10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 29, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 333-48123

The Hackett Group, Inc.

(Exact name of registrant as specified in its charter)

Florida	65-0750100
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1001 Brickell Bay Drive, Suite 3000 Miami, Florida	33131
(Address of principal executive offices)	(Zip Code)

(305) 375-8005

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.001 per share	HCKT	NASDAQ Stock Market

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☒
Non-Accelerated Filer	☐	Smaller Reporting Company	☐
		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. ☐

Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of November 3, 2023, there were 27,237,502 shares of common stock outstanding.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION		Page
Item 1.	Financial Statements
	Consolidated Balance Sheets as of September 29, 2023 (unaudited) and December 30, 2022	3
	Consolidated Statements of Operations for the Three and Nine Months Ended September 29, 2023, and September 30, 2022, (unaudited)	4
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 29, 2023, and September 30, 2022, (unaudited)	5
	Consolidated Statements of Cash Flows for the Nine Months Ended September 29, 2023, and September 30, 2022, (unaudited)	6
	Consolidated Statements of Equity for the Three and Nine Months Ended September 29, 2023, and September 30, 2022, (unaudited)	7
	Notes to Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
Item 5.	Other Information	23
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 6.	Exhibits	25
SIGNATURES		26

2

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The Hackett Group, Inc.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

	September 29,			December 30,
	2023			2022
ASSETS
Current assets:
Cash	$	9,879		$	30,255
Accounts receivable and contract assets, net of allowance of $973 and $856 at September 29, 2023 and December 30, 2022, respectively		62,207			48,376
Prepaid expenses and other current assets		3,174			2,535
Total current assets		75,260			81,166
Property and equipment, net		20,033			19,359
Other assets		282			268
Goodwill		83,663			83,502
Operating lease right-of-use assets		1,609			698
Total assets	$	180,847		$	184,993
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,039		$	8,741
Accrued expenses and other liabilities		23,726			30,953
Contract liabilities		12,869			13,278
Income tax payable		4,009			5,759
Operating lease liabilities		1,328			870
Total current liabilities		46,971			59,601
Non-current deferred tax liability, net		8,583			6,877
Long term debt, net		43,694			59,653
Operating lease liabilities		757			584
Total liabilities		100,005			126,715
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $0.001 par value, 1,250,000 shares authorized; none    issued and outstanding		—			—
Common stock, $0.001 par value, 125,000,000 shares authorized; 60,537,559 and    60,147,720 shares issued at September 29, 2023 and December 30, 2022, respectively		61			60
Additional paid-in capital		314,046			308,325
Treasury stock, at cost, 33,314,926 and 33,277,459 shares September 29, 2023 and December 30, 2022, respectively		(274,600	)		(273,866	)
Retained earnings		55,966			38,640
Accumulated other comprehensive loss		(14,631	)		(14,881	)
Total shareholders' equity		80,842			58,278
Total liabilities and shareholders' equity	$	180,847		$	184,993

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)

	Quarter Ended						Nine Months Ended
	September 29,			September 30,			September 29,			September 30,
	2023			2022			2023			2022
Revenue:
Revenue before reimbursements	$	74,634		$	70,995		$	220,106		$	220,871
Reimbursements		1,222			1,038			4,081			2,754
Total revenue		75,856			72,033			224,187			223,625
Costs and expenses:
Cost of service:
Personnel costs before reimbursable expenses (includes $1,518 and $4,687 and $1,652 and $4,801 of non-cash stock based compensation expense in the three and nine months ended September 29, 2023 and September 30, 2022, respectively)		44,421			42,870			132,990			134,904
Reimbursable expenses		1,222			1,038			4,081			2,754
Total cost of service		45,643			43,908			137,071			137,658
Selling, general and administrative costs (includes $1,193 and $3,243 and $859 and $3,027 of non-cash stock based compensation expense in the three and nine months ended September 29, 2023 and September 30, 2022, respectively)		16,470			14,616			49,331			44,993
Restructuring and asset impairment settlement		—			(526	)		—			(651	)
Total costs and operating expenses		62,113			57,998			186,402			182,000
Income from operations		13,743			14,035			37,785			41,625
Other expense, net:
Interest expense, net		(814	)		(14	)		(2,594	)		(70	)
Income from operations before income taxes		12,929			14,021			35,191			41,555
Income tax expense		3,509			3,655			8,890			10,469
Net income	$	9,420		$	10,366			26,301		$	31,086
Basic net income per common share:
Income per common share from operations	$	0.35		$	0.33		$	0.97		$	0.98
Weighted average common shares outstanding		27,220			31,686			27,146			31,596
Diluted net income per common share:
Income per common share from operations	$	0.34		$	0.32		$	0.95		$	0.97
Weighted average common and common equivalent shares outstanding		27,818			32,309			27,545		$	32,124

The accompanying notes are an integral part of the consolidated financial statements.

4

The Hackett Group, Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

	Quarter Ended						Nine Months Ended
	September 29,			September 30,			September 29,		September 30,
	2023			2022			2023		2022
Net income	$	9,420		$	10,366		$	26,301	$	31,086
Foreign currency translation adjustment		(1,018	)		(1,966	)		250		(5,996	)
Total comprehensive income	$	8,402		$	8,400		$	26,551	$	25,090

The accompanying notes are an integral part of the consolidated financial statements.

5

The Hackett Group, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months Ended
	September 29,			September 30,
	2023			2022
Cash flows from operating activities:
Net income	$	26,301		$	31,086
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		2,528			2,468
Amortization expense		—			154
Amortization of debt issuance costs		54			43
Non-cash stock based compensation expense		7,930			7,828
Provision for doubtful accounts		219			295
Loss (gain) on foreign currency translation		263			(1,383	)
Deferred income tax expense		1,617			360
Changes in assets and liabilities:
Increase in accounts receivable and contract assets		(14,134	)		(1,446	)
(Increase) decrease in prepaid expenses and other assets		(1,482	)		3,566
Decrease in accounts payable		(3,701	)		(2,992	)
Decrease in accrued expenses and other liabilities		(5,619	)		(9,783	)
Decrease in contract liabilities		(409	)		(2,201	)
(Decrease) increase in income tax payable		(1,750	)		6,083
Net cash provided by operating activities		11,817			34,078
Cash flows from investing activities:
Purchases of property and equipment		(3,203	)		(3,163	)
Net cash used in investing activities		(3,203	)		(3,163	)
Cash flows from financing activities:
Debt issuance costs		(14	)		(10	)
Proceeds from borrowings		5,000			—
Repayment of borrowings		(21,000	)		—
Proceeds from ESPP		481			407
Proceeds from the exercise of stock options		—			120
Dividends paid		(8,978	)		(6,954	)
Repurchase of common stock		(4,446	)		(3,211	)
Net cash used in financing activities		(28,957	)		(9,648	)
Effect of exchange rate on cash		(33	)		(16	)
Net (decrease) increase in cash		(20,376	)		21,251
Cash at beginning of period		30,255			45,794
Cash at end of period	$	9,879		$	67,045
Supplemental disclosure of cash flow information:
Cash paid (refunded) for income taxes	$	8,719		$	(34	)
Cash paid for interest	$	2,690		$	43
Supplemental disclosure of non-cash flow investing and financing activities:
Dividend declared during the quarter and paid the following quarter	$	2,994		$	3,483

The accompanying notes are an integral part of the consolidated financial statements.

6

The Hackett Group, Inc.

CONSOLIDATED STATEMENTS OF EQUITY

(in thousands)

(unaudited)

																	Accumulated
					Additional												Other			Total
	Common Stock				Paid in			Treasury Stock						Retained			Comprehensive			Shareholders'
	Shares		Amount		Capital			Shares			Amount			Earnings			Loss			Equity
Balance at December 30, 2022		60,148	$	60	$	308,325			(33,277	)	$	(273,866	)	$	38,640		$	(14,881	)	$	58,278
Issuance of common stock		343		—		(3,529	)		—			—			—			—			(3,529	)
Treasury stock purchased, net of costs		—		—		—			(37	)		(711	)		—			—			(711	)
Amortization of restricted stock    units and common stock subject to    vesting requirements		—		—		3,662			—			—			—			—			3,662
Dividends declared		—		—		—			—			—			(2,990	)		—			(2,990	)
Net income		—		—		—			—			—			8,161			—			8,161
Foreign currency translation		—		—		—			—			—			—			570			570
Balance at March 31, 2023		60,491	$	60	$	308,458			(33,314	)	$	(274,577	)	$	43,811		$	(14,311	)	$	63,441
Issuance of common stock		38		1		362			—			—			—			—			363
Treasury stock purchased, net of costs		—		—		—			—			(23	)		—			—			(23	)
Amortization of restricted stock    units and common stock subject to    vesting requirements		—		—		2,685			—			—			—			—			2,685
Dividends declared		—		—		—			—			—			(2,991	)		—			(2,991	)
Net income		—		—		—			—			—			8,720			—			8,720
Foreign currency translation		—		—		—			—			—			—			698			698
Balance at June 30, 2023		60,529	$	61	$	311,505			(33,314	)	$	(274,600	)	$	49,540		$	(13,613	)	$	72,893
Issuance of common stock		9		—		(67	)		—			—			—			—			(67	)
Amortization of restricted stock    units and common stock subject to    vesting requirements		—		—		2,608			—			—			—			—			2,608
Dividends declared		—		—		—			—			—			(2,994	)		—			(2,994	)
Net income		—		—		—			—			—			9,420			—			9,420
Foreign currency translation		—		—		—			—			—			—			(1,018	)		(1,018	)
Balance at September 29, 2023		60,538	$	61	$	314,046			(33,314	)	$	(274,600	)	$	55,966		$	(14,631	)	$	80,842
																	Accumulated
					Additional												Other			Total
	Common Stock				Paid in			Treasury Stock						Retained			Comprehensive			Shareholders'
	Shares		Amount		Capital			Shares			Amount			Earnings			Loss			Equity
Balance at December 31, 2021		59,631	$	60	$	300,288			(28,358	)	$	(157,294	)	$	11,272		$	(10,473	)	$	143,853
Issuance of common stock		373		—		(2,432	)		—			—			—			—			(2,432	)
Treasury stock purchased, net of costs		—		—		—			(31	)		(635	)		—			—			(635	)
Amortization of restricted stock    units and common stock subject to    vesting requirements		—		—		3,632			—			—			—			—			3,632
Dividends declared		—		—		—			—			—			(3,474	)		—			(3,474	)
Net income		—		—		—			—			—			10,505			—			10,505
Foreign currency translation		—		—		—			—			—			—			(1,134	)		(1,134	)
Balance at April 1, 2022		60,004	$	60	$	301,488			(28,389	)	$	(157,929	)	$	18,303		$	(11,607	)	$	150,315
Issuance of common stock		61		—		452			—			—			—			—			452
Amortization of restricted stock    units and common stock subject to    vesting requirements		—		—		2,224			—			—			—			—			2,224
Dividends declared		—		—		—			—			—			(3,480	)		—			(3,480	)
Net income		—		—		—			—			—			10,215			—			10,215
Foreign currency translation		—		—		—			—			—			—			(2,896	)		(2,896	)
Balance at July 1, 2022		60,065	$	60	$	304,164			(28,389	)	$	(157,929	)	$	25,038		$	(14,503	)	$	156,830
Issuance of common stock		8		—		(69	)		—			—			—			—			(69	)
Amortization of restricted stock    units and common stock subject to    vesting requirements		—		—		2,393			—			—			—			—			2,393
Dividends declared		—		—		—			—			—			(3,483	)		—			(3,483	)
Net income		—		—		—			—			—			10,366			—			10,366
Foreign currency translation		—		—		—			—			—			—			(1,966	)		(1,966	)
Balance at September 30, 2022		60,073	$	60	$	306,488			(28,389	)	$	(157,929	)	$	31,921		$	(16,469	)	$	164,071

The accompanying notes are an integral part of the consolidated financial statements.

7

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”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the Company’s accounts and those of its wholly-owned subsidiaries which the Company is required to consolidate. All intercompany transactions and balances have been eliminated in the consolidation.

In the opinion of management, the accompanying consolidated financial statements reflect all normal and recurring adjustments which are necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows as of the dates and for the periods presented. The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, these statements do not include all the disclosures normally required by U.S. GAAP for annual financial statements and should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 30, 2022, included in the Annual Report on Form 10-K filed by the Company with the SEC on March 3, 2023. The consolidated results of operations for the quarter and nine months ended September 29, 2023, are not necessarily indicative of the results to be expected for any future period or for the full fiscal year.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Segment Reporting

Segments are defined as components of a company that engage in business activities from which they earn revenue and incur expenses, and for which separate financial information is available and is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company assesses its operating segments under the management approach in accordance with ASC 280, "Segment Reporting" (ASC 280), and has determined that it has three operating segments: Global S&BT, Oracle Solutions and SAP Solutions which are also its reportable segments. See Note 12 “Segment Information and Geographical Data” for detailed segment information.

Goodwill and Other Intangible Assets

For acquisitions accounted for as a business combination, goodwill represents the excess of the cost over the fair value of the net assets acquired. The Company has organized its operating and internal reporting structure to align with its primary market solutions. In accordance with ASC 280, management made the determination to present three operating segments, three reportable segments and three reporting units as follows: (1) Global S&BT, (2) Oracle Solutions, and (3) SAP Solutions. Global S&BT includes the results of the Company’s strategic business consulting practices; Oracle Solutions includes the results of the Company’s Oracle EPM/ERP and Digital AMS practices; SAP Solutions includes the Company’s SAP applications and related SAP service offerings. A reporting unit is an operating segment or one level below an operating segment to which goodwill is assigned. The goodwill has been allocated to the reporting unit based on the reporting unit's relative fair value. The carrying amount of goodwill by reporting unit is as follows (in thousands):

					Foreign
	December 30,		Additions/		Currency		September 29,
	2022		Adjustments		Translation		2023
Global S&BT	$	56,810	$	-	$	161	$	56,971
Oracle Solutions		16,699		—		—		16,699
SAP Solutions		9,993		—		—		9,993
Goodwill	$	83,502	$	-	$	161	$	83,663

8

The Hackett Group, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation and General Information (continued)

Revenue Recognition

The Company generates substantially all of its revenue from providing professional services to its clients. The Company also generates revenue from software sales, software maintenance and support and subscriptions to its executive and best practices advisory programs. A single contract could include one or multiple performance obligations. For those contracts that have multiple performance obligations, the Company allocates the total transaction price to each performance obligation based on its relative standalone selling price. The Company determines the standalone selling price based on the respective selling price of the individual elements when sold separately.

Revenue is recognized when control of the goods and services provided are transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods and services using the following steps: 1) identify the contract, 2) identify the performance obligations, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract, and 5) recognize revenue as or when the Company satisfies the performance obligations.

The Company typically satisfies its performance obligations for professional services over time as the related services are provided. The performance obligations related to software maintenance and support and subscriptions to its executive and best practice advisory programs are typically satisfied evenly over the course of the service period. Other performance obligations, such as software sales, are satisfied at a point in time.

The Company generates revenue under four types of billing arrangements: fixed-fee; time-and-materials; executive and best practice advisory services; and software sales and software maintenance and support.

In fixed-fee billing arrangements, which would also include contracts with capped fees, the Company agrees to a pre-established fee or fee cap in exchange for a predetermined set of professional services. The Company sets the fees based on its estimates of the costs and timing for completing the engagements. The Company generally recognizes revenue under fixed-fee or capped fee arrangements using a proportionate performance approach, which is based on work completed to-date as compared to estimates of the total services to be provided under the engagement. Estimates of total engagement revenue and cost of services are monitored regularly during the term of the engagement. If the Company’s estimates indicate a potential loss, such a loss is recognized in the period in which the loss first becomes probable and reasonably estimable. The customer is invoiced based on the contractual agreement between the parties, typically bi-weekly, monthly or milestone driven, with net thirty-day terms, however client terms are subject to change.

