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 ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). YES ☒ NO ☐

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

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 ~~1, 2017,~~2, 2018, there were 29,518,236~~28,656,338~~ shares of common stock outstanding.

	September 29,			December 30,			September 28,			December 29,
	2017			2016			2018			2017
ASSETS
Current assets:
Cash	$	16,226		$	19,710		$	13,177		$	17,512
Accounts receivable and unbilled revenue, net of allowance of $2,686 and $2,574 at September 29, 2017 and December 30, 2016, respectively		55,552			47,399
Accounts receivable and unbilled revenue, net of allowance of $1,620 and $2,601 at September 28, 2018 and December 29, 2017, respectively								56,875			55,262
Prepaid expenses and other current assets		2,897			1,704			3,742			2,511
Total current assets		74,675			68,813			73,794			75,285

Property and equipment, net		17,854			14,774			24,313			18,851
Other assets		4,679			3,336			4,386			6,021
Goodwill, net		84,966			72,376			84,612			85,074
Total assets	$	182,174		$	159,299		$	187,105		$	185,231

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	8,597		$	9,089		$	5,119		$	8,434
Accrued expenses and other liabilities		35,971			46,725			34,065			43,014
Total current liabilities		44,568			55,814			39,184			51,448
Non-current accrued expenses and other liabilities		6,936			—			244			1,268
Long-term deferred tax liability, net		10,591			10,216			7,805			6,240
Long-term debt		22,000			7,000			11,500			19,000
Total liabilities		84,095			73,030			58,733			77,956

Commitments and contingencies

Shareholders’ equity:
Preferred stock, $.001 par value, 1,250,000 shares authorized; none issued and outstanding		—			—
Common stock, $.001 par value, 125,000,000 shares authorized; 55,600,776 and 54,785,193 shares issued at September 29, 2017 and December 30, 2016, respectively		57			55
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 56,535,542 and 55,744,893 shares issued at September 28, 2018 and December 29, 2017, respectively								57			56
Additional paid-in capital		284,628			277,100			294,680			288,297
Treasury stock, at cost, 26,945,776 and 26,197,981 shares September 29, 2017 and December 30, 2016, respectively		(134,053	)		(122,756	)
Treasury stock, at cost, 27,071,782 and 26,945,776 shares September 28, 2018 and December 29, 2017, respectively								(136,364	)		(134,054	)
Accumulated deficit		(43,301	)		(56,581	)		(19,866	)		(38,515	)
Accumulated comprehensive loss		(9,252	)		(11,549	)
Accumulated other comprehensive loss								(10,135	)		(8,509	)
Total shareholders' equity		98,079			86,269			128,372			107,275
Total liabilities and shareholders' equity	$	182,174		$	159,299		$	187,105		$	185,231

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

	Quarter Ended						Nine Months Ended						Quarter Ended						Nine Months Ended
	September 29,			September 30,			September 29,			September 30,			September 28,			September 29,			September 28,			September 29,
	2017			2016			2017			2016			2018			2017			2018			2017
Revenue:
Revenue before reimbursements	$	65,947			66,810		$	198,742			196,961		$	68,243			65,947		$	205,332			198,742
Reimbursements		5,515			7,308			17,719			21,548			5,597			5,515			16,890			17,719
Total revenue		71,462			74,118			216,461			218,509			73,840			71,462			222,222			216,461
Costs and expenses:
Cost of service:
Personnel costs before reimbursable expenses (includes $1,876 and $1,450 and $5,160 and $4,216 of stock compensation expense in the quarters and nine months ended September 29, 2017 and September 30, 2016, respectively)		42,302			42,071			127,108			125,082
Personnel costs before reimbursable expenses														41,601			40,426			125,426			121,948
Stock compensation expense														1,671			1,876			4,437			5,160
Reimbursable expenses		5,515			7,308			17,719			21,548			5,597			5,515			16,890			17,719
Total cost of service		47,817			49,379			144,827			146,630			48,869			47,817			146,753			144,827
Selling, general and administrative costs (includes $894 and $793 and $2,427 and $2,251 of stock compensation expense in the quarters and nine months ended September 29, 2017 and September 30, 2016, respectively)		15,771			15,732			48,039			46,994
Restructuring costs		—			—			1,293			—
Selling, general and administrative costs														15,690			14,877			46,738			45,612
Stock compensation expense														850			894			2,495			2,427
Acquisition-related contingent consideration liability														803			—			(3,750	)		—
Restructuring														—			—			—			1,293
Total costs and operating expenses		63,588			65,111			194,159			193,624			66,212			63,588			192,236			194,159
Income from operations		7,874			9,007			22,302			24,885			7,628			7,874			29,986			22,302

Other expense:
Interest expense		(184	)		(137	)		(401	)		(288	)		(158	)		(184	)		(515	)		(401	)
Income from operations before income taxes		7,690			8,870			21,901			24,597			7,470			7,690			29,471			21,901
Income tax expense		2,401			3,382			3,988			9,281			2,313			2,401			5,426			3,988
Net income	$	5,289		$	5,488		$	17,913		$	15,316		$	5,157		$	5,289		$	24,045		$	17,913

Basic net income per common share:
Income per common share from operations	$	0.18		$	0.19		$	0.62		$	0.52		$	0.17		$	0.18		$	0.82		$	0.62
Weighted average common shares outstanding		28,765			28,579			28,891			29,251			29,478			28,765			29,333			28,891

Diluted net income per common share:
Income per common share from operations	$	0.17		$	0.17		$	0.56		$	0.47		$	0.16		$	0.17		$	0.75		$	0.56
Weighted average common and common equivalent shares outstanding		31,958			32,375			32,254			32,870			32,593			31,958			32,214			32,254

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

	Quarter Ended					Nine Months Ended					Quarter Ended					Nine Months Ended
	September 29,		September 30,			September 29,		September 30,			September 28,			September 29,		September 28,			September 29,
	2017		2016			2017		2016			2018			2017		2018			2017
Net income	$	5,289	$	5,488		$	17,913	$	15,316		$	5,157		$	5,289	$	24,045		$	17,913
Foreign currency translation adjustment		829		(484	)		2,297		(2,721	)		(432	)		829		(1,626	)		2,297
Total comprehensive income	$	6,118	$	5,004		$	20,210	$	12,595		$	4,725		$	6,118	$	22,419		$	20,210

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

	Nine Months Ended						Nine Months Ended
	September 29,			September 30,			September 28,			September 29,
	2017			2016			2018			2017
Cash flows from operating activities:
Net income	$	17,913		$	15,316		$	24,045		$	17,913
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		1,841			1,875			1,857			1,841
Amortization expense		1,475			825			1,789			1,475
Amortization of debt issuance costs		68			84			68			68
Non-cash stock compensation expense		7,588			6,467			6,932			7,588
Provision (reversal) for doubtful accounts		142			(11	)
Loss (gain) on foreign currency translation		530			(566	)
Provision for doubtful accounts								313			142
(Gain) loss on foreign currency translation								(425	)		530
Release of valuation allowance		1,815			2,590			1,565			1,815
Changes in assets and liabilities:
Increase in accounts receivable and unbilled revenue		(4,935	)		(5,474	)		(1,612	)		(4,935	)
Increase in prepaid expenses and other assets		(1,172	)		(405	)		(1,352	)		(1,172	)
Decrease in accounts payable		(902	)		(2,090	)		(3,317	)		(902	)
Decrease in accrued expenses and other liabilities		(3,938	)		(10	)		(3,033	)		(3,938	)
(Decrease) increase in income tax payable		(1,474	)		2,211
Decrease in income tax payable								(2,476	)		(1,474	)
Net cash provided by operating activities		18,951			20,812			24,354			18,951

Cash flows from investing activities:
Purchases of property and equipment		(4,919	)		(2,068	)		(7,273	)		(4,919	)
Cash consideration paid for acquisitions		(9,268	)		—			—			(9,268	)
Cash acquired in acquisitions		261			—			—			261
Net cash used in investing activities		(13,926	)		(2,068	)		(7,273	)		(13,926	)

Cash flows from financing activities:
Proceeds from ESPP		562			519			387			562
Proceeds from borrowings		26,000			30,000			5,000			26,000
Repayment of borrowings		(11,000	)		(17,000	)		(12,500	)		(11,000	)
Debt issuance costs		—			(237	)
Dividends paid		(8,670	)		(7,163	)		(10,048	)		(8,670	)
Exercise of stock options		200			—			—			200
Repurchase of common stock		(15,598	)		(33,976	)		(4,272	)		(15,598	)
Net cash used in financing activities		(8,506	)		(27,857	)		(21,433	)		(8,506	)

Effect of exchange rate on cash		(3	)		(30	)		17			(3	)

Net decrease in cash and cash equivalents		(3,484	)		(9,143	)		(4,335	)		(3,484	)
Cash at beginning of period		19,710			23,503			17,512			19,710
Cash at end of period	$	16,226		$	14,360		$	13,177		$	16,226

Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	3,696		$	4,473		$	5,406		$	3,696
Cash paid for interest	$	292		$	187		$	450		$	292
Supplemental disclosure of non-cash acquisition financing activities:
Shares issued to sellers of Jibe Consulting	$	3,600,000		$	—		$	—		$	3,600,000

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

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

In the opinion of management, the accompanying consolidated financial statements reflect all normal and recurring adjustments which are necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows as of the dates and for the periods presented. The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, these statements do not include all the disclosures normally required by U.S. GAAP for annual financial statements and should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December ~~30, 2016,~~29, 2017, included in the Annual Report on Form 10-K filed by the Company with the SEC on March ~~10, 2017.~~9, 2018. The consolidated results of operations for the quarter and nine months ended September ~~29, 2017,~~28, 2018, are not necessarily indicative of the results to be expected for any future period or for the full fiscal year.

