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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Harte Hanks Inc | NYSE:HHS | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.69 | 0 | 01:00:00 |
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Delaware
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74-1677284
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification Number)
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Title of Each Class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock
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HHS
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New York Stock Exchange (“NYSE”)
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
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ý
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Smaller reporting company
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ý
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Emerging growth company
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o
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Page
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(Unaudited)
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In thousands, except per share and share amounts
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
ASSETS
|
|
|
|
|
|
|
||
Current assets
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
39,000
|
|
|
$
|
20,882
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|
Accounts receivable (less allowance for doubtful accounts of $813 at June 30, 2019
and $430 at December 31, 2018)
|
|
40,782
|
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|
54,240
|
|
||
Contract assets
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|
1,228
|
|
|
2,362
|
|
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Inventory
|
|
409
|
|
|
448
|
|
||
Prepaid expenses
|
|
3,632
|
|
|
4,088
|
|
||
Prepaid taxes and income tax receivable
|
|
656
|
|
|
20,436
|
|
||
Other current assets
|
|
1,844
|
|
|
2,536
|
|
||
Total current assets
|
|
87,551
|
|
|
104,992
|
|
||
Property, plant and equipment (less accumulated depreciation of $131,251 at June 30, 2019 and $133,559 at December 31, 2018)
|
|
9,953
|
|
|
13,592
|
|
||
Right-of-use assets
|
|
24,137
|
|
|
—
|
|
||
Other assets
|
|
4,605
|
|
|
6,591
|
|
||
Total assets
|
|
$
|
126,246
|
|
|
$
|
125,175
|
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
19,159
|
|
|
$
|
31,052
|
|
Accrued payroll and related expenses
|
|
5,267
|
|
|
6,783
|
|
||
Deferred revenue and customer advances
|
|
5,229
|
|
|
6,034
|
|
||
Customer postage and program deposits
|
|
8,052
|
|
|
6,729
|
|
||
Short-term lease liabilities
|
|
8,609
|
|
|
—
|
|
||
Other current liabilities
|
|
3,514
|
|
|
3,564
|
|
||
Total current liabilities
|
|
49,830
|
|
|
54,162
|
|
||
Long-term debt
|
|
18,700
|
|
|
14,200
|
|
||
Pensions
|
|
62,128
|
|
|
62,214
|
|
||
Long-term lease liabilities
|
|
16,469
|
|
|
—
|
|
||
Other long-term liabilities
|
|
4,038
|
|
|
4,060
|
|
||
Total liabilities
|
|
151,165
|
|
|
134,636
|
|
||
|
|
|
|
|
||||
Preferred stock, $1 par value, 1,000,000 shares authorized; 9,926 shares of Series A Convertible Preferred Stock authorized, issued and outstanding
|
|
9,723
|
|
|
9,723
|
|
||
|
|
|
|
|
||||
Stockholders’ deficit
|
|
|
|
|
|
|
||
Common stock, $1 par value, 25,000,000 shares authorized;12,121,484 and 12,115,055 shares issued, 6,276,963 and 6,260,075 shares outstanding at June 30, 2019 and December 31, 2018, respectively
|
|
12,121
|
|
|
12,115
|
|
||
Additional paid-in capital
|
|
451,937
|
|
|
453,868
|
|
||
Retained earnings
|
|
806,751
|
|
|
812,704
|
|
||
Less treasury stock, 5,844,521 shares at cost at June 30, 2019 and 5,854,980 shares at cost at December 31, 2018
|
|
(1,249,061
|
)
|
|
(1,251,388
|
)
|
||
Accumulated other comprehensive loss
|
|
(56,390
|
)
|
|
(46,483
