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(1) This amount is comprised of the below balances:

Cash and cash equivalents	$	5,582	9,810

Restricted cash	5		$	124

0	$	5,587	$	9,934

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K


			x			ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2024~~2025


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

Commission File Number: 001-07120

HARTE HANKS, INC.

(Exact name of registrant as specified in its charter)


Delaware	74-1677284	1 Executive Drive, Chelmsford, MA 01824
(State or other jurisdiction of	(I.R.S. Employer	(Address of principal executive offices,
incorporation or organization)	Identification Number)	including zip code)

Registrant's telephone number, including area code (512) 434-1100

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

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer o Accelerated filer o Non-accelerated filer x Smaller reporting company x Emerging growth company o

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. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. o

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). o

Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of June 30, ~~2024~~2025, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting and non-voting common equity held by non-affiliates was approximately $5426,~~992~~775,~~944~~155 based on the closing price on the NASDAQ on such date. Solely for purposes of this disclosure, shares of common stock held by executive officers and directors of the registrant as of such date have been excluded because such persons may be deemed to be affiliates. This determination of executive officers and directors as affiliates is not necessarily a conclusive determination for any other purposes.

As of February 2827, ~~2025~~2026, 7,~~357~~414,~~450~~794 shares of common stock, $1.00 par value per share of the registrant were issued and outstanding.

Documents incorporated by reference:

Portions of the Proxy Statement to be filed in relation to the Company’s ~~2025~~2026 Annual Meeting of Stockholders are incorporated herein by reference into Part III of this Form 10-K.

Table of Contents

Harte Hanks, Inc. and Subsidiaries

Table of Contents

Form 10-K Report

December 31, ~~2024~~2025

		Page
PART I
Item 1.	Business	3
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	2019
Item 1C	Cybersecurity	2019
Item 2.	Properties	2120
Item 3.	Legal Proceedings	21
Item 4.	Mine Safety Disclosures	21
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	2221
Item 6.	Selected Financial Data	22
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 8.	Financial Statements and Supplementary Data	3029
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	3029
Item 9A.	Controls and Procedures	3029
Item 9B.	Other Information	30
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	30
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	31
Item 11.	Executive Compensation	31
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	31
Item 13.	Certain Relationships and Related Transactions, and Director Independence	31
Item 14.	Principal Accountant Fees and Services	31
PART IV
Item 15.	Exhibits and Financial Statement Schedules	31
Item 16.	10-K Summary	33
	Consolidated Financial Statements	35
SIGNATURES

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), contains “forward-looking statements” within the meaning of the federal securities laws. All such statements are qualified by this cautionary note, which is provided pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. Forward-looking statements will also be included from time to time in our other public filings, press releases, our website, and oral and written presentations by management. Statements other than historical facts are forward-looking and may be identified by words such as “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “seeks,” “could,” “intends,” or words of similar meaning. Examples include statements regarding (1) our strategies and initiatives, including actions designed to respond to market conditions and improve our performance, (2) our financial outlook for revenues, earnings per share, operating income, expense related to equity-based compensation, capital resources and other financial items, if any, (3) expectations for our businesses and for the industries in which we operate, including the impact of economic conditions of the markets we serve on the marketing expenditures and activities of our clients and prospects, (4) competitive factors, (5) acquisition and development plans, (6) expectations regarding legal proceedings and other contingent liabilities, and (7) other statements regarding future events, conditions, or outcomes.

These forward-looking statements are based on current information, expectations, and estimates and involve risks, uncertainties, assumptions, and other factors that are difficult to predict and that could cause actual results to vary materially from what is expressed in or indicated by the forward-looking statements. In that event, our business, financial condition, results of operations, or liquidity could be materially adversely affected, and investors in our securities could lose part or all of their investments. Some of these risks, uncertainties, assumptions, and other factors can be found in our filings with the SEC, including the factors discussed below in this Item 1A, “Risk Factors” of this Annual Report, and any updates thereto in our Forms 10-Q and 8-K. The forward-looking statements included in this report and those included in our other public filings, press releases, our website, and oral and written presentations by management are made only as of the respective dates thereof, and we undertake no obligation to update publicly any forward-looking statement in this report or in other documents, our website, or oral statements for any reason, even if new information becomes available or other events occur in the future, except as required by law.

PART I

ITEM 1. BUSINESS

INTRODUCTION

Harte Hanks, Inc., together with its subsidiaries (“Harte Hanks,” “Company,” “we,” “our,” or “us”) is a ~~leading~~ global Business Experience Outsourcing company. We operate at the intersection of data, marketing , sales, customer care, fulfillment, and logistics integrating front office revenue growth and customer experience ~~company~~operations with back office execution to deliver measurable business outcomes. With offices in North America, Asia-Pacific and Europe, ~~Harte~~we ~~Hanks~~serve ~~works~~leading ~~with~~global ~~some~~brands ofenabling them to design, activate and optimize the ~~world’s~~full ~~most~~customer ~~respected~~and ~~brands~~product lifecycle.

We are the successor to a newspaper business started by Houston Harte and Bernard Hanks in Texas in the early 1920s. We were incorporated in Delaware on October 1, 1970. In 1972, Harte Hanks went public and was listed on the New York Stock Exchange (“NYSE”). We became a private company in a leveraged buyout in 1984, and in 1993 we again went public and listed our common stock on the NYSE. On July 13, 2020, we began trading on the OTCQX® Best Market (the “OTCQX”). On December 1, 2021, our stock was uplisted to be traded on the Nasdaq Global Market® (“Nasdaq”), where it continues to trade today.

All reports we file with the U.S. Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments thereto are publicly available. These documents may be accessed free of charge on our website (http://www.hartehanks.com). These documents are provided as soon as practical after they are filed with the SEC and may also be found at the SEC. The SEC also maintains a website (http://www.sec.gov) that contains periodic reports, proxy and information statements and other information regarding ~~irruers~~issuers, including Harte Hanks, that file electronically with the SEC. Additionally, we have adopted a code of ethics that applies to our ~~interim~~principal ~~chief operating officer~~officers, ~~chief~~including ~~financial~~those ~~officer~~serving ~~and~~in ~~general~~interim ~~counsel~~roles which is posted on our website. Our website also includes our corporate governance guidelines and the charters for each of our audit, compensation, and nominating and corporate governance committees. We will provide a printed copy of any of these documents to any requesting stockholder by following the instructions on our website. These website addresses are intended to be for inactive textual references only. None of the information on, or accessible through, these websites ~~are~~is part of this Form 10-K or is incorporated by reference herein.

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OUR BUSINESS

Harte Hanks is a leading customer and brand experience company operating in six service categories - data, marketing, sales, customer care, fulfillment and logistics. In and across these service categories, we address today's biggest growth and customer experience challenges for B2B and B2C businesses across the world in the new era of intelligence and ~~Artificial~~artificial ~~Intelligence~~intelligence ("“AI"”), by being a modern journey enabler. The challenges we solve include:

•Grappling with data, AI and technology in ~~the~~a cookie-~~less~~restricted ~~world~~digital environment;

•Growing awareness, demand and sales for products;

•Storing, fulfilling and delivering samples, kits, materials and products direct to the door of consumers, influencers or businesses;

•Delivering better customer experience and support across multiple channels; and

•Delivering effectively with tighter budgets and talent shortages.

Our clients need help enabling their journey to growth, to transformation, to customer centricity, to product success and to AI powered approaches and solutions to marketing, sales, fulfillment and customer care. At the core of how we address this is a concentration on our ~~client's~~clients’ key audiences - prospects, customers, patients, members, partners, employees and influencers - and how we help align our ~~client's~~clients’ brands and products to these different audiences along journeys. This includes the product journey, e.g., product innovation, build, strategy, launch, sell, deliver, support and recall and the customer journey, e.g., how customers become aware of their needs, how they buy, making the purchase, using the product or service, advocacy and renewal. We are focused on helping our clients better understand, engage, acquire, deliver to, service, support and retain these audiences. We start by understanding and architecting the journey in focus, and then enable, deliver and manage some or all aspects along this journey. Our alignment of customers and products on behalf of brands along the entire lifecycle distinguishes us from most other agencies and competitors in our service categories.

We offer a uniquely diverse range of services and solutions in and across our service categories to businesses in the following industries:

•B2B Technology & Services including cloud, SaaS, hardware, software, semiconductors, health technology, fintech, electronics, distributors and telecommunications

•Healthcare, Pharmaceuticals & Health Insurance

•Consumer Products including health, well-being and beauty; consumer tech/electronics; domestic appliances

•Travel, Hospitality, Streaming & Entertainment

•QSRs (Quick Service Restaurants)

•Financial Services and Fintech

•Automotive

•Retail

We work in partnership with our clients to provide them with: data-driven analytics and actionable insights from research; robust customer-experience ("CX"), marketing or sales strategies; and the data, content & technology to enable delivery. We then combine these insights with seamless program execution, fulfillment, service and delivery on a project or ongoing service basis to meet our ~~client's~~clients’ goals. In essence we offer services along the customer & product lifecycle - from Data to Demand, to Deal, to Delivery, and everything in between.

Operationally, starting in 2024, our services are organized into three business units that span the end to end customer and product lifecycles:

•Data, marketing, demand generation and managed marketing services

•Customer Care

•Fulfillment & Logistics

Data, Marketing, Demand Generation and Managed Marketing Services

Harte Hanks helps our clients determine, detect and activate their audiences through traditional, digital, and emerging channels. We provide full service multi-channel marketing from strategy to campaign execution. This includes the support of our customers’ sales teams in their continued pursuit of excellence, delivering specialized outsourcing, optimization, lead nurturing and messaging development services to global and national partners. We leverage data, insights, technology, and award-winning creative solutions to meet and exceed our clients’ business objectives and optimize our clients’ return on investment.

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Data, Marketing, Demand Generation and Managed Marketing Services (continued)

Our key offerings include:

•Data & Analytics – In-depth data and analytics including audience identification, profiling, segmentation and prioritization, predictive modeling and data strategy. We provide data hygiene and cleansing to ensure the best possible results. We access broad first-party and third-party data sources, search and social media, and research through syndicated, primary and secondary sources, and we leverage our proprietary DataView tool, a comprehensive, aggregate data mart for B2C (USA) and B2B (Global) that provides a 360-degree customer view, with over 1,500 attributes enabling accurate predictive marketing to our clients. We also offer a unique intent data solution called Audience Finder for detecting in-market prospects.

•Research & Intelligence - Primary and secondary research to help our clients understand their customers, category, competitors and capabilities, either as a standalone deliverable or to inform the development of strategies for campaigns and programs.

•Strategy – Provide strategic guidance to help clients efficiently and effectively plan and execute omnichannel marketing, demand generation and customer experience programs that deliver business results. We leverage data and insights to enhance our clients’ understanding of their consumers, competitors and category dynamics, then apply those insights to develop the strategies to fuel activities such as customer acquisition, engagement, purchase behavior, loyalty and advocacy. Our expertise spans the range of strategies including targeting, Go-To-Market, commercial, product launch, customer experience, campaign, content, ABM (Account Based Marketing) and demand strategy.

•Creative & Content - Full-service creative and content design, development and execution spanning traditional and digital channels, including creative concepts, messaging and content assets for print, broadcast, direct mail, website, app, display, social, mobile, search engine marketing, and voice.

•Marketing Technology – Website and app development, e-commerce development and enablement, database building and management, platform architecture creation, and marketing automation to serve as the foundation for digital and multi-channel marketing execution.

•Digital and Multi-channel Marketing Execution & Advertising - Orchestration and execution of programs and campaigns across multiple channels, territories and audiences, using data, strategies, content and Marketing technology or MarTech provided either by Harte Hanks or by our clients. Setup and management of digital advertising programs and campaigns across the latest advertising channels (e.g., Google, Meta, LinkedIn, TikTok) and platforms (DSPs, ABM advertising, industry networks).

•Demand Generation and ABM ~~(Account Based Marketing)~~ - Providing intelligence-based B2B solutions that understand audiences and their behaviors, and then inspire and drive action to deliver results. These solutions help companies understand which accounts, sectors and persons to target, and then generate marketing qualified leads (“MQLs”) and pipelines for their marketing and sales team, through combining data, strategy, content, MarTech and digital/multi-channel execution.

•Managed Marketing Services - Also referred to as "“Marketing as a Service"”. A flexible outsourcing marketing operations solution, that works as a highly integrated extension of a client’s own marketing function by blending the best of agency and business outsourcing processes and capabilities. Marketing as a ~~service~~Service operationalizes, manages and delivers some or all of: data operations, marketing technology, analytics, demand generation, and staff augmentation.

•Inside Sales Outsourcing - Combining best-in-class analytics, accomplished sales professionals and full-cycle experimentation we provide B2B enterprises, and Small to Midsized Businesses with a fully outsourced sales service, that can work alongside or in lieu of an internal sales function.

•Lead Generation – Combining data, lead generation resources and technology, we provide turnkey lead generation and development that converts interested or good fit prospects into leads for sales to qualify, nurture and sell to.

•Sales Play Development - Designing sales plays and cadences to enable sales teams to find, plan, engage, nurture and convert prospects into sales opportunities.

Customer Care

Our customer care services are customized to meet the needs of our partners’ customer, helping them attract new buyers and turn existing patrons into loyal brand advocates. We support our clients by addressing their end customers’ urgent needs, navigating an increasingly-complex technology landscape, and integrating ~~artificial~~AI ~~intelligence~~ technology and automation — while maintaining a fierce devotion to reducing customer effort, for the benefit of both the business and the buyer. This approach to “effortless customer experience” not only drives better service results but is also ~~lowers~~designed to lower our clients’ operational costs.

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Our global, omnichannel delivery model is focused on providing our clients three key services:

•Customer Service Outsourcing - Our accomplished customer care associates interact and resolve consumer queries and complaints across hardware and software platforms, healthcare benefit plans, product recalls and/or a myriad of other customer service issues. We leverage technology to help reduce customer effort while providing a human touch to increase customer satisfaction.

•Customer Care Technology and AI Transformation – Our solution services teams configure various CRM solutions (e.g., Salesforce, Zendesk) and channel /AI technology including Amazon Connect to create meaningful customer interactions by connecting content between agent, AI-driven interfaces and web-based self-help tools and community forums.

•Self-Service Technology - We ~~providing~~provide and maintain self -service solutions through Interactive Voice Response ("IVR"), Help Centers, online, and via apps and channel technology.

We also analyze a significant amount of aggregated data obtained from customer interactions on behalf of our clients. We leverage information gained from this analysis and end customer-driven feedback to drive efficiencies, provide insights on predictive behaviors that lead to lower customer churn and help our clients innovate their core product offerings and develop innovative product features.

Fulfillment & Logistics Services

Our fulfillment and logistics services are designed to meet the diverse and dynamic needs of businesses across industries, ensuring that products, promotional materials, and essential items are delivered efficiently, accurately, and on time. Harte Hanks fulfillment unlocks critical sales enablement, value-added product fulfillment, and eCommerce channels for our clients. Harte Hanks logistics supports the supply chain needs of our clients in everything from time-sensitive deliveries to full scale supply chain management. By leveraging our modern infrastructure, advanced technology, and industry expertise, we help our clients streamline their operations, enhance customer experience, and optimize cost efficiencies. We support enterprise-level supply chain management, execute precise time-sensitive deliveries, and enable eCommerce scalability.

End to ~~end~~End Product, Print-On-Demand, and Mail Fulfillment Services

Our extensive fulfillment capabilities include:

•Print-On-Demand & Literature Distribution – We facilitate the seamless production and distribution of marketing materials, sales collateral, and product literature, ensuring businesses can effectively engage with customers, prospects, and partners.

•Promotional & Branded Product Distribution – We manage and distribute promotional products, trade show materials, and corporate gifts to enhance brand awareness and customer engagement.

•Custom Kitting & Event Fulfillment – Our curated kitting solutions support corporate events, influencer marketing programs, employee appreciation campaigns, and conference giveaways, ensuring that clients can create impactful brand experiences.

•Product Recall Management – We assist in efficient product recalls, ensuring regulatory compliance, customer safety, and brand reputation protection.

•Temperature-Controlled & FDA-Registered Fulfillment Centers – We have strategically located fulfillment centers across the United States, that provide temperature-controlled storage and are FDA-registered to handle sensitive products such as:

◦Nutritional supplements, medical foods, and baby formulas

◦Chocolates, coffee, tea, snack foods, nuts, and seeds

◦Pet food, treats, and nutritional supplements

•Scalable Global Fulfillment – Our fulfillment network spans the U.S., with capabilities in Europe and additional support from regional logistics partners that ensure efficient international product distribution.

Through our upgraded order management platform, we can now streamline order processing, facilitate seamless integration with various data sources and eCommerce platforms, and ensure real-time visibility into inventory and shipment status.

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Third-Party Logistics & Freight Optimization

Harte Hanks logistics services help businesses achieve supply chain excellence by ensuring efficient transportation, freight optimization, and timely product delivery. Our logistics expertise enables businesses to reduce costs, improve delivery speed, and optimize their supply chain operations—whether managing individual shipments or full-scale supply chain management. Our comprehensive logistics solutions include:

•Nationwide & Regional Shipping – We facilitate the shipping of millions of time-sensitive materials annually, leveraging our nationwide logistics network.

•Certified Fleet & Expedited Shipping – With access to a contracted fleet of over 15,000 trucks, we provide clients with scalable third-party logistics (3PL) services tailored to their needs.

•Allink®360: Proprietary Logistics Technology – Our proprietary rate-shopping system, Allink® 360, optimizes freight costs and delivery timelines, ensuring shipments arrive on time and within budget.

•Flexible & Scalable Logistics Solutions – We offer customized logistics solutions designed to accommodate businesses of all sizes, from startups to Fortune 500 enterprises.

Client Relationships

We are known for helping clients build deep customer relationships, create connected customer experiences, and optimize each and every customer touch point in order to deliver desired business outcomes. Realizing our clients’ success is the only valid measure of our own success. We ensure all our efforts are aligned with our clients’ business objectives and measured against defined performance metrics. It is this commitment to our clients and their businesses that allows us to build meaningful relationships with them. Our client engagements may consist of one or a few of our service offerings – with a goal toward continuously expanding our relationships. We provide cross-service client management along with continuous business reviews to ensure our clients receive value from our partnerships.

Use of Subcontractors

Certain ~~Segments~~segments of our business rely on subcontractors and other third parties to provide a portion of our overall services in certain engagements. Over the years we have established strong relationships with subcontractors that translate into high level service and favorable prices for our customers.

Restructuring Activities

Our management team continuously reviews and adjusts our cost structure and operating footprint to optimize our operations, and invest in improved technology. ~~During~~The the second half of 2023, we engaged a consulting firm to help review and analyze the structure and operations of the Company. This review included greater than 200 meetings with personnel at all levels of the firm and led to the initiation of our transformation program named "Project Elevate"~~. The~~ ~~program~~involved ~~involves~~ the optimization and rationalization of our business resources as well as the partial reinvestment of savings into the Company's sales and marketing team, technology, and strategy. ~~A business transformation office was established at the beginning of 2024 to manage and measure these initiatives.~~ Reorganization cost reductions from Project Elevate during 2024 through ~~2026~~2025 are estimated to be $16.0 million. In connection with our cost-saving and restructuring initiatives, we incurred total restructuring charges of $21.48 million and $52.74 million in ~~2024~~2025 and ~~2023~~2024, respectively. This program has resulted in ongoing cost optimization and rationalization initiatives across the organization.

Customers

Our clients include large multinational enterprises, small and medium-sized businesses and government organizations. Our largest client in terms of revenue generated 910.45% of total revenues in ~~2024~~2025. Our largest 25 clients in terms of revenue generated 7268.13% of total revenue in ~~2024~~2025. Our clients span a wide range of industries including but not limited to retail, travel, streaming, healthcare, financial services, and technology, which ~~insulates~~reduced the ~~Company~~concentration ~~from~~risk ~~adverse~~of ~~conditions~~the Company in any one sector. We generally enter into long-term contracts with our clients ranging in duration from one to three years. Most of our contracts do not require our customers to purchase a minimum amount of services from us. In general, our contracts with our customers are terminable on short notice with little or no penalty payable on termination.

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Sales and Marketing

Harte Hanks operates a modern sales and marketing growth engine to generate awareness, create demand and convert this demand into new business, as well as support existing client growth and retention. As a B2B services company we practice the marketing and sales methodology and tactics we offer to our clients, including ABM, demand generation, content marketing, inside sales and enterprise sales. We also leverage partnerships to extend our reach and broaden our solutions.

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For marketing, we leverage a combination of corporate marketing resources, marketing services resources and a modern MarTech stack including CRM, content management, SEO/digital advertising tools to support targeting, account based marketing, demand creation and awareness.

For sales we rely on our enterprise and solution sellers, combined with an internal sales team, to sell our products and services to new clients and task our employees supporting existing clients to expand our client relationship through additional solutions and products. We have expanded our sales team coverage internationally to support our global client and prospect network. Our sales force sells a variety of solutions and services to address our clients’ cross-selling targeted marketing needs. We also maintain solution-specific experts in our sales force and sales groups to sell our individual products and solutions, with expertise by target industries including B2B, Health and B2C.

We had 1612 employees in our corporate sales and marketing function as of December 31, ~~2024~~2025.

Competition

Our competition comes from local, national, and international marketing, advertising, customer care, print fulfillment, smaller 3PL, logistics companies, and internal client resources, against whom we compete for individual projects, entire client relationships, and marketing expenditures. The principal competitive factors in our industry are the breadth, depth and quality of service offerings, technical and strategic expertise, the perceived value of the services provided, reputation, pricing, and brand recognition. We also compete against social, mobile, web-based, email, print, broadcast, and other forms of advertising for marketing and advertising dollars in general.

Furthermore, competition may begin to emerge as a result of the availability of in-house information technology solutions that can replicate some of our services. We expect our clients to continue to improve their information technology systems and offerings and, in some circumstances, move the services we provide in-house.

Seasonality

Some of our revenue streams tend to be higher in the fourth quarter than in other quarters during a given year. This increased revenue is a result of overall increased activity prior to the holiday season in the retail vertical, and due to the open enrollment period in the healthcare vertical.

GOVERNMENT REGULATION

As a company conducting varied business activities for clients across diverse industries around the world, we are subject to a variety of domestic and international legal and regulatory requirements that impact our business, including, for example, regulations governing consumer protection, and unfair business practices, contracts, e-commerce, intellectual property, labor, and employment (especially wage and hour laws), securities, tax, and other laws that are generally applicable to commercial activities. We do not anticipate making material capital expenditures to maintain compliance with government regulations.

We are also subject to, or affected by, numerous local, national, and international laws, regulations, and industry standards that regulate direct marketing activities, including those that address privacy, data security, and unsolicited marketing communications. The most significant aspect of these laws and regulations that may be applied to, or affect, our business or the businesses of our clients include the following:

•The Federal Trade Commission’s positions regarding the processing of personal information and consumer protection as expressed through its Protecting Consumer Privacy in an Era of Rapid Change, Data Brokers, Big Data and Cross-Device Tracking reports (each of which seek to address consumer privacy, data protection, and technological advancements related to the collection or use of personal information for marketing purposes).

•Data protection laws in the United States (“U.S.”) (which are generally state specific) and in the European Union (“EU”), including the General Data Protection Regulation (“EU Regulation 679/2016”), each of which imposes a number of obligations with respect to the processing of personal data, and with respect to EU Regulation 679/2016 also imposes prohibitions related to the transfer of personal information from the EU to other countries, including the United States, that do not provide data subjects with an “adequate” level of privacy or security, and applies to all of our products in the EU.

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~~•Data~~consumers ~~protection~~held ~~laws~~by infinancial ~~the United States (“U~~institutions.~~S.”)~~ Although ~~(which~~Harte ~~are~~Hanks ~~generally~~is ~~state~~not ~~specific)~~considered ~~and~~a infinancial ~~the European Union (“EU”)~~institution, ~~including~~many ~~the General Data Protection Regulation (“EU Regulation 679/2016”), each~~ of ~~which~~our ~~imposes~~clients aare ~~number~~subject ~~of obligations with respect~~ to the ~~processing~~GLB. The ofGLB ~~personal data, and with respect to EU Regulation 679/2016~~ also ~~imposes~~includes ~~prohibitions~~rules ~~related~~relating to the ~~transfer of personal information from the EU to other countries~~physical, ~~including the United States~~administrative, ~~that do not provide data subjects with an “adequate” level of privacy or security,~~ and ~~applies~~technological toprotection ~~all~~ of ~~our~~non-public ~~products~~personal infinancial ~~the EU~~information.

•The Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act (“GLB”), which, among other things, regulates the use for marketing purposes of non-public personal financial information of consumers held by financial institutions. Although Harte Hanks is not considered a financial institution, many of our clients are subject to the GLB. The GLB also includes rules relating to the physical, administrative, and technological protection of non-public personal financial information.

•The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which regulates the use of protected health information for marketing purposes and requires reasonable safeguards designed to prevent intentional or unintentional use or disclosure of protected health information.

•The Fair Credit Reporting Act (“FCRA”), which governs, among other things, the sharing of consumer report information, access to credit scores, and requirements for users of consumer report information.

•The Fair and Accurate Credit Transactions Act of 2003 (“FACT Act”), which amended the FCRA and requires, among other things, consumer credit report notices for creditors that use consumer credit report information in connection with risk-based credit pricing actions and also prohibits a business that receives consumer information from an affiliate from using that information for marketing purposes unless the consumer is first provided a notice and an opportunity to request the business not to use the information for such marketing purposes, subject to certain exceptions.

•Federal and state laws governing the use of email for marketing purposes, including the U.S. Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM”), Canada’s Anti-Spam Legislation (“CASL”) and similar e-Privacy laws in Europe (in support of Directive 2002/58/EC).

•Federal and state laws governing the use of telephones for unsolicited marketing purposes, including the Federal Trade Commission’s Telemarketing Sales Rule (“TSR”), the Federal Communications Commission’s Telephone Consumer Protection Act (“TCPA”), various U.S. state do-not-call laws, Canada’s National Do Not Call laws and rules (“Telecommunications Act”) and similar e-Privacy laws in Europe (in support of Directive 2002/58/EC).

•Federal and state laws governing the collection and use of personal data online and via mobile devices, including but not limited to the Federal Trade Commission Act and the Children’s Online Privacy Protection Act, which seek to address consumer privacy and protection.

•Federal and state laws in the U.S., Canada, and Europe specific to data security and breach notification, which include required standards for data security and generally require timely notifications to affected persons in the event of data security breaches or other unauthorized access to certain types of protected personal data.

There are additional consumer protection, privacy, and data security regulations in locations where we or our clients do business. These laws regulate the collection, use, disclosure, and retention of personal data and may require consent from consumers and grant consumers other rights, such as the ability to access their personal data and to correct information in the possession of data controllers.

As a result of increasing public awareness and interest in individual privacy rights, data protection, information security, and other concerns regarding marketing communications, federal, state, and foreign governmental and industry organizations continue to consider new legislative and regulatory proposals that would impose additional restrictions on direct marketing services and products.

In addition, our business, in general, and the way we do business in particular, may be affected by the impact of these restrictions on our clients and their marketing activities. These additional regulations could increase compliance cost and requirements, as well as restrict or prevent the collection, management, aggregation, transfer, use, or dissemination of information or data that is currently legally available. Continued public interest in individual privacy rights and data security may result in the adoption of further voluntary industry guidelines that could impact our direct marketing activities and business practices.

INTELLECTUAL PROPERTY RIGHTS

Our intellectual property assets include trademarks and service marks that identify our Company and our services, know-how, software, and other technology that we develop for our internal use and for license to clients and data and intellectual property licensed from third parties, such as commercial software and data providers. We generally seek to protect our intellectual property through a combination of license agreements and trademark, service mark, copyright, and trade secret laws as well as through domain name registrations and enforcement procedures. We also enter into confidentiality agreements with many of our employees, vendors, and clients and seek to limit access to and distribution of intellectual property and other proprietary information. We pursue the protection of our trademarks and other intellectual property in the U.S. and internationally. Although we from time to time evaluate inventions for their possibility of being awarded a

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~~INTELLECTUAL~~patent, ~~PROPERTY~~we ~~RIGHTS~~do not own any patents, and patents are not core to our intellectual property strategy (other than as may be incidental to commercially available technology or software we license).

~~Our~~We ~~intellectual~~have ~~property~~developed ~~assets~~proprietary ~~include trademarks and service marks that identify our Company and our services, know-how,~~ software, ~~and~~including ~~other~~NexTOUCH ~~technology that we develop for our internal use~~ and ~~for license to clients and data and intellectual property licensed from third parties~~Allink®360, ~~such~~each asof ~~commercial~~which ~~software~~are ~~and~~integral ~~data providers. We generally seek~~ to ~~protect~~ our ~~intellectual property through a combination of license agreements and trademark, service mark, copyright, and trade secret laws as well as through domain name registrations and enforcement procedures~~business. WeNexTOUCH ~~also~~is ~~enter~~key ~~into confidentiality agreements with many of our employees, vendors, and clients and seek~~ to ~~limit access to and distribution of intellectual property and other proprietary information. We pursue~~ the ~~protection~~success of our ~~trademarks~~print and ~~other~~product ~~intellectual~~fulfillment ~~property~~business inwhile ~~the~~Allink®360 ~~U.S.~~ensures ~~and~~customers' ~~internationally. Although~~products weare ~~from~~delivered ~~time~~on to time ~~evaluate inventions for their possibility of being awarded a patent, we do not own any patents,~~ and ~~patents are not core to our intellectual property strategy (other than as may be incidental to commercially available technology or software we license)~~on-budget.

We have developed proprietary software including NexTOUCH and Allink®360, each of which are integral to our business. NexTOUCH is key to the success of our print and product fulfillment business while Allink®360 ensures customers' products are delivered on-time and on-budget.

