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Harte Hanks(HHS) - 2024 Q3 - Earnings Call Transcript
HHSHarte Hanks(HHS)2024-11-15 00:39
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Financial Data and Key Metrics Changes - In Q3 2024, the company reported a revenue increase of 1.1% year-over-year, reaching 47.6millioncomparedto47.6 million compared to 47.1 million in Q3 2023, marking an improvement from a negative 16.6% revenue decline in Q3 2023 [6][12] - Operating income for Q3 2024 was 1.9million,downfrom1.9 million, down from 2.9 million in Q3 2023, while adjusted operating income was 3.1millioncomparedto3.1 million compared to 3.2 million in the same period last year [15] - EBITDA for Q3 2024 was 2.9million,downfrom2.9 million, down from 3.9 million in Q3 2023, with adjusted EBITDA at 4.1millioncomparedto4.1 million compared to 4.2 million in the prior year [15] Business Line Data and Key Metrics Changes - Customer Care segment revenues increased to 13.1millioninQ32024from13.1 million in Q3 2024 from 11.8 million in Q3 2023, driven by expanded workloads from multiple customers in the entertainment industry [12] - Sales Services revenues rose to 4.2millioncomparedto4.2 million compared to 2.2 million in the same quarter last year, primarily due to increased volume from a large client [12] - Marketing Services segment revenues fell to 9.1millionfrom9.1 million from 10.6 million year-over-year, attributed to customer budget reductions and the conclusion of certain programs [13] - Fulfillment and logistics revenues decreased to 21.3millionfrom21.3 million from 22.5 million, due to lower logistics volume and rates not keeping pace with new programs [13] Market Data and Key Metrics Changes - The company has secured new clients in various sectors, including a dynamic design marketplace and a top 15 financial services client, indicating growth opportunities in diverse markets [10][11] - The addition of a new client in the global luxury automotive industry and a prominent global resale marketplace for luxury goods highlights the company's expansion into high-value markets [11] Company Strategy and Development Direction - The company is focused on transforming its business for sustainable growth and optimizing free cash flow, with a strategy that includes creating lasting value through investment and recalibration [6][7] - The establishment of the Customer Excellence and Growth division aims to enhance customer experience and leverage data and AI capabilities across business segments [8][9] - Project Elevate is a key initiative aimed at improving profitability through cost reductions and increasing free cash flow, with a target of 6millioninEBITDAimprovement[14][15]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementacknowledgesthattherevenueturnaroundmaynotbelinear,anticipatingfluctuationsandoccasionaldeclinesaspartofthegrowthjourney[7]−Thefocusremainsonadaptingtocustomerneedsandprioritizinginnovationtoenhancethecompany′scompetitivepositioninthemarket[20]OtherImportantInformation−AsofSeptember30,2024,cashandcashequivalentswere6 million in EBITDA improvement [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that the revenue turnaround may not be linear, anticipating fluctuations and occasional declines as part of the growth journey [7] - The focus remains on adapting to customer needs and prioritizing innovation to enhance the company's competitive position in the market [20] Other Important Information - As of September 30, 2024, cash and cash equivalents were 5.9 million, down from 13.3millionayearprior,withacurrentlineofcreditof13.3 million a year prior, with a current line of credit of 25 million extended until June 2025 [16] - The pension plan was terminated in June 2024, resulting in a significant reduction of liabilities on the balance sheet [17][18] Q&A Session Summary - No questions were raised during the Q&A session, and the management concluded the call by expressing gratitude to investors, employees, and partners for their support [20][21]