|
)
|
||
Total stockholders’ deficit
|
|
(34,642
|
)
|
|
(19,184
|
)
|
||
Total liabilities, preferred stock and stockholders’ deficit
|
|
$
|
126,246
|
|
|
$
|
125,175
|
|
|
|
Three Months Ended June 30,
|
|
|||||||
In thousands, except per share amounts
|
|
2019
|
|
2018
|
|
|||||
Operating revenues
|
|
$
|
54,686
|
|
|
|
$
|
69,633
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
||
Labor
|
|
31,778
|
|
|
|
39,725
|
|
|
||
Production and distribution
|
|
17,816
|
|
|
|
26,358
|
|
|
||
Advertising, selling, general and administrative
|
|
7,127
|
|
|
|
7,955
|
|
|
||
Restructuring Expense
|
|
3,281
|
|
|
|
—
|
|
|
||
Depreciation, software and intangible asset amortization
|
|
1,297
|
|
|
|
1,903
|
|
|
||
Total operating expenses
|
|
61,299
|
|
|
|
75,941
|
|
|
||
Operating loss
|
|
(6,613
|
)
|
|
|
(6,308
|
)
|
|
||
Other (income) expenses
|
|
|
|
|
|
|
|
|
||
Interest expense, net
|
|
388
|
|
|
|
183
|
|
|
||
Gain on contingent payment from 3Q
|
|
(5,000
|
)
|
|
|
—
|
|
|
||
Other, net
|
|
1,854
|
|
|
|
827
|
|
|
||
Total other (income) expenses
|
|
(2,758
|
)
|
|
|
1,010
|
|
|
||
Loss before income taxes
|
|
(3,855
|
)
|
|
|
(7,318
|
)
|
|
||
Income tax benefit
|
|
(52
|
)
|
|
|
(584
|
)
|
|
||
Net loss
|
|
(3,803
|
)
|
|
|
(6,734
|
)
|
|
||
Less: Preferred stock dividends
|
|
124
|
|
|
|
124
|
|
|
||
Loss attributable to common stockholders
|
|
$
|
(3,927
|
)
|
|
|
$
|
(6,858
|
)
|
|
|
|
|
|
|
|
|
|
|
||
Loss per common share
|
|
|
|
|
|
|
|
|
||
Basic
|
|
$
|
(0.63
|
)
|
|
|
$
|
(1.10
|
)
|
|
Diluted
|
|
$
|
(0.63
|
)
|
|
|
$
|
(1.10
|
)
|
|
|
|
|
|
|
|
|
|
|
||
Weighted average shares used to compute loss per share attributable to common shares
|
|
|
|
|
|
|
|
|
||
Basic
|
|
6,272
|
|
619
|
|
6,226
|
|
|
||
Diluted
|
|
6,272
|
|
|
|
6,226
|
|
|
||
|
|
|
|
|
|
|
|
|
||
Comprehensive loss, net of tax:
|
|
|
|
|
|
|
|
|
||
Net loss
|
|
$
|
(3,803
|
)
|
|
|
$
|
(6,734
|
)
|
|
|
|
|
|
|
|
|
|
|
||
Adjustment to pension liability, net
|
|
549
|
|
|
|
517
|
|
|
||
Foreign currency translation adjustment
|
|
377
|
|
|
|
(805
|
)
|
|
||
Total other comprehensive income (loss), net of tax
|
|
$
|
926
|
|
|
|
$
|
(288
|
)
|
|
|
|
|
|
|
|
|
|
|
||
Comprehensive loss
|
|
$
|
(2,877
|
)
|
|
|
$
|
(7,022
|
)
|
|
Less: Preferred stock dividends
|
|
124
|
|
|
124
|
|
|
|||
Comprehensive loss attributable to common stockholders
|
|
$
|
(3,001
|
)
|
|
$
|
(7,146
|
)
|
|
|
|
Six Months Ended June 30,
|
||||||
In thousands, except per share amounts
|
|
2019
|
|
2018
|
||||
Operating revenues
|
|
$
|
113,836
|
|
|
$
|
150,829
|
|
Operating expenses
|
|
|
|
|
|
|
||
Labor
|
|
65,445
|
|
|
90,381
|
|
||
Production and distribution
|
|
40,816
|
|
|
50,506
|
|
||
Advertising, selling, general and administrative
|
|
14,602
|
|
|
17,232
|
|
||
Restructuring Expense
|
|
7,787
|
|
|
—
|
|
||
Depreciation, software and intangible asset amortization
|
|
2,740
|
|
|
4,054
|
|
||
Total operating expenses
|
|
131,390
|
|
|
162,173
|
|
||
Operating loss
|
|
(17,554
|
)
|
|
(11,344
|
)
|
||
Other (income) and expenses
|
|
|
|
|
|
|
||
Interest expense, net
|
|
609
|
|
|
1,112
|
|
||
Gain on sale from 3Q
|
|
(5,000
|
)
|
|
(30,954
|
)
|
||
Other, net
|
|
3,429
|
|
|
1,969
|
|
||
Total other income
|
|
(962
|
)
|
|
(27,873
|
)
|
||
(Loss) income before income taxes
|
|
(16,592
|
)
|
|
16,529
|
|
||
Income tax expense (benefit)
|
|
738
|
|
|
(9,364
|
)
|
||
Net (loss) income
|
|
(17,330
|
)
|
|
25,893
|
|
||
Less: Earnings attributable to participating securities
|
|
$
|
—
|
|
|
$
|
3,059
|
|
Less: Preferred stock dividends
|
|
246
|
|
|
207
|
|
||
(Loss) income attributable to common stockholders
|
|
$
|
(17,576
|
)
|
|
$
|
22,627
|
|
|
|
|
|
|
|
|
||
(Loss) earnings per common share
|
|
|
|
|
|
|
||
Basic
|
|
$
|
(2.80
|
)
|
|
$
|
3.64
|
|
Diluted
|
|
$
|
(2.80
|
)
|
|
$
|
3.62
|
|
|
|
|
|
|
|
|
||
