1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q X Quarterly report pursuant to Section 13 or 15(d) of the Securities - ----- Exchange Act of 1934 For the quarterly period ended March 31, 2000 -------------- Transition report pursuant to Section 13 or 15(d) of the Securities - ----- Exchange Act of 1934 For the transition period from __________ to __________ Commission File Number 1-7120 ------ HARTE-HANKS, INC. ----------------- (Exact name of registrant as specified in its charter) Delaware 74-1677284 ------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 200 Concord Plaza Drive, San Antonio, Texas 78216 ------------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code -- 210/829-9000 ------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock: $1 par value, 68,339,912 shares as of April 30, 2000. 2 2 HARTE-HANKS, INC. AND SUBSIDIARIES TABLE OF CONTENTS FORM 10-Q REPORT March 31, 2000 Page ---- Part I. Financial Information Item 1. Interim Condensed Consolidated Financial Statements (Unaudited) Condensed Consolidated Balance Sheets - 3 March 31, 2000 and December 31, 1999 Consolidated Statements of Operations - 4 Three months ended March 31, 2000 and 1999 Consolidated Statements of Cash Flows - 5 Three months ended March 31, 2000 and 1999 Consolidated Statements of Stockholders' Equity - 6 Three months ended March 31, 2000 and 1999 Notes to Interim Condensed Consolidated Financial 7 Statements Item 2. Management's Discussion and Analysis of Financial 9 Condition and Results of Operations Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 13 (a) Exhibits (b) Reports on Form 8-K Signature 14 3 3 Harte-Hanks, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands, except share amounts) (Unaudited) March 31, December 31, 2000 1999 --------- ------------ Assets Current assets Cash and cash equivalents ..................................... $ 44,743 $ 35,196 Accounts receivable, net ...................................... 148,343 154,030 Inventory ..................................................... 5,723 7,099 Prepaid expenses .............................................. 13,455 12,651 Current deferred income tax asset ............................. 7,153 6,848 Other current assets .......................................... 5,401 4,309 --------- --------- Total current assets ....................................... 224,818 220,133 Property, plant and equipment, net ............................... 109,294 106,250 Goodwill and other intangibles, net .............................. 406,040 409,791 Other assets ..................................................... 37,650 33,253 --------- --------- Total assets ............................................... $ 777,802 $ 769,427 ========= ========= Liabilities and Stockholders' Equity Current liabilities Accounts payable .............................................. $ 53,506 $ 64,812 Accrued payroll and related expenses .......................... 20,609 25,511 Customer deposits and unearned revenue ........................ 36,224 35,622 Income taxes payable .......................................... 23,703 13,667 Other current liabilities ..................................... 9,514 14,405 --------- --------- Total current liabilities .................................. 143,556 154,017 Long-term debt ................................................... 1,032 5,000 Other long-term liabilities ...................................... 35,173 32,792 --------- --------- Total liabilities .......................................... 179,761 191,809 --------- --------- Stockholders' equity Common stock, $1 par value, 250,000,000 shares authorized. 76,593,856 and 76,392,063 shares issued at March 31, 2000 and December 31, 1999, respectively ......................................... 76,594 76,392 Additional paid-in capital .................................... 199,277 197,454 Accumulated other comprehensive income ........................ 14,661 12,316 Retained earnings ............................................. 509,408 493,362 --------- --------- 799,940 779,524 Less treasury stock: 8,285,621 and 8,285,966 shares at cost at March 31, 2000 and December 31, 1999, respectively ............................ (201,899) (201,906) --------- --------- Total stockholders' equity ................................. 598,041 577,618 --------- --------- Total liabilities and stockholders' equity ................. $ 777,802 $ 769,427 ========= ========= See Notes to Interim Condensed Consolidated Financial Statements. 4 4 Harte-Hanks, Inc. and Subsidiaries Consolidated Statements of Operations (in thousands, except per share amounts) (Unaudited) Three Months Ended March 31, ---------------------------- 2000 1999 --------- --------- Operating revenues ................................................... $ 226,057 $ 188,128 --------- --------- Operating expenses Payroll .......................................................... 87,068 70,852 Production and distribution ...................................... 