Executives: Scott Hamilton - Investor Relations Karen Puckett - Chief Executive Officer Robert Munden - Chief Financial Officer Shirish Lal - Chief Operating Officer Carlos Alvarado - VP, Corporate Controller

Analysts: Michael Kupinski - Noble Capital Market Al Tobia - Sidus Investment

Operator: Good day. And welcome to the Harte Hanks’ Fourth Quarter and Full Year 2016 Earnings Conference Call. As a reminder, today's conference is being recorded. At this time, I would like to turn the conference over to Scott Hamilton, Investor Relations. Please go ahead, sir.

Scott Hamilton: Thank you, Lisa, and good morning everyone. Thanks for joining us. On the call with me today is our CEO, Karen Puckett our CFO, Robert Munden. Also in the room is our COO, Shirish Lal and our 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 affects of acquisitions, dispositions, litigation and regulatory changes, economic forecast for the market we serve and other statements that are not historical facts. Actual results may differ materially from those projected or imply the new statements, because of the various risks and uncertainties, including those described in our most recent 10-K filing, and other filing with the SEC and in the cautionary statement in today’s earnings release. Our call may also reference non-GAAP financial measures. Please refer today’s earnings release for the required reconciliations and other related disclosures. Our earnings release is available on the investor tab of our Web site at hartehanks.com. Now, I’ll turn it over to Karen.

Karen Puckett : Thank you, Scott and good morning everyone. Thanks for joining us this morning. I’d like to begin by sharing a few comments. First about the fourth quarter of 2016 and then about our strategy, go forward. Robert Munden will then go through the financial results and we’ll finish up with your questions. I’d like to say that we’re very happy to finally be here with you today. This has been a long row to get our financial results announced. I know this is not what you expect from us and it’s not what we expect either. I’ll let Robert discuss the reasons for the delay later in the call. Let’s turn to high level on the fourth quarter results. Our revenue from continued operation was $110 million for the quarter and a rate of decline moderated to 5.8% year-over-year. And was traditionally our strongest quarter from revenue and operating income perspective. While we still have work to do, this was the lowest rate of decline we achieved in 2016. We believe it reflects on intense focus on retaining our current customers, while expanding our client base and expected mail and logistic volume. We saw an improvement both in client satisfaction our new logo acquisitions around the middle of last year. And the improved results helped impact fourth quarter trend. In conjunction with our goals to stabilize our top-line performance, we recognize the need to rationalize our cost structure. We continue to take cost out of the business in the fourth quarter as part of the large cost savings program we announced in 2016. Robert will go into more detail regarding the fourth quarter in a moment. But I’d like to spend some time focusing on the work that we’ve done to strengthen the position in the marketplace. We did a lot of heavy lifting in 2016 that better positions us for success. We realigned our service offerings to better match client needs; recruited experienced new talent for agency consulting and marketing technology services lines; implement a large series of cost reductions; stabilize important client relationships; introduce several key service offerings, such as the consulting, the Buyer's Journey Diagnostic and the omnichannel optimization. We also completed the sale of the Trillium Software at the end of December, enabling us to eliminate our debt and focus on the marketing services turnaround. And progress continues in 2017. We announced our intent to sell 3Q Digital, putting a new $20 million credit facility to enhance our liquidity and financial flexibility, and identified another $10 million in cost reduction opportunities, which have been implemented. Importantly, we also introduced a five pillar of marketing approach to our clients and established and launched the Wipro and Opera partnerships. Our partnership with Wipro is a key initiative for us and is off to a good start. They’ve already helped us on several accounts and clearly enhanced our technical execution, making our offerings noticeably more robust. We are also going to target some of their customers and are optimistic about early progress. Beyond the go-to-market, we have leverage Wipro's tools and processes to greatly improve our technical execution. And that has shown up in feedback from client as well as reduction in our air rates. We are also encouraged about the response to offer solutions, which is our new data base capability. We believe this makes us a clear market leader in marketing data base, and we have gotten positive reaction from customers as well as prospects. The combination of our offer solutions along with our new data capability, which we call global data view, moves us towards a leadership position that we have not had any very long time. That is translating to a lot of conversations around solutions for customers that we were not able to have just six months ago. Our efforts in building an in-bound demand generation capability of gaining traction and delivering high quality client opportunities to our sales team; we deployed a marketing technology software suite that enables us to understand the conversations that are happening with prospects and deliver the best content at the best moment to our perspective buyers. This approach will evolve and we are really demonstrating to our clients what is possible with our solutions essentially this is our demonstration lab and has really enabled us to be very productive with over less than half of the sales team that we have last year. Our recent win with Nature Bounty’s becoming their agency of record that we announced earlier this year is an indicator of a quality of the deals we have gained through this process. This along with our joint Wipro funnel is driving a strong mix of marketing, strategy, agency, contact and contact services for customers and our B2B -- our financial services and our consumer verticals. If you like to know more about our approach, I would invite you to follow us on our social media, our Company LinkedIn, Twitter and Facebook address is an all the about Harte Hanks section of the press release, and I think you would find that very beneficial if you followed us on social media. And we also continue to work on our service model for mail logistics as we continue to face revenue headwinds in this service line, the impacts of which likely to be sales in coming quarters. Big box retailers are the largest vertical for our mail and logistic services and we remain cautious as retailers continue to adjust their operating models with volume changes and/or procurement led RPs impacting revenue and margins. We will continue to progress the model that makes our cost adjust and align more directly with volume, which should help us to better deal with volume and rate challenges, we see with our exposure to big box retailers in this category. We believe that all the work that I have just talked about really positions us for success in the market place as our capabilities are now more competitive. We have a more robust go-to-market model, which is well more efficient than the first part of last year. And we have a more competitive cost structure, improved client satisfaction, resulting in just overall better execution. As far as 2017, we’ll be releasing first quarter '17 numbers as soon as possible. But I can share with you that our sales are so far very strong for the quarter. We have some client losses and volume declines that we will need to overcome. From a vertical perspective, we are seeing strength in financial services, B2B technology, consumer and the automotive sector, especially for our marketing services and fulfillment offerings. However, we will remain cautious with the pressure from retail clients that I just mentioned to you earlier. We’ve done a lot of work and we know we have a lot of work to do, but believe the foundation in place to drive the business and align with our key focus areas I just discussed, we believe that we are poised for growth and profit in the coming quarters. So with that, I'll return it over to Robert to talk about the details of our financials.

