Good afternoon, ladies and gentlemen, and welcome to Harte Hanks Fourth Quarter and Full Year 2021 Earnings Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Rob Fink. Sir, the floor is yours.

Thank you, operator, and thank you, everyone, for joining us today for the Harte Hanks Fourth Quarter and Full Year 2021 Earnings Conference Call. Hosting the call today are Brian Linscott, Harte Hanks CEO, and Lauri Kearnes, Chief Financial Officer. Before we begin, I would like to remind everyone that the information provided during this call may contain forward-looking statements about the company's strategy, financial outlook, business and industry expectations, anticipated performance and outcomes and other statements that are not based on historical facts. Actual results may differ materially from those projected or implied in these statements because of the various risks and uncertainties, including those described in the company's Form 10-K and 10-Q and other filings with the SEC and the cautionary statement that was included in today's earnings press release. The call will also reference non-GAAP financial measures. Please refer to the earnings press release that was issued after the close today for a reconciliation of these and other related disclosures. The company's earnings release is available on the Investor Relations section of the Harte Hanks website at hartehanks.com. With that said, I'd now like to turn over the call to Brian Linscott. Brian, the call is yours.

Thank you, Rob, and good afternoon. 2021 was a significant turning point for Harte Hanks. We completed our restructuring; implemented our asset-light operating model; and with a more efficient significantly more profitable company, we listed our shares on the Nasdaq Global Market. We entered 2022 with a proven, profitable business model; a portfolio of loyal Tier 1 customers; and a business built upon value-added service offerings that our customers demand. We are poised for profitable long-term growth, and I want to commend and thank all of our employees for the professionalism and passion from which they serve our clients every day. It is because of them that Harte Hanks is a stronger company. Since our last earnings call, we've continued to invest in our business to maximize profitability and drive growth. These investments involve hiring the right people, expanding our tech capabilities and cross-selling our fully integrated service offerings. In early January, we hired Don Aicklen as Senior Vice President of Sales and Marketing. Don started his career with Harte Hanks, ultimately leading our national sales organization and established a new presence in automotive and consumer durables market. Today, Don is driving our marketing campaigns in a variety of verticals and leading our sales efforts across all 3 segments. We are excited for him to return to the company in a senior leadership role. In February, we announced our expanded health care practice under the experienced leadership of Janel Harris. Janel will be charged with expanding our practice of providing world-class service for our clients in the pharmaceutical, wellness and health care industries. Over the past few years, we have built a robust health care practice, including relationships with top-tier customers like Abbott, GSK, Pfizer and other national and state health care systems. Our proven ability to provide and execute…

Thank you, Brian. As Brian said, this was a strong end to a momentous year for Harte Hanks, and we entered 2022 in our strongest financial position in years. We achieved our fourth consecutive quarter of year-over-year revenue growth, and our operating income of $2.9 million was a $3.2 million positive swing. The December quarter was our seventh quarter in a row of positive adjusted EBITDA at $5.3 million. Our performance included new business wins and the benefits of our asset-light model. We continue to focus on streamlining and optimizing the business to meet the needs of the market today, and we are encouraged by our results. That said, the large nonoperational restructuring charges are now behind us. I'd now like to walk through the results in more detail. Fourth quarter revenue was $52 million, up $2.4 million sequentially from the third quarter and up $4.9 million or 10.4% from $47.1 million in the same period last year. Revenue growth was led by our Customer Care and Fulfillment & Logistics segments. Customer Care was up $2.2 million or 12.7% year-over-year as a result of several large COVID-related projects that we expect to wind down over the first half of 2022. Fulfillment & Logistics services was up $3.6 million or 24.5%. And Marketing Services was down $0.8 million or negative 5.4%. From a contribution margin perspective, our Customer Care segment delivered $2.6 million in EBITDA, up $0.1 million or 2.4%. Our Fulfillment & Logistics services segment delivered $2.1 million in EBITDA, up significantly from $30,000 in EBITDA in the year ago quarter. And our Marketing Services EBITDA grew by $0.5 million despite lower segment revenues due to our efforts to rightsized the cost structure of this business. We believe each of our 3 operating segments is now appropriately sized for current…

[Operator Instructions] Your first question is coming from Michael Kupinski from NOBLE Capital.

I was wondering if you can just kind of give us an outlook in terms of the tone of the market in general especially now with the market environment that we're seeing. I was wondering if you can do that. And then also, I know that the company has gone through a lot of expense cuts in light of inflationary pressures and things like that. If you can kind of just kind of give us an expense outlook as we go into 2023.

Sure. Thanks, Mike, for the question. So I think the market environment -- obviously, today was probably not the greatest day to have an earnings call given the kind of turmoil in Ukraine. That said, I will say that we've had a lot of positive momentum with a growing amount of opportunities that we are pursuing. And so I'm optimistic about our short-term prospects and excited about continued improvement on the revenue side. And then with respect to the cost side, it's very clear that we're through the restructuring efforts and we've got a much improved cost structure poised and set for going into 2022. And so it's exciting for me, and I think that we've got great opportunity on the revenue side, and we're a leaner and meaner organization on the cost side, which I expect to continue to generate some improved bottom line EBITDA as a result.

I know that the company was thinking about looking at more conventional financing terms and things like that. And I'm sorry if you addressed this earlier. I got late on the call. Where are the prospects in terms of maybe doing a refi? And then you obviously have a building cash flow situation. What are the prospects of -- or what are you thinking in terms of capital allocation? And maybe if you could talk about whether or not you're looking at M&A and that sort of thing as well?

Yes. So thanks for the question, Mike. I'll try it and Lauri can chime in as well. But in December, we -- actually, we got a more -- a traditional credit facility of $25 million in place. And so where we're at right now at the end of the year, I think as Lauri had mentioned, is $5 million drawn on that $25 million credit facility. So we're in a conventional lending agreement. And as far as use of cash, as we come in and hopefully continue to generate positive free cash flow and build some cash, in the short term, our objectives are really to pay down so that we're debt-free, number one; and number two, continued measured investments in technology in some areas that we find for organic growth. And then if there are selective inorganic opportunities that come our way, we're always open to kind of reviewing and looking. But our first priority now is pay down the debt and the second in continued investment in our people and our technology.

[Operator Instructions] Thank you. There are no further questions in the queue. I will now hand the conference back to Brian Linscott, CEO of Harte Hanks, for closing remarks. Please go ahead.

I just want to thank everyone for joining us this afternoon. I certainly look forward to our next earnings call. Have a good evening.

Thank you. Ladies and gentlemen, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.