Harte Hanks Inc (HHS) 2024 Q1 法說會逐字稿

Greetings. Welcome to the Harte Hanks first-quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. (Operator Instructions) Please note this conference is being recorded.

問候。歡迎參加 Harte Hanks 2024 年第一季財報電話會議。此時，所有參與者都處於只聽模式。正式演講後將舉行問答環節。（操作員說明）請注意，本次會議正在錄製中。

I will now turn the conference over to your host, Tom Baumann of FNK IR. You may begin.

現在我將會議交給主持人 FNK IR 的 Tom Baumann。你可以開始了。

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

謝謝。今天主持電話會議的是執行長 Kirk Davis； Kelly Waller，銷售與行銷資深副總裁；和財務長大衛·加里森。

Before we begin, I want to remind participants that during the call, management's prepared remarks may contain forward-looking statements that are subject to risks and uncertainties. Management may also make additional forward-looking statements in response to your questions today. Therefore, the company claims protection under safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

在開始之前，我想提醒與會者，在電話會議期間，管理階層準備的發言可能包含前瞻性陳述，這些陳述存在風險和不確定性。管理層還可能針對您今天的問題做出額外的前瞻性陳述。因此，該公司要求 1995 年《私人證券訴訟改革法案》中包含的前瞻性聲明受到安全港保護。

Actual results may differ from results discussed today and therefore, we will refer you to a more detailed discussion of these risks and uncertainties in the company's filings with the SEC. In addition, any projections as to the company's future performance represented by management include estimates as of today, May 9, 2024, and the company assumes no obligation to update these projections in the future as market conditions change.

實際結果可能與今天討論的結果有所不同，因此，我們將建議您參閱該公司向 SEC 提交的文件中對這些風險和不確定性的更詳細討論。此外，管理階層對公司未來業績的任何預測均包括截至今天（2024 年 5 月 9 日）的預測，本公司不承擔未來隨著市場狀況變化而更新這些預測的義務。

This webcast and certain financial information provided on the call, including reconciliations of non-GAAP financial measures to comparable GAAP financial measures are available in the earnings press release that was issued shortly after the market closed. A copy of that press release and other corporate disclosure is available on the Investor Relations section of the Harte Hanks website at hartehanks.com.

該網路廣播和電話會議中提供的某些財務信息，包括非公認會計原則財務指標與可比公認會計原則財務指標的調節表，可在收市後不久發布的收益新聞稿中找到。該新聞稿和其他公司披露的副本可在 Harte Hanks 網站 hartehanks.com 的投資者關係部分取得。

With that, I would now like to turn the call over to Kirk. Kirk, the call is yours.

現在，我想將電話轉給柯克。寇克，電話是你的。

Thank you, Tom, and good afternoon, everyone. I appreciate you joining our Q1 2024 earnings conference call. Joining me today from our Chelmsford, Massachusetts office are Kelly Waller, our Senior Vice President of Sales & Marketing and David Garrison, our Chief Financial Officer. Kelly and David were the first two new executive appointments I made last fall. We are fortunate to have assembled an exceptionally strong leadership team.

謝謝你，湯姆，大家午安。感謝您參加我們的 2024 年第一季財報電話會議。今天，我們的銷售與行銷資深副總裁 Kelly Waller 和我們的財務長 David Garrison 在馬薩諸塞州切姆斯福德辦事處與我一起。凱利和大衛是我去年秋天任命的前兩名新高管。我們很幸運能夠組建一支異常強大的領導團隊。

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

我們的團隊包括多年來對我們公司發揮重要作用的經驗豐富的高管，以及我們招募來領導銷售、財務和由大衛·費舍爾領導的新成立的轉型辦公室的新領導者。稍後在電話會議中，我們將更詳細地探討第一季的業績。

However, I want to highlight upfront that on a same-store basis, Q1 was our company's best revenue performance in the past five quarters at minus 3.5%. We are confident we are developing a durable growth engine for our company.

然而，我想預先強調的是，以同店計算，第一季是我們公司過去五個季度中最好的收入表現，為-3.5%。我們有信心為公司開發持久的成長引擎。

More broadly, I'd like to review the progress we are making on our Elevate program. Launched last October, Elevate aims to propel us towards greater agility, innovation and organic growth and customer centricity ensuring that we exceed the expectations of our stakeholders. Our Elevate program continues to evolve and revolves around four key areas and work streams.

更廣泛地說，我想回顧一下我們在 Elevate 計劃上的進展。Elevate 於去年 10 月推出，旨在推動我們實現更大的敏捷性、創新和有機成長以及以客戶為中心，確保我們超越利益相關者的期望。我們的 Elevate 計劃不斷發展，並圍繞著四個關鍵領域和工作流程。

The first is our sales and marketing transformation. While there's no finish line in sales, we have nearly completed the restructuring and expansion of our sales and marketing organization. Under the leadership of Kelly Waller, we have centralized our sales organization, undergone significant restaffing and structural changes, expanded our sales force and established strategic channels, all of which are currently fueling strong pipeline growth year-over-year.

