Harte Hanks, Inc. (NASDAQ:HHS) Q1 2024 Earnings Call Transcript

Our kitting capability is in demand and we expect continued growth, especially in the second half of the year. The growth should compound nicely. Also within our Fulfillment & Logistics segment, we have secured a new client through our established partnership with a prominent procurement and creative production firm. This partnership has connected us with one of the world’s most innovative pharmaceutical companies, entrusting us with the delivery of B2B and B2C literature and samples as well as providing kitting services. These services are set to commence, which bodes well for the second half of the year. Additionally, another opportunity arose from our long-standing quarter century partnership with a leading medical device and healthcare company.

This partnership has presented an opportunity for us to step into the fulfillment arena with the client, effectively serving as its e-commerce hub. Our onboarding process is underway and we will be fully operational by Q3. Shifting focus to logistics. As a preferred logistics partner for a rapidly expanding printing company in the Midwest, we are privileged to partner alongside them as they expand. Alongside them, we recently onboarded a national grocery client. Our intensified digital marketing efforts have yielded many leads and results already in our Customer Care segment, which is led by Ben Chacko. We have attracted a reputable managed health care system client from California, seeking assistance during the open enrollment period. This opportunity has proved beneficial in Q2 and presents additional growth opportunities.

Furthermore, our Customer Care segment has successfully secured a new client that specializes in technology driven vehicle safety devices. Under this collaboration customer seeking support for the project will be direct to our dedicated Harte Hanks Customer Care team. This new addition to our client portfolio is set to commence operations with Harte Hanks soon, transitioning from a self-managed team to our specialized customer care services. In marketing services, one of our existing clients, a global leader in the beauty industry has engaged us to expand marketing support to include a well-established moisturizer brand within its consumer products division. Also in marketing services, with a tie in with our sales services division, we are thrilled to be expanding our relationship with a leading international travel agency who has entrusted our team to help them engage property owners and consumers with their platform and is now expanding utilization of our services for a new division focused on reactivating their B2B database and intensifying new prospects in the U.S. The project is expected to roll out in the coming months.

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

There are additional wins, of course, but we are anticipating much more new business as the year progresses. I’d like to conclude my remarks by sharing some personal reflections on my journey with our company thus far. What’s truly thrilling to me is remarkable transformation we have accomplished in standing up a reimagined and expanded sales and marketing organization. We successfully revitalized and expanded our team, welcoming many talented individuals in key sales, marketing, partnership and training roles. We’re launching our first Harte Hanks Global Marketing and Sales Services Conference, Enable 360 in late June in London. It’s truly an exciting time to be part of this organization, and thank you. I’ll pass the call back to Kirk.

Kirk Davis: Thank you, Kelly. In addition to strategies Kelly outlined, we also have reinvigorated another sales channel in our company to cultivate new clients. In December 2022, our company acquired a premium sales enablement agency, which brought us experience and capabilities to enable clients to pilot outbound sales programs to forge new customer relationships among other services. In late 2023, we made additional strategic investments in this business that spanned leadership, expanding our sales team and adding training resources. This commitment coincided with the onboarding of a new global FinTech client. Presently, we are deeply immersed in training our sales force on the client’s offerings, pricing structures and packaging options.

Our collaborative efforts aim to ensure a successful pilot with the client. Reflecting on our first quarter, we are excited about our progress. And I want to reiterate in Q1, we had our best same-store comparison to prior year that we have reported in the past 5 quarters. I joined Harte Hanks in late June of last year during my first conference call in August, I related that our revenue in Q3 and Q4 of 2023 would approximate what we reported in Q2. Taken together, Q3 and Q4 revenue surpassed that expectation, which was gratifying only from the perspective that we understood our trend and risk factors at the time. We had not yet hired Kelly, so the transformative changes we knew were needed were not yet in scope. We understood the transformation of our sales and marketing organization would require some time.

We wanted to do it right and we have. Fast forward, we have now progressed to where we are nurturing and notably stronger pipeline already negotiating some deals and anticipating momentum will continue building as we progress through the remainder of 2024. I would now like to turn the call over to David Garrison, our CFO. Thereafter, I have some closing remarks and then David and I will be happy to take your questions. David?