HARTE HANKS INC
For the period ended Jun 30, 2024. Filed Aug 9, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 9, 2024
HHS$3.96-1.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-10.
0000045919-24-000026
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0000045919-24-000062
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 73 previous paragraphs and 89 current paragraphs.
43 unchanged; 22 reworded; 22 added; 7 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
For thethree and six months ended June 30, 2024, we recorded restructuring charges related to this business transformation effort of $0.4 million and$1.3 million, respectively.
Current report
Qualified Pension Plan I termination
Current report
In January 2023, the Board of Directors of the Company approved the termination of the Qualified Pension Plan I. The termination process was completed in June 2024 and resulted in the transfer of our obligations pursuant to this pension plan to an insurance company. We expect to make total cash contributions of$7.4 million will be required for the termination the Qualified Pension Plan I. We made a $6.1 million cash contribution in the three months ended June 30, 2024. This contribution with the liquidation of pension assets was used to purchase annuities from an insurance company, which settled the liabilities for Pension Plan I participants. Approximately $1.3 million will be paid during the third quarter of 2024 as the insurance company is onboarding plan participants and final filings are submitted to the Pension Benefit Guaranty Corporation. In connection with this termination, we recognized $38.2 million of pension termination charges reflected in our Condensed Consolidated Statements of Comprehensive Income (Loss) for three and six months ended June 30, 2024.
Current report
Revenue decreased $2.7 million, or 5.7%, to $45.0 million in the three months ended June 30, 2024, compared to the three months ended June 30, 2023 due to decreased revenue in two of the Company's operating segments. Those decreases were the result of fluctuations in timing of high volume periods associated with ongoing programs, and the conclusion of relationships with some customers.
Current report
Labor expense decreased $4.0 million, or 14.9%, primarily due to lower labor cost and bonus expense associated with lower revenue.
Current report
Production and Distribution expenses increased$0.4 million, or 2.6%, primarily due to higher volumes of brokered freight and materials as compared to the prior year quarter.
Current report
Advertising, Selling, General and Administrative expenses increased$0.8 million, or 15.5%, primarily due to continued investment in sales and marketing, and technology services expenses.
Current report
Other expense, net
Current report
Revenues
Current report
Revenue decreased $4.4 million, or 4.6%, to $90.5 million, in the six months ended June 30, 2024, compared to the six months ended June 30, 2023 due to decreased revenue in three of our operating segments. The reduction in revenues in the six month period relates to the conclusion of programs, and the ordinary turnover of customers at a higher rate than initiation of new programs and revenues from new customer. Our sales and marketing organization is amidst a transformation that includes an expansion of staff, a new centralized reporting structure, partnership channel development, and expanded international sales focus. Assuming a supportive economy, we expect improved revenues in the second half of 2024.
Current report
Operating Expenses
Current report
Operating expenses were $88.7 million in the six months ended June 30, 2024, a decrease of $3.4 million, or 3.7%, compared to $92.2 million in the six months ended June 30, 2023. Cost controls to match revenues and Project Elevate led to the decline in operating expense. The company expects further cost reductions in excess of new costs attributable to revenue growth.
Current report
Labor expense decreased $5.0 million, or 9.7%, primarily due to lower labor cost and bonus expense associated with lower revenue.
Current report
Other expense, net
Current report
Other expense, net, for the six months ended June 30, 2024 was$38.8 million compared to$3.2 million, in the prior year period. The$35.6 million increase in other expense, net was mainly due to the pension termination charge incurred in the six months ended June 30, 2024.
Current report
Income Taxes
Current report
Marketing Services segment revenue decreased $5.5 million, or 18.3%, due to several factors including higher customer turnover at the during the first half of 2023, coupled with additional client spending reductions. This segment is our most economically sensitive segment with regard to changes in client's marketing strategy. We anticipate naming new leadership in this segment in the fourth quarter with an expanded focus on new business development supporting the change. Operating income for thesix months ended June 30, 2024 decreased $1.0 million , or 38.1% from the prior year quarter due to the reduced revenue.
