2015 hackett working capital survey us 150604

2015

US

W

ork

ing

Cap

ital

S

urv

ey

1 I The Hackett Group I 2015 US Working Capital Survey

Cash flow lessons not learned from the Great Recession The cash conversion cycle (CCC) once again remained flat in 2014, only improving one day since 2007. Cash on hand continued to increase, improving a total 74% over the same period. Even though revenue has increased 39%, debt continues to be a source of investment, increasing an alarming total 62% over the same period. Companies that increased their debt 100% or more since 2007 had a 1,516% increase in cash on hand but their CCC worsened by 113%. The companies that decreased their debt since 2007 had a 336% increase in cash on hand but their CCC improved 31%. There is a $1 trillion cash flow opportunity comparing top and bottom performers with the most in Inventory and Payables.

This year’s working capital survey draws some interesting insights coming off a thriving US economy with the Standard & Poor’s 500-Stock Index gaining 11% in 20141, companies in this year’s survey gaining 9% in value, and revenue increasing 4% for both. Positive increases in the stock market, investment activities, consumer confidence, housing, and employment, to name a few, all have contributed to an improving economy in 2014 and confident outlook beyond.

However, the findings from this year’s survey indicate companies have learned very little from the Great Recession in terms of their cash management strategies, taking on alarming amounts of debt to fund increased investment activities while doing very little operationally to improve their own internal cash generation. “Cash is king” has been a traditional mantra but ironically, given recent history, debt has taken over the reins.

Consistent with this year’s theme, a few quotes from the great Warren Buffet come to mind. “I do not like debt and do not like to invest in companies that have too much debt, particularly long-term debt. With long-term debt, increases in interest rates can drastically affect company profits and make future cash flows less predictable.”2 And, “Cash ... is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent.”3

The cash king is dead. all

Cash, debt and the cash conversion cycleCash on hand continued to increase in 2014. It now shows a total growth of 74% since 2007 for the companies in the survey. At first glance this looks like a great improvement and might lead some to

1. http://dealbook.nytimes.com/2014/12/31/bull-market-for-stocks-

lasts-through-2014/?_r=12. http://www.minterest.org/best-warren-buffett-quotes-on-investing/3. http://www.fool.com/investing/general/2015/03/29/warren-buffett-

3-ways-to-protect-your-savings-from.aspx

http://dealbook.nytimes.com/2014/12/31/bull-market-for-stocks-lasts-through-2014/?_r=1

http://dealbook.nytimes.com/2014/12/31/bull-market-for-stocks-lasts-through-2014/?_r=1

http://www.minterest.org/best-warren-buffett-quotes-on-investing/

http://www.fool.com/investing/general/2015/03/29/warren-buffett-3-ways-to-protect-your-savings-from.aspx

2015 US Working Capital Survey I The Hackett Group I 2

hail the new king: Debt

believe corporations are hoarding cash, which has been a very common view over the past few years. However, cash on hand should not be analyzed independently; the economy is doing better with revenue increasing 39% over the same period, but cash on hand as a percent of revenue only increasing 2%. In addition, companies have been investing with increases in dividend payments, M&A activity, share buy-backs, and CAPEX.

So there is clearly more cash available and it’s being spent. But where is it coming from? We established

“I do not like debt and do not like to invest in companies that have too much debt, particularly long-term

debt. With long-term debt, increases in interest rates can drastically affect

company profits and make future cash flows less predictable.”

— Warren Buffet


above that there has been topline growth of 39% or $4.2 trillion. However, debt is a large contributor, rising an alarming 62% since 2007 to the tune of $4.6 trillion while the federal funds rate declined from 5% to 0.09%. Executive leadership has taken advantage of these low borrowing costs, often rewarding shareholders through dividends or directly in the share price through share buy-back programs in the short term. Companies should be very concerned about the long term risks such as over leveraging, liquidity, changes in interest rates, cash apathy and a general debt dependence; and they should be managing appropriately to mitigate those risks where possible.

However, the consistently flat CCC since 2007 suggests companies are doing very little to mitigate these risks through operational cash flow improvements. Improvements in the CCC reduces the amount of time each dollar is tied up in the buying, production and sales process before it is converted into cash through sales to customers. The lower the CCC, the better. Some companies even strive to achieve negative CCC, where the product is made and customer cash is received before suppliers are paid. Think end consumers paying for the Apple Watch™ before they receive it – that’s the CCC (Apple’s CCC is an incredibly great -56 days by the way). The CCC has only improved one day since 2007 (-3%) and there were recently only 30 companies whose executives mentioned the CCC in their Q1 2015 earnings transcripts4, confirming Mr Buffett’s comments above.

Companies focused on cash have trouble sustaining improvements. The companies able to consistently improve are in great cash healthNot all companies are completely ignoring cash flow management. Ninety-six companies (10%) improved the CCC every year for the past three years. Yet as we expand that time frame we find fewer and fewer companies really able to consistently improve, suggesting after three years the weeds begin to grow back. There are only five companies that improved their CCC every year since 2007 (Amerisource Bergen, Diebold, EQT, Goodyear, and Masco). These companies have seen a substantially better improvement in their cash metrics since 2007 vs. the entire REL 1000, with over 200% better cash on hand, 7% more cash on hand as a percent of revenue, 20% higher CAPEX, 21% less debt and 171% better improvement in the CCC. We believe the debt gap would have been

0

200

400

600

800

1000

Cash on hand increases 74%

2007

$535

$932

2014

0

1000

2000

3000

4000

5000

0

20

40

60

80

100

Debt increases 62% while borrowing rates are attractive

2007

$2,835

5.02% 0.09%

$4,593

2014

DEBT FEDERAL FUNDS RATE

0

1

2

3

4

5

6

7

8

Companies are not hoarding cashCash on hand as a % of revenue

2007 2014

6%

8%

0

200

400

600

800

1000

CAPEX increases 52%

2007 2014

$541

$823

0

50

100

150

200

250

300

350

Dividends increase 72%

2007 2014

$192

$331

0

5

10

15

20

25

30

35

Internal generation of cash ignoredCCC

2007 2014

34 33

4. http://seekingalpha.com/search/transcripts?term=%22cash%20

conversion%20cycle%22&all=true

http://seekingalpha.com/search/transcripts?term=%22cash%20conversion%20cycle%22&all=true

http://seekingalpha.com/search/transcripts?term=%22cash%20conversion%20cycle%22&all=true


Debt Range

% Chng

2007 - 2014

# of

Comp-

anies

CCC5

% Chng

2007 - 2014

Debt

Coverage

Ratio5

% Chng

2007 - 2014

Cash On

Hand5

% Chng

2007 -

2014

Reduction

in Debt219 -31% 94% 336%

Debt

Increase of

100% +

328 113% -1,508% 1,516%

even larger but two companies doubled and tripled their assets, suggesting an aggressive expansion/acquisition strategy.