HUMAN CAPITAL RESOURCES

As of December 31, ~~2024~~2025, Harte Hanks employed 1,~~715~~719 full-time employees and ~~288~~350 part-time employees, of which approximately 1,~~141~~380 are based outside of the U.S., primarily in the Philippines. A portion of our workforce is provided to us through staffing companies. None of our workforce is represented by labor unions. We consider our relations with our employees to be good.

We believe that our employees are the key to our success. Our human capital strategy focuses on:

Training and Talent Development: Harte Hanks is committed to the education of its employees and has committed to providing its employees with a variety of learning opportunities, including, but not limited to, technical skill development, soft skills development, workplace conduct guidance, and IT security training. Harte Hanks is proud of its diverse workforce and cross-cultural competency and, as of December 31, 2025, employed individuals in 7 different countries. As of December 31, 2025, 58% of Harte Hanks’ workforce was female. Harte Hanks is committed to recruiting and employing qualified candidates regardless of their gender or cultural background.

Diversity, Equity and Inclusion: Harte Hanks recognizes the value of diversity, equity and inclusion within its organization and strives to ensure that its workplace reflects the diverse communities in which it operates in order to promote collaboration, innovation, creativity and belonging. Harte Hanks is proud of its diverse workforce and cross-cultural competency and, as of December 31, 2024, employed individuals from 6 different countries. As of December 31, 2024, 58% of Harte Hanks’ workforce was female. Harte Hanks is committed to recruiting and employing qualified candidates regardless of their gender or cultural background.

Employee Benefits: Harte Hanks believes in the importance of offering its employees competitive salaries and wages, together with comprehensive insurance options. Harte Hanks recognizes the importance of comprehensive healthcare benefits, including medical, prescription drug, vision and dental, and employees and their family members are provided with tools and resources to assist in adopting and maintaining a healthy lifestyle. Harte Hanks pays the cost of basic life insurance, accidental death and dismemberment insurance, and short-term and long-term disability for its employees. Additionally, employees may purchase supplemental life and dependent life insurance. We also sponsored a 401(k) retirement plan in which we match a portion of employees’ voluntary before-tax contributions. Under this plan, both employee and matching contributions vest immediately.

ITEM 1A. RISK FACTORS

This section discusses the most significant factors that could affect our business, results of operations and financial condition, including the price of our common stock. You should carefully consider the following risks, which represent the material risk factors that affect the Company and are known to the Company at this time, as well as the other information contained in this Annual Report on Form 10-K in evaluating our company and our common stock. The risks described below are not the only ones we face. Additional risks not presently known to us or that we currently deem immaterial may also adversely affect our business, results of operations, or financial condition.

We have grouped these risk factors into three categories:

•Risks related to our business and how we operate;

•Risks related to cybersecurity and technology;

•Risks related to our capital structure and common stock.

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Risks Related to our Business and How we Operate

Most of our client engagements are cancellable on short notice.

The services we offer, in particular for contact center services, are generally terminable upon short notice by our clients, even if the term of the agreement (and the expected duration of services) is several or many years. Many of our customer agreements do not have minimum volume, revenue requirements or exclusivity arrangements, so clients may (and do) vary their actual orders from us over time based on their own business needs, their satisfaction with the quality and pricing of our services, and a variety of other competitive factors. In addition, the timing of particular jobs or types of jobs at particular times of year (such as mail programs supporting the holiday shopping season or contact center programs supporting a specific event) may cause significant fluctuations in the operating results of our operations in any given quarter.

~~A large portion of our revenue is generated from a limited number of clients. The loss of a client or significant work from one or more of our clients could adversely affect our business.~~10

~~Our~~Table ~~largest client (measured in revenue) generated 9.4%~~ of ~~total revenues in 2024 and represented 11.9% of total accounts receivable as of December 31, 2024.~~Contents Approximately 72.1% of our revenue for 2024 was generated by our 25 largest clients. While we typically have multiple projects with our largest customers which would not all terminate at the same time, the loss of one or more of our larger clients or even a single project or contract with one of our largest clients could adversely affect our business, results of operations, and financial condition if the lost revenues are not replaced with profitable revenues from that client or other clients.

A large portion of our revenue is generated from a limited number of clients. The loss of a client or significant work from one or more of our clients has adversely affected our business and could in the future adversely affect our business.

Our largest client (measured in revenue) generated 10.5% of total revenues in 2025 and represented 12.3% of total accounts receivable as of December 31, 2025. Approximately 68.3% of our revenue for 2025 was generated by our 25 largest clients. While we typically have multiple projects with our largest customers which would not all terminate at the same time, the loss of one or more of our larger clients or even a single project or contract with one of our largest clients could adversely affect our business, results of operations, and financial condition if the lost revenues are not replaced with profitable revenues from that client or other clients.

Our industry is subject to intense competition and dynamic changes in business model, which in turn could cause our operations to suffer.

The B2B services industry is highly competitive, highly fragmented, and subject to rapid change. We believe the principal competitive factors in this market are breadth, depth, and quality of service offerings, ability to tailor specific solutions to the needs of clients and their customers, the ability to attract, train, and retain qualified staff, cybersecurity infrastructure, compliance rigor, global delivery capabilities, pricing, and marketing and sales capabilities. We compete for business with a variety of companies, as well as in-house operations of existing and potential clients. If our clients place more focus on in-house marketing or utilize new or emerging technologies to internalize these operations, the size of the market for third-party service providers like us could decrease significantly. Similarly, if competitors offer their services at lower prices to gain market share or provide services that gain greater market acceptance than the services we offer or develop, the demand for our services may decline.

Specialized providers or new entrants can enter our markets by developing new systems or services that could impact our business. The opportunity for new entrants in our industry may expand as digital engagement and offerings increase in importance, and barriers to entry remain low. New competitors, new strategies by existing competitors or clients, and consolidation among clients or competitors could result in significant market share gains by our competitors, which could have an adverse effect on our revenue.

Some emerging technologies, such as AI, Robotic Process Automation, Machine Learning, Voice of the Customer, Interactive Voice Response, and Internet of Things, may cause an adverse shift in the way certain of our existing business operations are conducted, including by replacing human contacts with automated or self-service options, or by decreasing the size of the available market. We also expect our competitors to continue to improve their technology infrastructure, including with the use of AI and machine learning solutions, to interact with clients and prospects, automate their services, process and analyze large amounts of data and grow their customer base. Our ability to innovate our own technology infrastructure and appropriately grow our CX solutions offerings using these tools (and predicting the next generation of such tools) will affect our ability to compete. We may be unsuccessful at anticipating or responding to new developments on a timely and cost-effective basis, and our use of technology may differ from accepted practices in the marketplace. Certain of our solutions may require lengthy and complex implementations that can be subject to changing client preferences and continuing changes in technology, which can increase costs or adversely affect our business.

Current and future competitors may have significantly greater financial and other resources than we do, and they may sell competing services at lower prices or at lower profit margins, resulting in pressures on our prices and margins.

The size of our competitors varies widely across vertical markets and service lines. Some of our competitors have significantly greater financial, technical, marketing, and other resources than we do in one or all of our market segments. As a result, our competitors may be in a position to respond more quickly than we can to new or emerging technologies, methodologies, and changes in customer requirements, or may devote greater resources than we can to the development, promotion, sale, and support of innovative products and services. Moreover, new competitors or alliances among our competitors may emerge and potentially reduce our market share, revenue, or margins. Some of our competitors also may choose to sell products or services that compete with ours at lower prices by accepting lower margins and profits or may be able to sell products or services that compete with ours at lower prices given proprietary ownership of data, technical superiority, a broader or deeper product or experience set, greater capital resources or economies of scale. Price reductions or pricing pressure by our competitors could negatively impact our margins and results of operations and could also harm our ability to retain clients or obtain new customers on favorable terms. Competitive pricing pressures tend to increase in difficult or uncertain economic environments, due to the reduced marketing expenditures of many of our clients and

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~~Current and future competitors may have significantly greater financial and other resources than we do~~prospects, and ~~they~~in ~~may~~turn ~~sell~~negatively ~~competing~~impact ~~services~~the atcompetitive ~~lower~~business ~~prices~~environment orfor atmarketing ~~lower~~service ~~profit~~providers ~~margins,~~such ~~resulting~~as ~~in pressures on~~ our ~~prices and margins~~company.

We must maintain technological competitiveness, continually improve our processes, and develop and introduce new services in a timely and cost-effective manner.

We believe that our success depends on, among other things, maintaining technological competitiveness in our products, processing functionality, and software systems and services. Technology changes rapidly as makers of computer hardware, network systems, programming tools, computer and data architectures, operating systems, database technology, and mobile devices continually improve their offerings. Advances in information technology may result in changing client preferences for products and product delivery channels in our industry. The increasingly sophisticated requirements of our clients require us to continually improve our processes and provide new products and services in a timely and cost-effective manner (whether through development, license, or acquisition). We may be unable to successfully identify, develop, and bring new and enhanced services and products to market in a timely and cost-effective manner, such services and products may not be commercially successful, and services, products, and technologies developed by others may render our services and products noncompetitive or obsolete.

Our success depends on our ability to consistently and effectively deliver our services to our clients.

Our success depends on our ability to effectively and consistently staff and execute client engagements within the agreed upon time frame and budget. Depending on the needs of our clients, our engagements may require customization, integration, and coordination of a number of complex product and service offerings and execution across many facilities. Moreover, in some of our engagements, we rely on subcontractors and other third parties to provide some of the services to our clients, and we cannot guarantee that these third parties will effectively deliver their services, that we will be able to easily suspend work with contractors that are not performing adequately, or that we will have adequate recourse against these third parties in the event they fail to effectively deliver their services as we are generally responsible for the work of these sub-contractors. Other contingencies and events outside of our control may also impact our ability to provide our products and services, such as pandemics or other national or global health crisis or severe weather events that could disrupt our delivery networks. Our failure to effectively and timely staff, coordinate, and execute our client engagements may adversely impact existing client relationships, the amount or timing of payments from our clients and our reputation in the marketplace as well as our ability to secure additional business and our resulting financial performance. In addition, our contractual arrangements with our clients and other customers may not provide us with sufficient protection against claims for lost profits or other claims for damages.

We may experience in the future, reduced demand for our products and services due to the financial condition and marketing budgets of our clients and other factors that may impact the industry verticals that we serve.

Marketing budgets are largely discretionary in nature, and as a consequence are easier to reduce in the short-term than other expenses. Our customers have in the past, and may in the future, respond to their own financial constraints, whether caused by weak economic conditions, weak industry performance or client-specific circumstances, by reducing their marketing spend. ~~For~~Customers ~~instance,~~may inalso ~~light~~be ofslow to restore their marketing budgets to prior levels during an economic recovery and may respond similarly to adverse economic conditions in the ~~current~~future. Our ~~inflationary~~revenues ~~environment~~are dependent on national, regional, and ~~increased~~international ~~cost~~economies ofand ~~capital~~business ~~due~~conditions. A tolong-lasting ~~rising~~economic ~~interest~~recession, ~~rates~~regardless of the cause, ~~our~~or ~~customers~~anemic ~~may~~recovery ~~reduce~~in the ~~amount~~markets ofin ~~services~~which we ~~provide~~operate tocould ~~them~~have material adverse effects on our business, financial position, or operating results. Similarly, industry or company-specific factors may negatively impact our clients and prospective clients, and in turn result in reduced demand for ~~among~~our ~~other~~products ~~reasons~~and services, client insolvencies, collection difficulties or bankruptcy preference actions related to ~~preserve~~payments ~~liquidity.~~received ~~Customers~~from our clients. We may also beexperience ~~slow~~reduced todemand ~~restore~~as ~~their~~a ~~marketing~~result ~~budgets~~of toconsolidation ~~prior~~of ~~levels~~clients ~~during~~and anprospective ~~economic~~clients ~~recovery~~in ~~and~~the industry verticals that we serve.

We must effectively manage our costs to be successful. If we do not achieve our cost management objectives, our financial results could be adversely affected.

Our business plan and expectations for the future require that we effectively manage our cost structure, including our operating expenses and capital expenditure across our operations. The program named "Project Elevate" involved the optimization and rationalization of our business resources as well as the partial reinvestment of savings into the Company’s sales and marketing team, technology, and strategy. However, we may not be able to recognize all identified potential savings and even if we are able to recognize the identified savings, such cost savings may be insufficient to achieve our cost management objectives. To the extent that we do not successfully manage our costs our financial results may be adversely affected.

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may respond similarly to adverse economic conditions in the future. Our revenues are dependent on national, regional, and international economies and business conditions. A long-lasting economic recession, regardless of the cause, or anemic recovery in the markets in which we operate could have material adverse effects on our business, financial position, or operating results. Similarly, industry or company-specific factors may negatively impact our clients and prospective clients, and in turn result in reduced demand for our products and services, client insolvencies, collection difficulties or bankruptcy preference actions related to payments received from our clients. We may also experience reduced demand as a result of consolidation of clients and prospective clients in the industry verticals that we serve.

We must effectively manage our costs to be successful. If we do not achieve our cost management objectives, our financial results could be adversely affected.

Our business plan and expectations for the future require that we effectively manage our cost structure, including our operating expenses and capital expenditure across our operations. In 2023, the program named Project Elevate was created and changed processes in each of our business segments to transform the operational cost structure of the company and change the culture to be more agile, optimize the structure, and cost justify all activities of the organization. A transformational office was established at the beginning of 2024 with the mandate to manage and measure these initiatives on a go forward basis. However, we may not be able to recognize all identified potential savings and even if we are able to recognize the identified savings, such cost savings may be insufficient to achieve our cost management objectives. To the extent that we do not successfully manage our costs our financial results may be adversely affected.

Consumer perceptions regarding the privacy and security of their data may prevent or impair our ability to offer our products and services.

Various local, national, and international regulations, as well as industry standards, give consumers varying degrees of control as to how personal data is collected, used, and shared for marketing purposes. If, due to privacy, security, or other concerns, consumers exercise their ability to prevent or limit such data collection, use, or sharing, it may impair our ability to provide direct marketing services for those consumers and limit our clients’ demand for our services. Additionally, privacy and security concerns may limit consumers’ willingness to voluntarily provide data to our clients or marketing companies. Some of our services depend on voluntarily provided data. For instance, we believe that one of the most attractive offerings of our ~~Marketing~~Revenue ~~Services~~Solutions segment is the provision of data-analytics to our clients. However, the ability to provide such services is at least in part dependent on the ability to collect large volumes of voluntarily provided data. If there is a significant shift in consumer behavior or governmental regulations were to inhibit our ability to collect large amounts of this type of data, our ability to provide meaningful data analytics to our clients would likely be impaired.

If our facilities are damaged, or if we are unable to access and use our facilities, our business and results of operations will be adversely affected.

~~Our~~Many of our operations rely on the ability of our employees to work at specially equipped facilities to perform services for our clients. Although we have some excess capacity and redundancy, we do not have sufficient excess capacity or redundancy (in equipment, facilities, or personnel) to maintain our standard service and operational levels for an extended period of time if we are unable to use one of our major facilities. Outsourcing these processes to facilities not owned by us is not a viable option. Should we lose access to a facility for any reason, ~~including~~such as a result of pandemics, terrorist incident or natural disaster, our service levels are likely to decline or be suspended and clients would go without service or secure replacement services from a competitor. As a consequence of such an event, we would suffer a reduction in revenues and harm to (and loss of) client relationships.

If our new leaders are unsuccessful, or if we continue to lose key management and are unable to attract and retain the talent required for our business, our operating results could suffer.

~~Over~~Many of the ~~past~~members ~~few years, we have replaced many~~ of our ~~leaders~~current ~~(including~~leadership ~~our~~team ~~Chief~~have ~~Executive~~limited ~~Officer,~~tenure ~~Chief~~in ~~Financial~~their ~~Officer,~~current ~~and Chief Operating Officer), some a number of times~~roles. If our new leaders fail in their new and additional roles and responsibilities (and more generally if we are unable to attract additional leaders with the necessary skills to manage our business) our business and its operating results may suffer. Further, our prospects depend in large part upon our ability to attract, train, and retain experienced technical, client services, sales, consulting, marketing, and management personnel. While the demand for personnel is also dependent on employment levels, competitive factors, and general economic conditions, our recent business performance may diminish our attractiveness as an employer. The loss or prolonged absence of the services of these individuals could have a material adverse effect on our business, financial position, or operating results.

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Interest rate increases could affect our results of operations, cash flows and financial position.

Interest rate fluctuations in Europe and the United States may affect the amount of interest we earn on cash equivalents. Our Credit Facility bears interest based upon the Secured Overnight Financing Rate. Our results of operations, cash flows, and financial position could be materially or adversely affected by significant ~~increases~~changes into interest rates. We also have exposure to interest rate fluctuations in the United States, specifically money market, the value of our pension obligations and overnight time deposit rates, as these affect our earnings on excess cash. Even with the offsetting increase in earnings on excess cash in the event of an interest rate increase, we cannot be assured that future interest rate increases will not have a material adverse impact on our business, financial position, or operating results. Increased interest rates have put upward pressure on pricing and purchasing power.

Inflation could adversely affect our financial condition and results of operations.

Inflation could have a negative impact on our financial condition and results of operations. Significant increases in inflation, particularly in wages and, to a lesser extent, goods and services, can affect our business and profitability. Rising labor costs may compress our margins as we face challenges in maintaining profitability. Additionally, as we rely on third-party providers for some of our offerings, we have already experienced margin compression due to higher service charges. While inflation appears to be stabilizing, we are actively taking steps to preserve our margins. However, these efforts may not be sufficient, and inflation could continue to adversely impact our profitability.

The widespread increase in the cost of goods and services due to inflation, supply chain disruptions, and rising interest rates has negatively impacted, and may continue to affect the discretionary spending of our customers. This, in turn, may adversely impact our results of operations. We cannot predict the extent or duration of these negative effects on our business.13

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The widespread increase in the cost of goods and services due to inflation has negatively impacted, and may continue to affect the discretionary spending of our customers. This, in turn, may adversely impact our results of operations. We cannot predict the extent or duration of these negative effects on our business.

We are subject to risks associated with operations outside the United States

Harte Hanks conducts business outside of the United States. During ~~2024~~2025, approximately 9.45% of our revenues were derived from operations outside the United States, primarily in Europe and Asia. We may expand our international operations in the future as part of our growth strategy. Accordingly, our future operating results could be negatively affected by a variety of factors, some of which are beyond our control, including:

•changes in local, national, and international legal requirements or policies resulting in burdensome government controls, tariffs, restrictions, embargoes, or export license requirements;

•higher rates of inflation;

•the potential for nationalization of enterprises;

•less favorable labor laws that may increase employment costs and decrease workforce flexibility;

•potentially adverse tax treatment;

•less favorable foreign intellectual property laws that would make it more difficult to protect our intellectual property from misappropriation;

•more onerous or differing data privacy and security requirements or other marketing regulations;

•longer payment cycles;

•social, economic, and political instability;

•regional armed conflicts, as well as any additional economic sanctions adopted in response to such actions;

•the differing costs and difficulties of managing international operations;

•modifications to international trade policy or the imposition of increased or new tariffs, quotas or trade barriers on key commodities; and

•geopolitical risk and adverse market conditions caused by changes in national or regional economic or political conditions (which may impact relative interest rates and the availability, cost, and terms of mortgage funds).

In addition, exchange rate fluctuations may have an impact on our future costs or on future cash flows from foreign investments. We have not entered into any foreign currency forward exchange contracts or other derivative instruments to hedge the effects of adverse fluctuations in foreign currency exchange rates. The various risks that are inherent in doing business in the United States are also generally applicable to doing business anywhere else and may be exacerbated by the difficulty of doing business in numerous sovereign jurisdictions due to differences in culture, laws, and regulations.

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If we fail to establish and maintain proper and effective internal control over financial reporting, our operating results and our ability to operate our business could be harmed.

Section 404 of the Sarbanes-Oxley Act of 2002 requires that we establish and maintain internal control over financial reporting and we are also required to establish disclosure controls and procedures under applicable SEC rules. An effective internal control environment is necessary to enable us to produce reliable financial reports and is an important component of our efforts to prevent and detect financial reporting errors and fraud. Management is required to provide an annual assessment on the effectiveness of our internal control over financial reporting. Our testing may reveal significant deficiencies in our internal control over financial reporting that are deemed to be material weaknesses and render our internal control over financial reporting ineffective. In the past these assessments and similar reviews have led to the discovery of material weaknesses, all of which have been remediated. However, no assurance can be given that we won't discover material weaknesses in the future. We have incurred and we expect to continue to incur substantial accounting and auditing expenses and spend significant management time in complying with the requirements of Section 404.

While an effective internal control environment is necessary to enable us to produce reliable financial reports and is an important component of our efforts to prevent and detect financial reporting errors and fraud, disclosure controls and internal control over financial reporting are generally not capable of preventing or detecting all financial reporting errors and all fraud. A control system, no matter how well-designed and operated, is designed to reduce rather than eliminate the risk of material misstatements in our consolidated financial statements. There are inherent limitations on the effectiveness of internal controls, including collusion, management override and failure in human judgment. A control system can provide only reasonable, not absolute, assurance of achieving the desired control objectives and the design of a control system must reflect the fact that resource constraints exist.

If we are not able to comply with the requirements of Section 404, or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses (i) we could fail to meet our financial reporting obligations; (ii) our reputation may be adversely affected and our business and operating results could be harmed; (iii) the market price of our stock could decline; and (iv) we could be subject to litigation and/or investigations or sanctions by the SEC, or other regulatory authorities.

There were no changes in our internal controls over financial reporting during our most recent fiscal year that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Risks Related to Cybersecurity and Technology

Privacy, information security and other regulatory requirements may prevent or impair our ability to offer our products and services.

We are subject to and affected by numerous laws, regulations, and industry standards that regulate direct marketing activities, including those that address privacy, data protection, processing personal information, information security, and marketing communications.

As a result of increasing awareness and interest in privacy rights, data protection, the fair use of personal information, consumer protection, information security, and similar matters, national and local governments and industry organizations regularly consider and adopt new laws, rules, regulations, and guidelines that impact, restrict, and regulate our business products and services. Whether already in place or scheduled to become effective in the future, comprehensive data protection, privacy, and marketing laws apply across the jurisdictions in which we operate as well as in the locations where any such personal information originates, including Europe, the Philippines, and most states throughout the United States. These regulations apply when processing personal data for business and marketing purposes and broadly impact all marketing activities, including legitimate activities associated with profiling consumer behaviors, drawing inferences from personal information, making automated decisions about individuals using personal information, transferring personal information between parties and jurisdictions, communicating with existing and prospective customers, and to other similar activities. Additionally, we are subject to operational obligations when processing and storing personal information, including, but not limited to, adopting and upholding a governance framework to protect this information, registering with relevant regulators, implementing secure infrastructure and data security standards and strategies, data breach detection and response solutions, conducting audits to identify security risks as well as carrying out additional procedures to demonstrate accountability and compliance with national and local privacy and data protection regulations. Other relevant compliance considerations in support of these mandates include establishing solutions in support of broad privacy and data protection rights, including those designed to offer notice to individuals, capture prior consent, grant access to personal information,

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considerations in support of these mandates include establishing solutions in support of broad privacy and data protection rights, including those designed to offer notice to individuals, capture prior consent, grant access to personal information, offer choices regarding the decision to share one’s personal information and how such information can be used, as well as related controls to honor choices expressed related to if and how personal information can be processed or licensed for marketing purposes.

We anticipate new regulations will continue to be proposed and adopted in the future in the jurisdictions in which we operate and/or generate revenue. We also expect any new regulations will reflect the growing trends common to current privacy, data protection and marketing laws requiring companies to bear the burden of proving compliance efforts through demonstrable records, and may subject companies to significant fines and penalties should they violate any substantive or technical requirement. We may implement additional safeguards, controls and measures in response to these changes and trends; and may be required to change or limit our service offerings.

Our business may also be affected by the impact of rules and regulations on our clients’ business and marketing activities. In addition, as we acquire new capabilities and deploy new technologies to execute our strategy, we may be exposed to additional regulations. Current and future restrictions and regulations could increase compliance costs, and restrict or prevent the collection, management, aggregation, transfer, use or dissemination of personal information or change the requirements so as to require other changes to our business or our clients' businesses, practices and tolerance for risk. Additional restrictions and regulations may limit or prohibit current practices regarding marketing communications and information quality solutions. For example, multiple states have implemented opt out legislation for telephone marketing, requiring the creation of statewide do-not call registries. Such legislation could impact our business and the businesses of our clients and of their customers. In addition, continued public interest in privacy rights, data protection and access, and information security may result in the adoption of additional industry guidelines that could impact our direct marketing activities and business practices.

We cannot predict the scope of any new laws, rules, regulations, or industry guidelines or how courts or agencies may interpret existing rules, regulations or guidelines. Additionally, enforcement priorities by governmental authorities will change over time, which may impact our business. Understanding the laws, rules, regulations, and guidelines applicable to specific client multichannel engagements and across many jurisdictions poses a significant challenge, as such laws, rules, regulations, and guidelines are often inconsistent or conflicting, and are sometimes at odds with client objectives. Our failure to properly comply with these regulatory requirements and client needs may materially and adversely affect our business. General compliance with privacy, data protection, and information security obligations is costly and time-consuming, and we may encounter difficulties, delays, or significant expenses in connection with our compliance, or because of our clients’ need to comply. We may be exposed to significant penalties, liabilities, reputational harm, and loss of business in the event that we fail to comply. We could suffer a material adverse impact on our business due to the enactment or enforcement of legislation or industry regulations affecting us and/or our clients, the issuance of judicial or governmental interpretations, changed enforcement priorities of governmental agencies, or a change in behavior arising from public concern over privacy, data protection, and information security issues.

Uncertainty around, and disruption from, new and emerging technologies, including the adoption and utilization of ~~artificial intelligence~~AI, may result in risks and challenges that could impact our business.

We utilize new and emerging technologies, including AI, in our solutions and services. As with many innovations, AI presents risks and challenges that could significantly disrupt our business model. If we do not execute on AI effectively, this could result in loss of revenue and reduced margins.

Our success depends, in part, on our ability to continue to acquire, develop, and implement solutions that meet the evolving needs of our clients. The rapid evolution of AI will require us to expend resources to develop, test, and implement solutions that utilize AI effectively, which may lead us to incur significant expense to maintain a competitive advantage within the industry. We will also be required to attract, motivate, and retain top professionals with the skills necessary to execute our strategy relating to AI, machine learning and other emerging technologies. If we do not employ new technologies, including AI, as quickly or efficiently as our competitors, or if our competitors develop more cost-effective or client-preferred technologies, it could have a material adverse effect on our ability to win and retain business from clients, which would adversely affect our business.

The regulatory landscape surrounding AI and generative AI technologies is also evolving, and the ways in which these technologies will be regulated by governmental authorities, self-regulatory institutions, or other regulatory authorities remain uncertain. Such regulations may result in significant operational costs or constrain our ability to develop, deploy, or maintain these technologies.15

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Significant system disruptions, loss of data center capacity or interruption of telecommunication links could adversely affect our business and results of operations.

Our business is heavily dependent on data centers and telecommunications infrastructures, which are essential to both our call center services and our database services (which require that we efficiently and effectively create, access, manipulate and maintain large and complex databases). In addition to the third-party data centers we use, we also operate several of our own operations centers to support both our own and our clients’ needs. Our ability to protect our operations against damage or interruption from fire, flood, tornadoes, power loss, telecommunications or equipment failure, or other disasters and events beyond our control is critical to our continued success. Likewise, as we increase our use of third-party data centers, it is critical that these vendors adequately protect their data centers from the same risks we do. Our services are dependent on regional and international networking and telecommunication providers. We believe we have taken reasonable precautions to protect our data centers and telecommunication infrastructure from events that could interrupt our operations. Any damage to the data centers we use or any failure of our telecommunications links could materially adversely affect our ability to continue to provide services to our clients, which could result in loss of revenues, profitability and client confidence, and may adversely impact our ability to attract new clients and force us to expend significant company resources to repair the damage.

IfWe have experienced cybersecurity incidents in the past, and if we do not prevent security breaches and other interruptions to our infrastructure, we may be exposed to lawsuits, lose customers, suffer harm to our reputation, and incur additional costs.

The services we offer involve the transmission of large amounts of sensitive and proprietary information over public communications networks, as well as the processing and storage of confidential customer information. Unauthorized access, remnant data exposure, computer viruses, denial of service attacks, accidents, employee error or malfeasance, “social engineering” and “phishing” attacks, intentional misconduct by computer “hackers” and other disruptions can occur, and infrastructure gaps, hardware and software vulnerabilities, inadequate or missing security controls, and exposed or unprotected customer data can exist that (i) interfere with the delivery of services to our customers, (ii) impede our customers' ability to do business, or (iii) compromise the security of our or our customers' systems and data, which exposes confidential information to unauthorized third parties. We are a target of ~~cyber-attacks~~cybersecurity incidents of varying degrees on a regular basis. Over time, the techniques used to conduct these cyber-attacks, as well as the sources and targets of these attacks, have become increasingly sophisticated and, in some cases, have been but, are often not recognized until such attacks are launched or have been in place for some time. In addition, there has been an increase in cyber-attacks conducted or sponsored by capable and well-funded “nation state” operators. The Company expects that the sophistication and techniques of cyber-threats will continue to evolve with the rapid development and increased adoption of AI and machine-learning technologies.

Our reputation and business results may be adversely impacted if we, or subcontractors upon whom we rely, do not effectively protect sensitive personal information of our clients and our clients’ customers.

Current privacy and data security laws and industry standards impact the manner in which we capture, handle, analyze, and disseminate customer and prospect data as part of our client engagements. In many instances, our client contracts also mandate privacy and security practices. If we fail to effectively protect and control information, especially sensitive personal information (such as health information, social security numbers, or credit card numbers) of our clients and their customers or prospects in accordance with these requirements, we may incur significant expense, suffer reputational harm, loss of business, and, in certain cases, be subjected to regulatory or governmental sanctions or litigation. These risks may be increased due to our reliance on subcontractors and other third parties in providing a portion of our overall services in certain engagements. We cannot guarantee that these third parties will effectively protect and handle sensitive personal information or other confidential information, or that we will have adequate recourse against these third parties in the event such third parties fail to adequately protect and handle such sensitive or confidential information.