76,003 69,408 Advertising, selling, general and administrative ................. 22,461 16,047 Depreciation ..................................................... 6,730 5,358 Goodwill and intangible amortization ............................. 3,644 2,362 --------- --------- 195,906 164,027 --------- --------- Operating income ..................................................... 30,151 24,101 --------- --------- Other expenses (income) Interest expense ................................................. 254 41 Interest income .................................................. (412) (2,098) Other, net ....................................................... 483 100 --------- --------- 325 (1,957) --------- --------- Income before income taxes ........................................... 29,826 26,058 Income tax expense ................................................... 12,072 10,724 --------- --------- Net income ........................................................... $ 17,754 $ 15,334 ========= ========= Basic: Earnings per common share ........................................ $ 0.26 $ 0.22 ========= ========= Weighted-average common shares outstanding ....................... 68,263 71,193 ========= ========= Diluted: Earnings per common share ........................................ $ 0.25 $ 0.21 ========= ========= Weighted-average common and common equivalent shares outstanding ............................................ 70,301 73,605 ========= ========= See Notes to Interim Condensed Consolidated Financial Statements. 5 5 Harte-Hanks, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in thousands) (Unaudited) Three Months Ended March 31, ---------------------------- 2000 1999 ---- ---- Operating Activities Net income ............................................................................ $ 17,754 $ 15,334 Adjustments to reconcile net income to cash provided by operating activities: Depreciation ....................................................................... 6,730 5,358 Goodwill and intangible amortization ............................................... 3,644 2,362 Amortization of option-related compensation ........................................ 138 191 Deferred income taxes .............................................................. 1,373 2,584 Other, net ......................................................................... 262 444 Changes in operating assets and liabilities, net of acquisitions: Decrease in accounts receivable, net ............................................... 5,687 774 Decrease in inventory .............................................................. 1,376 2,065 Decrease (increase) in prepaid expenses and other current assets .................................................................. (1,896) 643 Increase (decrease)in accounts payable ............................................. (2,700) 2,445 Increase in other accrued expenses and other liabilities ........................................................... 76 23 Other, net ......................................................................... 16 293 -------- -------- Net cash provided by operating activities ....................................... 32,460 32,516 -------- -------- Investing Activities Acquisitions .......................................................................... (8,681) (414) Purchases of property, plant and equipment ............................................ (10,300) (6,907) Proceeds from sale of property, plant and equipment ................................... -- 26 Net purchases of available-for-sale short-term investments ........................................................................ -- (11,657) -------- -------- Net cash used in investing activities ........................................... (18,981) (18,952) -------- -------- Financing Activities Long-term borrowings .................................................................. 1,032 -- Repayment of long-term borrowings ..................................................... (5,000) -- Issuance of common stock .............................................................. 1,736 2,757 Purchase of treasury stock ............................................................ (12) (12,724) Issuance of treasury stock ............................................................ 20 24 Dividends paid ........................................................................ (1,708) (1,420) -------- -------- Net cash used in financing activities ........................................... (3,932) (11,363) -------- -------- Net increase in cash .................................................................. 9,547 2,201 Cash and cash equivalents at beginning of year ........................................ 35,196 30,367 -------- -------- Cash and cash equivalents at end of period ............................................ $ 44,743 $ 32,568 ======== ======== See Notes to Interim Condensed Consolidated Financial Statements. 