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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended DECEMBER 31, 1993
____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to __________
Commission File Number 1-7120
HARTE-HANKS COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 74-1677284
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
200 CONCORD PLAZA DRIVE SUITE 800
SAN ANTONIO, TEXAS 78216
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code -- 210-829-9000
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
Common Stock New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
NONE
(Title of class)
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
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated
by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
Aggregate market value of the Company's voting stock held by
non-affiliates on March 15, 1994, based on the $20 3/8 per share
closing price for the Company's Common Stock on the New York Stock
Exchange on such date: approximately $164,795,527.
Shares outstanding at March 15, 1994:
Common Stock - 18,158,400 shares
Documents incorporated by reference:
The Company's Annual Report to Stockholders for the year ended
December 31, 1993 (incorporated in Part II to the extent
provided in Items 5, 6, 7 and 8 hereof).
Definitive Proxy Statement for the Company's May 6, 1994 Annual
Meeting of Stockholders to be filed pursuant to Regulation
14A under the Securities Exchange Act of 1934 (incorporated
in Part III to the extent provided in Items 10, 11 and 12
hereof).
2
Harte-Hanks Communications, Inc.
Table of Contents
Form 10-K Report
December 31, 1993
PART I PAGE
Item 1. Business 3
Item 2. Properties 3
Item 3. Legal Proceedings 17
Item 4. Submission of Matters to a Vote of Security 17
Holders
PART II
Item 5. Market for Registrant's Common Equity and 17
Related Stockholder Matters
Item 6. Selected Financial Data 17
Item 7. Management's Discussion and Analysis of
Financial Condition and Results
of Operations 17
Item 8. Financial Statements and Supplementary Data 17
Item 9. Changes in and Disagreements with Accountants 17
on Accounting and Financial Disclosure
PART III
Item 10. Directors and Executive Officers of the
Registrant 18
Item 11. Executive Compensation 18
Item 12. Security Ownership of Certain Beneficial
Owners and Management 18
Item 13. Certain Relationships and Related
Transactions 18
PART IV
Item 14. Exhibits, Financial Statement Schedules and 18
Reports on Form 8-K.
Signatures 23
3
ITEM 1. BUSINESS and ITEM 2. PROPERTIES
INTRODUCTION
Harte-Hanks is a diversified communications company with
operations throughout the United States in four principal
businesses -- newspapers, shoppers, direct marketing and television.
The Company's newspaper, shopper and television businesses operate in
local markets, while its direct marketing business operates
nationwide. The Company believes that its leadership positions within
its markets have resulted from offering high-quality products,
utilizing advanced technologies and innovative marketing strategies,
and establishing strong relationships with its readers, viewers and
advertisers. The Company's strategy is to increase revenues by
building upon its existing businesses and by applying its capabilities
both across its businesses and to new products and markets, enabling
it to capitalize on trends in the media industry toward the use of
more direct, targeted marketing. Consistent with this strategy, the
Company is investing in advanced technologies, equipment and
personnel, introducing new products and services in existing markets,
entering new markets and making selective acquisitions. In 1993, the
Company had revenues of $463.5 million.
Harte-Hanks is the successor to a newspaper business begun in
Texas in the early 1920s by Houston Harte and Bernard Hanks. In 1972,
the Company went public and was listed on the NYSE. The Company went
private in a leveraged buyout initiated by management in 1984. In
November 1993, the Company again went public and listed its common
stock on the NYSE.
See Note H of Notes to Consolidated Financial Statements for
certain financial information by business segment.
HARTE-HANKS NEWSPAPERS
General
Harte-Hanks publishes the only daily newspaper in Abilene,
Corpus Christi, San Angelo and Wichita Falls, Texas and Anderson,
South Carolina (the "five principal newspapers"). The Company also
publishes four daily newspapers and 19 nondaily newspapers in higher-
income suburban areas of Boston and Dallas (the "suburban
newspapers"). In all of its daily newspaper markets, the Company
realizes additional revenue from niche publications and specialized
services (such as special interest publications and direct mail
programs) aimed at targeted consumer groups. Harte-Hanks' strategy in
its newspaper business is to build upon its strong local franchises,
to offer complementary products and services and to expand its market
areas.
The Company's five principal newspapers have achieved high
levels of household penetration. For 1993, daily circulation
penetration in the city zones for the five principal newspapers ranged
from 50% to 72%, and Sunday circulation penetration in the city zones
for the five principal newspapers ranged from 70% to 83%, providing
advertisers with broad coverage of the five principal newspapers'
local markets. Based on Standard Rate & Data's CIRCULATION '94, the
daily editions of the Company's newspapers in Abilene, San Angelo and
Wichita Falls ranked among the top 50 in the United States based on
household penetration in United States Census Bureau metropolitan
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statistical areas. In addition, these same newspapers Sunday editions
rank in the top 25 in the United States based on household
penetration. The Sunday editions of the newspapers in Wichita Falls,
San Angelo, Abilene and Corpus Christi rank first, second, fourth and
fifth among all Texas newspapers, respectively, based on household
penetration. Harte-Hanks' suburban newspapers serve local communities
within larger metropolitan areas and concentrate on local news stories
and other items of interest to those communities. Harte-Hanks
newspapers are recognized for their editorial excellence and community
leadership, with each newspaper edited locally to reflect the views
and interests of the particular market it serves. In 1993, Harte-
Hanks newspapers had revenues of $131.5 million and accounted for
approximately 28% of the Company's revenues.
Five Principal Newspapers
The Company believes that the high penetration levels of its
five principal newspapers are important to advertisers in their
determination of where to allocate advertising dollars as advertisers
increasingly require evidence that their messages are actually
reaching consumers. The Company's five principal newspapers, together
with their related niche publications, accounted for approximately 70%
of revenues of Harte-Hanks' newspapers in 1993.
The following table sets forth certain information with respect
to the Company's five principal newspapers for 1993:
AVERAGE
AVERAGE PAID CIRCULATION
CIRCULATION(1) PENETRATION(2)
PUBLICATION DAILY SUNDAY DAILY SUNDAY
Corpus Christi Caller-Times 67,508 96,032 50% 70%
(Founded 1877)
Abilene Reporter-News 42,505 54,163 61% 77%
(Founded 1881)
Anderson Independent-Mail 42,532 48,477 72% 82%
(Founded 1899)
Wichita Falls Times Record
News (Founded 1907) 39,326 48,066 63% 78%
San Angelo Standard-Times 32,446 39,516 66% 83%
(Founded 1884)
(1) In 1993, approximately 83% of daily circulation was home
delivered, with the remaining 17% derived from single copy sales.
