Harte Hanks Inc (HHS) 2024 Q2 法說會逐字稿

Greetings and welcome to the Harte Hanks second-quarter 2024 earnings conference call. (Operator instructions) Please note this conference is being recorded.

您好，歡迎參加 Harte Hanks 2024 年第二季財報電話會議。（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; David Garrison, Chief Financial Officer. 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.

謝謝。今天主持電話會議的是執行長 Kirk Davis；大衛‧加里森，財務長。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。

Therefore, the company claims protection under safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from results discussed today, and therefore, we refer you to a more detailed discussion of these risks and uncertainties in the Company's filings with the Securities and Exchange Commission.

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。實際結果可能與今天討論的結果有所不同，因此，我們建議您參閱公司向美國證券交易委員會提交的文件中對這些風險和不確定性的更詳細討論。

In addition, any projections as to the company's future performance represented by management may include estimates as of today, August 8, 2024, and the company assumes no obligation to update these projections in the future as market conditions change.

此外，管理層對公司未來業績的任何預測可能包括截至今天（2024 年 8 月 8 日）的估計，且本公司不承擔未來隨著市場條件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, our available in the earnings press release that was issued shortly after the market closed. And 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上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，我們可以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 enclosures.

有了這個，我現在想把電話轉給柯克外殼。

Thank you, Tom, and good afternoon, everyone. Welcome to our Q2 2024 earnings conference call. Last year's Q2 earnings call was my first since joining Harte-Hanks. Although I have only been with the company for seven weeks, I seized the opportunity to outline my vision for revitalizing our business and shared specific actions we needed to take now a year later, I would like to review the commitments we made and the progress we have achieved.

謝謝你，湯姆，大家午安。歡迎參加我們的 2024 年第二季財報電話會議。去年第二季的財報電話會議是我加入 Harte-Hanks 以來的第一次電話會議。雖然我只在公司工作了七個星期，但我抓住了這個機會，概述了我對振興我們業務的願景，並分享了一年後我們需要採取的具體行動，我想回顧一下我們所做的承諾和我們取得的進展。

One year ago, revenues were declining and there was not a prevailing strategy to expect. Otherwise. All we could commit to was that we believed the revenue we reported last year in Q2 2023, would serve as a baseline for Q3 and Q4, which we went on to modestly outperform. More importantly, we had four months remaining in 2023 to address the state of our marketing and sales organization. And I knew already that the organization needed improving.

一年前，收入不斷下降，而且沒有一個可預期的普遍策略。否則。我們所能承諾的是，我們相信去年 2023 年第二季報告的收入將作為第三季和第四季的基準，我們將繼續適度超越。更重要的是，到 2023 年，我們還有四個月的時間來解決行銷和銷售組織的狀況。我已經知道該組織需要改進。

Leadership is key and in my assessment, it was clear that we first needed to recruit a new corporate executive to lead sales and marketing. Further, we needed to empower that individual by centralizing oversight of our sales organization rather than having sales staff reporting into our business units.

領導力是關鍵，根據我的評估，很明顯，我們首先需要招募一名新的企業主管來領導銷售和行銷。此外，我們需要透過集中監督我們的銷售組織而不是讓銷售人員向我們的業務部門報告來賦予個人權力。

Legacy structure resulted in a siloed approach to selling and in formal process for managing and evaluating the performance of staff. Our structure make cross selling more difficult. In contrast today, our sales staff works closely with our business unit leaders, so we have developed company-wide standards for what we expect performance wise.

傳統的結構導致了孤立的銷售方法以及管理和評估員工績效的正式流程。我們的結構使交叉銷售變得更加困難。相較之下，今天，我們的銷售人員與業務部門領導層密切合作，因此我們針對我們期望的績效制定了全公司範圍的標準。

Additionally, today our corporate SVP of sales is directly involved in helping to close new business across Harte Hanks. Our previous structure also lacked essential essential sales channel experts in roles crucial for business development, expanding partnerships and enhancing our international sales presence, we needed to modernize how we approached and leveraged industry competences.

此外，如今，我們公司的銷售高級副總裁直接參與協助完成 Harte Hanks 的新業務。我們先前的結構也缺乏對業務發展、擴大合作夥伴關係和增強我們的國際銷售影響力至關重要的重要銷售通路專家，我們需要現代化我們處理和利用行業能力的方式。

Finally, our digital strategy needed optimization with higher quality, original content now one year later, we can confidently review our achievements and more accurately project their impact rather than just discussing our plans. In November, we welcomed Kelly Waller as our new corporate SVP of sales and marketing.

最後，我們的數位策略需要以更高品質的原創內容進行最佳化，一年後，我們可以自信地回顧我們的成就並更準確地預測其影響，而不僅僅是討論我們的計劃。11 月，我們歡迎 Kelly Waller 擔任我們新任公司銷售和行銷資深副總裁。

He spearheaded a comprehensive redesign and expansion of our sales and marketing organization. Last quarter, we featured Kelly, on this call to highlight many early new account wins that will contribute to revenue growth as the year progresses.

他帶頭對我們的銷售和行銷組織進行全面的重新設計和擴展。上個季度，我們在這次電話會議上特別介紹了凱利，以強調許多早期贏得的新客戶，這些客戶將有助於隨著時間的推移推動收入成長。

Last August, I discussed our engagement with a business development company. I had previously collaborated with to initiate initiate opportunity discussions for us targeting both Fortune 500 firms and well-funded startups. In late July, we closed a significant new marketing services account that originated from this partnership after 10 months of collaborating with this prospective client to formalize our relationship we have done so successfully.

