HHS - Earnings call 4 2021 | Harte Hanks, Inc.

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Operator

Good afternoon, ladies and gentlemen, and welcome to Harte Hanks Fourth Quarter and Full Year 2021 Earnings Call. [Operator Instructions]

It is now my pleasure to turn the floor over to your host, Rob Fink. Sir, the floor is yours.

Rob Fink

Thank you, operator, and thank you, everyone, for joining us today for the Harte Hanks Fourth Quarter and Full Year 2021 Earnings Conference Call. are Financial Harte Officer. today Lauri CEO, call Chief Kearnes, the Brian Hanks Linscott, and Hosting

may about uncertainties, Before the facts. including projected or on remind described implied business and information call these other various everyone begin, and may risks Actual that forward-looking we I performance are the Form results materially provided would of and the SEC company's and from industry those the expectations, statements statement and differ during and XX-Q financial the today's in that company's release. other historical those earnings included strategy, the with statements in like anticipated in to contain and cautionary because XX-K outlook, was statements press outcomes that this filings based not

disclosures. call that at for The press reconciliation and earnings measures. also hartehanks.com. close financial Investor Hanks is today Relations the related of non-GAAP company's will to these the a website section Please the refer Harte available on reference The was of earnings the after release issued release other

that I'd With turn Linscott. Brian, like over the said, call to yours. to call is the now Brian

Brian Linscott

afternoon. Harte a and restructuring; portfolio Tier Market. customers Nasdaq XXXX loyal and value-added turning Global profitable XXXX point more significant efficient a for our offerings upon a with with model; entered business that the demand. We on Thank Rob, our asset-light shares you, our company, customers; of service and profitable Hanks. built proven, business X a a listed we good our completed model; We was implemented operating significantly more

clients they I from that Harte of thank the employees are them professionalism a company. It is and of our poised because our and which want commend stronger to and for every is all We long-term Hanks profitable for passion serve day. growth,

hired Don our continued durables Hanks, and national Marketing. our campaigns involve started Don tech drive the right verticals consumer in to established growth. sales in to and market. expanding and Since Vice call, our segments. of offerings. people, hiring Senior Sales in our career President integrated In leading Aicklen a cross-selling our invest fully X business investments January, with as These last of service driving across we've a Today, efforts leading ultimately Don new we capabilities earnings and maximize organization profitability automotive marketing and is our variety our his presence and all Harte early sales

practice announced for service return a world-class company health expanded are care will him experienced practice our leadership be and leadership of Harris. Janel care our health to the wellness to under in February, In clients in providing senior the industries. with pharmaceutical, We of the we excited role. our expanding charged for Janel

practice, Abbott, past robust systems. with like including customers Pfizer care the we and top-tier a and built health GSK, few have health other care national Over years, relationships state

accelerate Our provide us and for to growth and patient service fully insights, and execute data integrated programs, fulfillment marketing to an proven analytics, support, logistics, customer health care campaigns, customers. strategy, and care, make partner their member ability ideal best comprehensive organizations including

already provide to pumps delivering care health including health-related breast new recently mothers care products a by health milk results. expanded contract Our national were materials. is multiyear a organization practice with awarded We and

integrated component to milk from kits example over participants under and & is and mothers new approach program in This prime the a the Logistics comprehensive is our XXX,XXX is milk and breast inbound segment to kits Care year newborn way. program first the to Kansas connected in Care expected serving covered Act our Affordable address win facility will Our breast the program. contract members fully distribute the and inquiries, our Customer In cost-effective designed a City. nutrition will deliver This wellness. to XXX,XXX-square-foot FDA-approved the new and to materials of with its customers alone, engage to segment improve of expecting Fulfillment our

