Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 15, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | HARTE HANKS INC | |
Entity Central Index Key | 45,919 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 6,241,230 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 20,213 | $ 8,397 |
Accounts receivable (less allowance for doubtful accounts of $381 at June 30, 2018 and $697 at December 31, 2017) | 52,141 | 81,397 |
Contract assets | 2,648 | 0 |
Inventory | 462 | 587 |
Prepaid expenses | 4,342 | 5,039 |
Prepaid taxes and income tax receivable | 12,655 | 3,886 |
Other current assets | 4,037 | 3,900 |
Total current assets | 96,498 | 103,206 |
Property, plant and equipment (less accumulated depreciation of $139,045 at June 30, 2018 and $136,753 at December 31, 2017) | 18,762 | 21,787 |
Other intangible assets (less accumulated amortization of $2,184 at December 31, 2017) | 0 | 2,589 |
Other assets | 4,724 | 3,230 |
Total assets | 119,984 | 130,812 |
Current liabilities | ||
Accounts payable | 32,796 | 36,130 |
Accrued payroll and related expenses | 5,564 | 10,601 |
Deferred revenue and customer advances | 6,749 | 5,342 |
Income taxes payable | 0 | 0 |
Customer postage and program deposits | 5,703 | 11,443 |
Other current liabilities | 3,273 | 3,732 |
Total current liabilities | 54,085 | 67,248 |
Pensions | 58,816 | 59,338 |
Contingent consideration | 0 | 33,887 |
Deferred tax liabilities, net | 294 | 773 |
Other long-term liabilities | 4,336 | 4,201 |
Total liabilities | 117,531 | 165,447 |
Preferred stock, $1 par value, 1,000,000 shares authorized; 9,926 designated as Series A Convertible Preferred Stock; 9,926 shares of Series A Convertible Preferred Stock authorized, issued and outstanding at June 30, 2018 | 9,723 | 0 |
Stockholders’ (deficit) equity | ||
Common stock, $1 par value, 25,000,000 shares authorized 12,105,474 shares issued at June 30, 2018 and 12,074,661 shares issued at December 31, 2017 | 12,108 | 12,075 |
Additional paid-in capital | 457,206 | 457,186 |
Retained earnings | 821,047 | 794,583 |
Less treasury stock, 5,864,244 shares at cost at June 30, 2018 and 5,864,641 shares at cost at December 31, 2017 | (1,253,404) | (1,254,176) |
Accumulated other comprehensive loss | (44,227) | (44,303) |
Total stockholders’ (deficit) equity | (7,270) | (34,635) |
Total liabilities, preferred stock and stockholders’ equity | $ 119,984 | $ 130,812 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Accounts receivable, allowance for doubtful accounts | $ 381 | $ 697 |
Property, plant and equipment, accumulated depreciation | 139,045 | 136,753 |
Other intangible assets, amortization | $ 0 | $ 2,184 |
Preferred stock, preferred stock authorized (in shares) | 1,000,000 | |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Common stock, shares issued (in shares) | 12,105,474 | 12,074,661 |
Treasury stock, shares (in shares) | 5,864,244 | 5,864,641 |
Series A Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 1 | |
Preferred stock, Series A convertible shares authorized (in shares) | 9,926 | |
Preferred stock, Series A convertible shares issued (in shares) | 9,926 | |
Preferred stock, Series A convertible shares outstanding (in shares) | 9,926 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive income/(Loss) - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Operating revenues | $ 69,633,000 | $ 94,722,000 | $ 150,829,000 | $ 189,616,000 |
Operating expenses | ||||
Labor | 39,725,000 | 57,103,000 | 90,381,000 | 117,453,000 |
Production and distribution | 26,358,000 | 26,521,000 | 50,506,000 | 53,399,000 |
Advertising, selling, general and administrative | 7,955,000 | 10,226,000 | 17,232,000 | 21,286,000 |
Depreciation, software and intangible asset amortization | 1,903,000 | 2,663,000 | 4,054,000 | 5,610,000 |
Total operating expenses | 75,941,000 | 96,513,000 | 162,173,000 | 197,748,000 |
Operating loss | (6,308,000) | (1,791,000) | (11,344,000) | (8,132,000) |
Other (income) and expenses | ||||
Interest expense, net | 183,000 | 1,235,000 | 1,112,000 | 2,258,000 |
Gain on sale | (30,954,000) | 0 | ||
Other, net | 827,000 | 1,826,000 | 1,969,000 | 3,324,000 |
Total other (income) and expenses | 1,010,000 | 3,061,000 | (27,873,000) | 5,582,000 |
Income/(loss) before income taxes | (7,318,000) | (4,852,000) | 16,529,000 | (13,714,000) |
Income tax benefit | (584,000) | (2,199,000) | (9,364,000) | (3,675,000) |
Net income/(loss) | (6,734,000) | (2,653,000) | 25,893,000 | (10,039,000) |
Less: Earnings attributable to participating securities | 0 | 0 | 3,059,000 | 0 |
Less: Preferred stock dividends | 124,000 | 0 | 207,000 | 0 |
Income/(loss) attributable to common stockholders | $ (6,858,000) | $ (2,653,000) | $ 22,627,000 | $ (10,039,000) |
Earnings/(loss) per common share | ||||
Basic (dollars per share) | $ (1.10) | $ (0.43) | $ 3.64 | $ (1.62) |
Diluted (dollars per share) | $ (1.10) | $ (0.43) | $ 3.62 | $ (1.62) |
Weighted average shares used to compute earnings/(loss) per share attributable to common shares | ||||
Basic (shares) | 6,226 | 6,190 | 6,220 | 6,179 |
Diluted (shares) | 6,226 | 6,190 | 6,250 | 6,179 |
Other comprehensive income/(loss), net of tax | ||||
Net Income/(loss) | $ (6,734,000) | $ (2,653,000) | $ 25,893,000 | $ (10,039,000) |
Adjustment to pension liability | 517,000 | 413,000 | 1,035,000 | 751,000 |
Foreign currency translation adjustment | (804,000) | 599,000 | (959,000) | 644,000 |
Total other comprehensive income/(loss), net of tax | (287,000) | 1,012,000 | 76,000 | 1,395,000 |
Comprehensive income/(loss) | $ (7,021,000) | $ (1,641,000) | $ 25,969,000 | $ (8,644,000) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Statement of Cash Flows [Abstract] | ||
Net income/(loss) | $ 25,893 | $ (10,039) |
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities | ||
Depreciation and software amortization | 3,941 | 5,236 |
Intangible asset amortization | 113 | 375 |
Stock-based compensation | 1,274 | 968 |
Net pension cost (payments) | 856 | 557 |
Interest accretion on contingent consideration | 742 | 2,081 |
Deferred income taxes | (821) | (1,160) |
Gain on sale | (32,760) | 0 |
Loss on disposal of assets | 0 | 102 |
Other, net | 614 | 0 |
Changes in assets and liabilities: | ||
Decrease (increase) in accounts receivable, net and contract assets | 8,871 | 7,377 |
Decrease (increase) in inventory | 125 | 59 |
Decrease (increase) in prepaid expenses, income tax receivable and other assets | (9,725) | (5,317) |
Increase (decrease) in accounts payable | 11,138 | (8,051) |
Increase (decrease) in other accrued expenses and liabilities | (7,760) | (34,013) |
Net cash provided by/(used in) operating activities | 2,501 | (41,825) |
Cash flows from investing activities | ||
Dispositions, net of cash transferred | 3,929 | 0 |
Purchases of property, plant and equipment | (2,111) | (3,026) |
Proceeds from sale of property, plant and equipment | 0 | 18 |
Net cash provided by/(used in) investing activities | 1,818 | (3,008) |
Cash flows from financing activities | ||
Borrowings | 9,000 | 20,000 |
Repayment of borrowings | (9,000) | (8,000) |
Debt financing costs | (980) | (395) |
Issuance of preferred stock, net of transaction fees | 9,723 | 0 |
Issuance of common stock | (70) | (92) |
Issuance of treasury stock | 37 | 0 |
Payment of capital leases | (254) | (255) |
Net cash provided by financing activities | 8,456 | 11,258 |
Effect of exchange rate changes on cash and cash equivalents | (959) | 644 |
Net increase (decrease) in cash and cash equivalents | 11,816 | (32,931) |
Cash and cash equivalents at beginning of period | 8,397 | 46,005 |
Cash and cash equivalents at end of period | 20,213 | 13,074 |
Supplemental disclosures | ||
Cash paid for interest | 79 | 65 |
Cash received (paid) for income taxes | 155 | (34,248) |
Non-cash investing and financing activities | ||
Purchases of property, plant and equipment included in accounts payable | 78 | 395 |
New capital lease obligations | $ 0 | $ 58 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income/(Loss) |
Increase (Decrease) in Stockholders' Equity (Deficit) | |||||||
Cumulative effect of accounting change | $ (164) | $ 709 | $ (873) | ||||
Balance at Dec. 31, 2016 | 2,656 | $ 0 | $ 12,044 | 458,638 | 837,316 | $ (1,259,164) | $ (46,178) |
Increase (Decrease) in Stockholders' Equity (Deficit) | |||||||
Exercise of stock options and release of unvested shares | (92) | 4 | (4) | (92) | |||
Stock-based compensation | 1,110 | 1,110 | |||||
Treasury stock issued | 104 | (1,984) | 2,088 | ||||
Net income/(loss) | (10,039) | (10,039) | |||||
Other comprehensive income (loss) | 1,395 | 1,395 | |||||
Balance at Jun. 30, 2017 | (5,030) | 0 | 12,048 | 458,469 | 826,404 | (1,257,168) | (44,783) |
Increase (Decrease) in Stockholders' Equity (Deficit) | |||||||
Cumulative effect of accounting change | 571 | 571 | |||||
Balance at Dec. 31, 2017 | (34,635) | 0 | 12,075 | 457,186 | 794,583 | (1,254,176) | (44,303) |
Increase (Decrease) in Stockholders' Equity (Deficit) | |||||||
Preferred stock issued | 0 | 9,723 | |||||
Exercise of stock options and release of unvested shares | (70) | 71 | (71) | (70) | |||
Payout of Reverse Stock Split shares eliminated due to rounding | 0 | (38) | 38 | ||||
Stock-based compensation | 858 | 858 | |||||
Treasury stock issued | 37 | (805) | 842 | ||||
Net income/(loss) | 25,893 | 25,893 | |||||
Other comprehensive income (loss) | 76 | 76 | |||||
Balance at Jun. 30, 2018 | $ (7,270) | $ 9,723 | $ 12,108 | $ 457,206 | $ 821,047 | $ (1,253,404) | $ (44,227) |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Consolidation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Harte Hanks, Inc. and 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. Interim Financial Information The financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles ("U.S. GAAP") 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 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. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 . The information included in this Quartery Report on Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (the "2017 10-K"). Reverse Stock Split On January 31, 2018, we executed a 1-for-10 reverse stock split (the "Reverse Stock Split") which became effective for trading purposes on February 1, 2018. Pursuant to the Reverse Stock Split, every 10 pre-split shares of our common stock, par value $1.00 per share ("Common Stock") were exchanged for one post-split share of the Company's common stock. