UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended July 3, 2009
OR
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
to
Commission File Number 0-24343
The Hackett Group, Inc.
(Exact name of Registrant as specified in its
charter)
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FLORIDA
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65-0750100
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(State or other jurisdiction of
Incorporation or organization)
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(I.R.S. Employer
Identification Number)
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1001 Brickell Bay Drive, Suite 3000
Miami, Florida
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33131
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(Address of principal executive offices)
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(Zip Code)
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(305) 375-8005
(Registrant’s telephone number, including area code)
Indicate by check mark whether
the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirement for the past 90 days. YES
x
NO
¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). YES
¨
NO
¨
Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large Accelerated Filer
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¨
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Accelerated Filer
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x
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Non-Accelerated Filer
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¨
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Smaller Reporting Company
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¨
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Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). YES
¨
NO
x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
As of August 7, 2009, there were 38,497,186 shares of common stock outstanding.
The Hackett Group, Inc.
TABLE OF CONTENTS
2
PART I — FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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The Hackett Group, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
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July 3,
2009
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January 2,
2009
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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22,516
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$
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32,060
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Marketable investments
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1,070
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1,727
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Accounts receivable and unbilled revenue, net of allowance of $1,512 and $1,631 at July 3, 2009 and January 2, 2009, respectively
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21,829
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25,481
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Prepaid expenses and other current assets
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3,556
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3,021
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Total current assets
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48,971
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62,289
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Restricted cash
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600
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600
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Property and equipment, net
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6,276
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5,767
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Other assets
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1,120
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1,392
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Goodwill, net
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65,231
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63,616
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Total assets
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$
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122,198
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$
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133,664
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable
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$
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2,569
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$
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3,711
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Accrued expenses and other liabilities
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21,977
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34,277
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Total current liabilities
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24,546
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37,988
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Accrued expenses and other liabilities, non-current
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1,200
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1,759
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Total liabilities
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25,746
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39,747
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Commitments and contingencies
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Shareholders’ equity:
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Preferred stock, $.001 par value, 1,250,000 shares authorized, none issued and outstanding
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—
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—
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Common stock, $.001 par value, 125,000,000 shares authorized; 54,018,421 and 53,408,465 shares issued at July 3, 2009 and January 2,
2009, respectively
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54
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53
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Additional paid-in capital
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287,537
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285,654
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Treasury stock, at cost, 15,533,902 and 14,352,458 shares at July 3, 2009 and January 2, 2009, respectively
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(55,505
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)
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(53,041
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)
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Accumulated deficit
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(131,314
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)
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(132,313
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)
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Accumulated other comprehensive loss
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(4,320
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)
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(6,436
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)
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Total shareholders’ equity
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96,452
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93,917
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Total liabilities and shareholders’ equity
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$
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122,198
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$
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133,664
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The accompanying notes are an integral part of the consolidated financial statements.
3
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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July 3,
2009
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June 27,
2008
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July 3,
2009
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June 27,
2008
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Revenue:
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Revenue before reimbursements
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$
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31,382
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$
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44,653
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$
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67,372
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$
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83,921
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Reimbursements
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3,234
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4,447
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6,760
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9,017
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Total revenue
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34,616
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49,100
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74,132
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92,938
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Costs and expenses:
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Cost of service:
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Personnel costs before reimbursable expenses (includes $529 and $261 and $1,089 and $658 of stock compensation expense in the quarters and six
months ended July 3, 2009 and June 27, 2008, respectively)
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20,381
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25,296
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42,655
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48,259
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Reimbursable expenses
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3,234
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4,447
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6,760
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9,017
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Total cost of service
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23,615
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29,743
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49,415
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57,276
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Selling, general and administrative costs (includes $218 and $839 and $324 and $1,387 of stock compensation expense in the quarters and six
months ended July 3, 2009 and June 27, 2008, respectively)
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10,791
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15,437
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23,630
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28,019
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Total costs and operating expenses
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34,406
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45,180
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73,045
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85,295
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Income from operations
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210
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3,920
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1,087
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7,643
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Other income (expense):
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Interest income
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11
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112
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36
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279
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Loss on marketable investments
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(35
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)
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—
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(35
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)
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—
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Income before income taxes
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186
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4,032
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1,088
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7,922
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Income tax expense
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26
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23
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89
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130
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Net income
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$
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160
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$
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4,009
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$
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999
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$
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7,792
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Basic net income per common share:
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Net income per common share
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$
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0.00
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$
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0.10
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$
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0.03
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$
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0.19
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Weighted average common shares outstanding
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37,894
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40,656
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38,169
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41,471
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Diluted net income per common share:
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Net income per common share
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$
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0.00
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$
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0.10
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$
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0.03
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$
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0.18
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Weighted average common and common equivalent shares outstanding
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38,070
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41,751
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38,387
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42,317
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The accompanying notes are an integral part of the consolidated financial statements.
