SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 1995
_____ Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from __________ to __________
Commission File Number 1-7120
HARTE-HANKS COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 74-1677284
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
200 Concord Plaza Drive, San Antonio, Texas 78216
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code -- 210/829-9000
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 X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock: $1 par value, 19,916,907 shares as of September 30, 1995
<PAGE>
<TABLE>
HARTE-HANKS COMMUNICATIONS, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
FORM 10-Q REPORT
September 30, 1995
<CAPTION>
Page
<S> <C> <C> <C>
Part I. Financial Information
Item 1. Interim Condensed Consolidated Financial
Statements (Unaudited)
Condensed Consolidated Balance Sheets - 3
September 30, 1995 and December 31, 1994
Consolidated Statements of Operations - 4
Three months ended September 30, 1995 and 1994
Consolidated Statements of Operations - 5
Nine months ended September 30, 1995 and 1994
Consolidated Statements of Cash Flows - 6
Nine months ended September 30, 1995 and 1994
Notes to Interim Condensed Consolidated Financial 7
Statements
Item 2. Management's Discussion and Analysis of Financial 9
Condition and Results of Operations
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 15
(a) Exhibits
(b) Reports on Form 8-K
Signature 15
</TABLE>
<PAGE>
<TABLE>
Harte-Hanks Communications, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (in thousands, except per share and share amounts)
(Unaudited)
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C> <C>
Assets
Current assets
Cash.............................................. $ 7,419 $ 4,391
Accounts receivable, net.......................... 68,679 70,929
Inventory......................................... 20,498 13,454
Prepaid expenses.................................. 5,461 5,904
Current deferred income tax benefit............... 7,758 6,808
Other current assets.............................. 4,477 4,143
Total current assets............................ 114,292 105,629
Property, plant and equipment, net.................. 87,903 91,278
Goodwill, net....................................... 273,810 290,335
Other assets........................................ 5,920 9,656
Total assets.................................... $ 481,925 $ 496,898
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable.................................. $ 39,838 $ 31,229
Accrued payroll and related expenses.............. 15,176 17,996
Accrued interest.................................. 546 731
Prepaid subscriptions............................. 3,175 3,978
Current portion of film contracts................. 1,264 1,717
Income taxes payable.............................. -- 1,867
Other current liabilities......................... 15,664 13,165
Current portion of long term debt................. 50 469
Total current liabilities....................... 75,713 71,152
Long term debt...................................... 228,270 292,858
Other long term liabilities......................... 25,910 25,248
Total liabilities............................... 329,893 389,258
Stockholders' equity
Common stock, $1 par value, authorized 50,000,000
shares. Issued and outstanding 1995: 19,916,907
shares; 1994: 18,342,503 shares................. 19,917 18,342
Additional paid-in capital........................ 164,861 144,350
Accumulated deficit............................... (30,801) (53,107)
Minimum pension liability adjustment.............. (1,945) (1,945)
Total stockholders' equity...................... 152,032 107,640
Total liabilities and stockholders' equity...... $ 481,925 $ 496,898
<FN>
See Notes to Interim Condensed Consolidated Financial Statements.
/TABLE
<PAGE>
<TABLE>
Harte-Hanks Communications, Inc. and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
<CAPTION>
Three Months Ended September 30,
1995 1994
<S> <C> <C>
Operating revenues.................................... $130,178 $128,433
Operating expenses
Payroll............................................. 46,169 48,072
Production and distribution......................... 46,724 45,155
Advertising, selling, general and administrative.... 12,856 12,981
Depreciation........................................ 3,364 3,030
Goodwill amortization............................... 2,299 2,352
111,412 111,590
Operating income...................................... 18,766 16,843
Other expenses (income)
Interest expense.................................... 3,784 4,404
Interest income..................................... (52) (49)
Gain on divestiture................................. (1,454) --
Other, net.......................................... 211 410
2,489 4,765
Income before income tax expense...................... 16,277 12,078
Income tax expense.................................... 7,354 5,829
Net income............................................ $ 8,923 $ 6,249
Primary:
Earnings per common share........................... $ 0.43 $ 0.33
Weighted average common and common equivalent
shares outstanding................................ 20,816 19,046
Fully diluted:
Earnings per common share........................... $ 0.43 $ 0.31
Weighted average common and common equivalent
shares outstanding................................ 20,869 20,482
<FN>
See Notes to Interim Condensed Consolidated Financial Statements.