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who would otherwise have held a fractional share of the Common Stock received (or are entitled to receive) a cash payment in lieu thereof. In addition, our authorized Common Stock was reduced from 250 million to 25 million shares. The number of authorized shares of preferred stock remained unchanged at one million shares. The Condensed Consolidated Financial Statements and Accompanying Notes to Unaudited Condensed Consolidated Financial Statements give retroactive effect to the Reverse Stock Split for all periods presented. The calculation of basic and diluted earnings/(loss) per share have been determined based on a retroactive adjustment of weighted average shares outstanding for all periods presented. To reflect the Reverse Stock Split on stockholders' equity, an amount equal to the par value of the reduced shares from the Common Stock par value account was reclassified to additional paid in capital resulting in no net impact to stockholders' equity on the Condensed Consolidated Balance Sheets. Use of Estimates The preparation of Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes could differ from those estimates and assumptions. Such estimates include, but are not limited to, estimates related to pension accounting; fair value for purposes of assessing long-lived assets for impairment; income taxes; stock-based compensation; and contingencies. On an ongoing basis, management reviews its estimates 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 Income/(Loss) The “Labor” line in the Condensed Consolidated Statements of Comprehensive Income/(Loss) includes all employee payroll and benefits, including stock-based compensation, along with temporary labor costs. The “Production and distribution” and “Advertising, selling, general and administrative” lines do not include labor, depreciation, or amortization. Securities Purchase Agreement On January 23, 2018, we entered into a Securities Purchase Agreement with Wipro, LLC, pursuant to which on January 30, 2018 we issued 9,926 shares of Series A Convertible Preferred Stock, par value $1.00 per share (the “Series A Preferred Stock”), for aggregate consideration of $9.9 million . Dividends on the Series A Preferred Stock accrue at a rate of 5.0% per year or the rate that cash dividends were paid in respect to shares of Common Stock if such rate is greater than 5.0% . The aggregate shares issued under the Securities Purchase Agreement are convertible into 1,001,614 shares of our Common Stock. Along with customary protective provisions, Wipro, LLC will be able to designate an observer or director to the Board of Directors. We are using the proceeds for general corporate purposes including for working capital purposes. See Note E, Convertible Preferred Stock , for further information. Related Party Transactions Since 2016, Wipro, LLC has provided a variety of technology-related service to the Company, including database and software development, database support and analytics, IT infrastructure support, and digital campaign management. Transactions with Wipro, LLC have been classified and disclosed in the 2017 10-K and in this Quarterly Report on Form 10-Q as related party transactions in accordance with ASC 850, Related Party Disclosures , and in accordance with the SEC's Regulation S-X Rule 4-08(k), as applicable. See Note N, Certain Relationships and Related Party Transactions , for further information. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to nonemployee share-based payment accounting, which supersedes ASC 505-50, Accounting for Distributions to Shareholders with Components of Stock and Cash, and expands the scope of ASC 718 to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. As a result, most of the guidance in ASC 718 associated with employee share-based payments, including most of its requirements related to classification and measurement, applies to nonemployee share-based payment arrangements. The ASU is effective for annual periods beginning after December 15, 2018, and the interim periods within those fiscal years with early adoption permitted after the entity has adopted ASC 606. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740)—Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 ("SAB 118"). This ASU amends certain Securities and Exchange Commission (SEC) material in Topic 740 for the income tax accounting implications of the recently issued Tax Reform. This guidance clarifies the application of Topic 740 in situations where a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting under Topic 740 for certain income tax effects of Tax Reform for the reporting period in which Tax Reform was enacted. See Note I, Income Taxes, for a discussion of the impacts of SAB 118 and this ASU. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . This ASU allows for reclassification of stranded tax effects on items resulting from the change in the corporate tax rate as a result of H.R. 1, originally known as the Tax Cuts and Jobs Act of 2017, from accumulated other comprehensive income to retained earnings. Tax effects unrelated to H.R. 1 are permitted to be released from accumulated other comprehensive income using either the specific identification approach or the portfolio approach, based on the nature of the underlying item. ASU 2018-02 is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting , which provides clarified guidance on applying modification accounting to changes in the terms or conditions of a share-based payment award. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. This change is required to be applied prospectively to an award modified on or after the adoption date. This standard was adopted as of January 1, 2018 and did not have a material impact on our consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which provides clarified guidance on the classification of certain cash receipts and payments in the statement of cash flows. This ASU is effective for annual periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. This change is required to be applied using a retrospective transition method to each period presented. Early adoption is permitted. This standard was adopted as of January 1, 2018 and did not have a material impact on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases , which requires all operating leases to be recorded on the balance sheet. The lessee will record a liability for its lease obligations (initially measured at the present value of the future lease payments not yet paid over the lease term, and an asset for its right to use the underlying asset equal to the lease liability, adjusted for lease payments made at or before lease commencement). This ASU is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. This change is required to be applied using a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited. We are evaluating the impact that adoption of ASU 2016-02 will have on our consolidated financial statements, but expect an increase in assets and liabilities on our consolidated balance sheets at adoption for the recording of right-of-use assets and corresponding lease liabilities. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). We adopted ASU 2014-09 and its related amendments (collectively known a “ASC 606”) effective on January 1, 2018 using the modified retrospective method. Please see Note C, Revenue from Contracts with Customers , for the required disclosures related to the impact of adopting this standard and a discussion of our updated policies related to revenue recognition and accounting for costs to obtain and fulfill a customer contract. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , related to revenue recognition. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of the new standard, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The new standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard also includes criteria for the capitalization and amortization of certain contract acquisition and fulfillment costs. Effective January 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers, using the modified retrospective method of adoption and have elected to apply the new standard only to contracts not completed at January 1, 2018. For contracts that were modified before the effective date, we applied the practical expedient method, which did not have a material effect on our adjustment to opening retained earnings. The reported results for 2018 reflect the application of ASC 606 guidance while the reported results for 2017 were prepared under the guidance of ASC 605, which is also referred to herein as “legacy GAAP.” Under ASC 606, revenue is recognized when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Our contracts with customers state the terms of sale, including the description, quantity, and price of the product or service purchased. Payment terms can vary by contract, but the period between invoicing and when payment is due is not significant. At January 1, 2018 and June 30, 2018, our contracts do not include any significant financing components. Consistent with legacy GAAP, we present taxes assessed on revenue-producing transactions on a net basis. Disaggregation of Revenue We disaggregate revenue by vertical market and key revenue stream. The following table summarizes revenue from contracts with customers for the three and six months ended June 30, 2018 by our key vertical markets: In thousands For the three months ended June 30, 2018 For the six months ended June 30, 2018 B2B $ 14,800 $ 33,483 Consumer Brands 15,828 35,171 Financial Services 14,441 28,922 Healthcare 4,083 8,461 Retail 15,836 32,215 Transportation 4,645 12,577 Total Revenues $ 69,633 $ 150,829 The nature of the services offered by each key revenue stream are different. The following tables summarize revenue from contracts with customers for the three and six months ended June 30, 2018 by our four major revenue streams and the pattern of revenue recognition: Three Months Ended June 30, 2018 In thousands Revenue for performance obligations recognized Revenue for performance obligations recognized at a point in time Total Agency & Digital Services $ 7,186 $ 314 $ 7,500 Database Marketing Solutions 8,365 539 8,904 Direct Mail, Logistics, and Fulfillment 32,553 2,403 34,956 Contact Centers 18,273 — 18,273 Total Revenues $ 66,377 $ 3,256 $ 69,633 For the six months ended June 30, 2018 In thousands Revenue for performance obligations recognized Revenue for performance obligations recognized at a point in time Total Agency & Digital Services $ 22,022 $ 590 $ 22,612 Database Marketing Solutions 16,653 1,821 18,474 Direct Mail, Logistics, and Fulfillment 62,665 4,540 67,205 Contact Centers 42,538 — 42,538 Total Revenues $ 143,878 $ 6,951 $ 150,829 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 standalone selling price based on the price at which the performance obligation is sold separately. Although uncommon, if the standalone selling price is not observable through past transactions, we estimate the standalone selling price 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: Agency & Digital Services Our agency services are full-service, customer engagement agencies specializing in direct and digital communications for both consumer and business-to-business markets. Our digital solutions integrate online services within the marketing mix and include: search engine management, display, digital analytics, website development and design, digital strategy, social media, email, e-commerce, and interactive relationship management. Our contracts may include a promise to purchase media or acquire search engine marketing solutions on behalf of our clients; in such cases, we have determined we are an agent, rather than principal and therefore recognize the net consideration as revenue (consistent with legacy GAAP). Agency and digital services performance obligations are satisfied over time and often offered on a project basis. We have concluded that the best approach of measuring the progress toward completion of the project based performance obligations is the input method based on costs or labor hours incurred to date dependent upon whether costs or labor hours more accurately depict the transfer of value to the customer. The variable consideration in these contracts primarily relates to time and material based services and reimbursable out-of-pocket travel costs, both of which are estimated using the expected value method. For time and material based contracts, we use the “as invoiced” practical expedient. Database Marketing Solutions Our solutions are built around centralized marketing databases with services rendered to build custom database, 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, professional 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 they 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. We charge our customers for certain data-related services at a fixed transaction based rate, e.g., per thousand customer records processed. Because the quantity of transactions is unknown at the onset of a contract, our transaction price is variable and we use the expected value method to estimate the transaction price. The uncertainty associated with the variable consideration generally resolves within a short period of time since the duration of these contracts is generally less than two months. Direct Mail, Logistics, and Fulfillment Our services include: digital printing, print on demand, advanced mail optimization, logistics and transportation optimization, tracking, commingling, shrink wrapping, and specialized mailings. We also maintain fulfillment centers where we provide custom kitting services, print on demand, product recalls, and freight optimization allowing our customers to distribute literature and other marketing materials. The majority of 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. For our direct mail revenue stream, our 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 (consistent with legacy GAAP). The variable consideration in our contracts results primarily from the transaction based fee structure of some performance obligations with their total transaction quantities to be provided unknown at the onset of a contract, which is estimated using the expected value method . Contact Centers We operate tele-service workstations in the U.S., Asia and Europe to provide advanced contact center solutions such as: speech, voice and video chat, integrated voice response, analytics, social cloud monitoring, and web self-service. Performance obligations are stand-ready obligations and satisfied over time. With regard to account management and SaaS, we use a time-elapsed output method. 