The Hackett Group Announces First Quarter 2013 Results

  The Hackett Group Announces First Quarter 2013 Results

  *Q1 2013 revenue of $54.3 million, up slightly from prior year
  *Pro forma EPS of $0.10, at mid point of guidance and up 25% from prior
  *Board authorizes additional $5.0 million for stock repurchase program

Business Wire

MIAMI -- May 07, 2013

The Hackett Group, Inc. (NASDAQ: HCKT), a global strategic advisory and
business transformation consulting firm, today announced its financial results
for the first quarter, which ended March 29, 2013.

First quarter 2013 revenue was $54.3 million. Pro forma diluted earnings per
share were $0.10 for the first quarter of 2013, as compared to $0.08 for the
same period in 2012. 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 $0.06 for the first quarter of 2013, as
compared to $0.09 in the first quarter of 2012. GAAP earnings per share for
the first quarter of 2012 benefitted by $1.3 million, or $0.03 per share,
resulting from the release of tax valuation allowances.

At the end of the first quarter of 2013, the Company’s cash balances were
$12.0 million. During the first quarter, the Company paid down $4.5 million of
its credit facility, leaving a $20.5 million balance at quarter end.

Subsequent to the end of the first quarter of 2013, cash was utilized to
repurchase approximately 113 thousand shares of the Company’s common stock at
an average price of $4.79, for a total cost of $544 thousand.  At its recent
meeting, the Board of Directors approved to increase the stock repurchase
program authorization by an additional $5.0 million.

"Even though new year initiatives did not ramp up as quickly as we planned, we
reported solid operating results," stated Ted A. Fernandez, Chairman and CEO
of The Hackett Group, Inc. "Given the solid US momentum that we are
experiencing, we believe we can continue to improve our financial performance
even if European headwinds continue."

Based on the current economic outlook, the Company estimates total revenue for
the second quarter of 2013 to be in the range of $54.0 million to $56.0
million, and estimates pro forma diluted earnings per share to be in the range
of $0.10 to $0.12.

Other Highlights

IT Key Issues Study - A new IT Key Issues study from The Hackett Group found
that IT organizations can expect to see small increases in operating budgets
for 2013, even as cutbacks continue across other parts of business services,
including finance, HR, and procurement. The study found that the IT budget
increases are in part being driven by increased demand and expectations, as IT
organizations are being asked to respond to the new "borderless" business
environment by building out a flexible, virtual, data-enabled model for
service delivery.

Procurement Key Issues Study - A new Procurement Key Issues study from The
Hackett Group found that procurement leaders face new pressures in 2013 as
companies focus on profitable growth and balance local agility with global
scale in their value chains. While company revenue continues to grow,
procurement leaders along with other business functions continue to be asked
to do more with less. Procurement leaders are now focusing on a much broader
list of procurement strategy priorities designed to improve their alignment
with business objectives.

Manufacturing Costs Research - New research from The Hackett Group found that
US manufacturers are targeting an aggressive 1.5 percent reduction in cost of
goods sold (COGS) for 2013 in an effort to drive margin growth. The study
found that with GDP growth stabilizing in major regions of the world,
manufacturers are expecting reduced sales forecast uncertainty, enabling them
to plan supply requirements and manufacturing capacity with far greater

2013 Best Practices Conference Preview - The Hackett Group announced plans to
hold its 2013 U.S. Best Practices Conference in Miami on May 21-22. The event
will feature senior executives from nearly a dozen of the world's largest and
most successful companies - including Citigroup, General Electric, General
Mills, Kimberly-Clark, MetLife, Office Depot, and TE Connectivity - discussing
their efforts to improve efficiency and effectiveness in finance, IT, HR,
procurement, and other business services.

On Tuesday, May 7, 2013, senior management will discuss first quarter results
in a conference call at 5:00 P.M. ET.

The number for the conference call is (800) 779-3138, [Passcode: First
Quarter, Leader: Ted A. Fernandez]. For International callers, please dial
(517) 308-9381.

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 7, 2013 and will run through 5:00 P.M. ET on
Tuesday, May 21, 2013. To access the rebroadcast, please dial (866) 441-1052.
For International callers, please dial (203) 369-1059.

In addition, The Hackett Group will also be webcasting this conference call
live through the service. To participate, simply visit 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 7, 2013 and will
run through 5:00 P.M. ET on Tuesday, May 21, 2013. To access the replay, visit or

For additional information on The Hackett Group, please visit our website at

About The Hackett Group

The Hackett Group, Inc. (NASDAQ: HCKT), a global strategic business advisory
and business transformation consulting firm, is a leader in best practice
advisory, benchmarking, and transformation consulting services including
strategy and operations, working capital management, shared services and
globalization advice. Utilizing best practices and implementation insights
from more than 8,500 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 ERP 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 3,500
major corporations and government agencies, including 97% of the Dow Jones
Industrials, 84% of the Fortune 100, 87% of the DAX 30 and 48% of the FTSE