/TABLE
<PAGE>
<TABLE>
Harte-Hanks Communications, Inc. and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
<CAPTION>
Nine Months Ended September 30,
1995 1994
<S> <C> <C>
Operating revenues.................................... $394,164 $370,414
Operating expenses
Payroll............................................. 142,998 142,703
Production and distribution......................... 140,017 129,335
Advertising, selling, general and administrative.... 41,832 38,914
Depreciation........................................ 10,111 9,366
Goodwill amortization............................... 7,021 7,054
341,979 327,372
Operating income...................................... 52,185 43,042
Other expenses (income)
Interest expense.................................... 12,887 12,514
Interest income..................................... (191) (140)
Other, net.......................................... 1,063 687
Gains on divestitures............................... (13,747) --
12 13,061
Income before income tax expense...................... 52,173 29,981
Income tax expense.................................... 28,412 14,526
Net income............................................ $ 23,761 $ 15,455
Net income per share -- primary....................... $ 1.19 $ 0.81
Weighted average common and common equivalent
shares outstanding................................ 19,929 19,043
Net income per share -- fully diluted................. $ 1.16 $ 0.78
Weighted average common and common equivalent
shares outstanding................................ 20,742 20,483
<FN>
See Notes to Interim Condensed Consolidated Financial Statements.
/TABLE
<PAGE>
<TABLE>
Harte-Hanks Communications, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (in thousands)
(Unaudited)
<CAPTION>
Nine Months Ended September 30,
1995 1994
<S> <C> <C>
Operating Activities
Net income.......................................... $ 23,761 $ 15,455
Add (deduct) non-cash income and expenses:
Depreciation ................................... 10,111 9,366
Goodwill amortization........................... 7,021 7,054
Amortization of option related expense.......... 1,483 1,198
Film amortization............................... 1,831 1,881
Deferred income taxes........................... (1,179) (1,882)
Other, net...................................... 355 446
Gains on divestitures............................... (13,747) --
Changes in operating assets and liabilities,
net of acquisitions and divestitures
Increase in accounts receivable, net.............. (1,254) (2,566)
Increase in inventory............................. (8,308) (4,118)
Increase in prepaid expenses and other
current assets.................................. (1,249) (622)
Increase in accounts payable...................... 8,071 1,417
Increase (decrease) in other accrued expenses
and other liabilities........................... (1,897) 5,032
Other, net........................................ 485 (26)
Net cash provided by operating activities....... 25,484 32,635
Investing Activities
Purchases of property, plant and equipment.......... (13,391) (10,977)
Proceeds from the sale of property, plant
and equipment and divested assets................. 42,466 74
Acquisitions........................................ (5,760) --
Payments on film contracts.......................... (1,441) (1,468)
Net cash provided by (used in)
investing activities............................ 21,874 (12,371)
Financing Activities
Long term debt borrowings........................... 831,064 348,302
Payments on long term debt, including current
maturities ....................................... (876,071) (367,958)
Issuance of common stock............................ 2,132 1,026
Dividends paid...................................... (1,455) --
Net cash used in financing activities............. (44,330) (18,630)
Net increase in cash................................ 3,028 1,634
Cash at beginning of year........................... 4,391 4,392
Cash at end of period............................... $ 7,419 $ 6,026
<FN>
See Notes to Interim Condensed Consolidated Financial Statements.
</TABLE>
Harte-Hanks Communications, Inc. and Subsidiaries
Notes to Interim Condensed Consolidated Financial Statements
(Unaudited)
Note A - Financial Statements
The accompanying unaudited Interim Condensed Consolidated Financial
Statements include the accounts of Harte-Hanks Communications, Inc. and
subsidiaries (the "Company").
The statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles 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. Operating results for the nine
months ended September 30, 1995 are not necessarily indicative of the
results that may be expected for the year ending December 31. For
further information, refer to the consolidated financial statements and
footnotes included in the Company's annual report on Form 10-K for the
year ended December 31, 1994.
Certain prior period amounts have been reclassified for comparative
purposes.
Note B - Divestitures
In March and July 1995, respectively, the Company sold its suburban
Boston community newspapers and a small local hand distribution
advertising business. These sales resulted in a third quarter gain on
divestiture of $0.8 million, or 4 cents per share, net of $0.6 million
of income taxes and year-to-date gains on divestitures of $3.1 million,
or 15 cents per share, net of $10.6 million of income taxes.
Note C - Income Taxes
The Company's quarterly income tax calculation is based on an effective
income tax rate that is derived by estimating pretax income and income
tax expense for the entire year ended December 31, 1995. Included in
the year-to-date income tax provision of $28.4 million is $10.6 million
related to the gains on divestitures. The estimated annual effective
income tax rate for the nine months ended September 30, 1995 of 46.3%
resulted in tax expense on income from operations of $17.8 million. The
effective income tax rate calculated is higher than the federal
statutory rate of 35% due to the addition of state taxes and to certain
expenses recorded for financial reporting purposes (primarily goodwill
amortization), which are not deductible for federal income tax purposes.
<PAGE>
Note D - Long Term Debt
On May 26, 1995, the Company issued 1,428,571 shares of common stock
upon conversion of the $20 million principal amount of the Company's
6 1/4% convertible notes. Accordingly, the Company transferred $20
million less $0.1 million of unamortized issue costs, to stockholders'
equity.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Operating results were as follows:
<TABLE>
Three months ended Nine months ended
In thousands September 30, 1995 September 30, 1994 Change September 30, 1995 September 30, 1994 Change
<S> <C> <C> <C> <C> <C> <C>
Revenues $130,178 $128,433 1.4% $394,164 $370,414 6.4%
Operating expenses 111,412 111,590 -0.2% 341,979 327,372 4.5%
Operating income $ 18,766 $ 16,843 11.4% $ 52,185 $ 43,042 21.2%
Net income $ 8,923 $ 6,249 42.8% $ 23,761 $ 15,455 53.7%
Fully diluted earnings
per share $ 0.43 $ 0.31 38.7% $ 1.16 $ 0.78 48.7%
</TABLE>
Third quarter net income of $8.9 million, or 43 cents per share, included a
gain on divestiture, net of income taxes, of $0.8 million, or 4 cents per
share. Excluding this net gain on divestiture, net income was $8.1 million, or
39 cents per share.
Excluding the results of the Boston community newspapers sold on March 31,
1995, consolidated revenues grew 7.4% to $130.2 million and operating income
grew 12.5% to $18.8 million in the third quarter of 1995 as compared to the
third quarter of 1994. The most dramatic growth occurred in the direct
marketing business where revenues increased 14.9% and operating income
increased 39.9%. The Company's overall growth in both the third quarter and
first nine months resulted from increased business with both new and existing
customers, new products and services as well as advertising and circulation
rate increases. Excluding the results of the Boston community newspapers,
operating expenses in both periods also rose due to the growth in business as
well as higher paper prices and postal rates.
Net income of $23.8 million, or $1.16 per share, for the first nine months of
1995 included gains on divestitures of $3.1 million, or 15 cents per share.
Excluding these net gains on divestitures, net income was $20.6 million, or
$1.01 per share, on a fully diluted basis.