首先是我們的銷售和行銷轉型。雖然銷售還沒結束，但我們已接近完成銷售和行銷組織的重組和擴張。在凱利·沃勒(Kelly Waller) 的領導下，我們集中了我們的銷售組織，進行了重大的人員重組和結構變革，擴大了我們的銷售團隊並建立了戰略渠道，所有這些目前都在推動渠道逐年強勁成長。

The caliber of talent we have attracted and the quality and composition of our sales pipeline have outpaced our expectations. Today, Kelly will highlight some of the early successes we have already had. Our increased investment in marketing is also yielding positive outcomes by bolstering our digital presence and creating better and more innovative content to drive website traffic and enhance our social activity, we are effectively boosting brand awareness, traffic and generating more organic leads.

我們吸引的人才素質以及銷售管道的品質和組成都超出了我們的預期。今天，凱利將重點介紹我們已經取得的一些早期成功。我們在行銷方面增加的投資也產生了積極的成果，透過增強我們的數位影響力並創造更好、更具創新性的內容來推動網站流量並增強我們的社交活動，我們正在有效地提高品牌知名度、流量並產生更多有機的潛在客戶。

The second key area of project Elevate is our focus on margin expansion and business optimization. We are in the early stages of a multiyear program. As we previously shared, we established a transformation office to thoughtfully execute our plans.

Elevate 專案的第二個關鍵領域是我們專注於利潤擴張和業務優化。我們正處於多年計劃的早期階段。正如我們之前分享的，我們成立了一個轉型辦公室來深思熟慮地執行我們的計劃。

We embarked on an effort with the Kearney organization, an acclaimed global consulting firm to catalyze our efforts in pinpointing inefficiencies and cost saving opportunities that would not jeopardize our customer delivery capabilities. This entailed exhaustive benchmarking against industry peers and best practices, coupled with a meticulous look at how technological advancements could streamline operations.

我們開始與著名的全球顧問公司科爾尼組織合作，以促進我們在找出效率低下和節省成本的機會方面所做的努力，而這些機會不會危及我們的客戶交付能力。這需要針對行業同行和最佳實踐進行詳盡的基準測試，並仔細研究技術進步如何簡化營運。

As a result, we have identified an immediate opportunity to reduce costs by $6 million by year end with a two-year forecasted annual savings of $16 million exiting 2025. Our third strategic focus area centers around harnessing artificial intelligence and data driven decision-making.

因此，我們發現了一個立即機會，可以在年底前將成本減少 600 萬美元，預計到 2025 年，兩年內每年可節省 1,600 萬美元。我們的第三個戰略重點領域圍繞著利用人工智慧和數據驅動的決策。

Our foundational efforts here involve rigorous due diligence, experimentation and learning. Through this process, we have pinpointed numerous practical use cases to leverage AI to enhance customer experience, fortify our value proposition and contemplate new business models.Highlighting the pivotal role of partnerships in our evolution, a standout example is our alliance with Amazon.

我們的基礎工作包括嚴格的盡職調查、實驗和學習。透過這個過程，我們找到了許多實際用例，利用人工智慧來增強客戶體驗，強化我們的價值主張並思考新的商業模式。突出的例子就是我們。

In 2023, as part of our ongoing efforts to modernize and transform, we made a significant investment in our partnership with Amazon Web Services. Presently, we are collaborating with AWS's generative AI experts on initiatives aimed at revolutioning our customer care business.

2023 年，作為我們持續現代化和轉型努力的一部分，我們對與 Amazon Web Services 的合作夥伴關係進行了大量投資。目前，我們正在與 AWS 的生成式 AI 專家合作進行旨在徹底改變我們的客戶服務業務的舉措。

These initiatives involve integrating AI and machine learning capabilities to streamline customer issue resolution. We are developing use cases focused on addressing our clients most intricate challenges. These endeavors will help us in provisioning new business models across different use cases.

這些舉措涉及整合人工智慧和機器學習功能，以簡化客戶問題的解決。我們正在開發專注於解決客戶最複雜挑戰的用例。這些努力將幫助我們在不同的用例中提供新的商業模式。

We also believe these advancements will embolden our efforts to win new business, initially for customer care, but inevitably throughout all of our services. Our fourth major initiative involves creating a more customer centric culture.

我們也相信，這些進步將增強我們贏得新業務的努力，最初是為了客戶服務，但不可避免地貫穿我們所有的服務。我們的第四個主要舉措涉及創造更以客戶為中心的文化。

In a quest to redefine our operational framework with an unwavering commitment to elevating customer experience, we are investing in a pivotal new role within our executive leadership team, a Chief Customer Officer.

為了重新定義我們的營運框架，堅定不移地致力於提升客戶體驗，我們正在我們的執行領導團隊中投資設立一個關鍵的新角色，即首席客戶長。

This strategic appointment will signify our dedication to placing the customer at the forefront of every decision and action we undertake. As retention plays a pivotal role in our success, having a dedicated focus on enhancing our customer experience will serve to enable net growth more quickly from our sales development efforts.