Companies with large amounts of debt apathetically ignore cash managementFurther expanding this analysis to a larger sample size, and analyzing based on the amount of debt incurred, also yielded some interesting results. There were 219 companies with any reduction in debt, no matter how large or how small, from 2007 to 2014 these companies had a 31% average reduction in the CCC and 336% increase in cash on hand. The 328 companies that increased their debt 100% or more from 2007 to 2014 had an average 113% increase in the CCC, a decrease of 1,500% in their debt coverage ratio but a 1,516% increase in cash on hand. So the companies with the largest increases in debt also had the largest increase in cash on hand, but apathetically ignored their own ability to generate cash independently.

These figures bring some interesting questions to the forefront for corporate leadership and investors: Is there really an abundance of cash? Has the great recession taught US companies anything about the importance of cash reserves? How much longer can cheap debt be the source of investment activity? Have corporations borrowed too much? Is the Federal Reserve going to raise interest rates? What is the long term impact of all this debt? How are companies proactively managing, if at all?

Not all industries are equalThe latest REL 1000 has identified an opportunity gap between top performers and bottom performers by industry totaling $1 trillion. While all three areas of working capital offer improvement potential, the largest performance gaps in 2014 lie in inventory and payables.

Companies reducing debt vs. companies increasing debt

100% or more

Profile of companies in 2015 US Working Capital Survey

10%

2%

<1%

(10%) 96 companies improved CCC every yearduring the last three years

(2%) 20 companies improved CCC every yearduring the last five years

(<1%) 5 companies improved CCC every yearduring the last seven years

0

5

10

15

20

25

30

35

40

0

50

100

150

200

250

300

0

10

20

30

40

50

60

70

80

0

50

100

150

200

Revenue Cash on hand

27%

39% 293%

74%

5 COMPANIES (7YR IMPROVEMENT IN CCC)

COMPANIES IN 2015 US WORKING CAPITAL SURVEY

72%

52%

-181%

-3%

0

2

4

6

8

10

0

10

20

30

40

50

60

70

80

9%

2%

41%

62%

Capex CCC

Cash as % of revenue Debt

Companies that improved CCC every year during the lastseven years vs. companies in 2015 survey that did not

5 Average of percentage change at individual company level


Some select industries have improved performance over the past year. Technology hardware, having first moved into negative CCC in 2010, has continued to improve with stellar DPO performance in 2014. Biotechnology has seen improved DIO as inventory management initiatives take effect, while the paper and forest products industry has witnessed an improvement in both inventory and receivables performance. Additional industries have seen working capital performance decline over the past year, including some short term, such as the DSO increase in construction and engineering. Other impacts are symptoms of permanent changes in the market place, such as retailer consolidation driving down DSO in the personal products industry, while in the internet and catalog retailing industry payables performance has continued the downward drift first seen in 2011.

The road aheadThe US economy is definitely enjoying all the benefits of acceleration. However, the source and

apathetic management of cash flow is concerning. In 2015 we expect the trend to continue and debt to grow significantly as companies take advantage of cheap borrowing costs for what is expected to be the last opportunity. If and when interest rates are raised, companies focused on optimizing their CCC will be best positioned to mitigate their risk, continue using cash for investment activities, and outperform their peers not only in areas directly related to cash, but also in the downstream elements impacting cost and internal/external service.

Companies wishing to improve their cash conversion cycle should start by understanding their gaps in each component of the CCC: receivables (DSO), payables (DPO), and inventory (DIO). Utilizing peer comparisons for similar organizations within the industry is a good place to start when evaluating potential cash flow benefits.


Aerospace and Defense Industry

Northrop Grumman Corporation 32 6% 30 43 7% 40 15 12% 13 26 11% 23

Honeywell International Inc. 56 -1% 57 68 0% 68 56 1% 55 68 2% 67

Lockheed Martin Corporation 59 -3% 61 47 0% 47 26 -2% 27 14 14% 13

Precision Castparts Corp. 198 0% 197 60 -9% 66 199 4% 192 60 0% 61

Rockwell Collins Inc. 199 -5% 210 76 -12% 86 180 1% 179 56 3% 54

The Boeing Company 202 5% 193 30 15% 26 223 4% 214 51 7% 47

Median Performance 112 9% 103 62 -8% 67 79 -5% 83 36 -4% 38

Air Freight and Logistics Industry

Hub Group Inc. 12 -1% 12 41 2% 40 NM NM NM 29 4% 28

Expeditors International of Washington Inc. 20 -1% 20 69 7% 64 NM NM NM 49 10% 44

CH Robinson Worldwide Inc. 21 7% 20 43 3% 41 NM NM NM 21 -1% 21

United Parcel Service, Inc. 23 -8% 25 42 -2% 43 3 -23% 3 21 0% 21

Atlas Air Worldwide Holdings, Inc. 26 71% 15 33 13% 29 5 -15% 6 12 -39% 20

FedEx Corporation 27 6% 26 44 5% 42 5 0% 5 21 3% 21

Median Performance 22 11% 20 42 2% 42 5 -1% 5 21 0% 21

Airlines Industry

Southwest Airlines Co. (17) -21% (14) 7 -4% 7 10 -25% 13 33 -2% 34

SkyWest Inc. (9) -276% (2) 9 -24% 12 19 1% 19 38 12% 34

JetBlue Airways Corporation (6) -62% (4) 9 -1% 9 4 -8% 4 19 11% 17

American Airlines Group Inc. 11 -27% 15 15 -29% 21 12 -36% 19 16 -35% 25

Alaska Air Group, Inc. 17 60% 11 18 58% 11 6 -5% 6 6 -5% 7

Republic Airways Holdings Inc. 25 -24% 33 5 -58% 13 28 -14% 32 9 -32% 13

Median Performance (3) 19% (2) 10 -19% 12 10 -25% 13 20 -12% 23

Auto Components Industry

Tower International, Inc. 3 -63% 9 41 -14% 47 14 -19% 17 51 -7% 55

Tenneco Inc. 10 13% 9 46 -3% 48 36 0% 36 72 -4% 74

Lear Corp. 16 13% 14 51 -1% 51 19 -4% 20 55 -5% 57

Modine Manufacturing Company 41 -13% 47 57 0% 57 35 -7% 37 51 7% 47

Cooper Tire & Rubber Co. 61 -8% 66 39 3% 38 56 -17% 67 34 -13% 39

Exide Technologies 84 21% 69 63 2% 62 71 3% 69 50 -19% 62


Automobiles Industry

FCA US LLC (21) 7% (23) 10 10% 10 31 -11% 35 63 -7% 68

General Motors Company (2) 58% (6) 21 6% 20 36 -4% 38 60 -6% 64

Harley-Davidson, Inc. 40 12% 36 15 -10% 16 46 1% 46 20 -21% 26

Tesla Motors, Inc. 54 207% 17 26 190% 9 150 88% 80 123 72% 71

Median Performance 34 93% 17 21 32% 16 36 -4% 38 60 -6% 64

BEST WORST

COMPANyCCC

2014 1 yR%CHANGE

2013DSO

2014 1 yR%CHANGE

2013DIO

2014 1 yR%CHANGE

2013DPO

2014 1 yR%CHANGE

2013

NOTE: For the purpose of the study companies that securitize their receivables have had the value of securitized receivables added back to the overall receivables figure. NM (not meaningful).

