Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐

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

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 ☒

As of ~~July~~October 31, 2019, there were ~~29,856,247~~29,896,607 shares of common stock outstanding.

	June 28,			December 28,			September 27,			December 28,
	2019			2018			2019			2018
ASSETS
Current assets:
Cash	$	16,682		$	13,808		$	16,423		$	13,808
Accounts receivable and unbilled revenue, net of allowance of $992 and $1,441 at June 28, 2019 and December 28, 2018, respectively		54,547			54,807
Accounts receivable and contract assets, net of allowance of $710 and $1,441 at September 27, 2019 and December 28, 2018, respectively								57,890			54,807
Prepaid expenses and other current assets		4,086			4,339			3,664			4,339
Assets related to discontinued operations		—			137			—			137
Total current assets		75,315			73,091			77,977			73,091

Property and equipment, net		21,112			19,750			21,080			19,750
Other assets		3,116			3,704			2,801			3,704
Goodwill, net		84,213			84,207			83,782			84,207
Operating lease right-of-use assets		7,613			—			8,293			—
Total assets	$	191,369		$	180,752		$	193,933		$	180,752

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,767		$	7,429		$	5,217		$	7,429
Accrued expenses and other liabilities		33,114			34,498			31,450			34,498
Operating lease liabilities		2,376			—			2,678			—
Liabilities related to discontinued operations		31			2,300			22			2,300
Total current liabilities		42,288			44,227			39,367			44,227
Long-term deferred tax liability, net		8,143			6,435			7,704			6,435
Long-term debt		4,500			6,500			2,500			6,500
Operating lease liabilities		5,237			—			5,615			—
Total liabilities		60,168			57,162			55,186			57,162

Commitments and contingencies

Shareholders’ equity:
Preferred stock, $0.001 par value, 1,250,000 shares authorized; none issued and outstanding		—			—			—			—
Common stock, $0.001 par value, 125,000,000 shares authorized 57,129,647 and 56,607,622 shares issued at June 28, 2019 and December 28, 2018, respectively		58			57
Common stock, $0.001 par value, 125,000,000 shares authorized 57,137,480 and 56,607,622 shares issued at September 27, 2019 and December 28, 2018, respectively								58			57
Additional paid-in capital		299,342			296,955			301,035			296,955
Treasury stock, at cost, 27,280,200 and 27,086,782 shares June 28, 2019 and December 28, 2018, respectively		(139,660	)		(136,604	)
Treasury stock, at cost, 27,280,200 and 27,086,782 shares September 27, 2019 and December 28, 2018, respectively								(139,660	)		(136,604	)
Accumulated deficit		(17,130	)		(25,424	)		(10,221	)		(25,424	)
Accumulated other comprehensive loss		(11,409	)		(11,394	)		(12,465	)		(11,394	)
Total shareholders' equity		131,201			123,590			138,747			123,590
Total liabilities and shareholders' equity	$	191,369		$	180,752		$	193,933		$	180,752

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

	Quarter Ended						Nine Months Ended
	September 27,			September 28,			September 27,			September 28,
	2019			2018			2019			2018
Revenue:
Revenue before reimbursements	$	66,755		$	68,183		$	197,101			202,928
Reimbursements		5,935			5,535			16,265			16,424
Total revenue		72,690			73,718			213,366			219,352
Costs and expenses:
Cost of service:
Personnel costs before reimbursable expenses		41,183			41,123			120,649			123,086
Stock compensation expense		1,155			1,646			3,465			4,367
Reimbursable expenses		5,935			5,535			16,265			16,424
Total cost of service		48,273			48,304			140,379			143,877
Selling, general and administrative costs		14,353			15,507			44,107			45,953
Stock compensation expense		776			850			2,268			2,495
Change in acquisition-related contingent consideration liability		(108	)		803			(1,133	)		(3,750	)
Total costs and operating expenses		63,294			65,464			185,621			188,575
Income from operations		9,396			8,254			27,745			30,777

Other expense:
Interest expense		(62	)		(158	)		(268	)		(515	)
Income from operations before income taxes		9,334			8,096			27,477			30,262
Income tax expense		2,427			2,425			6,481			5,618
Income from continuing operations		6,907			5,671			20,996			24,644
Income (loss) from discontinued operations		2			(514	)		(4	)		(599	)
Net income	$	6,909		$	5,157		$	20,992		$	24,045

Basic net income per common share:
Income per common share from continuing operations	$	0.23		$	0.19		$	0.70		$	0.84
Income (loss) per common share from discontinued operations		0.00			(0.02	)		(0.00	)		(0.02	)
Basic net income per common share	$	0.23		$	0.17		$	0.70		$	0.82

Diluted net income per common share:
Income per common share from continuing operations	$	0.21		$	0.18		$	0.65		$	0.77
Income (loss) per common share from discontinued operations		0.00			(0.02	)		(0.00	)		(0.02	)
Diluted net income per common share	$	0.21		$	0.16		$	0.65		$	0.75

Weighted average common shares outstanding:
Basic		29,876			29,478			29,794			29,332
Diluted		32,571			32,593			32,413			32,214

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

Quarter Ended

Six Months Ended

June 28,

June 29,

June 28,

June 29,

2019

2018

2019

2018

Revenue:

Revenue before reimbursements

$
67,976

$
68,706

$
130,346

134,745

Reimbursements

5,545

5,821

10,330

10,889

Total revenue

73,521

74,527

140,676

145,634

Costs and expenses:

Cost of service:

Personnel costs before reimbursable expenses

40,661

41,944

79,466

81,963

Stock compensation expense

1,311

898

2,310

2,721

Reimbursable expenses

5,545

5,821

10,330

10,889

Total cost of service

47,517

48,663

92,106

95,573

Selling, general and administrative costs

15,413

15,370

29,754

30,446

Stock compensation expense

787

804

1,492

1,645

Acquisition-related contingent consideration liability

45

(4,553
)

(1,025
)

(4,553
)
Total costs and operating expenses

63,762

60,284

122,327

123,111

Income from operations

9,759

14,243

18,349

22,523

Other expense:

Interest expense

(105
)

(178
)

(206
)

(357
)
Income from operations before income taxes

9,654

14,065

18,143

22,166

Income tax expense

2,614

2,393

4,054

3,193

Income from continuing operations

7,040

11,672

14,089

18,973

Loss from discontinued operations

(51
)

(151
)

(6
)

(85
)
Net income

$
6,989

$
11,521

$
14,083

$
18,888

Basic net income per common share:

Income per common share from continuing operations

$
0.23

$
0.40

$
0.47

$
0.65

Loss per common share from discontinued operations

(0.00
)

(0.01
)

(0.00
)

(0.00
)
Net income per common share

$
0.23

$
0.39

$
0.47

$
0.65

Diluted net income per common share:

Income per common share from continuing operations

$
0.22

$
0.36

$
0.44

$
0.59

Loss per common share from discontinued operations

(0.00
)

(0.00
)

(0.00
)

(0.00
)
Net income per common share

$
0.22

$
0.36

$
0.44

$
0.59

Weighted average common shares outstanding:

