HCKT Hackett Group Inc

 

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 2, 2024

 

 

The Hackett Group, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

FLORIDA		333-48123		65-0750100
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

1001 Brickell Bay Drive, Suite 3000 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 7, 2024, The Hackett Group, Inc. (the “Company”) issued a press release setting forth its consolidated financial results for the first fiscal quarter ended March 29, 2024. 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 2024 Annual Meeting of Shareholders of the Company was held on May 2, 2024. Matters submitted to shareholders at the meeting and the voting results thereof were as follows:

Proposal 1 - Election of Director. The shareholders of the Company elected the director nominee named below to serve until the 2027 Annual Meeting of Shareholders and until his or her successor is duly elected and qualified. The following is a breakdown of the voting results:

									BROKER
DIRECTOR		FOR		AGAINST		ABSTAIN			NON-VOTES
Maria A. Bofill		21,227,735		1,706,559		13,558			1,662,428

									BROKER
DIRECTOR		FOR		AGAINST		ABSTAIN			NON-VOTES
David N. Dungan		21,106,010		1,810,310		31,532			1,662,428

									BROKER
DIRECTOR		FOR		AGAINST		ABSTAIN			NON-VOTES
Richard N. Hamlin		16,896,269		6,020,031		31,552			1,662,428

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 1,200,000 shares, and (ii) increase the total number of shares authorized for issuance under the Plan by 1,200,000 shares. The following is a breakdown of the voting results:

						BROKER
FOR		AGAINST		ABSTAIN		NON-VOTES
22,545,974		359,916		41,962		1,662,428

Proposal 3 – 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
22,671,861		260,616		15,375		1,662,428

Proposal 4 – 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 27, 2024. The following is a breakdown of the voting results:

						BROKER
FOR		AGAINST		ABSTAIN		NON-VOTES
24,162,844		415,815		31,621		-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

---

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit Number		Description
99.1		Press Release of The Hackett Group, Inc., dated May 7, 2024
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 7, 2024				By:		/s/ Robert A. Ramirez
						Robert A. Ramirez
						Executive Vice President, Finance and Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

---

 

Contact:

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

The Hackett Group Announces First Quarter 2024 Results

MIAMI, FL (May 7, 2024) – The Hackett Group, Inc. (NASDAQ: HCKT), a leading benchmarking, executive advisory and strategic consultancy firm that enables organizations to achieve Digital World Class® performance, today announced its financial results for the first quarter, which ended on March 29, 2024.

Financial Highlights

“We reported solid operating results which met or exceeded our previously provided guidance. This was accomplished while aggressively pivoting to the emerging Gen AI consulting demand leveraging our recently launched AI XPLR platform and continuing our investment in our Executive Advisory offerings,” stated Ted A. Fernandez, Chairman & CEO of The Hackett Group, Inc. “AI XPLR, our AI ideation and assessment platform, is continuing to receive very favorable feedback and has led to a significant number of client meetings, and a number of new AI projects. We expect this activity to increase throughout the balance of the year as we continue to extend the AI capabilities of our associates and our AI XPLR platform.”

---

Business Outlook for the Second Quarter of 2024

Based on the Company’s current outlook:

Conference Call and Webcast Details

Use of Non-GAAP Financial Measures

The Company provides adjusted earnings results (which historically has excluded the loss from discontinued operations, non-cash stock-based compensation expense, acquisition-related compensation expense, acquisition-related non-cash stock-based compensation expense, restructuring charges and reversals, amortization of intangible assets, and any one-time charges or benefits and includes a GAAP 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 its ongoing primary operations and to provide a consistent basis for comparison between quarters. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting. The presentation of this additional non-GAAP information should be considered in addition to, and not as a substitute for or superior to, any 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 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, non-cash stock-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, Inc. (NASDAQ: HCKT) is a leading benchmarking, executive advisory and strategic consultancy firm that enables organizations to achieve Digital World Class® performance. Using AI XPLRä – our AI assessment platform – our experienced professionals guide organizations to harness the power of Gen AI to digitally transform their operations and achieve quantifiable, breakthrough results, allowing us to be key architects of their Gen AI journey.

Our expertise is grounded in unparalleled best practices insights from benchmarking the world’s leading businesses – including 97% of the Dow Jones Industrials, 89% of the Fortune 100, 70% of the DAX 40 and 55% of the FTSE 100 – and are delivered leveraging our Digital Transformation Platform, Hackett Connectä and Quantum Leap®.

For more information on The Hackett Group, visit: https://www.thehackettgroup.com/; email info@thehackettgroup.com; or call (770) 225-3600.

