Scott Hamilton - Investor Relations Karen Puckett - Chief Executive Officer Robert Munden - Chief Financial Officer Shirish Lal - Chief Operating Officer Carlos Alvarado - Controller

Good day. And welcome to the Harte Hanks’ Second Quarter 2017 Earnings Conference Call. Today’s conference is being recorded [Operator Instructions]. At this time, I would like to turn the conference over to Mr. Scott Hamilton, Investor Relations. Please go ahead, sir.

Thank you, Cary. Good morning everyone, and thanks for joining us for our second quarter 2017 earnings call. Joining me on the call today is our CEO, Karen Puckett and our CFO, Robert Munden. Also in the room is our COO, Shirish Lal and Controller, Carlos Alvarado. Our call will include forward-looking statements; such statements about our strategies, adjustments to our cost structure, financial outlook and capital resources, competitive factors; business and industry expectations, anticipated performance and outcomes, future effects of acquisitions, dispositions, 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. These refer to today's earnings release we refer and reconciliations and other related disclosures. Our earnings release is available on the Investor’s section of our Web site at hartehanks.com. I’ll now turn the call over to Karen Puckett, our CEO.

Thank you, Scott, and good morning everyone. And thanks for joining us this morning. I'll start with a few comments on our on-going strategy and our performance in the quarter, and then I will turn the call over to Robert Munden, who is going to go through the financial results and we will then go do your questions. I should start off today by saying that we expect to report our third quarter results on a normal schedule in mid-November. It will be good to get back on a schedule. I know we've seen late these past quarters what’s disappointing to you as it was to all of us. Now, as we figure out our results in second quarter, a key takeaway from our results is that we are meeting our internal expectations. These expectations are in three areas; revenue, new sales bookings, and profitability. We would like to make progress faster, but realistically, we know it takes time. We continue to focus on client satisfaction, which we know will lead to better retention as well as diversifying our clients and verticals, targeting all of our different capabilities. This combined with our revamped sales motion and marketing, our healthiness generates stronger bookings, which I’ll talk about here in a bit. We continue to see positive trends in customer satisfaction with more clients calling out our thought leadership. This is something that we did not see 18 months ago. In fact, it was a point that many clients make to us that we were lacking. So we’re good to seeing those comments from our clients about our good thought leadership. As I've discussed before, we're realizing more partnership models, enabling us to increase the quality and effectiveness of our service offerings, while limiting our investments. We are partnering with Opera Solutions…

Thank you, Karen and good morning. As Karen mentioned, our consolidate revenues for the quarter were $94.7 million compared to $97.3 million in revenues for the second quarter of last year. This represents a decline of 2.7% and longer rate of decline, within both the prior quarter and the second quarter of last year. Looking at our performance within industry verticals, our Auto & Consumer vertical was our strongest performer, showing a growth of $2.2 million or 10% year-over-year. This was a result of starting to recognize revenue from our strong fourth quarter and first quarter bookings, mainly the Nature's Bounty deal we announced in the first quarter, new business with a large consumer electronics company and the European luxury automaker. Moving to financial services. We grew about 3%. Sitting aside the effects of the loss of a large wholesale credit card client, and financial services vertical is performing quite well, supported by strong bookings in the first half of the year. Our healthcare vertical revenues declined year-over-year by about $2.3 million due to loss of the large medical insurance client first half 2016. We have, however, been doing well in the non-regulated pharma sub-segment providing both contact center and performance services to clients. So, we are refocusing our efforts towards this sub-segment. B2B revenue declined slightly due to loss of an outbound call center client, but we’ve seen growth from another high-tech clients for database, [smart tech] [ph] and logistic services. As expected, our retail vertical was weak, declining by $2 million or about 8%. This is mainly due to the loss of most marketing programs we have with the large big box retailer across a variety of service lines. In spite of our year-over-year revenue decline, our operating loss improved by $4.9 million year-over-year to a loss of $1.8 million, largely attributable to our cost control actions. Our labor costs decreased as a result of these cost control actions, and the decrease in labor [indiscernible] tie to the revenue declines themselves. These were partially offset by [temp] labor and consultants, primarily from technical development and additional expenses incurred with some new clients start-ups. We did have, however, [indiscernible] cash items that impacted our overall cash position, including increased audit professional service expenses and $2 million payment for a lawsuit that accrued in the first quarter, but was paid this quarter. As you probably recall, we paid $34 million in taxes related to the Trillium [indiscernible]. Consistent with our last earnings release discussion, we continue to anticipate continuing lower customer losses and volume declines from increased customers satisfaction, increased bookings and continuing cost control. As a consequence, we expect our cash position will improve in the second half of the year. We believe we have sufficient cash and credit facility capacity to execute our operating plans.

Thank you, Robert. So, Cary, currently we don’t have anyone in the queue. So, I’m going to go ahead and say goodbye to everybody. Thank you for joining us this morning. If you have any questions you would like to discuss them further, you’re welcome to the contact me. My contact information is on the press release. Thank you very much. Have a great day.

This concludes today’s call. Thank you for your participation. You may now disconnect. End of Q&A: