Harte Hanks, Inc. (NASDAQ:HHS) Q3 2022 Earnings Conference Call November 10, 2022 4:30 PM ET

Company Participants

Tom Baumann - Investor Relations

Brian Linscott - Chief Executive Officer

Lauri Kearnes - Chief Financial Officer

Conference Call Participants

Michael Kupinski - Noble Capital Markets

Julio Romero - Sidoti & Company

Operator

Good afternoon, ladies and gentlemen and welcome to the Harte Hanks Third Quarter 2022 Earnings Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Tom Baumann of FNK IR. Sir, the floor is yours.

Tom Baumann

Thank you. Hosting the call today are Brian Linscott, Chief Executive Officer; and Lauri Kearnes, Chief Financial Officer.

Before we begin, I want to remind participants that during the call management’s prepared remarks may contain forward-looking statements that are subject to risks and uncertainties. Management may also make additional forward-looking statements in response to your questions today. Therefore, the company claims protection under the Safe Harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from results discussed today and therefore we refer you to a more detailed discussion of these risks and uncertainties in the company’s filings with the SEC.

In addition any projections as to the company’s future performance represented by management include estimates as of today, November 10, 2022 and the company assumes no obligation to update these projections in the future as market conditions change. This webcast and certain financial information provided on the call, including reconciliations of non-GAAP financial measures to comparable GAAP financial measures are available in the earnings press release that was issued shortly after the market closed. A copy of that press release and other corporate disclosure is available on the Investor Relations section of Harte Hanks website at hartehanks.com.

With that, I would now like to turn the call over to Brian. Brian, the call is yours.

Brian Linscott

Thank you, Tom and good afternoon. This was another strong quarter for Harte Hanks. We entered the year expecting revenues to be generally flat to slightly down as pandemic-related projects ran off. However, our new business efforts have been successful. We have expanded existing client revenues and added new logos over the past few months. The recent wins have more than offset the project’s reaching end of life. And as a result, we continued to grow.

While most of that growth has been in our Fulfillment and Logistics segment, which has resulted in modest margin compression, we continue to generate significant profitability and free cash flow, enabling us to strengthen our balance sheet. The financial improvements are due in large part to systemic changes we have made at Harte Hanks. The strategic shift to an asset-light model the elimination of unprofitable contracts and the meaningful cost-cutting measures have positioned Harte Hanks for sustainable operating income and EBITDA generation. Our restructuring is behind us, but we will continue to drive operational improvements and strive for continued expansion of revenue and margins.