# # #

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

Cautionary Statement Regarding “Forward-Looking” Statements

This release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements including without limitation, words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” seeks,” “estimates,” or other similar phrases or variations of such words or similar expressions indicating, present or future anticipated or expected occurrences or outcomes are intended to identify such forward-looking statements. Forward-looking statements are not statements of historical fact and involve known and unknown risks, uncertainties and other factors that may cause the Company’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 may impact such forward-looking statements include without limitation, the ability of The Hackett Group to effectively market its artificial intelligence, digital transformation and other consulting services, competition from other consulting and technology companies that may have or develop in the future, similar offerings, the commercial viability of The Hackett Group and its services as well as other risk detailed in The Hackett Group’s reports filed with the United States Securities and Exchange Commission. The Hackett Group does not undertake any duty to update this release or any forward-looking statements contained herein.

---

The Hackett Group, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

		Quarter Ended
		March 29,				March 31,
		2024				2023
Revenue:
Revenue before reimbursements		$	75,727			$	69,831
Reimbursements			1,460				1,398
Total revenue			77,187				71,229
Costs and expenses:
Cost of service:
Personnel costs before reimbursable expenses (includes $1,393 and $1,526 of non-cash stock based compensation expense in the quarters ended March 29, 2024 and March 31, 2023, respectively)			45,771				43,143
Reimbursable expenses			1,460				1,398
Total cost of service			47,231				44,541
Selling, general and administrative costs (includes $1,206 and $921 of non-cash stock based compensation expense in the quarters ended March 29, 2024 and March 31, 2023, respectively)			18,329				15,436
Legal settlement and related costs			102				-
Total costs and operating expenses			65,662				59,977
Operating income			11,525				11,252
Other expense, net:
Interest expense, net			(472	)			(859	)
Income before income taxes			11,053				10,393
Income tax expense			2,322				2,232
Net income		$	8,731			$	8,161
Basic net income per common share:
Income per common share		$	0.32			$	0.30
Weighted average common shares outstanding			27,422				27,026
Diluted net income per common share:
Income per common share		$	0.32			$	0.30
Weighted average common and common equivalent shares outstanding			27,676				27,269

 

---

 

The Hackett Group, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

		March 29,				December 29,
		2024				2023
ASSETS
Current assets:
Cash		$	12,958			$	20,957
Accounts receivable and contract assets, net			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
Long-term deferred tax liability, net			10,133				8,118
Long-term debt			30,729				32,711
Operating lease liabilities			678				631
Total liabilities			85,836				91,348
Shareholders' equity			93,481				90,080
Total liabilities and shareholders' equity		$	179,317			$	181,428

 

 

 

---

 

The Hackett Group, Inc.

SEGMENT PROFIT

(in thousands)

(unaudited)

 

			Quarter Ended
			March 29,				March 31,
			2024				2023
	Global S&BT (1):
	Total revenue (4)		$	40,892			$	42,335
	Segment profit (5)			10,053				13,807
	Oracle Solutions (2):
	Total revenue (4)		$	21,729			$	17,168
	Segment profit (5)			5,261				3,049
	SAP Solutions (3):
	Total revenue (4)		$	14,566			$	11,726
	Segment profit (5)			4,882				2,634
	Total Company:
	Total revenue (4)		$	77,187			$	71,229
	Total segment profit		$	20,196			$	19,490
	Items not allocated to segment level (5):
	Corporate general and administrative expenses			5,028				4,961
	Non-cash stock based compensation expense			2,599				2,447
	Legal settlement and related costs			102				-
	Depreciation expense			942				830
	Interest expense, net			472				859
	Income before taxes		$	11,053			$	10,393

 

(1) Global S&BT includes the results of our strategic businesses consulting practices, including Strategy and Business Transformation Consulting, Benchmarking, Business Advisory Services, IP as-a-Service and OneStream.

(2) Oracle Solutions includes the results of our EPM/ERP and AMS practices.

(3) SAP Solutions includes the results of our SAP applications and related SAP service offerings.

(4) Total revenue includes reimbursable expenses, which are project travel-related expenses passed through to a client with no associated operating margin.

(5) Segment profits consist of the revenue generated by the segment, less the direct costs of revenue and selling, general and administrative expenses that are incurred directly by the segment. Items not allocated to the segment level include corporate costs related to administrative functions that are performed in a centralized manner that are not attributable to a particular segment. Items not allocated to the segment level include corporate general and administrative expenses, non-cash stock based compensation expense, depreciation and amortization expense, restructuring and asset impairment charge (settlement), legal settlement and related costs, interest expense and foreign currency gains and losses. Corporate general and administrative expenses primarily include costs related to business support functions including accounting and finance, human resources, legal, information technology and office administration. Corporate general and administrative expenses exclude one-time, non-recurring expenses and benefits.

