UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): May 5, 2022

The Hackett Group, Inc.

(Exact name of registrant as specified in its charter)

FLORIDA	333-48123	65-0750100
(State or other jurisdiction of<br><br><br>incorporation or organization)	(Commission File Number)	(I.R.S. Employer<br><br><br>Identification No.)
1001 Brickell Bay Drive, Suite 3000<br><br><br>Miami, Florida	33131
---	---
(Address of principal executive offices)	(Zip Code)

(305) 375-8005

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR § 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR § 240.12b-2).

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. ☐

Item 2.02    Results of Operations and Financial Condition.

On May 10, 2022, The Hackett Group, Inc. (the “Company”) issued a press release setting forth its consolidated financial results for the first fiscal quarter ended April 1, 2022. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein.

The information contained in Item 2.02 of this current report on Form 8-K, as well as Exhibit 99.1, is being furnished to the Securities and Exchange Commission and shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.

Item 5.07 Submission of Matters to a Vote of Security Holders.

The 2022 Annual Meeting of Shareholders of the Company was held on May 5, 2022. Matters submitted to shareholders at the meeting and the voting results thereof were as follows:

Proposal 1 - Election of Directors. The shareholders of the Company elected the director nominees named below to serve until the 2025 Annual Meeting of Shareholders and until his/her successors are duly elected and qualified. The following is a breakdown of the voting results:

				BROKER
DIRECTOR	FOR	AGAINST	ABSTAIN	NON-VOTES
Ted A. Fernandez	25,170,780	1,167,546	187,720	2,046,026
DIRECTOR	FOR	AGAINST	ABSTAIN	NON-VOTES
---	---	---	---	---
Robert A. Rivero	24,695,075	1,810,682	20,289	2,046,026
DIRECTOR	FOR	AGAINST	ABSTAIN	NON-VOTES
---	---	---	---	---
Alan T.G. Wix	19,822,813	6,686,241	16,992	2,046,026

Proposal 2 – Amendment to the Company’s 1998 Stock Option and Incentive Plan. The shareholders of the Company approved an amendment to the Company’s 1998 Stock Option and Incentive Plan (the “Plan”) to (i) increase the sublimit under the Plan for the issuance of restricted stock and restricted stock units by 1,900,000 shares, and (ii) increase the total number of shares authorized for issuance under the Plan by 1,900,000 shares. The following is a breakdown of the voting results:

			BROKER
FOR	AGAINST	ABSTAIN	NON-VOTES
25,329,151	1,038,693	158,202	2,046,026

Proposal 3 – Amendment to the Company’s Employee Stock Plan. The shareholders of the Company approved an amendment to the Company’s Employee Stock Purchase Plan (the “Purchase Plan”) to (i) increase the number of shares authorized for issuance under the Purchase Plan by 250,000 shares, and (ii) extend the term of the Purchase Plan by five years until July 1, 2028. The following is a breakdown of the voting results:

			BROKER
FOR	AGAINST	ABSTAIN	NON-VOTES
26,309,278	61,918	154,850	2,046,026

Proposal 4 – Advisory Vote on Executive Officer Compensation. The shareholders of the Company approved an advisory vote on executive officer compensation. The following is a breakdown of the voting results:

			BROKER
FOR	AGAINST	ABSTAIN	NON-VOTES
25,829,500	680,312	16,234	2,046,026

Proposal 5 – Appointment of RSM US LLP as Independent Auditor. The shareholders of the Company ratified the appointment of RSM US LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 30, 2022. The following is a breakdown of the voting results:

FOR	AGAINST	ABSTAIN	NON-VOTES
28,543,600	25,760	2,712	-

Item 9.01    Financial Statements and Exhibits.