去年八月，我討論了我們與一家業務開發公司的合作。我之前曾與我們合作，為我們發起了針對財富 500 強公司和資金雄厚的新創公司的機會討論。在與該潛在客戶合作 10 個月後，我們成功地建立了我們的關係，並於 7 月下旬關閉了一個源自該合作夥伴關係的重要新行銷服務帳戶。

We will begin work later this month for one of the world's leading global automotive manufacturers with annual revenues exceeding $170 billion. We are extremely excited about this new opportunity. Partnerships are a key contributor in building B2B revenues, which is why we now focus on this channel and again, it is why we now have a new logo opportunity with a top 50 Fortune company.

我們將於本月稍後開始為年收入超過 1700 億美元的全球領先汽車製造商之一提供服務。我們對這個新機會感到非常興奮。合作夥伴關係是建立 B2B 收入的關鍵貢獻者，這就是為什麼我們現在專注於這個管道，這也是為什麼我們現在有機會與財富 50 強公司合作的新標誌。

This recent win, which took 10 months of focus to bring to fruition underscores the dedication we bring to every opportunity. Although this project exceeded our normal sales cycle, it is an example of why some new clients have extended sales cycles. The complexity we can encounter in navigating compliance and legal hurdles when applicable is counterbalanced by the more turnkey opportunities we create with existing customers.

最近的勝利是我們花了 10 個月的時間才取得的成果，這突顯了我們對每一個機會的奉獻精神。雖然這個項目超出了我們正常的銷售週期，但這也是一些新客戶延長銷售週期的一個例子。我們在適用時克服合規性和法律障礙時可能遇到的複雜性，可以透過我們與現有客戶創造的更多交鑰匙機會來抵消。

Turning to our pipeline, our sales pipeline continues to grow and is well ahead of where it was when I arrived last year. That's a healthy indicator for an improving revenue backdrop in August last year, I shared my excitement about the potential of a small tuck-in acquisition. Our company completed in December 2022, when I joined, it was clear, we were on track to experience a significant decline in our 1st year of ownership 2023.

談到我們的管道，我們的銷售管道持續成長，遠遠領先於我去年到達時的水平。這是去年八月收入改善的一個健康指標，我分享了我對小型收購的潛力的興奮。我們的公司於 2022 年 12 月竣工，當我加入時，很明顯，我們預計在 2023 年所有權的第一年經歷大幅下降。

However, through close collaboration with the former owner of the business and the strategic hiring of a new SVP of Sales Services last November, we have achieved notable growth this year. We have several pilot programs in place now and expect several will carry over into 2025. Additionally, we recently introduced a product offering for small and medium-sized businesses called demand generation in a box this innovative product, a blend of our existing services tailored to SMBs was recently launched at our inaugural Harte Hanks enabled three 60 conference in London.

然而，透過與公司前所有者的密切合作以及去年 11 月策略性聘用新的銷售服務高級副總裁，我們今年取得了顯著的成長。我們現在已經實施了多個試點項目，預計其中幾個將延續到 2025 年。此外，我們最近推出了一款面向中小型企業的產品，稱為“盒中需求生成”，這項創新產品融合了我們為中小型企業量身定制的現有服務，最近在倫敦舉行的首屆Harte Hanks 啟用的三場60 人會議上推出。

One benefit of this product is that we can activate the buyer for a customer faster than most of our other services, reflecting on other key developments over the past year. I am energized by our senior leadership team. We have successfully integrated seasoned Harte Hanks executives with new leaders in corporate finance, sales, marketing, sales services and our transformation office.

該產品的一個好處是，我們可以比大多數其他服務更快地為客戶啟動買家，這反映了過去一年中的其他關鍵發展。我們的高階領導團隊讓我充滿活力。我們成功地將經驗豐富的 Harte Hanks 高階主管與企業財務、銷售、行銷、銷售服務和轉型辦公室的新領導者整合在一起。

Last quarter, I announced our intention to recruit a visionary executives to develop and implement data driven artificial intelligence powered solutions aimed at enhancing client experiences, driving growth and reinforcing customer retention. Today I am thrilled to introduce that we have hired our first Chief Customer and Data Officer. I will provide more details on this exciting appointment later in the call.

上季度，我宣布我們打算招募一位有遠見的高階主管來開發和實施數據驅動的人工智慧驅動的解決方案，旨在增強客戶體驗，推動成長並加強客戶保留。今天，我很高興地宣布，我們已經聘請了第一位首席客戶和數據長。我將在稍後的電話會議中提供有關此令人興奮的任命的更多詳細資訊。

As you may remember, in November 2023, we introduced project elevate to our employees and investors highlighting a company-wide initiative. We were undertaking to achieve many objectives, lowering operating costs to fund growth was a key component, but we also envisioned reengineering workflows, assessing resource allocation, establishing a culture of continuous improvement, instilling greater accountability, evaluating purchasing practices, better understanding customer profitability and proactively investing in technology to expand our capabilities and efficiency.

您可能還記得，2023 年 11 月，我們向員工和投資者推出了專案提升計劃，強調了全公司範圍內的舉措。我們致力於實現許多目標，降低營運成本以資助成長是一個關鍵組成部分，但我們也設想重新設計工作流程，評估資源分配，建立持續改進的文化，灌輸更大的責任感，評估採購實踐，更好地了解客戶的獲利能力和積極投資技術以擴大我們的能力和效率。

Partnered with currently a renowned global consultancy, with which I have had significant success in the past, a huge shout-out to our executive team for their dedication to the former program. Consequently, we have developed a comprehensive two year roadmap to reduce costs tied directly to specific initiatives. Our success in executing these cost programs is providing us with the flexibility to invest where we see opportunities and activating new customers while also focusing on margin improvement.