(2) Penetration is average paid circulation in the city zone divided
by the number of households in the city zone.
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The CORPUS CHRISTI CALLER-TIMES is a morning newspaper serving
Corpus Christi, Texas and 17 surrounding counties in South Texas. For
the years 1989, 1990, 1991 and 1993 the Dallas Press Club named the
Caller-Times the best daily newspaper in Texas with circulation under
100,000. Average circulation of the Sunday edition of the Caller-Times
increased from 87,475 in 1988 to 96,032 in 1993. Sunday circulation
reached an all-time high of 98,815 in 1993. The Corpus Christi
metropolitan statistical area had an estimated population of 359,000
as of December 31, 1992. The Corpus Christi economy is based on
tourism, military, shipping, oil and gas production, petrochemicals,
refining, manufacturing, agriculture, higher education, regional
health services and regional retail services. Texas A&M University-
Corpus Christi will become a four-year institution with graduate
programs in 1994. The Port of Corpus Christi is the nation's sixth
largest in terms of shipping tonnage.
The ABILENE REPORTER-NEWS is a morning newspaper serving Abilene,
Texas and its surrounding area. The Abilene metropolitan statistical
area had an estimated population of 119,700 as of December 31, 1992.
Abilene was recognized as one of ten All-America Cities in the United
States by the National Civic League in 1990 and is the heart of a
15-county regional trade market located in Central West Texas. The
Abilene economy is built around the oil and gas industry, agriculture,
light industry, military, regional health services and higher
education, including three universities located in Abilene.
The ANDERSON INDEPENDENT-MAIL is a morning newspaper serving
Anderson, South Carolina and its surrounding area. It regularly
receives editorial and public service awards, particularly for its
programs to increase literacy. Average paid circulation of the Sunday
edition of the Anderson Independent-Mail increased for the last four
years, from 42,729 in 1989 to 48,477 in 1993. Anderson County had an
estimated population of 148,300 as of December 31, 1992. Anderson
County is the retail and manufacturing center for a 9 county area
(which includes Clemson University) covering the northwest corner of
South Carolina and the northeast corner of Georgia. Other industries
include agriculture, healthcare, recreation and retirement services.
The WICHITA FALLS TIMES RECORD NEWS is a morning newspaper
serving Wichita Falls, Texas and 18 surrounding counties in North
Texas and Southern Oklahoma. The Wichita Falls metropolitan
statistical area had an estimated population of 130,000 as of December
31, 1992. The Wichita Falls economy is diversified and consists of
manufacturing, military, agriculture, oil and gas and retail and
wholesale trade. Sheppard Air Force Base is a significant factor in
the Wichita Falls economy and is currently undergoing a $200 million
facilities expansion.
The SAN ANGELO STANDARD-TIMES is a morning newspaper serving San
Angelo, Texas and its surrounding area. The San Angelo metropolitan
statistical area had an estimated population of 101,000 as of December
31, 1992. San Angelo has a diversified economic base consisting of
petroleum, military, regional health services, agriculture and light
industry. Goodfellow Air Force Base in San Angelo is currently
undergoing a $45 million facilities expansion.
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Suburban Newspapers
The Company publishes four daily newspapers and 19 nondaily
newspapers in higher income suburban communities within metropolitan
Boston and Dallas. Harte-Hanks' suburban newspapers concentrate on
local news stories and other items of interest to the communities they
serve and allow advertisers to target consumers in these communities.
The suburban newspapers typically compete with daily newspapers
published in the same large metropolitan area and local editions of
some daily newspapers. Readers of the suburban newspapers typically
subscribe to one or more other newspapers. The Company's nondaily
suburban newspapers are published either once or twice a week, and
many of them are distributed free of charge. The Company's suburban
newspapers, together with their related niche publications, accounted
for approximately 30% of Harte-Hanks newspaper revenues in 1993.
The following table sets forth certain information with respect
to the Company's suburban newspapers for 1993:
AVERAGE
TYPE OF CIRCU-
LOCATION PUBLICATION NAME PUBLICATION LATION
MASSACHUSETTS
Framingham The Middlesex News Daily 38,000
Sunday 48,000
Waltham Waltham News Tribune Daily 10,000
Dedham Dedham Daily Transcript Daily 9,000
Other Boston Area Newton Graphic Nondaily 28,000
Communities Needham Chronicle Nondaily 12,000
Arlington Advocate Nondaily 10,000
Wellesley Townsman Nondaily 8,000
Belmont Citizen-Herald Nondaily 6,000
Wayland-Weston Town Crier Nondaily 5,000
West Roxbury Transcript Nondaily 5,000
Winchester Star Nondaily 5,000
Sudbury Town Crier Nondaily 4,000
Roslindale Parkway
Transcript Nondaily 3,000
Watertown Sun Nondaily 3,000
TEXAS
Dallas Area Plano Star Courier Daily 13,000
Sunday 15,000
Mesquite News Nondaily 33,000
Lewisville Leader Nondaily 25,000
Carrollton Chronicle Nondaily 24,000
The Colony Leader Nondaily 8,000
Farmers Branch Times Nondaily 8,000
Coppell Gazette Nondaily 7,000
McKinney Messenger Nondaily 7,000
Allen American Nondaily 4,000
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Niche Publications and Services
In addition to its primary newspaper products, in all of its
markets the Company publishes numerous niche advertising and special
interest publications to allow advertisers to target specific consumer
groups more effectively or to achieve increased market coverage. The
specialized publications include rack products, coupon books, guides
covering specialized subjects such as television and real estate,
editions zoned to particular geographic areas, weekly news products
and military publications. Utilizing its national direct marketing
expertise, the Company has expanded into local direct marketing
services by starting direct mail services in each of its five
principal newspaper markets and by acquiring THE MONEY CLIP, a direct
mail coupon publication featuring local advertisers that is delivered
to all households in its market area. Since acquiring THE MONEY CLIP,
the Company has added a Wichita Falls edition to the original Abilene
and San Angelo editions, and the Company may expand publication of THE
MONEY CLIP to other markets. Harte-Hanks newspapers provide
commercial printing capabilities to their customers and also have
initiated audiotext "voice mail" capability, allowing readers to
access prerecorded messages and leave recorded messages by telephone.