Robert Munden: Thank you, Karen and good morning. Consistent with the third quarter, our fourth-quarter and full year earnings results report our customer interaction business on the face of our financials and the results of Trillium Software, shown as discontinued operations, due as sale just before your end. Effectively going forward our financials will reflect the results of what had been our customer interaction business as our soul reporting segment. Turning to our fourth quarter results, our consolidated revenues were $110.1 million compared to $116.9 million of revenues in the same quarter last year. This represents a decline of 5.8%. On a constant currency basis, revenues declined 4.7%. As a reminder, fourth quarter for us is usually our seasonally strongest due to clients’ holiday winded and open enrollment marking programs. Let me walk through the results by industry vertical. Our financial vertical showed slight growth year-over-year driven by a new context in our work project for credit card service provider, fulfillment work for financial services company and agency and related work for regional bank. We also had a modest increase in our technology vertical, primarily driven by the positive effect of our consulting practice acquisition and expansion of context in our work for our telecommunications provider, which more than offset the effect of the sale of our B2B research business in the prior year. Our healthcare vertical declined significantly during the quarter, and was the largest contributor to our overall revenue decline. This was driven by the continuing effects of the loss of an outsource fulfillment work we did for a pharmaceutical company and the loss of contact center and agency work for a home healthcare client. Our automobile and consumer brand vertical is essentially flat year-over-year in the fourth quarter, reflecting the effects of loss clients and clients spending less. The decreases were offset slightly by new work with a luxury vehicle manufacturer. Our select markets vertical declined from a reduction in contact center work with an entertainment client and reductions in mailing programs for a non-profit organization. The retail vertical continue to be our largest vertical in terms of revenue, and as year-over-year revenue decline, reflects reduced mailing volumes for holidays and the loss of a retail chain client as their retail chain has declined. As Karen mentioned, the challenges facing the traditional retail industry are causing these retailers to be ever more cost conscious, including in their market activities. And we continue to expect pressure on both revenue and margin in this vertical. Moving down income statement, our operating loss of $35 million reflects $38.7 million non-cash goodwill impairment. After excluding the goodwill impairment litigation cost, severance and other compensation expenses and non-recurring database development charges, our adjusted operating income from continuing operations was $5.8 million compared to adjusted income of $3.8 million in the same period last year. Labor costs declined slightly with cuts in some areas offset by some hiring to support service areas with revenue growth, and the acquisition of our Consulting practice earlier in the year and its subsequent expansion. Additional reductions were achieved in production expenses from outsourced costs in mail supply chain expenses, as well as sales and marketing expenses, reflecting some of the impact of the cost cutting effort we began last year. Shown in the loss from discontinued operations is both the $3.6 million in operating income from Trillium attributable to our period of vote ownership as well as $44 million loss on sale. As Karen mentioned, our results show that some of the benefits of the large expense reductions we announced last year, which include the closure of our Baltimore facility and other labor and selling general administrative costs. We believe that our efforts will enable us to improve our profit and cash flow from operations profile. We use substantially all the proceeds from the Trillium sale to retire a Wells Fargo credit facility prior to year end, and we began the year debt free. As previously disclosed, in April, we secured a new $20 million revolving credit facility to support our working capital needs. For 2016, our continuing operations had a negative effective tax rate of 29.9%, which was materially affected by both our goodwill impairment and a change in valuation allowance. Please not that in 2017 we have made $34.2 million in tax payments largely attributable to taxable gain on sale from the Trillium transaction. Finally, I want to address the delay in the announcement of these results and the related following of our annual report on Form 10-K to be filed in the coming days. Two primary factors combined because of these delays. First, the Trillium transaction and its complexity was a significant burden during both the fourth quarter and immediately thereafter as we supported the information needs for the sales, as well as the accounting for the transaction, which involve domestic and overseas jurisdictions and certainly complicated intercompany transactions. The timing of the transaction and its effects in turn hampered our analysis and calculation of goodwill impairment. Further, under the terms of our agreement with the purchaser, we provided substantial transitional financial support services to Trillium throughout the first quarter. Second, on top of the additional burden and delays caused by the Trillium related work, we discovered during the course of audit and internal controls, a number of material weakness. Our efforts to remediate these weaknesses through development, adoption and testing of additional controls took a significant amount of time; again, during the fourth quarter of 2016 and the first quarter of 2017. We're developing a plan for remediation, but such plans will require additional resources. And remediation for all items may not be completed this fiscal year. We will continue to work as expeditiously as possible to concurrent with our filings, but we still have much work to do. With that, operator, we'd like to open the call for questions.