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.

We generate substantially all of our revenue from providing professional services to our clients. We also generate revenue from software licenses, software support, maintenance and subscriptions to our executive and best practices advisory programs. A single contract could include one or multiple performance obligations. For those contracts that have multiple performance obligations, we allocate the total transaction price to each performance obligation based on its relative standalone selling price. We determine the standalone selling price based on the respective selling price of the individual elements when they are sold separately.

Revenue is recognized when control of the goods and services provided are transferred to our customers, in an amount that reflects the consideration we expect 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 we satisfy the performance obligations.

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

We generate our revenue under four types of billing arrangements: fixed-fee (including software license revenue); time-and-materials; executive and best practice advisory services; and software sales, software maintenance and support.

In fixed-fee billing arrangements, which would also include contracts with capped fees, we agree to a pre-established fee or fee cap in exchange for a predetermined set of professional services. We set the fees based on our estimates of the costs and timing for completing the engagements. We generally recognize 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 our estimates indicate a potential loss, such 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 mile-stone 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 our consultants at agreed upon hourly rates. We recognize revenue under time-and-material arrangements as the related services or goods are provided, using the right to invoice practical expedient which allows us 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 service 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 software and maintenance contracts are in the form of SAP America software license or maintenance agreements provided by SAP America. SAP is the principal and the Company is the agent in these transactions as the Company does not obtain title to the software and the maintenance is sold simultaneously. The transaction price is the Company’s agreed-upon percentage of the software license or maintenance amount in the contract with the vendor. Revenue for the resale of software licenses is recognized upon contract execution and customer’s receipt of the software. 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.

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.

The payment terms and conditions in our 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.

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

Differences between the timing of billings and the recognition of revenue are recognized as either unbilled services or deferred revenue in the accompanying consolidated balance sheets. Revenue recognized for services performed but not yet billed to clients are recorded as unbilled services. Revenue recognized, but for which are not yet entitled to bill because certain events, such as the completion of the measurement period, are recorded as contract assets and included within unbilled services. Client prepayments are classified as deferred revenue and recognized over future periods as earned in accordance with the applicable engagement agreement. See Note 3 for the accounts receivable and unbilled revenue balances and see Note 4 for the deferred revenue balances. During the quarter and nine months ended September 28, 2018, the Company recognized $4.2 million and $14.0 million of revenue as a result of changes in deferred revenue liability balance, respectively, as compared to $5.8 million and $17.1 million for the quarter and nine months ended September 29, 2017, respectively.

The following table reflects the Company’s disaggregation of total revenue including reimbursable expenses for the quarters and nine months ended September 28, 2018 and September 29, 2017:

Sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized as project revenue is recognized. We determined the period of amortization by taking into consideration the customer contract period, which are generally less than 12 months. Commission expense is included in Selling, General and Administrative Costs in the accompanying condensed consolidated statements of operations. As of December 29, 2017 and December 30, 2016, the Company had $1.4 million and $1.8 million, respectively, of deferred commissions, of which $0.1 million and $0.7 million was amortized during the quarters and nine months ended September 28, 2018, respectively, as compared to $0.2 million and $1.2 million during the quarter and nine months ended September 29, 2017, respectively. No impairment loss was recognized relating to the capitalization of deferred commission.

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.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable and unbilled revenue, accounts payable, accrued expenses and other liabilities and debt. As of September ~~29, 2017~~28, 2018 and December ~~30, 2016,~~29, 2017, 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.

The Company applies the provisions of ASC 805, Business Combinations, in the accounting for its acquisitions, which requires recognition of the assets acquired and the liabilities assumed at their acquisition date fair values, separately from goodwill. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition date fair values of the tangible and identifiable intangible assets acquired and liabilities assumed. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as contingent consideration, where applicable, its estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, that may be up to 12 months from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with a corresponding adjustment to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, the impact of any subsequent adjustments is included in the consolidated statements of operations.

In May 2014, the ~~Financial Accounting Standards Board (“FASB”)~~FASB issued ~~guidance on~~ASU 2014-09, Revenue from Contracts with Customers, as a new Topic, ASC 606, which superseded ASC 605. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which ~~provides~~the entity expects to be entitled in exchange for those goods or services. We adopted ASC 606 effective December 31, 2017 on a ~~single, principles-based model~~modified retrospective basis to all open contracts, as of that date. Adoption of the new standard resulted in changes to certain accounting policies for revenue recognition, ~~and replaces~~but on a modified retrospective basis had no impact on our consolidated financial statements in the ~~existing revenue recognition guidance. The guidance is effective for annual and interim~~ periods beginning on or after December 15, 2017 and will replace most existing revenue recognition guidance under U.S. GAAP when it becomes effective. It permits the use of either a retrospective or cumulative effect transition method and early adoption is permitted, however not before December 15, 2016.

The Company has completed an initial assessment of the impact of the new guidance on its existing revenue recognition policies and plans to adopt the rule on December 30, 2017, using the cumulative effect method of adoption. The guidance requires significantly expanded disclosures around the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, which the Company is currently compiling. While the Company has not fully completed its assessment of the impact of the standard, based on the analysis completed to date, the Company does not currently anticipate that the new rule will have a material impact on its consolidated financial statements.

In February 2016, the FASB issued guidance on leases which supersedes the current lease guidance. The core principle requires lessees to recognize the assets and liabilities that arise from nearly all leases on the balance sheet. Accounting applied by lessors will remain largely consistent with previous guidance. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is assessing the impact of this standard on its consolidated financial statements and related disclosures.

In ~~March 2016,~~July 2018, the FASB issued ~~guidance simplifying~~ASU 2018-09, which affects a wide variety of Topics in the ~~accounting for share-based payment transactions including~~Codification and applies to all reporting entities within the income tax consequences, classification of awards as either equity or liabilities and classification on the statements of cash flows. Under the new standard, all excess tax benefits and tax deficiencies should be recognized as income tax expense or benefit on the statements of income. An excess income tax benefit arises when the tax deduction of a share-based award for income tax purposes exceeds the compensation cost recognized for financial reporting purposes and, a tax deficiency arises when the compensation cost exceeds the tax deduction. Under current GAAP, excess tax benefits are recognized as additional paid-in capital while tax deficiencies are recognized either as an offset to accumulated excess tax benefits, if any, or on the statements of income.

~~Management adopted the guidance effective December 31, 2016. As a result~~scope of the ~~adoption of this guidance, management made an~~affected accounting ~~policy election~~guidance. The amendments in the ASU represent changes that clarify, correct errors in, or make minor improvements to ~~recognize~~ the ~~effect of forfeitures in compensation cost when they occur, which had an immaterial impact on results of operations~~Codification. Ultimately, the amendments make the Codification easier to understand and ~~financial position~~apply by eliminating inconsistencies and ~~no impact on cash flows at adoption. In the first quarter of 2017, the Company recorded no income tax expense as a result~~providing clarifications. Some of the ~~adoption~~amendments in this ASU do not require transition guidance and are effective upon issuance of the ~~new guidance relating to the accounting on the vesting of share-based awards. Excluding the effect~~ASU, while many of the ~~new~~amendments have transition guidance ~~the~~with effective ~~tax rate would have been 34%~~dates for ~~certain federal, foreign and state taxes during the nine months ended September 29, 2017.~~

In August 2016, the FASB issued guidance on the classification of certain cash receipts and cash payments. The guidance provides specific clarification on eight cash flow classification issues, including contingent consideration payments made after a business combination. The guidance is effective for interim and annual periods beginning after December 15, ~~2017. Early~~2018. The adoption ~~is permitted and~~of the ~~guidance requires a retrospective transition. We do~~amendments in this ASU are not ~~expect the guidance~~expected to have a material impact on ~~our~~the Company’s consolidated financial ~~statements.~~statements and related disclosures.

