Welcome to The Hackett Group first quarter earnings. (Operator Instructions) Hosting tonight’s call are Mr. Ted Fernandez, Chairman and CEO and Mr. Rob Ramirez, Chief Financial Officer. Mr. Ramirez you may begin.

Good afternoon everyone and thank you for joining us to discuss The Hackett Group’s first 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 pm ET. 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 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 statements 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. 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. Welcome everyone to the Hackett Group’s first quarter earnings call. For the quarter we reported revenues of $39.5 million and pro forma EPS of $0.03, both in line with our guidance. As expected, the results reflect the impact from the volatile economic environment which our clients are experiencing across the U.S. and European markets that we serve. As we noted in February when we provided our Q1 guidance, although pipeline activity is healthy clients are taking longer to make decisions and they are also doing what they can to reduce the size of their commitments to external providers. Overall, client indecision is reducing the pace at which we normally convert pipeline to active contract and report revenues. As we entered the year our plan assumed that Q1 would be a bottom relative to revenues but given the volatility in client decision making and the lack of broad market improvement reflected in GDP from Q4 to Q1 we are now hoping to see client activity bottom in Q2 and for revenues to stabilize in Q3. With the revised plan in mind we have taken cost reduction actions that will allow us to continue to invest in our people and our offerings while maintaining an appropriate level of profitability during the year. If revenue stabilizes in the second half of the year, these actions will provide the opportunity to show noticeable improvement in our operating results in the second half of the year. We also believe that these actions will provide sustainable operating leverage when our growth re-emerges. As expected in Q1 our Hackett Technology Solutions was impacted more significantly by the market environment. We continue to see good pipeline activity but experienced the same client indecision as we experienced in our other offerings. In this environment it is…

Thank you Ted. Good evening everyone. I plan to cover the following four main topics this evening: An overview of our 2009 first quarter results along with an overview of key operating statistics, a break down of our 2009 first quarter revenue, an overview of our cash flow activity during the quarter and I will then conclude with a discussion on our financial outlook for the second quarter of 2009. For purposes of this call any references to Hackett Group will specifically exclude Hackett Technology Solutions. Correspondingly I will comment separately regarding the financial results of The Hackett Group, Hackett Technology Solutions and the total company. Please not that all references to gross revenues in my discussion represent net revenues plus reimbursable expenses. For purposes of today’s call, I will provide most of my comments on net revenues or revenue before reimbursements. First I will discuss our first quarter 2009 results. We are pleased to report gross revenues and pro forma earnings per diluted share that are in line with our quarterly guidance range. For the first quarter of 2009 the company’s gross revenues were $39.5 million, a year-over-year decrease of 10% or 7% adjusting for constant currency. On a net revenue basis, Hackett Group revenues decreased 7% or 2% adjusted for constant currency and Technology Solutions revenues decreased 12% as compared to the comparable period in the previous year. As we discussed last quarter, we experienced delays in client decision making at the end of the fourth quarter of 2008 and in January 2009 that impacted our momentum as we move into the new fiscal year. On a total company basis our pro forma gross margin which excludes stock compensation expense was 39.7% of net revenues in the first quarter of 2009 as compared to 42.5% in the first…

Thank you Rob. As we look forward first let me comment on 2008. In 2008 we were net winners in an increasingly difficult environment. As I mentioned throughout last year that meant we had more clients turn to us quickly than those who either delayed or made a decision to go it alone. It is clear that the first half of 2009 will be more challenging than what we experienced in the second half of 2008. We continue to believe that demand for our services remains favorable. Companies clearly recognize the need to reduce costs and optimize cash during this period of economic uncertainty. However, they are being more thoughtful and involving more people in these decisions. It is also evident that there is a point where the market demand is so volatile that the client decision making for our specific offering is affected. At a macro level we believe that when GDP goes negative by a significant margin, say more than 2-3% negative as we experienced in Q4 and Q1, client decision making becomes less thoughtful and reduced discretionary spend impacts the demand for virtually all services, including ours. In that environment, as we have recently experienced, clients will take actions on their own regardless of whether the action is the most appropriate or will result in sustainable improvement. Between the negative 2-3% and a plus 2-3% GDP environment, clients stay very focused on sustainable productivity improvement and in that environment we fare very well as we proved throughout all of 2008. There is also a point on the plus GDP side where the growth opportunity is so strong, say beyond 3%, where the clients lose focus on productivity and focus on growth at any cost scenario kicks in. Our plan is now that we will see gradual improvement…

(Operator Instructions) The first question comes from the line of George Sutton – Craig-Hallum Capital. George Sutton – Craig-Hallum Capital: You suggested Q2 should or could mark the bottom with stabilization into Q3. Could you give us some specific guide posts you are looking at that might confirm that suggestion?