Operator: Yes, thank you [Operator Instructions]. And we'll take our first question from Michael Kupinski with Noble Capital Market.

Michael Kupinski: Just couple of really quick questions and then couple of others, so the cash position already reflects the cash tax from the sale of Trillium, right?

Robert Munden: No, I don't think so. So at year end, we had a cash balance and then that was, as I mentioned, we actually had -- we had a taxable gain on the sale. And so as I mentioned about $34.2 million has been depleted from that cash balance.

Michael Kupinski: So the cash balance should be something closer to $12 million or so?

Robert Munden: Net of the tax, yes.

Michael Kupinski: And so what is the status of the audit, at this point. Is it -- you mentioned that it kind of like you have some controls being put in place, and so forth. But is that mean that the audit is ongoing or what does that mean?

Robert Munden: Well, as I said, we anticipate filing our 10-K in the coming days. And so that means we’re nearly concluded with the audit.

Michael Kupinski: And so then you -- so once you’re concluded with the audit then you would be able to -- you would be set to report the first quarter. Is that the way I should read that?

Robert Munden: No, we’re not going to report the first quarter right on the hills of that. We’ll have to go through the usual process for that. I don’t have exact timing for when that will be. But I would say, frankly, it would be about the normal amount of time that would follow at the end of a quarter, this would be the starting point for that.

Michael Kupinski: So, just a couple of things about fourth quarter then, the production and distribution expense. Because I actually think that will higher to me as a percent of total revenues that we have seen in the past several quarters. Was there something unusual about the fourth quarter for that particular line item?

Robert Munden: I think it would be a seasonality effect…

Karen Puckett: With the high activity with the holiday.