4
The Hackett Group, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
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Six Months Ended
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July 3,
2009
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June 27,
2008
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Cash flows from operating activities:
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Net income
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$
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999
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$
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7,792
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Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation expense
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1,061
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1,018
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Amortization expense
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332
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|
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388
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(Reversal) provision for doubtful accounts
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(33
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)
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198
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Loss (gain) on foreign currency translation
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442
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(1,179
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)
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Non-cash stock compensation expense
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1,413
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2,045
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(Loss) gain on sale of property and equipment
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46
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(32
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)
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Loss on marketable investments
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35
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—
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Changes in assets and liabilities:
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Decrease (increase) in accounts receivable and unbilled revenue
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3,685
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(5,543
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)
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Increase in prepaid expenses and other assets
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(687
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)
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(2,044
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)
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(Decrease) increase in accounts payable
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(1,141
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)
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172
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(Decrease) increase in accrued expenses and other liabilities
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(12,723
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)
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362
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|
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Net cash (used in) provided by operating activities
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(6,571
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)
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3,177
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Cash flows from investing activities:
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Purchases of property and equipment
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(1,577
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)
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(1,101
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)
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Proceeds from sales of property and equipment
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—
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32
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Proceeds from redemptions of marketable securities
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623
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3,505
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Net cash (used in) provided by investing activities
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(954
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)
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2,436
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Cash flows from financing activities:
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Proceeds from issuance of common stock
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230
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276
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|
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Repurchases of common stock
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(2,464
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)
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(9,753
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)
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Net cash used in financing activities
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(2,234
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)
|
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(9,477
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)
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Effect of exchange rate on cash
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215
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(3
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)
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Net decrease in cash and cash equivalents
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|
|
(9,544
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)
|
|
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(3,867
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)
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Cash and cash equivalents at beginning of the period
|
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|
32,060
|
|
|
|
20,061
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|
|
|
|
|
|
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|
|
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Cash and cash equivalents at end of the period
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$
|
22,516
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|
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$
|
16,194
|
|
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|
|
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Supplemental disclosure of cash flow information:
|
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|
|
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Cash paid for income taxes
|
|
$
|
207
|
|
|
$
|
236
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|
The accompanying notes are an integral part of the consolidated financial statements.
5
The Hackett Group, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Basis of Presentation and General Information
Basis of Presentation
The accompanying consolidated financial statements of The Hackett Group
,
Inc. (“Hackett” or the “Company”) 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.
The Company consolidates the assets, liabilities, and results of operations of its entities in accordance with Accounting
Research Bulletin (“ARB”) No. 51,
Consolidated Financial Statements
, Statement of Financial Accounting Standards (“SFAS”) No. 94,
Consolidation of All Majority-Owned Subsidiaries – an amendment of ARB
No. 51, with related amendments of Accounting Principles Board (“APB”) Opinion No. 18 and ARB No. 43, Chapter 12
, and the Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”)
No. 46,
Consolidation of Variable Interest Entities
, as revised.
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 regarding interim financial reporting. Accordingly, these statements do not include all the disclosures normally
required by accounting principles generally accepted in the United States of America for annual financial statements and should be read in conjunction with the consolidated financial statements and notes thereto for the year ended January 2,
2009 included in the Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission. The consolidated results of operations for the quarter and six months ended July 3, 2009 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 accounting principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Recently Issued Accounting Standards
In December
2007, the FASB issued FAS No. 141 (revised 2007),
Business Combinations
. FAS No. 141 (revised 2007) establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, any non-controlling interest in the acquiree and the goodwill acquired. This standard also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business
combination and is effective for financial statements issued for fiscal years beginning after December 15, 2008. The adoption of FAS No. 141 (revised 2007) did not have a material impact on the Company’s consolidated financial
statements.
In April 2008, the FASB issued FSP No. 142-3,
Determination of the Useful Life of Intangible Assets
. FSP
No. 142-3 amends the factors an entity should consider in developing renewal or extension assumptions used in determining the useful life of recognized intangible assets under FAS No. 142,
Goodwill and Other Intangible Assets
. This
new guidance applies prospectively to intangible assets that are acquired individually or with a group of other assets in business combinations and asset acquisitions. FSP No. 142-3 is effective for financial statements issued for fiscal years
and interim periods beginning after December 15, 2008. The adoption of FSP No. 142-3 did not have a material impact on the Company’s consolidated financial statements.
6
The Hackett Group, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Basis of Presentation and General Information (continued)
In April 2009, the FASB issued FSP No. 157-4,
Determining Fair Value When the Volume and
Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions that are not Orderly
. FSP No. 157-4 provides additional guidance for estimating fair value in accordance with FAS No. 157. This
standard is effective for financial statements issued for periods ending after June 15, 2009. The adoption of FSP No. 157-4 did not have a material impact on the Company’s consolidated financial statements.
In April 2009, the FASB issued FSP No. 107-1 and APB No. 28-1,
Interim Disclosures about Fair Value of Financial Instruments
. FSP
No. 107-1 and APB No. 28-1 require disclosures about fair value of financial instruments for annual and interim reporting periods of publicly traded companies. FSP No. 107-1 and APB No. 28-1 are effective for financial statements
used for periods ending after June 15, 2009. The adoption of FSP No. 107-1 and APB No. 28-1 did not have a material impact on the Company’s consolidated financial statements.
In April 2009, the FASB issued FSP No. 141(R)-1,
Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise
from Contingencies
. FSP No. 141(R)-1 requires that assets acquired and liabilities assumed in a business combination that arise from contingencies be recognized at fair value if fair value can be reasonably estimated. This FSP is effective
for business combinations with an acquisition date on or after June 1, 2009. The adoption of FSP No. 141(R)-1 did not have a material impact on the Company’s consolidated financial statements.
In May 2009, the FASB issued FAS No. 165,
Subsequent Events
. FAS No. 165 establishes general standards of accounting for and
disclosure of events that occur after the balance sheet date but before financial statements are issued. FAS No. 165 is effective for interim or annual financial periods ending after June 15, 2009. As of this date the Company adopted FAS
No. 165 and evaluated subsequent events through the date of this filing.
