- Q1 2017 revenue of $71.4 million, up 4%
from prior year, and pro forma EPS of $0.23, up 15% from prior year
and in line with guidance
- Hackett acquires Oracle Cloud
Implementation firm, Jibe Consulting Inc.
- Hackett acquires Outsourcing and
Robotic Process Automation Advisory firm, Aecus Limited
- Board of Directors declares $0.15
semi-annual dividend
The Hackett Group, Inc. (NASDAQ: HCKT), a global intellectual
property-based strategic consultancy and leading
enterprise benchmarking and best practices implementation
firm, today announced its financial results for the first quarter,
which ended on March 31, 2017.
Q1 2017 revenue was $71.4 million, up 4%, or 5% in constant
currency, from prior year. Q1 2017 pro forma diluted earnings per
share were $0.23, up 15% when compared to $0.20 for the same period
in 2016. 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 $0.24 for the first quarter
of 2017, as compared to $0.13 in the first quarter of 2016. During
the quarter ended March 31, 2017, no income tax expense was
recorded as a result of the adoption of a new pronouncement
relating to the accounting on the vesting of share-based
awards.
In its recent meeting, the Company’s Board of Directors declared
a semi-annual dividend of $0.15 per share for shareholders of
record on June 30, 2017, to be paid on July 11, 2017.
At the end of the first quarter of 2017, the Company’s cash
balances were $17.1 million. During the quarter the Company
utilized cash to repurchase 233 thousand shares of the Company’s
common stock at an average price per share of $17.58 for a total of
$4.1 million. As of the end of the first quarter of 2017, the
Company’s remaining stock repurchase program authorization was $3.2
million.
On May 8, 2017, the Company acquired the operations of Jibe
Consulting Inc. (“Jibe”), a U.S.- based Oracle E-Business Suite
(“EBS”) and Oracle Cloud Business Application implementation firm.
The Jibe acquisition enhances the Company’s Cloud Applications
capabilities and strongly complements its market leading Enterprise
Performance Management (“EPM”) transformation and technology
implementation group. Closing consideration was $9.0 million in
cash and restricted stock, of which the stock is subject to
vesting, and $11.0 million in contingent consideration based on the
achievement of performance targets and is payable in cash and
restricted stock, of which the stock is subject to vesting.
On April 7, 2017, the Company acquired the U.K.-based operations
of Aecus Limited (“Aecus”), a European outsourcing advisory
and robotics process automation (“RPA”) consulting firm. This
acquisition strongly complements the global strategy and business
transformation offerings of the Hackett Group. Closing
consideration was £3.2 million, or approximately $4.0 million, in
cash with an additional £3.0 million in contingent consideration
based on the achievement of performance targets and is payable in
cash.
“We reported solid operating results but more importantly, the
acquisitions and alliances announced, significantly accelerate our
position in critical digital transformation areas,” stated Ted A.
Fernandez, Chairman & CEO of The Hackett Group. “We believe
that the opportunities provided from the rapidly emerging Digital
Transformation era are significant and enhancing our existing
capabilities were strategic priorities.”
Based on the current economic outlook, the Company estimates
total revenue for the second quarter of 2017 to be in the range of
$73.5 million to $75.5 million, and estimates pro forma diluted
earnings per share to be in the range of $0.24 to $0.26. At the
high end of the guidance, pro forma EPS would increase 8% when
compared to prior year. This includes $3.5 million to $4.0 million
of revenue in the quarter from the acquisitions announced today. We
expect that these acquisitions will have a neutral impact on pro
forma earnings per share in the second quarter of 2017.
Other Highlights
Symphony Alliance – On April 20, 2017, The Hackett Group and
Symphony Ventures announced a global partnership that will enable
enterprise digital transformation by integrating The Hackett
Group’s best practices and research data with Symphony’s strategic
and technical capabilities in robotics and intelligent automation.
The partnership is expected to offer clients the ability to further
improve the ROI of their RPA, Intelligent Automation and other
digital transformation efforts in finance, HR, procurement, and
other business services areas by combining Symphony’s global
leadership enabling digital transformation with The Hackett Group’s
deep empirical knowledge of how to assess and optimize processes
for both efficiency and effectiveness.
