Harte Hanks(US:HHS)2024-11-14 21:51Revenue Performance - Revenue increased by $0.5 million, or 1.1%, to $47.6 million for the three months ended September 30, 2024, compared to the same period in 2023[109]. - For the nine months ended September 30, 2024, revenue decreased by $3.9 million, or 2.7%, to $138.1 million, attributed to decreased revenue in three operating segments[116]. - Marketing Services segment revenue decreased by $1.5 million, or 14.6%, for the three months ended September 30, 2024, due to customer turnover and reduced client spending[124]. - Customer Care segment revenue increased by $1.2 million, or 10.4%, for the three months ended September 30, 2024, driven by specific program fluctuations[126]. - Sales Services segment revenue increased by $2.0 million, or 94.1%, for the three months ended September 30, 2024, primarily due to increased work from a large fintech customer[129]. - Fulfillment & Logistics Services segment revenue decreased by $1.2 million, or 5.4%, for the three months ended September 30, 2024, due to lower volume from existing customers[131]. Operating Expenses - Operating expenses rose by $1.5 million, or 3.5%, to $45.7 million for the three months ended September 30, 2024, primarily due to higher labor costs[110]. - Operating expenses for the nine months ended September 30, 2024, were $134.5 million, a decrease of $1.9 million, or 1.4%, compared to the same period in 2023[117]. - Labor expenses decreased by $3.7 million, or 5.0%, for the nine months ended September 30, 2024, due to lower labor costs associated with reduced revenue[118]. - Fulfillment & Logistics Services segment operating income decreased by $1.5 million, or 58.8%, for the three months ended September 30, 2024, primarily due to revenue mix and higher expenses[131]. Net Income and Other Financial Metrics - The company recorded a net income of $0.1 million for the three months ended September 30, 2024, compared to a net income of $0.6 million in the prior year[112]. - Other expense, net, for the nine months ended September 30, 2024, was $39.7 million, a significant increase from $3.6 million in the prior year, primarily due to pension termination charges[121]. - The effective tax rate for the nine months ended September 30, 2024, was 22.8%, a decrease from 79.9% in the same period of 2023[122]. Cash Flow and Liquidity - Net cash used in operating activities was $7.0 million for the nine months ended September 30, 2024, compared to net cash provided of $6.1 million for the same period in 2023[136]. - The company had cash and cash equivalents of $5.9 million as of September 30, 2024, down from $18.4 million at December 31, 2023[134]. - The company has the ability to borrow an additional $24.0 million under its Credit Facility as of September 30, 2024[145]. Strategic Initiatives - Project Elevate aims to achieve $6 million in savings for 2024 and a total of $16 million by the end of 2025[104]. Corporate Governance and Compliance - The CEO and CFO evaluated the effectiveness of disclosure controls and procedures as of September 30, 2024, concluding they were effective at the "reasonable assurance" level[150]. - There were no changes in internal controls over financial reporting during the most recent fiscal quarter that materially affected the internal control[151]. - Information regarding legal proceedings is detailed in Note L, Litigation and Contingencies, in the Notes to Condensed Consolidated Financial Statements[152]. Dividends - The company did not pay any dividends in the three months ended September 30, 2024, and 2023[145].