6 6 Harte-Hanks, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity (Unaudited) Accumulated Additional Other Total Common Paid-In Retained Treasury Comprehensive Stockholders' In thousands Stock Capital Earnings Stock Income Equity --------- ---------- -------- ---------- ------------- ------------- Balance at January 1, 1999 ............. $ 75,789 $ 189,698 $ 425,999 $ (114,395) $ -- $ 577,091 Common stock issued- employee benefit plans .............. 49 1,026 -- -- -- 1,075 Exercise of stock options .............. 238 1,444 -- -- -- 1,682 Tax benefit of options exercised ........................... -- 639 -- -- -- 639 Dividends paid ($0.02 per share) .............................. -- -- (1,420) -- -- (1,420) Treasury stock repurchase .............. -- -- -- (12,724) -- (12,724) Treasury stock issued .................. -- 8 -- 16 -- 24 Comprehensive income, net of tax: Net income .......................... -- -- 15,334 -- -- 15,334 --------- Total comprehensive income ............. 15,334 --------- --------- --------- ---------- --------- --------- Balance at March 31, 1999 .............. $ 76,076 $ 192,815 $ 439,913 $ (127,103) $ -- $ 581,701 ========= ========= ========= ========== ========= ========= Balance at January 1, 2000 ............. $ 76,392 $ 197,454 $ 493,362 $ (201,906) $ 12,316 $ 577,618 Common stock issued- employee benefit plans .............. 50 948 -- -- -- 998 Exercise of stock options .............. 152 586 -- -- -- 738 Tax benefit of options exercised ........................... -- 288 -- -- -- 288 Dividends paid ($0.025 per share) .............................. -- -- (1,708) -- -- (1,708) Treasury stock repurchase .............. -- -- -- (12) -- (12) Treasury stock issued .................. -- 1 -- 19 -- 20 Comprehensive income, net of tax: Net income .......................... -- -- 17,754 -- -- 17,754 Foreign currency translation adjustment ........... -- -- -- -- 381 381 Change in unrealized gain (loss) on long-term investments, net of reclassification adjustments (net of tax of $1,057) ................... -- -- -- -- 1,964 1,964 --------- Total comprehensive income ............. 20,099 --------- --------- --------- ---------- --------- --------- Balance at March 31, 2000 .............. $ 76,594 $ 199,277 $ 509,408 $ (201,899) $ 14,661 $ 598,041 ========= ========= ========= ========== ========= ========= See Notes to Interim Condensed Consolidated Financial Statements. 7 7 Harte-Hanks, Inc. and Subsidiaries Notes to Interim Condensed Consolidated Financial Statements (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited Interim Condensed Consolidated Financial Statements include the accounts of Harte-Hanks, Inc. and subsidiaries (the "Company"). The statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2000 are not necessarily indicative of the results that may be expected for the year ending December 31. For further information, refer to the consolidated financial statements and footnotes included in the Company's annual report on Form 10-K for the year ended December 31, 1999. Certain prior period amounts have been reclassified for comparative purposes. NOTE B - INCOME TAXES The Company's quarterly income tax provision of $12.1 million was calculated using an effective income tax rate of approximately 40.5%. The Company's effective income tax rate is derived by estimating pretax income and income tax expense for the year ending December 31, 2000. The effective income tax rate calculated is higher than the federal statutory rate of 35% due to the addition of state taxes and to certain expenses recorded for financial reporting purposes (primarily goodwill amortization) which are not deductible for federal income tax purposes. NOTE C - EARNINGS PER SHARE A reconciliation of basic and diluted earnings per share is as follows: Three Months Ended March 31, ---------------------------- In thousands, except per share amount 2000 1999 - ------------------------------------- ---- ---- BASIC EPS Net Income ................................................................................ $ 17,754 $ 15,334 ======== ======== Weighted-average common shares outstanding used in earnings per share computations ................................................. 68,263 71,193 ======== ======== Earnings per common share ................................................................. $ 0.26 $ 0.22 ======== ======== DILUTED EPS Net Income ................................................................................ $ 17,754 $ 15,334 ======== ======== Shares used in earnings per share computations ............................................ 70,301 73,605 -------- -------- Earnings per common share ................................................................. $ 0.25 $ 0.21 ======== ======== Computation of shares used in earnings per share computations: Average outstanding common shares ......................................................... 