companies in working capital management by 2014 CCC


Beverages Industry

Molson Coors Brewing Company (11) -15053% 0 46 -11% 52 33 -2% 34 90 5% 86

Pepsico, Inc. 8 -52% 16 31 -6% 33 37 -7% 40 61 6% 57

Coca-Cola Bottling Co. Consolidated 17 -30% 25 31 13% 27 25 8% 23 39 49% 26

Monster Beverage Corporation 57 -31% 83 42 -14% 48 57 -25% 75 41 2% 41

Constellation Brands Inc. 232 -31% 338 47 -24% 62 223 -31% 322 38 -17% 45

Brown-Forman Corporation 368 4% 354 69 -1% 70 353 4% 338 54 -1% 54

Median Performance 52 -11% 59 42 -14% 48 37 -7% 40 43 -1% 43

Biotechnology Industry

Gilead Sciences Inc. 109 -14% 127 68 -4% 71 134 -38% 217 92 -43% 160

Celgene Corporation 135 6% 128 56 -7% 60 161 28% 126 81 40% 58

Amgen Inc. 170 -42% 296 46 -12% 53 229 -30% 329 105 22% 86

Biogen Inc. 238 -2% 244 59 5% 57 251 -11% 280 71 -24% 94


Building Products Industry

AO Smith Corp. 28 7% 27 74 -5% 78 51 -1% 51 96 -6% 102

Masco Corporation 36 0% 36 44 -1% 45 49 4% 47 57 2% 56

USG Corporation 44 1% 44 40 5% 38 39 -4% 41 34 -1% 35

Universal Forest Products Inc. 67 5% 64 27 1% 27 54 10% 49 14 15% 12

Owens Corning 70 1% 70 47 -1% 47 69 0% 69 46 -2% 47

Griffon Corporation 85 -4% 88 68 -5% 71 69 20% 58 52 27% 41

Median Performance 62 9% 57 45 1% 44 64 9% 58 47 3% 46

Chemicals Industry

PolyOne Corporation 31 -14% 36 38 -9% 41 37 -10% 41 44 -6% 46

CF Industries Holdings, Inc. 31 11% 28 14 -5% 15 25 -26% 34 8 -61% 21

Praxair Inc. 32 8% 30 49 -7% 53 29 5% 27 45 -9% 50

Sigma-Aldrich Corporation 190 -5% 200 52 1% 52 187 -2% 190 49 18% 41

Sensient Technologies Corporation 191 -3% 197 58 -1% 58 171 -3% 176 38 3% 37

Tronox Limited 202 12% 180 57 -1% 57 184 17% 157 38 12% 34

Median Performance 79 13% 70 49 0% 49 70 6% 66 44 -10% 48

Commercial Services and Supplies Industry

The ADT Corporation (22) 17% (27) 11 14% 9 19 9% 17 52 -3% 54

Deluxe Corp. (4) 46% (7) 25 22% 20 24 26% 19 53 13% 47

Pitney Bowes Inc. (2) -135% 7 40 -13% 45 19 -20% 24 61 -2% 63

ACCO Brands Corporation 113 -6% 121 91 -7% 98 72 -5% 76 50 -6% 53

Cintas Corporation 125 -5% 131 41 -3% 42 105 -1% 106 21 19% 17

KAR Auction Services, Inc. 142 28% 110 272 12% 244 NM NM NM 131 -2% 134

Median Performance 34 -7% 37 50 1% 49 25 5% 24 39 4% 37

BEST WORST

COMPANyCCC

2014 1 yR%CHANGE

2013DSO

2014 1 yR%CHANGE

2013DIO

2014 1 yR%CHANGE

2013DPO

2014 1 yR%CHANGE

2013




Communications Equipment Industry

QUALCOMM Incorporated 8 -62% 21 33 7% 31 50 3% 48 75 29% 58

Juniper Networks, Inc. 9 -14% 11 47 5% 45 12 45% 8 50 17% 43

Brocade Communications Systems, Inc. 10 -53% 22 37 -9% 41 19 -7% 20 46 16% 40

CommScope Holding Company, Inc. 87 4% 83 58 -8% 64 55 -8% 60 27 -34% 40

Ciena Corporation 95 13% 84 83 -3% 86 69 -7% 75 57 -25% 76

Netgear Inc. 115 2% 112 72 2% 71 82 -3% 84 39 -9% 43

Median Performance 52 -7% 57 49 -16% 58 46 -5% 48 48 13% 43

Construction and Engineering Industry

Fluor Corporation 26 52% 17 52 29% 40 NM NM NM 26 12% 23

KBR, Inc. 35 2% 34 77 4% 74 0 -35% 1 42 5% 40

Granite Construction Incorporated 40 8% 37 55 2% 54 12 13% 11 27 -3% 28

Quanta Services, Inc. 76 9% 69 84 5% 81 18 11% 16 27 -2% 28

Tutor Perini Corporation 106 20% 88 179 10% 163 NM NM NM 73 -2% 75

Boart Longyear Limited 135 6% 127 51 13% 45 117 10% 107 33 35% 25


Construction Materials Industry

Vulcan Materials Company 70 -6% 75 43 2% 43 49 -9% 54 22 1% 22

Martin Marietta Materials Inc. 104 3% 102 56 24% 46 83 3% 80 34 44% 24

Median Performance 87 -1% 88 50 13% 44 66 -2% 67 28 24% 23

Containers and Packaging Industry

Crown Holdings Inc. 7 -22% 9 34 -8% 37 64 4% 62 91 2% 90

