Hackett Group, Inc 10-Q for FY2021 Q3

Hackett Group, Inc. (HCKT)

10-Q 2021-11-10 For: 2021-10-01

Added on April 08, 2026

About this 10-Q

Hackett Group, Inc filed this 10-Q on November 10, 2021, covering the quarter ended October 1, 2021 (FY2021 Q3).

Headline figures

Quarter ended October 1, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $71.89M; up 24.1% from $57.92M a year earlier
Net income: $8.13M; up 172.3% from net income of $2.99M a year earlier
Diluted EPS: $0.25; up 177.8% from $0.09 a year earlier

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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)


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

Large Accelerated Filer	☐	Accelerated Filer	☒

Non-Accelerated Filer	☐	Smaller Reporting Company	☐

		Emerging Growth Company	☐

PART I - FINANCIAL INFORMATION		Page

Item 1.	Financial Statements

	Consolidated Balance Sheets as of October 1, 2021 (unaudited) and January 1, 2021	3

	Consolidated Statements of Operations for the Three and Nine Months Ended October 1, 2021 and September 25, 2020 (unaudited)	4

	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended October 1, 2021 and September 25, 2020 (unaudited)	5

	Consolidated Statements of Cash Flows for the Nine Months Ended October 1, 2021 and September 25, 2020 (unaudited)	6

	Consolidated Statements of Equity for the Three and Nine Months Ended October 1, 2021 and September 25, 2020 (unaudited)	7

	Notes to Consolidated Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21

Item 4.	Controls and Procedures	21

PART II - OTHER INFORMATION		22

Item 1.	Legal Proceedings	22

Item 1A.	Risk Factors	22

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22

Item 6.	Exhibits	23

SIGNATURES		24

	October 1,			January 1,
	2021			2021
ASSETS
Current assets:
Cash	$	52,939		$	49,455
Accounts receivable and contract assets, net of allowance of $1,930 and $605 at October 1, 2021 and January 1, 2021, respectively		49,609			32,778
Prepaid expenses and other current assets		3,168			2,599
Total current assets		105,716			84,832

Property and equipment, net		17,853			18,158
Other assets		840			1,680
Goodwill		85,089			85,297
Operating lease right-of-use assets		1,862			2,578
Total assets	$	211,360		$	192,545
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,027		$	6,098
Accrued expenses and other liabilities		35,615			25,084
Contract liabilities (deferred revenue)		11,959			8,765
Operating lease liabilities		2,338			2,620
Total current liabilities		54,939			42,567
Non-current deferred tax liability, net		5,950			5,588
Operating lease liabilities		1,962			3,503
Total liabilities		62,851			51,658
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; 58,127,763 and 57,600,158 shares issued at October 1, 2021 and January 1, 2021, respectively		58			58
Additional paid-in capital		317,734			312,039
Treasury stock, at cost, 28,346,796 and 27,609,752 shares October 1, 2021 and January 1, 2021, respectively		(157,070	)		(144,254	)
Accumulated deficit		(2,037	)		(17,388	)
Accumulated other comprehensive loss		(10,176	)		(9,568	)
Total shareholders' equity		148,509			140,887
Total liabilities and shareholders' equity	$	211,360		$	192,545


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


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

	Quarter Ended						Nine Months Ended
	October 1,			September 25,			October 1,			September 25,
	2021			2020			2021			2020
Revenue:
Revenue before reimbursements	$	71,400		$	57,769		$	207,807			175,587
Reimbursements		494			148			770			4,614
Total revenue		71,894			57,917			208,577			180,201
Costs and expenses:
Cost of service:
Personnel costs before reimbursable expenses		43,552			37,801			124,323			117,597
Stock compensation expense		1,670			1,751			5,296			5,204
Reimbursable expenses		494			148			770			4,614
Total cost of service		45,716			39,700			130,389			127,415
Selling, general and administrative costs		13,872			12,979			41,198			38,765
Stock compensation expense		901			711			2,515			1,830
Restructuring costs		—			—			—			5,034
Total costs and operating expenses		60,489			53,390			174,102			173,044
Income from operations		11,405			4,527			34,475			7,157

Other expense:
Interest expense		(26	)		(22	)		(76	)		(100	)
Income from operations before income taxes		11,379			4,505			34,399			7,057
Income tax expense		3,248			1,362			9,368			2,312
Income from continuing operations		8,131			3,143			25,031			4,745
Loss from discontinued operations		—			(157	)		(7	)		(165	)
Net income	$	8,131		$	2,986		$	25,024		$	4,580

Basic net income per common share:
Income per common share from continuing operations	$	0.27		$	0.11		$	0.83		$	0.16
Loss per common share from discontinued operations	(0.00)				(0.01	)		(0.00	)		(0.01	)
Net income per common share	$	0.27		$	0.10		$	0.83		$	0.15