Basic

29,823

29,430

29,753

29,260

Diluted

32,374

32,235

32,334

32,025

	Nine Months Ended
	September 27,			September 28,
	2019			2018
Cash flows from operating activities:
Net income	$	20,992		$	24,045
Less loss from discontinued operations		(4	)		(599	)
Net income from continuing operations		20,996			24,644
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		2,320			1,857
Amortization expense		789			1,789
Amortization of debt issuance costs		68			68
Non-cash stock compensation expense		5,733			6,932
Provision for doubtful accounts		719			313
Gain on foreign currency translation		(384	)		(425	)
Release of valuation allowance		1,277			1,565
Changes in assets and liabilities:
Increase in accounts receivable and contract assets		(3,904	)		(1,612	)
(Increase) decrease in prepaid expenses and other assets		803			(1,352	)
Decrease in accounts payable		(2,213	)		(3,317	)
Decrease in accrued expenses and other liabilities		(1,463	)		(3,033	)
Increase (decrease) in income tax payable		1,803			(2,476	)
Net cash provided by operating activities		26,540			24,354
Cash flows from investing activities:
Purchases of property and equipment		(3,719	)		(7,273	)
Net cash used in investing activities		(3,719	)		(7,273	)
Cash flows from financing activities:
Proceeds from issuance of common stock		418			387
Proceeds from borrowings		1,000			5,000
Repayment of borrowings		(5,000	)		(12,500	)
Dividends paid		(11,196	)		(10,048	)
Repurchase of common stock		(5,531	)		(4,272	)
Net cash used in financing activities		(20,309	)		(21,433	)
Effect of exchange rate on cash		103			17
Net increase (decrease) in cash and cash equivalents		2,615			(4,335	)
Cash at beginning of period		13,808			17,512
Cash at end of period	$	16,423		$	13,177
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	3,410		$	5,406
Cash paid for interest	$	227		$	450

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

Quarter Ended

Six Months Ended

June 28,

June 29,

June 28,

June 29,

2019

2018

2019

2018

Net income

$
6,989

$
11,521

$
14,083

$
18,888

Foreign currency translation adjustment

(672
)

(2,346
)

(15
)

(1,194
)
Total comprehensive income

$
6,317

$
9,175

$
14,068

$
17,694

																	Accumulated
					Additional												Other			Total
	Common Stock				Paid in			Treasury Stock						Accumulated			Comprehensive			Shareholders'
	Shares		Amount		Capital			Shares			Amount			Deficit			Loss			Equity
Balance at December 28, 2018		56,615	$	57	$	296,955			(27,086	)	$	(136,604	)	$	(25,424	)	$	(11,394	)	$	123,590
Issuance of common stock		394		1		(2,373	)		—			—			—			—			(2,372	)
Treasury stock purchased		—		—		—			(102	)		(1,616	)		—			—			(1,616	)
Amortization of restricted stock units and common stock subject to vesting requirements		—		—		2,394			—			—			—			—			2,394
Net income		—		—		—			—			—			7,094			—			7,094
Foreign currency translation		—		—		—			—			—			—			657			657
Balance at March 29, 2019		57,009	$	58	$	296,976			(27,188	)	$	(138,220	)	$	(18,330	)	$	(10,737	)	$	129,747
Issuance of common stock		121		—		405			—			—			—			—			405
Treasury stock purchased		—		—		—			(92	)		(1,440	)		—			—			(1,440	)
Amortization of restricted stock units and common stock subject to vesting requirements		—		—		1,961			—			—			—			—			1,961
Dividends declared		—		—		—			—			—			(5,789	)		—			(5,789	)
Net income		—		—		—			—			—			6,989			—			6,989
Foreign currency translation		—		—		—			—			—			—			(672	)		(672	)
Balance at June 28, 2019		57,130	$	58	$	299,342			(27,280	)	$	(139,660	)	$	(17,130	)	$	(11,409	)	$	131,201
Issuance of common stock		7		—		(88	)		—			—			—			—			(88	)
Amortization of restricted stock units and common stock subject to vesting requirements		—		—		1,781			—			—			—			—			1,781
Net income		—		—		—			—			—			6,909			—			6,909
Foreign currency translation		—		—		—			—			—			—			(1,056	)		(1,056	)
Balance at September 27, 2019		57,137	$	58	$	301,035			(27,280	)	$	(139,660	)	$	(10,221	)	$	(12,465	)	$	138,747

					Additional												Other			Total
	Common Stock				Paid in			Treasury Stock						Accumulated			Comprehensive			Shareholders'
	Shares		Amount		Capital			Shares			Amount			Deficit			Loss			Equity
Balance at December 29, 2017		55,745	$	56	$	288,297			(26,945	)	$	(134,054	)	$	(38,515	)	$	(8,509	)	$	107,275
Issuance of common stock		721		1		(3,004	)		—			—			—			—			(3,003	)
Treasury stock purchased		—		—		1,346			(126	)		(2,310	)		—			—			(964	)
Amortization of restricted stock units and common stock subject to vesting requirements		—		—		3,557			—			—			—			—			3,557
Net income		—		—		—			—			—			7,367			—			7,367
Foreign currency translation		—		—		—			—			—			—			1,152			1,152
Balance at March 30, 2018		56,466	$	57	$	290,196			(27,071	)	$	(136,364	)	$	(31,148	)	$	(7,357	)	$	115,384
Issuance of common stock		56		—		205			—			—			—			—			205
Amortization of restricted stock units and common stock subject to vesting requirements		—		—		2,264			—			—			—			—			2,264
Dividends declared		—		—		—			—			—			(5,396	)		—			(5,396	)
Net income		—		—		—			—			—			11,521			—			11,521
Foreign currency translation		—		—		—			—			—			—			(2,346	)		(2,346	)
Balance at June 29, 2018		56,522	$	57	$	292,665			(27,071	)	$	(136,364	)	$	(25,023	)	$	(9,703	)	$	121,632
Issuance of common stock		12		—		(123	)		—			—			—			—			(123	)
Amortization of restricted stock units and common stock subject to vesting requirements		—		—		2,138			—			—			—			—			2,138
Net income		—		—		—			—			—			5,157			—			5,157
Foreign currency translation		—		—		—			—			—			—			(432	)		(432	)
Balance at September 28, 2018		56,534	$	57	$	294,680			(27,071	)	$	(136,364	)	$	(19,866	)	$	(10,135	)	$	128,372

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

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

Accumulated

Additional

Other

Total

Common Stock

Paid in

Treasury Stock

Accumulated

Comprehensive

Shareholders'

Shares

Amount

Capital

Shares

Amount

Deficit

Loss

Equity

Balance at December 28, 2018

56,615

$
57

$
296,955

(27,086
)

$
(136,604
)

$
(25,424
)

$
(11,394
)

$
123,590

Issuance of common stock

394

1

(2,373
)

—

—

—

—

(2,372
)
Treasury stock purchased

—

—

—

(102
)

(1,616
)

—

—

(1,616
)
Amortization of restricted stock
units and common stock subject to

vesting requirements

—

—

2,394

—

—

—

—

2,394

Dividends declared

—

—

—

—

—

—

—

—

Net income

—

—

—

—

—

7,094

—

7,094

Foreign currency translation

—

—

—

—

—

—

657

657

Balance at March 29, 2019

57,009

$
58

$
296,976

(27,188
)