Current report
Customer Care segment revenue decreased $2.5 million, or 17.0%, primarily dueto the timing of fluctuations with specific programs. Operating Income was $2.3 million for the three months ended June 30, 2024, compared to operating income of $2.5 million for the three months ended June 30, 2023. The $0.3 million decrease in operating income was due to the lower revenue.
Current report
Customer Care segment revenue decreased $1.7 million, or 6.5%, which can be impacted by one-time project-based engagements, temporary surges or declines in call volumes among retained customers due to specific programs and events. We also encounter fluctuations based on the geographic regions customers select for staff support. 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 was $4.7 million for the six months ended June 30, 2024, compared to operating income of $3.8 million for the six months ended June 30, 2023. The increase of $0.8 million was primarily driven by the lower labor cost.
Current report
Sales Services segment revenue increased $2.1 million, or 92.2%, primarily dueto increased work from a large fintech customer. Operating Income was $0.8 million for the three months ended June 30, 2024, compared to operating income of $48 thousand for the three months ended June 30, 2023. The $0.7 million increase was driven by the increased contribution margin related to higher revenues.
Current report
Sales Services segment revenue increased $4.0 million, or 78.4%, primarily dueto growth in work from a large fintech customer. Operating Income was $1.7 million for the six months ended June 30, 2024, compared to $0.4 million for the six months ended June 30, 2023. The $1.3 million increase was driven by the increased contribution margin related to higher revenues.
Current report
Fulfillment & Logistics Services segment revenue decreased by $1.2 million, or 2.9%, due to the lower volume from existing customers not being offset by growth in new programs and customers. We currently have a robust sales pipeline for fulfillment opportunities, particularly for the fourth quarter. The pipeline transcends an otherwise seasonally stronger fourth quarter juxtaposed to the other quarters. The logistics industry is experiencing much higher cost pressure. This is partially the result of market leaders competing for more dominant position, acquiring smaller logistics providers, achieving scale through lowering pricing, as they focus on consolidating market share. Operating income decreased by $1.0 million, or 27.4% due to the lower revenue and higher facility and technology expenses.
Removed paragraphs (7)
Previous report
For the three months ended March 31, 2024, we recorded restructuring charges of $0.9 million. For the year ended December 31, 2023, we incurred total restructuring charges of $5.7 million including $4.6 million of operational efficiency consulting, $0.9 million in real estate consolidation, and $0.2 million of other related costs.
Previous report
Three months ended March 31, 2024 vs. Three months ended March 31, 2023
Previous report
Revenues of $45.4 million decreased $1.7 million, or 3.5%, in the three months ended March 31, 2024, compared to the three months ended March 31, 2023. Revenue in our Marketing Services segment decreased $2.3 million, or 20.6%, to $8.9 million, and revenue in our Fulfillment & Logistics Services segment decreased $2.0 million, or 9.5% , to $19.4 million. Revenue in our Sales Services segment increased $1.9 million or 67.3%, to $4.7 million. Revenue in our Customer Care segment increased $0.8 million, or 7.0%, to $12.4 million.
Previous report
Labor expense decreased $1.0 million, or 4.0%, primarily due to the reduction in workforce in our Marketing Services segment.
Previous report
Other expense (income), net
Previous report
Customer Care segment revenue increased $0.8 million, or 7.0%, primarily dueto increased project work. Operating Income was $2.4 million for the three months ended March 31, 2024, compared to operating income of $1.3 million for the three months ended March 31, 2023. The $1.1 million increase was driven by the higher revenue.
Previous report
Sales Services segment revenue increased $1.9 million, or 67.3%, primarily dueto work from a new customer. Operating Income was $0.9 million for the three months ended March 31, 2024, compared to operating income of $0.3 million for the three months ended March 31, 2023. The $0.6 million increase was contributed by the increased revenue volume.
Reworded paragraphs (22)
Previous wording
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 (loss) per share, operating income (loss), 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.
Current wording
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 (loss) per share, operating income (loss), 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, (7) expectations regarding cost savings due to Project Elevate and (8) other statements regarding future events, conditions, or outcomes.
