UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2005

¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from              to             

Commission File Number 1-7120

HARTE-HANKS, INC.

(Exact name of registrant as specified in its charter)

Delaware	74-1677284
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
200 Concord Plaza Drive, San Antonio, Texas	78216
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number including area code — 210/829-9000

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 whether registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).    Yes  x    No  ¨

Indicate by check mark whether registrant is a shell company (as defined in Exchange Act Rule 12b-2).    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock: $1 par value per share, 82,286,543 shares as of October 31, 2005.

HARTE-HANKS, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

FORM 10-Q REPORT

September 30, 2005

		Page
Part I. Financial Information
Item 1.	Interim Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets - September 30, 2005 and December 31, 2004	3
	Consolidated Statements of Operations - Three months ended September 30, 2005 and 2004	4
	Consolidated Statements of Operations - Nine months ended September 30, 2005 and 2004	5
	Consolidated Statements of Cash Flows months ended September 30, 2005 and 2004	6
	Consolidated Statements of Stockholders’ Equity and Comprehensive Income - Nine months ended September 30, 2005 and twelve months ended December 31, 2004	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	22
Part II. Other Information
Item 2.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	22
Item 5.	Other Information	22
Item 6.	Exhibits and Reports on Form 8-K	23
(a)	Exhibits
(b)	Reports on Form 8-K

2

Item 1. Interim Condensed Consolidated Financial Statements (Unaudited)

Harte-Hanks, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (in thousands, except share amounts)

	(Unaudited)
	September 30, 2005			December 31, 2004
Assets
Current assets
Cash and cash equivalents	$	18,541		$	38,807
Accounts receivable, net		170,287			168,755
Inventory		7,373			6,086
Prepaid expenses		15,337			16,664
Current deferred income tax asset		14,972			13,812
Other current assets		9,801			6,373
Total current assets		236,311			250,497
Property, plant and equipment, net		115,552			113,770
Goodwill, net		502,748			458,171
Other intangible assets, net		17,115			2,067
Other assets		3,690			3,848
Total assets	$	875,416		$	828,353
Liabilities and Stockholders’ Equity
Current liabilities
Current maturities of long-term debt	$	—		$	10,000
Accounts payable		57,111			55,632
Accrued payroll and related expenses		30,746			36,539
Customer deposits and unearned revenue		54,049			53,707
Income taxes payable		16,618			17,239
Other current liabilities		11,181			9,075
Total current liabilities		169,705			182,192
Long-term debt		48,000			—
Other long-term liabilities		82,848			74,362
Total liabilities		300,553			256,554
Stockholders’ equity
Common stock, $1 par value per share, 250,000,000 shares authorized. 115,205,786 and 114,505,329 shares issued at September 30, 2005 and December 31, 2004 respectively		115,206			114,505
Additional paid-in capital		265,648			253,515
Retained earnings		953,165			882,750
Less treasury stock: 32,436,795 and 29,524,064 shares at cost at September 30, 2005 and December 31, 2004, respectively		(742,652	)		(663,779	)
Accumulated other comprehensive loss		(16,504	)		(15,192	)
Total stockholders’ equity		574,863			571,799
Total liabilities and stockholders’ equity	$	875,416		$	828,353

See Notes to Unaudited Condensed Consolidated Financial Statements.

3

Harte-Hanks, Inc. and Subsidiaries

Consolidated Statements of Operations (in thousands, except per share amounts)

(Unaudited)

	Three Months Ended September 30,
	2005			2004
Operating revenues	$	281,735		$	262,566
Operating expenses
Labor		102,550			99,726
Production and distribution		101,554			91,326
Advertising, selling, general and administrative		21,071			20,987
Depreciation and amortization		7,499			6,871
Intangible amortization		456			150
Total operating expenses		233,130			219,060
Operating income		48,605			43,506
Other expenses (income)
Interest expense		554			239
Interest income		(43	)		(31	)
Other, net		446			243
		957			451
Income before income taxes		47,648			43,055
Income tax expense		18,823			17,402
Net income	$	28,825		$	25,653
Basic earnings per common share	$	0.34		$	0.30
Weighted-average common shares outstanding		83,752			85,612
Diluted earnings per common share	$	0.34		$	0.29
Weighted-average common and common equivalent shares outstanding		85,408			87,259

See Notes to Unaudited Condensed Consolidated Financial Statements.

4

Harte-Hanks, Inc. and Subsidiaries

Consolidated Statements of Operations (in thousands, except per share amounts)

(Unaudited)

	Nine Months Ended September 30,
	2005			2004
Operating revenues	$	834,038		$	752,970
Operating expenses
Labor		312,227			291,175
Production and distribution		293,935			261,247
Advertising, selling, general and administrative		65,874			61,071
Depreciation and amortization		22,276			21,065
Intangible amortization		982			450
Total operating expenses		695,294			635,008
Operating income		138,744			117,962
Other expenses (income)
Interest expense		1,262			671
Interest income		(158	)		(322	)
Other, net		1,217			928
		2,321			1,277
Income before income taxes		136,423			116,685
Income tax expense		53,398			46,697
Net income	$	83,025		$	69,988
Basic earnings per common share	$	0.98		$	0.81
Weighted-average common shares outstanding		84,316			86,467
Diluted earnings per common share	$	0.96		$	0.79
Weighted-average common and common equivalent shares outstanding		86,056			88,084

See Notes to Unaudited Condensed Consolidated Financial Statements.