~~We could fail to adequately protect our intellectual property rights and may face claims for intellectual property infringement.~~16

Our ability to compete effectively depends in part on the protection of our technology, products, services, and brands through intellectual property right protections, including copyrights, database rights, trade secrets, trademarks, as well as through domain name registrations, and enforcement procedures. The extent to which such rights can be protected and enforced varies by jurisdiction, and capabilities we procure through acquisitions may have less protection than would be desirable for the use or scale we intend or need. Litigation involving patents and other intellectual property rights has

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~~become~~We ~~far~~could ~~more~~fail ~~common~~to ~~and~~adequately ~~expensive~~protect inour ~~recent~~intellectual ~~years,~~property rights and wemay face ~~the~~claims ~~risk~~for ~~of additional litigation relating to our use or future use of~~ intellectual property ~~rights of third parties~~infringement.

Despite our efforts to protect our intellectual property, unauthorized parties may attempt to copy or otherwise obtain and use our proprietary information and technology. Monitoring unauthorized use of our intellectual property is difficult, and unauthorized use of our intellectual property may occur. We cannot be certain that trademark registrations will be issued, nor can we be certain that any issued trademark registrations will give us adequate protection from competing products. For example, others may develop competing technologies or databases on their own. Moreover, there is no assurance that our confidentiality agreements with our employees or third parties will be sufficient to protect our intellectual property and proprietary information.

Third-party infringement claims and any related litigation against us could subject us to liability for damages, significantly increase our costs, restrict us from using and providing our technologies, products or services or operating our business generally, or require changes to be made to our technologies, products, and services. We may also be subject to such infringement claims against us by third parties and may incur substantial costs and devote significant management resources in responding to such claims. We have been, and continue to be, obligated under some agreements to indemnify our clients as a result of claims that we infringe on the proprietary rights of third parties. These costs and distractions could cause our business to suffer. In addition, if any party asserts an infringement claim, we may need to obtain licenses to disputed intellectual property. We cannot provide assurance, however, that we will be able to obtain these licenses on commercially reasonable terms or that we will be able to obtain any licenses at all. The failure to obtain necessary licenses or other rights may have an adverse effect on our ability to provide our products and services.

Breaches of security, or the perception that e-commerce is not secure, could severely harm our business and reputation.

Business-to-business and business-to-consumer electronic commerce requires the secure transmission of confidential information over public networks. Some of our products and services are accessed through, or are otherwise dependent on the internet. Security breaches in connection with the delivery of our products and services, or well-publicized security breaches that may affect us or our industry (such as database intrusion) could be severely detrimental to our business, operating results, and financial condition. We cannot be certain that advances in criminal capabilities, cryptography, or other fields will not compromise or breach the technology protecting the information systems that deliver our products, services, and proprietary database information.

Data suppliers could withdraw data that we rely on for our products and services.

We purchase or license much of the data we use for ourselves and for our clients. Our ability to provide our customers with data is somewhat dependent on the ability to obtain this data. There could be a material adverse impact on our business if owners of the data we use were to curtail access to the data or materially restrict the authorized use of their data. Data providers could withdraw their data for a number of reasons, including but not limited to, if there is a competitive reason to do so, if there is pressure from the consumer community, or if additional regulations are adopted restricting the use of the data. We also rely upon data from other external sources to maintain our proprietary and non-proprietary databases, including data received from customers and various government and public records. If a substantial number of data providers or other key data sources were to withdraw or restrict their data, if we were to lose access to data due to government regulation or if the collection of data becomes uneconomical, our ability to provide products and services to our clients could be materially and adversely affected, which could result in decreased revenues, net income and earnings per share.

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Risks Related to our Capital Structure and Common Stock

The covenants in the Credit Facility ~~may~~ limit the Company’s operating and financial flexibility.

The Credit Facility and the terms under which we borrow money under any future credit facilities or other agreements could have significant consequences for our business. The Credit Facility includes covenants currently restricting or potentially restricting the Company’s and its subsidiaries’ ability to create, incur, assume or become liable for indebtedness; make certain investments; pay dividends or repurchase the Company's stock; create, incur or assume liens, consummate mergers or acquisitions, liquidate, dissolve, suspend or cease operations, or modify accounting or tax reporting methods (other than as required by the generally accepted accounting principles in the United States of America).

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Covenant and ratio requirements may limit the manner in which we can conduct our business, and we may be unable to engage in favorable business activities or finance future operations and capital needs. Specifically, the amount and terms of the Company’s indebtedness could:

•limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate, including limiting our ability to invest in our strategic initiatives, and consequently, place us at a competitive disadvantage;

•reduce the availability of our cash flows that would otherwise be available to fund working capital, capital expenditures, acquisitions, and other general corporate purposes; and

•result in higher interest expense in the event of increases in interest rates, as discussed below under the Risk Factor “Interest rate increases could affect our results of operations, cash flows, and financial position.”

In addition, a failure to comply with these restrictions or to maintain the financial measures and ratios contained in the Credit Facility or future debt instruments could lead to an event of default that could result in an acceleration of debt repayment obligations, and refinancing existing letters of credit.

Risks related to our pension benefit plans may adversely impact our results of operations and cash flows.

Pension benefits represent significant financial obligations. As of December 31, ~~2024~~2025, we had approximately $2423.40 million of unfunded pension liabilities. Because of the uncertainties involved in estimating the timing and amount of future payments and asset returns, significant estimates are required to calculate pension expense and liabilities related to our plans. We utilize the services of independent actuaries, whose models are used to facilitate these calculations. Several key assumptions are used in the actuarial models to calculate pension expense and liability amounts recorded in the consolidated financial statements. In particular, significant changes in actual investment returns on pension assets, discount rates, or legislative or regulatory changes could impact future results of operations and required pension contributions. Differences between actual pension expenses and liability amounts from these estimated expense and liabilities may adversely impact our results of operations and cash flows.

Our operations are located on leasehold property, and our inability to renew our leases on commercially acceptable terms or at all may adversely affect our results of operations.

Our sites operate on leasehold property. Our leases are subject to renewal and we may be unable to renew such leases on commercially acceptable terms or at all. Our inability to renew our leases, or a renewal of our leases with a rental rate higher than the prevailing rate under the applicable lease prior to expiration, may cause an increase in operating costs, or may cause additional costs due to relocation.

We are a “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors.

We are a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million. We have elected to take advantage of certain of the scaled disclosures available to smaller reporting companies and may continue to rely on such exemptions. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Reports on Form 10-K.

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Fluctuations in our revenue and operating results and other factors may impact the volatility of our stock price.

The price at which our common stock has traded in recent years has fluctuated greatly and has declined significantly. Our common stock price may continue to be volatile due to several factors including the following (some of which are beyond our control):

•variations in our operating results from period to period and variations between our actual operating results and the expectations of securities analysts, investors, and the financial community;

•the development and sustainability of an active trading market for our common stock;

•unanticipated developments with client engagements or client demand, such as variations in the size, budget, or progress of engagements, variability in the market demand for our services, client consolidations, and the unanticipated termination of several major client engagements;

•announcements of developments affecting our businesses;

•competition and the operating results of our competitors;

•the overall strength of the economies of the markets we serve and general market volatility; and

•other factors discussed elsewhere in this Item 1A, “Risk Factors.”

Because of these and other factors, investors in our common stock may not be able to resell their shares at or above their original purchase price.

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Our certificate of incorporation and bylaws contain anti-takeover protections that may discourage or prevent strategic transactions, including a takeover of our company, even if such a transaction would be beneficial to our stockholders.

Provisions contained in our certificate of incorporation and bylaws, in conjunction with the provisions of the Delaware General Corporation Law, could delay or prevent a third party from entering a strategic transaction with us, even if such a transaction would benefit our stockholders. For example, our certificate of incorporation and bylaws do not allow written consents by stockholders and have strict advance notice and disclosure requirements for nominees and stockholder proposals.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

We rely on our technology infrastructure and information systems to interact with our clients, our employees, to sell our services, to utilize our data, to support and grow our client base, and to bill, collect, and make payments. Our technology infrastructure and information systems also support and form the foundation for our accounting and finance systems and form an integral part of our disclosure and accounting control environment. Our internally developed system and processes, as well as those systems and processes provided by third-party vendors that we contract with, may be susceptible to damage or interruption from cybersecurity threats, which include any unauthorized access to our information systems, and which may result in adverse effects on the confidentiality, integrity, or availability of such systems or the related information. Potential cybersecurity threats include terrorist or hacker attacks, the introduction of malicious computer viruses, ransomware, falsification of banking and other information, insider risk, or other security breaches. Such attacks have become more and more sophisticated over time, especially as threat actors have become increasingly well-funded by, or themselves include governmental actors or other actors with significant means. We expect that the sophistication of cyber-threats will continue to evolve as threat actors ~~increase~~increasingly ~~their~~ use of AI and ~~machine-learning~~automation ~~technologies~~to conduct cyberattacks at scale.

We have implemented robust processes to assess, identify, and manage cybersecurity risks, including potentially material risks, related to our internal information systems and our products. Our Board of Directors, our internal Risk Steering Committee, in conjunction with our Chief Security Officer ("CSO"), have direct oversight of our management of cybersecurity risks.

Our CSO and the Risk Steering Committee ("RSC") ~~oversees~~oversee our enterprise risk management process. Under the direction and supervision of our CSO, we conduct an annual comprehensive enterprise risk assessment, which includes details of our management of enterprise-wide risk topics, such as those related to cybersecurity risks. The Board of Directors receives the full results of the annual enterprise risk assessment, including an evaluation of cybersecurity risks presented, a detailed description of the actions we have taken to mitigate these risks, and an analysis of cybersecurity threats and incidents ~~across the industry. The CSO and RSC review the results of the enterprise risk assessment in detail with management on a regular basis and reports its findings, as needed, to the Board of Directors.~~

Our CSO, reporting to our Interim Chief Operations Officer, and in conjunction with our IT Department, has principal responsibility for assessing and managing cybersecurity risks and threats, implementing the systems necessary to address such risks and threats and preparing updates for the Board of Directors. Our CSO has 3 decades of information technology and cybersecurity experience with the last 7 years leading the cybersecurity activities at Harte Hanks, as well as participating in numerous cyber readiness exercises with U.S. Government agencies, and has specialized training in cybersecurity risk management, cloud security and holds a CISSP certification offered by ISC2. Our CSO is also responsible for the operation of our cybersecurity program, and management of our cybersecurity incident response team. 19

As mentioned above, in response to the increasing threats presented by cyber incidents, in 2020 we established the RSC, which meets regularly. This committee is comprised of our Chief Security Officer, our Interim Chief Operations Officer, our General Counsel / Privacy Officer, our Head of Human Resources, each Director of Operations of each of our business units, and our Chief Financial Officer, as well as other key leaders. The RSC (in conjunction with the CSO), oversees activities related to monitoring, prevention, detection, mitigation and remediation of cybersecurity risks. The RSC, along with our CSO, develops and implements cybersecurity risk mitigation strategies and activities throughout the year, including the management of comprehensive incident response plans, oversees the cybersecurity risks posed by third-party vendors, and receives regular updates on cybersecurity-related matters.

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Weacross ~~have adopted~~ the ~~National Institute of Standards and Technology (“NIST”) Cybersecurity Framework to continually evaluate and enhance our cybersecurity procedures~~industry. ~~Activities~~The ~~include~~CSO ~~mandatory yearly online training for all employees, technical security controls, enhanced data protection, the maintenance of backup~~ and ~~protective~~RSC ~~systems, policy~~ review ~~and implementation,~~ the ~~evaluation~~results ~~and retention~~ of cybersecurity insurance, periodic assessments of third-party service providers to assess cyber preparedness of key vendors, and running simulated cybersecurity drills, including vulnerability scanning, penetration testing and disaster recovery exercises, throughout the ~~organization. These~~enterprise ~~cybersecurity~~risk ~~drills~~assessment ~~are performed both~~ in~~-house~~ ~~and~~detail bywith ~~third-party~~management ~~service~~on ~~providers. We~~a ~~use~~regular ~~automated~~basis ~~tools that monitor, detect,~~ and ~~prevent~~reports ~~cybersecurity~~its ~~risks and have a security operations center that operates 24 hours a day to alert us to any potential cybersecurity threats. As noted above~~findings, ~~our~~as RSC also has effected comprehensive incident response plans that outline the appropriate communication flow and response for certain categories of potential cybersecurity incidents. The RSC escalates eventsneeded, ~~including~~to the ~~Interim Chief Operating Officer and~~ Board of Directors~~, as relevant, according to pre-defined criteria~~.

Our CSO, reporting to our President, and in conjunction with our IT Department, has principal responsibility for assessing and managing cybersecurity risks and threats, implementing the systems necessary to address such risks and threats and preparing updates for the Board of Directors. Our CSO has 3 decades of information technology and cybersecurity experience with the last 8 years leading the cybersecurity activities at Harte Hanks, as well as participating in numerous cyber readiness exercises with U.S. Government agencies, and has specialized training in cybersecurity risk management, cloud security and holds a CISSP certification offered by ISC2 and CRISC certification from ISACA. Our CSO is also responsible for the operation of our cybersecurity program, and management of our cybersecurity incident response team.

As mentioned above, in response to the increasing threats presented by cyber incidents, in 2020 we established the RSC, which meets regularly. This committee is comprised of our Chief Security Officer, our President, our Head of Human Resources, each Director of Operations of each of our business units, and our Chief Financial Officer, as well as other key leaders. The RSC (in conjunction with the CSO), oversees activities related to monitoring, prevention, detection, mitigation and remediation of cybersecurity risks. The RSC, along with our CSO, develops and implements cybersecurity risk mitigation strategies and activities throughout the year, including the management of comprehensive incident response plans, oversees the cybersecurity risks posed by third-party vendors, and receives regular updates on cybersecurity-related matters.

We have adopted the National Institute of Standards and Technology (“NIST”) Cybersecurity and AI Risk Management Frameworks to continually evaluate and enhance our cybersecurity procedures. Activities include mandatory yearly online training for all employees, technical security controls, enhanced data protection, the maintenance of backup and protective systems, policy review and implementation, the evaluation and retention of cybersecurity insurance, periodic assessments of third-party service providers to assess cyber preparedness of key vendors, and running simulated cybersecurity drills, including vulnerability scanning, penetration testing and disaster recovery exercises, throughout the organization. These cybersecurity drills are performed both in-house and by third-party service providers. We use automated tools that monitor, detect, and prevent cybersecurity risks and have a security operations center that operates 24 hours a day to alert us to any potential cybersecurity threats and have enabled automated threat response as a countermeasure to increasingly short windows between new vulnerabilities and attack. As noted above, our RSC also has effected comprehensive incident response plans that outline the appropriate communication flow and response for certain categories of potential cybersecurity incidents. The RSC escalates events, including the President and Board of Directors, as relevant, according to pre-defined criteria.

ITEM 2. PROPERTIES

Our headquarters is located in Chelmsford, MA. We lease office and fulfillment facilities around the world, primarily in the United States, Europe and Asia.

As of December 31, ~~2024~~2025, we operated the following types of facilities in the following locations:

Domestic Offices International Offices Operational Warehouses Chelmsford, Massachusetts Hasselt, Belgium East Bridgewater, Massachusetts ~~St. Petersburg~~Greenville, ~~Florida~~South Carolina Iasi, Romania ~~Kansas City~~Hasselt, ~~Kansas~~Belgium Plano, Texas Manila, Philippines ~~Lenexa~~Kansas City, Kansas St. Petersburg, Florida Uxbridge, United Kingdom ~~Hasselt~~Valencia, ~~Belgium~~Spain

~~As of December 31, 2024, our operational facilities were for the following use and square footage by segment:~~20

Description of Use	United States	International	Total
Office space	14,458	37,458	51,916
Fulfillment facilities	736,845	18,901	755,746
Total	751,303	56,359	807,662

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Segment						Leased Sq Ft
Customer Care						44,220
Fulfillment & Logistics						755,746
Marketing Services						1,445
						801,411
Corporate office						6,251
Total						807,662

As of December 31, 2025, our operational facilities were for the following use and square footage by segment:

We believe our facilities to be adequate for our business and operations as currently administered.


Description of Use	United States	International	Total
Office space	28,850	38,963	67,813
Fulfillment facilities	623,948	4,402	628,350
Total	652,798	43,365	696,163


Segment						Leased Sq Ft
Customer Care						49,615
Fulfillment & Logistics						628,350
Revenue Solutions						11,947
						689,912
Corporate office						6,251
Total						696,163

We believe our facilities to be suitable and adequate for our business and operations as currently administered.

ITEM 3. LEGAL PROCEEDINGS

In the ordinary course of its business, the Company is involved in various legal proceedings involving a variety of matters. The Company does not believe there are any pending legal proceedings that will have a material impact on the Company’s financial position or results of operations.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market

Our common stock is listed for trading on the NASDAQ under the symbol "HHS". As of January 31, ~~2025~~2026, there were approximately ~~668~~593 common stockholders of record.

Dividend Policy

The Company currently does not pay any dividends and any future dividend payment is at the discretion of the Board of Directors.

Issuer Purchases of Equity Securities

The following table contains information about our purchases of equity securities during the fourth quarter of ~~2024~~2025:

Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of a publicly announced plan	Maximum dollar amount that may yet be purchased under the program(1) (in thousands)
October 1 - 31, 2024	—	$	—	—	$	4,131
October 1 - 31, 2025	—	$	—	—	$	4,131
November 1 - 30, 2024	—	$	—	—	$	4,131
November 1 - 30, 2025	—	$	—	—	$	4,131
December 1 - 31, 2024	—	$	—	—	$	4,131
December 1 - 31, 2025	—	$	—	—	$	4,131
Total	—	$	—	—

(1)~~During~~On ~~the~~May 2, ~~fourth quarter of 2024~~2023, wethe ~~did~~Board ~~not~~of ~~purchase~~Directors ~~any shares~~ of ~~our~~the ~~common~~Company ~~stock~~approved ~~through~~a ~~our~~share ~~stock~~ repurchase program ~~that~~to ~~was~~maximize ~~publicly~~shareholder ~~announced~~value onwith ~~May 2,~~authorization ~~2023. Under this program, our Board has authorized us~~ to ~~spend~~repurchase ~~up to~~ $6.5 million ~~to repurchase shares~~ of ~~our~~the ~~outstanding~~Company’s ~~common~~Common ~~stock~~Stock. ~~After~~ ~~giving~~No ~~effect to these~~ repurchases, ~~we have remaining authority of $4.1 million to repurchase shares remaining under the program.~~

~~ITEM 6. SELECTED FINANCIAL DATA~~21

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were made during the quarter ended December 31, 2025. After giving effect to the repurchases made under the plan through December 31, 2025, the Company has remaining authority of $4.1 million to repurchase shares under the program, which has no expiration date.

ITEM 6. RESERVED

Not applicable.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Note About Forward-Looking Statements

This report, including this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), contains “forward-looking statements” within the meaning of the federal securities laws. All such statements are qualified by the cautionary note included under “Forward-Looking Statements” above, which is provided pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may vary materially from what is expressed in or indicated by the forward-looking statements, for the reasons described in this MD&A, in the Risk Factors in Item 1A above or elsewhere in this Annual Report on Form 10-K.

Overview

The following MD&A section is intended to help the reader understand the results of operations and the financial condition of Harte Hanks. This section is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes included herein.

22Harte Hanks, Inc. is a leading global customer experience company operating in three business segments: Revenue Solutions formerly referred to as Marking Services, Customer Care, and Fulfillment & Logistics Services. Our mission is to partner with clients to provide them with robust customer-experience, or CX strategy, data-driven analytics, and actionable insights combined with seamless program execution to better understand, attract, and engage their customers. Our services include strategic planning, data strategy, performance analytics, creative development, and execution; technology enablement; marketing automation; B2B and B2C e-commerce; cross-channel customer care; and product, print, and mail fulfillment.

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Harte Hanks, Inc. is a leading global customer experience company operating in three business segments: Marketing Services, Customer Care, and Fulfillment & Logistics Services. Our mission is to partner with clients to provide them with robust customer-experience, or CX strategy, data-driven analytics, and actionable insights combined with seamless program execution to better understand, attract, and engage their customers. Our services include strategic planning, data strategy, performance analytics, creative development, and execution; technology enablement; marketing automation; B2B and B2C e-commerce; cross-channel customer care; and product, print, and mail fulfillment.

We are affected by the general, national, and international economic and business conditions in the markets where we and our customers operate. Marketing budgets are largely discretionary in nature and, as a consequence, are easier for our clients to reduce in the short-term than other expenses. Our revenues are also affected by the economic fundamentals of each industry that we serve, the expansion of alternative channels, various market factors, including the demand for services by our clients, the financial condition of and budgets available to our clients, and regulatory factors, among other factors. Due to the recent increases in inflation and interest rates throughout the globe, as well as the ongoing armed conflicts in multiple regions, there is continued uncertainty and volatility in the global economy. We remain committed to executing our multichannel strategy while also continuing to adjust our cost structure to appropriately reflect our operations and outlook.

Management is closely monitoring inflation and wage pressure in the market, and the potential impact on our business. While inflation has not had a material impact on our business, it is possible a material increase in inflation could have an impact on our clients, and in turn, on our business.

~~Recent Developments~~22

~~Project~~Table ~~Elevate~~of Contents

Our management team continuously reviews and adjusts our cost structure and operating footprint to optimize our operations, and invest in improved technology. During the second half of 2023, we engaged a consulting firm to help review and analyze the structure and operations of the Company. This review included greater than 200 meetings with personnel at all levels of the firm and led to the initiation of our transformation program named "Project Elevate". The program involves the optimization and rationalization of our business resources as well as the partial reinvestment of savings into the Company's sales and marketing team, technology, and strategy. A business transformation office was established at the beginning of 2024 to manage and measure these initiatives. Reorganization savings from Project Elevate executed from 2024 to 2026 are estimated to be $16 million.

Results of Operations

Operating results from operations were as follows:

Year Ended December 31,

In thousands, except per share amounts

~~2024~~2025

% Change

~~2023~~2024

Operating revenue

~~185~~159,~~242~~570

-313.39%

~~191~~185,~~492~~242

Operating expenses

~~183~~159,~~149~~184

-213.61%

~~188~~183,~~133~~149

Operating income

~~2,093~~386

-3781.76%

32,~~359~~093

Operating margin

10.12%

-3578.6%

1.81%

Other expenses, net

401,~~027~~394

~~658~~-96.45%

540,~~278~~027

Income tax benefit

(~~7,637~~197)

~~2088~~-97.34%

(~~349~~7,637)

Net loss

(~~30,297~~811)

~~1829~~-97.73%

(130,~~570~~297)

Diluted EPS from operations

(40.1511)

~~1834~~-97.24%

(04.2115)

23Year Ended December 31, 2025 vs. Year Ended December 31, 2024

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Year Ended December 31, 2024 vs. Year Ended December 31, 2023

Consolidated Results

Revenues

Revenues of $~~185~~159.26 million for the year ended December 31, ~~2024~~2025 adecreased ~~decrease of~~ $625.36 million, or 313.39%, when compared to $~~191~~185.52 million for the year ended December 31, ~~2023~~2024. Revenue in ~~Fulfillment~~the &Revenue ~~Logistics~~Solutions ~~Services~~segment declined $315.02 million, or 330.52%, to $8235.01 million; our ~~Marketing~~Fulfillment ~~Services~~& ~~segment~~Logistics ~~revenue~~Services declined $27.6 million, or 4.9.3%, to $5074.34 million; revenue in our Customer Care segment declined $02.79 million, or 15.34%, to $5250.91 million. Please see segment results below for additional information on the changes in revenue year over year.

Operating Expenses

Operating expenses of $~~183~~159.12 million for the year ended December 31, ~~2024~~2025 decreased $524.0 million, or 213.61%, when compared to $~~188~~183.1 million for the year ended December 31, ~~2023~~2024.

Labor costs decreased by $412.29 million, or 413.38%, when compared to the year ended December 31, ~~2023~~2024, primarily due to the reduction in ~~workforce~~salary ~~in our Customer Care~~ and ~~Marketing~~wages ~~Service segments~~ as aoperations ~~result~~were ofoptimized ~~Project~~to ~~Elevate. This~~account ~~benefit~~for ~~was~~lower ~~partially~~revenue. ~~offset~~Termination ~~by the expansion~~ of ~~the~~senior ~~sales~~management ~~and~~staff ~~marketing~~also ~~team~~resulted ~~and higher labor production activities~~ in ~~the~~lower ~~Fulfillment~~stock ~~and~~based ~~Logistics segment~~compensation.

Production and Distribution expenses decreased $26.97 million, or 411.9%, when compared to the year ended December 31, ~~2023~~2024, primarily driven by lower transportation costs in proportion with our lower revenues in our logistics business.

Advertising, Selling, and General and Administrative expenses ~~increased~~decreased $20.16 million or ~~10.~~2.5%, when compared to the year ended December 31, ~~2023~~2024 primarily due to the ~~expansion~~lower ofsales ~~the~~expenses ~~sales~~from ~~and~~lower ~~marketing~~revenue ~~activities~~as well as lower professional expenses, which was partially offset by increased technology expenses.

Restructuring expenses decreased $30.36 million to $21.48 million for the year ended December 31, ~~2024~~2025. The restructuring expenses included $0.82 million of consulting expenses, $1.13 million of severance charges, and $0.53 million of facility related and other expenses.

~~Impairment~~2024 operating expenses also included impairment charges of $1.6 million and $1.5 million for goodwill and intangible assets. ~~decreased~~There ~~operating~~were ~~income~~no inimpairment ~~2024. These noncash~~ charges ~~related~~incurred tofor ~~the~~goodwill ~~previous~~and ~~acquisition~~intangible ofassets ~~the InsideOut~~ in ~~December of 2022~~2025.

Depreciation expense increased $0.1 million, or 32.50%, when compared to the year ended December 31, ~~2023~~2024.

The largest components of our operating expenses are labor, transportation expenses and outsourced costs. Each of these costs is, at least in part, variable and tends to fluctuate in line with revenues and the demand for our services. Transportation rates have decreased over the last year due to changes in demand and supply within the transportation industry. Future changes in transportation expenses will continue to impact our total production costs and total operating ~~expenses and in turn our margins. Postage costs of mailings are borne by our clients and are not directly reflected in our revenues or expenses.~~

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expenses and in turn our margins. Postage costs of mailings are borne by our clients and are not directly reflected in our revenues or expenses.

Other Expenses, net

The total other expenses, net were $401.04 million for the year ended December 31, ~~2024~~2025, when compared to other expense, net of $540.30 million for the year ended December 31, ~~2023~~2024. This $3438.76 million ~~increase~~decrease in other expenses ~~included~~was mainly due to $37.5 million inof pension termination charges ~~offset~~booked byin athe year ~~over~~ended ~~year~~December 31, ~~decrease in other expenses~~2024.

Income Tax Benefit

Our ~~2024~~2025 income tax benefit was $70.62 million for the year ended December 31, ~~2024~~2025, when compared to tax benefit of $07.36 million for the year ended December 31, ~~2023~~2024. The ~~increase~~decrease in tax benefit of $7.34 million was primarily related to the ~~$37.5~~one ~~million~~time pension termination charge booked in the year ended December 31, 2024.

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Segment Results

The following is a discussion and analysis of the results of our reporting segments for the years ended December 31, ~~2024~~2025 and ~~2023~~2024. There are three principal financial measures reported to our ~~Interim~~President ~~COO~~ (the chief operating decision maker) for use in assessing segment performance and allocating resources. Those measures are revenues, operating income and operating income plus depreciation and amortization (“EBITDA”). EBITDA is considered a non-GAAP financial measure. A reconciliation of EBITDA to operating income is included below.

~~Marketing~~Revenue ~~Services~~Solutions:

	Year Ended December 31,
In thousands	~~2024~~2025			% Change	~~2023~~2024
Operating revenues	$	5035,~~332~~128		-430.92%	$	5250,~~910~~332
EBITDA	5,~~182~~584			~~-21~~7.98%	65,~~637~~182
Operating Income	3,723			-32.8%	5,544
Depreciation and amortization expense	797			-45.4%	1,459
Operating Income % of Revenue	7.4		%	-29.4%	10.5		%
Operating income	4,787			28.6%	3,723
Operating income % of revenue	13.6%			84.2%	7.4%

~~Marketing~~Revenue ~~Services~~Solutions segment revenue declined $215.62 million, or 430.92%, due to customer turnover and additional client spending reductions. This segment is our most economically sensitive segment with regard to changes in our clients' marketing strategies. Operating income for the year ended December 31, ~~2024~~2025 ~~decreased~~increased $1.81 million ~~reducing~~improving operating income by 3228.86% ~~when~~mainly ~~compared~~due to the ~~prior~~2024 ~~year. The~~impairment ~~segment results were impacted by the noncash items, $1.6 million~~ of goodwill ~~impairment~~ and ~~$1.5 million of~~ intangible ~~asset impairment, in the fourth quarter associated with the write-down of the InsideOut acquisition~~assets.

