Harte Hanks(HHS) - 2019 Q2 - Quarterly Report

Part I. Financial Information This section presents the company's unaudited condensed consolidated financial statements and management's analysis Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for Harte Hanks, Inc. and its subsidiaries, including balance sheets, statements of comprehensive (loss) income, statements of changes in deficit, and statements of cash flows, along with detailed notes explaining significant accounting policies, recent pronouncements, revenue recognition, leases, debt, equity, and other financial details Condensed Consolidated Balance Sheets This statement presents the company's assets, liabilities, and stockholders' deficit at specific points in time | In thousands | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | ASSETS | | | | Total current assets | $87,551 | $104,992 | | Property, plant and equipment, net | $9,953 | $13,592 | | Right-of-use assets | $24,137 | — | | Other assets | $4,605 | $6,591 | | Total assets | $126,246 | $125,175 | | LIABILITIES AND STOCKHOLDERS' DEFICIT | | | | Total current liabilities | $49,830 | $54,162 | | Long-term debt | $18,700 | $14,200 | | Pensions | $62,128 | $62,214 | | Long-term lease liabilities | $16,469 | — | | Other long-term liabilities | $4,038 | $4,060 | | Total liabilities | $151,165 | $134,636 | | Preferred stock | $9,723 | $9,723 | | Total stockholders' deficit | $(34,642) | $(19,184) | | Total liabilities, preferred stock and stockholders' deficit | $126,246 | $125,175 | - Total assets increased by $1.071 million from December 31, 2018, to June 30, 2019, primarily due to the recognition of Right-of-use assets ($24.137 million) following the adoption of new lease accounting standards, offset by decreases in current assets[8] - Total liabilities increased by $16.529 million, driven by the recognition of long-term lease liabilities ($16.469 million) and an increase in long-term debt, partially offset by a decrease in current liabilities[8] - Stockholders' deficit worsened from $(19.184) million at December 31, 2018, to $(34.642) million at June 30, 2019[8] Condensed Consolidated Statements of Comprehensive (Loss) Income (Three Months) This statement details the company's revenues, expenses, and comprehensive loss for the three-month period | In thousands, except per share amounts | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Change (YoY) | | :--- | :--- | :--- | :--- | | Operating revenues | $54,686 | $69,633 | $(14,947) (-21.5%) | | Total operating expenses | $61,299 | $75,941 | $(14,642) (-19.3%) | | Operating loss | $(6,613) | $(6,308) | $(305) (4.8%) | | Loss before income taxes | $(3,855) | $(7,318) | $3,463 (-47.3%) | | Net loss | $(3,803) | $(6,734) | $2,931 (-43.5%) | | Loss attributable to common stockholders | $(3,927) | $(6,858) | $2,931 (-42.7%) | | Basic loss per common share | $(0.63) | $(1.10) | $0.47 (-42.7%) | | Diluted loss per common share | $(0.63) | $(1.10) | $0.47 (-42.7%) | | Comprehensive loss | $(2,877) | $(7,022) | $4,145 (-59.0%) | - Operating revenues decreased by 21.5% year-over-year, while total operating expenses decreased by 19.3%[9] - The company reported a net loss of $(3,803) thousand for Q2 2019, an improvement from $(6,734) thousand in Q2 2018, primarily due to a $5 million gain on contingent payment from 3Q Digital[9] Condensed Consolidated Statements of Comprehensive (Loss) Income (Six Months) This statement details the company's revenues, expenses, and comprehensive loss for the six-month period | In thousands, except per share amounts | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | Change (YoY) | | :--- | :--- | :--- | :--- | | Operating revenues | $113,836 | $150,829 | $(36,993) (-24.5%) | | Total operating expenses | $131,390 | $162,173 | $(30,783) (-19.0%) | | Operating loss | $(17,554) | $(11,344) | $(6,210) (54.7%) | | (Loss) income before income taxes | $(16,592) | $16,529 | $(33,121) (-200.4%) | | Net (loss) income | $(17,330) | $25,893 | $(43,223) (-166.9%) | | (Loss) income attributable to common stockholders | $(17,576) | $22,627 | $(40,203) (-177.7%) | | Basic (loss) earnings per common share | $(2.80) | $3.64 | $(6.44) (-176.9%) | | Diluted (loss) earnings per common share | $(2.80) | $3.62 | $(6.42) (-177.3%) | | Comprehensive (loss) income | $(27,237) | $25,969 | $(53,206) (-204.9%) | - Operating revenues for the six months ended June 30, 2019, decreased by 24.5% compared to the same period in 2018[9][10] - The company reported a net loss of $(17,330) thousand for the first half of 2019, a significant decline from a net income of $25,893 thousand in the first half of 2018, largely due to the absence of the $30.954 million gain on sale from 3Q Digital in 2018[10] Condensed Consolidated Statements of Changes in Stockholder's Deficit This statement outlines changes in the company's equity components over the reporting period | In thousands | Balance at Dec 31, 2018 | Balance at June 30, 2019 | | :--- | :--- | :--- | | Preferred Stock | $9,723 | $9,723 | | Common Stock | $12,115 | $12,121 | | Additional Paid-in Capital | $453,868 | $451,937 | | Retained Earnings | $812,704 | $806,751 | | Treasury Stock | $(1,251,388) | $(1,249,061) | | Accumulated Other Comprehensive Loss | $(46,483) | $(56,390) | | Total Stockholders' Deficit | $(19,184) | $(34,642) | - Total stockholders' deficit increased from $(19,184) thousand at December 31, 2018, to $(34,642) thousand at June 30, 2019, primarily due to net losses and an increase in accumulated other comprehensive loss[11] - The adoption of ASU 2018-02 resulted in a cumulative effect accounting change, reclassifying $11,377 thousand to retained earnings and $(11,355) thousand to accumulated other comprehensive loss[11] [Condensed Consolidated Statements of Cash Flows](index