Harte Hanks, Inc.

Good afternoon and welcome to the Hart Hanks third quarter 2024 earnings call. At this time all participants are in a listen only mode and we will open for questions following the presentation. If anyone should require operator assistance during the conference please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Tom Bauman, FNK Investor Relations. Tom, the floor is yours.

Thank you. Hosting the call today are Kirk Davis, Chief Executive Officer, 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 will refer you to a more detailed discussion of these risks and uncertainties in the company's filings with the Securities and Exchange Commission. In addition, any projections as to the company's future performance represented by management include estimates as of today, November 14, 2024, and the company assumes no obligations 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 thank you to all of our participants for joining our call. Over the past year, Hart Hanks has been committed to transforming our business, building a path towards sustainable growth, and optimizing free cash flow. In Q3, we reported a 1.1% year-over-year revenue increase and improvement from the negative 16.6% revenue decline on a comparable basis, so adjusted for acquired revenue, that we reported in Q3 2023. Moreover, we are showing improvement compared to the results of the previous six quarters during which revenues declined by an average of negative 8.8% on a cumulative basis, also adjusted for acquired revenue. However, we want to set realistic expectations by acknowledging that our revenue turnaround won't follow a perfectly straight upward path. Instead, we anticipate some natural fluctuations and occasional declines as part of our journey to sustainable growth. We will see that in Q4, where we expect a low to mid-single-digit revenue decline. Our strategy is focused on creating lasting value, which sometimes requires periods of investment and recalibration. We are proactively addressing longstanding challenges that have impacted our company, positioning ourselves for a more resilient future. Our focus remains on growing free cash flow as the transformative changes in our sales, marketing, and now including our customer organization continue gaining traction. As we approach 2025, and with the recent addition of our company's first Chief Customer and Data Officer, we are much better positioned to seize key growth opportunities through our newly established Customer Excellence and Growth Division, CEG. Under our CEG vision, our customer experience and sales and marketing teams are united in creating a positive, consistent, end-to-end customer experience. Our team is focused on uncovering the key drivers of Hart Hanks' customer loyalty, as well as to identify the root causes of client revenue shrinkage and attrition, devising actions to more effectively preserve our revenue base. Our CEG division will also take the lead in shaping our product strategy and development. Through this, we aim to leverage our advanced data solutions unit to strengthen our value proposition using data and AI as unique differentiators across each business segment's product offerings. Our goal is to develop integrated data and AI capabilities that meet the increasing demand for data intelligence and technology solutions from our clients. This approach is especially advantageous as our data solutions have a shorter sales cycle, yield strong margins, and offer a timely opportunity to enhance the value of all services we deliver across the company. In recent months, we have secured a number of new clients, as well as having won expansion programs from highly satisfied existing customers. I'd like to highlight a few of our recent success stories and as well, commend our employees company-wide for their hard work. Beginning with a new customer in our fulfillment practice, we recently added a new client that operates a dynamic design marketplace that connects independent artists and designers with consumers seeking unique personalized products, including high-end greeting cards. In Q4, we anticipate producing approximately 2.5 million holiday postcards on their behalf, We are well positioned for year-round custom opportunities with this impressive growing company. In Q4, we onboarded a top 15 financial services client that sought to outsource its fulfillment operations for the first time. This new customer is poised to spend $2 million annually handling printing and fulfillment fund-related collateral for the firm, including fund sheets, prospectuses, and annual supplements. We have current customers in financial services, so this represents a nice expansion in a space in which we perform well. Shifting to sales services, we landed a new client this month in the global luxury automotive industry, headquartered in England. The team we are deploying for this brand will interact with enthusiasts and clients, qualifying, scheduling, and coordinating dealership test drives, event attendants, and play a key role for the brand in driving qualified prospects and revenue to dealerships. In shifting to customer care, in late October, we began providing customer care for one of the most prominent global resale marketplaces in the world for luxury goods. As a result, we have established a regional presence in Dallas to support this exciting client, which we are well positioned to expand with. I will now turn the call over to David Garrison to review our financial performance and discuss our cost reduction program, Project Elevate.