Hackett Group (NASDAQ: HCKT) expands $125M credit line, Q2 2026 earnings detailed
Rhea-AI Filing Summary
The Hackett Group, Inc. amended and restated its revolving credit facility on August 3, 2026, increasing borrowing capacity by $25 million to $125 million and extending maturity to August 3, 2031. As of that date, $81.0 million was outstanding, secured by substantially all assets and subject to financial covenants including a maximum consolidated leverage ratio of 3.50 to 1.00.
For the quarter ended June 26, 2026, the company reported total revenue of $69.3 million versus $78.9 million a year earlier, and GAAP diluted EPS of $0.18 versus $0.06. Adjusted diluted EPS was $0.34 versus $0.38. Operating cash flow was $15.2 million, supporting $4.0 million of share repurchases, $3.0 million of dividends, and a reduction of net debt by $6.1 million.
The board declared a quarterly dividend of $0.12 per share, payable October 2, 2026 to shareholders of record on September 18, 2026. Management’s outlook for the third quarter of 2026 calls for revenue before reimbursements of $68.0–$70.0 million and adjusted diluted EPS of $0.37–$0.39.
Positive
- None.
Negative
- None.
Filing Explained
The executed amendment makes the enlarged revolving facility subject to guarantees, substantially all-assets security, and operating and financial covenant limits.
On
The agreement limits, among other things, new liens and indebtedness, mergers, asset sales, guarantees, investments, and dividends or distributions. It also requires a consolidated fixed-charge coverage ratio of at least 1.50 to 1.00 and a consolidated leverage ratio of no more than 3.50 to 1.00.
Borrowing costs are floating, using either a base rate or Term SOFR plus a leverage-based margin; unused commitments carry an annual fee ranging from
8-K Event Classification
Key Figures
Key Terms
Term SOFR rate financial
consolidated leverage ratio financial
consolidated fixed charge coverage ratio financial
non-GAAP financial
Value Added Reseller (VAR) financial
Earnings Snapshot
For Q3 2026, the company expects revenue before reimbursements of $68.0–$70.0 million and adjusted diluted EPS of $0.37–$0.39, assuming a GAAP effective tax rate of 26.5%.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
The
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(Commission File Number) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR § 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR § 240.12b-2).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On August 3, 2026, The Hackett Group, Inc. (the "Company") entered into a Fourth Amended and Restated Credit Agreement (the "Credit Agreement") with Bank of America, N.A., as administrative agent, and the lenders party thereto, pursuant to which the lenders agreed to amend and restate the Third Amended and Restated Credit Agreement, dated November 7, 2022, with Bank of America, N.A., as lender, in order to extend the maturity date of the revolving credit facility and provide the Company with an additional $25 million in borrowing capacity resulting in aggregate borrowing capacity of up to $125 million pursuant to a revolving line of credit (the "Credit Facility"). As of August 3, 2026, there was $81.0 million outstanding under the Credit Facility. The Credit Facility matures on August 3, 2031.
The obligations of the Company under the Credit Agreement are guaranteed by existing and future wholly-owned material domestic subsidiaries of the Company (the "Guarantors") and are secured by substantially all of the existing and future property and assets of the Company and the Guarantors.
The interest rates per annum applicable to loans under the Credit Facility will be, at the Company's option, equal to either a base rate or a Term SOFR rate, in each case, plus an applicable margin percentage. The applicable margin percentage is determined from time to time under the Credit Agreement based on a consolidated leverage ratio, and ranges from 1.375% to 2.250% per annum in the case of Term SOFR advances and from 0.375% to 1.250% per annum in the case of base rate advances. The initial applicable margin percentage is 1.625% per annum in the case of Term SOFR rate advances, and 0.625% per annum in the case of base rate advances. A commitment fee is also payable on unused commitments of the Credit Facility, and varies between 0.125% and 0.375% per annum depending on a consolidated leverage ratio, with the initial level being 0.225% per annum.
