HACKETT GROUP, INC. Leases Disclosure
7. Lease Commitments
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 less than 1 year and 5 years. Rents usually increase annually in accordance with defined rent steps or are based on current year consumer price index adjustments. Some of the lease agreements contain one or more of the following provisions 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 Company has certain leases that have terms that are a year or less and are accounted on a straight-line basis over the term of the lease. The Company recognized $0.1 million of lease expense in both 2025 and 2024 related to these short term leases.
The weighted average remaining lease term is 2.6 years. The weighted average discount rate utilized is 6%. 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 the Company’s lease payments in a similar economic environment. For the twelve months ended December 26, 2025, the Company paid $1.4 million from operating cash flows for operating leases.
The Company has operating lease agreements for its premises that expire on various dates through July 2029. Lease expense for the years ended December 26, 2025, December 27, 2024, and December 29, 2023 was $1.3 million, $1.2 million and $1.1 million, respectively. The components of lease expense during the fiscal years ended December 26, 2025, December 27, 2024, and December 29, 2023, all related to operating lease costs.
Future minimum lease commitments under non-cancelable operating leases as of December 26, 2025, are as follows (in thousands):
|
|
|
|
Rental |
|
|
|
|
|
|
Payments |
|
|
2026 |
|
|
|
$ |
1,259 |
|
2027 |
|
|
|
|
837 |
|
2028 |
|
|
|
|
441 |
|
2029 |
|
|
|
|
182 |
|
2030 |
|
|
|
|
— |
|
Total lease payments |
|
|
|
|
2,719 |
|
Less imputed interest |
|
|
|
|
(237 |
) |
Total |
|
|
|
$ |
2,482 |
|
As of December 26, 2025, the Company does not have any additional operating leases that have not yet commenced that create significant rights and obligations for the Company.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Mar 1, 2024 | |
| 2022 | Mar 3, 2023 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.