In June 2009, the FASB issued FAS No. 168,
The
FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles- a replacement of FASB Statement No. 162
. FAS No. 168 will become effective on the date of this Statement, and will supersede all
then-existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification will become non-authoritative. FAS No. 168 is effective for financial statements issued for
interim and annual periods ending after September 15, 2009. The Company is currently evaluating the impact FAS No. 168 will have on its consolidated financial statements.
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 or restricted stock units issued to employees, the calculation includes only the vested portion of such stock.
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.
7
The Hackett Group, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
2. Net Income per Common Share (continued)
The following table reconciles basic and dilutive weighted average shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Six Months Ended
|
|
|
|
July 3,
2009
|
|
June 27,
2008
|
|
July 3,
2009
|
|
June 27,
2008
|
|
Basic weighted average common shares outstanding
|
|
37,894,570
|
|
40,655,876
|
|
38,168,642
|
|
41,470,658
|
|
|
|
|
|
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
Unvested restricted stock units issued to employees
|
|
163,851
|
|
973,363
|
|
202,399
|
|
740,123
|
|
Common stock issuable upon the exercise of stock options
|
|
11,604
|
|
121,288
|
|
15,430
|
|
105,975
|
|
|
|
|
|
|
|
|
|
|
|
Dilutive weighted average common shares outstanding
|
|
38,070,025
|
|
41,750,527
|
|
38,386,471
|
|
42,316,756
|
|
|
|
|
|
|
|
|
|
|
Approximately 1.2 million stock options were excluded from the computations of diluted net
income per common share for the quarters ended July 3, 2009 and June 27, 2008, as the exercise price was higher than the Company’s average stock price.
3. Comprehensive Income
The Company accounts for comprehensive income under FAS No. 130,
Reporting Comprehensive Income
. Comprehensive income is summarized below (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
Six Months Ended
|
|
|
|
|
July 3,
2009
|
|
June 27,
2008
|
|
|
July 3,
2009
|
|
June 27,
2008
|
|
|
Net income
|
|
$
|
160
|
|
$
|
4,009
|
|
|
$
|
999
|
|
$
|
7,792
|
|
|
Change in cumulative foreign currency on translation adjustment
|
|
|
2,240
|
|
|
(369
|
)
|
|
|
2,116
|
|
|
(391
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
$
|
2,400
|
|
$
|
3,640
|
|
|
$
|
3,115
|
|
$
|
7,401
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4. Restructuring
As of July 3, 2009 and January 2, 2009, the Company had restructuring expense accruals related to the closure and consolidation of facilities and related exit costs recorded in fiscal years 2001, 2002 and
2005. The following table sets forth the activity in the restructuring expense accruals during the six months ended July 3, 2009 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrual Balance at
January 2, 2009
|
|
Expenditures
|
|
|
Accrual Balance at
July 3, 2009
|
|
2001 Restructuring Accrual
|
|
$
|
1,211
|
|
$
|
(244
|
)
|
|
$
|
967
|
|
2002 Restructuring Accrual
|
|
$
|
2,448
|
|
$
|
(338
|
)
|
|
$
|
2,110
|
|
2005 Restructuring Accrual
|
|
$
|
634
|
|
$
|
(144
|
)
|
|
$
|
490
|
8
The Hackett Group, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
5. Marketable Investments
The Company adopted FAS No. 157,
Fair Value Measurements
, on December 29, 2007. FAS No. 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a
liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. FAS No. 157 also establishes a fair value hierarchy which requires an
entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. FAS No. 157 describes the following three levels of inputs that may be used to measure fair value:
Level 1: Quoted market prices in active markets for identical assets or liabilities
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3: Unobservable inputs that are not corroborated by market data
As of July 3, 2009, the Company’s financial instruments were carried at fair value in the consolidated balance sheet. The fair value of the short-term financial instruments, including cash and cash
equivalents, marketable investments, restricted cash, accounts receivable and unbilled revenue, accounts payable and accrued expenses and other liabilities, equaled the respective carrying value due to the short-term nature of these instruments.
As of July 3, 2009 and January 2, 2009, the Company had a net balance of $1.1 million and $1.7 million, respectively, in Bank of
America’s Columbia Strategic Cash Portfolio (“Portfolio”). Subsequent to July 3, 2009, the Company’s remaining balance in the Portfolio was redeemed. As a result of the final redemption, the Company recorded an additional
reserve on the marketable investments of $35 thousand to reflect the fair market value as of July 3, 2009.
The following table
summarizes the Company’s activity in the Portfolio during the quarter and six months ended July 3, 2009 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
Six Months Ended
|
|
|
Portfolio beginning balance
|
|
$
|
1,262
|
|
|
$
|
1,727
|
|
|
Redemptions
|
|
|
(157
|
)
|
|
|
(622
|
)
|
|
Unrealized losses
|
|
|
(35
|
)
|
|
|
(35
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio ending balance
|
|
$
|
1,070
|
|
|
$
|
1,070
|
|
|
|
|
|
|
|
|
|
|
|
9
The Hackett Group, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
6. Accounts Receivable and Unbilled Revenue, Net
Accounts receivable and unbilled revenue, net, consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
July 3,
2009
|
|
|
January 2,
2009
|
|
|
Accounts receivable
|
|
$
|
18,499
|
|
|
$
|
21,889
|
|
|
Unbilled revenue
|
|
|
4,842
|
|
|
|
5,223
|
|
|
Allowance for doubtful accounts
|
|
|
(1,512
|
)
|
|
|
(1,631
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable and unbilled revenue, net
|
|
$
|
21,829
|
|
|
$
|
25,481
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable for the periods ending July 3, 2009 and January 2, 2009, is net of
uncollected advanced billings. Unbilled revenue as of July 3, 2009 and January 2, 2009 includes recognized recoverable costs and accrued profits on contracts for which billings had not been presented to clients.
