Answerthink Announces Fourth 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) ):
-- Q4 revenues grow 25%, excluding REL acquisition driven by
Business Intelligence and Hackett Group growth of 43% and 28%
respectively.
-- Revenues exceed guidance and Pro forma EPS 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 fourth quarter ended December December: see month. 30, 2005. Fourth quarter revenue was $44.7 million, a 33% increase compared to the fourth quarter of 2004. 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 $0.01, and includes 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 $0.04 per diluted share, related to the consolidation of facilities and related exit costs. This compares to a diluted loss per share of $0.02 in the fourth quarter of 2004. The fourth quarter 2005 results include $2.5 million of revenue attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the REL Consultancy acquisition which closed on November November: see month. 29, 2005. 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 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 fourth quarter of 2004. The fourth quarter 2005 results include a pro forma loss of $240,000 attributed to the REL acquisition. Pro forma information is provided to enhance the understanding of the Company's financial performance and is reconciled rec·on·cile v. rec·on·ciled, rec·on·cil·ing, rec·on·ciles v.tr. 1. To reestablish a close relationship between. 2. To settle or resolve. 3. to the Company's GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). information in the accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. tables. For fiscal year 2005, revenues were $163.3 million, a 14% increase from $143.6 million in fiscal year 2004. Diluted earnings per share were $0.03, compared to a diluted loss per share of $0.00 for fiscal year 2004. The 2005 and 2004 results included restructuring costs of $0.06 and $0.08 per diluted share, respectively. 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 $32.3 million at the end of the fourth quarter of 2005. During the quarter, approximately $21.5 million was paid to close the REL acquisition which was partially offset by cash flows from operations of $10.1 million and REL cash balances of $4.1 million. 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 fourth quarter of 2005, $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. . "Throughout the year we continued the transformation of our business model to fully leverage our best practice intellectual capital to uniquely guide our clients' pursuit of world class performance," said Answerthink 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. Ted A. Fernandez. "To supplement this, our Q4 acquisition of REL Consultancy is now enabling us to expand the scope of our offerings into working capital management, and also offering us opportunities to penetrate new markets abroad. We are excited to see our clients react so positively to our unique data-driven insight and to see that progress across all of our offerings and also reflected in our financial results." Based on the current economic outlook, the Company estimates total revenues for the first quarter of 2006 to be in the range of $48.0 million to $51.0 million. The Company also estimates pro forma diluted earnings per share to be in the range of $0.04 to $0.06. Other Highlights REL Consulting Acquisition - Answerthink acquired the REL Consultancy Group Limited, a global leader in generating cash improvements from working capital and enterprise operations. REL is a UK-based advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal organization that over the last 30 years has developed the premier global brand in working capital management advisory services. REL has enabled clients in more than 60 countries to free up over $25 billion through working capital optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. in the last 10 years alone. REL's offerings are now part of the offering portfolio of The Hackett Hackett may refer to: In places:
2005 Enterprise 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 (C) Analysis - The Hackett Group released its 2005 Enterprise Complexity Book of Numbers covering four major functional areas: finance, IT, procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. , and HR. A sample of key findings follows. Hackett found that finance costs at typical companies rose by 18 percent over the past two years, in part due to increased compliance-related costs. This was the first time in Hackett's 14-year history of benchmarking
Benchmarking (also "best practice benchmarking" or "process benchmarking") is a process used in management and particularly strategic that finance costs have risen for typical companies. In IT, 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. organizations now spend 10 percent more than typical companies, and have fully-loaded IT wage rates that are 32 percent higher than their peers. This represented the first time in recent years that world-class IT organizations have spent more than typical companies. In procurement, Hackett's Book of Numbers research found that world-class organizations generate 133 percent greater return on their investment in procurement than typical companies, driving an additional $3.6 million to their companies' bottom line for every $1 million in procurement operations costs. Finally, in HR, Hackett found that at typical companies, HR 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. leads to higher costs in most cases, despite the fact that world-class HR organizations rely on selective outsourcing to reduce costs in highly repetitive transaction-oriented areas. Representative Client Engagements Comprehensive World-Class Program for European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Home Care Products Company - This client is continuing its drive towards world-class SG&A performance by commissioning a multi-year benchmarking program. The findings from the SG&A benchmarks will be integrated with the results of IT and finance benchmarks previously performed. In addition, the contract enables us to support best practices implementation efforts 