Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Apr. 03, 2015 | 7-May-15 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | HACKETT GROUP, INC. | |
Entity Central Index Key | 1057379 | |
Document Type | 10-Q | |
Document Period End Date | 3-Apr-15 | |
Amendment Flag | FALSE | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | 0 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 29,696,698 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Apr. 03, 2015 | Jan. 02, 2015 |
Current assets: | ||
Cash and cash equivalents | $10,820,000 | $14,608,000 |
Accounts receivable and unbilled revenue, net of allowance of $1,251 and $1,330 at April 3, 2015 and January 2, 2015, respectively | 42,236,000 | 37,421,000 |
Deferred tax asset, net | 2,495,000 | 2,828,000 |
Prepaid expenses and other current assets | 2,294,000 | 2,199,000 |
Total current assets | 57,845,000 | 57,056,000 |
Property and equipment, net | 13,804,000 | 13,753,000 |
Other assets | 5,966,000 | 6,548,000 |
Goodwill, net | 74,658,000 | 75,429,000 |
Total assets | 152,273,000 | 152,786,000 |
Current liabilities: | ||
Accounts payable | 5,422,000 | 7,909,000 |
Accrued expenses and other liabilities | 31,331,000 | 30,901,000 |
Current portion of long-term debt | 1,661,000 | |
Total current liabilities | 38,414,000 | 38,810,000 |
Long-term deferred tax liability, net | 7,056,000 | 5,925,000 |
Long-term debt | 16,602,000 | 18,263,000 |
Total liabilities | 62,072,000 | 62,998,000 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Preferred stock, $.001 par value, 1,250,000 shares authorized; none issued and outstanding | ||
Common stock, $.001 par value, 125,000,000 shares authorized; 53,811,051 and 53,203,395 shares issued at April 3, 2015 and January 2, 2015, respectively | 53,000 | 53,000 |
Additional paid-in capital | 264,308,000 | 264,912,000 |
Treasury stock, at cost, 24,064,835 and 23,989,776 shares April 3, 2015 and January 2, 2015, respectively | -91,988,000 | -91,335,000 |
Accumulated deficit | -74,672,000 | -77,677,000 |
Accumulated comprehensive loss | -7,500,000 | -6,165,000 |
Total shareholders' equity | 90,201,000 | 89,788,000 |
Total liabilities and shareholders' equity | $152,273,000 | $152,786,000 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Apr. 03, 2015 | Jan. 02, 2015 |
In Thousands, except Share data, unless otherwise specified | ||
Consolidated Balance Sheets [Abstract] | ||
Accounts receivable and unbilled revenue, allowance | $1,251 | $1,330 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 1,250,000 | 1,250,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 53,811,051 | 53,203,395 |
Treasury stock, at cost, shares | 24,064,835 | 23,989,776 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | |
Apr. 03, 2015 | Mar. 28, 2014 | |
Revenue: | ||
Revenue before reimbursements | $54,905,000 | $49,418,000 |
Reimbursements | 6,069,000 | 5,487,000 |
Total revenue | 60,974,000 | 54,905,000 |
Cost of service: | ||
Personnel costs before reimbursable expenses (includes $1,309 and $686 of stock compensation expense in the quarters ended April 3, 2015 and March 28, 2014, respectively) | 34,946,000 | 34,184,000 |
Reimbursable expenses | 6,069,000 | 5,487,000 |
Total cost of service | 41,015,000 | 39,671,000 |
Selling, general and administrative costs (includes $515 and $653 of stock compensation expense in the quarters ended April 3, 2015 and March 28, 2014, respectively) | 15,324,000 | 14,235,000 |
Bargain purchase gain from acquisition | -3,015,000 | |
Restructuring costs | 3,604,000 | |
Total costs and operating expenses | 56,339,000 | 54,495,000 |
Income from operations | 4,635,000 | 410,000 |
Other income (expense): | ||
Interest income | 2,000 | 1,000 |
Interest expense | -140,000 | -124,000 |
Income from operations before income taxes | 4,497,000 | 287,000 |
Income tax expense (benefit) | 1,492,000 | -118,000 |
Net income | $3,005,000 | $405,000 |
Basic net income per common share: | ||
Income per common share from operations | $0.11 | $0.01 |
Weighted average common shares outstanding | 28,551,665 | 29,119,505 |
Diluted net income per common share: | ||
Income per common share from operations | $0.10 | $0.01 |
Weighted average common and common equivalent shares outstanding | 29,917,316 | 29,868,702 |
Consolidated_Statements_of_Ope1
Consolidated Statements of Operations (Parenthetical) (USD $) | 3 Months Ended | |
Apr. 03, 2015 | Mar. 28, 2014 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total share based compensation | $1,825,000 | $1,339,000 |
Cost of Sales [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total share based compensation | 1,309,000 | 686,000 |
Selling General and Administrative [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Total share based compensation | $515,000 | $653,000 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Apr. 03, 2015 | Mar. 28, 2014 |
Consolidated Statements of Comprehensive (Loss) Income [Abstract] | ||
