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): November 7, 2022
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 | Name of each exchange | ||
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 1.01 Entry into a Material Definitive Agreement.
On November 7, 2022, The Hackett Group, Inc. (the “Company”) entered into a third amended and restated credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and the lenders party thereto, pursuant to which the lenders agreed to amend and restate the Second Amended and Restated Credit Agreement, dated May 9, 2016, with Bank of America, N.A., as lender, in order to extend the maturity date of the revolving credit facility and provide the Company with an additional $55 million in borrowing capacity, for an aggregate amount of up to $100 million from time to time pursuant to a revolving line of credit (the “Credit Facility”). As of November 7, 2022, there were no outstanding balances under the Credit Facility. The Credit Facility matures on November 7, 2027.
The obligations of the Company under the Credit Agreement are guaranteed by existing and future material domestic subsidiaries of the Company (the “Guarantors”) and are secured by substantially all of the existing and future property and assets of the Company and the Guarantors.
The interest rates per annum applicable to loans under the Credit Facility will be, at the Company’s option, equal to either a base rate or a Bloomberg Short-Term Bank Yield Index (“BSBY”) rate, in each case, plus an applicable margin percentage. The applicable margin percentage is determined from time to time under the Credit Agreement based on a consolidated leverage ratio, and ranges from 1.50% to 2.25% per annum in the case of BSBY rate advances, and 0.75% to 1.50% per annum in the case of base rate advances. The initial applicable margin percentage is 1.75% per annum in the case of BSBY rate advances, and 1.00% per annum in the case of base rate advances. A commitment fee is also payable on unused commitments of the Credit Facility, and varies between 0.125% and 0.50% per annum depending on a consolidated leverage ratio, with the initial level being 0.250% per annum.
The Credit Agreement contains customary representations, warranties, indemnities and affirmative and negative covenants. The negative covenants include, among others, certain limitations on the ability to: incur liens and indebtedness; consummate mergers, consolidations or asset sales; make guarantees and investments; and pay dividends or distributions in respect of the Company’s shares. In addition, the Credit Agreement contains financial covenants that require the Company to maintain, on a consolidated basis (i) a consolidated fixed charge coverage ratio of at least 1.50 to 1.00, and (ii) a consolidated leverage ratio of not more than 3.50 to 1.00, in each case as calculated in accordance with the Credit Agreement.
The Credit Agreement also includes customary events of default, including, among others, the failure to make payments under the Credit Facility when due, bankruptcy, certain judgments, breaches of representations and warranties, breaches of covenants and the occurrence of certain events, including cross default to other indebtedness of the Company and its subsidiaries.
The preceding description of the Credit Agreement is a summary and is qualified in its entirety by the Credit Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated by reference herein.
Item 2.02 Results of Operations and Financial Condition.
On November 8, 2022, the Company issued a press release setting forth its consolidated financial results for the third fiscal quarter ended September 30, 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 (the “SEC”) and shall not be deemed “filed” with the SEC nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure contained in Item 1.01 is incorporated herein by reference.
Item 8.01 Other Events.
The press release referred to above also announced that the Company’s Board of Directors approved an additional $120 million to its share repurchase plan authorization and the Company plans to launch a modified “Dutch auction” tender offer on November 9, 2022 to purchase up to $120 million in value of its common stock, at a price ranging from $20.50 to $23.50.
Additional Information Regarding the Tender Offer
The tender offer described above has not yet commenced, and there can be no assurances that the Company will commence the tender offer on the terms described or at all. On the commencement date of the tender offer, the Company will file a tender offer statement on Schedule TO, including an offer to purchase, letter of transmittal and other tender offer materials, with the SEC. The tender offer will only be made pursuant to the offer to purchase, the related letter of transmittal and the other tender offer materials filed as part of the Schedule TO. When available, shareholders should read carefully the offer to purchase, the related letter of transmittal and other tender offer materials because they will contain important information, including the terms and conditions of the tender offer. Once the tender offer commences, shareholders will be able to obtain a free copy of the tender offer statement on Schedule TO, the offer to purchase, letter of transmittal and other documents that the Company will be filing with the SEC at the SEC’s website at www.sec.gov or from the Company’s information agent for the tender offer.
Item 9.01 Financial Statements and Exhibits.
(d) | Exhibits |
Exhibit Number | Description | |
10.1 | Third Amended and Restated Credit Agreement, dated November 7, 2022, among The Hackett Group, Inc., the material domestic subsidiaries of The Hackett Group, Inc. named on the signature pages thereto and Bank of America, N.A., as administrative agent, and the lenders party thereto | |
99.1 | Press Release of The Hackett Group, Inc., dated November 8, 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: November 8, 2022 | By: | /s/ Robert A. Ramirez | ||||
Robert A. Ramirez | ||||||
Executive Vice President, Finance and Chief Financial Officer |