Weighted-average shares used to compute (loss) earnings per share attributable to common shares
|
|
|
|
|
|
|
||
Basic
|
|
6,270
|
|
|
6,220
|
|
||
Diluted
|
|
6,270
|
|
|
6,250
|
|
||
|
|
|
|
|
|
|
||
Comprehensive (loss) income
|
|
|
|
|
|
|
||
Net (loss) income
|
|
$
|
(17,330
|
)
|
|
$
|
25,893
|
|
|
|
|
|
|
|
|
||
Adjustment to pension liability
|
|
1,099
|
|
|
1,035
|
|
||
Foreign currency translation adjustment
|
|
349
|
|
|
(959
|
)
|
||
Adoption of ASU 2018-02
|
|
(11,355
|
)
|
|
—
|
|
||
Total other comprehensive (loss) income, net of tax
|
|
$
|
(9,907
|
)
|
|
$
|
76
|
|
|
|
|
|
|
|
|
||
Comprehensive (loss) income
|
|
$
|
(27,237
|
)
|
|
$
|
25,969
|
|
Less: Earnings attributable to participating securities
|
|
—
|
|
|
3,059
|
|
||
Less: Preferred stock dividends
|
|
246
|
|
|
207
|
|
||
Comprehensive (loss) income attributable to common stockholders
|
|
$
|
(27,483
|
)
|
|
$
|
22,703
|
|
In thousands
|
|
Preferred Stock
|
Common
Stock |
|
Additional
Paid-in Capital |
|
Retained
Earnings |
|
Treasury
Stock |
|
Accumulated Other
Comprehensive Loss |
|
Total
Stockholders’ Deficit |
||||||||||||||
Balance at December 31, 2017
|
|
$
|
—
|
|
$
|
12,075
|
|
|
$
|
457,186
|
|
|
$
|
794,583
|
|
|
$
|
(1,254,176
|
)
|
|
$
|
(44,303
|
)
|
|
$
|
(34,635
|
)
|
Cumulative effect of accounting change
|
|
—
|
|
—
|
|
|
—
|
|
|
571
|
|
|
—
|
|
|
—
|
|
|
571
|
|
|||||||
Preferred stock issued
|
|
9,723
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Stock Option activities
|
|
—
|
|
38
|
|
|
(38
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||||
Rounding from reverse stock split
|
|
—
|
|
(38
|
)
|
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Stock-based compensation
|
|
—
|
|
—
|
|
|
433
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
433
|
|
|||||||
Treasury stock issued
|
|
—
|
|
—
|
|
|
(50
|
)
|
|
—
|
|
|
53
|
|
|
—
|
|
|
3
|
|
|||||||
Net income
|
|
—
|
|
—
|
|
|
—
|
|
|
32,629
|
|
|
—
|
|
|
—
|
|
|
32,629
|
|
|||||||
Other comprehensive income
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
364
|
|
|
364
|
|
|||||||
Balance at March 31, 2018
|
|
$
|
9,723
|
|
$
|
12,075
|
|
|
$
|
457,569
|
|
|
$
|
827,783
|
|
|
$
|
(1,254,124
|
)
|
|
$
|
(43,939
|
)
|
|
$
|
(636
|
)
|
Stock Option activities
|
|
—
|
|
33
|
|
|
(33
|
)
|
|
—
|
|
|
(69
|
)
|
|
—
|
|
|
(69
|
)
|
|||||||
Stock-based compensation
|
|
—
|
|
—
|
|
|
425
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
425
|
|
|||||||
Treasury stock issued
|
|
—
|
|
—
|
|
|
(755
|
)
|
|
—
|
|
|
789
|
|
|
—
|
|
|
34
|
|
|||||||
Net loss
|
|
—
|
|
—
|
|
|
—
|
|
|
(6,734
|
)
|
|
—
|
|
|
—
|
|
|
(6,734
|
)
|
|||||||
Other comprehensive loss
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(288
|
)
|
|
(288
|
)
|
|||||||
Balance at June 30, 2018
|
|
$
|
9,723
|
|
$
|
12,108
|
|
|
$
|
457,206
|
|
|
$
|
821,049
|
|
|
$
|
(1,253,404
|
)
|
|
$
|
(44,227
|
)
|
|
$
|
(7,268
|
)
|
In thousands
|
|
Preferred Stock
|
Common
Stock |
|
Additional
Paid-in Capital |
|
Retained
Earnings |
|
Treasury
Stock |
|
Accumulated Other
Comprehensive Loss |
|
Total
Stockholders’ Deficit |
||||||||||||||
Balance at December 31, 2018
|
|
$
|
9,723
|
|
$
|
12,115
|
|
|
$
|
453,868
|
|
|
$
|
812,704
|
|
|
$
|
(1,251,388
|
)
|
|
$
|
(46,483
|
)
|
|
$
|
(19,184
|
)
|
Cumulative effect of accounting change
|
|
—
|
|
—
|
|
|
—
|
|
|
11,377
|
|
|
—
|
|
|
(11,355
|
)
|
|
22
|
|
|||||||
Stock-based compensation
|
|
—
|
|
—
|
|
|
151
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
151
|
|
|||||||
Treasury stock issued
|
|
—
|
|
—
|
|
|
(1,968
|
)
|
|
—
|
|
|
1,984
|
|
|
—
|
|
|
16
|
|
|||||||
Net loss
|
|
—
|
|
—
|
|
|
—
|
|
|
(13,527
|
)
|
|
—
|
|
|
—
|
|
|
(13,527
|
)
|
|||||||
Other comprehensive income
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
522
|
|
|
522
|
|
|||||||
Balance at March 31, 2019
|
|
$
|
9,723
|
|
$
|
12,115
|
|
|
$
|
452,051
|
|
|
$
|
810,554
|
|
|
$
|
(1,249,404
|
)
|
|
$
|