Ball Corporation 17 -54% 36 34 -2% 34 54 -2% 55 71 34% 53

Owens-Illinois, Inc. 23 -36% 36 30 -21% 38 68 -5% 72 75 1% 74

Packaging Corporation of America 67 -30% 95 40 -37% 64 52 -33% 78 26 -44% 47

Bemis Company, Inc. 79 0% 79 48 -5% 50 60 -8% 66 29 -22% 37

AptarGroup, Inc. 98 -8% 107 57 -10% 63 65 -14% 75 24 -24% 32


Distributors Industry

Core-Mark Holding Company, Inc. 25 -2% 25 11 -2% 11 20 1% 20 6 11% 6

GROWMARK, Inc. 35 5% 34 21 -4% 22 29 12% 26 15 3% 14

VWR Funding, Inc. 40 3% 39 49 -5% 51 46 3% 45 54 -4% 56

American Tire Distributors Holdings, Inc. 56 5% 53 28 1% 28 93 4% 90 65 1% 65

Genuine Parts Company 61 -10% 68 45 3% 43 103 -5% 109 87 3% 84

LKQ Corp. 125 2% 122 33 -1% 33 128 -3% 132 36 -16% 43


Diversified Consumer Services Industry

H&R Block, Inc. (69) -7% (65) 16 -10% 18 NM NM NM 86 3% 83

Graham Holdings Company (13) 67% (38) 56 27% 44 3 279% 1 71 -13% 82

Service Corporation International (8) 12% (9) 9 -19% 12 5 -22% 6 22 -18% 26

Apollo Education Group, Inc. 7 397% 1 25 34% 18 NM NM NM 18 5% 17

Education Management Corporation 23 7% 22 34 12% 30 NM NM NM 10 25% 8

Regis Corp. 25 -6% 26 5 -17% 6 40 3% 39 20 8% 18


BEST WORST

COMPANyCCC

2014 1 yR%CHANGE

2013DSO

2014 1 yR%CHANGE

2013DIO

2014 1 yR%CHANGE

2013DPO

2014 1 yR%CHANGE

2013




Diversified Telecommunication

Frontier Communications Corporation (45) 3% (46) 43 30% 33 NM NM NM 87 11% 79

AT&T, Inc. (39) -4% (37) 40 9% 37 12 43% 8 90 10% 82

Level 3 Communications, Inc. (25) -6% (23) 40 2% 39 NM NM NM 64 4% 62

Windstream Holdings, Inc. (3) 29% (5) 40 3% 39 8 -12% 9 51 -3% 53

IDT Corporation 4 0% 4 15 4% 15 NM NM NM 11 6% 11

Verizon Communications Inc. 8 36% 6 40 7% 38 8 2% 8 41 2% 40

Median Performance (13) 85% (7) 40 4% 38 8 -3% 9 62 13% 55

Electric Utilities Industry

Great Plains Energy Incorporated (24) -64% (15) 10 -5% 11 58 -3% 60 93 8% 86

Edison International (16) -68% (9) 39 -7% 42 12 4% 11 66 6% 62

Eversource Energy 8 -31% 11 50 2% 50 29 9% 26 71 10% 65

Pepco Holdings, Inc. 55 -5% 57 59 -10% 65 16 -8% 18 20 -22% 26

Duke Energy Corporation 75 1% 74 43 -13% 50 94 -1% 94 62 -11% 69

Hawaiian Electric Industries Inc. 505 7% 473 531 6% 503 NM NM NM 26 -12% 30

Median Performance 27 -5% 29 41 -5% 43 38 7% 36 55 -6% 59

Electrical Equipment Industry

Acuity Brands, Inc. 37 -11% 42 57 2% 56 55 -8% 60 74 1% 73

Emerson Electric Co. 52 3% 51 75 5% 71 52 11% 47 75 11% 68

Ametek Inc. 69 -3% 71 53 -3% 55 70 -2% 71 54 -1% 55

EnerSys 104 10% 94 83 16% 72 72 -5% 76 51 -4% 53

Regal Beloit Corporation 107 2% 104 50 -8% 55 103 5% 98 47 -3% 48

GrafTech International Ltd. 169 -16% 202 55 -12% 62 148 -19% 182 33 -22% 43

Median Performance 82 8% 76 59 -8% 65 69 1% 69 48 -10% 53

Electronic Equipment, Instruments and Components Industry

Jabil Circuit Inc. 2 491% 0 28 13% 25 50 3% 48 76 4% 73

Tech Data Corp. 22 -11% 25 44 -5% 46 35 3% 34 57 2% 55

Ingram Micro Inc. 28 15% 24 48 3% 47 35 2% 34 54 -3% 56

Amphenol Corporation 101 -5% 107 77 -3% 79 87 -5% 91 62 -3% 63

Trimble Navigation Limited 117 11% 106 55 2% 54 99 7% 93 37 -9% 41

FLIR Systems, Inc. 207 -4% 215 85 21% 70 169 -10% 187 46 11% 41


Energy Equipment and Services Industry

Unit Corporation (57) -44% (40) 44 17% 38 3 -55% 6 104 24% 83

Patterson-UTI Energy Inc. 16 -45% 29 76 25% 61 6 24% 4 66 80% 37

SEACOR Holdings Inc. 30 -25% 40 62 -1% 63 9 -18% 11 42 21% 34

Forum Energy Technologies, Inc. 163 -8% 178 60 1% 60 143 -7% 153 40 13% 35

Cameron International Corporation 170 -20% 212 80 -23% 103 143 -18% 175 53 -20% 66

