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, 2001
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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
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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
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(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
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock: $1 par value, 63,545,162 shares as of April 30, 2001.
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HARTE-HANKS, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
FORM 10-Q REPORT
March 31, 2001
Page
----
Part I. Financial Information
Item 1. Interim Condensed Consolidated Financial
Statements (Unaudited)
Condensed Consolidated Balance Sheets - 3
March 31, 2001 and December 31, 2000
Consolidated Statements of Operations - 4
Three months ended March 31, 2001 and 2000
Consolidated Statements of Cash Flows - 5
Three months ended March 31, 2001 and 2000
Consolidated Statements of Stockholders' Equity - 6
Three months ended March 31, 2001 and 2000
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
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3
Harte-Hanks, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (in thousands, except share amounts)
- --------------------------------------------------------------------------------
(Unaudited)
March 31, December 31,
2001 2000
---------- ------------
Assets
Current assets
Cash and cash equivalents ........................... $ 21,504 $ 22,928
Accounts receivable, net ............................ 150,551 179,838
Inventory ........................................... 6,933 6,260
Prepaid expenses .................................... 15,007 14,072
Current deferred income tax asset ................... 7,120 7,648
Other current assets ................................ 4,552 5,127
---------- ----------
Total current assets ............................. 205,667 235,873
Property, plant and equipment, net ..................... 113,362 112,065
Goodwill and other intangibles, net .................... 434,983 439,148
Other assets ........................................... 19,588 20,019
---------- ----------
Total assets ..................................... $ 773,600 $ 807,105
========== ==========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable .................................... $ 70,473 $ 60,069
Accrued payroll and related expenses ................ 19,357 31,429
Customer deposits and unearned revenue .............. 44,395 42,712
Income taxes payable ................................ 10,059 5,135
Other current liabilities ........................... 7,479 10,619
---------- ----------
Total current liabilities ........................ 151,763 149,964
Long-term debt ......................................... 33,912 65,370
Other long-term liabilities ............................ 41,425 40,768
---------- ----------
Total liabilities ................................ 227,100 256,102
---------- ----------
Stockholders' equity
Common stock, $1 par value, 250,000,000 shares
authorized. 77,796,862 and 76,916,339 shares
issued at March 31, 2001 and December 31,
2000, respectively ............................... 77,797 76,916
Additional paid-in capital .......................... 211,811 202,222
Accumulated other comprehensive income (loss) ....... (2,785) (2,105)
Retained earnings ................................... 584,940 568,512
---------- ----------
871,763 845,545
Less treasury stock: 13,560,879 and 12,230,388
shares at cost at March 31, 2001 and
December 31, 2000, respectively .................. (325,263) (294,542)
---------- ----------
Total stockholders' equity ....................... 546,500 551,003
---------- ----------
Total liabilities and stockholders' equity ....... $ 773,600 $ 807,105
========== ==========
See Notes to Interim Condensed Consolidated Financial Statements.
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4
Harte-Hanks, Inc. and Subsidiaries
Consolidated Statements of Operations (in thousands, except per share amounts)
- --------------------------------------------------------------------------------
(Unaudited)
Three Months Ended March 31,
----------------------------
2001 2000
---- ----
Operating revenues ......................................... $ 232,120 $ 226,057
---------- ----------
Operating expenses
Payroll ................................................ 90,788 87,068
Production and distribution ............................ 77,256 76,003
Advertising, selling, general and administrative ....... 20,299 22,461
Depreciation ........................................... 7,703 6,730
Goodwill and intangible amortization ................... 4,222 3,644
---------- ----------
200,268 195,906
---------- ----------
Operating income ........................................... 31,852 30,151
---------- ----------
Other expenses (income)
Interest expense ....................................... 987 254
Interest income ........................................ (161) (412)
Other, net ............................................. 472 483
---------- ----------
1,298 325
---------- ----------
Income before income taxes ................................. 30,554 29,826
Income tax expense ......................................... 12,191 12,072
---------- ----------
Net income ................................................. $ 18,363 $ 17,754
========== ==========
Basic:
Earnings per common share .............................. $ 0.28 $ 0.26
========== ==========
Weighted-average common shares outstanding ............. 64,660 68,263
========== ==========
Diluted:
Earnings per common share .............................. $ 0.28 $ 0.25
========== ==========
Weighted-average common and common equivalent
shares outstanding .................................. 66,381 70,301
========== ==========
See Notes to Interim Condensed Consolidated Financial Statements.