$
(138,220
)

$
(18,330
)

$
(10,737
)

$
129,747

Issuance of common stock

121

—

405

—

—

—

—

405

Treasury stock purchased

—

—

—

(92
)

(1,440
)

—

—

(1,440
)
Amortization of restricted stock
units and common stock subject to

vesting requirements

—

—

1,961

—

—

—

—

1,961

Dividends declared

—

—

—

—

—

(5,789
)

—

(5,789
)
Net income

—

—

—

—

—

6,989

—

6,989

Foreign currency translation

—

—

—

—

—

—

(672
)

(672
)
Balance at June 28, 2019

57,130

$
58

$
299,342

(27,280
)

$
(139,660
)

$
(17,130
)

$
(11,409
)

$
131,201

Accumulated

Additional

Other

Total

Common Stock

Paid in

Treasury Stock

Accumulated

Comprehensive

Shareholders'

Shares

Amount

Capital

Shares

Amount

Deficit

Loss

Equity

Balance at December 29, 2017

55,745

$
56

$
288,297

(26,945
)

$
(134,054
)

$
(38,515
)

$
(8,509
)

$
107,275

Issuance of common stock

721

1

(3,004
)

—

—

—

—

(3,003
)
Treasury stock purchased

—

—

1,346

(126
)

(2,310
)

—

—

(964
)
Amortization of restricted stock
units and common stock subject to

vesting requirements

—

—

3,557

—

—

—

—

3,557

Dividends declared

—

—

—

—

—

—

—

—

Net income

—

—

—

—

—

7,367

—

7,367

Foreign currency translation

—

—

—

—

—

—

1,152

1,152

Balance at March 30, 2018

56,466

$
57

$
290,196

(27,071
)

$
(136,364
)

$
(31,148
)

$
(7,357
)

$
115,384

Issuance of common stock

56

—

205

—

—

—

—

205

Treasury stock purchased

—

—

—

—

—

—

—

—

Amortization of restricted stock
units and common stock subject to

vesting requirements

—

—

2,264

—

—

—

—

2,264

Dividends declared

—

—

—

—

—

(5,396
)

—

(5,396
)
Net income

—

—

—

—

—

11,521

—

11,521

Foreign currency translation

—

—

—

—

—

—

(2,346
)

(2,346
)
Balance at June 29, 2018

56,522

$
57

$
292,665

(27,071
)

$
(136,364
)

$
(25,023
)

$
(9,703
)

$
121,632

~~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 28, 2018, included in the Annual Report on Form 10-K filed by the Company with the SEC on March 8, 2019. The consolidated results of operations for the quarter and ~~six~~nine months ended ~~June 28,~~September 27, 2019, 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, 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.

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.

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.

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.

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 typically 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~~ability 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~~contract liabilities 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~~the Company is 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~~contract liabilities and recognized over future periods as earned in accordance with the applicable engagement agreement. See Note 3 for the accounts receivable and ~~unbilled revenue~~contract asset balances and see Note 4 for the ~~deferred revenue~~contract liabilities balances. During the quarter and ~~six~~nine months ended ~~June 28,~~September 27, 2019, the Company recognized ~~$4.3~~$3.8 million and ~~$8.3~~$12.0 million, respectively, of revenue as a result of changes in ~~deferred revenue~~contract liabilities liability balance, as compared to ~~$5.0~~$4.2 million and ~~$9.8~~$14.0 million for the quarter and ~~six~~nine months ended ~~June 29,~~September 28, 2018, respectively.

The following table reflects the Company’s disaggregation of total revenue including reimbursable expenses for the quarters and ~~six~~nine months ended ~~June 28,~~September 27, 2019 and ~~June 29,~~September 28, 2018:

	Quarter Ended				Six Months Ended				Quarter Ended				Nine Months Ended
	June 28,		June 29,		June 28,		June 29,		September 27,		September 28,		September 27,		September 28,
	2019		2018		2019		2018		2019		2018		2019		2018
Consulting	$	66,908	$	67,962	$	128,739	$	133,289	$	65,971	$	67,614	$	194,710	$	200,903
Software License Sales		1,068		744		1,607		1,456		784		569		2,391		2,025
Revenue before reimbursements from continuing operations	$	67,976	$	68,706	$	130,346	$	134,745	$	66,755	$	68,183	$	197,101	$	202,928

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 28, 2018, and December 29, 2017, the Company had $1.2 million and $1.4 million, respectively, of deferred commissions, of which ~~$0.3~~$0.4 million and ~~$0.5~~$0.9 million was amortized during the quarter and ~~six~~nine months of ~~each respective year.~~2019 and $0.1 million and $0.7 million for the same periods in 2018. No impairment loss was recognized relating to the capitalization of deferred ~~commission.~~commission during either years.

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 European REL Working Capital group’s sales had declined over the past several years as European countries have experienced continued economic recoveries and improved cash balances. Companies are holding high cash reserves which drove working capital project sales of this group down across all of Europe. The REL practice had a limited pipeline of potential client engagements; therefore, the Company made the strategic decision to exit the business at the end of fiscal year 2018.

The following table includes the carrying amounts of the major classes of assets and liabilities presented in discontinued operations in our consolidated balance sheet:

		June 28,		December 28,			September 27,		December 28,
		2019		2018			2019		2018
ASSETS
Accounts receivable and unbilled revenue (no allowance as of June 28, 2019 and December 28, 2018)		$	—	$	137
Accounts receivable and contract assets (no allowance as of September 27, 2019 and December 28, 2018)							$	—	$	137
Assets related to discontinued operations		$	-	$	137		$	—	$	137
LIABILITIES
Accrued expenses and other liabilities (1)		$	31	$	2,300		$	22	$	2,300
Liabilities related to discontinued operations		$	31	$	2,300		$	22	$	2,300

(1) The balance at December 28, 2018, primarily represents the accrued severance related to terminated employees.	(1) The balance at December 28, 2018, primarily represents the accrued severance related to terminated employees.					(1) The balance at December 28, 2018, primarily represents the accrued severance related to terminated employees.

The following table presents the gain and loss results for the Company’s discontinued operations:

	Quarter Ended						Six Months Ended						Quarter Ended						Nine Months Ended
	June 28,			June 29,			June 28,			June 29,			September 27,			September 28,			September 27,			September 28,
	2019			2018			2019			2018			2019			2018			2019			2018
Revenue:
Revenue before reimbursements	$	(17	)	$	908		$	75		$	2,344		$	—		$	60		$	75		$	2,404
Reimbursements		—			214			17			404			—			62			17			466
Total revenue		(17	)		1,122			92			2,748			—			122			92			2,870
Costs and expenses:
Cost of service:
Personnel costs before reimbursable expenses		(15	)		870			24			1,907			2			503			26			2,410
Reimbursable expenses		—			214			17			404			—			62			17			466
Total cost of service		(15	)		1,084			41			2,311			2			565			43			2,876
Selling, general and administrative costs		61			243			56			602			(4	)		183			52			785
Total costs and operating expenses		46			1,327			97			2,913			(2	)		748			95			3,661
Loss from discontinued operations before income taxes		(63	)		(205	)		(5	)		(165	)
Income (loss) from discontinued operations before income taxes														2			(626	)		(3	)		(791	)
Income tax expense (benefit)		(12	)		(54	)		1			(80	)		—			(112	)		1			(192	)
Loss from discontinued operations	$	(51	)	$	(151	)	$	(6	)	$	(85	)
Income (loss) from discontinued operations													$	2		$	(514	)	$	(4	)	$	(599	)

