Core Viewpoint - The article emphasizes the importance of value investing and highlights Harte Hanks (HHS) as a strong candidate for value investors due to its favorable valuation metrics and strong earnings outlook [2][8]. Company Overview - Harte Hanks (HHS) currently holds a Zacks Rank of 1 (Strong Buy) and has a Value grade of A, indicating it is a top pick for value investors [4]. - The stock is trading at a P/E ratio of 10.05, which is lower than the industry average of 10.59 [4]. Valuation Metrics - HHS has a PEG ratio of 0.84, significantly lower than the industry average of 1.45, suggesting it is undervalued relative to its expected earnings growth [5]. - The P/B ratio for HHS is 2.56, compared to the industry average of 5.42, indicating a favorable market value versus book value [6]. - HHS's P/S ratio stands at 0.27, which is lower than the industry's average of 0.44, further supporting the notion that HHS is undervalued [7]. Earnings Outlook - The data presented suggests that Harte Hanks is likely undervalued currently, and its strong earnings outlook positions it as one of the market's strongest value stocks [8].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-07120 HARTE HANKS, INC. (Exact name of registrant as specified in its charter) Delaware 1 Executive Drive, Chelmsfo ...

Chelmsford, Massachusetts – May 09, 2024 - Harte Hanks, Inc. (NASDAQ: HHS), a leading global customer experience company focused on bringing companies closer to customers for over 100 years, today announced financial results for the first quarter ended March 31, 2024. Kirk Davis, Chief Executive Officer, said: "Harte Hanks has transformed its senior leadership team, adding relevant and accomplished executives to reinvigorate our sales and finance organizations, as well as our newly established Transformatio ...

Financial Data and Key Metrics Changes - First quarter revenues were $45.4 million, a decline of 3.5% compared to $47.1 million in Q1 2023 [47] - Operating income in Q1 2024 was $0.4 million, down from $1.1 million in Q1 2023 [49] - Adjusted operating margin improved to 3.9% in Q1 2024 from 3.4% in the same quarter in 2023 [50] - EBITDA for Q1 2024 was $1.4 million, compared to $2.1 million in 2023 [50] - Cash and cash equivalents as of March 31, 2024, were $11.5 million, down from $18.4 million at the end of 2023 [51] Business Line Data and Key Metrics Changes - Customer Care segment revenues increased to $12.4 million in Q1 2024 from $11.6 million in Q1 2023 [47] - Sales Services segment revenues rose to $4.7 million, compared to $2.8 million in Q1 2023 [47] - Marketing Services segment revenues fell to $8.9 million in Q1 2024 from $11.2 million in the prior year [48] - Fulfillment and Logistics revenues decreased to $19.4 million in Q1 2024 from $21.5 million in the prior year [48] Market Data and Key Metrics Changes - The company reported strong pipeline growth year-over-year, particularly in the European market and the SMB segment [12][21] - The European operations are profitable and expected to contribute positively in Q3 [58] Company Strategy and Development Direction - The Elevate program aims to enhance agility, innovation, and organic growth, focusing on sales and marketing transformation, margin expansion, AI utilization, and customer-centric culture [10][14][15][18] - A Chief Customer Officer will be appointed to enhance customer experience and retention [18][56] - The company is investing in partnerships, notably with Amazon Web Services, to modernize customer care [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in developing a durable growth engine despite a challenging operating environment [9] - The company anticipates continued momentum in pipeline growth and new business acquisitions throughout 2024 [43][66] Other Important Information - The company has identified immediate cost reduction opportunities amounting to $6 million by year-end, with a forecasted annual savings of $16 million by the end of 2025 [14] - The company is in the early stages of a multi-year program for business optimization and margin expansion [14] Q&A Session Summary Question: What is the status of European operations? - European operations are profitable and expected to yield positive results in Q3 [58] Question: Can you provide insights on the growth potential of the Sales Services segment? - The Sales Services segment could translate to $9 million of new growth over the next couple of years [66] Question: What is the status of partnerships in the logistics division? - The company is developing partnerships and expects positive news in the next call [60] Question: Are the European operations currently profitable? - The European operations are expected to have a margin business around 30% to 35% [70] Question: What specific partnerships are contributing to growth? - The company has developed several partnerships that are expected to contribute significantly in the coming months [76]