The Credit Agreement contains customary representations, warranties, indemnities and affirmative and negative covenants. The negative covenants include, among others, certain limitations on the ability to: incur liens and indebtedness; consummate mergers, consolidations or asset sales; make guarantees and investments; and pay dividends or distributions in respect of the Company's shares. In addition, the Credit Agreement contains financial covenants that require the Company to maintain, on a consolidated basis (i) a consolidated fixed charge coverage ratio of at least 1.50 to 1.00, and (ii) a consolidated leverage ratio of not more than 3.50 to 1.00, in each case as calculated in accordance with the Credit Agreement.
The Credit Agreement also includes customary events of default, including, among others, the failure to make payments under the Credit Facility when due, bankruptcy, certain judgments, breaches of representations and warranties, breaches of covenants and the occurrence of certain events, including cross default to other indebtedness of the Company and its subsidiaries.
The preceding description of the Credit Agreement is a summary and is qualified in its entirety by the Credit Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated by reference herein.
Item 2.02 Results of Operations and Financial Condition.
On August 4, 2026, The Hackett Group, Inc. (the “Company”) issued a press release setting forth its consolidated financial results for the second fiscal quarter ended June 26, 2026. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein.
The information contained in Item 2.02 of this current report on Form 8-K, as well as Exhibit 99.1, is being furnished to the Securities and Exchange Commission and shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number |
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Description |
10.1 |
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Fourth Amended and Restated Credit Agreement, dated August 3, 2026, among The Hackett Group, Inc., the subsidiaries of The Hackett Group, Inc. named on the signature pages thereto,Bank of America, N.A., as administrative agent, and the lenders party thereto |
99.1 |
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Press Release of The Hackett Group, Inc., dated August 4, 2026 |
104 |
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Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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THE HACKETT GROUP, INC. |
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Date: August 4, 2026 |
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By: |
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/s/ Robert A. Ramirez |
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Robert A. Ramirez |
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Executive Vice President, Finance and Chief Financial Officer |
WWW.THEHACKETTGROUP.COM
Exhibit 99.1
The Hackett Group Announces Second Quarter 2026 Results
MIAMI, FL (August 4, 2026) - The Hackett Group, Inc. (NASDAQ: HCKT), a leading AI strategic consulting and digital transformation firm that enables Digital World Class® performance, today announced its financial results for the second quarter, which ended on June 26, 2026.
"While our second quarter reflected the ongoing transition of our business model, our third-quarter outlook marks what we believe is an important operational and financial inflection point," stated Ted A. Fernandez, Chairman & CEO of The Hackett Group, Inc. "Based on recent platform-led wins exceeding $30 million, and growing demand for AI-enabled transformation services, we expect both sequential revenue growth and year-over-year adjusted EPS growth in the third quarter. The positive market response to our platforms reinforces our conviction that enterprises are seeking trusted, outcome-oriented solutions that accelerate value realization while reducing transformation risk and positioning us to drive strong operating results and long-term shareholder value."
Financial Highlights
Business Outlook for the Third Quarter of 2026
Based on the Company's current outlook:
Conference Call and Webcast Details
On Tuesday, August 4, 2026, senior management will discuss second quarter results in a conference call at 5:00 P.M. ET. The number for the conference call is (800) 593-0486, [Passcode: Second Quarter]. For International callers, please dial (517) 308-9371. Please dial in at least 5-10 minutes prior to start time. If you are unable to participate on the conference call, a rebroadcast will be available beginning at 8:00 P.M. ET on Tuesday, August 4, 2026 and will run through 5:00 P.M. ET on Tuesday, August 18, 2026. To access the rebroadcast, please dial (800) 835-4610. For International callers, please dial (203) 369-3352.
In addition, The Hackett Group ® will also be webcasting this conference call live. To participate, simply visit https://www.thehackettgroup.com approximately 10 minutes prior to the start of the call and click on the conference call link provided. An online replay of the call will be available after 8:00 P.M. ET on Tuesday, August 4, 2026 and will run through 5:00 P.M. ET on Tuesday, August 18, 2026. To access the replay, visit www.thehackettgroup.com.
