The Hackett Group Announces Second Quarter 2014 Results

  The Hackett Group Announces Second Quarter 2014 Results

  *Q2 2014 revenue of $61.1 million and pro forma EPS of $0.16, both exceed
    high-end of guidance
  *Q2 2014 pro forma EPS up 23% from same period last year
  *Board authorizes additional $5.0 million under stock repurchase program

Business Wire

MIAMI -- August 5, 2014

The Hackett Group, Inc. (NASDAQ: HCKT), a global strategic advisory and
business transformation and technology consulting firm, today announced its
financial results for the second quarter, which ended June 27, 2014.

Second quarter 2014 revenue was $61.1 million. Pro forma diluted earnings per
share were $0.16 for the second quarter of 2014, as compared to $0.13 for the
same period in 2013. 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 $0.12 for the second quarter of 2014, an
increase of 33%, as compared to diluted earnings per share of $0.09 in the
second quarter of 2013.

During the second quarter, the Company utilized cash to repurchase
approximately 491 thousand shares of the Company's common stock at an average
price of $6.03 per share, for a total cost of $3.0 million. As of the end of
the second quarter of 2014, the Company's remaining stock repurchase program
authorization was $2.3 million. Subsequent to quarter end, the Company's Board
of Directors approved to increase the stock repurchase program authorization
by an additional $5.0 million.

"As a result of our actions taken in Europe and the strong Hackett North
America momentum, we exceeded last year's second quarter results," stated Ted.
A. Fernandez, Chairman & CEO of The Hackett Group, Inc. "More importantly, we
expect improving International results to help us carry this momentum into the
third quarter."

Based on the current economic outlook, the Company estimates total revenue for
the third quarter of 2014 to be in the range of $58.0 million to $60.0
million, and estimates pro forma diluted earnings per share to be in the range
of $0.14 to $0.16.

Other Highlights

North American Best Practices Conference - "Accelerating Growth Through
Innovation" was the focus of The Hackett Group's 2014 North American Best
Practices Conference held at the Peninsula Hotel in Chicago April 28-30, 2014.
This year's best practices conference brought together speakers from more than
a dozen of the world’s most respected companies, including CFOs, CIOs, and
leaders in procurement, human resources, and global business services from:
Air Products; Alcoa; Coty; Johnson & Johnson; Marriott; Mead Johnson
Nutrition; MultiCare Health System; Oracle Corporation; PAREXEL International
Corporation; RAI Services Company; United Continental Holdings; and Xerox
Corporation. The sold out event was attended by over 200 senior-level
executives from the world’s most respected brands.

Enterprise Performance Measurement (EPM) Key Issues Research - New EPM Key
Issues research from The Hackett Group found that companies now focusing on
innovation as a core strategy to deliver revenue growth and margin
improvements. Financial Planning & Analysis (FP&A) organizations need to rise
to the challenge and pursue broad transformation in EPM and business
intelligence. The Hackett Group's research recommends three main areas of
transformation focus for FP&A: integration of EPM processes and development of
better business partnerships; improvement of core processes to recalibrate
FP&A's value proposition; and development of better business intelligence

IT Key Issues Research - New IT Key Issues research from The Hackett Group
found that IT leaders are striving to reinvent themselves in 2014, as they
struggle to support innovation-based corporate growth efforts with improved
information and analytics. At the same time, IT organizations are facing
another year of staff cuts and only small budget increases in the face of
moderate revenue growth expectations. According to The Hackett Group's
research, companies are focusing on three IT strategy areas for 2014:
redefining IT's value proposition, including developing business relationships
necessary to support innovation and adopting metrics to better measure IT
value contribution; development of enterprise information architecture and
analytics capabilities to help their company support top-line revenue growth;
and talent realignment.

On Tuesday, August 5, 2014, senior management will discuss second quarter
results in a conference call at 5:00 P.M. ET.

The number for the conference call is (800) 779-3138, [Passcode: Second
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, August 5, 2014 and will run through 5:00 P.M. ET
on Tuesday, August 19, 2014. To access the rebroadcast, please dial (888)
433-2205. For International callers, please dial (402) 998-1308.

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, August 5, 2014 and
will run through 5:00 P.M. ET on Tuesday, August 19, 2014. To access the
replay, visit or

About The Hackett Group

The Hackett Group, Inc. (NASDAQ: HCKT), a global strategic business advisory
and business transformation and technology consulting firm, is a leader in
best practice advisory, benchmarking, and transformation consulting services
including enterprise performance management and business intelligence,
strategy and operations, working capital management, shared services and
globalization advice. Utilizing best practices and implementation insights
from more than 10,000 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 ERP Solutions group, The Hackett Group offers
business application consulting and application management 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, 83% of the Fortune 100, 87% of the DAX 30
and 48% of the FTSE 100.

