Answerthink Announces Second Quarter Results

Business Wire, July 31, 2007

Revenues of $45.5 Million, up 14% Sequentially with Pro Forma EPS of $0.04 Driven by Strong Hackett Group Revenue Growth

MIAMI -- Answerthink, Inc. (NASDAQ:ANSR), a strategic business advisory and technology consulting firm, today announced its financial results for the second quarter, which ended June 29, 2007.

Second quarter revenue was $45.5 million, a 14% sequential increase from the first quarter of $39.9 million, driven by The Hackett Group's sequential growth of 18%. Compared to the second quarter of 2006, revenues were down 7% primarily as a result of the Company's exit from its Lawson and SAP staff augmentation contracts in 2006 and lower Business Intelligence revenues.

Diluted earnings per share was $0.03 in the second quarter of 2007 compared to a diluted loss per share of $0.05 in the first quarter and diluted earnings per share of $0.05 for the second quarter of 2006. Pro forma diluted earnings per share was $0.04 in the second quarter of 2007 compared to a pro forma diluted loss per share of $0.01 in the first quarter of 2007 and pro forma diluted earnings per share of $0.06 in the second quarter of 2006. 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.

As of the end of the second quarter of 2007, the Company's cash balances, including restricted cash, amounted to $21.5 million. During the quarter, the Company spent $1.75 million to repurchase 509 thousand shares of the Company's common stock. As of the end of the quarter, $4.4 million remained available under the Company's share repurchase program authorization.

"We are seeing the introduction of our Transformational Benchmark and the sales incentive changes we made at the beginning of the year favorably impact our growth," said Ted A. Fernandez, Chairman and CEO of Answerthink. "Specifically, we experienced sequential growth across all of our Hackett, REL and Best Practice Solutions groups. This momentum, along with cost management programs also instituted at the beginning of the year, should continue to favorably impact our results."

Based on the current economic outlook, the Company estimates total revenues for the third quarter of 2007 to be in the range of $44 million to $46 million. The Company also estimates pro forma diluted earnings per share to be in the range of $0.04 to $0.06.

Other Highlights

Globalization Research - New Hackett research revealed that U.S. and European companies can increase their savings by over 40% by offshoring back office operations if they selectively integrate transformation and process improvement efforts into their globalization initiatives.

REL/CFO Total Working Capital Survey - The Tenth Annual Working Capital Survey, conducted jointly by REL and CFO Magazine/CFO Europe, found that after nearly a decade of annual reductions in working capital, the 1,000 largest U.S. companies showed no improvement in 2006, in large part due to increased inventory as a result of both slowing sales growth rate and increased use of overseas manufacturing facilities. At the same time, the survey found that the 1,000 largest companies in Europe resumed their working capital improvement in 2006, after stalled performance last year.

Technology ROI Book of Numbers - Hackett released Book of Numbers([TM]) research answering the question "Does IT Matter?" and demonstrating that the best companies clearly use information technology as a strategic enabler to create competitive advantage. Fortune 500 companies with world-class IT organizations spend 7% more than typical companies on IT, but the investment more than pays for itself, helping drive lower operating costs of $134 million per year (nearly 5 times the increase in IT spending) in finance, procurement, human resources, and other back office areas.

European Hackett Best Practices Conference - The Hackett Group previewed the findings from its 2007 Book of Numbers([TM]) research to a record attendance of over 100 delegates at its Third Annual European Best Practices Conference, "Leveraging Synergies: Myth or Reality" in London May 10th and 11th. The two-day invitation-only event featured presentations by senior executives from 13 of the world's most successful global companies including: Allianz, Britvic, Dow Chemical, Heineken, and Network Rail.

Representative Client Engagements

Oracle Implementation for Leading Business Process Outsourcing Services Provider - This company selected Answerthink for a comprehensive Oracle implementation designed to create a single integrated financial reporting system following a major corporate acquisition. The new system will streamline global operations and simplify financial reporting and analysis.

Hyperion Implementation for Health Insurance Provider - This company selected Answerthink to implement Hyperion System 9. The new system is designed to enable the company to make better business decisions by offering improved accuracy and timeliness of financial forecasts and enhanced visibility into profitability by business segment and region.