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable and ~~unbilled revenue,~~contract assets, accounts payable, accrued expenses and other liabilities and debt. As of ~~June 28,~~September 27, 2019 and December 28, 2018, 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 February 2016, the FASB issued guidance on leases which supersedes the current lease guidance. The core principle establishes a right-of-use (ROU) model ~~(ROU)~~ that requires lessees to recognize the assets and liabilities that arise from nearly all leases on the balance sheet. Accounting applied by lessees has remain largely consistent with previous guidance. The Company adopted the amended guidance effective December 29, 2018, including interim periods within this fiscal year, using the effective date as the date of initial application. Consequently, on adoption, the Company recognized additional operating liabilities of approximately $9.0 million, with corresponding ROU assets of approximately the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. The amended guidance did not have a material impact on the Company’s consolidated statements of comprehensive income or its consolidated statements of cash flows. See Note 5 for additional information.

In July 2018, the FASB issued ASU 2018-09, which affects a wide variety of ~~Topics~~topics in the Codification and applies to all reporting entities within the scope of the affected accounting guidance. The amendments in the ASU represent changes that clarify, correct errors in, or make minor improvements to the Codification. Ultimately, the amendments make the Codification easier to understand and apply by eliminating inconsistencies and providing clarifications. Some of the amendments in this ASU do not require transition guidance and are effective upon issuance of the ASU, while many of the amendments have transition guidance with effective dates for annual periods beginning after December 15, 2018. The adoption of the amendments in this ASU did not have a material impact on the Company’s consolidated financial statements and related disclosures.

In January 2017, the FASB issued ASU 2017-04, which eliminates Step 2 from the goodwill impairment test. For public companies, this update will be effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted for interim and annual goodwill impairment test with a measurement date after January 1, 2017. The Company does not expect the guidance to have a material impact on the Company’s consolidated financial statements.

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.

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				Six Months Ended				Quarter Ended				Nine Months Ended
	June 28,		June 29,		June 28,		June 29,		September 27,		September 28,		September 27,		September 28,
	2019		2018		2019		2018		2019		2018		2019		2018
Basic weighted average common shares outstanding		29,822,917		29,429,925		29,752,903		29,259,641		29,876,468		29,478,243		29,794,091		29,332,508

Effect of dilutive securities:
Unvested restricted stock units and common stock subject to vesting requirements issued to employees and non-employees		222,438		469,702		230,742		420,020		350,842		684,045		270,776		507,508
Common stock issuable upon the exercise of stock options and SARs		2,328,797		2,335,458		2,350,656		2,345,288
Common stock issuable upon the exercise of stock options and share appreciation rights (SARs)										2,343,432		2,431,071		2,348,248		2,374,403
Dilutive weighted average common shares outstanding		32,374,152		32,235,085		32,334,301		32,024,949		32,570,742		32,593,359		32,413,115		32,214,419

Approximately 926 thousand shares and 1339 thousand shares of common stock equivalents were excluded from the computations of diluted net income per common share for the quarter and ~~six~~nine months ended ~~June 28,~~September 27, 2019, respectively, as compared to ~~843~~1 thousand shares and ~~864~~2 thousand shares for the quarter and ~~six~~nine months ended ~~June 29,~~September 28, 2018, respectively, as their inclusion would have had an anti-dilutive effect on diluted net income per common share.

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

	June 28,			December 28,			September 27,			December 28,
	2019			2018			2019			2018
Accounts receivable	$	32,686		$	35,794		$	41,208		$	35,794
Unbilled revenue		22,853			20,454
Contract assets								17,392			20,454
Allowance for doubtful accounts		(992	)		(1,441	)		(710	)		(1,441	)
Accounts receivable and unbilled revenue, net	$	54,547		$	54,807
Accounts receivable and contract assets, net							$	57,890		$	54,807

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

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

	June 28,		December 28,		September 27,		December 28,
	2019		2018		2019		2018
Accrued compensation and benefits	$	7,609	$	5,012	$	9,392	$	5,012
Accrued bonuses		950		5,064		2,063		5,064
Accrued dividend payable		5,788		5,407		—		5,407
Acquisition earnout accruals		1,251		2,559		1,112		2,559
Deferred revenue		10,498		8,259
Contract liabilities						9,827		8,259
Accrued sales, use, franchise and VAT tax		2,222		3,077		2,956		3,077
Non-cash stock compensation accrual		538		872		689		872
Income tax payable		2,535		1,769		3,591		1,769
Other accrued expenses		1,723		2,479		1,820		2,479
Total accrued expenses and other liabilities	$	33,114	$	34,498	$	31,450	$	34,498

As described in Note 1 “Recently Issued Accounting Standards”, effective December 29, 2018, the Company adopted the new lease accounting standard. The Company has operating leases for office space and, to a much lesser extent, operating leases for equipment. The Company’s office leases are between terms of 1 and 10 years. Rents usually increase annually in accordance with defined rent steps or are based on current year consumer price index adjustments. Some of the lease agreements contain one or more of the following provisions or clauses: tenant allowances, rent holidays, lease premiums, and rent escalation clauses. There are typically no purchase options, residual value guarantees or restrictive covenants. When renewal options exist, the Company generally does not deem them to be reasonably certain to be exercised, and therefore the amounts are not recognized as part of our lease liability nor our right of use asset.

The components of lease expense during the three and ~~six~~nine months ended ~~June 28,~~September 27, 2019, were as follows (in thousands):

	Three Months		Six Months		Three Months		Nine Months
Operating lease cost	$	708	$	1,398	$	692	$	2,091

Total net lease costs	$	708	$	1,398	$	692	$	2,091

The weighted average remaining lease term is ~~5.3~~5.1 years. Assuming the Company exercises its opt-out option in year 5 for ~~the~~its London office lease, the weighted average remaining lease term would be ~~3.2~~3.3 years. The weighted average discount rate utilized is 4%. The discount rates applied to each lease, reflects the Company’s estimated incremental borrowing rate. This includes an assessment of the Company’s credit rating to determine the rate that the Company would have to pay to borrow, on a collateralized basis for a similar term, an amount equal to our lease payments in a similar economic environment. For the quarter and ~~six~~nine months ended ~~June 28,~~September 27, 2019, the Company paid $0.7 million and ~~$1.4~~$2.0 million, respectively, from operating cash flows for operating leases.

Future minimum lease payments under non-cancellable operating leases as of ~~June 28,~~September 27, 2019, were as follows (in thousands):

2019 (excluding the six months ended June 28, 2019	$	1,259
2019 (excluding the nine months ended September 27, 2019)				$	688
2020		2,057			2,362
2021		1,613			1,931
2022		1,371			1,676
2023		492			733
2024 and thereafter		1,705			1,831
Total lease payments		8,497			9,221
Less imputed interest		(884	)		(928	)
Total	$	7,613		$	8,293

As of ~~June 28,~~September 27, 2019, the Company does not have any additional operating leases that have not yet commenced that create significant rights and obligations for the Company.