Where fulfillment that we based and bringing inventory customer on to of provide our to this single-source clients' end-to-end, ability selected company approach engagement multidisciplinary provided to today, unique service business We by wellness mission. engagement are product Harte everything within health our satisfy silos, and kits. nutrition sourcing, solution customer from includes discrete a member Hanks previously were complete services distribution management, care large and

same our our base. the helping execution Marketing system, membership for clients analytics, health campaign Services its care segment provides grow in care For states, the health select strategy, organization

this of improving truly It industries. is our future full our other health and us and large-scale and To care are facilitate a data for model work capabilities. capabilities. engagement, smarter part future technology every our in of Overall, organization, advantage taking we faster, such in touches across investing enabling to organization, project our differentiated analytics engagements

and simplify data We these we Harte to and improve analytic as will addition, work. growth grow us look In and eliminate efficiency. to data our as standardize manual a catalyst to for their investments utilize view better Hanks processes expertise increasingly how and customers allow

tech, retail, and We are have consumer to products business. significant our we investing capabilities area of and auto, in expand BXB this

growth Another industry. Harte in Hanks the for catalyst is financial

strategy a to provide solution We respect banking have agency proven with CRM mid-market campaign ability particularly robust segment. to and

well our enrich analytics, proven privacy to growth customized data solutions campaign data of and expertise value is to involve delivering data execution delivery, strategy, our several to of and with cleanse, reports leverages enable data analytics digital where predictive modeling ability expertise, including area our of and augment as to and customers. financial significant printing areas digital customers. as such as Our design, offers This

Now to results. our on

delivered in the in results quarter. segments particularly contribution X fourth margin terms solid operating of Our

execution X Logistics, on tech-enabled As and I've customer Fulfillment fulfillment, customer customer literature and BXC strategic outcomes segments Care, are our and planning, is data-driven insights, -- market to and on number care program one, before, e-commerce Marketing focused on ROI. supply chain technology described sampling, focused people-driven; design, full-service business BXB & Services, customers' creative include: focused and end-to-end services; solutions performance drive that three, Customer delivering and optimize analytics, enablement and logistics which

and to transparency dynamics the into the visibility business. designed financials company's and segment reporting value provide is of each Our into

ended a increasing To the XX% $XX begin, over year with to with quarter revenues strong million. we fourth

importantly, More year fourth prior of quarter from of the an year. improvement in loss the profitability we a for million, $X.X last operating over is positive this to is year. moved quarter an EBITDA $X.X million the which

anticipate positive of each forward, XXXX. Going we for EBITDA quarter

in financial drive X.X% improvements EBITDA from to and increased prior quarter. year each of improved Customer our and Care million We from million XX.X% in continue year-over-year to previous $X.X year, by revenue segments. operational the the $X.X

from XXXX. to this project anticipate the albeit COVID-related COVID work a at we run half of rate. continue some as benefit We first through We work move lower reductions in

in said, recognize work-from-home also from Customer and in As as adapting environment. we the our allowing pressures we in see. expiring labor cost expect reductions are us recruiting structure wage some pressures wage the the to recruiting Care our We our leases further mitigate to today's -- flexibility environment, which of have we by by market we benefit and is are the work-from-home

selected self-service for and a into with and network. consulting will leverage selected Harte customer we customers distribution e-commerce a interactions experience. processing advanced Harte vendor the experience they company's interactions state in launch. sports by Hanks Hanks handling to we number was us build product phone, streaming experiences. practice, solution claims assist and we digital our also text to Harte third, New sports its the ticket social and their government their customer And interactions support due part and A for a leverage interactions one, include: network customer chat government. to invite to quarter Harte as support e-mail, performance direct-to-consumer as unemployment Hanks our hired business our their company top customer will selected Hanks support wins transaction industry for regional entertainment were and experience.

the million $X.X EBITDA approximately year, breakeven approximately and increased million or $X.X previous quarter. to revenue year Logistics & the essentially XX% to from prior improved compared Fulfillment

our capacity margin we organic to as XXXX. of facility, XXX,XXX continued new City improvement as growth serve approximately square anticipate added the client feet FDA-approved we With operations consolidation in operating of business. into Kansas And have well fulfillment

largely and additional in stored We to client growth clients' supply materials opportunities. to our our due in the of nature serves continue locations our facilities enablement to capacity chain products in success. The challenges sales of critical to grow the as our -- spite critical also

been relationships we deep have trucking costs transportation the In successful in the in and largely impacts higher addition, and of to long-standing mitigating industry. transportation due

to time-sensitive health on kits pricing. customer our to manage wins our with selected care and pediatrician and prebuilt long-standing fulfill included: one, the due print two, Harte a partnership program sample offices lanes $X winning a to nationwide; additional distribution nutrition deliver company, million-plus and a retail materials and to on-time business New performance for Hanks quarter low-cost expanding