目前與一家知名的全球顧問公司合作，我過去曾與該公司取得了巨大的成功，並對我們的管理團隊對前一個專案的奉獻表示大力讚揚。因此，我們制定了全面的兩年路線圖，以降低與具體措施直接相關的成本。我們在執行這些成本計劃方面的成功使我們能夠靈活地在看到機會的地方進行投資並激活新客戶，同時也專注於利潤率的提高。

We are also making strategic investments beyond our sales and marketing organization to facilitate growth and improve our competitiveness.

我們也在銷售和行銷組織之外進行策略性投資，以促進成長並提高我們的競爭力。

A notable example is how we have been investing in our fulfillment segment. In this spring, we embarked on a migration to a best-in-class warehouse in order technology suite suite, which will avail our company and customers and many benefits as we achieve various milestones. Some of the benefits include a modern modular infrastructure that empowers us to streamline and expedite integrations with our clients, thereby reducing the implementation cycle and accelerating the time to market for their product.

一個值得注意的例子是我們如何投資我們的履行部門。今年春天，我們開始遷移到一流的訂單技術套件倉庫，這將為我們的公司和客戶帶來好處，並在我們實現各種里程碑時帶來許多好處。其中一些好處包括現代化的模組化基礎設施，使我們能夠簡化和加快與客戶的集成，從而縮短實施週期並加快產品的上市時間。

Continuing our tradition of exceeding customer expectations. Our technology improvements will enable us to deliver an array of options, including flexible order management and storefront feature sets as an ala carte scaled offering as well as custom development and consultation for unique requirements, enhanced client inventory, visibility throughout the product lifecycle and revamped multi-site inventory capabilities for our e-commerce customers.

延續我們超越客戶期望的傳統。我們的技術改進將使我們能夠提供一系列選項，包括靈活的訂單管理和店面功能集（作為點菜規模的產品）以及針對獨特需求的定制開發和諮詢、增強的客戶庫存、整個產品生命週期的可見性以及改進的多- 為我們的電子商務客戶提供網站庫存功能。

Finally, our cloud-based infrastructure and designed to seamlessly scale unlocking new possibilities for both future acquisitions and organic expansion. This flexible rapidly deployable solution ensures that we can swiftly adapt to new locations and opportunities as they arise.

最後，我們基於雲端的基礎設施旨在無縫擴展，為未來的收購和有機擴張釋放新的可能性。這種靈活、可快速部署的解決方案確保我們能夠迅速適應新地點和新機會的出現。

Turning to our long-standing fulfillment facility in East Bridgewater, Massachusetts, which we have utilized for 25 years. Both our customers and valued employees are witnessing transformative changes within the facility, laying the foundation for a new era of operational excellence coinciding with the extension of our lease. We repurposed approximately 50,000 square feet of previously suboptimal space, repurposing it for expanded production and additional storage.

談到我們位於馬薩諸塞州東布里奇沃特的長期履行設施，我們已使用該設施 25 年。我們的客戶和尊貴的員工都見證了設施內的變革，為與我們延長租約同時實現卓越營運的新時代奠定了基礎。我們重新利用了大約 50,000 平方英尺的先前次優空間，將其重新用於擴大生產和額外存儲。

Moreover, we are undertaking a major transformation and one of our largest production areas there raising the roof to double our capacity in a portion of the facility, which affects about 30% of our entire space. And additionally, we have launched a beta version of a standalone micro site for our fulfillment and logistics segment designed to enhance our discoverability online and display our full range of capabilities and competitive advantages.

此外，我們正在進行重大改造，我們最大的生產區之一將屋頂提升至部分設施的產能翻倍，這影響了我們整個空間的約 30%。此外，我們還為我們的履行和物流部門推出了獨立微型網站的測試版，旨在增強我們的線上可發現性並展示我們的全方位能力和競爭優勢。

Our sales and marketing strategies for next year will be augmented to seize on these opportunities, ensuring that we remain a leader in delivering value and innovation to our clients. We are positioning our company to fully capitalize on the growth opportunities in the direct to consumer segment in 2025, which as we all recognize as consumers ourselves is rapidly growing. To sum it up, we are increasingly encouraged by the progress we are seeing to revitalize our business.

我們明年的銷售和行銷策略將得到加強，以抓住這些機會，確保我們在為客戶提供價值和創新方面保持領先地位。我們對公司的定位是充分利用 2025 年直接面向消費者細分市場的成長機會，我們都意識到消費者本身正在快速成長。總而言之，我們對振興業務所取得的進展越來越感到鼓舞。

Before I conclude my opening remarks, I want to emphasize a core commitment shared by our entire management team and Board for over a century. Harte Hanks has been a leader in customer service, partnering with the world's most ambitious companies. As we continue to prioritize our customers and drive their success in an ever evolving marketplace.

在結束我的開場白之前，我想強調一個多世紀以來我們整個管理團隊和董事會共同承擔的核心承諾。Harte Hanks 一直是客戶服務的領導者，與世界上最雄心勃勃的公司合作。我們繼續優先考慮客戶並推動他們在不斷發展的市場中取得成功。

We are confidently setting the stage for the next decade of growth and achievement. This commitment led us to hire our first Chief Customer and Data Officer, taking a significant step towards revitalizing and realizing our vision for the future. As I have assessed our company's evolution in customer service it has become clear that we must Transcend traditional customer service and strive to embody true customer centric leadership. This means not just meeting the needs of our customers, but anticipating them guiding them through their journey and setting new standards for customer experience.