5

Harte-Hanks, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2005			2004
Cash Flows from Operating Activities
Net income	$	83,025		$	69,988
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		22,276			21,065
Intangible amortization		982			450
Amortization of option-related compensation		141			76
Deferred income taxes		3,039			7,220
Other, net		344			314
Changes in operating assets and liabilities, net of acquisitions:
Increase in accounts receivable, net		—			(27,810	)
Increase in inventory		(509	)		(580	)
Increase in prepaid expenses and other current assets		(1,808	)		(4,276	)
Increase in accounts payable		304			1,415
(Decrease) increase in other accrued expenses and other current liabilities		(2,154	)		14,107
Other, net		1,938			2,452
Net cash provided by operating activities		107,578			84,421
Cash Flows from Investing Activities
Acquisitions, net of cash acquired		(63,274	)		(17,173	)
Purchases of property, plant and equipment		(22,328	)		(22,115	)
Proceeds from sale of property, plant and equipment		199			181
Net cash used in investing activities		(85,403	)		(39,107	)
Cash Flows from Financing Activities
Long-term borrowings		74,000			45,000
Repayment of long-term borrowings		(36,000	)		(30,000	)
Issuance of common stock		8,275			9,786
Purchase of treasury stock		(76,242	)		(72,862	)
Issuance of treasury stock		136			121
Dividends paid		(12,610	)		(10,375	)
Net cash used in financing activities		(42,441	)		(58,330	)
Net decrease in cash and cash equivalents		(20,266	)		(13,016	)
Cash and cash equivalents at beginning of year		38,807			32,151
Cash and cash equivalents at end of period	$	18,541		$	19,135

See Notes to Unaudited Condensed Consolidated Financial Statements.

6

Harte-Hanks, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity and Comprehensive Income (in thousands)

(2005 Unaudited)

	Common Stock		Additional Paid-In Capital		Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
Balance at January 1, 2004	$	113,281	$	235,996	$	798,974		$	(573,863	)	$	(18,790	)	$	555,598
Common stock issued-employee benefit plans		175		3,347		—			—			—			3,522
Exercise of stock options for cash and by surrender of shares		1,049		10,345		—			(4,334	)		—			7,060
Tax benefit of options exercised		—		3,818		—			—			—			3,818
Dividends paid ($0.16 per share)		—		—		(13,792	)		—			—			(13,792	)
Treasury stock repurchased		—		—		—			(85,738	)		—			(85,738	)
Treasury stock issued		—		9		—			156			—			165
Comprehensive income, net of tax:
Net income		—		—		97,568			—			—			97,568
Adjustment for minimum pension liability (net of tax of $1,519)		—		—		—			—			2,322			2,322
Foreign currency translation adjustment		—		—		—			—			1,276			1,276
Total comprehensive income															101,166
Balance at December 31, 2004		114,505		253,515		882,750			(663,779	)		(15,192	)		571,799
Common stock issued-employee benefit plans		124		2,788		—			—			—			2,912
Exercise of stock options for cash and by surrender of shares		577		5,774		—			(2,741	)		—			3,610
Tax benefit of options exercised		—		3,545		—			—			—			3,545
Dividends paid ($0.15 per share)		—		—		(12,610	)		—			—			(12,610	)
Treasury stock repurchased		—		—		—			(76,242	)		—			(76,242	)
Treasury stock issued		—		26		—			110			—			136
Comprehensive income, net of tax:
Net income		—		—		83,025			—			—			83,025
Foreign currency translation adjustment		—		—		—			—			(1,312	)		(1,312	)
Total comprehensive income															81,713
Balance at September 30, 2005	$	115,206	$	265,648	$	953,165		$	(742,652	)	$	(16,504	)	$	574,863

See Notes to Unaudited Condensed Consolidated Financial Statements.

7

Harte-Hanks, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

Note A - Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Harte-Hanks, Inc. and its subsidiaries (the “Company”).

The statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months and nine months ended September 30, 2005 are not necessarily indicative of the results that may be expected for the year ending December 31, 2005. For further information, refer to the consolidated financial statements and footnotes included in our annual report on Form 10-K for the year ended December 31, 2004.

Certain prior period amounts have been reclassified for comparative purposes.

Note B - Recent Accounting Pronouncements

In April 2005, the Securities Exchange Commission delayed the date by which we must adopt Financial Accounting Standards Board SFAS No. 123, as revised, “Accounting for Stock-Based Compensation”, (Statement 123R) to the first annual period beginning after June 15, 2005, which for Harte-Hanks, Inc. is January 1, 2006. Statement 123R focuses primarily on accounting for transactions in which an entity obtains employee services in exchange for share-based payment transactions. Statement 123R requires public entities to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is then recognized over the period during which an employee is required to provide service in exchange for the award – the requisite service period (typically the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service. The grant-date fair value of employee share options and similar instruments is to be estimated using option-pricing models adjusted for the unique characteristics of those instruments. Statement 123R supercedes APB Opinion No. 25 “Accounting for Stock Issued to Employees,” and eliminates the alternative to use the intrinsic value method of accounting prescribed by APB No. 25. Under APB No. 25, issuing stock options to employees with an exercise price equal to the market price on the date of grant generally resulted in recognition of no compensation cost. We currently follow the disclosure-only provisions of Statement 123 as originally issued, and accordingly no compensation expense has been recognized in the financial statements for options granted where the exercise price is equal to the market price of the underlying stock at the date of grant. The adoption of Statement 123R in our first fiscal quarter of 2006 will have an impact on our financial position and results of operations, but at this time we have not determined that impact.

Note C - Income Taxes

Our third quarter income tax provision of $18.8 million was calculated using an effective income tax rate of approximately 39.5%. Our nine month income tax provision of $53.4 million, was calculated using an effective income tax rate of approximately 39.1%. The effective rate for the nine month period was impacted by the $1.2 million favorable resolution of a tax issue in the second quarter of 2005. Excluding this favorable resolution, our effective tax rate for the nine

8

months ended September 30, 2005 was 40.0%. Our effective income tax rate is derived by estimating pretax income and income tax expense for the year ending December 31, 2005. The effective income tax rate calculated is higher than the federal statutory rate of 35% due to the addition of state taxes and to certain expenses recorded for financial reporting purposes that are not deductible for federal income tax purposes.

Note D - Earnings Per Share

A reconciliation of basic and diluted earnings per share (EPS) is as follows:

	Three Months Ended September 30,
In thousands, except per share amounts	2005		2004
BASIC EPS
Net Income	$	28,825	$	25,653
Weighted-average common shares outstanding used in earnings per share computations		83,752		85,612
Earnings per common share	$	0.34	$	0.30
DILUTED EPS
Net Income	$	28,825	$	25,653
Shares used in diluted earnings per share computations		85,408		87,259
Earnings per common share	$	0.34	$	0.29
Computation of shares used in earnings per share computations:
Weighted-average outstanding common shares		83,752		85,612
Weighted average common equivalent shares - dilutive effect of option shares		1,656		1,647
Shares used in diluted earnings per share computations		85,408		87,259

For the purpose of calculating the shares used in the diluted EPS calculation for the three months ending September 30, 2005, 71,000 anti-dilutive market price options have been excluded from the EPS calculation. For the purpose of calculating the shares used in the diluted EPS calculation for the three months ending September 30, 2004, there were no anti-dilutive options outstanding.

