Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 02, 2015 | Nov. 06, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | HACKETT GROUP, INC. | |
Entity Central Index Key | 1,057,379 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 2, 2015 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --01-01 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 29,382,893 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Oct. 02, 2015 | Jan. 02, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 16,338,000 | $ 14,608,000 |
Accounts receivable and unbilled revenue, net of allowance of $1,211 and $1,330 at October 2, 2015 and January 2, 2015, respectively | 43,993,000 | 37,421,000 |
Deferred tax asset, net | 486,000 | 2,828,000 |
Prepaid expenses and other current assets | 2,131,000 | 2,199,000 |
Total current assets | 62,948,000 | 57,056,000 |
Property and equipment, net | 14,189,000 | 13,753,000 |
Other assets | 4,796,000 | 6,548,000 |
Goodwill, net | 74,961,000 | 75,429,000 |
Total assets | 156,894,000 | 152,786,000 |
Current liabilities: | ||
Accounts payable | 5,950,000 | 7,909,000 |
Accrued expenses and other liabilities | 34,230,000 | 30,901,000 |
Total current liabilities | 40,180,000 | 38,810,000 |
Long-term deferred tax liability, net | 8,276,000 | 5,925,000 |
Long-term debt | 9,263,000 | 18,263,000 |
Total liabilities | $ 57,719,000 | $ 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; 53,504,524 and 52,836,011 shares issued at October 2, 2015 and January 2, 2015, respectively | $ 54,000 | $ 53,000 |
Additional paid-in capital | 270,054,000 | 264,912,000 |
Treasury stock, at cost, 24,138,694 and 23,989,776 shares at October 2, 2015 and January 2, 2015, respectively | (92,691,000) | (91,335,000) |
Accumulated deficit | (70,991,000) | (77,677,000) |
Accumulated comprehensive loss | (7,251,000) | (6,165,000) |
Total shareholders' equity | 99,175,000 | 89,788,000 |
Total liabilities and shareholders' equity | $ 156,894,000 | $ 152,786,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Oct. 02, 2015 | Jan. 02, 2015 |
Consolidated Balance Sheets [Abstract] | ||
Accounts receivable and unbilled revenue, allowance | $ 1,211 | $ 1,330 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
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 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 53,504,524 | 52,836,011 |
Treasury stock, at cost, shares | 24,138,694 | 23,989,776 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2015 | Sep. 26, 2014 | Oct. 02, 2015 | Sep. 26, 2014 | |
Revenue: | ||||
Revenue before reimbursements ("net revenue") | $ 59,992 | $ 54,550 | $ 174,320 | $ 158,968 |
Reimbursements | 7,225 | 5,887 | 20,266 | 17,426 |
Total revenue | 67,217 | 60,437 | 194,586 | 176,394 |
Cost of service: | ||||
Personnel costs before reimbursable expenses (includes $1,623 and $842 and $4,140 and $2,527 of stock compensation expense in the quarters and nine months ended October 2, 2015 and September 26, 2014, respectively) | 37,854 | 35,142 | 110,412 | 104,753 |
Reimbursable expenses | 7,225 | 5,887 | 20,266 | 17,426 |
Total cost of service | 45,079 | 41,029 | 130,678 | 122,179 |
Selling, general and administrative costs (includes $2,068 and $814 and $3,123 and $2,158 of stock compensation expense in the quarters and nine months ended October 2, 2015 and September 26, 2014, respectively) | 17,195 | 15,422 | 48,281 | 45,264 |
Bargain purchase gain from acquisition | (3,015) | |||
Restructuring costs | 3,604 | |||
Total costs and operating expenses | 62,274 | 56,451 | 178,959 | 168,032 |
Income from operations | 4,943 | 3,986 | 15,627 | 8,362 |
Other income (expense): | ||||
Interest income | 1 | 2 | 3 | 4 |
Interest expense | (102) | (173) | (351) | (463) |
Income from operations before income taxes | 4,842 | 3,815 | 15,279 | 7,903 |
Income tax expense | 1,784 | 879 | 5,525 | 1,734 |
Net income | $ 3,058 | $ 2,936 | $ 9,754 | $ 6,169 |
Basic net income per common share: | ||||
Income per common share | $ 0.11 | $ 0.10 | $ 0.34 | $ 0.21 |
Weighted average common shares outstanding | 28,755,225 | 28,557,528 | 28,674,838 | 28,872,043 |
Diluted net income per common share: | ||||
Income per common share | $ 0.10 | $ 0.10 | $ 0.32 | $ 0.21 |
Weighted average common and common equivalent shares outstanding | 31,488,390 | 29,800,325 | 30,764,732 | 29,884,274 |
Consolidated Statements of Ope5
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2015 | Sep. 26, 2014 | Oct. 02, 2015 | Sep. 26, 2014 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share based compensation | $ 7,263 | $ 4,685 | ||
Cost of Sales [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share based compensation | $ 1,623 | $ 842 | 4,140 | 2,527 |
