Item 5. Market for Registrant’s Common Equity
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is traded under the NASDAQ Stock Market symbol, "HCKT". The closing sale price for the common stock on March 8, 2021, was $17.20.
As of March 8, 2021, there were 231 holders of record of our common stock and 30,244,060 shares of common stock outstanding.
Securities Authorized for Issuance under Equity Compensation Plans
The information required by this section is set forth under Item 12 of this Annual Report on Form 10-K and is herein incorporated by reference.
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Performance Graph
The following graph compares our cumulative total shareholder return since January 1, 2016 with the NASDAQ Composite Index, Russell 2000 and a peer group index composed of other companies with similar business models identified below. We are electing to change from the NASDAQ Composite Index to the Russell 2000 Index and we have updated our Peer group as we believe the Russell 2000 Index and the new Peer group are a closer representation of our market capitalization.. The graph assumes that the value of the investment in our common stock and each index (including reinvestment of dividends) was $100 on January 1, 2016.
1/1/16
12/30/16
12/29/17
12/28/18
12/27/19
1/1/21
The Hackett Group, Inc.
$
100.00
$
111.78
$
101.37
$
104.87
$
107.08
$
99.06
NASDAQ Composite Index
$
100.00
$
108.87
$
141.13
$
137.12
$
187.44
$
271.64
Russell 2000
$
100.00
$
121.31
$
139.08
$
123.76
$
155.35
$
186.36
2019 Peer Group
$
100.00
$
108.04
$
97.98
$
134.99
$
210.03
$
205.51
2020 Peer Group
$
100.00
$
87.06
$
72.70
$
84.09
$
103.66
$
91.93
The 2020 Peer Group includes Alithya Group Inc. (formerly known as Edgewater Technology, Inc.), Huron Consulting Group, Inc. and Information Services Group, Inc. The 2019 Peer Group includes FTI Consulting, Inc., Huron Consulting Group, Inc. and Information Services Group, Inc.
Company Dividend Policy
In December 2012, we announced an annual dividend of $0.10 per share, and we have been gradually increasing the dividend for our shareholders since the announcement. In 2018, 2019 and 2020, the Board of Directors approved an increase in the annual dividend to $0.34 per share, $0.36 per share, and $0.38 per share, respectively. In addition, during 2020, the Board of Directors approved the increase in the frequency of dividend payments from semi-annual to a quarterly. During fiscal 2020, we paid the semi-annual dividend declared in December 2019 of $5.8 million in January 2020 and we paid the quarterly dividend to shareholders of record on June 30, 2020, September 25, 2020 and December 18, 2020, totaling $9.1 million. Our credit agreement contains restrictions on our ability to declare dividends and repurchase shares. Subsequent to fiscal year end the Board of Directors increased the annual dividend to $0.40 per share and declared the first quarterly dividend of 2021. The declaration of dividends shall at all times
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be subject to the final determination of our Board of Directors that a dividend is prudent and unlawful at that time in consideration of the needs of the business and other factors including the ability to pay dividends under our credit agreement.
Purchases of Equity Securities
We have an ongoing authorization from our Board of Directors to repurchase shares of our common stock. The repurchase plan was first announced on July 30, 2002. All repurchases under this program are discretionary and are made in the open market or through privately negotiated transactions, subject to market conditions and trading restrictions. There is no expiration date on the current authorization. The following table summarizes our share repurchases during the year ended January 1, 2021 under this authorization:
Total Number
Maximum Dollar
Total
of Shares Purchased
Value of Shares That
Number
Average
as Part of Publicly
May Yet Be Purchased
of Shares
Price Paid
Announced
Under the
Period
Purchased
per Share
Program
Program
Balance as of December 27, 2019
$
1,651,222
December 28, 2019 to March 27, 2020
72,956
$
13.79
72,956
$
5,644,873
*
March 28, 2020 to June 26, 2020
—
$
—
—
$
5,644,873
June 27, 2020 to September 25, 2020
75,091
$
12.41
75,091
$
4,713,293
September 26, 2020 to January 1, 2021
36,229
$
11.84
36,229
$
4,284,275
184,276
$
12.84
184,276
*
During the first quarter of 2020, the Company’s Board of Directors approved an additional share repurchase authorization of $5.0 million.
As of January 1, 2021, the Company’s Board of Directors had approved a cumulative authorization of $147.2 million with cumulative purchases under the plan of $142.9 million, leaving $4.3 million available for future purchases. During the year ended January 1, 2021, the Company repurchased 184 thousand shares of its common stock under the repurchase plan approved by the Company's Board of Directors for $2.4 million at an average share price of $12.84, which included 37 thousand shares of the Company’s common stock from members of our Board of Directors for a total of $0.7 million, or $17.43 per share. All shares repurchased from members of the Board of Directors were approved by the Audit Committee. During the year ended December 27, 2019, the Company repurchased 339 thousand shares of its common stock under the repurchase plan approved by the Company's Board of Directors for $5.3 million at an average share price of $15.60, which included 28 thousand shares of the Company’s common stock from members of our Board of Directors for a total of $0.5 million, or $16.25 per share. Subsequent to fiscal year end, we repurchased 24 thousand shares of the Company’s common stock from members of our Board of Directors for a total of $0.4 million, or $16.05 per share. Including these subsequent purchases, we have approximately $3.9 million available for future purchases under the plan.