Use of Non-GAAP Financial Measures
The Company provides adjusted earnings results (which excludes non-cash stock based compensation expense, stock price award program compensation expense, acquisition-related cash and non-cash stock based compensation expense, amortization expense, acquisition related costs and any one-time costs and includes a GAAP tax rate) as a complement to results provided in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP results are provided to enhance the users' overall understanding of the Company's current financial performance and its prospects for the future. The Company believes the non-GAAP results provide useful information to both management and investors and by excluding certain expenses that it believes are not indicative of its core operating results. The non-GAAP measures are included to provide investors and management with an alternative method for assessing operating results in a manner that is focused on the performance of its ongoing primary operations and to provide a consistent basis for comparison between quarters. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting. The presentation of this additional non-GAAP information should be considered in addition to, and not as a substitute for or superior to, any results prepared in accordance with GAAP. See the reconciliation of actual results titled "Reconciliation of GAAP to Non-GAAP Measures" in the accompanying tables.
The Company believes that the presentation of non-GAAP financial information on a forward-looking basis, including the guidance contained in this release, provides important supplemental information to management and investors regarding its anticipated results of operations. The Company is unable to provide a reconciliation of GAAP measures to corresponding forward-looking non-GAAP measures without unreasonable effort due to the high variability and low visibility of most of the items that have been excluded from these non-GAAP measures. For example, non-cash stock-based compensation expense is impacted by the Company's future hiring needs, the type and volume of equity awards necessary for such future hiring, and the price at which the Company's stock will trade in those future periods. In addition, the provision or benefit for income taxes is impacted by non-recurring income tax adjustments, valuation allowance on deferred tax assets, and the income tax effect of non-GAAP exclusions. The effects of these reconciling items may be significant, as the items that are being excluded are difficult to predict.
About The Hackett Group®
The Hackett Group, Inc. (NASDAQ: HCKT) is an AI strategic consulting and digital transformation firm
that enables Digital World Class® performance. Using Hackett AI XPLR™, ZBrain™, XT™, AIXelerator™,
AskHackett™, and Quantum Leap® platforms, the company's experienced professionals and engineers
help organizations realize the power of Gen AI from ideation through implementation to achieve
quantifiable, breakthrough results with unprecedented speed, allowing it to be key architects of their Gen
AI journey. The company's expertise is grounded in unparalleled best practices insights from enterprise
performance benchmarks from the world's leading businesses - including 97% of the Dow Jones
Industrials, 90% of the Fortune 100, 68% of the DAX 40 and 53% of the FTSE 100. Visit us at
www.thehackettgroup.com/.
# # #
Trademarks
The Hackett Group®, quadrant logo, Digital World Class® and Quantum Leap® are the registered marks of The Hackett Group®.
Cautionary Statement Regarding "Forward-Looking" Statements
This release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements including without limitation, words such as "expects," "anticipates," "intends," "plans," "believes," seeks," "estimates," or other similar phrases or variations of such words or similar expressions indicating, present or future anticipated or expected occurrences or outcomes are intended to identify such forward-looking statements. Forward-looking statements are not statements of historical fact and involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. Factors that could impact such forward-looking statements include, among others, changes in worldwide and U.S. economic conditions that impact business confidence and the demand for our products and services, our ability to transition our capabilities to support generative artificial intelligence (AI)-related consulting services and solutions, our ability to effectively integrate acquisitions, including the Leeway acquisition, into our operations, our ability to manage joint ventures and successfully cooperate with our joint venture partners, our ability to retain existing business, our ability to attract additional business, our ability to effectively market and sell our product offerings and other services, the timing of projects and the potential for contract cancellation by our customers, changes in expectations regarding the business consulting and information technology industries, our ability to attract and retain skilled employees, possible changes in collections of accounts receivable due to the bankruptcy or financial difficulties of our customers, risks of competition, price and margin trends, foreign currency fluctuations, the impact of the geopolitical conflict involving Russia and Ukraine and in the Middle East on our business and changes in general economic conditions, interest rates and our ability to obtain additional debt financing if needed as well as other risk detailed in The Hackett Group's reports filed with the United States Securities and Exchange Commission. The Hackett Group does not undertake any duty to update this release or any forward-looking statements contained herein.