Time-and-material billing arrangements require the client to pay based on the number of hours worked by the Company’s consultants at agreed hourly rates. The Company recognizes revenue under time-and-material arrangements as the related services or goods are provided, using the right to invoice practical expedient which allows it to recognize revenue in the amount based on the number of hours worked and the agreed upon hourly rates. The customer is invoiced based on the contractual agreement between the parties, typically bi-weekly, monthly or milestone driven, with net thirty-day terms, however client terms are subject to change.

Advisory services contracts are typically in the form of a subscription agreement which allows the customer access to the Company’s executive and best practice advisory programs. There is typically a single performance obligation and the transaction price is the contractual amount of the subscription agreement. Revenue from advisory services contracts is recognized ratably over the life of the agreements. Customers are typically invoiced at the inception of the contract, with net thirty-day terms, however client terms are subject to change.

The resale of on-premise software, cloud software and maintenance contracts are in the form of SAP America ("SAP") software or maintenance agreements provided by SAP. SAP is the principal and the Company is the agent in these transactions as the Company does not obtain title to the software and maintenance which is sold simultaneously. The transaction price is the Company’s agreed-upon percentage of the software sale for either on-premise software or cloud software or maintenance amount in the contract with the vendor. Revenue for the resale of software is recognized upon contract execution and customer’s receipt of the software. The Company also provides software maintenance on other ERP systems, primarily Oracle. Revenue from maintenance contracts is recognized ratably over the life of the agreements. The customer is typically invoiced at contract inception, with net thirty-day terms, however client terms are subject to change.

Revenue before reimbursements excludes reimbursable expenses charged to clients. Reimbursements, which include travel and out-of-pocket expenses, are included in revenue, and an equivalent amount of reimbursable expenses is included in the cost of service.

Expense reimbursements that are billable to clients are included in total revenue and are substantially all billed as time-and-material billing arrangements. Therefore, the Company recognizes all reimbursable expenses as revenue as the related services are provided, using the right to invoice practical expedient. Reimbursable expenses are recognized as expenses in the period in which the expense is incurred. Any expense reimbursements that are billable to clients under fixed-fee billing arrangements are recognized in line with the proportionate performance approach.

9

The Hackett Group, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation and General Information (continued)

The payment terms and conditions in the Company’s customer contracts vary. The agreements entered into in connection with a project, whether time and materials-based or fixed-fee or capped-fee based, typically allow clients to terminate early due to breach or for convenience with 30 days’ notice. In the event of termination, the client is contractually required to pay for all time, materials and expenses incurred by the Company through the effective date of the termination. In addition, from time to time the Company enters into agreements with its clients that limit its right to enter into business relationships with specific competitors of that client for a specific time period. These provisions typically prohibit the Company from performing a defined range of services which it might otherwise be willing to perform for potential clients. These provisions are generally limited to six to twelve months and usually apply only to specific employees or the specific project team.

Differences between the timing of billings and the recognition of revenue are recognized as either contract assets or contract liabilities in the accompanying consolidated balance sheets. Revenue recognized for services performed but not yet billed to clients is recorded as contract assets and is included within accounts receivable and contract assets. Services not yet performed, however billed to the client and uncollected at period end, are recorded as contract assets and are included within accounts receivable and contract assets. Client prepayments are classified as contract liabilities and recognized over future periods as earned in accordance with the applicable engagement agreement. See Note 3 for the accounts receivable and contract asset balances. During the quarter and nine months ended September 29, 2023, the Company recognized $1.5 million and $12.1 million, respectively, of revenue as a result of changes in the contract liability balance, as compared to $2.0 million and $12.3 million, respectively, for the quarter and nine months ended September 30, 2022.

Based on the information that management reviews internally for evaluating operating segment performance and nature, amount, timing, and uncertainty of revenue and cash flows affected by economic factors, the Company disaggregates revenue as follows for the quarters and nine months ended September 29, 2023 and September 30, 2022 (in thousands):

	Quarter Ended				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,
	2023		2022		2023		2022
Global S&BT:
North America Consulting	$	37,032	$	35,804	$	109,642	$	109,587
International Consulting		6,766		5,789		20,123		19,173
Total Global S&BT	$	43,798	$	41,593	$	129,765	$	128,760
Oracle Solutions:
Consulting and software support and maintenance	$	20,831	$	17,682	$	58,774	$	59,165
Total Oracle Solutions	$	20,831	$	17,682	$	58,774	$	59,165
SAP Solutions:
Consulting and software support and maintenance	$	10,605	$	10,118	$	32,372	$	30,880
Software sales		622		2,640		3,276		4,820
Total SAP Solutions	$	11,227	$	12,758	$	35,648	$	35,700
Total segment revenue	$	75,856	$	72,033	$	224,187	$	223,625

The total revenue from the Global S&BT segment, the Oracle Solutions segment and the SAP Solutions segment's consulting and software support and maintenance services is all recognized over time. The software sales total revenue included in the SAP Solutions segment is recognized at a point in time.

Capitalized Sales Commissions

Sales commissions earned by the Company’s sales force are considered the incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized as project revenue is recognized. The Company determined the period of amortization by taking into consideration the customer contract period, which is generally less than 12 months. Commission expenses are included the in Selling, general and administrative costs in the accompanying consolidated statements of operations. As of December 30, 2022 and December 31, 2021, the Company had $1.5 million and $1.6 million, respectively, of deferred commissions, of which $0.3 million and $0.9 million was amortized during the quarter and nine months ended September 29, 2023, respectively, and $0.2 million and $0.9 million for the same periods in 2022, respectively. No impairment loss was recognized relating to the capitalization of deferred commission.

10

The Hackett Group, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation and General Information (continued)

Practical Expedients

The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be less than one year.

Sales tax collected from customers and remitted to the applicable taxing authorities is accounted for on a net basis, with no impact on revenue.

Expense reimbursements that are billable to clients are included in total revenue and are substantially all billed as time-and-material billing arrangements. Therefore, the Company recognizes all reimbursable expenses as revenue as the related services are provided, using the right to invoice practical expedient. Reimbursable expenses are recognized as expenses in the period in which the expense is incurred. Any expense reimbursements that are billable to clients under fixed-fee billing arrangements are recognized in line with the proportionate performance approach.

Fair Value

The Company’s financial instruments consist of cash, accounts receivable and contract assets, accounts payable, accrued expenses and other liabilities and contract liabilities. As of September 29, 2023 and December 30, 2022, the carrying amount of each financial instrument approximated the instrument’s respective fair value due to the short-term nature and maturity of these instruments.

The Company uses significant other observable market data or assumptions (Level 2 inputs as defined in accounting guidance) that it believes market participants would use in pricing debt. The fair value of the debt approximated the carrying amount, using Level 2 inputs, due to the short-term variable interest rates based on market rates.

Impact of Macroeconomic Conditions on the Business

The level of revenue the Company achieves is based on its ability to deliver market leading services and solutions and to deploy skilled teams of professionals quickly. The Company’s results of operations are affected by economic conditions, including macroeconomic conditions and levels of business confidence. Any deterioration in the current macroeconomic environment or economic downturn as a result of weak or uncertain economic conditions due to inflation, high interest rates, national or geopolitical events or other factors impacting economic activity or business confidence could adversely affect the Company's clients' financial condition or outlook which may reduce clients' demand for the Company's services.

2. Net Income per Common Share

Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. With regard to common stock subject to vesting requirements and restricted stock units issued to the Company’s employees and non-employee members of its Board of Directors, the calculation includes only the vested portion of such stock and units.

Diluted 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.

11

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 common shares:

	Quarter Ended				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,
	2023		2022		2023		2022
Basic weighted average common shares outstanding		27,220,176		31,685,621		27,146,095		31,595,814
Effect of dilutive securities:
Unvested restricted stock units and common stock subject    to vesting requirements issued to employees and    non-employees		597,773		622,893		398,643		519,964
Common stock issuable upon the exercise of stock options    and SARs		—		—		—		8,593
Dilutive weighted average common shares outstanding		27,817,949		32,308,514		27,544,738		32,124,371

Approximately 102 shares and 2 thousand shares of common stock equivalents were excluded from the computations of diluted net income per common share for the quarter and nine months ended September 29, 2023, respectively, as compared to 3 thousand shares and 2 thousand shares for the quarter and nine months ended September 30, 2022, respectively, as inclusion would have had an anti-dilutive effect on diluted net income per common share.

3. Accounts Receivable and Contract Assets, Net

Accounts receivable and contract assets, net, consisted of the following (in thousands):

	September 29,			December 30,
	2023			2022
Accounts receivable	$	45,443		$	28,913
Contract assets		17,737			20,319
Allowance for doubtful accounts		(973	)		(856	)
Accounts receivable and contract assets, net	$	62,207		$	48,376

Accounts receivable is net of uncollected advanced billings. Contract assets represent revenue for services performed that have not been invoiced.

4. Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands):

	September 29,		December 30,
	2023		2022
Accrued compensation and benefits	$	9,453	$	9,320
Accrued bonuses		5,406		12,171
Accrued dividend payable		2,994		2,997
Accrued sales, use, franchise and VAT tax		2,578		2,572
Non-cash stock based compensation accrual		215		1,241
Other accrued expenses		3,080		2,652
Total accrued expenses and other liabilities	$	23,726	$	30,953

12

The Hackett Group, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

5. Leases

The Company has operating leases for office space and, to a much lesser extent, operating leases for equipment. The Company’s office leases are between terms of 1 year and 5 years. Rents usually increase annually in accordance with defined rent steps or are based on current year consumer price index adjustments. Some of the lease agreements contain one or more of the following provisions: tenant allowances, rent holidays, lease premiums, and rent escalation clauses. There are typically no purchase options, residual value guarantees or restrictive covenants. When renewal options exist, the Company generally does not deem them to be reasonably certain to be exercised, and therefore the amounts are not recognized as part of the lease liability nor the right of use asset.

The components of lease expense were as follows for the nine months ended September 29, 2023 (in thousands):

Operating lease cost	$	841
Total net lease costs	$	841

The weighted average remaining lease term is 2.8 years. The weighted average discount rate utilized is 4%. For the quarter and nine months ended September 29, 2023, the Company paid $0.4 million and $1.0 million, respectively, from operating cash flows for its operating leases.

Future minimum lease payments under non-cancellable operating leases as of September 29, 2023, were as follows (in thousands):

2023 (excluding the nine months ended September 29, 2023)	$	393
2024		1,068
2025		259
2026		222
Thereafter		365
Total lease payments		2,307
Less imputed interest		(126	)
Total	$	2,181

As of September 29, 2023, the Company does not have any additional operating leases that have not yet commenced.

6. Credit Facility

On November 7, 2022, the Company entered into a third amended and restated credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and the lenders party thereto, pursuant to which the lenders agreed to amend and restate its existing credit agreement, in order to extend the maturity date of the revolving line of credit and provide the Company with an additional $55.0 million in borrowing capacity, for an aggregate amount of up to $100.0 million from time to time pursuant to a revolving line of credit (the “Credit Facility”). The Credit Facility matures on November 7, 2027.

The obligations of Hackett under the Credit Facility are guaranteed by active existing and future material U.S. subsidiaries of Hackett (the “U.S. Subsidiaries”) and are secured by substantially all of the existing and future property and assets of Hackett and the U.S. Subsidiaries.

The interest rates per annum applicable to loans under the Credit Facility will be, at the Company’s option, equal to either a base rate or a Bloomberg Short-Term Bank Yield Index ("BSBY") rate, plus an applicable margin percentage. The applicable margin percentage is based on the consolidated leverage ratio, as defined in the Credit Agreement. As of September 29, 2023, the applicable margin percentage was 1.50% per annum for the BSBY rate, and 0.75% per annum, for the base rate. As of September 29, 2023, the interest rate on the Company's outstanding debt was 6.9%, utilizing the BSBY margin percentage. The interest rate of the commitment fee as of September 29, 2023 was 0.125%. Interest payments are made monthly.

The Company is subject to certain covenants, including total consolidated leverage, fixed cost coverage and liquidity requirements, each as set forth in the Credit Agreement, subject to certain exceptions. As of September 29, 2023, the Company was in compliance with all covenants.

13

The Hackett Group, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

6. Credit Facility (continued)

As of September 29, 2023, the Company had $44.0 million of outstanding debt, excluding $0.3 million of deferred debt costs. As of December 30, 2022, the Company had $60.0 million of outstanding debt, excluding $0.3 million of deferred debt costs. During the quarter and nine months ended September 29, 2023, the Company paid down $9.0 million and a net of $16.0 million, respectively, on the principal balance.

As of September 29, 2023, the Company had $0.3 million of debt issuance costs remaining which will be amortized over the remaining life of the Credit Facility.

7. Stock Based Compensation

During the quarter and nine months ended September 29, 2023, the Company issued 422 and 589,865 restricted stock units, respectively, at a weighted average grant-date fair value of $23.68 and $21.40 per share, respectively. As of September 29, 2023, the Company had 1,228,946 restricted stock units outstanding at a weighted average grant-date fair value of $19.76 per share. As of September 29, 2023, $14.7 million of total restricted stock unit non-cash compensation expense related to unvested awards had not been recognized and is expected to be recognized over a weighted average period of approximately 2.3 years. In addition, as of September 29, 2023, the Company had 1,318 shares of common stock subject to vesting requirements outstanding at a weighted average grant-date fair value of $16.17 per share.

Forfeitures for all of the Company’s outstanding equity awards are recognized as incurred.

8. Shareholders’ Equity

Treasury Stock and Tender Offer

On July 30, 2002, the Company announced that its Board of Directors approved the repurchase of up to $5.0 million of the Company’s common stock through its share repurchase program. Since the inception of the repurchase plan, the Board of Directors has approved the repurchase of $287.2 million of the Company’s common stock, $120.0 million of which was approved in 2022. As of September 29, 2023, the Company had affected cumulative purchases under the plan of $273.2 million, leaving $13.9 million available for future purchases.

In December 2022, the Company completed a tender offer through which 4.9 million shares of the Company's common stock were purchased for a total cost, inclusive of transaction related fees, of $116.0 million, or $23.72 per share, which represented 15% of the Company's issued and outstanding stock at the time. The Company used $60.0 million in borrowings from its Credit Facility and cash on hand to fund the tender offer.

During the quarter ended September 29, 2023 and September 30, 2022, the Company did not repurchase any outstanding stock in the open market. During the nine months ended September 29, 2023 and September 30, 2022, the Company repurchased 37 thousand shares and 31 thousand shares, respectively, from members of its Board of Directors at an average price per share of $18.96 and $20.50, respectively, for a total cost of $0.7 million and $0.6 million, respectively.

There is no expiration of the Company's repurchase authorization. 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. The Company holds repurchased shares of its common stock as treasury stock and accounts for treasury stock under the cost method.

Shares purchased under the repurchase plan do not include shares withheld to satisfy withholding tax obligations. These withheld shares are never issued and in lieu of issuing the shares, taxes were paid on the employee’s behalf. During the quarter and nine months ended September 29, 2023, 3 thousand shares and 171 thousand shares were withheld and not issued, respectively, for a cost of $66 thousand and $3.7 million, respectively. During the quarter and nine months ended September 30, 2022, 3 thousand shares and 134 thousand shares were withheld and not issued, respectively, for a cost of $69 thousand and $2.6 million, respectively. The shares withheld for taxes are included under issuance of common stock in the accompanying consolidated statements of shareholders’ equity.

