HHSMEDIUM SIGNALOPERATIONAL10-K

HHS repositioned itself from a "customer experience company" to a "Business Experience Outsourcing company" while achieving dramatic improvement in net losses despite declining revenue.

The strategic repositioning suggests management is pivoting the business model to focus on comprehensive business process outsourcing rather than just customer experience services. While revenue declined 14%, the company made substantial progress on profitability, nearly reaching breakeven with a 97% reduction in net losses, indicating improved operational efficiency and cost management.

Comparing 2026-03-17 vs 2025-03-17View on EDGAR →
FINANCIAL ANALYSIS

HHS showed mixed but encouraging financial performance with revenue declining 14% to $159.6M while dramatically improving profitability through a 97% reduction in net losses to just -$811K. The company strengthened its balance sheet by reducing total debt 82% from $27.1M to $5.0M, though this came with a concerning 44% decline in cash reserves to $5.6M. Operating cash flow improved significantly, moving closer to positive territory, while the company maintained disciplined capital spending, suggesting a focused turnaround effort despite revenue headwinds.

FINANCIAL STATEMENT CHANGES
Net Income
P&L
+97.3%
-$30.3M→-$811K

Net income grew 97.3% — bottom-line growth signals improving overall business health.

Inventory
Balance Sheet
-87%
$354K→$46K

Inventory drawn down 87% — strong sell-through or deliberate destocking; watch for supply constraints.

Operating Income
P&L
-81.6%
$2.1M→$386K

Operating income deteriorated sharply — investigate whether driven by one-time charges or structural cost issues.

Total Debt
Balance Sheet
-81.5%
$27.1M→$5.0M

Debt reduced 81.5% — deleveraging strengthens balance sheet and reduces financial risk.

Cash & Equivalents
Balance Sheet
-43.8%
$9.9M→$5.6M

Cash declined 43.8% — significant cash burn or deployment; verify adequacy of remaining liquidity runway.

Operating Cash Flow
Cash Flow
+41.9%
-$3.0M→-$1.7M

Operating cash flow surged 41.9% — exceptional cash generation, highest quality earnings signal.

Capital Expenditure
Cash Flow
-26.4%
$3.7M→$2.8M

Capex reduced 26.4% — investment cycle winding down or capital discipline; may improve near-term free cash flow.

Current Liabilities
Balance Sheet
-14.2%
$35.1M→$30.2M

Current liabilities reduced — improved short-term financial position and working capital health.

Revenue
P&L
-13.9%
$185.2M→$159.6M

Revenue softened 13.9% — monitor whether this is cyclical or structural.

Current Assets
Balance Sheet
-13.6%
$53.6M→$46.3M

Current assets declined 13.6% — monitor working capital adequacy and short-term liquidity.

LANGUAGE CHANGES
NEW — 2026-03-17
PRIOR — 2025-03-17
ADDED
As of February 27, 2026 , 7,414,794 shares of common stock, $1.00 par value per share of the registrant were issued and outstanding.
BUSINESS INTRODUCTION Harte Hanks, Inc., together with its subsidiaries ( Harte Hanks, Company, we, our, or us ) is a glob al Business Experience Outsourcing company .
We operate at the intersection of data, marketing , sales, customer care, fulfillment, and logistics integrating front office revenue growth and customer experience operations with back office execution to deliver measurable business outcomes.
With offices in North America, Asia-Pacific and Europe, we serve leading global brands enabling them to design, activate and optimize the full customer and product lifecycle.
Additionally, we have adopted a code of ethics that applies to our principal officers, including those serving in interim roles which is posted on our website.
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REMOVED
As of February 28, 2025 , 7,357,450 shares of common stock, $1.00 par value per share of the registrant were issued and outstanding.
BUSINESS INTRODUCTION Harte Hanks, Inc., together with its subsidiaries ( Harte Hanks, Company, we, our, or us ) is a leading glob al cus tomer experience company.
With offices in North America, Asia-Pacific and Europe, Harte Hanks works with some of the world s most respected brands.
Additionally, we have adopted a code of ethics that applies to our interim chief operating officer, chief financial officer and general counsel which is posted on our website.
product innovation, build, strategy, launch, sell, deliver, support and recall and the customer journey e.g.
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