Customer Care:

	Year Ended December 31,
In thousands	~~2024~~2025			% Change	~~2023~~2024
Operating revenues	$	5250,~~918~~067		-15.34%	$	5352,~~620~~918
EBITDA	106,~~128~~245			6-38.73%	910,~~488~~128
Operating Income	9,921			10.4%	8,988
Depreciation and amortization expense	266			28.5%	207
Operating Income % of Revenue	18.7		%	11.8%	16.8		%
Operating income	5,979			-39.7%	9,921
Operating income % of revenue	11.9%			-36.3%	18.7		%

Customer Care segment revenue declined $02.79 million, or 15.34% when ~~compare~~compared to the prior year, which was impacted by ~~one-time~~fluctuations ~~project-~~based ~~engagements,~~on ~~temporary~~the ~~surges~~geographic orregions ~~declines~~customers inselect ~~call~~for ~~volumes~~staff ~~among~~support. Existing ~~retained~~ customers ~~due~~who toshift ~~specific~~current programs ~~and~~to ~~events. We~~our ~~also~~lower ~~encounter~~cost ~~fluctuations~~off-shore ~~based~~markets oncan ~~the~~reduce ~~geographic~~revenues ~~regions~~as ~~customers~~the ~~select~~per ~~for~~agent ~~staff~~cost ~~support~~is lower. We are leveraging our Amazon Connect cloud-based platform to test and pilot new AI tools, and are exploring how we can augment growth by providing more technical support as clients migrate to more capable contact center platforms. Operating ~~Income~~income for the year ended December 31, ~~2024~~2025 ~~increased~~decreased by $03.9 million to $96.90 million, aor 1039.47%, ~~improvement~~primarily indue ~~profits when compared~~ to ~~the~~higher ~~prior~~technology ~~year~~costs, ~~despite~~tighter amargins ~~slight decrease~~ in ~~revenues. The~~a ~~improved~~competitive ~~operational~~marketplace ~~efficiency~~and isreduced ~~the result of diligent work to control costs while managing service delivery to meet customer expectations~~revenue.

~~Fulfillment & Logistics:~~24

	Year Ended December 31,
In thousands	2024			% Change	2023
Operating revenues	$	81,992		-3.5%	$	84,962
EBITDA	5,761			-34.9%	8,856
Operating Income	4,505			-41.6%	7,714
Operating Income % of Revenue	5.5		%	-39.5%	9.1		%

Fulfillment & Logistics segment revenue declined $3.0 million, or 3.5%, primarily due to the lower revenue from existing customers not being offset by growth in new programs and customers. For the year ended December 31, 2024, operating income was $4.5 million, a decrease of $3.2 million or 41.6%. The decrease in operating income was primarily the result of lower revenue.

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Fulfillment & Logistics:


	Year Ended December 31,
In thousands	2025		% Change	2024
Operating revenues	$	74,375	-9.3%	$	81,992
EBITDA	6,551		13.7%	5,761
Depreciation and amortization expense	2,214		76.3%	1,256
Operating income	4,337		-3.7%	4,505
Operating income % of revenue	5.8%		6.1%	5.5%

Fulfillment & Logistics segment revenue declined $7.6 million, or 9.3%, primarily due to lost customers and the lower revenue from existing customers not being offset by growth in new programs and customers. For the year ended December 31, 2025, operating income was $4.3 million, a decrease of $0.2 million or 3.7%. The decrease in operating income was primarily the result of lower revenue. Operating income as a percent of revenue improved with the continued focus on operational optimization.

Liquidity and Capital Resources

Sources and Uses of Cash

Our cash and cash equivalent balances were $95.96 million and $189.49 million as of December 31, ~~2024~~2025, and ~~2023~~2024, respectively. As of December 31, 2025 and 2024, we had the ability to borrow approximately $24.3 million and $24.0 million under our Credit Facility, respectively.

Our principal sources of liquidity are cash on hand, cash provided by operating activities, and borrowings available under our Credit Facility. Our cash is primarily used for general corporate purposes, working capital requirements, and capital expenditure. At this time, we believe that we will be able to continue to meet our liquidity requirements and fund our fixed obligations such as finance and operating leases and unfunded pension plan benefit payments and other needs for our operations in the short term and beyond. Although the Company believes that it will be able to meet its cash needs for the short and medium term, if unforeseen circumstances arise, the company may need to seek alternative sources of liquidity.

Operating Activities

Net cash used in operating activities was $31.07 million for the year ended December 31, ~~2024~~2025, when compared to cash ~~provided~~used byin operating activities of $103.50 million for the year ended December 31, ~~2023~~2024. The $131.53 million year-over-year decrease in cash ~~from~~used in operating activities was primarily due to ~~the~~changes ~~$6.7 million payment to terminate the Qualified Pension Plan I during the year ended December 31, 2024, as well as the $3.6 million net decrease~~ in ~~other~~ assets and liabilities.

Investing Activities

Net cash used in investing activities was $32.78 million for the year ended December 31, ~~2024~~2025, compared to cash used in investing activities of $2.3.7 million for the year ended December 31, ~~2023~~2024. The $10.49 million ~~increase~~decrease was mainly ~~due~~driven toby ~~the~~ $0.~~5 million of cash used and returned from escrow from acquisition activities and $0.~~9 million ~~more~~lower ~~cash~~property, ~~used~~plant ~~in technology improvement projects~~ and ~~routine~~ equipment ~~replacement~~purchase in the year ended December 31, ~~2024~~2025, ~~when~~as compared to the year ended December 31, ~~2023~~2024.

Financing Activities

Net cash ~~used~~provided inby financing activities was $0.45 million for the year ended December 31, ~~2024~~2025, compared to $30.24 million net cash used in financing activities for the year ended December 31, ~~2023~~2024. The $20.89 million ~~decrease~~increase in cash ~~used~~provided inby financing activities was primarily related to the $21.41 million ~~used~~of tocash ~~repurchase~~we ~~our~~received ~~common~~for ~~stock~~the recovery of short-swing profit from one shareholder in the year ended December 31, ~~2023~~2025, which was partially offset by $0.3 million of tax liability associated with this short-swing profit.

Foreign Holdings of Cash

Consolidated foreign holdings of cash as of December 31, ~~2024~~2025, and ~~2023~~2024 were $12.52 million and $51.45 million, respectively. The Company will repatriate foreign cash holdings when and if it is financially efficient to do so.

~~Long Term Debt~~25

On December 21, 2021, the Company entered into a three-year, $25.0 million asset-based revolving credit facility (the “Credit Facility”) with Texas Capital Bank ("TCB"). The Company’s obligations under the Credit Facility are guaranteed on a joint and several basis by the Company’s material subsidiaries (the “Guarantors”). The Credit Facility is secured by substantially all the assets of the Company and the Guarantors pursuant to a Pledge and Security Agreement, dated as of December 21, 2021, between the Company, TCB and the Guarantors (the “Security Agreement”). On December 31, 2023, the Company extended the maturity date for the Credit Facility by a period of six (6) months, to June 30, 2025. The extension extended the Credit Facility under substantially similar terms and conditions as originally executed.

The Credit Facility provides for loans up to the lesser of (a) $25.0 million, and (b) the amount available under a “borrowing base” calculated primarily by reference to the Company's cash and cash equivalents and accounts receivables. The Credit Facility allows the Company to use up to $3.0 million of its borrowing capacity to issue letters of credit.

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~~The~~Long ~~loans~~Term under the Credit Facility accrue interest at a varying rate equal to the Secured Overnight Financing Rate (SOFR) plus a margin of 2.25% per annum. The outstanding amounts advanced under the Credit Facility are due and payable in full on June 30, 2025.Debt

~~The~~On December 21, 2021, the Company ~~may~~entered ~~repay~~into ~~and~~a ~~borrow~~three-year, ~~all~~$25.0 ormillion ~~any~~asset-based ~~portion~~revolving ofcredit facility (the ~~loans~~“Credit ~~advanced~~Facility”) with Texas Capital Bank ("TCB"). The Company’s obligations under the Credit Facility atare ~~any~~guaranteed ~~time,~~on ~~without~~a ~~premium~~joint orand ~~penalty~~several basis by the Company’s material subsidiaries (the “Guarantors”). The Credit Facility is ~~subject~~secured toby ~~mandatory~~substantially ~~prepayments~~all ~~(i)~~the ~~from~~assets of the ~~net~~Company ~~proceeds~~and the Guarantors pursuant to a Pledge and Security Agreement, dated as of ~~asset~~December ~~dispositions~~21, ~~not~~2021, ~~otherwise~~among ~~permitted~~the ~~under~~Company, TCB and the ~~Credit~~Guarantors ~~Facility;~~party thereto (iithe “Security Agreement”). ifOn December 29, 2023, the ~~unpaid~~Company ~~principal~~extended ~~balance~~the ~~under~~maturity date for the Credit Facility ~~plus~~by a period of six months to June 30, 2025. The extension was executed with substantially similar terms and conditions as the ~~aggregate~~original ~~face~~Credit ~~amount~~Facility. ofOn ~~all~~June 24, ~~outstanding~~2025, ~~letters~~the ofCompany ~~credit~~entered ~~exceeds~~into a second amendment to the ~~borrowing~~Credit ~~base;~~Facility (~~iii~~the “Second Amendment”) inwith anTCB ~~amount~~which ~~equal~~extended tothe ~~50%~~maturity ofdate for the ~~net~~Credit ~~proceeds~~Facility ofby ~~issuances~~a period of ~~capital~~three ~~stock~~years ~~(subject~~ to ~~customary~~June 30, ~~exceptions);~~2028. orThe ~~(iv)~~Second inAmendment also includes an ~~amount~~accordion ~~equal~~feature tothat allows the ~~net~~Company ~~proceeds~~to ~~from~~seek ~~any~~up ~~issuance~~to ofa ~~debt~~$10.0 ~~not~~million ~~otherwise~~increase ~~permitted~~in commitments under the ~~Credit~~credit ~~Facility~~line, subject to TCB approval.

The Credit Facility ~~contains~~provides ~~certain~~for ~~covenants~~loans ~~restricting~~up to the ~~Company's~~lesser ~~and~~of ~~its~~(a) ~~subsidiaries'~~$25.0 ~~ability~~million toor ~~create,~~(b) ~~incur,~~the ~~assume~~amount oravailable ~~become~~under ~~liable~~a ~~for~~“borrowing ~~indebtedness;~~base” ~~make~~calculated ~~certain~~primarily ~~investments;~~by ~~pay~~reference ~~dividends~~to ~~or repurchase~~ the Company's ~~stock;~~cash ~~create,~~and ~~incur~~cash orequivalents ~~assume~~and ~~liens,~~accounts ~~consummate~~receivables. The ~~mergers~~Credit orFacility ~~acquisitions,~~allows ~~liquidate,~~the ~~dissolve,~~Company ~~suspend~~to oruse ~~cease~~up ~~operations,~~to or$3.0 million ~~modify~~of ~~accounting~~its orborrowing ~~tax~~capacity ~~reporting~~to ~~methods~~issue ~~(other~~letters ~~than~~of ~~as required by U~~credit.S. ~~GAAP).~~

AsThe ofloans ~~December 31, 2024 and 2023, the Company had no borrowings outstanding~~ under the Credit Facility~~. At~~ ~~each~~accrue ofinterest ~~December 31,~~at ~~2024,~~a ~~and~~varying ~~2023,~~rate equal to the ~~Company~~Secured ~~had~~Overnight ~~letters~~Financing ofRate ~~credit~~(“SOFR”) inplus ~~the~~a ~~amount~~margin of $12.~~0 million~~25% ~~and~~per $0annum.8 The ~~million~~ outstanding, ~~respectively. No~~ amounts ~~were~~advanced ~~drawn~~under ~~against~~the ~~these~~Credit ~~letters~~Facility ofare ~~credit~~due ~~as of December 31, 2024,~~ and ~~2023. These~~payable ~~letters~~in offull ~~credit~~on ~~exist~~June ~~to support insurance programs relating to workers’ compensation~~30, ~~and general liability as well as lease obligations~~2028. ~~We had no other off-balance sheet financing arrangements as of December 31, 2024, and 2023.~~

AsThe Company may repay and reborrow all or any portion of ~~December 31,~~the ~~2024~~loans advanced under the Credit Facility at any time, wewithout ~~had~~premium or penalty. The Credit Facility is subject to mandatory prepayments (i) from the ~~ability~~net proceeds of asset dispositions not otherwise permitted under the Credit Facility; (ii) if the unpaid principal balance under the Credit Facility plus the aggregate face amount of all outstanding letters of credit exceeds the borrowing base; (iii) in an amount equal to ~~borrow~~50% ~~approximately~~of ~~$24.0 million~~the net proceeds of issuances of capital stock (subject to customary exceptions); or (iv) in an amount equal to the net proceeds from any issuance of debt not otherwise permitted under the Credit Facility.

The Credit Facility contains certain covenants restricting the Company's and its subsidiaries' ability to create, incur, assume or become liable for indebtedness; make certain investments; pay dividends or repurchase the Company's stock; create, incur or assume liens, consummate mergers or acquisitions, liquidate, dissolve, suspend or cease operations, or modify accounting or tax reporting methods (other than as required by accounting principles generally accepted in the United States of America (“GAAP”)).

As of December 31, 2025 and 2024, we had no borrowings outstanding under the Credit Facility. At each of December 31, 2025 and 2024, we had letters of credit outstanding in the amount of $0.7 million and $1.0 million, respectively. No amounts were drawn against these letters of credit at December 31, 2025 and 2024. These letters of credit exist to support insurance programs relating to workers’ compensation, medical insurance, and reducing the cash security deposit on leased property. We had no other off-balance sheet financing activities at December 31, 2025 and 2024. After the letters of credit on December 31, 2025 and 2024, we had the ability to borrow up to $24.3 million and $24.0 million, respectively, under the Credit Facility.

Dividends

We did not pay any dividends in either ~~2024~~2025 or ~~2023~~2024. Any future dividend declaration can be made only upon, and subject to, approval of our Board of Directors, ~~based~~and will depend on ~~its~~our results of operations, financial condition, cash requirements, future business ~~judgment~~prospects, contractual and indenture restrictions and other factors deemed relevant by our Board of Directors.

Share Repurchase

On May 2, 2023, the Board of Directors of Harte Hanks approved a share repurchase program to maximize shareholder value with authorization to repurchase $6.5 million of the Company’s Common Stock. During 2023, 391,785 shares of common stock were repurchased for a total combined purchase price of $2.4 million. ~~and~~In in2025 and 2024, no shares of common stock were repurchased.

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Outlook

We consider such factors as total cash and cash equivalents and restricted cash, current assets, current liabilities, total debt, revenues, operating income, cash flows from operations, investing activities, and financing activities when assessing our liquidity. Our management of cash is designed to optimize returns on cash balances and to ensure that it is readily available to meet our operating, investing, and financing requirements as they arise. We believe that there are no conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern for the twelve months following the issuance of the Consolidated Financial Statements.

Critical Accounting Estimates

Our Consolidated Financial Statements are prepared in accordance with ~~accounting principles generally accepted in the United States of America (“U.S.~~ GAAP”), which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions based on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Our actual results could differ from these estimates under different assumptions or conditions. The areas that we believe involve the most significant management estimates and assumptions are detailed below. On an ongoing basis, management reviews its estimates and assumptions based on currently available information.

Management believes that the following are critical accounting estimates:

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Revenue Recognition

We recognize revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to be entitled to receive in exchange for those products or services based on the relevant contract. Certain client programs provide for adjustments to billings based upon whether we achieve certain performance criteria. In these circumstances, revenue is recognized when the foregoing conditions are met. We record revenue net of any taxes collected from customers and subsequently remitted to governmental authorities. Any payments received in advance of the performance of services or delivery of the product are recorded as deferred revenue until such time as the services are performed or the product is delivered. Costs incurred for search engine marketing solutions payable to the engine host and postage costs of mailings are billed to our clients and are not directly reflected in our revenue.

Revenue ~~from~~recognition ~~agency~~requires ~~and~~management ~~digital~~to ~~services,~~apply ~~direct~~judgment ~~mail,~~in ~~logistics,~~identifying ~~fulfillment~~performance obligations and ~~contact~~determining ~~center is recognized as~~ the ~~work~~timing isand ~~performed. Fees~~amount ~~for~~of ~~these~~revenue ~~services~~recognized ~~are~~under ~~determined~~customer bycontracts. ~~the~~Certain ~~terms~~client ~~set~~programs ~~forth~~provide infor ~~each~~adjustments ~~contract. These~~to ~~fees~~billings ~~are~~based ~~typically~~upon awhether ~~set~~we ~~fixed~~achieve ~~price~~certain orperformance ~~rate~~criteria bywhich ~~transaction~~requires ~~occurrence,~~us ~~service~~to ~~provided,~~estimate ~~time~~variable ~~spent, or product delivered~~consideration.

For arrangements requiring the design and build out of a database, revenue is not recognized until client acceptance occurs. Up-front fees billed during the setup phase for these arrangements are deferred and direct build costs are capitalized. Pricing for these types of arrangements is typically based on a fixed price determined in the contract. Revenue from other database marketing solutions is recognized ratably over the contractual service period. Pricing for these services is typically based on a fixed price per month or per contract.

Income Taxes

We are subject to income taxes in the United States and numerous other jurisdictions. Significant judgment is required in determining our provision for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws.

We record a provision for income taxes for the anticipated tax consequences of the reported results of operations using the asset and liability method. Under this method, we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We record a valuation allowance to reduce our deferred tax assets to the net amount that we believe is more likely than not to be realized. A material valuation allowance is recorded for foreign and specific state jurisdictions.

We recognize tax benefits from uncertain tax positions only if we believe that it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Although we believe that we have adequately reserved for our uncertain tax positions, we can provide no assurance that the final tax outcome of these matters will not be materially different. We adjust these reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and operating results. The provision for income taxes includes the effects of any reserves that we believe are appropriate, as well as the related net interest and penalties.

Goodwill and other Intangibles

Goodwill is the amount by which the cost of the acquired net assets in a business combination exceeds the fair value of the identifiable net assets on the date of purchase. Goodwill is not amortized. Goodwill is reviewed for impairment at least annually during the fourth quarter, or more frequently if events occur indicating the potential for impairment. During the goodwill impairment review, the Company may assess qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and the overall financial performance of the Company. If, after assessing the totality of these qualitative factors, the Company determines that it is not more likely than not that the fair value of its reporting unit is less than its carrying amount, then no additional assessment is deemed necessary. Otherwise, the Company performs a quantitative goodwill impairment test. The Company may also elect to bypass the qualitative assessment in a period and elect to proceed to perform the quantitative

2827

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factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and the overall financial performance of the Company. If, after assessing the totality of these qualitative factors, the Company determines that it is not more likely than not that the fair value of its reporting unit is less than its carrying amount, then no additional assessment is deemed necessary. Otherwise, the Company performs a quantitative goodwill impairment test in which the fair value of the reporting unit is compared to its carrying amount. Fair value is determined through various valuation techniques and assumptions such as cash flow models, discount rates, market multiples and control premiums.. The Company may also elect to bypass the qualitative assessment in a period and elect to proceed to perform the quantitative goodwill impairment test. We booked an impairment charge of $1.6 million for goodwill in the year ended December 31, 2024 , leaving a balance of $0.3 million. There was no goodwill impairment in the year ended December 31, 2025.

Intangible assets consist of finite-lived intangible assets acquired through the Company’s business combinations. Such amounts are initially recorded at fair value and subsequently amortized over their useful lives using the straight-line method, which reflects the pattern of benefit, and assumes no residual value. Finite-lived intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require an intangible asset to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that intangible asset to its carrying amount. If the carrying amount of the intangible asset is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary. The factors that drive the estimate of useful life are often uncertain and are reviewed on a periodic basis or when events occur that warrant review. Recoverability is measured by comparing the assets’ book value to future net undiscounted cash flows that the assets are expected to generate to determine if a write-down to the recoverable amount is appropriate. If such assets are written down, an impairment will be recognized as the amount by which the book value of the asset group exceeds the recoverable amount. During the year ended December 31, 2024, a significant amount of revenue from its original customers was lost. As a result, we booked an impairment loss of $1.5 million to our intangible assets. The ~~remaining~~net carrying balance of intangible assets as of December 31, 2025 and December 31, 2024 was $0.4 million and $0.6 million, respectively. There was no impairment of our intangible assets during the year ended December 31, 2025.

Pension Accounting

The Company sponsors defined benefit pension plans, the obligations and related expense of which are determined using actuarial valuations. Management engages a third‑party actuary to calculate the projected benefit obligation and pension expense based on standard actuarial assumptions, including the discount rate, mortality assumptions, and expected return on plan assets.

Legal and Other Contingencies

The Company is subject to various legal proceeding and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant ~~judgement~~judgment. Resolution of legal matters in a manner inconsistent with management's expectations could have a material impact on the Company's financial condition and operating results.

Recent Accounting Pronouncements

In ~~November~~December 2023, the FASB issued ASU 2023-0709, ~~which~~Improvements ~~enhances~~to ~~the~~Income ~~disclosures~~Tax ~~required~~Disclosures ~~for~~("ASU ~~reportable~~2023-09"). ~~segments~~ASU in2023-09 ~~annual~~amends ~~and~~ASC ~~interim~~740, ~~consolidated~~Income ~~financial~~Taxes ~~statements. ASU~~to ~~2023-07~~expand isincome ~~effective~~tax ~~for~~disclosures and requires that the Company ~~for~~disclose ~~annual~~(i) the income tax rate reconciliation using both percentages and reporting ~~periods~~currency ~~beginning~~amounts; ~~with~~(ii) specific categories within the ~~fiscal~~income ~~year~~tax ~~ending~~rate ~~December~~reconciliation; ~~15,~~(iii) ~~2024~~additional ~~and~~information for ~~interim~~reconciling ~~reporting~~items ~~periods~~that ~~beginning~~meet ina ~~fiscal~~quantitative ~~year~~threshold; ~~2025~~(iv) the composition of state and local income taxes by jurisdiction; and (v) the amount of income taxes paid disaggregated by jurisdiction. The Company ~~updated~~adopted ~~its~~ASU ~~disclosure~~2023-09 ~~included~~for inthe ~~its~~year ~~consolidated~~ended ~~financial~~December 31, ~~statements~~2025 ~~disclosure~~on ~~for~~a ~~this~~prospective ~~fiscal~~basis. See ~~year~~Note I. Income Taxes for additional information.

In ~~December~~November ~~2023~~2024, the FASB issued ASU ~~2023~~2024-0903, ~~which~~Disaggregation of Income Statement Expenses (Subtopic 220-40). The ASU requires ~~enhanced~~the ~~income~~disaggregated ~~tax~~disclosure ~~disclosures~~of specific expense categories, including ~~disaggregation~~purchases of ~~information~~inventory, inemployee ~~the~~compensation, ~~rate~~depreciation, ~~reconciliation table~~ and ~~disaggregated~~amortization, ~~information~~within ~~related~~relevant to income ~~taxes~~statement ~~paid~~captions. ~~The~~This ~~amendments in~~ ASU ~~2023-09~~also ~~are~~requires ~~effective~~disclosure ~~for~~of the ~~fiscal~~total ~~year~~amount ~~ending~~of ~~after~~selling ~~December~~expenses ~~15,~~along ~~2025~~with the definition of selling expenses. The ~~Company~~ASU is ~~currently~~effective ~~evaluating~~for ~~the~~annual ~~impact~~periods ~~that~~beginning ~~this~~after ~~update~~December ~~will~~15, ~~have~~2026, onand ~~its~~interim ~~disclosures~~periods inwithin ~~the~~fiscal ~~consolidated~~years ~~financial~~beginning ~~statements.~~after December 15,

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40). The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is also permitted. This ASU will likely result in the required additional disclosures being included in our consolidated financial statements, once adopted. We are currently evaluating the provisions of this ASU.28

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2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is also permitted. This ASU will likely result in the required additional disclosures being included in our consolidated financial statements, once adopted. We are currently evaluating the provisions of this ASU.

In July 2025, the FASB issued ASU 2025-05, which amends ASC 326-20 to provide a practical expedient (for all entities) relating to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact that this ASU will have on our consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06 to target improvements to the Accounting for Internal-Use Software, which simplifies the capitalization guidance by removing all references to software development project stages and clarifies the criteria to begin capitalizing cost. The amendment is effective for annual and interim periods beginning after December 15, 2027, though early adoption is permitted. The Company is currently evaluating the impact of this ASU on its Consolidated Financial Statements.

No other new accounting pronouncements recently adopted or issued had or are expected to have a material impact on the consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

~~Not~~The ~~applicable~~Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Financial Statements required to be presented under Item 8 are presented in the Consolidated Financial Statements and the notes thereto beginning at page 35 of this Form 10-K (Financial Statements).

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our ~~Interim~~President ~~Chief Operating Officer (“Interim COO”)~~ and Chief Financial Officer (“CFO”) as appropriate to allow timely decisions regarding required disclosure.

Our management, including our ~~Interim~~President ~~COO~~ and CFO, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of December 31, ~~2024~~2025. Based upon such evaluation, our ~~Interim~~President ~~COO~~ and CFO concluded that the design and operation of these disclosure controls and procedures were effective, at the “reasonable assurance” level, to ensure information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)). Our internal control over financial reporting is a process designed by, or under the supervision of our Interim COO and CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. GAAP.

Management evaluated, under the supervision of our Interim COO and CFO, the design and effectiveness of the Company’s internal control over financial reporting based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organization of the Treadway Commission (“COSO”). Based on this assessment, management concluded that internal control over financial reporting was effective.29

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under the supervision of our President and CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with GAAP.

Management evaluated, under the supervision of our President and CFO, the design and effectiveness of the Company’s internal control over financial reporting based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organization of the Treadway Commission (“COSO”). Based on this assessment, management concluded that internal control over financial reporting was effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal controls over financial reporting even though most of our employees have worked remotely. We are continually monitoring and assessing the impact of this remote working arrangement on our internal controls to minimize the impact on their design and operating effectiveness.

ITEM 9B. OTHER INFORMATION

~~None~~During the three months ended December 31, 2025, no director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of the Company adopted, modified or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information required by this item is incorporated herein by reference as a definitive proxy statement to be filed with the SEC within 120 days of the fiscal year ended December 31, ~~2024~~2025.

We have adopted the "Harte Hanks Business Conduct Policy: Insider Trading Restrictions" that governs the purchase, sales, and/or other dispositions of our securities by our directors, officers, and employees designed to promote compliance with insider trading laws, rules, and regulations, and any listing standards applicable to us. A copy of our Insider Trading Policy, as currently in effect is filed as Exhibit 19.1 to this Annual Report on Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

Information required by this item will be included in an amendment hereto or a definitive proxy statement to be filed with the SEC within 120 days of the fiscal year ended December 31, ~~2024~~2025.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information required by this item will be included in an amendment hereto or a definitive proxy statement to be filed with the SEC within 120 days of the fiscal year ended December 31, ~~2024~~2025.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information required by this item will be included in an amendment hereto or a definitive proxy statement to be filed with the SEC within 120 days of the fiscal year ended December 31, ~~2024~~2025.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information required by this item will be included in an amendment hereto or a definitive proxy statement to be filed with the SEC within 120 days of the fiscal year ended December 31, ~~2024~~2025.

PART IV


ITEM 15.			EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

15(a)(1)			Financial Statements

			The financial statements filed as part of this report and referenced in Item 8 are presented in the Consolidated Financial Statements and the notes thereto beginning at page 35 of this Form 10-K (Financial Statements).

15(a)(2)			Financial Statement Schedules

			All schedules for which provision is made in the applicable rules and regulations of the SEC have been omitted as the schedules are not required under the related instructions, are not applicable, or the information required thereby is set forth in the Consolidated Financial Statements or notes thereto.

15(a)(3)			Exhibits

			The Exhibit Index following the Notes to Consolidated Financial Statements in this Form 10-K lists the exhibits that are filed or furnished, as applicable, as part of this Form 10-K.

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INDEX TO EXHIBITS

We are incorporating certain exhibits listed below by reference to other Harte Hanks filings with the Securities and Exchange Commission, which we have identified in parentheses after each applicable exhibit.

