# EDGAR Filing Document

**Accession Number:** 0000045919
**File Stem:** 0001628280-25-051383
**Filing Date:** 2025-11
**Character Count:** 123536
**Document Hash:** 131ead6725ce9f800dc28119ede7fb83
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001628280-25-051383.hdr.sgml**: 20251112

**ACCESSION NUMBER**: 0001628280-25-051383

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 70

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251112

**DATE AS OF CHANGE**: 20251112

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** HARTE HANKS INC
- **CENTRAL INDEX KEY:** 0000045919
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-DIRECT MAIL ADVERTISING SERVICES [7331]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 741677284
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-07120
- **FILM NUMBER:** 251469651

**BUSINESS ADDRESS:**
- **STREET 1:** 1 EXECUTIVE DRIVE
- **STREET 2:** SUITE 303
- **CITY:** CHELMSFORD
- **STATE:** MA
- **ZIP:** 01824
- **BUSINESS PHONE:** 5124341100

**MAIL ADDRESS:**
- **STREET 1:** 1 EXECUTIVE DRIVE
- **STREET 2:** SUITE 303
- **CITY:** CHELMSFORD
- **STATE:** MA
- **ZIP:** 01824

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** HARTE HANKS COMMUNICATIONS INC
- **DATE OF NAME CHANGE:** 19920703

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** HARTE HANKS NEWSPAPERS INC
- **DATE OF NAME CHANGE:** 19771010

?xml version='1.0' encoding='ASCII'? hrth-20250930

<u>[**Table of Contents**](#ic6355800f70e4de3bf1b728bec93e092_7)</u>

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

**(Mark One)**

⌧ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

**or**

□ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

**For the transition period from&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to** 

**Commission File Number: 001-07120**

**HARTE HANKS, INC.**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **Delaware** | **1 Executive Drive, Chelmsford, MA 01824** | **74-1677284** |
| (State or other jurisdiction of | (Address of principal executive offices, | (I.R.S. Employer |
| incorporation or organization) | including zip code) | Identification Number) |

---

**(512) 434-1100**

(Registrant's telephone number including area code)

**None**

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

<u>Title of Each Class</u> <u>Trading Symbol(s)</u> <u>Name of each exchange on which registered</u> <br> Common Stock HHS NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No □

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No □

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | □ | Accelerated filer | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;□ |
| Non-accelerated filer | ⌧ | Smaller reporting company | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;⌧ |
| | | Emerging growth company | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;□ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes □ No ⌧

The number of shares outstanding of the issuer's common stock as of October 31, 2025 was 7,414,794 shares.

------

<u>[**Table of Contents**](#ic6355800f70e4de3bf1b728bec93e092_7)</u>

HARTE HANKS, INC. AND SUBSIDIARIES

**TABLE OF CONTENTS**

FORM 10-Q REPORT

For the Quarterly Period Ended September 30, 2025

---

| | |
|:---|:---|
| [PART 1. FINANCIAL INFORMATION](#i05db6e14e35b46adbdbacd423829dbc5) | [3](#i05db6e14e35b46adbdbacd423829dbc5) |
| [Item 1. Condensed Consolidated Financial Statements](#i011b9f66fc4b4cf9974b386915082263) | [3](#i011b9f66fc4b4cf9974b386915082263) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Condensed Consolidated Balance Sheets](#ifede10fa198b4b0eae97997b1b9373d4) | [3](#ifede10fa198b4b0eae97997b1b9373d4) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited)](#i031e345728ca4d63b08db87c0cf71d0f) | [4](#i031e345728ca4d63b08db87c0cf71d0f) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)](#ia72bccb203854591b9763903f3fc44e9) | [5](#ia72bccb203854591b9763903f3fc44e9) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Condensed Consolidated Statements of Cash Flows (Unaudited)](#i419d481eed0844b0b432e172c554fbf5) | [6](#i419d481eed0844b0b432e172c554fbf5) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Notes to Condensed Consolidated Financial Statements (Unaudited)](#i6838ead8c95a44a09062dfd9d09ffed1) | [7](#i6838ead8c95a44a09062dfd9d09ffed1) |
| [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](#i07704eaf7fd14a379d50caac2d3a2acf) | [21](#i07704eaf7fd14a379d50caac2d3a2acf) |
| [Item 3. Quantitative and Qualitative Disclosures About Market Risk](#i4ac7b2e18174468fa93739a563426444) | [28](#i4ac7b2e18174468fa93739a563426444) |
| [Item 4. Controls and Procedures](#i8cc06dc4a0fe4aceb466481cf06500e6) | [28](#i8cc06dc4a0fe4aceb466481cf06500e6) |
| [PART II. OTHER INFORMATION](#i03b116ae6e0b4fa98e553ff19a7e7bce) | [28](#i03b116ae6e0b4fa98e553ff19a7e7bce) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Item 1. Legal Proceedings](#ic6100b51a4de499287fe19f21a36cb2c) | [28](#ic6100b51a4de499287fe19f21a36cb2c) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Item 1a. Risk Factors](#ie85d5a298d4244388aca00908cfc07e9) | [28](#ie85d5a298d4244388aca00908cfc07e9) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](#i03a3b985a6174010bcbc5066a2d26ab1) | [29](#i03a3b985a6174010bcbc5066a2d26ab1) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Item 3. Defaults Upon Senior Securities](#iced7a45553bd4480ae441409a122a47d) | [29](#iced7a45553bd4480ae441409a122a47d) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Item 4. Mine Safety Disclosures](#idd6fb47804a04ecc990c3eae1373c526) | [29](#idd6fb47804a04ecc990c3eae1373c526) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Item 5. Other Information](#i0edbbe345a804be18d78f4413a03f03e) | [29](#i0edbbe345a804be18d78f4413a03f03e) |
| &nbsp;&nbsp;&nbsp;&nbsp;[Item 6. Exhibits](#i95e003df21ca43999851b4e43536a401) | [30](#i95e003df21ca43999851b4e43536a401) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

------

<u>[**Table of Contents**](#ic6355800f70e4de3bf1b728bec93e092_7)</u>

**PART 1. FINANCIAL INFORMATION**

**Item 1. Condensed Consolidated Financial Statements**

<u>Harte Hanks, Inc. and Subsidiaries Condensed Consolidated Balance Sheets</u>

---

| | | |
|:---|:---|:---|
| *In thousands, except shares and per share amounts* | **September 30,<br>2025** | **December 31,<br>2024** |
| ASSETS | *(unaudited)* |  |
| Current assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $6510 | $9934 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable (less allowance for doubtful accounts of $6 and $50 at September 30, 2025 and December 31, 2024, respectively) | 30206 | 31648 |
| &nbsp;&nbsp;&nbsp;&nbsp;Contract assets and unbilled accounts receivable | 7286 | 8215 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | 2023 | 1511 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid income taxes and income tax receivable | 938 | 938 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 1735 | 1368 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 48698 | 53614 |
| Property, plant and equipment (less accumulated depreciation of $34,657 and $37,635, respectively) | 7902 | 8956 |
| Right-of-use assets | 19728 | 22460 |
| Other assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible assets, net | 418 | 563 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill | 295 | 295 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred tax assets, net | 15101 | 15177 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other long-term assets | 565 | 717 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other assets | 16379 | 16752 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $92707 | $101782 |
| LIABILITIES AND STOCKHOLDERS' EQUITY |  |  |
| Current liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | $18103 | $21832 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued payroll and related expenses | 3827 | 3210 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue and customer advances | 2458 | 1589 |
| &nbsp;&nbsp;&nbsp;&nbsp;Customer postage and program deposits | 773 | 1625 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | 4313 | 3145 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current portion of lease liabilities | 3520 | 3736 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 32994 | 35137 |
| Pension liabilities - Qualified plans | 3942 | 5445 |
| Pension liabilities - Nonqualified plan | 16463 | 17103 |
| Long-term lease liabilities, net of current portion | 18240 | 20860 |
| Other long-term liabilities | 1188 | 1548 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 72827 | 80093 |
| Stockholders' equity |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock, $1 par value, 25,000,000 shares authorized; 12,221,484 shares issued, 7,414,794 and 7,357,450 shares outstanding at September 30, 2025 and December 31, 2024, respectively | 12221 | 12221 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 109621 | 124194 |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 811610 | 814623 |
| &nbsp;&nbsp;&nbsp;&nbsp;Less treasury stock, 4,806,690 shares at cost at September 30, 2025 and 4,864,034 shares at cost at December 31, 2024 | (900085) | (915752) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (13487) | (13597) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 19880 | 21689 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $92707 | $101782 |
| &nbsp;&nbsp;See Accompanying Notes to Condensed Consolidated Financial Statements | &nbsp;&nbsp;See Accompanying Notes to Condensed Consolidated Financial Statements | &nbsp;&nbsp;See Accompanying Notes to Condensed Consolidated Financial Statements |

---

------

<u>[**Table of Contents**](#ic6355800f70e4de3bf1b728bec93e092_7)</u>

<u>Harte Hanks, Inc. and Subsidiaries Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited)</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended September 30,** | **Three months ended September 30,** | **Nine months ended September 30,** | **Nine months ended September 30,** |
|<br>*In thousands, except per share amounts* | **2025** | **2024** | **2025** | **2024** |
| Revenue | $39520 | $47630 | $119712 | $138113 |
| Operating expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Labor | 20382 | 24176 | 59626 | 70343 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Production and distribution | 11724 | 14421 | 38181 | 41850 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advertising, selling, general and administrative | 5149 | 5260 | 16531 | 17051 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restructuring expenses | 538 | 836 | 1525 | 2116 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization expense | 1218 | 1039 | 3346 | 3107 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 39011 | 45732 | 119209 | 134467 |
| Operating income | 509 | 1898 | 503 | 3646 |
| Other expenses, net |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense, net | 84 | 57 | 198 | 107 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pension plan termination charges |  |  |  | 37505 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other expenses, net | 106 | 831 | 1006 | 2104 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other expenses, net | 190 | 888 | 1204 | 39716 |
| Income (loss) before income taxes | 319 | 1010 | (701) | (36070) |
| Income tax expense (benefit) | 2605 | 868 | 2312 | (8207) |
| Net (loss) income | (2286) | 142 | (3013) | (27863) |
| (Loss) income per common share |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic | $(0.31) | $0.02 | $(0.41) | $(3.83) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted | $(0.31) | $0.02 | $(0.41) | $(3.83) |
| Weighted average shares used to compute (loss) income per share | Weighted average shares used to compute (loss) income per share |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic | 7415 | 7324 | 7386 | 7273 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted | 7415 | 7398 | 7386 | 7273 |
| Comprehensive loss, net of tax: |  |  |  |  |
| Net (loss) income | $(2286) | $142 | $(3013) | $(27863) |
| Adjustment to pension liability, net | 73 | 102 | 282 | 29626 |
| Foreign currency translation adjustment | (281) | (8) | (172) | (1945) |
| Total other comprehensive (loss) income, net of tax | $(208) | $94 | $110 | $27681 |
| Comprehensive (loss) income | $(2494) | $236 | $(2903) | $(182) |