National Oilwell Varco, Inc. 171 -17% 205 75 -19% 93 123 -15% 145 28 -16% 33

Median Performance 91 3% 89 76 -3% 78 48 -7% 51 39 11% 35

BEST WORST

COMPANyCCC

2014 1 yR%CHANGE

2013DSO

2014 1 yR%CHANGE

2013DIO

2014 1 yR%CHANGE

2013DPO

2014 1 yR%CHANGE

2013




Food and Staples Retailing Industry

Casey's General Stores, Inc. (1) 11% (2) 1 14% 1 13 1% 12 15 1% 15

PriceSmart Inc. 1 -68% 4 1 131% 0 39 -5% 41 39 3% 38

The Pantry, Inc. 2 25% 2 3 6% 3 8 6% 8 9 2% 9

CVS Health Corporation 43 -5% 45 25 1% 25 38 -2% 39 21 7% 20

Rite Aid Corporation 48 -3% 49 14 2% 13 60 -6% 64 26 -7% 28

United Natural Foods, Inc. 53 5% 51 24 18% 20 54 6% 51 25 21% 21


Food Products Industry

H. J. Heinz Corporation II 3 -94% 49 28 -22% 36 64 -12% 73 90 47% 61

The WhiteWave Foods Company 7 130% 3 20 -3% 21 34 -3% 35 47 -11% 53

Mondelez International, Inc. 10 -50% 20 41 -12% 46 59 -5% 62 89 2% 88

McCormick & Company, Incorporated 92 6% 87 42 -3% 44 104 3% 101 54 -6% 58

Keurig Green Mountain, Inc. 102 16% 88 48 23% 39 105 17% 90 52 25% 42

Seneca Foods Corp. 132 -14% 153 21 -6% 22 132 -15% 154 21 -10% 23


Gas Utilities Industry

National Fuel Gas Company 7 -68% 21 30 -1% 30 23 -30% 33 47 10% 43

New Jersey Resources Corp. 16 -46% 30 19 -32% 28 31 -25% 42 34 -15% 40

Atmos Energy Corporation 25 -24% 33 22 -12% 25 27 -13% 31 24 3% 24

Ferrellgas Partners LP 44 0% 44 27 12% 24 33 -5% 35 16 8% 14

WGL Holdings Inc. 52 -31% 75 39 -17% 47 56 -15% 66 44 14% 39

AGL Resources Inc. 58 -17% 69 94 -23% 122 71 -12% 80 107 -19% 133


Health Care Technology Industry

Cerner Corporation (23) -29% (18) 74 -1% 75 17 -36% 27 114 -4% 119

Allscripts Healthcare Solutions, Inc. 53 11% 48 88 5% 83 NM NM NM 34 -3% 35


Healthcare Equipment and Supplies Industry

Invacare Corporation 61 -9% 67 46 -11% 52 62 5% 59 48 8% 44

West Pharmaceutical Services, Inc. 75 -1% 76 46 -7% 50 68 -2% 69 39 -8% 42

Steris Corp. 91 -3% 94 71 6% 67 59 -1% 60 39 19% 33

St. Jude Medical Inc. 224 9% 204 79 -16% 94 179 6% 169 35 -41% 59

Biomet Inc. 301 0% 302 65 3% 64 293 1% 290 57 10% 52

Zimmer Holdings, Inc. 365 8% 339 71 -4% 74 343 12% 307 49 17% 42

Median Performance 148 5% 141 59 -7% 64 119 4% 115 39 0% 39

BEST WORST

COMPANyCCC

2014 1 yR%CHANGE

2013DSO

2014 1 yR%CHANGE

2013DIO

2014 1 yR%CHANGE

2013DPO

2014 1 yR%CHANGE

2013




Healthcare Providers and Services Industry

Cigna Corp. (151) 7% (161) 29 28% 22 NM NM NM 180 -2% 184

Triple-S Management Corporation (116) 5% (122) 18 11% 16 NM NM NM 134 -3% 139

Aetna Inc. (67) 2% (69) 10 -1% 10 NM NM NM 77 -2% 79

Henry Schein, Inc. 63 0% 63 40 -2% 40 65 -2% 66 42 -3% 44

Patterson Companies, Inc. 67 8% 61 55 21% 45 56 3% 54 44 17% 37

Envision Healthcare Holdings, Inc. 77 2% 75 79 1% 78 2 -11% 3 5 -23% 6


Hotels, Restaurants and Leisure Industry

Marriott International, Inc. (142) -13% (126) 143 -7% 153 NM NM NM 285 2% 279

Wynn Resorts Ltd. (40) -19% (33) 16 2% 16 17 -6% 18 73 8% 67

Boyd Gaming Corporation (17) -147% (7) 4 -55% 8 4 -17% 5 25 22% 20

Hilton Worldwide Holdings Inc. 62 9% 56 52 6% 49 37 -2% 37 27 -10% 30

International Game Technology 91 10% 83 94 4% 90 31 -6% 33 34 -16% 40

Starwood Hotels & Resorts Worldwide Inc. 108 15% 94 79 9% 73 50 23% 41 22 8% 20

Median Performance (0) -104% 4 11 -1% 11 10 -6% 10 20 0% 20

Household Durables Industry

Whirlpool Corp. 7 46% 5 51 30% 39 61 7% 57 105 15% 91

Newell Rubbermaid Inc. 34 -60% 85 30 -58% 72 73 2% 72 70 19% 59

Tempur Sealy International Inc. 45 -16% 54 47 -9% 52 43 -14% 50 45 -7% 48

KB Home 587 28% 460 19 45% 13 604 25% 484 36 -4% 37

Standard Pacific Corp. 674 2% 659 3 5% 3 680 2% 665 9 2% 9

Toll Brothers Inc. 770 -4% 800 23 -25% 31 774 -3% 797 27 -7% 29


Household Products Industry

The Procter & Gamble Company 13 9% 12 28 -2% 29 59 -5% 61 73 -6% 78

Kimberly-Clark Corporation 17 -47% 32 37 -12% 42 53 -16% 63 74 0% 74

Church & Dwight Co. Inc. 28 -23% 36 36 -5% 38 49 -7% 52 56 5% 53

Spectrum Brands Holdings, Inc. 50 -14% 58 36 -16% 43 80 -8% 87 66 -8% 72

Energizer Holdings Inc. 75 -8% 82 41 3% 39 98 2% 95 63 19% 53

Central Garden & Pet Company 120 -9% 131 44 3% 43 104 -14% 120 28 -12% 32


Independent Power Producers and Energy Traders Industry

The AES Corporation 17 90% 9 58 6% 54 18 -8% 20 59 -9% 65

Calpine Corp. 23 -5% 24 31 -1% 32 28 0% 28 37 2% 36

NRG Energy, Inc. 36 10% 33 30 -22% 39 39 -4% 40 33 -30% 47

Dynegy Inc. 38 -43% 67 39 -62% 105 36 -22% 45 37 -55% 83


BEST WORST

COMPANyCCC

2014 1 yR%CHANGE

2013DSO

2014 1 yR%CHANGE

2013DIO

2014 1 yR%CHANGE

2013DPO

2014 1 yR%CHANGE

2013




Industrial Conglomerates Industry

Icahn Enterprises, L.P. 43 -1% 43 32 4% 31 40 -6% 43 30 -2% 30

General Electric Company 63 10% 57 57 7% 54 79 -3% 82 73 -6% 78

Danaher Corp. 65 -2% 66 67 1% 66 71 0% 71 73 2% 71

Carlisle Companies Incorporated 72 5% 68 50 1% 50 52 5% 50 30 -2% 31

Roper Industries, Inc. 75 -10% 83 63 -8% 68 49 -11% 55 36 -10% 40

3M Company 91 -7% 97 49 -3% 50 82 -6% 88 40 -2% 41


Internet and Catalog Retail Industry

Expedia Inc. (319) 0% (320) 49 5% 47 NM NM NM 368 0% 367

The Priceline Group Inc. (92) -64% (56) 28 -3% 29 NM NM NM 120 41% 85