這項策略任命將表明我們致力於將客戶置於我們所做的每項決策和行動的最前沿。由於保留對我們的成功至關重要，因此專注於增強客戶體驗將有助於我們的銷售開發工作更快地實現淨成長。

Additionally, emphasizing our commitment to evolving alongside our customers, understanding their journey and prioritizing the voice of the customer will undoubtedly strengthen our position during both the customer acquisition phase, but also in our ability to expand relationships.

此外，強調我們致力於與客戶一起發展、了解他們的旅程並優先考慮客戶的聲音，這無疑將加強我們在客戶獲取階段的地位，以及我們擴展關係的能力。

Especially Key, we expect to hire a visionary executive who excels at envisioning and implementing data driven and AI powered solutions to improve our clients experiences and results and drive growth.

尤其是 Key，我們希望聘請一位富有遠見的主管，他擅長設想和實施數據驅動和人工智慧驅動的解決方案，以改善客戶的體驗和成果並推動成長。

This individual will play a pivotal role serving as the heartbeat of our organization, fostering a culture where each team member is deeply committed to delivering unparalleled service to our customers. We expect to name a Chief Customer Officer in early Q3.

此人將發揮關鍵作用，成為我們組織的心跳，培育一種文化，使每個團隊成員都堅定致力於為我們的客戶提供無與倫比的服務。我們預計在第三季初任命首席客戶長。

I would now like to introduce Kelly Waller, our Senior Vice President for Sales & Marketing. Kelly joined Harte Hanks from a $1.8 billion FinTech company where she spearheaded global sales efforts. The remarkable pace and caliber of the sales transformation she is orchestrating is truly exciting and it is energizing our entire company.

現在我想介紹一下凱利沃勒（Kelly Waller），我們負責銷售和行銷的高級副總裁。凱莉 (Kelly) 加入哈特漢克斯 (Harte Hanks) 之前，曾在一家價值 18 億美元的金融科技公司擔任全球銷售工作的領導者。她正在策劃的銷售轉型的驚人速度和能力確實令人興奮，並為我們整個公司注入了活力。

In my career, I've seldom seen an executive have such a profound impact in such a brief span of time. Kelly will delve into the strategies she has employed and showcase some of the recent victories our team has achieved. Kelly?

在我的職業生涯中，我很少看到一位高階主管在如此短的時間內產生如此深遠的影響。凱利將深入研究她所採用的策略，並展示我們團隊最近的一些勝利。凱莉？

Thank you, Kirk. As you know, I'm happy to be here and quite proud of the team that we have built. Our relentless efforts have transformed our sales and marketing division from an underperforming entity into a sales force capable of driving organic growth.

謝謝你，柯克。如您所知，我很高興來到這裡，並對我們建立的團隊感到非常自豪。我們的不懈努力已將我們的銷售和行銷部門從表現不佳的實體轉變為能夠推動有機成長的銷售團隊。

Through the implementation of new and pivotal go to market strategies, we've created a robust action plan aimed at realizing our growth objectives. Central to our strategy is geographic expansion with a keen focus on better penetrating the European market and venturing into the SMB segment for the first time.

透過實施新的關鍵市場策略，我們制定了強有力的行動計劃，旨在實現我們的成長目標。我們策略的核心是地域擴張，重點是更好地滲透歐洲市場並首次進入中小企業領域。

We're proud to report significant strides in this direction with the establishment of a dedicated European sales team and the imminent launch of a compelling SMB product pilot beginning next month. This product, a comprehensive suite of B2B marketing and sales services, marks a milestone in our journey towards expansion.

我們很自豪地報告在這個方向上取得的重大進展，成立了專門的歐洲銷售團隊，並且即將從下個月開始推出引人注目的中小企業產品試點。該產品是一套全面的 B2B 行銷和銷售服務，標誌著我們擴張之旅的一個里程碑。

Additionally, we have fortified our sales and marketing teams by introducing two new units, the partner sales team and an inside sales team to complement our existing field sales team and client services team. By augmenting our workforce and bolstering our marketing campaigns, particularly in digital channels such as SEO, Google, social media and personalized events, we have achieved strong pipeline growth over the last couple of months.

此外，我們還透過引進兩個新部門（合作夥伴銷售團隊和內部銷售團隊）來加強我們的銷售和行銷團隊，以補充我們現有的現場銷售團隊和客戶服務團隊。透過擴大我們的員工隊伍並加強我們的行銷活動，特別是在搜尋引擎優化、Google、社交媒體和個人化活動等數位管道中，我們在過去幾個月實現了強勁的管道成長。

Obviously, this leads to our focus on conversions in which our sales organization is highly incentivized to achieve. The growth in our pipeline is beginning to yield results, which we anticipate will scale. We are having success in expanding our relationship with existing customers. Taken together, we believe this is the outset of our upward ascent.

