Harte Hanks, Inc. (NASDAQ:HHS) Q3 2020 Earnings Conference Call November 12, 2020 4:30 PM ET Company Participants Sheila Ennis - Investor Relations Andrew Benett - Executive Chairman and Chief Executive Officer Lauri Kearnes - Chief Financial Officer Conference Call Participants Michael Kupinski - NOBLE Capital Markets Operator Good day, everyone, and welcome to the Harte Hanks Third Quarter 2020 Financial Results Conference Call. Today's call is being recorded. At this time, I would like to turn the confer ...

Financial Data and Key Metrics Changes - The second quarter revenues were $41.6 million, up over $1 million sequentially from the previous quarter, but down $13.1 million year-over-year from $54.7 million [44] - Adjusted EBITDA improved to $480,000 compared to negative $1.8 million in the same period last year, indicating successful execution of the turnaround plan [51] - Operating loss was $5.9 million for the second quarter, an improvement from the $6.6 million operating loss in the year-ago quarter [49] Business Line Data and Key Metrics Changes - The B2B vertical revenue increased by $3.1 million or 28.2% due to heightened demand for contact center services [45] - The retail segment saw a decline of $7.3 million, primarily due to COVID-19 impacts, while the transportation segment experienced over 80% decline due to a large client not renewing [45] - The company fully exited its direct mail production business, which is expected to eliminate just under $1 million in quarterly losses [46] Market Data and Key Metrics Changes - The company reported a current weighted pipeline of $10.3 million and an unweighted pipeline of $31.2 million, with $10.1 million secured towards the $13 million annual goal [26] - There is a noted increase in demand for B2B services, particularly in contact center operations, which is expected to continue generating growth [42] Company Strategy and Development Direction - The company is focused on a three-pillar strategy: optimizing the business, growing current services, and transforming the business model [13] - A significant reduction in real estate footprint is underway, including a new 300,000 square foot fulfillment facility in Kansas City [16] - The company is enhancing its IT infrastructure by moving to the cloud, which is expected to yield over $2 million in annual savings [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving adjusted EBITDA positivity for the year and being free cash flow positive in the second half of 2021 [12] - The company is adapting to the pandemic by streamlining operations and focusing on higher-margin business lines [42] - Management believes that the changes being made will position the company competitively for the long term [55] Other Important Information - The company recognized a $1.5 million one-time tax benefit related to NOL carrybacks due to the CARES Act [50] - As of June 30, 2020, the company had cash and cash equivalents of $30.1 million, an increase from $23.5 million at the end of the previous quarter [52] Q&A Session Summary Question: Congratulations on achieving positive adjusted EBITDA - Management acknowledged the achievement and noted that it was the first positive cash flow in the second quarter since at least 2017 [58] Question: Can you provide insight on revenue stabilization and client losses? - Management confirmed that they believe they have stabilized the top line and are not experiencing the same customer losses as before [61] Question: What is the timeline for the $13 million in annualized savings? - Management clarified that the $13 million is an annualized figure, with a significant portion expected to be realized in the second, third, and fourth quarters [66] Question: Can you break down the savings by quarter? - Management indicated that savings began in the second quarter and will be more pronounced in the third and fourth quarters [67] Question: What should be expected regarding employee expenses going forward? - Management noted that increases in employee expenses are related to the revenue mix, particularly in the contact center business [71]

Harte Hanks, Inc. (NASDAQ:HHS) Q1 2020 Earnings Conference Call May 14, 2020 4:30 PM ET Company Participants Rob Fink – Investor Relations, FNK Andrew Benett – Executive Chairman and Chief Executive Officer Lauri Kearnes – Chief Financial Officer Conference Call Participants Michael Kupinski – Noble Capital Markets Operator Good day, and welcome to the Harte Hanks First Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, th ...