14

The Hackett Group, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

8. Shareholders’ Equity (continued)

Dividend Program

In 2022, the Company increased the annual dividend from $0.40 per share to $0.44 per share to be paid on a quarterly basis. During the nine months of 2023, the Company declared three quarterly dividends to its shareholders for an aggregate of $9.0 million, which were paid in April 2023, July 2023 and October 2023. These dividends were paid from U.S. domestic sources and are accounted for as a decrease to retained earnings. Subsequent to September 29, 2023, the Company declared its fourth quarter dividend in 2023 to be paid in January of 2024.

9. Transactions with Related Parties

During the nine months ended September 29, 2023, the Company bought back 37 thousand shares of its common stock from members of its Board of Directors for $0.7 million, or $18.96 per share.

10. Contingency

In May 2023, Gartner, Inc. filed a lawsuit seeking a preliminary injunction and damages against the Company and two ex-Gartner employees that were hired by the Company. On November 7, 2023, the Court issued a preliminary injunction preventing the Company from employing the individuals in their current roles. No trial date has been scheduled. Based on the early stage of the litigation, we are unable to reasonably estimate the loss, or range of loss, if any, that may result. Accordingly, the Company has not recorded a loss contingency related to this matter.

11. 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.

12. Segment Information and Geographical Data

The Company has organized its operating and internal reporting structure to align with its primary market solutions. In accordance with ASC 280, the Company determined it has three operating segments and three reportable segments: (1) Global S&BT, (2) Oracle Solutions, and (3) SAP Solutions. Global S&BT includes the results of the Company’s strategic business consulting practices; Oracle Solutions includes the results of the Company’s Oracle EPM/ERP and Digital AMS practices; SAP Solutions includes the Company’s SAP applications and related SAP service offerings. The SAP Solutions reportable segment is the only segment that contains software sales revenue.

The measurement criteria for segment profit or loss are substantially the same for each reportable segment, excluding any unusual or infrequent items, if any. Segment profit consists of the revenue generated by a segment, less operating expenses that are incurred directly by the segment. Unallocated costs include corporate costs related to the administrative functions that are performed in a centralized manner and that are not attributable to a particular segment, depreciation and amortization expense, interest expense, non-cash compensation expense and any non-recurring transactions. Segment information related to assets has been omitted as the chief operating decision maker does not receive discrete financial information regarding assets at the segment level.

15

The Hackett Group, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

12. Segment Information and Geographical Data (continued)

The tables below set forth information about the Company’s operating segments for the quarter and nine months ended September 29, 2023, and September 30, 2022, along with the items necessary to reconcile the segment information to the totals reported in the accompanying consolidated financial statements (in thousands):

	Quarter Ended					Nine Months Ended
	September 29,		September 30,			September 29,		September 30,
	2023		2022			2023		2022
Global S&BT:
Total revenue*	$	43,798	$	41,593		$	129,765	$	128,760
Segment profit		13,951		14,030			40,860		45,939
Oracle Solutions:
Total revenue*	$	20,831	$	17,682		$	58,774	$	59,165
Segment profit		5,031		3,313			13,966		12,147
SAP Solutions:
Total revenue*	$	11,227	$	12,758		$	35,648	$	35,700
Segment profit		2,861		3,847			8,486		9,238
Total Company:
Total revenue*	$	75,856	$	72,033		$	224,187	$	223,625
Total segment profit	$	21,843	$	21,190		$	63,312	$	67,324
Items not allocated to segment level:
Corporate general and administrative expenses**		4,497		4,332			15,069		15,899
Non-cash stock based compensation expense		2,711		2,511			7,930		7,828
Depreciation and amortization		892		838			2,528		2,623
Restructuring and asset impairment settlement		-		(526	)		-		(651	)
Interest expense, net		814		14			2,594		70
Income from continuing operations before taxes	$	12,929	$	14,021		$	35,191	$	41,555

*Total revenue includes reimbursable expenses, which are project travel-related expenses passed through to a client with no associated operating margin.

**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, as well as any foreign currency gains and losses. Corporate general and administrative expenses exclude one-time, non-recurring expenses and benefits.

The tables below set forth information on the Company's geographical data. Total revenue, which is primarily based on the country of the contracting entity, was attributed to the following geographical areas (in thousands):

	Quarter Ended				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,
	2023		2022		2023		2022
United States	$	63,955	$	62,505	$	190,578	$	193,614
Europe		7,399		5,311		21,132		17,952
Other (Australia, Canada, India and Uruguay)		4,502		4,217		12,477		12,059
Total revenue	$	75,856	$	72,033	$	224,187	$	223,625

16

The Hackett Group, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

12. Segment Information and Geographical Data (continued)

Long-lived assets are attributable to the following geographic areas (in thousands):

	September 29,		December 30,
	2023		2022
Long-lived assets:
United States	$	91,228	$	89,705
Europe		13,920		13,640
Other (Australia, Canada, India and Uruguay)		439		482
Total long-lived assets	$	105,587	$	103,827

As of September 29, 2023 and December 30, 2022, foreign assets included $13.7 million and $13.5 million, respectively, of goodwill related to prior acquisitions.

17

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes “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 (the "Exchange Act"). 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 reflected in such forward-looking statements will turn out to be correct. 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, the impact of the coronavirus (COVID-19) pandemic, our ability to effectively integrate acquisitions into our operations, 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 national or geopolitical conflict, such as the war involving Russia and Ukraine on our business and changes in general economic conditions, inflation, interest rates and our ability to obtain additional debt financing if needed. 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 following Management's Discussion and Analysis ("MD&A") is intended to help the reader understand the results of operations and financial condition of Hackett. MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

The Hackett Group, Inc. (“Hackett” or the “Company”) is a leading IP-based 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. Only Hackett empirically defines world-class performance in sales, general and administrative and certain supply chain activities with analysis gained through over 25,000 benchmark and performance studies over 29 years at over 8,800 of the world’s leading companies.

Impact of Macroeconomic Conditions on Our Business

The level of revenue we achieve is based on our ability to deliver market leading services and solutions and to deploy skilled teams of professionals quickly. Our results of operations are affected by economic conditions, including macroeconomic conditions and levels of business confidence. Any deterioration in the current macroeconomic environment or economic downturn as a result of weak or uncertain economic conditions due to inflation, high interest rates, national or geopolitical events or other factors impacting economic activity or business confidence could adversely affect our clients' financial condition or outlook which may reduce the clients' demand for our services.

18

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, our results of operations (in thousands and unaudited):

	Quarter Ended						Nine Months Ended
	September 29,			September 30,			September 29,			September 30,
	2023			2022			2023			2022
Revenue:
Revenue before reimbursements	$	74,634		$	70,995		$	220,106		$	220,871
Reimbursements		1,222			1,038			4,081			2,754
Total revenue		75,856			72,033			224,187			223,625
Costs and expenses:
Cost of service:
Personnel costs before reimbursable expenses (includes $1,518 and $4,687 and $1,652 and $4,801 of non-cash stock based compensation expense in the three and nine months ended September 29, 2023 and September 30, 2022, respectively)		44,421			42,870			132,990			134,904
Reimbursable expenses		1,222			1,038			4,081			2,754
Total cost of service		45,643			43,908			137,071			137,658
Selling, general and administrative costs (includes $1,193 and $3,243 and $859 and $3,027 of non-cash stock based compensation expense in the three and nine months ended September 29, 2023 and September 30, 2022, respectively)		16,470			14,616			49,331			44,993
Restructuring charge reversal		—			(526	)		—			(651	)
Total costs and operating expenses		62,113			57,998			186,402			182,000
Income from operations		13,743			14,035			37,785			41,625
Other expense:
Interest expense		(814	)		(14	)		(2,594	)		(70	)
Income from continuing operations before income taxes		12,929			14,021			35,191			41,555
Income tax expense		3,509			3,655			8,890			10,469
Net income	$	9,420		$	10,366		$	26,301		$	31,086
Diluted net income per common share	$	0.34		$	0.32		$	0.95		$	0.97

Revenue. We are a global company with operations in our primary markets located in the United States and Western Europe. Our revenue is denominated in multiple currencies, primarily the U.S. Dollar, British Pound and Euro, and as a result is affected by currency exchange rate fluctuations. The impact of currency fluctuations did not have a significant impact on comparisons between the quarter and first nine months of 2023 and the comparable periods of 2022. In this MD&A, we discuss revenue based on geographical location of engagement team personnel.

Our Company total revenue was $75.9 million and $224.2 million during the quarter and first nine months of 2023, respectively, as compared to $72.0 million and $223.6 million in the same periods in 2022, respectively. During the first nine months of 2022, we experienced stronger than expected post-Covid pent-up demand that drove strong results. By the middle of 2022, the impact of the increase in interest rates started to disrupt economic growth and resulted in extended client decision making. In the quarter and first nine months of 2023, one customer accounted for 6% and 5%, respectively, of our total Company revenue and in both the quarter and first nine months of 2022, one customer accounted for 7% of our total Company revenue.

Segment revenue. The Company has three reportable segments: Global Strategy & Business Transformation (Global S&BT), Oracle Solutions and SAP Solutions. Global S&BT includes S&BT Consulting, Benchmarking, Business Advisory Services, Intellectual Property as-a-Service (IPASS) and OneStream offerings. Oracle Solutions and SAP Solutions support the two fundamentally distinct ERP systems: Oracle and SAP.

The following table sets forth total revenue by operating segment, which includes reimbursable expenses related to project travel-related expenses passed through to a client with no associated operating margin (in thousands):

19

	Quarter Ended				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,
	2023		2022		2023		2022
Global S&BT	$	43,798	$	41,593	$	129,765	$	128,760
Oracle Solutions		20,831		17,682		58,774		59,165
SAP Solutions		11,227		12,758		35,648		35,700
Total revenue	$	75,856	$	72,033	$	224,187	$	223,625

Global S&BT total revenue was $43.8 million and $129.8 million during the quarter and first nine months of 2023, respectively, as compared to $41.6 million and $128.8 million in the same periods of 2022, respectively. This segment has been impacted by slowing economic growth resulting in extended client decision making in our business transformation engagements. Additionally, the prior period comparisons were against the accelerated post pandemic demand that we experienced throughout the first half of 2022.

Oracle Solutions total revenue was $20.8 million and $58.8 million during the quarter and first nine months of 2023, respectively, as compared to $17.7 million and $59.2 million in the same periods of 2022, respectively. The increase in revenue during the quarter ended September 29, 2023, as compared to the same period in 2022, was primarily due to the segment's continued momentum that began in the second quarter of 2023.

SAP Solutions total revenue was $11.2 million and $35.6 million during the quarter and first nine months of 2023, respectively, as compared to $12.8 million and $35.7 million in the same periods of 2022, respectively. The decrease in revenue during the quarter ended September 29, 2023, as compared to the same period in 2022, was due to lower sales of SAP software.

Reimbursements as a percentage of Company total revenue were 1.6% and 1.8% during the quarter and first nine months of 2023, respectively, as compared to 1.4% and 1.2%, in the same periods in 2022, respectively. Reimbursements are project travel-related expenses passed through to a client with no associated operating margin. We have experienced increased client-related travel since the transition to a remote delivery model, however we do not expect reimbursements to return to pre-pandemic levels.

Cost of Service. Cost of service consists of personnel costs before reimbursable expenses, which includes salaries, benefits and incentive compensation for consultants and subcontractor fees, acquisition-related cash, acquisition-related non-cash stock based compensation expense and non-cash stock based compensation expense, and reimbursable expenses which are travel and other expenses passed through to a client and are associated with projects.

Personnel costs before reimbursable expenses increased 4%, to $44.4 million, and decreased 1%, to $133.0 million, for the quarter and first nine months of 2023, respectively, as compared to $42.9 million and $134.9 million in the same periods of 2022, respectively. The higher costs in the third quarter of 2023 were primarily due to the increased incentive compensation accruals commensurate with Company performance and increased utilization of subcontractors. The lower costs in the nine-month period of 2023 were primarily a result of lower incentive compensation accruals commensurate with Company performance and lower salaries resulting from headcount adjustments made earlier this year, partially offset by the increased use of subcontractors in 2023. Personnel costs as a percentage of total Company revenue were 59% during both the quarter and first nine months of 2023, respectively, as compared to 60% for both of the same periods of 2022.

Non-cash stock based compensation expense, included in personnel costs before reimbursable expenses was $1.5 million and $4.7 million during the quarter and first nine months of 2023, respectively, as compared to $1.7 million and $4.8 million for the same periods of 2022, respectively.

Selling, General and Administrative Costs (“SG&A”). SG&A primarily consists of salaries, benefits and incentive compensation for the selling, marketing, administrative and executive employees, non-cash stock based compensation expense, amortization of intangible assets, acquisition related costs and various other overhead expenses.

SG&A costs increased 13%, to $16.5 million, and 10%, to $49.3 million, during the quarter and first nine months of 2023, respectively, as compared to $14.6 million and $45.0 million for the same periods of 2022, respectively. This increase in the costs during the quarter and first nine months of 2023 was primarily due to the increased investments in dedicated sales resources for our IP-based offerings in our Global S&BT segment, partially offset by lower incentive compensation commensurate with Company performance. SG&A costs as a percentage of total Company revenue were 22% during both the quarter and first nine months of 2023, respectively, as compared to 20% during the same periods in 2022.

Non-cash stock based compensation expense, included in SG&A, was $1.2 million and $3.2 million during the quarter and first nine months of 2023, respectively, as compared to $0.9 million and $3.0 million for the same periods, respectively.

There was no amortization expense included in SG&A in the first nine months of 2023, however, there was $154 thousand of amortization expense in the first nine months of 2022. The amortization expense in 2022 was related to the intangible assets acquired in our acquisitions and the buyout of our partner’s joint venture interest in the CGBS Training and Certification Programs in 2017. The intangible assets related to the acquisitions were fully amortized as of the second quarter of 2022.

20

Segment Profit. Segment profit consists 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 the administrative functions that are performed in a centralized manner and that are not attributable to a particular segment, depreciation and amortization expense, interest expense, non-cash compensation expense and any non-recurring transactions.

Global S&BT segment profit was $14.0 million and $40.9 million during the quarter and first nine months of 2023, respectively, as compared to $14.0 million and $45.9 million for the same periods in 2022, respectively. This decrease in the nine month comparison was primarily due to the incremental investments we are making in program development and additional dedicated sales resources for Benchmark, Executive Advisory Market Intelligence and our other IP as-a-service offerings.

Oracle Solutions segment profit was $5.0 million and $14.0 million during the quarter and first nine months of 2023, respectively, as compared to $3.3 million and $12.1 million for the same periods in 2022, respectively. The increase in the third quarter of 2023 segment profit, as compared to the same period in the prior year, was primarily due to the increase in year over year revenue, partially offset by the increase in new hires and higher use of subcontractors. The increase in the nine month comparison was primarily due to the lower salary and benefits costs in 2023, partially offset by higher use of subcontractors and lower revenue.

SAP Solutions segment profit was $2.9 million and $8.5 million during the quarter and first nine months of 2023, respectively, as compared to $3.8 million and $9.2 million in the same periods in 2022, respectively. The decrease in segment profit in both the quarter and nine month periods in 2023, as compared to the same periods in 2022, was primarily due to lower sales of SAP cloud software.

Interest Expense. Interest expense was $0.8 million and $2.6 million during the quarter and first nine months of 2023, respectively, as compared to $14 thousand and $70 thousand in 2022, respectively. In the fourth quarter of 2022, we drew down $60.0 million on our Credit Facility (as defined below) to fund the tender offer transaction. As of September 29, 2023, we had an outstanding balance of $44.0 million. As of September 30, 2022, we did not have any outstanding debt.