	Nine Months Ended September 30,
In thousands, except per share amounts	2005		2004
BASIC EPS
Net Income	$	83,025	$	69,988
Weighted-average common shares outstanding used in earnings per share computations		84,316		86,467
Earnings per common share	$	0.98	$	0.81
DILUTED EPS
Net Income	$	83,025	$	69,988
Shares used in diluted earnings per share computations		86,056		88,084
Earnings per common share	$	0.96	$	0.79
Computation of shares used in earnings per share computations:
Weighted-average outstanding common shares		84,316		86,467
Weighted-average common equivalent shares - dilutive effect of option shares		1,740		1,617
Shares used diluted in earnings per share computations		86,056		88,084

9

For the purpose of calculating the shares used in the diluted EPS calculation for the nine months ending September 30, 2005 and 2004, 32,000 and 93,000 anti-dilutive market price options have been excluded from the EPS calculations, respectively.

Note E - Business Segments

Harte-Hanks is a highly focused targeted media company with operations in two segments - Direct Marketing and Shoppers.

Information about the operations of Harte-Hanks in our two different business segments follows:

	Three Months Ended September 30,
In thousands	2005			2004
Operating revenues
Direct Marketing	$	168,861		$	162,410
Shoppers		112,874			100,156
Total operating revenues	$	281,735		$	262,566
Operating Income
Direct Marketing	$	26,395		$	23,508
Shoppers		25,096			23,013
Corporate Activities		(2,886	)		(3,015	)
Total operating income	$	48,605		$	43,506
Income before income taxes
Operating income	$	48,605		$	43,506
Interest expense		(554	)		(239	)
Interest income		43			31
Other, net		(446	)		(243	)
Total income before income taxes	$	47,648		$	43,055
	Nine Months Ended September 30,
In thousands	2005			2004
Operating revenues
Direct Marketing	$	507,268		$	461,804
Shoppers		326,770			291,166
Total operating revenues	$	834,038		$	752,970
Operating Income
Direct Marketing	$	75,890		$	61,217
Shoppers		72,469			64,801
Corporate Activities		(9,615	)		(8,056	)
Total operating income	$	138,744		$	117,962
Income before income taxes
Operating income	$	138,744		$	117,962
Interest expense		(1,262	)		(671	)
Interest income		158			322
Other, net		(1,217	)		(928	)
Total income before income taxes	$	136,423		$	116,685

10

Note F - Stock-Based Compensation

We have adopted the disclosure-only provisions of SFAS No. 123. Accordingly, no compensation expense has been recognized for options granted where the exercise price is equal to the market price of the underlying stock at the date of grant. For options issued with an exercise price below the market price of the underlying stock on the date of grant, we recognize compensation expense under the provisions of APB No. 25, as permitted under SFAS No. 123.

Had compensation expense for our options been determined based on the fair value at the grant date for awards since January 1, 1995, consistent with the provisions of SFAS No. 123, our net income and diluted earnings per share would have been reduced to the pro forma amounts indicated below:

	Three Months Ended September 30,
In thousands, except per share amounts	2005			2004
Net income – as reported	$	28,825		$	25,653
Stock-based employee compensation expense, included in reported net income, net of related tax effects		8			15
Stock-based employee compensation expense determined under fair value based methods for all awards, net of related tax effects		(990	)		(1,057	)
Net income – pro forma	$	27,843		$	24,611
Basic earnings per share – as reported	$	0.34		$	0.30
Basic earnings per share – pro forma	$	0.33		$	0.29
Diluted earnings per share – as reported	$	0.34		$	0.29
Diluted earnings per share – pro forma	$	0.33		$	0.28
	Nine Months Ended September 30,
In thousands, except per share amounts	2005			2004
Net income – as reported	$	83,025		$	69,988
Stock-based employee compensation expense, included in reported net income, net of related tax effects		87			46
Stock-based employee compensation expense determined under fair value based methods for all awards, net of related tax effects		(3,209	)		(2,771	)
Net income – pro forma	$	79,903		$	67,263
Basic earnings per share – as reported	$	0.98		$	0.81
Basic earnings per share – pro forma	$	0.95		$	0.78
Diluted earnings per share – as reported	$	0.96		$	0.79
Diluted earnings per share – pro forma	$	0.93		$	0.76

11

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants during the nine months ended September 30, 2005 and 2004:

	Nine Months Ended September 30, 2005		Nine Months Ended September 30, 2004
Expected dividend yield	0.75	%	0.71	%
Expected stock price volatility	25.6	%	26.4	%
Risk free interest rate	4.0	%	3.8	%
Expected Life of options	3-10 years		3-10 years

Note G - Components of Net Periodic Pension Benefit Cost

Prior to January 1, 1999, we maintained a defined benefit pension plan for which most of our employees were eligible. In conjunction with significant enhancements to our 401(k) plan, we elected to freeze benefits under this defined benefit pension plan as of December 31, 1998.

In 1994, we adopted a non-qualified, supplemental pension plan covering certain employees, which provides for incremental pension payments so that total pension payments equal those amounts that would have been payable from our principal pension plan if it were not for limitations imposed by income tax regulation. The benefits under this supplemental pension plan will continue to accrue as if the principal pension plan had not been frozen.

Net pension cost for both plans included the following components:

	Three Months Ended September 30,
In thousands, except per share amounts	2005			2004
Service Cost	$	185		$	140
Interest Cost		1,756			1,642
Expected return on plan assets		(1,979	)		(1,849	)
Amortization of prior service cost		15			16
Transition obligation		24			24
Recognized actuarial loss		594			491
Net periodic benefit cost	$	595		$	464
	Nine Months Ended September 30,
In thousands, except per share amounts	2005			2004
Service Cost	$	554		$	421
Interest Cost		5,267			4,927
Expected return on plan assets		(5,938	)		(5,547	)
Amortization of prior service cost		46			47
Transition obligation		72			72
Recognized actuarial loss		1,783			1,473
Net periodic benefit cost	$	1,784		$	1,393

We are not required to make and do not intend to make a contribution to either pension plan in 2005 other than to the extent needed to cover benefit payments related to the unfunded plan.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Harte-Hanks is a worldwide, direct and targeted marketing company that provides direct marketing services and shopper advertising opportunities to a wide range of local, regional, national and international consumer and business-to-business marketers. We manage our operations through two operating segments: Direct Marketing and Shoppers.