Certain prior period amounts in the consolidated financial statements, and notes thereto, have been reclassified to conform to current period presentation.

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

~~Dilutive~~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.

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

	Quarter Ended				Nine Months Ended				Quarter Ended				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,		September 28,		September 29,		September 28,		September 29,
	2017		2016		2017		2016		2018		2017		2018		2017
Basic weighted average common shares outstanding		28,764,661		28,579,237		28,891,301		29,251,459		29,478,243		28,764,661		29,332,508		28,891,301

Effect of dilutive securities:
Unvested restricted stock units and common stock subject to vesting requirements issued to employees and non-employees		928,103		1,472,927		1,008,159		1,327,491		684,045		928,103		507,508		1,008,159
Common stock issuable upon the exercise of stock options and SARs		2,264,901		2,323,333		2,354,767		2,291,271		2,431,071		2,264,901		2,374,403		2,354,767
Dilutive weighted average common shares outstanding		31,957,665		32,375,498		32,254,227		32,870,220		32,593,359		31,957,665		32,214,419		32,254,227

Approximately ~~0.9 million and 0.8 million~~1 thousand shares of common stock equivalents were excluded from the computations of diluted net income per common share for both the quarter and nine months ended September 28, 2018, as compared to 41 thousand and 20 thousand for the quarter and nine months ended September 29, 2017, respectively, ~~as compared to 0.8 million and 0.9 million for the same periods in 2016,~~ as their inclusion would have had an anti-dilutive effect on diluted net income per common share.

Accounts receivable and unbilled revenue, net, consisted of the following (in thousands):

	September 29,			December 30,			September 28,			December 29,
	2017			2016			2018			2017
Accounts receivable	$	39,614		$	39,335		$	44,636		$	44,972
Unbilled revenue		18,624			10,638			13,859			12,891
Allowance for doubtful accounts		(2,686	)		(2,574	)		(1,620	)		(2,601	)
Accounts receivable and unbilled revenue, net	$	55,552		$	47,399		$	56,875		$	55,262

Accounts receivable is net of uncollected advanced billings. Unbilled revenue ~~includes recognized recoverable costs and accrued profits on contracts~~represents revenue for ~~which billings had~~services performed that have not been ~~presented to clients.~~invoiced.

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

	September 29,		December 30,		September 28,		December 29,
	2017		2016		2018		2017
Accrued compensation and benefits	$	10,062	$	4,412	$	10,152	$	5,289
Accrued bonuses		3,318		13,038		4,230		4,119
Accrued dividend payable		—		4,023		—		4,656
Acquisition earnout accruals						2,928		6,207
Deferred revenue		11,959		10,975		9,083		9,271
Accrued sales, use, franchise and VAT tax		2,647		3,791		1,506		3,670
Non-cash stock compensation accrual		2,507		4,225		872		1,890
Income tax payable		2,953		4,437		3,173		5,649
Other accrued expenses		2,525		1,824		2,121		2,263
Total accrued expenses and other liabilities	$	35,971	$	46,725	$	34,065	$	43,014

~~In the prior quarter ended June 30,~~During 2017, the Company recorded restructuring costs of $1.3 million, which was primarily related to the transition of resources driven by ~~our~~the Company’s migration from on-premise software to cloud-based implementations, as well as the Jibe acquisition, and the rationalization of global ~~resources as a result of the emergence of RPA (“Robotic Process Automation”) related engagements from the Aecus acquisition.~~resources. As of September 28, 2018 and December 29, 2017, the Company did not have any remaining commitments related to restructuring.

~~The following table sets forth the activity in the restructuring expense accruals (in thousands):~~

In February 2012, the Company entered into a credit agreement with Bank of America, N.A. (“Bank of America”), pursuant to which Bank of America agreed to lend the Company up to $20.0 million pursuant to a revolving line of credit (the “Revolver”) and up to $47.0 million pursuant to a term loan (the “Term Loan”). The Company has fully utilized and repaid its Term Loan.

On May 9, 2016, the Company amended and restated the credit agreement with Bank of America (the “Credit Agreement”) to:

The obligations of Hackett under the Revolver 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, a 100% pledge of the capital stock of the U.S. Subsidiaries, and a 66% pledge of the capital stock of Hackett’s direct foreign subsidiaries (subject to certain exceptions).

During the quarter and nine months ended September ~~29, 2017,~~28, 2018, the Company ~~had~~paid down a net ~~borrowings of~~ $2.0 million and ~~$15.0~~$7.5 million, respectively, ~~under the Revolver~~of debt and of which had a balance of ~~$22.0~~$11.5 million outstanding as of September ~~29, 2017.~~28, 2018. Subsequent to September 28, 2018, the Company paid down an additional $3.0 million of debt, leaving a current outstanding balance of $8.5 million. The interest rates per annum applicable to borrowings under Revolver will be, at the Company’s option, equal to either a base rate or a LIBOR base rate, plus an applicable margin percentage. The applicable margin percentage is based on the consolidated leverage ratio, as defined in the

Credit Agreement. As of September ~~29, 2017,~~28, 2018, the applicable margin percentage was 1.50% per annum based on the consolidated leverage ratio, in the case of LIBOR rate advances, and 0.75% per annum, in the case of base rate advances. The interest rate as of September ~~29, 2017,~~28, 2018, was ~~2.73%~~3.6%.

The Company is subject to certain covenants, including total consolidated leverage, fixed cost coverage, adjusted fixed cost coverage and liquidity requirements, each as set forth in the Credit Agreement, subject to certain exceptions. As of September ~~29, 2017,~~28, 2018, the Company was in compliance with all covenants.

During the nine months ended September ~~29, 2017,~~28, 2018, the Company issued ~~672,592~~398,174 restricted stock units at a weighted average grant-date fair value of ~~$16.61~~$16.30 per share. As of September ~~29, 2017,~~28, 2018, the Company had ~~1,553,240~~1,178,222 restricted stock units outstanding at a weighted average grant-date fair value of ~~$12.81~~$15.19 per share. As of September ~~29, 2017, $11.2~~28, 2018, $9.6 million of total restricted stock unit compensation expense related to unvested awards had not been recognized and is expected to be recognized over a weighted average period of approximately ~~2.0~~2.3 years.

During the nine months ended September 29, 2017, 182,279 shares of common stock subject to vesting requirements were issued. These shares were issued to settle the equity portion of the closing consideration to the sellers in the acquisition of Jibe Consulting in May 2017 and will vest over four years. See Note 12 “Acquisitions” for further details. As of September ~~29, 2017,~~28, 2018, the Company had ~~531,024~~289,507 shares of common stock subject to vesting requirements outstanding at a weighted average grant-date fair value of ~~$12.85~~$16.03 per share. As of September ~~29, 2017, $4.8~~28, 2018, $2.7 million of compensation expense related to common stock subject to vesting requirements had not been recognized and is expected to be recognized over a weighted average period of approximately ~~3.1~~2.3 years.

~~The Hackett Group, Inc.~~Forfeitures for all of the Company’s outstanding equity are recognized as incurred.

~~In 2012,~~As of September 28, 2018, the Company’s Chief Executive Officer (“CEO”) and Chief Operating Officer (“COO”) agreed to give up 50% of their equity incentive compensation awards under the 1998 Stock Option and Incentive Plan for the years 2012 through 2015 in exchange forCompany had 2.9 million SARs outstanding with an exercise price of $4.00 ~~only to be earned upon the achievement of 50% growth in pro forma earnings~~ per share and ~~50% growth in pro forma EBITDA from a base year~~an expiration date of ~~2011. The grants would have expired if neither target were achieved during a six-year term.~~

In the first quarter of 2015, the outstanding SARs awards for the achievement of 50% growth in pro forma earnings per share vested with the Audit Committee’s approval of the Company’s 2014 financial statements. In the first quarter of 2016, the outstanding SARs awards for the Company’s achievement of over 50% growth of pro forma EBITDA vested with the Audit Committee’s approval of the Company’s 2015 financial statements. As of September 29, 2017, no SARs had been exercised. By the end of 2015, all non-cash stock compensation expense relating to the outstanding SARs had been expensed.February 2022.

Under the Company’s share repurchase plan, the Company may ~~buy back~~repurchase shares of its outstanding common stock either on the open market or through privately negotiated transactions subject to market conditions and trading restrictions. During the nine months ended September 28, 2018, the Company repurchased 53 thousand shares of its common stock at an average price of $18.33 per share for a total cost of $1.0 million. As of September 28, 2018, the Company had a total authorization remaining of $7.2 million under its repurchase plan with a total authorization of $142.2 million.