顯然，這導致我們專注於轉化，而我們的銷售組織非常有動力去實現這一目標。我們管道的成長已開始產生成果，我們預計這種成果將會擴大。我們在擴大與現有客戶的關係方面取得了成功。總而言之，我們相信這是我們向上攀登的開始。

So I'd like to share some examples of the early successes we're seeing in both new customer acquisition and expansion. In our fulfillment & logistics segment, led by Patrick O'Brien, we are progressing well as we expand our partnerships with existing clients, which is a major opportunity for us.

因此，我想分享一些我們在新客戶獲取和擴展方面所看到的早期成功的例子。在 Patrick O'Brien 領導下的履行和物流部門，我們進展順利，擴大了與現有客戶的合作夥伴關係，這對我們來說是一個重大機會。

For example, we have an established robust partnership with a prominent agency through our kitting capabilities. Our specialization in kitting, particularly for retail and e-commerce involves bundling related products into packages or kits for distribution as a unified entity. This is an exciting and expanding service we offer.

例如，我們透過我們的配套能力與知名機構建立了牢固的合作關係。我們在配套方面的專業知識，特別是零售和電子商務領域，涉及將相關產品捆綁成包裝或套件，以便作為統一實體進行分銷。這是我們提供的一項令人興奮且不斷擴展的服務。

Our kitting capability is in demand and we expect continued growth, especially in the second half of the year. The growth should compound nicely.

我們的配套能力很受歡迎，我們預計會持續成長，特別是在今年下半年。增長應該會很好地複合。

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.

同樣在我們的履行和物流領域，我們透過與一家著名的採購和創意製作公司建立的合作夥伴關係贏得了新客戶。這項合作關係將我們與世界上最具創新性的製藥公司之一聯繫起來，委託我們提供 B2B 和 B2C 文獻和樣品以及提供配套服務。這些服務即將開始，對今年下半年來說是個好兆頭。

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.

此外，我們與一家領先的醫療設備和醫療保健公司長達四分之一世紀的合作關係也帶來了另一個機會。這種合作關係為我們提供了與客戶一起進入履行領域的機會，有效地充當其電子商務中心。我們的入職流程正在進行中，我們將在第三季全面投入營運。

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.

將重點轉向物流。作為中西部一家快速擴張的印刷公司的首選物流合作夥伴，我們很榮幸能在他們的擴張過程中與他們合作。除了他們之外，我們最近還接待了一家全國雜貨客戶。我們強化的數位行銷努力已經在 Ben Chacko 領導的客戶服務部門取得了許多領先優勢和成果。

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.

我們吸引了一位來自加州的信譽良好的管理醫療保健系統客戶，在開放註冊期間尋求協助。事實證明，這個機會在第二季度是有利的，並提供了額外的成長機會。

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.

此外，我們的客戶服務部門已成功獲得了專門從事技術驅動的車輛安全設備的新客戶。在這種合作下，尋求專案支援的客戶將直接聯繫我們專門的 Harte Hanks 客戶服務團隊。

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.

我們客戶組合中的這個新成員很快就會與 Harte Hanks 開始合作，從自我管理團隊過渡到我們專業的客戶服務。

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.

在行銷服務方面，我們現有的客戶之一，一家美容行業的全球領導者，已聘請我們擴大行銷支持，將一個成熟的保濕霜品牌納入其消費品部門。

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 US The project is expected to roll out in the coming months.

同樣在行銷服務方面，透過與我們的銷售服務部門合作，我們很高興能夠擴大與一家領先的國際旅行社的關係，該旅行社委託我們的團隊幫助他們利用其平台吸引業主和消費者，現在正在擴大利用率我們為新部門提供的服務重點是重新激活其 B2B 數據庫並加強在美國的新前景 該項目預計將在未來幾個月內推出。

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.

最後，我想強調我們收到的客戶評價，它為 Harte Hanks 帶來了新的機會。最近，我們的策略團隊在幫助健康保險客戶制定策略以克服對其產品和品牌的長期看法方面發揮了關鍵作用。初步合作結束後，我們從客戶收到的回應激勵了所有參與者。

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.

客戶寫道，我們注定要以此來做一些偉大的事情。感謝大家對此過程的奉獻。我們在這裡生產的產品將激勵數千名員工和近百萬會員。強大的東西。

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.

因此，我們現在正在擴大與該客戶的合作。我相信您會理解這種類型的回饋如何激勵我們所有人。當然，還有更多的勝利，但隨著時間的推移，我們預計會有更多的新業務。

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.

我想透過分享迄今為止我在我們公司的旅程中的一些個人想法來結束我的發言。真正令我興奮的是我們在重新構想和擴大銷售和行銷組織方面所實現的非凡轉變。我們成功地振興和擴大了我們的團隊，迎來了許多優秀人才擔任關鍵的銷售、行銷、合作夥伴和培訓職位。

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.

我們將於 6 月底在倫敦舉辦首屆 Harte Hanks 全球行銷與銷售服務會議 Enable 360​​。成為這個組織的一員確實是一個令人興奮的時刻，謝謝你們。

I'll pass the call back to Kirk.

我會把電話轉回給柯克。

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.