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

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, 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 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.
(in thousands, except per share data)
                                         Quarter Ended
                                         March 29,              March 30,
                                         2013                   2012
    Revenue before                 $     48,871           $     49,044
    Reimbursements                       5,478                 5,039     
    Total revenue                        54,349                 54,083
Costs and expenses:
    Cost of service:
    Personnel costs before
    reimbursable expenses
    (includes $823 and $758
    of stock compensation
    expense in the quarters              32,042                 30,560
    ended March 29, 2013 and
    March 30, 2012,
    Reimbursable expenses                5,478                 5,039     
    Total cost of service                37,520                 35,599
    Selling, general and
    administrative costs
    (includes $699 and $507
    of stock compensation
    expense in the quarters              13,300                14,507    
    ended March 29, 2013 and
    March 30, 2012,
    Total costs and                      50,820                50,106    
    operating expenses
Income from operations                   3,529                  3,977
Other income (expense):
    Interest income                      1                      9
    Interest expense                     (142       )           (27       )
Income from continuing
operations before income                 3,388                  3,959
Income tax expense                       1,359                 108       
Income from continuing                   2,029                  3,851
Loss from discontinued                   (71        )           (318      )
Net income                         $     1,958           $     3,533     
Basic net income per common
    Income per common share
    from continuing                $     0.07             $     0.10
    Loss per common share
    from discontinued                    (0.00      )           (0.01     )
    Net income per common          $     0.06            $     0.09      
Diluted net income per
common share:
    Income per common share
    from continuing                $     0.06             $     0.10
    Loss per common share
    from discontinued                    (0.00      )           (0.01     )
    Net income per common          $     0.06            $     0.09      
Weighted average common
shares outstanding
    Basic                                30,292                 38,524
    Diluted                              31,473                 39,938
Pro forma data (1):
    Income from continuing
    operations before income       $     3,388            $     3,959
    Stock compensation                   1,522                  1,265
    Amortization of                      150                   137       
    intangible assets
    Pro forma income before              5,060                  5,361
    income taxes
    Pro forma income tax                 2,024                 2,144     
    Pro forma net income           $     3,036           $     3,217     
    Pro forma basic net            $     0.10             $     0.08
    income per common share
    Weighted average common              30,292                 38,524
    shares outstanding
    Pro forma diluted net          $     0.10             $     0.08
    income per common share
    Weighted average common
    and common equivalent                31,473                 39,938
    shares outstanding
    The Company provides pro forma earnings results (which exclude the
(1) amortization of intangible assets and stock compensation expense, and
    results from discontinued operations 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.
(in thousands)
                                                   March 29,     December 28,
                                                    2013          2012
Current assets:
  Cash and cash equivalents                       $ 11,337      $ 16,906
  Accounts receivable and unbilled revenue, net     33,798        36,869
  Deferred tax asset, net                           4,221         4,741
  Prepaid expenses and other current assets         2,646         2,335
  Total current assets                              52,002        60,851
Restricted cash                                     684           683
Property and equipment, net                         13,008        12,859
Other assets                                        1,409         1,598
Goodwill, net                                       75,104        76,220
Non-current deferred tax asset, net                 779           1,710
  Total assets                                    $ 142,986     $ 153,921
Current liabilities:
  Accounts payable                                $ 4,816       $ 7,711
  Accrued expenses and other liabilities            21,414        26,484
  Current portion of long-term debt                 -             2,895
  Total current liabilities                         26,230        37,090
Long-term debt                                      20,526        22,105
  Total liabilities                                 46,756        59,195
Shareholders' equity                                96,230        94,726
  Total liabilities and shareholders' equity      $ 142,986     $ 153,921

The Hackett Group, Inc.
                               Quarter Ended
                               March 29,        March 30,        December 28,
                               2013             2012             2012
Revenue Breakdown by
(in thousands)
The Hackett Group (2)          $  43,612        $  47,124        $  45,130
ERP Solutions (3)                10,737         6,959          9,912   
Total revenue                  $  54,349       $  54,083       $  55,042  
Revenue Concentration:
(% of total revenue)
Top customer                      4       %        5       %        3       %
Top 5 customers                   14      %        16      %        13      %
Top 10 customers                  23      %        27      %        22      %
Key Metrics and Other
Financial Data:
Total Company:
Consultant headcount              719              691              724
Total headcount                   906              891              921
Days sales outstanding            56               56               59
Cash (used in) provided
by operating activities        $  (547    )     $  (3,833  )     $  9,219
(in thousands)
Depreciation (in               $  499           $  614           $  483
Amortization (in               $  150           $  137           $  136
The Hackett Group (in
The Hackett Group
annualized revenue per         $  329           $  374           $  342
professional (2)
ERP Solutions:
ERP Solutions consultant          75      %        69      %        68      %
utilization rate (3)
ERP Solutions gross            $  137           $  119           $  135
billing rate per hour (3)
Share Repurchase Plan
Shares purchased in the           -                -                -
quarter (in thousands)
Cost of shares
repurchased in the             $  -             $  -             $  -
quarter (in thousands)
Average price per share
of shares purchased in         $  -             $  -             $  -
the quarter
Remaining authorization        $  556           $  556           $  556
(in thousands)

(2) The Hackett Group encompasses the Benchmarking, Business Transformation
and Executive Advisory groups, and EPM Technologies.
(3) ERP Solutions encompasses Best Practice Implementation of ERP Software,
which is currently SAP.
(4) The Share Repurchase Plan information does not include 11.0 million shares
purchased pursuant to the Dutch Tender Offer at $5.00 per share for a total of
$55.0 million, excluding fees, during Q1 2012.


The Hackett Group, Inc.
Robert A. Ramirez, CFO, 305-375-8005
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