Hackett Institute for Enterprise Analytics – The Hackett Group
announced the launch of The Hackett Institute for Enterprise
Analytics, a comprehensive training and certification offering
designed to enable professionals across the enterprise to improve
their mastery of the analytics techniques and tools necessary to
effectively analyze, predict and influence business performance.
The offerings of Hackett Group’s Institute for Enterprise Analytics
will be designed to address the needs of business professionals
from a wide range of disciplines, including finance, procurement
and supply chain, global business services, manufacturing, sales
and marketing and human resources.
Procurement Key Issues – New Procurement Key Issues research
from The Hackett Group found that while procurement leaders are
almost universally aware of the potentially dramatic impact of
digital transformation on the way they deliver services, few are
confident that they have the necessary strategy, talent and
competencies in place. The result is a gap between procurement’s
transformation agenda and enterprise-level digital transformation
priorities, and the risk that this gap may widen.
Finance Key Issues – New Finance Key Issues research from The
Hackett Group found that while finance leaders fully recognize the
unprecedented opportunity to drive performance improvement via
digital transformation, most lack a comprehensive strategy and are
not clear where or how to deploy digital technology to their best
advantage. In addition, The Hackett Group found that significant
skills and competency gaps are preventing finance organizations
from taking full advantage of digital transformation.
On Tuesday, May 9, 2017, senior management will discuss first
quarter results in a conference call at 5:00 P.M. ET. The number
for the conference call is (844) 358-9115, [Passcode: First
Quarter, The Hackett Group Earnings]. For International callers,
please dial (209) 905-5950.
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,
May 9, 2017 and will run through 5:00 P.M. ET on Tuesday, May 23,
2017. To access the rebroadcast, please dial (855) 859-2056. For
International callers, please dial (404) 537-3406, [Passcode:
First Quarter, The Hackett Group Earnings].
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,
May 9, 2017 and will run through 5:00 P.M. ET on Tuesday, May 23,
2017. To access the replay, visit www.thehackettgroup.com or
http://www.streetevents.com.
About The Hackett Group
The Hackett Group (NASDAQ: HCKT) is an intellectual
property-based strategic consultancy and leading
enterprise benchmarking and best practices implementation
firm to global companies, offering digital transformation and
enterprise application approaches including robotic process
automation and cloud computing. Services include business
transformation, enterprise performance
management, working capital management 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 EPM and SAP
practices.
The Hackett Group has completed more than 13,000 benchmarking
studies with major corporations and government agencies, including
93% of the Dow Jones Industrials, 87% of the Fortune 100, 87% of
the DAX 30 and 58% of the FTSE 100. These studies drive its Best
Practice Intelligence Center™ 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.
More information on The Hackett Group is available
at: www.thehackettgroup.com,info@thehackettgroup.com, or by
calling (770) 225-3600.
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, including the Jibe Consulting and Aecus Limited.
acquisitions referenced above, 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 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.
The Hackett Group, Inc. CONSOLIDATED STATEMENTS OF
OPERATIONS (in thousands, except per share data)
(unaudited) Quarter Ended March 31,
April 1, 2017 2016 Revenue:
Revenue before reimbursements ("net revenue") $ 65,069 $ 61,973
Reimbursements 6,360 6,805 Total revenue 71,429 68,778 Costs
and expenses: Cost of service: Personnel costs before reimbursable
expenses 40,152 38,351 Non-cash stock compensation expense 1,132
1,047 Acquisition-related non-cash stock compensation expense 310
268 Reimbursable expenses 6,360 6,805 Total cost of service 47,954
46,471 Selling, general and administrative costs 14,360
14,195 Non-cash stock compensation expense 659 597
Acquisition-related costs 106 - Amortization of intangible assets
386 275 Total selling, general, and administrative expenses 15,511