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5
Harte-Hanks, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (in thousands)
- --------------------------------------------------------------------------------
(Unaudited)
Three Months Ended March 31,
----------------------------
2001 2000
---- ----
Operating Activities
Net income ....................................................................... $ 18,363 $ 17,754
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation .................................................................. 7,703 6,730
Goodwill and intangible amortization .......................................... 4,222 3,644
Amortization of option-related compensation ................................... 93 138
Deferred income taxes ......................................................... 1,178 1,373
Other, net .................................................................... 604 262
Changes in operating assets and liabilities, net of acquisitions:
Decrease in accounts receivable, net .......................................... 29,287 5,687
Decrease (increase) in inventory .............................................. (673) 1,376
Increase in prepaid expenses and other
current assets ............................................................. (360) (1,896)
Increase (decrease)in accounts payable ........................................ 10,404 (2,700)
Increase (decrease) in other accrued expenses
and other liabilities ...................................................... (6,660) 76
Other, net .................................................................... (1,185) 16
---------- ----------
Net cash provided by operating activities .................................. 62,976 32,460
---------- ----------
Investing Activities
Acquisitions ..................................................................... - (8,681)
Purchases of property, plant and equipment ....................................... (8,963) (10,300)
Proceeds from sale of property, plant and equipment .............................. 154 -
---------- ----------
Net cash used in investing activities ...................................... (8,809) (18,981)
---------- ----------
Financing Activities
Long-term borrowings ............................................................. 112,000 1,032
Repayment of long-term borrowings ................................................ (143,000) (5,000)
Issuance of common stock ......................................................... 3,820 1,736
Purchase of treasury stock ....................................................... (26,497) (12)
Issuance of treasury stock ....................................................... 21 20
Dividends paid ................................................................... (1,935) (1,708)
---------- ----------
Net cash used in financing activities ...................................... (55,591) (3,932)
---------- ----------
Net increase (decrease) in cash .................................................. (1,424) 9,547
Cash and cash equivalents at beginning of year ................................... 22,928 35,196
---------- ----------
Cash and cash equivalents at end of period ....................................... $ 21,504 $ 44,743
========== ==========
See Notes to Interim Condensed Consolidated Financial Statements.
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6
Harte-Hanks, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity (in thousands)
- --------------------------------------------------------------------------------
(Unaudited)
Accumulated
Additional Other Total
Common Paid-In Retained Treasury Comprehensive Stockholders'
Stock Capital Earnings Stock Income (Loss) Equity
-----------------------------------------------------------------------------------------
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 net 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
=======================================================================================
Balance at January 1, 2001 .......... $ 76,916 $ 202,222 $ 568,512 $(294,542) $ (2,105) $ 551,003
Common stock issued-
employee benefit plans ......... 51 923 - - - 974
Exercise of stock options
for cash and by
surrender of shares ............ 830 3,383 - (4,243) - (30)
Tax benefit of options
exercised ...................... - 5,281 - - - 5,281
Dividends paid ($0.03 per
share) ......................... - - (1,935) - - (1,935)
Treasury stock repurchase ........... - - - (26,497) - (26,497)
Treasury stock issued ............... - 2 - 19 - 21
Comprehensive income, net of
tax:
Net income ..................... - - 18,363 - - 18,363
Foreign currency
translation adjustment ..... - - - - (351) (351)
Change in net unrealized
gain (loss) on
long-term investments
(net of tax of $177) ....... - - - - (329) (329)
---------
Total comprehensive income .......... 17,683
---------------------------------------------------------------------------------------
Balance at March 31, 2001 ........... $ 77,797 $ 211,811 $ 584,940 $(325,263) $ (2,785) $ 546,500
=======================================================================================
See Notes to Interim Condensed Consolidated Financial Statements.