Previous wording
The following MD&A section is intended to help the reader understand the results of operations and financial condition of Harte Hanks, including any material changes in the Company’s financial condition and results of operations since December 31, 2023, and as compared with the three months ended March 31, 2023. This section is provided as a supplement to, and should be read in conjunction with, our Condensed Consolidated Financial Statements and the accompanying notes included herein as well as our 2023 10-K. Our 2023 10-K contains a discussion of other matters not included herein, such as disclosures regarding critical accounting policies and estimates, and contractual obligations. See Note A, Overview and Significant Accounting Policies, in the Notes to Condensed Consolidated Financial Statements for further information.
Current wording
The following MD&A section is intended to help the reader understand the results of operations and financial condition of Harte Hanks, including any material changes in the Company’s financial condition and results of operations since December 31, 2023, and as compared with the three and six months ended June 30, 2023. This section is provided as a supplement to, and should be read in conjunction with, our Condensed Consolidated Financial Statements and the accompanying notes included herein as well as our 2023 10-K. Our 2023 10-K contains a discussion of other matters not included herein, such as disclosures regarding critical accounting policies and estimates, and contractual obligations. See Note A, Overview and Significant Accounting Policies, in the Notes to Condensed Consolidated Financial Statements for further information.
Previous wording
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 2025 are estimated to reach as much as $16.0 million.
Current wording
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. We expect to exceed our Project Elevate saving target for this year of $6 million and remain confident in our two-year target of exiting 2025 with$16 million in savings.
Previous wording
Starting in the first quarter of 2024, to improve our strategic posture in terms of go-to-market approach and cost structure, we removed the Sales Services business from the Customer Care segment to become its own segment.
Current wording
Starting in the first quarter of 2024, to improve our strategic posture in terms of go-to-market approach and cost structure, we removed the Sales Services business from the Customer Care segment and made the Sales Services business its own segment.
Previous wording
Operating expenses were $45.1 million in the three months ended March 31, 2024 , a decrease of $1.0 million, or 2.2%, compared to $46.1 million in the three months ended March 31, 2023.
Current wording
Operating expenses were $43.7 million in the three months ended June 30, 2024, a decrease of $2.4 million, or 5.3%, compared to $46.1 million in the three months ended June 30, 2023. Reductions in operating expenses are the result of cost controls and Project Elevate.
Previous wording
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 increased over the last few years due to demand and supply fluctuations 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, and may have an impact on future demand for our supply chain management services. Postage costs for mailings are borne by our clients and are not directly reflected in our revenues or expenses.
Current wording
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 six months due to dropping demand and supply fluctuations 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, and may have an impact on future demand for our supply chain management services. Postage costs for mailings are borne by our clients and are not directly reflected in our revenues or expenses.
Previous wording
Other expense, net, for the three months ended March 31, 2024 was$0.6 million compared to$2.4 million, in the prior year quarter . The$1.8 million decrease in other expense, net was mainly associated with changes in foreign currency gain and loss account.
Current wording
Other expense, net, for the three months ended June 30, 2024 was$38.2 million compared to$0.9 million, in the prior year quarter. The$37.4 million increase in other expense, net was mainly due to the pension termination charge of$38.2 millionin the three months ended June 30, 2024.
Previous wording
The income tax benefit of$0.1 million in the first quarter of 2024 represents an increase in income tax provision of$0.5 million when compared to the first quarter of 2023. Our effective tax rate was 29.3% for the first quarter of 2024, a decrease of 10.9% from the effective tax rate of 40.2% for the first quarter of 2023. The effective tax rate differs from the federal statutory rate of 21.0%, primarily due to the U.S. state income taxes and income earned in foreign jurisdictions.
Current wording
The income tax benefit of$9.0 million in the second quarter of 2024 represents an increase in income tax benefit of$9.2 million when compared to the second quarter of 2023. Our effective tax rate was 24.4% for the second quarter of 2024, a decrease of 4.8% from the effective tax rate of 29.3% for the second quarter of 2023. The effective tax rate differs from the federal statutory rate of 21.0%, primarily due to the U.S. state income taxes and income earned in foreign jurisdictions.