During the quarter and nine months ended September 29, 2017, the Company repurchased 182 thousand and 748 thousand shares of its common stock at an average price of $13.73 and $15.11 per share for a total cost of $2.5 ~~million. During the nine months ended September 29, 2017, the Company repurchased 748 thousand shares of its common stock at an average price of $15.11 per share for a total cost of~~million and $11.3 ~~million. During the quarter ended September 29, 2017, the Company’s Board of Directors approved an additional $5.0~~ million, authorization under the repurchase plan increasing the total authorization to $137.2 million. As of September 29, 2017, the Company had $3.1 million available under its share repurchase plan authorization.

During the quarter ended September 30, 2016, the Company repurchased 30 thousand shares of its common stock at an average price of $14.84 per share for a total cost of $449 thousand. During the nine months ended September 30, 2016, the Company repurchased 2.1 million shares of its common stock at an average price of $14.60 per share for a total cost of $30.1 million.respectively.

The shares repurchased under the share repurchase plan during the quarter and nine months ended September ~~29, 2017,~~28, 2018, do not include 688 thousand and ~~262~~191 thousand shares ~~respectively,~~ which the Company bought back to satisfy employee net vesting obligations for a cost of ~~$1.0~~$0.1 million and ~~$4.3~~$3.3 million, respectively. During the quarter and nine months ended September ~~30, 2016,~~29, 2017, the Company bought back 468 thousand and ~~288~~262 thousand shares ~~respectively,~~ at a cost of ~~$50 thousand~~$1.1 million and ~~$3.9~~$4.3 million, respectively, to satisfy employee net vesting obligations.

On May 6, 2016, the Company’s Board of Directors approved the repurchase of 697 thousand shares of its common stock from the Company’s CEO, 732 thousand shares of its common stock from the Company’s COO, and 73 thousand shares of its common stock from the Company’s Chief Financial Officer (“CFO”) for a total of approximately 1.5 million shares at a purchase price of $14.77 per share. The transaction was approved by the Audit Committee of the Board of Directors which is comprised solely of independent directors and was effected as part of the Company’s share repurchase program. Following the transaction, Mr. Fernandez, Mr. Dungan and Mr. Ramirez remained the beneficial owners of 11.8%, 4.9% and 0.9% shares, respectively, of the outstanding common stock. Following the transaction, approximately $3.1 million remained available under the Company’s share repurchase program. One of the primary reasons for this transaction was to lower the Company’s weighted average shares outstanding which had increased by 11% from the first quarter of 2016 as a result of the vesting of the SARs and appreciation in share price. The repurchase reduced weighted average shares outstanding by approximately 4% and is $0.03 to $0.04 accretive on an annualized basis. Based on the most recent SEC filings, including shares of Company common stock beneficially owned and shares that could be acquired upon the exercise of the SARs, Mr. Fernandez continues to be the single largest beneficial shareholder of the Company.

In reviewing and approving the transaction, the independent directors of the Board considered, among other factors, the benefits to the Company’s stockholders of this transaction such as the fact that (i) the share repurchase transaction is expected to be accretive to earnings per share, and (ii) the transaction was a unique opportunity to repurchase a large block of shares in an orderly manner. The transaction was funded from borrowings under the Company’s Revolver which was amended on May 9, 2016 in order to provide an additional $25.0 million in borrowing capacity for an aggregate amount of up to $45.0 million from time to time.

In ~~2016,~~2017, the Company increased the annual dividend from ~~$0.20~~$0.26 per share to ~~$0.26~~$0.30 per share to be paid on a semi-annual basis which resulted in aggregate dividends of ~~$4.0~~$4.6 million and $4.7 million paid to shareholders in July 2017 and January 2018. During the quarter ended March 30, 2018, the Company increased its annual dividend to $0.34 per share to be paid on a semi-annual basis. During the quarter ended June 29, 2018, the Company declared its semi-annual dividend of $0.17 per share for shareholders of record as of June 29, 2018, which was paid on July 11, ~~2016 and December 22, 2016, respectively.~~2018 for a total of $5.4 million. These dividends were paid from U.S. domestic sources and are accounted for as an increase to accumulated deficit. The dividend declared in December 2016 was paid in January 2017. During the quarter ended March 31, 2017, the Company increased its annual dividend to $0.30 per share to be paid on a semi-annual basis. The first semi-annual dividend for 2017 was paid on July 10, 2017, for a total of $4.6 million. Subsequent to quarter end, the Company declared its semi-annual dividend of ~~$0.15~~$0.17 per share for shareholders of record as of December ~~22, 2017,~~21, 2018, which is to be paid on January ~~5, 2018.~~4, 2019.

During the nine months ended September ~~29, 2017,~~28, 2018, the Company bought back 5953 thousand shares of its common stock from members of its Board of Directors and executives for ~~$1.2~~$1.0 million, or ~~$20.13~~$18.33 per share.

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.

Revenue before reimbursements, 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				Quarter Ended				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,		September 28,		September 29,		September 28,		September 29,
	2017		2016		2017		2016		2018		2017		2018		2017
Revenue:
Revenue before reimbursements:
North America	$	60,148	$	64,136	$	174,015	$	188,666	$	55,321	$	53,142	$	166,092	$	158,786
International (primarily European countries)		11,314		9,982		42,446		29,843		12,922		12,805		39,240		39,956
Total revenue	$	71,462	$	74,118	$	216,461	$	218,509
Revenue before reimbursements									$	68,243	$	65,947	$	205,332	$	198,742

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

	September 29,		December 30,		September 28,		December 29,
	2017		2016		2018		2017
Long-lived assets:
North America	$	90,218	$	78,200	$	93,758	$	90,605
International (primarily European countries)		17,281		12,286		19,553		19,341
Total long-lived assets	$	107,499	$	90,486	$	113,311	$	109,946

As of September ~~29, 2017~~28, 2018 and December ~~30, 2016,~~29, 2017, foreign assets included ~~$15.0~~$14.6 million and ~~$11.9~~$15.1 million, respectively, of goodwill related to acquisitions.

In the following table, “The Hackett Group” encompasses the ~~Hackett Group service group encompasses Benchmarking,~~Strategy and Business Transformation practice, Benchmarking, Executive Advisory ~~Oracle Cloud Applications,~~and Business Transformation practices, and the ERP, EPM and ~~EPM~~Analytics practices including Enterprise Analytics Transformation, as well as the Oracle ERP Applications and Application ~~Maintenance and Support groups.~~Managed Services practices. The ~~SAP~~“SAP Solutions ~~service group~~Group” which goes to market under the Answerthink brand, encompasses SAP ~~ERP~~Reseller, Implementation and ~~SAP Maintenance groups~~Application Managed Services practices (in thousands):

	Quarter Ended				Nine Months Ended				Quarter Ended				Nine Months Ended
	September 29,		September 30,		September 29,		September 30,		September 28,		September 29,		September 28,		September 29,
	2017		2016		2017		2016		2018		2017		2018		2017
The Hackett Group		60,789		62,610	$	183,510	$	186,302	$	60,285	$	56,107	$	180,470	$	168,757
SAP Solutions		10,673		11,508		32,951		32,207		7,958		9,840		24,862		29,985
Total revenue	$	71,462	$	74,118	$	216,461	$	218,509
Revenue before reimbursements									$	68,243	$	65,947	$	205,332	$	198,742

Effective May 1, 2017, the Company acquired certain assets and liabilities of Jibe Consulting, Inc. (“Jibe”), a ~~U.S.- based~~U.S.-based Oracle E-Business Suite (“EBS”) and Oracle Cloud Business Application implementation firm. The acquisition of Jibe enhances the Company’s Cloud Application capabilities and strongly complements its market leading EPM transformation and technology implementation group.

The sellers’ purchase consideration was $5.4 million in cash, not subject to vesting, and $3.6 million in shares of the Company’s common stock, subject to vesting. The initial cash consideration was funded from borrowings under the Company’s Revolver. The equity that was issued has a four-year vesting term and will be recorded as compensation expense over the respective vesting period. In addition, the sellers have the opportunity to earn an additional $6.6 million in cash and $4.4 million in Company common stock based on the achievement of the performance targets over the 18 ~~months~~month period following closing for a total of $11.0 million in contingent ~~consideration;~~consideration, a portion of which will be allocated to key employees in both cash and Company stock.

The cash related to the contingent consideration, which is to be paid to the sellers, is not subject to service vesting and has been accounted for as part of the purchase consideration. The cash related to the contingent consideration, which is to be paid to the key employees, is subject to service vesting and is being accounted for as compensation expense. ~~This~~Due to the projected earnout results, during the second quarter of 2018, the acquisition-related purchase consideration and compensation expense allocated to both the selling shareholders and key employees resulted in a benefit. During the quarter and nine months ended September 28, 2018, the Company recorded expense of $0.8 million and a benefit of $3.8 million in earnings from operations on the consolidated statement of operations related to the contingent earnout liability ~~has~~for the Jibe acquisition. During the quarter and nine months ended September 28, 2018, the Company recorded, in personnel costs before reimbursements on the consolidated statement of operations, expense of $0.1 million and a benefit of $0.1 million, respectively, related to the key employees’ portion of the cash related contingent consideration. Management utilizes the most recent financial results from which to base these estimates. These contingent liabilities have been recorded in the consolidated balance sheet as ~~non-current~~current accrued expenses and other liabilities.

