Harte-Hanks generated $217.7 million during first-quarter 2009, an 18.9% decline from the $268.5 million it pulled in a year ago. The company’s net income dropped at a much faster rate, however, falling by 47.6% from $13.6 million to $7.1 million. The quarter ended March 31.
“While our data-driven marketing solutions are even more necessary in this type of environment, our clients in direct marketing remain very cautious in their spending plans and are faced with decreased marketing budgets,” president and CEO Larry Franklin said in remarks accompanying his firm’s first-quarter results.
The company took significant cost-cutting steps during the quarter, even beyond what it had forecast. Its results include $2.6 million in plant consolidation and circulation curtailment, compared with the $2.15 million it had forecast for the quarter. It also recorded $2.8 million in severance costs, compared with the $1.6 million it had anticipated. Around two-thirds of the severance costs were incurred within its direct marketing operations.
Were these actions enough? A year ago, during first-quarter 2008, operating expenses amounted to 90.4% of the company’s revenue. During the quarter just ended, expenses were 93.7% of revenue.
Within its units, direct marketing operating revenue dropped 18%, from $179.1 million during first-quarter 2008 to $146.8 million, while operating income fell 9.5%, from $21.2 million to $19.2 million.
The company’s shopping circulars operations pulled in $70.9 million, a 20.7% drop from $89.4 million a year ago. This unit took a loss of $2.5 million, compared with $7.7 million in first-quarter 2008. During the most recent quarter the unit reduced its circulation within southern California by 650,000, and consolidated two Florida production facilities into one.
Network