Contact
Robert A. Ramirez, CFO, 305-375-8005 or rramirez@thehackettgroup.com
Page 4 of 8 - The Hackett Group, Inc. Announces First Quarter Results
The Hackett Group, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
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Quarter Ended |
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Six Months Ended |
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June 26, |
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June 27, |
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June 26, |
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June 27, |
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2026 |
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2025 |
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2026 |
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2025 |
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Revenue: |
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Revenue before reimbursements |
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$ |
68,342 |
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$ |
77,629 |
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$ |
136,185 |
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$ |
153,860 |
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Reimbursements |
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986 |
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1,270 |
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1,940 |
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2,904 |
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Total revenue |
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69,328 |
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78,899 |
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138,125 |
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156,764 |
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Costs and expenses: |
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Cost of service: |
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Personnel costs before reimbursable expenses (includes $2,460 and $1,871 and $4,985 and $9,913 of non-cash stock based compensation expense in the three and six months ended June 26, 2026 and June 27, 2025, respectively) |
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40,632 |
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49,672 |
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79,137 |
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98,052 |
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Reimbursable expenses |
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986 |
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1,270 |
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1,940 |
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2,904 |
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Total cost of service |
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41,618 |
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50,942 |
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81,077 |
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100,956 |
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Selling, general and administrative costs (includes $1,793 and $3,861 and $4,736 and $9,480 of non-cash stock based compensation expense in the three and six months ended June 26, 2026 and June 27, 2025, respectively) |
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19,506 |
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23,362 |
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37,952 |
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46,810 |
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Restructuring costs |
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492 |
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- |
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2,448 |
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- |
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Total costs and operating expenses |
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61,616 |
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74,304 |
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121,477 |
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147,766 |
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Operating income |
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7,712 |
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4,595 |
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16,648 |
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8,998 |
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Other expense, net: |
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Interest expense, net |
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(1,211 |
) |
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(366 |
) |
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(2,219 |
) |
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(568 |
) |
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Income before income taxes |
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6,501 |
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4,229 |
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14,429 |
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8,430 |
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Income tax expense |
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2,092 |
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2,568 |
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5,739 |
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3,626 |
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Net income |
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$ |
4,409 |
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$ |
1,661 |
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$ |
8,690 |
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$ |
4,804 |
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Basic net income per common share: |
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Income per common share |
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$ |
0.18 |
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$ |
0.06 |
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$ |
0.35 |
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$ |
0.17 |
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Weighted average common shares outstanding |
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25,064 |
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27,602 |
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25,115 |
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27,595 |
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Diluted net income per common share: |
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Income per common share |
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$ |
0.18 |
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$ |
0.06 |
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$ |
0.34 |
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$ |
0.17 |
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Weighted average common and common equivalent shares outstanding |
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25,166 |
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28,482 |
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25,212 |
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28,433 |
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Page 5 of 8 - The Hackett Group, Inc. Announces First Quarter Results
The Hackett Group, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
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June 26, |
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December 27, |
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2026 |
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2025 |
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ASSETS |
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Current assets: |
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Cash |
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$ |
14,162 |
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$ |
18,197 |
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Accounts receivable and contract assets, net |
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61,900 |
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59,505 |
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Prepaid expenses and other current assets |
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8,444 |
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6,175 |
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Total current assets |
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84,506 |
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83,877 |
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Property, software and equipment, net |
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26,584 |
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24,011 |
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Other assets |
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358 |
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358 |
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Intangible assets |
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2,572 |
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3,252 |
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Goodwill |
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90,080 |
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90,659 |
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Operating lease right-of-use assets |
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2,173 |
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2,484 |
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Deferred tax asset |
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2,336 |
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1,806 |
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Total assets |
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$ |
208,609 |
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$ |
206,447 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
5,246 |
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$ |
6,295 |
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Accrued expenses and other liabilities |
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23,797 |
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28,824 |
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Contract liabilities |
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13,287 |
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12,317 |
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Income tax payable |
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- |
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74 |
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Operating lease liabilities |
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1,292 |
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1,259 |
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Total current liabilities |
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43,622 |
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48,769 |
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Deferred tax liability |
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15,072 |
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12,537 |
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Long-term debt |
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80,852 |
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75,818 |
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Operating lease liabilities |
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881 |
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1,223 |
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Total liabilities |
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140,427 |
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138,347 |
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Shareholders' equity |
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68,182 |
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68,100 |
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Total liabilities and shareholders' equity |
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$ |
208,609 |
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$ |
206,447 |
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Page 6 of 8 - The Hackett Group, Inc. Announces First Quarter Results
The Hackett Group, Inc.