ExhibitNo.						Description of Exhibit
3.1						Amended and Restated Certificate of Incorporation as amended through May 5, 1998 (incorporated by reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K, ~~filed~~for ~~with~~ the ~~Commission~~year onended ~~April~~December 131, ~~2024~~2023, File No. 001-7120).
3.2						Certificate of Amendment of Incorporation dated as of January 31, 2018 (incorporated by reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K, ~~filed~~for ~~with~~ the ~~Commission~~year onended ~~April~~December 131, ~~2024~~2023, File No. 001-7120).
3.3						~~Certificate~~Fifth ofAmended ~~Designation~~and ofRestated ~~Series~~Bylaws ~~A Preferred Stock of Harte Hanks, Inc.~~ (incorporated by reference to Exhibit 3.14 to the Company's ~~form~~Annual 8Report on Form 10-K, ~~filed~~for ~~with~~ the ~~Commission~~year onended ~~January~~December 2931, ~~2018~~2023, File No. 001-7120).
3.4						Fifth Amended and Restated Bylaws (incorporated by reference to Exhibit 3.4 to the Company's Form 10-K, filed with the Commission on April 1, 2024).
10.01						Loan Agreement, dated as of December 21, 2021, among Harte Hanks, Inc. the subsidiary guarantors party thereto and Texas Capital Bank (incorporated by reference to Exhibit 10.01 to the Company's Annual Report on Form 10-K for the year ended December 31, 2023, File No. 001-7120).
3.5						Elimination of Certificate of Designation of Rights, Preferences and Privileges of Series A Preferred Stock of Harte Hanks, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Form 8-K, filed with the Commission on March 24, 2023).
10.02						Security Agreement, dated as of December 21, 2021, between Harte Hanks, Inc. and Texas Capital Bank (incorporated by reference to Exhibit 10.02 to the Company's Annual Report on Form 10-K,for the year ended December 31, 2023, File No. 001-7120).
10.01						Loan Agreement, dated December 21, 2021, among Harte Hanks, Inc. the subsidiary guarantors party thereto and Texas Capital Bank, National Association. (incorporated by reference to Exhibit 10.01 to the Company's Form 10-K, filed with the Commission on April 1, 2024).
10.03						Harte Hanks, Inc. Restoration Pension Plan, as Amended and Restated, dated as of January 1, 2008) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on June 27, 2008, File No. 001-7120).
10.02						Security Agreement, dated December 21, 2021, between Harte Hanks, Inc. and Texas Capital Bank, National Association. (incorporated by reference to Exhibit 10.02 to the Company's Form 10-K, filed with the Commission on April 1, 2024).
10.04						First Amendment to the Harte Hanks, Inc. Amended & Restated Restoration Pension Plan, dated as of October 11, 2016 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on October 14, 2016, File No. 001-7120).
10.03						Harte Hanks, Inc. Restoration Pension Plan (As Amended and Restated Effective January 1, 2008) (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K, filed with the Commission on June 27, 2008).
10.05						Amended and Restated Harte Hanks 2013 Omnibus Incentive Plan, dated as of September 13,2018 (incorporated by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-8, filed on September 13, 2018, File NO. 333-274226).
10.04						First Amendment to the Harte Hanks, Inc. Amended & Restated Restoration Pension Plan, dated October 11, 2016 (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K, filed with the Commission on October 14, 2016).
10.06						Harte Hanks, Inc. 2020 Equity Incentive Plan, dated as of August 3, 2020 (incorporated by reference to Exhibit 10.07 to the Company's Annual Report on Form 10-K for the year ended December 31, 2023, File No. 001-7120).
10.05						Securities Purchase Agreement, dated January 23, 2018, by and between Harte Hanks, Inc. and Wipro, LLC (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K, filed with the Commission on January 29, 2018).
10.07						Employment Agreement between the Company and Kirk Davis, dated as of June 19, 2023 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on June 20, 2023, File No. 001-7120).
10.06						Amended and Restated Harte Hanks 2013 Omnibus Incentive Plan effective September 13,2018 (incorporated by reference to Exhibit 4.1 to the Company's Form S-8, filed with the Commission on September 13, 2018).
10.08						Separation Agreement between the Company and Brian Linscott, dated as of June 21, 2023 (incorporated by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K for the year ended December 31, 2023, File No. 001-7120).
10.07						Harte Hanks, Inc. 2020 Equity Incentive Plan, dated August 3, 2020 (incorporated by reference to Exhibit 10.07 to the Company's Form 10-K, filed with the Commission on April 1, 2024).
10.09						Hart Hanks Inc. 2023 Inducement Equity Incentive Plan (incorporated by reference to Exhibit 99.01 to the Company's Registration Statement on Form S-8 , filed on August 25, 2023, File No. 333-274226).
10.08						Employment Agreement between the Company and Brian Linscott, effective as of June 23, 2021 (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K, filed with the Commission on June 23, 2021).
10.10						Separation Agreement between the Company and Lauri Kearnes, dated as of October 15, 2023 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on October 17, 2023, File No. 001-7120).
10.09						Employment Agreement between the Company and Kirk Davis, effective as of June 19, 2023 (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K, filed with the Commission on June 20, 2023).
10.11						First Amendment to Loan Agreement, dated as of December 29, 2023, among Harte Hanks Inc. the other loan parties thereto and Texas Capital Bank (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on January 5, 2024, File No. 001-7120).
10.10						Separation Agreement between the Company and Brian Linscott effective as of June 21, 2023 (incorporated by reference to Exhibit 10.10 to the Company's Form 10-K, filed with the Commission on April 1, 2024).
10.12						Employment Agreement between the Company and David Garrison, dated as of January 29, 2024 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on January 29, 2024, File No. 001-7120).
10.11						Hart Hanks Inc. 2023 Inducement Equity Incentive Plan (incorporated by reference to Exhibit 99.01 to the Company's Form S-8 on August 25, 2023 as file number 333-274226).
10.13						Employment Agreement between the Company and David Fisher, dated as of January 27, 2025 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on January 28, 2025, File No. 001-7120).
10.12						Separation Agreement between the Company and Lauri Kearnes effective as of October 15, 2023 (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K, filed with the Commission on October 17, 2023).
10.13						First Amendment to Loan Agreement, effective December 29, 2023, among Harte Hanks Inc. the subsidiary guarantors party thereto and with Texas Capital Bank (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K, filed with the Commission on January 5, 2024).
*Filed or furnished herewith, as applicable

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INDEX TO EXHIBITS (continued)
ExhibitNo.						Description of Exhibit
10.14						~~Employment~~Cooperation Agreement, ~~between~~dated ~~the~~as ~~Company~~of ~~and~~May ~~David~~14, ~~Garrison~~2025, ~~effective~~by asand ofbetween ~~January~~Harte 29Hanks, ~~2024~~Inc. and Gary S. Rosenbach and Susan Rosenbach (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed ~~with~~on ~~the~~May ~~Commission~~14, on2025, ~~January~~File ~~29,~~No. ~~2024~~001-7120).
10.15						Employment Agreement between the Company and David Fisher, ~~effective~~dated as of ~~January~~June 2724, 2025 (incorporated by reference to Exhibit 10.12 to the Company's Current Report on Form 8-K, filed ~~with the Commission~~ on ~~January~~June 2830, 2025, File No. 001-7120).
16.01						Letter from Baker Tilly LLP to the Securities and Exchange Commission, Dated August 23, 2024 (incorporated by reference to Exhibit 16.1 to the Company's Form 8-K, filed with the Commission on August 23, 2024).
10.16						Second Amendment to Loan Agreement, dated as of June 24, 2025, among Harte Hanks Inc. the other loan parties thereto and Texas Capital Bank (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on June 30, 2025, File No. 001-7120).
*19						Harte Hanks Business Conduct Policy: Insider Trading Restrictions
16.01						Letter from Baker Tilly LLP to the Securities and Exchange Commission, dated as of August 23, 2024 (incorporated by reference to Exhibit 16.1 to the Company's Current Report on Form 8-K, filed on August 23, 2024, File No. 001-7120).
*19						Harte Hanks Business Conduct Policy: Insider Trading Restrictions (incorporated by reference to Exhibit 19 to the Company's Annual Report on Form 10-K for the year ended December 31, 2024, File No. 001-7120).
*21.1						Subsidiaries of Harte Hanks, Inc.
*23.1						Consent of ~~Baker~~Wolf ~~Tilly~~& USCompany, ~~LLP~~P.C.
*23.2						Consent of Wolf & Company, P.C.
*31.1						Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2						Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*32.1						Furnished Certification of Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*32.2						Furnished Certification of Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
97						Harte Hanks Clawback Policy (incorporated by reference to Exhibit 97 to the Company's Annual Report on Form 10-K, ~~filed~~for ~~with~~ the ~~Commission~~year onended ~~April~~December 131,~~2024~~ 2023, File No 001-7120).
*101.INS						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data Files because its XBRL tags are embedded within the Inline XBRL Document.
*101.SCH						Inline XBRL Taxonomy Extension Schema Document.
*101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
*101.LAB						Inline XBRL Taxonomy Extension Labels Linkbase Document.
*101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
*101.DEF						Inline XBRL Definition Linkbase Document.
*104						Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101).
*Filed or furnished herewith, as applicable

ITEM 16. 10-K SUMMARY

None

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Harte Hanks, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

HARTE HANKS, INC.
By:			/s/ David Fisher
			David Fisher
			Interim Chief Operating Officer
			President
Date:			March 17, ~~2025~~2026

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ David Fisher						/s/ David Garrison
David Fisher						David Garrison
Interim Chief Operating Officer						Chief Financial Officer
President						Chief Financial Officer
Date: March 17, 2025						Date: March 17, 2025
Date: March 17, 2026						Date: March 17, 2026
/s/ John H. Griffin, Jr.						/s/ Genevieve C. Combes
John H. Griffin Jr., Director						Genevieve C. Combes, Director
Date: March 17, 2025						Date: March 17, 2025
Date: March 17, 2026						Date: March 17, 2026
/s/ Liz Ross						/s/ ~~Radoff,~~ Bradley L Radoff
Liz Ross, Director						Bradley L. Radoff, Director
Date: March 17, 2025						Date: March 17, 2025
Date: March 17, 2026						Date: March 17, 2026

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Harte Hanks, Inc. and Subsidiaries

Index to Consolidated Financial Statements

Reports of Independent Registered Public Accounting Firms on the Consolidated Financial Statements (Wolf & Company, P.C., PCAOB ID #392 and Baker Tilly US, LLP, PCAOB ID: 23)			36
Report of Independent Registered Public Accounting Firm on the Consolidated Financial Statements (Wolf & Company, P.C., PCAOB ID #392)			36
Consolidated Balance Sheets as of December 31, 2024 and 2023			39
Consolidated Balance Sheets as of December 31, 2025 and 2024			38
Consolidated Statements of Comprehensive Income for the years ended December 31, 2024 and 2023			40
Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2025 and 2024			39
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2024 and 2023			41
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2025 and 2024			40
Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023			42
Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024			41
Notes to Consolidated Financial Statements			4342

All schedules for which provision is made in the applicable rules and regulations of the SEC have been omitted as the schedules are not required under the related instructions, are not applicable, or the information required thereby is set forth in the consolidated financial statements or notes thereto.

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Harte Hanks, Inc. and Subsidiaries:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance ~~sheet~~sheets of Harte Hanks, Inc. and Subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of comprehensive (loss) income, changes in stockholders' equity and cash flows for each of the ~~year~~two ~~then~~years in the period ended December 31, 2025, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the ~~year~~two ~~then~~years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note N to the financial statements, the Company changed the composition of its reportable segments and adopted ASU 2023-07, Segment Reporting (ASC 280): Improvements to Reportable Segment Disclosures. We also have audited the adjustments to the 2023 financial statements to retrospectively apply the changes in composition of the reportable segments and significant segment expenses, as described in Notes C and N. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review or apply any procedures to the 2023 financial statements of the Company other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2023 financial statements taken as a whole.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our ~~audit~~audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our ~~audit~~audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our ~~audit~~audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our ~~audit~~audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our ~~audit~~audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our ~~audit~~audits ~~provides~~provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit ~~matter~~matters communicated below isare amatters ~~matter~~ arising from the current period audit of the financial statements that ~~was~~were communicated or required to be communicated to the audit committee and that: (1) ~~relates~~relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit ~~matter~~matters below, providing separate opinions on the critical audit ~~matter~~matters or on the accounts or disclosures to which itthey ~~relates~~relate.

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Revenue from Contracts with Customers

As described in Note C to the financial statements, the Company generates revenue by offering a variety of services discrete to each of its reportable segments. ~~These~~Revenue ~~services~~recognition ~~require~~requires ~~the~~management ~~Company~~ to apply ~~multiple~~judgment ~~complex~~in ~~processes~~identifying ~~for~~performance ~~recognizing~~obligations and determining the timing and amount of revenue ~~across~~recognized ~~its~~under customer contracts. Given the ~~varying~~diversity ~~nature~~ of services offered and the ~~volume~~judgment ofrequired ~~customer~~to ~~contracts~~apply ~~that~~the ~~include~~relevant ~~elements~~accounting ~~of variable consideration~~guidance, we ~~have~~ identified revenue recognition as a critical audit matter.

Obtaining an understanding of the Company’s accounting policies and processes for revenue recognition across its segments required significant auditor effort. We also applied subjective auditor judgment when determining the nature and extent of our audit procedures and evaluating the overall sufficiency of the audit evidence obtained.

Addressing this critical audit matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures include, among others: i) obtaining, reading and assessing management’s accounting policy memorandums, ii) testing a sample of revenue transactions to customer contracts, third-party source documents and other documentation, as applicable, to support the amount and timing of revenue recognized and iii) for customer contracts obtained, we evaluated the completeness and accuracy of performance obligations identified by management and for any elements of variable consideration.36

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/s/ Wolf & Company, P.C.

We have served as the Company's auditor since 2024.

Boston, Massachusetts

March 17, ~~2025~~2026

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Harte Hanks, Inc. and Subsidiaries Consolidated Balance Sheets	December 31,
In thousands, except per share and share amounts	2025		2024
ASSETS
Current assets
Cash and cash equivalents and restricted cash	$	5,587	$	9,934
Accounts receivable (less allowance of $22 and $50 at December 31, 2025 and 2024, respectively)	27,841		31,648
Contract assets and unbilled accounts receivable	7,049		8,215
Prepaid expenses	2,363		1,511
Prepaid income tax and income tax receivable	1,431		938
Other current assets	2,046		1,368
Total current assets	$	46,317	$	53,614
Net property, plant and equipment	8,386		8,956
Right-of-use assets	19,854		$	22,460

Other assets
Intangible assets, net	370		563
Goodwill	295		295
Deferred tax assets, net	16,040		15,177
Other long-term assets	564		717
Total other assets	$	17,269	$	16,752
Total assets	$	91,826	$	101,782

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	13,096	$	13,429
Accrued expenses	5,915		8,403
Accrued payroll and related expenses	2,749		3,210
Deferred revenue and customer advances	813		1,589
Customer postage and program deposits	868		1,625
Other current liabilities	3,180		3,145
Short-term lease liabilities	3,543		3,736
Total current liabilities	$	30,164	$	35,137
Pension liabilities - Qualified plans	4,106		5,445
Pension liabilities - Nonqualified plan	16,995		17,103
Long-term lease liabilities	18,861		20,860
Other long-term liabilities	1,174		1,548
Total liabilities	$	71,300	$	80,093

Stockholders’ equity
Common stock, $1 par value, 25,000,000 shares authorized, 12,221,484 shares issued, 7,414,794 and 7,357,450 shares outstanding at December 31, 2025 and 2024, respectively	12,221		12,221
Additional paid-in capital	109,558		124,194
Retained earnings	813,812		814,623
Less treasury stock, 4,806,690 and 4,864,034 shares at December 31, 2025 and 2024, respectively, at cost	(900,085)		(915,752)
Accumulated other comprehensive loss	(14,980)		(13,597)
Total stockholders’ equity	$	20,526	$	21,689
Total liabilities and stockholders’ equity	$	91,826	$	101,782
See Accompanying Notes to Consolidated Financial Statements.

To the shareholders and the board of directors of Harte Hanks, Inc. and Subsidiaries:

Opinion on the Financial Statements

We have audited, before the effects of the adjustments to retrospectively apply the changes in presentation of the Company’s segments disclosure described in Note N, the accompanying consolidated balance sheet of Harte Hanks, Inc. and Subsidiaries (the "Company") as of December 31, 2023, the related consolidated statements of comprehensive income, changes in stockholders’ equity (deficit), and cash flows, for the year ended December 31, 2023, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements, before the effects of the adjustments to retrospectively apply the changes in presentation of the Company’s segments disclosure described in Note N, present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the changes in segment presentation described in Note N, and accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by other auditors.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

Baker Tilly, US, LLP

We served as the Company's auditor from 2019 - 2023.

Tewksbury, Massachusetts

April 1, 2024

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Harte Hanks, Inc. and Subsidiaries Consolidated Balance Sheets	December 31,
In thousands, except per share and share amounts	2024		2023
ASSETS
Current assets
Cash and cash equivalents	$	9,934	$	18,364
Accounts receivable (less allowance of $50 and $474 at December 31, 2024 and 2023, respectively)	31,648		34,313
Contract assets and unbilled accounts receivable	8,215		7,935
Prepaid expenses	1,511		1,915
Prepaid income tax and income tax receivable	938		1,758
Other current assets	1,368		928
Total current assets	53,614		65,213
Net property, plant and equipment	8,956		8,855
Right-of-use assets	22,460		$	25,417
Other assets
Intangible assets, net	563		2,820
Goodwill	295		1,926
Deferred tax assets, net	15,177		17,268
Other long-term assets	717		1,258
Total other assets	16,752		23,272
Total assets	$	101,782	$	122,757
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	21,832	$	23,176
Accrued payroll and related expenses	3,210		5,615
Deferred revenue and customer advances	1,589		3,195
Customer postage and program deposits	1,625		1,815
Other current liabilities	3,145		9,495
Short-term lease liabilities	3,736		4,815
Total current liabilities	35,137		48,111
Pension liabilities - Qualified plans	5,445		10,540
Pension liabilities - Nonqualified plan	17,103		18,630
Long-term lease liabilities	20,860		23,691
Other long-term liabilities	1,548		1,928
Total liabilities	80,093		102,900
Stockholders’ equity
Common stock, $1 par value, 25,000,000 shares authorized,12,221,484 shares issued, 7,357,450 and 7,224,718 shares outstanding at December 31, 2024 and 2023, respectively	12,221		12,221
Additional paid-in capital	124,194		157,889
Retained earnings	814,623		844,920
Less treasury stock, 4,864,034 and 4,996,766 shares at December 31, 2024 and 2023, respectively, at cost	(915,752)		(951,083)
Accumulated other comprehensive loss	(13,597)		(44,090)
Total stockholders’ equity	21,689		19,857
Total liabilities and stockholders’ equity	$	101,782	$	122,757
See Accompanying Notes to Consolidated Financial Statements.

Harte Hanks, Inc. and Subsidiaries Consolidated Statements of Comprehensive (Loss) Income


	Year Ended December 31,
In thousands, except per share amounts	2025		2024
Operating revenue	$	159,570	$	185,242
Operating expenses
Labor	80,823		93,769
Production and distribution	49,898		56,644
Advertising, selling, general and administrative	22,209		22,781
Restructuring expense	1,782		2,402
Goodwill impairment charge	—		1,631
Intangible assets impairment charge	—		1,537
Depreciation and amortization expense	4,472		4,385
Total operating expenses	$	159,184	$	183,149
Operating income	$	386	$	2,093
Other expenses, net
Interest expense, net	248		187
Pension plan termination charges	—		37,505
Other expenses, net	1,146		2,335
Total other expenses, net	$	1,394	$	40,027
Loss before income taxes	(1,008)		(37,934)
Income tax benefit	(197)		(7,637)
Net loss	$	(811)	$	(30,297)

Loss per common share
Basic and Diluted	$	(0.11)	$	(4.15)


Weighted-average shares used to compute loss per share attributable to common shares
Basic and Diluted	7,393		7,293


Comprehensive income, net of tax
Net loss	$	(811)	$	(30,297)

Adjustment to pension liabilities, net of tax benefit of $180 and $11,492	(1,014)		32,273
Foreign currency translation adjustments	(369)		(1,780)
Total other comprehensive (loss) income, net of tax	$	(1,383)	$	30,493

Comprehensive (loss) income	$	(2,194)	$	196

See Accompanying Notes to Consolidated Financial Statements.

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Harte Hanks, Inc. and Subsidiaries Consolidated Statements of ~~Comprehensive~~Changes ~~Income~~in Stockholders’ Equity

	Year Ended December 31,
In thousands	CommonStock				Additional Paid-in Capital				Retained Earnings				Treasury Stock		Accumulated Other Comprehensive(loss) income		Total Stockholders’Equity
In thousands, except per share amounts	2024				2023
Balance at December 31, 2023	$	12,221			$	157,889			$	844,920			$	(951,083)	$	(44,090)	$	19,857
Operating revenue	$	185,242			$	191,492
Stock-based compensation	—				1,931				—				—		—		1,931
Operating expenses
Vesting of RSUs	—				(35,626)				—				35,331		—		(295)
Labor	93,769				97,968
Net loss	—				—				(30,297)				—		—		(30,297)
Production and distribution	56,644				59,568
Other comprehensive income	—				—				—				—		30,493		30,493
Advertising, selling, general and administrative	22,781				20,673
Balance at December 31, 2024	$	12,221	$	—	$	124,194	$	—	$	814,623	$	—	$	(915,752)	$	(13,597)	$	21,689
Restructuring expense	2,402				5,687
Stock-based compensation	—				258				—				—		—		258
Goodwill impairment charge	1,631				—
Vesting of RSUs	—				(15,732)				—				15,667		—		(65)
Intangible assets impairment charge	1,537				—
Net Recovery of short swing profits	—				838				—				—		—		838
Depreciation and amortization expense	4,385				4,237
Net loss	—				—				(811)				—		—		(811)
Total operating expenses	183,149				188,133
Other comprehensive loss	—				—				—				—		(1,383)		(1,383)
Operating income	2,093				3,359
Balance at December 31, 2025	$	12,221			$	109,558			$	813,812			$	(900,085)	$	(14,980)	$	20,526
Other expenses, net
Interest expense (income), net	187				(135)
Pension Plan termination charges	37,505				—
Other expenses, net	2,335				5,413
Total other expenses, net	40,027				5,278
Loss before income taxes	(37,934)				(1,919)
Income tax benefit	(7,637)				(349)
Net loss	$	(30,297)			$	(1,570)
Loss per common share
Basic and Diluted	$	(4.15)			$	(0.21)
Weighted-average shares used to compute loss per share attributable to common shares
Basic and Diluted	7,293				7,310
Comprehensive income, net of tax
Net loss	$	(30,297)			$	(1,570)
Adjustment to pension liabilities	32,273				1,664
Foreign currency translation adjustments	(1,780)				2,548
Total other comprehensive income, net of tax	30,493				4,212
Comprehensive income	$	196			$	2,642

See Accompanying Notes to Consolidated Financial Statements.

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Harte Hanks, Inc. and Subsidiaries Consolidated Statements of ~~Changes~~Cash ~~in Stockholders’ Equity~~ Flows

In thousands	CommonStock		Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive(loss) income		Total Stockholders’Equity
	Year Ended December 31,
Balance at December 31, 2022	$	12,221	$	218,411	$	846,490	$	(1,010,012)	$	(48,302)	$	18,808
In thousands	2025		2024
Stock-based compensation	—		1,418		—		—		—		1,418
Cash Flows from Operating Activities
Vesting of RSUs	—		(61,940)		—		61,299		—		(641)
Net loss	$	(811)	$	(30,297)
Repurchase of common stock	—		—		—		(2,370)		—		(2,370)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities
Net loss	—		—		(1,570)		—		—		(1,570)
Depreciation and amortization expense	4,472		4,385
Other comprehensive income	—		—		—		—		4,212		4,212
Restructuring expense	—		158
Balance at December 31, 2023	$	12,221	$	157,889	$	844,920	$	(951,083)	$	(44,090)	$	19,857
Impairment charges for goodwill and intangible assets	—		3,168
Stock-based compensation	—258		1,931		—		—		—		~~1,931~~
Vesting of RSUs	—		(35,626)		—		35,331		—		(295)
Net pension cost	(2,343)		30,576
Net loss	—		—		$	(30,297)	—		—		(30,297)
Deferred income taxes	(928)		(9,279)
Other comprehensive income	—		—		—		—		30,493		30,493
Changes in assets and liabilities:
Balance at December 31, 2024	$	12,221	$	124,194	$	814,623	$	(915,752)	$	(13,597)	$	21,689
Accounts receivable, net and contract assets	4,973		2,385
Prepaid expenses, income tax receivable and other current assets	(1,885)		703
Accounts payable and accrued expenses	(3,210)		(795)
Deferred revenue and customer advances	(776)		(1,606)
Customer postage and program deposits	(757)		(190)
Other accrued expenses and liabilities	(728)		(4,126)
Net cash used in operating activities	$	(1,735)	$	(2,987)
Cash Flows from Investing Activities
Purchases of property, plant and equipment	(2,757)		(3,746)
Proceeds from the sale of property, plant and equipment	1		2
Net cash used in investing activities	$	(2,756)	$	(3,744)
Cash Flows from Financing Activities
Debt financing costs	(100)		—
Payment of finance leases	(159)		(124)
Recovery of short-swing profit from stockholders	838		—
Treasury stock activities	(65)		(295)
Net cash provided by (used in) financing activities	$	514	$	(419)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(370)		(1,780)
Net decrease in cash and cash equivalents and restricted cash	(4,347)		(8,930)
Cash and cash equivalents and restricted cash at beginning of year	9,934		18,864
Cash and cash equivalents and restricted cash at end of year (1)	$	5,587	$	9,934
(1) This amount is comprised of the below balances:
Cash and cash equivalents	5,582		9,810
Restricted cash	5		124
	$	5,587	$	9,934
See Accompanying Notes to Consolidated Financial Statement
Harte Hanks, Inc. and Subsidiaries Consolidated Statements of Cash Flows (continued)
Supplemental disclosures:
Cash paid for interest	$	292	$	234
Cash (received) for interest	$	(123)	$	(236)
Cash paid for income taxes, net of refunds	$	1,779	$	1,452
Non-cash investing and financing activities:
Purchases of property, plant and equipment included in accounts payable and accrued expense	$	498	$	1,257
Right-of-use assets acquired through operating leases	$	1,252	$	303
See Accompanying Notes to Consolidated Financial Statements

See Accompanying Notes to Consolidated Financial Statements.

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Harte Hanks, Inc. and Subsidiaries Consolidated Statements of Cash Flows

	Year Ended December 31,
In thousands	2024			2023
Cash Flows from Operating Activities
Net loss	$	(30,297)		$	(1,570)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities
Depreciation and amortization expense	4,385			4,237
Restructuring expense	158			861
Impairment charges for goodwill and intangible assets	3,168			—
Stock-based compensation	1,931			1,418
Net pension cost	30,576			70
Deferred income taxes	(9,279)			(1,474)
Changes in assets and liabilities:
Accounts receivable, net and contract assets	2,385			5,654
Prepaid expenses, income tax receivable and other current assets	703			3,440
Accounts payable and accrued expenses	(795)			844
Deferred revenue and customer advances	(1,606)			(1,395)
Customer postage and program deposits	(190)			592
Other accrued expenses and liabilities	(4,126)			(2,200)
Net cash (used in) provided by operating activities	(2,987)			10,477
Cash Flows from Investing Activities
Purchases of property, plant and equipment	(3,746)			(2,812)
Proceeds from the sale of property, plant and equipment	2			3
Acquisition of InsideOut	—			500
Net cash used in investing activities	(3,744)			(2,309)
Cash Flows from Financing Activities
Debt financing costs	—			(45)
Payment of finance leases	(124)			(160)
Repurchase common stock	—			(2,370)
Treasury stock activities	(295)			(641)
Net cash used in financing activities	(419)			(3,216)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(1,780)			2,548
Net (decrease) increase in cash and cash equivalents and restricted cash	(8,930)			7,500
Cash and cash equivalents and restricted cash at beginning of year	18,864			11,364
Cash and cash equivalents and restricted cash at end of year	$	9,934	(1)	$	18,864
(1) This amount is comprised of the below balances:
Cash and cash equivalents	$	9,934		$	18,364
Cash held in escrow account included in other assets	—			500
	$	9,934		$	18,864
Harte Hanks, Inc. and Subsidiaries Consolidated Statements of Cash Flows (continued)
Supplemental disclosures
Cash (received) paid for interest, net	$	(2)		$	244
Cash paid for income taxes, net of (refunds)	$	1,452		$	(2,899)
Non-cash investing and financing activities
Purchases of property, plant and equipment included in accounts payable and accrued expense	$	1,257		$	1,997

See Accompanying Notes to Consolidated Financial Statements

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Harte Hanks, Inc. and Subsidiaries Notes to Consolidated Financial Statements

Note A — Background and Basis of Presentation

Background

Harte Hanks, Inc. together with its subsidiaries (“Harte Hanks,” “Company,” “we,” “our,” or “us”) is a leading global customer experience company. With offices in North America, Asia-Pacific and Europe, Harte Hanks works with some of the world’s most respected brands.

Basis of Presentation ~~(including principles of consolidation)~~

Consolidation

The accompanying audited consolidated financial statements include the accounts of Harte Hanks, Inc. and its wholly-owned 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, as the context may require..

Operating Expense Presentation in the Consolidated Statements of Comprehensive (Loss) Income

The “Labor” line in the Consolidated Statements of Comprehensive (Loss) Income includes all employee payroll and benefits costs, including stock-based compensation and temporary labor costs. The “Production and distribution” and “Advertising, selling, general and administrative” lines do not include labor, depreciation, or amortization expense. Certain labor costs are included in restructuring expense, please see Note M for details.

Note B — Significant Accounting Policies

Use of Estimates

Preparation of consolidated financial statements in conformity with ~~U.S.~~ GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from those estimates due to uncertainties. Such estimates include, but are not limited to, estimates related to revenue recognition;; income taxes; goodwill and intangible assets impairment as well as pension accounting. On an ongoing basis, management reviews its estimates and assumptions based on currently available information. Changes in facts and circumstances could result in revised estimates and assumptions.

Segment Reporting

The Company operates three business segments: ~~Marketing~~ ~~Services~~Revenue Solutions; Customer Care; and Fulfillment & Logistics Services. Our ~~Interim~~President ~~Chief Operating Officer (“Interim COO”)~~ is considered to be our chief operating decision maker (CODM). Our ~~Interim~~President ~~COO~~ reviews our operating results on an aggregate basis for purposes of allocating resources and evaluating financial performance by using the three financial measures: revenue, operating income and operating income plus depreciation and amortization (EBITDA).

Cash Equivalents

All highly liquid investments with an original maturity of 90 days or less at the time of purchase are considered to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value.

Restricted Cash

In our normal business operation, we receive cash from our customers for certain customer program service funding. As these programs impose legal restrictions on the commingling of funds, we present this cash as restricted cash.

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Accounts Receivable and Allowance for Credit Losses

Accounts receivables are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. We make estimates of expected credit and collectability trends for the allowance for credit losses based upon our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current and future economic conditions that may affect the Company's expectation of the collectability in determining the allowance for credit losses. Provisions for expected credit losses are recorded in the “Advertising, selling, general, and administrative” line of our Consolidated Statements of Comprehensive (Loss) Income. As of December 31, ~~2024~~2025 and ~~2023~~2024, our accounts receivables, net, were $3127.68 million and $3431.36 million, respectively. ~~The Company classifies unbilled receivables as Accounts receivable. The changes in the allowance for credit losses accounts consisted of the following:~~

	Year Ended December 31,
In thousands	2024		2023
Balance at beginning of year	$	474	$	163
Net charges to expense	(86)		321
Amounts recovered against the allowance	(338)		(10)
Balance at end of year	$	50	$	474

The changes in the allowance for credit losses accounts consisted of the following:


	December 31,
In thousands	2025		2024
Balance at beginning of year	$	50	$	474
Net charges to expense	27		(86)
Amounts recovered against the allowance	(55)		(338)
Balance at end of year	$	22	$	50

Unbilled receivables

For the majority of service contracts, the Company performs the services prior to billing the client, and this amount is captured as anUnbilled ~~unbilled receivable included in contract assets and unbilled~~ accounts receivable, net on the consolidated balance sheet. Billing usually occurs in the month after the Company performs the services or in accordance with the specific contractual provisions.