68,263 71,193 Average common equivalent shares - dilutive effect of option shares ........................................................ 2,038 2,412 -------- -------- Shares used in earnings per share computations ............................................ 70,301 73,605 ======== ======== As of March 31, 2000 the Company had 1,087,127 antidilutive market price options outstanding. 8 8 NOTE D - BUSINESS SEGMENTS Harte-Hanks is a highly focused targeted media company with operations in two segments - direct and interactive marketing and shoppers. Information about the Company's operations in different industry segments: Three Months Ended March 31 In thousands 2000 1999 - ------------ ---- ---- Operating revenues Direct Marketing ...................................... $ 156,191 $ 124,934 Shoppers .............................................. 69,866 63,194 --------- --------- Total operating revenues .......................... $ 226,057 $ 188,128 ========= ========= Operating income Direct Marketing ...................................... $ 21,359 $ 17,284 Shoppers .............................................. 11,087 8,785 Corporate Activities .................................. (2,295) (1,968) --------- --------- Total operating income ............................ $ 30,151 $ 24,101 ========= ========= Income before income taxes Operating income ...................................... $ 30,151 $ 24,101 Interest expense ...................................... (254) (41) Interest income ....................................... 412 2,098 Other, net ............................................ (483) (100) --------- --------- Total income before income taxes .................. $ 29,826 $ 26,058 ========= ========= 9 9 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS Operating results were as follows: THREE MONTHS ENDED In thousands MARCH 31, 2000 MARCH 31, 1999 CHANGE - ------------ -------------- -------------- ------ Revenues $ 226,057 $ 188,128 20.2% Operating expenses 195,906 164,027 19.4% --------- --------- Operating income $ 30,151 $ 24,101 25.1% ========= ========= Net income $ 17,754 $ 15,334 15.8% ========= ========= Diluted earnings per share $ 0.25 $ 0.21 19.0% ========= ========= Consolidated revenues grew 20.2% to $226.1 million and operating income grew 25.1% to $30.2 million in the first quarter of 2000 when compared to the first quarter of 1999. The Company's overall growth resulted from acquisitions, increased business with both new and existing customers and from the sale of new products and services. Overall operating expenses compared to 1999 increased 19.4% to $195.9 million. Net income grew 15.8% to $17.8 million, or 25 cents per share, compared to 21 cents per share on a diluted basis. The net income growth resulted from the growth in operating income partially offset by a decrease of $1.7 million in interest income due to the sale of substantially all of the Company's short-term investments throughout 1999, the proceeds of which were used to fund acquisitions and repurchase the Company's stock. DIRECT MARKETING Direct and interactive marketing operating results were as follows: THREE MONTHS ENDED In thousands MARCH 31, 2000 MARCH 31, 1999 CHANGE - ------------ -------------- -------------- ------ Revenues $ 156,191 $ 124,934 25.0% Operating expenses 134,832 107,650 25.3% --------- --------- Operating income $ 21,359 $ 17,284 23.6% ========= ========= Direct and interactive marketing revenues increased $31.3 million, or 25.0%, in the first quarter of 2000 compared to 1999. Revenue increases were lead by CRM/response management and marketing services which both had strong growth, while CRM/database revenues were soft for the quarter. CRM/response management revenues increased due to increased internet and fulfillment business with existing customers, new customer gains, and the October 1999 acquisition of ZD Market Intelligence, renamed Harte-Hanks Market Intelligence. The traditional growth oriented business-to-business activities of CRM/response management continued to have significant growth in the first quarter. The mutual fund and high technology industry sectors contributed significantly to overall CRM/response management revenue growth. Marketing services' revenues, led by its targeted mail operations, increased due to increased product sales as well as new product sales to new and existing customers, primarily in the banking and retail industries. The May 1999 acquisition of Direct Marketing Associates, Inc. also contributed to the marketing services revenue increase. CRM/database revenues were soft, primarily due to slowdowns in the insurance and managed care industries. Operating expenses increased $27.2 million, or 25.3%, in the first quarter of 2000 compared to 1999. Payroll costs increased $16.2 million due to expanded hiring to support revenue growth. Also contributing to the increased operating 10 10 expenses were additional production costs of $6.6 million due to increased volumes. Depreciation and amortization expense increased $2.7 million