7. Stock Based Compensation
During the quarter and
six months ended July 3, 2009, the Company issued 4,831 and 1,378,301 restricted stock units, respectively, at a weighted average grant-date fair value of $2.07 and $2.56, respectively. As of July 3, 2009, the Company had 2,462,993
restricted stock units outstanding at a weighted average grant-date fair value of $3.14. As of July 3, 2009, there was $5.6 million of total restricted stock unit compensation expense related to nonvested awards not yet recognized, which is
expected to be recognized over a weighted average period of 2.42 years.
8. Shareholders’ Equity
Treasury Stock
Under the
repurchase plan, the Company may buy back shares of its outstanding stock from time to time either on the open market or through privately negotiated transactions subject to market conditions and trading restrictions. During the quarter ended
July 3, 2009, the Company repurchased approximately 163 thousand shares of its common stock at an average price of $2.12, for a total cost of approximately $346 thousand. During the six months ended July 3, 2009, the Company
repurchased approximately 1.2 million shares of its common stock at an average price of $2.09, for a total cost of approximately $2.5 million. As of July 3, 2009, the Company had $4.5 million available under its buyback program.
9. 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.
10
The Hackett Group, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
10. Geographic and Group Information
Revenue is primarily based on the country of the contracting entity and was attributed to the following geographical areas (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Six Months Ended
|
|
|
|
July 3,
2009
|
|
June 27,
2008
|
|
July 3,
2009
|
|
June 27,
2008
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
$
|
26,258
|
|
$
|
35,696
|
|
$
|
57,029
|
|
$
|
68,305
|
|
International (primarily European countries)
|
|
|
8,358
|
|
|
13,404
|
|
|
17,103
|
|
|
24,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
34,616
|
|
$
|
49,100
|
|
$
|
74,132
|
|
$
|
92,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-lived assets are attributed to the following geographical areas (in thousands):
|
|
|
|
|
|
|
|
|
|
|
July 3,
2009
|
|
January 2,
2009
|
|
Long-Lived Assets:
|
|
|
|
|
|
|
|
North America
|
|
$
|
57,170
|
|
$
|
56,810
|
|
International (primarily European countries)
|
|
|
15,457
|
|
|
13,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-lived assets
|
|
$
|
72,627
|
|
$
|
70,775
|
|
|
|
|
|
|
|
|
As of July 3, 2009 and January 2, 2009, international assets included $15.2 million and
$13.6 million of goodwill and intangible assets, respectively, related to the REL acquisition.
The Company’s revenue was derived from
the following service groups (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Six Months Ended
|
|
|
|
July 3,
2009
|
|
June 27,
2008
|
|
July 3,
2009
|
|
June 27,
2008
|
|
The Hackett Group
|
|
$
|
24,596
|
|
$
|
33,297
|
|
$
|
51,929
|
|
$
|
63,278
|
|
Hackett Technology Solutions
|
|
|
10,020
|
|
|
15,803
|
|
|
22,203
|
|
|
29,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
34,616
|
|
$
|
49,100
|
|
$
|
74,132
|
|
$
|
92,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11. Reclassifications
Certain prior period amounts in the consolidated financial statements, and notes thereto, have been reclassified to conform to current period presentation.
11
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report and the information incorporated by
reference in it include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend the forward-looking statements to be covered
by the safe harbor provisions for forward-looking statements in these sections. All statements regarding our expected financial position and operating results, our business strategy, our financing plans and forecasted demographic and economic trends
relating to our industry are forward-looking statements. These statements can sometimes be identified by our use of forward-looking words such as “may,” “will,” “anticipate,” “estimate,” “expect,” or
“intend” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the results, performance or
achievements expressed or implied by the forward-looking statements. We cannot promise you that our expectations in such forward-looking statements will turn out to be correct. Factors that impact such forward-looking statements include, among
others, our ability to attract additional business, the timing of projects and the potential for contract cancellation by our customers, changes in expectations regarding the business 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, and changes in general economic conditions and interest
rates. An additional description of our risk factors is set forth in our Annual Report on Form 10-K for the year ended January 2, 2009. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result
of new information, future events or otherwise, except as required by law.
OVERVIEW
The Hackett Group, Inc. (“Hackett”) is a leading strategic advisory and technology consulting firm that enables companies to achieve world-class
business performance. By leveraging the comprehensive Hackett database, the world’s leading repository of enterprise business process performance metrics and best practice intellectual capital, our business and technology solutions help clients
improve performance and maximize returns on technology investments.
Hackett, formed on April 23, 1997, is a strategic advisory firm
and a world leader in best practice research, benchmarking, business transformation and working capital management services that empirically defines and enables world-class enterprise performance. Only Hackett empirically defines world-class
performance in sales, general and administrative and supply chain activities with analysis gained through more than 4,000 benchmark studies over 16 years at 2,700 of the world’s leading companies.
Hackett’s combined capabilities include business advisory programs, benchmarking, business transformation, working capital management and technology
solutions, with corresponding offshore support.
In the following discussion, “Hackett” represents our total company, “The
Hackett Group” encompasses our Benchmarking, Business Transformation and Executive Advisory groups, and “Hackett Technology Solutions” encompasses our technology groups, including SAP, Oracle and EPM Oracle.