Previous wording
Production and Distribution expenses decreased$0.7 million, or 4.9%, primarily due to lower transportation services cost associated with the lower Fulfillment & Logistics segment revenue as compared to the prior year quarter.
Current wording
Production and Distribution expenses decreased$0.4 million, or 1.3%, primarily due to lower software costs as compared to the prior year.
Previous wording
Advertising, Selling, General and Administrative expenses decreased$0.1 million, or 2.4%, primarily due to lower professional services expenses.
Current wording
Advertising, Selling, General and Administrative expenses increased$0.6 million, or 5.8%, primarily due to higher sales and marketing expenses.
Previous wording
The following is a discussion and analysis of the results of our reportable segments for the three months ended three months ended March 31, 2024 and 2023. There are four principal financial measures reported to our CEO (the chief operating decision maker) for use in assessing segment performance and allocating resources. Those measures are revenue, operating income and operating income plus depreciation and amortization (“EBITDA”). For additional information, see Note N, Segment Reporting, in the Notes to Condensed Consolidated Financial Statements.
Current wording
The following is a discussion and analysis of the results of our reportable segments for the three and six months ended June 30, 2024 and 2023. There are four principal financial measures reported to our CEO (the chief operating decision maker) for use in assessing segment performance and allocating resources. Those measures are revenue, operating income, operating income as a percentage of revenue, and operating income plus depreciation and amortization (“EBITDA”). For additional information, see Note N, Segment Reporting, in the Notes to Condensed Consolidated Financial Statements.
Previous wording
Marketing Services segment revenue decreased $2.3 million, or 20.6%, due to the decline of marketing spend and the loss of a customer. Operating income for thethree months ended March 31, 2024 decreased $0.4 million from the prior year quarter due to the reduced revenue.
Current wording
Marketing Services segment revenue decreased $3.2 million, or 29.1%, due to customer turnover, the decline of client spending in excess of new business starting in the quarter. Operating income for thethree months ended June 30, 2024 decreased $0.6 million, or 47.4%from the prior year quarter due to the reduced revenue.
Previous wording
Fulfillment & Logistics Services segment revenue decreased by $2.0 million, primarily due to the lower volume from the existing customers. Operating income decreased by $0.6 million due to the lower revenue.
Current wording
Fulfillment & Logistics Services segment revenue increased $0.9 million, or 4.4%, primarily due to the higher volumes and new programs from the existing customers. Operating income decreased by $0.4 million primarily due to revenue mix, and higher facility and technology expenses.
Previous wording
Our cash and cash equivalent balances were $11.5 million and $18.4 million at March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024, we had the ability to borrow an additional 24.0 million under our Credit Facility.
Current wording
Our cash and cash equivalent balances were $11.0 million and $18.4 million at June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024, we had the ability to borrow an additional $24.0 million under our Credit Facility.
Previous wording
Net cash used in the operating activities for the three months ended March 31, 2024 was $5.7 million, compared to net cash provided by operating activities of $1.7 million for the three months ended March 31, 2023. The $7.4 million year-over-year decrease in cash provided by operating activities was primarily due to the $4.6 million changes in accounts payable and accrued expenses balances, $4.1 million change in prepaid expenses, income tax receivable and other current assets balances, as well as $2.3 million change in accounts receivable and contract assets balances. The above decrease was partially offset by a $2.5 million change in other accrued expenses and liabilities balances in the three months ended March 31, 2024 as compared to the same period in 2023.
Current wording
Net cash used in the operating activities for thesix months ended June 30, 2024 was $4.1 million, compared to net cash provided by operating activities of $4.6 million for thesix months ended June 30, 2023. The $8.7 million year-over-year decrease in cash provided by operating activities was primarily driven by the net of $27.8 million decrease in net income and net pension cost of $31.9 million and deferred tax benefit of$10.2 million, and the $3.0 million changes in current assets and current liabilities.
Previous wording
Net cash used in investing activities was $0.5 million for the three months ended March 31, 2024, which is comparable to the $0.6 million used in the same period in 2023.