---

See Accompanying Notes to Condensed Consolidated Financial Statements

------

<u>[**Table of Contents**](#ic6355800f70e4de3bf1b728bec93e092_7)</u>

<u>Harte Hanks, Inc. and Subsidiaries Condensed Consolidated Statements of Changes in Stockholders' Equity</u> *<u>(Unaudited)</u>*

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| ***In thousands*** | **Common<br>Stock** | **Additional<br>Paid-in<br>Capital** | **Retained<br>Earnings** | **Treasury<br>Stock** | **Accumulated<br>Other<br>Comprehensive<br>Loss** | **Total<br>Stockholders'<br>Equity** |
| Balance at December 31, 2024 | $12221 | $124194 | $814623 | $(915752) | $(13597) | $21689 |
| Stock-based compensation |  | (49) |  |  |  | (49) |
| Vesting of RSUs |  | (2353) |  | 2325 |  | (28) |
| Net loss |  |  | (392) |  |  | (392) |
| Other comprehensive income |  |  |  |  | 201 | 201 |
| Balance at March 31, 2025 | $12221 | $121792 | $814231 | $(913427) | $(13396) | $21421 |
| Stock-based compensation |  | 220 |  |  |  | 220 |
| Vesting of RSUs |  | (11006) |  | 10985 |  | (21) |
| Recovery of short swing profits, net of tax |  | 838 |  |  |  | 838 |
| Net loss |  |  | (335) |  |  | (335) |
| Other comprehensive income |  |  |  |  | 117 | 117 |
| Balance at June 30, 2025 | $12221 | $111844 | $813896 | $(902442) | $(13279) | $22240 |
| Stock-based compensation |  | 150 |  |  |  | 150 |
| Vesting of RSUs |  | (2373) |  | 2357 |  | (16) |
| Net loss |  |  | (2286) |  |  | (2286) |
| Other comprehensive loss |  |  |  |  | (208) | (208) |
| Balance at September 30, 2025 | $12221 | $109621 | $811610 | $(900085) | $(13487) | $19880 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| ***In thousands*** | **Common<br>Stock** | **Additional<br>Paid-in<br>Capital** | **Retained<br>Earnings** | **Treasury<br>Stock** | **Accumulated<br>Other<br>Comprehensive<br>Loss** | **Total<br>Stockholders'<br>Equity** |
| Balance at December 31, 2023 | $12221 | $157889 | $844920 | $(951083) | $(44090) | $19857 |
| Stock-based compensation |  | 552 |  |  |  | 552 |
| Vesting of RSUs |  | (5264) |  | 5177 |  | (87) |
| Net loss |  |  | (171) |  |  | (171) |
| Other comprehensive loss |  |  |  |  | (189) | (189) |
| Balance at March 31, 2024 | $12221 | $153177 | $844749 | $(945906) | $(44279) | $19962 |
| Stock-based compensation |  | 734 |  |  |  | 734 |
| Vesting of RSUs |  | (8208) |  | 8178 |  | (30) |
| Net loss |  |  | (27834) |  |  | (27834) |
| Other comprehensive income |  |  |  |  | 27776 | 27776 |
| Balance at June 30, 2024 | $12221 | $145703 | $816915 | $(937728) | $(16503) | $20608 |
| Stock-based compensation |  | 368 |  |  |  | 368 |
| Vesting of RSUs |  | (20898) |  | 20735 |  | (163) |
| Net income |  |  | 142 |  |  | 142 |
| Other comprehensive income |  |  |  |  | 94 | 94 |
| Balance at September 30, 2024 | $12221 | $125173 | $817057 | $(916993) | $(16409) | $21049 |

---

See Accompanying Notes to Condensed Consolidated Financial Statements

------

<u>[**Table of Contents**](#ic6355800f70e4de3bf1b728bec93e092_7)</u>

<u>Harte Hanks, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited)</u>

---

| | | | |
|:---|:---|:---|:---|
| | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
| *In thousands* | **2025** |  | **2024** |
| Cash Flows from Operating Activities |  |  |  |
| Net loss | $(3013) |  | $(27863) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization expense | 3346 |  | 3107 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 321 |  | 1654 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net pension (payment) cost | (1847) | <sup>(1)</sup> | 31027 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | (76) |  | (10254) |
| Changes in assets and liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable and contract assets | 2371 |  | (287) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses, income tax receivable and other current assets | (551) |  | (79) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | (4120) |  | (1989) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue and customer advances | 869 |  | 205 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customer postage and program deposits | (852) |  | (385) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other accrued expenses and liabilities | 1080 |  | (2168) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (2472) |  | (7032) |
| Cash Flows from Investing Activities |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of property, plant and equipment | (1334) |  | (3119) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of property, plant and equipment |  |  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (1334) |  | (3118) |
| Cash Flows from Financing Activities |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt financing costs | (100) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment of finance leases | (118) |  | (45) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recovery of short-swing profit from stockholders | 838 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Treasury stock activities | (65) |  | (280) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) financing activities | 555 |  | (325) |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (173) |  | (1945) |
| Net decrease in cash and cash equivalents and restricted cash | (3424) |  | (12420) |
| Cash and cash equivalents and restricted cash at beginning of period | 9934 |  | 18864 |
| Cash and cash equivalents and restricted cash at end of period | $6510 | <sup>(2)</sup> | $6444 |
| Supplemental disclosures |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for (received) interest | $137 |  | $(34) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for income taxes, net | $1496 |  | $1194 |
| Non-cash investing and financing activities |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of property, plant and equipment included in accounts payable | $583 |  | $1402 |
| <sup>(1)</sup> This amount is comprised of the below balances: |  |  |  |
| Pension Plan I termination payments and charges | $— |  | $31879 |
| Normal pension plan activities | (1847) |  | (852) |
| Net Pension cost, net | $(1847) |  | $31027 |
| <sup>(2)</sup> This amount is comprised of the below balances: |  |  |  |
| Cash and cash equivalents | $6510 |  | $5944 |
| Cash held in Escrow account included in other assets |  |  | 500 |
| Cash and cash equivalents and restricted cash at end of period | $6510 |  | $6444 |

---

See Accompanying Notes to Condensed Consolidated Financial Statements

------

<u>[**Table of Contents**](#ic6355800f70e4de3bf1b728bec93e092_7)</u>

Harte Hanks, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

**<u>Note A - Overview and Significant Accounting Policies</u>**

**Background**

Harte Hanks, Inc. together with its subsidiaries ("Harte Hanks," "Company," "we," "our," or "us") is a leading global customer experience company. With offices in North America, Asia-Pacific and Europe, Harte Hanks works with some of the world's most respected brands.

**Segment Reporting**

The Company operates three reportable segments: Marketing Services; Customer Care; and Fulfillment & Logistics Services. Our President is considered to be our chief operating decision maker (CODM). Our President reviews our operating results on an aggregate basis for purposes of allocating resources and evaluating financial performance by using the three financial measures: revenue, operating income and operating income plus depreciation and amortization (EBITDA).

**Accounting Principles** 

Our unaudited interim condensed consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "2024 10-K").

**Consolidation**

The accompanying unaudited interim condensed consolidated financial statements include the accounts of Harte Hanks, Inc. and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. As used in this report, the terms "Harte Hanks," "the Company," "we," "us," or "our" may refer to Harte Hanks, Inc., one or more of its consolidated subsidiaries, or all of them taken as a whole, as the context may require.

**Interim Financial Information**

The condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Rule 8-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

**Use of Estimates**

Preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from those estimates due to uncertainties. Such estimates include, but are not limited to, estimates related to revenue recognition; income taxes; goodwill and intangible assets impairment. On an ongoing basis, management reviews its estimates and assumptions based on currently available information. Changes in facts and circumstances could result in revised estimates and assumptions.

**Operating Expense Presentation in Condensed Consolidated Statements of Comprehensive (Loss) Income**

The "Labor" line in the Condensed Consolidated Statements of Comprehensive (Loss) Income includes all employee payroll and benefits costs, including stock-based compensation and temporary labor costs. The "Production and distribution" and "Advertising, selling, general and administrative" lines do not include any labor, depreciation, or

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amortization expense. Certain labor costs are included in restructuring expense, please see Note M - Restructuring Activities for details.

**Revenue Recognition**

We recognize revenue upon the transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to be entitled to receive in exchange for those products or services based on the relevant contract. We apply the following five-step revenue recognition model:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Identification of the contract, or contracts, with a customer

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Identification of the performance obligations in the contract

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Determination of the transaction price

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Allocation of the transaction price to the performance obligations in the contract

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Recognition of revenue when (or as) we satisfy the performance obligation

Certain client programs provide for adjustments to billings based upon whether we achieve certain performance criteria. In these circumstances, revenue is recognized when the foregoing conditions are met. We record revenue net of any taxes collected from customers and subsequently remitted to governmental authorities. Any payments received in advance of the performance of services or delivery of the product are recorded as deferred revenue until such time as the services are performed or the product is delivered. Costs incurred for search engine marketing solutions payable to the engine host and postage costs of mailings are billed to our clients and are not directly reflected in our revenue.

Revenue from agency and digital services, direct mail, logistics, fulfillment and contact center is recognized when the work is performed. Fees for these services are determined by the terms set forth in each contract. These fees are typically a set fixed price or rate by transaction occurrence, service provided, time spent, or product delivered.

For arrangements requiring design and build of a database, revenue is not recognized until client acceptance occurs. Up-front fees billed during the setup phase for these arrangements are deferred and direct build costs are capitalized. Pricing for these types of arrangements is typically based on a fixed price determined in the contract. Revenue from other database marketing solutions is recognized ratably over the contractual service period. Pricing for these services is typically based on a fixed price per month or per contract.