Harte-Hanks Direct Marketing improves the return on its clients’ marketing investment with a range of services and products organized around five solution points: Construct and update the database - Access the data - Analyze the data - Apply the knowledge - Execute the programs. The services and products offered by Direct Marketing are tailored to specific industries or markets. Revenues from the Direct Marketing segment represented approximately 60% and 61% of our total revenue for the three months and nine months ended September 30, 2005, respectively.

Harte-Hanks Shoppers is North America’s largest owner, operator and distributor of shopper publications, based on weekly circulation and revenues. Shoppers are weekly advertising publications delivered free by Standard Mail to households and businesses in a particular geographic area. As of September 30, 2005, the Shoppers are zoned into 1,030 separate editions with circulation in excess of 12 million in California and Florida each week. Revenues from the Shoppers segment represented 40% and 39% of our total revenue for the three months and nine months ended September 30, 2005, respectively.

Harte-Hanks derives its revenues from the sale of direct marketing services and software related products and shopper advertising services. As a worldwide business, Direct Marketing is affected by various market factors, including the demand for its services by its clients or its prospective clients, the financial condition or budgets available to its clients, the business conditions of the industries of each of the verticals it serves and general national and international economic trends. Shoppers operate in local markets and are largely affected by the strength of the various competitive factors in the local markets it serves, the financial condition of its clients and the local economies in which it provides services. Our principal expense items are payroll, postage and transportation.

Critical Accounting Policies

There have been no changes to the critical accounting policies described in our annual report on form 10-K for the year ended December 31, 2004.

Results of Operations

Operating results were as follows:

	Three months ended						Nine months ended
In thousands	Sept. 30, 2005		Sept. 30, 2004		Change		Sept. 30, 2005		Sept. 30, 2004		Change
Revenues	$	281,735	$	262,566	7.3	%	$	834,038	$	752,970	10.8	%
Operating expenses		233,130		219,060	6.4	%		695,294		635,008	9.5	%
Operating income	$	48,605	$	43,506	11.7	%	$	138,744	$	117,962	17.6	%
Net income	$	28,825	$	25,653	12.4	%	$	83,025	$	69,988	18.6	%
Diluted earnings per share	$	0.34	$	0.29	17.2	%	$	0.96	$	0.79	21.5	%

13

Consolidated revenues increased 7.3% to $281.7 million and operating income increased 11.7% to $48.6 million in the third quarter of 2005 when compared to the third quarter of 2004. The increase in consolidated revenues was a result of increased revenues from both the Shoppers and Direct Marketing segments. Overall operating expenses increased 6.4% to $233.1 million in the third quarter of 2005 when compared to the third quarter of 2004. The increase in consolidated operating expenses was a result of increased operating expenses from both the Shoppers and Direct Marketing segments, partially offset by a decrease in general corporate expense.

Net income increased 12.4% to $28.8 million and diluted earnings per share grew 17.2% to 34 cents per share in the third quarter of 2005 when compared to the third quarter of 2004. The increase in net income was a result of increased operating income combined with a lower tax rate, partially offset by higher interest expense, in the third quarter of 2005 when compared to the third quarter of 2004.

Direct Marketing

Direct Marketing operating results were as follows:

	Three months ended						Nine months ended
In thousands	Sept. 30, 2005		Sept. 30, 2004		Change		Sept. 30, 2005		Sept. 30, 2004		Change
Revenues	$	168,861	$	162,410	4.0	%	$	507,268	$	461,804	9.8	%
Operating expenses		142,466		138,902	2.6	%		431,378		400,587	7.7	%
Operating income	$	26,395	$	23,508	12.3	%	$	75,890	$	61,217	24.0	%

3^rd Quarter 2005 vs. 3^rd Quarter 2004

Direct Marketing revenues increased $6.5 million, or 4.0%, in the third quarter of 2005 compared to 2004. These results reflect year-over-year revenue growth in four of Direct Marketing’s five vertical markets. The retail and pharmaceutical/healthcare verticals produced low double-digit revenue growth. Revenues from the select vertical markets group were up in the high single-digits and revenues from the financial services vertical market were up in the mid single-digits. Revenues from the high-tech/telecom vertical market were down in the high-single digits. The acquisitions of Postfuture, Inc. in December 2004 and Communiqué Direct in February 2005 positively affected the revenues for the quarter. Revenues from our vertical markets are impacted by the economic fundamentals of each industry as well as the financial condition of specific customers. In addition, revenues for Direct Marketing are affected by various market factors, including the demand for its services by its clients or its prospective clients, the financial condition of or budgets available to its clients, and general national and international economic trends.

From a service offering perspective, Direct Marketing experienced increased revenues from logistics, data processing, personalized mail, analytics and agency-related work. Partially offsetting these increases were declines in revenues from customer care, printing and fulfillment.

Operating expenses increased $3.6 million, or 2.6%, in the third quarter of 2005 compared to the third quarter of 2004 as increased production and distribution costs and depreciation and amortization expense were partially offset by decreased labor costs and general and administrative expenses. Labor costs decreased $1.1 million, or 1.6%, in the third quarter of 2005 compared to 2004 as a result of lower payroll costs due to decreased headcount, and lower incentive compensation. Production and distribution costs increased $4.2 million, or 8.2%, due primarily to higher logistics-related transportation costs, including increased fuel prices, and higher outsourcing costs. General and administrative expense was down slightly, 0.3%, as decreased insurance expense and professional services were offset by increased expenses related to business services and promotions. Depreciation and amortization expense increased $0.5 million, or 8.9%, due to capital expenditures to support revenue growth. The acquisitions of Postfuture, Inc. in December 2004 and Communiqué Direct in February 2005 also contributed to the increase in operating expenses in the third quarter of 2005.

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Direct Marketing’s largest cost components are labor, outsourced costs, and transportation. Each of these costs are variable and tend to fluctuate with revenues and the demand for our direct marketing services.