(d)	Exhibits
Exhibit<br><br><br>Number	Description
---	---
99.1	Press Release of The Hackett Group, Inc., dated April 1, 2022
104	Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	THE HACKETT GROUP, INC.
Date: May 10, 2022	By:	/s/ Robert A. Ramirez
		Robert A. Ramirez
		Executive Vice President, Finance and Chief Financial Officer

hckt-ex991_6.htm

Exhibit 99.1

Contact:

Robert A. Ramirez, CFO, 305-375-8005 or rramirez@thehackettgroup.com

The Hackett Group Announces First Quarter 2022 Results

MIAMI, FL (May 10, 2022) - The Hackett Group, Inc. (NASDAQ: HCKT), a global intellectual property-based strategic consultancy and leading enterprise benchmarking and best practices digital transformation firm, today announced its financial results for the first quarter, which ended on April 1, 2022.

Financial Highlights

•	Revenue increased 19% to $75.7 million and revenue before reimbursements increased 18% to $75.1 million, as compared to the first quarter of 2021, which exceeded high end of guidance.
•	GAAP diluted earnings per share increased 74% to $0.33, as compared to the first quarter of 2021, primarily as a result of increased revenue and margins.
---	---
•	Adjusted diluted earnings per share, a non-GAAP measure, increased 41% to $0.38, as compared to the first quarter of 2021, which exceeded high end of guidance.  Adjusted financial information is provided to enhance the understanding of the Company’s financial performance and is reconciled to the Company’s GAAP information in the accompanying table.
---	---
•	The Company repurchased 157 thousand shares of its stock at an average price of $19.51 for a total of $3.1 million.  As of the end of the first quarter of 2022, the Company's remaining share repurchase program authorization was $10.6 million.
---	---
•	Subsequent to the end of the first quarter, the Company's Board of Directors declared a quarterly dividend of $0.11 per share for its shareholders of record on June 24, 2022, to be paid on July 8, 2022. As of April 1, 2022, the Company's cash balances were $47.8 million, with no outstanding debt.
---	---

“We reported better than expected results as we continued to experience strong demand for our IP centric digital transformation offerings,” stated Ted A. Fernandez, Chairman & CEO of The Hackett Group, Inc. “Our ability to define and roll out new Hackett Digital World Class standards for organizations to compare and enable their digital performance are key elements of our go-to-market success.”

Business Outlook for the Second Quarter of 2022

Based on the Company's current economic outlook:

•	The Company estimates total revenue before reimbursements for the second quarter of 2022 will be in the range of $71.0 million to $73.0 million.
•	The Company estimates adjusted diluted earnings per share for the second quarter of 2022 to be in the range of $0.33 and $0.35.
---	---
•	The second quarter of fiscal 2021 included a large SAP software sale transaction that totaled $5.3 million in revenues which favorably impacted prior year adjusted diluted earnings per share by $0.09.
---	---

Conference Call and Webcast Details

•	On Tuesday, May 10, 2022, senior management will discuss first quarter results in a conference call at 5:00 P.M. ET.  The number for the conference call is (800) 593-0486, [Passcode: First Quarter]. For International callers, please dial (517) 308-9371. Please dial in at least 5-10 minutes prior to start time. If you are unable to participate on the conference call, a rebroadcast will be available beginning at 8:00 P.M. ET on Tuesday, May 10, 2022, and will run through 5:00 P.M. ET on Tuesday, May 24, 2022. To access the rebroadcast, please dial (800) 841-8615. For International callers, please dial (203) 369-3833.
•	In addition, The Hackett Group will also be webcasting this conference call live through the StreetEvents.com service.  To participate, simply visit http://www.thehackettgroup.com approximately 10 minutes prior to the start of the call and click on the conference call link provided.  An online replay of the call will be available after 8:00 P.M. ET on Tuesday, May 10, 2022, and will run through 5:00 P.M. ET on Tuesday, May 24, 2022. To access the replay, visit www.thehackettgroup.com or http://www.streetevents.com.
---	---

Use of Non-GAAP Financial Measures

The Company provides adjusted earnings results (which exclude the amortization of intangible assets, non-cash stock compensation expense, acquisition-related one-time expense, restructuring charges, asset impairments, and include a normalized tax rate, which is our long-term projected cash tax rate) as a complement to results provided in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP earnings results are provided to enhance the users' overall understanding of the Company's current financial performance and its prospects for the future. The Company believes the non-GAAP results provide useful information to both management and investors and by excluding certain items that it believes are not indicative of its core operating results. The non-GAAP measures are included to provide investors and management with an alternative method for assessing operating results in a manner that is focused on the performance of ongoing operations and to provide a more consistent basis for comparison between quarters. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting in future periods. In addition, since the Company has historically reported non-GAAP results to the investment community, it believes the continued inclusion of non-GAAP results provides consistency in its financial reporting. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.  See the reconciliation of actual results titled “Reconciliation of GAAP to Non-GAAP Measures” in the accompanying tables.

