XML 31 R20.htm IDEA: XBRL DOCUMENT v3.23.3
Note N - Segment Reporting
 9 Months Ended
Sep. 30, 2023
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

Note N — Segment Reporting

 

Harte Hanks is a leading global customer experience company. We have organized our operations into three business segments based on the types of products and services we provide: Marketing Services, Customer Care, Fulfillment & Logistics Services.

 

Our Marketing Services segment leverages data, insight, and experience to support clients as they engage customers through digital, traditional, and emerging channels.  We partner with clients to develop strategies and tactics to identify and prioritize customer audiences in B2C and B2B transactions.  Our key service offerings include strategic business, brand, marketing and communications planning, data strategy, audience identification and prioritization, predictive modeling, creative development and execution across traditional and digital channels, website and app development, platform architecture, database build and management, marketing automation, and performance measurement, reporting and optimization.  

 

Our Customer Care segment offers intelligently responsive contact center solutions, which use real-time data to effectively interact with each customer.  Customer contacts are handled through phone, e-mail, social media, text messaging, chat and digital self-service support.  We provide these services utilizing our advanced technology infrastructure, human resource management skills and industry experience.

 

Our Fulfillment & Logistics Services segment consists of mail and product fulfillment and logistics services.  We offer a variety of product fulfillment solutions, including printing on demand, managing product recalls, and distributing literature and promotional products to support B2B trade, drive marketing campaigns, and improve customer experience.  We are also a provider of third-party logistics and freight optimization in the United States.  Prior to the sale of our direct mail equipment in 2020, this segment also included our direct mail operations.  Outsourced direct mail is now included in our Marketing Services segment.

 

There are three principal financial measures reported to our CEO (the chief operating decision maker) for use in assessing segment performance and allocating resources. Those measures are revenue, operating income (loss) and operating income (loss) plus depreciation and amortization (“EBITDA”). Operating income for segment reporting disclosed below, is revenues less operating costs and allocated corporate expenses. Segment operating expenses include allocations of certain centrally incurred costs such as employee benefits, occupancy, information systems, accounting services, internal legal staff, and human resources administration. These costs are allocated based on actual usage or other appropriate methods.  Unallocated corporate expenses are corporate overhead expenses not attributable to the operating groups. Interest income and expense are not allocated to the segments.  The Company does not allocate assets to our reportable segments for internal reporting purposes, nor does our CEO evaluate operating segments using discrete asset information.  The accounting policies of the segments are consistent with those described in the Note A, Overview and Significant Accounting Policies.

 

The following table presents financial information by segment:

 

Three Months ended September 30, 2023

  

Marketing Services

    

Customer Care

    

Fulfillment and Logistics Services

    

Unallocated Corporate

    

Total

  
      (In thousands)  

Revenues

   $ 10,591     $ 13,998     $ 22,530     $ —     $ 47,119  

Segment Operating Expense

   $ 8,370     $ 11,339     $ 18,995     $ 4,549     $ 43,253  

Contribution margin (loss)

   $ 2,221     $ 2,659     $ 3,535     $ (4,549 )   $ 3,866  

Shared Services

   $ 706     $ 668     $ 680     $ (2,054 )   $ —  

EBITDA

   $ 1,515     $ 1,991     $ 2,855     $ (2,495 )   $ 3,866  

Depreciation and amortization

   $ 71     $ 253     $ 249     $ 379     $ 952  

Operating income (loss)

   $ 1,444     $ 1,738     $ 2,606     $ (2,874 )   $ 2,914  

 

Three Months ended September 30, 2022

  

Marketing Services

    

Customer Care

    

Fulfillment and Logistics Services

    

Unallocated Corporate

    

Total

  
      (In thousands)  

Revenues

   $ 13,016     $ 17,375     $ 23,495     $ —     $ 53,886  

Segment Operating Expense

   $ 9,970     $ 13,661     $ 19,865     $ 6,038     $ 49,534  

Contribution margin (loss)

   $ 3,046     $ 3,714     $ 3,630     $ (6,038 )   $ 4,352  

Shared Services

   $ 1,125     $ 743     $ 853     $ (2,721 )   $ —  

EBITDA

   $ 1,921     $ 2,971     $ 2,777     $ (3,317 )   $ 4,352  

Depreciation and amortization

   $ 98     $ 206     $ 176     $ 99     $ 579  

Operating income (loss)

   $ 1,823     $ 2,765     $ 2,601     $ (3,416 )   $ 3,773  

 

Nine Months ended September 30, 2023

  

Marketing Services

    

Customer Care

    

Fulfillment and Logistics Services

    

Unallocated Corporate

    

Total

  
                   

(In thousands)

                  

Revenues

   $ 32,751     $ 45,625     $ 63,625     $ —     $ 142,001  

Segment Operating Expense

   $ 26,464     $ 36,534     $ 54,435     $ 15,880     $ 133,313  

Contribution margin

   $ 6,287     $ 9,091     $ 9,190     $ (15,880 )   $ 8,688  

Shared Services

   $ 2,261     $ 2,102     $ 2,203     $ (6,566 )   $ —  

EBITDA

   $ 4,026     $ 6,989     $ 6,987     $ (9,314 )   $ 8,688  

Depreciation and amortization

   $ 167     $ 1,024     $ 736     $ 1,124     $ 3,051  

Operating income (loss)

   $ 3,859     $ 5,965     $ 6,251     $ (10,438 )   $ 5,637  

 

Nine Months ended September 30, 2022

  

Marketing Services

    

Customer Care

    

Fulfillment and Logistics Services (1)

    

Unallocated Corporate

    

Total

  
                   

(In thousands)

                  

Revenues

   $ 39,389     $ 50,499     $ 61,612     $ —     $ 151,500  

Segment Operating Expense

   $ 30,903     $ 39,434     $ 50,795     $ 16,926     $ 138,058  

Contribution margin

   $ 8,486     $ 11,065     $ 10,817     $ (16,926 )   $ 13,442  

Shared Services

   $ 3,290     $ 2,139     $ 2,483     $ (7,912 )   $ —  

EBITDA

   $ 5,196     $ 8,926     $ 8,334     $ (9,014 )   $ 13,442  

Depreciation and amortization

   $ 288     $ 609     $ 581     $ 286     $ 1,764  

Operating income (loss)

   $ 4,908     $ 8,317     $ 7,753     $ (9,300 )   $ 11,678