M&A

10 November, 2009

UPDATE 1-Hackett Q3 misses Street, buys Archstone Consulting

* Q3 EPS $0.03 vs est $0.04

* Acquires Archstone Consulting

* Revenue falls 33 percent

* Sees Q4 proforma loss $0.01 to EPS $0.03

Nov 10 (Reuters) - Hackett Group Inc (HCKT.O) posted lower-than-expected quarterly results, forecast a weak fourth quarter and said it acquired advisory consultancy Archstone Consulting LLC in a stock deal.

The holiday season will reduce available billing days by about 12 percent, hurting fourth-quarter results on a sequential basis, the company said.

For the third quarter ended Oct. 2, the strategic advisory and technology consulting firm posted a net income of $816,000, or 2 cents a share, compared with $4.6 million, or 12 cents a share, a year earlier. Revenue fell 33 percent to $34 million.

Excluding items, Hackett, whose offerings include benchmarking, transformation consulting services, offshoring and outsourcing advice, earned 3 cents a share.

Analysts on average expected earnings of 4 cents a share, on revenue of $35.4 million, according to Thomson Reuters I/B/E/S.

For the fourth quarter, the company expects a loss of 1 cent to a profit of 3 cents a share, before items, on revenue of $34 million to $36 million.

Analysts expected earnings of 5 cents a share on revenue of $36.3 million for the period.

Hackett said it will issue 5.2 million shares, of which 1.6 million shares are subject to an earn-out based revenue achieved in 2010, as part of its acquisition of Archstone.

The deal is expected to dent fourth-quarter earnings by 2 cents a share, before items, but add about $35 million to $40 million in annualized revenue in 2010, Hackett said.

Shares of the company closed at $3.76 Tuesday on Nasdaq. (Reporting by Archana Shankar in Bangalore; Editing by Deepak Kannan)

Source: http://www.reuters.com