**Fair Value of Financial Instruments**

Financial Accounting Standards Board ("FASB") Accounting Standard Codification ("ASC") 820, *Fair Value Measurements and Disclosures*, ("ASC 820") defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy that prioritizes the inputs used in valuation methodologies into three levels:

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| **Level 1**  | Quoted prices in active markets for identical assets or liabilities. |
| **Level 2** | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
| **Level 3** | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |

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Because of their maturities and/or variable interest rates, certain financial instruments have fair values approximating their carrying values. These instruments include cash and cash equivalents and restricted cash, accounts receivable, trade payables, and debt. The fair value of the assets in our funded pension plan is discussed in Note H, *Employee Benefit Plans.*

**Leases**

We determine if an arrangement is a lease at its inception. Operating and finance leases are included in the lease right-of-use ("ROU") assets and in the current portion and long-term portion of lease liabilities on our condensed consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of each lease based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date of each lease to determine the present value of lease payments. The operating lease ROU assets also include any lease payments made and exclude lease incentives. Our lease terms may include options to extend or terminate the lease, which are included in the lease ROU assets when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We have lease

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agreements with lease and non-lease components, which are generally accounted for separately. For certain real estate leases, we account for the lease and non-lease components as a single lease component.

**<u>Note B - Recent Accounting Pronouncements</u>**

***<u>Recent Accounting Guidance Not Yet Adopted</u>***

In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09, which requires enhanced income tax disclosures, including disaggregation of information in the rate reconciliation table and disaggregated information related to income taxes paid. The amendments in ASU 2023-09 are effective for the Company beginning with the upcoming fiscal year ending December 31, 2025. The Company is currently evaluating the impact that this update will have on its disclosures in the consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40). The ASU requires entities to disclose the disaggregated information for specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within the relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of what constitutes selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is also permitted. Upon adoption, this ASU will likely require additional disclosures to be included in our consolidated financial statements. We are currently evaluating the provisions of this ASU.

In July 2025, the FASB issued ASU 2025-05, which amends ASC 326-20 to provide a practical expedient (for all entities) relating to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact that this ASU will have on our consolidated financial statements.

No other new accounting pronouncements recently adopted or issued had or are expected to have a material impact on the condensed consolidated financial statements.

**<u>Note C - Revenue from Contracts with Customers</u>**

Our contracts with customers state the terms of sale, including the description, quantity, and price of the product sold or service provided. Payment terms can vary by contract, but the period between invoicing and when payment is due is not significant. The Company's contracts with its customers generally do not include rights of return or a significant financing component.

<u>Disaggregation of Revenue</u> 

We disaggregate revenue by three key revenue streams which are aligned with our reportable segments. The nature of the services offered by each key revenue stream is different. The following table summarizes revenue from contracts with customers for the three and nine months ended September 30, 2025 and 2024 by our three reportable segments:

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| | | | | |
|:---|:---|:---|:---|:---|
| | Three months ended September 30, | Three months ended September 30, | Nine months ended September 30, | Nine months ended September 30, |
| *In thousands* | 2025 | 2024 | 2025 | 2024 |
| Marketing Services | $8826 | $13255 | $26269 | $38990 |
| Customer Care | 11553 | 13068 | 36400 | 37894 |
| Fulfillment & Logistics Services | 19141 | 21307 | 57043 | 61229 |
| &nbsp;&nbsp;&nbsp;Total Revenues | $39520 | $47630 | $119712 | $138113 |

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During the three and nine months ended September 30, 2025 and 2024, the Company recognized revenue of $1.1 million and $4.8 million, $2.8 million and $14.6 million, respectively, from performance obligations satisfied at a point in time. The remaining revenue recognized in both 2025 and 2024 was recognized over time. Our contracts with customers may consist of multiple performance obligations. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price ("SSP") basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct good or service that forms part of a single performance obligation. For most performance obligations, we determine SSP based on the price at which the performance obligation is sold separately. Although uncommon, if the SSP is not observable through past transactions, we estimate the SSP taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. Further discussion of other performance obligations in each of our major revenue streams follows:

*Marketing Services*

Our Marketing Services segment delivers strategic planning, data strategy, performance analytics, creative development and execution, technology enablement, marketing automation, and database management. We create relevancy by leveraging data, insight, and our extensive experience in leading clients as they engage their customers through digital, traditional, and emerging channels. The customer can choose other services to supplement and support their own in-house sales team. These services may range from leveraging data for lead generation, and outsourcing the design and testing of sales play, to full hiring and managing of a dedicated internal sales team. With these services, we help clients build deep customer relationships, create connected customer experiences, and optimize each and every customer touch point in order to deliver desired business outcomes.

Most marketing services performance obligations are satisfied over time and often offered on a per project basis. We have concluded that the best approach to measure the progress toward completion of the project-based performance obligations is the input method, which is based on either the costs or labor hours incurred to date depending upon whether costs or labor hours more accurately depict the transfer of value to the customer.

Our database solutions are built around centralized marketing databases with services rendered to build custom databases, database hosting services, customer or target marketing lists and data processing services.

These performance obligations, including services rendered to build a custom database, database hosting services, customer or target marketing lists and data processing services, may be satisfied over time or at a point in time. We provide software as a service ("SaaS") solutions to host data for customers and have concluded that these solutions are stand-ready obligations to be recognized over time on a monthly basis. Our promise to provide certain data related services meets the over-time recognition criteria because our services do not create an asset with an alternative use, and we have an enforceable right to payment. For performance obligations recognized over time, we choose either the input (i.e., labor hour) or output method (i.e., number of customer records) to measure the progress toward completion depending on the nature of the services provided. Some of our other data-related services do not meet the over-time criteria and are therefore, recognized at a point-in-time, typically upon the delivery of a specific deliverable.

Our contracts may include outsourced print production work for our clients. These contracts may include a promise to purchase postage on behalf of our clients. In such cases, we have determined we are an agent, rather than principal and therefore recognize net consideration as revenue.

*Customer Care* 

We deliver customer care services in the United States, Asia, and Europe to provide advanced solutions such as voice, SMS/chat, email, integrated voice response, web self-service, social cloud monitoring, and analytics.

Performance obligations are stand-ready obligations and are satisfied over time. With regard to account management and SaaS, we use a time-elapsed output method to recognize revenue. For performance obligations where we charge customers a transaction-based fee, we use the output method based on transaction quantities. In most cases, our contracts provide us the right to invoice for services provided, therefore, we generally use the "as invoiced" practical expedient to recognize revenue associated with these performance obligations unless significant discounts are offered in a contract and prices for services do not represent their SSPs.

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*Fulfillment & Logistics Services*

Our services, delivered internally and with our partners, include printing, lettershop, advanced mail optimization (including commingling services), logistics and transportation optimization, monitoring and tracking, to support traditional and specialized mailings. Our print and fulfillment centers in Massachusetts and Kansas provide custom kitting services, print on demand, product recalls, trade marketing fulfillment, ecommerce product fulfillment, sampling programs, and freight optimization, thereby allowing our customers to distribute literature and other marketing materials.

Most performance obligations offered within this revenue stream are satisfied over time and utilize the input or output method, depending on the nature of the service, to measure progress toward satisfying the performance obligation. For performance obligations where we charge customers a transaction-based fee, we utilize the output method based on the quantities fulfilled. Services provided through our fulfillment centers are typically priced at a per transaction basis and our contracts provide us the right to invoice for services provided and reflects the value to the customer of the services transferred to date. In most cases, we use the "as invoiced" practical expedient to recognize revenue associated with these performance obligations unless significant discounts are offered in a contract and prices for services do not represent their standalone selling prices. Our direct mail business contracts may have included a promise to purchase postage on behalf of our clients; in such cases, we have determined we are an agent, rather than principal and therefore recognize net consideration as revenue.

<u>Transaction Price Allocated to Future Performance Obligations</u> 

We have elected to apply certain optional exemptions that limit the disclosure requirements over remaining performance obligations at period end to exclude the performance obligations that have an original expected duration of one year or less, transactions using the "as invoiced" practical expedient, or when a performance obligation is a series and we have allocated the variable consideration directly to the services performed. As of September 30, 2025, we had no transaction prices allocated to unsatisfied or partially satisfied performance obligations.

<u>Contract Balances</u>

We record a unbilled accounts receivable when revenue is recognized prior to invoicing when we have an unconditional right to consideration (only the passage of time is required before payment of that consideration is due) and a contract asset when the right to payment is conditional upon our future performance such as delivery of an additional good or service (e.g. customer contract requires customer's final acceptance of custom database solution or the delivery of a final marketing strategy delivery presentation before customer payment is required). If invoicing occurs prior to revenue recognition, the unearned revenue is presented on our Condensed Consolidated Balance Sheet as a contract liability, referred to as deferred revenue.

The following table summarizes our contract balances as of September 30, 2025 and December 31, 2024:

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|:---|:---|:---|
| *In thousands* | **September 30, 2025** | **December 31, 2024** |
| Unbilled accounts receivable | 6991 | 7851 |
| Contract assets | 295 | 364 |
| Deferred revenue and customer advances | (2458) | (1589) |
| Deferred revenue, included in other long-term liabilities | (33) | (182) |

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Revenue recognized during the nine months ended September 30, 2025 from amounts included in deferred revenue at the beginning of the period was approximately $1.3 million. Revenue recognized during the nine months ended September 30, 2024 from amounts included in deferred revenue at the beginning of the period was approximately $2.9 million.

<u>Costs to Obtain and Fulfill a Contract</u>

We recognize an asset for the direct costs incurred to obtain and fulfill our contracts with customers to the extent that we expect to recover these costs and if the benefit is longer than one year. These costs are amortized to expense over the expected period of the benefit in a manner that is consistent with the transfer of the related goods or services to which the asset relates. We impair the asset when recoverability is not anticipated. We capitalized a portion of commission expense, implementation and other costs that represent the cost to obtain a contract. The remaining unamortized contract costs were

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$0.3 million and $0.2 million as of September 30, 2025 and December 31, 2024, respectively. They are included in other current assets and other assets on our balance sheet. For the periods presented, no impairment was recognized.

**<u>Note D - Leases</u>**

We have operating and finance leases for corporate and business offices, service facilities, call centers and certain equipment. Leases with an initial term of 12 months or less are generally not recorded on the balance sheet, unless the arrangement includes an option to purchase the underlying asset, or an option to renew the arrangement, that we are reasonably certain to exercise ("short-term leases"). Our leases have remaining lease terms of one to seven years , some of which may include options to extend the leases for up to an additional five years.

As of September 30, 2025, assets recorded under finance and operating leases were approximately $0.7 million and $19.1 million, respectively, and accumulated amortization associated with finance leases was $0.2 million. As of December 31, 2024, assets recorded under finance and operating leases were approximately $0.8 million and $21.7 million, respectively, and accumulated amortization associated with finance leases was $0.1 million. Operating lease right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The discount rate used to determine the commencement date present value of lease payment is the interest rate implicit in the lease, or when that is not readily determinable, we utilize our incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received.