The CORPUS CHRISTI CALLER-TIMES uses its advertiser-sponsored
audiotext system to provide on a 24-hour basis more than 120
categories of updated news and information, all of which are
accessible through a single telephone number promoted in the
newspaper.
Sales and Marketing
The Company maintains local sales offices in each of its
principal newspaper markets and in Boston and Dallas. Each office has
commissioned sales representatives dedicated specifically to
advertising or circulation sales. The Company uses its research
capabilities and twice-a-year customer surveys to communicate with
customers, track media competition and assess changes in advertising
patterns and needs of key customers. Harte-Hanks has recently
initiated several new marketing techniques, including programs whereby
an advertiser purchases a package consisting of multiple
advertisements for a fixed budget amount. Additionally, the Company
offers advertisers a combination of products and delivery methods,
including niche publications and direct marketing products, to further
increase market coverage or target specific consumer groups.
Facilities
Harte-Hanks newspaper operations are housed in modern facilities
that are owned by the Company in its five principal newspaper markets
and are owned or leased in its suburban newspaper markets. The
Company is installing a nine- unit offset printing press in a newly
expanded building in Corpus Christi. The Company expects that this
press will be operational in the second quarter of 1994 and will
enhance the newspaper's production and color capacity and print
quality as well as support growth in that market.
8
Competition
There are no competing daily newspapers published in the markets
where the Company publishes its five principal newspapers. In recent
years, the Company's suburban newspapers have faced increasing
competition from strengthening daily metropolitan newspapers in Boston
and Dallas, including local editions of such newspapers. Each of the
Company's newspapers competes in varying degrees for advertisers and
readers with newspapers, magazines, radio, broadcast and cable
television, shoppers, directories and other communications media that
operate in its markets.
SHOPPERS
General
Harte-Hanks is the largest publisher of shoppers in North
America based on weekly circulation and revenues, and is the only
national media company that focuses on shoppers as a core business.
Shoppers are weekly advertising publications delivered free by third-
class saturation mail to all households in a particular geographic
area. Shoppers offer advertisers a targeted, cost-effective local
advertising system, with virtually 100% penetration in their area of
distribution. Shoppers are particularly effective in large markets
with high media fragmentation in which major metropolitan newspapers
generally have low penetration. As of December 31, 1993, the shoppers
currently owned by Harte-Hanks reached approximately 6.7 million
households in four markets each week -- Southern California, Northern
California, Miami/Ft. Lauderdale and Dallas/Fort Worth. The Company's
Southern California shopper, THE ORIGINAL PENNYSAVER, accounted for
64% of these households. In February 1994, the Company sold its
smallest shopper in Tucson, Arizona, which reached 297,000 households
each week.
Harte-Hanks publishes 536 individual shopper editions each week
distributed to zones of approximately 12,500 households each, allowing
single location, local advertisers to saturate a single geographic
zone and allowing multiple location advertisers to saturate multiple
zones. The Company believes that its zoning and marketing
capabilities and production technologies have enabled it to increase
its share of the advertising expenditures in its markets even in
difficult economic conditions, as presently exist in California. The
Company's strategy in its shopper business is to increase its share of
local advertising in its existing circulation areas, increase
circulation through expansion into contiguous areas and make selective
acquisitions. In 1993, Harte-Hanks shoppers had revenues of $174.5
million and accounted for approximately 38% of the Company's revenues.
The combined circulation of the Company's shoppers has grown
from approximately 4.1 million households at January 1, 1986 to over
6.7 million households at December 31, 1993. In 1993, 0.9 million
households were added, primarily in Southern California, Miami/Ft.
Lauderdale and Dallas/Fort Worth, through internal expansion and, to a
lesser degree, acquisitions. The Company believes that this expansion
will provide increased revenue and operating income as the
publications in these areas mature. The Company believes that
expansion opportunities of approximately 4 million additional
households exist in areas contiguous to current circulation areas.
9
Publications
Harte-Hanks shoppers are published in Southern California,
Northern California, Miami/Ft. Lauderdale and Dallas/Fort Worth. The
Southern California unit accounted for 67% of shopper revenues in
1993.
The following table sets forth certain information with respect
to shopper publications:
DECEMBER 31,
1993 NUMBER OF
MARKET PUBLICATION NAME CIRCULATION ZONES
Southern California The Original PennySaver 4,279,000 348
Northern California Potpourri 964,000 72
Miami/Ft. Lauderdale The Flyer 945,000 72
Dallas/Fort Worth Shopper's Guide 507,000 44
Total 6,695,000 536
Shopper publications consist of classified and display
advertising and are delivered to consumers' homes by third-class
saturation mail. The typical shopper publication has 50 pages of
classified and display advertising and is 8 1/2 by 10 inches in size.
Each edition, or zone, is targeted around a natural neighborhood
marketing pattern. Shoppers also serve as a distribution vehicle for
a four-color proprietary product, MARQUEE, carrying multiple national
and regional advertisers; "print-and-deliver," single sheet inserts
designed and printed by the Company; coupon books; and preprinted
inserts from major retail chains. Harte-Hanks shopper publications
also use audiotext "voice mail" in both pay-per-call and free formats
allowing readers to access prerecorded advertising or personal
messages, leave recorded messages or participate in retail store
surveys targeted around local retail locations, reader opinion surveys
and interactive reader contests.
The Company has acquired, developed and applied innovative
technology and customized equipment to the publication of its
shoppers, which have contributed to efficiency and growth. A
proprietary data processing, job tracking and pagination system,
jointly developed by the Company and a software company, is currently
being installed in Southern California. The Company anticipates
complete installation by mid-1994. This computer controlled system,
which fully paginates both graphics and text, will replace manual
pagination and simplify production of multiple zoned editions. It
also will permit designated types of advertisers to be pulled from the
database, thereby allowing production of specialized niche
publications, such as automotive, real estate and employment products,
which may be mailed or distributed through newsstands. Harte-Hanks
has installed high speed automatic inserting equipment that decreases
production costs for work previously done largely by hand.