Michael Kupinski: So as a percent of revenues, I guess, or even there as a percent of expenses, it was typical of the 2015 level. But as we’ve seen in terms of the trends for the first, second quarter and third quarter was much higher than what it had been trending; so you're just saying, it’s normal seasonality. In terms of the -- just kind of on your comments regarding the first quarter just to put some color about around that; and you indicated that you’re anticipating growth and profits. And I just wanted to make sure that I understand what you're trying to explain for the full year versus the first quarter and so forth. Because I know seasonally your first quarter is a weak quarter, we wouldn’t expect you to have profits in the quarter. Can you just kind of give us what your thoughts are in terms of revenue pacing in the first quarter, and then your thoughts on revenues for the full year? Are you looking for growth for the full year in revenues? And then also your thoughts on positive cash flow for the year, what your -- if you can add any color on that?

Karen Puckett: I'll start and Robert you can chime in here. So, relative -- first off, we’re not going to give specific guidance. But relative to ‘17, and we will be very quickly trying to get the first quarter numbers out as soon as we can that’s working hard to get that done. What I said, first off, is the color that I can describe for first quarter is that ourselves are strong, they’re very solid. By the way, we’re producing a level of sales with nearly only 30% of the reps that we had. So we’ve cut more than half of our sales organization and the overhead that goes with that in producing at levels that we didn’t in the prior year. So that’s something that we are very optimistic about, and still will continue that work and go-to-market and how we’re doing the demand generation, which by the way is work that we do for clients too. So we’re showing to our clients what we’ve done for ourselves, that’s category number one. We are having success in certain verticals, in particular, financial services, the B2B, technology, consumer and automotive. However, we are very cautious about retail. Our retail vertical under pressure, it’s no surprise to anyone, the headwinds that are coming out of that. Many of them are sure what they’re doing with their models from volume to tactic changes. And so that’s why we remain cautious for the year with the overhang on retail. We have done a lot of work to take cost out of the mail and logistics category, and we have more work to do. And we’re in some very specific options that we’re working through there as we speak, so more to come on the mill logistic side to really offset the retail vertical. In terms of profitability, I would say the profitability will come towards the backend of the year as we were through the rest of this restructuring.

Michael Kupinski: And Karen, just to make sure what you mean by, sales are strong in solid in the first quarter. Are you saying that you believe sales will be up year-over-year?

Karen Puckett: Well, first off, we’re counting sales differently in fairness year-over-year with we have a multi-year contract, we only are accounting this -- we’re only counting the first year of that. So we’re being very conservative. But yes they’re up and there with less sales organization. Now, the other thing that’s emerging is the work that we’re doing with our partner Wipro. We’re still very, very early on. There is two components to that partnership. First one is the back office and what they’re helping with us on that front, both improving our execution capabilities to do some processes and tools, as well as allowing us to scale quick up with certain clients that were on-boarding with a whole lot better cost structure and position us in some technology capability that we need go forward as we roll out these different solutions. And then the other side of that, which we’re very excited and optimistic about, is Wipro very much need to partner in the marketing domain category, that’s part of why they were interested in doing business with Harte Hanks. And so we’re working a joint funnel where we bring the marketing domain experience to their clients. And these are opportunities that likely we would not have had an opportunity to swing out on our own. So you’ll see that -- we’ll talk about that as things progress. And I don’t want to over say an expectation, but I would say that we’re very encouraged about the quality of the opportunities that are also coming through that funnel, and we’ll keep you posted on that one.

Michael Kupinski: And the additional $10 million in operating expenses that you’re observing this year that you would be cutting. Is that began in the first quarter or is that and you should start to see that?

Karen Puckett: Yes, it’s done.

Michael Kupinski: So we should start to see the benefit for that beginning in the second half and then particularly in the second half?

Karen Puckett: That’s right.

Operator: We will go to Al Tobia with Sidus.

Al Tobia: Can you give us an idea just of the relative sizes of some of the businesses? I don’t know how you want to or going to look at segment revenues. But maybe give us an idea of any kind of revenue breakdown by segment? And then secondarily, how should we think about the value of 3Q Digital. If I use the price that you paid for it and that the business has grown, or how should we think about valuation on that business?

