HHS - Earnings call transcript Q1 2024

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Operator

Greetings. Welcome to the Harte Hanks First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this conference is being recorded.I will now turn the conference over to your host, Tom Baumann of FNK IR.

You may begin.

Tom Baumann

Thank you. are President Chief and of Chief Officer. today Waller, Officer; David call Financial Vice Senior Sales the Kirk Executive Davis, Kelly Garrison, Hosting & Marketing;

X, shortly the now I release to call over section issued of that, Harte turn the the press certain the of Litigation forward-looking the and was the financial Kirk, available may future want Act hartehanks.com.With statements after measures on your May we forward-looking are performance questions change. GAAP future XXXX. contained response company financial differ copy and as filings a the to press make these as of A from would Relations subject you webcast Investor statements uncertainties. is the today, that management the company's are by participants comparable of Before additional may call, the and in measures, that to therefore, claims risks represented today. website the safe the may including of This more available the begin, with other XXXX, refer financial prepared market projections Kirk. remarks is Therefore, of market in Private to no to as and risks I that SEC.In company obligation we information Reform earnings the that closed. update Securities in harbor any protection projections and on to non-GAAP during include Management call, Actual corporate disclosure like Hanks and to estimates detailed discussion company's forward-looking conditions management's contain these in for remind yours. to call results the in under also results at discussed reconciliations will uncertainties to today assumes addition, provided release statements

Kirk Davis

conference call. XXXX Tom, joining good our appreciate earnings everyone. afternoon, you I and you, Thank QX

today Senior Garrison, me the Kelly Sales made from Waller, our Kelly and Joining office Chief executive X first David and I were Massachusetts appointments our Officer. of are President Marketing; Vice fall. last Financial our new Chelmsford, & David

to fortunate assembled strong leadership team. are We exceptionally have an

both many to and in who been new we instrumental team in leaders years call, led have comprises Fisher. greater newly to into office quarter for Later finance lead performance the and company we've our executives our first seasoned detail. recruited by Our established transformation will delve David our much sales,

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and streams. Our around to program evolve key revolves Elevate work and X areas continues

The marketing our first and sales transformation. is

nearly already and are have sales have force of sales changes, completed the had. caliber restructuring strategic restaffing significant undergone of highlight our Under our we of our organization, and expectations. we organization. early While sales the the structural marketing pipeline Waller, line our we our leadership will established centralized Kelly pipeline growth finish expansion quality no channels; Kelly talent sales, we which year-over-year.The expanded have and and sales there's of strong some have and successes all outpaced fueling in composition of Today, of the currently attracted have and

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decision-making. around driven harnessing and artificial third intelligence focus centers Our data area strategic

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career, team orchestrating & the some such into Kelly seen profound has Kelly is executive showcase to like and Officer and $X.X it achieved. name such a impact joined of The remarkable recent truly a brief to strategies expect Chief have In caliber sales Hanks FinTech from is a Kelly Senior President where span in QX.I exciting Harte Marketing. We efforts. Waller, and I've early a employed in has she company she energizing victories of our global delve pace will the seldom Customer she company. Kelly? time. is entire the would an Vice sales introduce billion for Sales spearheaded transformation my our now of our

Kelly Waller

you, Thank Kirk.

we be the team and have built. of happy quite I'm to As here you that know, proud

with and the as media services, better our the is and social Our workforce couple marketing realizing focus a team. force X our plan dedicated complement bolstering teams from and on marketing We're our SEO, such penetrating Through will of over a yield towards This milestone events, organic a an to next the team particularly campaigns, team action Obviously channels growth of into sales to underperforming we and highly beginning to anticipate a strategies, relentless our a capable keen establishment leads our BXB growth SMB marketing robust Google, digital transformed organization marks our new Central in last in augmenting journey and sales expansion geographic for sales pipeline the of to our pivotal months. go-to-market in introducing existing product by this personalized new units, a this driving month. of and the sales services European strategy in growth sales results, marketing division pilot European team the sales incentivized to first report we at and the team, and of and which aimed achieved sales achieve. The with into our proud strong scale. strides inside our have field to launch beginning is conversions the an suite efforts significant growth. focus entity SMB have direction in market implementation created and which pipeline sales expansion.Additionally, partner comprehensive sales imminent we have product, By we've our our objectives. on venturing client of a segment compelling time. is fortified

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ascent. the Taken our of upward we this together, believe is outset

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partnership our we agency a For robust an example, prominent through with capabilities. established have kitting

unified into for particularly kits bundling packages specialization products distribution for and retail service an a kitting, involves This entity. expanding is in we Our e-commerce, and offer. exciting as or related

