The Hackett Group
Annual Report 2008

Plain-text annual report

20 8 annual report World-class EFFECTIVENESS Strategic Business Enablement E F F I C I E N C Y W o r l d - c l a s s “ The strategy we put in place several years ago has been favorable to our growth and profitability. I am especially proud of the great progress we made during 2008 and the exceptional operating results we achieved during an increasingly difficult economic environment. “ Ted A. Fernandez Chairman and Chief Executive Officer Dear Shareholders, I am pleased to report the best operating results in the Company’s history. Despite an increasingly challenging economic climate in 2008, revenues grew by 9% (10% on a constant currency basis) and pro-forma and GAAP diluted earnings per share increased by 94% and 115%, respectively. The operating results, along with improved days sales outstanding performance, resulted in over $27 million of cash flow from operations which allowed us to return over $19 million to our shareholders through our stock buy-back program. Several changes have driven our improved performance and progress over the last two years. The introduction of our transformational benchmark, which combines our traditional benchmark with a strategic transformation plan, has expanded our initial entry point with our clients. The improved performance by our REL working capital management focused team has been meaningful. The stability of our Hackett Technology Solutions group also contributed to our results. A key strategic area where we showed noticeable improvement this past year has been our ability to sell other services to our Executive Advisory client base. We are pleased to say that over 40% of our Hackett sales in 2008 came from our Executive Advisory client base, thus validating a key element of our strategy that those clients who value our best practice intellectual property the most should be our largest and most loyal clients. Hackett’s long term growth lies in our ability to extend our unique benchmarking market permission and global brand into our other offerings. The expansion of our benchmarking entry point and the strategic relationship that results from our Executive Advisory programs are strong indications of our expanding market permission. However, our most significant growth opportunity is in our ability to expand our brand and market recognition into all of our transformation implementation offerings where our ability to increase revenue per client is exponential. In 2008 we made great improvements in positioning transformational benchmarks into larger implementation initiatives, but we know the opportunity for further improvement remains significant. Most of our new and expanded sales and delivery training initiatives are directly focused on improving our execution in this area. In 2008 we were “net winners” in an increasingly difficult economic environment. In other words, we had more clients turn to us quicker for assistance than those who either delayed or made a decision to go it alone. As we look at 2009, it is clearly too early and market volatility too high to know how we will fare. However, given our performance this past year, we know that our offerings are well aligned to address the tremendous pressure that all organizations face to reduce costs and optimize cash balances. The question is whether organizations can do this for themselves or whether they will turn to organizations such as ours for assistance. The key is for us to continue to ensure that our clients understand that our unique intellectual capital and implementation expertise will enable them to effect the changes necessary to drive the quickest path to benefit realization. We understand that we must continue to extend our special market permission from being the premier global benchmarking organization to our other implementation offerings. Specifically in 2009 all of our research and marketing will further highlight the unique best practice implementation skills that reside in our business transformation and technology groups. Additionally, our ability to better integrate the REL working capital capabilities with other Hackett opportunities is also significant. There is great opportunity for international expansion. We see our brand strongly resonating with both prospective clients and associates outside the markets that we currently serve. 2008 marked our entry into South Korea and Australia. In 2009 we will look for additional alliance relationships that will allow us to efficiently pursue geographic expansion opportunities. We are also looking for acquisitions that would enhance and strongly leverage our existing intellectual capital to drive and accelerate our growth. Lastly, our commitment and focus on talent management remains an integral and vital piece to our strategy. As we continue to grow and fully recognize the potential of our business model, it has become increasingly evident that the only limit to our progress and opportunity will be our ability to attract, retain, develop and motivate our associates. We are confident that the new talent initiatives launched in 2008 and further developing in 2009 will assist us in this pursuit. In summary, the strategy we put in place several years ago has been favorable to our growth and profitability. I am especially proud of the great progress we made during 2008 and the exceptional operating results we achieved during an increasingly difficult economic environment. We have a powerful brand, proprietary and unmatched intellectual capital, a terrific group of talented associates and a pristine balance sheet with strong cash balances and no debt. These attributes proved to be extremely valuable during increasingly challenging economic times and we believe they will allow us to optimize our market opportunity in the coming year. In closing, to our clients and shareholders, I express my gratitude for your ongoing commitment to our organization and a very special thank you to all of our associates for their dedication and tireless contributions during this past year. Ted A. Fernandez Chairman and Chief Executive Officer Corporate Headquarters The Hackett Group, Inc. 1001 Brickell Bay Drive, Suite 3000 Miami, FL 33131 Telephone: 305-375-8005 Facsimile: 305-379-8810 www.thehackettgroup.com Annual Meeting The Hackett Group shareholders are invited to attend our Annual Meeting on Friday, May 8, 2009 at 11:00 am at: JW Marriott Hotel Miami 1109 Brickell Avenue Miami, FL 33131 Transfer Agent Computershare Trust Company, NA PO Box 43078 Providence, RI 02940-3078 1-877-282-1168 www.computershare.com/investor Independent Auditors BDO Seidman, LLP Miami, FL Board of Directors Ted A. Fernandez Chairman & Chief Executive Officer The Hackett Group, Inc. David N. Dungan Vice Chairman & Chief Operating Officer The Hackett Group, Inc. Richard N. Hamlin Retired Partner KPMG LLP John R. Harris President & CEO eTelecare Global Solutions Edwin A. Huston Retired Vice Chairman Ryder System, Inc. Alan T.G. Wix Former Chairman of the Board Fiva Marketing, Ltd. “ We have a powerful brand, proprietary and unmatched intellectual capital, a terrific group of talented associates and a pristine balance sheet with strong cash balances and no debt. These attributes proved to be extremely valuable during increasingly challenging economic times and we believe they will allow us to optimize our market opportunity in the coming year. “ Ted A. Fernandez Chairman and Chief Executive Officer 1001 Brickell Bay Drive 30th Floor Miami, Florida 33131 www.thehackettgroup.com 

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