due to goodwill associated with acquisitions and higher levels of capital investment to support growth. Operating expenses were also impacted by the acquisitions noted above. SHOPPERS Shopper operating results were as follows: THREE MONTHS ENDED In thousands MARCH 31, 2000 MARCH 31, 1999 CHANGE - ------------ -------------- -------------- ------ Revenues $ 69,866 $ 63,194 10.6% Operating expenses 58,779 54,409 8.0% -------- -------- Operating income $ 11,087 $ 8,785 26.2% ======== ======== Shopper revenues increased $6.7 million, or 10.6%, in the first quarter of 2000 compared to 1999. Revenue increases were the result of improved sales in established markets as well as year-over-year geographic expansions into new neighborhoods in Northern and Southern California. From a product-line perspective, Shoppers had growth in both its in-book products, primarily core sales, employment and automotive related advertising, and its distribution products, primarily 4-color glossy heatset flyers. Shoppers also continued to experience success in up-selling ads onto its web-site. Operating expenses increased $4.4 million, or 8.0%, in the first quarter of 2000 compared to 1999. The increase in operating expenses was primarily due to increases in payroll costs of $1.7 and additional production costs of $1.2 million, including increased postage of $0.7 million due to increased volumes. Other Income and Expense The Company realized a loss of approximately $0.2 million in the first quarter 2000 on the disposal of certain fixed assets in its Shopper operations. In addition, the Company wrote off approximately $0.1 million of inventory and other assets in the first quarter of 2000. Interest Expense/Interest Income Interest income decreased $1.7 million in the first quarter of 2000 over the same period in 1999 due to larger cash and investment balances in the first quarter of 1999. The Company sold substantially all of its short-term investments throughout 1999 in order to fund acquisitions and repurchase the Company's stock. Interest expense increased $0.2 million in the first quarter of 2000 over 1999 due primarily to amortization of financing costs and commitment charges relating to the unsecured revolving credit facilities the Company obtained in November 1999. Income Taxes The Company's income tax expense increased $1.3 million in the first quarter of 2000 compared to the first quarter of 1999. This increase was due primarily to the higher pre-tax income levels. The effective tax rate was 40.5% for the first quarter of 2000 and 41.2% for the first quarter of 1999. Liquidity and Capital Resources Cash provided by operating activities for the three months ended March 31, 2000 was $32.5 million. Net cash outflows from investing activities were $19.0 11 11 million for the first three months of 2000, and primarily relate to purchases of fixed assets. Net cash outflows from financing activities were $3.9 million compared to $11.4 million in 1999. The cash outflow from financing activities in 2000 is attributable primarily to the repayment of long-term borrowings. The cash outflow in 1999 was attributable primarily to the repurchase of treasury stock of $12.7 million. Capital resources are also available from and provided through the Company's two unsecured credit facilities. These credit facilities, two $100 million variable rate, revolving loan commitments, were put in place on November 4, 1999. All borrowings under the $100 million revolving 364-Day Credit Agreement are to be repaid by November 3, 2000 unless the Company requests and is granted a 364-day extension. All borrowings under the $100 million revolving Three-Year Credit Agreement are to be repaid by November 4, 2002. As of March 31, 2000, the Company had $200 million of unused borrowing capacity under these two credit facilities. In addition, capital resources are available to the Company through an unsecured credit facility obtained for the purpose of financing the construction of a new building. This credit facility, a $2.5 million variable rate, revolving loan commitment was put in place on November 29, 1999 and has no stated maturity. $1.5 million of unused borrowing capacity is available from this credit facility as of March 31, 2000. Management believes that its credit facilities, together with cash provided from operating activities, will be sufficient to fund operations and anticipated acquisitions and capital service needs for the foreseeable future. Factors That May Affect Future Results and Financial Condition From time to time, in both written reports and oral statements by senior management, the Company may express its expectations regarding its future performance. These "forward-looking statements" are inherently uncertain, and investors should realize that events could turn out to be other than what senior management expected. Set forth below are some key factors which could affect the Company's future performance, including its revenues, net income and earnings per