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Sales and Marketing
The Company maintains local sales offices throughout its
geographic markets and employs more than 500 commissioned sales
representatives who develop both targeted and saturation advertising
programs for customers. The sales organization provides service to
both national and local advertisers through its telemarketing
departments and its field sales representatives. Shopper customers
vary from individuals with a single item for sale to local
neighborhood advertisers to large multi-location advertisers. The core
customers continue to be local service businesses and small retailers.
The Company is increasingly focusing its marketing efforts on larger
national accounts by emphasizing its ability to deliver saturation
advertising in defined zones.
The Company has installed SAMS (Sales and Marketing System), a
proprietary order entry system on a Unix platform in its Southern
California sales offices. The Company typically processes 16,000
customer orders each week. SAMS speeds customer order entry and
facilitates placement of advertising in multiple zoned editions. The
Company is in the process of expanding SAMS so that, in addition to
entering advertising information for immediate publication, it will
build a relational customer database, allowing sales personnel to
access customer history by designated variables, thereby identifying
similar potential customers and assisting follow-up with existing
customers. The Company also believes the relational customer database
presents the opportunity for a new revenue stream through the sale and
use of customer lists. The Company anticipates that an expanded
version of SAMS will be installed at its Southern California shopper
by mid-1994 and in all of its shoppers by the end of 1995.
Facilities
Harte-Hanks shoppers are produced at owned or leased facilities
in the markets they serve. The Company has five production
facilities, two in Southern California and one in each of its other
markets, and 21 sales offices.
Competition
Harte-Hanks shoppers compete primarily with metropolitan daily
newspapers, shared mail packages and other local advertising media.
The Company believes that its production systems and technology, which
permit it to publish separate editions in narrowly targeted zones,
allow it to compete effectively, particularly in large markets with
high media fragmentation. Shoppers also compete in varying degrees for
advertisers and readers with magazines, radio, broadcast and cable
television, directories, other shoppers and other communications media
that operate in their markets.
DIRECT MARKETING
General
Harte-Hanks operates a nationwide direct marketing business
offering a
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broad range of integrated services utilizing advanced technologies to
enable its customers to identify, target and reach specific consumers
or businesses by mail. The Company's strategy is to provide a single
source of solutions for its customers' direct marketing objectives.
The Company believes that developments in computer technology and
trends toward more sophisticated marketing analysis and measurement
will continue to result in increased usage of direct marketing
services. Harte-Hanks' direct marketing customers include many of the
nation's largest retailers, banks and insurance companies. Harte-Hanks
provides five broad direct marketing services -- marketing services,
database, data processing/addressing, transportation and integrated
direct marketing. In 1993, Harte-Hanks Direct Marketing had revenues
of $129.6 million, which accounted for approximately 28% of the
Company's revenues.
Marketing Services
The Company provides a full range of marketing services,
assisting customers in defining objectives, developing direct
marketing programs, targeting markets and measuring the effectiveness
of their marketing efforts, including measuring consumer satisfaction
through the use of a proprietary scannable survey. The Company also
distributes marketing materials on behalf of its customers to
consumers and businesses who request information in response to a
customer's advertising program. The Company believes it is the
nation's largest external fulfillment provider to the mutual fund
industry, distributing prospectuses and other financial material on
behalf of more than 20 mutual fund companies. In addition, the Company
provides telemarketing services, including answering toll-free calls
generated by a customer's advertising program and, in the process,
collecting for its customers valuable data about the consumer.
Database
The Company's database services build sophisticated databases
and deliver them to clients on personal computers, networks and
workstations. These services provide user friendly applications to
allow customers to identify consumers most likely to respond to a
particular offer. Databases are built using the Company's proprietary
name and address processing software to integrate the client's
customer files and other consumer and business files with individual,
demographic and lifestyle information. The Company's software then
screens the database for the desired characteristics, enabling
customers to make informed marketing decisions and to cost-effectively
target consumers and businesses likely to buy specific products. The
database is updated to reflect changes in customer status and response
to a particular offer, thereby increasing its effectiveness for future
programs.
Database services are marketed to specific industries or markets
with software modifications tailored to each industry or market.
Having established the basic technological foundation for providing
database services, the Company is able to provide database services to
new industries and markets by making appropriate modifications to its
existing database technology. The Company currently provides database
services to the banking, retail and insurance industries and has
expanded into the utilities, mutual fund, automotive and
business-to-business markets. The Company also provides
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database services in Canada and the United Kingdom, primarily in the
banking industry, and has expanded into Europe, Asia, Latin America
and New Zealand. Database services are provided in part under the
Company's trade name, Harte-Hanks Data Technologies.
Data Processing/Addressing
Data processing services include maintaining customer files and
outside lists, preparing those lists for mailing, eliminating
duplicate addresses and updating mailing lists, to increase on-time
deliveries and lower postage expense. Harte-Hanks also identifies and
updates changed addresses through a nonexclusive license with the
United States Postal Service. The Company provides computerized
addressing and labeling of advertising mail pieces, primarily for
large retailers, at six mail production facilities. Data
processing/addressing services enable consumers to receive advertising
materials within a one- to three-day delivery window selected by the
customer.
Transportation
The Company arranges for the transportation of time-sensitive
material such as dated advertising inserts and direct mail pieces to
postal facilities, newspapers and mailhouses nationwide. The Company
uses its proprietary software system -- Transportation Optimization of
Postal Savings -- to determine a transportation plan that optimizes
each customer's postal costs and improves on-time delivery of
advertising material. The transportation unit maintains seven
warehouses as staging locations across the nation and has personnel
located at five of the Company's mail production facilities. The
Company believes that it benefits from the nationwide location of its
facilities and its ability to combine printed material destined for
similar locations.
Integrated Direct Marketing
In contrast to a typical mass mailing, which involves sending
consumers individually addressed but otherwise identical advertising
pieces, integrated direct marketing uses laser printing and
sophisticated insertion technology to target consumers with
personalized mail appealing directly to them. The Company designs and
creates personalized communications that may be combined with other
printed material from the customer for mailing to consumers and
businesses. The integrated direct marketing process begins when a
customer accesses a database and selects a consumer file for mailing.