There was no impairment of leases during the three and nine months ended September 30, 2025 and 2024.

The following table presents supplemental balance sheet information related to our financing and operating leases:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| *In thousands* | **As of September 30, 2025** | **As of September 30, 2025** | **As of September 30, 2025** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
|  | Operating Leases | Finance Leases | **Total** | Operating Leases | Finance Leases | **Total** |
| Right-of-use Assets | $19078 | $650 | $19728 | $21678 | $782 | $22460 |
| Liabilities |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current portion of lease liabilities | 3356 | 164 | 3520 | 3578 | 158 | 3736 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term lease liabilities | 17737 | 503 | 18240 | 20235 | 625 | 20860 |
| Total Lease Liabilities | $21093 | $667 | $21760 | $23813 | $783 | $24596 |

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For the three and nine months ended September 30, 2025 and 2024, the components of lease expense were as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended September 30,** | **Three months ended September 30,** | **Nine months ended September 30,** | **Nine months ended September 30,** |
|<br>*In thousands* | **2025** | **2024** | **2025** | **2024** |
| Operating lease cost | $1257 | $1314 | $3781 | $3996 |
| Finance lease cost: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of right-of-use assets | 43 | 30 | 131 | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest on lease liabilities | 13 | 9 | 42 | 17 |
| Total Finance lease cost | 56 | 39 | 173 | 78 |
| Variable lease cost | 373 | 412 | 1150 | 1443 |
| Sublease income |  | (53) |  | (368) |
| Total lease cost, net | $1686 | $1712 | $5104 | $5149 |

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Other information related to leases was as follows:

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| | | |
|:---|:---|:---|
| *In thousands* | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2024** |
| **Supplemental Cash Flows Information** |  |  |
| Cash paid for amounts included in the measurement of lease liabilities: | Cash paid for amounts included in the measurement of lease liabilities: | Cash paid for amounts included in the measurement of lease liabilities: |
| Operating cash flows from operating leases | $3926 | $8464 |
| Operating cash flows from finance leases | 39 | 15 |
| Financing cash flows from finance leases | 118 | 79 |
| Weighted Average Remaining Lease term |  |  |
| Operating leases | 5.8 | 6.6 |
| Finance leases | 3.8 | 4.5 |
| Weighted Average Discount Rate |  |  |
| Operating leases | 5.78% | 5.73% |
| Finance leases | 7.77% | 8.15% |

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The maturities of the Company's finance and operating lease liabilities as of September 30, 2025 are as follows:

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| | | |
|:---|:---|:---|
| *In thousands* | **Operating Leases** | **Finance Leases** |
| **Year Ending December 31,** |  |  |
| Remainder of 2025 | $1280 | $52 |
| 2026 | 4175 | 207 |
| 2027 | 4162 | 206 |
| 2028 | 4117 | 206 |
| 2029 | 4149 | 98 |
| 2030 and beyond | 7094 |  |
| Total future minimum lease payments | 24977 | 769 |
| Less: imputed interest | 3884 | 102 |
| Total lease liabilities | $21093 | $667 |

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**<u>Note E - Share Repurchase Program</u>**

On May 2, 2023, the Board of Directors of Harte Hanks approved a share repurchase program to maximize shareholder value with authorization to repurchase $6.5 million of the Company's Common Stock. As of September 30, 2025, the share repurchase program authorization availability was $4.1 million. In the three and nine months ended September 30, 2025 and 2024, the Company repurchased zero shares of common stock.

**<u>Note F — Debt - Credit Facility</u>**

On December 21, 2021, the Company entered into a three-year, $25.0 million asset-based revolving credit facility (the "Credit Facility") with Texas Capital Bank ("TCB"). The Company's obligations under the Credit Facility are guaranteed on a joint and several basis by the Company's material subsidiaries (the "Guarantors"). The Credit Facility is secured by substantially all of the assets of the Company and the Guarantors pursuant to a Pledge and Security Agreement, dated as of December 21, 2021, among the Company, TCB and the other Guarantors party thereto (the "Security Agreement"). On December 29, 2023, the Company extended the maturity date for the Credit Facility by a period of six months to June 24, 2025. The extension was executed with substantially similar terms and conditions as the original Credit Facility. On June 24, 2025, the Company entered into a second amendment to the Credit Facility (the "Second Amendment") with TCB which extended the maturity date for the Credit Facility by a period of three years to June 30, 2028. The Second Amendment also includes an accordion feature that allows the Company to seek up to a $10.0 million increase in commitments under the credit line, subject to TCB approval.

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The Credit Facility provides for loans up to the lesser of (a) $25.0 million, and (b) the amount available under a "borrowing base" calculated primarily by reference to the Company's cash and cash equivalents and accounts receivables. The Credit Facility allows the Company to use up to $3.0 million of its borrowing capacity to issue letters of credit.

The loans under the Credit Facility accrue interest at a variable rate equal to the Secured Overnight Financing Rate (SOFR) plus a margin of 2.25% per annum. The interest rate was 6.49% as of September 30, 2025. The outstanding amounts advanced under the Credit Facility are due and payable in full on June 30, 2028. As of September 30, 2025 and December 31, 2024, we had letters of credit outstanding in the amount of $1.0 million and $1.0 million, respectively. No amounts were drawn against these letters of credit at September 30, 2025. These letters of credit exist to support insurance programs relating to worker's compensation and general liability. Unused commitment balances accrue fees at a rate of 0.25%.

As of September 30, 2025 and December 31, 2024, we had no borrowings outstanding under the Credit Facility. After the letters of credit on September 30, 2025, we had the ability to borrow up to $24.0 million under the Credit Facility.

**<u>Note G — Stock-Based Compensation</u>**

We maintain stock incentive plans for the benefit of certain officers, directors, and employees. Our stock incentive plans provide for the ability to issue stock options, cash stock appreciation rights, performance stock units, phantom stock units and cash performance stock units. Our cash stock appreciation rights, phantom stock units and cash performance stock units settle solely in cash and are treated as the current liability, which are adjusted each reporting period based on changes in our stock price.

Compensation expense for stock-based awards is based on the fair values of the awards on the date of grant and is recognized on a straight-line basis over the vesting period of the entire award in the "Labor" line of the Condensed Consolidated Statements of Comprehensive (Loss) Income. We recognized $0.2 million and $0.4 million of stock-based compensation expense during the three months ended September 30, 2025 and 2024, respectively. We recognized $0.3 million and $1.7 million of stock-based compensation expense during the nine months ended September 30, 2025 and 2024, respectively.

**<u>Note H — Employee Benefit Plans</u>**

Prior to January 1, 1999, we provided a defined benefit pension plan for which most of our employees were eligible to participate (the "Qualified Pension Plan"). In conjunction with significant enhancements to our 401(k) plan, we elected to freeze benefits under the Qualified Pension Plan as of December 31, 1998.

In 1994, we adopted a non-qualified, unfunded, supplemental pension plan (the "Restoration Pension Plan") covering certain employees, which provides for incremental pension payments so that total pension payments equal those amounts that would have been payable from the principal pension plan were it not for limitations imposed by income tax regulation. The benefits under the Restoration Pension Plan were intended to provide benefits equivalent to our Qualified Pension Plan as if such plan had not been frozen. We elected to freeze benefits under the Restoration Pension Plan as of April 1, 2014.

At the end of 2020, the Board of Directors of the Company approved the division of the Qualified Pension Plan into two distinct plans, "Qualified Pension Plan I" and "Qualified Pension Plan II." The assets and liabilities of the Qualified Pension Plan that were attributable to certain participants in Qualified Pension Plan II were spun off and transferred into Qualified Pension Plan II effective as of the end of December 31, 2022, in accordance with Internal Revenue Code section 414(I) and ERISA Section 4044. In 2024, Qualified Pension Plan I was terminated with the transfer of our obligations pursuant to this pension plan to a third-party provider.

The overfunded or underfunded status of our defined benefit post-retirement plans is recorded as an asset or liability on our condensed consolidated balance sheets. The funded status is measured as the difference between the fair value of plan assets and the projected benefit obligation. Periodic changes in the funded status are recognized through other comprehensive income in the Condensed Consolidated Statements of Comprehensive Income (Loss). We currently measure the funded status of our defined benefit plans as of December 31, the date of our year-end Consolidated Balance Sheets.

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Net pension cost for both plans included the following components:

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|:---|:---|:---|:---|:---|
| | **Three Months Ended September 30,** | **Three Months Ended September 30,** | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|<br>*In thousands* | **2025** | **2024** | **2025** | **2024** |
| Interest cost | $740 | $702 | $2218 | $4330 |
| Expected return on plan assets | (537) | (470) | (1611) | (3163) |
| Recognized actuarial loss | 99 | 137 | 296 | 1420 |
| Net periodic benefit cost | $302 | $369 | $903 | $2587 |

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Based on current estimates, we are required to make a $2.2 million contribution to the qualified Pension Plan in 2025. We made $1.6 million of such $2.2 million aggregate contribution in the nine months ended September 30, 2025.

We are not required to make, and do not intend to make, any contributions to our Restoration Pension Plan in 2025 other than to the extent needed to cover benefit payments. We made benefit payments under this supplemental plan of $1.4 million in the nine months ended September 30, 2025 and 2024.

**<u>Note I - Income Taxes</u>**

The income tax provision was $2.6 million and $0.9 million for the three months ended September 30, 2025 and 2024, respectively. The provision for income taxes resulted in an effective tax rate of 816.6% for the three months ended September 30, 2025 and 85.9% for the three months ended September 30, 2024. The effective income tax rate for the three months ended September 30, 2025 and 2024 differs from the federal statutory rate of 21%, primarily due to the U.S. state income taxes and the impact of income earned in foreign jurisdictions comparative to the level of income in total.

The income tax provision was $2.3 million and income tax benefit was $8.2 million for the nine months ended September 30, 2025 and 2024, respectively. The provision for income taxes resulted in an effective tax rate of (329.8)% for the nine months ended September 30, 2025 and 22.8% for the nine months ended September 30, 2024. The effective income tax rate for the nine months ended September 30, 2025 and 2024 differs from the federal statutory rate of 21%, primarily due to the U.S. state income taxes and the impact of income earned in foreign jurisdictions comparative to the level of income in total.