15,067 Total costs and operating expenses 63,465
61,538 Income from operations 7,964 7,240 Other
expense: Interest expense (90) (41) Income from operations
before income taxes 7,874 7,199 Income tax expense - 2,817 Net
income $ 7,874 $ 4,382 Basic net income per common share:
Income per common share from operations $ 0.27 $ 0.15 Weighted
average common shares outstanding 28,868 29,890 Diluted net
income per common share: Income per common share from operations $
0.24 $ 0.13 Weighted average common and common equivalent shares
outstanding 32,292 33,353 Pro forma data (1): Income
from operations before income taxes $ 7,874 $ 7,199 Non-cash stock
compensation expense 1,791 1,644 Acquisition-related non-cash stock
compensation expense 310 268 Acquisition-related costs 106 -
Amortization of intangible assets 386 275 Pro forma income before
income taxes 10,467 9,386 Pro forma income tax expense 3,140 2,816
Pro forma net income $ 7,327 $ 6,570 Pro forma basic net
income per common share $ 0.25 $ 0.22 Weighted average common
shares outstanding 28,868 29,890 Pro forma diluted net
income per common share $ 0.23 $ 0.20 Weighted average common and
common equivalent shares outstanding 32,292 33,353
(1) The Company provides pro forma
earnings results (which exclude the amortization of intangible
assets, stock compensation expense, acquisition-related costs and
include a normalized tax rate, which is our long term projected
cash 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
and 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)
March 31, December 30, 2017 2016
ASSETS Current assets: Cash and cash equivalents $ 17,050 $
19,710 Accounts receivable and unbilled revenue, net 49,906 47,399
Prepaid expenses and other current assets 2,631 1,704 Total current
assets 69,587 68,813 Property and equipment, net 15,776
14,774 Other assets 2,841 3,336 Goodwill, net 72,553 72,376 Total
assets $ 160,757 $ 159,299
LIABILITIES AND SHAREHOLDERS'
EQUITY Current liabilities: Accounts payable $ 11,655 $ 9,089
Accrued expenses and other liabilities 34,153 46,725 Total current
liabilities 45,808 55,814 Long-term deferred tax liability, net
9,923 10,216 Long-term debt 9,000 7,000 Total liabilities 64,731
73,030 Shareholders' equity 96,026 86,269 Total liabilities
and shareholders' equity $ 160,757 $ 159,299
The Hackett
Group, Inc. SUPPLEMENTAL FINANCIAL DATA
(unaudited) Quarter Ended March 31,
April 1, December 30, 2017 2016
2016 Revenue Breakdown by Group: (in thousands) The
Hackett Group (2) $ 60,249 $ 57,945 $ 59,908 ERP Solutions (3)
11,180 10,833 10,144 Total revenue $ 71,429 $ 68,778 $ 70,052
Revenue Concentration: (% of total revenue) Top
customer 4% 6% 6% Top 5 customers 18% 19% 18% Top 10 customers 30%
31% 28%
Key Metrics and Other Financial Data:
Total Company: Consultant headcount 922 861 940 Total
headcount 1,142 1,056 1,155 Days sales outstanding (DSO) 64 62 62
Cash provided by operating activities (in thousands) $ 4,876 $ 536
$ 12,077 Depreciation (in thousands) $ 639 $ 637 $ 610 Amortization
(in thousands) $ 386 $ 275 $ 275
The Hackett Group
(in thousands)
: The Hackett Group annualized revenue per
professional (2) $ 355 $ 375 $ 342
ERP Solutions: ERP
Solutions consultant utilization rate (3) 75% 79% 70% ERP Solutions
gross billing rate per hour (3) $ 134 $ 132 $ 129
Shares
Repurchased Under the Share Repurchase Plan: Shares purchased
(in thousands) 59 307 - Cost of shares repurchased (in thousands) $
1,186 $ 4,256 $ - Average price per share of shares purchased $
20.13 $ 13.85 $ - Remaining Plan authorization (in thousands) $
3,247 $ 3,054 $ 4,433
Shares Purchased to Satisfy
Employee Net Vesting Obligations: Shares purchased (in
thousands) 174 255 6 Cost of shares purchased (in thousands) $
2,906 $ 3,437 $ 104 Average price per share of shares purchased $
16.72 $ 13.48 $ 16.89 (2) The Hackett Group encompasses the
Benchmarking, Business Transformation and Executive Advisory
groups, and EPM Groups. (3) ERP Solutions encompasses Best Practice
Implementation of ERP Software, the SAP group, approximately 40% of
which are offshore resources. (4) Certain reclassifications have
been made to conform with current reporting requirements.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170509006686/en/
The Hackett Group, Inc.Robert A. Ramirez,
305-375-8005CFOrramirez@thehackettgroup.com
Hackett (NASDAQ:HCKT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Hackett (NASDAQ:HCKT)
Historical Stock Chart
From Jul 2023 to Jul 2024