The Company believes that the presentation of non-GAAP financial information on a forward-looking basis, including the guidance contained in this release, provides important supplemental information to management and investors regarding its anticipated financial and business trends relating to the Company’s results of operations. The Company is unable to provide a reconciliation of GAAP measures to corresponding forward-looking non-GAAP measures without unreasonable effort due to the high variability and low visibility of most of the items that have been excluded from these non-GAAP measures. For example, share-based compensation expense is impacted by the Company’s future hiring needs, the type and volume of equity awards necessary for such future hiring, and the price at which the Company’s stock will trade in those future periods. In addition, the provision or benefit for income taxes is impacted by non-recurring income tax adjustments, valuation allowance on deferred tax assets, and the income tax effect of non-GAAP exclusions. The effects of these reconciling items may be significant, as the items that are being excluded are difficult to predict.

About The Hackett Group

The Hackett Group (NASDAQ: HCKT) is an intellectual property-based strategic consultancy and leading enterprise benchmarking firm to global companies, offering digital transformation including implementation of leading enterprise cloud applications, workflow automation and analytics that enable Digital World Class performance.

Drawing from our unparalleled IP from nearly 20,000 benchmark studies with the world’s leading businesses – including 97% of the Dow Jones Industrials, 94% of the Fortune 100, 70% of the DAX 30 and 51% of the FTSE 100 – captured through our leading benchmarking platform, Quantum Leap®, and our Digital Transformation Platform, we accelerate best practices implementations.

More information on The Hackett Group is available at: www.thehackettgroup.com, info@thehackettgroup.com, or by calling (770) 225-3600.

#

The Hackett Group, quadrant logo, World Class Defined and Enabled and Quantum Leap are the registered marks of The Hackett Group, Inc.

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks, uncertainties and other factors that may cause The Hackett Group's actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. Factors that impact such forward-looking statements include, among others, the impact of the coronavirus pandemic, including the duration and severity of the pandemic, the economic impact of the pandemic and the timing of an economic recovery, demand for our services, our ability to manage our business and capital resources through the pandemic, the ability of our products, services, or offerings mentioned in this release to deliver the desired effect, our ability to effectively integrate acquisitions into our operations, our ability to retain existing business, our ability to attract additional business through strategic initiatives or otherwise, our ability to effectively market and sell our product offerings and other services, including those referenced above, the timing of projects and the potential for contract cancellations by our customers, especially given that our clients are also impacted by the pandemic, changes in expectations regarding the business consulting and information technology industries, our ability to attract and retain skilled employees, the impact of any federally-mandated vaccine, testing or other COVID-19 related requirements on employee retention and our results of operations, possible changes in collections of accounts receivable due to the bankruptcy or financial difficulties of our customers, risks of competition, price and margin trends, foreign currency fluctuations, the impact of the geopolitical conflict involving Russian and Ukraine on our business, changes in general economic conditions, inflation and interest rates, our ability to obtain additional debt financing if needed, as well as other risks detailed in our Annual Report on Form 10-K for the most recent fiscal year as filed with the Securities and Exchange Commission. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Page 4 of 7 - The Hackett Group, Inc. Announces First Quarter Results