Net income | $3,005 | $405 |
Foreign currency translation adjustment | -1,336 | 379 |
Total comprehensive income | $1,669 | $784 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
Apr. 03, 2015 | Mar. 28, 2014 | |
Cash flows from operating activities: | ||
Net income | $3,005,000 | $405,000 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation expense | 612,000 | 654,000 |
Amortization expense | 547,000 | 551,000 |
Amortization of debt issuance costs | 14,000 | 23,000 |
Non-cash compensation expense | 1,825,000 | 1,339,000 |
Bargain purchase gain from acquisition | -3,015,000 | |
Restructuring costs | 3,604,000 | |
Provision for doubtful accounts | 159,000 | 253,000 |
Loss on foreign currency translation | 206,000 | 46,000 |
Changes in assets and liabilities, net of effects from acquisitions: | ||
Increase in accounts receivable and unbilled revenue | -5,136,000 | -1,262,000 |
Increase in prepaid expenses and other assets | -74,000 | -392,000 |
Decrease in accounts payable | -2,487,000 | -3,038,000 |
Decrease in accrued expenses and other liabilities | -1,076,000 | -7,155,000 |
Net cash used in operating activities | -2,405,000 | -7,987,000 |
Cash flows from investing activities: | ||
Purchases of property and equipment | -725,000 | -443,000 |
Cash consideration paid for acquisition | -2,700,000 | |
Cash acquired in acquisition of business | 522,000 | |
Increase in restricted cash | -300,000 | |
Net cash used in investing activities | -725,000 | -2,921,000 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 254,000 | |
Proceeds from borrowings | 9,500,000 | |
Repurchases of common stock | -653,000 | -4,363,000 |
Net cash (used in) provided by financing activities | -653,000 | 5,391,000 |
Effect of exchange rate on cash | -6,000 | 12,000 |
Net decrease in cash and cash equivalents | -3,788,000 | -5,505,000 |
Cash and cash equivalents at beginning of year | 14,608,000 | 18,199,000 |
Cash and cash equivalents at end of period | 10,820,000 | 12,694,000 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 164,000 | 413,000 |
Cash paid for interest | $122,000 | $107,000 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Shares issued to Sellers of acquired business | 1,000,000 |
Basis_of_Presentation_and_Gene
Basis of Presentation and General Information | 3 Months Ended |
Apr. 03, 2015 | |
Basis of Presentation and General Information [Abstract] | |
Basis Of Presentation And General Information | 1. Basis 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 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 January 2, 2015, included in the Annual Report on Form 10-K filed by the Company with the SEC. The consolidated results of operations for the quarter ended April 3, 2015, 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. | |
Fair Value | |
The Company’s financial instruments consist of cash and cash equivalents, accounts receivable and unbilled revenue, accounts payable, accrued expenses and other liabilities and debt. As of April 3, 2015 and January 2, 2015, the carrying amount of each financial instrument, with the exception of debt, approximated the instrument’s respective fair value due to the short-term nature and 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 the short-term variable interest rates based on market rates. | |
Business Combinations | |
The Company applies the provisions of ASC 805, Business Combinations, in the accounting for its acquisitions, which requires recognition of the assets acquired and the liabilities assumed at their acquisition date fair values, separately from goodwill. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition date fair values of the tangible and identifiable intangible assets acquired and liabilities assumed. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, its estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, that may be up to 12 months from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with a corresponding adjustment to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, the impact of any subsequent adjustments is included in the consolidated statements of operations. | |
Recently Issued Accounting Standards | |
In May 2014, the FASB issued guidance on revenue recognition, which provides for a single, principles-based model for revenue recognition and replaces the existing revenue recognition guidance. The guidance is effective for annual and interim periods beginning on or after December 15, 2016 and will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective. It permits the use of either a retrospective or cumulative effect transition method and early adoption is not permitted. The Company has not yet selected a transition method and is in the process of evaluating the effect this standard will have on its consolidated financial statements and related disclosures. | |
1. Basis of Presentation and General Information (continued) | |
Reclassifications | |