 

 

---

 

The Hackett Group, Inc.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(in thousands, except per share data)

(unaudited)

 

		Quarter Ended
		March 29,				March 31,
		2024				2023
GAAP NET INCOME		$	8,731			$	8,161
Adjustments (1):
Non-cash stock based compensation expense (2)			2,599				2,444
Acquisition-related non-cash stock based compensation expense (3)			-				3
Legal settlement and related costs			102				-
ADJUSTED NET INCOME BEFORE INCOME TAXES ON ADJUSTMENTS (1)			11,432				10,608
Tax effect of adjustments above (4)			708				646
ADJUSTED NET INCOME (1)		$	10,724			$	9,962
GAAP diluted net income per common share		$	0.32			$	0.30
Adjusted diluted net income per common share (1)		$	0.39			$	0.37
Weighted average common and common equivalent shares outstanding			27,676				27,269

 

(1) The Company provides adjusted earnings results (which excludes non-cash stock-based compensation expense, acquisition-related non-cash stock-based compensation expense, legal settlement and related costs and includes a GAAP 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 its ongoing primary operations and to provide a consistent basis for comparison between quarters. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting. The presentation of this additional non-GAAP information should be considered in addition to, and not as a substitute for or superior to, any results prepared in accordance with GAAP.

(2) Non-cash stock based compensation expense is accounted for under Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation. The Company excludes non-cash 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 non-cash stock based compensation, are widely used by investors.

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

(4) 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 based compensation expense was $0.7 million and $0.6 million in 2024 and 2023, respectively. The impact of the legal settlement and related costs were $27 thousand in 2024.

 

---

The Hackett Group, Inc.

SUPPLEMENTAL FINANCIAL DATA

(unaudited)

		Quarter Ended
		March 29,				December 29,				March 31,
		2024				2023				2023
Segment Total Revenue and Revenue Before Reimbursements (in thousands):
Global S&BT:
Total revenue		$	40,892			$	42,162			$	42,335
Reimbursements			639				566				668
Revenue before reimbursements		$	40,253			$	41,596			$	41,667
Oracle Solutions:
Total revenue		$	21,729			$	18,998			$	17,168
Reimbursements			661				556				467
Revenue before reimbursements		$	21,068			$	18,442			$	16,701
SAP Solutions:
Total revenue		$	14,566			$	11,243			$	11,726
Reimbursements			160				114				263
Revenue before reimbursements		$	14,406			$	11,129			$	11,463
Total segment revenue:
Total revenue		$	77,187			$	72,403			$	71,229
Reimbursements			1,460				1,236				1,398
Revenue before reimbursements		$	75,727			$	71,167			$	69,831
Revenue Concentration:
(% of total revenue)
Top customer			9	%			7	%			5	%
Top 5 customers			24	%			18	%			16	%
Top 10 customers			34	%			27	%			24	%
Key Metrics and Other Financial Data:
Total Company:
Consultant headcount			1,154				1,168				1,128
Total headcount			1,414				1,416				1,368
Days sales outstanding (DSO)			68				65				66
Cash provided by (used in) operating activities (in thousands)		$	2,792			$	25,587			$	(3,063	)
Depreciation (in thousands)		$	942			$	894			$	830
Capital expenditures (in thousands)		$	948			$	898			$	1,063
Remaining Plan authorization:
Shares purchased (in thousands)			43				-				37
Cost of shares repurchased (in thousands)		$	1,055			$	—			$	711
Average price per share of shares purchased		$	24.34			$	—			$	18.98
Remaining Plan authorization (in thousands)		$	12,883			$	13,938			$	13,961
Shares Purchased to Satisfy Employee Net Vesting Obligations:
Shares purchased (in thousands)			162				3				162
Cost of shares purchased (in thousands)		$	3,782			$	71			$	3,526
Average price per share of shares purchased		$	23.36			$	23.08			$	21.75

 

---

v3.24.1.u1

Document and Entity Information	May 02, 2024
Cover [Abstract]
Amendment Flag	false
Entity Central Index Key	0001057379
Document Type	8-K
Document Period End Date	May 02, 2024
Entity Registrant Name	Hackett Group, Inc.
Entity Incorporation, State or Country Code	FL
Entity File Number	333-48123
Entity Tax Identification Number	65-0750100
Entity Address, Address Line One	1001 Brickell Bay Drive
Entity Address, Address Line Two	Suite 3000
Entity Address, City or Town	Miami
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33131
City Area Code	305
Local Phone Number	375-8005
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Title of 12(b) Security	Common Stock, par value $.001 per share
Trading Symbol	HCKT
Security Exchange Name	NASDAQ

---