(57,316
|
)
|
|
$
|
(32,000
|
)
|
Stock Option activities
|
|
—
|
|
6
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||||
Stock-based compensation
|
|
—
|
|
—
|
|
|
239
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
239
|
|
|||||||
Treasury stock issued
|
|
—
|
|
—
|
|
|
(345
|
)
|
|
—
|
|
|
343
|
|
|
—
|
|
|
(2
|
)
|
|||||||
Net loss
|
|
—
|
|
—
|
|
|
—
|
|
|
(3,803
|
)
|
|
—
|
|
|
—
|
|
|
(3,803
|
)
|
|||||||
Other comprehensive income
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
926
|
|
|
926
|
|
|||||||
Balance at June 30, 2019
|
|
$
|
9,723
|
|
$
|
12,121
|
|
|
$
|
451,937
|
|
|
$
|
806,751
|
|
|
$
|
(1,249,061
|
)
|
|
$
|
(56,390
|
)
|
|
$
|
(34,642
|
)
|
|
|
Six Months Ended June 30,
|
||||||
In thousands
|
|
2019
|
|
2018
|
||||
Cash flows from operating activities
|
|
|
|
|
|
|
||
Net (loss) income
|
|
$
|
(17,330
|
)
|
|
$
|
25,893
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities
|
|
|
|
|
||||
Depreciation, software amortization
|
|
2,740
|
|
|
3,941
|
|
||
Intangible asset amortization
|
|
—
|
|
|
113
|
|
||
Restructuring
|
|
4,991
|
|
|
—
|
|
||
Stock-based compensation
|
|
424
|
|
|
1,274
|
|
||
Net pension cost
|
|
1,379
|
|
|
856
|
|
||
Interest accretion on contingent consideration
|
|
—
|
|
|
742
|
|
||
Deferred income taxes
|
|
576
|
|
|
(821
|
)
|
||
Gain on sale
|
|
—
|
|
|
(32,760
|
)
|
||
Other, net
|
|
—
|
|
|
614
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
|||
Decrease in accounts receivable, net and contract assets
|
|
14,592
|
|
|
8,871
|
|
||
Decrease in inventory
|
|
39
|
|
|
125
|
|
||
Decrease (increase) in prepaid expenses, income tax receivable and other assets
|
|
18,223
|
|
|
(9,725
|
)
|
||
(Decrease) increase in accounts payable
|
|
(11,630
|
)
|
|
11,138
|
|
||
Increase (decrease) in other accrued expenses and liabilities
|
|
1,323
|
|
|
(7,760
|
)
|
||
Net cash provided by operating activities
|
|
15,327
|
|
|
2,501
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities
|
|
0
|
|
|
|
|
||
Dispositions, net of cash transferred
|
|
—
|
|
|
3,929
|
|
||
Purchases of property, plant and equipment
|
|
(1,306
|
)
|
|
(2,111
|
)
|
||
Proceeds from sale of property, plant and equipment
|
|
15
|
|
|
—
|
|
||
Net cash (used in) provided by investing activities
|
|
(1,291
|
)
|
|
1,818
|
|
||
|
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
|
||
Borrowings
|
|
4,500
|
|
|
9,000
|
|
||
Repayment of borrowings
|
|
—
|
|
|
(9,000
|
)
|
||
Debt financing costs
|
|
(328
|
)
|
|
(980
|
)
|
||
Issuance of preferred stock, net of transaction fees
|
|
—
|
|
|
9,723
|
|
||
Issuance of common stock
|
|
(2
|
)
|
|
(70
|
)
|
||
Issuance of treasury stock
|
|
14
|
|
|
37
|
|
||
Payment of finance leases
|
|
(451
|
)
|
|
(254
|
)
|
||
Net cash provided by financing activities
|
|
3,733
|
|
|
8,456
|
|
||
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
|
349
|
|
|
(959
|
)
|
||
Net increase in cash and cash equivalents
|
|
18,118
|
|
|
11,816
|
|
||
Cash and cash equivalents at beginning of period
|
|
20,882
|
|
|
8,397
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
39,000
|
|
|
$
|
20,213
|
|
|
|
|
|
|
||||
Supplemental disclosures
|
|
|
|
|
||||
Cash paid for interest
|
|
$
|
411
|
|
|
$
|
79
|
|
Cash received for income taxes
|
|
$
|
19,465
|
|
|
$
|
155
|
|
Non-cash investing and financing activities
|
|
|
|
|
||||
Purchases of property, plant and equipment included in accounts payable
|
|
$
|
609
|
|
|
$
|
78
|
|
•
|
Identification of the contract, or contracts, with a customer
|
•
|
Identification of the performance obligations in the contract
|
•
|
Determination of the transaction price
|
•
|
Allocation of the transaction price to the performance obligations in the contract
|
•
|
Recognition of revenue when (or as) we satisfy the performance obligation
|
Level 1
|
|
Quoted prices in active markets for identical assets or liabilities.