Income Taxes. During the quarter and first nine months of 2023, we recorded $3.5 million and $8.9 million of income tax expense, respectively, related to certain federal, foreign and state taxes which reflected an effective tax rate of 27.1% and 25.3%, respectively. During the third quarter and first nine months of 2022, we recorded $3.7 million and $10.5 million of income tax expense, respectively, related to certain federal, foreign and state taxes which reflected an effective tax rate of 26.1% and 25.2%, respectively.

Liquidity and Capital Resources

As of September 29, 2023 and December 30, 2022, we had $9.9 million and $30.3 million, respectively, classified as cash on the consolidated balance sheets. We currently believe that available funds (including the cash on hand and funds available for borrowing under our revolving line of credit the "Credit Facility") and cash flows generated by operations will be sufficient to fund our working capital requirements, including debt payments, lease obligations and capital expenditures for at least the next twelve months and beyond. 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 that additional financing would be available when needed or desired. Our cash requirements have not changed materially from those disclosed in Item 7 included in Part II of our Annual Report on Form 10-K for the year ended December 30, 2022.

The following table summarizes our cash flow activity (in thousands):

	Nine Months Ended
	September 29,			September 30,
	2023			2022
Cash flows provided by operating activities	$	11,817		$	34,078
Cash flows used in investing activities	$	(3,203	)	$	(3,163	)
Cash flows used in financing activities	$	(28,957	)	$	(9,648	)

Cash Flows from Operating Activities

Net cash provided by operating activities was $11.8 million during the first nine months of 2023, as compared to $34.1 million during the same period in 2022. In 2023, the net cash provided by operating activities was primarily due to net income adjusted for non-cash items, partially offset by an increase in accounts receivable and contract assets, a decrease in accrued liabilities and other accruals primarily due to payments of the 2022 incentive compensation liabilities, payments to vendors and payments related to income tax liabilities. In 2022, the net cash provided by operating activities was primarily due to net income adjusted for non-cash items and an increase in income tax liabilities, partially offset by a decrease in accounts payable and accrued liabilities and other accruals primarily due to payments to vendors, payments of the 2021 incentive compensation liabilities and lower contract liabilities.

21

Cash Flows from Investing Activities

Net cash used in investing activities was $3.2 million during both the first nine months of 2023 and 2022. During both periods, cash flows used in investing activities primarily related to investments for the development of our Hackett Connect Executive Advisory member platform and continued development of our Quantum Leap benchmark and Digital Transformation technologies.

Cash Flows from Financing Activities

Net cash used in financing activities was $29.0 million and $9.6 million during the first nine months of 2023 and 2022, respectively. The usage of cash in 2023 primarily related to the net repayment of borrowings of $16.0 million related to our Credit Facility, dividend payments of $9.0 million and the repurchase of $4.4 million of the Company's common stock. The usage of cash in 2022 primarily related to the repurchase of $3.2 million of the Company’s common stock and dividend payments of $7.0 million.

On November 7, 2022, we amended and restated our credit agreement in order to extend the maturity date of the Credit Facility and provide the Company with an additional $55 million in borrowing capacity, for an aggregate amount of up to $100 million. See Note 6, “Credit Facility,” to our consolidated financial statements included in this Quarterly Report on Form 10-Q for more information. As of September 29, 2023, we had $44.0 million of outstanding borrowings under our Credit Facility, excluding deferred debt costs, leaving us with a capacity of approximately $56.0 million.

22

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As of September 29, 2023, our exposure to market risk related primarily to changes in interest rates and foreign currency exchange rate risks.

Interest Rate Risk

Our exposure to market risk for changes in interest rates relates primarily to the Credit Facility, which is subject to variable interest rates. Under our prior credit agreement, which was amended and restated in November 2022, the interest rates per annum applicable to loans under the Credit Facility was, at our option, equal to a base rate for one-, two-, three- or nine-month interest periods chosen by us in each case, plus an applicable margin percentage. A 100-basis point increase in our interest rate under our Credit Facility (Bloomberg Short-Term Bank Yield Index) would not have had a material impact on our results of operations for the quarter and nine months ended September 29, 2023.

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, the Euro and the Australian Dollar. These exposures may change over time as business practices evolve.

Item 4. Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control 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 control over financial reporting.

Item 5. Other Information.

Rule 10b5-1 Trading Arrangements

During the three months ended September 29, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

23

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.

Item 1A. Risk Factors.

For a discussion of our potential risks and uncertainties, see the risk factor below and the information under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 30, 2022 (the “Annual Report”).

There have been no material changes to any of the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended December 30, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

During the quarter ended September 29, 2023 the Company did not repurchase any common stock under the repurchase plan and during the nine months ended September 29, 2023, the Company repurchased 37 thousand shares of its common stock under the repurchase plan. As of September 29, 2023, the Company had $13.9 million of authorization remaining under the repurchase plan.

					Total Number		Maximum Dollar
					of Shares as Part		Value That May
					of Publicly		Yet be Purchased
	Total Number		Average Price		Announced		Under the
Period	of Shares		Paid per Share		Program		Program
Balance as of June 30, 2023							$	13,937,978
July 1, 2023 to July 28, 2023		—	$	—		—	$	13,937,978
July 29, 2023 to August 25, 2023		—	$	—		—	$	13,937,978
August 26, 2023 to September 29, 2023		—	$	—		—	$	13,937,978
		—	$	—		—

Shares repurchased during the quarter and nine months ended September 29, 2023 under the repurchase plan do not include 3 thousand shares and 171 thousand shares, respectively, for a cost of $66 thousand and $3.7 million, respectively, that the Company bought back to satisfy employee net vesting obligations.

24

Item 6. 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	Articles of Amendment of the Articles of Incorporation of the Registrant (incorporated herein by reference to the Registrant's Form 10-K for the year ended December 28, 2007).
3.3	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).
3.4	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).
3.5	Amendment to Amended and Restated Bylaws of the Registrant (incorporated herein by reference to the Registrant's Form 8-K filed on January 21, 2015).
31.1*	Certification by CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification by CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32*	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document.
101.SCH**	Inline XBRL Taxonomy Extension Schema
101.CAL**	Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF**	Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB**	Inline XBRL Taxonomy Extension Label Linkbase
101.PRE**	Inline XBRL Taxonomy Extension Presentation Linkbase
104**	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith

** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

25

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: November 8, 2023	/s/ Robert A. Ramirez
	Robert A. Ramirez
	Executive Vice President, Finance and Chief Financial Officer

26

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ted A. Fernandez, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of The Hackett Group, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2023	By:	/s/ Ted A. Fernandez
		Ted A. Fernandez
		Chairman of the Board and Chief Executive Officer
		The Hackett Group, Inc.

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert A. Ramirez, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of The Hackett Group, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 8, 2023	By:	/s/ Robert A. Ramirez
		Robert A. Ramirez
		Executive Vice President, Finance and Chief Financial Officer
		The Hackett Group, Inc.

EX-32

Exhibit 32

THE HACKETT GROUP, INC

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of The Hackett Group, Inc. (the “Company”) on Form 10-Q for the period ended September 29, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Ted A. Fernandez, Chairman of the Board and Chief Executive Officer, and Robert A. Ramirez, Executive Vice President, Finance and Chief Financial Officer, of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

(1)The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

By:	/s/ Ted A. Fernandez
	Ted A. Fernandez
	Chairman of the Board and Chief Executive Officer
	November 8, 2023
By:	/s/ Robert A. Ramirez
	Robert A. Ramirez
	Executive Vice President, Finance and Chief Financial Officer
	November 8, 2023

A signed original of this statement required by Section 906 has been provided to The Hackett Group, Inc. and will be retained by The Hackett Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 29, 2023	Nov. 03, 2023
Cover [Abstract]
Trading Symbol	HCKT
Entity Registrant Name	Hackett Group, Inc.
Entity Central Index Key	0001057379
Document Type	10-Q
Document Period End Date	Sep. 29, 2023
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-30
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		27,237,502
Title of 12(b) Security	Common Stock, par value $.001 per share
Security Exchange Name	NASDAQ
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity File Number	333-48123
Entity Tax Identification Number	65-0750100
Entity Address, Address Line One	1001 Brickell Bay Drive
Entity Address, Address Line Two	Suite 3000
Entity Address, City or Town	Miami
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33131
City Area Code	305
Local Phone Number	375-8005
Entity Incorporation, State or Country Code	FL
Document Quarterly Report	true
Document Transition Report	false

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 29, 2023	Dec. 30, 2022
Current assets:
Cash	$ 9,879	$ 30,255
Accounts receivable and contract assets, net of allowance of $973 and $856 at September 29, 2023 and December 30, 2022, respectively	62,207	48,376
Prepaid expenses and other current assets	3,174	2,535
Total current assets	75,260	81,166
Property and equipment, net	20,033	19,359
Other assets	282	268
Goodwill	83,663	83,502
Operating lease right-of-use assets	1,609	698
Total assets	180,847	184,993
Current liabilities:
Accounts payable	5,039	8,741
Accrued expenses and other liabilities	23,726	30,953
Contract liabilities	12,869	13,278
Income taxes payable	4,009	5,759
Operating lease liabilities	1,328	870
Total current liabilities	46,971	59,601
Non-current deferred tax liability, net	8,583	6,877
Long term debt, net	43,694	59,653
Operating lease liabilities	757	584
Total liabilities	100,005	126,715
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $0.001 par value, 1,250,000 shares authorized; none issued and outstanding
Common stock, $0.001 par value, 125,000,000 shares authorized; 60,537,559 and 60,147,720 shares issued at September 29, 2023 and December 30, 2022, respectively	61	60
Additional paid-in capital	314,046	308,325
Treasury stock, at cost, 33,314,926 and 33,277,459 shares September 29, 2023 and December 30, 2022, respectively	(274,600)	(273,866)
Retained earnings	55,966	38,640
Accumulated other comprehensive loss	(14,631)	(14,881)
Total shareholders' equity	80,842	58,278
Total liabilities and shareholders' equity	$ 180,847	$ 184,993

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 29, 2023	Dec. 30, 2022
Statement of Financial Position [Abstract]
Accounts receivable and unbilled revenue, allowance	$ 973	$ 856
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,250,000	1,250,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	125,000,000	125,000,000
Common stock, shares issued	60,537,559	60,147,720
Treasury stock, at cost, shares	33,314,926	33,277,459

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 29, 2023	Sep. 30, 2022	Sep. 29, 2023	Sep. 30, 2022
Revenue:
Revenue	$ 75,856	$ 72,033	$ 224,187	$ 223,625
Cost of service:
Total cost of service	45,643	43,908	137,071	137,658
Selling, general and administrative costs (includes $1,193 and $3,243 and $859 and $3,027 of non-cash stock based compensation expense in the three and nine months ended September 29, 2023 and September 30, 2022, respectively)	16,470	14,616	49,331	44,993
Restructuring and asset impairment settlement		(526)		(651)
Total costs and operating expenses	62,113	57,998	186,402	182,000
Income from operations	13,743	14,035	37,785	41,625
Other expense, net:
Interest expense, net	(814)	(14)	(2,594)	(70)
Income from operations before income taxes	12,929	14,021	35,191	41,555
Income tax expense	3,509	3,655	8,890	10,469
Net income	$ 9,420	$ 10,366	$ 26,301	$ 31,086
Basic net income per common share:
Income per common share from operations	$ 0.35	$ 0.33	$ 0.97	$ 0.98
Weighted average common shares outstanding	27,220,176	31,685,621	27,146,095	31,595,814
Diluted net income per common share:
Income per common share from operations	$ 0.34	$ 0.32	$ 0.95	$ 0.97
Weighted average common and common equivalent shares outstanding	27,817,949	32,308,514	27,544,738	32,124,371
Revenue Before Reimbursements [Member]
Revenue:
Revenue	$ 74,634	$ 70,995	$ 220,106	$ 220,871
Reimbursements [Member]
Revenue:
Revenue	1,222	1,038	4,081	2,754
Cost of service:
Total cost of service	1,222	1,038	4,081	2,754
Cost Before Reimbursements [Member]
Cost of service:
Total cost of service	$ 44,421	$ 42,870	$ 132,990	$ 134,904

XML

Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 29, 2023	Sep. 30, 2022	Sep. 29, 2023	Sep. 30, 2022
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total share based compensation	$ 2,711	$ 2,511	$ 7,930	$ 7,828
Cost of Sales [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total share based compensation	1,518	4,687	1,652	4,801
Selling General and Administrative [Member]
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Total share based compensation	$ 1,193	$ 3,243	$ 859	$ 3,027

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 29, 2023	Sep. 30, 2022	Sep. 29, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 9,420	$ 10,366	$ 26,301	$ 31,086
Foreign currency translation adjustment	(1,018)	(1,966)	250	(5,996)
Total comprehensive income	$ 8,402	$ 8,400	$ 26,551	$ 25,090

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 29, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net income	$ 26,301	$ 31,086
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	2,528	2,468
Amortization expense		154
Amortization of debt issuance costs	54	43
Non-cash stock based compensation expense	7,930	7,828
Provision for doubtful accounts	219	295
Loss (gain) on foreign currency translation	263	(1,383)
Deferred income tax expense	1,617	360
Changes in assets and liabilities:
Increase in accounts receivable and contract assets	(14,134)	(1,446)
(Increase) decrease in prepaid expenses and other assets	(1,482)	3,566
Decrease in accounts payable	(3,701)	(2,992)
Decrease in accrued expenses and other liabilities	(5,619)	(9,783)
Decrease in contract liabilities	(409)	(2,201)
(Decrease) increase in income tax payable	(1,750)	6,083
Net cash provided by operating activities	11,817	34,078
Cash flows from investing activities:
Purchases of property and equipment	(3,203)	(3,163)
Net cash used in investing activities	(3,203)	(3,163)
Cash flows from financing activities:
Debt issuance costs	(14)	(10)
Proceeds from borrowings	5,000
Repayment of borrowings	(21,000)
Proceeds from ESPP	481	407
Proceeds from the exercise of stock options		120
Dividends paid	(8,978)	(6,954)
Repurchase of common stock	(4,446)	(3,211)
Net cash used in financing activities	(28,957)	(9,648)
Effect of exchange rate on cash	(33)	(16)
Net (decrease) increase in cash	(20,376)	21,251
Cash at beginning of period	30,255	45,794
Cash at end of period	9,879	67,045
Supplemental disclosure of cash flow information:
Cash paid (refunded) for income taxes	8,719	(34)
Cash paid for interest	2,690	43
Supplemental disclosure of non-cash flow investing and financing activities:
Dividend declared during the quarter and paid the following quarter	$ 2,994	$ 3,483