share; however, the risks described below are not the only ones the Company faces. Additional risks and uncertainties that are not presently known, or that the Company currently considers immaterial, could also impair the Company's business operations. Legislation -- There could be a material adverse impact on the Company's direct and interactive marketing business due to the enactment of legislation or industry regulations arising from public concern over consumer privacy issues. Restrictions or prohibitions could be placed upon the collection and use of information that is currently legally available. Data Suppliers -- The Company could suffer a material adverse effect if owners of the data the Company uses were to withdraw the data. Data providers could withdraw their data if there is a competitive reason to do so or if legislation is passed restricting the use of the data. Acquisitions -- In recent years the Company has made a number of acquisitions in its direct and interactive marketing and shopper businesses, and it expects to pursue additional acquisition opportunities. Acquisition activities, even if not consummated, require substantial amounts of management time and can distract from normal operations. In addition, there can be no assurance that the synergies and other objectives sought in acquisitions will be achieved. Competition -- Direct and interactive marketing is a rapidly evolving business, subject to periodic technological advancements, high turnover of customer personnel who make buying decisions, and changing customer needs and preferences. Consequently, the Company's direct and interactive marketing business faces competition in each of its three sectors -- CRM/response management, CRM/database, and marketing services. The Company's shopper business competes 12 12 for advertising, as well as for readers, with other print and electronic media. Competition comes from local and regional newspapers, magazines, radio, broadcast and cable television, shoppers and other communications media that operate in the Company's markets. The extent and nature of such competition are, in large part, determined by the location and demographics of the markets targeted by a particular advertiser, and the number of media alternatives in those markets. Failure to continually improve the Company's current processes and to develop new products and services could result in loss of the Company's customers to current or future competitors. In addition, failure to gain market acceptance of new products and services could adversely affect the Company's growth. Qualified Personnel -- The Company believes that its future prospects will depend in large part upon its ability to attract, train and retain highly skilled technical, client services and administrative personnel. Qualified personnel are in great demand and are likely to remain a limited resource for the foreseeable future. Postal Rates -- The Company's shoppers are delivered by standard mail, and postage is the second largest expense, behind payroll, in the Company's shopper business. The present standard postage rates went into effect in January 1999, and a rate increase is expected in 2001. Postal rates also influence the demand for the Company's direct and interactive marketing services even though the cost of mailings is borne by the Company's customers and is not directly reflected in the Company's revenues or expenses. Newsprint Prices -- Newsprint represents a substantial expense in the Company's shopper operations. In recent years newsprint prices have fluctuated widely, and such fluctuations can materially affect the results of the Company's operations. Economic Conditions -- Changes in national economic conditions can affect levels of advertising expenditures generally, and such changes can affect each of the Company's businesses. In addition, revenues from the Company's shopper business are dependent to a large extent on local advertising expenditures in the markets in which they operate. Such expenditures are substantially affected by the strength of the local economies in those markets. Direct and interactive marketing revenues are dependent on national and international economics. 13 13 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. See index to Exhibits on Page 15. (b) No Form 8-K has been filed during the three months ended March 31, 2000. 14 14 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. HARTE-HANKS, INC. May 12, 2000 /s/ Jacques D. Kerrest ------------ ---------------------------------- Date Jacques D. Kerrest Senior Vice President, Finance and Chief Financial Officer 15 15 Exhibit No. Description of Exhibit - ------- ---------------------- 2(a) Certificate of Ownership and Merger (filed as Exhibit 2(a) to the Company's Registration Statement No. 33-69202 and incorporated by reference herein). 2(b) Agreement and Plan of Merger dated as of February 4, 1996 among Harte-Hanks Communications, Inc., HHD Acquisition Corp. and DiMark, Inc. (filed as Appendix A to the Company's Registration Statement No. 333-02047 and incorporated by reference herein). 