Certain prior period amounts in the consolidated financial statements, and notes thereto, have been reclassified to conform to current period presentation. | |
Net_Income_Per_Common_Share
Net Income Per Common Share | 3 Months Ended | ||||||
Apr. 03, 2015 | |||||||
Net Income Per Common Share [Abstract] | |||||||
Net (Loss) Income Per Common Share | 2. Net Income per Common Share | ||||||
Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. With regard to common stock subject to vesting requirements and restricted stock units issued to the Company’s employees and non-employee members of its Board of Directors, the calculation includes only the vested portion of such stock and units. | |||||||
Dilutive net income per common share is computed by dividing net income by the weighted average number of common shares outstanding, increased by the assumed conversion of other potentially dilutive securities during the period. | |||||||
The following table reconciles basic and dilutive weighted average common shares: | |||||||
Quarter Ended | |||||||
April 3, | March 28, | ||||||
2015 | 2014 | ||||||
Basic weighted average common shares outstanding | 28,551,665 | 29,119,505 | |||||
Effect of dilutive securities: | |||||||
Unvested restricted stock units and common stock subject to | |||||||
vesting requirements issued to employees and non-employees | 847,951 | 739,752 | |||||
Common stock issuable upon the exercise of stock options | 517,700 | 9,445 | |||||
Dilutive weighted average common shares outstanding | 29,917,316 | 29,868,702 | |||||
Approximately 0.6 million and 0.4 million shares of common stock equivalents were excluded from the computations of diluted net income per common share for the quarters ended April 3, 2015 and March 28, 2014, respectively, as their inclusion would have had an anti-dilutive effect on diluted net income per common share. | |||||||
Accounts_Receivable_And_Unbill
Accounts Receivable And Unbilled Revenue, Net | 3 Months Ended | ||||||
Apr. 03, 2015 | |||||||
Accounts Receivable And Unbilled Revenue, Net [Abstract] | |||||||
Accounts Receivable And Unbilled Revenue, Net | |||||||
3. Accounts Receivable and Unbilled Revenue, Net | |||||||
Accounts receivable and unbilled revenue, net, consisted of the following (in thousands): | |||||||
April 3, | January 2, | ||||||
2015 | 2015 | ||||||
Accounts receivable | $ | 29,553 | $ | 28,154 | |||
Unbilled revenue | 13,934 | 10,597 | |||||
Allowance for doubtful accounts | -1,251 | -1,330 | |||||
Accounts receivable and unbilled revenue, net | $ | 42,236 | $ | 37,421 | |||
Accounts receivable is net of uncollected advanced billings. Unbilled revenue includes recognized recoverable costs and accrued profits on contracts for which billings had not been presented to clients. | |||||||
Accrued_Expenses_And_Other_Lia
Accrued Expenses And Other Liabilities | 3 Months Ended | ||||||
Apr. 03, 2015 | |||||||
Accrued Expenses And Other Liabilities [Abstract] | |||||||
Accrued Expenses And Other Liabilities | |||||||
4. Accrued Expenses and Other Liabilities | |||||||
Accrued expenses and other liabilities consisted of the following (in thousands): | |||||||
April 3, | 2-Jan | ||||||
2015 | 2015 | ||||||
Accrued compensation and benefits | $ | 6,617 | $ | 3,266 | |||
Accrued bonuses | 2,234 | 7,682 | |||||
Accrued restructuring related expenses | 156 | 270 | |||||
Deferred revenue | 11,813 | 8,896 | |||||
Accrued sales, use, franchise and VAT tax | 1,949 | 1,977 | |||||
Acquisition-related contingent consideration | 3,440 | 3,440 | |||||
Other accrued expenses | 5,122 | 5,370 | |||||
Total accrued expenses and other liabilities | $ | 31,331 | $ | 30,901 | |||
Restructuring_Costs
Restructuring Costs | 3 Months Ended | ||
Apr. 03, 2015 | |||
Restructuring Costs [Abstract] | |||
Restructuring Costs | 5. Restructuring Costs | ||
The Company recorded restructuring costs of $3.6 million during the quarter ended March 28, 2014, primarily for reductions in consultants and functional support personnel in Europe. These actions were taken as a result of the continued decline in demand in its European markets. The Company took steps to reduce its costs to better align its overall cost structure and organization with anticipated demand for its services. As of April 3, 2015, the Company had $0.2 million remaining in commitments primarily related to employee severance costs in Europe. | |||
The following table sets forth the activity in the restructuring expense accruals (in thousands): | |||
Severance and Other | |||
Employee Costs | |||
Accrual balance at January 2, 2015 | $ | 270 | |
Accrual | - | ||
Expenditures | -114 | ||
Accrual balance at April 3, 2015 | $ | 156 | |
Credit_Facility
Credit Facility | 3 Months Ended | |||
Apr. 03, 2015 | ||||
Credit Facility [Abstract] | ||||
Credit Facility | 6. Credit Facility | |||