Amazon.com Inc. (24) 15% (29) 23 -2% 23 48 -3% 50 96 -6% 102

Groupon, Inc. 20 -9% 22 12 1% 12 13 -35% 19 5 -48% 9

HSN, Inc. 52 36% 38 29 12% 26 63 14% 55 40 -6% 43

Liberty Interactive Corporation 60 -14% 70 43 4% 41 57 -9% 63 40 19% 34

Median Performance (2) -32% (3) 29 4% 28 53 1% 52 68 6% 64

Internet Software and Services Industry

Rackspace Hosting, Inc. (54) 11% (61) 32 8% 29 NM NM NM 86 -5% 90

IAC/InterActiveCorp (6) -82% (3) 28 11% 25 NM NM NM 34 19% 28

EarthLink Holdings Corp. 13 41% 9 29 -3% 30 NM NM NM 16 -24% 20

Google Inc. 27 54% 18 52 -11% 58 NM NM NM 25 -39% 41

AOL Inc. 64 16% 55 80 4% 77 NM NM NM 17 -26% 22

eBay Inc. 206 -1% 209 231 0% 231 NM NM NM 26 14% 22

Median Performance 15 -15% 18 52 -11% 58 #NUM! #NUM! #NUM! 31 10% 28

IT Services Industry

Visa Inc. (60) 37% (95) 46 -4% 48 NM NM NM 106 -26% 144

Euronet Worldwide, Inc. (52) 8% (57) 82 -19% 102 32 -21% 40 167 -16% 199

CoreLogic, Inc. (28) -18% (24) 56 0% 56 NM NM NM 84 5% 80

Gartner Inc. 92 1% 91 100 -1% 100 NM NM NM 8 -15% 9

Global Payments Inc. 140 112% 66 142 106% 69 3 -46% 5 5 -36% 8

Moneygram International Inc. 147 -8% 159 190 0% 190 NM NM NM 43 40% 31


Leisure Equipment and Products Industry

Polaris Industries Inc. 42 -1% 43 16 -7% 18 65 14% 57 40 21% 33

Brunswick Corporation 80 8% 74 37 5% 35 85 6% 80 41 1% 41

Mattel, Inc. 82 -13% 94 66 -7% 71 68 -2% 69 52 14% 46

Hasbro Inc. 116 -7% 124 93 -4% 98 60 -3% 62 38 7% 35

Median Performance 81 -4% 84 51 -3% 53 67 2% 66 41 6% 38

BEST WORST

COMPANyCCC

2014 1 yR%CHANGE

2013DSO

2014 1 yR%CHANGE

2013DIO

2014 1 yR%CHANGE

2013DPO

2014 1 yR%CHANGE

2013




Life Sciences Tools and Services Industry

Mettler-Toledo International Inc. 83 -11% 93 64 -11% 72 66 -5% 70 47 -3% 49

Thermo Fisher Scientific, Inc. 95 2% 93 53 -1% 54 75 3% 72 33 -2% 34

PerkinElmer Inc. 110 2% 108 77 -3% 79 85 5% 81 52 0% 52

Waters Corporation 160 -4% 165 80 -4% 83 109 -4% 113 29 -4% 30

Bio-Rad Laboratories, Inc. 190 -11% 213 63 -12% 72 174 -12% 197 47 -17% 57

Bruker Corporation 203 -17% 244 59 -3% 61 171 -19% 210 27 2% 27


Machinery Industry

Deere & Company (29) -58% (18) 34 -8% 37 62 -12% 70 125 0% 125

Navistar International Corporation 9 -34% 14 19 -25% 25 51 11% 45 60 7% 56

PACCAR Inc. 11 -14% 13 17 -6% 18 22 2% 21 28 4% 26

Pall Corporation 145 2% 142 81 3% 78 108 -1% 109 44 -1% 45

Kennametal Inc. 162 13% 144 68 9% 63 133 10% 121 39 -2% 40

Joy Global, Inc. 200 25% 160 102 30% 79 152 24% 123 54 30% 42


Marine Industry

Matson, Inc. 8 -2% 8 42 4% 41 NM NM NM 34 5% 32

Kirby Corporation 53 32% 40 59 17% 51 41 21% 34 48 7% 45


Media Industry

The Interpublic Group of Companies, Inc. (216) 11% (243) 281 -10% 313 NM NM NM 497 -11% 555

Sirius XM Holdings Inc. (81) 12% (92) 17 3% 17 3 26% 3 102 -9% 112

Omnicom Group Inc. (70) 7% (75) 155 -6% 166 38 -14% 44 263 -8% 284

Scholastic Corporation 106 9% 97 51 16% 44 118 -4% 122 63 -9% 69

CBS Corporation 119 13% 106 91 8% 84 42 20% 35 14 6% 13

Time Warner Inc. 130 1% 129 103 2% 101 40 -1% 41 14 9% 12


Metals and Mining Industry

Alcoa Inc. 20 37% 15 21 10% 19 59 15% 51 60 8% 56

SunCoke Energy Inc. 28 62% 17 19 -5% 20 43 18% 37 34 -12% 39

Novelis Inc. 36 -24% 47 49 -4% 50 51 1% 50 63 17% 54

Allegheny Technologies Inc. 139 7% 130 52 9% 48 140 10% 127 53 16% 45

Carpenter Technology Corp. 144 6% 136 57 4% 55 144 10% 131 57 14% 50

Newmont Mining Corporation 163 0% 163 24 14% 21 175 -4% 182 36 -9% 39


BEST WORST

COMPANyCCC

2014 1 yR%CHANGE

2013DSO

2014 1 yR%CHANGE

2013DIO

2014 1 yR%CHANGE

2013DPO

2014 1 yR%CHANGE

2013




Multiline Retail Industry

Sears Holdings Corporation 66 1% 66 6 -4% 6 94 0% 94 33 -3% 34

Fred's, Inc. 70 0% 70 7 0% 7 97 3% 94 33 10% 30

Macy's, Inc. 74 1% 73 6 17% 5 121 4% 117 53 9% 49

Nordstrom Inc. 74 -7% 79 61 -1% 62 73 8% 67 60 20% 50

Dillard's Inc. 78 7% 73 2 -1% 2 116 4% 111 40 0% 40

Belk Inc. 101 -9% 110 5 75% 3 136 -5% 144 40 10% 36


Multi-Utilities Industry

Iberdrola USA, Inc. (58) 42% (101) 68 -9% 75 63 -29% 88 188 -29% 264

Berkshire Hathaway Energy Company (16) -1426% (1) 39 -24% 51 39 -32% 57 94 -14% 109

Vectren Corporation 4 -83% 21 50 -13% 58 43 -20% 53 89 0% 89

NiSource Inc. 56 5% 53 60 -7% 65 52 4% 50 57 -8% 62

Dominion Resources, Inc. 66 39% 48 44 -6% 47 67 23% 54 45 -16% 54

CMS Energy Corp. 68 -12% 78 52 -6% 55 66 -7% 70 49 4% 48


Oil, Gas and Consumable Fuels Industry

Anadarko Petroleum Corporation (346) 6% (370) 25 -31% 36 26 2% 26 397 -8% 432

EQT Corporation (316) -16% (274) 45 -2% 46 3 -83% 20 365 7% 340

Cabot Oil & Gas Corporation (226) -12% (203) 42 -5% 45 10 -39% 16 278 6% 263

Whiting Petroleum Corp. 35 364% (13) 66 40% 47 NM NM NM 30 -49% 60

Newfield Exploration Co. 59 -61% 152 59 -33% 88 20 -84% 119 19 -66% 55

Spectra Energy Corp. 63 0% 63 83 -7% 88 42 15% 36 61 -1% 61


Paper and Forest Products Industry

International Paper Company 39 -26% 53 44 -19% 54 54 -14% 63 60 -8% 65

Boise Cascade Company 46 -3% 48 18 4% 17 47 -4% 49 18 0% 18

Louisiana-Pacific Corp. 50 12% 45 18 51% 12 48 -5% 50 16 -9% 17

KapStone Paper and Packaging Corporation 57 -14% 66 36 -25% 49 56 -16% 67 35 -28% 49