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Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]
Balance at Dec. 31, 2021	$ 143,853	$ 60	$ 300,288	$ (157,294)	$ 11,272	$ (10,473)
Balance, Shares at Dec. 31, 2021		59,631		(28,358)
Issuance of common stock	(2,432)		(2,432)
Issuance of common stock, Shares		373
Treasury stock purchased, net of costs	(635)			$ (635)
Treasury stock purchased, net of costs, Shares				(31)
Amortization of restricted stock units and common stock subject to vesting requirements	3,632		3,632
Dividends declared	(3,474)				(3,474)
Net income	10,505				10,505
Foreign currency translation	(1,134)					(1,134)
Balance at Apr. 01, 2022	150,315	$ 60	301,488	$ (157,929)	18,303	(11,607)
Ending Balance, Shares at Apr. 01, 2022		60,004		(28,389)
Balance at Dec. 31, 2021	143,853	$ 60	300,288	$ (157,294)	11,272	(10,473)
Balance, Shares at Dec. 31, 2021		59,631		(28,358)
Net income	31,086
Foreign currency translation	(5,996)
Balance at Sep. 30, 2022	164,071	$ 60	306,488	$ (157,929)	31,921	(16,469)
Ending Balance, Shares at Sep. 30, 2022		60,073		(28,389)
Balance at Dec. 31, 2021	143,853	$ 60	300,288	$ (157,294)	11,272	(10,473)
Balance, Shares at Dec. 31, 2021		59,631		(28,358)
Balance at Dec. 30, 2022	58,278	$ 60	308,325	$ (273,866)	38,640	(14,881)
Ending Balance, Shares at Dec. 30, 2022		60,148		(33,277)
Balance at Apr. 01, 2022	150,315	$ 60	301,488	$ (157,929)	18,303	(11,607)
Balance, Shares at Apr. 01, 2022		60,004		(28,389)
Issuance of common stock	452		452
Issuance of common stock, Shares		61
Amortization of restricted stock units and common stock subject to vesting requirements	2,224		2,224
Dividends declared	(3,480)				(3,480)
Net income	10,215				10,215
Foreign currency translation	(2,896)					(2,896)
Balance at Jul. 01, 2022	156,830	$ 60	304,164	$ (157,929)	25,038	(14,503)
Ending Balance, Shares at Jul. 01, 2022		60,065		(28,389)
Issuance of common stock	(69)		(69)
Issuance of common stock, Shares		8
Amortization of restricted stock units and common stock subject to vesting requirements	2,393		2,393
Dividends declared	(3,483)				(3,483)
Net income	10,366				10,366
Foreign currency translation	(1,966)					(1,966)
Balance at Sep. 30, 2022	164,071	$ 60	306,488	$ (157,929)	31,921	(16,469)
Ending Balance, Shares at Sep. 30, 2022		60,073		(28,389)
Balance at Dec. 30, 2022	58,278	$ 60	308,325	$ (273,866)	38,640	(14,881)
Balance, Shares at Dec. 30, 2022		60,148		(33,277)
Issuance of common stock	(3,529)		(3,529)
Issuance of common stock, Shares		343
Treasury stock purchased, net of costs	(711)			$ (711)
Treasury stock purchased, net of costs, Shares				(37)
Amortization of restricted stock units and common stock subject to vesting requirements	3,662		3,662
Dividends declared	(2,990)				(2,990)
Net income	8,161				8,161
Foreign currency translation	570					570
Balance at Mar. 31, 2023	63,441	$ 60	308,458	$ (274,577)	43,811	(14,311)
Ending Balance, Shares at Mar. 31, 2023		60,491		(33,314)
Balance at Dec. 30, 2022	58,278	$ 60	308,325	$ (273,866)	38,640	(14,881)
Balance, Shares at Dec. 30, 2022		60,148		(33,277)
Dividends declared	(9,000)
Net income	26,301
Foreign currency translation	250
Balance at Sep. 29, 2023	80,842	$ 61	314,046	$ (274,600)	55,966	(14,631)
Ending Balance, Shares at Sep. 29, 2023		60,538		(33,314)
Balance at Mar. 31, 2023	63,441	$ 60	308,458	$ (274,577)	43,811	(14,311)
Balance, Shares at Mar. 31, 2023		60,491		(33,314)
Issuance of common stock	363	$ 1	362
Issuance of common stock, Shares		38
Treasury stock purchased, net of costs	(23)			$ (23)
Amortization of restricted stock units and common stock subject to vesting requirements	2,685		2,685
Dividends declared	(2,991)				(2,991)
Net income	8,720				8,720
Foreign currency translation	698					698
Balance at Jun. 30, 2023	72,893	$ 61	311,505	$ (274,600)	49,540	(13,613)
Ending Balance, Shares at Jun. 30, 2023		60,529		(33,314)
Issuance of common stock	(67)		(67)
Issuance of common stock, Shares		9
Amortization of restricted stock units and common stock subject to vesting requirements	2,608		2,608
Dividends declared	(2,994)				(2,994)
Net income	9,420				9,420
Foreign currency translation	(1,018)					(1,018)
Balance at Sep. 29, 2023	$ 80,842	$ 61	$ 314,046	$ (274,600)	$ 55,966	$ (14,631)
Ending Balance, Shares at Sep. 29, 2023		60,538		(33,314)

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 29, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jul. 01, 2022	Apr. 01, 2022	Sep. 29, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net Income (Loss)	$ 9,420	$ 8,720	$ 8,161	$ 10,366	$ 10,215	$ 10,505	$ 26,301	$ 31,086

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Insider Trading Arrangements	9 Months Ended
	Sep. 29, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Basis of Presentation and General Information

9 Months Ended

Sep. 29, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and General Information

1. Basis of Presentation and General Information

Basis of Presentation

The accompanying consolidated financial statements of The Hackett Group, Inc. (“Hackett” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the Company’s accounts and those of its wholly-owned subsidiaries which the Company is required to consolidate. All intercompany transactions and balances have been eliminated in the consolidation.

In the opinion of management, the accompanying consolidated financial statements reflect all normal and recurring adjustments which are necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows as of the dates and for the periods presented. The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, these statements do not include all the disclosures normally required by U.S. GAAP for annual financial statements and should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 30, 2022, included in the Annual Report on Form 10-K filed by the Company with the SEC on March 3, 2023. The consolidated results of operations for the quarter and nine months ended September 29, 2023, are not necessarily indicative of the results to be expected for any future period or for the full fiscal year.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Segment Reporting

Segments are defined as components of a company that engage in business activities from which they earn revenue and incur expenses, and for which separate financial information is available and is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company assesses its operating segments under the management approach in accordance with ASC 280, "Segment Reporting" (ASC 280), and has determined that it has three operating segments: Global S&BT, Oracle Solutions and SAP Solutions which are also its reportable segments. See Note 12 “Segment Information and Geographical Data” for detailed segment information.

Goodwill and Other Intangible Assets

For acquisitions accounted for as a business combination, goodwill represents the excess of the cost over the fair value of the net assets acquired. The Company has organized its operating and internal reporting structure to align with its primary market solutions. In accordance with ASC 280, management made the determination to present three operating segments, three reportable segments and three reporting units as follows: (1) Global S&BT, (2) Oracle Solutions, and (3) SAP Solutions. Global S&BT includes the results of the Company’s strategic business consulting practices; Oracle Solutions includes the results of the Company’s Oracle EPM/ERP and Digital AMS practices; SAP Solutions includes the Company’s SAP applications and related SAP service offerings. A reporting unit is an operating segment or one level below an operating segment to which goodwill is assigned. The goodwill has been allocated to the reporting unit based on the reporting unit's relative fair value. The carrying amount of goodwill by reporting unit is as follows (in thousands):

					Foreign
	December 30,		Additions/		Currency		September 29,
	2022		Adjustments		Translation		2023
Global S&BT	$	56,810	$	-	$	161	$	56,971
Oracle Solutions		16,699		—		—		16,699
SAP Solutions		9,993		—		—		9,993
Goodwill	$	83,502	$	-	$	161	$	83,663

1. Basis of Presentation and General Information (continued)

Revenue Recognition

The Company generates substantially all of its revenue from providing professional services to its clients. The Company also generates revenue from software sales, software maintenance and support and subscriptions to its executive and best practices advisory programs. A single contract could include one or multiple performance obligations. For those contracts that have multiple performance obligations, the Company allocates the total transaction price to each performance obligation based on its relative standalone selling price. The Company determines the standalone selling price based on the respective selling price of the individual elements when sold separately.

Revenue is recognized when control of the goods and services provided are transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods and services using the following steps: 1) identify the contract, 2) identify the performance obligations, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract, and 5) recognize revenue as or when the Company satisfies the performance obligations.

The Company typically satisfies its performance obligations for professional services over time as the related services are provided. The performance obligations related to software maintenance and support and subscriptions to its executive and best practice advisory programs are typically satisfied evenly over the course of the service period. Other performance obligations, such as software sales, are satisfied at a point in time.

The Company generates revenue under four types of billing arrangements: fixed-fee; time-and-materials; executive and best practice advisory services; and software sales and software maintenance and support.

In fixed-fee billing arrangements, which would also include contracts with capped fees, the Company agrees to a pre-established fee or fee cap in exchange for a predetermined set of professional services. The Company sets the fees based on its estimates of the costs and timing for completing the engagements. The Company generally recognizes revenue under fixed-fee or capped fee arrangements using a proportionate performance approach, which is based on work completed to-date as compared to estimates of the total services to be provided under the engagement. Estimates of total engagement revenue and cost of services are monitored regularly during the term of the engagement. If the Company’s estimates indicate a potential loss, such a loss is recognized in the period in which the loss first becomes probable and reasonably estimable. The customer is invoiced based on the contractual agreement between the parties, typically bi-weekly, monthly or milestone driven, with net thirty-day terms, however client terms are subject to change.

Time-and-material billing arrangements require the client to pay based on the number of hours worked by the Company’s consultants at agreed hourly rates. The Company recognizes revenue under time-and-material arrangements as the related services or goods are provided, using the right to invoice practical expedient which allows it to recognize revenue in the amount based on the number of hours worked and the agreed upon hourly rates. The customer is invoiced based on the contractual agreement between the parties, typically bi-weekly, monthly or milestone driven, with net thirty-day terms, however client terms are subject to change.

Advisory services contracts are typically in the form of a subscription agreement which allows the customer access to the Company’s executive and best practice advisory programs. There is typically a single performance obligation and the transaction price is the contractual amount of the subscription agreement. Revenue from advisory services contracts is recognized ratably over the life of the agreements. Customers are typically invoiced at the inception of the contract, with net thirty-day terms, however client terms are subject to change.

The resale of on-premise software, cloud software and maintenance contracts are in the form of SAP America ("SAP") software or maintenance agreements provided by SAP. SAP is the principal and the Company is the agent in these transactions as the Company does not obtain title to the software and maintenance which is sold simultaneously. The transaction price is the Company’s agreed-upon percentage of the software sale for either on-premise software or cloud software or maintenance amount in the contract with the vendor. Revenue for the resale of software is recognized upon contract execution and customer’s receipt of the software. The Company also provides software maintenance on other ERP systems, primarily Oracle. Revenue from maintenance contracts is recognized ratably over the life of the agreements. The customer is typically invoiced at contract inception, with net thirty-day terms, however client terms are subject to change.

Revenue before reimbursements excludes reimbursable expenses charged to clients. Reimbursements, which include travel and out-of-pocket expenses, are included in revenue, and an equivalent amount of reimbursable expenses is included in the cost of service.

Expense reimbursements that are billable to clients are included in total revenue and are substantially all billed as time-and-material billing arrangements. Therefore, the Company recognizes all reimbursable expenses as revenue as the related services are provided, using the right to invoice practical expedient. Reimbursable expenses are recognized as expenses in the period in which the expense is incurred. Any expense reimbursements that are billable to clients under fixed-fee billing arrangements are recognized in line with the proportionate performance approach.

1. Basis of Presentation and General Information (continued)

The payment terms and conditions in the Company’s customer contracts vary. The agreements entered into in connection with a project, whether time and materials-based or fixed-fee or capped-fee based, typically allow clients to terminate early due to breach or for convenience with 30 days’ notice. In the event of termination, the client is contractually required to pay for all time, materials and expenses incurred by the Company through the effective date of the termination. In addition, from time to time the Company enters into agreements with its clients that limit its right to enter into business relationships with specific competitors of that client for a specific time period. These provisions typically prohibit the Company from performing a defined range of services which it might otherwise be willing to perform for potential clients. These provisions are generally limited to six to twelve months and usually apply only to specific employees or the specific project team.

Differences between the timing of billings and the recognition of revenue are recognized as either contract assets or contract liabilities in the accompanying consolidated balance sheets. Revenue recognized for services performed but not yet billed to clients is recorded as contract assets and is included within accounts receivable and contract assets. Services not yet performed, however billed to the client and uncollected at period end, are recorded as contract assets and are included within accounts receivable and contract assets. Client prepayments are classified as contract liabilities and recognized over future periods as earned in accordance with the applicable engagement agreement. See Note 3 for the accounts receivable and contract asset balances. During the quarter and nine months ended September 29, 2023, the Company recognized $1.5 million and $12.1 million, respectively, of revenue as a result of changes in the contract liability balance, as compared to $2.0 million and $12.3 million, respectively, for the quarter and nine months ended September 30, 2022.

Based on the information that management reviews internally for evaluating operating segment performance and nature, amount, timing, and uncertainty of revenue and cash flows affected by economic factors, the Company disaggregates revenue as follows for the quarters and nine months ended September 29, 2023 and September 30, 2022 (in thousands):

	Quarter Ended				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,
	2023		2022		2023		2022
Global S&BT:
North America Consulting	$	37,032	$	35,804	$	109,642	$	109,587
International Consulting		6,766		5,789		20,123		19,173
Total Global S&BT	$	43,798	$	41,593	$	129,765	$	128,760
Oracle Solutions:
Consulting and software support and maintenance	$	20,831	$	17,682	$	58,774	$	59,165
Total Oracle Solutions	$	20,831	$	17,682	$	58,774	$	59,165
SAP Solutions:
Consulting and software support and maintenance	$	10,605	$	10,118	$	32,372	$	30,880
Software sales		622		2,640		3,276		4,820
Total SAP Solutions	$	11,227	$	12,758	$	35,648	$	35,700
Total segment revenue	$	75,856	$	72,033	$	224,187	$	223,625

The total revenue from the Global S&BT segment, the Oracle Solutions segment and the SAP Solutions segment's consulting and software support and maintenance services is all recognized over time. The software sales total revenue included in the SAP Solutions segment is recognized at a point in time.

Capitalized Sales Commissions

Sales commissions earned by the Company’s sales force are considered the incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized as project revenue is recognized. The Company determined the period of amortization by taking into consideration the customer contract period, which is generally less than 12 months. Commission expenses are included the in Selling, general and administrative costs in the accompanying consolidated statements of operations. As of December 30, 2022 and December 31, 2021, the Company had $1.5 million and $1.6 million, respectively, of deferred commissions, of which $0.3 million and $0.9 million was amortized during the quarter and nine months ended September 29, 2023, respectively, and $0.2 million and $0.9 million for the same periods in 2022, respectively. No impairment loss was recognized relating to the capitalization of deferred commission.

1. Basis of Presentation and General Information (continued)

Practical Expedients

The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be less than one year.

Sales tax collected from customers and remitted to the applicable taxing authorities is accounted for on a net basis, with no impact on revenue.

Expense reimbursements that are billable to clients are included in total revenue and are substantially all billed as time-and-material billing arrangements. Therefore, the Company recognizes all reimbursable expenses as revenue as the related services are provided, using the right to invoice practical expedient. Reimbursable expenses are recognized as expenses in the period in which the expense is incurred. Any expense reimbursements that are billable to clients under fixed-fee billing arrangements are recognized in line with the proportionate performance approach.

Fair Value

The Company’s financial instruments consist of cash, accounts receivable and contract assets, accounts payable, accrued expenses and other liabilities and contract liabilities. As of September 29, 2023 and December 30, 2022, the carrying amount of each financial instrument approximated the instrument’s respective fair value due to the short-term nature and maturity of these instruments.

The Company uses significant other observable market data or assumptions (Level 2 inputs as defined in accounting guidance) that it believes market participants would use in pricing debt. The fair value of the debt approximated the carrying amount, using Level 2 inputs, due to the short-term variable interest rates based on market rates.

Impact of Macroeconomic Conditions on the Business

The level of revenue the Company achieves is based on its ability to deliver market leading services and solutions and to deploy skilled teams of professionals quickly. The Company’s results of operations are affected by economic conditions, including macroeconomic conditions and levels of business confidence. Any deterioration in the current macroeconomic environment or economic downturn as a result of weak or uncertain economic conditions due to inflation, high interest rates, national or geopolitical events or other factors impacting economic activity or business confidence could adversely affect the Company's clients' financial condition or outlook which may reduce clients' demand for the Company's services.