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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 accounting principles
generally accepted in the United States of America 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 accounting principles generally accepted in the United States of
America 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, 2001 are not necessarily indicative of the results that
may be expected for the year ending December 31, 2001. 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, 2000.
Certain prior period amounts have been reclassified for comparative purposes.
NOTE B - INCOME TAXES
The Company's quarterly income tax provision of $12.2 million was calculated
using an effective income tax rate of approximately 39.9%. The Company's
effective income tax rate is derived by estimating pretax income and income tax
expense for the year ending December 31, 2001. 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 amounts 2001 2000
- -------------------------------------------------------------------------------------------------------
BASIC EPS
Net Income ........................................................ $ 18,363 $ 17,754
======== ========
Weighted-average common shares outstanding
used in earnings per share computations ......................... 64,660 68,263
======== ========
Earnings per common share ......................................... $ 0.28 $ 0.26
======== ========
DILUTED EPS
Net Income ........................................................ $ 18,363 $ 17,754
======== ========
Shares used in earnings per share computations .................... 66,381 70,301
======== ========
Earnings per common share ......................................... $ 0.28 $ 0.25
======== ========
Computation of shares used in earnings per share computations:
Average outstanding common shares ................................. 64,660 68,263
Average common equivalent shares -
dilutive effect of option shares ................................ 1,721 2,038
-------- --------
Shares used in earnings per share computations .................... 66,381 70,301
======== ========
As of March 31, 2001 the Company had 1,037,700 antidilutive market price options
8
8
outstanding.
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 2001 2000
- -----------------------------------------------------------------------------------
Operating revenues
Direct Marketing ........................ $ 157,793 $ 156,191
Shoppers ................................ 74,327 69,866
--------- ---------
Total operating revenues ............ $ 232,120 $ 226,057
========= =========
Operating Income
Direct Marketing ........................ $ 21,418 $ 21,359
Shoppers ................................ 12,782 11,087
Corporate Activities .................... (2,348) (2,295)
--------- ---------
Total operating income .............. $ 31,852 $ 30,151
========= =========
Income before income taxes
Operating income ........................ $ 31,852 $ 30,151
Interest expense ........................ (987) (254)
Interest income ......................... 161 412
Other, net .............................. (472) (483)
--------- ---------
Total income before income taxes .... $ 30,554 $ 29,826
========= =========
NOTE E - RECENT ACCOUNTING PRONOUNCEMENT
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities," issued in June 1998, establishes
accounting and reporting standards for derivative instruments and hedging
activities. This statement requires than an entity recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. The Company adopted SFAS No. 133 in the first
quarter of 2001. The adoption of SFAS No. 133 did not have a material impact on
the Company's financial position or results of operations.
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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, 2001 MARCH 31, 2000 CHANGE
- ------------ -------------- -------------- ------
Revenues $ 232,120 $ 226,057 2.7%
Operating expenses 200,268 195,906 2.2%
----------- -----------
Operating income $ 31,852 $ 30,151 5.6%
=========== ===========
Net income $ 18,363 $ 17,754 3.4%
=========== ===========
Diluted earnings
per share $ 0.28 $ 0.25 12.0%
=========== ===========
Consolidated revenues grew 2.7% to $232.1 million and operating income grew 5.6%
to $31.9 million in the first quarter of 2001 when compared to the first quarter
of 2000. The Company's overall growth resulted from acquisitions and increased
business with both new and existing customers. Overall operating expenses
compared to 2000 increased 2.2% to $200.3 million.
Net income grew 3.4% to $18.4 million, or 28 cents per share, compared to 25
cents per share on a diluted basis. The net income growth resulted from the
growth in operating income partially offset by $1.0 million in higher interest
expense and lower interest income. Increased interest cost was the result of
higher debt levels in 2001, the proceeds of which were primarily used to
repurchase the Company's stock.
