Harte Hanks(US:HHS)2021-05-19 14:59Financial Data and Key Metrics Changes - The company reported Q1 2021 revenue of $43.8 million, an 8% increase from $40.5 million in Q1 2020 [7][16] - Adjusted EBITDA for Q1 was $2.2 million, marking the fourth consecutive quarter of positive adjusted EBITDA [7][15] - The operating loss improved to $884,000 from a $5.1 million loss in the same quarter last year [19] Business Line Data and Key Metrics Changes - Customer Care: Revenue increased by $8.1 million year-over-year, with EBITDA improving to $2.6 million from a negative $800,000 [10][16] - Fulfillment & Logistics: Revenue declined by $4 million year-over-year, but EBITDA improved to $1.2 million from a negative $700,000 [11][18] - Marketing Services: Revenue and EBITDA declined by $600,000 and $500,000 respectively due to reduced client marketing spend [13][18] Market Data and Key Metrics Changes - The company experienced strong revenue growth in the Customer Care segment, driven by COVID-related projects, which are expected to taper off as the year progresses [10][16] - The Fulfillment & Logistics segment benefited from a favorable litigation settlement of $750,000 [18] Company Strategy and Development Direction - The company has organized into three operating segments: Customer Care, Fulfillment & Logistics, and Marketing Services, aiming for transparency and visibility into financials [6] - Cost reduction initiatives are expected to deliver an incremental $6 million to $8 million in EBITDA improvement in 2022 [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future performance, citing stabilized top-line revenue and a rightsized cost structure [14] - The company is encouraged by new business wins and growth in pharmaceutical and consumer packaged goods verticals [15] Other Important Information - As of March 31, 2021, the company had cash and cash equivalents of $24.9 million, down from $29.4 million at the end of 2020 [20][21] - Long-term debt stood at $18.4 million, which includes a portion of the PPP loan [21] Q&A Session Summary Question: Revenue expectations for the second quarter - Management indicated that $40 million is a baseline for future quarterly revenues [24] Question: Labor expenses outlook - Management anticipates some increases in labor costs due to adjustments in the Customer Care business and broader labor market challenges [26][27] Question: Customer Care revenue expectations for Q2 - Management has good visibility for Q2 but noted uncertainty for the second half of the year due to the nature of COVID-related projects [28]