hackett, over 350,000 jobs in corporate finance, IT,
HR, and procurement will move offshore in 2009 and 2010 alone,
bringing the total number of back office jobs in these key areas
being done offshore to over 800,000. For the first time, finance
positions are now moving offshore more quickly than corporate IT
jobs.
IMA Partnership � As part of a newly formed alliance with the
Institute of Management Accountants (IMA), The Hackett Group
launched a research study designed to assess the readiness of U.S.
companies to move to International Financial Reporting Standards
(IFRS). The study is designed to evaluate a range of key issues
around IFRS adoption, including: companies� planned timelines for
IFRS adoption; the expected impact on organization, processes, and
technology; implementation practices, including expected
investments; and plans for internal training.
At 5:00 P.M. ET on Tuesday, February 24, 2009 the senior
management of The Hackett Group, Inc. (NASDAQ:HCKT - News),
formerly known as Answerthink, Inc., will host a conference call to
discuss fourth quarter earnings results for the period ending
January 2, 2009.
The number for the conference call is (800) 857-9601, [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
24, 2009 and will run through 5:00 P.M. ET on Tuesday, March 10,
2009. To access the rebroadcast, please dial (866) 491-2939. For
International callers, please dial (203) 369-1727.
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 Tuesday, February 24, 2009
and will run through 5:00 P.M. ET on Tuesday, March 10, 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 �
Twelve Months
Ended � �
January 2, December 28, January
2, December 28, 2009 2007 2009
2007 Revenue: Revenue before reimbursements $ 43,846 $
40,473 $ 173,217 $ 158,973 Reimbursements 4,909 4,417 � 18,884
18,035 � Total revenue 48,755 44,890 192,101 177,008 � Costs and
expenses: Cost of service: Personnel costs before reimbursable
expenses
(includes $324 and $288 and $1,234
and $1,622 of stock compensation expense in the quarters and twelve
months ended January 2, 2009 and December 28, 2007, respectively)
(1)
24,034 22,047 96,844 91,853 Reimbursable expenses 4,909 4,417 �
18,884 18,035 �
�
Total cost of service 28,943 26,464 115,728 109,888 � Selling,
general and administrative costs (includes $646 and $558 and $2,824
and $2,390 of stock compensation expense in the quarters and twelve
months ended January 2, 2009 and December 28, 2007, respectively)
(1) 14,206 14,081 58,474 60,746 Collections from misappropriation -
(2,224 ) - (2,574 ) Total costs and operating expenses 43,149
38,321 � 174,202 168,060 � Income from operations 5,606 6,569
17,899 8,948 Other income (expense): Interest income 54 208 442 869
Interest expense
-
- - (94 ) Loss on marketable investments
-
(450 )
-
(450 ) Income before income taxes 5,660 6,327 18,341 9,273 Income
tax expense 212 31 � 465 278 � Net income $ 5,448 $ 6,296 � $
17,876 $ 8,995 � � Basic net income per common share: Net income
per common share $ 0.14 $ 0.15 $ 0.44 $ 0.20 Weighted average
common shares outstanding 38,936 42,872 40,471 44,127 � Diluted net
income per common share: Net income per common share $ 0.14 $ 0.14
$ 0.43 $ 0.20 Weighted average common and common equivalent shares
outstanding
39,786 43,572 41,498 44,978 � Pro forma data (2): Income before
income taxes $ 5,660 $ 6,327 $ 18,341 $ 9,273 Stock compensation
expense 970 846 4,058 4,012 Amortization of intangible assets 164
296 732 1,351 Professional fees related to the misappropriation - -
- 239 Collections from misappropriation - (2,224 ) - (2,574 ) Loss
on marketable investments - 450 � - 450 � Pro forma income before
income taxes 6,794 5,695 23,131 12,751 Pro forma income tax expense
2,718 2,278 � 9,252 5,100 � Pro forma net income $ 4,076 $ 3,417 �
$ 13,879 $ 7,651 � � Pro forma basic net income per common share $
0.10 $ 0.08 $ 0.34 $ 0.17 Weighted average common shares
outstanding 38,936 42,872 40,471 44,127 � Pro forma diluted net
income per common share $ 0.10 $ 0.08 $ 0.33 $ 0.17 Weighted
average common and common equivalent shares outstanding 39,786
43,572 41,498 44,978 � (1) Certain items in the quarter and twelve
months ended December 28, 2007 have been reclassified to conform
with the January 2, 2009 presentation. As a result, SGA for the
second quarter, third quarter and fourth quarters of 2007 have been
recast to $15,224, $14,978 and $14,081, respectively. In addition,
personnel costs before reimbursable expenses for the second
quarter, third quarter and fourth quarters of 2007 have been recast
to $23,886, $23,363 and $22,047, respectively. (2) The Company
provides pro forma earnings results (which exclude amortization of
intangible assets, stock compensation expense, collections and
professional fees related to the misappropriation 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 users' overall
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 inclusion of non-GAAP numbers
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 accounting principles generally accepted in the United States
of America.
