Answerthink Announces First Quarter Results.MIAMI Miami, cities, United States Miami (mīăm`ē, –ə). 1 City (1990 pop. 358,548), seat of Dade co., SE Fla., on Biscayne Bay at the mouth of the Miami River; inc. 1896. -- Answerthink, Inc. (Nasdaq:ANSR ANSR Autonomous Naval Support Round ANSR Adaptive Network Solutions Research, Inc. ANSR Advanced Neutron Source Reactor ANSR Active No Swashplate Rotor (Army) ): --Revenues grow 35% driven by REL acquisition and Business Intelligence and Hackett Hackett may refer to: In places:
--Revenues and Pro Forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. in line with guidance Answerthink, Inc. (Nasdaq:ANSR), a strategic business advisory and technology consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a , today announced its financial results for the first quarter ended March 31, 2006. First quarter revenue was $49.8 million, a 35% increase from the first quarter of 2005. Diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. loss per share was $0.13, compared to a diluted loss per share of $0.03 in the first quarter of 2005. The 2006 results included restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs of $0.14 per diluted share, primarily related to the REL acquisition and the closure and consolidation of facilities and related exit costs. The 2005 results included restructuring costs of $0.03 per diluted share from the buyout Buyout The purchase of a company or a controlling interest of a corporation's shares. Notes: A leveraged buyout is accomplished with borrowed money or by issuing more stock. of the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of lease obligation. Pro forma diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $0.04, compared to $0.01 in the first quarter of 2005. Pro forma information is provided to enhance the understanding of the Company's financial performance and is reconciled to the Company's GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). information in the accompanying tables. The Company's cash balances, including restricted cash and marketable Marketable are securities that can be easily converted into cash. Such securities will generally have highly liquid markets allowing the security to be sold at a reasonable price very quickly. investments, were $24.3 million at the end of the first quarter of 2006. During the quarter, the Company did not repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. any shares of the Company's common stock. As of the end of the first quarter of 2006, $7.9 million remained available under the Company's share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program authorization The right or permission to use a system resource; the process of granting access. See access control. . "We continue to see strong client demand for our empirical data and related best practice insight as we experienced solid growth across all of our service lines," said Ted A. Fernandez, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Answerthink. "Our increased focus and investment in our membership advisory programs was evident in our sales growth, but of greater importance is the broader impact it can have on our business model as we look forward." Based on the current economic outlook, the Company estimates total revenues for the second quarter of 2006 to be in the range of $48.5 million to $51.5 million. The Company also estimates pro forma diluted earnings per share to be in the range of $0.05 to $0.07. Other Highlights Procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. Staffing Research - New Procurement Book of Numbers Noun 1. Book of Numbers - the fourth book of the Old Testament; contains a record of the number of Israelites who followed Moses out of Egypt Numbers research from Hackett found that world-class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. procurement executives build organizations that have a much more strategic staffing mix than typical companies, with 63% fewer clerical staff and 31% more professionals. While these world-class procurement organizations have fully-loaded wage rates that are 41% higher than typical companies, this staffing model allows these organizations to spend 20% less on operations than peers and have about half of the overall staff. World-class procurement organizations also drive much higher return on investment within procurement operations than typical companies and are more closely aligned with their companies' business goals. Finance Research on DSO See CSO. - Hackett issued select findings from its Finance Book of Numbers, showing that world-class finance executives get customers to pay their bills nearly 30 percent faster than typical companies. Hackett's analysis found that a typical $10 billion company can generate more than $35.8 million/year in bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. savings if they achieve world-class performance in this area by reducing Days Sales Outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (DSO). Finance Outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. Survey Results - Hackett issued survey results that question the widespread attention and publicity paid to finance outsourcing. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Hackett, companies are doing very little of it today, and onshore on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. or offshore shared service centers remain the preferred options. Hackett's study found that companies today outsource only 4% of all finance processes, while they turn to onshore or offshore shared service centers 65% of the time. Companies surveyed reported that they expected their use of outsourcing to more than double in the next three years, but reliance on shared service centers will increase slightly as well, and shared services shared services, n.pl the administrative, clinical, or other service functions that are common to two or more hospitals or their health care facilities and used jointly or cooperatively by them. is expected to remain the preferred sourcing alternative for finance by a wide margin. Total Working Capital Research Covering Auto Suppliers - Hackett issued research and analysis from its new Total Working Capital Executive Advisory Program showing that in the face of bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most filings, lagging Lagging Strategy used by a firm to stall payments, normally in response to exchange rate projections. sales and rising raw-material prices, the 15 largest US automotive suppliers are nevertheless ignoring up to $7.6 billion in cash opportunity. The opportunity comes in the form of excess working capital tied up in invoices paid late by customers, suppliers being paid too early and inventory lying unsold on warehouse shelves. Representative Client Engagements Hyperion Hyperion, in astronomy Hyperion (hīpēr`ēən), in astronomy, one of the named moons, or natural satellites, of Saturn. Implementation for a Leading U.S. Newspaper Publisher - This client contracted with Answerthink for a Hyperion Financial Management implementation and with Hackett for best practices workshops to help identify best practices gaps in finance. The project will offer more robust reporting to support more detailed analysis, and a Web-based delivery system that will broaden potential user access. The client's goals include speeding up the closing process and improving auditability. Customer-to-Cash Transformation Project for Major European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Electrical Utility - This client contracted for an extension of a multi-year engagement with Hackett - REL designed to improve receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed management. The project includes an analysis of billing and collections strategies, and the implementation of customer segmentation programs and other best practices to enhance cash flow and close performance gaps. To date, this program has helped the client generate hundreds of millions of dollars of cash flow improvement. Oracle Implementation for Quick Serve Restaurant Chain - This client selected Answerthink for a comprehensive Oracle implementation with integrated Hackett best practices. The goal is to create a sustainable controls environment and improve the company's transactional processes across finance, construction management, lease and property management, and sales royalty and revenue accounting. Over the past year, Answerthink has assisted the client with best practices implementation requirements development and with vendor-agnostic ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. planning and best practice implementation configuration design. World-Class Merger & Integration Program for U.S. Electrical Utility - This client contracted for two G&A benchmarks and membership in four Executive Advisory Programs, in anticipation of a merger with another utility. We will benchmark both organizations, and use the data to model the future combined entity under several sets of assumptions. The goal is to help the client determine how best to optimize optimize - optimisation the newly-merged back office operations, improve efficiency and effectiveness, and set cost reduction and performance targets. World-Class Program for a Global Financial Conglomerate conglomerate, in business conglomerate, corporation whose asset growth, often very rapid, comes largely through the acquisition of, or merger with, other firms whose products are largely unrelated to each other or to that of the parent company. - This client contracted for a G&A benchmark and one-year adj. 1. completing its life cycle within a year. Adj. 1. one-year - completing its life cycle within a year; "a border of annual flowering plants" annual phytology, botany - the branch of biology that studies plants membership in four Executive Advisory Programs as part of an effort to reassess reassess Verb to reconsider the value or importance of reassessment n Verb 1. reassess - revise or renew one's assessment reevaluate the scalability How much a system can be expanded. See scalable. scalability - How well a solution to some problem will work when the size of the problem increases. For example, a central server of some kind with ten clients may perform adequately but with a thousand clients it of its global corporate infrastructure. In part to address shrinking profit margins in their industry, this company is hoping to reduce costs, improve its utilization of technology, and determine how best to integrate and consolidate decentralized de·cen·tral·ize v. de·cen·tral·ized, de·cen·tral·iz·ing, de·cen·tral·iz·es v.tr. 1. To distribute the administrative functions or powers of (a central authority) among several local authorities. strategic support functions across its various functional silos and business units. "Customer-to-Cash" Initiative for International Aviation Ground Services Provider - This client selected Hackett-REL to implement a "Customer-to-Cash" working capital improvement initiative designed to address billing problems, including late billing, high error rates, and inefficiencies in their dispute management system. The goal is to reduce Days Sales Outstanding (DSO) and free up cash from the receivables process. At 5:00 P.M. ET on Tuesday Tuesday: see week. , May 2, 2006, senior management of Answerthink will host a conference call to discuss first quarter earnings results for the quarter ending March 31, 2006. The number for the conference call is (800) 857-4830, (Passcode: First Quarter; Leader: Ted A. Fernandez). For International callers, please dial (210) 839-8500. 