12
Results of Operations
The following table sets forth, for the periods indicated, our results of operations and the percentage relationship to total revenue of such results (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
Six Months Ended
|
|
|
|
|
July 3,
2009
|
|
|
June 27,
2008
|
|
|
July 3,
2009
|
|
|
June 27,
2008
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue before reimbursements
|
|
$
|
31,382
|
|
|
90.7
|
%
|
|
$
|
44,653
|
|
90.9
|
%
|
|
$
|
67,372
|
|
|
90.9
|
%
|
|
$
|
83,921
|
|
90.3
|
%
|
|
Reimbursements
|
|
|
3,234
|
|
|
9.3
|
%
|
|
|
4,447
|
|
9.1
|
%
|
|
|
6,760
|
|
|
9.1
|
%
|
|
|
9,017
|
|
9.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
34,616
|
|
|
100.0
|
%
|
|
|
49,100
|
|
100.0
|
%
|
|
|
74,132
|
|
|
100.0
|
%
|
|
|
92,938
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of service:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personnel costs before reimbursable expenses
|
|
|
20,381
|
|
|
58.9
|
%
|
|
|
25,296
|
|
51.5
|
%
|
|
|
42,655
|
|
|
57.5
|
%
|
|
|
48,259
|
|
51.9
|
%
|
|
Reimbursable expenses
|
|
|
3,234
|
|
|
9.3
|
%
|
|
|
4,447
|
|
9.1
|
%
|
|
|
6,760
|
|
|
9.1
|
%
|
|
|
9,017
|
|
9.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of service
|
|
|
23,615
|
|
|
68.2
|
%
|
|
|
29,743
|
|
60.6
|
%
|
|
|
49,415
|
|
|
66.6
|
%
|
|
|
57,276
|
|
61.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative costs
|
|
|
10,791
|
|
|
31.2
|
%
|
|
|
15,437
|
|
31.4
|
%
|
|
|
23,630
|
|
|
31.9
|
%
|
|
|
28,019
|
|
30.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and operating expenses
|
|
|
34,406
|
|
|
99.4
|
%
|
|
|
45,180
|
|
92.0
|
%
|
|
|
73,045
|
|
|
98.5
|
%
|
|
|
85,295
|
|
91.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
210
|
|
|
0.6
|
%
|
|
|
3,920
|
|
8.0
|
%
|
|
|
1,087
|
|
|
1.5
|
%
|
|
|
7,643
|
|
8.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
11
|
|
|
0.0
|
%
|
|
|
112
|
|
0.2
|
%
|
|
|
36
|
|
|
0.0
|
%
|
|
|
279
|
|
0.3
|
%
|
|
Loss on marketable investments
|
|
|
(35
|
)
|
|
-0.1
|
%
|
|
|
—
|
|
0.0
|
%
|
|
|
(35
|
)
|
|
0.0
|
%
|
|
|
—
|
|
0.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
186
|
|
|
0.5
|
%
|
|
|
4,032
|
|
8.2
|
%
|
|
|
1,088
|
|
|
1.5
|
%
|
|
|
7,922
|
|
8.5
|
%
|
|
Income tax expense
|
|
|
26
|
|
|
0.1
|
%
|
|
|
23
|
|
0.0
|
%
|
|
|
89
|
|
|
0.1
|
%
|
|
|
130
|
|
0.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
160
|
|
|
0.4
|
%
|
|
$
|
4,009
|
|
8.2
|
%
|
|
$
|
999
|
|
|
1.4
|
%
|
|
$
|
7,792
|
|
8.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter and Six Months Ended July 3, 2009 versus Quarter and Six Months Ended June 27, 2008
Revenue
. We are a global company with operations primarily in the United States and Western Europe. Our revenue is denominated
in multiple currencies, mostly the U.S. Dollar, British Pound and Euro, and as a result is affected by currency exchange rate fluctuations. The exchange rate fluctuations had an impact on our revenue comparisons between the quarters and six
months ended July 3, 2009 and June 27, 2008; therefore, in the following revenue discussion we will disclose The Hackett Group revenue variances based on the U.S. Dollar reporting currency, as well as variances excluding the impact of
currency fluctuations, otherwise referred to below as constant currency. Hackett Technology Solutions was not materially impacted by foreign currency rate fluctuations.
The following table summarizes revenue (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Six Months Ended
|
|
|
|
July 3,
2009
|
|
June 27,
2008
|
|
July 3,
2009
|
|
June 27,
2008
|
|
The Hackett Group
|
|
$
|
24,596
|
|
$
|
33,297
|
|
$
|
51,929
|
|
$
|
63,278
|
|
Hackett Technology Solutions
|
|
|
10,020
|
|
|
15,803
|
|
|
22,203
|
|
|
29,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
34,616
|
|
$
|
49,100
|
|
$
|
74,132
|
|
$
|
92,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue decreased 29%, or 27% in constant currency, for the quarter ended July 3, 2009,
as compared to the quarter ended June 27, 2008. Total revenue decreased 20%, or 17% in constant currency, for the six months ended July 3, 2009, as compared to the six months ended June 27, 2008. The Hackett Group revenue decreased
26%, or 22% in constant currency, for the quarter ended
13
July 3, 2009, as compared to the quarter ended June 27, 2008. The Hackett Group revenue decreased 18%, or 14% in constant currency, for the six
months ended July 3, 2009, as compared to the six months ended June 27, 2008. The decrease in The Hackett Group revenue was primarily the result of delays in client decision-making and protracted sales cycles which has impacted our
momentum in 2009.