|
|
|
|
Level 2
|
|
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
|
|
|
Level 3
|
|
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
In thousands
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30, 2019
|
|
June 30, 2018
|
|
June 30, 2019
|
|
June 30, 2018
|
||||||||
B2B
|
|
$
|
11,074
|
|
|
$
|
14,800
|
|
|
$
|
23,859
|
|
|
$
|
33,483
|
|
Consumer Brands
|
|
11,888
|
|
|
15,828
|
|
|
24,051
|
|
|
35,171
|
|
||||
Financial Services
|
|
12,250
|
|
|
14,441
|
|
|
25,215
|
|
|
28,922
|
|
||||
Healthcare
|
|
5,061
|
|
|
4,083
|
|
|
9,689
|
|
|
8,461
|
|
||||
Retail
|
|
10,639
|
|
|
15,836
|
|
|
22,949
|
|
|
32,215
|
|
||||
Transportation
|
|
3,774
|
|
|
4,645
|
|
|
8,073
|
|
|
12,577
|
|
||||
Total Revenues
|
|
$
|
54,686
|
|
|
$
|
69,633
|
|
|
$
|
113,836
|
|
|
$
|
150,829
|
|
|
|
For the Three Month Ended June 30, 2019
|
||||||||||
In thousands
|
|
Revenue for performance obligations recognized
over time |
|
Revenue for performance obligations recognized at a point in time
|
|
Total
|
||||||
Agency & Digital Services
|
|
$
|
6,314
|
|
|
$
|
92
|
|
|
$
|
6,406
|
|
Contact Centers
|
|
16,332
|
|
|
—
|
|
|
16,332
|
|
|||
Database Marketing Solutions
|
|
5,367
|
|
|
580
|
|
|
5,947
|
|
|||
Direct Mail, Logistics, and Fulfillment
|
|
22,340
|
|
|
3,661
|
|
|
26,001
|
|
|||
Total Revenues
|
|
$
|
50,353
|
|
|
$
|
4,333
|
|
|
$
|
54,686
|
|
|
|
For the Six Month Ended June 30, 2019
|
||||||||||
In thousands
|
|
Revenue for performance obligations recognized
over time |
|
Revenue for performance obligations recognized at a point in time
|
|
Total
|
||||||
Agency & Digital Services
|
|
$
|
12,507
|
|
|
$
|
131
|
|
|
$
|
12,638
|
|
Contact Centers
|
|
32,070
|
|
|
—
|
|
|
32,070
|
|
|||
Database Marketing Solutions
|
|
11,473
|
|
|
1,366
|
|
|
12,839
|
|
|||
Direct Mail, Logistics, and Fulfillment
|
|
47,078
|
|
|
9,211
|
|
|
56,289
|
|
|||
Total Revenues
|
|
$
|
103,128
|
|
|
$
|
10,708
|
|
|
$
|
113,836
|
|
In thousands
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Contract assets
|
|
$
|
1,228
|
|
|
$
|
2,362
|
|
Deferred revenue and customer advances
|
|
5,229
|
|
|
6,034
|
|
||
Deferred revenue, included in other long-term liabilities
|
|
965
|
|
|
578
|
|
in thousands
|
|
As of June 30, 2019
|
||||||
|
|
Finance Leases
|
|
|
Operating Leases
|
|
||
Right-of-use Assets
|
|
$
|
1,113
|
|
|
$
|
23,024
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
||||
Short-term lease liabilities
|
|
438
|
|
|
8,171
|
|
||
Long-term lease liabilities
|
|
574
|
|
|
15,895
|
|
||
Total Liabilities
|
|
$
|
1,012
|
|
|
$
|
24,066
|
|
in thousands
|
|
Three Months Ended June 30, 2019
|
|
Six Months Ended June 30, 2019
|
||||
Operating lease cost
|
|
$
|
2,378
|
|
|
$
|
4,593
|
|
|
|
|
|
|
||||
Finance lease cost
|
|
|
|
|
||||
Amortization of right-of-use assets
|
|
86
|
|
150
|
|
|||
Interest on lease liabilities
|
|
19
|
|
38
|
|
|||
Total Finance lease cost
|
|
105
|
|
|
188
|
|
||
Variable lease cost
|
|
840
|
|
|
1,377
|
|
||
Total lease cost
|
|
$
|
3,323
|
|
|
$
|
6,158
|
|
in thousands
|
|
Six Months Ended June 30, 2019
|
||
Supplemental Cash Flows Information
|
|
|
||
|
|
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
8,631
|
|
Operating cash flows from finance leases
|
|
38
|
|
|
Financing cash flows from finance leases
|
|
227
|
|
|
|
|
|
||
Weighted Average Remaining Lease term