It is really our ability to convert the current pipeline that we have right now. We have opportunities in front of us that if they convert the way we believe they will that would allow that to happen. I think you said right. Should or could is right. In this environment obviously everything lacks certainty but we believe that opportunity is clearly there for us. George Sutton – Craig-Hallum Capital: Just to be clear, the problem is not with your pipeline. Your pipeline in your view is as large as it has been. It is simply the conversion of the pipeline to business?

Absolutely. Now the real question for us is how much of it will ultimately convert or not. To give you some color, we went into March with 16 large transactions that at this point as we sit here today we have converted 12 of those 16. A portion of them closed in March but not nearly as many of them as we had hoped. A nice number closed in April which likely resulted in a pretty decent April sales activity. Obviously we continue to pursue the balance. There are only a couple that we believe have actually gone away. If you take just that example of those 16 clients and when the client’s decision extends or when it comes in smaller amounts when their commitments are in smaller amounts it simply provides for more down time. It is harder for us to plan. It provides for more pockets of non-chargeable time and then results in the lower reported revenue. So that is really what we hope that as the economy recovers, as we see gradual improvement in overall economic behavior simply clients will go back to making decisions the way we are traditionally accustomed to them making. We clearly didn’t see that in March and we will have to see how it plays out in Q2 but we know the activity is there for it to stabilize. George Sutton – Craig-Hallum Capital: You mentioned your conference coming up soon. Is there a way you can give us a year-over-year comparison in terms of attendees last year versus how many you would anticipate this year?

The attendance will be down on a year-over-year basis but the fee level participation of clients is actually up. So when we look at the, I will call it primary decision makers we are actually very enthusiastic about the conference. It is going to be very well attended. There is no doubt that clients are being more cautious in the number of people that may attend from an individual company. So we have clearly seen some reduction in that area. George Sutton – Craig-Hallum Capital: Lastly for me, with respect to the REL business, we track a number of companies that sell cash management software and companies that are focused on the working capital from a software perspective and they are doing extremely well in this environment. I am surprised that REL specifically is not benefiting from that same trend. Can you just give us a little picture as to why that might be the case?

They did benefit. Their Q1 results were absolutely solid. So the only question for them is whether or not it gets disrupted. We will have to wait and see. As you know, they had a strong 2008 and their performance continued into Q1.

The next question comes from Mickey Schleien – Ladenburg Thalmann & Co. Mickey Schleien – Ladenburg Thalmann & Co. : My question is related back to the clients. During the last call there was a sense that there was clearly a disruption at the end of last year in terms of decision making and then things started to improve as the first quarter started to progress at least to the point of time we had the call. What I want to understand is what happened since then specifically in terms of client behavior that has caused you to become a little bit more cautious about the second quarter?

It is really back to the same comments that I made to George. At the heart of the business or the core of the business with the 16 new deals the best example is to go back to the 16 deals. In a traditional environment, especially coming off of pretty good behavior in February, we would have expected probably 12 of those 16 to actually convert in the month of March and for many of them to actually have impacted March performance and given the absolutely strong running rate into April. The decision making, just to use that 16 as a way to respond to your question, it simply extended out. Even though at this point we have converted, I believe probably 12 of those 16 it took us much longer to do that and that resulted in revenue disruption in March and in April that we clearly didn’t plan for. When we look at that even a little further, the opportunity we were originally tracking when we looked at that group of 16 in many of them we closed a contract but the contract was closed for an amount lower than what we had originally envisioned. That doesn’t mean that the client relationship will not extend but any time you have transition points from one phase or another or you need approval especially in this environment internally from a client to go from one phase to another we just know that you need to plan on that to simply take longer. We are assuming that in Q2 until we see it change as we go into Q3.

The next question comes from William Sutherland - Boenning & Scattergood, Inc. William Sutherland - Boenning & Scattergood, Inc.: Just a couple of number questions that I noticed. The technology gross billing rate seemed to drop pretty significantly. Is that a blip or a trend?