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”, and together with the Revolver, the “Credit Facility”). 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 ~~six~~nine months ended ~~June~~September 28, 2019, the Company paid down ~~$3.0~~$2.0 million and a net ~~$2.0~~$4.0 million under the Revolver, respectively, which had a balance of ~~$4.5~~$2.5 million outstanding as of ~~June 28,~~September 27, 2019. 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 ~~June 28,~~September 27, 2019, the applicable margin percentage was ~~1.50%~~1.25% 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 ~~June 28,~~September 27, 2019, was ~~3.9%~~3.3%. Subsequent to September 27, 2019, the Company paid off the remaining $2.5 million balance outstanding under the Revolver.

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.~~Agreement. As of ~~June 28,~~September 27, 2019, the Company was in compliance with all covenants.

During the ~~six~~nine months ended ~~June 28,~~September 27, 2019, the Company issued ~~413,636~~430,412 restricted stock units at a weighted average grant-date fair value of ~~$18.53~~$18.45 per share. As of ~~June 28,~~September 27, 2019, the Company had ~~985,258~~948,144 restricted stock units outstanding at a weighted average grant-date fair value of ~~$17.38~~$17.44 per share. As of ~~June 28,~~September 27, 2019, ~~$12.4~~$10.5 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 ~~2.4~~2.3 years.

During the ~~quarter~~nine months ended ~~June 28,~~September 27, 2019, ~~21,276~~30,773 shares of common stock subject to vesting requirements were issued at a weighted average grant-date fair value of ~~$15.29~~$15.57 per share. As of ~~June 28,~~September 27, 2019, the Company had ~~109,293~~96,639 shares of common stock subject to vesting requirements outstanding at a weighted average grant-date fair value of ~~$18.94~~$19.46 per share. As of ~~June 28,~~September 27, 2019, $1.8 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 ~~2.0~~1.6 years.

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

As of ~~June 28,~~September 27, 2019, the Company had 2.9 million SARs outstanding with an exercise price of $4.00 per share and an expiration date of February 2022.

Under the Company’s share repurchase plan, the Company may 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 ~~three months and six~~nine months ended ~~June 28,~~September 27, 2019, the Company repurchased ~~92 thousand and~~ 193 thousand shares ~~respectively,~~ of its common stock at an average price of ~~$15.59 and~~ $15.80, ~~per share, respectively, for~~or a total cost of ~~$1.4 million and~~ $3.1 ~~million, respectively.~~million. No shares were repurchased during the three months ended September 27, 2019. As of ~~June 28,~~September 27, 2019, the Company had a total authorization remaining of $3.9 million under ~~its~~the repurchase plan with a total authorization of $142.2 million.

During the ~~six~~nine months ended ~~June 29,~~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.

The shares repurchased under the share repurchase plan during the quarter and ~~six~~nine months ended ~~June 28,~~September 27, 2019, do not include ~~825~~5 thousand shares and ~~124~~129 thousand shares, respectively, which the Company bought back to satisfy employee net vesting obligations for a cost of ~~$14~~$88 thousand and ~~$2.4~~$2.5 million, respectively. During the quarter and ~~six~~nine months ended ~~June 29,~~September 28, 2018, the Company bought back 118 thousand and ~~184~~191 thousand shares, respectively, at a cost of ~~$0.2~~$0.1 million and ~~$3.1~~$3.3 million, respectively, to satisfy employee net vesting obligations.

In early 2019, the Company increased ~~the~~its 2019 annual dividend from $0.34 per share to $0.36 per share to be paid on a semi-annual basis. During the second quarter of 2019, the Company declared its semi-annual dividend of $0.18 per share, which was paid on July 10, 2019, for a total of $5.8 million. These dividends were paid from U.S. domestic sources and are accounted for as an increase to accumulated deficit. Subsequent to September 27, 2019, the Company declared its semi-annual dividend of $0.18 per share for shareholders as of record date December 20, 2019, which is expected to be paid January 7, 2020.

During the ~~six~~nine months ended ~~June 28,~~September 27, 2019, the Company bought back 28 thousand shares of its common stock from members of its Board of Directors for $0.5 million, or $16.25 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				Six Months Ended				Quarter Ended				Nine Months Ended
	June 28,		June 29,		June 28,		June 29,		September 27,		September 28,		September 27,		September 28,
	2019		2018		2019		2018		2019		2018		2019		2018
Revenue before reimbursements:
North America	$	56,750	$	57,245	$	109,287	$	110,770	$	56,014	$	55,321	$	165,301	$	166,092
International (primarily European countries)		11,226		11,461		21,059		23,975		10,741		12,862		31,800		36,836
Revenue before reimbursements from continuing operations	$	67,976	$	68,706	$	130,346	$	134,745	$	66,755	$	68,183	$	197,101	$	202,928

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

	June 28,		December 28,		September 27,		December 28,
	2019		2018		2019		2018
Long-lived assets:
North America	$	92,758	$	88,317	$	92,745	$	88,317
International (primarily European countries)		23,296		19,344		23,211		19,344
Total long-lived assets	$	116,054	$	107,661	$	115,956	$	107,661

As of ~~June 28,~~September 27, 2019 and December 28, 2018, foreign assets included ~~$14.2~~$13.8 million and $14.5 million, respectively, of goodwill related to acquisitions. As of ~~June 28,~~September 27, 2019, foreign assets included ~~$4.8~~$5.6 million of operating lease ~~right of use assets.~~ROA.

In the following table (in thousands), U.S. Strategy and Business Transformation Group ~~(S&BT)~~ includes the results of ~~our~~the Company’s domestic Executive Advisory Programs, Benchmarking Services, ~~and~~ Business Transformation ~~Practices.~~Practices and IP as a Service offerings (S&BT). U.S. ERP, EPM and Analytics Solutions ~~(EEA)~~ includes the results of ~~our~~the Company’s domestic Oracle EEA and SAP Solutions Practices ~~(in thousands):~~(EEA). International includes results of the Company’s S&BT and EEA Practices, primarily in Europe. The revenue reported in the below table represents revenue following each of the Company’s consultant’s assigned Group and home domicile.