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). , Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. , and the Asia-Pacific The term Asia-Pacific generally applies to littoral East Asia, Southeast Asia and Australasia near the Pacific Ocean, plus the states in the ocean itself (Oceania). region.Global AR System Implementation for Global Air Courier A monospaced typeface originating from the typewriter that is commonly used for letters. It is still considered by many to be the "appropriate" typeface for business correspondence. Company - This client has expanded its existing relationship for design and implementation of an Oracle 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 and billing application. This program will be rolled out over the next three years and builds on our previous support of the company's finance best practices implementation program. Business Transformation Support for Global Packaging Company - This client selected Hackett to lead a comprehensive transformation effort of their global 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. operations for all SG&A functions. The work will include across-the-board integration of Hackett best practices. Last year, in preparation for the launch of this transformation activity, this client contracted for an SG&A benchmark A performance test of hardware and/or software. There are various programs that very accurately test the raw power of a single machine, the interaction in a single client/server system (one server/multiple clients) and the transactions per second in a transaction processing system. and membership in four Executive Advisory Programs. The company is seeking to reduce costs and also establish an infrastructure that can be scaled to address its organic and acquisition growth strategies. Hyperion Hyperion, in astronomy Hyperion (hīpēr`ēən), in astronomy, one of the named moons, or natural satellites, of Saturn. Implementation for Japanese Japanese (jăp'ənēz`), language of uncertain origin that is spoken by more than 125 million people, most of whom live in Japan. There are also many speakers of Japanese in the Ryukyu Islands, Korea, Taiwan, parts of the United States, and Auto Manufacturer - This company expanded its contract to implement Hyperion Planning Hyperion® Planning™ is a budgeting and forecasting application from Hyperion Solutions Corporation. Hyperion Planning uses Essbase (a multidimensional database product sold by Hyperion) as a database and calculation engine, and includes a web-based user interface. for its North American operations North American operation Surgical oncology Radical surgery of a 'frozen pelvis', consisting of radical en bloc resection of the uterus and urinary bladder. See 'Frozen pelvis.'. Cf 'All-American' and 'South American' operations. . Under the new contract, we will implement Hyperion Planning at the business unit level within the company, enabling its use by their sales & marketing and manufacturing organizations. The company's goal is to use Hyperion Planning as its standard budgeting and forecasting system during the upcoming budgeting cycle. Procurement Transformation Support for Home Mortgage Financing Provider - We were selected to guide and facilitate the procurement transformation efforts using Hackett-best practices, governance Governance makes decisions that define expectations, grant power, or verify performance. It consists either of a separate process or of a specific part of management or leadership processes. Sometimes people set up a government to administer these processes and systems. enhancement, skills analysis, and best practice implementation support. The goal is to improve the overall level of service being provided by the procurement organization to its internal and external clients. Multi-Year SG&A Benchmark for European Food Packaging Company - This client contracted with Hackett for a World-Class Program that includes a multi-year benchmarking and transformation program which will be continuously supported by the research and advisory access provided across several Executive Advisory Programs. The company has grown significantly through acquisition, and senior leadership is seeking Hackett's guidance as it builds business cases for standardizing on best practices throughout the enterprise. Answerthink will host a conference call and webcast at 5 pm today to discuss fourth quarter earnings results and outlook. The number for the conference call is (800) 857-4830 and (210) 839-8500 for international callers (Passcode: Fourth Quarter, Leader: Ted A. Fernandez). 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. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. on Tuesday Tuesday: see week. , February February: see month. 21, 2006 and will run through 5:00 P.M. EST on Tuesday, March 7, 2006. To access the rebroadcast, dial (888) 568-0884. 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. EST on Tuesday, February 21, 2006 and will run through 5:00 P.M. EST on Tuesday, March 7, 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 and India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. . 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, business transformation and working capital management services that empirically define and enable world-class enterprise performance. The foundation of Hackett's services is a proprietary database of Hackett-Certified(TM) Practices, approaches that correlate with superior performance. Only The Hackett Group empirically defines world-class performance in sales, general and administrative (SG&A) and supply chain activities with analysis gained through 3,400 benchmark studies over 14 years at 2,000 of the world's leading companies. Hackett 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. From the 2005 acquisition of REL Consultancy Group, a global leader in generating cash improvement from working capital, Hackett offers Total Working Capital Management 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. REL has enabled clients in more than 60 countries free up over $25 billion through working capital optimization in the last 10 years alone. 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 involves 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 transformation advisory 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, 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 31, 2004 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)