On February 21, 2012, the Company entered into a credit agreement with Bank of America, N.A. ("Bank of America"), pursuant to which Bank of America agreed to lend the Company up to $20.0 million pursuant to a revolving line of credit (the “Revolver”) and up to $30.0 million pursuant to a five-year term loan (the “Term Loan”), which was used to finance the Company's $55.0 million tender offer for its shares in March 2012. | ||||
On August 27, 2013, the Company amended and restated the credit agreement (the "Credit Agreement") with Bank of America to finance a tender offer for shares of its common stock completed in October 2013. The Credit Agreement was amended and restated to: | ||||
· | To provide for up to an additional $17.0 million of borrowing under the Term Loan (the "Amended Term Loan" and together with the Revolver, the "Credit Facility"). As of April 3, 2015, the Company had $18.3 million principal amount outstanding on the Amended Term loan and a zero balance outstanding on the Revolver. | |||
· | To extend the maturity date on the Revolver and the Amended Term Loan to August 27, 2018, five years from the date of the amendment and restatement of the Credit Agreement. | |||
The Amended Term Loan was used to finance the Company’s $6.9 million tender offer for its shares in October 2013. | ||||
The obligations of the Company under the Credit Facility are guaranteed by the active existing and future material U.S. subsidiaries of the Company and are secured by substantially all of the existing and future property and assets of the Company (subject to certain exceptions). | ||||
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 LIBOR base rate, plus an applicable margin percentage. The applicable margin percentage is based on the consolidated leverage ratio, as defined in the Credit Agreement. As of April 3, 2015, the applicable margin percentage was 1.50% per annum based on the consolidated leverage ratio, in the case of LIBOR rate advances, and 0.75% per annum, in the case of base rate advances. | ||||
The Term Loan requires the amortization of principal payments in equal quarterly installments beginning December 31, 2013 through August 27, 2018, unless payments are made in advance. The Company is subject to certain covenants, including total consolidated leverage, fixed cost coverage and liquidity requirements, each as set forth in the Credit Agreement, subject to certain exceptions. | ||||
Acquisition
Acquisition | 3 Months Ended |
Apr. 03, 2015 | |
Acquisition [Abstract] | |
Acquisition | |
7. Acquisition | |
During the quarter ended March 28, 2014, the Company acquired the U.S., Canada and Uruguay operations of Technolab International Corporation ("Technolab"). | |
Management's purchase consideration was $3.0 million in cash upon closing. In addition, at closing, the sellers were granted $1.0 million in shares which is being recorded as non-cash compensation over the service vesting period. The sellers also had the ability to earn an additional $8.0 million in contingent consideration in cash and stock subject to an earn-out based on actual results achieved. The cash was not subject to vesting, however the stock was subject to service vesting. The entire cash portion of the earn-out was recorded as compensation expense in 2014 of which $0.9 million was recorded in the first quarter of 2014. The stock portion of the earn-out is being recorded as compensation expense over the service vesting period. | |
The purchase accounting resulted in a bargain purchase gain of $3.0 million on the acquisition and intangible assets with definite lives of $7.7 million which will be amortized over periods ranging from 2 years to 5 years. | |
Stock_Based_Compensation
Stock Based Compensation | 3 Months Ended |
Apr. 03, 2015 | |
Stock Based Compensation [Abstract] | |
Stock Based Compensation | 8. Stock Based Compensation |
During the quarter ended April 3, 2015, the Company issued 619,584 restricted stock units at a weighted average grant-date fair value of $7.93 per share. As of April 3, 2015, the Company had 2,144,774 restricted stock units outstanding at a weighted average grant-date fair value of $6.46 per share. As of April 3, 2015, $10.6 million of total restricted stock unit compensation expense related to unvested awards had not been recognized and is expected to be recognized over a weighted average period of approximately 2.4 years. | |
During the quarter ended April 3, 2015, there were no shares of common stock subject to vesting requirements granted. As of April 3, 2015, the Company had 264,474 shares of common stock subject to vesting requirements outstanding at a weighted average grant-date fair value of $7.54 per share. As of April 3, 2015, $1.8 million of compensation expense related to common stock subject to vesting requirements had not been recognized and is expected to be recognized over a weighted average period of approximately 2.8 years. | |