XX% $X.X compared EBITDA to last about Services million Marketing by rose year. or

we segment -- resources, driven on our stated, we our to products. attract tech previously As as technology financial, and Marketing serve expenses customers customers. categories, SG&A have Services efforts including health consumer improved realigned Services market marketing within from have our aggressively to our infrastructure We BXB new reduced focused invested profitability and in and better care, our remain Marketing prioritized

-- significant our capabilities. services, agency made in CRM including product marketing marketing have data and our analytics, progress offerings, enablement We strategy,

wide drive generation; generation leverages Hanks selected sales technology full-service one, them in Harte analytics professional wins existing was $X.X chose we buys, through program annual space. The Harte second, to We media client and of our solutions analytics, and variety services, increased to beauty that business strategy marketing a its distributes campaigns. in outbound after Hanks because execute customer strategy quarter include: to New where billion helped creative, the sales. products, a manufacturer and line execute we remit multinational and calling lead global an top existing loyalty salon required provide demand services achieve of BXB marketing for data-driven and implement omnichannel program. the

new operating strong this in reflecting opportunities us year, conclusion, efficiency momentum revenue business significantly productive and in growing vetted and In of with the and XXXX. that strong our was Recent continued give and improved confidence level line near-term pipeline encouraging business. a remain a wins will and

in remain to we profitability. ability importantly, to increased optimistic drive continue More our

We significant higher in positive full expect improvement year net EBITDA, flows driving income continued and cash XXXX. during year-over-year free

With over Lauri. it to that, I turn

Laurilee Kearnes

Brian. you, Thank

achieved growth, strong our revenue operating in fourth year of momentous said, Harte million million a positive We of to seventh quarter and in our a financial consecutive this The positive entered strongest December at XXXX in EBITDA our position year-over-year row quarter $X.X adjusted and quarter years. swing. was was of Brian million. income a a we our end for As $X.X $X.X was Hanks,

Our and of wins performance included our the benefits asset-light business new model.

us. behind the on our are large we said, to and streamlining continue restructuring today, market charges the are meet business focus now the encouraged of and optimizing That needs to We by the results. nonoperational

I'd of walk Revenue $XX.X Logistics to XX.X%. the result was we projects now or million more the the same revenue up $X.X XX.X% and segments. $X.X $XX Care down last period in $X.X several million X.X%. year. up services Care half was up to up or was Fourth a Fulfillment & large Fulfillment million results growth or Services and year-over-year in wind sequentially Logistics over through COVID-related Customer & quarter first XX.X% million of And as Marketing million, quarter like million $X.X led million down the expect was negative our was XXXX. by $X.X Customer from detail. from third or that

EBITDA, margin $X.X million a delivered segment in or our contribution perspective, Customer X.X%. up Care $X.X million From

X appropriately up cost segment business. services Logistics operating of million for Marketing our And the EBITDA, this in grew from ago $X.X volumes our due segment of EBITDA levels future. efforts current & year $XX,XXX the despite revenues foreseeable Services segments Fulfillment operate now and in $X.X sized structure delivered our by believe should quarter. to We million is in EBITDA EBITDA positive rightsized to the Our significantly lower for each at

In can we begin to is leases leverage our of structure. addition, in there take as cost we advantage believe expire, additional

and $X.X million from Our in to million. administrative quarter the operating general costs year advertising, expenses expenses for due We $XX.X ago million, reduced up revenue. by increased $XX.X quarter in were the fourth selling,

EBITDA fourth to the efforts. of compared the in ago management million to or primarily basic Operating basic the for and an or net our both $X.X of the per income This diluted net of quarter. We year. in $X.XX up million was attributed operating $X.X expense quarter $X.X income was per loss posted growth million million in million, per year $X.XX revenue per from and in fourth fourth share improvement quarter $X.XX compared $X.X year is ago share sustained million $X.X quarter. and $X last to income diluted the quarter