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 standalone selling prices. The variable consideration in our contracts results primarily from the transaction based fee structure of some performance obligations with their total transaction quantities to be provided unknown at the onset of a contract, which is estimated using the expected value method . Upfront Non-Refundable Fees We may receive non-refundable upfront fees from customers for implementation of our SaaS database solutions products or for providing training in connection with our contact center solutions. These activities are not deemed to transfer a separate promised service and therefore, represent advanced payments. Where customers have an option to renew a contract, the customer is not required to pay similar upfront fees upon renewal. As a result, we have determined that these renewal options provide for the purchase of future services at a reduced rate and therefore, provide a material right. These upfront non-refundable fees are recognized over the period of benefit which is generally consistent with estimated customer life ( four and five years for database solutions contracts and six months to one year for contact center contracts). The upfront non-refundable fees collected from customers were immaterial as of June 30, 2018. Transaction Price Allocated to Future Performance Obligations We have elected to apply certain optional exemptions that limit the disclosure requirements over remaining performance obligations at period end to exclude: 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. After considering the above exemptions, the transaction prices allocated to unsatisfied or partially satisfied performance obligations as of June 30, 2018 totaled $1.1 million , which is expected to be recognized over the following 3 years as follows: $0.4 million for the remaining 6 months of 2018, $0.6 million in 2019 and $0.1 million in 2020. Contract Balances We record a 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 delivery of 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 January 1, 2018 and June 30, 2018 : In thousands June 30, 2018 January 1, 2018 Contract assets $ 2,648 $ 7,120 Deferred revenue and customer advances 6,749 5,906 Deferred revenue, included in other long-term liabilities 454 341 Revenue recognized during the six months ended June 30, 2018 from amounts included in deferred revenue at the beginning of the period was approximately $2.8 million . We recognized no revenues during the six months ended June 30, 2018 from performance obligations satisfied or partially satisfied in previous periods. During the six months ended June 30, 2018 , we reclassified $7.1 million of contract assets to receivables as a result of the right to the transaction consideration becoming unconditional. Costs to Obtain and Fulfill a Contract 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 benefit in a manner that is consistent with the transfer of the related goods or services to which the asset relates. The remaining unamortized contract costs were $1.2 million as of June 30, 2018. For the periods presented, no impairment was recognized. Financial Statement Impact of Adopting ASC 606 Upon the adoption of ASC 606 on January 1, 2018, we recorded a cumulative adjustment of $0.6 million , a net increase to opening retained earnings as of January 1, 2018. The following table shows the cumulative effect of the changes made to the accounts on the Condensed Consolidated Balance Sheet as of January 1, 2018 (in thousands): As Reported Adjusted December 31, 2017 Cumulative Adjustments January 1, ASSETS Accounts receivable, net $ 81,397 $ (6,710 ) $ 74,687 Contract assets — 7,120 7,120 Other current assets 3,900 373 4,273 Other assets 3,230 1,018 4,248 LIABILITIES Deferred revenue and related expenses 5,342 564 5,906 Deferred income taxes 773 119 892 Other current liabilities 3,732 245 3,977 Other long-term liabilities 4,201 302 4,503 STOCKHOLDERS’ EQUITY Retained earnings 794,583 571 795,154 The cumulative effect adjustments to the opening retained earnings relate to a few key differences between legacy GAAP and ASC 606 which include capitalizing costs to obtain and fulfill a contract (increase to retained earnings), changes in the timing of revenue recognition for non-refundable upfront fees (decrease to retained earnings), and changes in the timing of revenue recognition for Database Marketing Solutions and Logistics services (increase to retained earnings). Impact of New Revenue Guidance on Financial Statement Line Items We identified the financial statement line items impacted by ASC 606 as compared to the pro-forma amounts had the legacy GAAP been in effect, as of and for the three and six months ended June 30, 2018 , and these are summarized as follows: Balance Sheet Financial Statement Line Items The impact of adopting ASC 606 had the following impact on the Condensed Consolidated Balance Sheet as of June 30, 2018: an increase of $1.4 million and $1.0 million to reported total assets and reported retained earnings, respectively, and an increase in total reported liabilities of $0.5 million as compared to the pro-forma balance sheet which assumes legacy GAAP remained in effect as of June 30, 2018. The reported total assets increase was largely due to capitalized costs to obtain and fulfill contracts and contract assets recognized for performance obligations in our Database Marketing Solutions and Logistics businesses, of which revenues are recognized over time. The reported total liabilities increase was largely due to deferred revenue recognized for upfront non-refundable fee and accrued expenses associated with performance obligations in our Database Marketing Solutions and Logistics businesses. Income Statement Financial Statement Line Items ( three and six months ended June 30, 2018 ) The impact of adopting ASC 606 did not have a significant impact on our Condensed Consolidated Statements of Comprehensive Income/(Loss) for the three and six months ended June 30, 2018 . The adoption of ASC 606 had no significant impact on our cash flows from operations for the six months ended June 30, 2018 . The aforementioned impacts resulted in offsetting shifts in cash flows throughout net income and various changes in working capital balances. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments FASB ASC 820, Fair Value Measurements and Disclosures, 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. The guidance also establishes a fair value hierarchy that prioritizes the inputs used in valuation methodologies into three levels: 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. 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, accounts receivable, and trade payables. Our calculation of the acquisition related contingent consideration accounted for at fair value on a recurring basis is disclosed in Note M , Disposition. |
Convertible Preferred Stock
Convertible Preferred Stock | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Convertible Preferred Stock | Convertible Preferred Stock Under our Amended and Restated Certificate of Incorporation, as amended, we have authorized 1.0 million shares of preferred stock (“Preferred Stock”). On January 30, 2018, we issued 9,926 shares of our Series A Preferred Stock to Wipro, LLC (as further described in Note A above under the heading "Securities Purchase Agreement") at an issue price of $1,000 per share, for gross proceeds of $9.9 million . We incurred $0.2 million of transactions fees on the issuance of the Preferred Stock which are netted against the gross proceeds of $9.9 million on our Condensed Consolidated Financial Statements. Series A Preferred Stock has the following rights and privileges: Liquidation Rights In the event of a liquidation, dissolution or winding down of the company or a Fundamental Transaction (defined in the Certificate of Designation for the Series A Preferred Stock), whether voluntary or involuntary, the holders of the Series A Preferred Stock are entitled to receive, prior to and in preference to the holders of common stock, from the assets of the company available for distribution, an amount equal to the greater of (i) the original issue price, plus any dividends accrued but unpaid thereon, and (ii) such amount per share as would have been payable had all shares of Series A Preferred Stock been converted into Common Stock immediately before such liquidation. Upon liquidation, after the payment of all preferential amounts required to be paid to the holders of Series A Preferred Stock, the remaining assets of the Company available for distribution to its stockholders shall be distributed among the holders of common stock. Dividends Upon liquidation, dissolution or winding down of the company, or a Fundamental Transaction, shares of Series A Preferred Stock which have not been otherwise converted to Common Stock, shall be entitled to receive dividends that accrue at a rate of (i) 5% each year, or (ii) the rate that cash dividends were paid in respect of common stock (with Series A Preferred Stock being paid on an as-converted basis in such case) for such year if such rate is greater than 5% . Dividends on the Series A Preferred Stock are cumulative and accrue to the holders thereof whether or not declared by the Board of Directors. Dividends are payable solely upon a Liquidation (as defined in the Certificate of Designation), but only if prior to such Liquidation such shares of Series A Preferred Stock have not been converted to Common Stock. As of June 30, 2018 , cumulative dividends payable to the holders of Series A Preferred Stock upon a Liquidation totaled $0.2 million , or $20.83 per share of Series A Preferred Stock. Conversion At the option of the holders of Series A Preferred Stock, shares of Series A Preferred Stock may be converted into Common Stock at a rate of 100.90817 shares of Common Stock for one share of Series A Preferred Stock, subject to certain future adjustments. Voting and Other Rights The Series A Preferred Stock shall have no voting rights, except as otherwise required by law. Other rights afforded the holders of Series A Preferred Stock, under defined circumstances, include the election and removal of one member of the Board of Directors as a separate voting class, the ability to approve certain actions of the Company prior to execution, and preemptive rights to participate in any future issuances of new securities. We determined that the Series A Preferred Stock has contingent redemption provisions allowing redemption by the holder upon certain defined events. As the event that may trigger the