First Nine Months 2005 vs. First Nine Months 2004

Direct Marketing revenues increased $45.5 million, or 9.8%, in the first nine months of 2005 compared to the first nine months of 2004. These results reflect double-digit year-over-year revenue growth from the high-tech/telecom, retail and select vertical markets group. Revenues from the financial services vertical were up in the high single-digits, and revenues from the pharmaceutical/healthcare vertical market were up in the mid single-digits. Direct Marketing revenues benefited from a large, complex, world-wide project that was launched and substantially completed in the first quarter of 2005. Excluding revenues from this project, revenues in the first nine months of 2005 were up high single-digits compared to the first nine months of 2004. In addition, the acquisitions of Avellino Technologies Ltd. at the end of February 2004, Postfuture, Inc. in December 2004 and Communiqué Direct in February 2005 also positively affected the revenues and operating expenses for the first nine months of 2005.

From a service offering perspective, Direct Marketing experienced increased revenues from logistics, data processing, telesales, personalized mail, database processing, analytics and agency-related work. Partially offsetting these increases were declines in revenues from customer care and fulfillment.

Operating expenses increased $30.8 million, or 7.7%, in the first nine months of 2005 compared to the first nine months of 2004 as a result of increased labor costs, production and distribution costs, general and administrative expenses and depreciation and amortization expense. Labor costs increased $10.6 million, or 5.2%, in the first nine months of 2005 compared to 2004 as a result of higher payroll costs due to higher volumes in certain offerings and salary increases, increased incentive compensation due to Direct Marketing’s financial performance, and higher healthcare costs. Production and distribution costs increased $17.0 million, or 11.7% primarily due to higher logistics-related transportation costs, including increased fuel prices, higher outsourcing costs and increased repairs and maintenance expense, partially offset by decreased lease expense. General and administrative expense increased $2.3 million, or 6.7%, due to increased employee expense, business services, bad debt expense and facilities services, partially offset by decreased insurance expense. Depreciation and amortization expense increased $1.0 million, or 5.6%, due to capital expenditures to support revenue growth. The acquisitions of Avellino Technologies Ltd. at the end of February 2004, Postfuture, Inc. in December 2004 and Communiqué Direct in February 2005 also contributed to the increase in operating expenses for the first nine months of 2005.

Shoppers

Shopper operating results were as follows:

	Three months ended						Nine months ended
In thousands	Sept. 30, 2005		Sept. 30, 2004		Change		Sept. 30, 2005		Sept. 30, 2004		Change
Revenues	$	112,874	$	100,156	12.7	%	$	326,770	$	291,166	12.2	%
Operating expenses		87,778		77,143	13.8	%		254,301		226,365	12.3	%
Operating income	$	25,096	$	23,013	9.1	%	$	72,469	$	64,801	11.8	%

3^rd Quarter 2005 vs. 3^rd Quarter 2004

Shoppers revenues increased $12.7 million, or 12.7%, in the third quarter of 2005 compared to the third quarter of 2004. The acquisition of The Tampa Flyer in April 2005 contributed approximately two-thirds of this revenue growth. The remaining revenue increases primarily were the result of new year-over-year geographic expansions and household growth in California and Florida. Total

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Shoppers circulation increased by approximately 70,000, all in the Tampa area, during the third quarter of 2005. At the end of the quarter Shopper circulation reached over 12.0 million (including 239,000 in South Orange County, California where Shoppers publish two editions each week). We believe that geographic expansions provide increased revenue opportunities and plan to cover an additional circulation of greater than 1.0 million over the next three years in California and Florida. Newer areas initially contribute less from a revenue-per-thousand perspective than existing areas, and in fact are typically expected to be less profitable or even unprofitable until the publications in those areas mature.

From a product-line perspective, Shoppers had growth from run-of-press (ROP, or in-book) advertising, primarily employment-related advertising and core sales. Revenues from distribution products were down compared to the prior year quarter.

Operating expenses increased $10.6 million, or 13.8%, in the third quarter of 2005 compared to the third quarter of 2004 as a result of increased labor costs, production and distribution costs and depreciation and amortization expense, as well as the acquisition of The Tampa Flyer. Total labor costs increased $4.0 million, or 14.7%. Excluding the Tampa acquisition, labor costs increased $0.9 million or 3.3%, due to higher payroll costs to support higher circulation volumes and expansions, and higher healthcare costs. Total production costs increased $6.0 million, or 15.1%. Excluding the Tampa acquisition, production costs increased $1.9 million or 4.8% including increased outsourced costs and increased paper costs due to increased newsprint prices. Postage expense was up $0.1 million as an increase in regular postage was offset by a decrease in overweight postage. Total general and administrative costs increased $0.2 million, or 2.0%. Excluding the Tampa acquisition, general and administrative costs decreased $0.5 million or 5.6%, primarily due to lower bad debt expense and promotion costs. Total depreciation expense was up $0.1 million or 10.3%, with the majority of the increase attributable to the Tampa acquisition. Intangible amortization related to the Tampa acquisition was $0.3 million during the third quarter of 2005.

First Nine Months 2005 vs. First Nine Months 2004

Shopper revenues increased $35.6 million, or 12.2%, in the first nine months of 2005 compared to the first nine months of 2004. The acquisition of The Tampa Flyer in April 2005 contributed about half of this revenue growth. The remaining revenue increases primarily were the result of improved sales in established markets and new year-over-year geographic expansions and household growth in California and Florida. Total Shoppers circulation increased by almost 1.1 million during the first nine months of 2005, including the circulation in Tampa at the date of acquisition of approximately 955,000.

From a product-line perspective, Shoppers had growth from run-of-press (ROP, or in-book) advertising, primarily core sales, employment and real estate-related advertising. Revenues from distribution products were down slightly compared to the first nine months of 2004.