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Net Income Per Common Share

9 Months Ended

Sep. 29, 2023

Earnings Per Share [Abstract]

Net Income Per Common Share

2. Net Income per Common Share

Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. With regard to common stock subject to vesting requirements and restricted stock units issued to the Company’s employees and non-employee members of its Board of Directors, the calculation includes only the vested portion of such stock and units.

Diluted 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.

2. Net Income per Common Share (continued)

The following table reconciles basic and dilutive weighted average common shares:

	Quarter Ended				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,
	2023		2022		2023		2022
Basic weighted average common shares outstanding		27,220,176		31,685,621		27,146,095		31,595,814
Effect of dilutive securities:
Unvested restricted stock units and common stock subject    to vesting requirements issued to employees and    non-employees		597,773		622,893		398,643		519,964
Common stock issuable upon the exercise of stock options    and SARs		—		—		—		8,593
Dilutive weighted average common shares outstanding		27,817,949		32,308,514		27,544,738		32,124,371

Approximately 102 shares and 2 thousand shares of common stock equivalents were excluded from the computations of diluted net income per common share for the quarter and nine months ended September 29, 2023, respectively, as compared to 3 thousand shares and 2 thousand shares for the quarter and nine months ended September 30, 2022, respectively, as inclusion would have had an anti-dilutive effect on diluted net income per common share.

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Accounts Receivable and Contract Assets, Net

9 Months Ended

Sep. 29, 2023

Receivables, Net, Current [Abstract]

Accounts Receivable and Contract Assets, Net

3. Accounts Receivable and Contract Assets, Net

Accounts receivable and contract assets, net, consisted of the following (in thousands):

	September 29,			December 30,
	2023			2022
Accounts receivable	$	45,443		$	28,913
Contract assets		17,737			20,319
Allowance for doubtful accounts		(973	)		(856	)
Accounts receivable and contract assets, net	$	62,207		$	48,376

Accounts receivable is net of uncollected advanced billings. Contract assets represent revenue for services performed that have not been invoiced.

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Accrued Expenses and Other Liabilities

9 Months Ended

Sep. 29, 2023

Accrued Liabilities And Other Liabilities Current [Abstract]

Accrued Expenses and Other Liabilities

4. Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands):

	September 29,		December 30,
	2023		2022
Accrued compensation and benefits	$	9,453	$	9,320
Accrued bonuses		5,406		12,171
Accrued dividend payable		2,994		2,997
Accrued sales, use, franchise and VAT tax		2,578		2,572
Non-cash stock based compensation accrual		215		1,241
Other accrued expenses		3,080		2,652
Total accrued expenses and other liabilities	$	23,726	$	30,953

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Leases

9 Months Ended

Sep. 29, 2023

Leases [Abstract]

Leases

5. Leases

The Company has operating leases for office space and, to a much lesser extent, operating leases for equipment. The Company’s office leases are between terms of 1 year and 5 years. Rents usually increase annually in accordance with defined rent steps or are based on current year consumer price index adjustments. Some of the lease agreements contain one or more of the following provisions: tenant allowances, rent holidays, lease premiums, and rent escalation clauses. There are typically no purchase options, residual value guarantees or restrictive covenants. When renewal options exist, the Company generally does not deem them to be reasonably certain to be exercised, and therefore the amounts are not recognized as part of the lease liability nor the right of use asset.

The components of lease expense were as follows for the nine months ended September 29, 2023 (in thousands):

Operating lease cost	$	841
Total net lease costs	$	841

The weighted average remaining lease term is 2.8 years. The weighted average discount rate utilized is 4%. For the quarter and nine months ended September 29, 2023, the Company paid $0.4 million and $1.0 million, respectively, from operating cash flows for its operating leases.

Future minimum lease payments under non-cancellable operating leases as of September 29, 2023, were as follows (in thousands):

2023 (excluding the nine months ended September 29, 2023)	$	393
2024		1,068
2025		259
2026		222
Thereafter		365
Total lease payments		2,307
Less imputed interest		(126	)
Total	$	2,181

As of September 29, 2023, the Company does not have any additional operating leases that have not yet commenced.

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Credit Facility

9 Months Ended

Sep. 29, 2023

Debt Disclosure [Abstract]

Credit Facility

6. Credit Facility

On November 7, 2022, the Company entered into a third amended and restated credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and the lenders party thereto, pursuant to which the lenders agreed to amend and restate its existing credit agreement, in order to extend the maturity date of the revolving line of credit and provide the Company with an additional $55.0 million in borrowing capacity, for an aggregate amount of up to $100.0 million from time to time pursuant to a revolving line of credit (the “Credit Facility”). The Credit Facility matures on November 7, 2027.

The obligations of Hackett under the Credit Facility are guaranteed by active existing and future material U.S. subsidiaries of Hackett (the “U.S. Subsidiaries”) and are secured by substantially all of the existing and future property and assets of Hackett and the U.S. Subsidiaries.

The interest rates per annum applicable to loans under the Credit Facility will be, at the Company’s option, equal to either a base rate or a Bloomberg Short-Term Bank Yield Index ("BSBY") rate, plus an applicable margin percentage. The applicable margin percentage is based on the consolidated leverage ratio, as defined in the Credit Agreement. As of September 29, 2023, the applicable margin percentage was 1.50% per annum for the BSBY rate, and 0.75% per annum, for the base rate. As of September 29, 2023, the interest rate on the Company's outstanding debt was 6.9%, utilizing the BSBY margin percentage. The interest rate of the commitment fee as of September 29, 2023 was 0.125%. Interest payments are made monthly.

The Company is subject to certain covenants, including total consolidated leverage, fixed cost coverage and liquidity requirements, each as set forth in the Credit Agreement, subject to certain exceptions. As of September 29, 2023, the Company was in compliance with all covenants.

6. Credit Facility (continued)

As of September 29, 2023, the Company had $44.0 million of outstanding debt, excluding $0.3 million of deferred debt costs. As of December 30, 2022, the Company had $60.0 million of outstanding debt, excluding $0.3 million of deferred debt costs. During the quarter and nine months ended September 29, 2023, the Company paid down $9.0 million and a net of $16.0 million, respectively, on the principal balance.

As of September 29, 2023, the Company had $0.3 million of debt issuance costs remaining which will be amortized over the remaining life of the Credit Facility.

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Stock Based Compensation

9 Months Ended

Sep. 29, 2023

Share-Based Payment Arrangement [Abstract]

Stock Based Compensation

7. Stock Based Compensation

During the quarter and nine months ended September 29, 2023, the Company issued 422 and 589,865 restricted stock units, respectively, at a weighted average grant-date fair value of $23.68 and $21.40 per share, respectively. As of September 29, 2023, the Company had 1,228,946 restricted stock units outstanding at a weighted average grant-date fair value of $19.76 per share. As of September 29, 2023, $14.7 million of total restricted stock unit non-cash compensation expense related to unvested awards had not been recognized and is expected to be recognized over a weighted average period of approximately 2.3 years. In addition, as of September 29, 2023, the Company had 1,318 shares of common stock subject to vesting requirements outstanding at a weighted average grant-date fair value of $16.17 per share.

Forfeitures for all of the Company’s outstanding equity awards are recognized as incurred.

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Shareholders' Equity

9 Months Ended

Sep. 29, 2023

Stockholders' Equity Note [Abstract]

Shareholders' Equity

8. Shareholders’ Equity

Treasury Stock and Tender Offer

On July 30, 2002, the Company announced that its Board of Directors approved the repurchase of up to $5.0 million of the Company’s common stock through its share repurchase program. Since the inception of the repurchase plan, the Board of Directors has approved the repurchase of $287.2 million of the Company’s common stock, $120.0 million of which was approved in 2022. As of September 29, 2023, the Company had affected cumulative purchases under the plan of $273.2 million, leaving $13.9 million available for future purchases.

In December 2022, the Company completed a tender offer through which 4.9 million shares of the Company's common stock were purchased for a total cost, inclusive of transaction related fees, of $116.0 million, or $23.72 per share, which represented 15% of the Company's issued and outstanding stock at the time. The Company used $60.0 million in borrowings from its Credit Facility and cash on hand to fund the tender offer.

During the quarter ended September 29, 2023 and September 30, 2022, the Company did not repurchase any outstanding stock in the open market. During the nine months ended September 29, 2023 and September 30, 2022, the Company repurchased 37 thousand shares and 31 thousand shares, respectively, from members of its Board of Directors at an average price per share of $18.96 and $20.50, respectively, for a total cost of $0.7 million and $0.6 million, respectively.

There is no expiration of the Company's repurchase authorization. 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. The Company holds repurchased shares of its common stock as treasury stock and accounts for treasury stock under the cost method.

Shares purchased under the repurchase plan do not include shares withheld to satisfy withholding tax obligations. These withheld shares are never issued and in lieu of issuing the shares, taxes were paid on the employee’s behalf. During the quarter and nine months ended September 29, 2023, 3 thousand shares and 171 thousand shares were withheld and not issued, respectively, for a cost of $66 thousand and $3.7 million, respectively. During the quarter and nine months ended September 30, 2022, 3 thousand shares and 134 thousand shares were withheld and not issued, respectively, for a cost of $69 thousand and $2.6 million, respectively. The shares withheld for taxes are included under issuance of common stock in the accompanying consolidated statements of shareholders’ equity.

8. Shareholders’ Equity (continued)

Dividend Program

In 2022, the Company increased the annual dividend from $0.40 per share to $0.44 per share to be paid on a quarterly basis. During the nine months of 2023, the Company declared three quarterly dividends to its shareholders for an aggregate of $9.0 million, which were paid in April 2023, July 2023 and October 2023. These dividends were paid from U.S. domestic sources and are accounted for as a decrease to retained earnings. Subsequent to September 29, 2023, the Company declared its fourth quarter dividend in 2023 to be paid in January of 2024.

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Transactions with Related Parties

9 Months Ended

Sep. 29, 2023

Related Party Transactions [Abstract]

Transactions with Related Parties

9. Transactions with Related Parties

During the nine months ended September 29, 2023, the Company bought back 37 thousand shares of its common stock from members of its Board of Directors for $0.7 million, or $18.96 per share.

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Contingency

9 Months Ended

Sep. 29, 2023

Commitments and Contingencies Disclosure [Abstract]

Contingency

10. Contingency

In May 2023, Gartner, Inc. filed a lawsuit seeking a preliminary injunction and damages against the Company and two ex-Gartner employees that were hired by the Company. On November 7, 2023, the Court issued a preliminary injunction preventing the Company from employing the individuals in their current roles. No trial date has been scheduled. Based on the early stage of the litigation, we are unable to reasonably estimate the loss, or range of loss, if any, that may result. Accordingly, the Company has not recorded a loss contingency related to this matter.

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Litigation

9 Months Ended

Sep. 29, 2023

Commitments and Contingencies Disclosure [Abstract]

Litigation

11. 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.

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Segment Information and Geographical Data

9 Months Ended

Sep. 29, 2023

Segment Reporting [Abstract]

Segment Information and Geographical Data

12. Segment Information and Geographical Data

The Company has organized its operating and internal reporting structure to align with its primary market solutions. In accordance with ASC 280, the Company determined it has three operating segments and three reportable segments: (1) Global S&BT, (2) Oracle Solutions, and (3) SAP Solutions. Global S&BT includes the results of the Company’s strategic business consulting practices; Oracle Solutions includes the results of the Company’s Oracle EPM/ERP and Digital AMS practices; SAP Solutions includes the Company’s SAP applications and related SAP service offerings. The SAP Solutions reportable segment is the only segment that contains software sales revenue.

The measurement criteria for segment profit or loss are substantially the same for each reportable segment, excluding any unusual or infrequent items, if any. Segment profit consists of the revenue generated by a segment, less operating expenses that are incurred directly by the segment. Unallocated costs include corporate costs related to the administrative functions that are performed in a centralized manner and that are not attributable to a particular segment, depreciation and amortization expense, interest expense, non-cash compensation expense and any non-recurring transactions. Segment information related to assets has been omitted as the chief operating decision maker does not receive discrete financial information regarding assets at the segment level.

12. Segment Information and Geographical Data (continued)

The tables below set forth information about the Company’s operating segments for the quarter and nine months ended September 29, 2023, and September 30, 2022, along with the items necessary to reconcile the segment information to the totals reported in the accompanying consolidated financial statements (in thousands):

	Quarter Ended					Nine Months Ended
	September 29,		September 30,			September 29,		September 30,
	2023		2022			2023		2022
Global S&BT:
Total revenue*	$	43,798	$	41,593		$	129,765	$	128,760
Segment profit		13,951		14,030			40,860		45,939
Oracle Solutions:
Total revenue*	$	20,831	$	17,682		$	58,774	$	59,165
Segment profit		5,031		3,313			13,966		12,147
SAP Solutions:
Total revenue*	$	11,227	$	12,758		$	35,648	$	35,700
Segment profit		2,861		3,847			8,486		9,238
Total Company:
Total revenue*	$	75,856	$	72,033		$	224,187	$	223,625
Total segment profit	$	21,843	$	21,190		$	63,312	$	67,324
Items not allocated to segment level:
Corporate general and administrative expenses**		4,497		4,332			15,069		15,899
Non-cash stock based compensation expense		2,711		2,511			7,930		7,828
Depreciation and amortization		892		838			2,528		2,623
Restructuring and asset impairment settlement		-		(526	)		-		(651	)
Interest expense, net		814		14			2,594		70
Income from continuing operations before taxes	$	12,929	$	14,021		$	35,191	$	41,555

*Total revenue includes reimbursable expenses, which are project travel-related expenses passed through to a client with no associated operating margin.

**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, as well as any foreign currency gains and losses. Corporate general and administrative expenses exclude one-time, non-recurring expenses and benefits.

The tables below set forth information on the Company's geographical data. Total revenue, which is primarily based on the country of the contracting entity, was attributed to the following geographical areas (in thousands):

	Quarter Ended				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,
	2023		2022		2023		2022
United States	$	63,955	$	62,505	$	190,578	$	193,614
Europe		7,399		5,311		21,132		17,952
Other (Australia, Canada, India and Uruguay)		4,502		4,217		12,477		12,059
Total revenue	$	75,856	$	72,033	$	224,187	$	223,625

12. Segment Information and Geographical Data (continued)

Long-lived assets are attributable to the following geographic areas (in thousands):

	September 29,		December 30,
	2023		2022
Long-lived assets:
United States	$	91,228	$	89,705
Europe		13,920		13,640
Other (Australia, Canada, India and Uruguay)		439		482
Total long-lived assets	$	105,587	$	103,827

As of September 29, 2023 and December 30, 2022, foreign assets included $13.7 million and $13.5 million, respectively, of goodwill related to prior acquisitions.

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Basis of Presentation and General Information (Policies)

9 Months Ended

Sep. 29, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements of The Hackett Group, Inc. (“Hackett” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the Company’s accounts and those of its wholly-owned subsidiaries which the Company is required to consolidate. All intercompany transactions and balances have been eliminated in the consolidation.

In the opinion of management, the accompanying consolidated financial statements reflect all normal and recurring adjustments which are necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows as of the dates and for the periods presented. The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, these statements do not include all the disclosures normally required by U.S. GAAP for annual financial statements and should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 30, 2022, included in the Annual Report on Form 10-K filed by the Company with the SEC on March 3, 2023. The consolidated results of operations for the quarter and nine months ended September 29, 2023, are not necessarily indicative of the results to be expected for any future period or for the full fiscal year.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Segment Reporting

Segment Reporting

Segments are defined as components of a company that engage in business activities from which they earn revenue and incur expenses, and for which separate financial information is available and is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company assesses its operating segments under the management approach in accordance with ASC 280, "Segment Reporting" (ASC 280), and has determined that it has three operating segments: Global S&BT, Oracle Solutions and SAP Solutions which are also its reportable segments. See Note 12 “Segment Information and Geographical Data” for detailed segment information.