The Hackett Group’s international revenue, which is primarily based on the country of the contracting entity,
accounted for 34% and 33%, or 39% and 39% in constant currency, of The Hackett Group’s total revenue in the quarter and six months ended July 3, 2009, respectively, as compared to 40% and 39% for the quarter and six months ended
June 27, 2008, respectively.
Hackett Technology Solutions revenue decreased 37% and 25% for the quarter and six months ended
July 3, 2009, respectively, as compared to the quarter and six months ended June 27, 2008, primarily due to lower revenue from our Oracle and EPM Oracle groups.
During the quarter and six months ended July 3, 2009 one customer accounted for 7% and 8%, respectively, of our total revenue. For the quarter and six months ended June 27, 2008, no customer accounted for
greater than 5% of our total revenue.
Cost of Service.
Cost of service primarily consists of salaries, benefits and incentive
compensation for consultants and reimbursable expenses associated with projects. Cost of service before reimbursable expenses decreased 19% and 12% for the quarter and six months ended July 3, 2009, respectively, as compared to the quarter and
six months ended June 27, 2008, primarily due to lower accruals for 2009 incentive compensation awards and reductions in headcount made to conform to the current market demand.
Total cost of service as a percentage of revenue before reimbursable expenses increased to 59% and 58% for the quarter and six months ended July 3,
2009, respectively, from 52% for the quarter and six months ended June 27, 2008. The increase was primarily due to the decrease in revenue as previously discussed. Cost of service is also denominated in multiple currencies and is therefore
affected by currency exchange rate fluctuations.
The Hackett Group revenue produced gross margins of 40% and 41% for the quarter and six
months ended July 3, 2009, respectively, as compared to Hackett Technology Solutions which produced gross margins of 21% and 22% for the same periods, respectively. On a net revenue basis, The Hackett Group produced gross margins as a
percentage of revenue of 43% and 45% for the quarter and six months ended July 3, 2009, respectively, as compared to Hackett Technology Solutions, which produced gross margins as a percentage of net revenue of 24% and 25% for the same periods,
respectively.
Selling, General and Administrative
. Selling, general and administrative costs decreased by 30% and 16% for the
quarter and six months ended July 3, 2009, respectively, compared to the quarter and six months ended June 27, 2008. The decrease was primarily related to lower 2009 incentive compensation accruals, lower commission expense due to the
decrease in revenue as previously discussed and various other cost reduction actions taken in 2009. Partially offsetting these cost reductions for the six months ended July 3, 2009 were foreign currency losses of $0.4 million, compared to
foreign currency gains of $1.2 million for the six months ended June 27, 2008. Selling, general and administrative costs as a percentage of revenue were 31% and 32% for the quarter and six months ended July 3, 2009, respectively, as
compared to 31% and 30% for the quarter and six months ended June 27, 2008, respectively.
Income Taxes.
We recorded income
taxes of $26 thousand and $89 thousand for the quarter and six months ended July 3, 2009, respectively, which reflected estimated annual tax rates of 14% and 8%, respectively, for certain federal and state taxes. For the quarter and six months
ended June 27, 2008, we recorded income taxes of $23 thousand and $130 thousand, respectively, which reflected estimated annual tax rates of 1% and 2%, respectively, for certain federal and state taxes.
Liquidity and Capital Resources
At July 3, 2009
and January 2, 2009, we had $22.5 million and $32.1 million, respectively, classified in cash and cash equivalents in the accompanying consolidated balance sheets. During these same periods, we had $600 thousand on deposit with financial
institutions as collateral for letters of credit classified as restricted cash in the accompanying consolidated
14
balance sheets. At July 3, 2009 and January 2, 2009, we had a net balance of $1.1 million and $1.7 million, respectively, in Bank of America’s
Columbia Strategic Cash Portfolio (“Portfolio”). The Portfolio is classified as marketable investments in the accompanying consolidated balance sheets (see Note 5 to our accompanying consolidated financial statements). Subsequent to
July 3, 2009, our remaining balance in the Portfolio was redeemed.
The following table summarizes our cash flow activity (in
thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
July 3,
2009
|
|
|
June 27,
2008
|
|
|
Cash flows from operating activities
|
|
$
|
(6,571
|
)
|
|
$
|
3,177
|
|
|
Cash flows from investing activities
|
|
$
|
(954
|
)
|
|
$
|
2,436
|
|
|
Cash flows from financing activities
|
|
$
|
(2,234
|
)
|
|
$
|
(9,477
|
)
|
Net cash used in operating activities was $6.6 million for the six months ended July 3, 2009,
as compared to net cash provided by operating activities of $3.2 million for the six months ended June 27, 2008. During the six months ended July 3, 2009, net cash used in operating activities was primarily attributable to the payout of
2008 incentive compensation awards, timing of vendor payments and an increase in prepaid assets related to the renewal of insurance policies. These uses of cash were partially offset by decreases in accounts receivable for the six months ended
July 3, 2009.
Net cash provided by operating activities for the six months ended June 27, 2008 was primarily attributable to
earnings net of non-cash items including foreign currency gains, depreciation and amortization expense, and non-cash stock compensation expense. The increases were mostly offset by higher accounts receivable and unbilled revenue due to an increase
in revenue which resulted in an increase of five days in Days Sales Outstanding from December 28, 2007.
Net cash used in investing
activities was $1.0 million for the six months ended July 3, 2009, as compared to net cash provided by investing activities of $2.4 million for the six months ended June 27, 2008. Cash used in investing activities for the six months ended
July 3, 2009 was primarily attributable to $1.6 million in capital expenditures, partially offset by $623 thousand of Portfolio redemptions.
