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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
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
3 I The Hackett Group I 2015 US Working Capital Survey
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
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Cash on hand increases 74%
2007
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Debt increases 62% while borrowing rates are attractive
2007
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2014
DEBT FEDERAL FUNDS RATE
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Companies are not hoarding cashCash on hand as a % of revenue
2007 2014
6%
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CAPEX increases 52%
2007 2014
$541
$823
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Dividends increase 72%
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$331
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4. http://seekingalpha.com/search/transcripts?term=%22cash%20
conversion%20cycle%22&all=true
2015 US Working Capital Survey I The Hackett Group I 4
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
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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
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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
5 I The Hackett Group I 2015 US Working Capital Survey
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.
2015 US Working Capital Survey I The Hackett Group I 6
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
Median Performance 30 16% 26 51 -2% 52 29 -11% 33 52 -11% 58
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
7 I The Hackett Group I 2015 US Working Capital Survey
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
Median Performance 139 -18% 169 59 -1% 60 161 -26% 217 81 -5% 86
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
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
2015 US Working Capital Survey I The Hackett Group I 8
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
Median Performance 50 11% 45 73 1% 73 12 12% 11 29 4% 28
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
Median Performance 43 -11% 48 40 -3% 42 54 -2% 55 46 1% 45
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
Median Performance 55 3% 53 28 1% 28 93 4% 90 54 2% 53
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
Median Performance 2 87% 1 22 18% 18 5 -22% 6 20 -5% 21
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
9 I The Hackett Group I 2015 US Working Capital Survey
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
Median Performance 57 5% 54 58 4% 55 50 2% 49 57 5% 54
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
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
2015 US Working Capital Survey I The Hackett Group I 10
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
Median Performance 14 14% 13 9 -6% 10 31 -20% 39 25 4% 24
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
Median Performance 42 5% 40 26 -1% 26 49 -2% 50 32 0% 32
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
Median Performance 30 -5% 32 29 -10% 32 30 -10% 34 33 -15% 39
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
Median Performance 15 1% 15 81 2% 79 17 -36% 27 74 -4% 77
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
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
11 I The Hackett Group I 2015 US Working Capital Survey
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
Median Performance 27 20% 22 35 8% 32 14 -4% 15 27 -10% 30
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
Median Performance 96 -5% 101 24 -14% 27 104 -3% 108 38 -5% 40
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
Median Performance 35 -8% 37 36 -7% 39 65 -5% 68 63 3% 61
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
Median Performance 29 4% 28 35 -25% 47 32 -7% 34 37 -34% 56
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
2015 US Working Capital Survey I The Hackett Group I 12
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
Median Performance 68 2% 67 54 3% 52 61 -3% 63 38 -6% 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
Median Performance 42 0% 42 63 2% 62 11 66% 6 24 4% 23
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
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
13 I The Hackett Group I 2015 US Working Capital Survey
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
Median Performance 117 -7% 126 64 -12% 72 109 -4% 113 40 -2% 41
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
Median Performance 78 -1% 79 54 -1% 55 72 -3% 74 45 3% 44
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
Median Performance 31 26% 24 51 11% 46 41 21% 34 41 6% 38
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
Median Performance 17 7% 16 52 2% 51 13 -18% 17 40 -5% 42
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
Median Performance 71 -8% 77 35 3% 34 70 -2% 72 32 13% 28
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
2015 US Working Capital Survey I The Hackett Group I 14
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
Median Performance 74 1% 73 6 6% 5 107 4% 103 40 5% 38
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
Median Performance 24 -23% 31 48 -15% 56 39 -5% 41 57 -3% 59
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
Median Performance 6 11% 5 28 -22% 36 17 -3% 17 30 -32% 44
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
Median Performance 54 1% 54 25 -19% 31 55 -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
Median Performance 151 23% 123 45 7% 42 179 13% 159 84 -3% 87
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
15 I The Hackett Group I 2015 US Working Capital Survey
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
Median Performance 148 0% 149 62 0% 62 149 8% 138 76 -18% 93
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
Median Performance 92 -15% 108 48 -4% 50 98 -1% 100 45 5% 43
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
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
2015 US Working Capital Survey I The Hackett Group I 16
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
Median Performance 46 -4% 48 6 9% 6 77 -1% 78 41 7% 38
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
Median Performance 103 -6% 110 40 -11% 45 119 2% 116 41 -5% 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
Median Performance 121 -1% 122 20 -24% 26 119 1% 118 25 -1% 25
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
Median Performance 81 9% 75 49 8% 45 68 6% 64 34 4% 33
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
17 I The Hackett Group I 2015 US Working Capital Survey
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
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Philips
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
2015 US Working Capital Survey I The Hackett Group I 18
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.
19 I The Hackett Group I 2015 US Working Capital Survey
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.
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