Selling General and Administrative [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total share based compensation | $ 2,068 | $ 814 | $ 3,123 | $ 2,158 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2015 | Sep. 26, 2014 | Oct. 02, 2015 | Sep. 26, 2014 | |
Consolidated Statements of Comprehensive Income [Abstract] | ||||
Net income | $ 3,058 | $ 2,936 | $ 9,754 | $ 6,169 |
Foreign currency translation adjustment | (922) | (786) | (1,086) | (301) |
Total comprehensive income | $ 2,136 | $ 2,150 | $ 8,668 | $ 5,868 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Oct. 02, 2015 | Sep. 26, 2014 | |
Cash flows from operating activities: | ||
Net income | $ 9,754 | $ 6,169 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation expense | 1,926 | 1,731 |
Amortization expense | 1,642 | 1,679 |
Amortization of debt issuance costs | 73 | 68 |
Non-cash compensation expense | 7,263 | 4,685 |
Acquisition consideration reflected as compensation expense | (3,440) | |
Bargain purchase gain from acquisition | (3,015) | |
Restructuring costs | 3,604 | |
Provision for doubtful accounts | 165 | 728 |
Loss on foreign currency translation | 214 | 91 |
Provision for deferred tax liability | 4,694 | 2,710 |
Changes in assets and liabilities, net of effects from acquisitions: | ||
Increase in accounts receivable and unbilled revenue | (6,958) | (9,581) |
Decrease (increase) in prepaid expenses and other assets | 118 | (503) |
Decrease in accounts payable | (1,959) | (2,670) |
Increase (decrease) in accrued expenses and other liabilities | 5,459 | (2,730) |
Decrease in income tax payable | 270 | (1,772) |
Net cash provided by operating activities | 19,221 | 1,194 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (2,428) | (1,924) |
Cash consideration paid for acquisition | (2,877) | |
Cash acquired in acquisition of business | 522 | |
Net cash used in investing activities | (2,428) | (4,279) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 573 | 620 |
Proceeds from borrowings | 2,500 | 10,500 |
Repayment of borrowings | (11,500) | (2,721) |
Dividends paid | (3,067) | |
Purchases of common stock | (3,598) | (12,981) |
Net cash used in financing activities | (15,092) | (4,582) |
Effect of exchange rate on cash | 29 | 20 |
Net increase (decrease) in cash and cash equivalents | 1,730 | (7,647) |
Cash and cash equivalents at beginning of year | 14,608 | 18,199 |
Cash and cash equivalents at end of period | 16,338 | 10,552 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income taxes | 260 | 687 |
Cash paid for interest | $ 292 | $ 389 |
Basis of Presentation and Gener
Basis of Presentation and General Information | 9 Months Ended |
Oct. 02, 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 and nine months ended October 2, 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 October 2, 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, 2017 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. Early adoption is permitted, but not before December 15, 2016. 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) In April 2015, the FASB issued amendments to ASU 2015-03, which are intended to simplify the balance sheet presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this update. The amendments are effective for annual and interim periods beginning after December 15, 2015 and requires a retrospective transition method. Early adoption is permitted for financial statements that have not been previously issued. The Company does not expect the adoption to have a material impact on its consolidated financial statements. 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 | 9 Months Ended |
Oct. 02, 2015 | |
Net Income Per Common Share [Abstract] | |
Net 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 Nine Months Ended October 2, September 26, October 2, September 26, 2015 2014 2015 2014 Basic weighted average common shares outstanding Effect of dilutive securities: Unvested restricted stock units and common stock subject to vesting requirements issued to employees and non-employees Common stock issuable upon the exercise of stock options Dilutive weighted average common shares outstanding Approximately 0.5 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 October 2, 2015 and September 26, 2014 , respectively, as their inclusion would have had an anti-dilutive effect on diluted net income per common share. |
Accounts Receivable And Unbille
Accounts Receivable And Unbilled Revenue, Net | 9 Months Ended |
Oct. 02, 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): October 2, January 2, 2015 2015 Accounts receivable $ $ Unbilled revenue Allowance for doubtful accounts Accounts receivable and unbilled revenue, net $ $ 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 clie nts. |
Accrued Expenses And Other Liab
Accrued Expenses And Other Liabilities | 9 Months Ended |