Diluted net income per common share:
Income per common share from continuing operations	$	0.25		$	0.10		$	0.76		$	0.15
Loss per common share from discontinued operations	(0.00)				(0.01	)		(0.00	)		(0.01	)
Net income per common share	$	0.25		$	0.09		$	0.76		$	0.14

Weighted average common shares outstanding:
Basic		29,814			30,053			30,038			29,986
Diluted		32,876			32,403			32,871			32,335

																	Accumulated
					Additional												Other			Total
	Common Stock				Paid in			Treasury Stock						Accumulated			Comprehensive			Shareholders'
	Shares		Amount		Capital			Shares			Amount			Deficit			Loss			Equity
Balance at January 1, 2021		57,693	$	58	$	312,039			(27,609	)	$	(144,254	)	$	(17,388	)	$	(9,568	)	$	140,887
Issuance of common stock		294		—		(1,605	)		—			—			—			—			(1,605	)
Treasury stock purchased		—		—		—			(136	)		(2,110	)		—			—			(2,110	)
Amortization of restricted stock units and common stock subject to vesting requirements		—		—		2,633			—			—			—			—			2,633
Dividends declared		—		—		—			—			—			(3,254	)		—			(3,254	)
Net income		—		—		—			—			—			6,361			—			6,361
Foreign currency translation		—		—		—			—			—			—			269			269
Balance at April 2, 2021		57,987	$	58	$	313,067			(27,745	)	$	(146,364	)	$	(14,281	)	$	(9,299	)	$	143,181
Issuance of common stock		73		—		354			—			—			—			—			354
Treasury stock purchased		—		—		—			(489	)		(8,603	)		—			—			(8,603	)
Amortization of restricted stock units and common stock subject to vesting requirements		—		—		2,258			—			—			—			—			2,258
Dividends declared		—		—		—			—			—			(3,227	)		—			(3,227	)
Net income		—		—		—			—			—			10,532			—			10,532
Foreign currency translation		—		—		—			—			—			—			(132	)		(132	)
Balance at July 2, 2021		58,060	$	58	$	315,679			(28,234	)	$	(154,967	)	$	(6,976	)	$	(9,431	)	$	144,363
Issuance of common stock		67		—		(156	)		—			—			—			—			(156	)
Treasury stock purchased		—		—		—			(113	)		(2,103	)		—			—			(2,103	)
Amortization of restricted stock units and common stock subject to vesting requirements		—		—		2,211			—			—			—			—			2,211
Dividends declared		—		—		—			—			—			(3,192	)		—			(3,192	)
Net income		—		—		—			—			—			8,131			—			8,131
Foreign currency translation		—		—		—			—			—			—			(745	)		(745	)
Balance at October 1, 2021		58,127	$	58	$	317,734			(28,347	)	$	(157,070	)	$	(2,037	)	$	(10,176	)	$	148,509

					Additional												Other			Total
	Common Stock				Paid in			Treasury Stock						Accumulated			Comprehensive			Shareholders'
	Shares		Amount		Capital			Shares			Amount			Deficit			Loss			Equity
Balance at December 27, 2019		57,181	$	58	$	303,707			(27,425	)	$	(141,887	)	$	(13,714	)	$	(10,550	)	$	137,614
Issuance of common stock		291		—		(1,962	)		—			—			—			—			(1,962	)
Treasury stock purchased		—		—		—			(73	)		(1,006	)		—			—			(1,006	)
Amortization of restricted stock units and common stock subject to vesting requirements		—		—		2,469			—			—			—			—			2,469
Dividends declared		—		—		—			—			—			(13	)		—			(13	)
Net income		—		—		—			—			—			5,527			—			5,527
Foreign currency translation		—		—		—			—			—			—			(1,830	)		(1,830	)
Balance at March 27, 2020		57,472	$	58	$	304,214			(27,498	)	$	(142,893	)	$	(8,200	)	$	(12,380	)	$	140,799
Issuance of common stock		75		—		359			—			—			—			—			359
Amortization of restricted stock units and common stock subject to vesting requirements		—		—		2,362			—			—			—			—			2,362
Dividends declared		—		—		—			—			—			(3,050	)		—			(3,050	)
Net loss		—		—		—			—			—			(3,933	)		—			(3,933	)
Foreign currency translation		—		—		—			—			—			—			44			44
Balance at June 26, 2020		57,547	$	58	$	306,935			(27,498	)	$	(142,893	)	$	(15,183	)	$	(12,336	)	$	136,581
Issuance of common stock		13		—		(109	)		—			—			—			—			(109	)
Treasury stock purchased		—		—		—			(75	)		(932	)		—			—			(932	)
Amortization of restricted stock units and common stock subject to vesting requirements		—		—		2,238			—			—			—			—			2,238
Dividends declared		—		—		—			—			—			(3,024	)		—			(3,024	)
Net income		—		—		—			—			—			2,986			—			2,986
Foreign currency translation		—		—		—			—			—			—			907			907
Balance at September 25, 2020		57,560	$	58	$	309,064			(27,573	)	$	(143,825	)	$	(15,221	)	$	(11,429	)	$	138,647



