Hackett Group Files 10-Q for Period Ending March 29, 2024

TL;DR

<b>Hackett Group, Inc. (HCKT) filed its quarterly 10-Q report for the period ending March 29, 2024, detailing financial performance and operational segments.</b>

AI Summary

HACKETT GROUP, INC. (HCKT) filed a Quarterly Report (10-Q) with the SEC on May 8, 2024. The Hackett Group, Inc. filed a 10-Q report for the period ending March 29, 2024. The filing covers the company's financial performance and position. Key financial data points such as revenue, net income, and debt levels are detailed. The report includes information on various segments including Consulting and Software Support & Maintenance. Specific dates related to financial reporting and company events are provided.

Why It Matters

For investors and stakeholders tracking HACKETT GROUP, INC., this filing contains several important signals. This 10-Q filing provides investors with the latest financial snapshot of The Hackett Group, Inc., crucial for understanding its current performance and making informed investment decisions. The detailed segment information allows for an analysis of which business areas are driving revenue and growth, offering insights into the company's strategic focus.

Risk Assessment

Risk Level: low — HACKETT GROUP, INC. shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not indicate any immediate or significant new risks beyond those typically associated with public companies in the consulting sector.

Analyst Insight

Monitor the revenue growth and profitability of the Consulting and Software Support & Maintenance segments in future filings to assess the company's ongoing performance.

Revenue Breakdown

Key Numbers

• 2024-03-29 — Period End Date (Quarterly report period)
• 2024-05-08 — Filing Date (Date the report was filed)
• 8742 — SIC Code (Services-Management Consulting Services)
• FL — State of Incorporation (Company's state of incorporation)
• 1230 — Fiscal Year End (Company's fiscal year end month and day)

Key Players & Entities

• HACKETT GROUP, INC. (company) — Filer name
• HCKT (company) — Ticker symbol
• 2024-03-29 (date) — Period of report
• 2024-05-08 (date) — Filing date
• ANSWERTHINK INC (company) — Former company name
• ANSWERTHINK CONSULTING GROUP INC (company) — Former company name
• 1001 BRICKELL BAY DRIVE (address) — Business address
• MIAMI (location) — Business address city

FAQ

Key Dates

• 2024-03-29: Quarter End Date — End of the reporting period for the 10-Q filing.
• 2024-05-08: Filing Date — Date the 10-Q report was officially submitted to the SEC.

Filing Documents

• hckt-20240329.htm (10-Q) — 1196KB
• hckt-ex31_1.htm (EX-31.1) — 17KB
• hckt-ex31_2.htm (EX-31.2) — 17KB
• hckt-ex32.htm (EX-32) — 16KB
• 0000950170-24-055642.txt (&nbsp;) — 5365KB
• hckt-20240329.xsd (EX-101.SCH) — 794KB
• hckt-20240329_htm.xml (XML) — 858KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION Page Item 1.

Financial Statements

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 )

Notes to Consolidated Financial Statements ( unaudited ) 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 18 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 23 Item 4.

Controls and Procedures

Controls and Procedures 23 Item 5. Other Information 23

- OTHER INFORMATION

PART II - OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 24 Item 1A.

Risk Factors

Risk Factors 24 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 24 Item 6. Exhibits 25

— FINANCI AL INFORMATION

PART I — FINANCI AL INFORMATION

FINANCI AL STATEMENTS

ITEM 1. FINANCI AL STATEMENTS The Hackett Group, Inc. CONSOLIDATED BA LANCE 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. B asis of Presentation and General Information Basis of Presentation The accompanying consolidated financial statements of The Hackett Group , Inc. ("Hackett" or the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and include the Company's accounts and those of its wholly-owned subsidiaries which the Company is required to consolidate. All intercompany transactions and balances have been eliminated in the consolidation. In the opinion of management, the accompanying consolidated financial statements reflect all normal and recurring adjustments which are necessary for a fair presentation of the Company's financial position, results of operations, and cash flows as of the dates and for the periods presented. The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Accordingly, these statements do not include all the disclosures normally required by U.S. GAAP for annual financial statements and should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 29, 2023, included in the Annual Report on Form 10-K filed by the Company with the SEC on March 1, 2024. The consolidated results of operations for the quarter ended March 29, 2024 , are not necessarily indicative of the results to be expected for any future period or for the full fiscal year. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Segment Reporting Segments are defined as components of a company that engage in business activities f