Harte Hanks, or one of our subsidiaries file income tax returns in the U.S. federal, U.S. state, and foreign jurisdictions. For U.S. state returns, we are no longer subject to tax examinations for years prior to 2022. The Company has reviewed all of its tax positions in order to determine whether all, a portion, or none of any related tax benefit should be recognized and has not identified or recorded any ASC 740-10 reserve.

We have elected to classify any interest expense and penalties related to income taxes within income tax expense in our Condensed Consolidated Statements of Comprehensive (Loss) Income. We did not have a significant amount of interest or penalties accrued at September 30, 2025 or December 31, 2024.

**<u>Note J - Earnings (Loss) Per Share</u>**

Basic income (loss) per share ("EPS") is calculated using income (loss) available to common stockholders, divided by the weighted average number of shares outstanding during the period. Diluted earnings per share is calculated using income available to common stockholders divided by the weighted average number of shares of common stock including both shares outstanding and shares potentially issuable in connection with restricted common stock awards and stock options under our stock incentive plans.

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Reconciliations of basic and diluted EPS were as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended September 30,** | **Three months ended September 30,** | **Nine months ended September 30,** | **Nine months ended September 30,** |
|<br>*In thousands, except per share amounts* | **2025** | **2024** | **2025** | **2024** |
| Numerator: |  |  |  |  |
| Net (loss) income | $(2286) | $142 | $(3013) | $(27863) |
| Denominator: |  |  |  |  |
| Basic EPS denominator: weighted-average common shares outstanding | 7415 | 7324 | 7386 | 7273 |
| Diluted EPS denominator | 7415 | 7398 | 7386 | 7273 |
| Basic (loss) Income per Common Share | $(0.31) | $0.02 | $(0.41) | $(3.83) |
| Diluted (loss) income per Common Share | $(0.31) | $0.02 | $(0.41) | $(3.83) |

---

For the three months ended September 30, 2025 and 2024, respectively, the following shares have been excluded from the calculation of shares used in the diluted EPS calculation: 259,338 and 354,239 shares of anti-dilutive market price options; 195,002 and 13,567 of anti-dilutive unvested restricted shares.

For the nine months ended September 30, 2025 and 2024, respectively, the following shares have been excluded from the calculation of shares used in the diluted EPS calculation: 239,373 and 335,431 shares of anti-dilutive market price options; 30,633 and 23,114 of anti-dilutive unvested restricted shares.

**<u>Note K — Comprehensive Income (Loss)</u>**

Comprehensive income (loss) for a period encompasses net income (loss) and all other changes in equity other than from transactions with our stockholders.

Changes in accumulated other comprehensive loss by component were as follows:

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| | | | |
|:---|:---|:---|:---|
| *In thousands* | **Defined Benefit<br>Pension Items** | **Foreign Currency<br>Items** | **Total** |
| Balance at December 31, 2024 | $(10183) | $(3414) | $(13597) |
| Other comprehensive loss, net of tax, before reclassifications |  | (172) | (172) |
| Amounts reclassified from accumulated other comprehensive income, net of tax, to other, net, on the condensed consolidated statements of comprehensive (loss) income | 282 |  | 282 |
| Net current period other comprehensive income (loss), net of tax | 282 | (172) | 110 |
| Balance at September 30, 2025 | $(9901) | $(3586) | $(13487) |

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| | | | |
|:---|:---|:---|:---|
| *In thousands* | **Defined Benefit Pension Items** | **Foreign Currency Items** | **Total** |
| Balance at December 31, 2023 | $(42456) | $(1634) | $(44090) |
| Other comprehensive loss, net of tax, before reclassifications |  | (1945) | (1945) |
| Amounts reclassified from accumulated other comprehensive income, net of tax, to other, net, on the condensed consolidated statements of comprehensive (loss) income | 29626 |  | 29626 |
| Net current period other comprehensive income (loss), net of tax | 29626 | (1945) | 27681 |
| Balance at September 30, 2024 | $(12830) | $(3579) | $(16409) |

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Reclassification amounts related to the defined pension plans are included in the computation of net periodic pension benefit cost (see Note H, *Employee Benefit Plans*).

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**<u>Note L — Litigation and Contingencies</u>**

In the normal course of our business, we are obligated under some agreements to indemnify our clients as a result of third party claims that we infringe on the proprietary rights of third parties, or third party claims relating to other *ad hoc* contract obligations. The terms and duration of these commitments vary and, in some cases, may be indefinite, and some of these contractual commitments do not limit the maximum amount of future payments we could become obligated to make thereunder; accordingly, our actual aggregate maximum exposure related to these types of commitments is not reasonably estimable. Historically, we have not been obligated to make significant payments for obligations of this nature, and no liabilities have been recorded for these obligations in our consolidated financial statements.

We are also subject to various claims and legal proceedings in the ordinary course of conducting our businesses and, from time to time, we may become involved in additional claims and lawsuits incidental to our businesses. We routinely assess the likelihood of adverse judgments or outcomes to these matters, as well as ranges of probable losses; to the extent losses are reasonably estimable. Accruals are recorded for these matters to the extent that management concludes a loss is probable and the financial impact, should an adverse outcome occur, is reasonably estimable.

In the opinion of management, appropriate and adequate accruals for legal matters have been made, and management believes that the probability of a material loss beyond the amounts accrued is remote. Nevertheless, we cannot predict the impact of future developments affecting our pending or future claims and lawsuits. We expense legal costs as incurred, and all recorded legal liabilities are adjusted as required as better information becomes available to us. The factors we consider when recording an accrual for contingencies include, among others: (i) the opinions and views of our general counsel and outside legal counsel; (ii) our previous experience with similar claims; and (iii) the decision of our management as to how we intend to respond to the complaints.

**<u>Note M — Restructuring Activities</u>**

During the second half of 2023, we engaged a consulting firm to help review and analyze the structure and operations of the Company. This review included greater than 200 meetings with personnel at all levels of the firm and led to the initiation of our transformation program named "Project Elevate". The program involves the optimization and rationalization of our business resources as well as the partial reinvestment of savings into the Company's sales and marketing team, technology, and strategy. A business transformation office was established at the beginning of 2024 to manage and measure these initiatives. Reorganization cost reductions from Project Elevate during 2024 through 2026 are estimated to be $16.0 million. For the three and nine months ended September 30, 2025 and 2024, we recorded restructuring charges of $0.5 million and $0.8 million, and $1.5 million and $2.1 million, respectively.

The following table summarizes the restructuring charges which are recorded in "Restructuring Expense" in the Condensed Consolidated Statement of Comprehensive (Loss) Income.

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three months ended September 30,** | **Three months ended September 30,** | **Nine months ended September 30,** | **Nine months ended September 30,** |
| *In thousands* | **2025** | **2024** | **2025** | **2024** |
| Consulting and employee expense | $78 | $215 | $170 | $677 |
| Severance | 240 | 243 | 1031 | 1025 |
| Facility and other expenses | 220 | 378 | 324 | 414 |
| Total | $538 | $836 | $1525 | $2116 |

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The following table summarizes the changes in liabilities related to restructuring activities:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Nine months ended September 30, 2025** | **Nine months ended September 30, 2025** | **Nine months ended September 30, 2025** | **Nine months ended September 30, 2025** |
| *In thousands* | Consulting and Employee Expense | &nbsp;&nbsp;Severance | Facility, asset impairment and other expense | &nbsp;&nbsp;Total |
| Beginning balance: | $— | $110 | $— | $110 |
| Additions | 170 | 1031 | 324 | 1525 |
| Payments and adjustment | (170) | (718) | (324) | (1212) |
| Ending balance: | $— | $423 | $— | $423 |

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**<u>Note N — Related Party Transactions</u>**

In the three and nine months ended September 30, 2025, the Company recorded $0 and $0.8 million related to net recovery short-swing profit from one of the Company's shareholders under Section 16(b) of the Securities Exchange Act of 1934, as amended. The Company recognized the $1.1 million of gross related party proceeds, net of $0.3 million of tax impact, as an increase to additional paid-in capital and as cash provided by financing activities in the condensed consolidated statement of cash flows for the nine months ended September 30, 2025.

**<u>Note O — Segment Reporting</u>**

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

There are three principal financial measures reported to our President (the chief operating decision maker) for use in assessing segment performance and allocating resources. Those measures are revenue, operating income and operating income plus depreciation and amortization ("EBITDA"). Operating income for segment reporting, disclosed below, is revenues less operating costs and allocated corporate expenses. Segment operating expenses are generally directly attributed to our segments and 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 President evaluate operating segments using discrete asset information. The accounting policies of the segments are consistent with those described in Note B, *Significant Accounting Policies.* 

SEC Regulation S-K 229.10(e)1(ii)(A) defines EBITDA as earnings before interest, taxes, depreciation and amortization. EBITDA is presented to provide additional information to investors about the Company's operations on a basis consistent with the measures that the Company uses to manage its operations and evaluate its performance. Management also uses this measurement to evaluate working capital requirements. EBITDA should not be considered in isolation or as a substitute for operating income and net income prepared in accordance with U.S. GAAP or as a measure of the Company's profitability.

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The following table presents financial information by segment for the three months ended September 30, 2025:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| *In thousands* | **Marketing Services** | **Customer Care** | **Fulfillment & Logistics Services** | **Restructuring Expense** | **Unallocated Corporate** | **Total** |
| Revenue | $8826 | $11553 | $19141 | $— | $— | $39520 |
| Segment labor expense | 4524 | 7722 | 5360 |  | 2776 | 20382 |
| Other segment operating expense | 1912 | 1988 | 10682 |  | 2291 | 16873 |
| Restructuring expense |  |  |  | 538 |  | 538 |
| Contribution margin (loss) | $2390 | $1843 | $3099 | $(538) | $(5067) | $1727 |
| Overhead allocation | 633 | 747 | 754 |  | (2134) |  |
| EBITDA | $1757 | $1096 | $2345 | $(538) | $(2933) | $1727 |
| Depreciation and amortization | 222 | 59 | 655 |  | 282 | 1218 |
| Operating income (loss) | $1535 | $1037 | $1690 | $(538) | $(3215) | $509 |

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The following table presents financial information by segment for the three months ended September 30, 2024:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| *In thousands* | **Marketing Services** | **Customer Care** | **Fulfillment & Logistics Services** | **Restructuring Expense** | **Unallocated Corporate** | **Total** |
| Revenue | $13255 | $13068 | $21307 | $— | $— | $47630 |
| Segment labor expense | 6730 | 8390 | 5647 |  | 3409 | 24176 |
| Other segment operating expense | 2746 | 1605 | 13545 |  | 1785 | 19681 |
| Restructuring expense |  |  |  | 836 |  | 836 |
| Contribution margin (loss) | $3779 | $3073 | $2115 | $(836) | $(5194) | $2937 |
| Overhead allocation | 981 | 567 | 775 |  | (2323) |  |
| EBITDA | $2798 | $2506 | $1340 | $(836) | $(2871) | $2937 |
| Depreciation and amortization | 365 | 44 | 266 |  | 364 | 1039 |
| Operating income (loss) | $2433 | $2462 | $1074 | $(836) | $(3235) | $1898 |