Harte Hanks, Inc. (NASDAQ:HHS) Q4 2019 Earnings Conference Call March 12, 2020 4:30 PM ET Company Participants Rob Fink – FNK, Investor Relations Andrew Benett – Executive Chairman and Chief Executive Officer Laurilee Kearnes – Chief Financial Officer Conference Call Participants Michael Kupinski – NOBLE Capital Markets Operator Good day and welcome to the Harte Hanks Fourth Quarter and Year-End 2019 Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference ove ...

Financial Data and Key Metrics Changes - The company achieved positive adjusted EBITDA of $203,000, a significant improvement from a negative $6.9 million in the same period last year [23][29] - Revenue for the third quarter was $51.4 million, down from $63.6 million a year ago, reflecting a year-over-year decline of $12.2 million or 19% [29] - Operating expenses decreased by $18 million or 24% year-over-year, totaling $59.9 million compared to $73.9 million in the previous year [31] Business Line Data and Key Metrics Changes - Revenue declined in B2B consumer financial services, retail, and transportation verticals, with retail experiencing the largest decline of $6.1 million or 41% [30] - The healthcare vertical saw an increase, contributing positively to the overall performance [30] Market Data and Key Metrics Changes - The company reported a year-over-year revenue decline of $12.2 million, which is an improvement compared to declines of $15 million in Q2 and $22 million in Q1 [22] Company Strategy and Development Direction - The company is focused on eliminating low-margin contracts and pursuing value-based engagements with healthier margins [6][7] - Efforts include consolidating smaller production facilities into larger, strategically located ones to create efficiencies [12] - The company aims to retain high-quality revenue and control costs while adding new business from existing and new accounts [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving positive adjusted EBITDA for the full year 2020, indicating a material decline in cash burn [7][24] - The company expects to continue seeing improvements in EBITDA as restructuring costs decline [24][26] Other Important Information - The company ended the third quarter with $32 million in cash, down from $39 million at the end of Q2 [25] - Restructuring expenses for the third quarter totaled $3.1 million, with annualized savings identified of more than $21 million associated with these efforts [27][28] Q&A Session Summary Question: Can you talk about the quality of revenues and how you plan to manage revenues going forward? - Management acknowledged the discontinuation of low-margin revenue and emphasized that new revenue is coming at higher margins [39] Question: How does the pipeline of business translate in terms of profitability? - Management stated that the new business won is generally profitable from the beginning, although it may take time to ramp up [43] Question: What is the magnitude of the decrease in losses from vendor relationships? - Management indicated that they were previously spending over $10 million a year on certain vendors, with most costs expected to be eliminated by Q1 [46] Question: Was the consolidation of facilities in the third quarter or fourth quarter? - Management confirmed that the consolidation began in the third quarter and will continue into the fourth quarter [48] Question: Will there be any revenue impact from the consolidation? - Management stated that the revenue impact from the consolidation would not be material [51]

Harte Hanks Inc. (NASDAQ:HHS) Q2 2019 Earnings Conference Call August 8, 2019 4:30 PM ET Company Participants Rob Fink – Managing Partner-FNK IR Andrew Harrison – President and Chief Operating Officer Mark Del Priore – Chief Financial Officer Conference Call Participants Michael Kupinski – NOBLE Capital Markets Operator Good day, and welcome to the Harte Hanks Second Quarter 2019 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Rob Fink of FNK ...

Harte Hanks, Inc. (NASDAQ:HHS) Q1 2019 Results Earnings Conference Call May 8, 2019 4:30 PM ET Company Participants Rob Fink - Hayden IR Andrew Harrison - President Mark Del Priore - Chief Financial Officer Jack Griffin - Vice Chairman, Board of Directors Conference Call Participants Michael Kupinski - Noble Capital Markets Operator Please standby. Good day. And welcome to the Harte Hanks First Quarter 2019 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn th ...