Net cash provided by investing activities in the six months ended June 27, 2008 was primarily attributable to $3.5 million of Portfolio redemptions, partially offset by $1.1 million of capital expenditures.
Net cash used in financing activities was $2.2 million for the six months ended July 3, 2009, as compared to $9.5 million for the six months ended
June 27, 2008. Cash used in financing activities for the quarter ended July 3, 2009 was attributable to the repurchase of 1.2 million shares of our common stock at an average price of $2.09 per share, for a total cost of $2.5 million.
Net cash used in financing activities for the six months ended June 27, 2008 was primarily attributable to the repurchase of
2.5 million shares of our common stock at an average price of $3.97 per share, for a total cost of $9.8 million.
As of July 3,
2009, our total authorization under our share repurchase program was $60.0 million. Under the repurchase plan, we may buy back shares from time to time either on the open market or through privately negotiated transactions subject to market
conditions and trading restrictions. As of July 3, 2009, we had $4.5 million available under the buyback program.
We currently
believe that available funds and cash flows generated by operations will be sufficient to fund our working capital and capital expenditure requirements for at least the next twelve months. We may decide to raise additional funds in order to fund
expansion, to develop new or further enhance products and services, to respond to competitive pressures, or to acquire complementary businesses or technologies. There is no assurance, however, that additional financing will be available when needed
or desired.
15
Recently Issued Accounting Standards
In December 2007, the FASB issued FAS No. 141 (revised 2007),
Business Combinations
. FAS No. 141 (revised 2007) establishes principles and requirements for how an acquirer recognizes and measures in
its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree and the goodwill acquired. This standard also establishes disclosure requirements to enable the evaluation of the nature
and financial effects of the business combination and is effective for financial statements issued for fiscal years beginning after December 15, 2008. The adoption of FAS No. 141 (revised 2007) did not have a material impact on our
consolidated financial statements.
In April 2008, the FASB issued FSP No. 142-3,
Determination of the Useful Life of Intangible
Assets
. FSP No. 142-3 amends the factors an entity should consider in developing renewal or extension assumptions used in determining the useful life of recognized intangible assets under SFAS No. 142,
Goodwill and Other Intangible
Assets
. This new guidance applies prospectively to intangible assets that are acquired individually or with a group of other assets in business combinations and asset acquisitions. FSP No. 142-3 is effective for financial statements issued
for fiscal years and interim periods beginning after December 15, 2008. The adoption of FSP No. 142-3 did not have a material impact on our consolidated financial statements.
In April 2009, the FASB issued FSP No. 157-4,
Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions that are not Orderly
. FSP No. 157-4 provides additional guidance for estimating fair value in accordance with FAS No. 157. This standard is effective for financial statements issued
for periods ending after June 15, 2009. The adoption of FSP No. 157-4 did not have a material impact on our consolidated financial statements.
In April 2009, the FASB issued FSP No. 107-1 and APB No. 28-1,
Interim Disclosures about Fair Value of Financial Instruments
. FSP No. 107-1 and APB No. 28-1 require disclosures about
fair value of financial instruments for annual and interim reporting periods of publicly traded companies. FSP No. 107-1 and APB No. 28-1 are effective for financial statements used for periods ending after June 15, 2009. The adoption
of FSP No. 107-1 and APB No. 28-1 did not have a material on our consolidated financial statements.
In April 2009, the FASB
issued FSP No. 141(R)-1,
Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies
. FSP No. 141(R)-1 requires that assets acquired and liabilities assumed in a business
combination that arise from contingencies be recognized at fair value if fair value can be reasonably estimated. This FSP is effective for business combinations with an acquisition date on or after June 1, 2009. The adoption of FSP
No. 141(R)-1 did not have a material impact on our consolidated financial statements.
In May 2009, the FASB issued FAS
No. 165,
Subsequent Events
. FAS No. 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. FAS No. 165 is effective for
interim or annual financial periods ending after June 15, 2009. As of this date we adopted FAS No. 165 and evaluated subsequent events through the date of this filing.
In June 2009, the FASB issued FAS No. 168,
The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles- a replacement of FASB Statement No. 162
. FAS No. 168, will become effective on the date of this Statement, and will supersede all then-existing non-SEC accounting and reporting standards. All other non-grandfathered,
non-SEC accounting literature not included in the Codification will become non-authoritative. FAS No. 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. We are currently
evaluating the impact FAS No. 168 will have on our consolidated financial statements.
16
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
At July 3, 2009, our exposure to market risk related primarily to changes in interest rates and foreign currency exchange rate risks.
Interest Rate Risk
We invest only with high credit quality issuers and we do not use derivative financial instruments in
our investments. As of July 3, 2009, we had a net balance of $1.1 million in Bank of America’s Columbia Strategic Cash Portfolio (“Portfolio”), all of which was collected subsequent to the end of the quarter (see Note 5 to the
accompanying consolidated financial statements).
Exchange Rate Sensitivity
We face exposure to adverse movements in foreign currency exchange rates, as a portion of our revenue, expenses, assets and liabilities are denominated in
currencies other than the U.S. Dollar, primarily the British Pound and the Euro. These exposures may change over time as business practices evolve. Currently, we do not hold any derivative contracts that hedge our foreign currency risk, but we
may adopt such strategies in the future.
|
Item 4.
|
Controls and Procedures
|
Evaluation of Disclosure Controls and
Procedures
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the
participation of management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure
Controls”) pursuant to Rule 13a-14(c) and Rule 15d-14(c) under the Securities Exchange Act of 1934. Based upon that evaluation, the CEO and CFO concluded that our disclosure controls are effective in timely alerting them to material information
required to be included in our periodic SEC filings.