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The following table presents financial information by segment for the nine months ended September 30, 2025:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| *In thousands* | **Marketing Services** | **Customer Care** | **Fulfillment & Logistics Services** | **Restructuring Expense** | **Unallocated Corporate** | **Total** |
| Revenue | $26269 | $36400 | $57043 | $— | $— | $119712 |
| Segment labor expense | 13470 | 23249 | 14654 |  | 8253 | 59626 |
| Other segment operating expense | 6612 | 6080 | 34550 |  | 7470 | 54712 |
| Restructuring expense |  |  |  | 1525 |  | 1525 |
| Contribution margin (loss) | $6187 | $7071 | $7839 | $(1525) | $(15723) | $3849 |
| Overhead allocation | 1996 | 2310 | 2375 |  | (6681) |  |
| EBITDA | $4191 | $4761 | $5464 | $(1525) | $(9042) | $3849 |
| Depreciation and amortization | 657 | 160 | 1675 |  | 854 | 3346 |
| Operating income (loss) | $3534 | $4601 | $3789 | $(1525) | $(9896) | $503 |

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The following table presents financial information by segment for the nine months ended September 30, 2024:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| *In thousands* | **Marketing Services** | **Customer Care** | **Fulfillment & Logistics Services** | **Restructuring Expense** | **Unallocated Corporate** | **Total** |
| Revenue | $38990 | $37894 | $61229 | $— | $— | $138113 |
| Segment labor expense | 20780 | 24547 | 14912 |  | 10104 | 70343 |
| Other segment operating expense | 8466 | 4309 | 39436 |  | 6690 | 58901 |
| Restructuring expense |  |  |  | 2116 |  | 2116 |
| Contribution margin (loss) | $9744 | $9038 | $6881 | $(2116) | $(16794) | $6753 |
| Overhead allocation | 3041 | 1761 | 2403 |  | (7205) |  |
| EBITDA | $6703 | $7277 | $4478 | $(2116) | $(9589) | $6753 |
| Depreciation and amortization | 1098 | 160 | 757 |  | 1092 | 3107 |
| Operating income (loss) | $5605 | $7117 | $3721 | $(2116) | $(10681) | $3646 |

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**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**

**<u>Cautionary Note Regarding Forward-Looking Statements</u>**

This report, including the Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"), contains "forward-looking statements" within the meaning of the federal securities laws. All such statements are qualified by this cautionary note, which is provided pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. Forward-looking statements will also be included from time to time in our other public filings, press releases, our website, and oral and written presentations by management. Statements other than historical facts are forward-looking and may be identified by words such as "may," "will," "expects," "believes," "anticipates," "plans," "estimates," "seeks," "could," "intends," or words of similar meaning. Examples include statements regarding (1) our strategies and initiatives, including actions designed to respond to market conditions and improve our performance, (2) our financial outlook for revenues, earnings (loss) per share, operating income (loss), expense related to equity-based compensation, capital resources and other financial items, if any, (3) expectations for our businesses and for the industries in which we operate, including the impact of economic conditions of the markets we serve on the marketing expenditures and activities of our clients and prospects, (4) competitive factors, (5) acquisition and development plans, (6) expectations regarding legal proceedings and other contingent liabilities, (7) other statements regarding future events, conditions, or outcomes.

These forward-looking statements are based on current information, expectations, and estimates and involve risks, uncertainties, assumptions, and other factors that are difficult to predict and that could cause actual results to vary materially from what is expressed in or indicated by the forward-looking statements. In that event, our business, financial condition, results of operations, or liquidity could be materially adversely affected and investors in our securities could lose part or all of their investments. A discussion of some of these risks, uncertainties, assumptions, and other factors can be found in our filings with the SEC, including the factors discussed under "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "2024 10-K"), "Part II - Item 1A. Risk Factors" in this Quarterly Report, and in our other reports filed or furnished with the SEC. The forward-looking statements included in this report and those included in our other public filings, press releases, our website, and oral and written presentations by management are made only as of the respective dates thereof, and we undertake no obligation to update publicly any forward-looking statement in this report or in other documents, our website, or oral statements for any reason, even if new information becomes available or other events occur in the future, except as required by law.

**<u>Overview</u>**

The following MD&A section is intended to help the reader understand the results of operations and financial condition of Harte Hanks, Inc. including any material changes in the Company's financial condition and results of operations since December 31, 2024, and as compared with the three and nine months ended September 30, 2025. This section is provided as a supplement to, and should be read in conjunction with, our Condensed Consolidated Financial Statements and the accompanying notes included herein as well as our 2024 10-K. Our 2024 10-K contains a discussion of other matters not included herein, such as disclosures regarding critical accounting policies and estimates, and contractual obligations. See Note A, *Overview and Significant Accounting Polici*es, in the Notes to Condensed Consolidated Financial Statements for further information.

Harte Hanks, Inc. is a leading global customer experience company operating in three reportable segments: Marketing Services, Customer Care, and Fulfillment & Logistics Services. Our mission is to partner with clients to provide them with a robust customer-experience, or CX, strategy, data-driven analytics and actionable insights combined with seamless program execution to better understand, attract, and engage their customers. Our services include strategic planning, data strategy, performance analytics, creative development and execution; technology enablement; marketing automation; B2B and B2C e-commerce; cross-channel customer care; and product, print, and mail fulfillment.

We are affected by the general, national, and international economic and business conditions in the markets where we and our customers operate. Marketing budgets are largely discretionary in nature and, as a consequence, are easier for our clients to reduce in the short-term than other expenses. Our revenues are also affected by the economic fundamentals of each industry that we serve, the expansion of alternative channels, various market factors, including the demand for services by our clients, the financial condition of and budgets available to our clients, and regulatory factors, among other factors. Due to the recent increases in inflation and interest rates throughout the globe, as well as the ongoing armed conflicts in multiple regions, there is continued uncertainty and volatility in the global economy. We remain committed to

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executing our multichannel strategy while also continuing to adjust our cost structure to appropriately reflect our operations and outlook.

Management closely monitors inflation and wage pressure in the market and their potential impact on our business. In recent periods, the U.S. government has imposed tariffs on certain goods imported from countries including China. While tariffs will not have a direct impact on our business, they could negatively impact to our customers and increase inflation. Any adverse economic impact on our clients, could in turn, negatively impact our business.

**<u>Recent Developments</u>**

***Project Elevate***

Our management team continuously reviews and adjusts our cost structure and operating footprint to optimize our operations, and invest in improved technology. During the second half of 2023, we engaged a consulting firm to help review and analyze the structure and operations of the Company. This review included greater than 200 meetings with personnel at all levels of the firm and led to the initiation of our transformation program named "Project Elevate". The program involves the optimization and rationalization of our business resources as well as the partial reinvestment of savings into the Company's sales and marketing team, technology, and strategy. A business transformation office was established at the beginning of 2024 to manage and measure these initiatives. We estimate reorganization savings from Project Elevate executed from 2024 to 2026 will be approximately $16.0 million.

For the three and nine months ended September 30, 2025, we recorded restructuring charges related to this business transformation effort of $0.5 million and $1.5 million, respectively. For the year ended December 31, 2024, we incurred total restructuring charges of $2.4 million.

***Changes in Segment Reporting***

Starting in the fourth quarter of 2024, to improve our strategic posture in terms of go-to-market approach and cost structure, we merged the Sales Services business into the Marketing Services segment. The segment information for 2024 presented below was realigned to reflect such changes.

**<u>Results of Operations</u>**

Operating results were as follows:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three months ended September 30,** | **Three months ended September 30,** | **Three months ended September 30,** | **Nine months ended September 30,** | **Nine months ended September 30,** | **Nine months ended September 30,** |
| *In thousands, except per share amounts* | **2025** | **% Change** | **2024** | **2025** | **% Change** | **2024** |
| Revenue | $39520 | -17.0% | $47630 | $119712 | -13.3% | $138113 |
| Operating expenses | 39011 | -14.7% | 45732 | 119209 | -11.3% | 134467 |
| Operating income | $509 | -73.2% | $1898 | $503 | -86.2% | $3646 |
| Operating margin | 1.3% | -67.7% | 4.0% | 0.4% | -84.1% | 2.6% |
| Other expenses, net | 190 |  | 888 | 1204 |  | 39716 |
| Income tax expense (benefit) | 2605 |  | 868 | 2312 |  | (8207) |
| Net (loss) income | $(2286) |  | $142 | $(3013) |  | $(27863) |
| Basic and diluted EPS | $(0.31) |  | $0.02 | $(0.41) |  | $(3.83) |

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***<u>Consolidated Results</u>***

<u>Three months ended September 30, 2025 vs. Three months ended September 30, 2024</u>

*Revenues*

Revenue decreased $8.1 million, or 17.0%, to $39.5 million in the three months ended September 30, 2025, compared to the three months ended September 30, 2024 due to a reduction in revenue in all three segments. Those decreases were the result of fluctuations in timing of high volume periods associated with ongoing programs, and the conclusion of relationships with some customers.

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*Operating Expenses*

Operating expenses were $39.0 million in the three months ended September 30, 2025, a decrease of $6.7 million, or 14.7%, compared to $45.7 million in the three months ended September 30, 2024.

Labor expense decreased $3.8 million, or 15.7%, to $20.4 million due to lower labor expense associated with lower revenue, and cost controls related to overhead labor.

Production and Distribution expenses decreased $2.7 million, or 18.7%, primarily to $11.7 million due to lower transportation cost associated with the lower logistics revenue.

Advertising, Selling, General and Administrative expenses decreased $0.1 million, or 2.1%, to $5.1 million primarily due to lower professional service expenses.

The largest components of our operating expenses are labor, transportation expenses and outsourced costs. Each of these costs is, at least in part, variable and tends to fluctuate in line with revenues and the demand for our services. Postage costs for mailings are borne by our clients and are not directly reflected in our revenues or expenses.

*Other expenses, net*

Other expenses, net, for the three months ended September 30, 2025 were $0.2 million compared to $0.9 million, in the prior year quarter. The $0.7 million decrease in other expenses, net, was mainly due to the lower pension expense and changes in foreign currency gain and loss account, as compared to the prior year quarter.