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 our employee’s behalf. In 2020, 139 thousand shares were withheld and not issued for a cost of $2.1 million, bringing the total cumulative cash used to repurchase stock in 2020 to $4.5 million. In 2019, 132 thousand shares were withheld and not issued for a cost of $2.5 million, bringing the total cumulative cash used to repurchase stock in 2019 to $7.8 million.
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ITEM 6. SELECTED FINANCIAL DATA
The following consolidated financial data sets forth our selected financial information as of and for each of the years in the five-year period ended January 1, 2021, and has been derived from our audited consolidated financial statements. The selected consolidated financial data should be read together with our consolidated financial statements, related notes thereto and with “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Year Ended
January 1,
December 27,
December 28,
December 29,
December 30,
2021
2019
2018
2017
2016
Consolidated Statement of Operations Data:
(in thousands, except per share data)
Revenue:
Revenue before reimbursements
$
234,810
$
260,837
$
264,523
$
255,131
$
252,096
Reimbursements
4,672
21,635
21,364
21,468
27,691
Total revenue (1)
239,482
282,472
285,887
276,599
279,787
Costs and expenses:
Cost of service:
Personnel costs before reimbursable expenses (2)
161,696
164,044
164,921
161,863
158,500
Reimbursable expenses
4,672
21,635
21,364
21,468
27,691
Total cost of service
166,368
185,679
186,285
183,331
186,191
Selling, general and administrative costs
53,984
62,074
64,123
63,271
60,079
Restructuring charges and asset impairments (3)
10,488
4,514
6,269
1,293
—
Acquisition-related contingent consideration liability (4)
—
(1,133
)
(4,364
)
—
—
Total costs and operating expenses
230,840
251,134
252,313
247,895
246,270
Operating income
8,642
31,338
33,574
28,704
33,517
Other expense:
Interest expense, net
(126
)
(311
)
(638
)
(584
)
(387
)
Income from continuing operations before income taxes
8,516
31,027
32,936
28,120
33,130
Income tax expense (5)
2,871
7,744
5,577
2,564
12,455
Income from continuing operations
5,645
23,283
27,359
25,556
20,675
(Loss) earnings from discontinued operations (6) (net of taxes)
(172
)
(6
)
(3,450
)
1,798
866
Net income
$
5,473
$
23,277
$
23,909
$
27,354
$
21,541
Basic net income per common share:
Income per common share from continuing operations
$
0.19
$
0.78
$
0.93
$
0.89
$
0.71
(Loss) income per common share from discontinued operations
(0.01
)
(0.00
)
(0.12
)
0.06
0.03
Net income per common share
$
0.18
$
0.78
$
0.81
$
0.95
$
0.74
Diluted net income per common share:
Income per common share from continuing operations
$
0.17
$
0.72
$
0.85
$
0.79
$
0.63
(Loss) income per common share from discontinued operations
(0.00
)
(0.00
)
(0.11
)
0.06
0.03
Net income per common share
$
0.17
$
0.72
$
0.74
$
0.85
$
0.66
Weighted average common shares outstanding:
Basic
29,988
29,805
29,379
28,852
29,082
Diluted
32,405
32,453
32,330
32,196
32,815
Consolidated Balance Sheet Data:
Cash
$
49,455
$
25,954
$
13,808
$
17,512
$
19,710
Working capital
$
42,265
$
34,944
$
28,864
$
23,837
$
12,999
Total assets
$
192,545
$
193,735
$
180,752
$
185,231
$
159,299
Long-term debt
$
—
$
—
$
6,500
$
19,000
$
7,000
Shareholders' equity
$
140,887
$
137,614
$
123,590
$
107,275
$
86,269
Dividends paid/declared per share
$
0.38
$
0.36
$
0.34
$
0.30
$
0.26
(1)
In April 2017 and May 2017, we acquired Aecus Limited, a U.K.-based European Outsourcing Advisory and Robotics Process Automation (“RPA”) consulting firm company and Jibe Consulting, a U.S.-based Oracle E-Business Suite (“EBS”) and Oracle Cloud Business Application implementation firm, respectively. Our 2017 results of operations included $16.2 million in total revenue from these acquisitions.
( 2 )
Fiscal year 2018 includes an acquisition-related compensation benefit of $0.5 million. Fiscal years 2016 through 2017 include an acquisition-related compensation expense of $4.1 million in 2017 and $1.2 million in 2016, from the acquisitions of Jibe Consulting and Aecus Limited in 2017 and Technolab in 2014.
( 3 )
Fiscal year 2020 includes a $3.9 million impairment of lease right-of-use assets and certain property, equipment and leasehold improvements. In addition, fiscal 2020 includes restructuring charges of $6.6 million for the reduction of staff in the U.S. and Europe. Fiscal year 2019 includes a $3.3 million restructuring charge for the reduction of staff in Australia and Europe and also includes a $1.2 million asset impairment of the investment in the Hackett Institute’s Enterprise Analytics Program. Fiscal year 2018 include a $6.4 million asset impairment of the investment in the Hackett Performance Exchange and Working Capital Course.
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(4)
Fiscal year 2019 and 2018 includes a benefit related to the adjustment for the contingent consideration liability from the acquisition of Jibe Consulting in 2017.
( 5 )
Fiscal year 2017 includes the tax benefit for the revaluation of the deferred tax liabilities as a result of tax legislation enacted at the end of 2017 and accounting on the vesting of share-based awards.
( 6 )
Discontinued operations relate to the discontinuance of the European based REL Working Capital group.
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