Limitations on the Effectiveness of Controls
Management, including our CEO and CFO, does not expect that our disclosure controls and internal controls will prevent all error and all fraud. A control
system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of
fraud, if any, within our Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be
circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.
Changes in Internal
Controls
There were no changes in our internal controls over financial reporting that occurred during the period covered by this
Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
17
PART II — OTHER INFORMATION
|
Item 1.
|
Legal Proceedings
|
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.
There have been no material changes
to any of the risk factors disclosed in the Company’s most recently filed Annual Report on Form 10-K.
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
During the quarter ended July 3, 2009, the Company repurchased 163 thousand shares of its common stock at a cost of approximately $346 thousand under the Company’s share repurchase program approved by the Board of Directors
in 2002. All repurchases were made in the open market or through privately negotiated transactions, subject to market conditions and trading restrictions. There is no expiration date on the current authorization during the period covered by the
table, nor was any determination made by the Company to suspend or cancel purchases under the program.
Issuer Purchases of Equity Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
|
|
Total Number
of Shares
|
|
Average Price
Paid per Share
|
|
Total Number
of Shares as Part
of Publicly
Announced
Program
|
|
Maximum Dollar
Value That May
Yet be Purchased
Under the
Program
|
|
|
|
|
|
|
|
Balance as of January 2, 2009
|
|
—
|
|
$
|
—
|
|
—
|
|
$
|
1,958,622
|
|
January 3, 2009 to January 30, 2009
|
|
68,657
|
|
$
|
2.62
|
|
68,657
|
|
$
|
1,778,537
|
|
January 31, 2009 to February 27, 2009 *
|
|
229,511
|
|
$
|
2.45
|
|
229,511
|
|
$
|
6,217,165
|
|
February 28, 2009 to April 3, 2009
|
|
720,158
|
|
$
|
1.91
|
|
720,158
|
|
$
|
4,841,135
|
|
April 4, 2009 to May 1, 2009
|
|
—
|
|
$
|
—
|
|
—
|
|
$
|
4,841,135
|
|
May 2, 2009 to May 29, 2009
|
|
158,477
|
|
$
|
2.12
|
|
158,477
|
|
$
|
4,504,703
|
|
May 30, 2009 to July 3, 2009
|
|
4,641
|
|
$
|
2.16
|
|
4,641
|
|
$
|
4,494,661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,181,444
|
|
$
|
2.09
|
|
1,181,444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
In February 2009, the Board of Directors approved an additional $5.0 million to the Company’s share repurchase program.
|
|
Item 4.
|
Submission of Matters to a Vote of Security Holders
|
At the Company’s Annual Meeting of Shareholders held on May 8, 2009, the following proposals were voted on by the Company’s shareholders:
|
|
(i)
|
The election of two Directors (David Dungan and Richard Hamlin) to serve until the year 2012. The shareholders elected all nominated Directors with votes cast as follows:
Mr. Dungan: 37,137,685 shares for and 1,548,448 shares withheld; Mr. Hamlin: 27,891,439 shares for and 10,794,694 shares withheld. There were no abstentions or broker non-votes applicable to the election of Directors. In addition to the
Directors listed above that were elected at the meeting, the terms of the following directors continued after the meeting: Ted Fernandez, Alan Wix, John Harris and Edwin Huston.
|
18
|
|
(ii)
|
To approve an amendment to the Company’s 1998 Stock Option and Incentive Plan to raise the sublimit for restricted stock and restricted stock unit issuances thereunder by
2,500,000 shares. The shareholders voted to approve the proposal with the votes cast as follows: 16,047,213 shares for, 12,738,336 against and 35,475 abstentions. There were 9,865,109 broker non-votes on this proposal.
|
See Index to Exhibits on page 21, which
is incorporated herein by reference.
The Exhibits listed in the accompanying Index to Exhibits are filed as part of this report.
19
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 thereunto duly authorized.
|
|
|
|
|
|
|
|
|
|
|
The Hackett Group, Inc.
|
|
|
|
|
|
Date: August 12, 2009
|
|
|
|
/s/ Robert A. Ramirez
|
|
|
|
|
|
Robert A. Ramirez
|
|
|
|
|
|
Executive Vice President, Finance and Chief Financial Officer
|
20
INDEX TO EXHIBITS
|
|
|
|
|
Exhibit No.
|
|
Exhibit Description
|
|
3.1
|
|
Second Amended and Restated Articles of Incorporation of the Registrant, as amended (incorporated herein by reference to the Registrant’s Form 10-K for the year ended December 29, 2000).
|
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of the Registrant, as amended (incorporated herein by reference to the Registrant’s Form 10-K for the year ended December 29, 2000).
|
|
|
|
|
3.3
|
|
Articles of Amendment of the Third Amended and Restated Articles of Incorporation of the Registrant (incorporated herein by reference to the Registrant’s Form 10-K for the year ended
December 28, 2007).
|
|
|
|
|
3.4
|
|
Amendment to Amended and Restated Bylaws of the Registrant (incorporated herein by reference to the Registrant’s Form 8-K filed on March 31, 2008).
|
|
|
|
|
31.1
|
|
Certification by CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (exhibits filed herewith).
|
|
|
|
|
31.2
|
|
Certification by CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (exhibits filed herewith).
|
|
|
|
|
32
|
|
Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (exhibits filed herewith).
|
21
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