Oct. 02, 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): October 2, January 2, 2015 2015 Accrued compensation and benefits $ $ Accrued bonuses Accrued restructuring related expenses - Deferred revenue Accrued sales, use, franchise and VAT tax Accrued Technolab earnout liability - Other accrued expenses Total accrued expenses and other liabilities $ $ |
Restructuring Costs
Restructuring Costs | 9 Months Ended |
Oct. 02, 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. 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 $ Expenditures Accrual balance at October 2, 2015 $ - |
Credit Facility
Credit Facility | 9 Months Ended |
Oct. 02, 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: · P rovide 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 October 2, 2015 , the Company had $ 9.3 million principal amount outstanding on the Amended Term L oan and no outstanding balance on the Revolver. · E xtend 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 October 2 , 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 | 9 Months Ended |
Oct. 02, 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"). At closing, the Seller received $3.0 million in cash, not subject to vesting, and $1.0 million in shares subject to vesting, which is being recorded as non-cash compensation over the service vesting period. The seller also had the ability to earn an additional $8.0 million in a combination of cash, not subject to service vesting, and stock, subject to service vesting, based on a one-year profitability-based earn-out contingent upon actual results achieved. The entire cash portion of the earn-out was recorded as compensation expense in 2014, of which $0.9 million and $2.6 million was recorded in the third quarter and first nine months of 2014, respectively. The stock portion of the earn-out is being recorded as compensation expense over the service vesting period. During the third quarter of 2015, the Company settled the contingent earn-out with cash and stock issuances in accordance with the agreement. 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 | 9 Months Ended |
Oct. 02, 2015 | |
Stock Based Compensation [Abstract] | |
Stock Based Compensation | 8 . Stock Based Compensation During the nine months ended October 2, 2015 , the Company issued 7 30,237 restricted stock units at a weighted average grant-date fair value of $ 8.36 per share. As of October 2, 2015 , the Company had 2,185,728 restricted stock units outstanding at a weighted average grant-date fair value of $ 6.73 per share. As of October 2, 2015 , $8.1 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 1.95 years. During the quarter ended October 2, 2015, 483,051 shares of common stock subject to vesting requirements were granted for the settlement of the contingent earn-out consideration related to the 2014 acquisition of Technolab. As of October 2, 2015 , the Company had 747,525 shares of common stock subject to vesting requirements outstanding at a weighted average grant-date fair value of $8.77 per share. As of October 2, 2015 , $ 4.5 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 2.9 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 would have vested upon the achievement of at least 50% growth of pro forma earnings per share and the remaining half would have vested upon the achievement of at least 50% pro forma EBITDA growth. Each metric could have been achieved at any time during the six-year term of the award based on a trailing twelve month period measured quarterly. The grants would have expired if neither target were achieved during the six-year term. The base year for the performance calculation was 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. In the third quarter of 2015, the Company recorded $1.3 million of compensation expense related to the SARs awards tied to the pro forma EBITDA performance target, which represented 50% of the total non-cash compensation expense assuming the awards fully vest. These awards have not yet vested. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Oct. 02, 2015 | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | 9. Shareholders’ Equity Treasury Stock 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 nine months ended October 2, 2015, the Company repurc hased approximately 149 thousand shares of its common stock at an average price of $9.10 per share for a total cost of approximately $1.4 million . The shares repurchased under the share repurchase plan during the nine months ended October 2, 2015, do not include 281 thousand shares for a cost of $2.2 million that the Company bought back to satisfy employee net vesting obligations. During the quarter ended October 2, 2015, the Company bought back 5 thousand shares at a cost of $65 thousand to satisfy employee net vesting obligations and no shares were repurchased under the share repurchase plan. As of October 2, 2015, the Company had approximately $ 2.3 million available under its share repurchase plan authorization. During the quarter ended September 26, 2014, the Company repurchased approximately 485 thousand shares of its common stock at an average price of $ 6.13 per share for a total cost of approximately $ 3. 