Direct Marketing
Direct marketing operating results were as follows:
<TABLE>
Three months ended Nine months ended
In thousands September 30, 1995 September 30, 1994 Change September 30, 1995 September 30, 1994 Change
<S> <C> <C> <C> <C> <C> <C>
Revenues $47,909 $41,700 14.9% $143,209 $115,728 23.7%
Operating expenses 40,935 36,716 11.5% 123,753 104,012 19.0%
Operating income $ 6,974 $ 4,984 39.9% $ 19,456 $ 11,716 66.1%
</TABLE>
Direct marketing revenues increased $6.2 million, or 14.9%, in the third
quarter of 1995 when compared to 1994. Revenue growth resulted from new
customers, particularly in the financial services and high technology
industries, as well as continued expansion into the international arena with
both new and existing customers. Also contributing to the revenue growth was
increased business with existing customers through new products and services
and cross-selling of services. Although the majority of direct marketing's
revenue growth came from existing operations, a portion of the increase was
attributable to the acquisitions of Select Marketing, Inc., an Austin, Texas
response management company, and Steinert & Associates, a New York City
advertising and marketing communications firm, in October 1994 and January
1995, respectively. In addition, revenue growth was impacted by the absence of
a small local hand distribution advertising business sold in July 1995.
Third quarter operating expenses increased $4.2 million, or 11.5%, when
compared to 1994. Payroll costs were up $2.3 million, or 14.6%, as a result of
increased hiring to support revenue growth as well as higher sales commissions.
Also contributing to the increase in operating expenses were additional general
and administrative costs and higher depreciation expense of $1.2 million and
$0.5 million, respectively, reflecting increased volumes. Expanded facilities
and upgraded technology to support current and anticipated growth also
contributed to increased expenses. The acquisitions noted above were another
contributing factor. Slightly offsetting these cost increases were decreased
costs related to the July 1995 divestiture.
Direct marketing revenues increased $27.5 million, or 23.7%, in the first nine
months of 1995 when compared to 1994. Increased revenues reflect growth in
customer base as well as increased business with existing customers. The
revenue increase during this time period was also affected by the acquisitions
and the sale of the hand distribution advertising business.
Year-to-date 1995 operating expenses rose $19.7 million, or 19.0%, when
compared to 1994. Payroll costs increased $9.2 million, or 19.9%, due to
additional hiring to support revenue growth. In addition, production costs and
general and administrative costs increased $5.8 million and $3.8 million,
respectively, due to increased volumes. The remaining increase in operating
expenses was driven by acquisitions and, to a lesser extent, higher
depreciation expense incurred as a result of overall growth and expansion.
Slightly offsetting these cost increases were decreased costs related to the
July 1995 divestiture.
Shoppers
Shopper operating results were as follows:
<TABLE>
Three months ended Nine months ended
In thousands September 30, 1995 September 30, 1994 Change September 30, 1995 September 30, 1994 Change
<S> <C> <C> <C> <C> <C> <C>
Revenues $47,550 $45,043 5.6% $139,481 $132,485 5.3%
Operating expenses 41,365 39,281 5.3% 123,907 118,746 4.3%
Operating income $ 6,185 $ 5,762 7.3% $ 15,574 $ 13,739 13.4%
</TABLE>
Shopper revenues grew $2.5 million, or 5.6%, in the third quarter of 1995 as
compared to 1994. Revenue increases occurred primarily in existing circulation
zones, driven mainly by rate increases. Total weekly shopper household
circulation was 7.0 million at September 30, 1995.
Third quarter operating expenses increased $2.1 million, or 5.3%, when compared
to 1994. Postage costs increased $1.0 million, primarily due to this year's
14% postage rate increase as well as to increased circulation. Paper costs
increased $0.9 million, or 23.3%, due to higher prices, partially offset by
reduced consumption due in part to new pagination technology used in the
Company's Southern California and Miami shoppers. Pagination technology
permits a more efficient publication design and reduces the number of pages in
the book. In addition, color printing costs increased $0.4 million, due both
to rates and volumes.
Excluding revenues from the Company's small Tucson shopper that was sold in
February 1994, year-to-date revenues increased $7.9 million, or 6.0%, as
compared to 1994. Revenue growth for the first nine months of 1995 was
primarily attributable to increased advertising rates in existing circulation
zones.
Excluding operating expenses from the divested Tucson shopper, year-to-date
operating costs increased $6.2 million, or 5.2%, in the first nine months of
1995 as compared to 1994. Postage costs rose $4.2 million, due primarily to
the 14% postage rate increase as well as to increased circulation. In
addition, higher color printing costs and paper cost increases contributed to
higher operating costs. Paper costs increased $1.7 million due to higher
prices partially offset by reduced volumes due to the new pagination
technology. The increased operating costs were partially offset by lower
payroll costs of $1.3 million due to reduced headcount and changes in
commission plans.