redemption of the Series A Preferred Stock is not solely within our control, the Series A Preferred Stock is classified as mezzanine equity (temporary equity) in the Condensed Consolidated Balance Sheet as of June 30, 2018 . |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt As of June 30, 2018 and December 31, 2017 , we did not have any debt outstanding. Credit Facilities On April 17, 2017, we entered into a secured credit facility with Texas Capital Bank, N.A., that provided a $20 million revolving credit facility (the "Texas Capital Credit Facility") and letters of credit issued by Texas Capital Bank up to $5.0 million . The Texas Capital Credit Facility will be used for general corporate purposes. The Texas Capital Credit Facility is secured by substantially all of the company's assets and its material domestic subsidiaries. The Texas Capital Credit Facility is secured by HHS Guaranty, LLC, an entity formed to provide credit support for Harte Hanks by certain members of the Shelton family (descendants of one of our founders). The Texas Capital Credit Facility had an expiration date of April 17, 2019, at which point all outstanding principal amounts will be due. We can elect to accrue interest on outstanding principal balances at either LIBOR plus 1.95% or prime plus 0.75% . Unused credit balances will accrue interest at 0.50% . We are required to pay a quarterly fee of $0.1 million as consideration for the collateral balances provided by HHS Guaranty, LLC. The Texas Capital Credit Facility is subject to customary covenants requiring insurance, legal compliance, payment of taxes, prohibition of second liens, and secondary indebtedness, as well as the filing of quarterly and annual financial statements. On January 9, 2018, we entered into an amendment to the Texas Capital Credit Facility that increased the borrowing capacity to $22 million and extended the maturity by one year to April 17, 2020. The Texas Capital Credit Facility remains secured by substantially all of our assets and continues to be guaranteed by HHS Guaranty. At June 30, 2018 , we had letters of credit in the amount of $2.8 million . No amounts were drawn against these letters of credit at June 30, 2018 . These letters of credit exist to support insurance programs relating to workers’ compensation, automobile, and general liability. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation We maintain stock incentive plans for the benefit of certain officers, directors, and employees, including the 2013 Omnibus Incentive Plan. Our stock incentive plans include 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 a 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 Income/(Loss). We recognized $1.3 million and $1.0 million of stock-based compensation expense during the six months ended June 30, 2018 and 2017 , respectively. |
Components of Net Periodic Bene
Components of Net Periodic Benefit Cost | 6 Months Ended |
Jun. 30, 2018 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |
Components of Net Periodic Benefit Cost | Components of Net Periodic Benefit Cost Prior to January 1, 1999, we maintained a defined benefit pension plan for which most of our employees were eligible (the "Qualified Pension 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 our Qualified Pension Plan were it not for limitations imposed by income tax regulation. The Restoration Pension Plan was 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. Net pension cost for both plans included the following components: Three Months Ended June 30, Six Months Ended June 30, In thousands 2018 2017 2018 2017 Interest cost $ 1,685 $ 1,837 $ 3,370 $ 3,674 Expected return on plan assets (1,524 ) (1,832 ) (3,047 ) (3,664 ) Recognized actuarial loss 689 688 1,377 1,377 Net periodic benefit cost $ 850 $ 693 $ 1,700 $ 1,387 We are not required to make, and do not intend to make, any contributions to our Qualified Pension Plan in 2018 . Based on current estimates we will not be required to make any contributions to our Qualified Pension Plan until the 2019 plan year. We are not required to make, and do not intend to make, any contributions to our Restoration Pension Plan other than to the extent needed to cover benefit payments. We made benefit payments under this supplemental plan of $0.4 million and $0.8 million in the three and six months ended June 30, 2018 , respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our three months ended June 30, 2018 income tax benefit of $0.6 million resulted in an effective income tax rate of 8.0% . Our six months ended June 30, 2018 income tax benefit of $9.4 million resulted in an effective income tax rate of (56.7)% . The effective income tax benefit for the three months ended June 30, 2018 differs from the federal statutory rate of 21.0% , primarily due to valuation allowances recorded on our deferred tax assets for current period federal net operating losses incurred, as we have concluded that it is more likely than not that these deferred tax assets will not be realized. The effective income tax benefit for the six months ended June 30, 2018 differs from the federal statutory rate of 21.0% , primarily due to the capital loss generated from the sale of 3Q Digital which will be available for carryback. We have historically, including for 2017, calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full calendar year to ordinary income or loss for the reporting period. However, we have used a discrete effective tax rate method to calculate income taxes for the three and six months ended June 30, 2018 because we determined that our ordinary income or loss cannot be reliably estimated and small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rate. Our three months ended June 30, 2017 income tax benefit of $2.2 million resulted in an effective income tax rate of 45.3% . Our six months ended June 30, 2017 income tax benefit of $3.7 million resulted in an effective income tax rate of 26.8% . The effective income tax rate for the three and six months ended June 30, 2017 differs from the federal statutory rate of 35.0% , primarily due to the nondeductible interest associated with the 3Q Digital contingent consideration and foreign tax credit limitations on dividends paid from foreign subsidiaries. As noted above, we calculated the provision for income taxes for the three and six months ended June 30, 2017 by applying an estimate of the annual effective tax rate for the full calendar year to ordinary income or loss for the reporting period . The U.S. Tax Cuts and Jobs Act (the "Tax Reform Act”) was enacted on December 22, 2017. The legislation significantly changed U.S. tax law by, among other things, lowering the corporate income tax rate from 35% to 21% , implementing a territorial tax system and imposing a one-time repatriation tax on deemed repatriated earnings of foreign subsidiaries. Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Reform Act, we made reasonable estimates of the effects and recorded provisional amounts in our financial statements as of December 31, 2017 in accordance with the SEC Staff Accounting Bulletin (“SAB”) 118. We did not record any adjustments to our provisional amounts in the first or second quarter of 2018. The provisional amounts are subject to revisions as we continue to complete our analysis of the Tax Reform Act, collect and prepare necessary data, and interpret any additional guidance issued by the U.S. Treasury Department, Internal Revenue Service ("IRS"), the Financial Accounting Standards Board ("FASB"), and other standard-setting and regulatory bodies. Any such revisions will be treated in accordance with the one-year measurement period guidance outlined in SAB 118. Harte Hanks, or one of our subsidiaries, files 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 tax years prior to 2013. For U.S. federal and foreign returns, we are no longer subject to tax examinations for tax years prior to 2014. We have elected to classify any interest expense and penalties related to income taxes within income tax expense in our Consolidated Statements of Comprehensive Income/(Loss). We did not have a significant amount of interest or penalties accrued at June 30, 2018 or December 31, 2017 . |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share In periods in which the company has net income, the company is required to calculate earnings per share ("EPS") using the two-class method. The two-class method is required because the company's preferred stock is considered a participating security with objectively determinable and non-discretionary dividend participation rights. Preferred stockholders have the right to participate in dividends above their five percent dividend rate should the company declare dividends on its Common Stock at a dividend rate higher than the five percent (on an as-converted basis). Under the two-class method, undistributed and distributed earnings are allocated on a pro-rata basis to the common and the preferred stockholders. The weighted-average number of common and preferred stock outstanding during the period is then used to calculate EPS for each class of shares. In periods in which the company has a net loss, basic loss per share is calculated using the treasury stock method. The treasury stock method is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period. The two-class method is not used, because the calculation would be anti-dilutive. Reconciliations of basic and diluted EPS were as follows: Three Months Ended June 30, In thousands, except per share amounts 2018 2017 Net Loss $ (6,734 ) $ (2,653 ) Less: Preferred stock dividends 124 — Income/(loss) attributable to common stockholders $ (6,858 ) $ (2,653 ) Basic Earnings/(Loss) per Common Share Weighted-average common shares outstanding 6,226 6,190 Basic earnings/(loss) per common share $ (1.10 ) $ (0.43 ) Diluted Earnings/(Loss) per Common Share Weighted-average shares used to compute earnings/(loss) per share attributable to common shares 6,226 6,190 Diluted earnings/(loss) per common share $ (1.10 ) $ (0.43 ) Computation of Shares Used in Diluted Earnings/(Loss) Per Common Share Weighted-average common shares outstanding 6,226 6,190 Shares used in diluted earnings/(loss) per common share computations 6,226 6,190 0.3 million and 0.3 million of anti-dilutive market price options have been excluded from the calculation of shares used in the diluted EPS calculation for the three months ended June 30, 2018 and 2017 , respectively. 0.2 million and 0.1 million anti-dilutive unvested shares were excluded from the calculation of shares used in the diluted EPS calculation for the three months ended June 30, 2018 and 2017 , respectively. 1.0 million of anti-dilutive preferred stock (as if converted) have been excluded from the calculation of shares used in the diluted EPS calculation for the three months ended June 30, 2018 . Six Months Ended June 30, In thousands, except per share amounts 2018 2017 Numerator: Net income/(loss) $ 25,893 $ (10,039 ) Less: Preferred stock dividend 207 — Less: Earnings attributable to participating securities 3,059 — Numerator for basic EPS: income/(loss) attributable to common stockholders $ 22,627 $ (10,039 ) Effect of dilutive securities: Add back: Allocation of earnings to participating securities 3,059 — Less: Re-allocation of earnings to participating securities considering potentially dilutive securities (3,046 ) — Numerator for diluted EPS $ 22,640 $ (10,039 ) Denominator: Basic EPS denominator: weighted-average common shares outstanding 6,220 6,179 Effect of dilutive securities: Unvested shares 30 — Diluted EPS denominator 6,250 6,179 Basic earnings/(loss) per common share $ 3.64 $ (1.62 ) Diluted earnings/(loss) per common share $ 3.62 $ (1.62 ) 0.3 million and 0.3 million of anti-dilutive market price options have been excluded from the calculation of shares used in the diluted EPS calculation for the six months ended June 30, 2018 and 2017, respectively. $ 32.0 thousand and 0.1 million anti-dilutive unvested shares were excluded from the calculation of shares used in the diluted EPS calculation for the six months ended June 30, 2018 and 2017 , respectively. |