The equity related to the contingent consideration will be subject to service vesting and will be recorded as compensation expense over the respective vesting period. As ~~of September 29, 2017,~~mentioned above, due to the projected results, the Company ~~had~~ recorded ~~$1.0~~for the quarter and nine months ended September 28, 2018, expense of $0.2 million and benefit of $0.1 million, respectively, of acquisition-related ~~compensation expense and~~ non-cash stock compensation ~~related to~~in cost of sales on the ~~equity portion~~consolidated statement of ~~the closing consideration and the equity portion of the contingent consideration. The initial cash consideration was funded from borrowings under the Company’s Revolver.~~

The purchase price was allocated to tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The fair value of identifiable intangible assets acquired was based on estimates and assumptions made by management at the time of the acquisition. Management is currently working to complete the valuation of identified intangible assets, goodwill and related deferred income taxes. As additional information, as of the acquisition date, becomes available and as management completes its evaluation, the preliminary purchase price allocation may be revised during the remainder of the measurement period (which will not exceed 12 months from the acquisition date). Any such revisions or changes may be material as the fair values of the tangible and intangible assets acquired and liabilities assumed are finalized. The following table presents the ~~preliminary~~ purchase price allocation of the assets acquired and liabilities assumed, based on the fair ~~values (in thousands):~~values:

			Purchase Price
	Purchase Price		Allocation
	Allocation		(in thousands)
Total purchase consideration	$	11,293	$	11,293
Accounts receivable		1,932		1,932
Other current assets		59		59
Total current assets acquired		1,991		1,991
Intangible assets		931		931
Goodwill		9,538		9,538
Total assets		12,460		12,460
Other accrued expenses		1,167		1,167
Total liabilities acquired		1,167		1,167
Purchase consideration on acquisition	$	11,293	$	11,293

The recognized goodwill is primarily attributable to the benefits the Company expects to derive from enhanced market opportunities. The acquired intangible assets with definite lives are amortized over periods ranging from 2 to 5 years. The following table presents the ~~preliminary~~ intangible assets acquired from Jibe:

The acquisition was not material to the Company's results of operations, financial position or cash flows and therefore, the pro forma impact of these acquisitions is not presented. ~~Since the acquisition date through September 29, 2017,~~ Jibe contributed ~~$7.6~~$12.3 million of revenue before reimbursable expenses and contribution before depreciation, amortization, interest, corporate overhead allocation and taxes ~~of $0.7 million.~~totaled $1.2 million for the year ended December 29, 2017. The acquisition related costs incurred in the second quarter of 2017 totaled $0.2 million and were all classified in selling, general and administrative costs in the Company’s consolidated statements of operations. All goodwill is expected to be deductible for tax purposes.

Effective April 6, 2017, the Company acquired 100% of the equity of the U.K.-based operations of Aecus Limited (“Aecus”), a European Outsourcing Advisory and ~~Robotics Process Automation (“RPA”)~~RPA consulting firm. This acquisition ~~strongly~~ complements the global strategy and business transformation offerings of the Hackett Group.

The sellers’ purchase consideration was £3.2 million in cash. The closing purchase consideration was funded with the Company’s available funds. In addition, the sellers ~~have~~had the opportunity to earn an additional £2.4 million in contingent consideration in cash based on the achievement of performance targets achieved over the next 12 months, and key personnel ~~have~~had the opportunity to earn £0.3 million in cash and £0.3 million in the Company’s common stock. The contingent consideration for the selling shareholders and key personnel is subject to performance and service periods and will be accounted for as compensation expense and in non-current accrued expenses and other liabilities. AsDuring the first quarter of ~~September 29, 2017,~~2018, the ~~Company had recorded a total of $0.9 million of acquisition-related compensation expense and~~ acquisition ~~non-cash stock~~related compensation expense for Aecus resulted in a benefit due to the estimated results of the contingent earnout calculation.

During the first quarter of 2018, the Company recorded a £0.5 million compensation benefit from acquisition-related cash and ~~equity~~non-cash compensation for the cash portion of the contingent consideration. ~~The closing purchase consideration was funded with~~During the ~~Company’s available funds.~~quarter and nine months ended September 28, 2018, the Company recorded compensation expense of £0.1 million and a compensation benefit of £0.3 million, respectively, from acquisition-related cash compensation for the cash portion of the contingent consideration.

The acquisition was not material to the Company's results of operations, financial position or cash flows and therefore, the pro forma impact of these acquisitions is not presented. ~~From acquisition date through the month ended September 29, 2017,~~ Aecus ~~has~~ contributed ~~$2.6~~$3.9 million of revenue before reimbursable expenses and contribution before depreciation, amortization, interest, corporate overhead allocation and taxes oftotaled $0.5 ~~million.~~million during the year ended December 29, 2017. The acquisition related costs incurred during the ~~first nine months of~~year ended December 29, 2017 totaled $0.1 million and were all classified in selling, general and administrative costs in the Company’s consolidated statements of operations. The goodwill and intangibles resulting from this transaction are not expected to be deductible under UK tax regulations.

~~Subsequent to the quarter ended September 29,~~Effective October 2017, Hackett-REL, Ltd., a subsidiary of the Company located in the United Kingdom, acquired The Chartered Institute of Management Accountants' share of the Certified GBS Professionals program. This acquisition allows those studying under the program and their employers to benefit further from the Company’s sector specific expertise and focus on the growing global business services market. Purchase consideration was $2.0 million in cash and was funded with the Company’s available funds. Also in connection with this transaction, the Alliance and Program Development Agreement between the Company, Hackett-REL, ~~Ltd~~Ltd. and The Chartered Institute of Management Accountants was terminated.

As The acquired intangible asset has a ~~result of the short period between the acquisition date and the date of the issuance of the Company’s third quarter consolidated financial statements, all of the information required to~~definite life which will be ~~disclosed by ASC 805 has not yet been completed.~~amortized over 4 years.

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. We intend the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements. 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 impact such forward-looking statements include, among others, 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 and changes in general economic conditions, interest rates and our ability to obtain additional debt financing ~~through additional borrowings under an amendment to our existing credit facility.~~if needed. An additional description of our risk factors is set forth in our Annual Report on Form 10-K for the year ended December ~~30, 2016.~~29, 2017. 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.

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 more than ~~13,000~~15,200 benchmark and performance studies over 2324 years at over ~~5,100~~5,300 of the world’s leading companies.

In the following discussion, “The Hackett Group” encompasses our ~~Benchmarking,~~Strategy and Business Transformation practice, Benchmarking, Executive Advisory and Business Transformation practices, and our ERP, EPM and Analytics practices including Enterprise ~~Performance Management (“EPM”), EPM~~Analytics Transformation, as well as our Oracle ERP Applications and Application ~~Maintenance and Support (“AMS”) and Oracle Cloud Applications groups.~~Managed Services practices. The “SAP ~~Solutions”~~Solutions Group” which goes to market under our Answerthink brand, encompasses our SAP ~~ERP~~Reseller, Implementation and ~~SAP Maintenance groups.~~Application Managed Services practices.

~~Adjusted non-GAAP information is provided to enhance~~During the ~~understanding~~second quarter of 2017, we completed the ~~financial performance~~acquisitions of ~~our business compared to prior periods~~Jibe Consulting, Inc. and ~~is reconciled~~Aecus Limited. See Note 12, “Acquisitions” to our ~~GAAP information~~consolidated financial statements included in the tables below. In our quarterly earnings announcements, we refer to adjusted non-GAAP information as “pro-forma”, which is unaudited. We also present earnings before income taxes, interest, depreciation and amortization expense (EBITDA), and other one-time acquisition-related and restructuring charges (Adjusted EBITDA), both of which are non-GAAP measures. These measures are used by management to evaluate our financial performance.

References to adjusted non-GAAP results below specifically exclude non-cash stock compensation expense, intangible asset amortization expense, other one-time acquisition related income and expense, restructuring charges and assumes a normalized long-term cash tax rate.

All non-GAAP information presented herein should be considered in addition to, and not as substitute for or superior to, any measure of performance, cash flows, or liquidity prepared in accordance with GAAP.this Quarterly Report on Form 10-Q.