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our This century health for step into effectively from us fulfillment medical device as with a serving opportunity arose and to partnership presented has arena its the company. partnership quarter e-commerce with longstanding the an leading client opportunity another hub. Additionally, care

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will to Under devices. We a utilization platform out Customer BXB assistance help are California has project specializes a team segment expected and Customer seeking product intensifying growth has customers beauty a in the moisturizer engage the our from Care dedicated with and has who opportunity new their database our industry vehicle thrilled This in client with new to Services, successfully in travel health Services managed prospects Harte team has our is engaged leading portfolio services Care team. that international months. this to operations expanding reputable Also and support coming soon its opportunities. existing Marketing period. on presents seeking of be beneficial X of Sales well-established addition collaboration, include to our and Harte roll for reactivating This in transitioning for with a within relationship leader a client our the focused self-managed proved is in secured have Hanks direct be Hanks open tie-in commence to brand during to client division, a Care the driven our entrusted additional safety global with expanding their property our them from Services, is we with QX support technology set agency a care attracted new Customer the products services.In division. in The now Marketing a system owners division clients, our specialized U.S. us enrollment to consumers our expand Furthermore, consumer to new marketing to

brand. for opportunities a here want health we to we to testimonial we nearly client team the in to new aiding this. and received longstanding chart that What to are I from response you insurance the its about Thank engagement following thousands a strategy Lastly, inspired and Hanks.Recently perceptions of involved. of a overcome produce members. role to everybody will initial destined your The dedication received played this great our Harte client for million a a something pivotal all wrote, conclusion strategy client with offering client The inspire process. we stuff. Powerful do the employees highlight opens

the Hanks Global you.I'll London. We Enable It's of marketing team, many more in in marketing, result, of accomplished a standing There this and but course, our some exciting much Marketing welcoming to to motivates like XXX now new on reimagined remarkable us an the you to truly pass client. and expanded sharing of our Harte Conference back successfully and thus What's the in thank business sales, part can reflections our time my progresses.I'd a additional Sales with are June are organization. in we thrilling are anticipating we truly expanded is how by and talented as Services We're personal organization launching roles. the feedback our first my conclude Kirk. sales year be far. As transformation have type company I'm training expanding wins remarks all. up key sure and partnership appreciate and revitalized work late journey this we to call individuals with me

Kirk Davis

Thank you, Kelly.

Kelly In This clients global options. we capabilities XXXX, in to have the onboarding strategies that company made to enable XXXX, and experience enablement our new company FinTech force outbound cultivate packaging customer sales relationships pricing training pilot team clients. among addition another this acquired are premium sales structures to deeply we and offerings, adding our investments In in outlined, spanned sales commitment other client. reinvigorated to forge agency, late expanding which also In programs of additional on sales immersed resources. our training us in strategic new and we brought our to services. a new client's a channel the with sales Presently, coincided business leadership, December

our late QX, year. we June to past our that are excited comparison the a same-store in X our quarter, Our joined on have Harte pilot year aim I had first efforts collaborative in of to we successful ensure reiterate last the with in about I we want Reflecting progress.And client. quarters. prior best reported to Hanks

During my QX. in August, reported would and that first related I conference QX approximate in revenue call we XXXX our QX of in what

forward yet transformative Taken gratifying trend through of marketing are had the will it and nurturing CFO. understood building some right our revenue that were we David together, time. from the like We wanted would we over already we were and sales surpassed We to risk now to have yet progressed remainder our not factors and We now do some stronger require we knew a to pipeline, not continue Fast QX hired we and time. in expectation, notably QX was needed call our turn where have. the XXXX.I of progress the deals and organization transformation Garrison, Kelly the would at the which changes perspective we only negotiating momentum scope. to that understood anticipating so as

your David Thereafter, I questions. remarks. to take and happy have some David? then closing will And I be

David Garrison

Please of as XXXX, each has we referred begin as note including Thank X XX-K, segment. It made business segment. instead relates now you, quarter Inside X. our starting Services. for be consolidated that The segments to separated the Kirk. reporting in results, I first will Care review from discussed revenues in acquisition segment, been the XXXX Out will the Sales to and Customer newest in

