Harte Hanks Q2 2021 Revenues Up 18%

Harte Hanks, Inc. (OTCQX: HRTH), an industry leader in data-driven, omnichannel marketing, today announced financial results for the second quarter ended June 30, 2021.

Second Quarter Operational and Financial Highlights

Revenues improved by 18% to $49.3 million, compared to $41.6 million in the same period last year.
Operating income of $1.4 million, compared to operating loss of ($5.9) million in the same period last year.
Net income of $10.6 million, compared to net loss of ($6.2) million in the same period last year.
EBITDA improved to $2.1 million compared to ($4.8) million in the same period last year.¹
Adjusted EBITDA improved to $4.4 million compared to $480,000 in the same period last year.¹
On June 23, 2021, the Company promoted Brian Linscott to Chief Executive Officer. Mr. Linscott has served as the Company’s Chief Operating Officer since January 2020.

The second quarter results by segment were as follows:

1) Customer Care, $19.2 million in revenue, 39% of total – Revenue increased by $4 million from the previous year quarter and year-over-year EBITDA improved to $3.4 million from $2.1 million. Customer Care continued to experience strong revenue tailwinds from COVID-related project work. New business wins for the quarter included a major regional sports network for streaming support and an expanded relationship with two media entertainment organizations.

2) Fulfillment & Logistics, $15.9 million in revenue, 32% of total – Revenue increased by $2.5 million compared to the previous year quarter and year-over-year EBITDA improved to $1.7 million from ($1 million). The consolidation of Fulfillment operations into the Kansas City facility resulted in increased margins for the quarter. New business wins for the quarter included product sampling campaigns for a Fortune 500 CPG company and fulfillment of branded product and apparel for a leading U.S. tech company.

3) Marketing Services, $14.2 million revenue, 29% of total – Revenue increased by $1.2 million compared to the previous year quarter and year-over-year EBITDA improved to $1.7 million from $1.2 million. New business wins for the quarter included a major global packaged goods company, a leading North American automotive parts retailer, and a national sports association.

Harte Hanks CEO, Brian Linscott, commented: “I want to thank our Harte Hanks team for delivering another strong quarter with improvement across each of our business segments. We are excited about our new business wins and continued profitable growth and remain focused on executing margin improvement initiatives and identifying cost reduction opportunities across all segments. As a result, we believe our efforts will deliver significant incremental EBITDA improvement in 2022.” Mr. Linscott continued: “I am proud to work alongside our seasoned leadership team and look forward to building on the favorable progress we have made over the last two years.”

Second Quarter 2021 Results

Second quarter revenues were $49.3 million, up from $41.6 million a year ago and up sequentially from $43.8 million in the first quarter of 2021. Continued growth in our Customer Care segment led our second quarter performance.

Second quarter operating income was $1.4 million, compared to an operating loss of ($5.9) million in the second quarter of 2020. The improvement resulted from the Company’s revenue increases and cost reduction efforts, including a 10% reduction in advertising, selling, general and administrative expense as well as a 67% reduction in restructuring expense.

Second quarter Adjusted Operating Income² was $3.7 million, compared to a loss of ($563,000) in the second quarter of 2020. The improvement in Adjusted Operating Income reflects improved revenue and continued cost-cutting actions taken by management. Income attributable to common stockholders for the second quarter was $9.1 million, or $1.36 and $1.27 per basic and diluted share, respectively. This includes a $10 million gain on extinguishment of debt related to forgiveness of the Company’s PPP loan.