Harte Hanks, Inc. (NYSE: HHS), an industry leader in data-driven, omni-channel marketing and customer relationship solutions and logistics, today announced financial results for the third quarter ended September 30, 2019.
Recent Operational and Financial Highlights
- Third quarter GAAP net loss of ($6.0) million narrowed from ($10.0) million in the same period last year
- Third quarter adjusted EBITDA of $203,000 compared to ($6.6) million in the same period last year
- New business awarded in Q3 2019 of $4.6 million, more than double the revenue from new business generated in the same period last year
Harte Hanks President Andrew Harrison stated, “We achieved a significant financial milestone during the third quarter generating positive Adjusted EBITDA by continuing our efforts to align expenses with revenues and to boost sales performance. In the third quarter of 2019, on a year-over-year basis, we reduced our operating expenses, excluding restructuring and impairment, by $17.3 million, which more than offset the $12.2 million revenue decline, as cost reductions again outpaced revenue declines, and we added new customers to further slow the decline. We expect to generate positive Adjusted EBITDA on a quarterly basis again in the fourth quarter and we expect to be EBITDA positive on an annual basis in full-year 2020 as we drive toward our ultimate goal of achieving positive cash flow in the future.”
Mr. Harrison continued, “We significantly reduced a large vendor engagement that was negatively impacting performance and profitability, resulting in a smaller and more manageable relationship. We also began the consolidation of several smaller production facilities into larger locations, enabling improved efficiency and better service to our clients.”
“Our turnaround effort is gaining traction, and we are encouraged by a growing pipeline of new business opportunities,” Harrison added. “During the third quarter we won business with new customers that will generate approximately $5 million in revenue over the course of the next year, more than double the sales results during the same period last year. With additional business improvements initiatives in place, focus on expanding our penetration with existing accounts, and generating new leads, we expect the improving trends we achieved during the quarter to accelerate in the fourth quarter.”
Third Quarter 2019 Results
Third quarter 2019 revenues were $51.4 million, compared to $63.6 million during the same quarter last year, a $12.2 million, or a 19% 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.
Third quarter operating loss was $4.5 million, compared to an operating loss of $10.4 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 $7.0 million or 20% reduction in labor expense.
Third quarter 2019 Adjusted Operating Loss was $1.1 million, compared to a loss of $8.5 million in the prior year quarter. The improvement 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 third quarter of 2019 was $6.1 million, or a loss of $0.97 per basic and diluted share. In the prior year period, loss attributable to common stockholders was $10.1 million, or a loss of $1.62 per basic and diluted share.
About Harte Hanks:
Harte Hanks is an industry leader in data-driven, omni-channel marketing solutions and logistics. The fuel that powers this Company is customer data. We offer clients around the world the strategic guidance they need across the customer data landscape as well as the executional know-how in database build and management, data analytics, data-driven creativity, digital media, direct mail, customer contact, client fulfillment, and marketing and product logistics. Harte Hanks has approximately 3000 employees delivering solutions in North America, Asia-Pacific and Europe. For more information, visit Harte Hanks at www.hartehanks.com, call 800-456-9748, or email us at [email protected].
Source: Harte Hanks Earnings Release