SEGMENT CONTRIBUTIONS
(in thousands)
(unaudited)
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Quarter Ended |
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Six Months Ended |
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June 26, |
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June 27, |
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June 26, |
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June 27, |
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2026 |
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2025 |
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2026 |
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2025 |
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Global S&BT (1): |
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Revenue before reimbursements |
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$ |
35,589 |
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$ |
43,611 |
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$ |
71,959 |
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$ |
86,253 |
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Cost of sales |
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19,051 |
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22,760 |
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39,148 |
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45,086 |
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Gross margin |
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16,538 |
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20,851 |
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32,811 |
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41,167 |
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Selling, general and administrative costs |
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7,437 |
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7,863 |
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14,637 |
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15,395 |
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Segment contribution |
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9,101 |
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12,988 |
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18,174 |
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25,772 |
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Oracle Solutions (2): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Revenue before reimbursements |
|
$ |
15,317 |
|
|
$ |
20,494 |
|
|
$ |
30,765 |
|
|
$ |
40,890 |
|
|
Cost of sales |
|
|
9,551 |
|
|
|
13,931 |
|
|
|
20,149 |
|
|
|
27,626 |
|
|
Gross margin |
|
|
5,766 |
|
|
|
6,563 |
|
|
|
10,616 |
|
|
|
13,264 |
|
|
Selling, general and administrative costs |
|
|
1,575 |
|
|
|
2,112 |
|
|
|
2,862 |
|
|
|
4,447 |
|
|
Segment contribution |
|
|
4,191 |
|
|
|
4,451 |
|
|
|
7,754 |
|
|
|
8,817 |
|
|
SAP Solutions (3): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Revenue before reimbursements |
|
$ |
17,436 |
|
|
$ |
13,524 |
|
|
$ |
33,461 |
|
|
$ |
26,717 |
|
|
Cost of sales |
|
|
9,563 |
|
|
|
7,713 |
|
|
|
18,415 |
|
|
|
14,851 |
|
|
Gross margin |
|
|
7,873 |
|
|
|
5,811 |
|
|
|
15,046 |
|
|
|
11,866 |
|
|
Selling, general and administrative costs |
|
|
2,285 |
|
|
|
1,919 |
|
|
|
4,495 |
|
|
|
3,723 |
|
|
Segment contribution |
|
|
5,588 |
|
|
|
3,892 |
|
|
|
10,551 |
|
|
|
8,143 |
|
|
Total Company (4): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Total segment contribution |
|
|
18,880 |
|
|
|
21,331 |
|
|
|
36,479 |
|
|
|
42,732 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Items not allocated to segment level (4): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Corporate general and administrative expenses |
|
|
4,976 |
|
|
|
5,248 |
|
|
|
8,788 |
|
|
|
10,902 |
|
|
Non-cash stock based compensation expense |
|
|
2,138 |
|
|
|
2,814 |
|
|
|
4,534 |
|
|
|
5,579 |
|
|
Stock price award program compensation expense |
|
|
1,643 |
|
|
|
5,142 |
|
|
|
2,739 |
|
|
|
10,285 |
|
|
Acquisition-related cash compensation (reversal) expense |
|
|
- |
|
|
|
308 |
|
|
|
(64 |
) |
|