Geographic Concentrations

Depending on the needs of our clients, our services are provided through an integrated approach through ~~eleven~~twelve facilities worldwide, of which ~~five~~six are located outside of the U.S.

The following table provides information about the operations in different geographic for the periods indicated:

Revenue(1)

Year Ended December 31,

In thousands

~~2024~~2025

~~2023~~2024

United States

~~167~~144,~~787~~338

~~173~~167,~~162~~787

Other countries

1715,~~455~~232

1817,~~330~~455

Total revenue

~~185~~159,~~242~~570

~~191~~185,~~492~~242

(1) Geographic revenues are based on the location of the service being performed.

Property, plant and equipment, net(2)

December 31,

In thousands

~~2024~~2025

~~2023~~2024

United States

87,~~374~~279

8,~~005~~374

Other countries

~~582~~1,107

~~850~~582

Net property, plant and equipment

8,~~956~~386

8,~~855~~956

(2) Property, plant and equipment are based on physical location.

Credit Risk and Concentration

Accounts receivables are typically unsecured and are derived from revenue earned from customers across different industries and countries. We perform ongoing credit evaluations of our customers and generally do not require collateral. In the event that the accounts receivable collection cycle deteriorates, our operating results and financial position could be adversely affected.

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Our top customer represented 1112.93% and 11.29% of total accounts receivable as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

Revenue by Top Customers

The table below sets forth the percentage of our total revenue derived from our largest customers:

	Year Ended December 31,
	2024		2023
	2025		2024
Top ten customers	4643.2	%	4846.52	%
Top twenty-five customers	7268.13	%	7172.71	%

Our top customer represented 910.45% and 119.24% of total revenue for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

Revenue Recognition

We recognize revenue upon the transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to be entitled to receive in exchange for those products or services based on the relevant contract. We apply the following five-step revenue recognition model:

•Identification of the contract, or contracts, with a customer;

•Identification of the performance obligations in the contract;

•Determination of the transaction price;

•Allocation of the transaction price to the performance obligations in the contract; and

•Recognition of revenue when (or as) we satisfy the performance obligation.

Certain client programs provide for adjustments to billings based upon whether we achieve certain performance criteria. In these circumstances, revenue is recognized when the foregoing conditions are met. We record revenue net of any taxes collected from customers and subsequently remitted to governmental authorities. Any payments received in advance of the performance of services or delivery of the product are recorded as deferred revenue until such time as the services are performed or the product is delivered. Costs incurred for search engine marketing solutions payable to the engine host and postage costs of mailings are billed to our clients and are not directly reflected in our revenue.

Revenue from agency and digital services, direct mail, logistics, fulfillment and contact center is recognized as the work is performed. Fees for these services are determined by the terms set forth in each contract. These fees are typically a set fixed price or rate by transaction occurrence, service provided, time spent, or product delivered.

Fair Value of Financial Instruments

~~Fair value is defined by~~ Financial Accounting Standards Board ("FASB") Accounting Standard Codification ("ASC") 820, Fair Value Measurements and Disclosures, ("“ASC 820"”) 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. ASC 820 also establishes a fair value hierarchy that prioritizes the inputs used in valuation methodologies into three levels:

Level 1Quoted prices in active markets for identical assets or liabilities.

Level 2Observable 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 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

45Because 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 and restricted cash, accounts receivable, trade payables, and debt. The fair value of the assets in our funded pension plan is disclosed in Note H, Employee Benefit Plans.

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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 and restricted cash, accounts receivable, trade payables, and long-term debt. The fair value of the assets in our funded pension plan is disclosed in Note H, Employee Benefit Plans.

Property, Plant and Equipment

Property, plant and equipment, net consist of the following:

Year Ended December 31,

December 31,

In thousands

~~2024~~2025

~~2023~~2024

Property, plant and equipment

Buildings and improvements

45,~~550~~284

4,~~635~~550

Equipment and furniture

2016,~~336~~156

20,~~881~~336

Software

19,~~799~~949

1819,~~030~~799

Software development and equipment installations in progress

1,~~906~~613

1,~~842~~906

Gross property, plant and equipment

4643,~~591~~002

4546,~~388~~591

Less accumulated depreciation

(3734,~~635~~616)

(3637,~~533~~635)

Net property, plant and equipment

8,~~956~~386

8,~~855~~956

Property, plant and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The general ranges of estimated useful lives are:

						Years
Buildings and improvements						3 to 40
Software						2 to 105
Equipment and furniture						3 to 20

For the year ended December 31, ~~2024~~2025, the Company recorded $34.51 million of depreciation expense compared to $3.45 million for the year ended December 31, ~~2023~~2024.

Capitalized software costs for internally developed software and implementation of third-party software are amortized over a period of three to five years. On an ongoing basis, management reviews the valuation of these software costs to determine if there has been impairment to the carrying value of these assets and adjusts this value accordingly.

Long-lived assets such as property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset group is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset group. ~~We recorded an immaterial amount and $0.1 million of impairment for property, plant and equipment in 2024 and 2023, respectively.~~

Leases

We determine if an arrangement is a lease at its inception. Operating and finance leases are included in the lease right-of-use (“ROU”) assets and in the current portion and long-term portion of lease liabilities on our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of each lease based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at commencement date of each lease to determine the present value of lease payments. The operating lease ROU assets also include any lease payments made and exclude lease incentives. Our lease terms may include options to extend or terminate the lease, which are included in the lease ROU assets when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain real estate leases, we account for the lease and non-lease components as a single lease component.

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Goodwill

The Company has three reporting segments, but the current goodwill balance is booked in the Marketing Services segment. During its goodwill impairment review, the Company may assess qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and the overall financial performance of the Company. If, after assessing the totality of these qualitative factors, the Company determines that it is not more likely than not that the fair value of its reporting unit is less than its carrying amount, then no additional assessment is deemed necessary. Otherwise, the Company performs a quantitative goodwill impairment test. The Company may also elect to bypass the qualitative assessment in a period and elect to proceed to perform the quantitative goodwill impairment test. We booked an impairment charge of $1.6 million for goodwill in the year ended December 31, 2024, leaving a balance of $0.3 million. There was no goodwill impairment in the year ended December 31, 2023. 45

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The Company has three reporting segments, but the current goodwill balance is booked in the Revenue Solutions segment. During its goodwill impairment review, the Company may assess qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount, including goodwill. The qualitative factors include, but are not limited to, macroeconomic conditions, industry and market considerations, and the overall financial performance of the Company. If, after assessing the totality of these qualitative factors, the Company determines that it is not more likely than not that the fair value of its reporting unit is less than its carrying amount, then no additional assessment is deemed necessary. Otherwise, the Company performs a quantitative goodwill impairment test. The Company may also elect to bypass the qualitative assessment in a period and elect to proceed to perform the quantitative goodwill impairment test. There was no goodwill impairment in the year ended December 31, 2025. We booked an impairment charge of $1.6 million for goodwill in the year ended December 31, 2024, leaving a balance of $0.3 million.

Intangible Assets

Finite-lived intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require an intangible asset to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that intangible asset to its carrying amount. If the carrying amount of the intangible asset is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary.

The factors that drive the estimate of useful life are often uncertain and are reviewed on a periodic basis or when events occur that warrant review. Recoverability is measured by comparing the assets’ book value to future net undiscounted cash flows that the assets are expected to generate to determine if a write-down to the recoverable amount is appropriate. If such assets are written down, an impairment will be recognized as the amount by which the book value of the asset group exceeds the recoverable amount. There iswas no impairment of our intangible assets during the year ended December 31, ~~2023~~2025. During the year ended December 31, 2024, ~~a significant amount of~~ revenue from its original ~~customers~~customer base was lost. As a result, we booked an impairment loss of $1.5 million to our intangible assets. The ~~gross carrying amount below is adjusted for impairment charges and the~~ net carrying balance of intangible assets as of December 31, 2024 was $0.6 million.

A summary of the Company’s intangible asset as of December 31, ~~2024~~2025, is as follows:

In thousands

Weighted Average Amortization Period

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Customer Relationships

5 years

2,102

1,~~539~~732

~~563~~370

Estimated future amortization expense related to intangible assets as of December 31, ~~2024~~2025, is as follows:

In thousands
Year Ending December 31,	Amount
2025	$	193
2026	$	193
2026	193
2027	177
Total	$	~~563~~370

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Income Taxes

Income tax expense includes U.S. and international income taxes accounted for under the asset and liability method. Certain income and expenses are not reported in tax returns and financial statements in the same year. Such temporary differences are reported as deferred tax. Deferred tax assets are reported net of valuation allowances where we have assessed that it is more likely than not that a tax benefit will not be realized.

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Earnings Per Share

Basic earnings per common share are based upon the weighted-average number of common shares outstanding during the period. Diluted earnings per common share are based upon the weighted-average number of common shares and dilutive common stock equivalents outstanding during the period. Dilutive common stock equivalents are calculated based on the assumed exercise of stock options and vesting of unvested shares using the treasury stock method.

Stock-Based Compensation

All share-based awards are recognized as operating expense in the “Labor” line of the Consolidated Statements of Comprehensive (Loss) Income. Calculated expense is based on the fair values of the awards on the date of grant and is recognized over the requisite service period or performance period of the awards. We account for forfeitures as they occur.

Reserve for Healthcare Benefit and Worker's Compensation Liability

We are self-insured for the majority of our healthcare insurance. We pay actual medical claims up to a stop loss limit of $0.34 million. The reserve is estimated using current claims activity, historical experience, and claims incurred but not reported. We use loss development factors that consider both industry norms and company specific information. Our liability is recorded at the estimate of the ultimate cost of claims at the balance sheet date. On December 31, ~~2024~~2025 and ~~2023~~2024, our reserve for healthcare, and workers’ compensation, net, was $1.1 million and ~~$1.1~~were ~~million~~included in accrued liabilities. Periodic changes to the reserve for workers’ compensation are recorded as increases or decreases to insurance expense, which is included in the “Advertising, selling, general and administrative” line of our Consolidated Statements of Comprehensive (Loss) Income. Periodic changes to the reserve for healthcare are recorded as increases or decreases to employee benefits expense, which is included in the “Labor” line of our Consolidated Statements of Comprehensive (Loss) Income.

Foreign Currencies

In most instances, the functional currencies of our foreign operations are the local currencies. Assets and liabilities recorded in foreign currencies are translated in U.S. dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during a given month. Adjustments resulting from this translation are charged or credited to other comprehensive income.

Recent Accounting Pronouncements

Recent Accounting Guidance Adopted in the Current Year

In ~~November~~December 2023, ~~the Financial Accounting Standards Board (the “~~FASB”) issued ~~Accounting Standards Update (“~~ASU”) 2023-0709, Improvements to ~~improve~~Income ~~segment~~Tax ~~disclosure~~Disclosures ~~requirements~~("ASU ~~under~~2023-09"). ~~Accounting~~ASU ~~Standards~~2023-09 ~~Codification~~amends (“ASC”) ~~280~~740, ~~Segment~~Income ~~Reporting,~~Taxes ~~primarily~~to ~~through~~expand ~~enhancing~~income tax disclosures ~~about~~and ~~significant segment expenses. The guidance~~ requires ~~entities to provide significant segment expenses~~ that ~~are~~the ~~regularly~~Company ~~provided~~disclose to(i) the ~~CODM~~income ~~and~~tax ~~other~~rate ~~segment~~reconciliation ~~expenses~~using ~~included~~both inpercentages ~~each~~and ~~reported~~reporting ~~measure~~currency ofamounts; ~~segment~~(ii) ~~profitability. This~~specific ~~ASU~~categories ~~also~~within ~~enhances~~the ~~interim~~income ~~segment~~tax ~~reporting~~rate ~~requirements~~reconciliation; by(iii) ~~aligning~~additional ~~interim~~information ~~disclosures~~for ~~with~~reconciling ~~information~~items that ~~must~~meet bea ~~disclosed~~quantitative ~~annually~~threshold; in(iv) ~~accordance with ASC 280. We adopted this ASU in~~ the ~~fourth~~composition ~~quarter~~ of ~~2024~~state and ~~added~~local ~~significant~~income ~~expenses~~taxes ~~reviewed~~ by ~~CODM~~jurisdiction; ~~for~~and ~~each~~(v) ~~reportable~~the ~~segment~~amount inof ~~Note~~income O,taxes ~~Segment~~paid ~~Reporting. The~~disaggregated ~~disclosures~~by ~~were~~jurisdiction. ~~applied~~The ~~retrospectively~~Company toadopted ASU 2023-09 for ~~comparable~~the ~~presentation.~~year ~~There~~ended ~~was~~December 31, no2025 ~~other~~on ~~impact~~a toprospective ~~our~~basis. See ~~financial~~Note ~~statement~~I. ~~disclosures~~Income asTaxes afor ~~result~~additional ~~of adopting this ASU~~information.

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Recent Accounting Guidance Not Yet Adopted

In December 2023, FASB issued ASU 2023-09, which requires enhanced income tax disclosures, including disaggregation of information in the rate reconciliation table and disaggregated information related to income taxes paid. The amendments in ASU 2023-09 are effective for the fiscal year ending after December 15, 2025. The Company is currently evaluating the impact that this update will have on its disclosures in the consolidated financial statements.

In November 2024, FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40). The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is also permitted. This ASU will likely result in the required additional disclosures being included in our consolidated financial statements, once adopted. We are currently evaluating the provisions of this ASU.

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No other new accounting pronouncements recently adopted or issued had or are expected to have a material impact on the consolidated financial statements.

Note C - Operating revenue from Contracts with Customers

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 products sold or service provided. Payment terms can vary by contract, but the period between invoicing and when payment is due is not significant. The Company's contracts with its customers generally do not include rights of return or a significant financing component.

We present sales taxes assessed on revenue-producing transactions on a net basis.

Disaggregation of Revenue

We disaggregate revenue by three key revenue streams which are aligned with our business segments. The nature of the services offered by each key revenue stream is different. The following tables summarize revenue from contracts with customers for the years ended December 31, ~~2024~~2025, and ~~2023~~2024 ~~from~~by our three business segments:

	Year Ended December 31,
In thousands	~~2024~~2025		~~2023~~2024
Marketing Services	$	50,332	$	52,910
Revenue Solutions	$	35,128	$	50,332
Customer Care	5250,~~918~~067		5352,~~621~~918
Fulfillment & Logistics Services	8174,~~992~~375		8481,~~961~~992
Total Revenue	$	~~185~~159,~~242~~570	$	~~191~~185,~~492~~242

During the years ended December 31, ~~2024~~2025 and ~~2023~~2024, the Company recognized revenue of $23.4 million and $~~20.~~2.4 million from performance obligations satisfied at a point in time. The remainder of revenues recognized in ~~2024~~2025 and ~~2023~~2024 were recognized in an over time pattern. 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 SSP based on the price at which the performance obligation is sold separately. Although uncommon, if the SSP is not observable through past transactions, we estimate the SSP 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:

49Revenue Solutions

Our Revenue Solutions segment delivers strategic planning, data strategy, performance analytics, creative development and execution, technology enablement, marketing automation, and database management. The customer can choose other services to supplement and support their own in-house sales team. These services may range from leveraging data for lead generation, and outsourcing the design and testing of sale play, to full hiring and managing of a dedicated internal sales team.

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~~Further~~Most ~~discussion~~revenue solutions performance obligations are satisfied over time and often offered on a project basis. We have concluded that the best approach to measure the progress toward completion of ~~other~~the project-based performance obligations inis ~~each~~the ofinput ~~our~~method, ~~major~~which ~~revenue~~is ~~streams~~based ~~follows:~~on either the costs or labor hours incurred to date depending upon whether costs or labor hours more accurately depict the transfer of value to the customer.

Marketing Services

Our Marketing Services segment delivers strategic planning, data strategy, performance analytics, creative development and execution, technology enablement, marketing automation, and database management. We create relevancy by leveraging data, insight, and our extensive experience in leading clients as they engage their customers through digital, traditional, and emerging channels. The customer can choose other services to supplement and support their own in-house sales team. These services can include leveraging data for lead generation, outsourcing sales play design and testing, up to full hiring and managing of a dedicated internal sales team. With these services, we help clients build deep customer relationships, create connected customer experiences, and optimize each and every customer touch point in order to deliver desired business outcomes.

Most marketing services performance obligations are satisfied over time and often offered on a project basis. We have concluded that the best approach to measure the progress toward completion of the project-based performance obligations is the input method, which is based on either the costs or labor hours incurred to date depending upon whether costs or labor hours more accurately depict the transfer of value to the customer.

Our database solutions are built around centralized marketing databases with services rendered to build custom databases, 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, 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~~these solutions 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.

Our contracts may include outsourced print production work for our clients. These 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 on the postage purchase and therefore recognize net consideration as revenue.

Customer Care

We deliver customer care services in the United States, Asia and Europe to provide advanced solutions such as voice, SMS/chat, email, integrated voice response, web self-service, social cloud monitoring and analytics.

Performance obligations are stand-ready obligations and are satisfied over time. With regard to account management and SaaS, we use a time-elapsed output method to recognize revenue. 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 SSPs.

Fulfillment & Logistics Services

Our services, delivered internally and with our partners, include: printing, lettershop, advanced mail optimization (including commingling services), logistics and transportation optimization, monitoring and tracking, to support traditional and specialized mailings. Our print and fulfillment centers in Massachusetts and Kansas provide custom kitting services, print on demand, product recalls, trade marketing fulfillment, ~~ecommerce~~e-commerce product fulfillment, sampling programs, and freight optimization, thereby allowing our customers to distribute literature and other marketing materials.

~~Most~~Performance ~~performance~~ obligations offered within this revenue stream ~~are~~may be satisfied either over time ~~and~~or at a point in time. Over time performance obligations utilize either 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. Our direct mail business contracts may have included 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.

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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. Our direct mail business contracts may have included 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.

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. As of December 31, 2024, we had no transaction prices allocated to unsatisfied or partially satisfied performance obligations.~~

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the variable consideration directly to the services performed. As of December 31, 2025 and 2024, we had no transaction prices allocated to unsatisfied or partially satisfied performance obligations requiring disclosure, upon application of the above exemptions.

Contract Balances

We record aan unbilled accounts 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 the delivery of a final marketing strategy delivery presentation before customer payment is required). If invoicing occurs prior to revenue recognition, the unearned revenue is presented on our Consolidated Balance Sheets as a contract liability, referred to as deferred revenue. ~~The~~ ~~following table summarizes our contract balances as of December 31, 2024 and 2023:~~

In thousands	December 31, 2024		December 31, 2023
Contract assets	$	363	$	258
Deferred revenue and customer advances	1,589		3,195
Deferred revenue included in other long-term liabilities	182		294

The following table summarizes our contract balances as of December 31, 2025 and 2024:

Revenue recognized during the year ended December 31, 2024 from amounts included in deferred revenue as of December 31, 2023 was approximately $3.0 million. Revenue recognized during the year ended December 31, 2023 from amounts included in deferred revenue as of December 31, 2022 was approximately $4.3 million.


In thousands	December 31, 2025		December 31, 2024		January 1, 2024
Unbilled Accounts Receivable	$	6,728	$	7,852	$	7,677
Contract assets	321		363		258
Deferred revenue and customer advances	813		1,589		3,195
Deferred revenue included in other long-term liabilities	—		182		294

Revenue recognized during the year ended December 31, 2025 from amounts included in deferred revenue as of December 31, 2024 was approximately $1.3 million. Revenue recognized during the year ended December 31, 2024 from amounts included in deferred revenue as of December 31, 2023 was approximately $3.0 million.

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 the benefit in a manner that is consistent with the transfer of the related goods or services to which the asset relates. We impair the asset when recoverability is not anticipated. We capitalized a portion of commission expense, implementation and other costs that represent the cost to obtain a contract. The remaining unamortized contract costs were $0.23 million and $0.62 million as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively. They are included in other current assets and other assets on our consolidated balance ~~sheet~~sheets. For the years presented, no impairment was recognized.

Note D - Leases

We have operating and finance leases for corporate and business offices, service facilities, call centers and certain equipment. Leases with an initial term of 12 months or less are generally not recorded on the balance sheet, unless the arrangement includes an option to purchase the underlying asset, or an option to renew the arrangement, that we are reasonably certain to exercise (short-term leases). Our leases have remaining lease terms of one year to ~~eight~~seven years, some of which may include options to extend the leases for up to an additional five years.

WeAs ~~subleased~~of ~~our~~December 31, ~~Fullerton~~2025, ~~(CA)~~assets recorded under finance and operating leases were approximately $0.6 million and $19.2 million respectively, ~~Jacksonville~~and ~~(FL)~~accumulated amortization associated with finance leases was $0.3 million. As of December 31, 2024, assets recorded under finance and ~~Uxbridge~~operating ~~(UK)~~leases ~~facilities~~were approximately $0.8 million and $21.7 million respectively, and accumulated depreciation associated with finance leases was $0.1 million. ~~The~~Operating lease right of use assets and ~~sublease~~lease ~~for~~liabilities ~~Fullerton~~are ~~(CA)~~recognized ~~facility~~at ~~expired~~the inlease ~~April~~commencement ~~2023,~~date based on the present value of lease ~~and~~payments ~~sublease~~over ~~for~~the ~~Uxbridge~~lease ~~(UK)~~term. The ~~facility~~discount ~~expired~~rate used to determine the commencement date present value of lease payment is the interest rate implicit in ~~October~~the ~~2023~~lease, ~~and~~or when that is not readily determinable, we utilized our incremental borrowing rate, which is the ~~lease~~rate ~~and~~incurred ~~sublease~~to ~~for~~borrow ~~Jacksonville~~on ~~(FL)~~a ~~facility~~collateralized ~~expired~~basis over a similar term at an amount equal to the ~~end~~lease ofpayments ~~July~~in ~~2024~~a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received.

51There was no impairment of leases during the years ended December 31, 2025 and 2024.

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As of December 31, 2024, assets recorded under finance and operating leases were approximately $0.8 million and $21.7 million respectively, and accumulated amortization associated with finance leases was $0.1 million. As of December 31, 2023 assets recorded under finance and operating leases were approximately $0.1 million and $25.3 million respectively, and accumulated depreciation associated with finance leases was $0.1 million. Operating lease right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The discount rate used to determine the commencement date present value of lease payment is the interest rate implicit in the lease, or when that is not readily determinable, we utilized our incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received.

During the year ended December 31, 2023, we impaired two leases for the facilities we no longer occupied. The resulting impairment and early termination charges are included in our restructuring expenses for the year ended December 31, 2023. There is no impairment of leases in the year ended December 31, 2024.

The following tables present supplemental balance sheet information related to our financing and operating leases:

As of December 31, 2024

As of December 31, 2023

As of December 31, 2025

As of December 31, 2024

In thousands

Operating Leases

Finance Leases

Total

Operating Leases

Finance Leases

Total

Right-of-use Assets

2119,~~678~~247

~~782~~607

2219,~~460~~854

2521,~~288~~678

~~129~~782

2522,~~417~~460

Liabilities:

Short-term lease liabilities

3,~~578~~376

~~158~~167

3,~~736~~543

43,~~773~~578

42158

43,~~815~~736

Long-term lease liabilities

2018,~~235~~400

~~625~~461

2018,~~860~~861

2320,~~687~~235

4625

2320,~~691~~860

Total Lease Liabilities

2321,~~813~~776

~~783~~628

2422,~~596~~404

2823,~~460~~813

46783

2824,~~506~~596

For the years ended December 31, ~~2024~~2025 and ~~2023~~2024, the components of lease expense were as follows:

In thousands

Year Ended December 31, ~~2024~~2025

Year Ended December 31, ~~2023~~2024

Operating lease cost

5,~~315~~108

5,~~526~~315

Finance lease cost

Amortization of right-of-use assets

~~102~~174

~~123~~102

Interest on lease liabilities

3155

731

Total Finance lease cost

~~133~~229

~~130~~133

Variable lease cost

1,~~875~~484

21,~~068~~875

Sublease income

~~(368)~~—

(~~834~~368)

Total lease cost, net

6,~~955~~821

6,~~890~~955

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Other information related to leases was as follows:

In thousands	Year Ended December 31, ~~2024~~2025		Year Ended December 31, ~~2023~~2024
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	118,~~170~~742	$	1211,~~525~~170
Operating cash flows from finance leases	2851		2128
Financing cash flows from finance leases	~~124~~159		~~160~~124
Weighted Average Remaining Lease term (in years)
Operating leases	65.3855		6.8438
Finance leases	43.5355		14.0453
Weighted Average Discount Rate
Operating leases	5.7489%		5.6574%
Finance leases	7.77%		7.7677%

~~The maturities of the Company’s finance and operating lease liabilities as of December 31, 2024 are as follows:~~51

In thousands	Operating Leases		Finance Leases
Year Ending December 31,
2025	$	4,777	$	210
2026	4,219		206
2027	4,190		206
2028	4,094		206
2029	4,132		99
2030 & Beyond	7,264		—
Total future minimum lease payments	28,676		927
Less: Imputed interest	4,863		144
Total lease liabilities	$	23,813	$	783

As of December 31, 2024, we have no new operating leases that have not yet commenced.

Note E - Convertible Preferred Stock and Share Repurchase Program

Convertible Preferred Stock

On March 20, 2023, the Company cancelled all shares of Series A Preferred Stock pursuant to the Certificate of Elimination filed with the Secretary of State of Delaware.

Share Repurchase Program

On May 2, 2023, the Board of Directors of Harte Hanks approved a share repurchase program to maximize shareholder value with authorization to repurchase $6.5 million of the Company’s Common Stock. In the year ended December 31, 2024, we didn't repurchase any shares of common stock. In the year ended December 31, 2023, we repurchased 0.4 million shares of common stock for $2.4 million.

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The maturities of the Company’s finance and operating lease liabilities as of December 31, 2025 are as follows:


In thousands	Operating Leases		Finance Leases
Year Ending December 31,
2026	$	4,492	$	207
2027	4,524		206
2028	4,525		206
2029	4,568		98
2030	4,485		—
2031 & Beyond	3,116		—
Total future minimum lease payments	25,710		717
Less: Imputed interest	3,934		89
Total lease liabilities	$	21,776	$	628

As of December 31, 2025, we have no new operating leases that have not yet commenced.

Note E - Stock Repurchase Program

On May 2, 2023, the Board of Directors of Harte Hanks approved a share repurchase program to maximize shareholder value with authorization to repurchase $6.5 million of the Company’s Common Stock. As of December 31, 2025, the share repurchase program authorization availability was $4.1 million. In the year ended December 31, 2025 and 2024, we didn't repurchase any shares of common stock.

Note F — Credit Facility

On December 21, 2021, the Company entered a three -year, $25.0 million asset-based revolving credit facility (the “Credit Facility”) with Texas Capital Bank ("TCB"). The Company’s obligations under the Credit Facility are guaranteed on a joint and several basis by the Company’s material subsidiaries (the “Guarantors”). The Credit Facility is secured by substantially all the assets of the Company and the Guarantors pursuant to a Pledge and Security Agreement, dated as of December 21, 2021, among the Company, TCB and the other Guarantors party thereto (the “Security Agreement”). On December 29, 2023, the Company extended the maturity date of the Credit Facility by a period of six months to June 30, 2025. The extension was executed with substantially similar terms and conditions as the original Credit Facility. On June 24, 2025, the Company entered into a second amendment to the Credit Facility (the “Second Amendment”) with TCB which extended the maturity date for the Credit Facility by a period of three years to June 30, 2028. The Second Amendment also includes an accordion feature that allows the Company to seek up to a $10.0 million increase in commitments under the credit line, subject to TCB approval.

The Credit Facility provides for loans up to the lesser of (a) $25.0 million, ~~and~~or (b) the amount available under a “borrowing base” calculated primarily by reference to the Company's cash and cash equivalents and accounts receivables. The Credit Facility allows the Company to use up to $3.0 million on of its borrowing capacity to issue letters of credit.

The loans under the Credit Facility accrue interest at a varying rate equal to the Secured Overnight Financing Rate (SOFR) plus a margin of 2.25% per annum. The interest rate was 6.7130% as of December 31, ~~2024~~2025. The outstanding amounts advanced under the Credit Facility are due and payable in full on June 30, ~~2025~~2028. As of December 31, ~~2024~~2025 and ~~2023, we had no borrowings outstanding under the Credit Facility. As of December 31,~~ 2024 ~~and 2023~~, we had letters of credit outstanding in the amount of $1.0.7 million and $01.80 million, respectively. No amounts were drawn against these letters of credit as of December 31, ~~2024~~ 2025. These letters of credit exist into ~~lieu~~support ~~of cash deposits with real estate leases, and self-~~insurance programs relating to workers' compensation, medical ~~benefits~~insurance, and reducing the ~~now~~cash ~~closed~~security ~~workers‘~~on ~~compensation~~leased ~~program~~property. ~~Unused~~The ~~commitment~~Company ~~balances~~is ~~accrued~~charged ~~fees at~~ a ~~rate~~commitment fee of 0.25% per annum on the unused portion of the revolving credit facility.

AsThe ~~of December 31,~~Credit ~~2024,~~Facility wecontains ~~had~~certain covenants restricting the Company's and its subsidiaries' ability to ~~borrow~~create, anincur, ~~additional~~assume ~~$24.0~~or ~~million~~become ~~under~~liable for indebtedness; make certain investments; pay dividends or repurchase the ~~Credit~~Company's ~~Facility. As~~stock; ofcreate, ~~December 31~~incur or assume liens, ~~2024~~consummate ~~and~~mergers ~~December 31~~or acquisitions, ~~2023~~liquidate, wedissolve, ~~had~~suspend noor ~~borrowing~~cease ~~outstanding~~operations, ~~under~~or ~~the~~modify ~~Credit~~accounting ~~Facility.~~or tax reporting methods (other than as required by GAAP)

~~Note G — Stock-Based Compensation~~52

We maintain stock incentive plans for the benefit of certain officers, directors, and employees. Our stock incentive plans provide for the ability to issue 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 the current liability, which are adjusted each reporting period based on changes in our stock price.