The following table sets forth, for the periods indicated, our results of operations and the percentage relationship to revenue before reimbursements of such results (in thousands and unaudited):

	Quarter Ended										Nine Months Ended										Quarter Ended										Nine Months Ended
	September 29,					September 30,					September 29,					September 30,					September 28,					September 29,					September 28,					September 29,
	2017					2016					2017					2016					2018					2017					2018					2017
Revenue:
Revenue before reimbursements	$	65,947		100.0	%	$	66,810		100.0	%	$	198,742		100.0	%	$	196,961		100.0	%	$	68,243		100.0	%	$	65,947		100.0	%	$	205,332		100.0	%	$	198,742		100.0	%
Reimbursements		5,515					7,308					17,719					21,548					5,597					5,515					16,890					17,719
Total revenue		71,462					74,118					216,461					218,509					73,840					71,462					222,222					216,461

Costs and expenses:
Cost of service:
Personnel costs before reimbursable expenses		39,807		60.4	%		40,621		60.8	%		120,906		60.8	%		120,866		61.4	%		41,361		60.6	%		39,807		60.4	%		125,975		61.4	%		120,906		60.8	%
Acquisition-related compensation expense		619					—					1,042					—
Non-cash stock compensation expense		1,082					1,135					3,440					3,318					940					1,082					2,985					3,440
Acquisition-related compensation expense (benefit)																						240					619					(549	)				1,042
Acquisition-related non-cash stock compensation expense		794					315					1,720					898					731					794					1,452					1,720
Reimbursable expenses		5,515					7,308					17,719					21,548					5,597					5,515					16,890					17,719
Total cost of service		47,817					49,379					144,827					146,630					48,869					47,817					146,753					144,827

Selling, general and administrative costs		14,209		21.5	%		14,664		21.9	%		43,759		22.0	%		43,918		22.3	%		15,105		22.1	%		14,209		21.5	%		44,949		21.9	%		43,759		22.0	%
Non-cash stock compensation expense		894					793					2,427					2,251					850					894					2,495					2,427
Amortization of intangible assets																						585					557					1,789					1,475
Acquisition-related costs		111					—					378					—					—					111					—					378
Amortization of intangible assets		557					275					1,475					825
Acquisition-related contingent consideration liability																						803					—					(3,750	)				—
Restructuring costs		—					—					1,293					—					—					—					—					1,293
Total selling, general, and administrative expenses		15,771					15,732					49,332					46,994					17,343					15,771					45,483					49,332

Total costs and operating expenses		63,588					65,111					194,159					193,624					66,212					63,588					192,236					194,159

Income from operations		7,874		11.9	%		9,007		13.5	%		22,302		11.2	%		24,885		12.6	%		7,628		11.2	%		7,874		11.9	%		29,986		14.6	%		22,302		11.2	%

Other expense:
Interest expense		(184	)				(137	)				(401	)				(288	)				(158	)				(184	)				(515	)				(401	)

Income from operations before income taxes		7,690		11.7	%		8,870		13.3	%		21,901		11.0	%		24,597		12.5	%		7,470		10.9	%		7,690		11.7	%		29,471		14.4	%		21,901		11.0	%
Income tax expense		2,401		3.6	%		3,382		5.1	%		3,988		2.0	%		9,281		4.7	%		2,313		3.4	%		2,401		3.6	%		5,426		2.6	%		3,988		2.0	%
Net income	$	5,289		8.0	%	$	5,488		8.2	%	$	17,913		9.0	%	$	15,316		7.8	%	$	5,157		7.6	%	$	5,289		8.0	%	$	24,045		11.7	%	$	17,913		9.0	%

Diluted net income per common share	$	0.17				$	0.17				$	0.56				$	0.47				$	0.16				$	0.17				$	0.75				$	0.56

Adjusted non-GAAP data (unaudited):
Income from operations before income taxes	$	7,690				$	8,870				$	21,901				$	24,597
Acquisition-related compensation expense		619					—					1,042					—
Non-cash stock compensation expense		1,976					1,928					5,867					5,569
Acquisition-related non-cash stock compensation expense		794					315					1,720					898
Acquisition-related costs		111					—					378					—
Restructuring costs		—					—					1,293					—
Amortization of intangible assets		557					275					1,475					825
Adjusted non-GAAP income before income taxes		11,747					11,388					33,676					31,889
Adjusted non-GAAP income tax expense		3,524		30.0	%		3,416		30.0	%		10,103		30.0	%		9,567		30.0	%
Adjusted non-GAAP net income	$	8,223				$	7,972				$	23,573				$	22,322

Adjusted non-GAAP diluted net income per share	$	0.26				$	0.25				$	0.73				$	0.68
EBITDA: (non-GAAP)
Income from operations before income taxes		7,690					8,870					21,901					24,597
Interest expense		184					137					401					288
Depreciation expense		590					618					1,841					1,875
Amortization of intangible assets		557					275					1,475					825
EBITDA (non-GAAP)	$	9,021				$	9,900				$	25,618				$	27,585

Reconciliation to adjusted non-GAAP EBITDA:
EBITDA		9,021					9,900					25,618					27,585
Acquisition-related compensation expense		619					—					1,042					—
Non-cash stock compensation expense		1,976					1,928					5,867					5,569
Acquisition-related non-cash stock compensation expense		794					315					1,720					898
Acquisition-related costs		111					—					378					—
Restructuring costs		—					—					1,293					—
Adjusted non-GAAP EBITDA	$	12,521				$	12,143				$	35,918				$	34,052

~~Overview.~~ References to adjusted non-GAAP results specifically exclude non-cash stock compensation expense, intangible asset amortization expense, acquisition-related cash and stock compensation expenses, acquisition and restructuring related charges and assumes a normalized long-term cash tax rate of 30%.

During the second quarter of 2017, we completed the acquisitions of Jibe Consulting, Inc. and Aecus Limited. See Note 12, “Acquisitions” to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

Revenue. We are a global company with operations located ~~primarily~~ in ~~the United States~~North and South America, Western ~~Europe.~~Europe, Australia and India. Our revenue is denominated in multiple currencies, primarily the U.S. Dollar, British Pound, Euro and Australian Dollar 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 third quarter and first nine months of ~~2017~~2018 and the comparable ~~period~~periods of ~~2016.~~2017. Revenue is analyzed based on geographical location of engagement team personnel.

Our total Company net revenue, or revenue before reimbursements, ~~decreased~~increased by 1%3.5%, to ~~$65.9~~$68.2 million ~~in the third quarter of 2017, as compared to $66.8 million in the third quarter of 2016. Our total Company net revenue increased 1%~~and by 3.3%, to ~~$198.7~~$205.3 million, in ~~the first nine months of 2017, as compared to $197.0 million during the same period in 2016. In both~~ the third quarter and first nine months of 2018, as compared to $65.9 million and $198.7 million in the same periods of 2017. In the third quarter of 2018, one customer accounted for more than 7% of our total revenue, however in the first nine months of 2018 and both periods of 2017, ~~and 2016,~~ no ~~one~~ customer accounted for more than 5% of our total revenue.

The Hackett Group net revenue ~~decreased less than a percent,~~increased 7%, to ~~$56.1~~$60.3 million ~~during the third quarter of 2017, as compared~~and 7%, to ~~$56.3~~$180.5 million in the third quarter of 2016. The Hackett Group net revenue increased less than a percent, to $168.8 million during the first nine months of 2017, as compared to $168.0 million during the same period in 2016. Hackett domestic revenue was down 7% during both the third quarter and first nine months of 2017, as revenue was adversely impacted as a result of the transition from on- premise to cloud application migration activity and slightly lower than anticipated activity in some of our other Hackett domestic practices. The decrease of the domestic Hackett revenue was offset by strong Hackett international growth of 36% and 39%, primarily in Europe, during the third quarter and first nine months of 2018, respectively, as compared to $56.1 million and $168.8 million in the same periods of 2017. Hackett U.S. revenue was up 9% and 8% during third quarter and first nine months of 2018, respectively, as compared to the same periods in 2017. The growth in the third quarter of 2018 primarily related to growth of 25% in our U.S. Strategy and Business Transformation group when compared to the same period in the prior year. The increase in the nine months ended September 28, 2018, as compared to the same period in the prior year, primarily related to the acquisition of Jibe in the second quarter of 2017 and strong growth of 19% from our U.S. Strategy and Business Transformation practice, partially offset by the revenue decline resulting from the Oracle on-premise implementation demand.

Hackett international revenue was flat and up 5% during the third quarter and first nine months of 2018, respectively, as compared to the same periods in the prior year. The weak performance internationally was primarily due to our European Working Capital group. Excluding this group, international revenue would have been up 20% and 5% during the third quarter and first nine

months of 2018, respectively. The growth in the first nine months of 2018 was also a result of the acquisition of Aecus in the second quarter of 2017. Given the results of the European Working Capital group, Management will be evaluating all available alternatives during the next few months.