Revenue and Client Concentration - Harte Hanks generated 71.7% of total revenue in 2023 from its largest 25 clients, with the largest client accounting for 11.2%[37] - The largest client accounted for 11.2% of total revenues in 2023, with the top 25 clients generating approximately 71.7% of total revenue[59] - In 2023, approximately 9.6% of the company's revenues were derived from operations outside the United States, primarily in Europe and Asia[74] Financial Performance - Operating revenue for the year ended December 31, 2023, was $191.5 million, a decrease of $14.8 million or 7.2% compared to $206.3 million in 2022[132] - The net loss for the year ended December 31, 2023, was $1.57 million, a decline of 104.3% compared to a net income of $36.8 million in 2022[132] - The diluted EPS from operations for 2023 was $(0.21), a decrease of 104.5% from $4.75 in 2022[132] - Total operating revenue for 2023 was $191,492,000, a decrease of 7.5% from $206,278,000 in 2022[212] - Operating income fell to $3,359,000 in 2023, down 77.8% from $15,107,000 in the previous year[212] - Comprehensive income for 2023 was $2,642,000, down from $41,802,000 in 2022, marking a decrease of 93.7%[212] Restructuring and Cost Management - The company incurred total restructuring charges of $5.7 million in 2023, including $4.6 million for operational efficiency consulting[36] - Project Elevate is expected to yield estimated cost reductions of $16.0 million from 2024 through 2026[35] - The company has initiated Project Elevate to focus on cost-saving initiatives and restructuring efforts to transform its operational cost structure[68] - Restructuring expenses for 2023 totaled $5.7 million, including $4.6 million in consulting expenses and $0.8 million in lease impairment[136] Workforce and Employment - As of December 31, 2023, the company employed 1,709 full-time and 253 part-time employees, with around 980 employees based outside the U.S.[53] - Approximately 58% of the workforce was female as of December 31, 2023, reflecting the company's commitment to diversity and inclusion[55] Operational Challenges and Risks - The company faces intense competition, with significant risks from clients moving services in-house and emerging technologies[60] - The company faces risks related to reduced demand for its products and services due to clients' financial conditions and marketing budgets, which are discretionary and easier to cut[67] - Consumer privacy and security concerns may limit the company's ability to collect data, impacting its marketing services segment[69] - The company is exposed to cybersecurity threats, including sophisticated attacks that could compromise sensitive information and disrupt operations[91][106] Cash Flow and Liquidity - Net cash provided by operating activities was $10.5 million in 2023, down $18.3 million from $28.8 million in 2022[148] - Cash and cash equivalents increased to $18.4 million in 2023 from $10.4 million in 2022, with an additional borrowing capacity of $24.2 million under the Credit Facility[145][158] - The company experienced a net increase in cash and cash equivalents of $7,500,000 in 2023, contrasting with a decrease of $3,769,000 in 2022[216] Regulatory and Compliance - The company is subject to various domestic and international regulations affecting marketing activities, including data protection laws[47] - The company is subject to numerous laws and regulations regarding privacy and data protection, which may increase compliance costs and affect service offerings[83] - The evolving regulatory landscape surrounding AI technologies may impose significant operational costs and affect the company's ability to innovate[89] Technology and Innovation - The company leverages a