Comprehensive Income_(Loss)
Comprehensive Income/(Loss) | 6 Months Ended |
Jun. 30, 2018 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Comprehensive Income/(Loss) | Comprehensive Income/(Loss) Comprehensive income/(loss) for a period encompasses net income/(loss) and all other changes in equity other than from transactions with our stockholders. Our comprehensive income/(loss) was as follows: Three Months Ended June 30, Six Months Ended June 30, In thousands 2018 2017 2018 2017 Net income/(loss) $ (6,734 ) $ (2,653 ) 25,893 (10,039 ) Other comprehensive income/(loss): Adjustment to pension liability 686 688 1,377 1,252 Tax expense (169 ) (275 ) (342 ) (501 ) Adjustment to pension liability, net of tax 517 413 1,035 751 Foreign currency translation adjustment, net of tax (804 ) 599 (959 ) 644 Total other comprehensive income/(loss), net of tax (287 ) 1,012 76 1,395 Total comprehensive income/(loss) $ (7,021 ) $ (1,641 ) $ 25,969 $ (8,644 ) Changes in accumulated other comprehensive income/(loss) by component were as follows: In thousands Defined Benefit Foreign Currency Items Total Balance at December 31, 2017 $ (45,418 ) $ 1,115 $ (44,303 ) Other comprehensive income/(loss), net of tax, before reclassifications — (959 ) (959 ) Amounts reclassified from accumulated other comprehensive income/(loss), net of tax, to other, net, on the condensed consolidated statements of comprehensive income/(loss) 1,035 — 1,035 Net current period other comprehensive income/(loss), net of tax 1,035 (959 ) 76 Balance at June 30, 2018 $ (44,383 ) $ 156 $ (44,227 ) In thousands Defined Benefit Foreign Currency Items Total Balance at December 31, 2016 $ (46,977 ) $ 799 $ (46,178 ) Other comprehensive income/(loss), net of tax, before reclassifications — 644 644 Amounts reclassified from accumulated other comprehensive income/(loss), net of tax, to other, net, on the condensed consolidated statements of comprehensive income/(loss) 751 — 751 Net current period other comprehensive income/(loss), net of tax 751 644 1,395 Balance at June 30, 2017 $ (46,226 ) $ 1,443 $ (44,783 ) Reclassification amounts related to the defined pension plans are included in the computation of net periodic pension benefit cost (see Note H , Components of Net Periodic Pension Benefit Cost ). |
Litigation Contingencies
Litigation Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation Contingencies | Litigation Contingencies In the normal course of our business, we are obligated under some agreements to indemnify our clients as a result of claims that we infringe on the proprietary rights of third parties. The terms and duration of these commitments vary and, in some cases, may be indefinite, and certain of these 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 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 reasonable 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 legal counsel; (ii) our previous experience; and (iii) the decision of our management as to how we intend to respond to the complaints. |
Disposition
Disposition | 6 Months Ended |
Jun. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposition | Disposition On February 28, 2018, we sold our 3Q Digital, Inc. subsidiary ("3Q Digital") to an entity owned by certain former owners of the 3Q Digital business. Consideration for the sale included $5.0 million in cash proceeds, subject to certain working capital adjustments, and up to $5.0 million in additional consideration if the 3Q Digital business is sold again (provided certain value thresholds are met). The $35.0 million contingent consideration obligation of the company that related to our acquisition of 3Q Digital in 2015 was assigned to the buyer, thereby relieving us of the obligation. In addition, the identified intangible assets with definite lives for client relationships and non-compete agreements were written-off as a component of the gain on sale. The 3Q Digital business represented less than 10% of our total 2017 revenues. As a result of the sale, the company recognized a pre-tax gain of $31.0 million in the first quarter of 2018. The assets included net intangible assets and the liabilities (including contingent consideration). The purchase agreement and subsequent amendment to the purchase agreement for the 2015 acquisition of 3Q Digital included a contingent consideration arrangement that would have required us to pay the former owners of 3Q Digital an additional cash payment depending on achievement of certain revenue growth goals. The potential undiscounted amount of all future payments that would have been required to be paid under the contingent consideration arrangement was $35.0 million in cash payable in 2019. A reconciliation of accrued balances of the contingent consideration using significant unobservable inputs (Level 3) is as follows: (in thousands) Fair Value Accrued contingent consideration liability as of December 31, 2017 $ 33,887 Accretion of interest 742 Disposition (34,629 ) Accrued contingent consideration liability as of June 30, 2018 $ — |
Certain Relationships and Relat
Certain Relationships and Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Certain Relationships and Related Party Transactions | Certain Relationships and Related Party Transactions Since 2016, we have conducted (and we continue to conduct) business with Wipro, LLC (“Wipro”), whereby Wipro provides us with a variety of technology-related services, including database and software development, database support and analytics, IT infrastructure support, leased facilities and digital campaign management. Additionally, we also provide Wipro with agency services. Effective January 30, 2018, Wipro became a related party when it purchased 9,926 shares of our Series A Preferred Stock, for aggregate consideration of $9.9 million . For information pertaining to the Company’s preferred stock, See Note E, Convertible Preferred Stock . During the three and six months ended June 30, 2018 , we recorded no revenue from services provided to Wipro. During the three and six months ended June 30, 2017 , we recorded $15 thousand and $0.1 million of revenue for agency-related services we provided Wipro, respectively. During the three months ended June 30, 2018 and 2017 , we recorded $3.3 million and $2.5 million of expense, respectively, in technology-related services and leased facilities Wipro provided to us. During the six months ended June 30, 2018 and 2017, we recorded $6.1 million and $2.9 million of expense, respectively, in technology-related services Wipro provided to us. During the three and six months ended June 30, 2018 , we capitalized $0.4 million and $1.5 million of costs, respectively, for internally developed software services received from Wipro. These capitalized costs are included in Property, Plant and Equipment on the Condensed Consolidated Balance Sheet as of June 30, 2018 . As of June 30, 2018 and December 31, 2017 , we had a trade payable due to Wipro of $2.9 million and $2.2 million , respectively. We had $15 thousand in trade receivables due from Wipro for services provided in 2017 but invoiced in 2018 as of June 30, 2018 and no trade receivables due from Wipro as of December 31, 2017 . As described in “Note F- Long-Term Debt", the Company’s Texas Capital Credit Facility is secured by HHS Guaranty, LLC, an entity formed to provide credit support for the Company by certain members of the Shelton family (descendants of one of our founders). Pursuant to the Amended and Restated Fee, Reimbursement and Indemnity Agreement, dated January 9, 2018, between HHS Guarantee. LLC and the Company, HHS Guarantee, LLC has the right to appoint one representative director to the Board of Directors. Currently, David L. Copeland serves as the HHS Guarantee, LLC representative on the Board of Directors. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | Consolidation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Harte Hanks, Inc. and 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. |
Interim Financial Information | Interim Financial Information The financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles ("U.S. GAAP") 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 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. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018 . The information included in this Quartery Report on Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (the "2017 10-K"). |
Use of Estimates | Use of Estimates The preparation of Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes could differ from those estimates and assumptions. Such estimates include, but are not limited to, estimates related to pension accounting; fair value for purposes of assessing long-lived assets for impairment; income taxes; stock-based compensation; and contingencies. On an ongoing basis, management reviews its estimates 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 Income/(Loss) | Operating Expense Presentation in Condensed Consolidated Statements of Comprehensive Income/(Loss) The “Labor” line in the Condensed Consolidated Statements of Comprehensive Income/(Loss) includes all employee payroll and benefits, including stock-based compensation, along with temporary labor costs. The “Production and distribution” and “Advertising, selling, general and administrative” lines do not include labor, depreciation, or amortization. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to nonemployee share-based payment accounting, which supersedes ASC 505-50, Accounting for Distributions to Shareholders with Components of Stock and Cash, and expands the scope of ASC 718 to include all share-based payment arrangements related to the acquisition of goods and services from both nonemployees and employees. As a result, most of the guidance in ASC 718 associated with employee share-based payments, including most of its requirements related to classification and measurement, applies to nonemployee share-based payment arrangements. The ASU is effective for annual periods beginning after December 15, 2018, and the interim periods within those fiscal years with early adoption permitted after the entity has adopted ASC 606. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. In March 2018, the FASB issued ASU 2018-05, Income Taxes (Topic 740)—Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 ("SAB 118"). This ASU amends certain Securities and Exchange Commission (SEC) material in Topic 740 for the income tax accounting implications of the recently issued Tax Reform. This guidance clarifies the application of Topic 740 in situations where a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting under Topic 740 for certain income tax effects of Tax Reform for the reporting period in which Tax Reform was enacted. See Note I, Income Taxes, for a discussion of the impacts of SAB 118 and this ASU. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . This ASU allows for reclassification of stranded tax effects on items resulting from the change in the corporate tax rate as a result of H.R. 1, originally known as the Tax Cuts and Jobs Act of 2017, from accumulated other comprehensive income to retained earnings. Tax effects unrelated to H.R. 1 are permitted to be released from accumulated other comprehensive income using either the specific identification approach or the portfolio approach, based on the nature of the underlying item. ASU 2018-02 is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting , which provides clarified guidance on applying modification accounting to changes in the terms or conditions of a share-based payment award. This ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. This change is required to be applied prospectively to an award modified on or after the adoption date. This standard was adopted as of January 1, 2018 and did not have a material impact on our consolidated financial statements and related disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments , which provides clarified guidance on the classification of certain cash receipts and payments in the statement of cash flows. This ASU is effective for annual periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. This change is required to be applied using a retrospective transition method to each period presented. Early adoption is permitted. This standard was adopted as of January 1, 2018 and did not have a material impact on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases , which requires all operating leases to be recorded on the balance sheet. The lessee will record a liability for its lease obligations (initially measured at the present value of the future lease payments not yet paid over the lease term, and an asset for its right to use the underlying asset equal to the lease liability, adjusted for lease payments made at or before lease commencement). This ASU is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. This change is required to be applied using a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited. We are evaluating the impact that adoption of ASU 2016-02 will have on our consolidated financial statements, but expect an increase in assets and liabilities on our consolidated balance sheets at adoption for the recording of right-of-use assets and corresponding lease liabilities. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). We adopted ASU 2014-09 and its related amendments (collectively known a “ASC 606”) effective on January 1, 2018 using the modified retrospective method. Please see Note C, Revenue from Contracts with Customers , for the required disclosures related to the impact of adopting this standard and a discussion of our updated policies related to revenue recognition and accounting for costs to obtain and fulfill a customer contract. |
Revenue from Contracts with Customers | Costs to Obtain and Fulfill a Contract 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 benefit in a manner that is consistent with the transfer of the related goods or services to which the asset relates. The remaining unamortized contract costs were $1.2 million as of June 30, 2018. For the periods presented, no impairment was recognized. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , related to revenue recognition. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of the new standard, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The new standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new standard also includes criteria for the capitalization and amortization of certain contract acquisition and fulfillment costs. Effective January 1, 2018, we adopted ASC 606, Revenue from Contracts with Customers, using the modified retrospective method of adoption and have elected to apply the new standard only to contracts not completed at January 1, 2018. For contracts that were modified before the effective date, we applied the practical expedient method, which did not have a material effect on our adjustment to opening retained earnings. The reported results for 2018 reflect the application of ASC 606 guidance while the reported results for 2017 were prepared under the guidance of ASC 605, which is also referred to herein as “legacy GAAP.” Under ASC 606, revenue is recognized when control of the promised goods or services is transferred to the customer, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Our contracts with customers state the terms of sale, including the description, quantity, and price of the product or service purchased. Payment terms can vary by contract, but the period between invoicing and when payment is due is not significant. At January 1, 2018 and June 30, 2018, our contracts do not include any significant financing components. Consistent with legacy GAAP, we present taxes assessed on revenue-producing transactions on a net basis. Agency & Digital Services Our agency services are full-service, customer engagement agencies specializing in direct and digital communications for both consumer and business-to-business markets. Our digital solutions integrate online services within the marketing mix and include: search engine management, display, digital analytics, website development and design, digital strategy, social media, email, e-commerce, and interactive relationship management. Our contracts may include a promise to purchase media or acquire search engine marketing solutions on behalf of our clients; in such cases, we have determined we are an agent, rather than principal and therefore recognize the net consideration as revenue (consistent with legacy GAAP). Agency and digital services performance obligations are satisfied over time and often offered on a project basis. We have concluded that the best approach of measuring the progress toward completion of the project based performance obligations is the input method based on costs or labor hours incurred to date dependent upon whether costs or labor hours more accurately depict the transfer of value to the customer. The variable consideration in these contracts primarily relates to time and material based services and reimbursable out-of-pocket travel costs, both of which are estimated using the expected value method. For time and material based contracts, we use the “as invoiced” practical expedient. Database Marketing Solutions Our solutions are built around centralized marketing databases with services rendered to build custom database, 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, professional 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 they 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. We charge our customers for certain data-related services at a fixed transaction based rate, e.g., per thousand customer records processed. Because the quantity of transactions is unknown at the onset of a contract, our transaction price is variable and we use the expected value method to estimate the transaction price. The uncertainty associated with the variable consideration generally resolves within a short period of time since the duration of these contracts is generally less than two months. Direct Mail, Logistics, and Fulfillment Our services include: digital printing, print on demand, advanced mail optimization, logistics and transportation optimization, tracking, commingling, shrink wrapping, and specialized mailings. We also maintain fulfillment centers where we provide custom kitting services, print on demand, product recalls, and freight optimization allowing our customers to distribute literature and other marketing materials. The majority of 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. For our direct mail revenue stream, our 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 (consistent with legacy GAAP). The variable consideration in our contracts results primarily from the transaction based fee structure of some performance obligations with their total transaction quantities to be provided unknown at the onset of a contract, which is estimated using the expected value method . Contact Centers We operate tele-service workstations in the U.S., Asia and Europe to provide advanced contact center solutions such as: speech, voice and video chat, integrated voice response, analytics, social cloud monitoring, and web self-service. Performance obligations are stand-ready obligations and satisfied over time. With regard to account management and SaaS, we use a time-elapsed output method. 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 standalone selling prices. The variable consideration in our contracts results primarily from the transaction based fee structure of some performance obligations with their total transaction quantities to be provided unknown at the onset of a contract, which is estimated using the expected value method . Upfront Non-Refundable Fees We may receive non-refundable upfront fees from customers for implementation of our SaaS database solutions products or for providing training in connection with our contact center solutions. These activities are not deemed to transfer a separate promised service and therefore, represent advanced payments. Where customers have an option to renew a contract, the customer is not required to pay similar upfront fees upon renewal. As a result, we have determined that these renewal options provide for the purchase of future services at a reduced rate and therefore, provide a material right. These upfront non-refundable fees are recognized over the period of benefit which is generally consistent with estimated customer life ( four and five years for database solutions contracts and six months to one year for contact center contracts). The upfront non-refundable fees collected from customers were immaterial as of June 30, 2018. Transaction Price Allocated to Future Performance Obligations We have elected to apply certain optional exemptions that limit the disclosure requirements over remaining performance obligations at period end to exclude: 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. After considering the above exemptions, the transaction prices allocated to unsatisfied or partially satisfied performance obligations as of June 30, 2018 totaled $1.1 million , which is expected to be recognized over the following 3 years as follows: $0.4 million for the remaining 6 months of 2018, $0.6 million in 2019 and $0.1 million in 2020. Contract Balances We record a 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 delivery of 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 January 1, 2018 and June 30, 2018 : In thousands June 30, 2018 January 1, 2018 Contract assets $ 2,648 $ 7,120 Deferred revenue and customer advances 6,749 5,906 Deferred revenue, included in other long-term liabilities 454 341 Revenue recognized during the six months ended June 30, 2018 from amounts included in deferred revenue at the beginning of the period was approximately $2.8 million . We recognized no revenues during the six months ended June 30, 2018 from performance obligations satisfied or partially satisfied in previous periods. During the six months ended June 30, 2018 , we reclassified $7.1 million of contract assets to receivables as a result of the right to the transaction consideration becoming unconditional. Costs to Obtain and Fulfill a Contract 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 benefit in a manner that is consistent with the transfer of the related goods or services to which the asset relates. |
Revenue from Contracts with C22
Revenue from Contracts with Customers (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes revenue from contracts with customers for the three and six months ended June 30, 2018 by our key vertical markets: In thousands For the three months ended June 30, 2018 For the six months ended June 30, 2018 B2B $ 14,800 $ 33,483 Consumer Brands 15,828 35,171 Financial Services 14,441 28,922 Healthcare 4,083 8,461 Retail 15,836 32,215 Transportation 4,645 12,577 Total Revenues $ 69,633 $ 150,829 The following tables summarize revenue from contracts with customers for the three and six months ended June 30, 2018 by our four major revenue streams and the pattern of revenue recognition: Three Months Ended June 30, 2018 In thousands Revenue for performance obligations recognized Revenue for performance obligations recognized at a point in time Total Agency & Digital Services $ 7,186 $ 314 $ 7,500 Database Marketing Solutions 8,365 539 8,904 Direct Mail, Logistics, and Fulfillment 32,553 2,403 34,956 Contact Centers 18,273 — 18,273 Total Revenues $ 66,377 $ 3,256 $ 69,633 For the six months ended June 30, 2018 In thousands Revenue for performance obligations recognized Revenue for performance obligations recognized at a point in time Total Agency & Digital Services $ 22,022 $ 590 $ 22,612 Database Marketing Solutions 16,653 1,821 18,474 Direct Mail, Logistics, and Fulfillment 62,665 4,540 67,205 Contact Centers 42,538 — 42,538 Total Revenues $ 143,878 $ 6,951 $ 150,829 |