Operating expenses increased $27.9 million, or 12.3%, in the first nine months of 2005 compared to the first nine months of 2004 as a result of increased labor costs, production and distribution costs, general and administrative costs and depreciation and amortization expense, as well as the acquisition of The Tampa Flyer. Total labor costs increased $10.0 million, or 12.2%. Excluding the Tampa acquisition, labor costs increased $4.4 million or 5.4%, due to higher payroll costs as a result of higher circulation volumes and expansions, and higher healthcare costs. Total production costs increased $15.7 million, or 13.5%. Excluding the Tampa acquisition, production costs increased $8.3 million or 7.2% including increased postage due to increased volumes, increased offload printing expense due to increased print-and-deliver volumes and higher printing rates, and increased paper costs due to increased rates. Total general and administrative costs increased $1.5 million, or 6.0%. Excluding the Tampa acquisition, general and administrative costs increased $0.4 million or 1.5%, primarily due to

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increased promotion costs, business services and bad debt expense, partially offset by decreased insurance costs. Total depreciation expense was up $0.3 million or 6.2%, with most of the increase attributable to the Tampa acquisition. Intangible amortization related to the Tampa acquisition was $0.5 million during the first nine months of 2005.

Shoppers labor costs are variable and tend to fluctuate with the number of zones, circulation volumes and revenues. Standard postage rates have been unchanged since the beginning of the third quarter of 2002 and it is anticipated that the next increase in postage rates will occur in the first quarter of 2006. Increased postage rates would impact Shoppers total production costs. Newsprint prices increased throughout 2004 and the first half of 2005 and are expected to continue to increase through 2005. This increase impacted Shoppers production costs in the first nine months of 2005, and rising newsprint prices are expected to impact Shoppers production costs for the remainder of 2005 and into 2006.

Hurricane Wilma

On October 24, 2005 Hurricane Wilma moved across South Florida causing extensive wind and water damage and loss of electrical power to millions of homes and businesses. Our South Florida Shopper facility suffered some damage, primarily the roof which will need to be replaced, and we suffered some water damage to the sales and administrative offices. Printing and other production equipment was not damaged. Our South Florida Shoppers operations were affected by the extensive loss of power and as well as issues with mail delivery. These factors caused us to delay the distribution of one publication cycle by one week, and to miss one publication cycle. We have returned to our normal publication cycle (once weekly). While there is some uncertainty as to the levels of advertising spending by our customers in the short term, revenue from our first publication following the disruption was at a similar level to revenue from the publications prior to the disruption . Our South Florida Shopper represents less than 10% of total Shoppers revenues and less than 3.5% of total company revenue.

General Corporate Expense

General corporate expense decreased $0.1 million, or 4.3%, during the third quarter of 2005 compared to the third quarter of 2004, due to decreased professional services and decreased labor, primarily payroll due to lower incentive compensation. General corporate expense increased $1.6 million, or 19.4%, during the first nine months of 2005 compared to the first nine months of 2004. The increase in general corporate expense in the first nine months of 2004 was primarily a result of increased professional services, primarily consulting related to a state tax refund and Sarbanes-Oxley related costs, and increased labor, primarily payroll due to higher headcount and higher salaries and pension expense.

Other Income and Expense

Other net expense for the third quarter and first nine months of 2005 primarily consists of stockholder expenses and balance-based bank charges.

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Interest Expense/Interest Income

Interest expense was up $0.3 million in the third quarter and $0.6 million in the first nine months of 2005 compared to the same periods in 2004. These increases were due to higher outstanding debt levels, primarily due to the acquisition of substantially all of the assets of The Tampa Flyer in April 2005, repurchases of our common stock and higher interest rates under our revolving credit facility in 2005 than in 2004.

Interest income was up slightly in the third quarter of 2005 compared to the third quarter of 2004. Interest income was down $0.2 million in the first nine months of 2005 compared to the first nine months of 2004, due to interest related to a tax refund we received in the first quarter of 2004.

Income Taxes

Our income tax expense increased $1.4 million in the third quarter and $6.7 million in the first nine months of 2005 compared to the same periods in 2004. These changes were primarily due to the changes in pre-tax income levels. Tax expense for the nine month period was also positively impacted by a favorable resolution to a state tax matter in the second quarter, resulting in a lower effective tax rate. The effective tax rate was 39.5% for the third quarter of 2005 and 40.4% for the third quarter of 2004. The effective tax rate was 39.1% for the first nine months of 2005 and 40.0% for the first nine months of 2004. Excluding the favorable resolution in the second quarter, our effective tax rate for the nine months ended September 30, 2005 was 40.0%.

Liquidity and Capital Resources

Cash provided by operating activities for the nine months ended September 30, 2005 was $107.6 million, compared to $84.4 million for the first nine months of 2004. Net cash outflows from investing activities were $85.4 million for the first nine months of 2005, compared to $39.1 million for the first nine months of 2004. The difference between net cash outflows from investing activities in 2005 and 2004 is primarily the result of the acquisition of The Tampa Flyer in April 2005. Net cash outflows from financing activities were $42.4 million in 2005 compared to $58.3 million in 2004. The difference between net cash outflows from financing activities in 2005 and 2004 is attributable primarily to $23.0 million more net borrowings on our credit facility in the first nine months of 2005 compared to the first nine months of 2004. Partially offsetting the difference in cash outflows from financing activities in 2005 compared to 2004 were the higher amount spent on repurchase of our common stock and higher dividend payments in 2005.

Capital resources are also available from and provided through our unsecured credit facility. On August 12, 2005, Harte-Hanks entered into a five-year $125 million revolving credit facility (the “Credit Facility”) with JPMorgan Chase Bank, N.A., as administrative agent. The Credit Facility replaced the existing revolving credit facility with JPMorgan Chase Bank, N.A., as administrative agent, which was scheduled to mature on October 18, 2005. The Credit Facility allows us to obtain revolving credit loans and provides for the issuance of letters of credit. For each borrowing under the Credit Facility, we can generally choose to have the interest rate for that borrowing calculated based on either JPMorgan Chase Bank’s publicly announced New York prime rate or on a Eurodollar (as defined in our new Five-Year Credit Agreement) rate plus a spread. The spread is determined based on our total debt-to-EBITDA (as defined in our new Five-Year Credit Agreement) ratio then in effect, and ranges from .315% to .6%. There is a facility fee that we are also required to pay under the Credit Facility that is based on a rate applied to the total commitment amount under the Credit Facility (which is $125 million), regardless of how much of that commitment we have actually drawn upon. The facility fee rate ranges from .085% to .15%, depending on our total debt-to-EBITDA ratio then in effect. In addition, we will also be

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charged a letter of credit fee with respect to any outstanding letters of credit issued under this credit facility. That fee is calculated by applying a rate equal to the spread applicable to Eurodollar based loans plus a fronting fee of .125% per annum to the average daily undrawn amount of the outstanding letters of credit.