Current wording
Net cash used in investing activities was $1.2 million for the six months ended June 30, 2024, which is comparable to the $1.3 million used in investing activities during the same period in 2023.
Previous wording
Net cash used in financing activities was $0.1 million for the three months ended March 31, 2024, as compared to $0.3 million of net cash used in the three months ended March 31, 2023. The $0.1 million decrease was primarily related to the change in Treasury stock activities.
Current wording
Net cash used in financing activities was $0.2 million for the six months ended June 30, 2024, as compared to $2.3 million of net cash used in financing activities during the six months ended June 30, 2023. The $2.1 million decrease was primarily related to the $1.9 million used to repurchase our common stock in the six months ended June 30, 2023.
Previous wording
Consolidated foreign holdings of cash as of March 31, 2024 and December 31, 2023 were $4.9 million and $5.4 million, respectively.
Current wording
Consolidated foreign holdings of cash as of June 30, 2024 and December 31, 2023 were $1.2 million and $5.4 million, respectively.
Previous wording
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 of 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 for 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 Facility.
Current wording
On December 21, 2021, the Company entered into a three-year, $25 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 of 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 for the Credit Facility by a period of 6 months, to June 30, 2025. The extension was executed with substantially similar terms and conditions as the original Facility.
Previous wording
The loans under the Credit Facility accrue interest at a variable rate equal to the Secured Overnight Financing Rate (SOFR) plus a margin of 2.25% per annum. The latest rate was 7.68% as of March 31, 2024. The outstanding amounts advanced under the Credit Facility are due and payable in full on June 30, 2025.
Current wording
The loans under the Credit Facility accrue interest at a variable rate equal to the Secured Overnight Financing Rate (SOFR) plus a margin of 2.25% per annum. The latest rate was 7.69% as of June 30, 2024. The outstanding amounts advanced under the Credit Facility are due and payable in full on June 30, 2025.
Previous wording
$0.8 million, respectively. No amounts were drawn against these letters of credit at March 31, 2024 and December 31, 2023. These letters of credit exist to support insurance programs relating to workers’ compensation and general liability. We had no other off-balance sheet financing activities at March 31, 2024 and December 31, 2023.
Current wording
As of June 30, 2024 and December 31, 2023, we had no borrowings outstanding under the Credit Facility. At each of June 30, 2024 and December 31, 2023, we had letters of credit outstanding in the amount of $1.0 million and $0.8 million, respectively. No amounts were drawn against these letters of credit at June 30, 2024 and December 31, 2023. These letters of credit exist to support insurance programs relating to workers’ compensation, insurance, and reducing cash security deposits on leased property. We had no other off-balance sheet financing activities at June 30, 2024 and December 31, 2023.
Previous wording
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, we repurchased 0.4 million shares of common stock for a total combined purchase price of$2.4 million. We didn't repurchase any stock during the three months ended March 31, 2024 and 2023.
Current wording
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, we repurchased 0.4 million shares of common stock for a total combined purchase price of$2.4 million. During 2024, we repur chased zero shares of stock during thethree and six months ended June 30, 2024. In the three and six months ended June 30, 2023, we repurchased 0.3 million shares of Common Stock for $1.9 million.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
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. There has been significant variability in transportation rates in recent years due to demand and supply fluctuations within the transportation industry. Future changes in transportation expenses will continue to impact our total production costs and total operating expenses, and revenues. Postage costs for mailings are borne by our clients and are not directly reflected in our revenues or expenses.
Current report — wording carried from elsewhere
The income tax benefit of$9.1 million in the six months ended June 30, 2024 represents an increase in income tax benefit of$8.8 million when compared to the same period of 2023. Our effective tax rate was 24.5% for the six months ended June 30, 2024, a decrease of 33.6% from the effective tax rate of 58.1% for the same period of 2023. The effective tax rate differs from the federal statutory rate of 21.0%, primarily due to the U.S. state income taxes and income earned in foreign jurisdictions.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
As of March 31, 2024 and December 31, 2023, we had no borrowings outstanding under the Credit Facility. At each of March 31, 2024 and December 31, 2023, we had letters of credit outstanding in the amount of $1.0 million and