2(c) Agreement and Plan of Merger and Reorganization, dated as of May 16, 1997, by and between The E.W. Scripps Company and Harte-Hanks Communications, Inc. (filed as Exhibit 2.1 to the Company's Form 8-K dated May 22, 1997 and incorporated by reference herein). 2(d) Acquisition Agreement, dated as of May 16, 1997, by and between The E.W. Scripps Company and Harte-Hanks Communications, Inc. (filed as Exhibit 2.2 to the Company's Form 8-K dated May 22, 1997 and incorporated by reference herein). 2(e) Stock Purchase Agreement dated as of July 26, 1997 between ABC, Inc. and Harte-Hanks Communications, Inc. (filed as Exhibit 2(e) to the Company's Form 10-Q for the nine months ended September 30, 1997 and incorporated by reference herein). 3(a) Amended and Restated Certificate of Incorporation (filed as Exhibit 3(a) to the Company's Form 10-K for the year ended December 31, 1993 and incorporated by reference herein). 3(b) Amended and Restated Bylaws (filed as Exhibit 3(b) to the Company's Registration Statement No. 33-69202 and incorporated by reference herein). 3(c) Amendment dated April 30, 1996 to Amended and Restated Certificate of Incorporation (filed as Exhibit 3(c) to the Company's Form 10-Q for the nine months ended September 30, 1996 and incorporated by reference herein). 3(d) Amendment dated May 5, 1998 to Amended and Restated Certificate of Incorporation (filed as Exhibit 3(d) to the Company's Form 10-Q for the six months ended June 30, 1998 and incorporated by reference herein). 3(e) Amended and Restated Certificate of Incorporation as amended through May 5, 1998 (filed as Exhibit 3(e) to the Company's Form 10-Q for the six months ended June 30, 1998 and incorporated by reference herein). 4(a) 364-Day Credit Agreement dated as of November 4, 1999 between Harte-Hanks, Inc. and the Lenders named therein [$100 million] (filed as Exhibit 4(a) to the Company's form 10-Q for the nine months ended September 30, 1999 and incorporated by reference herein). 16 16 Exhibit No. Description of Exhibit - ------- ---------------------- 4(b) Three-Year Credit Agreement dated as of November 4, 1999 between Harte-Hanks, Inc. and the Lenders named therein [$100 million] (filed as Exhibit 4(b) to the Company's form 10-Q for the nine months ended September 30, 1999 and incorporated by reference herein). 4(c) Other long term debt instruments are not being filed pursuant to Section (b)(4)(ii) of Item 601 of Regulation S-K. Copies of such instruments will be furnished to the Commission upon request. 10(a) 1984 Stock Option Plan (filed as Exhibit 10(d) to the Company's Form 10-K for the year ended December 31, 1984 and incorporated herein by reference). 10(b) Registration Rights Agreement dated as of September 11, 1984 among HHC Holding Inc. and its stockholders (filed as Exhibit 10(b) to the Company's Form 10-K for the year ended December 31, 1993 and incorporated by reference herein). 10(c) Severance Agreement between Harte-Hanks Communications, Inc. and Larry Franklin, dated as of July 23, 1993 (filed as Exhibit 10(f) to the Company's Registration Statement No. 33-69202 and incorporated by reference herein). 10(d) Form of Severance Agreement between Harte-Hanks Communications, Inc. and certain Executive Officers of the Company, dated as of July 7 or December 28,1997 (filed as Exhibit 10(f) to the Company's Form 10-K for the year ended December 31, 1997 and incorporated by reference herein). 10(e) Form of Severance Agreement between Harte-Hanks, Inc. and Richard M. Hochhauser dated as of January 25, 2000 (filed as Exhibit 10(e) to the Company's Form 10-K for the year ended December 31, 1999 and incorporated by reference herein). 10(f) Harte-Hanks, Inc. Amended and Restated Restoration Pension Plan dated as of January 1, 2000 (filed as Exhibit 10(f) to the Company's Form 10-K for the year ended December 31, 1999 and Incorporated by reference herein). 10(g) Harte-Hanks Communications, Inc. 1996 Incentive Compensation Plan (filed as Exhibit 10(p) to the Company's Form 10-Q for the nine months ended September 30, 1996 and incorporated by reference herein). 10(h) Harte-Hanks, Inc. Amended and Restated 1991 Stock Option Plan (filed as Exhibit 10(g) to the Company's Form 10-Q for the six months ended June 30, 1998 and incorporated by reference herein). 10(i) Harte-Hanks, Inc. 1998 Director Stock Plan (filed as Exhibit 10(h) to the Company's Form 10-Q for the six months ended June 30, 1998 and incorporated by reference herein). 10(j) Harte-Hanks, Inc. Deferred Compensation Plan (filed as Exhibit 10(i) to the Company's Form 10-K for the year ended December 31, 1998 and incorporate by reference herein). 17 17 Exhibit No. Description of Exhibit - ------- ---------------------- *11 Statement Regarding Computation of Net Income (Loss) Per Common Share *21 Subsidiaries of the Company. *27 Financial Data Schedule. - --------------------- *Filed herewith