Sales $X.X Fulfillment this revenues decrease X reductions and the quarter shrink new budget to in quarter segment segments quarter clients $X.X of Customer existing the client million The to reduction $X.X decrease Growth $XX.X XXXX in of XXXX.Growth with million leading staffing Sales $XX.X to in in expenses in compared $XX.X Logistics account first $XX.X decline prior million Revenues of X EBITDA. in in the the quarter in XXXX. improve compared from the were million Operating program the Marketing expenses million to were will million to in in of a first in expansion quarter million million the in the the offset prior The revenues Elevate of $X.X by Customer overall completed in commencement result of to resulted the year. $X.X segment including $XX.X compared restructuring QX million million for same compared segment cost QX of X.X% quarter.This in were annualized compression restructuring to million in and is in Services. of million increased in $XX.X revenue year-over-year. was first quarter segments. in conclusion $XX.X Sales Services Services expenditure related Customer year. reductions the of in space in Care of these First period to in demand. FinTech for million prior to XXXX million declines expense to fell a Project XXXX quarter first the Service compared $XX.X XXXX. The the expenses & the first related to million revenues Care compared year. other logistics market $X.X the quarter were first a as a that for reductions this and same the the $XX.X were of costs segment

expect $X.X is in to quarter XXXX. to to first the $X.X income operating quarter same executing million operating the X.X% operating X.X% adjusted million QX the during expenses of the compared QX at in compared in The XXXX is million was The $X.X adjusted Elevate XXXX. stock of additional margin in the After in the first expenses; in of restructuring income quarter adjusting XXXX XXXX. and first million incur $X.X We $X.X of income compared operating quarter for estimated to XXXX. Project million in XXXX compensation, in severance

$X.X is million $X.X XXXX $X.X QX expenses, million for million and of stock compared restructuring for of severance adjusted in XXXX The and same EBITDA $X.X first quarter XXXX. for EBITDA EBITDA to the of adjusting period in compensation, the of XXXX.When an million had an

the to balance Turning sheet.

As end million XXXX. of of the cash cash million XXXX $XX.X XX, March of and $XX.X to we equivalents had at compared

million during which current June of continues XXXX, has of has Target not drawn X been without credit, until Pension to no debt. the line $XX June company against any Our and was extended obstacles. terminate

As turn sheet contribution million reminder, the on The another is June.Thank funding in made your $X.X a call Kirk. balance requirement be as I'd the to back like liability And termination liability. pension to listed million termination will pension as of is support. $XX.X the current our for you long-term over

Kirk Davis

In on their journey. unwavering to and like engagement extensive of customers in into Thank Through focus both I've our aspirations. you, gaining clients, closing, underscore insights David. the profound and needs customers prospective our privilege I'd with our had their

to customer our we endeavors Chief a appoint mission milestone in-depth Our is framework, an into compelling translate to in teams clientele brand dialogs will Through acquisition these organizational our experience.It improving of incentive Hanks across insights our we leadership customer have the Officer, by to differentiator. Customer caliber believe and employees plans strong frontline a offer. to and be alike, we be fortify and will the elevate opportunities exciting for identified tangible enhancements their with thought aim Harte bolster which

As demonstrated through transformative this enthusiasm we dedication progress by employees. period, and I'm inspired our by the

at would we for to take happy August.Thank that's old providing in thank your updating about support. business value ongoing While the And We on progress century much. this changing look you chapter very forging be Harte you outstanding Hanks, your you experiences. time, one our a focused legacy, questions. new and thrilled we customer We forward on responsive environment our to for deeply equally to we're

Operator

questioner [Operator with Markets. is Capital Kupinski first Instructions] NOBLE Our Michael

Michael Kupinski

questions. company Couple on getting on Congratulations of this track.

point the kind they'll margin are you that is some give at can expansion, located European you anticipate In and where terms going swing of operations those your or when contribution forward? us European profitable towards do this of of sense operations

Kirk Davis

and I'm Europe And So is the as was second are team sorry, we there question? what beachhead in the we of ramping your our up Portugal speak. part

Michael Kupinski

just to or your do anticipate European see start margin from contribution was I coming it's that profitable already wondering you when if operations? we'll

Kirk Davis

Yes.

team company a start our So geo actually perspective, a I and would be Europe delivery in proud And to that operations. for very and our of will the sales we're From It's fruitful. expectations. of we our have we in that growing outperforming customer expect we're extremely efforts European the there. proud profitable quarter third are additional

as are international same are we developing at We as the a States. in we're doing well time strong United the pipeline

Michael Kupinski

for of margin we also anticipate give Service expect a your out Sales thanks kind terms segment. that this look potential? and then the type Out what can revenues Can here of of And for revenue growth you into breaking you terms Inside sense in you potential? growth of the of should us segment then acquisition in What

