Harte Hanks downward revenue spiral continues. The company reported first quarter 2019 revenue was $59.1 million, compared to $81.2 million during the same quarter last year, a $22.1 million, or a 27.2% decline. Harte Hanks Q4 2018 revenues were down 29.7% for the full year of 2018 down 26%.
Harte Hanks President Andrew Harrison stated, “In the first quarter of 2019, on a year-over-year basis, revenue declined $22.0 million and operating expenses declined by $16.1 million. More telling of our efforts, revenue (excluding the results of 3Q Digital which was sold in February of 2018) declined $15.1 million. We are operating with discipline and rigor, and, as a result, on the same basis (excluding the results of 3Q Digital), the company reduced cash operating expenses by $14.1 million, nearly offsetting the full scope of our revenue decline.”
“During the quarter, we also made some important operational improvements that were necessary to address the challenges facing Harte Hanks,” Harrison added “Notably, we strengthened our new business pipeline and made important progress advancing the restructuring efforts that began in the second half of 2018. In 2019 we reduced our vendor costs by more than $5 million on an annualized basis and are in the process of advancing initiatives to remove an additional $3 million in annualized vendor-related savings. We will continue to aggressively pursue additional cost cutting opportunities across the organization as the year progresses.”
Harte Hanks Chief Financial Officer Mark Del Priore added, “We ended the quarter with a cash position of more than $20 million. Subsequent to the quarter end, we received a $5 million Contingent Payment related to the Qualified Sale of 3Q Digital as defined in the Purchase and Sale Agreement dated February 28, 2018. In addition, we have extended our revolving credit line by 12 months, to April 2021, and expect to further bolster our balance sheet with approximately $16 million of tax refunds that we anticipate receiving as part of our 2018 tax filing. Based on our current initiatives and visibility, we believe that the Company has the balance sheet and resources needed to restore profitability and revitalize growth.”
First Quarter 2019 Results
First quarter 2019 revenues were $59.1 million, compared to $81.2 million during the same quarter last year, a $22.1 million, or a 27.2% decline. This decline was due to lower revenue in our B2B, Consumer, Financial Services, Retail and Transportation verticals, offset by an increase in our Healthcare vertical. 3Q Digital’s revenue, which contributed revenue of $6.9 million in the first quarter of 2018, was absent from first quarter 2019 results. Excluding this impact, first quarter 2019 revenues would have declined $15.1 million or 20.4%. The 3Q Digital business was sold in the first quarter of 2018.
First quarter operating loss was $10.9 million, compared to an operating loss of $5.0 million in the same quarter last year. The loss was a result of lower revenue, which was meaningfully offset by the impact of the company’s cost reduction efforts which lowered operating expenses, including a $12.1 million or 26.3% reduction in labor expense and the absence of expenses related to the company’s 3Q Digital business.
First quarter 2019 Adjusted Operating Loss was $6.4 million, compared to a loss of $4.4 million in the prior year quarter. The decrease in Adjusted Operating Income was due to the impact of lower revenue, partially offset by the company’s cost reduction efforts, which reduced expenses.
Loss attributable to common stockholders for the first quarter of 2019 was $13.6 million, or a loss of $2.18 per basic and diluted share. In the prior year period, earnings attributable to common stockholders was $32.6 million, or $5.24 per basic and $4.67 per diluted per share.
Source: Harte Hanks Earnings Release