SAP Solutions net revenue decreased 6%19%, to ~~$9.8~~$8.0 million, and 17%, to $24.9 million during the third quarter of ~~2017, as compared to $10.5 million in the third quarter of 2016. SAP Solutions net revenue increased 3%, to $30.0 million, during the~~2018 and first nine months of ~~2017,~~2018, respectively, as compared ~~$29.0~~to $9.8 million ~~during~~and $30.0 million in the same ~~period~~periods of ~~2016.~~2017, primarily due to the impact of channel transition from on-premise to cloud-based offerings and the loss of a large AMS client.

Total Company international net revenue accounted for 18% and 19% of total Company net revenue during the third quarter and first nine months of ~~2017,~~2018, respectively, as compared to ~~13% and 14%~~19% during both the same periods in ~~2016,~~2017, respectively.

Reimbursements as a percentage of total net revenue were 8% ~~and 9%~~ during both the third quarter and first nine months of ~~2017, respectively,~~2018, as compared to ~~11%~~8% and 9% during ~~both of~~ the same periods in ~~2016. This~~2017, respectively. The decrease in the first nine months, primarily related to lower expense ratios resulting from the recent acquisitions and the increase in IP as a service revenue, which both historically drive lower levels of reimbursable expenses. Reimbursements are ~~engagement travel related~~project travel-related expenses ~~which are billed~~passed through to ~~clients and have~~a client with no ~~impact on profitability.~~ associated margin.

Cost of Service. Cost of service primarily consists of salaries, benefits and incentive compensation for consultants and subcontractor fees; acquisition-related cash and stock compensation costs; non-cash stock compensation expense; and reimbursable expenses associated with projects.

Personnel costs ~~decreased 2%~~increased 4%, to $39.8 million, for the third quarter of 2017, from $40.6 million in the third quarter of 2016. The decrease in absolute dollar was primarily a result of lower incentive compensation accruals, partially offset by higher use of subcontractors during the quarter and higher fringe and payroll taxes. Personnel costs were $120.9 million, in both the first nine months of 2017 and 2016. Personnel costs before reimbursable expenses, a non-GAAP metric, as a percentage of revenue before reimbursements, were 60% and 61% for the third quarter and first nine months of 2017, respectively, as compared to 61% for both of the same periods in 2016.

~~Acquisition related compensation costs of $0.6~~$41.4 million, and ~~$1.0~~$126.0 million, for the third quarter and first nine months of 2018, respectively, from $39.8 million and $120.9 million in the same periods of 2017, respectively. The increase was primarily a result of an increase in average headcount due to the timing of the Jibe acquisition in May 2017, higher use of subcontractors during the period and higher incentive compensation accruals. Personnel costs before reimbursable expenses, as a percentage of revenue before reimbursements, were 60% for both the third quarter of 2018 and 2017 and 61% for the first nine months of 2018 and 2017.

Non-cash stock compensation expense was $0.9 million and $3.0 million in the third quarter and first nine months of 2018, respectively, ~~relate~~as compared to $1.1 million and $3.4 million for the same periods of 2017, respectively.

The acquisition-related compensation expense (benefit) in all periods relates to the accrual for the cash portion of the Aecus contingent consideration to be paid to the selling shareholders and key personnel, and the cash portion of the Jibe contingent consideration that is to be paid to key employees, all of which are subject to service vesting and as a result is recorded as compensation expense. During the first quarter of 2018, the acquisition-related compensation expense for Aecus resulted in a benefit and during the second quarter of 2018 the acquisition-related compensation expense for Jibe resulted in a benefit, both due to the amount of estimated earnout achieved. See Note 12, “Acquisitions” to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

Non-cash stock compensation expense was $1.1 million and $3.4 million in the third quarter and first nine months of 2017, respectively, as compared to $1.1 million and $3.3 million during the same period in 2016.

Acquisition related non-cash stock compensation expense in 2018 and 2017 primarily ~~relates~~related to our EPM AMS acquisition of Technolab in fiscal 2014 and the Jibe and Aecus acquisitions in 2017. See Note 12, “Acquisitions” to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

~~Total company adjusted non-GAAP gross margin was 40% and 39% of net revenue in the third quarter and first nine months of 2017, respectively, and 39% for both of the same periods in 2016.~~

Selling, General and Administrative Costs ~~(SG&A)~~(“SG&A”). SG&A ~~excluding~~primarily consists of salaries, benefits and incentive compensation for the selling, marketing, administrative and executive employees; non-cash compensation expense, ~~the~~ amortization of intangible assets, ~~and~~ acquisition related costs ~~was $14.2~~and various other overhead expenses.

SG&A costs were $15.1 million and ~~$43.8~~$44.9 million for the third quarter and first nine months of ~~2017,~~2018, respectively, as compared to ~~$14.7~~$14.2 million and ~~$43.9~~$43.8 million for the same periods in ~~2016,~~2017, respectively. These SG&A costs as a percentage of revenue before reimbursements ~~was~~were 22% ~~for both the third quarter and first nine months of 2017 and 2016.~~during all four periods.

Amortization expense was $0.6 million and ~~$1.5~~$1.8 million in the third quarter and first nine months ~~2017,~~of 2018, respectively, as compared to ~~$0.3~~$0.6 million and ~~$0.8~~$1.5 million in the same periods in ~~2016.~~2017. The amortization expense ~~in 2017~~ relates to the amortization of the intangible assets acquired in our 2014 EPM AMS acquisition of Technolab and our acquisitions of Jibe and Aecus in the second quarter of 2017, and the buyout of our partner’s joint venture interest in the CGBS Training and Certification Programs in the fourth quarter of 2017. The intangible assets relate to the customer relationship, customer backlog and non-compete agreements. The Technolab intangible assets will continue to amortize through 2018, ~~and~~ the Jibe and Aecus intangible assets will continue to amortize until ~~2022.~~2022, and CGBS Training and Certification Program intangible assets will continue to amortize until 2021.

~~Restructuring Costs.~~Acquisition-related Contingent Consideration Liability. InDuring the second quarter of 2018, the liability related to the cash portion of the Jibe acquisition contingent consideration due to the selling shareholders, which was not subject to vesting, resulted in a benefit due to the reduction of the contingent earnout liability. During the third quarter of 2018 an additional adjustment to increase the contingent earnout liability was recorded based on the most current results.

Restructuring. In 2017, we recorded restructuring costs primarily related to the transition of resources driven by ~~our~~the Company’s migration from ~~on premise~~on-premise software to cloud-based implementations, as well as the Jibe acquisition, and the rationalization of global resources as a result of the emergence of RPA related engagements from our Aecus acquisition. There were no restructuring costs related to employee severance costs recorded in the third quarter of 2017.resources.

Income Taxes. During the third quarter and first nine months of ~~2017,~~2018, we recorded ~~$2.4~~$2.3 million and ~~$4.0~~$5.4 million, respectively, of income tax expense related to ~~for~~ certain federal, foreign and state taxes which reflected an effective tax rate of 31% and 18%, respectively. ~~During~~In the third quarter and first ~~quarter~~nine months of 2017, we recorded no$2.4 million and $4.0 million of income tax expense related to certain federal, foreign and state taxes which reflected an effective tax rate of 31% and 18%, respectively. All periods were impacted as a result of the adoption of a new pronouncement relating to the accounting on the vesting of share-based awards. ~~Excluding~~

In March 2016, the ~~effect~~FASB issued guidance simplifying the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities and classification on the statements of cash flows. Under the new ~~pronouncement, the effective~~standard, all excess tax ~~rate would have been 34% for certain federal, foreign~~benefits and ~~state taxes for the nine months ended September 29, 2017. In the third quarter and first nine months of 2016, we recorded~~tax deficiencies should be recognized as income tax expense or benefit on the statements of ~~$3.4 million~~income. An excess income tax benefit arises when the tax deduction of a share-based award for income tax purposes exceeds the compensation cost recognized for financial reporting purposes and, ~~$9.3 million, which reflected an~~a tax deficiency arises when the compensation cost exceeds the tax deduction. Management adopted the guidance effective ~~tax rate of 38% in both periods for certain federal, foreign and state taxes.~~December 31, 2016.

As of September 28, 2018, and December 29, 2017, ~~and December 30, 2016,~~ we had ~~$16.2~~$13.2 million and ~~$19.7~~$17.5 million, respectively, classified in cash on the consolidated balance sheets. We currently believe that available funds (including the cash on hand and funds available for borrowing capacity under the ~~Revolver),~~revolving line of credit) and cash flows generated by operations will be sufficient to fund our working capital and capital expenditure requirements for at least the next twelve months. We may decide to raise additional funds in order to fund expansion, to develop new or further enhance products and services, to respond to competitive pressures, or to acquire complementary businesses or technologies. There is no assurance ~~however,~~ that additional financing ~~will~~would be available when needed or desired.