*Income Taxes*

The income tax benefit of $2.6 million in the third quarter of 2025 represents an increase in income tax provision of $1.7 million when compared to the third quarter of 2024. Our effective tax rate was 816.6% for the third quarter of 2025, an increase of 730.7% when compared to the third quarter of 2024. The effective income tax rate differs from the federal statutory rate of 21%, primarily due to the U.S. state income taxes and income earned in foreign jurisdictions comparative to the level of income in total.

<u>Nine months ended</u> <u>September 30, 2025 vs. Nine months ended September 30, 2024</u>

*Revenues*

Revenue decreased $18.4 million, or 13.3%, to $119.7 million, in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024 due to decreased revenue in all three segments. The reduction in revenue mainly relates to the conclusion of programs, and the ordinary turnover of customers at a higher rate than initiation of new programs and revenues from new customers.

*Operating Expenses*

Operating expenses were $119.2 million in the nine months ended September 30, 2025, a decrease of $15.3 million, or 11.3%, compared to $134.5 million in the nine months ended September 30, 2024. Cost controls to match revenues and Project Elevate led to the decline in operating expenses. Management expects further cost reductions in excess of new costs attributable to revenue growth.

Labor expense decreased $10.7 million, or 15.2%, to $59.6 million primarily due to lower direct labor costs as workforce was adjusted with the reduction in revenue.

Production and Distribution expenses decreased $3.7 million, or 8.8%, to $38.2 million, primarily due to lower transportation costs associated with lower logistics services revenue as compared to the prior year period.

Advertising, Selling, General and Administrative expenses decreased $0.5 million, or 3.0%, to $16.5 million primarily due to lower sales and marketing expenses.

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The largest components of our operating expenses are labor, transportation expenses and outsourced costs. Each of these costs is, at least in part, variable and tends to fluctuate in line with revenues and the demand for our services. Postage costs for mailings are borne by our clients and are not directly reflected in our revenues or expenses.

*Other expenses, net*

Other expenses, net, for the nine months ended September 30, 2025 were $1.2 million compared to $39.7 million, in the prior year period. The other expenses, net for the nine months ended September 30, 2024 included $37.5 million in charges resulting from the pension termination expenses.

*Income Taxes*

The income tax provision of $2.3 million in the nine months ended September 30, 2025 represents an increase in income tax expense of $10.5 million when compared to the same period of 2024. Our effective tax rate was (329.8)% for the nine months ended September 30, 2025, a decrease of 352.6% when compared to the same period of 2024. The effective tax rate differs from the federal statutory rate of 21.0%, primarily due to the income earned in foreign jurisdictions compared to the domestic earnings. This imbalance created the higher tax provision when compared to the level of income in total.

**One Big Beautiful Bill Act**

On July 4, 2025, the President of the United States signed H.R. 1, the "One Big Beautiful Bill Act (OBBBA)," into law. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic R&D expenditures, reinstatement of 100% of bonus depreciation, and more favorable rules for determining the limitation on business interest expense.

The Act also includes certain changes to the US taxation of foreign activity, including changes to foreign tax credits, amongst other changes. These changes are generally effective for tax years beginning after December 31, 2025, and therefore do not impact the current quarter's tax provision. While these changes are not yet effective, the Company has begun assessing the potential impact on its future effective tax rate, deferred tax assets and liabilities, and global tax planning strategies. Based on preliminary modeling, the Company anticipates that the elimination of the Net Deemed Tangible Income Return (NDTIR) may slightly increase future U.S. tax liability on foreign earnings, partially offset by the increased foreign tax credit.

The Company will continue to monitor regulatory guidance and assess the impact of these changes in future reporting periods. No adjustments to current or deferred taxes have been recorded in the third quarter of 2025 related to the OBBBA.

*Segment Results*

The following is a discussion and analysis of the results of our reportable segments for the three and nine months ended September 30, 2025 and 2024. There are three principal financial measures reported to our President (the chief operating decision maker) for use in assessing segment performance and allocating resources. Those measures are revenue and operating income and operating income plus depreciation and amortization ("EBITDA"). For additional information, see Note O, *Segment Reporting*, in the Notes to Condensed Consolidated Financial Statements.

**Marketing Services:**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three months ended September 30,** | **Three months ended September 30,** | **Three months ended September 30,** | **Nine months ended September 30,** | **Nine months ended September 30,** | **Nine months ended September 30,** |
|<br>*In thousands* | **2025** | **% Change** | **2024** | **2025** | **% Change** | **2024** |
| Revenue | $8826 | (33.4)% | $13255 | $26269 | (32.6)% | $38990 |
| EBITDA | 1757 | (37.2)% | 2798 | 4191 | (37.5)% | 6703 |
| Operating income | 1535 | (36.9)% | 2433 | 3534 | (36.9)% | 5605 |

---

<u>Three months ended September 30, 2025 vs. Three months ended September 30, 2024</u>

Marketing Services segment revenue decreased $4.4 million, or 33.4%, due to customer turnover and the decline of client spending in excess of new business. Operating income for the three months ended September 30, 2025 decreased

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<u>[**Table of Contents**](#ic6355800f70e4de3bf1b728bec93e092_7)</u>

$0.9 million, or 36.9% from the prior year quarter. Labor and other costs were reduced as programs and projects ended with customers resulting in lower revenue .

<u>Nine months ended September 30, 2025 vs. Nine months ended September 30, 2024</u>

Marketing Services segment revenue decreased $12.7 million, or 32.6%, due to customer turnover and additional client spending reductions. This segment is our most economically sensitive segment with regard to changes in our clients' marketing strategy. Operating income for the nine months ended September 30, 2025 decreased $2.1 million , or 36.9% from the prior year period primarily due to the reduced revenue.

**Customer Care:**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three months ended September 30,** | **Three months ended September 30,** | **Three months ended September 30,** | **Nine months ended September 30,** | **Nine months ended September 30,** | **Nine months ended September 30,** |
|<br>*In thousands* | **2025** | **% Change** | **2024** | **2025** | **% Change** | **2024** |
| Revenue | $11553 | (11.6)% | $13068 | $36400 | (3.9)% | $37894 |
| EBITDA | 1096 | (56.3)% | 2506 | 4761 | (34.6)% | 7277 |
| Operating income | 1037 | (57.9)% | 2462 | 4601 | (35.4)% | 7117 |

---

<u>Three months ended September 30, 2025 vs. Three months ended September 30, 2024</u>

Customer Care segment revenue decreased $1.5 million, or 11.6%, primarily due to the timing of fluctuations with specific programs. Operating income was $1.0 million for the three months ended September 30, 2025, compared to operating income of $2.5 million for the three months ended September 30, 2024. The $1.4 million decrease in operating income was primarily due to lower labor costs from lower revenue.

<u>Nine months ended September 30, 2025 vs. Nine months ended September 30, 2024</u>

Customer Care segment revenue decreased $1.5 million, or 3.9%, which can be impacted by one-time project-based engagements, temporary surges or declines in call volumes among retained customers due to specific programs and events. We also encounter fluctuations based on the geographic regions customers select for staff support. We are leveraging our Amazon Connect cloud-based platform to test and pilot new AI tools, and are exploring how we can augment growth by providing more technical support as clients migrate to more capable contact center platforms. Operating Income was $4.6 million for the nine months ended September 30, 2025, compared to operating income of $7.1 million for the nine months ended September 30, 2024. The decrease of $2.5 million in operating income was due to higher technology costs being slightly offset by lower labor costs.

**Fulfillment & Logistics Services:**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three months ended September 30,** | **Three months ended September 30,** | **Three months ended September 30,** | **Nine months ended September 30,** | **Nine months ended September 30,** | **Nine months ended September 30,** |
|<br>*In thousands* | **2025** | **% Change** | **2024** | **2025** | **% Change** | **2024** |
| Revenue | $19141 | (10.2)% | $21307 | $57043 | (6.8)% | $61229 |
| EBITDA | 2345 | 75.0% | 1340 | 5464 | 22.0% | 4478 |
| Operating income | 1690 | 57.4% | 1074 | 3789 | 1.8% | 3721 |

---

<u>Three months ended September 30, 2025 vs. Three months ended September 30, 2024</u>

Fulfillment & Logistics Services segment revenue decreased $2.2 million, or 10.2%, primarily due to the lower volume from the existing customers not being offset by growth in new programs and customers. Operating income increased by $0.6 million primarily due to the conclusion of a production technology investment and a shift to higher contribution margin revenue mix.

<u>Nine months ended September 30, 2025 vs. Nine months ended September 30, 2024</u>

Fulfillment & Logistics Services segment revenue decreased by $4.2 million, or 6.8%, due to lost customers and the lower volume from existing customers. Operating income increased slightly by $0.1 million, or 1.8% due to the conclusion of a production technology investment and a shift to higher contribution margin revenue mix.

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<u>[**Table of Contents**](#ic6355800f70e4de3bf1b728bec93e092_7)</u>

**<u>Liquidity and Capital Resources</u>**

*Sources and Uses of Cash*

Our cash and cash equivalent balances were $6.5 million and $9.9 million at September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025, we had the ability to borrow up to $24.0 million under our Credit Facility in addition to the existing letters of credit.

Our principal sources of liquidity are cash on hand, cash provided by operating activities, and borrowings available under our Credit Facility. Our cash is primarily used for general corporate purposes, working capital requirements, and capital expenditure. At this time, we believe that we will be able to continue to meet our liquidity requirements and fund our fixed obligations such as finance and operating leases and unfunded pension plan benefit payments and other needs for our operations in the short term and beyond. Although the Company believes that it will be able to meet its cash needs for the short and medium term, if unforeseen circumstances arise the Company may need to seek alternative sources of liquidity.

*Operating Activities*

Net cash used in the operating activities for the nine months ended September 30, 2025 was $2.5 million, compared to net cash used in operating activities of $7.0 million for the nine months ended September 30, 2024. The $4.6 million year-over-year increase in cash used in the operating activities was primarily due to $3.5 million changes in other assets and current liabilities.

*Investing Activities*

Net cash used in investing activities was $1.3 million for the nine months ended September 30, 2025, as compared to the $3.1 million used in investing activities during the same period in 2024. The $1.8 million decrease in cash used in investing activities was primarily driven by lower property, plant and equipment purchase in the nine months ended September 30, 2025.

*Financing Activities* 

Net cash provided by financing activities was $0.6 million for the nine months ended September 30, 2025, as compared to $0.3 million of net cash used in financing activities during the nine months ended September 30, 2024. The $0.9 million increase in cash provided by financing activities was primarily related to the $1.1 million of cash we received for the recovery of short-swing profit from one shareholder in the nine months ended September 30, 2025<u>. This required</u> $0.3 million tax liability offset for to this short-swing profit.