Newspapers
Newspaper operating results were as follows:
<TABLE>
Three months ended Nine months ended
In thousands September 30, 1995 September 30, 1994 Change September 30, 1995 September 30, 1994 Change
<S> <C> <C> <C> <C> <C> <C>
Revenues $28,803 $34,682 -17.0% $92,963 $101,694 -8.6%
Operating expenses 22,361 28,564 -21.7% 74,041 83,917 -11.8%
Operating income $ 6,442 $ 6,118 5.3% $18,922 $ 17,777 6.4%
</TABLE>
Newspaper revenues decreased $5.9 million, or 17.0%, in the third quarter of
1995 when compared to 1994. This decrease is due to the March 1995 divestiture
of the Company's Boston community newspapers. Excluding the results from the
Boston newspapers, third quarter newspaper revenues increased $1.3 million, or
4.8%, to $28.8 million. Classified advertising revenues grew 8.3% as a result
of increases both in rates and volumes. The classified growth was primarily
attributable to increased revenues from help wanted and automotive advertising.
Retail advertising revenues decreased 4.9% on lower volumes offset by higher
rates. Insert revenues rose 4.9% on increased volumes. In addition, niche and
specialty product revenues grew primarily due to a direct mail initiative into
South Texas, begun in 1994, and to audiotext, a new revenue stream for the
newspapers in 1995. Circulation revenues increased 10.3%, reflecting home
delivery and single-copy price increases.
Newspaper operating expenses decreased $6.2 million, or 21.7%, in the third
quarter of 1995 when compared to 1994. Excluding the divested Boston community
newspapers, operating expenses increased $0.8 million, or 3.9% in the third
quarter of 1995. Newsprint costs increased $1.0 million, or 32.2%, as a result
of higher average prices offset slightly by reduced volumes resulting from
various operating decisions to control newsprint consumption. Costs associated
with the direct mail program also rose slightly due to increased volumes as
well as the January 1995 postal rate increase.
Newspaper revenues decreased $8.7 million, or 8.6%, in the first nine months of
1995 when compared to 1994. Excluding the divested Boston newspapers, year-to-
date revenues increased 7.0%, or $5.6 million, as compared to 1994. Classified
advertising revenues grew 10.1% as a result of increases both in rates and
volumes. The classified revenue growth was primarily attributable to increases
in help wanted and automotive categories. Insert revenues increased 3.7% as a
result of increased volumes. In addition, niche and specialty product revenues
were up, primarily as a result of the South Texas direct mail initiative and,
to a lesser extent, audiotext revenues. Circulation revenues increased 9.7%,
reflecting home delivery price increases in the fall of 1994.
Year-to-date newspaper operating expenses decreased $9.9 million, or 11.8%,
when compared to 1994. Excluding the divested Boston newspapers, operating
expenses increased $3.8 million, or 6.0% over 1994. Newsprint costs increased
$2.4 million, or 25.5%, as a result of higher average newsprint prices offset
slightly by reduced volumes. The reduction in volumes was attributable to
newsprint savings from the new press installed in July 1994 at the Corpus
Christi Caller-Times, as well as to various operating decisions to control
newsprint consumption. Postage costs associated with the direct mail program
also increased.
Television
Television operating results were as follows:
<TABLE>
Three months ended Nine months ended
In thousands September 30, 1995 September 30, 1994 Change September 30, 1995 September 30, 1994 Change
<S> <C> <C> <C> <C> <C> <C>
Revenues $5,916 $ 7,008 -15.6% $18,511 $20,507 - 9.7%
Operating expenses 4,407 4,959 -11.1% 13,531 14,445 - 6.3%
Operating income $1,509 $ 2,049 -26.4% $ 4,980 $ 6,062 -17.8%
</TABLE>
Revenues for the television segment decreased $1.1 million, or 15.6%, in the
third quarter of 1995 when compared to 1994. The majority of this decline was
due to very soft national advertising revenues, the effects of weak CBS network
ratings as well as to the absence of political advertising that benefitted the
third quarter of 1994. Television segment revenues were also affected by the
absence of a direct mail publication in 1995. These declines were slightly
offset by increased network affiliation compensation resulting from a new
agreement that took effect in September 1995.