A creative concept for that promotion is matched with the targeted
consumer. A personalized and individualized message is then produced.
The Company's services include printing promotional material and the
outside and inside envelopes, inserting the individual pieces into the
outside envelope, and binding and mailing. If the consumer responds to
the offer through purchases or by other means, the database is updated
with the response for later use. A customer may, based upon its needs,
use some components or all of the Company's integrated direct
marketing services.
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Sales and Marketing
Harte-Hanks' national direct marketing sales force is
headquartered in Cincinnati, Ohio, with sales offices maintained
throughout the United States, and in Toronto and London. The focus of
the sales force is to position Harte-Hanks as a single source solution
for a customer's target marketing needs. The sales force emphasizes
cross-selling the range of direct marketing services. For example,
through its database, market research and integrated direct marketing
services, the Company can define new markets for its customers and
reach those markets through the creation and delivery of personalized
printed materials. The sales force is supported by employees in
specialized areas such as marketing services, transportation and
database. In addition, there are specialized sales forces for
literature fulfillment, database and transportation services. The
Company generally charges fees each time it provides direct marketing
services. For certain database projects it charges a one-time,
negotiated fee to build a database, plus an additional fee each time
the database is updated.
Facilities
Market research is conducted from a leased facility in River
Edge, New Jersey and literature fulfillment from a leased facility in
Brockton, Massachusetts. Database services are headquartered in
Billerica, Massachusetts. Database services have specialty sales and
service offices in California, New Jersey, Toronto and Great Britain.
Data processing functions are primarily centralized in the Company's
Baltimore facility, with mail production at five additional facilities
nationwide. The transportation unit maintains warehouses across the
nation and has personnel located at five of the Company's mail
production plants. Integrated direct marketing services are performed
at the Company's recently constructed state-of-the-art facility in
Cincinnati and its recently acquired facility in Jacksonville,
Florida.
Competition
Harte-Hanks' direct marketing business faces competition
primarily from other direct mail and database organizations, as well
as from print and electronic media and other forms of advertising.
Harte-Hanks believes that its database capabilities, combined with its
national production capability and its ability to offer a full range
of integrated services (i.e., targeting and identification of
potential markets, and production and delivery of advertising
materials), enable the Company to compete effectively.
TELEVISION
General
The Company owns and operates KENS, a CBS-affiliated VHF
television station in San Antonio, Texas, the 36th largest television
market in the United States according to Arbitron Ratings Service.
San Antonio is the business and retail center for South Texas and has
a growing, diversified economy based on tourism, military, health care
and international trade. KENS has been the number one-rated station in
its market, "sign-on to sign-off,"
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for 21 consecutive years. In 1993, all five of its local daily and all
of its weekend news programs were the top-rated newscasts in their
time slots. KENS' 10 p.m. newscast has consistently ranked as the
top-rated late newscast among the largest 50 television markets in the
United States. KENS has consistently received the highest ratings in
65-75% of the time periods it programs locally. The Company believes
that its market dominance results from strong local newscasts and its
highly visible community involvement and public affairs projects. In
1993, Harte-Hanks television had revenues of $27.8 million, which
accounted for approximately 6% of the Company's revenues.
According to the May 1993 Arbitron Ratings Index, KENS
broadcasts to a market of approximately 626,700 households, defined as
the Area of Dominant Influence (the "ADI"). The San Antonio ADI is
served by 14 stations, including stations affiliated with the other
two national networks, a Fox affiliate, five stations affiliated with
various Spanish language networks and low power stations. Cable
penetration is approximately 64% in the City of San Antonio. San
Antonio is a growing advertising market and is consistently ranked
higher in terms of total television advertising dollars spent than its
market ranking. Because of its market ranking and ethnic diversity,
San Antonio has experienced regional and national advertising growth
and frequently enjoys test-market status. Broadcast advertising in San
Antonio has also benefited from the closure of one of San Antonio's
two daily newspapers in 1992.
Network affiliation can have a significant impact on the
revenues of a television station because the popularity of a network's
programming can affect the rates at which a station can sell time for
local advertising. CBS was the number one-rated network in the
1992-93 primetime season. The KENS network contract with CBS has been
renewed as of January 1994 for a successive three-year term. KENS has
been affiliated with CBS since the station's inception.
Harte-Hanks' strategy is to maintain its leadership position in
order to continue to increase its television revenues and to
capitalize on the station's reputation and leadership position by
providing additional products and services for advertisers. The
Company recently acquired an AM radio station in San Antonio, which
began broadcasting as KENS-AM on October 15, 1993. The Company has
moved the radio station offices and studio to its KENS television
facility. KENS Radio features a news/talk and Texas music format,
capitalizing on the strong news reputation and advertising sales staff
of KENS-TV. The Company also offers video production and graphics
services in its full-service production facility. Video production
services are provided for programming, commercial and industrial video
applications. Graphics services provide print advertisers and other
Harte-Hanks units with a full range of graphics capabilities such as
ad design, ad layout, typesetting and color separation. The Company
has recently introduced KENS MARQUEE, which is a direct mail coupon
advertising magazine mailed to approximately 460,000 households in the
greater San Antonio area. KENS MARQUEE is cross-promoted on KENS-TV
and Radio and features the KENS logo and personalities on its cover.
The Company also offers satellite uplinking services. In addition,
KENS has initiated a joint programming venture with the local cable
franchise, in which KENS produces programs for cable viewing and local
news inserts into CNN Headline News.
15
Sales and Marketing
Local advertising spots are sold by KENS sales personnel.
National advertising spots are sold by Katz Communications, an
independent advertising sales agent with offices throughout the United
States. Generally, advertising rates for national spot and local
advertising are determined by the individual station, which receives
all of the revenues (less sales representatives commissions). Rates
are influenced both by the demand for advertising time and the
popularity of the station's programming. Most advertising during
network programs is sold by the network, which pays its affiliated
stations negotiated fees for broadcasting such programs. Advertising
rates charged by a television station are based primarily on the size
of the market and the station's ability to attract audiences as
reflected in surveys made by national ratings services. Rates are
highest during the most desirable viewing hours. Normally a majority
of local affiliate station revenues comes from locally programmed
dayparts, particularly local newscasts.