|
|
|
||
|
|
|
|
|
Operating leases
|
|
3.0
|
|
|
Finance leases
|
|
3.5
|
|
|
|
|
|
||
Weighted Average Discount Rate
|
|
|
||
Operating leases
|
|
4.74
|
%
|
|
Finance leases
|
|
6.91
|
%
|
in thousands
|
|
Operating Leases
|
|
|
Finance Leases
|
|
||
Year Ending December 31,
|
|
|
|
|
|
|||
2019 (excluding the quarter ended March 31, 2019)
|
|
$
|
4,769
|
|
|
$
|
257
|
|
2020
|
|
7,997
|
|
|
389
|
|
||
2021
|
|
5,850
|
|
|
195
|
|
||
2022
|
|
3,960
|
|
|
146
|
|
||
2023
|
|
2,190
|
|
|
108
|
|
||
2024
|
|
1,397
|
|
|
—
|
|
||
Total future minimum lease payments
|
|
26,163
|
|
|
1,095
|
|
||
Less: Imputed interest
|
|
2,097
|
|
|
83
|
|
||
Total lease liabilities
|
|
$
|
24,066
|
|
|
$
|
1,012
|
|
in thousands
|
|
Operating Leases
|
|
Finance Leases
|
||||
Year Ending December 31,
|
|
|
|
|
||||
2019
|
|
$
|
9,645
|
|
|
$
|
748
|
|
2020
|
|
8,815
|
|
|
307
|
|
||
2021
|
|
7,425
|
|
|
131
|
|
||
2022
|
|
5,456
|
|
|
133
|
|
||
2023
|
|
2,349
|
|
|
104
|
|
||
Thereafter
|
|
1,328
|
|
|
—
|
|
||
Total future minimum lease payments
|
|
$
|
35,018
|
|
|
$
|
1,423
|
|
|
|
|
|
|
||||
Less: imputed interest
|
|
|
|
$
|
120
|
|
||
|
|
|
|
|
||||
Total
|
|
|
|
$
|
1,303
|
|
||
|
|
|
|
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||
In thousands
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||
Interest cost
|
$
|
1,813
|
|
|
$
|
1,685
|
|
$
|
3,626
|
|
|
$
|
3,370
|
|
Expected return on plan assets
|
(1,111
|
)
|
|
(1,524
|
)
|
(2,222
|
)
|
|
(3,047
|
)
|
||||
Recognized actuarial loss
|
733
|
|
|
689
|
|
1,466
|
|
|
1,377
|
|
||||
Net periodic benefit cost
|
$
|
1,435
|
|
|
$
|
850
|
|
$
|
2,870
|
|
|
$
|
1,700
|
|
|
Three Months Ended June 30,
|
||||||
In thousands, except per share amounts
|
2019
|
|
2018
|
||||
Net loss
|
$
|
(3,803
|
)
|
|
$
|
(6,734
|
)
|
Less: Preferred stock dividends
|
124
|
|
|
124
|
|
||
Loss attributable to common stockholders
|
$
|
(3,927
|
)
|
|
$
|
(6,858
|
)
|
|
|
|
|
||||
Basic loss per Common Share
|
|
|
|
||||
Weighted-average common shares outstanding
|
6,272
|
|
|
6,226
|
|
||
Basic loss per common share
|
$
|
(0.63
|
)
|
|
$
|
(1.10
|
)
|
|
|
|
|
||||
Diluted Loss per Common Share
|
|
|
|
|
|
||
Weighted-average shares used to compute earnings/(loss) per share attributable to common shares
|
6,272
|
|
|
6,226
|
|
||
Diluted Loss per common share
|
$
|
(0.63
|
)
|
|
$
|
(1.10
|
)
|
|
|
|
|
||||
Computation of Shares Used in Diluted Loss Per Common Share
|
|
|
|
|
|
||
Weighted-average common shares outstanding
|
6,272
|
|
|
6,226
|
|
||
Shares used in diluted loss per common share computations
|
6,272
|
|
|
6,226
|
|
|
|
Six Months Ended June 30,
|
||||||
In thousands, except per share amounts
|
|
2019
|
|
2018
|
||||
Numerator:
|
|
|
|
|
||||
Net (loss) income
|
|
$
|
(17,330
|
)
|
|
$
|
25,893
|
|
Less: Preferred stock dividend
|
|
246
|
|
|
207
|
|
||
Less: Earnings attributable to participating securities
|
|
—
|
|
|
3,059
|
|
||
Numerator for basic EPS: (loss) income attributable to common stockholders
|
|
$
|
(17,576
|
)
|
|
$
|
22,627
|
|
|
|
|
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
||||
Add back: Allocation of earnings to participating securities
|
|
—
|
|
|
3,059
|
|
||
Less: Re-allocation of earnings to participating securities considering potentially dilutive securities
|
|
—
|
|
|
(3,046
|
)
|
||
Numerator for diluted EPS