DIRECT MARKETING
Direct and interactive marketing operating results were as follows:
THREE MONTHS ENDED
In thousands MARCH 31, 2001 MARCH 31, 2000 CHANGE
- ------------ -------------- -------------- ------
Revenues $ 157,793 $ 156,191 1.0%
Operating expenses 136,375 134,832 1.1%
----------- -----------
Operating income $ 21,418 $ 21,359 0.3%
=========== ===========
Direct and interactive marketing revenues increased $1.6 million, or 1.0%, in
the first quarter of 2001 compared to 2000. These results reflect a decline in
the retail industry sector, direct and interactive marketing's largest vertical
market, and slowdowns in the high tech/telecom and financial services industry
sectors. These results were offset by excellent revenue growth in the
pharmaceutical, healthcare and automotive industry sectors. Customer
Relationship Management (CRM) experienced moderate growth while Marketing
Services revenues declined slightly from the prior year. CRM revenues increased
due to acquisitions, new customer gains and increased software revenue and
internet business with existing customers, partially offset by decreased
revenues from lead generation, telesales and fulfillment business. The
traditional business-to-business activities of CRM continued to have steady
growth in the first quarter, but were partially offset by declines in revenues
from business-to-consumer activities. Marketing Services experienced revenue
declines in its targeted mail operations and softness in its logistics and
personalized direct mail operations. The remainder of fiscal year 2001 results
could be affected by the recent economic uncertainty and continued softness in
many of the direct and interactive marketing segment's largest industry sectors.
Operating expenses increased $1.5 million, or 1.1%, in the first quarter of 2001
compared to 2000. Payroll costs increased $3.0 million, primarily due to
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acquisitions and increased wages. Also contributing to the increased operating
expenses was additional depreciation and amortization expense of $1.6 million
due to goodwill associated with acquisitions and higher levels of capital
investment to support growth. Partially offsetting these increased operating
expenses were decreased general and administrative expenses, primarily
professional services, resulting from the Company's effort to control
discretionary costs. Operating expenses were also impacted by prior year
acquisitions.
SHOPPERS
Shopper operating results were as follows:
THREE MONTHS ENDED
In thousands MARCH 31, 2001 MARCH 31, 2000 CHANGE
- ------------ -------------- -------------- ------
Revenues $ 74,327 $ 69,866 6.4%
Operating expenses 61,545 58,779 4.7%
----------- -----------
Operating income $ 12,782 $ 11,087 15.3%
=========== ===========
Shopper revenues increased $4.5 million, or 6.4%, in the first quarter of 2001
compared to 2000. Revenue increases were the result of improved sales in
established markets as well as year-over-year geographic expansions into new
neighborhoods in both California and Florida. From a product-line perspective,
Shoppers had growth in both its distribution products, primarily pre-printed
inserts and 4-color glossy heatset flyers, and its in-book products, primarily
core sales and employment related advertising. Shoppers also continued to
experience success in up-selling ads onto its web-site. Shoppers experienced
decreases in its real-estate and automotive related advertising sectors.
Operating expenses increased $2.8 million, or 4.7%, in the first quarter of 2001
compared to 2000. The increase in operating expenses was primarily due to
increases in labor costs of $0.8 million and additional production costs of $2.2
million, including increased postage of $1.6 million due to increased volumes
and higher postage rates. Partially offsetting these increased operating
expenses were decreased general and administrative expenses, resulting from the
Company's effort to control discretionary costs.
Other Income and Expense
The Company recorded a loss of approximately $0.5 million in the first quarter
2001 on the write-down of an investment which was being accounted for under the
cost method.
Interest Expense/Interest Income
Interest expense increased $0.7 million in the first quarter of 2001 over 2000
due primarily to higher debt levels in 2001, the proceeds of which were used to
repurchase the Company's stock.
Interest income decreased $0.3 million in the first quarter of 2001 over the
same period in 2000 due to lower cash balances and lower interest rates during
the first quarter of 2001.