Client Dependence and Revenue - The company's ten largest clients represented 44% of revenues in 2018, with traditional consumer retail accounting for 23% of total revenues[40]. - The company has experienced reduced demand for its products and services due to clients' financial conditions and marketing budget constraints, which are discretionary and easier to cut in the short term[58]. - The company’s financial performance may be adversely affected by fluctuations in client marketing expenditures due to economic downturns[39]. Financial Obligations and Performance - The company continues to experience net operating losses, impacting its ability to operate as a going concern without additional funding[51]. - The company’s pension benefit plans represent significant financial obligations, with uncertainties in estimating future payments[47]. - Employee morale and compensation have declined due to financial constraints, making it difficult for the company to attract and retain skilled professionals[61]. - The company is unlikely to declare cash dividends or repurchase shares in the near term, which could affect the market price of its common stock[93]. Debt and Credit Facilities - The company has a $22.0 million revolving credit facility, which was amended to extend the term to April 17, 2020[44]. - As of December 31, 2018, the company had $14.2 million of debt outstanding under the Texas Capital Credit Facility, with interest rates affected by market fluctuations[163]. - The company may incur additional indebtedness in the future, with limitations based on the terms of its Series A Convertible Preferred Stock[45]. Compliance and Regulatory Risks - The company received notices from the NYSE regarding non-compliance with listing requirements, including maintaining an average market capitalization of over $50 million[64][65]. - The company is at risk of delisting if it fails to maintain compliance with NYSE requirements, which could adversely affect its market price and liquidity[69]. - The company faces challenges in complying with privacy and data protection regulations, which could increase compliance costs and restrict its marketing activities[71][72]. Competition and Market Conditions - The company faces significant competition for marketing services, which may pressure pricing and margins[52]. - The company must maintain technological competitiveness and continually improve processes to meet client needs[54]. - Increased paper prices could lead to reduced customer spending on marketing programs, materially affecting revenues and profits[92]. - The company may be adversely affected by increases in postal rates and disruptions in postal services, which influence client marketing spending[90]. Operational Risks - The reliance on subcontractors and third parties for service delivery poses risks to client engagement execution[57]. - The company is vulnerable to cyber-attacks and security breaches, which could harm its reputation and result in significant costs[78]. - Security breaches could severely harm the company's business and reputation, particularly in e-commerce operations[86]. - Recent leadership changes may impact the company's operational results if new leaders are unsuccessful in their roles[82]. Intellectual Property and Legal Risks - The company faces risks related to the protection of its intellectual property rights, which could lead to increased litigation costs and operational restrictions[83]. - The company has identified material weaknesses in its internal control over financial reporting, which could result in misstatements in financial statements if not remediated[98]. International Operations and Currency Risks - Approximately 14.5% of the company's revenues were derived from operations outside the U.S. in 2018, primarily from Europe and Asia[95]. - The company is primarily exposed to fluctuations in foreign currency exchange rates, particularly the Euro, British Pound Sterling, and Philippine Peso[164]. - The company has not entered into any foreign currency forward exchange contracts to hedge against adverse fluctuations in foreign currency exchange rates, exposing it to additional risks[97]. - In 2018, the company reported a pre-tax currency transaction gain of $0.5 million, while in 2017, it experienced a pre-tax currency transaction loss of $0.4 million[164]. - The majority of transactions are conducted in local currencies, minimizing the impact of foreign currency fluctuations on overall annual earnings[164]. - The company does not engage in derivative instruments for speculation or hedging purposes[165]. Asset Management - The company sold its 3Q Digital business for $5 million in cash, significantly lower than the $30 million purchase price in 2015, indicating challenges in asset dispositions[88].

Harte Hanks, Inc. (NASDAQ:HHS) Q4 2018 Earnings Conference Call March 13, 2019 4:30 PM ET Company Participants Rob Fink - Hayden, IR Bant Breen - Chief Executive Officer Mark Del Priore - Chief Financial Officer Conference Call Participants Michael Kupinski - Noble Capital Markets Operator Good day, and welcome to the Harte Hanks Fourth Quarter and Full Year 2018 Earnings Conference Call. Today's conference is being recorded. As a reminder, there will be a question-and-answer session during today’s call. [O ...