Good evening, my name is Nicole and I will be your conference operator today. At this time, I would like to welcome everyone to the Harte Hanks Third Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Robert Munden, you may begin your conference.

Thank you, operator. Our call will include forward-looking statements, such as statements about our strategies, adjustments to our cost structure, financial outlook and capital resources, competitive factors, business and industry expectations, anticipated effects of acquisitions, litigation and regulatory changes, economic forecasts for the markets we serve and other statements that are not historical facts. Actual results may differ materially from those projected or implied in these statements because of various risks and uncertainties, including those described in our most recent Form 10-K and other filings with the SEC and in the cautionary statement in today's earnings release. Our call may also reference non-GAAP financial measures. Please refer to today's earnings release for the required reconciliations and other related disclosures. Our earnings release is available on the Investors tab of our web site at hartehanks.com. I'll now turn the call back over to our new CEO, Karen Puckett.

Thank you, Robert and good afternoon, everyone. Thank you for joining us on our earnings call. I am very pleased to have joined Harte Hanks as CEO and I am excited about the opportunity to speak with you today and in the future. By now you've had a chance to review our third quarter results and a full earnings release we issued earlier today. We deliver core operating revenues of $122 million compared to $134 million in the third quarter of 2014. Consistent with the expectations we shared with you last quarter, the rate of revenue decline improved compared to the second quarter of 2015. Doug will walk you through the financials in more detail in a moment, but I would like to spend my time discussing my observations from my first month and half as CEO of Harte Hanks and elaborate on our areas of focus going forward. As a member of the Harte Hanks Board for the past six years, I am familiar with our business and I support the strategic vision we announced last year to become a leader in smarter customer interactions. Our overall business strategy remains unchanged. We will continue to leverage our existing strength, coupled with an acquisition strategy that will augment our capabilities to meet the needs of both existing and potential clients. Living from a Board member to the CEO role has given me more opportunities to engage with our talented employee base. We have smart traders and loyal people who bring knowledge and expertise across our business practices in all industries we serve. I am very pleased to be leading such a great team and I am focused on employee engagement, improving collaboration and creating opportunities for development. Delivering on our vision to be a leader in smarter customer interaction will…

Thank you, Karen and good evening. The quarter included two significant events. First Karen is appointed as our CEO in early September. Second during the third quarter as a result of sustained declining of market capitalization below the book value of our equity and recent operating performance of the company, we had a trigger event for goodwill impairment. As a result we've performed an analysis to estimate the fair value of each of our reporting segments. Based on our analysis, the fair value of trillion segment was estimated to be more than book value of its equity requiring no goodwill impairment charge for it. We have estimated share value for our customer interaction segment to be less than the book value of its equity and consequently determine that we should take a $209 million goodwill impairment charge for this segment. This is of course a non-cash charge based off of future projections that are heavily influenced by recent performance and does not impact how we operate our business. Most of our goodwill balance accumulated from business acquisitions made in the late 90s. Also, we have now owned 3Q Digital for two quarter and they continue to outperform both the search market and out anticipated revenue growth. 3Q is driving strong results and we're starting to experience growth in social marketing with changes for clients looking for assistance in using data to place and target social sites such as Facebook. 3Q's reputation is helping us to grow our sales pipeline resulting in more deals and is a part of Harte Hanks' their average deal size is now larger than historically seeking in 3Q. Turning to our third quarter results, our consolidated revenues were $122 million compared to $134.1 million of revenues in the same quarter last year. Customer interaction revenue declined…

[Operator Instructions] Your first question comes from the line of Michael Kupinski. Your line is open.

Thank you. Thanks for taking the questions. In spite of the extremely challenging quarter it seems like you guys managed to beat my numbers, which is a good thing. And so I did wanted to ask you a little bit about some of the trends in the business, particularly those that you indicated that most of it was because of the volume declines in your customer interaction business and I was wondering if you lost any clients in the quarter and as we head into the fourth quarter, are you seeing any traction in that? Are we still anticipating the prospect of seeing a decelerate in the rate of decline in the fourth quarter as well and when do you think that you might even turn the corner towards revenue growth in the customer interaction space?

So one or two lost clients, a majority of the revenue decline from a lost client standpoint actually the bigger impact was from clients lost earlier in the year, that has also been offset by a higher amount of wins that we have gotten from clients than we have historically had in the last two or three years, which is a result of some of the new products that we have rolled out in new additional sales force emphasis that we put on sales and marketing, but we've talked about for the last several quarters. So we are and we have been seeing some successes coming out of that investment and commitment to bringing in new clients, new logos and new businesses. So we’re glad to see the rate of decline in the third quarter to be less than what it was through the first six months of the year, obviously lower than what it was through the end of the second quarter and that's what we through we would see and we're glad to seeing that to this point.

