Harte Hanks Announces Delay in Financial Report Filing

SAN ANTONIO, TX--(Marketwired - Mar 17, 2017) - Harte Hanks (NYSE: HHS), a leader in customer relationships, experiences and interaction-led marketing, today announced that its release of earnings for the fourth quarter of, and full year 2016 has been delayed, and that its annual report on Form 10-K ("Annual Report") for its fiscal year ended December 31, 2016, will not be timely filed. The company filed today with the Securities and Exchange Commission the notification of late filing on Form 10b-25.

The company's delay in announcing 2016 results and filing the Annual Report is in part due to the additional time the company requires to complete the preparation of its financial statements for the year ended December 31, 2016. The company was delayed in completing the closing of its accounting books for the fiscal year ended December 31, 2016 primarily due to (i) unexpected complications required to account for the sale of its Trillium business (and calculate the tax therefor), which sale was completed on December 23, 2016, (ii) delays and complications in performing its annual goodwill impairment analysis, and (iii) additional time-consuming review, testing and evaluation related to potential material weaknesses in internal controls. These factors combined to result in a delay in the completion of the company's preparation of financial statements and audit thereon, and consequently the company's filing of the Annual Report. The company anticipates being able to announce fourth quarter and full year of 2016 results, and file its Annual Report, towards the end of April.

Although the Trillium transaction complicated and delayed its Annual Report, the sale of Trillium was crucial to refocusing the company on becoming the leading customer engagement agency, while also allowing it to retire its debt facility. Likewise, the in-depth review of internal controls should result in improved processes that will benefit the company's operations.

Commenting on the situation, Chief Executive Officer Karen Puckett said, "We continue to make progress on our revenue stability efforts around client expansion and new client additions, and in the fourth quarter, we expect to reduce our rate of revenue decline and see improving profitability from continuing operations. We are encouraged that the strategic changes we are making to the business are taking hold."