|
616 |
|
|
Acquisition-related non-cash stock based compensation (reversal) expense |
|
|
472 |
|
|
|
1,765 |
|
|
|
(1,541 |
) |
|
|
3,530 |
|
|
Acquisition-related costs |
|
|
- |
|
|
|
194 |
|
|
|
- |
|
|
|
387 |
|
|
Restructuring costs |
|
|
492 |
|
|
|
- |
|
|
|
2,448 |
|
|
|
- |
|
|
Depreciation expense |
|
|
1,148 |
|
|
|
1,034 |
|
|
|
2,313 |
|
|
|
2,059 |
|
|
Amortization expense |
|
|
299 |
|
|
|
231 |
|
|
|
614 |
|
|
|
376 |
|
|
Interest expense, net |
|
|
1,211 |
|
|
|
366 |
|
|
|
2,219 |
|
|
|
568 |
|
|
Income before taxes |
|
$ |
6,501 |
|
|
$ |
4,229 |
|
|
$ |
14,429 |
|
|
$ |
8,430 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
(1) Global S&BT includes the results of our North America and International Gen AI Consulting, Implementation and Licensing, Benchmarking and Business Transformation offerings, Executive Advisory, Market Intelligence and IP as-a-Service, OneStream and eProcurement. |
|
|||||||||||||||
|
(2) Oracle Solutions includes the results of our EPM/ERP and AI Enablement practices. |
|
|||||||||||||||
|
(3) SAP Solutions includes the results of our SAP applications and related SAP service offerings. |
|
|||||||||||||||
|
(4) Segment contributions consist of the revenue generated by the segment, less the direct costs of revenue and selling, general and administrative expenses that are incurred directly by the segment. Items not allocated to the segment level include corporate costs related to administrative functions that are performed in a centralized manner that are not attributable to a particular segment. Items not allocated to the segment level include corporate general and administrative expenses, non-cash stock based compensation expense, acquisition related cash and non-cash stock based compensation expense, depreciation and amortization expense, any one-time costs, interest expense and foreign currency gains and losses. Corporate general and administrative expenses primarily include costs related to business support functions including accounting and finance, human resources, legal, information technology and office administration. Corporate general and administrative expenses exclude one-time, non-recurring expenses and benefits. |
|
|||||||||||||||
Page 7 of 8 - The Hackett Group, Inc. Announces First Quarter Results
The Hackett Group, Inc. |
RECONCILIATION OF GAAP TO NON-GAAP MEASURES |
(in thousands, except per share data) |
(unaudited)
|
|
|
Quarter Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 26, |
|
|
June 27, |
|
|
June 26, |
|
|
June 27, |
|
||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
GAAP NET INCOME |
|
$ |
4,409 |
|
|
$ |
1,661 |
|
|
$ |
8,690 |
|
|
$ |
4,804 |
|
Adjustments (1): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-cash stock based compensation expense (2) |
|
|
2,138 |
|
|
|
2,814 |
|
|
|
4,534 |
|
|
|
5,579 |
|
Stock price award program compensation expense (2)(3) |
|
|
1,643 |
|
|
|
5,142 |
|
|
|
2,739 |
|
|
|
10,285 |
|
Acquisition-related cash compensation (reversal) expense (4) |
|
|
- |
|
|
|
308 |
|
|
|
(64 |
) |
|
|
616 |
|
Acquisition-related non-cash stock based compensation (reversal) expense (4) |
|
|
472 |
|
|
|
1,765 |
|
|
|
(1,541 |
) |
|
|
3,530 |
|
Acquisition-related costs |
|
|
- |
|
|
|
194 |
|
|
|
- |
|
|
|
387 |
|
Amortization expense |
|
|
299 |
|
|
|
231 |
|
|
|
614 |
|
|
|
376 |
|
Restructuring costs |
|
|
492 |
|
|
|
- |
|
|
|
2,448 |
|
|
|
- |
|
ADJUSTED NET INCOME BEFORE INCOME TAXES ON ADJUSTMENTS (1) |
|
|
9,453 |
|
|
|
12,115 |
|
|
|
17,420 |
|
|
|
25,577 |
|
Tax effect of adjustments above (5) |
|
|
981 |
|
|
|
1,424 |
|
|
|
296 |
|
|
|
3,280 |
|
ADJUSTED NET INCOME (1) |
|
$ |
8,472 |
|
|
$ |
10,691 |
|
|
$ |
17,124 |
|
|
$ |
22,297 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
GAAP diluted net income per common share |
|
$ |
0.18 |
|
|
$ |
0.06 |
|
|
$ |
0.34 |
|
|
$ |
0.17 |
|
Adjusted diluted net income per common share (1) |
|
$ |
0.34 |
|
|
$ |
0.38 |
|
|
$ |
0.68 |
|
|
$ |
0.78 |
|
Weighted average common and common equivalent shares outstanding |
|
|
25,166 |
|
|
|
28,482 |
|
|
|
25,212 |
|
|
|
28,433 |
|
|
|
|||||||||||||||