The Hackett Group, Inc. CONDENSED
CONSOLIDATED BALANCE SHEETS (in thousands)
(unaudited) �
January 2, �
December 28, �
2009 2007 �
ASSETS � Current assets: Cash and
cash equivalents $ 32,060 $ 20,061 Marketable investments
1,727
7,032 Accounts receivable and unbilled revenue, net 25,481 29,735
Prepaid expenses and other current assets 3,021 1,586 Total current
assets
62,289
58,414 � Restricted cash 600 600 Property and equipment, net 5,767
5,709 Other assets
1,392
2,434 Goodwill, net 63,616 68,302 Total assets $ 133,664 $ 135,459
�
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:
Accounts payable $ 3,711 $ 3,970 Accrued expenses and other
liabilities 34,277 29,047 Total current liabilities 37,988 33,017
Accrued expenses and other liabilities, non-current 1,759 3,623
Total liabilities 39,747 36,640 � Shareholders' equity 93,917
98,819 Total liabilities and shareholders' equity $ 133,664 $
135,459
The Hackett Group, Inc. Supplemental Financial
Data (unaudited) � � � � �
Quarter Ended
January 2, 2009 September 26, 2008 December 28,
2007 Revenue Breakdown by Group: (in thousands) � The
Hackett Group: Benchmarking and Business Transformation (4) $
30,094 $ 29,876 $ 26,022 Executive Advisory Programs (5) � 3,693 �
� 3,875 � � 3,893 � Total The Hackett Group 33,787 33,751 29,915 �
Hackett Technology Solutions (6) � 14,968 � � 16,657 � � 14,975 �
Total Revenue $ 48,755 � $ 50,408 � $ 44,890 � � �
Revenue
Concentration: (% of total revenue) � Top customer 6 % 8 % 5 %
Top 5 customers 21 % 20 % 17 % Top 10 customers 30 % 31 % 28 % � �
Key Metrics and Other Financial Data: �
The Hackett
Group: The Hackett Group annualized revenue per professional
(in thousands) $ 409 $ 452 $ 411 Executive Advisory Programs -
Annualized Contract Value (in thousands in USD) (3) (7) $ 14,015 $
14,780 $ 16,031 Executive Advisory Programs - Annualized Contract
Value (in thousands in constant currency) (3) (7) $ 15,286 $ 15,441
$ 16,031 �
Hackett Technology Solutions: Hackett Technology
Solutions consultant utilization rate 64 % 74 % 62 % Hackett
Technology Solutions gross billing rate per hour $ 168 $ 166 $ 161
�
Total Company: Consultant headcount 547 566 552 Total
headcount 724 747 739 Days sales outstanding (DSO) 51 56 60 Cash
provided by operating activities (in thousands) $ 11,361 $ 12,929 $
8,320 Depreciation (in thousands) $ 512 $ 522 $ 508 Amortization
(in thousands) $ 164 $ 180 $ 296 �
Share Repurchase Program:
Shares purchased in the quarter (in thousands) 938 1,073 1,029 Cost
of shares repurchased in the quarter (in thousands) $ 2,889 $ 6,459
$ 4,208 Average price per share of shares purchased in the quarter
$ 3.08 $ 6.02 $ 4.09 Remaining authorization (in thousands) $ 1,959
$ 4,848 $ 6,060 � (3) We define "Annualized Contract Value" as of
the beginning of the following quarter as the aggregate annualized
revenue attributed to all agreements in effect on such date,
without regard to the remaining duration of any such agreement. �
(4) 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. � (5) Annual or multi-year contract that provides
clients with on-demand access to world-class performance metrics,
best practice repository, best practice research forums and
conferences, and advice. � (6) Best Practice Implementation of ERP
Software, which is primarily Oracle and SAP, and business
performance management solutions, which is primarily Hyperion. �
(7) Certain items in the quarter ended December 28, 2007 have been
reclassified to conform with the January 2, 2009 presentation.
Hackett (NASDAQ:HCKT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Hackett (NASDAQ:HCKT)
Historical Stock Chart
From Jul 2023 to Jul 2024