We determined the fair value of the stock options using the Black-Scholes option pricing model and we determined the fair value of the performance stock units using Monte-Carlos simulation model.

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 Consolidated Statements of Comprehensive Income. We recognized $2.0 million and $1.4 million of stock-based compensation expense for the years ended December 31, 2024 and 2023, respectively.

In 2020, we established our 2020 Equity Incentive Plan ("2020 Plan") which replaced the 2013 Equity Incentive Plan (“2013 Plan”). Any shares of common stock that remained eligible for issuance under the 2013 Plan are now instead eligible for issuance under the 2020 Plan. The “2013 Plan” as of December 31, 2024 and 2023, has 195,124 and 190,187 shares available for grant, respectively. In August 2020, we filed a Form S-8 to register up to an aggregate of 2,521,244 shares that may be issued under the 2020 Plan. The 2020 Plan provides for the issuance of stock-based awards to directors, employees and consultants. No additional stock-based awards will be granted under the 2013 Plan, but awards previously granted under the 2013 Plan will remain outstanding in accordance with their respective terms. As of December 31, 2024 and 2023, there were 1.1 million and 1.3 million shares available, respectively, for grant under the 2020 Plan.

In August 2023, we established the 2023 Inducement Equity Incentive Plan ("2023 Plan"), pursuant to which the Company issued 240,000 shares of stock option awards. During 2024, the Board approved the issuance of 148,200 incentive stock options.

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As of December 31, 2025 and 2024, we had the ability to borrow an additional $24.3 million and $24.0 million, respectively, under the Credit Facility. As of December 31, 2025 and December 31, 2024 we had no borrowings outstanding under the Credit Facility.

Note G — Stock-Based Compensation

We maintain stock incentive plans for the benefit of certain officers, directors, and employees. Our stock incentive plans provide for the ability to issue stock options, cash stock appreciation rights, performance stock units, phantom stock units and cash performance stock units. We determined the fair value of the stock options using the Black-Scholes option pricing model and we determined the fair value of the performance stock units using Monte-Carlos simulation model.

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 Consolidated Statements of Comprehensive (Loss) Income. We recognized $0.3 million and $2.0 million of stock-based compensation expense for the years ended December 31, 2025 and 2024, respectively.

In 2020, we established our 2020 Equity Incentive Plan ("2020 Plan") which replaced the 2013 Equity Incentive Plan (“2013 Plan”). Any shares of common stock that remained eligible for issuance under the 2013 Plan are now instead eligible for issuance under the 2020 Plan. The “2013 Plan” as of December 31, 2025 and 2024, has 196,850 and 195,124 shares available for grant, respectively. In August 2020, we filed a Form S-8 to register up to an aggregate of 2,521,244 shares that may be issued under the 2020 Plan. The 2020 Plan provides for the issuance of stock-based awards to directors, employees and consultants. No additional stock-based awards will be granted under the 2013 Plan, but awards previously granted under the 2013 Plan will remain outstanding in accordance with their respective terms. As of December 31, 2025 and 2024, there were approximately 1.0 million and 1.1 million shares available, respectively, for grant under the 2020 Plan.

In August 2023, we established the 2023 Inducement Equity Incentive Plan ("2023 Plan"), pursuant to which the Company issued 240,000 shares of stock option awards. During 2025 and 2024, the Board approved the issuance of 69,702 and 148,200 incentive stock options, respectively.

Stock Options

Options granted under the 2023 Plan have an exercise price equal to the closing market price of our common stock on the date prior to the grant date. These options become exercisable in 33.3% increments on the first three anniversaries of their date of grant and expire on the tenth anniversary of their date of grant. Options to purchase ~~388~~166,~~200~~602 and ~~240~~388,~~000~~200 shares granted under 2023 Plan awards were outstanding as of December 31, ~~2024~~2025 and ~~2023~~2024, respectively, with exercise prices ranging from $4.55 to $7.74 and $5.59 to $76.80 per share, respectively.

Options granted under the 2020 Plan, 2013 Plan or as inducement awards have an exercise price equal to the market value of the common stock on the grant date. These options become exercisable in 25% increments on the first four anniversaries of their date of grant and expire on the ~~tenth~~10th anniversary of their date of grant. There were no options outstanding under the 2020 plan as of December 31, ~~2024~~2025 and ~~2023~~2024.

There were no options outstanding under the 2013 plan as of December 31, 2025. Options to purchase 1,726 ~~and 6,663~~ shares granted under 2013 Plan awards were outstanding as of December 31, 2024 ~~and 2023~~, ~~respectively,~~ with exercise prices ranging from $5.59 to $116.40 per share.

Options under the 2005 Plan were granted at exercise prices equal to the market value of the common stock on the grant date. All such awards have met their respective vesting dates. There were no options outstanding under the 2005 Plan as of December 31, 2024 and 2023.

Options granted to officers after April 2015 vest in full upon a change in control if such options are not assumed or replaced by a publicly traded successor with an equivalent award (as defined in such officers’ change in control severance agreements).

~~The following summarizes all stock option activity during the years ended December 31, 2024 and 2023:~~53

	Number of Shares	Weighted-Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (In thousands)
Options outstanding at December 31, 2022	12,668	$	78.88	1.16	$	—
Granted	240,000	5.59		9.63	288
Exercised	—	—		—	—
Unvested options forfeited	—	—		—	—
Vested options expired	(6,005)	77.38		—	—
Options outstanding at December 31, 2023	246,663	$	7.61	9.67	288
Granted	148,200	$	7.59	—	—
Exercised	—	—		—	—
Unvested options forfeited	—	—		—	—
Vested options expired	(4,937)	81.35		—	—
Options outstanding at December 31, 2024	389,926	$	6.67	8.84	$	—
Vested and expected to vest at December 31, 2024	389,926	$	6.67	8.84	$	—
Exercisable at December 31, 2024	81,726	$	7.10	8.45	$	—

The aggregate intrinsic value at year end in the table above represents the total pre-tax intrinsic value that would have been received by the option holders if all of the in-the-money options were exercised on December 31, 2024. The pre-tax intrinsic value is the difference between the closing price of our common stock on December 31, 2024, and the exercise price for each in-the-money option. This value fluctuates with the changes in the price of our common stock.

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The following ~~table~~ summarizes ~~information~~all ~~about~~ stock ~~options~~option ~~outstanding~~activity atduring the years ended December 31, 2025 and 2024:

Range ofExercise Prices	NumberOutstanding	Weighted-AverageExercise Price		Weighted-Average Remaining Life(Years)		NumberExercisable		Weighted-Average price per shareOutstanding and Vested
	Number of Shares	Weighted-Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (In thousands)
$5.59 - 76.80	389,356	$	6.60	8.51		81,156		$	6.60
Options outstanding at December 31, 2023	246,663	$	7.61	9.67		$	288
$77.60 - 116.40	570	$	77.60	0.1		570		$	77.60
Granted	148,200	7.59		$	—	—
Exercised	—	—		—		—
Unvested options forfeited	—	—		—		—
Vested options expired	(4,937)	81.35		—		—
Options outstanding at December 31, 2024	389,926	$	6.67	8.84		$	—
Granted	69,702	$	4.96	—		—
Exercised				—		—
Unvested options forfeited	(211,300)	6.01		—		—
Vested options expired	(81,726)	7.10		—		—
Options outstanding at December 31, 2025	166,602	$	6.58	8.57		$	—
Vested and expected to vest at December 31, 2025	166,602	$	6.58	8.57		$	—
Exercisable at December 31, 2025	32,299	$	7.74	8.08		$	—

There were ~~148~~69,~~200~~702 and ~~240~~148,~~000~~200 options granted during ~~2024~~2025 and ~~2023~~2024, respectively. The weighted average grant date fair value of 2025 options granted is $3.24. The weighted average grant date fair value of 2024 options granted is $5.08 . As of December 31, 2025 and 2024, there ~~was~~were $0.3 million and $1.0 million of unrecognized compensation cost related to unvested stock options, respectively.

Restricted Stock Units

Restricted stock units granted as inducement awards or under the 2020 Plan and 2013 Plan vest in three equal increments on the first three anniversaries of their date of grant. Restricted stock units settle in treasury stock or newly issued shares and are treated as equity. Outstanding restricted stock units granted to officers as inducement awards or under the 2013 Plan vest in full (to the extent not previously vested) upon a change in control if such unvested shares are not assumed or replaced by a publicly traded successor with an equivalent award (as such terms are defined in such officers’ change-in-control severance agreements).

The following summarizes all restricted stock units’ activity during ~~2024~~2025 and ~~2023~~2024:

	~~Number of Shares~~	Number of Shares	~~Weighted-Average Grant Date Fair Value~~	Weighted-Average Grant Date Fair Value
Unvested shares outstanding at December 31, 2022	516,176		$6.43
Unvested shares outstanding at December 31, 2023		243,441		$	7.24
Granted in 2023	80,225		5.73
Granted in 2024		98,192		$	7.61
Vested in 2023	(308,523)		5.53
Vested in 2024		(187,778)		6.76
Forfeited in 2023	(44,437)		7.02
Forfeited in 2024		(32,662)		7.49
Unvested shares outstanding at December 31, 2023	243,441		$7.24
Unvested shares outstanding at December 31, 2024		121,193		$	8.21
Granted in 2024	98,192		7.61
Granted in 2025		281,444		$	4.03
Vested in 2024	(187,778)		6.76
Vested in 2025		(83,691)		8.43
Forfeited in 2024	(32,662)		7.49
Forfeited in 2025		(45,834)		6.00
Unvested shares outstanding at December 31, 2024	121,193		$8.21
Unvested shares outstanding at December 31, 2025		273,112		$	4.21

The fair value of each restricted stock unit is estimated on the date of grant as the closing market price of our common stock on the date prior to the grant. As of December 31, 2024, there was $535,763 of total unrecognized compensation cost related to restricted stock units. This cost is expected to be recognized over a weighted average period of approximately 1.34 years.54

Performance Stock Units

Performance stock units are a form of share-based award similar to unvested shares, except that the number of shares ultimately issued is based on our performance against specific performance goals over a roughly three-year period. At the end of the performance period, the number of shares of stock issued will be determined in accordance with the specified performance target(s) in a range between 0% and 100%. Performance stock units vest solely in common stock and are treated as equity. Upon a change in control, performance stock units granted to officers vest on a pro-rated basis (based on time elapsed from the grant) to the extent not previously settled if they are not assumed or replaced by a publicly traded successor with an equivalent award (as such terms are defined in such officers’ change-in-control severance agreements). Performance Stock Units have been issued under the 2013 Plan, and the 2020 Plan as inducement awards.

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The ~~following~~fair ~~summarizes~~value ~~all~~of ~~performance~~each restricted stock unit ~~activity~~is ~~during~~estimated ~~2024~~on ~~and~~the ~~2023:~~date of grant as the closing market price of our common stock on the date prior to the grant. As of December 31, 2025, there was $0.9 million of total unrecognized compensation cost related to restricted stock units. This cost is expected to be recognized over a weighted average period of approximately 1.79 years.

	Number of Units	Weighted-Average GrantDate Fair Value
Performance stock units outstanding as of December 31, 2022	142,000	$	7.34
Granted	—	—
Settled	—	—
Forfeited	(99,000)	7.14
Performance stock units outstanding as of December 31, 2023	43,000	$	7.80
Granted	50,000	$	7.53
Settled	—	—
Forfeited	(6,000)	7.96
Performance stock units outstanding as of December 31, 2024	87,000	$	7.63

Performance Stock Units

~~The~~Performance ~~fair~~stock ~~value~~units are a form of ~~each~~share-based ~~performance~~award ~~stock~~similar ~~unit~~to unvested shares, except that the number of shares ultimately issued is ~~estimated~~based on our performance against specific performance goals over either a two-year or three-year period. At the ~~date~~end of ~~grant~~the asperformance period, the ~~closing~~number ~~market~~of ~~price~~shares of ~~our~~stock ~~common~~issued ~~stock~~will onbe ~~the~~determined ~~date~~in ~~prior~~accordance towith the ~~grant,~~specified ~~minus~~performance ~~the~~target(s) ~~present~~in ~~value~~a ofrange ~~anticipated~~between ~~dividend~~0% ~~payments~~and 100%. ~~Periodic~~Performance ~~compensation~~stock ~~expense~~units isvest ~~based~~solely onin ~~the~~common ~~current~~stock ~~estimate~~and ofare ~~future~~treated ~~performance~~as ~~against~~equity. Upon ~~specific~~a change in control, performance ~~goals~~stock ~~over~~units granted to officers vest on a ~~three~~pro-~~year~~rated ~~period~~basis ~~and~~(based ison ~~adjusted~~time upelapsed from the grant) to the extent not previously settled if they are not assumed or ~~down~~replaced ~~based~~by ona ~~those~~publicly ~~estimates. As~~traded ofsuccessor ~~December 31,~~with ~~2024,~~an ~~the~~equivalent ~~total~~award ~~unrecognized~~(as ~~compensation~~such ~~cost~~terms ~~related~~are todefined ~~performance~~in ~~stock~~such ~~units~~officers’ ~~was~~change-in-control ~~$53,439~~severance agreements). ~~This~~ ~~cost~~Performance isStock ~~expected~~Units tohave bebeen ~~recognized~~issued ~~over~~under athe ~~weighted~~2013 ~~average~~Plan, ~~period~~and ofthe ~~approximately~~2020 ~~0.35~~Plan ~~years~~as inducement awards.

The following summarizes all performance stock unit activity during 2025 and 2024 :


	Number of Units	Weighted- Average Grant Date Fair Value
Performance stock units outstanding as of December 31, 2023	43,000	$	7.80

Granted	50,000	$	7.53
Settled	—	—
Forfeited	(6,000)	7.96
Performance stock units outstanding as of December 31, 2024	87,000	$	7.63

Granted	—	$	—
Settled	—	—
Forfeited	(37,000)	7.61
Performance stock units outstanding as of December 31, 2025	50,000	$	7.65

The fair value of each performance stock unit is estimated on the date of grant as the closing market price of our common stock on the date prior to the grant, minus the present value of anticipated dividend payments. Periodic compensation expense is based on the current estimate of future performance against specific performance goals over a two-year or three-year period and is adjusted up or down based on those estimates. As of December 31, 2025, the total unrecognized compensation cost related to performance stock units was $0.

Note H — Employee Benefit Plans

Prior to January 1, 1999, we provided a defined benefit pension plan for which most of our employees were eligible to participate (the “Qualified Pension Plan”). In conjunction with significant enhancements to our 401(k) 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 the principal pension plan were it not for limitations imposed by income tax regulation. The benefits under the Restoration Pension Plan were 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.

At the end of 2020, the Board of Directors of the Company approved the division of the Qualified Pension Plan into two distinct plans, “Qualified Pension Plan I” and “Qualified Pension Plan II.” The assets and liabilities of the Qualified Pension Plan that were attributable to certain participants in Qualified Pension Plan II were spun off and transferred into Qualified Pension Plan II effective as of the end of December 31, 2021, in accordance with Internal Revenue Code section 414 (I) and ERISA Section 4044.

In January 2023, the Board of Directors of the Company approved the termination of the Qualified Pension Plan I. The termination process took approximately eighteen months and was completed in June 2024, which resulted in the transfer of our obligations pursuant to this pension plan to an insurance company. We made a cash contribution of $6.7 million in the year ended December 31, 2024 to terminate the Qualified Pension Plan I. This contribution, together with the liquidation of pension assets was used to purchase annuities from an insurance company, which settled the liabilities for Pension Plan I participants as well as to submit the final filings to the Pension Benefit Guaranty Corporation. We recognized $37.5 million of pension termination charges which were reflected in our Consolidated Statements of Comprehensive Income (Loss) for the year ended December 31, 2024.55

The Qualified Pension Plans I and II, together with the Restoration Pension Plan are collectively referred to as the "defined benefit pension plans. The overfunded or underfunded status of our defined benefit pension plans is recorded as an asset or liability on our consolidated balance sheets. The funded status is measured as the difference between the fair value of plan assets and the projected benefit obligation. Periodic changes in the funded status are recognized through other comprehensive income in the Consolidated Statements of Comprehensive Income. We currently measure the funded status of our defined benefit plans as of December 31, the date of our year-end Consolidated Balance Sheets.

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In January 2023, the Board of Directors of the Company approved the termination of the Qualified Pension Plan I. The termination process took approximately eighteen months and was completed in June 2024, which resulted in the transfer of our obligations pursuant to this pension plan to an insurance company. We made a cash contribution of $6.7 million in the year ended December 31, 2024 to terminate the Qualified Pension Plan I. This contribution, together with the liquidation of pension assets was used to purchase annuities from an insurance company, which settled the liabilities for Pension Plan I participants as well as to submit the final filings to the Pension Benefit Guaranty Corporation. We recognized $37.5 million of pension termination charges which were reflected in our Consolidated Statements of Comprehensive (Loss) Income for the year ended December 31, 2024.

The Qualified Pension Plans II, together with the Restoration Pension Plan are collectively referred to as the “defined benefit pension plans”. The overfunded or underfunded status of our defined benefit pension plans is recorded as an asset or liability on our consolidated balance sheets. The funded status is measured as the difference between the fair value of plan assets and the projected benefit obligation. Periodic changes in the funded status are recognized through other comprehensive income in the Consolidated Statements of Comprehensive (Loss) Income. We currently measure the funded status of our defined benefit plans as of December 31, the date of our year-end Consolidated Balance Sheets.

The status of the defined benefit pension plans at year-end was as follows:

Year Ended December 31,

In thousands

~~2024~~2025

~~2023~~2024

Change in benefit obligation

Benefit obligation at beginning of year

~~141~~54,~~427~~537

~~143~~141,~~521~~427

Interest cost

52,~~032~~957

75,~~088~~032

Settlements

~~(77,891)~~—

—(77,891)

Actuarial gain (loss)

(7,361)

1,465

Benefits paid

(4,102)

(7,361)

Benefits paid

(6,670)

(10,647)

Actuarial loss (gain)

1,963

(6,670)

Benefit obligation at end of year

5455,~~537~~355

~~141~~54,~~427~~537

Change in plan assets

Fair value of plan assets at beginning of year

~~103~~30,~~696~~119

103,~~891~~696

Actual return on plan assets

12,~~790~~820

71,~~128~~790

Settlements

~~(77,891)~~—

—(77,891)

Contributions

93,~~885~~546

39,~~324~~885

Benefits paid

(74,~~361~~102)

(107,~~647~~361)

Fair value of plan assets at end of year

3032,~~119~~383

~~103~~30,~~696~~119

Funded status at end of year

(2422,~~418~~972)

(3724,~~731~~418)

The following amounts have been recognized in the Consolidated Balance Sheets as of December 31:

In thousands

~~2024~~2025

~~2023~~2024

Current pension liabilities within accrued expenses

1,~~870~~871

81,~~561~~870

Long term pension liabilities - Qualified plans

54,~~445~~106

105,~~540~~445

Long term pension liabilities - Nonqualified plan

1716,~~103~~995

1817,~~630~~103

Total pension liabilities

2422,~~418~~972

3724,~~731~~418

The following amounts have been recognized in accumulated other comprehensive losses, net of tax, as of December 31:

In thousands

~~2024~~2025

~~2023~~2024

Accumulated other comprehensive losses, net of tax

1011,~~183~~197

4210,~~456~~183

Based on current estimates, we will be required to make $21.07 million in cash contributions to our Qualified Pension Plan II in ~~2025~~2026.

We are not required to make and do not intend to make any contributions to our Restoration Pension Plan in 2025 other than to the extent needed to cover benefit payments. We made benefit payments under this supplemental plan of $1.8 million in 2024.56

The following information is presented for pension plans with an accumulated benefit obligation in excess of plan assets:

In thousands	2024		2023
Projected benefit obligation	$	54,537	$	141,427
Accumulated benefit obligation	$	54,537	$	141,427
Fair value of plan assets	$	30,119	$	103,696

The Restoration Pension Plan had an accumulated benefit obligation of $19.0 million and $20.5 million as of December 31, 2024, and 2023, respectively.

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~~The~~We ~~following~~are ~~table~~not ~~presents~~required ~~the~~to ~~components~~make ofand ~~net~~do ~~periodic~~not ~~benefit~~intend ~~cost~~to ~~and~~make ~~other~~any ~~amounts~~contributions ~~recognized~~to inour ~~other~~Restoration ~~comprehensive~~Pension ~~income~~Plan in 2026 other than to the ~~Consolidated~~extent ~~Statements~~needed ofto ~~Comprehensive~~cover ~~Income~~benefit ~~for~~payments. We ~~Qualified~~made ~~Pension~~benefit ~~Plan~~payments IIunder ~~and~~this ~~Restoration~~supplemental ~~Pension~~plan ~~Plans:~~of $1.9 million in 2025.

	Year Ended December 31,
In thousands	2024		2023
Net Periodic Benefit Cost
Interest cost	$	5,032	$	7,088
Expected return on plan assets	(3,633)		(6,216)
Recognized actuarial loss	1,557		2,521
Net periodic benefit cost	2,956		3,393
Amounts Recognized in Other Comprehensive Income
Adjustment to pension liabilities	(32,273)		(1,723)
Net cost recognized in net periodic benefit cost and other comprehensive income	$	(29,317)	$	1,670

The following information is presented for pension plans with an accumulated benefit obligation in excess of plan assets:

The components of net periodic benefit costs other than the service cost component are included in Other expenses, net in our Consolidated Statement of Comprehensive Income. The estimated net loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in 2025 is $0.4 million. The period over which the net loss from the Qualified Pension Plan is amortized into net periodic benefit cost was the average future lifetime of all participants (approximately 23.9 years for Qualified Pension Plan II ). The Qualified Pension Plan II is frozen and almost all of the plan’s participants are not active employees.


In thousands	2025		2024
Projected benefit obligation	$	55,355	$	54,537
Accumulated benefit obligation	$	55,355	$	54,537
Fair value of plan assets	$	32,383	$	30,119

The Restoration Pension Plan had an accumulated benefit obligation of $18.9 million and $19.0 million as of December 31, 2025, and 2024, respectively.

The following table presents the components of net periodic benefit cost and other amounts recognized in other comprehensive income in the Consolidated Statements of Comprehensive (Loss) Income for Qualified Pension Plan II and Restoration Pension Plans:


	Year Ended December 31,
In thousands	2025		2024
Net Periodic Benefit Cost
Interest cost	$	2,957	$	5,032
Expected return on plan assets	(2,147)		(3,633)
Recognized actuarial loss	394		1,557
Net periodic benefit cost	1,204		2,956

Amounts Recognized in Other Comprehensive (Loss) income
Adjustment to pension liabilities	1,014		(32,273)

Net cost recognized in net periodic benefit cost and other comprehensive income	$	2,218	$	(29,317)

The components of net periodic benefit costs other than the service cost component are included in Other expenses, net in our Consolidated Statement of Comprehensive (Loss) Income. The estimated net loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in 2026 is $0.4 million. The period over which the net loss from the Qualified Pension Plan is amortized into net periodic benefit cost was the average future lifetime of all participants (approximately 23.0 years for Qualified Pension Plan II). The Qualified Pension Plan II is frozen and almost all of the plan’s participants are not active employees.

The weighted-average assumptions used for measurement of the defined pension plans were as follows:

Weighted-average assumptions used to determine net periodic benefit cost	Year Ended December 31,
	2024		2023
	2025		2024
Discount rate
Qualified Plan I	~~5.64~~n/a	%	5.1364	%
Qualified Plan II	45.9963	%	54.1899	%
Restoration Plan	45.9254	%	54.1292	%
Expected return on plan assets
Qualified Plan I	~~4.85~~n/a	%	54.9585	%
Qualified Plan II	67.9515	%	76.0595	%
Restoration Plan	n/a		n/a

Weighted-average assumptions used to determine benefit obligations	December 31,
	2024		2023
Discount rate
Qualified Plan I	n/a		5.64	%
Qualified Plan II	5.63	%	4.99	%
Restoration Plan	5.64	%	4.92	%

The discount rate assumptions are based on current yields of investment-grade corporate long-term bonds. The expected long-term return on plan assets is based on the expected future average annual return for each major asset class within the plan’s portfolio (which is principally comprised of equity investments) over a long-term horizon. In determining the expected long-term rate of return on plan assets, we evaluated input from our investment consultants, actuaries, and investment management firms, including their review of asset class return expectations, as well as long-term historical asset class returns. Projected returns by such consultants and economists are based on broad equity and bond indices. Additionally, we considered our historical 15-year compounded returns, which were in excess of the forward-looking return expectations.

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The funded pension plan assets as of December 31, 2024 and 2023, by asset category, were as follows:


Weighted-average assumptions used to determine benefit obligations	December 31,
	2025		2024
Discount rate
Qualified Plan I	n/a		n/a
Qualified Plan II	5.37	%	5.63	%
Restoration Plan	5.18	%	5.64	%

In thousands	2024		%		2023		%
Equity securities	$	23,658	79	%	$	20,635	20	%
Debt securities	5,252		17	%	76,036		73	%
Other	1,209		4	%	7,025		7	%
Total plan assets	$	30,119	100	%	$	103,696	100	%

The ~~fair~~funded ~~values~~pension ~~presented~~plan ~~have~~assets ~~been~~as ~~prepared~~of ~~using~~December 31, ~~values~~2025 and ~~information~~2024, ~~available~~by asasset ~~of December 31~~category, ~~2024~~were ~~and~~as ~~2023.~~follows:


In thousands	2025		%		2024		%
Equity securities	$	31,599	98	%	$	23,658	79	%
Debt securities	—		—	%	5,252		17	%
Other	784		2	%	1,209		4	%
Total plan assets	$	32,383	100	%	$	30,119	100	%

The fair values presented have been prepared using values and information available as of December 31, 2025 and 2024.

The following tables present the fair value measurements of the assets in our funded pension plan:


	As of December 31, 2025
In thousands	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity securities	$	31,599	$	31,572	$	—	$	27
Debt securities	—		—		—		—
Total investments, excluding investments valued at NAV	31,599		31,572		—		27
Investments valued at NAV(1)	784		—		—		—
Total plan assets	$	32,383	$	31,572	$	—	$	27


	As of December 31, 2024
In thousands	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Equity securities	$	23,658	$	23,658	$	—	$	—
Debt securities	5,252		3,669		1,583		—
Total investments, excluding investments valued at NAV	28,910		27,327		1,583		—
Investments valued at NAV(1)	1,209		—		—		—
Total plan assets	$	30,119	$	27,327	$	1,583	$	—

	As of December 31, 2023
In thousands	Total		Quoted Prices in Active Markets for Identical Assets(Level 1)		Significant Other Observable Inputs(Level 2)		Significant Unobservable Inputs(Level 3)
Equity securities	$	20,635	$	20,635	$	—	$	—
Debt securities	$	76,036	66,847		9,189		—
Total investments, excluding investments valued at NAV	96,671		87,482		9,189		—
Investments valued at NAV(1)	$	7,025	—		—		—
Total plan assets	$	103,696	$	87,482	$	9,189	$	—

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(1)Investment valued at net asset value ("NAV") are comprised of cash, cash equivalents, and short-term investments used to provide liquidity for the payment of benefits and other purposes. The commingled funds are valued at NAV based on the market value of the underlying investments, which are primarily government issued securities.

The investment policy for the Qualified Pension Plan II focuses on the preservation and enhancement of the corpus of the plan’s assets through prudent asset allocation, quarterly monitoring and evaluation of investment results, and periodic meetings with investment managers.

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The investment policy’s goals and objectives are to meet or exceed the representative indices over a full market cycle (3-5 years). The policy establishes the following investment mix, which is intended to subject the principal to an acceptable level of volatility while still meeting the desired return objectives:

Qualified Pension Plan II	Target	Acceptable Range	Benchmark Index
Equities	77%	62% - 87%
U.S. Large Cap	28%	18% - 38%	Russell 1000 TR
U.S. Mid Cap	18%	13% - 23%	Russell Mid Cap Index TR
U.S. Small Cap	9%	4% - 14%	Russell 2000 TR
International Equity
Developed	16%	11% - 21%	MSCI EAFE Net TR USD Index
Emerging Markets	6%	0% - 9%	MSCI Emerging Net Total Return
Fixed Income	21%	11% - 31%
Investment Grade	21%	11% - 31%	BBG BARC US Aggregate Bond Index
Cash Equivalent	2%	0% - 40%	ICE BofA US 3-Month Treasury Bill Index TR

The funded pension plans provide for investment in various investment types. Investments, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility risk. Due to the level of risk associated with investments, it is reasonably possible that changes in the value of investments will occur in the near term and may impact the funded status of these plans. To address the issue of risk, the investment policy places high priority on the preservation of the value of capital (in real terms) over a market cycle. Investments are made in companies with a minimum five-year operating history and sufficient trading volume to facilitate, under most market conditions, prompt sales without severe market effects. Investments are diversified across numerous market sectors and individual companies. Reasonable concentration in any one issue, issuer, industry, or geographic area is allowed if the potential reward is worth the risk.

Investment managers are evaluated by the performance of the representative indices over a full market cycle for each class of assets. The Pension Plan Committee reviews, on a quarterly basis, the investment portfolio of each manager, which includes rates of return, performance comparisons with the most appropriate indices, and comparisons of each manager’s performance with a universe of other portfolio managers that employ the same investment style.

The expected future benefit payments for Qualified Pension Plan II and Restoration Pension Plan over the next ten years as of December 31, ~~2024~~2025, are as follows:

In thousands
2025	$	4,110
2026	$	4,306
2026	4,204
2027	4,396
2027	4,302
2028	4,479
2028	4,403
2029	4,637
2029	4,582
2030	4,735
2030 - 2034	22,944
2031 - 2035	22,679
Total	$	4445,~~545~~232

The Company also has two pension plans in its foreign jurisdictions, the associated pension liabilities are not material.