Karen Puckett: On the first one, Al, the revenue by segment -- the revenue segment as we said in the press release as well as Robert’s comment, before we had two segments, customer interaction and Trillium, now we just have customer interaction. So we will give as much color as we can around the service capabilities that we have that we are reporting under one segment. And then on this 3Q, the value of 3Q; 3Q first off is just -- had very good success. They continue to perform really beyond expectations. Their deal size is growing so they really move up in deal size as well as they are showing the ability to expand with current client in a fairly significant way. So I can't put a value on what will happen through the process, but the team, as you know, shows up very well you’ve seen some of them. They outperform nearly every take off that they’re in against the competitor and we’re optimistic about their performance and hopefully what value that brings to the Company.

Al Tobia: And can we talk about rough timing in terms of when you think that you would like to have 3Q resolved?

Robert Munden: It's a little too early to put any timing out on that. Al, this is Robert speaking. And as soon as we have something that we can announce, we will. We did initiate the process shortly after we made the public announcement. And so we are making progress. But at this point, we don’t have anything we can report.

Al Tobia: What about -- maybe just, Karen, could you give us a rough idea of how much business you would be at risk regarding the retail segment, I guess? Because what I am hearing and I was a little confused when you said sales were strong, you expect the sales would be up year-over-year in the first quarter. I thought it was still we’re talking about reducing rates of decline, that’s what I didn’t understand what that...

Karen Puckett: Yes, so let me first off, so sales -- last year we had a very soft first quarter and second. We really picked that second half year. The difference is we’re having a relatively stronger first quarter than when we did last in sales. Now remember sales is not revenue yet it have to be converted. So depending on the client, depending on the project, the work that has to get done, they get on boarded. There is no delay from sales to revenue, so that’s the inward piece. If you look back in '16 and all the transcripts and the conversation that we just had on fourth quarter, we continue to have headwinds. Specifically, we lost clients in other verticals. But on the mail logistic side, the retail is been hit by volume and it has been hit by volume over the last couple of years. And so we think it's important as we’ve challenged ourselves to take cost out of that mail logistics business. We think there is other opportunity to do that very creatively that we’ll talk about more in the coming quarters. But we are having the -- retail is a big part of mail and logistics business, or it has been. Now, we had successes in other consumer and/or retail business like Real Whirl. Real Whirl was a retail client that was born in the cloud digital client that decided that they need more direct mail. And we are seeing more of that demand, but they’re not the big, big, big box retailer kinds of volume quite yet. So they’ve been in their volume but the big retail box has large volume.

Al Tobia: So retail is -- big box retail represents the majority of the direct mail business?

Karen Puckett: I would say that big box retail represents -- yes, more than 50% of the business. It's not a 100% of the business, but clearly, it’s a large percent of the business. And they surprised us, as you know, nearly every quarter because sometimes they change their mind and they increase their spend, so this sector is clearly trying to still figure it out. And what we are seeing is the need for data and with our new capability with data view, which is more of a recurring opportunity and how we’re blending third party data together that we’ve never had the ability to do it before. We’re seeing the need for that. But again, these are big volume that we want to make sure we’re cautious about as they move forward with their models and what they are going to do with their businesses overtime.

Al Tobia: So the way we should be thinking about it is sales are strong; revenue in the first half is going to be weak because of the impact of the direct mail side; but underpinning the sales strength; you put cost cuts on top of that and the Company turns profitable in the second half of the year? It’s sort of been a broad statement.

Karen Puckett: From what we know now at a very broad, broad statement, other good things can happen and other surprises can continue to happen, which I know we need to be get more predictable on. But our clients' needs change and that’s been the challenge. But, in general, I would say that that’s correct.

Operator: [Operator Instructions] We’ll now go to Larry Franklin, Private Investor.

Unidentified Analyst: Can you, Karen, talk a little bit about how the revenue that comes from these partnership relationships that you're forming, the Wipro? Is that an incremental revenue that we will be getting, and will it be from new customers? And what would be the order of magnitude from that particular relationship?