Sales of advertising in KENS MARQUEE and of graphics and production
services are handled by a separate sales staff working with KENS'
television sales staff. The Company employs a similar policy with
respect to KENS-AM.
Facilities
KENS owns a modern 50,000 square foot facility constructed in
1982. The facility includes two video production studios with separate
technical control rooms, a graphics facility and a satellite uplink
facility. The offices and studio of KENS-AM radio are also located at
this facility.
Competition
KENS ranks as the number one television station in its local
market, which enhances KENS' ability to attract advertising. KENS
competes with other advertising media such as newspapers and
magazines, and, within its coverage areas, television and radio
stations serving the same or nearby areas. KENS also competes with the
local cable television system, which has 64% penetration in the City
of San Antonio, according to a report published by Arbitron Ratings in
May 1993.
Regulation of Television and Radio
The FCC regulates television and radio stations under the
Communications Act of 1934, as amended (the "Communications Act"),
which together with FCC rules and policies thereunder governs the
issuance, renewal and assignment of licenses; technical operation;
and, to a limited extent, program, employment and commercial
practices. Television broadcast station licenses are issued for a
maximum term of five years and are renewable upon application for
additional five-year terms. The KENS-TV broadcast station license was
renewed in September 1993 for an additional five-year term expiring
August 1, 1998. Radio broadcast station licenses are issued for a
maximum term of seven years and are renewable upon application for
additional seven-year terms. The license of the AM radio station will
expire August 1, 1997. Renewal applications are granted without
hearing if the licensee's qualifications are not materially
16
challenged by either a third party or the FCC and if no competing
applications for the same facility are filed. Despite the relatively
short term license period, the broadcast industry has been
characterized by stability. Harte-Hanks has operated television
broadcast stations since 1962, and to date its renewal applications
have been granted without hearing. Under the Communications Act, a
broadcast license may not be granted to or held by any corporation
that has more than one-fifth of its capital stock owned or voted by
aliens or their representatives, by foreign governments or their
representatives, or by non-U.S. corporations, or that has an alien as
an officer or a director. Under the Communications Act, a broadcast
license also may not be granted to or held by any corporation that is
controlled, directly or indirectly, by any other corporation that has
an alien as an officer, more than one-fourth of whose directors are
aliens, or more than one-fourth of whose capital stock is owned or
voted by aliens or their representatives, by foreign governments or
their representatives, or by non-U.S. corporations, if the FCC finds
that the public interest will be served by the refusal or revocation
of such license. The Communications Act and FCC rules also generally
prohibit the common ownership, operation or control of a television
broadcast station and a radio broadcast station serving the same local
market and of a broadcast station and a daily newspaper serving the
same local market. However, the FCC has waived this rule as it applies
to the ownership of KENS-TV and the recently acquired radio station.
The FCC generally applies its ownership limits to "attributable"
interests held by an individual, corporation, partnership or other
association.
Employees
As of December 31, 1993, Harte-Hanks employed 5,114 full time
employees and 1,036 part time employees, as follows: newspapers --
1,665 full time and 342 part time employees; shoppers -- 1,653 full
time and 458 part time employees; direct marketing -- 1,616 full time
and 203 part time employees; television -- 155 full time and 32 part
time employees; and corporate office -- 25 full time employees and one
part time employee. None of the work force is represented by labor
unions. The Company considers its relations with its employees to be
good.
Facilities
Harte-Hanks' executive offices are located in San Antonio, Texas
and occupy approximately 35,000 square feet in leased premises. The
Company's business is conducted in premises containing aggregate space
of approximately 2.3 million square feet nationwide. Approximately 1.4
million square feet are held under leases, which expire at dates
through 2003. The balance of the properties, which are used primarily
in the Company's newspaper, Southern California shopper and television
operations, are owned by the Company.
17
ITEM 3. LEGAL PROCEEDINGS
The Company from time to time becomes involved in various claims and
lawsuits incidental to its businesses, including defamation actions.
In the opinion of management, after consultation with counsel, any
ultimate liability arising out of currently pending claims and
lawsuits will not have a material effect on the financial condition or
operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year covered by this report.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Incorporated herein by reference from the Company's Annual Report to
Stockholders for the year ended December 31, 1993 at pages 24 and 37.
ITEM 6. SELECTED FINANCIAL DATA
Incorporated herein by reference from the Company's Annual Report to
Stockholders for the year ended December 31, 1993 at pages 32 and 33.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Incorporated herein by reference from the Company's Annual Report to
Stockholders for the year ended December 31, 1993 at pages 13 through
17.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following information is set forth in the Company's Annual Report
to Stockholders for the year ended December 31, 1993, which is
incorporated herein by reference: All Consolidated Financial
Statements (pages 18 through 21); all Notes to Consolidated Financial
Statements (pages 22 through 31); and the "Independent Auditors'
Report" (page 34). With the exception of the information herein
expressly incorporated by reference, the Company's Annual Report to
Stockholders for the year ended December 31, 1993 is not deemed filed
as part of this Annual Report on Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
18
ITEM 10. MANAGEMENT
Incorporated herein by reference from the information the Company's
definitive proxy statement dated March 30, 1994 for the May 6, 1994
Annual Meeting of Stockholders under the caption "Management --
Directors and Executive Officers" on pages 5 and 6.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated herein by reference from the information the Company's
definitive proxy statement dated March 30, 1994 for the May 6, 1994
Annual Meeting of Stockholders under the caption "Executive
Compensation and Other Information" on pages 7 through 14.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Incorporated herein by reference from the information the Company's
definitive proxy statement dated March 30, 1994 for the May 6, 1994
Annual Meeting of Stockholders under the caption "Security Ownership
of Management and Principal Stockholders" on pages 4 and 5.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a)(1) The following consolidated financial statements are
incorporated by reference from the Company's Annual Report
to Stockholders for the year ended December 31, 1993
attached hereto:
Consolidated Balance Sheets, December 31, 1993 and 1992
Consolidated Statements of Operations, Years ended
December 31, 1993, 1992 and 1991
Consolidated Statements of Cash Flows, Years ended December
31, 1993, 1992 and 1991
Consolidated Statements of Stockholder's Equity, Years
ended December 31, 1993, 1992 and 1991
Notes to Consolidated Financial Statements
Independent Auditors' Report
19
(a)(2) The following accountants' report and financial schedules
for years ending December 31, 1993, 1992 and 1991 are
submitted herewith:
Independent Auditors' Report 10-K Schedules
Schedule II - Amounts Receivable From Related Parties and
Underwriters, Promoters, and Employees Other Than Related
Parties
Schedule V - Property, Plant and Equipment
Schedule VI - Accumulated Depreciation and Amortization of
Property, Plant and Equipment
Schedule VIII - Valuation and Qualifying Accounts
Schedule X - Supplementary Income Statement Information
All other schedules are omitted as the required information
is inapplicable.