謝謝你，凱利。除了凱利概述的策略之外，我們還重振了公司的另一個銷售管道以培養新客戶。2022 年 12 月，我們公司收購了一家優質銷售支援機構，這為我們帶來了經驗和能力，使客戶能夠試點對外銷售計劃，以在其他服務中建立新的客戶關係。

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.

2023 年末，我們對該業務進行了額外的策略性投資，涵蓋領導力、擴大銷售團隊和增加培訓資源。這項承諾恰逢新的全球金融科技客戶的加入。

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 five quarters.

目前，我們正在深入培訓我們的銷售人員，以了解客戶的產品、定價結構和包裝選項。我們的合作努力旨在確保與客戶的試點成功。回顧第一季度，我們對我們的進步感到興奮。我想在第一季重申，我們在過去五個季度中報告了與去年同期的最佳同店比較。

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.

我於去年 6 月底加入 Harte Hanks，在 8 月的第一次電話會議上，我提到我們 2023 年第三季和第四季的營收將接近我們在第二季報告的營收。總而言之，第三季和第四季的收入超出了預期，僅從我們了解當時的趨勢和風險因素的角度來看，這是令人欣慰的。

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.

我們還沒有聘請凱利，因此我們知道需要的變革尚未在範圍內。我們知道銷售和行銷組織的轉型需要一些時間。我們想把事情做好，而且我們做到了。

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.

快進到，我們現在已經取得了進展，我們正在培育更強大的管道，已經在談判一些交易，並預計隨著 2024 年剩餘時間的進展，勢頭將繼續增強。

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?

我現在想將電話轉給我們的財務長大衛·加里森 (David Garrison)。接下來，我會做一些總結發言，然後大衛和我將很樂意回答你們的問題。大衛？

Thank you, Kirk. I will now review the first quarter consolidated results, including revenues for each business segment. Please note that starting in 2024, we begin reporting four segments instead of three. The newest segment as discussed in our 10-K will be referred to as sales services.

謝謝你，柯克。我現在將回顧第一季的合併業績，包括每個業務部門的收入。請注意，從 2024 年開始，我們開始報告四個細分市場，而不是三個細分市場。我們 10-K 中討論的最新部分將稱為銷售服務。

It relates to the Inside Out acquisition made in 2022 and has been separated from the customer care segment.

它與 2022 年進行的 Inside Out 收購有關，並已從客戶服務部門中分離出來。

First quarter revenues were $45.4 million a decline of 3.5% compared to $47.1 million for the first quarter in 2023. Growth in the customer care and Sales Services segment was offset by the declines in the two other segments.

第一季營收為 4,540 萬美元，比 2023 年第一季的 4,710 萬美元下降 3.5%。客戶服務和銷售服務部門的成長被其他兩個部門的下降所抵消。

Revenues in the customer care segment were $12.4 million in the first quarter of 2024 compared to $11.6 million in the same quarter prior year. Sales services increased to $4.7 million, compared to $2.8 million in the first quarter of 2023. Growth in these two segments were the result of expansion with existing clients and the first quarter of a new FinTech client in sales services.

2024 年第一季客戶服務部門的營收為 1,240 萬美元，而去年同期為 1,160 萬美元。銷售服務增加至 470 萬美元，而 2023 年第一季為 280 萬美元。這兩個細分市場的成長是現有客戶擴張以及第一季銷售服務領域新金融科技客戶的結果。

The Marketing Service segment revenues fell to $8.9 million in Q1 of 2024 compared to $11.2 million in the prior year. Customer budget reductions and a program conclusion account for the decrease in this segment year over year.

2024 年第一季度，行銷服務部門營收降至 890 萬美元，而前一年為 1,120 萬美元。客戶預算的減少和計劃的結束是該細分市場同比下降的原因。

Fulfillment and logistics revenues were $19.4 million in the first quarter of 2024 compared to $21.5 million in the prior year. The decrease in revenue is related to cost compression in the logistics space as costs shrink from reductions in overall market demand.

2024 年第一季的配送和物流收入為 1,940 萬美元，而前一年為 2,150 萬美元。收入的下降與物流領域的成本壓縮有關，因為整體市場需求的減少導致成本下降。

Operating expenses in Q1 were $45.1 million including restructuring expenses of $0.9 million, compared to $46.1 million in the same period of 2023.

第一季的營運費用為 4,510 萬美元，其中包括 90 萬美元的重組費用，而 2023 年同期為 4,610 萬美元。

The commencement of project Elevate resulted in $0.9 million of restructuring expenses for this quarter. This expenditure related to staffing reductions completed in the first quarter leading to a $2.3 million annualized expense reduction that will improve EBITDA.

Elevate 計畫的啟動為本季帶來了 90 萬美元的重組費用。該支出與第一季完成的人員削減有關，導致年度費用減少 230 萬美元，從而提高 EBITDA。

We expect to incur additional expenses estimated at $2.5 million in executing project Elevate during 2024. The operating income in Q1 2024 was $0.4 million compared to the operating income of $1.1 million in the first quarter of 2023.