proprietary DataView tool that provides a 360-degree customer view with over 1,500 attributes for predictive marketing[27] - The company is investing in artificial intelligence (AI) technologies, which are essential for maintaining a competitive advantage, but failure to execute effectively could result in revenue loss and reduced margins[87][88] - The company emphasizes the need to maintain technological competitiveness and improve processes to develop new services in a timely and cost-effective manner[64] Shareholder and Stock Information - The company has remaining authority of $4.1 million to repurchase shares under its stock repurchase program[124] - The company did not pay any dividends in 2023 or 2022, with future dividends subject to Board approval[159] - The company’s stock price has experienced significant volatility, which may affect investors' ability to resell shares at favorable prices[103]

Financial Performance - Total revenues for Q4 2023 were $49.5 million, down 9.7% from $54.8 million in Q4 2022[4] - Operating loss for Q4 2023 was $2.3 million, compared to operating income of $3.4 million in the prior-year quarter[7] - Net loss for Q4 2023 was $2.0 million, or $0.27 per share, compared to net income of $21.8 million, or $2.81 per share, in Q4 2022[8] - Full-year revenues for 2023 were $191.5 million, down 7.2% from $206.3 million in 2022[9] - Operating revenue for Q4 2023 was $49,491,000, a decrease of 9.4% from $54,778,000 in Q4 2022[23] - Net loss for Q4 2023 was $1,977,000 compared to a net income of $21,804,000 in Q4 2022, representing a significant decline[25] - EBITDA for the year ended December 31, 2023, was $7,596,000, down from $17,835,000 in 2022, representing a decrease of 57.5%[26] - Operating income for the year ended December 31, 2023, was $3,359,000, compared to $15,107,000 in 2022, indicating a decline of 77.8%[26] Revenue by Segment - Customer Care segment revenue increased by $1.0 million or 6.0% year-over-year, totaling $17.7 million in Q4 2023[13] - Fulfillment & Logistics Services segment revenue decreased by $3.2 million or 12.9% year-over-year, totaling $21.3 million in Q4 2023[13] - Marketing Services segment revenue decreased by $3.1 million or 23.1% year-over-year, totaling $10.5 million in Q4 2023[13] - The contribution margin for the Marketing segment decreased to $8,409,000 in 2023 from $11,734,000 in 2022, reflecting a decline of 28.5%[26] - The contribution margin for the Fulfillment & Logistics segment was $2,558,000 for Q4 2023, down from $3,101,000 in Q4 2022, a decline of 17.5%[26] Expenses and Losses - Total operating expenses for Q4 2023 were $51,769,000, an increase of 0.8% from $51,349,000 in Q4 2022[23] - The company reported a restructuring expense of $5,687,000 in Q4 2023, with no such expense reported in Q4 2022[23] - Restructuring expenses for the year ended December 31, 2023, totaled $5,687,000, with no restructuring expenses reported in 2022[26] - Segment operating expenses for the Customer Care segment were $49,851,000 in 2023, compared to $52,173,000 in 2022, a decrease of 4.4%[26] - Depreciation and amortization expense for the year ended December 31, 2023, was $4,237,000, up from $2,728,000 in 2022, an increase of 55.3%[26] Cash and Assets - The company ended the year with a cash balance of $18.4 million and no debt[4] - Cash and cash equivalents increased to $18,364,000 in December 2023 from $10,364,000 in December 2022[24] - Total assets as of December 31, 2023, were $122,757,000, up from $119,984,000 in December 2022[24] - Total liabilities increased to $102,900,000 in December 2023 from $101,176,000 in December 2022[24] Future Projections - Project Elevate is expected to generate approximately $6 million in cost reductions in 2024 and $16 million over two years[3] - The company has extended its $25 million line of credit until June 30, 2025[4] Margins - Adjusted EBITDA for Q4 2023 was $5,209,000, slightly up from $5,155,000 in Q4 2022[25] - Adjusted operating margin for Q4 2023 was 8.1%, compared to 7.7% in Q4 2022[25] - The company reported a loss attributable to common stockholders of $1,977,000 for Q4 2023, compared to a profit of $20,424,000 in Q4 2022[23]

Table of Contents U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-07120 HARTE HANKS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. E ...