	Nine Months Ended						Nine Months Ended
	September 29,			September 30,			September 28,			September 29,
	2017			2016			2018			2017
Cash flows provided by operating activities	$	18,952		$	20,812		$	24,354		$	18,951
Cash flows used in investing activities	$	(13,926	)	$	(2,068	)	$	(7,273	)	$	(13,926	)
Cash flows used in financing activities	$	(8,507	)	$	(27,857	)	$	(21,433	)	$	(8,506	)

Net cash provided by operating activities was ~~$19.0~~$24.4 million during the ~~first~~ nine months of ~~2017,~~2018, as compared to ~~$20.8~~$19.0 million during the same period in ~~2016.~~2017. In 2018, the net cash provided by operating activities was primarily due to net income adjusted for non-cash items, partially offset by a decrease in accrued expenses and other accruals due to the payout of the 2017 incentive compensation, a decrease in the income tax payable accruals due to estimated federal payments, and an increase in accounts receivable and unbilled revenue. In 2017, the net cash provided by operating activities was primarily due to net income adjusted for non-cash items, offset by a decrease in accrued expenses and other ~~liabilities~~accruals due to the payout of the 2016 incentive compensation and a decrease in income tax payable and an increase in accounts receivable and unbilled revenue.In 2016, the net cash provided by operating activities was primarily due to net income adjusted for non-cash items and an increase in income taxes payable, partially offset by increased accounts receivable and unbilled revenue, decreases in accounts payable related to the timing of vendor payments and decreases in accrued income taxes resulting from the 2016 income tax payment.

Net cash used in investing activities was ~~$13.9~~$7.3 million and ~~$2.1~~$13.9 million during the first nine months of 2018 and 2017, ~~and 2016,~~ respectively. ~~Net~~During 2018, cash flows used in investing activities ~~during~~included investments relating to investments in internal corporate systems, the ~~first nine months~~global rollout of new laptops which occurs every three to four years, and our investments relating to the development of our Quantum Leap benchmark technology. During 2017, cash flows used in investing activities primarily related to the ~~cash~~closing consideration paid for the Jibe and Aecus ~~acquisitions.~~acquisitions, for investments in internal corporate systems and investments relating to the development our Quantum Leap benchmark technology. Additionally during 2017, cash flows used in investing activities also included investments relating to the development of the ~~Hackett Academy and our~~Quantum Leap benchmark technology, as well as ~~further investments in~~ internal corporate ~~systems. During 2016, investing activities related to capital expenditures on the continued development of our benchmark technology.~~ services.

Net cash used in financing activities was $21.4 million and $8.5 million during 2018 and ~~$27.9~~2017, respectively. The usage of cash in 2018 was primarily related to the dividend payment of $10.0 million, ~~during 2017 and 2016, respectively.~~the net paydown of the revolving line of credit of $7.5 million, the repurchase of $4.3 million of Company common stock. The usage of cash in 2017 was primarily related to the repurchase of ~~$11.3~~$15.6 million of ~~Company~~the Company’s common stock, ~~the cost of share purchases to satisfy employee net vesting requirements of $4.3 million,~~ the payment of the ~~second 2016 semi-annual~~ dividend ~~and first 2017 semi-annual dividend totaling~~of $8.7 ~~million. These uses of cash were~~million, partially offset by the net $15.0 million drawdown on the ~~Revolver~~revolving line of ~~$15.0~~credit.

As of September 28, 2018, we had $11.5 million ~~(as defined below).~~ ~~The usage of cash in 2016 was primarily related to the cost of the repurchase of $30.1 million of Company common stock~~outstanding under the Company’s share repurchase program, $3.9 million to satisfy employee net vesting-related tax requirements, and $7.2 million was utilized to payout dividends. These uses of cash were partially offset by the net borrowings of $13.0 million.

~~The Company is party to a credit agreement with Bank of America, N.A, dated as of May 9, 2016, (the “Credit Agreement”). The Credit Agreement provides for a~~ revolving line of credit, ~~(the “Revolver”)~~ with ~~a total borrowing capacity of $45.0 million. As of September 29, 2017, we had~~ a remaining capacity ~~under our Revolver~~ of ~~$23.0~~$33.5 million. See Note 6, “Credit Facility,” to our consolidated financial statements included in this Quarterly Report on Form 10-Q for more information.

For a discussion of recently issued accounting standards, see Note 1, “Basis of Presentation and General Information,” to our consolidated financial statements included in this Quarterly Report on Form 10-Q and Note 1, “Basis of Presentation and General Information,” to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December ~~30, 2016.~~29, 2017.

As of September ~~29, 2017,~~28, 2018, our exposure to market risk related primarily to changes in interest rates and foreign currency exchange rate risks.

Our exposure to market risk for changes in interest rates relates primarily to the Revolver, which is subject to variable interest rates. The interest rates per annum applicable to loans under the Revolver will be, at our option, equal to either a base rate or a LIBOR 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 Revolver ~~would~~did not have had a material impact on our results of operations for the quarter and nine months ended September ~~29, 2017.~~28, 2018.

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.

Under the supervision and with the participation of our management, including our ~~Principal~~Chief Executive Officer and ~~Principal~~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 ~~Principal~~Chief Executive Officer and ~~Principal~~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.

~~There were no~~Beginning December 30, 2017, we implemented ASC 606, “Revenue from Contracts with Customers.” Although the new revenue standard had an immaterial impact on our ongoing net income, we did implement changes to our processes related to revenue recognition and the control activities within them. These included the development of new policies based on the five-step model provided 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.~~new revenue standard, new training, ongoing contract review requirements, and gathering of information provided for disclosures.

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, 2016.~~29, 2017.

During the quarter ended September ~~29, 2017,~~28, 2018, the Company ~~repurchased 182 thousand~~did not repurchase any shares of its common stock ~~at an average price of $13.73 per share, for a total cost of $2.5 million,~~ under the repurchase plan approved by the Company's Board of Directors. As of September ~~29, 2017,~~28, 2018, the Company had ~~$3.1~~$7.2 million of authorization remaining under the repurchase plan.

*During the third quarter of 2017, the Company’s Board of Directors approved an additional $5.0 million increase to the repurchase plan.

Shares repurchased during the quarter and nine months ended September ~~29, 2017~~28, 2018 under the repurchase plan approved by the Company's Board of Directors do not include 688 thousand shares and 191 thousand shares, respectively, for a cost of ~~$1.0~~$0.1 million and $3.3 million that the Company bought back to satisfy employee net vesting obligations.

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.

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)

Large Accelerated Filer	☐	Accelerated Filer	☒

Non-Accelerated Filer	☐ ~~(Do not check if a smaller reporting company)~~	Smaller Reporting Company	☐

		Emerging Growth Company	☐

PART I - FINANCIAL INFORMATION		Page

Item 1.	Financial Statements

	Consolidated Balance Sheets as of September ~~29, 2017~~28, 2018 and December ~~30, 2016~~29, 2017 (unaudited)	3

	Consolidated Statements of Operations for the Quarters and Nine Months Ended September ~~29, 2017~~28, 2018 and September ~~30, 2016~~29, 2017 (unaudited)	4

	Consolidated Statements of Comprehensive Income for the Quarters and Nine Months Ended September ~~29, 2017~~28, 2018 and September ~~30, 2016~~29, 2017 (unaudited)	5

	Consolidated Statements of Cash Flows for the Nine Months Ended September ~~29, 2017~~28, 2018 and September ~~30, 2016~~29, 2017 (unaudited)	6

	Notes to Consolidated Financial Statements (unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2122

Item 4.	Controls and Procedures	2122

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	22

Item 1A.	Risk Factors	22

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2223

Item 6.	Exhibits	2324

SIGNATURES		2425

	~~Severance and Other~~
	~~Employee Costs~~
~~Accrual balance at December 30, 2016~~	$	—
~~Expenses~~		~~1,293~~
~~Payments~~		~~1,293~~
~~Accrual balance at September 29, 2017~~	$	—

	Amount		Useful Life
Category	(in thousands)		(in years)
Customer Base	$	140	5
Customer Backlog		325	2
Non-Compete		466	5
	$	931

					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, 2017		—	$	—		—	$	630,006
July 1, 2017 to July 28, 2017		—	$	—		—	$	630,006
July 29, 2017 to August 25, 2017		166,516	$	13.73		166,516	$	3,343,305	*
August 26, 2017 to September 29, 2017		15,000	$	13.70		15,000	$	3,137,863
		181,516	$	13.73		181,516

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		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase

101.DEF		XBRL Taxonomy Extension Definition Linkbase

101.LAB		XBRL Taxonomy Extension Label Linkbase

101.PRE		XBRL Taxonomy Extension Presentation Linkbase

	The Hackett Group, Inc.

Date: November ~~8, 2017~~7, 2018	/s/ Robert A. Ramirez
	Robert A. Ramirez
	Executive Vice President, Finance and Chief Financial Officer