Answerthink Announces Third Quarter Results

Business Wire, Oct 30, 2007

* Revenues of $46.7 million and pro forma EPS of $0.07 exceed guidance

* Hackett Group year over year revenue growth of 42%

* Company plans to re-brand as The Hackett Group in January 2008

* Announces additional authorization for share repurchase program

MIAMI -- Answerthink, Inc. (NASDAQ:ANSR), a strategic business advisory and technology consulting firm, today announced its financial results for the third quarter, which ended September 28, 2007.

Third quarter 2007 revenue was $46.7 million, a 7% increase from the same period in 2006, driven by Hackett Group revenue growth. Excluding revenues from the Lawson and SAP staff augmentation practices exited in the fourth quarter of 2006, third quarter revenues increased 14% from the same period in 2006.

Diluted earnings per share was $0.08 in the third quarter of 2007, as compared to $0.03 in the second quarter of 2007 and $0.01 in the third quarter of 2006. Pro forma diluted earnings per share were $0.07 in the third quarter of 2007, as compared to $0.04 in the second quarter of 2007 and $0.03 in the third 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.

At the end of the third quarter of 2007 the Company's cash balances were $25.6 million. During the quarter the Company used $4.1 million to repurchase 1.2 million shares of the Company's common stock. Subsequent to the end of the quarter, the Board of Directors authorized an additional $5.0 million increase to the share repurchase program. This authorization raises the amount available under the Company's repurchase program to $9.9 million.

"We are pleased to see our strong growth and operating profits emanate from our decision to aggressively expand and leverage the Hackett Group intellectual capital and brand," said Ted A. Fernandez, Chairman and Chief Executive Officer. "With 65% of our current quarter revenues now coming from The Hackett Group, we plan to rename the organization as The Hackett Group, subject to shareholder approval, by January of 2008."

Based on the current economic outlook, the Company estimates total revenues for the fourth quarter of 2007 to be in the range of $41.5 million to $43.5 million. The Company also estimates pro forma diluted earnings per share to be in the range of $0.06 to $0.08. This pro forma guidance excludes the recovery of $2.3 million misappropriated by its former UK disbursement agent that was received in October 2007.

Other Highlights

Talent Management Research - Hackett released Book of Numbers(tm) research findings showing that by excelling in talent management, the average Fortune 500 company can generate a nearly 15% improvement in earnings before interest, depreciation, and amortization , netting almost $400 million annually.

Cash Masters Europe Study - REL and CFO Europe Magazine released a study showing that despite a booming economy and record sales figures, the top 1,000 public companies in Europe lost ground in the battle to generate and manage cash in 2006. According to the study, European companies could generate an additional EU407 billion of cash flow annually if all companies matched the cash conversion performance of top performers in their industries.

Working Capital Asia Study - REL and CFO Asia released a study showing that Asia's 725 largest companies (excluding automakers and financial institutions) significantly improved their working capital performance in 2006, liberating $15 billion, largely through better bill collection and improved inventory management.

Representative Client Engagements

Business Services Transformation Effort for Specialty Materials Company - This company selected Hackett to develop and assist in the execution of a comprehensive business services transformation plan and the design of a new operating model for its North American services which include finance, IT, procurement, HR, and comprehensive Customer to Cash. To better serve a diverse and changing global portfolio of companies, the company desires to re-balance cost structures and achieve significant regional growth by leveraging services most effectively across disparate business units.

Total Working Capital Transformation Program for Global Specialty Chemicals Company - This client, which is owned by a private equity firm, contracted with REL to drive improvements in its cash flow and service levels by focusing on reducing inventory, optimizing receivables, and extending payables terms. Management believes REL's programs will play a strategic role in paying down debt and optimizing the operations of the newly-acquired companies.

Advisory Program Renewals for European Financial Services Company - This client signed a two-year extension of its membership to Hackett's Finance and EPM Executive Advisory Program, and also joined Hackett's Finance Operations Advisory Program. The company has been an Executive Advisory Program member for three years, and also recently completed a Hackett benchmark of its finance function. The benchmark results and advisory program memberships will be used by the company's finance process optimization organization to improve leverage of technology and shared services operations, reduce cost, and improve service levels.