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The company's unaudited financial statements for H1 2023 show a net loss of **$0.2 million**, reduced operating cash flow, and a decline in total assets to **$114.7 million** [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2023, total assets decreased to **$114.7 million**, total liabilities decreased to **$94.1 million**, and stockholders' equity increased to **$20.6 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | June 30, 2023 (unaudited) | December 31, 2022 (audited) | | :--- | :--- | :--- | | **Total current assets** | $63,950 | $66,311 | | **Total assets** | **$114,660** | **$119,984** | | **Total current liabilities** | $40,406 | $43,566 | | **Total liabilities** | **$94,110** | **$101,176** | | **Total stockholders' equity** | **$20,550** | **$18,808** | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) For Q2 2023, revenue slightly decreased to **$47.8 million** and net income sharply fell to **$0.6 million**, while the six-month period saw a net loss of **$0.2 million** Q2 Financial Performance (in thousands, except per share amounts) | Metric | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | Revenue | $47,762 | $48,553 | | Operating Income | $1,670 | $4,011 | | Net Income | $580 | $4,461 | | Diluted EPS | $0.08 | $0.52 | Six-Month Financial Performance (in thousands, except per share amounts) | Metric | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Operating Revenues | $94,882 | $97,615 | | Operating Income | $2,723 | $7,906 | | Net (Loss) Income | ($211) | $7,806 | | Diluted (Loss) EPS | ($0.03) | $0.91 | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Stockholders' equity increased to **$20.6 million** by June 30, 2023, driven by comprehensive income and stock-based compensation, despite a net loss and stock repurchases - Total stockholders' equity increased by **$1.7 million** in the first six months of 2023, from **$18.8 million** to **$20.6 million**[12](index=12&type=chunk) - Key activities affecting equity in H1 2023 include a net loss of **$0.2 million**, stock repurchases of **$1.9 million**, and other comprehensive income of **$3.1 million**[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities decreased to **$4.6 million** in H1 2023, while investing activities used **$1.3 million** and financing activities used **$2.3 million** Six-Month Cash Flow Summary (in thousands) | Cash Flow Activity | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $4,587 | $9,862 | | Net cash used in investing activities | ($1,255) | ($3,559) | | Net cash (used in) provided by financing activities | ($2,312) | $4,508 | | **Net increase in cash** | **$3,000** | **$7,700** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section details the company's accounting policies and financial items, including segment performance, lease obligations, share repurchases, and the InsideOut Solutions acquisition - The company operates three business segments: Marketing Services, Customer Care, and Fulfillment & Logistics Services[16](index=16&type=chunk) Disaggregated Revenue by Segment - Six Months Ended June 30 (in thousands) | Segment | 2023 | 2022 | | :--- | :--- | :--- | | Marketing Services | $22,160 | $26,374 | | Customer Care | $31,627 | $33,123 | | Fulfillment and Logistics Services | $41,095 | $38,118 | | **Total Revenues** | **$94,882** | **$97,615** | - On May 2, 2023, the Board approved a **$6.5 million** share repurchase program[63](index=63&type=chunk) - In Q2 2023, the company repurchased **0.3 million** shares for **$1.9 million**[63](index=63&type=chunk) - The company acquired Inside Out Solutions, LLC on December 1, 2022, for approximately **$7.5 million**[91](index=91&type=chunk) - This acquisition contributed **$5.1 million** in revenue for the first six months of 2023[91](index=91&type=chunk)[98](index=98&type=chunk) Segment Operating Income - Six Months Ended June 30 (in thousands) | Segment | 2023 | 2022 | | :--- | :--- | :--- | | Marketing Services | $2,415 | $3,084 | | Customer Care | $4,227 | $5,552 | | Fulfillment and Logistics Services | $3,645 | $5,155 | | Unallocated Corporate | ($7,564) | ($5,885) | | **Total Operating Income** | **$2,723** | **$7,906** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results for H1 2023, noting a **2.8%** revenue decrease and a **65.6%** drop in operating income, driven by segment-specific challenges and partially offset by acquisitions [Recent Developments](index=33&type=section&id=Recent%20Developments) Key recent developments include the appointment of a new CEO, a strategic segment combination, and the initiation of a **$6.5 million** share repurchase program - Kirk Davis was appointed as the new Chief Executive Officer, effective June 19, 2023[115](index=115&type=chunk) - The company plans to combine its Marketing Services and Customer Care segments into a new 'Customer Experience' segment