Harte Hanks, Inc. (NYSE: HHS), an industry leader in data-driven, omni-channel marketing and customer relationship solutions and logistics,
Recent Operational and Financial Highlights continues to report declining revenues.
- The receipt of $15.9 million in aggregate tax refunds during the second quarter increased cash to $39 million as of June 30, 2019, which will further advance business improvement initiatives;
- Significant progress toward the goal of achieving positive adjusted EBITDA on a quarterly basis later this year;
- Doubling of new business awarded through Q2 2019 of $6.2 million compared to the same period last year;
- Second quarter net loss of ($3.8) million narrowed from ($6.7) million in the same period last year;
- Second quarter adjusted EBITDA improved to ($1.8) million from ($3.7) million in the same period last year despite revenue declines of $14.9 million.
Harte Hanks President Andrew Harrison stated, “The strategic transition to improve Harte Hanks’ financial performance and streamline the cost structure to align expenses with revenues is taking hold. In the second quarter of 2019, on a year-over-year basis, we reduced our operating expenses by $14.6 million, which nearly offset the $14.9 million revenue decline. We are operating with discipline and rigor to stabilize our business. Based on our current plan, positive adjusted EBITDA is an attainable goal as early as the fourth quarter of this year, and we expect to generate positive adjusted EBITDA for the full year of 2020.”
“We also have begun to convert our growing pipeline of new business opportunities into revenue,” Harrison added. “We have won business with new customers in the first half that will generate approximately $6.2 million in revenue over the course of the year, double what we generated last year from new customers. In the first half of the year, we recognized $1.7 million in revenue from new customers compared to $700,000 in the first half of 2018.”
“During the quarter, we received $15.9 million in aggregate tax refunds and ended the quarter with a cash position of $39 million,” Harrison concluded. “The receipt of these funds will allow the Company to advance further cost-cutting and business improvement initiatives that are needed to restore profitability and revitalize long-term growth.”
Second quarter 2019 revenues were $54.7 million, compared to $69.6 million during the same quarter last year, a $14.9 million, or a 21.5% decline. This decline was due to lower revenue in the B2B, Consumer, Financial Services, Retail and Transportation verticals, offset by an increase in the Healthcare vertical.
Second quarter operating loss was $6.6 million, compared to an operating loss of $6.3 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 $7.9 million or 20% reduction in labor expense.
Second quarter 2019 Adjusted Operating Loss was $3.1 million, compared to a loss of $5.6 million in the prior year quarter. The decrease in Adjusted Operating Loss was related to reduced production and distribution expense associated partially with the Company’s cost reduction efforts.
Loss attributable to common stockholders for the second quarter of 2019 was $3.9 million, or a loss of $0.63 per basic and diluted share. In the prior year period, earnings attributable to common stockholders was $6.9 million, or $1.10 per basic and diluted share.
Source: Harte Hanks Earnings Release