hhs20230930_10q.htm

Table of Contents

U.S.

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

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

For the quarterly period ended September 30, 2023

☐

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	74-1677284
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

1 Executive Drive, Suite 303, Chelmsford, MA 01824

(Address of principal executive offices, including zip code)

(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 ☒ No ☐

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 ☒ No ☐

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. ☐

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

The number of shares outstanding of the issuer’s common stock as of October 15, 2023 was 7,216,314 shares.

Table of Contents

HARTE HANKS, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

FORM 10-Q REPORT

For the Quarterly Period Ended September 30, 2023

		Page
Part I.	Financial Information

Item 1.	Condensed Consolidated Financial Statements

	Condensed Consolidated Balance Sheets — September 30, 2023 (Unaudited) and December 31, 2022 (Audited)	3

	Condensed Consolidated Statements of Comprehensive Income — Three and Nine months ended September 30, 2023 and 2022 (Unaudited)	4

	Condensed Consolidated Statements of Changes in Stockholders’ Equity— Three and Nine months ended September 30, 2023 and 2022 (Unaudited)	5

	Condensed Consolidated Statements of Cash Flows — Nine months ended September 30, 2023 and 2022 (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	26

Item 4.	Controls and Procedures	26

Part II.	Other Information

Item 1.	Legal Proceedings	27

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 3.	Defaults Upon Senior Securities	27

Item 4.	Mine Safety Disclosure	27

Item 5.	Other Information	27

Item 6.	Exhibits	28

Table of Contents

Item 1. Condensed Consolidated Financial Statements

Harte Hanks, Inc. and Subsidiaries Condensed Consolidated Balance Sheets

	*September 30,*		*December 31,*
In thousands, except shares and per share amounts	*2023*		*2022*
	(unaudited)		(audited)
ASSETS
Current assets
Cash and cash equivalents	$	13,288	$	10,364
Accounts receivable (less allowance for doubtful accounts of $170 and $163, respectively)		33,303		39,700
Unbilled accounts receivable		10,350		7,893
Contract assets		433		309
Prepaid expenses		2,722		2,176
Prepaid income taxes and income tax receivable		1,221		4,262
Other current assets		878		1,607
Total current assets		62,195		66,311
Property, plant and equipment (less accumulated depreciation of $37,847 and $44,013, respectively)		9,279		10,523
Right-of-use assets		16,773		19,169
Other assets
Intangible assets, net		3,000		3,540
Goodwill		2,426		2,398
Deferred tax assets, net		15,816		16,306
Other long-term assets		1,323		1,737
Total other assets		22,565		23,981

Total assets	$	110,812	$	119,984

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	18,547	$	22,465
Accrued payroll and related expenses		4,944		6,679
Deferred revenue and customer advances		5,681		4,590
Customer postage and program deposits		1,445		1,223
Other current liabilities		2,652		2,862
Current portion of lease liabilities		5,446		5,747
Total current liabilities		38,715		43,566

Pension liabilities - Qualified plans		17,388		18,674
Pension liabilities - Nonqualified plan		18,510		19,098
Long-term lease liabilities, net of current portion		13,553		16,575
Other long-term liabilities		2,142		3,263
Total liabilities		90,308		101,176

Stockholders’ equity
Common stock, $1 par value, 25,000,000 shares authorized;12,221,484 shares issued, 7,216,314 and 7,402,614 shares outstanding at September 30, 2023 and December 31, 2022, respectively		12,221		12,221
Additional paid-in capital

SEC Form 10-Q filed by Harte-Hanks Inc.