The Hackett Group, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

			April 2,
			2021
Revenue:
Revenue before reimbursements	75,108		$	63,410
Reimbursements	556			76
Total revenue	75,664			63,486
Costs and expenses:
Cost of service:
Personnel costs before reimbursable expenses (includes 1,666 and 1,847 of stock compensation expense in 2022 and 2021, respectively)	47,333			41,170
Reimbursable expenses	556			76
Total cost of service	47,889			41,246
Selling, general and administrative costs (includes 933 and 740 of stock compensation expense in 2022 and 2021, respectively)	14,366			13,387
Total costs and operating expenses	62,255			54,633
Operating income	13,409			8,853
Other expense:
Interest expense	(28	)		(25	)
Income from continuing operations before income taxes	13,381			8,828
Income tax expense	2,876			2,460
Income from continuing operations	10,505			6,368
Loss from discontinued operations (net of taxes)	-			(7	)
Net income	10,505		$	6,361
Weighted average common shares outstanding:
Basic	31,449			30,207
Diluted	31,844			32,769
GAAP basic net income per common share:
Income per common share from continuing operations	0.33		$	0.21
Loss per common share from discontinued operations				(0.00	)
GAAP basic net income per common share	0.33		$	0.21
GAAP diluted net income per common share:
Income per common share from continuing operations	0.33		$	0.19
Loss per common share from discontinued operations				(0.00	)
GAAP diluted net income per common share	0.33		$	0.19

All values are in US Dollars.

Page 5 of 7 - The Hackett Group, Inc. Announces First Quarter Results

The Hackett Group, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

	April 1,		December 31,
	2022		2021
ASSETS
Current assets:
Cash and cash equivalents	$	47,752	$	45,794
Accounts receivable and contract assets, net		50,514		50,616
Prepaid expenses and other current assets		5,364		5,766
Total current assets		103,630		102,176
Property and equipment, net		18,212		18,026
Other assets		540		620
Goodwill		84,639		85,070
Operating lease right-of-use assets		1,424		1,649
Total assets	$	208,445	$	207,541
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	8,041	$	7,677
Accrued expenses and other liabilities		21,981		30,297
Contract liabilities (deferred revenue)		15,863		14,616
Operating lease liabilities		2,073		2,299
Total current liabilities		47,958		54,889
Long-term deferred tax liability, net		8,992		7,325
Operating lease liabilities		1,180		1,474
Total liabilities		58,130		63,688
Shareholders' equity		150,315		143,853
Total liabilities and shareholders' equity	$	208,445	$	207,541

Page 6 of 7 - The Hackett Group, Inc. Announces First Quarter Results

The Hackett Group, Inc.

SUPPLEMENTAL FINANCIAL DATA

(unaudited)

	Quarter Ended
	April 1,			December 31,			April 2,
	2022			2021			2021
Revenue Breakdown by Group:
(in thousands)
S&BT (1)	$	29,980		$	28,642		$	25,759
EEA (2)		37,965			35,006			32,192
International (3)		7,719			6,584			5,535
Total revenue	$	75,664		$	70,232		$	63,486
Revenue Concentration:
(% of total revenue)
Top customer		7	%		6	%		3	%
Top 5 customers		16	%		15	%		13	%
Top 10 customers		24	%		22	%		22	%
Key Metrics and Other Financial Data:
Total Company:
Consultant headcount		1,141			1,106			963
Total headcount		1,351			1,308			1,167
Days sales outstanding (DSO)		61			66			55
Cash provided by operating activities (in thousands)	$	6,054		$	19,885		$	5,895
Depreciation (in thousands)	$	802		$	809		$	874
Amortization (in thousands)	$	144		$	233		$	261
Capital expeditures (in thousands)	$	993		$	986		$	525
Remaining Plan authorization:
Shares purchased (in thousands)		31			10			136
Cost of shares repurchased (in thousands)	$	635		$	224		$	2,106
Average price per share of shares purchased	$	20.50		$	21.64		$	15.45
Remaining Plan authorization (in thousands)	$	10,609		$	11,244		$	2,178
Shares Purchased to Satisfy Employee Net Vesting Obligations (4):
Shares purchased (in thousands)		126			998			108
Cost of shares purchased (in thousands)	$	2,433		$	19,767		$	1,606
Average price per share of shares purchased	$	19.27		$	19.81		$	14.85

(1) Strategy and Business Transformation Group (S&BT) includes the results of our IP as-a-service offerings, which includes our North America Executive Advisory Programs, our Benchmarking Services and our Business Transformation Practices.