Karen Puckett: Larry, let me take that in two pieces, for example, with Wipro. On the Wipro if I first look at them helping us deliver for our client, like a digital delivery project or such, we would -- their cost structure, their benefitted cost structure benefits us. So it's our revenue but instead of us having the employee, they've the employee at a different cost structure. So we get the benefit of their cost structure that we don't have today. And many times either very specific technical expertise that we really -- it's difficult for us to go out and hire in a competitive way, so that's point one. So that's kind of think about that as cost structure back office, so it helps us over time really improve the cost structure there, and the technical capability, and improve the air rates better execution, which is what we've already seen. Second part of that is on the joint go-to-market, so they have a client. They do business mainly -- their main focus is with CIO's, Chief Information Officer and CTO's, however, the marketing and the IT and the technology is all converging. And what they realize is their clients need -- they need help with their clients in bringing the marketing expertise. So what might be some type of customer experience enhancement, some type of go-to-market, they bring us in on those bids and then that would be, that piece of that bid that we win from marketing, would be our revenue. And so we do see that as incremental, because the…

Unidentified Analyst: As we build the client or do they build the client?

Karen Puckett: We build the client. And again, we’ll have to see how this evolves. But the things that are in the funnel right now are opportunities that we wouldn't have even known about, or had a chance to swing at.

Unidentified Analyst: Have we booked any revenue yet from this relationship?

Karen Puckett: Excuse me.

Unidentified Analyst: Have we booked any revenue, meaning real revenue…

Karen Puckett: Yes, we just started but we have one -- we did win one very quickly. And we've got quite a few that were in the process of proposals on.

Unidentified Analyst: On a different question, we say that you've already implemented the $10 million of expense cuts in addition to the $25 million from last year. Where and in which of these line items labor, production distribution, advertising, selling, G&A, where will those expense show up?

Karen Puckett: You'll see it in more sales and marketing, you'll see it which will be labor of course. You'll see it in other labor and some of these service capabilities. We’ve cut more people; we’ve taken our utilization rates; we look at that kind of labor rate to revenues in each one of those service lines. We look at that ratio and we’ve taken those ratios way up. And those are the main -- and you'll see it -- so mainly in labor, Larry, because that’s mainly our overhead and you'll see some incorporate overhead.

Unidentified Analyst: But there is no reduction in the fourth quarter in labor from last year, and that $25 million, even though there is $6 million less revenue and we know that these dollars -- there is a certain variable cost here out of it…

Karen Puckett: Yes, so…

Unidentified Analyst: Yes, I add to that that you decreased your marketing and sales 50%. I'm just trying to figure out where we’re going to see the numbers?

Karen Puckett: So on the labor side, we have the offset -- we have contact center, some of that’s on the contractor side. And then 3Q, 3Q wasn’t involved we didn’t have them involved in these cost reductions and may have been adding headcount as they over performed on their revenue. And we had, last year we did not have the Aleutian Consulting organization. So those were comparisons that we did have a year ago.

Unidentified Analyst: We didn’t have their revenue also…

Karen Puckett: That’s correct.

Unidentified Analyst: Can you, Robert, what do you mean when you say, the question was asked the audit is complete, though the auditors have signed off on these numbers. Correct?

Robert Munden: I didn’t say the audit was completed, I said it was nearing completion. It’ll be complete when the 10-K is issued.

Unidentified Analyst: Have the auditors reviewed signed off on these numbers in this press release?

Shirish Lal: Yes, they've reviewed the press release.

Unidentified Analyst: When you say there is a plan or remediation of material weaknesses, what does that meant?

Shirish Lal: Could you repeat your question, Larry?

Unidentified Analyst: I think you said we have a plan or remediating these material weaknesses that have been discovered by the auditors. And we will continue to work on that and it will require some additional resources. What does a plan for remediation, what does that mean?

Shirish Lal: Well, for some things, Larry, the past word for some of the material weakness is pretty straight forward, this is pretty straight forward. For others, we’re going to need to develop new controls. And for that, we may need to hire outside resources, we need to hire additional internal resources in order to do that. We’re still stepping through the development of some of those.

Unidentified Analyst: But those additional costs are already baked into your plan that you discussed for the current year, right?

Shirish Lal: Not all of them now.

Unidentified Analyst: What is, just a ballpark level of cash today?

