Good day, and welcome to the Harte-Hanks Fourth Quarter Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Robert Munden, General Counsel. Please go ahead.

Thank you, Glenn. 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 at our website at hartehanks.com. I'll now turn the call back over to Glenn.

Thank you, Mr. Munden. I will turn it over to Robert Philpott, CEO at Harte-Hanks. Please go ahead, sir.

Thank you, Glenn. Good afternoon, everyone, and welcome to Harte-Hank's fourth quarter 2014 earnings call. Doug Shepard, our CFO, joins me on today's call, and in a few moments, he will take you through the details of our earnings release. This call will obviously focus on our performance in the final quarter of last year, but I'll also take the opportunity to review Harte Hanks performance for full year 2014. In our news release earlier this afternoon, I described 2014 as a transitional year for the business. So let me explain what I mean by that and during the course of our call today, I'll also provide more information on the latest steps and initial results of the transformative actions we have taken. This time last year, I said that we were entering 2014 with a degree of optimism and that I was confident that we could arrest the decline in our business. Looking back now on 2014, I believe that we were inconsistent in our delivery of these commitments, but that we have made much more progress than anticipated in building a robust foundation to our business for 2015. But first let me deal with the prior quarter performance and I’ll start here with the top line. Revenues fell short of prior year levels, explained to some degree by a shortfall in Trillium Software revenue performance. This quarter was always going to be a challenging one for Trillium because as most of you will remember, we had two very significant wins in the business right at the end of 2013 and in the early days of 2014. In addition, our international network of resellers for Trillium had a tough final quarter, which is consistent with the wavering economic performance of economies in Europe and Asia. But overall, Harte Hanks…

Thank you, Robert, and good afternoon. In our last earnings call, we discussed our plans to close consolidate six facilities, along with taking actions to align our organization around our revenue base and strategy. The results in the fourth quarter show the evidence of these actions. While we had disappointing revenue performance in the business during the quarter, expense action allowed us to improve our operating performance compared to this time last year. Both quarters in 2014 and 2013 had $2 million to $2.5 million of charges related to various actions I'll explain in a minute. Turning to our fourth quarter results, our consolidated revenues of $146.5 million were 3.7% below our $152.2 million of revenues in the same quarter last year. Let me walk through the results of Customer Interaction by industry vertical. Customer Interaction revenue declined 2.6%, several verticals delivered revenue growth during the quarter led by our financial vertical, which increased 13.8% or $1.9 million primarily due to regional banks increasing their credit card solicitation activity. Our select markets vertical also had $1.9 million revenue increase during the quarter or 23.1%, driven by continued contact center support provided to an online streaming client won earlier in the year. Our technology vertical increased $1.8 million or 5.7% due to cell phone support for a new client, along with the expansion of contact center services for an existing client. Automotive and consumer brands declined $1.2 million or 5.3% from reductions in mail volumes and agency services provided to auto manufacturers. Healthcare decreased $1.7 million or 11.1%, primarily due to decreased affordable care act implementation efforts compared to the fourth quarter of 2013. Retail declined 14.8% or $6.2 million, primarily driven by clients continuing to change to wider and less expensive print formats in response to postal service rate increase…

Okay, thank you for that, Doug. Now, earlier on the call, I talked about investments on our business and one of the most important was the news release yesterday by Trillium Software of Trillium cloud. This is a new service platform that provides our clients with a richly featured enterprise data quality solution, consumable via a managed public cloud environment. With this new cloud solution, we can help our clients implement a complete data quality solution within 30 days, with less of the overarching infrastructure costs and management of our data quality competitors. Trillium cloud is available globally and brings our client offering right up to date with the needs of today's marketplace. Obviously it's too early yet to report performance, but I can tell you that initial discussions with key clients through our client user groups have been very supportive. The cloud also addresses a gap at our go to market story when attempting to secure new clients. When I am on this subject of Trillium Software, I'm delighted that we have once again been positioned as the data quality leader by independent analyst firm, Gartner. In the Gartner Magic quadrant for data quality tools for 2014 [indiscernible]. Since this report's inception in 2007, Trillium Software has been recognized as one of the industry leaders in data quality tools. In addition, Gartner forecasted this market's growth will accelerate during the next few years to almost 16% annualized by 2017, bringing the total value of the data quality sector up to about $2 billion. This market is amongst the fastest growing in the enterprise software sector and I'm confident that Trillium Software with its unique positioning and our new solutions delivery platform will take a substantial share of this projected growth. Switching topics now, we continue to reinvest in talent…

[Operator Instructions] We’ll go to Michael Kupinski with Noble Financial.