|
|
$
|
(17,576
|
)
|
|
$
|
22,640
|
|
|
|
|
|
|
||||
Denominator:
|
|
|
|
|
||||
Basic EPS denominator: weighted-average common shares outstanding
|
|
6,270
|
|
|
6,220
|
|
||
|
|
|
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
||||
Unvested shares
|
|
—
|
|
|
30
|
|
||
Diluted EPS denominator
|
|
6,270
|
|
|
6,250
|
|
||
|
|
|
|
|
||||
Basic (loss) earnings per common share
|
|
$
|
(2.80
|
)
|
|
$
|
3.64
|
|
Diluted (loss) earnings per common share
|
|
$
|
(2.80
|
)
|
|
$
|
3.62
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
In thousands
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net (loss) Income
|
|
$
|
(3,803
|
)
|
|
$
|
(6,734
|
)
|
|
$
|
(17,330
|
)
|
|
$
|
25,893
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustment to pension liability
|
|
732
|
|
|
686
|
|
|
1,465
|
|
|
1,377
|
|
||||
Tax expense
|
|
(183
|
)
|
|
(169
|
)
|
|
(366
|
)
|
|
(342
|
)
|
||||
|
|
549
|
|
|
517
|
|
|
1,099
|
|
|
1,035
|
|
||||
Foreign currency translation adjustment, net of tax
|
|
377
|
|
|
(805
|
)
|
|
349
|
|
|
(959
|
)
|
||||
Adoption of ASU 2018-2
|
|
—
|
|
|
—
|
|
|
(11,355
|
)
|
|
—
|
|
||||
Total other comprehensive income (loss), net of tax
|
|
926
|
|
|
(288
|
)
|
|
(9,907
|
)
|
|
76
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Total comprehensive (loss) income
|
|
$
|
(2,877
|
)
|
|
$
|
(7,022
|
)
|
|
$
|
(27,237
|
)
|
|
$
|
25,969
|
|
In thousands
|
|
Defined Benefit
Pension Items |
|
Foreign Currency Items
|
|
Total
|
||||||
Balance at December 31, 2018
|
|
$
|
(46,584
|
)
|
|
$
|
101
|
|
|
$
|
(46,483
|
)
|
Other comprehensive income (loss), net of tax, before reclassifications
|
|
—
|
|
|
349
|
|
|
349
|
|
|||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax, to other, net, on the condensed consolidated statements of comprehensive (loss) income
|
|
1,099
|
|
|
—
|
|
|
1,099
|
|
|||
Adoption of ASU 2018-02
|
|
(11,355
|
)
|
|
|
|
|
(11,355
|
)
|
|||
Net current period other comprehensive income (loss), net of tax
|
|
(10,256
|
)
|
|
349
|
|
|
(9,907
|
)
|
|||
Balance at June 30, 2019
|
|
$
|
(56,840
|
)
|
|
$
|
450
|
|
|
$
|
(56,390
|
)
|
In thousands
|
|
Defined Benefit
Pension Items |
|
Foreign Currency Items
|
|
Total
|
||||||
Balance at December 31, 2017
|
|
$
|
(45,418
|
)
|
|
$
|
1,115
|
|
|
$
|
(44,303
|
)
|
Other comprehensive (loss), net of tax, before reclassifications
|
|
—
|
|
|
(959
|
)
|
|
(959
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax, to other, net, on the condensed consolidated statements of comprehensive (loss) income
|
|
1,035
|
|
|
—
|
|
|
1,035
|
|
|||
Net current period other comprehensive income (loss), net of tax
|
|
1,035
|
|
|
(959
|
)
|
|
76
|
|
|||
Balance at June 30, 2018
|
|
$
|
(44,383
|
)
|
|
$
|
156
|
|
|
$
|
(44,227
|
)
|
In thousands
|
|
Fair Value
|
||
Accrued contingent consideration liability as of December 31, 2017
|
|
$
|
33,887
|
|
Accretion of interest
|
|
742
|
|
|
Disposition
|
|
(34,629
|
)
|
|
Accrued contingent consideration liability as of June 30, 2018
|
|
$
|
—
|
|
in thousands
|
|
Three Months Ended June 30, 2019
|
|
Six months Ended June 30, 2019
|
||||
Customer database build write off
|
|
$
|
1,845
|
|
|
$
|
4,036
|
|
Contract termination fee
|
|
—
|
|
|
2,100
|
|
||
Severance
|
|
496
|
|
|
644
|
|
||
Facility, asset impairment and other expense
|
|
940
|
|
|
1,008
|
|
||
Total
|
|