On February 8, 2012, the Compensation Committee approved the fiscal year 2012 through 2015 equity compensation target for the Company’s Chief Executive Officer and Chief Operating Officer. Under this target, a single performance-based option grant was made to the Company’s Chief Executive Officer and the Chief Operating Officer of 1,912,500 options and 1,004,063 options, respectively, totaling 2,916,563 options, each with an exercise price of $4.00 and a fair value of $1.31. One-half of the options vest upon the achievement of at least 50% growth of pro forma earnings per share and the remaining half vest upon the achievement of at least 50% pro forma EBITDA growth. Each metric could be achieved at any time during the six-year term of the award based on a trailing twelve month period measured quarterly. The grants will expire if neither target is achieved during the six-year term. The base year for the performance calculation is fiscal 2011 for both pro forma earnings per share and pro forma EBITDA performance targets. | |
In March of 2013, these performance-based stock option grants were surrendered by the Company’s Chief Executive Officer and Chief Operating Officer and replaced with performance-based SARs, equal to the number of options. The terms and conditions and the specific performance targets applicable to the SARs are the same as those applicable to the replaced options, with the exception that the SARs will be settled in cash, stock or any combination thereof, at the Company’s discretion. | |
Subsequent to year end 2014, in connection with the Company’s achievement of over 50% growth of pro-forma net earnings per share since fiscal 2011 base year and upon the approval of the Audit Committee’s review of the Company’s 2014 financial statements and Annual Report on Form 10-K, 50% of the outstanding SARs awards granted to the CEO and COO became vested. | |
Shareholders_Equity
Shareholders' Equity | 3 Months Ended |
Apr. 03, 2015 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | 9. Shareholders’ Equity |
Share Repurchase Plan | |
Under the Company’s share repurchase plan, the Company may buy back shares of its outstanding stock either on the open market or through privately negotiated transactions subject to market conditions and trading restrictions. During the quarter ended April 3, 2015, the Company repurchased approximately 75 thousand shares of its common stock at an average price of $8.70 per share for a total cost of approximately $0.7 million. As of April 3, 2015, the Company had approximately $3.0 million available under its share repurchase plan authorization. During the quarter ended March 28, 2014, the Company repurchased approximately 716 thousand shares of its common stock at an average price of $6.06 per share for a total cost of approximately $4.3 million. | |
Litigation
Litigation | 3 Months Ended |
Apr. 03, 2015 | |
Litigation [Abstract] | |
Litigation | |
10. Litigation | |
The Company is involved in legal proceedings, claims, and litigation arising in the ordinary course of business not specifically discussed herein. In the opinion of management, the final disposition of such matters will not have a material adverse effect on the Company’s financial position, cash flows or results of operations. | |
Geographic_And_Group_Informati
Geographic And Group Information | 3 Months Ended | ||||||
Apr. 03, 2015 | |||||||
Geographic And Group Information [Abstract] | |||||||
Geographic And Group Information | |||||||
11. Geographic and Group Information | |||||||
Revenue which is primarily based on the country of the contracting entity, was attributed to the following geographical areas (in thousands): | |||||||
Quarter Ended | |||||||
April 3, | March 28, | ||||||
2015 | 2014 | ||||||
Revenue: | |||||||
North America | $ | 48,710 | $ | 45,488 | |||
International (primarily European countries) | 12,264 | 9,417 | |||||
Total revenue | $ | 60,974 | $ | 54,905 | |||
Long-lived assets are attributable to the following geographic areas (in thousands): | |||||||
April 3, | January 2, | ||||||
2015 | 2015 | ||||||
Long-lived assets: | |||||||
North America | $ | 79,662 | $ | 80,152 | |||
International (primarily European countries) | 14,766 | 15,578 | |||||
Total long-lived assets | $ | 94,428 | $ | 95,730 | |||
As of April 3, 2015 and January 2, 2015, foreign assets included $14.2 million and $15.0 million, respectively, of goodwill related to the REL and Archstone acquisitions. | |||||||
In the following table, the Hackett Group service group encompasses Benchmarking, Business Transformation, Executive Advisory and EPM and EPM Application Maintenance and Support. The ERP Solutions service group encompasses SAP ERP Technology and SAP Maintenance (in thousands): | |||||||
Quarter Ended | |||||||
April 3, | March 28, | ||||||
2015 | 2014 | ||||||
The Hackett Group | $ | 51,592 | $ | 46,133 | |||
ERP Solutions | 9,382 | 8,772 | |||||
Total revenue | $ | 60,974 | $ | 54,905 | |||
Basis_of_Presentation_and_Gene1