我們預計 2024 年執行 Elevate 專案將產生約 250 萬美元的額外費用。2024 年第一季的營業收入為 40 萬美元，而 2023 年第一季的營業收入為 110 萬美元。

After adjusting for stock compensation, severance and restructuring expenses, the adjusted operating income in the first quarter of 2024 is $1.8 million, compared to $1.6 million in the first quarter of 2023.

調整股票薪酬、遣散費和重組費用後，2024 年第一季調整後營業收入為 180 萬美元，而 2023 年第一季為 160 萬美元。

The adjusted operating margin is 3.9% in Q1 2024, compared to 3.4% in the same quarter in 2023. The first quarter of 2024 had an EBITDA of $1.4 million, compared to an EBITDA of $2.1 million in 2023.

2024 年第一季調整後營業利益率為 3.9%，而 2023 年同一季度為 3.4%。2024 年第一季的 EBITDA 為 140 萬美元，而 2023 年的 EBITDA 為 210 萬美元。

When adjusting for stock compensation, severance and restructuring expenses, the adjusted EBITDA is $2.8 million for Q1 of 2024 and $2.7 million for the same period in 2023.

在調整股票報酬、遣散費和重組費用後，2024 年第一季調整後的 EBITDA 為 280 萬美元，2023 年同期調整後的 EBITDA 為 270 萬美元。

Turning to the balance sheet. As of March 31, 2024, we had cash and cash equivalents of $11.5 million, compared to $18.4 million at the end of 2023. Our current $25 million line of credit, which was extended until June of 2025 has not been drawn against and the company has no debt. Target to terminate Pension 1 during June continues without any obstacles.

轉向資產負債表。截至 2024 年 3 月 31 日，我們的現金和現金等價物為 1,150 萬美元，而 2023 年底為 1,840 萬美元。我們目前的 2,500 萬美元信貸額度已延長至 2025 年 6 月，但尚未被提取，公司也沒有任何債務。6 月終止退休金 1 的目標繼續順利進行。

As a reminder, the long-term pension liability on our balance sheet is $28.6 million as the termination funding requirement is listed as another current liability. The pension termination contribution of $7.5 million will be made in June.

提醒一下，我們資產負債表上的長期退休金負債為 2,860 萬美元，因為終止資金要求被列為另一項流動負債。750 萬美元的退休金終止繳款將於 6 月繳納。

Thank you for your support and I'd like to turn the call back over to Kirk.

感謝您的支持，我想將電話轉回給柯克。

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

謝謝你，大衛。最後，我想強調我們對客戶及其旅程的堅定不移的關注。透過與我們的客戶和潛在客戶的廣泛接觸，我有幸深入了解他們的需求和願望。

Our aim is to translate these insights into tangible enhancements across our organizational framework, incentive plans and by improving the caliber of thought leadership we offer.

我們的目標是將這些見解轉化為我們組織框架、激勵計畫的實際改進，並提高我們提供的思想領導力的水平。

Through in-depth dialogues with employees and clientele alike, we have identified compelling opportunities to bolster our customer acquisition endeavors and fortify our frontline teams and their mission to elevate the customer experience.

透過與員工和客戶等的深入對話，我們發現了令人信服的機會來支持我們的客戶獲取工作，並加強我們的第一線團隊及其提升客戶體驗的使命。

It will be an exciting milestone for Harte Hanks to appoint a Chief Customer Officer, which we believe will be a strong brand differentiator. As we progress through this transformative period, I'm inspired by the enthusiasm and dedication demonstrated by our employees.

對於 Harte Hanks 來說，任命首席客戶長將是一個令人興奮的里程碑，我們相信這將是一個強大的品牌差異化因素。當我們經歷這個變革時期時，我被我們員工所表現出的熱情和奉獻所鼓舞。

While we deeply value our century old legacy, we're equally thrilled about forging a new chapter for Harte Hanks, one that's responsive to the changing business environment and focused on providing outstanding customer experiences.

雖然我們深深珍惜我們的百年傳統，但我們同樣為 Harte Hanks 翻開新篇章而感到興奮，新篇章能夠響應不斷變化的商業環境並專注於提供卓越的客戶體驗。

We thank you for your ongoing support. We look forward to updating you on our progress in August. Thank you very much. And at this time, we would be happy to take your questions.

我們感謝您一直以來的支持。我們期待向您通報八月的最新進展。非常感謝。此時，我們很樂意回答您的問題。

At this time, we will be conducting a question and answer session. (Operator Instructions)

此時，我們將進行問答環節。（操作員說明）

Michael Kupinski, Noble Capital Markets.

邁克爾·庫平斯基（Michael Kupinski），諾布爾資本市場。

Thank you for taking the questions. Good afternoon and congratulations on getting the company on track card. I know it's a lot of work. A couple of questions. In terms of your European expansion, where are those operations located? And can you kind of give us some sense of are these is the European operations profitable at this point? Or when do you anticipate that they'll swing towards contribution margin going forward?

