ITEM 1. BUSINESS AND ITEM 2.
ITEM 3. LEGAL PROCEEDINGS
The Company from time to time becomes involved in various claims and lawsuits incidental to its businesses. 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.
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.
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, 1998 at page 32.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
Incorporated herein by reference from the Company's Annual Report to Stockholders for the year ended December 31, 1998 at page 31.
ITEM 7.
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, 1998 at pages 13 through 18.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
The Company is exposed to interest rate risk primarily thorough its portfolio of cash equivalents and short-term marketable securities. The Company does not believe that it has significant exposure to market risks associated with changing interest rates as of December 31, 1998 because the Company's intention is to maintain a liquid portfolio to take advantage of investment opportunities. The Company does not use derivative financial instruments in its operations.
ITEM 8.
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, 1998, which is incorporated herein by reference: All Consolidated Financial Statements (pages 19 through 22); all Notes to Consolidated Financial Statements (pages 23 through 30); and the Independent Auditors' Report (page 32). With the exception of the information herein expressly incorporated by reference, the Company's Annual Report to Stockholders for the year ended December 31, 1998 is not deemed filed as part of this Annual Report on Form 10-K.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 10.
ITEM 10. MANAGEMENT
Incorporated herein by reference from the information in the Company's definitive proxy statement dated March 26, 1999 for the May 4, 1999 Annual Meeting of Stockholders under the caption "Management -- Directors and Executive Officers" on pages 4 and 5.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated herein by reference from the information in the Company's definitive proxy statement dated March 26, 1999 for the May 4, 1999 Annual Meeting of the Stockholders under the caption, "Executive Compensation and Other Information" on pages 6 through 10.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated herein by reference from the information in the Company's definitive proxy statement dated March 26, 1999 for the May 4, 1999 Annual Meeting of Stockholders under the caption "Security Ownership of Management and Principal Stockholders" on pages 3 and 4.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
ITEM 14.
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, 1998 attached hereto:
Consolidated Balance Sheets, December 31, 1998 and 1997
Consolidated Statements of Operations, Years ended December 31, 1998, 1997 and 1996
Consolidated Statements of Cash Flows, Years ended December 31, 1998, 1997 and 1996
Consolidated Statements of Stockholders' Equity, Years ended December 31, 1998, 1997 and 1996
Notes to Consolidated Financial Statements
Independent Auditors' Report
(a) (2) The following accountants' report and financial schedule for years ending December 31, 1998, 1997 and 1996 are submitted herewith:
Independent Auditors' Report 10-K Schedule
Schedule II-- Valuation and Qualifying Accounts
All other schedules are omitted as the required information is inapplicable.
(a) (3) EXHIBITS
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*Filed herewith
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (continued)
14(c) Exhibits -- The response to this portion of item 14 is submitted as a separate section of this report on pages 20 to 50.
14(d) Financial Statement Schedule -- The response to this portion of Item 14 is submitted as a separate section of this report on page 19.
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.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Harte-Hanks, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
HARTE-HANKS, INC.
By: /s/ Larry Franklin ----------------------------------------- Larry Franklin President & Chief Executive Officer
By: /s/ Jacques D. Kerrest ----------------------------------------- Jacques D. Kerrest Senior Vice President, Finance and Chief Financial and Accounting Officer
Date: March 29, 1999
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.
INDEPENDENT AUDITORS' REPORT 10-K SCHEDULE
The Board of Directors and Stockholders Harte-Hanks, Inc.:
Under date of January 25, 1999, we reported on the consolidated balance sheets of Harte-Hanks, Inc. and subsidiaries as of December 31, 1998 and 1997 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, 1998, as contained in the 1998 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 1998. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedule as listed in Item 14(a)(2). This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
/s/ KPMG LLP
San Antonio, Texas January 25, 1999
Harte-Hanks, Inc. and Subsidiaries
Financial Statement Schedule
Schedule II Valuation and Qualifying Accounts
(in thousands)
EXHIBIT INDEX
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*Filed herewith