by the end of 2023[116](index=116&type=chunk) - A share repurchase program for **$6.5 million** of common stock was approved on May 2, 2023, with **$1.9 million** used to repurchase shares in Q2 2023[117](index=117&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Consolidated revenues decreased by **2.8%** to **$94.9 million** in H1 2023, leading to a **65.6%** drop in operating income, primarily due to declines in Marketing Services and Customer Care Consolidated Results of Operations - Six Months Ended June 30 (in thousands) | Metric | 2023 | 2022 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $94,882 | $97,615 | (2.8)% | | Operating income | $2,723 | $7,906 | (65.6)% | | Diluted (loss) per common share | ($0.03) | $0.91 | (103.3)% | - Marketing Services revenue decreased by **$4.2 million (16.0%)** in H1 2023 due to lower direct mail volume from existing customers[123](index=123&type=chunk)[142](index=142&type=chunk) - Customer Care revenue decreased by **$1.5 million (4.5%)** in H1 2023, as non-recurring pandemic-related projects from 2022 ended, partially offset by **$5.1 million** from the InsideOut acquisition[123](index=123&type=chunk)[145](index=145&type=chunk) - Fulfillment & Logistics Services revenue increased by **$3.0 million (7.8%)** in H1 2023, but operating income decreased by **$1.5 million** due to changes in revenue mix and higher transportation costs[123](index=123&type=chunk)[148](index=148&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity, including **$13.4 million** cash and a **$24.2 million** available credit facility, is deemed sufficient to meet obligations and fund expected capital expenditures of **$3 million to $4 million** - Cash and cash equivalents stood at **$13.4 million** as of June 30, 2023[149](index=149&type=chunk) - The company has the ability to borrow an additional **$24.2 million** under its New Credit Facility, with no borrowings outstanding as of June 30, 2023[149](index=149&type=chunk)[164](index=164&type=chunk) - Capital expenditures for 2023 are expected to be between **$3 million** and **$4 million**, mainly for a new ERP system and facility expansion[150](index=150&type=chunk) - The company received a **$5.3 million** tax refund in March 2023 as a result of NOL carryback provisions in the CARES Act[150](index=150&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section on market risk disclosures is not applicable for the current reporting period - The company has indicated that this item is not applicable[172](index=172&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2023[174](index=174&type=chunk) - No material changes were made to internal controls over financial reporting during the second quarter of 2023[176](index=176&type=chunk) [Part II. Other Information](index=42&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings, for which management believes adequate accruals have been made, with no expectation of material loss beyond current provisions - Information regarding legal proceedings is detailed in Note M, Litigation and Contingencies[177](index=177&type=chunk) - Management believes adequate accruals for legal matters have been made and the probability of further material loss is remote[101](index=101&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's previously disclosed risk factors were reported for the current period - No material changes to risk factors were reported for the three months ended June 30, 2023, compared to those disclosed in the 2022 10-K[178](index=178&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not sell unregistered equity securities but repurchased **314,558** common shares for **$1.9 million** in Q2 2023, with **$4.6 million** remaining for future repurchases Common Stock Repurchases - Q2 2023 | Period | Total Shares Purchased | Average Price per Share | Total Cost (approx.) | | :--- | :--- | :--- | :--- | | May 2023 | 231,922 | $5.86 | $1.36M | | June 2023 | 82,636 | $6.29 | $0.52M | | **Total Q2** | **314,558** | **-** | **$1.88M** | - As of June 30, 2023, approximately **$4.6 million** remained available for repurchase under the authorized **$6.5 million** program[179](index=179&type=chunk) [Exhibits](index=43&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the CEO's employment agreement and Sarbanes-Oxley Act certifications - Filed exhibits include the employment agreement for CEO Kirk Davis and Sarbanes-Oxley Act certifications[183](index=183&type=chunk)

Harte Hanks, Inc. (NASDAQ:HHS) Q2 2023 Earnings Conference Call August 10, 2023 4:30 PM ET Company Participants Tom Baumann - Investor Relations Kirk Davis - Chief Executive Officer Lauri Kearnes - Chief Financial Officer Conference Call Participants Julio Romero - Sidoti & Company Michael Kupinski - NOBLE Capital Markets Operator Greetings and welcome to the Harte Hanks Second Quarter 2023 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference ...