	Quarter Ended				Six Months Ended				Quarter Ended				Nine Months Ended
	June 28,		June 29,		June 28,		June 29,		September 27,		September 28,		September 27,		September 28,
	2019		2018		2019		2018		2019		2018		2019		2018
S&BT	$	35,718	$	37,816	$	68,988	$	72,955	$	27,435	$	26,014	$	78,632	$	76,931
EEA		32,258		30,890		61,358		61,790		30,920		29,971		89,049		89,145
International										8,400		12,198		29,420		36,852
Revenue before reimbursements from continuing operations	$	67,976	$	68,706	$	130,346	$	134,745	$	66,755	$	68,183	$	197,101	$	202,928

Effective May 1, 2017, the Company acquired certain assets and liabilities of Jibe Consulting, Inc. (“Jibe”), a U.S.-based Oracle E-Business Suite ~~(“EBS”)~~ and Oracle Cloud Business Application implementation firm. The acquisition of Jibe ~~enhances~~enhanced 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 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 had 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 month period following closing for a total of $11.0 million in contingent consideration, a portion of which ~~will~~was to be allocated to key employees in both cash and Company ~~stock.~~

common stock, subject to vesting. As of October 1, 2019, the earnout was finalized and subsequently settled, resulting in a benefit of $0.1 million and $1.1 million during the quarter and nine months ended September 27, 2019, respectively. During the third 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 for the Jibe acquisition earnout expectations. 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. During the ~~second~~ quarter and ~~six~~nine months ended ~~June 28,~~September 27, 2019, ~~the Company recorded expense of $45 thousand and a benefit of $1.0 million, respectively. During both the second quarter and six months ended June 29, 2018,~~ the Company recorded a benefit of ~~$4.6~~$32 thousand and $0.2 million, respectively, in personnel costs before reimbursements on the consolidated statement of operations leading up to the finalization of the earnout. During the third quarter and nine months ended September 28, 2018, the Company recorded expense of $0.1 million and a benefit of $0.1 million in earnings from operations on the consolidated statement of operations related to the change in contingent earnout liability for the Jibe acquisition earnout expectations.

During the six months ended June 28, 2019, the Company recorded, in personnel costs before reimbursements on the consolidated statement of operations, a benefit of $0.1 million, related to the key employees’ portion of the cash related contingent consideration. Management utilized the most recent financial results from which to base these estimates. These contingent liabilities have been recorded in the consolidated balance sheet as 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 mentioned above, due to the projected results, the~~The Company recorded expense of $34 thousand and a benefit of $0.2 million ~~benefit~~ during the ~~six~~quarter and nine months ended ~~June 28,~~September 27, 2019, of acquisition-related non-cash stock compensation in cost of sales on the consolidated statement of operations.

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 RPA consulting firm. This acquisition ~~complements~~complemented 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 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 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. The Aecus earnout settlement was completed during the quarter ended September 27, 2019 and resulted in personnel costs before reimbursements on the consolidated statement of operations of $0.2 million and $24 thousand during the quarter and nine months ended September 27, 2019, respectively related to the cash portion of the earnout.

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. and The Chartered Institute of Management Accountants was terminated.

Subsequent to September 27, 2019, the Company expects to record restructuring costs of approximately $2.5 million, primarily for employee severance costs in Europe as well as Australia. These actions were taken as a result of the continued decline in demand in the Company’s European and Australian markets. The Company effected these changes to reduce its costs to better align the overall cost structure and organization with anticipated demand for the Company services.

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, the impact of Brexit on our business and changes in general economic conditions, interest rates and our ability to obtain additional debt financing 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 28, 2018. 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 16,500 benchmark and performance studies over 25 years at over 5,900 of the world’s leading companies.

In the following discussion, U.S. Strategy and Business Transformation Group ~~(S&BT)~~ includes the results of our domestic Executive Advisory Programs, Benchmarking Services, Business Transformation Practices and IP as a ~~Service.~~Service offerings (US S&BT). U.S. ERP, EPM and Analytics Solutions ~~(EEA)~~ includes the results of our domestic Oracle EEA and SAP Solutions ~~Practices.~~ Practices (US EEA). International includes results of our S&BT and EEA Practices primarily in Europe.

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										Six Months Ended										Quarter Ended										Nine Months Ended
	June 28,					June 29,					June 28,					June 29,					September 27,					September 28,					September 27,					September 28,
	2019					2018					2019					2018					2019					2018					2019					2018
Revenue:
Revenue before reimbursements	$	67,976		100.0	%	$	68,706		100.0	%	$	130,346		100.0	%	$	134,745		100.0	%	$	66,755		100.0	%	$	68,183		100.0	%	$	197,101		100.0	%	$	202,928		100.0	%
Reimbursements		5,545					5,821					10,330					10,889					5,935					5,535					16,265					16,424
Total revenue		73,521					74,527					140,676					145,634					72,690					73,718					213,366					219,352

Costs and expenses:
Cost of service:
Personnel costs before reimbursable expenses		40,820		60.1	%		42,148		61.3	%		79,754		61.2	%		82,752		61.4	%		41,026		61.5	%		40,883		60.0	%		120,780		61.3	%		123,635		60.9	%
Stock compensation expense		1,022					977					1,942					2,000					833					915					2,775					2,915
Acquisition-related compensation benefit		(159	)				(204	)				(288	)				(789	)
Acquisition-related compensation expense (benefit)																						157					240					(131	)				(549	)
Acquisition-related non-cash stock compensation expense		289					(79	)				368					721					322					731					690					1,452
Reimbursable expenses		5,545					5,821					10,330					10,889					5,935					5,535					16,265					16,424
Total cost of service		47,517					48,663					92,106					95,573					48,273					48,304					140,379					143,877

Selling, general and administrative costs		15,159		22.3	%		14,779		21.5	%		29,201		22.4	%		29,242		21.7	%		14,085		21.1	%		14,922		21.9	%		43,286		22.0	%		44,164		21.8	%
Non-cash stock compensation expense		787					804					1,492					1,645					776					850					2,268					2,495
Amortization of intangible assets		254					591					553					1,204					236					585					789					1,789
Acquisition-related contingent consideration liability		45					(4,553	)				(1,025	)				(4,553	)
Acquisition-related costs																						32					—					32					—
Change in acquisition-related contingent consideration liability																						(108	)				803					(1,133	)				(3,750	)
Total selling, general, and administrative expenses		16,245					11,621					30,221					27,538					15,021					17,160					45,242					44,698

Total costs and operating expenses		63,762					60,284					122,327					123,111					63,294					65,464					185,621					188,575

Income from operations		9,759		14.4	%		14,243		20.7	%		18,349		14.1	%		22,523		16.7	%		9,396		14.1	%		8,254		12.1	%		27,745		14.1	%		30,777		15.2	%

Other expense:
Interest expense		(105	)				(178	)				(206	)				(357	)				(62	)				(158	)				(268	)				(515	)

Income from continuing operations before income taxes		9,654		14.2	%		14,065		20.5	%		18,143		13.9	%		22,166		16.5	%		9,334		14.0	%		8,096		11.9	%		27,477		13.9	%		30,262		14.9	%
Income tax expense		2,614		3.8	%		2,393		3.5	%		4,054		3.1	%		3,193		2.4	%		2,427		3.6	%		2,425		3.6	%		6,481		3.3	%		5,618		2.8	%
Income from continuing operations (net of taxes)		7,040					11,672					14,089					18,973					6,907					5,671					20,996					24,644
Loss from discontinued operations		(51	)				(151	)				(6	)				(85	)
Income (loss) from discontinued operations																						2					(514	)				(4	)				(599	)
Net income	$	6,989		10.3	%	$	11,521		16.8	%	$	14,083		10.8	%	$	18,888		14.0	%	$	6,909		10.3	%	$	5,157		7.6	%	$	20,992		10.7	%	$	24,045		11.8	%


Diluted net income per common share	$	0.22				$	0.36				$	0.44				$	0.59				$	0.21				$	0.16				$	0.65				$	0.75

Revenue. We are a global company with operations located in North and South America, Western Europe, Australia and India. Our revenue is denominated in multiple currencies, primarily the U.S. Dollar, British Pound ~~Euro~~ and ~~Australian Dollar~~Euro and as a result is affected by currency exchange rate fluctuations. The impact of currency fluctuations did not have a significant impact on comparisons between the ~~second~~third quarter and ~~six~~nine months ended ~~June 28,~~September 27, 2019 and the comparable periods of 2018. Revenue is analyzed based on geographical location of engagement team personnel.