NewPage Holdings Inc. 58 -17% 69 19 -22% 24 55 -17% 66 17 -22% 21

Clearwater Paper Corporation 60 -8% 66 25 -19% 31 62 6% 59 27 12% 24


Personal Products Industry

Coty Inc. 15 -47% 29 53 9% 49 122 2% 119 160 15% 140

Avon Products Inc. 15 -52% 32 23 -6% 25 89 -5% 94 97 11% 87

Revlon, Inc. 47 -32% 68 45 -27% 62 86 -28% 119 84 -25% 113

The Estée Lauder Companies Inc. 176 13% 156 46 9% 42 219 9% 201 89 2% 87

Elizabeth Arden, Inc. 197 20% 164 50 -12% 57 193 14% 169 47 -26% 62

Nu Skin Enterprises Inc. 237 23% 193 5 -35% 8 258 5% 245 26 -56% 60


BEST WORST

COMPANyCCC

2014 1 yR%CHANGE

2013DSO

2014 1 yR%CHANGE

2013DIO

2014 1 yR%CHANGE

2013DPO

2014 1 yR%CHANGE

2013




Pharmaceuticals Industry

Bristol-Myers Squibb Company (21) -20% (17) 69 10% 63 151 33% 113 240 24% 193

Johnson & Johnson 63 -27% 86 54 -10% 60 131 2% 129 122 19% 103

Merck & Co. Inc. 128 -16% 152 58 -7% 62 134 -6% 142 63 21% 52

Roche Holdings, Inc. 156 56% 100 79 27% 62 145 42% 102 68 6% 64

Eli Lilly and Company 179 -5% 189 60 11% 54 203 -7% 218 83 0% 83

Zoetis Inc. 291 9% 268 75 -18% 91 279 -4% 290 63 -45% 114


Professional Services Industry

Verisk Analytics, Inc. 1 111% (11) 46 27% 36 NM NM NM 45 -6% 47

Insperity, Inc. 26 -22% 33 27 -20% 34 NM NM NM 1 66% 1

Robert Half International Inc. 28 3% 27 51 8% 47 NM NM NM 23 14% 20

Towers Watson & Co. 83 0% 83 86 -2% 88 NM NM NM 3 -37% 5

Dun & Bradstreet Corp. 94 10% 85 114 0% 114 NM NM NM 21 -28% 29

FTI Consulting, Inc. 98 -2% 100 101 -4% 105 NM NM NM 3 -43% 5

Median Performance 47 8% 44 65 1% 64 #NUM! #NUM! #NUM! 16 9% 15

Road and Rail Industry

AMERCO (22) -63% (13) 25 -29% 35 13 11% 11 59 -1% 60

Norfolk Southern Corporation (18) 12% (21) 33 0% 33 12 5% 12 63 -3% 65

Kansas City Southern (0) -101% 10 26 -16% 31 28 -12% 31 53 3% 52

Old Dominion Freight Line Inc. 31 2% 31 40 2% 39 NM NM NM 8 6% 8

Burlington Northern Santa Fe, LLC 33 -7% 36 22 1% 22 21 -10% 23 9 5% 8

Werner Enterprises Inc. 35 17% 30 46 9% 42 4 9% 4 15 -7% 16

Median Performance 17 4% 16 34 -2% 34 8 5% 8 25 1% 24

Semiconductors and Semiconductor Equipment Industry

SunEdison, Inc. (52) -262% 32 69 8% 64 77 -45% 141 199 15% 173

Broadcom Corp. 37 26% 30 35 0% 35 48 2% 47 45 -14% 52

Amkor Technology, Inc. 42 10% 38 55 15% 48 33 7% 31 45 14% 40

Lam Research Corporation 136 13% 121 63 4% 61 104 12% 93 31 -6% 33

Atmel Corporation 144 7% 135 57 5% 54 133 8% 124 47 8% 43

KLA-Tencor Corporation 225 2% 220 61 -9% 67 195 4% 187 31 -10% 34


Software Industry

Intuit Inc. (81) -3% (78) 11 -5% 11 NM NM NM 92 2% 89

Autodesk, Inc. (44) 33% (66) 68 -13% 78 NM NM NM 112 -22% 144

Symantec Corporation (34) 28% (48) 55 1% 54 5 -41% 8 94 -15% 110

PTC Inc. 75 -5% 79 95 -1% 95 NM NM NM 19 22% 16

Cadence Design Systems Inc. 101 38% 73 28 5% 27 92 0% 92 20 -57% 46

salesforce.com, inc. 104 8% 97 129 23% 104 NM NM NM 24 216% 8

Median Performance 18 -31% 26 60 4% 58 15 21% 13 51 1% 50

BEST WORST

COMPANyCCC

2014 1 yR%CHANGE

2013DSO

2014 1 yR%CHANGE

2013DIO

2014 1 yR%CHANGE

2013DPO

2014 1 yR%CHANGE

2013




Specialty Retail Industry

Aaron's, Inc. (54) 21% (68) 14 28% 11 4 -27% 5 72 -14% 84

Rent-A-Center, Inc. (43) -14% (38) 8 8% 7 2 15% 2 53 13% 47

AutoZone, Inc. (30) 1% (30) 8 13% 7 252 7% 237 290 6% 274

RadioShack Corp. 146 101% 73 21 446% 4 177 36% 129 51 -16% 61

Pier 1 Imports, Inc. 150 -8% 163 5 6% 5 187 -1% 190 42 33% 31

Tiffany & Co. 494 1% 489 17 2% 17 502 0% 500 25 -8% 27


Technology Hardware, Storage and Peripherals Industry

Apple Inc. (56) -33% (43) 35 25% 28 7 14% 6 98 28% 77

Lexmark International Inc. (3) -129% 11 41 -8% 45 40 -9% 44 85 8% 79

Hewlett-Packard Company 4 -76% 18 45 -12% 52 28 8% 26 69 15% 59

SanDisk Corp. 63 -18% 77 46 15% 40 74 -13% 85 57 18% 48

NCR Corporation 72 -17% 87 75 -3% 77 51 -23% 66 54 -3% 56

Diebold, Incorporated 80 -5% 85 57 0% 57 65 4% 63 42 20% 35

Median Performance 30 5% 29 48 4% 46 42 -7% 44 67 12% 59

Textiles, Apparel and Luxury Goods

Steven Madden, Ltd. 53 32% 40 53 3% 51 39 21% 32 39 -10% 43

Skechers USA Inc. 70 -13% 80 42 -6% 44 127 0% 127 99 8% 92

V.F. Corporation 84 -7% 90 38 -13% 43 86 0% 86 40 2% 39

Quiksilver Inc. 124 -9% 136 74 -10% 83 126 -5% 133 76 -4% 79

Hanesbrands Inc. 146 1% 145 46 1% 46 167 8% 155 68 20% 56

Fossil Group, Inc. 151 -4% 157 45 -12% 51 145 -3% 149 39 -11% 43


Tobacco Industry

Lorillard, Inc. 60 -21% 75 1 -33% 1 64 -21% 81 5 -28% 7

Altria Group Inc. 79 2% 77 3 6% 2 96 0% 95 20 -6% 21

Reynolds American Inc. 109 8% 101 7 -6% 7 115 3% 112 13 -30% 18

Alliance One International, Inc. 133 -27% 183 33 -27% 44 131 -22% 168 31 2% 30

Universal Corporation 155 8% 143 68 14% 60 122 -2% 124 36 -13% 41

Philip Morris International, Inc. 306 -11% 346 49 9% 45 301 -13% 345 43 -3% 45


Trading Companies and Distributors Industry

GATX Corp. (0) -104% 10 64 -18% 78 29 8% 27 94 -1% 95

United Rentals, Inc. 37 17% 32 60 2% 59 9 1% 9 32 -11% 36

Graybar Electric Company, Inc. 37 -7% 40 57 7% 53 35 -2% 35 55 12% 49

MSC Industrial Direct Co. Inc. 131 -2% 135 50 -2% 51 109 -4% 114 28 -9% 31

Fastenal Company 197 -3% 203 45 -1% 45 173 -3% 178 21 0% 21

Titan Machinery, Inc. 220 12% 197 16 -21% 20 209 15% 182 5 -17% 6


BEST WORST

COMPANyCCC

2014 1 yR%CHANGE

2013DSO

2014 1 yR%CHANGE

2013DIO

2014 1 yR%CHANGE

2013DPO

2014 1 yR%CHANGE

2013




Water Utilities Industry

American Water Works Company, Inc. (13) -5% (12) 55 2% 54 10 8% 9 78 3% 76

Median Performance (13) 5% (12) 55 2% 54 10 8% 9 78 3% 76

Wireless Telecommunication Services Industry

T-Mobile US, Inc. (39) -115% (18) 62 13% 55 26 47% 17 126 40% 90

Sprint Corporation (6) -359% (1) 37 1% 37 19 -11% 22 62 4% 60

Telephone & Data Systems Inc. 23 13605% (0) 40 -3% 41 40 -1% 40 56 -31% 81

NII Holdings Inc. 27 -28% 38 39 0% 40 33 -38% 54 45 -18% 55

Median Performance 9 -1368% (1) 40 -2% 40 29 -5% 31 59 -16% 71

“The Hackett Group hit the bull’s eye with a pragmatic, straight forward process that met our needs. Their professionals found real solutions that our team embraced and implemented with line of sight impact on our target KPI. These guys get the job done.”

Tim Wild,Vice President, Supply Chain,

Brunswick Boat Group

