Harte Hanks(US:HHS)2025-11-12 14:13Revenue Performance - Revenue for the three months ended September 30, 2025, decreased by $8.1 million, or 17.0%, to $39.5 million compared to the same period in 2024, attributed to reductions across all three segments [110]. - For the nine months ended September 30, 2025, revenue decreased by $18.4 million, or 13.3%, to $119.7 million compared to the same period in 2024, due to decreased revenue in all segments [116]. - Marketing Services segment revenue decreased by $4.4 million, or 33.4%, to $8.826 million for the three months ended September 30, 2025, compared to $13.255 million in the prior year [127]. - Customer Care segment revenue decreased by $1.5 million, or 11.6%, to $11.553 million for the three months ended September 30, 2025, primarily due to timing fluctuations [130]. - Fulfillment & Logistics Services segment revenue decreased by $2.2 million, or 10.2%, to $19.141 million for the three months ended September 30, 2025, due to lower volume from existing customers [133]. Operating Income and Expenses - Operating income for the three months ended September 30, 2025, was $509,000, down 73.2% from $1.9 million in the same quarter of 2024 [109]. - Operating expenses for the three months ended September 30, 2025, were $39.0 million, a decrease of $6.7 million, or 14.7%, from $45.7 million in the prior year [111]. - Operating income for the Marketing Services segment decreased by $0.9 million, or 36.9%, to $1.535 million for the three months ended September 30, 2025 [128]. - Customer Care segment operating income decreased by $1.4 million, or 57.9%, to $1.037 million for the three months ended September 30, 2025 [131]. - Fulfillment & Logistics Services segment operating income increased by $0.6 million, or 57.4%, to $1.690 million for the three months ended September 30, 2025 [133]. - Operating expenses for the nine months ended September 30, 2025, were $119.2 million, a decrease of $15.3 million, or 11.3%, from $134.5 million in the prior year [117]. - Labor expenses for the nine months ended September 30, 2025, decreased by $10.7 million, or 15.2%, to $59.6 million due to adjustments in workforce aligned with revenue reductions [118]. Cash and Financing - Cash and cash equivalents were $6.5 million as of September 30, 2025, down from $9.9 million at December 31, 2024 [135]. - Net cash used in operating activities was $2.5 million for the nine months ended September 30, 2025, compared to $7.0 million for the same period in 2024 [137]. - The Company had the ability to borrow up to $24.0 million under its Credit Facility as of September 30, 2025 [146]. - The Credit Facility interest rate was 6.49% as of September 30, 2025, with a maturity date extended to June 30, 2028 [143]. Tax and Restructuring - The effective tax rate for the nine months ended September 30, 2025, was (329.8)%, a decrease of 352.6% compared to the same period in 2024, primarily due to income earned in foreign jurisdictions [122]. - Restructuring charges related to the business transformation for the three and nine months ended September 30, 2025, were $0.5 million and $1.5 million, respectively [107]. - The company expects reorganization savings from "Project Elevate" to be approximately $16.0 million from 2024 to 2026 [106]. - The company initiated "Project Elevate" to optimize operations and reinvest savings into sales, marketing, and technology [106].