我們充滿信心地為下一個十年的成長和成就奠定基礎。這項承諾促使我們聘請了第一位首席客戶和數據官，為振興和實現我們的未來願景邁出了重要一步。當我評估我們公司在客戶服務方面的發展時，很明顯我們必須超越傳統的客戶服務並努力體現真正以客戶為中心的領導力。這意味著不僅要滿足客戶的需求，還要期望他們引導他們完成整個旅程並為客戶體驗設定新標準。

We all understand that data technology and artificial intelligence are pivotal in this transformation, leveraging advanced analytics and artificial intelligence we can gain deeper insights into customer behavior, preferences and needs. This will allow us to create highly personalized and seamless experiences, forging stronger connections and fostering greater loyalty by harnessing the power of these innovative technologies, we can stay ahead of the curve, continuously improving and innovating to lead our customers into the future.

我們都知道數據技術和人工智慧在這項轉型中至關重要，利用先進的分析和人工智慧，我們可以更深入地了解客戶的行為、偏好和需求。這將使我們能夠創造高度個人化和無縫的體驗，透過利用這些創新技術的力量建立更牢固的聯繫並培養更高的忠誠度，我們可以保持領先地位，不斷改進和創新，引領我們的客戶走向未來。

These ambitions require that we strengthen and embolden our customer organization. We are pleased to announce that Sirona same card team has been named Chief Customer and Data Officer for Harte Hanks effective September 4. [Sirona] joins us from Bain & Company where she excelled as a partner and a key member in their customer, advanced analytics and financial services practices with over three decades of experience in the analytics domain. Sharon is a renowned expert in customer value optimization and generative AI value creation.

這些雄心壯志要求我們加強和壯大我們的客戶組織。我們很高興地宣布，Sirona 同卡團隊已被任命為Harte Hanks 的首席客戶和數據官，自9 月4 日起生效。關鍵成員，在客戶、高級分析方面表現出色和金融服務實踐，在分析領域擁有三十多年的經驗。Sharon 是客戶價值優化和生成式人工智慧價值創造領域的知名專家。

Our deep knowledge and strategic acumen will be pivotal in advancing our customer-centric initiatives. Sirona's impressive career includes executive roles at top tier agencies and data companies, such as Executive Vice President and head of marketing science at EBDO, which is now part of Omnicom and managing partner North American lead for digital media optimization and advanced analytics at MEC, which is now part of WPP.

我們深厚的知識和策略敏銳度對於推進以客戶為中心的措施至關重要。Sirona 令人印象深刻的職業生涯包括在頂級機構和數據公司擔任高階主管職務，例如EBDO 的執行副總裁兼行銷科學主管（現已成為Omnicom 的一部分）以及MEC 的管理合作夥伴北美負責數位媒體優化和高級分析的主管，其中現在是 WPP 的一部分。

Our academic credentials are equally stellar with a master's degree in applied statistics from Columbia University and a BS in quantitative psychology from Penn State for and also holds certifications and Chief Data Officer from Carnegie Mellon University, digital marketing strategies from Kellogg and Python programming from the University of Michigan. Additionally, she has received advanced training in large language models in general AI, from Bain advanced analytics is pursuing certification in Chennai development for business.

我們的學術資歷同樣出色，擁有哥倫比亞大學應用統計學碩士學位和賓州州立大學定量心理學學士學位，並擁有卡內基美隆大學的認證和首席數據官、凱洛格大學的數位行銷策略和該大學的Py​​thon 程式設計密西根州。此外，她還接受了貝恩高級分析的通用人工智慧大型語言模型的高級培訓，正在尋求欽奈業務開發的認證。

We are excited about Sirona appointment and complement her expertise will propel our company and our customers toward enhanced business insights and outcomes through the power of generative AI data and analytics. Our leadership is dedicated to making our customers journey with us exciting, rewarding and next level.

我們對 Sirona 的任命感到興奮，並補充她的專業知識將推動我們的公司和我們的客戶透過產生人工智慧數據和分析的力量來增強業務洞察力和成果。我們的領導階層致力於讓客戶與我們一起度過令人興奮、回報豐厚且更上一層樓的旅程。

I would now like to turn the call over to David Garrison, our Chief Financial Officer, 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），隨後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 second quarter consolidated results, including revenues from each business segment. As a reminder, starting in 2024, we began reporting four segments instead of three. The additional segment is referred to as sales services and relates to the inside-out acquisition made in 2022.

謝謝你，柯克。我現在將回顧第二季的合併業績，包括每個業務部門的收入。提醒一下，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。額外的部分被稱為銷售服務，與 2022 年進行的由內而外的收購相關。

Second-quarter revenues were $45 billion, down by 5.7% compared to 447.8 million for the second quarter of 2023. Growth in fulfillment and logistics and sales services segments was offset by declines in the other two sites. Revenues in the customer care segment were $12.4 million in the second quarter of 2024 compared to $14.9 million in the same quarter prior year.

第二季營收為 450 億美元，比 2023 年第二季的 4.478 億美元下降 5.7%。履行、物流和銷售服務部門的成長被其他兩個地點的下降所抵消。2024 年第二季客戶服務部門的營收為 1,240 萬美元，而去年同期為 1,490 萬美元。

This was related to the timing between quarters of a surge in volume with a large customer. Sales services increased to $4.4 million compared to $2.3 million in the second quarter of 2023. The increase in volume from a large fintech client was the majority of the increase. The marketing service segment revenues fell to $7.7 million in the second quarter of 2024 compared to $10.9 million in the prior year. Customer budget reductions and the end of specific programs account for decrease in this segment year over year.

