The Hackett Group, Inc.

Welcome to the Hackett Group Fourth Quarter Earnings Conference Call. Your lines have been placed in a listen-only mode until the question and answer session. Please be advised, the conference is being recorded. Hosting tonight's call are Mr. Ted Fernandez, Chairman and CEO, and Mr. Rob Ramirez, Chief Financial Officer. Mr. Ramirez, you may begin.

Thank you, Operator. Good afternoon, everyone, and thank you for joining us to discuss the Hackett Group's fourth quarter results. Speaking on the call today and here to answer your questions are Ted Fernandez, chairman and CEO of the Hackett Group, and myself, Robert Ramirez, CFO. A press announcement was released over the wires at 4.05 p.m. Eastern Time. For a copy of the release, please visit our website at www.thehackettgroup.com. We will also place any additional financial or statistical data discussed on this call that is not contained in the body of the release on the investor relations page of our website. Before we begin, I would like to remind you that in the following comments and in the question and answer session, we will be making comments about expected future results, which may be forward-looking statements for the purposes of the federal securities laws. These statements relate to our current expectations, estimates, and projections and are not a guarantee of future performance. They involve risks, uncertainties, and assumptions that are difficult to predict and which may not be accurate, especially in light of COVID-19. Actual results may vary. These forward-looking statements should be considered only in conjunction with the detailed information, particularly the risk factors contained in our SEC filings. At this point, I would like to turn it over to Ted.

Thank you, Rob, and welcome, everyone, to our fourth quarter earnings call. As we normally do, I will open the call with some overview comments on the quarter. I will then turn it back over to Rob to comment on detailed operating results, cash flow, as well as to comment on outlook. We will then review our market and strategy-related comments, after which we will open it up to Q&A. When we started 2020, We were aggressively ramping headcount in anticipation of increased demand, only to be disrupted by the COVID pandemic. Although the disruption was significant and swift, we have experienced increased client engagement since Q3 of 2020. Consistent with our pre-COVID expectation, we are experiencing strong demand for our services. It is clearly evident that organizations have recognized the need to embrace digital transformation as a requirement to remain competitive, and the rate of digital innovation and related change is clearly unprecedented. Before I move to our quarterly results, let me start by congratulating our associates for their outstanding 2021 performance. Our revenues were up 18%, but more impressive was our record pro forma EPS of $1.31, which exceeded our prior year results by 90%, and our 2019 pre-COVID results by 31%. Given the circumstances, I wanted to acknowledge their performance at the onset of our call. Moving on to our quarterly results, this afternoon we reported net revenues of 69.8 million and pro forma earnings per share of 33 cents, both above our quarterly guidance and up strongly on a year-over-year basis. All our groups experienced strong demand and contributed to our results. U.S. results were up 18% driven by the strong performance of both our SMBT and EEA groups nearly across all of our U.S. practices. Our SBT group was up sequentially for the sixth consecutive quarter with improving rates, utilization, and gross margins on a year-over-year basis. Additionally, our IP-based higher margin executive advisory offerings grew at a higher rate than our SMBT consulting services and are expected to continue to grow at a higher rate into 2022. Our EEA growth was driven by strong Oracle and OneStream growth. We also saw improved European performance which is expected to carry over into the first quarter of 2022 as well. Strong demand for our services along with increasing leverage of high-margin IP-based benchmarking, executive advisory, and IPaaS offerings, as well as the efficiencies from our virtual sales and delivery business model are expected to continue to contribute to our performance. This increased momentum should allow us to perform at the higher end of our long-term growth and profitability targets. Additionally, the investments we have made to fully digitize all of our IP and the development of our digital platforms, which include Quantum Leap, our state-of-the-art global benchmarking platform, and our proprietary Hackett Digital Transformation Platform, or DTP, are allowing us to highly differentiate and expand our offerings and are important drivers of our long-term growth. These platforms are allowing us to develop new relationships and invest in rapidly growing cloud workflow automation and process mining technology providers across all areas of the enterprise. We believe these new and potential relationships are key to our digital transformation strategy and are important components of our growth strategy. It is worth noting that our reported results were achieved without any additional IPaaS relationships in the quarter, which we believe should benefit our future results. On the balance sheet side, our ability to generate strong cash flow from operations has allowed us to increase our dividend in our buyback program. We also plan to expand our current credit facility to fund acquisitions we identified and to buy back stock while continuing to invest in our business. With that said, let me ask Rob to provide details on our operating results, cash flows, as well as outlook. I will make additional comments on strategy and market condition following Rob's comments.