Under the Credit Facility, we are required to maintain an interest coverage ratio of not less than 2.75 to 1 and a total debt-to-EBITDA ratio of not more than 3.0 to 1. The Credit Facility also contains covenants restricting our and our subsidiaries’ ability to grant liens, enter into certain transactions and allow the total amount of indebtedness of our subsidiaries to exceed $20 million.

The Credit Facility also includes customary covenants regarding reporting obligations, delivery of notices regarding certain events, maintaining our corporate existence, payment of obligations, maintenance of our properties and insurance thereon at customary levels with financially sound and reputable insurance companies, maintaining books and records and compliance with applicable laws. The Credit Facility provides for customary events of default including nonpayment of principal or interest, breach of representations and warranties, violations of covenants, failure to pay certain other indebtedness, bankruptcy and material judgments and liabilities, certain violations of environmental laws or ERISA or the occurrence of a change of control. As of September 30, 2005, we were in compliance with all of the covenants of our credit facility.

Management believes that our credit facility, together with cash provided from operating activities, will be sufficient to fund operations and anticipated acquisitions, capital expenditures, stock repurchases and dividend payments for the foreseeable future.

Factors That May Affect Future Results and Financial Condition

From time to time, in both written reports and oral statements by senior management, we may express our expectations regarding our future performance. These “forward-looking statements” are inherently uncertain, and investors should realize that events could turn out to be other than what senior management expected. Set forth below are some key factors that could affect our future performance, including our revenues, operating income, net income and earnings per share; however, the risks described below are not the only ones we face. Additional risks and uncertainties that are not presently known, or that we currently consider immaterial, could also impair our business operations.

Legislation, Judicial Interpretations, Consumer Environment

There could be a material adverse impact on our business due to the enactment of legislation or industry regulations, the issuance of judicial interpretations, or simply a change in customs, arising from public concern over consumer privacy issues. Restrictions could be placed upon the collection, management, aggregation and use of information that is legally available, which could result in a material increase in the cost of collecting some kinds of data. It is also possible that we could be prohibited from collecting or disseminating certain types of data, which could in turn materially adversely affect our ability to meet and serve our clients’ requirements.

Data Suppliers

There could be a material adverse impact on our Direct Marketing business if owners of the data we use were to withdraw the data. Data providers could withdraw their data if there is a competitive reason to do so or if additional legislation is passed restricting the use of the data. We could also be adversely impacted if the data suppliers we use were unable to obtain the same amount or type of data due to prospective privacy legislation.

Acquisitions

We continue to pursue acquisition opportunities. Acquisition activities, even if not consummated, require substantial amounts of management time and can distract

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from normal operations. In addition, there can be no assurance that the synergies and other objectives sought in acquisitions would be achieved. We believe that we will be able to successfully integrate recently acquired businesses into existing operations, but there is no certainty that future acquisitions will be consummated on acceptable terms or that any acquired assets, data or businesses will be successfully integrated into our operations. The failure to identify appropriate candidates, to negotiate favorable terms, or to successfully integrate future acquisitions into existing operations could result in decreased revenues, net income and earnings per share.

Competition

Direct marketing is a rapidly evolving business, subject to periodic technological advancements, high turnover of customer personnel who make buying decisions, and changing customer needs and preferences. Consequently, our Direct Marketing business faces competition in all of its offerings and within each of its vertical markets. Our Shoppers business competes for advertising, as well as for readers, with other print and electronic media. Competition comes from local and regional newspapers, magazines, radio, broadcast and cable television, shoppers, shared mail, other communications media and other advertising printers that operate in our markets. The extent and nature of such competition are, in large part, determined by the location and demographics of the markets targeted by a particular advertiser, and the number of media alternatives in those markets. Failure to continually improve our current processes and to develop new products and services could result in the loss of our customers to current or future competitors. In addition, failure to gain market acceptance of new products and services could adversely affect our growth.

Qualified Personnel

We believe that our future prospects will depend in large part upon our ability to attract, train and retain highly skilled technical, client services and administrative personnel. While dependent on employment levels and general economic conditions, qualified personnel historically have been in great demand and from time to time and in the foreseeable future will likely remain a limited resource.

Postal Rates

Our Shoppers and Direct Marketing services depend on the United States Postal Service to deliver products. Our shoppers are delivered by Standard Mail, and postage is the second largest expense, behind payroll, in our Shoppers business. Standard postage rates have been unchanged since the beginning of the third quarter of 2002, and it is anticipated the next increase in postage rates will occur in the first quarter of 2006. Overall Shoppers postage costs are expected to grow as a result of anticipated increases in circulation. Postal rates also influence the demand for our Direct Marketing services even though the cost of mailings is borne by our customers and is not directly reflected in our revenues or expenses.

Paper Prices

Paper represents a substantial expense in our Shoppers operations. In recent years newsprint prices have fluctuated widely, and such fluctuations can materially affect the results of our operations.

Economic Conditions

Changes in national economic conditions can affect levels of advertising expenditures generally, and such changes can affect each of our businesses. In addition, revenues from our Shoppers business are dependent to a large extent on local advertising expenditures in the markets in which they operate. Such expenditures are substantially affected by the strength of the local economies in those markets. Direct Marketing revenues are dependent on national and international economies.

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Interest Rates

Interest rate movements in Europe and the United States can affect the amount of interest we pay related to our debt and the amount it earns on cash equivalents. Our primary interest rate exposure is to interest rate fluctuations in Europe, specifically Eurodollar rates due to their impact on interest related to our $125 million credit facility. We also have exposure to interest rate fluctuations in the United States, specifically money market, commercial paper and overnight time deposit rates as these affect our earnings on excess cash.