Thank you for taking the questions. I was wondering if you guys can just give us a little bit more of color on the acquisition prospects. I know that you are hopeful to have a couple of them announced by the end of last year and I was just wondering how the pipeline is looking may be if – maybe are you kind of resetting the timetable in terms of acquisitions? And I'm sorry if you addressed this question before, I joined the call little bit late, so sorry about that.

No problem. It’s Robert, Michael thank you for the question today. Obviously, we can't comment on the specifics of any particular acquisition that we are discussing. But the overall question of like where we would set timelines for that, we had hoped to complete an acquisition before the end of 2014. That didn't happen although that was not for a lack of effort in the closing stages of 2014. We're confident that in 2015 we can keep pace with the acquisition targets that we've defined in our strategy and all I can say is watch this space.

And in terms of the prospect of repositioning your existing portfolio, can you talk a little bit about the prospect of asset sales may be, are there things that you may want to get out of in maybe help pay for some of the acquisitions, any thoughts on that?

At this point, Mike, there is nothing to comment on. We talked about this when we did our strategy out, everything is always constantly under review, considered, things of that nature. Obviously the final answer is what our client is buying, what’s in demand in the marketplace. Of our product lines, we have some that are in very high growth markets, we have others that are in lower growth markets, but everything is in a growing sector within the marketing and advertising area. But as you know from Harte Hanks history, there are always – we’ve built this company through acquisitions in evolving from a 90 year old company. In addition, that involves making changes over time. So there will be changes as we move forward.

And I noticed that obviously with the new Trillium cloud-based software that you're implementing, you made some investments in Trillium. In terms of the R&D budget, what does it look like in terms of spending more capital on Trillium versus some of your other initiatives that you might have?

It’s a relatively consistent with what they’ve done in prior years. Overall, the total Harte Hanks capital expectation is in the $15 million range for Harte Hanks, Trillium has the same share of that they have had in the past, but I will say that, as Robert commented on a little bit, that there is under this management team are very defined product portfolio roadmap that’s out there that they are executing against as evidenced by the cloud announcement yesterday. And so there is functionality development and things of that nature to keep the product as one of the top rated products that Gartner has done for eight straight years in a row. And that does mean that you invest back in the product and keep it up-to-date so that it stays with that top ranking.

If I could circle back real quick on the acquisitions, what was the, what was the hold up in terms of making acquisitions, was it more of a price situation or was it just the valuation. If you can just give me some thoughts on what has been the hang-up or the biggest obstacle that you guys have had in completing your planned acquisitions?

If somebody wants to describe this whole idea of making acquisitions as not this similar, trying to get married, it’s very difficult to set yourself a timeline and be accurate even to within one or two months on it. The other thing that took place that would have caused us to rethink what we are doing in acquisitions, I think it’s just a case that it takes time to sit down with management teams, look at opportunities, make sure that both sites are fully committed to what’s going on. And in some cases some of the deals are competitive than we’ve got to run against the process timeline that’s driven by investment bankers. So you should read nothing into the fact that we are a couple of months behind where we would have liked at being at this stage other than that’s the way things happen with acquisitions.

Has anything that you guys have looked at that have been sold that you can comment on to kind of give us a flavor of some of the things that maybe you have kind of looked at that you would have liked to have had?

No, I don’t want to comment on any other deals that are out there other than to say we used some of those just to make sure that we are understanding things like valuation levels that are in the market right now that gives us a sense of the sorts of commitments that are being made in some cases by competitors. So we’ve used it for a little bit of intelligence, but it’s not determining what we’re going to do. We are really defined from our strategy and the types of businesses and the sorts of services that we want to have to build out our portfolio.

Okay, that's all I have. Thank you.

Okay, thanks for the questions.

[Operator Instructions] And with no other questions, I’d like to turn the conference back over to Robert Philpott for any closing remarks.

Okay, thank you everybody, thanks everyone for joining today’s call. Thanks also for your continued interest in the business and for your ongoing support for our shared ambitions. I look forward to seeing many of you again during the course of this year when Doug and I will again be on the road with our investor roadshow. Talk to you again soon. Thank you.

Thank you everyone. That does conclude today’s conference. We thank you for your participation.