We also sponsored a 401(k) retirement plan in which we match a portion of employees’ voluntary before-tax contributions prior. Under this plan, both employee and matching contributions vest immediately. We incurred $1.0 million and $1.2 million in 401k match expenses in 2024 and 2023, respectively.59

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We also sponsored a 401(k)-retirement plan in which we match a portion of employees’ voluntary before-tax contributions prior. Under this plan, both employee and matching contributions vest immediately. We incurred $0.9 million and $1.0 million in 401k match expenses in 2025 and 2024, respectively.

Note I — Income Taxes

The components of income tax provision (benefit) are as follows:

Year Ended December 31,

In thousands

~~2024~~2025

~~2023~~2024

Current

Federal

—

~~(10)~~—

State and local

~~428~~288

~~264~~428

Foreign

~~1,214~~443

~~871~~1,214

Total current

~~1,642~~731

1,~~125~~642

Deferred

Federal

(~~7,729~~254)

(17,~~340~~729)

State and local

(~~1,446~~703)

(~~216~~1,446)

Foreign

~~(104)~~29

82(104)

Total deferred

(~~9,279~~928)

(19,~~474~~279)

Total income tax benefit

(~~7,637~~197)

(~~349~~7,637)

The U.S. and foreign components of loss before income taxes were as follows:

Year Ended December 31,

In thousands

~~2024~~2025

~~2023~~2024

United States

(434,~~860~~629)

(743,~~546~~860)

Foreign

53,~~926~~621

5,~~627~~926

Total loss before income taxes

(371,~~934~~008)

(137,~~919~~934)

The provision (benefit) for income taxes is based on the various rates set by federal, foreign and local authorities and is affected by permanent and temporary differences between financial accounting and tax reporting requirements. The principal reasons for the difference between the statutory rate and the annual effective rate for ~~2024~~2025 ~~and 2023~~ were the state taxes, change in valuation allowance, federal and foreign income tax credits and the ~~benefit~~shortfall ofexpense ~~excess~~related ~~stock~~to ~~benefits on~~ vested restricted stock~~, offset by flow-through partnership income from a United Kingdom affiliate~~.

~~The~~As ~~differences~~further ~~between~~described ~~total~~in ~~income~~Note ~~tax~~B ~~benefit~~- ~~and~~Significant Accounting Policies, the ~~amount~~Company ~~computed~~has byelected ~~applying~~to prospectively adopt the ~~statutory~~guidance ~~federal~~in ~~income~~ASC ~~tax~~2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures or ASU 2023-09. The following table is a reconciliation of the U.S. federal statutory rate of 21% to ~~income~~the ~~(loss)~~Company's ~~before~~effective ~~income~~tax ~~taxes~~rate ~~were~~for asthe ~~follows:~~year ended December 31, 2025 in accordance with the guidance in ASU 2023-09.

	Year Ended December 31,
In thousands	2024		2023
Computed expected income tax benefit	$	(7,966)	$	(403)
Net effect of state income taxes	(1,885)		(206)
Foreign subsidiary dividend inclusions	666		507
Foreign tax rate differential	42		(257)
Change in valuation allowance	991		(562)
Return to Provision	599		706
Change in Rate	(125)		165
Credits	(346)		(543)
Adjustments to State Attributes	565		(137)
Other Adjustments, net	(178)		381
Income tax benefit	$	(7,637)	$	(349)

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		Year Ended December 31,
In thousands, except percentages		2025
Loss before income taxes		$	(1,008)
Provision for income taxes at U.S. federal statutory rate		(212)		21.0	%
State and local income taxes, net of federal benefit (1)		(481)		47.6	%
Foreign tax effects
Belgium
	Statutory Tax Rate Difference	48		(4.7)	%
	Other	(20)		2.0	%
France
	Statutory Tax Rate Difference	17		(1.7)	%
	Differences with statutory accounting policies	(124)		12.3	%
	Valuation Allowance	41		(4.1)	%
Netherlands
	Statutory Tax Rate Difference	(4)		0.4	%
	Valuation Allowance	22		(2.1)	%
Philippines
	Statutory Tax Rate Difference	(258)		25.5	%
	Other	1		(0.1)	%
Other foreign Jurisdictions		(11)		1.1	%
Effect of cross-border tax laws:
	Global Intangible Low-Taxed Income	569		(56.5)	%
	Section 78 Gross-up	95		(9.4)	%
Tax Credits		(50)		5.0	%
Changes in valuation allowances		14		(1.4)	%
Non-taxable or non-deductible items:
	Equity compensation	132		(13.1)	%
	Meals and Entertainment	15		(1.5)	%
	Work Opportunity Tax Credit	11		(1.1)	%
	Other	3		(0.3)	%
Other Reconciling Items		(5)		0.5	%
Effective income tax rate		$	(197)	19.6	%
	(a) TX made up the majority (greater than 50%) of the tax effect in this category.

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The following table is a reconciliation of the U.S. federal statutory rate of 21% to the Company's effective rate for the years ended December 31, 2024 in accordance with the guidance prior to the adoption of ASU 2023-09:


In thousands	Year Ended December 31, 2024
Computed expected income tax benefit	$	(7,966)
Net effect of state income taxes	(1,885)
Foreign subsidiary dividend inclusions	666
Foreign tax rate differential	42
Change in valuation allowance	991
Return to Provision	599
Change in Rate	(125)
Credits	(346)
Adjustments to State Attributes	565
Other Adjustments, net	(178)
Income tax benefit	$	(7,637)

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and liabilities were as follows:

	Year Ended December 31,
	December 31,
In thousands	~~2024~~2025		~~2023~~2024
Deferred tax assets
Deferred compensation and retirement plan	$	—	$	9,667
Accrued expenses not deductible until paid	$	58	$	173
Accrued expenses not deductible until paid	173		1,177
Lease liability	5,713		6,201
Lease liability	6,201		6,979
Investment in foreign subsidiaries, outside basis difference	1,969		1,930
Investment in foreign subsidiaries, outside basis difference	1,930		1,604
Interest Expense limitations	1,495		1,167
Interest Expense limitations	1,167		971
Other, net	1,625		1,979
Other, net	1,979		1,320
Foreign net operating loss carryforwards	1,535		1,325
Foreign net operating loss carryforwards	1,325		1,382
State net operating loss carryforwards	7,845		7,709
State net operating loss carryforwards	7,709		5,309
Federal net operating loss carryforwards	9,692		9,585
Federal net operating loss carryforwards	9,585		—
Foreign tax credit carryforwards	3,740		3,726
Foreign tax credit carryforwards	3,726		3,730
General Business Credit Carryovers	641		591
General Business Credit Carryovers	591		538
Total gross deferred tax assets	$	34,313	$	34,386
Total gross deferred tax assets	34,386		32,677
Less valuation allowances	(7,757)		(8,082)
Less valuation allowances	(8,082)		(7,091)
Net deferred tax assets	$	26,556	$	26,304
Net deferred tax assets	$	26,304	$	25,586

Deferred tax liabilities

Property, plant and equipment

(~~1,143~~890)

(1,~~485~~143)

Deferred compensation and retirement plan

(3,~~394~~706)

—(3,394)

Right-of-use asset

(5,~~624~~041)

(65,~~144~~624)

Other, net

(~~966~~879)

(~~689~~966)

Total gross deferred tax liabilities

~~(11,127)~~$

(10,516)

~~(8,318)~~$

(11,127)

Net deferred tax assets

1516,~~177~~040

1715,~~268~~177

InDuring ~~assessing~~ the ~~realizability~~year ofended ~~deferred tax assets~~December 31, ~~we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. After considering the weight of available evidence~~2025, ~~both positive and negative,~~ the Company ~~concluded~~paid ~~that~~$455 itthousand isin ~~more-likely-than-not that it will realize the majority of its U.S. deferred tax assets. Certain foreign tax credits as well as certain~~ state ~~net operating loss carryovers will continue to have a valuation allowance until there is substantial evidence that enough future taxable~~ income ~~exists~~taxes, atnet ~~a more likely than not level in order to utilize those deferred tax assets. The valuation allowance for deferred tax assets was $8.1 million and $7.1 million as~~ of ~~December 31~~ refunds, ~~2024~~ and ~~2023, respectively. The change in the valuation allowance was~~ $1.03 million ~~for~~in ~~the~~foreign ~~year ended December 31, 2024~~taxes.

We or one of our subsidiaries file income tax returns in the U.S. federal, U.S. state, and foreign jurisdictions. For U.S. state, federal and foreign returns, we are no longer subject to tax examinations for years prior to 2019.62

~~There~~Table ~~is no balance~~ of ~~unrecognized tax benefits as of~~Contents ~~December 31, 2024 and 2023. Any adjustments to this liability as a result of the finalization of audits or potential settlements would not be material.~~

WeThe ~~have~~amount ~~elected to classify any interest and penalties related to income taxes within income tax expense in our Consolidated Statements~~ of ~~Comprehensive~~cash ~~Income. There are no interest and penalties related to~~ income taxes ~~for~~paid by the ~~year~~Company ~~ended~~were ~~December 31,~~as ~~2024 and 2023.~~follows:


	Year ended December 31, 2025
In thousands
State and Local
Florida	$	90
Texas	215
Other	150
Foreign
United Kingdom	538
Philippines	412
Romania	82
Belgium	292
Income taxes, net of amounts refunded	$	1,779

In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. After considering the weight of available evidence, both positive and negative, the Company concluded that it is more-likely-than-not that it will realize the majority of its U.S. deferred tax assets. Certain foreign tax credits as well as certain state net operating loss carryovers will continue to have a valuation allowance until there is substantial evidence that enough future taxable income exists at a more likely than not level in order to utilize those deferred tax assets. The valuation allowance for deferred tax assets was $7.8 million and $8.1 million as of December 31, 2025 and 2024, respectively. The change in the valuation allowance was $0.3 million for the year ended December 31, 2025.

There is no balance of unrecognized tax benefits as of December 31, 2025 and 2024. Any adjustments to this liability as a result of the finalization of audits or potential settlements would not be material.

We have elected to classify any interest and penalties related to income taxes within income tax expense in our Consolidated Statements of Comprehensive (Loss) Income. There are no interest and penalties related to income taxes for the year ended December 31, 2025 and 2024.

For U.S. tax return purposes, net operating losses and tax credits are normally available to be carried forward to future years, subject to limitations as discussed below.

As of December 31, 2025, the Company has federal NOL carryforwards of $46.2 million. The entire amount was generated in 2024 and will be carried over indefinitely, but will generally limit the net operating deduction to the lesser of the net operating loss carryforward or 80% of a corporation's taxable income (subject to Section 382 of the Internal Revenue Code of 1986, as amended).

The Company also has state NOL carryforward of $158.1 million and foreign NOL carryforwards of $5.0 million. The state NOL carryforwards will begin to expire in 2029, The federal foreign tax carryforward credits of $3.7 million will expire on various dates from 2027 to 2036. General business credit carryforwards of $0.6 million will begin to expire on various dates from 2037 to 2046. Under Section 163(j) of the Internal Revenue Code, the deduction for business interest expense is limited to the sum of business interest income, 30% of adjusted taxable income, and floor plan financing interest. Any business interest expense that is disallowed due to the limitation can be carried forward indefinitely to future years. As of December 31, 2025 and 2024, the Company has disallowed business interest expense carryforwards of $5.7 million and $3.8 million, respectively.

Deferred income taxes have not been provided on the undistributed earnings of our foreign subsidiaries as these earnings have been, and under current plans will continue to be, permanently reinvested in these subsidiaries. It is not practicable to estimate the amount of additional taxes which may be payable upon the distribution of these earnings. However, because of the provisions in the Tax Reform Act, the tax cost of repatriation is immaterial and limited to foreign withholding taxes, currency translation and state taxes.

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AsOn ofJuly ~~December 31~~4, ~~2024~~2025, the ~~Company~~“One ~~has~~Big Beautiful Bill Act” (the “Act”) became law. The legislation includes several changes to federal ~~NOL~~tax ~~carryforwards~~law that generally allow more favorable deductibility of ~~$45.6~~certain ~~million~~business expenses beginning in 2025, including the reinstatement of 100% of bonus depreciation, and more favorable rules for determining the limitation on business interest expense. The ~~entire~~Act ~~amount~~also ~~was~~includes ~~generated~~certain inchanges ~~2024~~to the US taxation of foreign activity, including changes to foreign tax credits, global intangible low-taxed income, and ~~will~~base beerosion ~~carried~~and ~~over~~anti-abuse ~~indefinitely~~tax, ~~but~~amongst ~~will~~other changes. These changes are generally ~~limit~~effective for tax years beginning after December 31, 2025, and therefore do not impact the ~~net~~current ~~operating~~year's ~~deduction~~tax toprovision. While these changes are not yet effective, the ~~lesser~~Company ofhas begun assessing the ~~net~~potential ~~operating~~impact ~~loss~~on ~~carryforward~~its orfuture ~~80%~~effective tax rate, deferred tax assets and liabilities, and global tax planning strategies. Based on preliminary modeling, the Company anticipates that the elimination of athe ~~corporation's~~Net ~~taxable~~Deemed ~~income~~Tangible Income Return (~~subject~~NDTIR) tomay ~~Section~~slightly ~~382~~increase offuture U.S. tax liability on foreign earnings, partially offset by the ~~Internal~~increased ~~Revenue~~foreign ~~Code~~tax credit. The Company will continue to monitor regulatory guidance and assess the impact of ~~1986,~~these aschanges ~~amended)~~in future reporting periods. No adjustments to current or deferred taxes have been recorded in the second half of 2025 related to the Act.

The Company also has state NOL carryforward of $153.9 million and foreign NOL carryforwards of $4.3 million. The federal foreign tax carryforward credits of $3.7 million will expire on various dates from 2027 to 2035. General business credit carryforwards of $0.6 million will begin to expire on various dates from 2037 to 2045. Under Section 163(j) of the Internal Revenue Code, the deduction for business interest expense is limited to the sum of business interest income, 30% of adjusted taxable income, and floor plan financing interest. Any business interest expense that is disallowed due to the limitation can be carried forward indefinitely to future years. As of December 31, 2024 and 2023, the Company has disallowed business interest expense carryforwards of $3.8 million and $4.4 million, respectively.

Note J — Earnings Per Share

Basic income (loss) per share (“EPS”) is calculated using the income available to common stockholders, divided by the weighted average number of shares outstanding during the period. Diluted earnings per share is calculated using income available to common stockholders divided by the weighted average number of shares of common stock including both shares outstanding and shares potentially issuable in connection with restricted common stock awards and stock options under our stock incentive plans.

Reconciliations of basic and diluted EPS are as follows:

Year Ended December 31,

In thousands, except per share amounts

~~2024~~2025

~~2023~~2024

Numerator:

Net loss

(~~30,297~~811)

(130,~~570~~297)

Denominator:

Basic EPS denominator:

7,~~293~~393

7,~~310~~293

Diluted EPS denominator

7,~~293~~393

7,~~310~~293

Basic (loss) income per common share

(40.1511)

(04.2115)

Diluted (loss) income per common share

(40.1511)

(04.2115)

For the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, the following shares have been excluded from the calculation of shares used in the diluted EPS calculation: ~~349~~207,~~129~~406 and 99349,~~791~~129 shares of anti-dilutive market price options; 20127,~~685~~506 and 3720,~~653~~685 anti-dilutive unvested shares.

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Note K — 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. Changes in accumulated other comprehensive loss by component were as follows:

In thousands	Defined Benefit Pension Items		Foreign Currency Items		Total
Balance at December 31, 2022	$	(44,120)	$	(4,182)	$	(48,302)
Other comprehensive income, net of tax, before reclassifications	—		2,548		2,548
Amounts reclassified from accumulated other comprehensive loss, net of tax	1,664		—		1,664
Net current period other comprehensive income (loss), net of tax	1,664		2,548		4,212
Balance at December 31, 2023	$	(42,456)	$	(1,634)	$	(44,090)
Other comprehensive loss, net of tax, before reclassifications	—		(1,780)		(1,780)
Amounts reclassified from accumulated other comprehensive loss, net of tax	32,273		—		32,273
Net current period other comprehensive income, net of tax	32,273		(1,780)		30,493
Net current period other comprehensive income (loss), net of tax	32,273		(1,780)		30,493
Balance at December 31, 2024	$	(10,183)	$	(3,414)	$	(13,597)
Other comprehensive loss, net of tax, before reclassifications	—		(369)		(369)
Amounts reclassified from accumulated other comprehensive loss, net of tax	(1,014)		—		(1,014)
Net current period other comprehensive loss, net of tax	(1,014)		(369)		(1,383)
Balance at December 31, 2025	$	(11,197)	$	(3,783)	$	(14,980)

Reclassification amounts related to the defined pension plans are included in the computation of net period pension benefit cost (see Note H, Employee Benefit Plans).

Note L — Litigation and Contingencies

In the normal course of our business, we are obligated under some agreements to indemnify our clients as a result of third -party claims that we infringe on the proprietary rights of third parties, or third party claims relating to other ad hoc contract obligations. The terms and duration of these commitments vary and, in some cases, may be indefinite, and some of these contractual 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 ordinary course of conducting our business and, from time to time, we may become involved in additional claims and lawsuits incidental to our business. 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 reasonably 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 general counsel and outside legal counsel; (ii) our previous experience with similar claims; and (iii) the decision of our management as to how we intend to respond to the complaints.

Note M — Restructuring Activities

During the second half of 2023, we engaged a consulting firm to help review and analyze the structure and operations of the Company. ~~This~~The ~~review included greater than 200 meetings with personnel at all levels of the firm and led to the initiation of our transformation~~ program named "Project Elevate"~~. The~~ ~~program~~involved ~~involves~~ the optimization and rationalization of our business resources as well as the partial reinvestment of savings into the Company's sales and marketing team, technology, and strategy. ~~A business transformation office was established at the beginning of 2024 to manage and measure these initiatives.~~ Reorganization cost reductions from Project Elevate during 2024 through ~~2026~~2025 are estimated to be $16.0 million. We ~~expect~~incurred ~~to incur~~ total restructuring charges of $109.19 million through the end of 2025. For the ~~year~~years ended December 31, ~~2024~~2025 and ~~2023~~2024, we recorded restructuring charges of $21.4 8 million and $52.74 million, respectively. This program has resulted in ongoing cost optimization and rationalization initiatives across the organization.

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The following table summarizes the restructuring charges which are recorded in “Restructuring Expense” in the Consolidated Statement of Comprehensive Income.

In thousands	Year Ended December 31, ~~2024~~2025		Year Ended December 31, ~~2023~~2024
Consulting expense	$	803	$	4,579
Consulting and employee expense	$	239	$	803
Severance	1,~~112~~255		~~169~~1,112
Facility, asset impairment and other expense	288		487
Lease impairment and termination expense	98		798
Total	$	1,782	$	2,402
Fixed Asset disposal and impairment charges	151		63
Facility and other expenses	238		78
Total facility, asset impairment and other expense	487		939
Total	$	2,402	$	5,687

The following table summarizes the changes in liabilities related to restructuring activities:

Year Ended December 31, 2024

Year Ended December 31, 2025

In thousands

Consulting and employee expense

Severance

Facility, asset impairment and other expense

Total

Beginning balance:

~~3,574~~—

~~144~~110

38—

~~3,756~~110

Additions

~~803~~239

1,~~112~~255

~~328~~288

21,~~243~~782

Payments and adjustment

(~~4,377~~239)

(1,~~146~~037)

(~~366~~288)

(51,~~889~~564)

Ending balance:

—

~~110~~328

—

~~110~~328

Note N — ~~Segment~~Related ~~Reporting~~Party Transactions

~~Harte~~In ~~Hanks~~the isyear aended ~~leading~~December 31, ~~global~~2025, ~~customer~~the ~~experience~~Company ~~company~~recorded $0. ~~Based~~8 onmillion related to net recovery short-swing profit from one of the ~~types~~Company's shareholders under Section 16(b) of ~~products~~the ~~and~~Securities ~~services~~Exchange weAct ~~provide~~of 1934, weas ~~have~~amended. ~~organized~~The ~~our~~Company ~~operations~~recognized ~~into~~the ~~three~~$1.1 ~~business~~million ~~segments: Marketing~~of ~~Services~~gross related party proceeds, ~~Customer~~net ~~Care~~of $0.3 million of tax impact, ~~and~~as ~~Fulfillment~~an increase to additional paid-in capital and ~~logistics~~as cash provided by financing activities in the condensed consolidated statement of cash flows for the year ended December 31, 2025.

~~Our~~Note ~~Marketing~~O ~~Services~~— ~~segment~~Segment leverages data, insight, and experience to support clients as they engage customers through digital, traditional, and emerging channels. We partner with clients to develop strategies and tactics to identify and prioritize customer audiences in B2C and B2B transactions. Our key service offerings include strategic business, brand, marketing, and communications planning; data strategy; audience identification and prioritization; predictive modeling; creative development and execution across traditional and digital channels; website and app development; platform architecture; database build and management, marketing automation, and performance measurement, reporting and optimization. Reporting

~~Our~~Harte ~~Customer~~Hanks ~~Care~~is ~~segment~~a ~~offers~~leading ~~intelligently~~global ~~responsive~~customer ~~contact~~experience ~~center~~company. Based ~~solutions~~on ~~that~~the ~~use~~types ~~real-time~~of ~~data~~products toand ~~effectively~~services ~~interact~~we ~~with each customer. Customer contacts are handled through phone~~provide, ~~e-mail,~~we ~~social~~have ~~media,~~organized ~~text~~our ~~messaging,~~operations ~~chat,~~into ~~and~~three ~~digital~~business ~~self-service support.~~segments: WeRevenue ~~provide~~Solutions ~~these~~formerly ~~services~~known ~~utilizing~~as ~~our~~Marketing ~~advanced technology infrastructure~~Services, ~~human~~Customer ~~resource management skills~~Care, and ~~industry~~Fulfillment ~~experience~~and Logistics.

~~Our~~There ~~Fulfillment~~are &three ~~Logistics~~principal financial measures reported to our President (the chief operating decision maker) for use in assessing segment ~~comprises~~performance ~~mail~~and allocating resources. Those measures are revenue, ~~product~~operating ~~fulfillment~~income and operating income plus depreciation and amortization (“EBITDA”), which is a non-GAAP measure. Operating income for segment reporting, disclosed below, is revenues less operating costs and ~~logistics~~allocated ~~services~~corporate expenses. WeSegment ~~offer~~operating aexpenses ~~variety~~are generally directly attributed to our segments and include allocations of ~~product~~certain ~~fulfillment~~centrally ~~solutions~~incurred costs such as employee benefits, ~~including~~occupancy, ~~printing~~information onsystems, ~~demand~~accounting services, ~~managing~~internal ~~product~~legal ~~recalls~~staff, and ~~distributing~~human ~~literature~~resources administration. These costs are allocated based on actual usage or other appropriate methods. Unallocated corporate expenses are corporate overhead expenses not attributable to the operating groups. Interest income and ~~promotional~~expense ~~products~~are not allocated to ~~support~~the ~~B2B~~segments. The ~~trade,~~Company ~~driving~~does ~~marketing~~not ~~campaigns~~allocate assets to our reportable segments for internal reporting purposes, ~~and~~nor ~~improving~~does ~~customer~~our ~~experience~~President evaluate operating segments using discrete asset information. WeThe ~~are~~accounting ~~also~~policies aof ~~third-party~~the ~~logistics~~segments ~~and~~are ~~freight~~consistent ~~optimization~~with ~~provider~~those described in ~~the~~Note ~~United~~B, ~~States~~Significant Accounting Policies.

~~There~~SEC ~~are~~Regulation ~~three~~S-K ~~principal~~229.10(e)1(ii)(A) ~~financial~~defines ~~measures~~EBITDA ~~reported~~as toearnings ~~our~~before ~~Interim~~interest, ~~COO~~taxes, ~~(the~~depreciation ~~chief~~and ~~operating~~amortization. EBITDA ~~decision~~is ~~maker)~~presented ~~for~~to ~~use~~provide inadditional ~~assessing~~information ~~segment~~to ~~performance~~investors ~~and~~about ~~allocating~~the ~~resources. Those~~Company’s ~~measures~~operations ~~are~~on ~~revenue,~~a ~~operating~~basis ~~income~~consistent ~~and~~with ~~operating~~the ~~income~~measures ~~plus~~that ~~depreciation~~the ~~and~~Company ~~amortization~~uses ~~(“EBITDA”). Operating~~to ~~income~~manage ~~for~~its ~~segment~~operations ~~reporting,~~and ~~disclosed~~evaluate ~~below,~~its isperformance. Management ~~revenues~~also ~~less~~uses ~~operating~~this ~~costs~~measurement ~~and~~to ~~allocated~~evaluate ~~corporate~~working ~~expenses~~capital requirements. ~~Segment~~EBITDA ~~operating~~should ~~expenses~~not ~~are~~be ~~generally~~considered ~~directly~~in ~~attributed~~isolation toor ~~our~~as ~~segments~~a substitute for operating income and ~~include~~net ~~allocations~~income ofprepared ~~certain~~in ~~centrally~~accordance ~~incurred~~with ~~costs~~GAAP ~~such~~or as ~~employee~~a ~~benefits,~~measure ~~occupancy,~~of the Company’s profitability.

Table of Contents

information systems, accounting services, internal legal staff, and human resources administration. These costs are allocated based on actual usage or other appropriate methods. Unallocated corporate expenses are corporate overhead expenses not attributable to the operating groups. Interest income and expense are not allocated to the segments. The ~~Company~~following ~~does~~table ~~not~~presents ~~allocate~~financial ~~assets to our reportable segments for internal reporting purposes, nor does our Interim COO evaluate operating segments using discrete asset~~ information~~. The~~ ~~accounting~~by ~~policies~~segment ofyear ~~the~~ended ~~segments~~December ~~are consistent with those described in Note B~~31, ~~Significant Accounting Policies.~~ 2025:

SEC Regulation S-K 229.10(e)1(ii)(A) defines EBITDA as earnings before interest, taxes, depreciation and amortization. EBITDA is presented to provide additional information to investors about the Company’s operations on a basis consistent with the measures that the Company uses to manage its operations and evaluate its performance. Management also uses this measurement to evaluate working capital requirements. EBITDA should not be considered in isolation or as a substitute for operating income and net income prepared in accordance with U.S. GAAP or as a measure of the Company’s profitability.


(In thousands)	Revenue Solutions		Customer Care		Fulfillment & Logistics		Restructuring		Unallocated Corporate		Total

Operating revenue	$	35,128	$	50,067	$	74,375	$	—	$	—	$	159,570
Segment labor expense	18,058		32,567		19,445		—		10,753		80,823
Other segment operating expense	8,868		8,218		45,268		—		9,753		72,107
Restructuring expense	—		—		—		1,782		—		1,782
Contribution margin	$	8,202	$	9,282	$	9,662	$	(1,782)	$	(20,506)	$	4,858
Overhead Allocation	2,618		3,037		3,111		—		(8,766)		—

EBITDA (unaudited)	$	5,584	$	6,245	$	6,551	$	(1,782)	$	(11,740)	$	4,858
Depreciation and amortization expense	797		266		2,214		—		1,195		4,472
Operating income (loss)	$	4,787	$	5,979	$	4,337	$	(1,782)	$	(12,935)	$	386

In the first quarter of 2024, the Sales Service segment was separated from Customer Care into its own operating segment for interim reporting. Changes in the operations of Sales Service during the fourth quarter caused management to combine this segment with Marketing Services segment for better alignment of our business strategy.

We adopted ASU 2023-07 beginning with our 2024 annual reporting,and now disclose segment labor expenses separate from other segment operating expenses. We recast 2023 for the effects of ASU 2023-07 and change in the composition of our reportable segments as described above.

The following table presents financial information by segment year ended December 31, 2024:

(In thousands)	~~Marketing~~Revenue ~~Services~~Solutions		Customer Care		Fulfillment & Logistics		Restructuring		Unallocated Corporate		Total
Operating revenue	$	50,332	$	52,918	$	81,992	$	—	$	—	$	185,242
Segment labor expense	26,440		34,175		20,263		—		12,891		93,769
Other segment operating expense	11,468		6,260		52,770		—		8,927		79,425
Restructuring expense	—		—		—		2,402		—		2,402
Contribution margin	$	12,424	$	12,483	$	8,959	$	(2,402)	$	(21,818)	$	9,646
Overhead Allocation	4,074		2,355		3,198		—		(9,627)		—
Overhead allocation	4,074		2,355		3,198		—		(9,627)		—
Goodwill and intangible assets impairment charges	3,168		—		—		—		—		3,168
EBITDA (unaudited)	$	5,182	$	10,128	$	5,761	$	(2,402)	$	(12,191)	$	6,478
Depreciation and amortization expense	1,459		207		1,256		—		1,463		4,385
Operating income (loss)	$	3,723	$	9,921	$	4,505	$	(2,402)	$	(13,654)	$	2,093

The following table presents financial information by segment year ended December 31, 2023:

(In thousands)	Marketing Services		Customer Care		Fulfillment & Logistics		Restructuring		Unallocated Corporate		Total
Operating revenue	$	52,910	$	53,620	$	84,962	$	—	$	—	$	191,492
Segment labor expense	30,938		35,345		19,418		—		12,267		97,968
Other segment operating expense	12,351		6,013		53,797		—		8,080		80,241
Restructuring expense	—		—		—		5,687		—		5,687
Contribution margin	$	9,621	$	12,262	$	11,747	$	(5,687)	$	(20,347)	$	7,596
Overhead allocation	2,984		2,774		2,891		—		(8,649)		—
EBITDA (unaudited)	$	6,637	$	9,488	$	8,856	$	(5,687)	$	(11,698)	$	7,596
Depreciation and amortization expense	1,093		500		1,142		—		1,502		4,237
Operating income (loss)	$	5,544	$	8,988	$	7,714	$	(5,687)	$	(13,200)	$	3,359

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