(2) ERP, EPM and Analytics Solutions (EEA) includes the results of our North America Oracle EEA and SAP Solutions Practices and One Stream.

(3) International Groups include the results of our S&BT and EEA Practices, primarily in Europe.

(4) The share repurchases to satisfy employee net vesting obligations in the quarter ended December 31, 2021, included the net exercise of 2.9 million SARs.

Page 7 of 7 - The Hackett Group, Inc. Announces First Quarter Results

The Hackett Group, Inc.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(in thousands, except per share data)
(unaudited)
	Quarter Ended
---	---	---	---	---	---
	April 1,		April 2,
	2022		2021
GAAP NET INCOME	$	10,505	$	6,361
Adjustments (1):
Loss from discontinued operations (net of taxes) (2)		-		7
Non-cash stock compensation expense (3)		2,595		2,339
Acquisition-related compensation expense (4)		-		11
Acquisition-related non-cash stock compensation expense (4)		4		248
Amortization of intangible assets (5)		144		261
ADJUSTED NET INCOME BEFORE INCOME TAXES (1)		13,248		9,227
Tax effect of adjustments above (6)		695		710
Adjusted income tax expense (benefit) (7)		460		(248	)
ADJUSTED NET INCOME (1)	$	12,093	$	8,765
GAAP diluted net income per common share	$	0.33	$	0.19
Adjusted diluted net income per common share (1)	$	0.38	$	0.27
Weighted average common and common equivalent shares outstanding		31,844		32,769

____________________________________________________________________________________________________________

(1) The Company provides adjusted earnings results (which exclude the amortization of intangible assets, non-cash stock compensation expense, acquisition-related one-time expense, restructuring charges, asset impairments, and include a normalized tax rate, which is our long-term projected cash tax rate) as a complement to results provided in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP results are provided to enhance the users' overall understanding of the Company's current financial performance and its prospects for the future. The Company believes the non-GAAP results provide useful information to both management and investors and by excluding certain expenses that it believes are not indicative of its core operating results. The non-GAAP measures are included to provide investors and management with an alternative method for assessing operating results in a manner that is focused on the performance of ongoing operations and to provide a more consistent basis for comparison between quarters. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting in future periods. In addition, since the Company has historically reported non-GAAP results to the investment community, it believes the continued inclusion of non-GAAP results provides consistency in its financial reporting. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP.

(2) Discontinued operations relate to the discontinuance of the Company's European Working Capital group, which is adjusted from the GAAP net income as it is not part of the Company's ongoing results of operations.

(3) Non-cash stock compensation expense is accounted for under Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation.  The Company excludes stock-based compensation expense and the related tax effects for the purposes of adjusted net income and adjusted diluted earnings per share.  The Company believes that non-GAAP measures of profitability, which exclude stock-based compensation, are widely used by investors.

(4) The Company incurs cash and stock compensation expense for acquisition related consideration that is recognized over time under GAAP.  The Company believes excluding these amounts more consistently present its ongoing results of operations because they are related to acquisitions and not due to normal operating activities. The acquisition-related non-cash stock compensation expense is also accounted for under Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation.

(5) The Company has incurred expense on amortization of intangible assets related to various acquisitions.  The Company excludes the effect of the amortization of intangibles from our adjusted results in order to more consistently present its ongoing results of operations.

(6) The adjustment for the income tax expense is based on the accounting treatment and income tax rate for the jurisdiction of each item (the impact of non-cash stock compensation was $0.7 million and $0.7 million in 2022 and 2021, respectively, and the impact of intangible amortization was $29 thousand and $52 thousand in 2022 and 2021, respectively).

(7) To compute adjusted net income, the Company has reflected an adjustment to arrive at an adjusted effective tax rate of 25% after taking into consideration the tax effect of adjusted items reflected in the Reconciliation of GAAP to Non-GAAP Measures.