8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM 8-K

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CURRENT REPORT

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

December 1, 2022

Date of Report (Date of Earliest Event Reported)

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Harte Hanks, Inc.
(Exact Name of Registrant as Specified in its Charter)

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Delaware	1-7120	74-1677284
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)
1 Executive Drive, Suite 303 Chelmsford, Massachusetts 01824 (210) 829-9000
(Address of principal executive offices and Registrant’s telephone number, including area code)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	HHS	NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐ Emerging growth company

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

Item 8.01 Other Events.

On December 1, 2022, Harte Hanks, Inc., a Delaware corporation (“Harte Hanks,” the “Company,” “we” or “us”) purchased substantially all of the assets (the “Transaction”) of Inside Out Solutions, LLC, a Florida limited liability company (“InsideOut”), for an aggregate purchase price of approximately $7.5 million (the “Purchase Price”) pursuant to an asset purchase agreement, dated as of December 1, 2022 by and between Harte Hanks and InsideOut (the “Asset Purchase Agreement”).

InsideOut is a premium sales enablement agency offering technology and data driven support to technology, media telecommunications, business services, industrial, and financial technology customers in the North American and European markets with its headquarters in St. Petersburg, Florida. InsideOut’s trailing twelve months revenue and Adjusted EBITDA as of November 30, 2022 is currently estimated to be $11.5 million and $1.5 million, respectively. This estimate is preliminary and actual results may differ. Accordingly, undue reliance should not be placed on these figures.

The acquisition of InsideOut further expands Harte Hanks’ capabilities within its marketing services and customer care segments and strengthens Harte Hanks’ ability to drive profitable revenue growth within Harte Hanks’ current sales enablement offerings, including: (i) demand generation which creates qualified marketing leads for Harte Hanks’ clients, and (ii) inside sales offerings to further promote a client’s internal growth objectives. In addition, the owner and CEO of InsideOut entered into a two-year consulting agreement with Harte Hanks, which will ensure consistency in Harte Hanks’ delivery of these sales enablement offerings, post-closing.

Pursuant to the Asset Purchase Agreement, $5.75 million of the Purchase Price was paid in cash at closing, $1.0 million in cash was placed in escrow to satisfy indemnification obligations, if any, and separately, to satisfy earn-outs related to future revenue performance. Separately, $0.75 million of the Purchase Price was paid at closing in shares of Harte Hanks common stock, par value $1.00 per share (the “Common Stock”). The share amount was based on the volume weighted closing price during the 15-day period prior to close.

The Purchase Price is subject to a post-closing net working capital true-up 180-days after the Transaction closes if net working capital is not between $1.3 million and $1.6 million.

A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

Exhibit	Description
99.1	Press Release dated December 1, 2022
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

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

HARTE HANKS, INC.
By:	/s/ Laurilee Kearnes
Name:	Laurilee Kearnes
Title:	Chief Financial Officer

Date: December 1, 2022

EX-99.1

Exhibit 99.1

Harte Hanks Acquires InsideOut Solutions, LLC, for $7.5 million

Acquisition Adds New Inbound and Outbound Sales Support Capabilities

Chelmsford, MA (December 1, 2022) – Harte Hanks Inc. (NASDAQ: HHS), a leading global customer experience company, announced today that it has completed the acquisition of InsideOut Solutions, LLC, an inside sales optimization firm. InsideOut offers inbound and outbound sales outsourcing and experimentation services for partners globally.

"With the acquisition of InsideOut and its inside sales capabilities, Harte Hanks is uniquely positioned to help customers drive growth by optimizing sales and marketing demand generation programs,” commented Brian Linscott, Harte Hanks CEO. “We couldn't be more pleased with this acquisition, and we are excited to welcome the talented InsideOut team to Harte Hanks. The acquisition of InsideOut will not only provide short-term revenue growth opportunities, but also will be immediately accretive to HHS value. We anticipate cost synergies alone will drive the post-acquisition valuation in the 3-4x EBITDA range.”

“Harte Hanks’ proven ability to drive marketing leads with our cross-segment Marketing Services and Customer Care team and InsideOut’s talent, processes, and experience in delivering sales-qualified leads will drive higher value for our clients,” added Linscott. "InsideOut clients can now come to Harte Hanks for a broad scope of marketing (including data & analytics), customer care, fulfillment and logistics services.”

“We are thrilled to have InsideOut join the Harte Hanks team. What attracted us to Harte Hanks was the clear alignment in culture and values, the like-minded commitment to our partners and a focus on our people, who we believe are the cornerstone for our successes,” remarked Christina Cherry, CEO of InsideOut. Ms. Cherry continued, “This transaction enables us to scale faster and support further growth for our partners, and to provide additional opportunities for our exceptional team of employees, given Harte Hanks’ broader scope of services.”

The combined organizations will begin operations as Harte Hanks on December 1, 2022, with 136 employees joining the Harte Hanks team. Harte Hanks also adds a seventh location to its North American offices with the acquisition of InsideOut's 7,500-square-foot headquarter facility based in St. Petersburg, Florida.

Transaction Details

Harte Hanks has acquired substantially all the assets of InsideOut on December 1, 2022 for a purchase price of $7.5 million, to be paid with a combination of cash and shares of HHS common stock.

Additional information about the completed acquisition will be provided in a Current Report on Form 8-K filed by Harte Hanks with the Securities and Exchange Commission and available at www.sec.gov.

About InsideOut:

InsideOut specializes in building, scaling and optimizing inside sales initiatives for some of the world’s largest corporations. In the last seven years the Florida-based organization has partnered with leading Fortune 500 companies including Google, IBM, T-Mobile and Honeywell.

Deploying an analytically driven approach to inside sales experimentation and testing, InsideOut has gained global recognition as one of the most innovative revenue development organizations in the United States. For more information, visit insideoutlab.com.

InsideOut was represented in the transaction by its investment banker Novistra Capital.

About Harte Hanks:

Harte Hanks (Nasdaq: HHS) is a leading global customer experience company that partners with clients to provide them with CX strategy, data-driven analytics and actionable insights combined with seamless program execution to better understand, attract and engage their customers.

Using its resources and talent in the areas of Customer Care, Fulfillment, Logistics, and Marketing Services, Harte Hanks has driven results for some of the world's premier brands, including Bank of America, GlaxoSmithKline, Unilever, Pfizer, HBOMax, Volvo, Ford, FedEx, Midea, Sony and IBM. Headquartered in Chelmsford, Massachusetts, Harte Hanks has over 2,500 employees in offices across the Americas, Europe, and Asia Pacific. For more information, visit hartehanks.com.

XML

Document And Entity Information	Dec. 01, 2022
Document Information [Line Items]
Entity, Registrant Name	Harte Hanks, Inc.
Document, Type	8-K
Document, Period End Date	Dec. 01, 2022
Entity, Incorporation, State or Country Code	DE
Entity, File Number	1-7120
Entity, Tax Identification Number	74-1677284
Entity, Address, Address Line One	1 Executive Drive, Suite 303
Entity, Address, City or Town	Chelmsford
Entity, Address, State or Province	MA
Entity, Address, Postal Zip Code	01824
City Area Code	210
Local Phone Number	829-9000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	HHS
Security Exchange Name	NASDAQ
Entity, Emerging Growth Company	false
Amendment Flag	false
Entity, Central Index Key	0000045919