Financial Performance - Revenue for the three months ended March 31, 2023, was $47,120,000, a decrease of 3.9% compared to $49,062,000 for the same period in 2022[9] - Operating income for Q1 2023 was $1,053,000, down 73.0% from $3,894,000 in Q1 2022[9] - Net loss attributable to common stockholders for Q1 2023 was $791,000, compared to net income of $2,819,000 in Q1 2022, representing a significant decline[9] - Comprehensive income for Q1 2023 was $1,829,000, compared to $3,851,000 in Q1 2022, indicating a decrease of 52.5%[9] - Basic loss per common share was $(0.11) for the three months ended March 31, 2023, compared to earnings of $0.40 per share for the same period in 2022[84] - The company reported a net loss of $791,000 for the three months ended March 31, 2023, compared to a net income of $3,345,000 for the same period in 2022[84] - Operating income fell to $1,053,000 in Q1 2023, down 73.0% from $3,894,000 in Q1 2022[9] - Total operating expenses increased to $46,067,000 in Q1 2023, up 2.0% from $45,168,000 in Q1 2022[9] Assets and Liabilities - Total current assets decreased to $62,179,000 as of March 31, 2023, from $66,311,000 at December 31, 2022, a reduction of 6.4%[8] - Total liabilities decreased to $93,918,000 as of March 31, 2023, down from $101,176,000 at December 31, 2022, a decline of 7.1%[8] - Stockholders' equity increased to $20,965,000 as of March 31, 2023, compared to $18,808,000 at December 31, 2022, an increase of 11.5%[8] - Cash and cash equivalents increased to $13,118,000 as of March 31, 2023, from $10,364,000 at December 31, 2022, an increase of 26.8%[8] - The company reported a pension liability of $17,988,000 for qualified plans as of March 31, 2023, down from $18,674,000 at December 31, 2022[8] Revenue Segments - Marketing Services revenue recognized over time was $10,420,000, down from $10,895,000 in the prior year, while revenue recognized at a point in time decreased from $2,029,000 to $819,000[34] - Customer Care segment revenue decreased from $17,742,000 in Q1 2022 to $14,416,000 in Q1 2023[34] - Fulfillment and Logistics Services revenue increased from $18,396,000 in Q1 2022 to $21,465,000 in Q1 2023, with revenue recognized over time at $18,090,000[34] - The Marketing Services segment reported revenues of $11.24 million, while the Customer Care segment reported revenues of $14.42 million for the same period[103] Cash Flow and Investments - Cash flows from operating activities for Q1 2023 were $1,704,000, compared to a cash outflow of $764,000 in Q1 2022[11] - The company had cash and cash equivalents of $14,118,000 at the end of Q1 2023, an increase from $12,211,000 at the end of Q1 2022[11] - Net cash provided by operating activities increased by $2.5 million year-over-year to $1.7 million for the three months ended March 31, 2023, primarily due to a $10.7 million decrease in accounts receivable and contract assets[135] - Net cash used in investing activities decreased by $0.8 million year-over-year to $0.6 million for the three months ended March 31, 2023, mainly due to reduced cash used for purchasing property, plant, and equipment[136] Acquisitions and Growth - The acquisition of Inside Out Solutions, LLC was completed on December 1, 2022, for an aggregate purchase price of approximately $7.5 million[87] - The acquisition is expected to enhance the company's marketing services and customer care segments, driving profitable revenue growth through demand generation and inside sales offerings[89] - For the quarter ended March 31, 2023, the InsideOut operation generated revenue of $2.8 million and net earnings of $0.5 million[93] - The company recognized $3.6 million of intangible assets and $2.4 million of goodwill associated with the InsideOut acquisition, amortizing the intangible assets over five years[93] Tax and Compliance - The effective income tax rate was 41.8% for the three months ended March 31, 2023, compared to 12.0% for the same period in 2022[78] - The effective tax rate for the first quarter of 2023 was 41.8%, an increase of 29.8% from the prior year, primarily due to changes in valuation allowance and state income taxes[124] Shareholder Actions - The company approved a share repurchase program on May 2, 2023, with authorization to repurchase $6.5 million of its Common Stock[111] - No shares were repurchased under the stock repurchase program during the three months ended March 31, 2023, with $11.4 million remaining authorization as of that date[151] Lease and Operating Costs - Operating lease costs for the three months ended March 31, 2023, were $1.456 million, a decrease from $1.581 million in the same period of 2022[56] - Total lease liabilities as of March 31, 2023, amounted to $22.018 million, slightly down from $22.322 million as of December 31, 2022[55] - The weighted average remaining lease term for operating leases was 5.7 years as of March 31, 2023, compared to 6.2 years in the previous year[56] - Total future minimum lease payments for operating leases are projected to be $23.93 million, with the remainder of 2023 accounting for $4.872 million[56]