*Foreign Holdings of Cash*

Consolidated foreign holdings of cash as of September 30, 2025 and December 31, 2024 were $2.2 million and $1.5 million, respectively.

*Debt*

On December 21, 2021, the Company entered into a three-year, $25.0 million asset-based revolving credit facility (the "Credit Facility") with Texas Capital Bank ("TCB"). The Company's obligations under the Credit Facility are guaranteed on a joint and several basis by the Company's material subsidiaries (the "Guarantors"). The Credit Facility is secured by substantially all of the assets of the Company and the Guarantors pursuant to a Pledge and Security Agreement, dated as of December 21, 2021, among the Company, TCB and the other Guarantors party thereto (the "Security Agreement"). On December 29, 2023, the Company extended the maturity date for the Credit Facility by a period of 6 months, to June 30, 2025. On June 24, 2025, the Company entered into a second amendment to the Credit Facility (the "Second Amendment") with TCB which extended the maturity date for the Credit Facility by a period of three years to June 30, 2028. The Second Amendment also includes an accordion feature that allows the Company to seek up to a $10.0 million increase in commitments under the credit line, subject to TCB approval.

The Credit Facility provides for loans up to the lesser of (a) $25.0 million, and (b) the amount available under a "borrowing base" calculated primarily by reference to the Company's cash and cash equivalents and accounts receivables. The Credit Facility allows the Company to use up to $3.0 million of its borrowing capacity to issue letters of credit.

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<u>[**Table of Contents**](#ic6355800f70e4de3bf1b728bec93e092_7)</u>

The loans under the Credit Facility accrue interest at a variable rate equal to the Secured Overnight Financing Rate (SOFR) plus a margin of 2.25% per annum. The latest rate was 6.49% as of September 30, 2025. The outstanding amounts advanced under the Credit Facility are due and payable in full on June 30, 2028.

The Company may repay and reborrow all or any portion of the loans advanced under the Credit Facility at any time, without premium or penalty. The Credit Facility is subject to mandatory prepayments (i) from the net proceeds of asset dispositions not otherwise permitted under the Credit Facility; (ii) if the unpaid principal balance under the Credit Facility plus the aggregate face amount of all outstanding letters of credit exceeds the borrowing base; (iii) in an amount equal to 50% of the net proceeds of issuances of capital stock (subject to customary exceptions); or (iv) in an amount equal to the net proceeds from any issuance of debt not otherwise permitted under the Credit Facility.

The Credit Facility contains certain covenants restricting the Company's and its subsidiaries' ability to create, incur, assume or become liable for indebtedness; make certain investments; pay dividends or repurchase the Company's stock; create, incur or assume liens; consummate mergers or acquisitions; liquidate, dissolve, suspend or cease operations; or modify accounting or tax reporting methods (other than as required by U.S. GAAP).

As of September 30, 2025 and December 31, 2024, we had no borrowings outstanding under the Credit Facility. At each of September 30, 2025 and December 31, 2024, we had letters of credit outstanding in the amount of $1.0 million and $1.0 million, respectively. No amounts were drawn against these letters of credit at September 30, 2025 and December 31, 2024. These letters of credit exist to support insurance programs relating to workers' compensation, medical insurance, and reducing cash security deposits on leased property. We had no other off-balance sheet financing activities at September 30, 2025 and December 31, 2024. After the letters of credit on September 30, 2025, we had the ability to borrow up to $24.0 million under the Credit Facility.

*Dividends*

We did not pay any dividends in the three months ended September 30, 2025 and 2024.

*Share Repurchase*

On May 2, 2023, the Board of Directors of Harte Hanks approved a share repurchase program to maximize shareholder value with authorization to repurchase $6.5 million of the Company's Common Stock. As of September 30, 2025, the share repurchase program authorization availability was $4.1 million. The Company repurchased zero shares of common stock during the three and nine months ended September 30, 2025 and 2024.

*Outlook*

We consider such factors as total cash and cash equivalents and restricted cash, current assets, current liabilities, total debt, revenues, operating income, cash flows from operations, investing activities, and financing activities when assessing our liquidity. Our management of cash is designed to optimize returns on cash balances and to ensure that it is readily available to meet our operating, investing, and financing requirements as they arise. We believe that there are no conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern for the twelve months following the issuance of these Condensed Consolidated Financial Statements.

**<u>Critical and Recent Accounting Policies</u>**

Critical accounting estimates are defined as those that, in our judgment, are most important to the portrayal of our Company's financial condition and results of operations and which require complex or subjective judgments or estimates. Actual results could differ materially from those estimates under different assumptions and conditions. Refer to the 2024 10-K for a discussion of our critical accounting estimates.

Our Significant Accounting policies are described in Note A, *Overview and Significant Accounting Policies*, in the Notes to Condensed Consolidated Financial Statements.

See Recent Accounting Pronouncements under Note B of the Notes to Condensed Consolidated Financial Statements for a discussion of certain accounting standards that have been recently issued.

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<u>[**Table of Contents**](#ic6355800f70e4de3bf1b728bec93e092_7)</u>

**Item 3. Quantitative and Qualitative Disclosures About Market Risk**

Not applicable.

**Item 4. Controls and Procedures**

*Evaluation of Disclosure Controls and Procedures*

We maintain disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including our President and Chief Financial Officer ("CFO"), as appropriate to allow timely decisions regarding required disclosure.

Our management, including our President and CFO, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of September 30, 2025, the end of the period covered by this Quarterly Report on Form 10-Q. Based upon such evaluation, our President and CFO concluded that the design and operation of these disclosure controls and procedures were effective, at the "reasonable assurance" level, to ensure information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms.

*Changes in Internal Control over Financial Reporting*

There were no changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**PART II. OTHER INFORMATION**

**Item 1. Legal Proceedings**

Information regarding legal proceedings is set forth in Note L, *Litigation and Contingencies,* in the Notes to Condensed Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q, which information is incorporated herein by reference.

**Item 1a. Risk Factors**

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in our 2024 10-K, which could materially affect our business, financial condition, or future results. The risks described in our 2024 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and operating results. There have been no material changes during the nine months ended September 30, 2025 to the risk factors previously disclosed in our 2024 10-K.

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<u>[**Table of Contents**](#ic6355800f70e4de3bf1b728bec93e092_7)</u>

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds**

We did not sell any unregistered equity securities during the quarter ended September 30, 2025.

The following table provides information with respect to purchases by the Company of shares of our Common Stock during the quarter ended September 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total Number of Shares (or units) Purchased** | **Average Price per Share (or unit)** | **Total number of Shares Purchased as Part of a Publicly Announced Plan or Program** | **Approximate dollar value of shares that may yet be purchased under the program**<sup>(1)</sup> |
|  |  |  |  | *in thousands* |
| July 1, 2025 to July 31, 2025 |  | $— |  | $4131 |
| August 1, 2025 to August 31, 2025 |  | $— |  | 4131 |
| September 1, 2025 to September 30, 2025 |  | $— |  | 4131 |
|  |  |  |  | $4131 |

---

<sup>(1)</sup> On May 2, 2023, the Board of Directors of the Company approved a share repurchase program to maximize shareholder value with authorization to repurchase $6.5 million of the Company's Common Stock. No repurchases were made during the quarter ended September 30, 2025. After giving effect to the repurchases made under the plan through September 30, 2025, the Company has remaining authority of $4.1 million to repurchase shares under the program.

**Item 3. Defaults Upon Senior Securities**

Not applicable.

**Item 4. Mine Safety Disclosures**

Not applicable.

**Item 5. Other Information**

None.

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<u>[**Table of Contents**](#ic6355800f70e4de3bf1b728bec93e092_7)</u>

**Item 6. Exhibits**

---

| | |
|:---|:---|
| **Exhibit<br>No.** | **Description of Exhibit** |
| \*31.1 | <u>[Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](a20250930ex311.htm)</u> |
| \*31.2 | <u>[Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](a20250930ex312.htm)</u> |
| \*32.1 | <u>[Furnished Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](a20250930ex321.htm)</u> |
| \*32.2 | <u>[Furnished Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](a20250930ex322.htm)</u> |
| \*101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data Files because its XBRL tags are embedded within the Inline XBRL Document. |
| \*101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| \*101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| \*101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document |
| \*101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| \*101.DEF | Inline XBRL Definition Linkbase Document |
| \*104 | Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101) |

---

__________________________________

\*Filed or furnished herewith, as applicable.

\*\*Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | |
|:---|:---|
| | HARTE HANKS, INC. |
| November 12, 2025 | /s/ David Fisher |
| Date | David Fisher |
| | President |
| November 12, 2025 | /s/ David Garrison |
| Date | David Garrison |
| | Chief Financial Officer |

---

## Exhibit 31.1

**Exhibit 31.1**

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David Fisher, President of Harte Hanks, Inc. (the "Company"), hereby certify that:

1. I have reviewed this quarterly report on Form 10-Q of the Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

---

| | |
|:---|:---|
| November 12, 2025 | /s/ David Fisher |
| Date | David Fisher |
| | President |

---

## Exhibit 31.2

**Exhibit 31.2**

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David Garrison, Chief Financial Officer of Harte Hanks, Inc. (the "Company"), hereby certify that:

1. I have reviewed this quarterly report on Form 10-Q of the Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting.

---

| | |
|:---|:---|
| November 12, 2025 | /s/ David Garrison |
| Date | David Garrison<br>Chief Financial Officer |

---

## Exhibit 32.1

**Exhibit 32.1**

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, David Fisher, President of Harte Hanks, Inc. (the "Company"), hereby certify that the accompanying report on Form 10-Q for the quarter ended September 30, 2025 and filed with the Securities and Exchange Commission on the date hereof pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (the "Report") by the Company fully complies with the requirements of those sections.

I further certify that, based on my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| November 12, 2025 | /s/ David Fisher |
| Date | David Fisher |
| | President |

---

Note: This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

## Exhibit 32.2

**Exhibit 32.2**

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, David Garrison, Chief Financial Officer of Harte Hanks, Inc. (the "Company"), hereby certify that the accompanying report on Form 10-Q for the quarter ended September 30, 2025 and filed with the Securities and Exchange Commission on the date hereof pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (the "Report") by the Company fully complies with the requirements of those sections.

I further certify that, based on my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| November 12, 2025 | /s/ David Garrison |
| Date | David Garrison<br>Chief Financial Officer |

---

Note: This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

<br>