Third quarter operating expenses for the television segment decreased $0.6
million, or 11.1%, when compared to the same period in 1994. The decrease was
attributable to the absence of costs associated with the direct mail
publication, lower film costs and the effective management of payroll and sales
commission costs.
Revenues for the television segment decreased $2.0 million, or 9.7%, in the
first nine months of 1995 when compared to 1994. Contributing to these results
were lower national advertising revenues and the effects of weak CBS network
performance. In addition, the first quarter of 1994 benefited from CBS
coverage of the National Football League playoffs and winter Olympics, while
the first and third quarters of 1994 benefited from political advertising.
Year-to-date operating expenses for the television segment decreased $0.9
million, or 6.3%, when compared to the same time period in 1994. The decrease
was due to lower payroll costs and direct mail publication production costs
offset partially by higher metered rating service costs.
Gains on Divestitures
In March and July 1995, respectively, the Company sold its suburban Boston
community newspapers and a small local hand distribution advertising business.
As a result of these transactions, the Company recognized gains on divestitures
of $3.1 million, or 15 cents per share, net of $10.6 million of income taxes.
Interest Expense
Interest expense decreased $0.6 million in the third quarter of 1995 when
compared to 1994 due to lower debt levels and conversion of the 6 1/4%
convertible
notes. Interest expense for the first nine months of 1995 increased $0.4
million from the same period in 1994 due primarily to higher interest rates
experienced during 1995 partially offset by the reduced debt levels. The
Company is realizing lower interest costs and commitment fees after amending
its revolving credit commitment in February 1995.
In May 1995, the $20 million principal amount of the Company's 6 1/4%
convertible
notes due September 15, 2002 was converted into 1,428,571 shares of common
stock. The conversion will result in annual interest expense savings of $1.3
million going forward.
Income Taxes
Income tax expense in the third quarter and the first nine months of 1995
included $0.6 million and $10.6 million, respectively, of income taxes relating
to the gains on divestitures. Income tax expense on operations increased in
both periods due to increased income levels.
Liquidity and Capital Resources
Cash provided from operating activities for the nine months ended September 30,
1995 was $25.5 million as compared to $32.6 million for the comparable period
in 1994. Net cash inflows for investing activities were $21.9 million as
compared to outflows of $12.4 million in 1994. Investing activities for the
first nine months of 1995 included $42.5 million in proceeds from the sale of
property, plant and equipment and divested assets. Also included in investing
activities were expenditures of $5.8 million for acquisitions and $13.4 million
for capital investments. Cash provided from operating activities and the sale
of the Boston community newspapers was used to reduce borrowings under the
Company's credit facility and to make capital investments and acquisitions.
Capital resources are available from and provided through the Company's
unsecured credit facility. All borrowings under the revolving credit facility
are to be repaid by December 31, 2001. Management believes that its credit
facility, together with cash provided from operating activities, will be
sufficient to fund operations, anticipated capital and film expenditures and
debt service requirements for the foreseeable future. As of September 30,
1995, the Company had $97 million of unused borrowing capacity under its credit
facility, of which $3.6 million was reserved to serve as backup for the
Company's other short-term borrowing facilities.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. See index to Exhibits on Page 16.
(b) No reports on Form 8-K were filed for the nine months ended
September 30, 1995.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
<TABLE>
HARTE-HANKS COMMUNICATIONS, INC.
<S> <C>
November 13, 1995 /s/ Richard L. Ritchie
Date Richard L. Ritchie
Senior Vice President,
Finance and Chief Financial
and Accounting Officer
/TABLE
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibit Page No.
<C> <S>
*11 Statements Regarding Computation of Per
Share Earnings
*27 Financial Data Schedules
* Filed herewith.