No, that was really when you look at the groups that reside in that group are the overall balance of our Hyperion group relative to the other groups was down on a relative basis. That was probably the single largest impact just say from one quarter to the other. William Sutherland - Boenning & Scattergood, Inc.: Just a revenue mix this year.

A change in mix as you look at it from the second half of 2008 coming into 2009. But it is a mix that we would expect. We have very high hopes and think we have a phenomenal Hyperion business that if that business re-establishes its momentum as we hope that it does then you would see the higher rates they normally realize blended in with the other two groups increase that overall number. William Sutherland - Boenning & Scattergood, Inc.: I have heard that [VI] is increasingly being thought of as a little bit of a nice to have in this environment. Is that pretty much the issue?

Clearly clients understand that having better information is important especially as they are trying to make decisions. Now the other thing that is good about that business is that the implementation cycles and the sales software come in smaller amounts which provide for smaller investment and quicker ROI so we continue to be very hopeful that given the quality of that EPM group, that Hyperion EPM group it will recapture its momentum hopefully in the second half of the year. William Sutherland - Boenning & Scattergood, Inc.: I just noticed the top customer inched up to 8%. Is that the same customer that has been in the top slot for awhile?

We may have had the top customer there for the second half of the year but no this is actually a different top customer that we had in Q4 of 2008 which by the way was part of the reason why our Q1 was a little softer in that large client relationship ended at 12/31 and originally that was expected to continue into as late as the latter part of 01 [sic] but some of the reasons for that initiative change and that relationship ended at 12/31. So this is a new client. William Sutherland - Boenning & Scattergood, Inc.: Is it a Hackett customer?

Actually it is an REL customer. It is a large working capital global engagement being done by both our North American and European groups. William Sutherland - Boenning & Scattergood, Inc.: So this one would have some duration to it?

The job continues. That is correct. William Sutherland - Boenning & Scattergood, Inc.: Can we get a little color in terms of sequential revenue trend in Q2 more or less if it is balanced between Hackett and Technology?

I think Rob mentioned that technology was down 12%. Hackett was down I think sequentially 9%.

No, we didn’t give the sequential numbers.

Year-over-year, both groups were down and tech was down more than Hackett. William Sutherland - Boenning & Scattergood, Inc.: That continues?

I’m sorry. Q1 to Q2 or Q4 to Q1? William Sutherland - Boenning & Scattergood, Inc.: Either but that is a pretty significant step down even though one group was more impacted than the other.

No, actually we are expecting both groups to be down around that 10% number Q1 to Q2. I mentioned also that because tech was being more heavily affected in Q1 that we have got an opportunity with the deals we have in place to have our technology group have the same stabilization opportunity that we would hope the non-tech group would have in Q3. William Sutherland - Boenning & Scattergood, Inc.: Remind me, does the FX comp stay difficult pretty much through the calendar year?

It will go through Q3 and it will start to level off in Q4. Primarily with the Pound was at its kind of record high in Q1 of last year. That weakened in Q2. The Euro started off weaker but then actually strengthened in Q2. So you will see a lot of the fluctuations actually level off towards the end of the year. William Sutherland - Boenning & Scattergood, Inc.: Are you feeling like as far as the acquisition pipeline there is anything that is a little more real at this point or are you still sort of sitting back?

There are opportunities for us. It is about making sure that you are doing it at the right value given the opportunity before you. We are continuing to be actively considering opportunities but we will only pull the trigger if we strongly believe that it will be accretive, highly aligned with our model and both on a short and long-term basis. If not, we are pretty happy with the, I will call it, the full organic performance and profitability we showed in 2008 and would be comfortable continuing to play that organic hand but we would love scale. As you know we would love scale. If we can do that where it makes sense for shareholders we would do it. William Sutherland - Boenning & Scattergood, Inc.: The example of the 16 deals coming into March, was that of a larger number of deals than you would have had last year? Or similar?

Without getting into details, given the size of the deals it was a very, very good volume of deals. Yes. The pipeline activity going into March was good. Getting it through and converting that into reported revenue was just a heck of a lot tougher than we have experienced in a very, very long time.

There are no further questions at this time. I will turn the call back to Mr. Fernandez.

Thank you everyone. We look forward to updating you again when we report Q2. Thank you again for participating. Have a nice evening or afternoon.

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