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

For acquisitions accounted for as a business combination, goodwill represents the excess of the cost over the fair value of the net assets acquired. The Company has organized its operating and internal reporting structure to align with its primary market solutions. In accordance with ASC 280, management made the determination to present three operating segments, three reportable segments and three reporting units as follows: (1) Global S&BT, (2) Oracle Solutions, and (3) SAP Solutions. Global S&BT includes the results of the Company’s strategic business consulting practices; Oracle Solutions includes the results of the Company’s Oracle EPM/ERP and Digital AMS practices; SAP Solutions includes the Company’s SAP applications and related SAP service offerings. A reporting unit is an operating segment or one level below an operating segment to which goodwill is assigned. The goodwill has been allocated to the reporting unit based on the reporting unit's relative fair value. The carrying amount of goodwill by reporting unit is as follows (in thousands):

					Foreign
	December 30,		Additions/		Currency		September 29,
	2022		Adjustments		Translation		2023
Global S&BT	$	56,810	$	-	$	161	$	56,971
Oracle Solutions		16,699		—		—		16,699
SAP Solutions		9,993		—		—		9,993
Goodwill	$	83,502	$	-	$	161	$	83,663

Revenue Recognition

Revenue Recognition

The Company generates substantially all of its revenue from providing professional services to its clients. The Company also generates revenue from software sales, software maintenance and support and subscriptions to its executive and best practices advisory programs. A single contract could include one or multiple performance obligations. For those contracts that have multiple performance obligations, the Company allocates the total transaction price to each performance obligation based on its relative standalone selling price. The Company determines the standalone selling price based on the respective selling price of the individual elements when sold separately.

Revenue is recognized when control of the goods and services provided are transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods and services using the following steps: 1) identify the contract, 2) identify the performance obligations, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract, and 5) recognize revenue as or when the Company satisfies the performance obligations.

The Company typically satisfies its performance obligations for professional services over time as the related services are provided. The performance obligations related to software maintenance and support and subscriptions to its executive and best practice advisory programs are typically satisfied evenly over the course of the service period. Other performance obligations, such as software sales, are satisfied at a point in time.

The Company generates revenue under four types of billing arrangements: fixed-fee; time-and-materials; executive and best practice advisory services; and software sales and software maintenance and support.

In fixed-fee billing arrangements, which would also include contracts with capped fees, the Company agrees to a pre-established fee or fee cap in exchange for a predetermined set of professional services. The Company sets the fees based on its estimates of the costs and timing for completing the engagements. The Company generally recognizes revenue under fixed-fee or capped fee arrangements using a proportionate performance approach, which is based on work completed to-date as compared to estimates of the total services to be provided under the engagement. Estimates of total engagement revenue and cost of services are monitored regularly during the term of the engagement. If the Company’s estimates indicate a potential loss, such a loss is recognized in the period in which the loss first becomes probable and reasonably estimable. The customer is invoiced based on the contractual agreement between the parties, typically bi-weekly, monthly or milestone driven, with net thirty-day terms, however client terms are subject to change.

Time-and-material billing arrangements require the client to pay based on the number of hours worked by the Company’s consultants at agreed hourly rates. The Company recognizes revenue under time-and-material arrangements as the related services or goods are provided, using the right to invoice practical expedient which allows it to recognize revenue in the amount based on the number of hours worked and the agreed upon hourly rates. The customer is invoiced based on the contractual agreement between the parties, typically bi-weekly, monthly or milestone driven, with net thirty-day terms, however client terms are subject to change.

Advisory services contracts are typically in the form of a subscription agreement which allows the customer access to the Company’s executive and best practice advisory programs. There is typically a single performance obligation and the transaction price is the contractual amount of the subscription agreement. Revenue from advisory services contracts is recognized ratably over the life of the agreements. Customers are typically invoiced at the inception of the contract, with net thirty-day terms, however client terms are subject to change.

The resale of on-premise software, cloud software and maintenance contracts are in the form of SAP America ("SAP") software or maintenance agreements provided by SAP. SAP is the principal and the Company is the agent in these transactions as the Company does not obtain title to the software and maintenance which is sold simultaneously. The transaction price is the Company’s agreed-upon percentage of the software sale for either on-premise software or cloud software or maintenance amount in the contract with the vendor. Revenue for the resale of software is recognized upon contract execution and customer’s receipt of the software. The Company also provides software maintenance on other ERP systems, primarily Oracle. Revenue from maintenance contracts is recognized ratably over the life of the agreements. The customer is typically invoiced at contract inception, with net thirty-day terms, however client terms are subject to change.

Revenue before reimbursements excludes reimbursable expenses charged to clients. Reimbursements, which include travel and out-of-pocket expenses, are included in revenue, and an equivalent amount of reimbursable expenses is included in the cost of service.

Expense reimbursements that are billable to clients are included in total revenue and are substantially all billed as time-and-material billing arrangements. Therefore, the Company recognizes all reimbursable expenses as revenue as the related services are provided, using the right to invoice practical expedient. Reimbursable expenses are recognized as expenses in the period in which the expense is incurred. Any expense reimbursements that are billable to clients under fixed-fee billing arrangements are recognized in line with the proportionate performance approach.

1. Basis of Presentation and General Information (continued)

The payment terms and conditions in the Company’s customer contracts vary. The agreements entered into in connection with a project, whether time and materials-based or fixed-fee or capped-fee based, typically allow clients to terminate early due to breach or for convenience with 30 days’ notice. In the event of termination, the client is contractually required to pay for all time, materials and expenses incurred by the Company through the effective date of the termination. In addition, from time to time the Company enters into agreements with its clients that limit its right to enter into business relationships with specific competitors of that client for a specific time period. These provisions typically prohibit the Company from performing a defined range of services which it might otherwise be willing to perform for potential clients. These provisions are generally limited to six to twelve months and usually apply only to specific employees or the specific project team.

Differences between the timing of billings and the recognition of revenue are recognized as either contract assets or contract liabilities in the accompanying consolidated balance sheets. Revenue recognized for services performed but not yet billed to clients is recorded as contract assets and is included within accounts receivable and contract assets. Services not yet performed, however billed to the client and uncollected at period end, are recorded as contract assets and are included within accounts receivable and contract assets. Client prepayments are classified as contract liabilities and recognized over future periods as earned in accordance with the applicable engagement agreement. See Note 3 for the accounts receivable and contract asset balances. During the quarter and nine months ended September 29, 2023, the Company recognized $1.5 million and $12.1 million, respectively, of revenue as a result of changes in the contract liability balance, as compared to $2.0 million and $12.3 million, respectively, for the quarter and nine months ended September 30, 2022.

Based on the information that management reviews internally for evaluating operating segment performance and nature, amount, timing, and uncertainty of revenue and cash flows affected by economic factors, the Company disaggregates revenue as follows for the quarters and nine months ended September 29, 2023 and September 30, 2022 (in thousands):

	Quarter Ended				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,
	2023		2022		2023		2022
Global S&BT:
North America Consulting	$	37,032	$	35,804	$	109,642	$	109,587
International Consulting		6,766		5,789		20,123		19,173
Total Global S&BT	$	43,798	$	41,593	$	129,765	$	128,760
Oracle Solutions:
Consulting and software support and maintenance	$	20,831	$	17,682	$	58,774	$	59,165
Total Oracle Solutions	$	20,831	$	17,682	$	58,774	$	59,165
SAP Solutions:
Consulting and software support and maintenance	$	10,605	$	10,118	$	32,372	$	30,880
Software sales		622		2,640		3,276		4,820
Total SAP Solutions	$	11,227	$	12,758	$	35,648	$	35,700
Total segment revenue	$	75,856	$	72,033	$	224,187	$	223,625

The total revenue from the Global S&BT segment, the Oracle Solutions segment and the SAP Solutions segment's consulting and software support and maintenance services is all recognized over time. The software sales total revenue included in the SAP Solutions segment is recognized at a point in time.

Capitalized Sales Commissions

Sales commissions earned by the Company’s sales force are considered the incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized as project revenue is recognized. The Company determined the period of amortization by taking into consideration the customer contract period, which is generally less than 12 months. Commission expenses are included the in Selling, general and administrative costs in the accompanying consolidated statements of operations. As of December 30, 2022 and December 31, 2021, the Company had $1.5 million and $1.6 million, respectively, of deferred commissions, of which $0.3 million and $0.9 million was amortized during the quarter and nine months ended September 29, 2023, respectively, and $0.2 million and $0.9 million for the same periods in 2022, respectively. No impairment loss was recognized relating to the capitalization of deferred commission.

1. Basis of Presentation and General Information (continued)

Practical Expedients

The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be less than one year.

Sales tax collected from customers and remitted to the applicable taxing authorities is accounted for on a net basis, with no impact on revenue.

Expense reimbursements that are billable to clients are included in total revenue and are substantially all billed as time-and-material billing arrangements. Therefore, the Company recognizes all reimbursable expenses as revenue as the related services are provided, using the right to invoice practical expedient. Reimbursable expenses are recognized as expenses in the period in which the expense is incurred. Any expense reimbursements that are billable to clients under fixed-fee billing arrangements are recognized in line with the proportionate performance approach.

Fair Value

Fair Value

The Company’s financial instruments consist of cash, accounts receivable and contract assets, accounts payable, accrued expenses and other liabilities and contract liabilities. As of September 29, 2023 and December 30, 2022, the carrying amount of each financial instrument approximated the instrument’s respective fair value due to the short-term nature and maturity of these instruments.

The Company uses significant other observable market data or assumptions (Level 2 inputs as defined in accounting guidance) that it believes market participants would use in pricing debt. The fair value of the debt approximated the carrying amount, using Level 2 inputs, due to the short-term variable interest rates based on market rates.

Impact of Macroeconomic Conditions on the Business

Impact of Macroeconomic Conditions on the Business

The level of revenue the Company achieves is based on its ability to deliver market leading services and solutions and to deploy skilled teams of professionals quickly. The Company’s results of operations are affected by economic conditions, including macroeconomic conditions and levels of business confidence. Any deterioration in the current macroeconomic environment or economic downturn as a result of weak or uncertain economic conditions due to inflation, high interest rates, national or geopolitical events or other factors impacting economic activity or business confidence could adversely affect the Company's clients' financial condition or outlook which may reduce clients' demand for the Company's services.

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Basis of Presentation and General Information (Tables)

9 Months Ended

Sep. 29, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Carrying Amount of Goodwill

The carrying amount of goodwill by reporting unit is as follows (in thousands):

					Foreign
	December 30,		Additions/		Currency		September 29,
	2022		Adjustments		Translation		2023
Global S&BT	$	56,810	$	-	$	161	$	56,971
Oracle Solutions		16,699		—		—		16,699
SAP Solutions		9,993		—		—		9,993
Goodwill	$	83,502	$	-	$	161	$	83,663

Summary of Disaggregation of Total Revenue

Based on the information that management reviews internally for evaluating operating segment performance and nature, amount, timing, and uncertainty of revenue and cash flows affected by economic factors, the Company disaggregates revenue as follows for the quarters and nine months ended September 29, 2023 and September 30, 2022 (in thousands):

	Quarter Ended				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,
	2023		2022		2023		2022
Global S&BT:
North America Consulting	$	37,032	$	35,804	$	109,642	$	109,587
International Consulting		6,766		5,789		20,123		19,173
Total Global S&BT	$	43,798	$	41,593	$	129,765	$	128,760
Oracle Solutions:
Consulting and software support and maintenance	$	20,831	$	17,682	$	58,774	$	59,165
Total Oracle Solutions	$	20,831	$	17,682	$	58,774	$	59,165
SAP Solutions:
Consulting and software support and maintenance	$	10,605	$	10,118	$	32,372	$	30,880
Software sales		622		2,640		3,276		4,820
Total SAP Solutions	$	11,227	$	12,758	$	35,648	$	35,700
Total segment revenue	$	75,856	$	72,033	$	224,187	$	223,625

The total revenue from the Global S&BT segment, the Oracle Solutions segment and the SAP Solutions segment's consulting and software support and maintenance services is all recognized over time. The software sales total revenue included in the SAP Solutions segment is recognized at a point in time.

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Net Income Per Common Share (Tables)

9 Months Ended

Sep. 29, 2023

Earnings Per Share [Abstract]

Reconciliation of Basic and Diluted Weighted Average Shares

The following table reconciles basic and dilutive weighted average common shares:

	Quarter Ended				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,
	2023		2022		2023		2022
Basic weighted average common shares outstanding		27,220,176		31,685,621		27,146,095		31,595,814
Effect of dilutive securities:
Unvested restricted stock units and common stock subject    to vesting requirements issued to employees and    non-employees		597,773		622,893		398,643		519,964
Common stock issuable upon the exercise of stock options    and SARs		—		—		—		8,593
Dilutive weighted average common shares outstanding		27,817,949		32,308,514		27,544,738		32,124,371

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Accounts Receivable and Contract Assets, Net (Tables)

9 Months Ended

Sep. 29, 2023

Receivables, Net, Current [Abstract]

Accounts Receivable and Contract Assets, Net

Accounts receivable and contract assets, net, consisted of the following (in thousands):

	September 29,			December 30,
	2023			2022
Accounts receivable	$	45,443		$	28,913
Contract assets		17,737			20,319
Allowance for doubtful accounts		(973	)		(856	)
Accounts receivable and contract assets, net	$	62,207		$	48,376

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Accrued Expenses and Other Liabilities (Tables)

9 Months Ended

Sep. 29, 2023

Accrued Liabilities And Other Liabilities Current [Abstract]

Components of Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following (in thousands):

	September 29,		December 30,
	2023		2022
Accrued compensation and benefits	$	9,453	$	9,320
Accrued bonuses		5,406		12,171
Accrued dividend payable		2,994		2,997
Accrued sales, use, franchise and VAT tax		2,578		2,572
Non-cash stock based compensation accrual		215		1,241
Other accrued expenses		3,080		2,652
Total accrued expenses and other liabilities	$	23,726	$	30,953

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Leases (Tables)

9 Months Ended

Sep. 29, 2023

Leases [Abstract]

Components of Lease Expense

The components of lease expense were as follows for the nine months ended September 29, 2023 (in thousands):

Operating lease cost	$	841
Total net lease costs	$	841

Future Minimum Lease Payments Under Non-Cancellable Operating Leases

Future minimum lease payments under non-cancellable operating leases as of September 29, 2023, were as follows (in thousands):

2023 (excluding the nine months ended September 29, 2023)	$	393
2024		1,068
2025		259
2026		222
Thereafter		365
Total lease payments		2,307
Less imputed interest		(126	)
Total	$	2,181

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Segment Information and Geographical Data (Tables)

9 Months Ended

Sep. 29, 2023

Segment Reporting [Abstract]

Segment Information and Geographical Data

The tables below set forth information about the Company’s operating segments for the quarter and nine months ended September 29, 2023, and September 30, 2022, along with the items necessary to reconcile the segment information to the totals reported in the accompanying consolidated financial statements (in thousands):

	Quarter Ended					Nine Months Ended
	September 29,		September 30,			September 29,		September 30,
	2023		2022			2023		2022
Global S&BT:
Total revenue*	$	43,798	$	41,593		$	129,765	$	128,760
Segment profit		13,951		14,030			40,860		45,939
Oracle Solutions:
Total revenue*	$	20,831	$	17,682		$	58,774	$	59,165
Segment profit		5,031		3,313			13,966		12,147
SAP Solutions:
Total revenue*	$	11,227	$	12,758		$	35,648	$	35,700
Segment profit		2,861		3,847			8,486		9,238
Total Company:
Total revenue*	$	75,856	$	72,033		$	224,187	$	223,625
Total segment profit	$	21,843	$	21,190		$	63,312	$	67,324
Items not allocated to segment level:
Corporate general and administrative expenses**		4,497		4,332			15,069		15,899
Non-cash stock based compensation expense		2,711		2,511			7,930		7,828
Depreciation and amortization		892		838			2,528		2,623
Restructuring and asset impairment settlement		-		(526	)		-		(651	)
Interest expense, net		814		14			2,594		70
Income from continuing operations before taxes	$	12,929	$	14,021		$	35,191	$	41,555

*Total revenue includes reimbursable expenses, which are project travel-related expenses passed through to a client with no associated operating margin.

