10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 29, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 333-48123

The Hackett Group, Inc.

(Exact name of registrant as specified in its charter)


Florida		65-0750100
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1001 Brickell Bay Drive, Suite 3000 Miami, Florida		33131
(Address of principal executive offices)		(Zip Code)

(305) 375-8005

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.001 per share	HCKT	NASDAQ Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☐	Accelerated Filer	☒

Non-Accelerated Filer	☐	Smaller Reporting Company	☐

		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of May 3, 2024, there were 27,613,912 shares of common stock outstanding.

TABLE OF CONTENTS


PART I - FINANCIAL INFORMATION		Page

Item 1.	Financial Statements

	Consolidated Balance Sheets as of March 29, 2024 (unaudited) and December 29, 2023	3

	Consolidated Statements of Operations for the Three Months Ended March 29, 2024, and March 31, 2023, (unaudited)	4

	Consolidated Statements of Comprehensive Income for the Three Months Ended March 29, 2024, and March 31, 2023, (unaudited)	5

	Consolidated Statements of Cash Flows for the Three Months Ended March 29, 2024, and March 31, 2023, (unaudited)	6

	Consolidated Statements of Shareholders' Equity for the Three Months Ended March 29, 2024, and March 31, 2023, (unaudited)	7

	Notes to Consolidated Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

Item 4.	Controls and Procedures	23

Item 5.	Other Information	23

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 6.	Exhibits	25

SIGNATURES		26

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The Hackett Group, Inc.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)


	March 29,			December 29,
	2024			2023
ASSETS
Current assets:
Cash	$	12,958		$	20,957
Accounts receivable and contract assets, net of allowance of $867 and $1,072 at March 29, 2024 and December 29, 2023, respectively		57,979			52,113
Prepaid expenses and other current assets		2,730			2,368
Total current assets		73,667			75,438

Property and equipment, net		20,048			20,044
Other assets		283			285
Goodwill		84,099			84,242
Operating lease right-of-use assets		1,220			1,419
Total assets	$	179,317		$	181,428

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,215		$	7,557
Accrued expenses and other liabilities		19,870			26,801
Contract liabilities		14,957			12,087
Income tax payable		2,443			2,360
Operating lease liabilities		811			1,083
Total current liabilities		44,296			49,888
Non-current deferred tax liability, net		10,133			8,118
Long term debt, net		30,729			32,711
Operating lease liabilities		678			631
Total liabilities		85,836			91,348

Commitments and contingencies

Shareholders’ equity:
Preferred stock, $0.001 par value, 1,250,000 shares authorized; none issued and outstanding		—			—
Common stock, $0.001 par value, 125,000,000 shares authorized; 60,959,197 and 60,581,418 shares issued at March 29, 2024 and December 29, 2023, respectively		61			61
Additional paid-in capital		316,126			317,034
Treasury stock, at cost, 33,358,277 and 33,314,926 shares March 29, 2024 and December 29, 2023, respectively		(275,655	)		(274,600	)
Retained earnings		66,515			60,820
Accumulated other comprehensive loss		(13,566	)		(13,235	)
Total shareholders' equity		93,481			90,080
Total liabilities and shareholders' equity	$	179,317		$	181,428

The accompanying notes are an integral part of the consolidated financial statements.

The Hackett Group, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)


	Quarter Ended
	March 29,			March 31,
	2024			2023
Revenue:
Revenue before reimbursements	$	75,727		$	69,831
Reimbursements		1,460			1,398
Total revenue		77,187			71,229
Costs and expenses:
Cost of service:
Personnel costs before reimbursable expenses (includes $1,393 and $1,526 of non-cash stock based compensation expense in the quarters ended March 29, 2024 and March 31, 2023, respectively)		45,771			43,143
Reimbursable expenses		1,460			1,398
Total cost of service		47,231			44,541
Selling, general and administrative costs (includes $1,206 and $921 of non-cash stock based compensation expense in the quarters ended March 29, 2024 and March 31, 2023, respectively)		18,329			15,436
Legal settlement and related costs		102			—
Total costs and operating expenses		65,662			59,977
Income from operations		11,525			11,252

Other expense, net:
Interest expense, net		(472	)		(859	)
Income before income taxes		11,053			10,393
Income tax expense		2,322			2,232
Net income	$	8,731		$	8,161

Basic net income per common share:
Income per common share	$	0.32		$	0.30
Weighted average common shares outstanding		27,422			27,026

Diluted net income per common share:
Income per common share	$	0.32		$	0.30
Weighted average common and common equivalent shares outstanding		27,676			27,269

The accompanying notes are an integral part of the consolidated financial statements.

The Hackett Group, Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)


	Quarter Ended
	March 29,			March 31,
	2024			2023
Net income	$	8,731		$	8,161
Foreign currency translation adjustment		(331	)		570
Total comprehensive income	$	8,400		$	8,731

The accompanying notes are an integral part of the consolidated financial statements.

The Hackett Group, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Quarter Ended
	March 29,		March 31,
	2024		2023
Cash flows from operating activities:
Net income	$	8,731	$	8,161
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation expense		942		830
Amortization of debt issuance costs		18		18
Non-cash stock based compensation expense		2,599		2,447
Provision for doubtful accounts		88		16
Loss on foreign currency translation		77		237
Deferred income tax expense		2,001

SEC Form 10-Q filed by Hackett Group Inc.