“The Hackett Group brings in good professionals, who roll up their sleeves and start working with local teams to make things happen. They have a hands-on mentality and a no-nonsense approach. They are not like typical consultants who only give you plans to follow.”

Rens Blankers, Head of Shared Business Services Finance,

Philips

BEST WORST

COMPANyCCC

2014 1 yR%CHANGE

2013DSO

2014 1 yR%CHANGE

2013DIO

2014 1 yR%CHANGE

2013DPO

2014 1 yR%CHANGE

2013




Scorecard methodologyThe Hackett Group’s Working Capital Survey calculates working capital performance based on the latest publicly available annual financial statements of the 1,0006 largest listed non-financial companies with headquarters in the US. The survey takes an industry-based approach to ranking companies according to the four key working capital metrics: days sales outstanding (DSO), days inventory outstanding (DIO), days payables outstanding (DPO) and cash conversion cycle (CCC). For each industry the companies are ranked according to overall CCC, the top three and bottom three performers are listed in the scorecard.

Companies are classified according to the Standard and Poor’s Global Industry Classification Standard (GICS), using data sourced from S&P Capital IQ. Historical comparisons within the survey are made on a like-for-like basis. Where off-balance sheet arrangements are used by the company, adjustments have been made to the data in order to provide true, consistent and comparable figures.

Days Sales Outstanding (DSO) = Accounts Receivable/(One day revenue) – Year-end trade receivables net of allowance for doubtful accounts, divided by one day of average

revenue– A decrease in DSO represents an improvement, an increase a deterioration

Days Inventory Outstanding (DIO) = Inventory/(One Day Cost of Goods Sold (COGS))– Year-end inventory balance divided by average days COGS– A decrease is an improvement, an increase a deterioration

Days Payables Outstanding (DPO) = Accounts Payable/(One Day COGS)– Year-end trade accounts payable balance divided by average days COGS– An increase in DPO represents an improvement, a decrease a deterioration

Cash Conversion Cycle (CCC) = (DSO + DIO - DPO)– Year-end DSO + DIO - DPO performance (in days as calculated above)– The lower the number of days, the better

6 The Hackett Group targets the 1,000 largest (by revenue) publicly traded companies for inclusion in the survey. To be included in

the survey the companies must file their FY2014 financials before the survey closes. This year, the survey included 967.


ATLANTA1000 Abernathy Road NWSuite 1400Atlanta, GA 30328

CHICAGO525 W. Monroe StreetSuite 1550Chicago, IL 60661

FRANKFURTTorhaus WesthafenSpeicherstrasse 5960327 Frankfurt am Main

HyDERABADPlot# 6, 1-55/4/RP/L1/W1&W2Raja Prasadam, KondapurHyderabad 500084, India +91 40 4488 4000

LONDONMartin House5 Martin LaneLondon EC4R 0DP

MONTEVIDEOWTC Free ZoneDr. Luis Bonavita 1294, Office 1701Montevideo, Uruguay 11300

MIAMI1001 Brickell Bay Drive30th FloorMiami, Florida 33131

NEW yORK270 Madison AvenueSuite 401New York, NY 10016

PARIS8, rue de Port Mahon75002 Paris

PHILADELPHIA101 West Elm StreetSuite 330Conshohocken, PA 19428

SAN FRANCISCO505 Montgomery Street10th FloorSan Francisco, CA 94111

SyDNEySuite 40335 Lime StreetSydney, NSW2000Australia

VANCOUVER7360 137 StreetSuite 382Surrey, Vancouver, BCV3W 1A3, Canada

To receive a complimentary cash flow assessment, call 1 866 442 2538 or register your details online to take the first step toward releasing more cash from your operations today. To download our Working Capital Survey and its summary of findings, please register your details at www.thehackettgroup.com/workingcapital.

About The Hackett Group

The Hackett Group (NASDAQ: HCKT) is an intellectual property-based

strategic consultancy and leading enterprise benchmarking and best

practices implementation firm to global companies. Services include

business transformation, enterprise performance management,

working capital management, and global business services. The

Hackett Group also provides dedicated expertise in business strategy,

operations, finance, human capital management, strategic sourcing,

procurement and information technology, including its award-winning

Oracle EPM and SAP practices.

The Hackett Group has completed more than 11,000 benchmarking

studies with major corporations and government agencies, including

93% of the Dow Jones Industrials, 86% of the Fortune 100, 87% of the

DAX 30 and 51% of the FTSE 100. These studies drive its Best Practice

Intelligence Center™, which includes the firm’s benchmarking metrics,

best practices repository, and best practice configuration guides and

process flows. It is this intellectual capital that enables The Hackett

Group’s clients and partners to achieve world-class performance.

About REL

REL, a division of The Hackett Group, Inc., is a world-leading

consulting firm dedicated to delivering sustainable cash flow

improvement from working capital and across business operations.

REL’s tailored solutions balance client trade-offs between working

capital, operating costs, service performance and risk. REL’s expertise

has helped clients free up billions in cash, creating the financial freedom

to fund acquisitions, product development, debt reduction and share

buy-back programs. In-depth process expertise, analytical rigor and

collaborative client relationships enable REL to deliver an exceptional

return on investment in a short timeframe. REL has delivered work in

over 60 countries for Global 1000 companies.

www.thehackettgroup.com

© 2015 The Hackett Group, Inc.; All Rights Reserved

http://www.thehackettgroup.com/#_blank

http://www.thehackettgroup.com/business-benchmarking/#_blank

http://www.thehackettgroup.com/business-performance-management/#_blank

http://www.thehackettgroup.com/working-capital-management/#_blank

http://www.thehackettgroup.com/global-business-services/#_blank

2015 hackett working capital survey us 150604

Documents

cash king

cash conversion cycle

cash flow opportunity

cash management strategies

future cash flows

internal cash generation

longterm debt

cash conversion cycle