這與大客戶的交易量激增的季度之間的時間有關。銷售服務增加至 440 萬美元，而 2023 年第二季為 230 萬美元。大型金融科技客戶的交易量成長佔了成長的大部分。2024 年第二季度，行銷服務部門營收降至 770 萬美元，而前一年為 1,090 萬美元。客戶預算的減少和特定計劃的結束導致該細分市場逐年減少。

Fulfillment & Logistics revenues were $20.5 million in the second quarter of 2024 compared to $19.6 million in the prior year. The increases were the result of new and expanded programs with existing customers.

2024 年第二季的履行和物流收入為 2,050 萬美元，而前一年為 1,960 萬美元。這一成長是與現有客戶合作實施新專案和擴大專案的結果。

Operating expenses in Q2 were $43.7 million, including restructuring expenses of $427,000 compared to [$46.1] million in the same period in 2023. The operating income in Q2 2024 was $1.4 million compared to the operating income of $1.7 million in the second quarter of 2023. When adjusting for stock compensation, severance and restructuring expenses, the adjusted operating income in the second quarter of 2024 is $2.5 million compared to $3.4 million dollars in Q2 of 2023.

第二季的營運費用為 4,370 萬美元，其中包括 427,000 美元的重組費用，而 2023 年同期為 4,610 萬美元。2024 年第二季的營業收入為 140 萬美元，而 2023 年第二季的營業收入為 170 萬美元。在調整股票薪酬、遣散費和重組費用後，2024 年第二季調整後的營業收入為 250 萬美元，而 2023 年第二季為 340 萬美元。

The adjusted operating margin is 5.6% in Q2 2024 compared to 7% in the same period in 2023. Second-quarter of 2024 had an EBITDA of $2.4 million compared to an EBITDA of $2.7 million in the same period in 2023, when adjusting for stock compensation, severance and restructuring expenses, the adjusted EBITDA is $3.6 million for 2024 and $4.4 million for the same period in 2023.

2024 年第二季調整後營業利益率為 5.6%，而 2023 年同期為 7%。2024 年第二季的EBITDA 為240 萬美元，而2023 年同期的EBITDA 為270 萬美元，調整股票薪資、遣散費和重組費用後，2024 年調整後的EBITDA 為360 萬美元，2023 年調整後的EBITDA 為440 萬美元。

Turning to the balance sheet. As of June 30, 2024 we had cash and cash equivalents of $11 million compared to $18 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 pension plan one was terminated as planned during June of 2024.

轉向資產負債表。截至 2024 年 6 月 30 日，我們的現金和現金等價物為 1,100 萬美元，而 2023 年底為 1,800 萬美元。我們目前延長至 2025 年 6 月的 2,500 萬美元信貸額度尚未提取，公司也沒有債務退休金計劃，該計劃已按計劃於 2024 年 6 月終止。

Let's walk through the time line of the progress to terminate the pension and its impact on our financial statements. In June, the assets of the pension were liquidated into cash in Coop in order to purchase the equivalent annuity product from an insurance company for the pension participants, this product would contractually replace the company's obligations related to the pension and relief our respective liability for the purchase to occur.

讓我們來看看終止退休金的進展時間表及其對我們財務報表的影響。6月，退休金資產在Coop清算為現金，以便為退休金參與者從保險公司購買等值年金產品，該產品將按照合約取代公司與退休金相關的義務，並減輕我們各自的責任購買發生。

The pension assets required an additional cash contribution from the company of $6.1 million. This contribution allowed for the formal termination of the pension and its obligations as of June 30, 2024. The annuity provider requires 60 days to onboard the pension participants during the third quarter, the company will contribute an additional $1.3 million for the month's monthly pension payments and final government filings associated with the termination process.

退休金資產需要公司額外提供 610 萬美元現金。這項繳款允許自 2024 年 6 月 30 日起正式終止退休金及其義務。年金提供者在第三季需要 60 天的時間來讓退休金參與者入職，該公司將額外繳納 130 萬美元，用於每月的退休金支付以及與終止流程相關的最終政府備案。

The financial impact to the second quarter income statement is dramatic. Pension accounting requires the reversal of the equity balance of the accumulated other comprehensive income associated with pension plan one. This results in a pension charge of $38.2 million. This charge provides a tax benefit of $10.1 million, resulting in a net loss of $27.8 million for the quarter. It is important to note that without the pension charge and tax benefit, the company would have had a net income of $300,000.

對第二季損益表的財務影響是巨大的。退休金會計要求轉回與退休金計畫一相關的累計其他綜合收益的權益餘額。這導致退休金費用為 3820 萬美元。這項費用提供了 1,010 萬美元的稅收優惠，導致該季度淨虧損 2,780 萬美元。值得注意的是，如果沒有退休金費用和稅收優惠，該公司的淨收入將為 30 萬美元。

Thank you for your continued support, and I'll turn the call back to Kirk.

感謝您一直以來的支持，我會將電話轉回給柯克。

Thanks, Dave. Before we move to the Q&A session, I want to emphasize that Harte Hanks is amid an exciting turnaround. Our sales transformation is complete, and we are embarking on a new era of growth and success.

謝謝，戴夫。在我們進入問答環節之前，我想強調哈特漢克斯正處於令人興奮的轉變之中。我們的銷售轉型已經完成，我們正在進入一個成長和成功的新時代。

With the recent appointment of our Chief Customer and Data Officer, our senior management team is now fully assembled and committed to driving shareholder value cost objective of our LT elevate program is on track. Our sales pipeline well exceeds what I inherited and continues to grow. Additionally, we successfully terminated pension plan one in June, fulfilling our commitments in this area.