$
|
3,281
|
|
|
$
|
7,788
|
|
in thousands
|
Three months Ended June 30, 2019
|
||||||||||||||
|
Contract Termination Fee
|
|
Severance
|
|
Facility, asset impairment and other expense
|
|
Total
|
||||||||
Beginning Balance:
|
$
|
—
|
|
|
$
|
68
|
|
|
$
|
—
|
|
|
$
|
68
|
|
Additions:
|
2,100
|
|
|
496
|
|
|
38
|
|
|
2,634
|
|
||||
Payments
|
—
|
|
|
(304
|
)
|
|
—
|
|
|
(304
|
)
|
||||
Ending Balance:
|
$
|
2,100
|
|
|
$
|
260
|
|
|
$
|
38
|
|
|
$
|
2,398
|
|
in thousands
|
Six Months Ended June 30, 2019
|
||||||||||||||
|
Contract Termination Fee
|
|
Severance
|
|
Facility, asset impairment and other expense
|
|
Total
|
||||||||
Beginning balance:
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Additions:
|
2,100
|
|
|
644
|
|
|
38
|
|
|
2,782
|
|
||||
Payments
|
—
|
|
|
(384
|
)
|
|
—
|
|
|
(384
|
)
|
||||
Ending balance:
|
$
|
2,100
|
|
|
$
|
260
|
|
|
$
|
38
|
|
|
$
|
2,398
|
|
•
|
Agency
|
•
|
Digital Solutions
|
•
|
Database Marketing Solutions
|
•
|
Direct mail
|
•
|
Mail and Product Fulfillment
|
•
|
Logistics
|
•
|
Contact centers.
|
|
|
Three Months Ended June 30,
|
|
|
|
Six Months Ended June 30,
|
|
|
||||||||||||||
In thousands
|
|
2019
|
|
2018
|
|
% Change
|
|
2019
|
|
2018
|
|
% Change
|
||||||||||
Revenues
|
|
$
|
54,686
|
|
|
$
|
69,633
|
|
|
(21.5
|
)%
|
|
$
|
113,836
|
|
|
$
|
150,829
|
|
|
(24.5
|
)%
|
Operating expenses
|
|
61,299
|
|
|
75,941
|
|
|
(19.3
|
)%
|
|
131,390
|
|
|
162,173
|
|
|
(19.0
|
)%
|
||||
Operating Loss
|
|
$
|
(6,613
|
)
|
|
$
|
(6,308
|
)
|
|
4.8
|
%
|
|
$
|
(17,554
|
)
|
|
$
|
(11,344
|
)
|
|
54.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating margin
|
|
(12.1
|
)%
|
|
(9.1
|
)%
|
|
|
|
(15.4
|
)%
|
|
(7.5
|
)%
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Loss) income before taxes
|
|
$
|
(3,855
|
)
|
|
$
|
(7,318
|
)
|
|
(47.3
|
)%
|
|
$
|
(16,592
|
)
|
|
$
|
16,529
|
|
|
(200.4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted (Loss) income per common share from operations
|
|
(0.63
|
)
|
|
(1.10
|
)
|
|
(42.7
|
)%
|
|
$
|
(2.80
|
)
|
|
$
|
3.62
|
|
|
(177.3
|
)%
|
•
|
The adoption of ASC 842,
Leases - t
he impact of this change in accounting policy is described in detail in Note D of the Notes to Unaudited Condensed Consolidated Financial Statements in this 10Q; and
|
•
|
Goodwill and intangible assets are no longer included as a critical accounting policy as we no longer have these assets on our condensed consolidated balance sheet
|
Period
|
|
Total Number of
Shares
Purchased (1)
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased
as Part of a Publicly
Announced Plan (2)
|
|
Maximum Dollar
Amount that May
Yet Be Spent
Under the Plan
|
||||||
April 1-30, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
11,437,538
|
|
May 1-31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
11,437,538
|
|
June 1-30, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
11,437,538
|
|
Total
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
HARTE HANKS, INC.
|
|
|
|
August 9, 2019
|
|
/s/ Mark A. Del Priore
|
Date
|
|
Mark A. Del Priore
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
August 9, 2019
|
|
/s/ Lauri Kearnes
|
Date
|
|
Lauri Kearnes
|
|
|
Vice President, Finance and
|
|
|
Corporate Controller
|
1 Year Harte Hanks Chart |
1 Month Harte Hanks Chart |
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