Would you anticipate that you're going to see similar trends like that in the fourth quarter?

I don’t know but it will be as much. We primarily expect the fourth quarter to be consistent with the third quarter performance and revenues performance.

And Doug, in terms of the issues with the consolidation among our luxury European auto manufacturer to one vendor, what was that you weren't able to provide that lost that business?

That business was primarily related to them selecting a much larger agency that’s specialize solely in services to the auto industry and from a competitive standpoint that's not unusual. It was the normal bill industry specialist.

Now that you're introducing new products in Trillium, has it turned the corner towards sustainable revenue growth at this point?

Yes we believe so, we're very happy to see -- we got a couple of quarters of revenue growth behind it. There is a nice cycle as you can see of product innovation, new products rolling out and that's starting to take hold in the market place and we're starting to see some results from that.

What, could this be the time to start considering maybe selling that asset given the fact that now that if we're turning the corner toward sustainable revenue growth that maybe this gets better price for that valuable asset. I was just wondering if you give us your thoughts on that.

At this point, it’s way too early to commit or make that kind of decision. It is performing well. We still believe that the industry that it participates in is growing faster and at higher rate than what Trillium has done for the last couple of quarters and there is a lot of potential upside in valuation and performance that both Harte Hanks and its shareholders can participate in.

It seems like the pace of acquisitions are falling a buck behind the level indicated by the company's promise to double the company's revenues. I believe it was over a five-year period at that point. And Karen, you indicated that you plan to continue this strategy that the company outlined in terms of the acquisition growth, are there any specific areas that strategically you may tweak or reasons why may be that the company hasn't really fulfilled a much more aggressive acquisition strategy behind the 3Q investment?

No, I would answer it this way in terms of first off supportive of the strategy and coming from a World War I had to deliver quarters every quarter. The numbers I record, I understand the complexity of the environment that the marketing environment is changing so dramatically. So the great news is it’s wonderful to be in an area where there is growth potential because anytime there is disruption and changes in opportunity and that’s really what’s happening in the marketing landscape. Saying that when we came out with the strategy and talked to all of you about that relative to capabilities and acquisition I would say that we're not going to do acquisitions because we put out number out there. We got to do the right acquisition, which I think is what our shareholders wanted to do and furthermore I think that we've been very clear when we acquire a company that we not only know and we know the growth of that company as a standalone, but we have to have an integrated go to market capability a unified approach to the customer to the market place. So it can't be just a standalone. We have to be able to take that capability and apply to existing customers or a new sub-segment that we have observed before. I think that’s the power of the opportunity. If I look at -- we are continuing, we've got someone full time is focused on acquisitions in this development. Very intrigued with just data and data analytics it's foundational to what we do and we have to ensure that we have the best both capability and power around that. I think that’s an area that we just have to drive a lot more focused and attention to. So you'll probably see more in that area.

I'm sorry. I'll ask the final question again. I guess I give out this question asked a lot, obviously Harte Hanks has never cut its dividend over the course of its history that I recall and the yield is obviously quite extraordinary. I know the company is generating free cash flow and so forth, but in the light of the investments that are needed, acquisitions and investments into the company, do you feel that there is any prospect that the company will cut the dividend to accelerate maybe some investments into the company.

Yes, the whole of strategy with use of cash is a way discussed with the Board and we will continue to keep all of you posted, but right now we are very committed to the current strategy that we have and will continue on this.

Okay. That’s all I have, thank you.

Thanks.

[Operator Instructions] There are no questions at this time.

Well I am going to conclude our earnings report tonight. I do appreciate the time that you have taken with us today and I think you realize through our earnings and what you heard today is that we do have some work to do, but I am very confident and excited about our future. We have experience in loyal employees, which is very, very important and so impressed with our employee base and the loyal team and just their commitment to the company and an impressive global client list that included renowned brand names and a deep and growing product portfolio and to consistently generate significant amount of cash flow. I believe that we have a strong and effective strategy to return to profitable revenue growth, position ourselves for future opportunities and to establish ourselves as a leader in smarter customer interaction. I look forward to updating you on our progress and we would also like to thank all of you again for your time today. I appreciate your support of Harte Hanks and we'll speak with you again soon .Good night.

This concludes today's conference call. You may now disconnect.