隨著最近任命我們的首席客戶和數據官，我們的高階管理團隊現已完全集結，致力於推動 LT 提升計劃的股東價值成本目標步入正軌。我們的銷售管道遠遠超出了我繼承的範圍，而且還在持續成長。此外，我們在6月份成功終止了退休金計畫一，並履行了我們在這方面的承諾。

As David outlined, we closed the quarter with $11 million in cash and cash equivalents, and we again we have no debt. Clearly, our year to date revenue performance does not mirror the promising outlook we hold for our business. It is important to recognize that we are in the final stages of overcoming the challenges posed by an outdated approach to scaling. However, we are confident in our strategy and excited about the future. Dave and I are happy to answer your questions.

正如 David 所概述的，我們在本季結束時擁有 1,100 萬美元的現金和現金等價物，我們再次沒有債務。顯然，我們今年迄今的營收表現並沒有反映出我們對業務的樂觀前景。重要的是要認識到，我們正處於克服過時的擴展方法所帶來的挑戰的最後階段。然而，我們對我們的策略充滿信心，並對未來感到興奮。戴夫和我很高興回答您的問題。

Michael Kupinski, Noble Capital Markets.

邁克爾·庫平斯基（Michael Kupinski），諾布爾資本市場。

Good afternoon, everyone. Thanks for taking my questions. Kirk, as you mentioned, you recently centralized your sales staff and reporting structure and Restat we ended the staff. When do you think that this new structure and sales expansion will be kind of hitting its stride in terms accelerating revenue generation and possibly improved efficiency? I was just wondering, again add some more color there.

大家下午好。感謝您回答我的問題。柯克，正如您所提到的，您最近集中了銷售人員和報告結構，並重新統計了我們終止的人員。您認為這種新的結構和銷售擴張何時會在加速創收和可能提高效率方面取得進展？我只是想知道，再次添加一些顏色。

Sure. Happy to and nice to hear from you. I think at this point, you know, our pipeline is at a really strong level compared to prior year. We're learning a great deal and how effective our go to market strategy is we continue to make tweaks.

當然。很高興也很高興收到您的來信。我認為目前我們的管道與去年相比處於非常強勁的水平。我們學到了很多東西，我們的市場策略的有效性如何，我們將繼續進行調整。

We're optimistic as we go through the balance of the year that we'll continue to see improvements in our conversion rates, and we'll see more efficiency in our sales cycle. We're anxious to integrate the role of our new Chief Customer and Data Officer into conversations that we're having with clients because it's becoming increasingly apparent to us that there are avenues we could be pursuing.

我們樂觀地認為，在今年餘下的時間裡，我們將繼續看到轉換率的提高，並且我們將看到銷售週期的效率更高。我們渴望將新進首席客戶和數據長的角色融入我們與客戶的對話中，因為我們越來越明顯地意識到，我們可以追求一些途徑。

That will certainly enhance our prospects for closing more business. There's great interest right now in data. There's great interest in analytics. There's great interest in Gen AI and I think better being and better able to articulate the unique value we bring, it will be very, very helpful. So I would say our organic lead generation efforts are an area we still want to expand more. And I'd say that we have a promising outlook as we proceed through the balance of the year and especially as we think about 2025.

這肯定會增強我們完成更多業務的前景。現在人們對數據很感興趣。人們對分析非常感興趣。人們對 Gen AI 很感興趣，我認為更好地表達我們帶來的獨特價值，這將非常非常有幫助。因此，我想說，我們的有機潛在客戶開發工作是我們仍希望進一步擴展的領域。我想說，在今年剩下的時間裡，特別是在我們思考 2025 年時，我們的前景充滿希望。

So, we're really pleased with the way the organization has come together and we've retained all of the folks we initially hired, but made some selective choices to come to to change out staff, which is not uncommon when you when you build a new organization and it's very performance based and we definitely are focused more on generating our own leads.

因此，我們對組織的團結方式感到非常滿意，我們保留了最初僱用的所有人員，但做出了一些有選擇的選擇來更換員工，這在您構建時並不罕見一個新的組織，它非常基於績效，我們肯定更專注於產生我們自己的潛在客戶。

And so we're really deeply moving the needle in our digital presses because that's where we have the best chances for conversion. And I say that with respect to pressing, you know, our involvement or reliance on our key processes and such we have such a good value proposition, which I see only getting stronger and that we want to generate more of our own leads and that's happening. And so I think I think this is going to prove to be a game changing our transformation that we've accomplished here. And I think the evidence of that will be playing out the balance of the year and into next year.

因此，我們正在大力推動數位印刷機的發展，因為這是我們實現轉換的最佳機會。我說，就壓力而言，你知道，我們對關鍵流程的參與或依賴，因此我們有一個很好的價值主張，我認為它只會變得更強，我們希望產生更多自己的線索，而這正在發生。所以我認為這將被證明是一場改變我們在這裡完成的轉型的遊戲。我認為這一點的證據將在今年剩餘時間和明年顯現出來。

Thanks, Krik. And then I know on top of everyone's mind is the economy and I was just wondering if you look at the this quarter. I know some of the issues affecting this quarter were kind of already on play in the quarter or but I was just wondering if any of what we saw in terms of weakness in some of your segments were related to the economy.

謝謝，克里克。然後我知道每個人最關心的是經濟，我只是想知道你是否看看本季的情況。我知道影響本季的一些問題已經在本季出現，或者但我只是想知道我們所看到的某些細分市場的疲軟是否與經濟有關。

And if you think as we kind of see the weakening economy in the second half year was wondering if you can kind of give us your thoughts, your business will fare on in kind of more of a lackluster economic scenario that we might.

