Harte Hanks, Inc.

Greetings. Welcome to the Hart 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. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Tom Bauman of SNKIR. You may begin.

Thank you. Hosting the call today are Kirk Davis, Chief Executive Officer, Kelly Waller, Senior Vice President of Sales and Marketing, and 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. 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 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. 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 Hart Hanks website at harthanks.com. With that, I would now like to turn the call over to Kirk. Kirk, the call is yours.

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 and 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. 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. However, I want to highlight upfront that on the 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. 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. 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. 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. The second key area of Project Elevate is our focus on margin expansion and business optimization. We are in the early stages of a multi-year program. As we previously shared, we established a transformation office to thoughtfully execute our plans. 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. 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. 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. 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. 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. 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. 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, 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. 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. 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. 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. I would now like to introduce Kelly Waller, our Senior Vice President for Sales and Marketing. Kelly joined Hart 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. 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?