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 2, 2006 and will run through 5:00 P.M. ET on Tuesday, May 16, 2006. To access the rebroadcast, please dial (800) 728-5859. For International callers, please dial (402) 220-0344. In addition, Answerthink will also be webcasting this conference call live through the StreetEvents.com service. To participate, simply visit http://www.answerthink.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 2, 2006 and will run through 5:00 P.M. ET on Tuesday, May 16, 2006. To access the call, visit http://www.answerthink.com or http://www.streetevents.com About Answerthink Answerthink, Inc. (http://www.Answerthink.com) is a leading business and technology consulting firm that enables companies to achieve world-class business performance. By leveraging the comprehensive database of The Hackett Group, Answerthink's business and technology solutions help clients significantly improve performance and maximize returns on technology investments. Answerthink's capabilities include benchmarking, business transformation, business applications, business intelligence, and offshore application development and support. Founded in 1997, Answerthink has offices throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and India.
About The Hackett Group The Hackett Group (http://www.TheHackettGroup.com), a strategic advisory firm and an Answerthink company, is a world leader in best practice research, benchmarking and business transformation services that empirically define and enable world-class enterprise performance. Through the acquisition of REL Consultancy Group, a global leader in generating cash improvement from working capital, we offer Hackett-REL Total Working Capital services to liberate (Liberate Technologies, San Mateo, CA) A software company that specialized in the information appliance field. Formerly Network Computer, Inc. (NCI), a spin-off from Oracle in 1996, it changed its name in 1999. cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses through improved working capital, reduced costs and increased service quality. Hackett-REL has helped clients in more than 60 countries free up over $25 billion through working capital improvements in the last 10 years alone. The Hackett Group empirically defines world-class performance in sales, general and administrative (SG&A) and supply chain activities with analysis gained through 3,500 benchmark studies over 14 years at 2,000 of the world's leading companies. Our clients comprise 96 percent of the Dow Jones Dow Jones the best known of several U.S. indexes of movements in price on Wall Street. [Am. Hist.: Payton, 202] See : Finance Industrials, 77 percent of the Fortune 100 and 92 percent of the Dow Jones Global Titans The Dow Jones Global Titans 50 Index was created to reflect the globalization of international blue chip securities in the wake of mergers and the creation of mega-corporations. Index. This press release contains "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 and involve known and unknown risks, uncertainties and other factors that may cause Answerthink'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 the 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 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 accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying , 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 the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended December 30, 2005 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.
Answerthink, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Quarter Ended
---------------------
March 31, April 1,
2006 2005
---------- ---------
(unaudited)
Revenues:
Revenues before reimbursements $44,896 $33,178
Reimbursements 4,935 3,694
------- -------
Total revenues 49,831 36,872
Costs and expenses:
Project personnel and expenses:
Project personnel and expenses before
reimbursable expenses (includes $220
and $122 of stock compensation expense in
2006 and 2005, respectively) 26,464 20,508
Reimbursable expenses 4,935 3,694
------- -------
Total project personnel and expenses 31,399 24,202
Selling, general and administrative expenses
(includes $856 and $435 of stock compensation
expense in 2006 and 2005, respectively) 17,791 13,319
Restructuring costs 6,313 1,134
------- -------
Total costs and operating expenses 55,503 38,655
------- -------
Loss from operations (5,672) (1,783)
Other income (expense):
Interest income 189 263
Interest expense (106) (24)
------- -------
Loss before income taxes (5,589) (1,544)
Income taxes 365 (114)
------- -------
Net loss $(5,954) $(1,430)
------- -------
Basic net loss per common share $ (0.13) $ (0.03)
Weighted average common shares outstanding 44,518 43,439
Diluted net loss per common share (1) $ (0.13) $ (0.03)
Weighted average common and common
equivalent shares outstanding 44,518 43,439
Pro forma data: (2)
Loss before income taxes $(5,589) $(1,544)
Restructuring costs 6,313 1,134
Stock compensation expense 1,076 557
Amortization of intangible assets 969 444
------- -------
Pro forma income before income taxes 2,769 591
Pro forma income taxes 1,108 236
------- -------
Pro forma net income $ 1,661 $ 355
------- -------
Pro forma basic net income per common share $ 0.04 $ 0.01
Weighted average common shares outstanding 44,518 43,439
Pro forma diluted net income per common share $ 0.04 $ 0.01
Weighted average common and common
equivalent shares outstanding 46,551 47,540
(1) Potentially dilutive shares were excluded from the diluted loss
per share calculation for the quarters ended March 31, 2006 and
April 1, 2005 as their effects would have been anti-dilutive to the
loss incurred by the Company.