如果您認為我們看到下半年經濟疲軟，想知道您是否可以向我們提供您的想法，那麼您的業務將在我們可能面臨的經濟狀況更加黯淡的情況下發展。

And yes, thanks for that. I'm very aware, I am and I fully appreciate what a slowing economy means of run companies during some of the most notable slumps in recent decades. So I'm very attuned to that frankly, there's so much untapped potential here. It's not a prevailing concern of mine right now. I am I think we need to hustle and obviously start closing on many of the opportunities in our pipeline come.

是的，謝謝你。我非常清楚，我現在也完全理解，在近幾十年來一些最顯著的經濟衰退期間，經濟放緩對經營的公司意味著什麼。坦白說，我對此非常認同，這裡有很多尚未開發的潛力。這不是我現在最關心的問題。我認為我們需要加緊努力，顯然要開始抓住我們管道中的許多機會。

We're aware of how our customers can elect lower cost alternatives, if that's if that's important to their business. You know, we've seen labor arbitrage a factor in customer care. Clearly, companies can dialed back marketing investments if they're concerned and managing earnings as such. However, that's really a good idea and in some cases, maybe to fund more investments in technology.

我們知道我們的客戶如何選擇成本較低的替代方案（如果這對他們的業務很重要的話）。您知道，我們已經看到勞動力套利是客戶服務的因素。顯然，如果公司擔心並管理收益，他們可以減少行銷投資。然而，這確實是一個好主意，在某些情況下，也許可以為更多的技術投資提供資金。

It certainly is a year for for that. But at this moment, honestly, I believe our potential to organically attract business far outweighs any economic concerns at the present time, we're really positioned on both sides of the ledger, we've talked about project Elevate.

這無疑是一個值得紀念的一年。但目前，老實說，我相信我們有機吸引業務的潛力遠遠超過目前的任何經濟擔憂，我們確實處於帳本的兩邊，我們已經討論了 Elevate 專案。

So we are we are equally focused on costs that aren't going to be limiting factors toward toward our growth programs. We think our fulfillment business business is positioned exceedingly well as we head into the second half of the year and much of that work, whether it's for back-to-school. But even doing kitting projects right now for major retailers is really a back to school and almost holidays story as it stands here right now.

因此，我們同樣關注成本，這些成本不會成為我們成長計畫的限制因素。我們認為，隨著下半年的到來，我們的履行業務定位非常好，其中大部分工作都是為了返校。但即使是現在為主要零售商做配套項目，也確實是一個回到學校、幾乎是假期的故事，因為現在的情況如此。

So that's not to say that 2025 can't hold surprises, but we have we have good visibility into the second half of the year. And when I think about the pharma work that we do in the company, it's primarily necessities related. So we're actually currently pursuing some attractive additional farm opportunities.

所以這並不是說 2025 年不會有驚喜，但我們對下半年有很好的預見性。當我想到我們在公司所做的製藥工作時，它主要與必需品有關。因此，我們目前實際上正在尋求一些有吸引力的額外農場機會。

I think about all of our our high volumes of digital printing and mailings, you know that's driven by regulatory requirements that must do work, you know, late in the second half. And so overall, I feel I feel we're in an envious position to be as clear as a company can be on what we need to do and get done. And then we're still feeling positive about the outlook. And at this moment, I wouldn't blame anything on the economy.

我想到我們所有的大量數位印刷和郵寄，你知道這是由監管要求驅動的，這些要求必須在下半年末發揮作用。總的來說，我覺得我們處於一種令人羨慕的境地，因為我們能夠像一家公司一樣清楚地了解我們需要做什麼和完成什麼。然後我們仍然對前景感到樂觀。此時此刻，我不會將任何責任歸咎於經濟。

And sorry, I just have two more questions on you mentioned about the visibility into the second. I was wondering if you can kind of give us your thoughts and certainly we know that customers can cancel or postpone campaigns and things like that.

抱歉，我還有兩個關於你提到的關於第二個的可見性的問題。我想知道您是否可以告訴我們您的想法，當然我們知道客戶可以取消或推遲活動之類的事情。

And do you anticipate that you'll see sequential quarterly improvement in revenues in the second half or do you think that that's more 2025 situation.

您是否預計下半年收入會出現環比季度改善，或者您認為這更像是 2025 年的情況。

And the unpredictability in that is really in the sales cycle. And when we when we make when we make a call on and no assurances of revenue growth in Q3 or Q4. It has to be that that's the stage we're in across our our sales cycle, particularly, you know, the contracting and legal stage is where we have to see through. I would say at this point, it's too early to make a call.

其中的不可預測性確實存在於銷售週期中。當我們做出決定時，我們並不能保證第三季或第四季的營收成長。這一定是我們在整個銷售週期中所處的階段，特別是，你知道，合約和法律階段是我們必須貫穿的階段。我想說，現在打電話還太早。

We'll do another call, obviously in November and I expect our our visibility, obviously at that stage will be vastly enhanced. So we have a lot of activity and we have a very robust pipeline. But I would want to stop short right now of making a call on the quarter specifically, typically, we have better seasonality in Q4 right now. I would say, apart from the seasonality, our new business outlook is stronger there and as well. So we'll see, but we're quite optimistic.

我們會再打一次電話，顯然是在 11 月，我預計我們的知名度，顯然在那個階段將會大大提高。因此，我們有很多活動，並且有非常強大的管道。但我現在想暫時停止對本季的具體情況進行討論，通常情況下，我們現在第四季的季節性因素更好。我想說，除了季節性因素之外，我們的新業務前景也更加強勁。所以我們拭目以待，但我們非常樂觀。

My final question is about your marketing services. Obviously, this has been a problem segment. I was just wondering you have faced some unique challenges there. I was wondering if you can just kind of give us your thoughts in terms of the strategy and how you're approaching kind of getting that back on a revenue growth trajectory. And then just was wondering if you can just quickly talk a little bit about your expansion plans internationally as well. And that's all I have.