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Basis of Presentation and General Information (continued) Revenue Recognition The Company primarily generates its revenue from providing professional services to its clients. The Company also generates revenue from software sales, software maintenance and support and subscriptions to its executive and best practices advisory programs. A single contract could include one or multiple performance obligations. For those contracts that have multiple performance obligations, the Company allocates the total transaction price to each performance obligation based on its relative standalone selling price. The Company determines the standalone selling price based on the respective selling price of the individual elements when sold separately. Revenue is recognized when control of the goods and services provided are transferred to the Company's customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods and services using the following steps: 1) identify the contract, 2) identify the performance obligations, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract, and 5) recognize revenue as or when the Company satisfies the performance obligations. The Company typically satisfies its performance obligations for professional services over time as the related services are provided. The performance obligations related to software maintenance and support and subscriptions to its executive and best practice advisory programs are typically satisfied evenly over the course of the service period. Other performance obligations, such as software sales, are satisfied at a point in time. The Company generates revenue under four types of billing arrangements: fixed-fee; time-and-materials; executive and best practice advisory services; and software sales and software maintenance and support. In fixed-fee

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Basis of Presentation and General Information (continued) The payment terms and conditions in the Company's customer contracts vary. The agreements entered into in connection with a project, whether time and materials-based or fixed-fee or capped-fee based, typically allow clients to terminate early due to breach or for convenience with 30 days' notice. In the event of termination, the client is contractually required to pay for all time, materials and expenses incurred by the Company through the effective date of the termination. In addition, from time to time the Company enters into agreements with its clients that limit its right to enter into business relationships with specific competitors of that client for a specific time period. These provisions typically prohibit the Company from performing a defined range of services which it might otherwise be willing to perform for potential clients. These provisions are generally limited to six to twelve months and usually apply only to specific employees or the specific project team. Differences between the timing of billings and the recognition of revenue are recognized as either contract assets or contract liabilities in the accompanying consolidated balance sheets. Revenue recognized for services performed but not yet billed to clients is recorded as contract assets and is included within accounts receivable and contract assets. Services not yet performed, however billed to the client and uncollected at period end, are recorded as contract assets and are included within accounts receivable and contract assets. Client prepayments are classified as contract liabilities and recognized over future periods as earned in accordance with the applicable engagement agreement. See Note 3 for the accounts receivable and contract asset balances. During the three months ended March 29, 2024, the Company recog nized $ 5.7 million of revenue as a result of changes in

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Basis of Presentation and General Information (continued) Practical Expedients The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be less than one year. Sales tax collected from customers and remitted to the applicable taxing authorities is accounted for on a net basis, with no impact on revenue. Expense reimbursements that are billable to clients are included in total revenue and are substantially all billed as time-and-material billing arrangements. Therefore, the Company recognizes all reimbursable expenses as revenue as the related services are provided, using the right to invoice practical expedient. Reimbursable expenses are recognized as expenses in the period in which the expense is incurred. Any expense reimbursements that are billable to clients under fixed-fee billing arrangements are recognized in line with the proportionate performance approach. Fair Value The Company's financial instruments consist of cash, accounts receivable and contract assets, accounts payable, accrued expenses and other liabilities, contract liabilities and long-term debt. As of March 29, 2024 and December 29, 2023, the carrying amount of each financial instrument approximated the instrument's respective fair value due to either the short-term nature or the maturity of these instruments. The Company uses significant other observable market data or assumptions (Level 2 inputs as defined in accounting guidance) that it believes market participants would use in pricing debt. The fair value of the debt approximated the carrying amount, using Level 2 inputs, due to th

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