International Operations

Harte-Hanks Direct Marketing conducts business outside of the United States. Approximately 9.0% and 9.6% of Harte-Hanks Direct Marketing’s revenues were derived from business outside the United States during the third quarter and first nine months of 2005, respectively. Accordingly, our future operating results could be negatively affected by a variety of factors, some of which are beyond our control. In addition, exchange rate movements may have an impact on our future costs or on future cash flows from foreign investments. We have not entered into any foreign currency forward exchange contracts or other derivative instruments to hedge the effects of adverse fluctuations in foreign currency exchange rates. Additional risks inherent in our non-U.S. business activities generally include, among others, potentially longer accounts receivable payment cycles, the costs and difficulties of managing international operations, potentially adverse tax consequences, and greater difficulty enforcing intellectual property rights. The various risks that are inherent in doing business in the United States are also generally applicable to doing business outside of the United States, and may be exaggerated by the difficulty of doing business in numerous sovereign jurisdictions due to differences in culture, laws and regulations.

War

War and/or terrorism or the threat of war and/or terrorism involving the United States could have a significant impact on our operations, and could substantially affect the levels of advertising expenditures by clients in each of our businesses. In addition, each of our businesses could be affected by operation disruptions and a shortage of supplies and labor related to such a war and/or terrorism or threat of war and/or terrorism.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our earnings are affected by changes in short-term interest rates as a result of our revolving credit agreement, which bears interest at variable rates based on Eurodollar rates (effective rate of 4.16% at September 30, 2005) and has a maturity date of August 12, 2010. At September 30, 2005, we had $48 million of debt outstanding under our revolving line of credit. Our earnings are also affected by changes in short-term interest rates as a result of our deferred compensation agreement, which bears interest at variable rates based on Prime (effective rate of 6.75% at September 30, 2005) and has a balance of $6.8 million at September 30, 2005. Assuming the current level of borrowing and deferred compensation balance and assuming a one percentage point change in the quarter’s and first nine months’ annual interest rates, it is estimated that our net income for the third quarter and first nine months of 2005 would have been approximately $79,000 and $141,000 lower, respectively. Due to the our debt level and deferred compensation balance at September 30, 2005, anticipated cash flows from operations, and the various financial alternatives available to management, should there be an adverse change in interest rates, we do not believe that we have significant exposure to market risks associated with changing interest rates as of September 30, 2005. We do not use derivative financial instruments in our operations.

Our earnings are also affected by fluctuations in foreign exchange rates as a result of our operations in foreign countries. Due to the level of operations in foreign countries, the impact of fluctuations in foreign exchange rates is not significant to our overall earnings.

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Item 4. Controls and Procedures

As of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer concluded that the design and operation of these disclosure controls and procedures were effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in our periodic SEC filings. During the period covered by this report, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 2. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table contains information about our purchases of equity securities during the third quarter of 2005:

Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Plan	Maximum Number of Shares that May Yet Be Purchased Under the Plan
July 1 - 31, 2005	53,000	$	27.53	53,000	4,429,928
August 1 - 31, 2005(2)	1,068,027	$	27.12	1,000,500	3,429,428
September 1 - 30, 2005	616,900	$	26.28	616,900	2,812,528
Total	1,737,927	$	26.83	1,670,400

(1) During the third quarter of 2005, 1,670,400 shares were purchased through our stock repurchase program that was publicly announced in January 1997. Under this program, from which shares can be purchased in the open market or through privately negotiated transactions, our Board of Directors authorized the repurchase of up to 44,900,000 shares of our outstanding common stock. As of September 30, 2005 we had repurchased a total of 42,087,472 shares at an average price of $17.09 per share under this program.

(2) On August 15, 2005, we purchased 100,000 shares of our common stock for $27.33 per share (the closing price per share of our common stock on August 15, 2005) from Mr. Houston H. Harte. Mr. Harte is a member of our Board of Directors.

Item 5. Other Information

We furnished a report on Form 8-K dated July 27, 2005. The report incorporated our earnings release for the period ended June 30, 2005. Under the report, we furnished (not filed) pursuant to Item 7.01 and Item 9.01, the press release entitled “Harte-Hanks Reports Second Quarter EPS Up 17% to $0.34 with Revenue Up 11.7%” relating to the results of the second fiscal quarter ended June 30, 2005. In that report we also furnished GAAP financial statements,which were mistakenly furnish under Item 12 ( “Results of Operations and Financial Condition”) and should have been furnished under Item 2.02 ( “Results of Operations and Financial Condition” which replaced former Item 12).

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Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits. See index to Exhibits on Page 27.

We furnished a report on Form 8-K dated July 27, 2005. The report incorporated our earnings release for the period ended June 30, 2005. Under the report, we furnished (not filed) pursuant to Item 7.01 and Item 9.01, the press release entitled “Harte-Hanks Reports Second Quarter EPS Up 17% to $0.34 with Revenue Up 11.7%” relating to the results of the second fiscal quarter ended June 30, 2005, as well as filed GAAP financial statements.

We filed a Form 8-K, dated August 15, 2005, reporting in Item 1.01 that we entered into a material definitive agreement with JPMorgan Chase Bank, N.A. as administrative agent, for a new five-year $125 million revolving credit facility. In this Form 8-K, we reported in Item 2.03 that this agreement created a direct financial obligation for us. This agreement was filed under Item 9.01 as an exhibit to this Form 8-K.

We filed a Form 8-K, dated August 30, 2005, reporting in Item 1.01 that Larry Franklin informed Harte-Hanks that effective January 1, 2006, Mr. Franklin was resigning as an employee of Harte-Hanks, but would continue to serve as Chairman of the Board. On such date, Mr. Franklin will no longer be compensated as an employee of Harte-Hanks. As Chairman of the Board of Directors, he will receive $250,000 annually as fees for his service. In addition in this Form 8-K, we reported in Items 7.01 and 9.01 that we issued a press release announcing Mr. Franklin’s resignation.

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Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HARTE-HANKS, INC.
November 9, 2005 Date	/s/ Richard M. Hochhauser
	Richard M. Hochhauser
	President and Chief Executive Officer

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Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HARTE-HANKS, INC.
November 9, 2005 Date	/s/ Dean H. Blythe
	Dean H. Blythe
	Senior Vice President and
	Chief Financial Officer

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Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HARTE-HANKS, INC.
November 9, 2005 Date	/s/ Jessica M. Huff
	Jessica M. Huff
	Vice President, Finance and
	Chief Accounting Officer

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Exhibit No.	Description of Exhibit
*21	Subsidiaries of the Company.
*31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
*32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Filed herewith

+ Indicates management contract or compensatory plan, contract or arrangement.

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.

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