**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, as well as any foreign currency gains and losses. Corporate general and administrative expenses exclude one-time, non-recurring expenses and benefits.

Geographic Revenue before Reimbursements

The tables below set forth information on the Company's geographical data. Total revenue, which is primarily based on the country of the contracting entity, was attributed to the following geographical areas (in thousands):

	Quarter Ended				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,
	2023		2022		2023		2022
United States	$	63,955	$	62,505	$	190,578	$	193,614
Europe		7,399		5,311		21,132		17,952
Other (Australia, Canada, India and Uruguay)		4,502		4,217		12,477		12,059
Total revenue	$	75,856	$	72,033	$	224,187	$	223,625

12. Segment Information and Geographical Data (continued)

Long-Lived Assets Attributable To Geographic Areas

Long-lived assets are attributable to the following geographic areas (in thousands):

	September 29,		December 30,
	2023		2022
Long-lived assets:
United States	$	91,228	$	89,705
Europe		13,920		13,640
Other (Australia, Canada, India and Uruguay)		439		482
Total long-lived assets	$	105,587	$	103,827

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Basis of Presentation and General Information (Narrative) (Details)	3 Months Ended		9 Months Ended
	Sep. 29, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 29, 2023 USD ($) Segment	Sep. 30, 2022 USD ($)	Dec. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Basis Of Presentation And General Information [Line Items]
Number of operating segments | Segment			3
Number of reportable segments | Segment			3
Number of reporting units | Segment			3
Revenue recognized as a result of change in contract liability	$ 1,500,000	$ 2,000,000	$ 12,100,000	$ 12,300,000
Deferred commissions					$ 1,500,000	$ 1,600,000
Commissions expense	300,000	200,000	900,000	900,000
Impairment loss recognized to capitalization of deferred commission	0	0	0	0
Segment revenue	$ 75,856,000	$ 72,033,000	$ 224,187,000	$ 223,625,000
Minimum [Member]
Basis Of Presentation And General Information [Line Items]
Business relationship agreement period			6 months
Maximum [Member]
Basis Of Presentation And General Information [Line Items]
Business relationship agreement period			12 months
Customer contract period			12 months

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Basis of Presentation and General Information (Summary of Carrying Amount of Goodwill) (Details) $ in Thousands	9 Months Ended
	Sep. 29, 2023 USD ($)
Goodwill [Line Items]
Goodwill, Beginning Balance	$ 83,502
Foreign Currency Translation	161
Goodwill, Ending Balance	83,663
Global S&BT [Member]
Goodwill [Line Items]
Goodwill, Beginning Balance	56,810
Foreign Currency Translation	161
Goodwill, Ending Balance	56,971
Oracle Solutions [Member]
Goodwill [Line Items]
Goodwill, Beginning Balance	16,699
Goodwill, Ending Balance	16,699
SAP Solutions [Member]
Goodwill [Line Items]
Goodwill, Beginning Balance	9,993
Goodwill, Ending Balance	$ 9,993

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Basis of Presentation and General Information (Summary of Disaggregation of Total Revenue) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 29, 2023	Sep. 30, 2022	Sep. 29, 2023	Sep. 30, 2022
Disaggregation Of Revenue [Line Items]
Segment revenue	$ 75,856	$ 72,033	$ 224,187	$ 223,625
Global S&BT [Member]
Disaggregation Of Revenue [Line Items]
Segment revenue	43,798	41,593	129,765	128,760
Global S&BT [Member] | Consulting [Member] | North America [Member]
Disaggregation Of Revenue [Line Items]
Segment revenue	37,032	35,804	109,642	109,587
Global S&BT [Member] | Consulting [Member] | International [Member]
Disaggregation Of Revenue [Line Items]
Segment revenue	6,766	5,789	20,123	19,173
Oracle Solutions [Member]
Disaggregation Of Revenue [Line Items]
Segment revenue	20,831	17,682	58,774	59,165
Oracle Solutions [Member] | Consulting and Software Support and Maintenance [Member]
Disaggregation Of Revenue [Line Items]
Segment revenue	20,831	17,682	58,774	59,165
SAP Solutions [Member]
Disaggregation Of Revenue [Line Items]
Segment revenue	11,227	12,758	35,648	35,700
SAP Solutions [Member] | Consulting and Software Support and Maintenance [Member]
Disaggregation Of Revenue [Line Items]
Segment revenue	10,605	10,118	32,372	30,880
SAP Solutions [Member] | Software Sales [Member]
Disaggregation Of Revenue [Line Items]
Segment revenue	$ 622	$ 2,640	$ 3,276	$ 4,820

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Net Income Per Common Share (Reconciliation of Basic and Diluted Weighted Average Shares) (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 29, 2023	Sep. 30, 2022	Sep. 29, 2023	Sep. 30, 2022
Earnings Per Share [Abstract]
Basic weighted average common shares outstanding	27,220,176	31,685,621	27,146,095	31,595,814
Unvested restricted stock units and common stock subject to vesting requirements issued to employees and non-employees	597,773	622,893	398,643	519,964
Common stock issuable upon the exercise of stock options and SARs				8,593
Dilutive weighted average common shares outstanding	27,817,949	32,308,514	27,544,738	32,124,371

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Net Income Per Common Share (Narrative) (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 29, 2023	Sep. 30, 2022	Sep. 29, 2023	Sep. 30, 2022
Earnings Per Share [Abstract]
Antidilutive common share equivalents	102	3	2	2

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Accounts Receivable and Contract Assets, Net (Details) - USD ($) $ in Thousands	Sep. 29, 2023	Dec. 30, 2022
Receivables, Net, Current [Abstract]
Accounts receivable	$ 45,443	$ 28,913
Contract assets	17,737	20,319
Allowance for doubtful accounts	(973)	(856)
Accounts receivable and contract assets, net	$ 62,207	$ 48,376

XML

Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands	Sep. 29, 2023	Dec. 30, 2022
Accrued Liabilities And Other Liabilities Current [Abstract]
Accrued compensation and benefits	$ 9,453	$ 9,320
Accrued bonuses	5,406	12,171
Accrued dividend payable	2,994	2,997
Accrued sales, use, franchise and VAT tax	2,578	2,572
Non-cash stock based compensation accrual	215	1,241
Other accrued expenses	3,080	2,652
Total accrued expenses and other liabilities	$ 23,726	$ 30,953

XML

Leases (Narrative) (Details) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 29, 2023 USD ($)	Sep. 29, 2023 USD ($)
Lessee Lease Description [Line Items]
Weighted average remaining lease term	2 years 9 months 18 days	2 years 9 months 18 days
Weighted average discount rate	4.00%	4.00%
Operating lease payments	$ 0.4	$ 1.0
Lessee, operating lease not yet commenced description		As of September 29, 2023, the Company does not have any additional operating leases that have not yet commenced
Minimum [Member]
Lessee Lease Description [Line Items]
Operating leases terms	1 year	1 year
Maximum [Member]
Lessee Lease Description [Line Items]
Operating leases terms	5 years	5 years

XML

Leases (Components of Lease Expense) (Details) $ in Thousands	9 Months Ended
	Sep. 29, 2023 USD ($)
Leases [Abstract]
Operating lease cost	$ 841
Total net lease costs	$ 841

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Leases (Future Minimum Lease Payments Under Non-Cancellable Operating Leases) (Details) $ in Thousands	Sep. 29, 2023 USD ($)
Leases [Abstract]
2023 (excluding the nine months ended September 29, 2023)	$ 393
2024	1,068
2025	259
2026	222
Thereafter	365
Total lease payments	2,307
Less imputed interest	(126)
Total	$ 2,181

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Credit Facility (Narrative) (Details) - Revolving line of credit facility [Member] - USD ($)		3 Months Ended	9 Months Ended	12 Months Ended
	Nov. 07, 2022	Sep. 29, 2023	Sep. 29, 2023	Dec. 30, 2022
Line of Credit Facility [Line Items]
Borrowing capacity under credit facility	$ 100,000,000
Maturity date	Nov. 07, 2027
Frequency of interest payments			Interest payments are made monthly
Commitment fees percentage			0.125%
Additional borrowing capacity	$ 55,000,000
Remaining debt issuance cost to be amortized			$ 300,000
Debt balance		$ 44,000,000	44,000,000	$ 60,000,000
Amount drawn on loan			300,000	$ 300,000
Payment of credit		$ 9,000,000	$ 16,000,000
London Interbank Offered Rate (LIBOR) [Member]
Line of Credit Facility [Line Items]
Margin percentage base rate			1.50%
Base Rate [Member]
Line of Credit Facility [Line Items]
Margin percentage base rate			0.75%
BSBY [Member]
Line of Credit Facility [Line Items]
Interest rate on outstanding debt		6.90%	6.90%

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Stock Based Compensation (Narrative) (Details) $ / shares in Units, $ in Millions	3 Months Ended	9 Months Ended
	Sep. 29, 2023 USD ($) $ / shares shares	Sep. 29, 2023 USD ($) $ / shares shares
Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares granted | shares	422	589,865
Weighted average grant-date fair value | $ / shares	$ 23.68	$ 21.4
Shares outstanding | shares	1,228,946	1,228,946
Nonvested weighted average grant-date fair value | $ / shares	$ 19.76	$ 19.76
Compensation expense | $	$ 14.7	$ 14.7
Weighted average period		2 years 3 months 18 days
Common Stock Subject to Vesting Requirements [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares outstanding | shares	1,318	1,318
Nonvested weighted average grant-date fair value | $ / shares	$ 16.17	$ 16.17

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Shareholders' Equity (Narrative) (Details) $ / shares in Units, $ in Thousands		3 Months Ended						9 Months Ended		12 Months Ended
	Jul. 30, 2022 USD ($)	Sep. 29, 2023 USD ($) shares	Jun. 30, 2023 USD ($)	Mar. 31, 2023 USD ($)	Sep. 30, 2022 USD ($) shares	Jul. 01, 2022 USD ($)	Apr. 01, 2022 USD ($)	Sep. 29, 2023 USD ($) $ / shares shares	Sep. 30, 2022 USD ($) $ / shares shares	Dec. 30, 2022 USD ($) $ / shares	Sep. 30, 2023	Jul. 30, 2002 USD ($)
Equity, Class of Treasury Stock [Line Items]
Total cost			$ 23	$ 711			$ 635
Amount available under repurchase plan		$ 13,900						$ 13,900
Stock repurchase authorized												$ 5,000
Stock repurchase additional authorized amount	$ 287,200									$ 120,000
Cumulative purchases		273,200						273,200
Dividend payment		$ 2,994	$ 2,991	$ 2,990	$ 3,483	$ 3,480	$ 3,474	$ 9,000
Dividends payable, date to be paid, year and month		2023-10	2023-07	2023-04				2023-10
Subsequent Event [Member]
Equity, Class of Treasury Stock [Line Items]
Dividends payable, date declared, year											2023
Dividends payable, date to be paid, year and month											2024-01
Minimum [Member]
Equity, Class of Treasury Stock [Line Items]
Dividend declared | $ / shares										$ 0.40
Maximum [Member]
Equity, Class of Treasury Stock [Line Items]
Dividend declared | $ / shares										0.44
Share Repurchase Plan [Member]
Equity, Class of Treasury Stock [Line Items]
Repurchase of common stock | shares		0			0			37,000	31,000
Total cost								$ 700	$ 600
Share Purchase Plan [member]
Equity, Class of Treasury Stock [Line Items]
Purchase price per share | $ / shares										$ 23.72
Total cost										$ 116,000
Tender Offer										$ 4,900
Common stock issued and outstanding										0.15
Credit facility and cash on hand										$ 60,000
Tax Withholding [Member]
Equity, Class of Treasury Stock [Line Items]
Shares withheld and not issued | shares		3,000			3,000			171,000	134,000
Cost of shares withheld and not issued		$ 66			$ 69			$ 3,700	$ 2,600
Director [Member] | Share Repurchase Plan [Member]
Equity, Class of Treasury Stock [Line Items]
Purchase price per share | $ / shares								$ 18.96	$ 20.5

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Transactions with Related Parties (Narrative) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended			9 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Apr. 01, 2022	Sep. 29, 2023
Related Party Transaction [Line Items]
Total cost	$ 23	$ 711	$ 635
Director [Member]
Related Party Transaction [Line Items]
Repurchase of common stock				37
Total cost				$ 700
Purchase price per share				$ 18.96

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Segment Information and Geographical Data (Narrative) (Details) $ in Millions	9 Months Ended
	Sep. 29, 2023 USD ($) Segment	Dec. 30, 2022 USD ($)
Segment Reporting [Abstract]
Number of operating segments	3
Number of reportable segments	3
Goodwill included in foreign assets | $	$ 13.7	$ 13.5

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Segment Information and Geographical Data (Segment Information and Geographical Data) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 29, 2023	Sep. 30, 2022	Sep. 29, 2023	Sep. 30, 2022
Segment Reporting Information [Line Items]
Total Revenue	$ 75,856	$ 72,033	$ 224,187	$ 223,625
Segment profit	21,843	21,190	63,312	67,324
Corporate general and administrative expenses	4,497	4,332	15,069	15,899
Non-cash stock based compensation expense	2,711	2,511	7,930	7,828
Depreciation and amortization	892	838	2,528	2,623
Restructuring and asset impairment settlement		(526)		(651)
Interest expense, net	814	14	2,594	70
Income from operations before income taxes	12,929	14,021	35,191	41,555
Global S&BT [Member]
Segment Reporting Information [Line Items]
Total Revenue	43,798	41,593	129,765	128,760
Segment profit	13,951	14,030	40,860	45,939
Oracle Solutions [Member]
Segment Reporting Information [Line Items]
Total Revenue	20,831	17,682	58,774	59,165
Segment profit	5,031	3,313	13,966	12,147
SAP Solutions [Member]
Segment Reporting Information [Line Items]
Total Revenue	11,227	12,758	35,648	35,700
Segment profit	$ 2,861	$ 3,847	$ 8,486	$ 9,238

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Segment Information and Geographical Data (Geographic Revenue before Reimbursements) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 29, 2023	Sep. 30, 2022	Sep. 29, 2023	Sep. 30, 2022
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 75,856	$ 72,033	$ 224,187	$ 223,625
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	63,955	62,505	190,578	193,614
Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	7,399	5,311	21,132	17,952
Other (Australia, Canada, India and Uruguay) [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 4,502	$ 4,217	$ 12,477	$ 12,059

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Segment Information and Geographical Data (Long-Lived Assets Attributable To Geographic Areas) (Details) - USD ($) $ in Thousands	Sep. 29, 2023	Dec. 30, 2022
Revenues from External Customers and Long-Lived Assets [Line Items]
Total long-lived assets	$ 105,587	$ 103,827
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total long-lived assets	91,228	89,705
Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total long-lived assets	13,920	13,640
Other (Australia, Canada, India and Uruguay) [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total long-lived assets	$ 439	$ 482