(2) The Company provides pro forma earnings results (which exclude
amortization of intangible assets, non-cash compensation and
restructuring charges, and include a normalized tax rate) as a
complement to results provided in accordance with Generally Accepted
Accounting Principles. These non-GAAP results are provided to enhance
the users's 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.
Answerthink, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 30,
2006 2005
---------- ------------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 18,785 $ 18,103
Marketable investments 4,928 9,902
Restricted cash - 3,657
Accounts receivable and unbilled revenue,
net 42,182 41,928
Prepaid expenses and other current assets 3,393 3,273
-------- --------
Total current assets 69,288 76,863
Restricted cash 600 600
Property and equipment, net 5,485 6,304
Other assets 5,489 6,422
Goodwill, net 62,176 61,692
-------- --------
Total assets $143,038 $151,881
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,807 $ 6,319
Accrued expenses and other liabilities 35,681 37,751
Loan payable - 3,657
-------- ---------
Total current liabilities 40,488 47,727
Accrued expenses and other liabilities,
non-current 5,750 3,272
-------- --------
46,238 50,999
Shareholders' equity 96,800 100,882
-------- --------
Total liabilities and shareholders'
equity $143,038 $151,881
-------- --------
Answerthink, Inc.
Supplemental Financial Data
(unaudited)
2006 2005
------- -----------------
Q1 Q4 Q1
------- -------- --------
Revenue Breakdown by Group:
(in thousands)
The Hackett Group
Benchmarking $ 4,623 $ 4,810 $ 4,633
Membership Advisory Programs 2,236 2,202 1,675
Transformation Advisory 18,354 13,620 9,079
------- ------- -------
Total The Hackett Group 25,213 20,632 15,387
Best Practice Solutions
Business Applications 14,124 13,702 13,233
Business Intelligence 10,494 10,407 8,252
------- ------- -------
Total Best Practice Solutions 24,618 24,109 21,485
-------- -------- --------
Total revenues $49,831 $44,741 $36,872
======= ======= =======
Revenue Concentration:
(% of total revenues)
Top customer 6% 7% 7%
Top 5 customers 21% 20% 24%
Top 10 customers 32% 30% 36%
Key Metrics and Other Financial Data:
The Hackett Group revenue per
professional (in thousands) $ 350 $ 375 $ 352
Best Practice Solutions consultant
utilization rate 76% 72% 73%
Best Practice Solutions gross billing
rate per hour $ 155 $ 155 $ 146
Best Practice Solutions net billing
rate per hour $ 138 $ 139 $ 132
Consultant headcount 670 694 569
Total headcount 856 899 753
Days sales outstanding (DSO) 76 73 71
Cash provided by (used in) operating
activities (in thousands) $(3,633) $10,142 $ (262)
Depreciation and amortization
(in thousands) $ 1,640 $ 1,054 $ 1,262
Share Repurchase Program:
Shares purchased since inception
(in thousands) 6,534 6,534 5,723
Cost of shares repurchased since
inception (in thousands) $22,119 $22,119 $18,987
Average per share cost of shares
purchased since inception $ 3.39 $ 3.39 $ 3.32
Remaining authorization (in thousands) $ 7,881 $ 7,881 $ 6,013
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