20
(a)(3) Exhibits (continued).
EXHIBIT
NO. DESCRIPTION OF EXHIBIT PAGE NO.
2(a) Certificate of Ownership and Merger (filed
as Exhibit 2(a) to the Company's Registration
Statement No. 33-69202 and incorporated by
reference herein).
* 3(a) Amended and Restated Certificate of Incorporation. 30
3(b) Amended and Restated Bylaws (filed as Exhibit 3(b)
to the Company's Registration Statement No. 33-69202
and incorporated by reference herein).
4(a) Long term debt instruments are not being filed
pursuant to Section (b)(4)(iii) of Item 601 of
Regulation S-K. Copies of such instruments will
be furnished to the Commission upon request.
10(a) 1984 Stock Option Plan (filed as Exhibit 10(d)
to the Company's Form 10-K for the year ended
December 31, 1984 and incorporated herein by
reference).
*10(b) Registration Rights Agreement dated as of 38
September 11, 1984 among HHC Holding Inc. and
its stockholders.
10(c) HHC Holding Inc. 1991 Stock Option Plan (filed as
Exhibit 10(l) to the Company's Form 10-K for the
year ended December 31, 1991 and incorporated by
reference herein).
10(d) Amendment to HHC Holding Inc. 1991 Stock Option Plan
(filed as Exhibit 10(l) to the Company's Form 10-K
for the year ended December 31, 1992 and incorporated
by reference herein).
10(e) Third Amended and Restated Loan Agreement dated May 19,
1993 among the Company, The Toronto-Dominion Bank,
NationsBank of Texas, N.A., National Westminster Bank
USA, The First National Bank of Boston, Bank of Hawaii,
Corestates Bank, N.A., The Bank of Nova Scotia, CIBC
Inc., and National Bank of Canada; and Toronto-Dominion
(Texas), Inc., as agent (filed as Exhibit 10(l) to the
Company's 10-Q for the quarter ended June 30, 1993 and
incorporated by reference herein).
21
(a)(3) Exhibits (continued).
EXHIBIT
NO. DESCRIPTION OF EXHIBIT PAGE NO.
10(f) Note Purchase Agreement by and between HHC Holding
Inc. and The Goldman Sachs Group, L.P. (filed as
Exhibit 10(f) to the Company's Registration
Statement No. 33-69202 and incorporated by
reference herein).
10(g) Severance Agreement between Harte-Hanks
Communications, Inc. and Larry Franklin, dated
as of July 23, 1993 (filed as Exhibit 10(f) to
the Company's Registration Statement No. 33-69202
and incorporated by reference herein).
10(h) Form of Severance Agreement between Harte-Hanks
Communications, Inc. and certain Executive
Officers of the Company, dated as of July 23,
1993 (filed as Exhibit 10(h) to the Company's
Registration Statement No. 33-69202 and
incorporated by reference herein).
10(i) Amendment No. 2 to HHC Holding Inc. 1991 Stock
Option Plan (filed as Exhibit 10(l) to the
Company's Registration Statement No. 33-69202
and incorporated by reference herein).
10(j) Harte-Hanks Communications, Inc. Pension
Restoration Plan (filed as Exhibit 10(j) to
the Company's Registration Statement No.
33-69202 and incorporated by reference herein).
10(k) First Amendment, dated as of November 3, 1993 to
Third Amended and Restated Loan Agreement dated
May 19, 1993 among the Company, The Toronto-Dominion
Bank, NationsBank of Texas, N.A., National Westminster
Bank USA, The First National Bank of Boston, Bank of
Hawaii, Corestates Bank, N.A., The Bank of Nova Scotia,
CIBC Inc., and National Bank of Canada; and Toronto-
Dominion (Texas), Inc., as agent (filed as Exhibit
10(l) to the Company's Form 10-Q for the quarter
ended September 30, 1993 and incorporated by
reference herein).
22
(a)(3) Exhibits (continued).
EXHIBIT
NO. DESCRIPTION OF EXHIBIT PAGE NO.
10(l) Amendment No. 1, dated as of November 10, 1993 to
Note Purchase Agreement by and between Harte-Hanks
Communications, Inc. and GS Capital Partners, L.P.,
Stone Street Fund 1992, L.P. and Bridge Street Fund
1992, L.P. (filed as Exhibit 10(l) to the Company's
Form 10-Q for the quarter ended September 30, 1993
and incorporated by reference herein).
*10(m) Harte-Hanks Communications, Inc. Incentive Bonus Plan. 62
*11 Statement Regarding Computation of Net Income (Loss) 63
Per Common Share.
*13 Annual Report to Securityholders (only those portions 64
incorporated by reference into the Form 10-K are
filed herewith).
*21 Subsidiaries of the Company. 91
*23 Consent of KPMG Peat Marwick. 92
24 Power of Attorney (included on the signature page of
the Registration Statement on Form S-2 filed with the
Commission on September 23, 1993).
*Filed herewith.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the fourth
quarter of 1993.
(c) Exhibits -- The response to this portion of Item 14 is
submitted as separate section of this report on pages 30 to
92.
(d) Financial Statement Schedules -- The response to this
portion of Item 14 is submitted as a separate section of
this report on pages 25 to 29.
The agreements set forth above describe the contents of certain
exhibits thereunto which are not included. However, such
exhibits will be furnished to the Commission upon request.
23
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Harte-Hanks Communications, Inc. has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
HARTE-HANKS COMMUNICATIONS, INC.
By: /s/ LARRY D. FRANKLIN
Larry D. Franklin
President & Chief Executive
Officer
By: /s/ RICHARD L. RITCHIE
Richard L. Ritchie
Senior Vice President,
Finance & Chief Financial and
Accounting Officer
Date: March 28, 1994
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on behalf
of the Registrant and in the capacities indicated.