Basis of Presentation and General Information (Policies) | 3 Months Ended |
Apr. 03, 2015 | |
Basis of Presentation and General Information [Abstract] | |
Basis of Presentation | 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 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 January 2, 2015, included in the Annual Report on Form 10-K filed by the Company with the SEC. The consolidated results of operations for the quarter ended April 3, 2015, are not necessarily indicative of the results to be expected for any future period or for the full fiscal year. | |
Use of Estimates | 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. | |
Fair Value | Fair Value |
The Company’s financial instruments consist of cash and cash equivalents, accounts receivable and unbilled revenue, accounts payable, accrued expenses and other liabilities and debt. As of April 3, 2015 and January 2, 2015, the carrying amount of each financial instrument, with the exception of debt, approximated the instrument’s respective fair value due to the short-term nature and 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 the short-term variable interest rates based on market rates. | |
Business Combinations | Business Combinations |
The Company applies the provisions of ASC 805, Business Combinations, in the accounting for its acquisitions, which requires recognition of the assets acquired and the liabilities assumed at their acquisition date fair values, separately from goodwill. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition date fair values of the tangible and identifiable intangible assets acquired and liabilities assumed. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, its estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, that may be up to 12 months from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with a corresponding adjustment to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, the impact of any subsequent adjustments is included in the consolidated statements of operations. | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards |
In May 2014, the FASB issued guidance on revenue recognition, which provides for a single, principles-based model for revenue recognition and replaces the existing revenue recognition guidance. The guidance is effective for annual and interim periods beginning on or after December 15, 2016 and will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective. It permits the use of either a retrospective or cumulative effect transition method and early adoption is not permitted. The Company has not yet selected a transition method and is in the process of evaluating the effect this standard will have on its consolidated financial statements and related disclosures. | |
Reclassifications | Reclassifications |
Certain prior period amounts in the consolidated financial statements, and notes thereto, have been reclassified to conform to current period presentation. | |
Net_Income_Per_Common_Share_Ta
Net Income Per Common Share (Tables) | 3 Months Ended | ||||||
Apr. 03, 2015 | |||||||
Net Income Per Common Share [Abstract] | |||||||
Basic And Diluted Weighted Average Shares | |||||||
Quarter Ended | |||||||
April 3, | March 28, | ||||||
2015 | 2014 | ||||||
Basic weighted average common shares outstanding | 28,551,665 | 29,119,505 | |||||
Effect of dilutive securities: | |||||||
Unvested restricted stock units and common stock subject to | |||||||
vesting requirements issued to employees and non-employees | 847,951 | 739,752 | |||||
Common stock issuable upon the exercise of stock options | 517,700 | 9,445 | |||||
Dilutive weighted average common shares outstanding | 29,917,316 | 29,868,702 | |||||
Accounts_Receivable_And_Unbill1
Accounts Receivable And Unbilled Revenue, Net (Tables) | 3 Months Ended | ||||||
Apr. 03, 2015 | |||||||
Accounts Receivable And Unbilled Revenue, Net [Abstract] | |||||||
Accounts Receivable And Unbilled Revenue, Net | |||||||
April 3, | January 2, | ||||||
2015 | 2015 | ||||||
Accounts receivable | $ | 29,553 | $ | 28,154 | |||
Unbilled revenue | 13,934 | 10,597 | |||||
Allowance for doubtful accounts | -1,251 | -1,330 | |||||
Accounts receivable and unbilled revenue, net | $ | 42,236 | $ | 37,421 | |||
Accrued_Expenses_And_Other_Lia1
Accrued Expenses And Other Liabilities (Tables) | 3 Months Ended | ||||||
Apr. 03, 2015 | |||||||
Accrued Expenses And Other Liabilities [Abstract] | |||||||
Components Of Accrued Expenses And Other Liabilities | |||||||
April 3, | 2-Jan | ||||||
2015 | 2015 | ||||||
Accrued compensation and benefits | $ | 6,617 | $ | 3,266 | |||
Accrued bonuses | 2,234 | 7,682 | |||||
Accrued restructuring related expenses | 156 | 270 | |||||
Deferred revenue | 11,813 | 8,896 | |||||
Accrued sales, use, franchise and VAT tax | 1,949 | 1,977 | |||||
Acquisition-related contingent consideration | 3,440 | 3,440 | |||||
Other accrued expenses | 5,122 | 5,370 | |||||