0 million under the share repurchase plan. During the nine months ended September 26, 2014, the Company repurchased approximately 1.7 million shares of its common stock at an average price of $6.0 7 per share for a total cost of approximately $10.3 million under the share repurchase plan. The shares repurchased during the quarter and nine months ended Septem ber 26, 2014, do not include 2 thousand shares at a cost of $12 thousand and 446 thousand shares at a cost of $2.7 million, respectively, that the Company bought back to satisfy employee net vesting obligations. Dividend Program During the quarter ended October 2, 2015, the Company paid its first semi-annual dividend of $0.10 per share totaling $3.1 million to shareholders on record as of June 29, 2015. Subsequent to the quarter ended October 2, 2015, the Company declared its second semi-annual dividend of $0.10 per share for holders of record on December 28, 2015. The dividend will be paid on January 8, 2016. |
Litigation
Litigation | 9 Months Ended |
Oct. 02, 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 Informatio
Geographic And Group Information | 9 Months Ended |
Oct. 02, 2015 | |
Geographic And Group Information [Abstract] | |
Geographic And Group Information | 11 . Geographic and Group Information Revenue , which is primarily based on the count ry of the contracting entity and differs from the Company’s non-GAAP reporting, was attributed to the following geographical areas (in thousands): Quarter Ended Nine Months Ended October 2, September 26, October 2, September 26, 2015 2014 2015 2014 Revenue: North America $ $ $ $ International (primarily European countries) Total revenue $ $ $ $ Long-lived assets are attributable to the following geographic areas (in thousands): October 2, January 2, 2015 2015 Long-lived assets: North America $ $ International (primarily European countries) Total long-lived assets $ $ As of October 2, 2015 and January 2, 2015, f oreign assets included $1 4.5 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 groups. The ERP Solutions service group encompasses SAP ERP Technology and SAP Maintenance groups (in thousands): Quarter Ended Nine Months Ended October 2, September 26, October 2, September 26, 2015 2014 2015 2014 The Hackett Group $ $ $ $ ERP Solutions Total revenue $ $ $ $ |
Basis of Presentation and Gen19
Basis of Presentation and General Information (Policies) | 9 Months Ended |
Oct. 02, 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 and nine months ended October 2, 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 October 2, 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, 2017 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. Early adoption is permitted, but not before December 15, 2016. 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) In April 2015, the FASB issued amendments to ASU 2015-03, which are intended to simplify the balance sheet presentation of debt issuance costs. These amendments require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this update. The amendments are effective for annual and interim periods beginning after December 15, 2015 and requires a retrospective transition method. Early adoption is permitted for financial statements that have not been previously issued. The Company does not expect the adoption to have a material impact on its consolidated financial statements. |
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) | 9 Months Ended |
Oct. 02, 2015 | |
Net Income Per Common Share [Abstract] | |
Basic And Diluted Weighted Average Shares | Quarter Ended Nine Months Ended October 2, September 26, October 2, September 26, 2015 2014 2015 2014 Basic weighted average common shares outstanding Effect of dilutive securities: Unvested restricted stock units and common stock subject to vesting requirements issued to employees and non-employees Common stock issuable upon the exercise of stock options Dilutive weighted average common shares outstanding |
Accounts Receivable And Unbil21
Accounts Receivable And Unbilled Revenue, Net (Tables) | 9 Months Ended |
Oct. 02, 2015 | |
Accounts Receivable And Unbilled Revenue, Net [Abstract] | |
Accounts Receivable And Unbilled Revenue, Net | October 2, January 2, 2015 2015 Accounts receivable $ $ Unbilled revenue Allowance for doubtful accounts Accounts receivable and unbilled revenue, net $ $ |
Accrued Expenses And Other Li22