Our total Company net revenue from continuing operations, or revenue before reimbursements, decreased by ~~1.1%~~2.1%, to ~~$68.0~~$66.8 million and ~~3.3%~~2.9% to ~~$130.3~~$197.1 million in the ~~second~~third quarter and first ~~six~~nine months of 2019, respectively, as compared to ~~$68.7~~$68.2 million and ~~$134.7~~$202.9 million in the same periods of 2018, respectively. In the ~~second~~third quarter of 2019 and 2018, one customer accounted for ~~more than 5%~~6% and 7% of our total revenue, respectively, and during the first ~~six~~nine months of 2018 and both periods in 2019, no customer accounted for more than 5% of our total revenue. See Footnote 11 for revenue by Service Group.

US S&BT net revenue ~~decreased 5.6%~~increased 5.5%, to ~~$35.7~~$27.4 million, and ~~5.4%~~2.2%, to ~~$69.0~~$78.6 million during the ~~second~~third quarter and first ~~six~~nine months of 2019, respectively, as compared to ~~$37.8 million and $73.0 million in~~ the same periods of 2018, ~~respectively.~~ This decrease is primarily due to weaker than expected international revenue, which was down 21%, as the uncertainties surrounding Brexit appear to have impacted client decision making. S&BT U.S. revenue was up 1.5%, to $26.3 million, during the second quarter of 2019, and slightly down in the first six months of 2019 to $50.6 million, as compared to the same periods in 2018.driven by strong results across most practices.

EEA net revenue increased ~~4.4%~~3.2%, to ~~$32.3~~$30.9 million, and ~~down 0.7%,~~decreased less than a one percent, to ~~$61.4~~$89.0 million, during the ~~second~~third quarter and first ~~six~~nine months of 2019, respectively, as compared to the same periods in ~~2018, primarily~~2018. The increase in the third quarter was driven by strong ~~Oracle Cloud revenue growth offsetting our Oracle on-premise declines, and better than expected~~ growth from our SAP ~~practice.~~and Oracle ERP practices, as well as strong cloud revenue growth from our EPM practices partially offsetting our Oracle EPM On-Premise declines.

International revenue decreased 31.1%, to $8.4 million, and 20.2%, to $29.4 million, during the third quarter and first nine months of 2019, respectively, as compared to the same periods in 2018. This decrease was primarily due to the uncertainties surrounding Brexit which appears to have continued to impact client decision making. In addition to Brexit, a meaningful portion of a European engagement was discontinued when the client was acquired. Total Company international net revenue accounted for ~~16%~~13% and 15% of total Company net revenue during ~~both~~ the ~~second~~third quarter and first ~~six~~nine months of 2019, respectively, as compared to ~~19% and~~ 18% for both the same periods in 2018, respectively.

Reimbursements as a percentage of total net revenue were 8%8.9% and 8.3% during the ~~second quarters~~third quarter and first ~~six~~nine months of 2019, ~~and~~respectively, as compared to 8.1% for the same periods in 2018. Reimbursements are project travel-related expenses passed through to a client with no associated margin.

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

Personnel costs before reimbursable expenses increased slightly to $41.0 million, and decreased 3%2%, to ~~$40.8 million, and 4%, to $79.8~~$120.8 million, for the ~~second~~third quarter and first ~~six~~nine months of 2019, respectively, from ~~$42.1~~$40.9 million and ~~$82.8~~$123.6 million in the same periods of 2018, respectively. ~~The decrease was primarily a result of lower utilization of subcontractors and lower 2019 incentive compensation accruals in all periods.~~ Personnel costs before reimbursable expenses, as a percentage of revenue before reimbursements, were ~~60%~~62% and 61% for the ~~second~~third quarter and first ~~six~~nine months of 2019, respectively, as compared to 60% and 61% for the same periods in ~~2018.~~2018, respectively.

Non-cash stock compensation expense was ~~$1.0~~$0.8 million and ~~$1.9~~$2.8 million for the ~~second~~third quarter and first ~~six~~nine months of 2019, respectively, as compared to ~~$1.0~~$0.9 million and ~~$2.0~~$2.9 million for the same periods of 2018, respectively.

The acquisition-related compensation expense and 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 is subject to service vesting and as a result has been recorded as compensation expense. The Aecus earnout was settled during the three months ended September 27, 2019 and the Jibe earnout was adjusted in the first three months of 2019, resulting in a benefit. In 2018, the acquisition-related compensation expense for Aecus resulted in a benefit. All benefits related to Jibe and Aecus were a result of the decrease in the amount of estimated earnout achieved.settled effective October 1, 2019. See Note 12, “Acquisitions” to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

Acquisition related non-cash stock compensation expense in 2019 and 2018 primarily related to our EPM AMS acquisition of Technolab in fiscal 2014 and the Jibe and Aecus acquisitions in 2017. The equity portion of the earnout for Jibe and Aecus resulted in adjustments based on the estimated and final earnout achieved. As discussed above, both earnout achievements have been settled. See Note 12, “Acquisitions” to our consolidated financial statements included in this Quarterly Report on Form 10-Q for further information on the Jibe and Aecus acquisitions.

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

SG&A costs were ~~$15.2~~$14.1 million and ~~$29.2~~$43.3 million for the ~~second~~third quarter and first ~~six~~nine months of 2019, respectively, as compared to ~~$14.8~~$14.9 million and ~~$29.2~~$44.2 million for the same periods in 2018, respectively. These SG&A costs as a percentage of revenue before reimbursements were 21% and 22% during ~~all~~third quarter and first nine months of 2019, respectively, as compared to 22% for both periods ~~presented~~ in ~~2019 and~~ 2018.

Amortization expense was ~~$0.3~~$0.2 million and ~~$0.6~~$0.8 million in the ~~second~~third quarter and first ~~six~~nine months of 2019, respectively, as compared to $0.6 million and ~~$1.2~~$1.8 million in the same periods in 2018. The amortization expense in 2019 and 2018 ~~relate~~related to the amortization of the intangible assets acquired in 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 2018 amortization expense also includes the amortization of the intangible assets acquired in our 2014 EPM AMS acquisition of Technolab. The intangible assets relate to customer relationships, customer backlog and non-compete agreements. The Jibe and Aecus intangible assets will continue to amortize until 2022, and CGBS Training and Certification Program intangible assets will continue to amortize until 2021.

Non-cash stock compensation expense was $0.8 million and ~~$1.5~~$2.3 million in the ~~second~~third quarter and first ~~six~~nine months of 2019, respectively, as compared to ~~$0.8~~$0.9 million and ~~$1.6~~$2.5 million in the same periods in 2018, respectively.