Total accrued expenses and other liabilities | $ | 31,331 | $ | 30,901 | |||
Restructuring_Costs_Tables
Restructuring Costs (Tables) | 3 Months Ended | ||
Apr. 03, 2015 | |||
Restructuring Costs [Abstract] | |||
Summary Of Restructuring Expense Accruals | |||
Severance and Other | |||
Employee Costs | |||
Accrual balance at January 2, 2015 | $ | 270 | |
Accrual | - | ||
Expenditures | -114 | ||
Accrual balance at April 3, 2015 | $ | 156 | |
Geographic_And_Group_Informati1
Geographic And Group Information (Tables) | 3 Months Ended | ||||||
Apr. 03, 2015 | |||||||
Geographic And Group Information [Abstract] | |||||||
Geographic Revenue | |||||||
Quarter Ended | |||||||
April 3, | March 28, | ||||||
2015 | 2014 | ||||||
Revenue: | |||||||
North America | $ | 48,710 | $ | 45,488 | |||
International (primarily European countries) | 12,264 | 9,417 | |||||
Total revenue | $ | 60,974 | $ | 54,905 | |||
Long-Lived Assets Attributable To Geographic Area | |||||||
April 3, | January 2, | ||||||
2015 | 2015 | ||||||
Long-lived assets: | |||||||
North America | $ | 79,662 | $ | 80,152 | |||
International (primarily European countries) | 14,766 | 15,578 | |||||
Total long-lived assets | $ | 94,428 | $ | 95,730 | |||
Revenue By Service Group | |||||||
Quarter Ended | |||||||
April 3, | March 28, | ||||||
2015 | 2014 | ||||||
The Hackett Group | $ | 51,592 | $ | 46,133 | |||
ERP Solutions | 9,382 | 8,772 | |||||
Total revenue | $ | 60,974 | $ | 54,905 | |||
Net_Income_Per_Common_Share_Na
Net Income Per Common Share (Narrative) (Details) | 3 Months Ended | |
In Millions, unless otherwise specified | Apr. 03, 2015 | Mar. 28, 2014 |
Net Income Per Common Share [Abstract] | ||
Antidilutive common share equivalents | 0.6 | 0.4 |
Net_Income_Per_Common_Share_Ba
Net Income Per Common Share (Basic And Diluted Weighted Average Shares) (Details) | 3 Months Ended | |
Apr. 03, 2015 | Mar. 28, 2014 | |
Net Income Per Common Share [Abstract] | ||
Basic weighted average common shares outstanding | 28,551,665 | 29,119,505 |
Unvested restricted stock units and common stock subject to vesting requirements issued to employees and non-employees | 847,951 | 739,752 |
Common stock issuable upon the exercise of stock options | 517,700 | 9,445 |
Diluted weighted average common shares outstanding | 29,917,316 | 29,868,702 |
Accounts_Receivable_And_Unbill2
Accounts Receivable And Unbilled Revenue, Net (Details) (USD $) | Apr. 03, 2015 | Jan. 02, 2015 |
In Thousands, unless otherwise specified | ||
Accounts Receivable And Unbilled Revenue, Net [Abstract] | ||
Accounts receivable | $29,553 | $28,154 |
Unbilled revenue | 13,934 | 10,597 |
Allowance for doubtful accounts | -1,251 | -1,330 |
Accounts receivable and unbilled revenue, net | $42,236 | $37,421 |
Accrued_Expenses_And_Other_Lia2
Accrued Expenses And Other Liabilities (Details) (USD $) | Apr. 03, 2015 | Jan. 02, 2015 |
In Thousands, unless otherwise specified | ||
Accrued Expenses And Other Liabilities [Abstract] | ||
Accrued compensation and benefits | $6,617 | $3,266 |
Accrued bonuses | 2,234 | 7,682 |
Accrued restructuring related expenses | 156 | 270 |
Deferred revenue | 11,813 | 8,896 |
Accrued sales, use, franchise and VAT tax | 1,949 | 1,977 |
Acquisition-related contingent consideration | 3,440 | 3,440 |
Other accrued expenses | 5,122 | 5,370 |
Total accrued expenses and other liabilities | $31,331 | $30,901 |
Restructuring_Costs_Narrative_
Restructuring Costs (Narrative) (Details) (USD $) | 3 Months Ended | |
Mar. 28, 2014 | Apr. 03, 2015 | |
Restructuring Costs [Abstract] | ||
Restructuring costs | $3,604,000 | |
Accural balance | $200,000 |
Restructuring_Costs_Summary_Of
Restructuring Costs (Summary Of Restructuring Expense Accruals) (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Apr. 03, 2015 |
Restructuring Cost and Reserve [Line Items] | |
Accrual balance | $200 |
Severance And Other Employee Costs [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Accrual balance | 270 |
Accrual | |
Expenditures | -114 |
Accrual balance | $156 |
Credit_Facility_Details
Credit Facility (Details) (USD $) | 3 Months Ended | ||||
Apr. 03, 2015 | Feb. 21, 2012 | Aug. 27, 2013 | Mar. 21, 2012 | Oct. 31, 2013 | |
Revolving line of credit facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity under credit facility | $20,000,000 | ||||
Credit facility amount outstanding | 0 | ||||
Term Loan [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity under credit facility | 30,000,000 | ||||
Credit facility amount outstanding | 18,300,000 | ||||
Term of debt | 5 years | ||||
Maturity date | 27-Aug-18 | ||||
Revolving Line Of Credit Facility And Term Loan [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Term of debt | 5 years | ||||
Additional borrowing capacity | 17,000,000 | ||||
Maturity date | 27-Aug-18 | ||||
LIBOR Rate [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Margin percentage base rate | 1.50% | ||||