Accrued Expenses And Other Liabilities (Tables) | 9 Months Ended |
Oct. 02, 2015 | |
Accrued Expenses And Other Liabilities [Abstract] | |
Components Of Accrued Expenses And Other Liabilities | October 2, January 2, 2015 2015 Accrued compensation and benefits $ $ Accrued bonuses Accrued restructuring related expenses - Deferred revenue Accrued sales, use, franchise and VAT tax Accrued Technolab earnout liability - Other accrued expenses Total accrued expenses and other liabilities $ $ |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 9 Months Ended |
Oct. 02, 2015 | |
Restructuring Costs [Abstract] | |
Summary Of Restructuring Expense Accruals | Severance and Other Employee Costs Accrual balance at January 2, 2015 $ Expenditures Accrual balance at October 2, 2015 $ - |
Geographic And Group Informat24
Geographic And Group Information (Tables) | 9 Months Ended |
Oct. 02, 2015 | |
Geographic And Group Information [Abstract] | |
Geographic Revenue | Quarter Ended Nine Months Ended October 2, September 26, October 2, September 26, 2015 2014 2015 2014 Revenue: North America $ $ $ $ International (primarily European countries) Total revenue $ $ $ $ |
Long-Lived Assets Attributable To Geographic Area | October 2, January 2, 2015 2015 Long-lived assets: North America $ $ International (primarily European countries) Total long-lived assets $ $ |
Revenue By Service Group | Quarter Ended Nine Months Ended October 2, September 26, October 2, September 26, 2015 2014 2015 2014 The Hackett Group $ $ $ $ ERP Solutions Total revenue $ $ $ $ |
Net Income Per Common Share (Na
Net Income Per Common Share (Narrative) (Details) - shares shares in Millions | 3 Months Ended | |
Oct. 02, 2015 | Sep. 26, 2014 | |
Net Income Per Common Share [Abstract] | ||
Antidilutive common share equivalents | 0.5 | 0.4 |
Net Income Per Common Share (Ba
Net Income Per Common Share (Basic And Diluted Weighted Average Shares) (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2015 | Sep. 26, 2014 | Oct. 02, 2015 | Sep. 26, 2014 | |
Net Income Per Common Share [Abstract] | ||||
Basic weighted average common shares outstanding | 28,755,225 | 28,557,528 | 28,674,838 | 28,872,043 |
Unvested restricted stock units and common stock subject to vesting requirements issued to employees and non-employees | 1,919,882 | 1,232,971 | 1,419,441 | 1,002,642 |
Common stock issuable upon the exercise of stock options | 813,283 | 9,826 | 670,454 | 9,589 |
Diluted weighted average common shares outstanding | 31,488,390 | 29,800,325 | 30,764,732 | 29,884,274 |
Accounts Receivable And Unbil27
Accounts Receivable And Unbilled Revenue, Net (Details) - USD ($) $ in Thousands | Oct. 02, 2015 | Jan. 02, 2015 |
Accounts Receivable And Unbilled Revenue, Net [Abstract] | ||
Accounts receivable | $ 35,643 | $ 28,154 |
Unbilled revenue | 9,561 | 10,597 |
Allowance for doubtful accounts | (1,211) | (1,330) |
Accounts receivable and unbilled revenue, net | $ 43,993 | $ 37,421 |
Accrued Expenses And Other Li28
Accrued Expenses And Other Liabilities (Details) - USD ($) $ in Thousands | Oct. 02, 2015 | Jan. 02, 2015 |
Accrued Expenses And Other Liabilities [Abstract] | ||
Accrued compensation and benefits | $ 7,449 | $ 3,266 |
Accrued bonuses | 9,578 | 7,682 |
Accrued restructuring related expenses | 270 | |
Deferred revenue | 9,277 | 8,896 |
Accrued sales, use, franchise and VAT tax | 2,110 | 1,977 |
Accrued Technolab earn-out liability | 3,440 | |
Other accrued expenses | 5,816 | 5,370 |
Total accrued expenses and other liabilities | $ 34,230 | $ 30,901 |
Restructuring Costs (Narrative)
Restructuring Costs (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Mar. 28, 2014 | Sep. 26, 2014 | |
Restructuring Costs [Abstract] | ||
Restructuring costs | $ 3,600 | $ 3,604 |
Restructuring Costs (Summary Of
Restructuring Costs (Summary Of Restructuring Expense Accruals) (Details) - Severance And Other Employee Costs [Member] $ in Thousands | 9 Months Ended |
Oct. 02, 2015USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Accrual balance | $ 270 |
Expenditures | $ (270) |
Accrual balance |
Credit Facility (Details)
Credit Facility (Details) - USD ($) $ in Millions | 9 Months Ended | ||||
Oct. 02, 2015 | Oct. 31, 2013 | Aug. 27, 2013 | Mar. 21, 2012 | Feb. 21, 2012 | |
Revolving line of credit facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity under credit facility | $ 20 | ||||
Term Loan [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Borrowing capacity under credit facility | $ 30 | ||||
Credit facility amount outstanding | $ 9.3 | ||||
Term of debt | 5 years | ||||
Maturity date | Aug. 27, 2018 | ||||
Revolving Line Of Credit Facility And Term Loan [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Term of debt | 5 years | ||||
Additional borrowing capacity | $ 17 | ||||
Maturity date | Aug. 27, 2018 | ||||
