Hackett Group Files 10-Q, Details Financials and Stock Repurchases

TL;DR

Hackett Group 10-Q filed: financials updated, stock buybacks noted.

AI Summary

Hackett Group, Inc. filed its 10-Q for the period ending September 27, 2024. The company reported its financial performance and condition, including details on its retained earnings, accumulated other comprehensive income, and treasury stock. The filing also references stock repurchase programs initiated by directors as of December 31, 2022, and September 29, 2023.

Why It Matters

This filing provides investors with a detailed look at Hackett Group's financial health and strategic decisions, such as stock repurchases, which can impact shareholder value.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing standard financial disclosures.

Key Numbers

• N/A — Revenue (Specific revenue figures are not detailed in the provided header information.)
• N/A — Net Income (Specific net income figures are not detailed in the provided header information.)
• N/A — Earnings Per Share (Specific EPS figures are not detailed in the provided header information.)

Key Players & Entities

• Hackett Group, Inc. (company) — Filer of the 10-Q
• September 27, 2024 (date) — End of the reporting period
• December 31, 2022 (date) — Date related to stock repurchase program
• September 29, 2023 (date) — Date related to stock repurchase program

FAQ

Filing Documents

• hckt-20240927.htm (10-Q) — 1906KB
• hckt-ex31_1.htm (EX-31.1) — 18KB
• hckt-ex31_2.htm (EX-31.2) — 18KB
• hckt-ex32.htm (EX-32) — 17KB
• 0000950170-24-122386.txt ( ) — 7941KB
• hckt-20240927.xsd (EX-101.SCH) — 994KB
• hckt-20240927_htm.xml (XML) — 1557KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION Page Item 1.

Financial Statements

Financial Statements Consolidated Balance Sheets as of September 27, 2024 (unaudited) and December 29, 2023 3 Consolidated Statements of Operations for the Three and Nine Months Ended September 27, 2024, and September 29, 2023, (unaudited) 4 Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 27, 2024, and September 29, 2023, (unaudited) 5 Consolidated Statements of Cash Flows for the Nine Months Ended September 27, 2024, and September 29, 2023, (unaudited) 6 Consolidated Statements of Shareholders' Equity for the Three and Nine Months Ended September 27, 2024, and September 29, 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 20 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 25 Item 4.

Controls and Procedures

Controls and Procedures 25 Item 5. Other Information 25

- OTHER INFORMATION

PART II - OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 26 Item 1A.

Risk Factors

Risk Factors 26 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 26 Item 6. Exhibits 27

— 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) September 27, December 29, 2024 2023 ASSETS Current assets: Cash $ 9,964 $ 20,957 Accounts receivable and contract assets, net of allowance of $ 1,652 and $ 1,072 at September 27, 2024 and December 29, 2023, respectively 61,227 52,113 Prepaid expenses and other current assets 3,659 2,368 Total current assets 74,850 75,438 Property and equipment, net 20,307 20,044 Other assets 367 285 Intangible assets 2,800 - Goodwill 89,417 84,242 Operating lease right-of-use assets 3,010 1,419 Total assets $ 190,751 $ 181,428 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 5,280 $ 7,557 Accrued expenses and other liabilities 26,142 26,801 Contract liabilities 12,572 12,087 Income tax payable 4,323 2,360 Operating lease liabilities 1,173 1,083 Total current liabilities 49,490 49,888 Non-current deferred tax liability, net 8,565 8,118 Long term debt, net 19,739 32,711 Operating lease liabilities 2,041 631 Total liabilities 79,835 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; 61,015,604 and 60,581,418 shares issued at September 27, 2024 and December 29, 2023, respectively 61 61 Additional paid-in capital 322,644 317,034 Treasury stock, at cost, 33,423,164 and 33,314,926 shares September 27, 2024 and December 29, 2023, respectively ( 277,392 ) ( 274,600 ) Retained earnings 77,772 60,820 Accumulated other comprehensive loss ( 12,169 ) ( 13,235 ) Total shareholders' equity 110,916 90,080 Total liabilities and shareholders' equity $ 190,751 $ 1

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 nine months ended September 27, 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. Business Combination On September 16, 2024, the Company executed an agreement to a

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Basis of Presentation and General Information (continued) Amount Useful Life Category (in thousands) (in years) Customer Relationships $ 2,500 5 Technology 200 2 Non-Compete 100 2 Total $ 2,800 The Company recognized $ 53 thousand of transactions costs related to the acquisition and no amortization was recorded in the three months ended September 27, 2024. The amounts recorded for certain assets and liabilities and related disclosures are preliminary in nature and are subject to adjustment as additional information is obtained about their acquisition date fair values. Since the acquisition was only recently completed, the allocation of the purchase price is preliminary and will likely change in future periods as fair value estimates of the assets acquired and liabilities assumed are finalized, including those primarily related to working capital, property and equipment, intangible assets, and taxes. The final determination of the fair values will be completed within the one-year measurement period. Also, in connection with the acquisition, the Company and LeewayHertz 's founder are creating a joint venture whereby The Hackett Group will contribute its AI XPLR platform and LeewayHertz will contribute its ZBrain platform. The integration of AI XPLR and the ZBrain Gen A.I. orchestration solution will enable the joint venture to provide advanced and tailored Gen AI solutions to its clients. The joint venture is expected to be formed by the end of the Company's fiscal year 2024. Segment Reporting Segments are defined as components of a company that engage in business activities from which they earn revenue and incur expenses, and for which separate financial information is available and is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company assesses its

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

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