(unaudited)
Quarter Ended Year Ended
--------------------- ---------------------
Dec.30, Dec.31, Dec.30, Dec.31,
2005 2004 2005 2004
----------- --------- ---------- ----------
Revenues:
Revenues before
reimbursements $ 39,904 $ 30,446 $146,693 $129,339
Reimbursements 4,837 3,232 16,625 14,208
-------- -------- -------- --------
Total revenues 44,741 33,678 163,318 143,547
Costs and expenses:
Project personnel and expenses:
Project personnel and
expenses before reimbursable
expenses 22,392 18,398 82,631 75,774
Reimbursable expenses 4,837 3,232 16,625 14,208
-------- -------- -------- --------
Total project personnel
and expenses 27,229 21,630 99,256 89,982
Selling, general and
administrative expenses 15,163 12,369 57,201 48,491
Restructuring costs 1,789 - 2,923 3,749
Stock compensation expense 1,202 430 3,392 2,321
-------- -------- -------- --------
Total costs and
operating expenses 45,383 34,429 162,772 144,543
-------- -------- -------- --------
Income (loss) from operations (642) (751) 546 (996)
Other income (expense):
Interest income 238 296 1,168 866
Interest expense (27) (24) (79) (64)
-------- -------- -------- --------
Income (loss) before income
taxes and income from
discontinued operations (431) (479) 1,635 (194)
Income taxes (161) 251 (6) 324
-------- -------- -------- --------
Income (loss) from
continuing operations (270) (730) 1,641 (518)
Income from discontinued
operations - - - 370
-------- -------- -------- --------
Net income (loss) $ (270) $ (730) $ 1,641 $ (148)
-------- -------- -------- --------
Basic net income (loss) per common share:
Income (loss) from
continuing operations $ (0.01) $ (0.02) $ 0.04 $ (0.01)
Income from
discontinued operations $ - $ - $ - $ 0.01
Net income (loss)
per common share $ (0.01) $ (0.02) $ 0.04 $ (0.00)
Weighted average common
shares outstanding 44,163 43,471 43,575 44,188
Diluted net income (loss) per common share (1):
Income (loss)from
continuing operations $ (0.01) $ (0.02) $ 0.03 $ (0.01)
Income from
discontinued operations $ - $ - $ - $ 0.01
Net income (loss)
per common share $ (0.01) $ (0.02) $ 0.03 $ (0.00)
Weighted average common
and common equivalent
shares outstanding 44,163 43,471 47,073 44,188
Pro forma data (2):
Income (loss) before income
taxes and income from
discontinued operations $ (431) $ (479) $ 1,635 $ (194)
Restructuring costs 1,789 - 2,923 3,749
Stock compensation expense 1,202 430 3,392 2,321
Amortization of
intangible assets 562 604 1,801 1,975
-------- -------- -------- --------
Pro forma income
before income taxes 3,122 555 9,751 7,851
Pro forma income taxes 1,249 223 3,900 3,141
-------- -------- -------- --------
Pro forma net income $ 1,873 $ 332 $ 5,851 $ 4,710
-------- -------- -------- --------
Pro forma basic net income
per common share $ 0.04 $ 0.01 $ 0.13 $ 0.11
Weighted average common
shares outstanding 44,163 43,471 43,575 44,188
Pro forma diluted net income
per common share $ 0.04 $ 0.01 $ 0.12 $ 0.10
Weighted average common
and common equivalent
shares outstanding 46,864 47,353 47,073 48,457
(1)Potentially diluted shares were excluded from the diluted loss per
share calculation for the quarters ended December 30, 2005, and
December 31, 2004 and the year ended Decemeber 31, 2004 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' 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)
December 30, December 31,
2005 2004
----------------------------------------------------------------------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 18,103 $ 38,890
Marketable investments 9,902 -
Restricted cash 3,657 -
Accounts receivable and
unbilled revenue, net 41,928 28,883
Prepaid expenses and
other current assets 3,273 3,459
--------- ---------
Total current assets 76,863 71,232
Marketable investments - 9,902
Restricted cash 600 3,000
Property and equipment, net 6,304 7,568
Other assets 6,422 3,245
Goodwill, net 61,371 33,786
--------- ---------
Total assets $151,560 $128,733
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,954 $ 3,462
Accrued expenses and other liabilities 39,577 17,910
Total current liabilities 47,531 21,372
Accrued expenses and other
liabilities, non-current 3,363 7,507
--------- ---------
Total liabilities 50,894 28,879
Shareholders' equity 100,666 99,854
Total liabilities and
shareholders' equity $151,560 $128,733
========= =========
Answerthink, Inc.
Supplemental Financial Data
(unaudited)
2005 2004
----------------- --------
Q4 Q3 Q4
-------- -------- --------
Revenue Breakdown by Group:
(in thousands)
The Hackett Group
Benchmarking and Membership Advisory
Programs $ 7,012 $ 7,168 $ 5,852
Transformation Advisory 11,088 9,161 8,240
REL Consultancy Group 2,532 - -
-------- -------- --------
Total The Hackett Group 20,632 16,329 14,092
Best Practice Solutions
Business Applications 13,702 13,555 12,327
Business Intelligence 10,407 10,121 7,259
-------- -------- --------
Total Best Practice Solutions 24,109 23,676 19,586
-------- -------- --------
Total revenues $44,741 $40,005 $33,678
======== ======== ========
Revenue Concentration (excluding REL Consultancy Group Limited):
(% of total revenues)
Top customer 7% 6% 5%
Top 5 customers 20% 20% 23%
Top 10 customers 30% 33% 36%
Key Metrics and Other Financial Data (excluding REL Consultancy Group
Limited):
Consultant utilization rate 69% 67% 61%
Gross billing rate per hour $ 191 $ 194 $ 181
Net billing rate per hour $ 170 $ 175 $ 163
Consultant headcount 620 601 550
Total headcount 798 780 717
Days sales outstanding (DSO) 73 86 76
Cash provided by (used in) operating
activities (in thousands) $10,142 $(1,363) $ 4,283
Depreciation and amortization (in
thousands) $ 1,054 $ 1,138 $ 1,467
Share Repurchase Program:
Shares purchased since inception
(in thousands) 6,534 6,534 5,527
Cost of shares repurchased since inception
(in thousands) $22,119 $22,119 $18,178
Average per share cost of shares purchased
since inception $ 3.39 $ 3.39 $ 3.29
Remaining authorization (in thousands) $ 7,881 $ 7,881 $ 6,822
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