感謝您提出問題。下午好，祝賀公司進入正軌。我知道這需要很多工作。有幾個問題。就您的歐洲擴張而言，這些業務位於哪裡？您能否讓我們了解一下歐洲業務目前是否獲利？或者您預計他們什麼時候會轉向邊際貢獻？

First of all, thanks for your comment, Michael. It's good to speak with you. So our beachhead in Europe is Portugal, and we are ramping up the team there as we speak. And I'm sorry, what was the second part of your question?

首先，感謝您的評論，邁克爾。很高興與你交談。因此，我們在歐洲的灘頭陣地是葡萄牙，就在我們發言之際，我們正在那裡加強團隊建設。抱歉，您問題的第二部分是什麼？

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

我只是想知道它是否已經盈利，或者您預計我們什麼時候會開始看到來自您歐洲業務的邊際貢獻？

Yes. So we are -- actually, we're extremely proud of our European operations. From a delivery perspective, we are outperforming customer expectations. It's a profitable and growing geo for our company and we're very proud of the team that we have there.

是的。事實上，我們對我們的歐洲業務感到非常自豪。從交付的角度來看，我們的表現超越了客戶的期望。對於我們公司來說，這是一個盈利且不斷增長的地區，我們為我們在那裡擁有的團隊感到非常自豪。

And I would expect that in the third quarter, our additional sales efforts in Europe will start to be fruitful. We are developing a strong international pipeline at the same time we're doing as well as we are in the United States.

我預計，在第三季度，我們在歐洲的額外銷售努力將開始取得成果。我們正在開發強大的國際管道，同時我們也在美國做同樣的事情。

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

明白你了。感謝您突破了 Inside Out 收購銷售服務領域。您能否讓我們了解一下您對該細分市場的成長潛力的預期？您可以期待什麼類型的收入——我們應該在這裡尋找收入成長以及利潤潛力？

Sure. So I think this will be a margin business that will be around 30% to 35%. What we're doing right now is focusing intensely on onboarding and coming up the curve for a large client that we're very, very proud to have. It's a client profile that if we do an exceptional job, has the capacity to invest more with us in the years to come. So it's a thrilling opportunity.

當然。所以我認為這將是一個利潤率約為 30% 至 35% 的業務。我們現在正在做的就是集中精力為我們非常非常自豪擁有的大客戶提供入職和提升服務。這是一種客戶檔案，如果我們做得出色，就有能力在未來幾年與我們一起進行更多投資。所以這是一個令人興奮的機會。

I would also say that Kelly and Ron Lee, our lead in our inside sales or sales services business, have done some great work on a go to market strategy that is really going to be targeting the B2B marketplace in software and tech in particular, which is an area that we feel we can excel in delivery through our sales services division.

我還想說，Kelly 和 Ron Lee（我們內部銷售或銷售服務業務的負責人）在進入市場策略方面做了一些出色的工作，該策略真正針對的是軟體和技術領域的 B2B 市場，其中我們認為我們可以透過我們的銷售服務部門在交付方面表現出色。

So we actually will be launching this program in the next few weeks. And I believe in August, we can give an update. But it's a business that we think out over the next couple of years could certainly translate to $9 million of new growth. And that's apart from our regular pipeline sales efforts, which our sales services division is very much poised to benefit from.

所以我們實際上將在接下來的幾週內啟動這個計劃。我相信在八月，我們可以提供更新。但我們認為，這項業務在未來幾年肯定會轉化為 900 萬美元的新成長。這還不包括我們的常規通路銷售工作，我們的銷售服務部門非常有望從中受益。

In fact, right now, when we think about our pipeline, there's a very good distribution between marketing services, customer care, sales services and fulfillment logistics. So it's just as we would want to see it, because as we bring in new business, it's nice that it's evenly distributed across the company, because it emboldens our execution ability as opposed to if we had a super large new business build up in one division or another and facing a backlog challenge.

事實上，現在，當我們考慮我們的管道時，行銷服務、客戶服務、銷售服務和履行物流之間都有很好的分配。所以這正如我們希望看到的那樣，因為當我們引入新業務時，它在整個公司中均勻分佈是件好事，因為它增強了我們的執行能力，而不是我們在一個公司中建立一個超大型的新業務。

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

到目前為止，我們對銷售服務的表現、羅恩帶來的新領導層以及我們在所有四個細分市場上的啟動和有效交付的定位非常滿意。

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

太棒了。在物流部門，我知道如果我弄錯了，請原諒我，但我以為你的意思是你正在得到雜貨店的配送。我知道，如果我沒記錯的話，您正在尋求 FDA 批准，以便能夠為您分銷的食品提供服務。這就是我們在那裡談論的嗎？或者你可以在上面添加一些顏色嗎？

Yes, we have that capability already in our fulfillment business, which is located in Kansas City. The reference that we made to the grocer comes with an emerging and fabulous relationship we have with a successful printing company that we've developed a good partnership with. And so as they secure large new printing clients, where the logistics arm for them and make sure that product gets delivered to many different destinations.

