Harte-Hanks Communications, Inc. 1993 Annual Report (10-K) Summary
Business Context and Reporting Period
This Form 10-K covers the fiscal year ended December 31, 1993. Harte-Hanks Communications, Inc. is a diversified communications company operating in four principal segments: newspapers, shoppers, direct marketing, and television. The company operates primarily in the United States, with a significant presence in Texas, California, Florida, and the Northeast. Notably, the company returned to public trading on the New York Stock Exchange in November 1993 following a leveraged buyout in 1984.
Key Financial Metrics
While specific profit, cash flow, and debt figures are incorporated by reference from the Annual Report to Stockholders and not explicitly detailed in the text of this filing, the following revenue and operational metrics are provided:
- Total Revenue (1993): $463.5 million.
- Segment Revenue Breakdown:
- Shoppers: $174.5 million (38% of total).
- Newspapers: $131.5 million (28% of total).
- Direct Marketing: $129.6 million (28% of total).
- Television: $27.8 million (6% of total).
- Market Capitalization: Approximately $164.8 million (as of March 15, 1994, based on 18,158,400 shares outstanding).
- Employee Count: 6,150 total (5,114 full-time, 1,036 part-time).
- Property, Plant, and Equipment: Total cost at year-end was $190.5 million, with accumulated depreciation of $99.7 million.
Material Changes and Operational Highlights
The filing highlights several strategic and operational developments during 1993:
- Re-IPO: The company went public again in November 1993 after being privately held since 1984.
- Shopper Expansion: The shopper business added 0.9 million households in 1993, primarily in Southern California, Miami/Ft. Lauderdale, and Dallas/Fort Worth. Total circulation reached 6.7 million households.
- Acquisitions: The company acquired an AM radio station in San Antonio (KENS-AM) in October 1993 and expanded its direct mail coupon publication, "The Money Clip," to Wichita Falls.
- Divestiture: In February 1994, the company sold its smallest shopper in Tucson, Arizona.
- Technology Investments: Significant investments were made in proprietary data processing, job tracking, and pagination systems, particularly in the Southern California shopper unit.
Outlook, Risks, and Management Commentary
Strategy and Outlook: Management's strategy focuses on increasing revenues by leveraging existing businesses, applying capabilities across segments, and capitalizing on trends toward direct, targeted marketing. The company plans to continue investing in advanced technologies and making selective acquisitions.
Risks and Contingencies:
- Competition: The newspaper segment faces competition from other media in suburban markets. The shopper segment competes with metropolitan dailies and shared mail packages. The television segment (KENS) competes with other stations and cable TV (64% penetration in San Antonio).
- Regulatory: Television and radio operations are subject to FCC regulations regarding license renewals and ownership limits. The KENS-TV license was renewed in September 1993 for five years.
- Legal: The company is involved in various claims and lawsuits incidental to its business, including defamation actions. Management believes these will not have a material effect on financial condition.
- Unusual Items: The filing notes significant goodwill amortization of $10.176 million for 1993.
Key Facts for Investor Verification
- Debt and Liquidity: The text does not provide specific values for total debt, current liabilities, or cash flow from operations; these must be verified in the incorporated Annual Report to Stockholders.
- Profitability: Net income and operating margins are not explicitly stated in the text; verification is required in the incorporated financial statements.
- Segment Performance: Verify the operating income contribution of each segment (Newspapers, Shoppers, Direct Marketing, Television) to assess diversification benefits.
- Capital Expenditures: Review the "Construction in progress" and "Additions" in Schedule V to understand the scale of ongoing technology and facility investments.
- Post-Period Events: Confirm the impact of the February 1994 sale of the Tucson shopper and the operational integration of the new KENS-AM radio station.