Kirk Davis

Sure.

have. coming a that has do I come. very doing So It's client we're this that will focusing onboarding and right curve around us for What client capacity is invest that business a large the margin to think a on intensely will profile we're XX% an be be now job the more to to XX%. if very, to we the in exceptional proud with years up

also really Services is be a Sales our to targeting our that feel sales it's in some we particular, on software Lee, excel we BXB area the tech an thrilling division. which can strategy through a go-to-market and great our in say is I Sales delivery marketplace that opportunity. going in or and that work have done inside lead business, So in would Services Kelly Ron

actually and will give we So translate regular update.But $X an of that's in think growth efforts, Sales million couple I which few from it's is business apart from. next be much could certainly to benefit the launching years weeks division in we that poised and believe August, sales this of a over out Services new program we next can our pipeline very to our the

between distribution Care, Services & Services, about when now a and Sales pipeline, right Logistics. Customer Fulfillment there's good think fact In Marketing we our very

or we our buildup just because large it's division in because new nice to So and another bring emboldens had as would business ability evenly business, the a see backlog we across it's distributed new that it want challenge. in it to we a opposed facing if it's as X company super execution as

leadership pleased are X that far, so Sales positioned is onboard the to we're there all well across but just with also very new really and we deliver brings, effectively Services segments. doing how Ron how So and

Michael Kupinski

terrific. distribution. approval recall, the provide were you be you me And services what to Is know if and Logistics able this that your thought got incorrect, food that? color That's I kind add And FDA getting in grocery were a I I you but I meant division if pardon if store or some just to in you for about items seeking distribution. there that can talking you of were on

Kirk Davis

Yes.

We The located have Fulfillment which partnership company fabulous relationship with. with made and that have that capability comes City. our printing already that we reference in the business, an developed is with we've to a successful in good grocer Kansas we a emerging

as product And new sure that different gets for clients them so make secure arm many delivered printing they logistics where there's and destinations. to large

Michael Kupinski

Got you.

terms your been of on have for And that food so distribution in you items, able capitalize yet? to

Kirk Davis

just be to clear. I want

deal We're it complex. distribution So, doing have efficiently pharmaceutical many a that but handle, City. the definitely for but across great example we've an facility sure do products right product lines are grocery handled baby out of approved are not Kansas different what I'm capitalizing on not capabilities in how of could the formula we for FDA in complex. we now,

now, and we're but other it right well have in follow don't is numerous that. with in growing up do But suited that you I We So think to now it distribution. food right product could complex. a areas I great deal outfitted of on

Michael Kupinski

question. final One you. Got

we suite. I seeking improving of know how about Can and I performing? products QX of your you spent point to in in wondering in developed specific the on call a and terms you've time forth. but that if those, go-to-market You talking as your lot I you the just an I you so sales of wondering improved QX? that little time know were some into last you indicated just us past specifically terms contribute was product and update was your spend highlighted your upon on a go-to-market you partnerships can that give partnerships strategy and kind of how you to be you that might start of go partnerships those are in

Kirk Davis

Yes.

strategy. in share able partnership August be to we'll I with our think outcomes some

very just of meeting had through our senior team exceedingly a companies In looks fact relationship that like Head Partnerships very, that an our it's walked with large past in us where But week does one we a excited a leadership of dozen. at dive work the is find deep I'm our amount this least that helping to customer of companies out company getting care. good well in about gate handle particularly

the within pipeline week here, so that can in working been for business effectively. this a with front very Fortune X development months builder first does we've strong but regard And and organization which with in the enables or that is and that also established business and we first is obviously my be months I'll geos And them that abilities X a back that and multiplier here, serve of to to that this an call strong capabilities partnership for as our us.And that, to network this to accomplish a a respect. company, we in harken efforts. right us we expect type that other very developed X to company be on month our we to first and just got will with news to basis we prove service transparent customers through we our that some XXXX Xx to scope a next do and addition in And we'll share for dozen be completely a that pipeline. build to over number acquisition But us really I care a in on partnerships conversations believe a are area we we've effect now now positive the once have Xx new companies particularly looking of have just team's in at our opportunity

of commented we next revenue XX% an a I've It's de BXB today, strong channel. their coming it's source. that minimis see this to over X can for but us So the that typically from months. important contributor poised previously companies are make

Operator

conference today's today reached our We have question-and-answer call. it, end with of the session Instructions] of conclusion and [Operator the

participation. disconnect your time thank you may your and You at lines for any

Harte Hanks (HHS) 9 May 242024 Q1 Earnings call transcript