HCKT 8-K

THE HACKETT GROUP, INC.

Date: August 4, 2020

/s/ Robert A. Ramirez

Robert A. Ramirez

Executive Vice President, Finance and Chief Financial Officer

Hackett Group, Inc. (HCKT)

8-K 2020-08-04 For: 2020-07-30

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Added on April 08, 2026

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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

	Quarter Ended						Six Months Ended
	June 26,			June 28,			June 26,			June 28,
	2020			2019			2020			2019
REVENUE:
Revenue before reimbursements ("net revenue")	$	52,632		$	67,976		$	117,818		$	130,346
Reimbursements		119			5,545			4,466			10,330
TOTAL REVENUE FROM CONTINUING OPERATIONS		52,751			73,521			122,284			140,676

COSTS AND EXPENSES:
Cost of service:
Personnel costs before reimbursable expenses		38,654			40,820			79,767			79,754
Non-cash stock compensation expense		1,600			1,022			2,941			1,942
Acquisition-related compensation expense (benefit)		29			(159	)		29			(288	)
Acquisition-related non-cash stock compensation expense		259			289			512			368
Reimbursable expenses		119			5,545			4,466			10,330
TOTAL COST OF SERVICE		40,661			47,517			87,715			92,106

Selling, general and administrative costs		11,413			15,159			25,310			29,201
Non-cash stock compensation expense		483			787			1,119			1,492
Amortization of intangible assets		238			254			476			553
Acquisition-related contingent consideration liability		-			45			-			(1,025	)
Restructuring costs		5,034			-			5,034			-
TOTAL SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		17,168			16,245			31,939			30,221

TOTAL COSTS AND OPERATING EXPENSES		57,829			63,762			119,654			122,327

INCOME (LOSS) FROM OPERATIONS		(5,078	)		9,759			2,630			18,349

Other expense:
Interest expense		(41	)		(105	)		(78	)		(206	)

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(5,119	)		9,654			2,552			18,143
Income tax (benefit) expense		(1,186	)		2,614			950			4,054
INCOME (LOSS) FROM CONTINUING OPERATIONS		(3,933	)		7,040			1,602			14,089
Loss from discontinued operations (2)		-			(51	)		(8	)		(6	)
NET INCOME (LOSS)	$	(3,933	)	$	6,989		$	1,594		$	14,083

Basic net income (loss) per common share:
Income (loss) per common share from continuing operations	$	(0.13	)	$	0.23		$	0.05		$	0.47
Weighted average common shares outstanding		30,015			29,823			29,952			29,753

Diluted net income (loss) per common share:
Income (loss) per common share from continuing operations	$	(0.13	)	$	0.22		$	0.05		$	0.44
Weighted average common and common equivalent share outstanding (3)		30,015			32,374			32,301			32,334

PRO FORMA DATA (1):
Income (loss) from continuing operations before income taxes	$	(5,119	)	$	9,654		$	2,552	$	18,143
Non-cash stock compensation expense		2,083			1,809			4,060		3,434
Acquisition-related compensation expense (benefit)		29			(159	)		29		(288	)
Acquisition-related non-cash stock compensation expense		259			289			512		368
Acquisition-related contingent consideration liability		-			45			-		(1,025	)
Restructuring costs		5,034			-			5,034		-
Amortization of intangible assets		238			254			476		553
PRO FORMA INCOME BEFORE INCOME TAXES		2,524			11,892			12,663		21,185
Pro forma income tax expense		631			2,973			3,166		5,296
PRO FORMA NET INCOME	$	1,893		$	8,919		$	9,497	$	15,889

Pro forma basic net income per common share	$	0.06		$	0.30		$	0.32	$	0.53
Weighted average common shares outstanding		30,015			29,823			29,952		29,753

Pro forma diluted net income per common share	$	0.06		$	0.28		$	0.29	$	0.49
Weighted average common and common equivalent shares outstanding (3)		30,015			32,374			32,301		32,334

	June 26,		December 27,
	2020		2019
ASSETS
Current assets:
Cash and cash equivalents	$	37,370	$	25,954
Accounts receivable and unbilled revenue, net		36,962		49,778
Prepaid expenses and other current assets		3,719		2,895
Total current assets		78,051		78,627
Property and equipment, net		19,724		19,916
Other assets		2,052		2,652
Goodwill		83,880		84,578
Operating lease right-of-use assets		8,753		7,962
Total assets	$	192,460	$	193,735

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	4,739	$	8,494
Accrued expenses and other liabilities		34,810		32,482
Operating lease liabilities		2,701		2,707
Total current liabilities		42,250		43,683
Long-term deferred tax liability, net		7,577		7,183
Operating lease liabilities		6,052		5,255
Total liabilities		55,879		56,121

Shareholders' equity		136,581		137,614
Total liabilities and shareholders' equity	$	192,460	$	193,735


(d)	Exhibits

	Quarter Ended
	June 26,			June 28,			March 27,
	2020			2019			2020
Revenue Breakdown by Group:
(in thousands)
S&BT (4)	$	16,798		$	26,261		$	24,462
EEA (5)		31,399			31,005			33,223
International (6)		4,435			10,710			7,500
Net revenue from continuing operations (7)	$	52,632		$	67,976		$	65,186

Revenue Concentration:
(% of total revenue)
Top customer		6	%		4	%		4	%
Top 5 customers		17	%		16	%		15	%
Top 10 customers		27	%		25	%		25	%

Key Metrics and Other Financial Data:
Total Company:
Consultant headcount		908			999			1,026
Total headcount		1,110			1,240			1,243
Days sales outstanding (DSO)		64			68			70
Cash provided by operating activities (in thousands)	$	14,547		$	11,273		$	6,521
Pro forma return on equity (8)		20	%		26	%		24	%
Depreciation (in thousands)	$	883		$	830		$	800
Amortization (in thousands)	$	238		$	254		$	238

Remaining Plan authorization:
Shares purchased (in thousands)		-			92			73
Cost of shares repurchased (in thousands)	$	—		$	1,440		$	1,006
Average price per share of shares purchased	$	—		$	15.59		$	13.79
Remaining Plan authorization (in thousands)	$	5,645		$	3,878		$	5,645

Shares Purchased to Satisfy Employee Net Vesting Obligations:
Shares purchased (in thousands)		2			1			125
Cost of shares purchased (in thousands)	$	25		$	14		$	1,962
Average price per share of shares purchased	$	13.29		$	16.39		$	15.70