Acquisition-related Contingent Consideration Liability. The acquisition-related contingent consideration liability ~~relates~~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~~is

recorded as part of purchase accounting. The liability was revalued during 2019 and 2018 based on earnout achievement leading up to the ~~reduction of~~final earnout settlement.

Income Taxes. During the ~~contingent earnout liability during the second~~third quarter and first ~~six months of 2018 and during the first six months of 2019. These adjustments are based on estimated earnout achieved.~~

~~Income Taxes.~~ ~~During the second quarter and first six~~nine months of 2019, we recorded ~~$2.6~~$2.4 million and ~~$4.0~~$6.5 million, respectively, of income tax expense related to certain federal, foreign and state taxes which reflected an effective tax rate of ~~27%~~26% and ~~22%~~24%, respectively. In the ~~second~~third quarter and first ~~six~~nine months of 2018, we recorded $2.4 million and ~~$3.2~~$5.6 million, respectively, of income tax expense related to certain federal, foreign and state taxes which reflected an effective tax rate of ~~17%~~30% and ~~14%~~19%, respectively.

As of ~~June 28,~~September 27, 2019, and December 28, 2018, we had ~~$16.7~~$16.4 million and $13.8 million, respectively, of cash on the consolidated balance sheets. We currently believe that available funds (including the cash on hand and funds available for borrowing capacity under our revolving line of credit (the “Revolver”)) 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 existing products and services, to respond to competitive pressures or to acquire complementary businesses or technologies. There is no assurance that additional financing would be available when needed or desired.

	Six Months Ended						Nine Months Ended
	June 28,			June 29,			September 27,			September 28,
	2019			2018			2019			2018
Cash flows provided by operating activities	$	18,032		$	14,833		$	26,540		$	24,354
Cash flows used in investing activities	$	(2,819	)	$	(5,161	)	$	(3,719	)	$	(7,273	)
Cash flows used in financing activities	$	(12,432	)	$	(13,918	)	$	(20,309	)	$	(21,433	)

Net cash provided by operating activities was ~~$18.0~~$26.5 million during the first ~~six~~nine months of 2019, as compared to ~~$14.8~~$24.4 million during the same period in 2018. In 2019, 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 an increase in accounts receivable and contract assets and a decrease in accounts payable due to the timing of vendor payments and a decrease in accrued expenses and liabilities after the payout of 2018 incentive compensation. In 2018, the net cash provided by operating activities was primarily driven by net income adjusted for non-cash items, partially offset by decreases in accounts payable, accrued expenses and other accruals after the payout of ~~the~~ 2017 incentive compensation, a decrease in the income tax payable accruals due to the estimated federal tax payments, and an increase in accounts receivable and ~~unbilled revenue.~~contract assets.

Net cash used in investing activities was ~~$2.8~~$3.7 million and ~~$5.2~~$7.3 million during the first ~~six~~nine months of 2019 and 2018, respectively. During 2019 and 2018, cash flows used in investing activities included investments relating to investments in internal corporate systems, the rollout of new laptops which occurs every three to four years, and our investments relating to the development of our Quantum Leap benchmark technology.

Net cash used in financing activities was ~~$12.4~~$20.3 million and ~~$13.9~~$21.4 million during the first ~~six~~nine months of 2019 and 2018, respectively. The usage of cash in 2019 primarily related to ~~the~~ dividend ~~payment~~payments of ~~$5.4~~$11.2 million, the repurchase of ~~$5.4~~$5.5 million of the Company’s common stock and net principal paydown under the Revolver of ~~$2.0~~$4.0 million. The usage of cash in 2018 was primarily related to ~~the~~ dividend ~~payment~~payments of ~~$4.7~~$10.0 million, principal paydown under the Revolver ~~$5.5~~of $7.5 million and the repurchase of ~~$4.0~~$4.3 million of the Company’s common stock.

As of ~~June 28,~~September 27, 2019, we had ~~$4.5~~$2.5 million outstanding under the Revolver, with a remaining capacity of approximately ~~$40.5~~$42.5 million. Subsequent to September 27, 2019, the outstanding balance was paid off in full. 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 28, 2018.

As of ~~June 28,~~September 27, 2019, 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 ~~did~~would not have had a material impact on our results of operations for the quarter and ~~six~~nine months ended ~~June 28,~~September 27, 2019.

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

There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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 28, 2018.

During the quarter ended ~~June 28,~~September 27, 2019, the Company ~~repurchased 92 thousand~~did not repurchase any shares of its common stock under the repurchase plan approved by the Company's Board of Directors. As of ~~June 28,~~September 27, 2019, the Company had $3.9 million of authorization remaining under the repurchase plan.

Shares repurchased during the quarter and ~~six~~nine months ended ~~June 28,~~September 27, 2019 under the repurchase plan approved by the Company's Board of Directors do not include ~~825~~5 thousand shares and ~~124~~129 thousand shares, respectively, for a cost of ~~$14~~$88 thousand and ~~$2.4~~$2.5 million, respectively, 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~~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)


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

PART I - FINANCIAL INFORMATION		Page

Item 1.	Financial Statements

	Consolidated Balance Sheets as of ~~June 28,~~September 27, 2019 and December 28, 2018 (unaudited)	3

	Consolidated Statements of Operations for the Three and ~~Six~~Nine Months Ended ~~June 28,~~September 27, 2019 and ~~June 29,~~September 28, 2018 (unaudited)	4

	Consolidated Statements of Comprehensive Income for the Three and ~~Six~~Nine Months Ended ~~June 28,~~September 27, 2019 and ~~June 29,~~September 28, 2018 (unaudited)	5

	Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~June 28,~~September 27, 2019 and ~~June 29,~~September 28, 2018 (unaudited)	6

	Consolidated Statements of Equity for the Three and ~~Six~~Nine Months Ended ~~June 28,~~September 27, 2019 and ~~June 29,~~September 28, 2018 (unaudited)	7

	Notes to Consolidated Financial Statements (unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1819

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2224

Item 4.	Controls and Procedures	2224

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	2224

Item 1A.	Risk Factors	2224

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2325

Item 6.	Exhibits	2426

SIGNATURES		2527

					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 March 29, 2019							$	5,317,933
March 30, 2019 to April 26, 2019		82,354	$	15.56		82,354	$	4,036,726
April 27, 2019 to May 24, 2019		10,000	$	15.88		10,000	$	3,877,922
May 25, 2019 to June 28, 2019		—	$	—		—	$	3,877,922
		92,354	$	15.59		92,354

					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 28, 2019							$	3,877,922
June 29, 2019 to July 26, 2019		—	$	—		—	$	3,877,922
July 27, 2019 to August 23, 2019		—	$	—		—	$	3,877,922
August 24, 2019 to September 27, 2019		—	$	—		—	$	3,877,922
		—	$	—		—

Large Accelerated Filer	☐	Accelerated Filer	☒

Non-Accelerated Filer	☐	Smaller Reporting Company	☐

		Emerging Growth Company	☐

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).

10.1*		Amendment to the Registrant’s 1998 Stock Option and Incentive Plan (Amended and Restated as of March 16, 2015) dated October 31, 2019.

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: ~~August 7,~~November 6, 2019	/s/ Robert A. Ramirez
	Robert A. Ramirez
	Executive Vice President, Finance and Chief Financial Officer