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 | ||||
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 | $ 6.9 |
Acquisition (Details)
Acquisition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 26, 2014 | Mar. 28, 2014 | Oct. 02, 2015 | Sep. 26, 2014 | |
Business Acquisition [Line Items] | ||||
Purchase price | $ 3,000 | |||
Shares granted to sellers | 1,000 | |||
Contingent consideration | 8,000 | |||
Compensation expense | $ 900 | $ 2,600 | ||
Bargain purchase gain from acquisition | $ 3,015 | |||
Acquired intangible assets | $ 7,700 | |||
Minimum [Member] | ||||
Business Acquisition [Line Items] | ||||
Amortization period | 2 years | |||
Maximum [Member] | ||||
Business Acquisition [Line Items] | ||||
Amortization period | 5 years |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 08, 2012 | Feb. 08, 2012 | Oct. 02, 2015 | Oct. 02, 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 10 months 24 days | ||||
Number of shares granted subject to vesting requirements | 483,051 | ||||
Shares subject to vesting requirements | 747,525 | 747,525 | |||
Nonvested weighted average grant-date fair value, Common stock | $ 8.77 | $ 8.77 | |||
Compensation expense related to common stock subject to vesting requirements | $ 4.5 | $ 4.5 | |||
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 | 730,237 | ||||
Weighted average grant-date fair value | $ 8.36 | ||||
Weighted average period, Restricted stock units | 1 year 11 months 12 days | ||||
Restricted stock units outstanding | 2,185,728 | 2,185,728 | |||
Nonvested weighted average grant-date fair value | $ 6.73 | $ 6.73 | |||
Performance Shares [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted average grant-date fair value | $ 1.31 | ||||
Performance based stock option grant, Exercise price | $ 4 | ||||
Performance based stock option grant | 2,916,563 | ||||
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 | ||||
Stock Appreciation Rights (SARs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 1.3 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Oct. 02, 2015 | Sep. 26, 2014 | Oct. 02, 2015 | Sep. 26, 2014 | Oct. 03, 2015 | |
Equity, Class of Treasury Stock [Line Items] | |||||
Purchase price per share | $ 6.13 | $ 6.07 | |||
Repurchase of common stock | 0 | 485,000 | 1,700,000 | ||
Total cost | $ 3,000 | $ 10,300 | |||
Amount available under repurchase plan | $ 2,300 | $ 2,300 | |||
Dividend paid, per share | $ 0.10 | ||||
Dividend paid, cash value | $ 3,100 | ||||
Shares repurchased for employee net vesting obligations, shares | 5,000 | 2,000 | 281,000 | 446,000 | |
Shares repurchased for employee net vesting obligations, value | $ 65 | $ 12 | $ 2,200 | $ 2,700 | |
Stock Repurchase A [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Purchase price per share | $ 9.10 | ||||
Repurchase of common stock | 149,000 | ||||
Total cost | $ 1,400 | ||||
Subsequent Event [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Dividend declared | $ 0.10 |
Geographic And Group Informat35
Geographic And Group Information (Narrative) (Details) - USD ($) $ in Millions | Oct. 02, 2015 | Jan. 02, 2015 |
Geographic And Group Information [Abstract] | ||
Goodwill included in foreign assets | $ 14.5 | $ 15 |
Geographic And Group Informat36
Geographic And Group Information (Geographic Revenue) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2015 | Sep. 26, 2014 | Oct. 02, 2015 | Sep. 26, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 67,217 | $ 60,437 | $ 194,586 | $ 176,394 |
North America [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | 57,060 | 48,094 | 161,025 | 142,797 |
International Primarily European Countries [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total revenue | $ 10,157 | $ 12,343 | $ 33,561 | $ 33,597 |
Geographic And Group Informat37
Geographic And Group Information (Long-Lived Assets Attributable To Geographic Area) (Details) - USD ($) | Oct. 02, 2015 | Jan. 02, 2015 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | $ 93,946,000 | $ 95,730,000 |
North America [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | 78,882,000 | 80,152,000 |
International Primarily European Countries [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total long-lived assets | $ 15,064,000 | $ 15,578,000 |
Geographic And Group Informat38
Geographic And Group Information (Revenue By Service Group) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Oct. 02, 2015 | Sep. 26, 2014 | Oct. 02, 2015 | Sep. 26, 2014 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 67,217 | $ 60,437 | $ 194,586 | $ 176,394 |
The Hackett Group [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 58,174 | 51,370 | 165,757 | 146,654 |
ERP Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 9,043 | $ 9,067 | $ 28,829 | $ 29,740 |