(1) The Company provides adjusted earnings results (which excludes non-cash stock based compensation expense, stock price award program compensation expense, acquisition-related cash and non-cash stock based compensation expense, amortization expense, acquisition related costs and any one-time costs and includes a GAAP tax rate) as a complement to results provided in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP results are provided to enhance the users' overall understanding of the Company's current financial performance and its prospects for the future. The Company believes the non-GAAP results provide useful information to both management and investors and by excluding certain expenses that it believes are not indicative of its core operating results. The non-GAAP measures are included to provide investors and management with an alternative method for assessing operating results in a manner that is focused on the performance of its ongoing primary operations and to provide a consistent basis for comparison between quarters. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting. The presentation of this additional non-GAAP information should be considered in addition to, and not as a substitute for or superior to, any results prepared in accordance with GAAP. |
|
|||||||||||||||
(2) Non-cash stock based compensation expense is accounted for under Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation. The Company excludes non-cash stock based compensation expense and the related tax effects for the purposes of adjusted net income and adjusted diluted earnings per share. The Company believes that non-GAAP measures of profitability, which exclude non-cash stock based compensation expense, are widely used by investors. |
|
|||||||||||||||
(3) The stock price award program compensation expense relates to equity awards that were granted with certain market share price hurdles and service conditions to meet before they are vested. The market price hurdles include twenty consecutive trading days of equal to or greater than $30, $40 and $50 per share price. As of June 26, 2026, the first market condition had been met, and although the shares have not vested they are included in the Company's dilutive shares outstanding for the quarter ended June 26, 2026. As of June 26, 2026, the second and third market conditions had not been met and as such the shares have not vested and are not included in the Company's basic or dilutive shares outstanding. Non-cash compensation of $1.6 million and $2.7 million was recorded in the second quarter and first six months of 2026, respectively. |
|
|||||||||||||||
(4) The Company incurs cash and non-cash stock based compensation expense for acquisition related consideration that is recognized over time under GAAP. The Company believes excluding these amounts more consistently presents its ongoing results of operations because they are related to acquisitions and not due to normal operating activities. The acquisition-related non-cash stock based compensation expense is also accounted for under Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation. |
|
|||||||||||||||
(5) The adjustment for the income tax expense is based on the accounting treatment and income tax rate for the jurisdiction of each item. The impact of all of the non-cash stock based compensation expense was expense of $0.8 million and benefit of $0.5 million and expense of $1.2 million and $2.9 million in the second quarter and first six months of 2026 and 2025, respectively. The impact of acquisition related cash compensation reversal was a benefit of $16 thousand in the first six months of 2026 and expense of $78 thousand and $155 thousand in the second quarter and first six months of 2025, respectively. The impact of the acquisition related costs including amortization was $78 thousand and $160 thousand and $111 thousand and $199 thousand in the second quarter and first six months of 2026 and 2025, respectively. The impact of the restructuring cost was $124 thousand and $0.6 million in the second quarter and first six months of 2026, respectively. |
|
|||||||||||||||
Page 8 of 8 - The Hackett Group, Inc. Announces First Quarter Results
The Hackett Group, Inc.
