Hackett Group Files 10-Q for Q2 2024

TL;DR

Hackett Group's Q2 10-Q is in: Revenue, costs, stock buybacks detailed. #Finance

AI Summary

Hackett Group, Inc. filed its 10-Q for the period ending June 28, 2024. The filing details financial performance, including revenue and costs, and mentions activities like stock repurchases and tax withholdings. The company, formerly Answerthink Inc., is based in Miami, Florida.

Why It Matters

This filing provides investors with an update on Hackett Group's financial health and operational activities during the second quarter of 2024, impacting investment decisions.

Risk Assessment

Risk Level: medium — The filing contains financial data and operational details that could influence stock price and investor confidence.

Key Numbers

• 2024-06-28 — Period End Date (Financial reporting period)
• 2023-04-01 to 2023-06-30 — Stock Repurchase Period (Specific period for stock repurchase activity)
• 2023-12-30 to 2024-06-28 — Reimbursements Period (Period for reimbursements)
• 2022-12-31 to 2023-06-30 — Revenue Period (Period for revenue reporting)

Key Players & Entities

• HACKETT GROUP, INC. (company) — Filer
• 20240628 (date) — Period of Report
• ANSWERTHINK INC (company) — Former Company Name
• 3053758005 (dollar_amount) — Business Phone Number

FAQ

Filing Documents

• hckt-20240628.htm (10-Q) — 1595KB
• hckt-ex10_2.htm (EX-10.2) — 1595KB
• hckt-ex31_1.htm (EX-31.1) — 18KB
• hckt-ex31_2.htm (EX-31.2) — 18KB
• hckt-ex32.htm (EX-32) — 16KB
• 0000950170-24-092921.txt ( ) — 8262KB
• hckt-20240628.xsd (EX-101.SCH) — 790KB
• hckt-20240628_htm.xml (XML) — 1196KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION Page Item 1.

Financial Statements

Financial Statements Consolidated Balance Sheets as of June 28, 2024 (unaudited) and December 29, 2023 3 Consolidated Statements of Operations for the Three and Six Months Ended June 28, 2024, and June 30, 2023, (unaudited) 4 Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 28, 2024, and June 30, 2023, (unaudited) 5 Consolidated Statements of Cash Flows for the Six Months Ended June 28, 2024, and June 30, 2023, (unaudited) 6 Consolidated Statements of Shareholders' Equity for the Three and Six Months Ended June 28, 2024, and June 30, 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) June 28, December 29, 2024 2023 ASSETS Current assets: Cash $ 19,145 $ 20,957 Accounts receivable and contract assets, net of allowance of $ 1,513 and $ 1,072 at June 28, 2024 and December 29, 2023, respectively 58,133 52,113 Prepaid expenses and other current assets 2,981 2,368 Total current assets 80,259 75,438 Property and equipment, net 19,990 20,044 Other assets 375 285 Goodwill 84,110 84,242 Operating lease right-of-use assets 2,790 1,419 Total assets $ 187,524 $ 181,428 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 4,290 $ 7,557 Accrued expenses and other liabilities 24,048 26,801 Contract liabilities 13,299 12,087 Income tax payable 4,242 2,360 Operating lease liabilities 927 1,083 Total current liabilities 46,806 49,888 Non-current deferred tax liability, net 9,626 8,118 Long term debt, net 26,747 32,711 Operating lease liabilities 2,122 631 Total liabilities 85,301 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; 61,000,200 and 60,581,418 shares issued at June 28, 2024 and December 29, 2023, respectively 61 61 Additional paid-in capital 319,235 317,034 Treasury stock, at cost, 33,358,277 and 33,314,926 shares June 28, 2024 and December 29, 2023, respectively ( 275,655 ) ( 274,600 ) Retained earnings 72,226 60,820 Accumulated other comprehensive loss ( 13,644 ) ( 13,235 ) Total shareholders' equity 102,223 90,080 Total liabilities and shareholders' equity $ 187,524 $ 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 and six months ended June 28, 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 busines

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 quarter and six months ended June 28, 2024, the Company recog nized $ 3.3 million and $ 9.0 million, respecti

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 ar

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