是的，我們位於堪薩斯城的履行業務已經具備這種能力。我們對雜貨商的提及源於我們與一家成功的印刷公司之間正在建立的良好關係，我們與這家印刷公司建立了良好的合作夥伴關係。因此，當他們獲得大型新印刷客戶時，他們的物流部門會為他們提供支持，並確保產品被運送到許多不同的目的地。

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

哦，明白了。那麼，就食品分配而言，您是否能夠利用這一點？

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

我們——我只是想澄清一下。因此，我們肯定正在利用整個製藥綜合體的產品分銷。我們現在在雜貨方面做得不多，但我們在堪薩斯城有一家 FDA 批准的工廠。我不確定它可以處理多少種不同的產品線。但例如，我們已經在該綜合體中有效地處理了嬰兒配方奶粉。

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

這樣我就可以跟進你的情況。但我認為現在它非常適合進行食品分銷。我們現在還沒有太多，但我們正在該綜合體的許多其他領域不斷發展。

Got you. One final question. You indicated in the past you were seeking partnerships and I know you spent a lot of time talking about how you've improved upon your sales strategy and your go to market products and so forth. I was just wondering in terms of partnerships that you highlighted in your last call in terms of improving your go to market product suite. Can you kind of give us an update on how those are performing?

明白你了。最後一個問題。您過去曾表示您正在尋求合作夥伴，我知道您花了很多時間談論如何改進銷售策略和產品上市等。我只是想知道您在上次電話會議中強調的改善上市產品套件方面的合作夥伴關係。能為我們介紹一下這些產品的最新表現嗎？

I know that you spend a little time on some of those, but I was just wondering specifically if you can point to specific partnerships that you developed that might be start to contribute as we go into the Q2 and Q3?

我知道您在其中一些方面花費了一些時間，但我只是想知道您是否可以具體指出您建立的具體合作夥伴關係，這些合作夥伴關係可能會在我們進入第二季度和第三季度時開始做出貢獻？

Yes. I think in August, we'll be able to share some outcomes with our partnership strategy. In fact, we just had a very, very deep dive this past week in our senior leadership team meeting, where our Head of Partnerships walked us through at least a dozen.

是的。我認為在八月，我們將能夠分享我們的合作夥伴策略的一些成果。事實上，上週我們在高階領導團隊會議上進行了非常非常深入的探討，我們的合作夥伴主管向我們介紹了至少十幾個。

But one that I'm particularly excited about that looks like it's getting out of the gate well is our relationship with a company that does an exceedingly large amount of work in helping companies find good companies to handle customer care. And so this is an organization that does a strong business in that regard.

但令我特別興奮的是，我們與一家公司的關係看起來進展順利，該公司在幫助公司找到優秀的公司來處理客戶服務方面做了大量的工作。因此，這是一個在這方面開展業務的組織。

And we've been working with them for 3 or 4 months to obviously prove our abilities and capabilities and the geos that we can service effectively. And just this week, we got our first opportunity with that company, but we expect that to be a very strong pipeline builder for us.

我們已經與他們合作了三四個月，以明顯證明我們的能力和能力以及我們可以有效服務的地理區域。就在本週，我們獲得了與該公司的第一個機會，但我們預計這將成為我們非常強大的管道建設者。

And I'll also harken back to the very first partnership we established within my first 2 months here, which is with a business development company that enables us to be in front of Fortune 1000 type companies on a 2 to 3 times a month basis. And we have now developed a number of new customers through that pipeline.

我還要回顧一下我們在任職的頭2 個月內建立的第一個合作夥伴關係，即與一家業務開發公司建立的合作夥伴關係，這使我們能夠每月2 到3 次面對財富1000 強類型的公司。現在，我們已經透過該管道開發了許多新客戶。

But we are looking at other partnerships, particularly in the care area. And I do believe we'll have some positive news to share on our next call in that respect. And really, just to be completely transparent here, we have over a dozen conversations in scope right now to build this network. And once we accomplish that, that will serve as a multiplier effect for us in addition to our team's acquisition efforts.

但我們正在考慮其他合作關係，特別是在護理領域。我確實相信我們會在下一次電話會議上分享一些這方面的正面消息。實際上，為了在這裡完全透明，我們現在已經進行了十多次對話來建立這個網絡。一旦我們實現了這一目標，除了我們團隊的收購努力之外，這還將為我們帶來乘數效應。

So it's an important channel. I've commented previously that B2B companies can typically see 30% of their revenue coming from this source. It's de minimis for us today, but we are poised to make that a strong contributor over the next 6 months.

所以這是一個重要的管道。我之前曾評論過，B2B 公司通常 30% 的收入來自此來源。今天這對我們來說是微不足道的，但我們準備在未來 6 個月內使其成為強大的貢獻者。

Thanks, Kirk. That's all I have. Good luck to you and your team. Thanks.

謝謝，柯克。這就是我的全部。祝您和您的團隊好運。謝謝。

Okay. Thanks. So much, Michael.

好的。謝謝。就這麼多，麥可。

(Operator Instructions) We reach the end of our question-and-answer session today and with it the conclusion of today's conference call. You may disconnect your lines at any time and thank you for your participation.

（操作員說明）今天的問答環節到此結束，今天的電話會議也隨之結束。您可以隨時斷開線路，感謝您的參與。