Base Rate [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Margin percentage base rate | 0.75% | ||||
2012 Tender Offer [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Stock repurchase cost of tender offer net of fees and expenses related to tender offer | 55,000,000 | ||||
2013 Tender Offer [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Stock repurchase cost of tender offer net of fees and expenses related to tender offer | $6,900,000 |
Acquisition_Details
Acquisition (Details) (USD $) | 3 Months Ended | |
Mar. 28, 2014 | Apr. 03, 2015 | |
Purchase price | $3,000,000 | |
Shares granted to sellers | 1,000,000 | |
Contingent consideration | 8,000,000 | |
Compensation expense | 900,000 | |
Bargain purchase gain from acquisition | 3,015,000 | |
Acquired intangible assets | $7,700,000 | |
Minimum [Member] | ||
Amortization period | 2 years | |
Maximum [Member] | ||
Amortization period | 5 years |
Stock_Based_Compensation_Detai
Stock Based Compensation (Details) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended |
In Millions, except Share data, unless otherwise specified | Feb. 08, 2012 | Apr. 03, 2015 | Jan. 02, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Growth of Pro-forma EPS Percentage | 50.00% | ||
Growth of Pro-forma EBITDA percentage | 50.00% | ||
Weighted average period, Common stock | 2 years 9 months 18 days | ||
Performance based stock option grant, Exercise price | $4 | ||
Shares subject to vesting requirements | 264,474 | ||
Nonvested weighted average grant-date fair value, Common stock | $7.54 | ||
Compensation expense related to common stock subject to vesting requirements | $1.80 | ||
Chief Executive Officer And Chief Operating Officer [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards vested | 50.00% | ||
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock units granted | 619,584 | ||
Weighted average grant-date fair value | $7.93 | ||
Weighted average period, Restricted stock units | 2 years 4 months 24 days | ||
Restricted stock units outstanding | 2,144,774 | ||
Nonvested weighted average grant-date fair value | $6.46 | ||
Compensation expenses related to unvested restricted stock unit based awards | $10.60 | ||
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant-date fair value | $1.31 | ||
Trailing period | 12 months | ||
Performance based stock option grant | 2,916,563 | ||
Term of the award | 6 years | ||
Performance Shares [Member] | Chief Executive Officer [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance based stock option grant | 1,912,500 | ||
Performance Shares [Member] | Chief Operating Officer [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance based stock option grant | 1,004,063 |
Shareholders_Equity_Details
Shareholders' Equity (Details) (USD $) | 3 Months Ended | ||
In Millions, except Share data in Thousands, unless otherwise specified | Apr. 03, 2015 | Mar. 28, 2014 | Jan. 02, 2015 |
Equity, Class of Treasury Stock [Line Items] | |||
Common stock, par value | $0.00 | $0.00 | |
Purchase price per share | $6.06 | ||
Repurchase of common stock | 716 | ||
Total cost | $4.30 | ||
Amount available under repurchase plan | 3 | ||
Stock Repurchase A [Member] | |||
Equity, Class of Treasury Stock [Line Items] | |||
Purchase price per share | $8.70 | ||
Repurchase of common stock | 75 | ||
Total cost | $0.70 |
Geographic_And_Group_Informati2
Geographic And Group Information (Narrative) (Details) (USD $) | Apr. 03, 2015 | Jan. 02, 2015 |
In Millions, unless otherwise specified | ||
Geographic And Group Information [Abstract] | ||
Goodwill included in foreign assets | $14.20 | $15 |
Geographic_And_Group_Informati3
Geographic And Group Information (Geographic Revenue) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Apr. 03, 2015 | Mar. 28, 2014 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | $60,974 | $54,905 |
North America [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | 48,710 | 45,488 |
International Primarily European Countries [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | $12,264 | $9,417 |
Geographic_And_Group_Informati4
Geographic And Group Information (Long-Lived Assets Attributable To Geographic Area) (Details) (USD $) | Apr. 03, 2015 | Jan. 02, 2015 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | $94,428,000 | $95,730,000 |
North America [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | 79,662,000 | 80,152,000 |
International Primarily European Countries [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | $14,766,000 | $15,578,000 |
Geographic_And_Group_Informati5
Geographic And Group Information (Revenue By Service Group) (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Apr. 03, 2015 | Mar. 28, 2014 |
Segment Reporting Information [Line Items] | ||
Total revenue | $60,974 | $54,905 |
The Hackett Group [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 51,592 | 46,133 |
ERP Solutions [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | $9,382 | $8,772 |