SUPPLEMENTAL FINANCIAL DATA
(unaudited)
|
|
Quarter Ended |
|
|||||||||
|
|
June 26, |
|
|
March 27, |
|
|
June 27, |
|
|||
|
|
2026 |
|
|
2026 |
|
|
2025 |
|
|||
Segment Total Revenue and Revenue Before Reimbursements (in thousands): |
|
|
|
|
|
|
|
|
|
|||
Global S&BT: |
|
|
|
|
|
|
|
|
|
|||
Total revenue |
|
$ |
36,036 |
|
|
$ |
36,775 |
|
|
$ |
44,205 |
|
Reimbursements |
|
|
447 |
|
|
|
405 |
|
|
|
594 |
|
Revenue before reimbursements |
|
$ |
35,589 |
|
|
$ |
36,370 |
|
|
$ |
43,611 |
|
|
|
|
|
|
|
|
|
|
|
|||
Oracle Solutions: |
|
|
|
|
|
|
|
|
|
|||
Total revenue |
|
$ |
15,481 |
|
|
$ |
15,685 |
|
|
$ |
20,801 |
|
Reimbursements |
|
|
164 |
|
|
|
237 |
|
|
|
307 |
|
Revenue before reimbursements |
|
$ |
15,317 |
|
|
$ |
15,448 |
|
|
$ |
20,494 |
|
|
|
|
|
|
|
|
|
|
|
|||
SAP Solutions: |
|
|
|
|
|
|
|
|
|
|||
Total revenue |
|
$ |
17,811 |
|
|
$ |
16,337 |
|
|
$ |
13,893 |
|
Reimbursements |
|
|
375 |
|
|
|
312 |
|
|
|
369 |
|
Revenue before reimbursements |
|
$ |
17,436 |
|
|
$ |
16,025 |
|
|
$ |
13,524 |
|
|
|
|
|
|
|
|
|
|
|
|||
Total segment revenue: |
|
|
|
|
|
|
|
|
|
|||
Total revenue |
|
$ |
69,328 |
|
|
$ |
68,797 |
|
|
$ |
78,899 |
|
Reimbursements |
|
|
986 |
|
|
|
954 |
|
|
|
1,270 |
|
Revenue before reimbursements |
|
$ |
68,342 |
|
|
$ |
67,843 |
|
|
$ |
77,629 |
|
|
|
|
|
|
|
|
|
|
|
|||
Revenue Concentration: |
|
|
|
|
|
|
|
|
|
|||
(% of total revenue) |
|
|
|
|
|
|
|
|
|
|||
Top customer |
|
|
3 |
% |
|
|
4 |
% |
|
|
7 |
% |
Top 5 customers |
|
|
13 |
% |
|
|
13 |
% |
|
|
19 |
% |
Top 10 customers |
|
|
23 |
% |
|
|
22 |
% |
|
|
27 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Key Metrics and Other Financial Data: |
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Total Company: |
|
|
|
|
|
|
|
|
|
|||
Consultant headcount |
|
|
1,211 |
|
|
|
1,247 |
|
|
|
1,382 |
|
Total headcount |
|
|
1,491 |
|
|
|
1,535 |
|
|
|
1,685 |
|
Days sales outstanding (DSO) (1) |
|
|
56 |
|
|
|
67 |
|
|
|
54 |
|
Cash (used by) provided by operating activities (in thousands) |
|
|
15,160 |
|
|
$ |
(5,067 |
) |
|
$ |
5,649 |
|
Depreciation (in thousands) |
|
|
1,148 |
|
|
$ |
1,165 |
|
|
$ |
1,034 |
|
Amortization (in thousands) |
|
|
299 |
|
|
$ |
315 |
|
|
$ |
231 |
|
Capital expenditures (in thousands) |
|
|
2,575 |
|
|
$ |
2,414 |
|
|
$ |
1,910 |
|
|
|
|
|
|
|
|
|
|
|
|||
Remaining Plan authorization: |
|
|
|
|
|
|
|
|
|
|||
Shares purchased (in thousands) |
|
|
372 |
|
|
|
212 |
|
|
|
177 |
|
Cost of shares repurchased (in thousands) |
|
$ |
3,928 |
|
|
$ |
2,966 |
|
|
$ |
4,320 |
|
Average price per share of shares purchased |
|
$ |
10.56 |
|
|
$ |
14.00 |
|
|
$ |
24.47 |
|
Remaining Plan authorization (in thousands) |
|
$ |
18,106 |
|
|
$ |
22,034 |
|
|
$ |
16,996 |
|
|
|
|
|
|
|
|
|
|
|
|||
Shares Purchased to Satisfy Employee Net Vesting Obligations: |
|
|
|
|
|
|
|
|
|
|||
Shares purchased (in thousands) |
|
|
5 |
|
|
|
121 |
|
|
|
3 |
|
Cost of shares purchased (in thousands) |
|
$ |
57 |
|
|
$ |
1,666 |
|
|
$ |
88 |
|
Average price per share of shares purchased |
|
$ |
12.14 |
|
|
$ |
13.84 |
|
|
$ |
25.77 |
|
|
|
|||||||||||
(1) Given the increase in Value Added Reseller (VAR) revenue over the last two years, which carries multi-year terms, the DSO calculation has been revised to exclude the related revenue and accounts receivables. |
|
|||||||||||
|
|
|||||||||||