/s/ HOUSTON H. HARTE /s/ DR. PETER T. FLAWN
Houston H. Harte, Chairman Dr. Peter T. Flawn, Director
/s/ LARRY D. FRANKLIN /s/ CHRISTOPHER M. HARTE
Larry D. Franklin, Director Christopher M. Harte, Director
/s/ EDWARD H. HARTE /s/ JAMES L. JOHNSON
Edward H. Harte, Director James L. Johnson, Director
/s/ ANDREW B. SHELTON
Andrew B. Shelton, Director
24
INDEPENDENT AUDITORS' REPORT 10-K SCHEDULES
The Board of Directors and Stockholders
Harte-Hanks Communications, Inc.:
Under date of January 28, 1994, we reported on the consolidated
balance sheets of Harte-Hanks Communications, Inc. and subsidiaries as
of December 31, 1993 and 1992 and the related consolidated statements
of operations, cash flows and stockholders' equity for each of the
years in the three-year period ended December 31, 1993, as contained
in the 1993 annual report to stockholders. These consolidated
financial statements and our report thereon are incorporated by
reference in the annual report on Form 10-K for the year 1993. In
connection with our audits of the aforementioned consolidated
financial statements, we also have audited the related financial
statement schedules as listed in Item 14(a)(2). These financial
statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statement schedules based on our audits.
In our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a
whole, present fairly, in all material respects, the information set
forth therein.
KPMG Peat Marwick
San Antonio, Texas
January 28, 1994
25
Harte-Hanks Communications, Inc. and Subsidiaries
Financial Statement Schedules
Schedule II
Amounts Receivable From Related Parties and Underwriters,
Promoters, and Employees Other Than Related Parties
(in thousands)
DEDUCTION BALANCE AT END OF
BALANCE AT AMOUNTS YEAR
BEGINNING OF AMOUNTS WRITTEN NOT
NAME OF DEBTOR YEAR ADDITIONS COLLECTED OFF CURRENT CURRENT
EMPLOYEE ADVANCES
Year ended
December 31, 1993.... $114 $-- $21 $-- $-- $ 93
Year ended
December 31, 1992.... $125 $-- $11 $-- $-- $114
Year ended
December 31, 1991.... $141 $ 7 $23 $-- $-- $125
26
Harte-Hanks Communications, Inc. and Subsidiaries
Financial Statement Schedules
Schedule V
Property, Plant and Equipment
(in thousands)
BALANCE AT BALANCE
BEGINNING ADDITIONS OTHER AT END
CLASSIFICATION OF YEAR AT COST ADDITIONS RETIREMENTS OF YEAR
(3)
Year ended December 31, 1993:
Land......................... $ 9,894 $ -- $ 877 $ 92 $ 10,679
Buildings and improvements... 38,373 3,850 1,550 1,544 42,230
Equipment and furniture...... 119,135 12,924 746 2,071 130,733
Construction in progress..... 2,059 18,258 (1) -- 86 6,888
(13,343)(2)
$169,461 $ 21,689 $3,173 $3,793 $190,530
Year ended December 31, 1992:
Land......................... $ 9,894 $ -- $ -- $ -- $ 9,894
Buildings and improvements... 39,358 354 -- 1,339 38,373
Equipment and furniture...... 115,602 6,884 -- 3,351 119,135
Construction in progress..... 1,157 5,307 (1) -- -- 2,059
(4,405)(2)
$166,011 $ 8,140 $ $4,690 $169,461
Year ended December 31, 1991:
Land......................... $ 10,066 $ -- $ -- $ 172 $ 9,894
Buildings and improvements... 39,828 971 -- 1,441 39,358
Equipment and furniture...... 112,737 7,260 -- 4,395 115,602
Construction in progress..... 4,935 3,133 (1) -- -- 1,157
(6,911)(2)
$167,566 $ 4,453 $ $6,008 $166,011
(1) Represents initiation of construction in progress.
(2) Represents the completion of construction in progress.
(3) Represents total cost of property, plant and equipment acquired
through purchase of operating units.
27
Harte-Hanks Communications, Inc. and Subsidiaries
Financial Statement Schedules
Schedule VI
Accumulated Depreciation and Amortization of
Property, Plant and Equipment
(in thousands)
ADDITIONS
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND AT END
CLASSIFICATION OF YEAR EXPENSES RETIREMENTS OF YEAR
Year ended December 31, 1993:
Buildings and improvements... $17,445 $ 1,860 $1,224 $18,081
Equipment and furniture...... 73,806 9,646 1,812 81,640
$91,251 $11,506 $3,036 $99,721
Year ended December 31, 1992:
Buildings and improvements... $16,088 $ 2,424 $1,067 $17,445
Equipment and furniture...... 66,809 9,760 2,763 73,806
$82,897 $12,184 $3,830 $91,251
Year ended December 31, 1991:
Buildings and improvements... $14,060 $ 2,973 $ 945 $16,088
Equipment and furniture...... 60,083 9,996 3,270 66,809
$74,143 $12,969 $4,215 $82,897
28
Harte-Hanks Communications, Inc. and Subsidiaries
Financial Statement Schedules
Schedule VIII
Valuation and Qualifying Accounts
(in thousands)
ADDITIONS
BALANCE AT CHARGED TO BALANCE
BEGINNING COSTS AND AT END
DESCRIPTION OF YEAR EXPENSES DEDUCTIONS OF YEAR
Allowance for doubtful accounts:
Year ended December 31, 1993... $2,512 $4,160 $4,647 $2,025
Year ended December 31, 1992... $2,620 $3,649 $3,757 $2,512
Year ended December 31, 1991... $3,309 $4,047 $4,736 $2,620
29
Harte-Hanks Communications, Inc. and Subsidiaries
Financial Statement Schedules
Schedule X
Supplementary Income Statement Information
(in thousands)
YEAR ENDED DECEMBER 31,
ITEMS CHARGED TO COSTS AND EXPENSES 1993 1992 1991
Maintenance and repairs............... $ 6,224 $ 5,671 $ 5,468
Goodwill amortization................. $10,176 $10,788 $10,785