Our up results. last was from financial $XXX.X progress at the year. more is even impressive XX% when million, revenue million full looking year $XXX.X XXXX

$XXX.X $XX We $X.XX year. to year compared million. net $X.X loss share share Operating more operating million million, per were of million, and a diluted or for per $X.X loss $XX posted income basic million from of per million $XXX million or $XX.X down income $X.XX of swing operating was of a $X.XX from Our year, expenses and positive the year. basic last an net diluted than up last last

Our net from income gain forgiveness for of the the PPP loan. a on year our benefited onetime

However, the a similar-sized prior from year tax benefited benefit.

in year the in To income reflects last XXXX. further $XX this validate losses net was net true to the So year EBITDA to our our the XXXX business. year compared compared improvement in full largely million for point, million full significant $X.X improvement

sheet. Now turning our to balance

XXXX, million. of XX, ended December balance $XX.X million a the to of XXXX. compares cash and cash of had December cash period This equivalents as $XX.X we of XX, As

$X.X receivable. income December XX, carrybacks tax are XXXX in XXXX, of As of million is payables. we to which net This partially offset million operating for state due with our have $X.X net tax loss

funds the this operating our in receive loss to QX net for expect of carrybacks year. We

we of $X drawn December XX, had million million facility. $XX our against XXXX, As credit

will I to turn Thank you. the over With take that, questions. it to back operator your

Operator

from Instructions] Your is Michael question from NOBLE coming [Operator Kupinski first Capital.

Michael Kupinski

that wondering was that. can in market seeing. general if kind can of terms if market now of especially the was you of tone I just the us an wondering I outlook do with environment in the you give we're

I then light things gone a that. And in expense company has know that cuts of like inflationary lot through pressures also, the and of

XXXX. If an of into you can give expense we kind kind of just us go outlook as

Brian Linscott

for Sure. the Thanks, Mike, question.

the I of had in obviously, amount we've said, today environment turmoil of that pursuing. a the have will momentum was That lot think we call that greatest given of I an market to So with opportunities not probably earnings -- the kind Ukraine. growing are positive say a day

And optimistic the so and excited continued on revenue about short-term our improvement prospects I'm about side.

cost it's poised improved that side, XXXX. for And very we're going got then the efforts respect cost restructuring much to we've structure the clear and into with and set a through

expect on and I some think we're continue to it's side, on bottom opportunity we've to me, and And cost so as I a for leaner exciting that which got revenue generate line meaner improved the organization a great the and side, EBITDA result.

Michael Kupinski

not have or are flow prospects that and company was at prospects situation. I'm the I thinking on more refi? are conventional like maybe sorry as know are at in about then earlier. things of addressed a talk What that of terms that. whether of M&A if And could if the terms capital you And the the obviously in building thing what a call. cash of about looking late maybe financing this thinking doing looking you you Where terms I -- And or got you're you sort allocation? well? and

Brian Linscott

Yes.

question, actually, the got chime facility well. million a But I'll we credit in Lauri -- as more in $XX December, for place. can Mike. traditional and -- we thanks So a in of try it

year, at And of where as end drawn on $XX had is we're million think the so credit at $X I facility. now mentioned, right that Lauri the million

investments objectives But and So in build measured and as we're pay that to flow one; so generate come number cash lending conventional And cash, some and our continued we in far positive a are we're free as term, to use the debt-free, as in hopefully we down first two, to we're that reviewing short continue agreement. number of cash, pay really our technology. And and in our down open always that inorganic the if in now kind our second debt growth. investment way, opportunities then the of our technology in selective priority continued is and and areas come for find are looking. organic some people there in

Operator

[Operator closing Harte are Hanks, CEO Instructions] hand questions of conference I There Linscott, will for go you. no the queue. Thank back ahead. Brian in Please now to the remarks. further

Brian Linscott

for to look our earnings afternoon. want good I us just call. joining evening. I thank certainly Have this everyone forward to a next

Operator

event. this you. and today's gentlemen, Thank Ladies concludes

and Thank have for at time, your disconnect a wonderful may participation. this day. You you

Harte Hanks (HHS) 24 Feb 222021 Q4 Earnings call transcript