hrth-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


x			QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-07120

HARTE HANKS, INC.

(Exact name of registrant as specified in its charter)


Delaware	1 Executive Drive, Chelmsford, MA 01824	74-1677284
(State or other jurisdiction of	(Address of principal executive offices,	(I.R.S. Employer
incorporation or organization)	including zip code)	Identification Number)

(512) 434-1100

(Registrant’s telephone number including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	HHS	NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The number of shares outstanding of the issuer’s common stock as of October 31, 2024 was 7,288,983 shares.

Table of Contents

HARTE HANKS, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

FORM 10-Q REPORT

For the Quarterly Period Ended September 30, 2024


PART 1. FINANCIAL INFORMATION			3
Item 1. Condensed Consolidated Financial Statements			3
Condensed Consolidated Balance Sheets			3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)			4
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)			5
Condensed Consolidated Statements of Cash Flows (Unaudited)			6
Notes to Condensed Consolidated Financial Statements (Unaudited)			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			20
Item 3. Quantitative and Qualitative Disclosures About Market Risk			28
Item 4. Controls and Procedures			28
PART II. OTHER INFORMATION			28
Item 1. Legal Proceedings			28
Item 1a. Risk Factors			28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			29
Item 3. Defaults Upon Senior Securities			29
Item 4. Mine Safety Disclosures			29
Item 5. Other Information			29
Item 6. Exhibits			30

Table of Contents

PART 1. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Harte Hanks, Inc. and Subsidiaries Condensed Consolidated Balance Sheets


In thousands, except shares and per share amounts	September 30, 2024		December 31, 2023
ASSETS	(unaudited)
Current assets
Cash and cash equivalents	$	5,944	$	18,364
Accounts receivable (less allowance for doubtful accounts of $54 and $474 at September 30, 2024 and December 31, 2023, respectively)	33,275		34,313
Contract assets and unbilled accounts receivable	9,260		7,935
Prepaid expenses	2,119		1,915
Prepaid income taxes and income tax receivable	1,758		1,758
Other current assets	1,467		928
Total current assets	53,823		65,213
Property, plant and equipment (less accumulated depreciation of $38,845 and $36,533, respectively)	9,310		8,855
Right-of-use assets	22,926		25,417
Other assets
Intangible assets, net	2,280		2,820
Goodwill	1,926		1,926
Deferred tax assets, net	17,128		17,268
Other long-term assets	734		1,258
Total other assets	22,068		23,272
Total assets	$	108,127	$	122,757
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	20,880	$	23,176
Accrued payroll and related expenses	4,476		5,615
Deferred revenue and customer advances	3,400		3,195
Customer postage and program deposits	1,430		1,815
Other current liabilities	2,995		9,495
Current portion of lease liabilities	3,762		4,815
Total current liabilities	36,943		48,111
Pension liabilities - Qualified plans	8,931		10,540
Pension liabilities - Nonqualified plan	17,968		18,630
Long-term lease liabilities, net of current portion	21,469		23,691
Other long-term liabilities	1,767		1,928
Total liabilities	87,078		102,900
Stockholders’ equity
Common stock, $1 par value, 25,000,000 shares authorized; 12,221,484 shares issued, 7,353,162 and 7,224,718 shares outstanding at September 30, 2024 and December 31, 2023, respectively	12,221		12,221
Additional paid-in capital	125,173		157,889
Retained earnings	817,057		844,920
Less treasury stock, 4,868,322 shares at cost at September 30, 2024 and 4,996,766 shares at cost at December 31, 2023	(916,993)		(951,083)
Accumulated other comprehensive loss	(16,409)		(44,090)
Total stockholders’ equity	21,049		19,857
Total liabilities and stockholders’ equity	$	108,127	$	122,757
See Accompanying Notes to Condensed Consolidated Financial Statements

Table of Contents

Harte Hanks, Inc. and Subsidiaries Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)


	Three months ended September 30,				Nine months ended September 30,
In thousands, except per share amounts	2024		2023		2024		2023
Revenue	$	47,630	$	47,119	$	138,113	$	142,001
Operating expenses
Labor	24,176		22,953		70,343		74,084
Production and distribution	14,421		15,378		41,850		43,158
Advertising, selling, general and administrative	5,260		4,922		17,051		16,071
Restructuring expenses	836		—		2,116		—
Depreciation and amortization expense	1,039		952		3,107		3,051
Total operating expenses	45,732		44,205		134,467		136,364
Operating income	1,898		2,914		3,646		5,637

Other expense, net
Interest expense (income), net	57		1		107		(150)
Pension plan termination charges	—		—		37,505		—
Other expense, net	831		383		2,104		3,760
Total other expense, net	888		384		39,716		3,610
Income (loss) before income taxes	1,010		2,530		(36,070)		2,027
Income tax expense (benefit)	868		1,912		(8,207)		1,620
Net income (loss)	142		618		(27,863)		407

Income (loss) per common share
Basic	$	0.02	$	0.09	$	(3.83)	$	0.06
Diluted	$	0.02	$	0.08	$	(3.83)	$	0.05

Weighted average shares used to compute income (loss) per share
Basic	7,324		7,239		7,273		7,340
Diluted	7,398		7,314		7,273		7,509

Comprehensive income (loss) net of tax:
Net income (loss)	$	142	$	618	$	(27,863)	$	407

Adjustment to pension liability, net	102		503		29,626		1,421
Foreign currency translation adjustment	(8)		(559)		(1,945)		1,645
Total other comprehensive income (loss), net of tax	$	94	$	(56)	$	27,681	$	3,066

Comprehensive income (loss)	$	236	$	562	$	(182)	$	3,473

See Accompanying Notes to Condensed Consolidated Financial Statements

Table of Contents

Harte Hanks, Inc. and Subsidiaries Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)


In thousands	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
Balance at December 31, 2023	$	12,221	$	157,889	$	844,920	$	(951,083)	$	(44,090)	$	19,857
Stock-based compensation	—		552		—		—		—		552
Vesting of RSUs	—		(5,264)		—		5,177		—		(87)
Net loss	—		—		(171)		—		—		(171)
Other comprehensive loss	—		—		—		—		(189)		(189)
Balance at March 31, 2024	$	12,221	$	153,177	$	844,749	$	(945,906)	$	(44,279)	$	19,962
Stock-based compensation	—		734		—		—		—		734
Vesting of RSUs	—		(8,208)		—		8,178		—		(30)
Net loss	—		—		(27,834)		—		—		(27,834)
Other comprehensive income	—		—		—		—		27,776		27,776
Balance at June 30, 2024	$	12,221	$	145,703	$	816,915	$	(937,728)	$	(16,503)	$	20,608
Stock-based compensation			368								368
Vesting of RSUs			(20,898)				20,735				(163)
Net income					142						142
Other comprehensive income									$	94	94
Balance at September 30, 2024	$	12,221	$	125,173	$	817,057	$	(916,993)	$	(16,409)	$	21,049


In thousands	Common Stock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss	Total Stockholders’ Equity
Balance at December 31, 2022	$	12,221	$	218,411	$	846,490	$	(

SEC Form 10-Q filed by Harte Hanks Inc.