Contract Balances | The following table summarizes our contract balances as of January 1, 2018 and June 30, 2018 : In thousands June 30, 2018 January 1, 2018 Contract assets $ 2,648 $ 7,120 Deferred revenue and customer advances 6,749 5,906 Deferred revenue, included in other long-term liabilities 454 341 |
Cumulative Effect of Changes | The following table shows the cumulative effect of the changes made to the accounts on the Condensed Consolidated Balance Sheet as of January 1, 2018 (in thousands): As Reported Adjusted December 31, 2017 Cumulative Adjustments January 1, ASSETS Accounts receivable, net $ 81,397 $ (6,710 ) $ 74,687 Contract assets — 7,120 7,120 Other current assets 3,900 373 4,273 Other assets 3,230 1,018 4,248 LIABILITIES Deferred revenue and related expenses 5,342 564 5,906 Deferred income taxes 773 119 892 Other current liabilities 3,732 245 3,977 Other long-term liabilities 4,201 302 4,503 STOCKHOLDERS’ EQUITY Retained earnings 794,583 571 795,154 |
Components of Net Periodic Be23
Components of Net Periodic Benefit Cost (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |
Schedule of net pension cost of plans | Net pension cost for both plans included the following components: Three Months Ended June 30, Six Months Ended June 30, In thousands 2018 2017 2018 2017 Interest cost $ 1,685 $ 1,837 $ 3,370 $ 3,674 Expected return on plan assets (1,524 ) (1,832 ) (3,047 ) (3,664 ) Recognized actuarial loss 689 688 1,377 1,377 Net periodic benefit cost $ 850 $ 693 $ 1,700 $ 1,387 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic and diluted earnings per share | Six Months Ended June 30, In thousands, except per share amounts 2018 2017 Numerator: Net income/(loss) $ 25,893 $ (10,039 ) Less: Preferred stock dividend 207 — Less: Earnings attributable to participating securities 3,059 — Numerator for basic EPS: income/(loss) attributable to common stockholders $ 22,627 $ (10,039 ) Effect of dilutive securities: Add back: Allocation of earnings to participating securities 3,059 — Less: Re-allocation of earnings to participating securities considering potentially dilutive securities (3,046 ) — Numerator for diluted EPS $ 22,640 $ (10,039 ) Denominator: Basic EPS denominator: weighted-average common shares outstanding 6,220 6,179 Effect of dilutive securities: Unvested shares 30 — Diluted EPS denominator 6,250 6,179 Basic earnings/(loss) per common share $ 3.64 $ (1.62 ) Diluted earnings/(loss) per common share $ 3.62 $ (1.62 ) Reconciliations of basic and diluted EPS were as follows: Three Months Ended June 30, In thousands, except per share amounts 2018 2017 Net Loss $ (6,734 ) $ (2,653 ) Less: Preferred stock dividends 124 — Income/(loss) attributable to common stockholders $ (6,858 ) $ (2,653 ) Basic Earnings/(Loss) per Common Share Weighted-average common shares outstanding 6,226 6,190 Basic earnings/(loss) per common share $ (1.10 ) $ (0.43 ) Diluted Earnings/(Loss) per Common Share Weighted-average shares used to compute earnings/(loss) per share attributable to common shares 6,226 6,190 Diluted earnings/(loss) per common share $ (1.10 ) $ (0.43 ) Computation of Shares Used in Diluted Earnings/(Loss) Per Common Share Weighted-average common shares outstanding 6,226 6,190 Shares used in diluted earnings/(loss) per common share computations 6,226 6,190 |
Comprehensive Income_(Loss) (Ta
Comprehensive Income/(Loss) (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Schedule of comprehensive income (loss) | Our comprehensive income/(loss) was as follows: Three Months Ended June 30, Six Months Ended June 30, In thousands 2018 2017 2018 2017 Net income/(loss) $ (6,734 ) $ (2,653 ) 25,893 (10,039 ) Other comprehensive income/(loss): Adjustment to pension liability 686 688 1,377 1,252 Tax expense (169 ) (275 ) (342 ) (501 ) Adjustment to pension liability, net of tax 517 413 1,035 751 Foreign currency translation adjustment, net of tax (804 ) 599 (959 ) 644 Total other comprehensive income/(loss), net of tax (287 ) 1,012 76 1,395 Total comprehensive income/(loss) $ (7,021 ) $ (1,641 ) $ 25,969 $ (8,644 ) |
Schedule of changes in accumulated other comprehensive income | Changes in accumulated other comprehensive income/(loss) by component were as follows: In thousands Defined Benefit Foreign Currency Items Total Balance at December 31, 2017 $ (45,418 ) $ 1,115 $ (44,303 ) Other comprehensive income/(loss), net of tax, before reclassifications — (959 ) (959 ) Amounts reclassified from accumulated other comprehensive income/(loss), net of tax, to other, net, on the condensed consolidated statements of comprehensive income/(loss) 1,035 — 1,035 Net current period other comprehensive income/(loss), net of tax 1,035 (959 ) 76 Balance at June 30, 2018 $ (44,383 ) $ 156 $ (44,227 ) In thousands Defined Benefit Foreign Currency Items Total Balance at December 31, 2016 $ (46,977 ) $ 799 $ (46,178 ) Other comprehensive income/(loss), net of tax, before reclassifications — 644 644 Amounts reclassified from accumulated other comprehensive income/(loss), net of tax, to other, net, on the condensed consolidated statements of comprehensive income/(loss) 751 — 751 Net current period other comprehensive income/(loss), net of tax 751 644 1,395 Balance at June 30, 2017 $ (46,226 ) $ 1,443 $ (44,783 ) |
Disposition (Tables)
Disposition (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of reconciliation of beginning and ending balances of contingent earnout consideration | A reconciliation of accrued balances of the contingent consideration using significant unobservable inputs (Level 3) is as follows: (in thousands) Fair Value Accrued contingent consideration liability as of December 31, 2017 $ 33,887 Accretion of interest 742 Disposition (34,629 ) Accrued contingent consideration liability as of June 30, 2018 $ — |
Basis of Presentation (Details)
Basis of Presentation (Details) $ / shares in Units, $ in Millions | Jan. 31, 2018shares | Jan. 30, 2018USD ($)$ / sharesshares | Jan. 23, 2018 | Jun. 30, 2018$ / sharesshares | Dec. 31, 2017$ / sharesshares |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Conversion ratio | 0.1 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 1 | $ 1 | |||
Common stock, shares authorized (in shares) | 25,000,000 | 250,000,000 | 25,000,000 | 25,000,000 | |
Preferred stock, preferred stock authorized (in shares) | 1,000,000 | 1,000,000 | |||
Series A Preferred Stock | Securities Purchase Agreement | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Number of shares issued (in shares) | 9,926 | ||||
Convertible preferred stock, Series A convertible par value (in dollars per share) | $ / shares | $ 1 | ||||
Consideration received on transaction | $ | $ 9.9 | ||||
Dividend rate (as percent) | 5.00% | 5.00% | |||
Shares issued upon conversion (in shares) | 1,001,614 |
Revenue from Contracts with C28
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018USD ($) | Jun. 30, 2018USD ($) | |
Disaggregation of Revenue [Line Items] | ||
Total Revenues | $ 69,633 | $ 150,829 |
Performance obligation, amount | $ 1,100 | $ 1,100 |
Performance obligation, period | 3 years | 3 years |
Agency & Digital Services | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | $ 7,500 | $ 22,612 |
Database Marketing Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 8,904 | $ 18,474 |
Estimated customer life | 2 months | |
Database Marketing Solutions | Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Estimated customer life | 4 years | |
Database Marketing Solutions | Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Estimated customer life | 5 years | |
Direct Mail, Logistics, and Fulfillment | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 34,956 | $ 67,205 |
Contact Centers | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 18,273 | $ 42,538 |
Contact Centers | Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Estimated customer life | 6 months | |
Contact Centers | Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Estimated customer life | 1 year | |
Revenue for performance obligations recognized over time | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 66,377 | $ 143,878 |
Revenue for performance obligations recognized over time | Agency & Digital Services | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 7,186 | 22,022 |
Revenue for performance obligations recognized over time | Database Marketing Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 8,365 | 16,653 |
Revenue for performance obligations recognized over time | Direct Mail, Logistics, and Fulfillment | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 32,553 | 62,665 |
Revenue for performance obligations recognized over time | Contact Centers | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 18,273 | 42,538 |
Revenue for performance obligations recognized at a point in time | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 3,256 | 6,951 |
Revenue for performance obligations recognized at a point in time | Agency & Digital Services | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 314 | 590 |
Revenue for performance obligations recognized at a point in time | Database Marketing Solutions | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 539 | 1,821 |
Revenue for performance obligations recognized at a point in time | Direct Mail, Logistics, and Fulfillment | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 2,403 | 4,540 |
Revenue for performance obligations recognized at a point in time | Contact Centers | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 0 | 0 |
B2B | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 14,800 | 33,483 |
Consumer Brands | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 15,828 | 35,171 |
Financial Services | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 14,441 | 28,922 |
Healthcare | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 4,083 | 8,461 |
Retail | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | 15,836 | 32,215 |
Transportation | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenues | $ 4,645 | $ 12,577 |
Revenue from Contracts with C29
Revenue from Contracts with Customers - Future Performance Obligations (Details) $ in Millions | Jun. 30, 2018USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation, amount | $ 1.1 |
Performance obligation, period | 3 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation, amount | $ 0.4 |
Performance obligation, period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation, amount | $ 0.6 |
Performance obligation, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligation, amount | $ 0.1 |
Performance obligation, period | 1 year |
Revenue from Contracts with C30
Revenue from Contracts with Customers - Contract Balances (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Contract with Customer [Line Items] | |||
Contract assets | $ 2,648,000 | $ 7,120,000 | $ 0 |
Revenue recognized from deferred revenue | 2,800,000 | ||
Amount of contract assets reclassified to receivables | 7,100,000 | ||
Capitalized contract costs | 1,200,000 | ||
Impairment | 0 | ||
Satisfied in Previous Period | |||
Contract with Customer [Line Items] | |||
Revenue recognized from deferred revenue | 0 | ||
Other long-term liabilities | |||
Contract with Customer [Line Items] | |||
Deferred revenue, included in other long-term liabilities | $ 454,000 | $ 341,000 |
Revenue from Contracts with C31
Revenue from Contracts with Customers - Cumulative Effect of Changes (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
ASSETS | |||
Accounts receivable, net | $ 52,141 | $ 74,687 | $ 81,397 |
Contract assets | 2,648 | 7,120 | 0 |
Other current assets | 4,037 | 4,273 | 3,900 |