Income Taxes
The Company's income tax expense increased $0.1 million in the first quarter of
2001 compared to the first quarter of 2000. This increase was due primarily to
the higher pre-tax income levels. The effective tax rate was 39.9% for the first
quarter of 2001 and 40.5% for the first quarter of 2000.
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Liquidity and Capital Resources
Cash provided by operating activities for the three months ended March 31, 2001
was $63.0 million, compared to $32.5 million for the first three months of 2000.
The increase in 2001 primarily related to increased collections of a higher
accounts receivable balance at December 31, 2000 than at December 13, 1999. Net
cash outflows from investing activities were $8.8 million for the first three
months of 2001, compared to $19.0 million for the first three months of 2000.
The cash outflow in 2001 primarily relates to purchases of fixed assets, while
the outflow in 2000 relates to both purchases of fixed assets and acquisitions.
Net cash outflows from financing activities were $55.6 million in 2001 compared
to $3.9 million in 2000. The cash outflow in 2001 is attributable primarily to
the net repayment of long-term borrowings and the repurchase of treasury stock.
Capital resources are 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 Three-Year Credit Agreement are to
be repaid by November 4, 2002. On November 2, 2000 the Company was granted a
364-day extension to its $100 million revolving 364-Day Credit Agreement. All
borrowings under the $100 million revolving 364-Day Credit Agreement are to be
repaid by November 1, 2001. As of March 31, 2001, the Company had $176 million
of unused borrowing capacity under these two credit facilities. Management
believes that its credit facilities, together with cash provided from operating
activities, will be sufficient to fund operations and anticipated acquisitions
and capital expenditures 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 - There could be a material adverse impact on the Company's
direct and interactive marketing business 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 segment, 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.
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Consequently, the Company's direct and interactive marketing business faces
competition in both of its sectors -- CRM and Marketing Services. The Company's
shopper business competes 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 the 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 2001
and are expected to increase in the third quarter of 2001. Overall shopper
postage costs are expected to grow moderately as a result of this increase as
well as anticipated increases in circulation and insert volumes. 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.
Paper Prices -- Paper 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.
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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, 2001.
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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 15, 2001 /s/ Jacques D. Kerrest
------------ ----------------------------------
Date Jacques D. Kerrest
Senior Vice President, Finance and
Chief Financial Officer
15
15
Exhibit
No. Description of Exhibit Page No.
- -------- ----------------------------------------------------------------------- --------
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).
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) Amendment No. 2 dated October 30, 2000 to 364-Day Credit
Agreement [$100 million] (filed as Exhibit 4(c) to the Company's
Form 10-Q for the nine months ended September 30, 2000 and
incorporated by reference herein).
4(d) 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, Inc. and Larry
Franklin, dated as of December 15, 2000 (filed as Exhibit
10(c) to the Company's Form 10-K for the year ended December
31, 2000 and incorporated by reference herein).
16
16
Exhibit
No. Description of Exhibit Page No.
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10(d) Severance Agreement between Harte-Hanks, Inc. and Richard M.
Hochhauser dated as of December 15, 2000 (filed as Exhibit
10(d) to the Company's Form 10-K for the year ended
December 31, 2000 and incorporated by reference herein).
10(e) Form 1 of Severance Agreement between Harte-Hanks, Inc. and
certain Executive Officers of the Company, dated as of
December 15, 2000 (filed as Exhibit 10(e) to the Company's
Form 10-K for the year ended December 31, 2000 and
incorporated by reference herein).
10(f) Form 2 of Severance Agreement between Harte-Hanks, Inc. and
certain Executive Officers of the Company, dated as of
December 15, 2000 (filed as Exhibit 10(f) to the Company's
Form 10-K for the year ended December 31, 2000 and
incorporated by reference herein).
10(g) 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(h) 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(i) 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(j) 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(k) 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 incorporated by reference herein).
10(l) Amendment One to Harte-Hanks, Inc. Amended and Restated
Restoration Plan dated December 18, 2000 (filed as Exhibit 10(l)
to the Company's Form 10-K for the year ended December 31, 2000
and incorporated by reference herein).
*21 Subsidiaries of the Company. 17
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*Filed herewith