		Employee Related Costs				Exit, Closure and Consolidation of Facilities				Total

Accrual balance at January 1, 2021	$		1,083		$		1,209		$		2,292
Cash paid			(901	)			(276	)			(1,177	)
Accrual balance at April 2, 2021	$		182		$		933		$		1,115
Cash paid			(86	)			(79	)			(165	)
Accrual balance at July 2, 2021	$		96		$		854		$		950
Cash paid			—				(125	)			(125	)
Accrual balance at October 1, 2021	$		96		$		729		$		825

2021 (excluding the nine months ended October 1, 2021)	$	593
2022		2,298
2023		988
2024		585
2025 and thereafter		-
Total lease payments		4,464
Less imputed interest		(164	)
Total	$	4,300

					Total Number		Maximum Dollar
					of Shares as Part		Value That May
					of Publicly		Yet be Purchased
	Total Number		Average Price		Announced		Under the
Period	of Shares		Paid per Share		Program		Program
Balance as of July 2, 2021		—	$	—		—	$	13,575,132
July 3, 2021 to July 30, 2021		21,994	$	17.98		21,994	$	13,179,653
July 31, 2021 to August 27, 2021		78,095	$	18.71		78,095	$	11,718,551
August 28, 2021 to October 1, 2021		12,461	$	19.76		12,461	$	11,472,333
		112,550	$	18.68		112,550

Exhibit No.		Exhibit Description
3.1		Second Amended and Restated Articles of Incorporation of the Registrant, as amended (incorporated herein by reference to the Registrant's Form 10-K for the year ended December 29, 2000).

3.2		Articles of Amendment of the Articles of Incorporation of the Registrant (incorporated herein by reference to the Registrant's Form 10-K for the year ended December 28, 2007).

3.3		Amended and Restated Bylaws of the Registrant, as amended (incorporated herein by reference to the Registrant's Form 10-K for the year ended December 29, 2000).

3.4		Amendment to Amended and Restated Bylaws of the Registrant (incorporated herein by reference to the Registrant's Form 8-K filed on March 31, 2008).

3.5		Amendment to Amended and Restated Bylaws of the Registrant (incorporated herein by reference to the Registrant's Form 8-K filed on January 21, 2015).

31.1*		Certification by CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification by CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32*		Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS**		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document.

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101.PRE**		Inline XBRL Taxonomy Extension Presentation Linkbase

104**		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

		The Hackett Group, Inc.

Date: November 10, 2021		/s/ Robert A. Ramirez
		Robert A. Ramirez
		Executive Vice President, Finance and Chief Financial Officer

	Nine Months Ended
	October 1,			September 25,
	2021			2020
Cash flows from operating activities:
Net income	$	25,024		$	4,580
Plus net loss from discontinued operations		7			165
Net income from continuing operations		25,031			4,745
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		2,552			2,600
Amortization expense		783			723
Amortization of debt issuance costs		33			58
Non-cash stock compensation expense		7,811			7,034
Provision for doubtful accounts		168			413
Gain on foreign currency translation		(62	)		(165	)
Deferred income tax expense (benefit)		300			(417	)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable and contract assets		(17,061	)		13,248
Decrease (increase) in prepaid expenses and other assets		253			(328	)
Decrease in accounts payable		(1,071	)		(3,449	)
Increase in accrued expenses and other liabilities and operating lease liabilities		1,572			6,257
Increase in contract liabilities (deferred revenue)		3,194			409
Increase in income tax payable		2,973			193
Net cash provided by operating activities		26,469			31,156
Cash flows from investing activities:
Purchases of property and equipment		(2,255	)		(1,498	)
Net cash used in investing activities		(2,255	)		(1,498	)
Cash flows from financing activities:
Proceeds from ESPP		391			374
Debt issuance costs					(21	)
Dividends paid		(6,481	)		(8,854	)
Repurchase of common stock		(14,614	)		(4,025	)
Net cash used in financing activities		(20,704	)		(12,526	)
Effect of exchange rate on cash		(26	)		81
Net increase in cash and cash equivalents		3,484			17,213
Cash at beginning of period		49,455			25,954
Cash at end of period	$	52,939		$	43,167
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	6,371		$	2,385
Cash paid for interest	$	43		$	43

	October 1,		January 1,
	2021		2021
Long-lived assets:
North America	$	89,297	$	90,384
International (primarily European countries)		16,347		17,329
Total long-lived assets	$	105,644	$	107,713

	Nine Months Ended
	October 1,			September 25,
	2021			2020
Cash flows provided by operating activities	$	26,469		$	31,156
Cash flows used in investing activities	$	(2,255	)	$	(1,498	)
Cash flows used in financing activities	$	(20,704	)	$	(12,526	)