Other assets | 4,724 | 4,248 | 3,230 |
LIABILITIES | |||
Deferred revenue and related expenses | 6,749 | 5,906 | 5,342 |
Deferred tax liabilities, net | 294 | 892 | 773 |
Other current liabilities | 3,273 | 3,977 | 3,732 |
Other long-term liabilities | 4,336 | 4,503 | 4,201 |
STOCKHOLDERS’ EQUITY | |||
Retained earnings | 821,047 | 795,154 | 794,583 |
Total assets | 119,984 | 130,812 | |
Liabilities | 117,531 | 165,447 | |
Calculated under Revenue Guidance in Effect before Topic 606 | |||
ASSETS | |||
Accounts receivable, net | 81,397 | ||
Contract assets | 0 | ||
Other current assets | 3,900 | ||
Other assets | 3,230 | ||
LIABILITIES | |||
Deferred revenue and related expenses | 5,342 | ||
Deferred tax liabilities, net | 773 | ||
Other current liabilities | 3,732 | ||
Other long-term liabilities | 4,201 | ||
STOCKHOLDERS’ EQUITY | |||
Retained earnings | $ 794,583 | ||
Cumulative Adjustments | Accounting Standards Update 2014-09 | |||
ASSETS | |||
Accounts receivable, net | (6,710) | ||
Contract assets | 7,120 | ||
Other current assets | 373 | ||
Other assets | 1,018 | ||
LIABILITIES | |||
Deferred revenue and related expenses | 564 | ||
Deferred tax liabilities, net | 119 | ||
Other current liabilities | 245 | ||
Other long-term liabilities | 302 | ||
STOCKHOLDERS’ EQUITY | |||
Retained earnings | 1,000 | $ 571 | |
Total assets | 1,400 | ||
Liabilities | $ 500 |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details) $ / shares in Units, $ in Thousands | Jan. 30, 2018USD ($)$ / sharesshares | Jan. 23, 2018 | Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | Jan. 31, 2018shares |
Class of Stock [Line Items] | |||||
Preferred stock authorized (in shares) | shares | 1,000,000 | 1,000,000 | |||
Transaction fees on issuance of stock | $ 70 | $ 92 | |||
Gross proceeds from issuance of preferred stock, net of transaction fees | 9,723 | $ 0 | |||
Liquidation value | $ 200 | ||||
Liquidation value (in dollars per share) | $ / shares | $ 20.83 | ||||
Series A Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Conversion ratio for convertible preferred stock | 100.90817 | ||||
Securities Purchase Agreement | Series A Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Number of shares issued (in shares) | shares | 9,926 | ||||
Price per share (in dollars per share) | $ / shares | $ 1,000 | ||||
Consideration received on transaction | $ 9,900 | ||||
Transaction fees on issuance of stock | $ 200 | ||||
Gross proceeds from issuance of preferred stock, net of transaction fees | $ 9,900 | ||||
Dividend rate (as percent) | 5.00% | 5.00% |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | Apr. 17, 2017 | Jun. 30, 2018 | Jan. 09, 2018 | Dec. 31, 2017 |
Debt instrument | ||||
Long-term debt | $ 0 | $ 0 | ||
Letters of credit outstanding | 0 | |||
Letter of Credit | ||||
Debt instrument | ||||
Line of credit | $ 2,800,000 | |||
Texas Capital Credit Facility | ||||
Debt instrument | ||||
Borrowing capacity | $ 20,000,000 | $ 22,000,000 | ||
Sublimit available for letters of credit | $ 5,000,000 | |||
Unused capacity commitment fee percentage (as percent) | 0.50% | |||
Quarterly collateral fees | $ 100,000 | |||
Texas Capital Credit Facility | Variable rate one | ||||
Debt instrument | ||||
Variable rate basis | LIBOR | |||
Rate spread on variable rate (as percent) | 1.95% | |||
Texas Capital Credit Facility | Variable rate two | ||||
Debt instrument | ||||
Variable rate basis | prime | |||
Rate spread on variable rate (as percent) | 0.75% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock-based compensation | $ 1,274 | $ 968 |
Components of Net Periodic Be35
Components of Net Periodic Benefit Cost (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2018 | |
Net pension cost of plans | |||||
Interest cost | $ 1,685,000 | $ 1,837,000 | $ 3,370,000 | $ 3,674,000 | |
Expected return on plan assets | (1,524,000) | (1,832,000) | (3,047,000) | (3,664,000) | |
Recognized actuarial loss | 689,000 | 688,000 | 1,377,000 | 1,377,000 | |
Net periodic benefit cost | 850,000 | $ 693,000 | 1,700,000 | $ 1,387,000 | |
Restoration Pension Plan | |||||
Defined Benefit Plan Disclosure | |||||
Benefits paid | $ 400,000 | $ 800,000 | |||
Forecast | Qualified Pension Plan | |||||
Defined Benefit Plan Disclosure | |||||
Contributions to qualified pension plan | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense/(benefit) | $ (584) | $ (2,199) | $ (9,364) | $ (3,675) | |
Effective income tax rate (as a percent) | 8.00% | (45.30%) | (56.70%) | (26.80%) | |
Income tax interest or penalties accrued | $ 0 | $ 0 | $ 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Reconciliation of basic and diluted earnings per share (EPS) | ||||
Net income/(loss) | $ (6,734,000) | $ (2,653,000) | $ 25,893,000 | $ (10,039,000) |
Less: Preferred stock dividend | 124,000 | 0 | 207,000 | 0 |
Less: Earnings attributable to participating securities | 0 | 0 | (3,059,000) | 0 |
Income/(loss) attributable to common stockholders | (6,858,000) | (2,653,000) | 22,627,000 | (10,039,000) |
Effect of dilutive securities: | ||||
Add back: Allocation of earnings to participating securities | $ 0 | $ 0 | 3,059,000 | 0 |
Less: Re-allocation of earnings to participating securities considering potentially dilutive securities | (3,046,000) | 0 | ||
Numerator for diluted EPS | $ 22,640,000 | $ (10,039,000) | ||
Basic Earnings/(Loss) per Common Share | ||||
Weighted-average common shares outstanding (shares) | 6,226,000 | 6,190,000 | 6,220,000 | 6,179,000 |
Basic earnings/(loss) per common share (dollars per share) | $ (1.10) | $ (0.43) | $ 3.64 | $ (1.62) |
Diluted Earnings/(Loss) per Common Share | ||||
Weighted-average shares used to compute earnings/(loss) per share attributable to common shares (shares) | 6,226,000 | 6,190,000 | 6,250,000 | 6,179,000 |
Diluted earnings/(loss) per common share (dollars per share) | $ (1.10) | $ (0.43) | $ 3.62 | $ (1.62) |
Computation of Shares Used in Diluted Earnings/(Loss) Per Common Share | ||||
Weighted-average common shares outstanding (shares) | 6,226,000 | 6,190,000 | 6,220,000 | 6,179,000 |
Weighted average common equivalent shares-dilutive effect of unvested shares (shares) | 30,000 | 0 | ||
Weighted-average common and common equivalent shares outstanding (shares) | 6,226,000 | 6,190,000 | 6,250,000 | 6,179,000 |
Stock Options | ||||
Stock-based compensation arrangement by stock-based payment award | ||||
Weighted-average anti-dilutive shares have been excluded from the EPS calculations (in shares) | 300,000 | 300,000 | 300,000 | 300,000 |
Unvested Shares | ||||
Stock-based compensation arrangement by stock-based payment award | ||||
Weighted-average anti-dilutive shares have been excluded from the EPS calculations (in shares) | 200,000 | 100,000 | 0 | 100,000 |
Preferred Stock | ||||
Stock-based compensation arrangement by stock-based payment award | ||||
Weighted-average anti-dilutive shares have been excluded from the EPS calculations (in shares) | 1,000,000 |
Comprehensive Income_(Loss) (De
Comprehensive Income/(Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||||
Net income/(loss) | $ (6,734) | $ (2,653) | $ 25,893 | $ (10,039) |
Other comprehensive income/(loss): | ||||
Adjustment to pension liability | 686 | 688 | 1,377 | 1,252 |
Tax expense | (169) | (275) | (342) | (501) |
Adjustment to pension liability, net of tax | 517 | 413 | 1,035 | 751 |
Foreign currency translation adjustment, net of tax | (804) | 599 | (959) | 644 |
Total other comprehensive income/(loss), net of tax | (287) | 1,012 | 76 | 1,395 |
Comprehensive income/(loss) | (7,021) | (1,641) | 25,969 | (8,644) |
Changes in other comprehensive loss by component | ||||
Balance | (34,635) | 2,656 | ||
Other comprehensive income/(loss), net of tax, before reclassifications | (959) | 644 | ||
Amounts reclassified from accumulated other comprehensive income/(loss), net of tax, to other, net, on the condensed consolidated statements of comprehensive income/(loss) | 1,035 | 751 | ||
Total other comprehensive income/(loss), net of tax | (287) | 1,012 | 76 | 1,395 |
Balance | (7,270) | (5,030) | (7,270) | (5,030) |
Total | ||||
Changes in other comprehensive loss by component | ||||
Balance | (44,303) | (46,178) | ||
Balance | (44,227) | (44,783) | (44,227) | (44,783) |
Defined Benefit Pension Items | ||||
Other comprehensive income/(loss): | ||||
Total other comprehensive income/(loss), net of tax | 1,035 | 751 | ||
Changes in other comprehensive loss by component | ||||
Balance | (45,418) | (46,977) | ||
Other comprehensive income/(loss), net of tax, before reclassifications | 0 | 0 | ||
Amounts reclassified from accumulated other comprehensive income/(loss), net of tax, to other, net, on the condensed consolidated statements of comprehensive income/(loss) | 1,035 | 751 | ||
Total other comprehensive income/(loss), net of tax | 1,035 | 751 | ||
Balance | (44,383) | (46,226) | (44,383) | (46,226) |
Foreign Currency Items | ||||
Other comprehensive income/(loss): | ||||
Total other comprehensive income/(loss), net of tax | (959) | 644 | ||
Changes in other comprehensive loss by component | ||||
Balance | 1,115 | 799 | ||
Other comprehensive income/(loss), net of tax, before reclassifications | (959) | 644 | ||
Amounts reclassified from accumulated other comprehensive income/(loss), net of tax, to other, net, on the condensed consolidated statements of comprehensive income/(loss) | 0 | 0 | ||
Total other comprehensive income/(loss), net of tax | (959) | 644 | ||
Balance | $ 156 | $ 1,443 | $ 156 | $ 1,443 |
Litigation Contingencies (Detai
Litigation Contingencies (Details) | Jun. 30, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation liability | $ 0 |
Disposition (Details)
Disposition (Details) - USD ($) $ in Thousands | Feb. 28, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Mar. 16, 2015 |
Acquisitions | |||||
Gain on sale | $ 30,954 | $ 0 | |||
Reconciliation of accrued earnout consideration | |||||
Interest accretion on contingent consideration | 742 | $ 2,081 | |||
3Q Digital Inc | |||||
Acquisitions | |||||
Contingent consideration, maximum potential payment | $ 35,000 | ||||
3Q Digital Inc | Level 3 | Contingent Consideration | |||||
Reconciliation of accrued earnout consideration | |||||
Accrued contingent consideration at beginning of period | 33,887 | ||||
Interest accretion on contingent consideration | 742 | ||||
Disposition | (34,629) | ||||
Accrued contingent consideration at end of period | 0 | $ 33,887 | |||
3Q Digital Inc | |||||
Acquisitions | |||||
Proceeds from sale of business | $ 5,000 | ||||
Additional proceeds for sale of business | $ 5,000 | ||||
Disposal group percent of total revenue (less than) (as percent) | 10.00% | ||||
Gain on sale | $ 31,000 |
Certain Relationships and Rel41
Certain Relationships and Related Party Transactions (Details) - USD ($) | Jan. 30, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Wipro | ||||||
Related Party Transaction [Line Items] | ||||||
Capitalized costs for internally developed software services received | $ 400,000 | $ 1,500,000 | ||||
Accounts payable, related parties | 2,900,000 | 2,900,000 | $ 2,200,000 | |||
Accounts receivable, related parties | 0 | 0 | $ 0 | |||
Wipro | Agency Related Services | ||||||
Related Party Transaction [Line Items] | ||||||
Revenue from related parties | 0 | $ 15,000 | 0 | $ 100,000 | ||
Wipro | Technology Related Services | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses from transactions with related party | $ 3,300,000 | $ 2,500,000 | $ 6,100,000 | $ 2,900,000 | ||
Securities Purchase Agreement | Series A Preferred Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Number of shares issued (in shares) | 9,926 | |||||
Consideration received on transaction | $ 9,900,000 | |||||
Securities Purchase Agreement | Series A Preferred Stock | Wipro | ||||||
Related Party Transaction [Line Items] | ||||||
Number of shares issued (in shares) | 9,926 | |||||
Consideration received on transaction | $ 9,900,000 |