/TABLE
<PAGE>
<TABLE> Exhibit 11
Harte-Hanks Communications, Inc. and Subsidiaries
Earnings Per Share Computations
(in thousands, except per share data)
PRIMARY
<CAPTION>
Three Months Ended September 30,
1995 1994
<S> <C> <C>
Net income................................ $ 8,728 $ 6,249
Shares used in net earnings per
share computations...................... 20,816 19,046
Earnings per share........................ $ .44 $ .33
</TABLE>
<TABLE>
Computation of Shares Used In Net Earnings Per Share Computations
<CAPTION>
Three Months Ended September 30,
1995 1994
<S> <C> <C>
Average outstanding common shares......... 19,868 18,245
Average common equivalent shares --
dilutive effect of option shares........ 948 801
Shares used in net earnings
per share computations.................. 20,816 19,046
</TABLE>
<TABLE>
FULLY DILUTED
<CAPTION>
Three Months Ended September 30,
1995 1994
<S> <C> <C>
Net income................................ $ 8,728 $ 6,249
Adjusted net income for interest
on convertible note..................... $ 8,853 $ 6,437
Shares used in net earnings
per share computations.................. 20,869 20,482
Earnings per share........................ $ .43 $ .31
</TABLE>
<TABLE>
Computation of Shares Used In Net Earnings Per Share Computations
<CAPTION>
Three Months Ended September 30,
1995 1994
<S> <C> <C>
Average outstanding common shares......... 19,868 18,245
Average common equivalent shares --
dilutive effect of option shares........ 1,001 808
Dilutive effect of convertible note....... -- 1,429
Shares used in net earnings
per share computations.................. 20,869 20,482
</TABLE>
<PAGE>
<TABLE> Exhibit 11
Harte-Hanks Communications, Inc. and Subsidiaries
Earnings Per Share Computations
(in thousands, except per share data)
PRIMARY
<CAPTION>
Nine Months Ended September 30,
1995 1994
<S> <C> <C>
Net income................................ $14,838 $15,455
Shares used in net earnings per
share computations...................... 19,929 19,043
Earnings per share........................ $ .76 $ .81
</TABLE>
<TABLE>
Computation of Shares Used In Net Earnings Per Share Computations
<CAPTION>
Nine Months Ended September 30,
1995 1994
<S> <C> <C>
Average outstanding common shares......... 19,057 18,190
Average common equivalent shares --
dilutive effect of option shares........ 872 853
Shares used in net earnings
per share computations.................. 19,929 19,043
</TABLE>
<TABLE>
FULLY DILUTED
<CAPTION>
Nine Months Ended September 30,
1995 1994
<S> <C> <C>
Net income................................ $14,838 $15,455
Adjusted net income for interest
on convertible note..................... $15,151 $16,019
Shares used in net earnings
per share computations.................. 20,742 20,483
Earnings per share........................ $ .73 $ .78
</TABLE>
<TABLE>
Computation of Shares Used In Net Earnings Per Share Computations
<CAPTION>
Nine Months Ended September 30,
1995 1994
<S> <C> <C>
Average outstanding common shares......... 19,057 18,190
Average common equivalent shares --
dilutive effect of option shares........ 916 864
Dilutive effect of convertible note....... 769 1,429
Shares used in net earnings
per share computations.................. 20,742 20,483
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 7419
<SECURITIES> 0
<RECEIVABLES> 71589
<ALLOWANCES> 2910
<INVENTORY> 20498
<CURRENT-ASSETS> 114292
<PP&E> 186664
<DEPRECIATION> 98761
<TOTAL-ASSETS> 481925
<CURRENT-LIABILITIES> 75713
<BONDS> 228270
<COMMON> 19917
0
0
<OTHER-SE> 132115
<TOTAL-LIABILITY-AND-EQUITY> 152032
<SALES> 394164
<TOTAL-REVENUES> 394164
<CGS> 283015
<TOTAL-COSTS> 341979
<OTHER-EXPENSES> (12875)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12887
<INCOME-PRETAX> 52173
<INCOME-TAX> 28412
<INCOME-CONTINUING> 23761
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23761
<EPS-PRIMARY> 1.19
<EPS-DILUTED> 1.16
</TABLE>