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, 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.
(in thousands, except per share data)
                             Quarter Ended             Six Months Ended
                             June 27,     June 28,     June 27,      June 28,
                             2014         2013         2014          2013
Revenue before             $ 55,000     $ 52,341     $ 104,418     $ 101,212
Reimbursements               6,052       6,620       11,539       12,098  
Total revenue                61,052       58,961       115,957       113,310
Costs and expenses:
Cost of service:
Personnel costs before
reimbursable expenses
(includes $785 and $863
and $1,400 and $1,686 of
stock compensation
expense in the quarters
and six months ended
June 27, 2014 and June
28, 2013, respectively)      34,353       33,363       67,606        65,405
Reimbursable expenses        6,052       6,620       11,539       12,098  
Total cost of service        40,405       39,983       79,145        77,503
Selling, general and
administrative costs
(includes $691 and $782
and $1,344 and $1,481 of
stock compensation
expense in the quarters
and six months ended
June 27, 2014 and June
2013, respectively)          15,621       13,893       29,862        27,193
Restructuring costs          -           -           3,604        -       
Total costs and              56,026      53,876      112,611      104,696 
operating expenses
Income from operations       5,026        5,085        3,346         8,614
Other income (expense):
Interest income              1            3            2             4
Interest expense             (166   )     (125   )     (290    )     (267    )
Income from continuing
operations before income     4,861        4,963        3,058         8,351
Income tax expense           1,386       2,033       1,629        3,392   
Income from continuing       3,475        2,930        1,429         4,959
Loss from discontinued       -           -           -            (71     )
Net income                 $ 3,475     $ 2,930     $ 1,429      $ 4,888   
Basic net income per
common share:
Income per common share
from continuing            $ 0.12       $ 0.10       $ 0.05        $ 0.16
Loss per common share
from discontinued            -           -           -            -       
Net income per common      $ 0.12      $ 0.10      $ 0.05       $ 0.16    
Diluted net income per
common share:
Income per common share
from continuing            $ 0.12       $ 0.09       $ 0.05        $ 0.16
Loss per common share
from discontinued            -           -           -            (0.01   )
Net income per common      $ 0.12      $ 0.09      $ 0.05       $ 0.15    
Weighted average common
shares outstanding:
Basic                        28,939       30,532       29,029        30,412
Diluted                      29,984       32,251       29,926        31,862
Pro forma data (1):
Income from continuing
operations before income   $ 4,861      $ 4,963        3,058         8,351
Stock compensation           1,476        1,645        2,744         3,167
Acquisition-related          -            -            120           -
Restructuring costs          -            -            3,604         -
Amortization of              590         151         1,147        301     
intangible assets
Pro forma income before      6,927        6,759        10,673        11,819
income taxes
Pro forma income tax         2,217       2,704       3,640        4,728   
Pro forma net income       $ 4,710     $ 4,055       7,033        7,091   
Pro forma basic net        $ 0.16       $ 0.13         0.24          0.23
income per common share
Weighted average common      28,939       30,532       29,029        30,412
shares outstanding
Pro forma diluted net      $ 0.16       $ 0.13         0.24          0.22
income per common share
Weighted average common
and common equivalent        29,984       32,251       29,926        31,862
shares outstanding

(1) The Company provides pro forma earnings results (which exclude the
amortization of intangible assets, stock compensation expense, restructuring
expense, acquisition-related costs 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)
                                                   June 27,     December 27,
                                                    2014         2013
  Current assets:
  Cash and cash equivalents                       $ 10,805     $ 18,199
  Accounts receivable and unbilled revenue, net     43,865       34,011
  Deferred tax asset, net                           3,189        5,130
  Prepaid expenses and other current assets         2,850        2,283
  Total current assets                              60,709       59,623
  Restricted cash                                   655          354
  Property and equipment, net                       12,785       13,019
  Other assets                                      4,050        1,039
  Goodwill, net                                     84,126       76,283
  Total assets                                    $ 162,325    $ 150,318
  Current liabilities:
  Accounts payable                                $ 5,020      $ 8,080
  Accrued expenses and other liabilities            35,044       25,646
  Current portion of long-term debt                 3,496        -
  Total current liabilities                         43,560       33,726
  Long-term deferred tax liability, net             3,599        4,387
  Long-term debt                                    26,217       19,029
  Total liabilities                                 73,376       57,142
  Shareholders' equity                              88,949       93,176
  Total liabilities and shareholders' equity      $ 162,325    $ 150,318

The Hackett Group, Inc.
                                           Quarter Ended
                                           June 27,     March 28,     June 28,
                                           2014         2014          2013
Revenue Breakdown by Group:
(in thousands)
The Hackett Group (2)                    $ 49,151     $ 46,133      $ 47,659
ERP Solutions (3)                          11,901      8,772        11,302 
Total revenue                            $ 61,052    $ 54,905     $ 58,961 
Revenue Concentration:
(% of total revenue)
Top customer                               5      %     4       %     3      %
Top 5 customers                            19     %     13      %     16     %
Top 10 customers                           29     %     22      %     24     %
Key Metrics and Other Financial Data:
Total Company:
Consultant headcount                       774          770           735
Total headcount                            975          971           926
Days sales outstanding (DSO)               65           61            55
Cash provided by (used in) operating     $ 611        $ (7,987  )   $ 5,720
activities (in thousands)
Depreciation (in thousands)              $ 565        $ 653         $ 461
Amortization (in thousands)              $ 590        $ 557         $ 151
The Hackett Group (in thousands):
The Hackett Group annualized revenue     $ 359        $ 336         $ 358
per professional (2)
ERP Solutions:
ERP Solutions consultant utilization       75     %     76      %     83     %
rate (3)
ERP Solutions gross billing rate per     $ 125        $ 127         $ 130
hour (3)
Share Repurchase Plan:
Shares purchased in the quarter (in        491          716           124
Cost of shares repurchased in the        $ 2,961      $ 4,337       $ 594
quarter (in thousands)
Average price per share of shares        $ 6.03       $ 6.06        $ 4.80
purchased in the quarter
Remaining authorization (in thousands)   $ 2,296      $ 5,257       $ 4,963

(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,
the SAP group, approximately 45% of which are offshore resources.


The Hackett Group, Inc.
Robert A. Ramirez, CFO, 305-375-8005
Press spacebar to pause and continue. Press esc to stop.