我的最後一個問題是關於你們的行銷服務。顯然，這是一個有問題的部分。我只是想知道您在那裡遇到了一些獨特的挑戰。我想知道您是否可以向我們提供您對策略的想法以及您如何讓其回到收入成長軌道。然後我想知道您是否也可以快速談談您的國際擴張計劃。這就是我所擁有的一切。

So from a green marketing services has been a weakness and that really originates back to some last spring and summer. And we did we did see some customers some leave and that they were they were they were they were setbacks, morale wise and obviously economically from and we've been retooling sense. But I will tell you that, um, I am still quite optimistic about that segment. It's going to be a major focal point in 2025. I'm very excited that corona, I think, will bring a lot of value and concentration to this segment early on as well.

因此，綠色行銷服務一直是一個弱點，這實際上可以追溯到去年春天和夏天。我們確實看到一些客戶離開了，他們是他們是他們是他們是挫折，士氣明智，顯然是經濟上的，我們一直在重組意識。但我告訴你，嗯，我對這個細分市場還是相當樂觀的。這將成為 2025 年的主要焦點。我很高興新冠病毒也將在早期為這一領域帶來許多價值和關注。

I think we're going to bolster our set our sales support for marketing services in 2025, and we'll onboard one or two more resources for that in late Q3.

我認為我們將在 2025 年加強對行銷服務的銷售支持，並將在第三季末為此增加一到兩個資源。

I think there are some new services that we could look at packaging and our marketing services business that we're hearing from customers that they have great interest in those examples would be in research and data and tech services. And those are not those are not services today with the exception of data that we aggressively market. But even data isn't really today involving us getting involved with anybody's data practice or helping them improve their data practice. It's really it's really the sale of data that we that we really leverage today.

我認為我們可以專注於包裝和行銷服務業務中的一些新服務，我們從客戶那裡聽到他們對這些例子非常感興趣，包括研究、數據和技術服務。除了我們積極行銷的數據之外，這些都不是今天的服務。但即使是數據，今天也沒有真正讓我們參與任何人的數據實踐或幫助他們改善數據實踐。我們今天真正利用的是數據銷售。

So I think I think when I talk about customer leadership and customer retention, which obviously takes some of the pressure off, you know, how much new business we need to generate and it's in these areas and marketing marketing today is becoming increasingly more marketing science oriented.

所以我想當我談論客戶領導力和客戶保留時，這顯然會減輕一些壓力，你知道，我們需要在這些領域產生多少新業務，而當今的營銷正變得越來越營銷科學面向。

And I think you can see we're bolstering up our resources there, we will need somebody to lead that. And that division for us in 2025, we've been doing some restructuring in there right now.

我想你可以看到我們正在加強我們的資源，我們需要有人來領導。對於我們 2025 年的部門，我們現在正在那裡進行一些重組。

We've been analyzing the capability gaps that we have to be more competitive, although that notwithstanding, you know, we the large customer that we just signed was in our marketing services segment and that customer will begin in the next few weeks.

我們一直在分析我們必須更具競爭力的能力差距，儘管如此，您知道，我們剛剛簽署的大客戶屬於我們的行銷服務部門，該客戶將在接下來的幾週內開始。

So got it. It has been a weakness here. It's an area where I've had a deep experience myself in my career, building digital agencies and such. So I'm very committed to the segment, and I think the problems were internal and we'll have them fixed and it will be a strong contributor in 2025. And then on the international side, the real the real gap there is that is that we have opportunities to expand US based clients and into Europe.

所以明白了。這是這裡的一個弱點。在我的職業生涯中，我在建立數位機構等方面擁有豐富的經驗。所以我非常致力於這個領域，我認為問題是內部的，我們將解決它們，它將在 2025 年成為一個強大的貢獻者。然後在國際方面，真正的差距是我們有機會將美國客戶擴展到歐洲。

We have the opportunity to do more lead gen work, you know, specifically in Europe, and we've got a couple of the staffers there who are outstanding, but that that division and the brilliant way that they execute warrants more sales pressure because we execute exceedingly well in Europe right now. We have great teams. Obviously, it's a smaller part of our company than than our domestic operations, but we are we think we can be very, very successful there. We have we have a strong team. We've started building some really strong leads and so stay tuned. But I think I think Europe specifically will be a growth driver for us in '25.

我們有機會做更多的潛在客戶開發工作，你知道，特別是在歐洲，我們在那裡有幾位非常出色的員工，但是這個部門和他們出色的執行方式保證了更大的銷售壓力，因為我們目前在歐洲執行得非常好。我們有很棒的團隊。顯然，與我們的國內業務相比，它在我們公司中所佔的比例較小，但我們認為我們可以在那裡取得非常非常成功。我們有一支強大的團隊。我們已經開始建立一些非常強大的線索，所以請繼續關注。但我認為歐洲將成為我們 25 年的成長動力。

That's all I have. Thank you, guys. Good luck to you.

這就是我所擁有的一切。謝謝你們，夥計們。祝你好運。

Yes, thanks so much. Appreciate it.

是的，非常感謝。欣賞它。

Thank you. And there are no further questions in queue at this time.

謝謝。目前隊列中沒有其他問題。

This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. And thank you for your participation.

今天的電話會議到此結束。此時您可以斷開電話線並度過美好的一天。並感謝您的參與。