Shirish Lal: Larry, I don’t think that we can really comment on balance sheet that hasn’t been pretty riskier. I think we got to just saying that the cash on hand was what it was shown on the balance sheet. And Robert mentioned being $34 million in income tax relative to Trillium sales.

Unidentified Analyst: Well, I don’t know how you can -- that’s what it was in December.

Shirish Lal: Understood…

Unidentified Analyst: So you talk about this line of credit and it -- give you the flexibility to invest implement or strategic direction, and we’re down about $20 million of cash. And we’ve got a first quarter that is the lowest quarter of revenue. And therefore, the lowest quarter of profitability. So there is no guidance at all on what the cash balance is today, is that right?

Shirish Lal: No, not at this call. Thank you. Thank you, Larry. Please ask the next question please.

Operator: And we’ll go to [Charles Lantern] with Lantern Associates.

Unidentified Analyst: I’ve got few questions. Karen, the hunt for the new CFO, where we’re at on that; also, on the right off? Will the income statement be cleaner, going forward? In other words, are we pretty much completed the write-off? And then the final question is pension liability. What is the dollar amount and give me some color on how that being determined?

Karen Puckett: I’m going to take the first one, and I’ll let Robert take the other two that you mentioned. On the CFO, where we’re at is, first off, we wanted -- we heads down and working through our audit and getting Trillium closed out. And not that we’ve got that behind us and we’re within days of filing the 10-K, we will now turn towards some of the things that we were just talking about on the internal control; so we’re going to be adding a level of detail on our controls. We’re going to be looking for resources and/or someone who can come in, roll up their sleeves and help us improve our control process. I would say that from an overall standpoint, the organization, as we looked at it, we have a fairly strong group and we’ve realigned for one later who really support the line of the service levels and then businesses, and helping them look at their cost structure, run rates, budgeting, so all that business day-to-day work. And then we’ve got the control size. So Carlos and team, our Controller, is where we feel like we’ve got to step it up and look at some incremental resources and process, and streamline. And we think we have an opportunity to look at our back office in a way that needs to be relooked at from a streamlining standpoint. So to answer your question specifically, we really want to be smart about this. I don’t think it's a going out and getting a CFO just to get a co-CFO. It really is looking at where we think we have -- we need to shore up our resource and to get that done. And so that number one priority is around this control and process work that we have net interest front of us. Robert?

Robert Munden: And I think, if I understood your question correctly, your second one. Do you think it will be cleaner, going forward? I don’t know what other detail to provide on that.

Unidentified Analyst: What I was asking was the financial statement, the income statement, will it be cleaner, going forward, in other words to wind off. Are we near the end of the write-off?

Robert Munden: Well, I mean we evaluate as needed for impairment. So I mean I don’t -- I can't at this point predict whether not we’ll have others. Those are going to be driven by the facts as they arise. On the pension, looking at the comparison from '15 to '16, it's quite comparable. Most of the difference I think is going to be driven by changes in the actuarial assumptions. We get the -- we use a third party actuary to estimate our liability for those. And so that’s the general basis for the change there.

Unidentified Analyst: My real question was you don’t post the balance sheet in your announcement. I don’t know what the number is or the pension liability, also going little bit further on the pension question is, what is the assumed rate of return on the pension?

Robert Munden: I think for both of those, I think you’ll probably get your answer when the 10-K is filed for both of those in terms of the detail. So if you need to -- yes, if you don’t get what you need from the 10-K itself then call me and follow up with us.

Unidentified Analyst: Going forward, is there any way you can post the balance sheet at the same time you post income statement?

Robert Munden: We will think about it. But I don’t think we have in the past.

Unidentified Analyst: Well, I know you haven't. But most currently it feel like it's very hard to feel what the balance sheet looks like when you post the cash and then long term debt metric?

Robert Munden: Yes, no that’s…

Unidentified Analyst: Okay, have a good day.

Operator: And we’ll go to [Armen Grigorian] with [indiscernible].

Unidentified Analyst: I wanted to speak, mainly ask questions about the business line. Specifically, create the service in digital and social media. We have announced one that you are going to put 3Q Digital on the block. I mean, are we seeing -- is this the case that you are leaving the digital channel? And also I wanted to ask what do you see the growth behind creative services and digital social media? And also what part of your business are these two segments?

Karen Puckett: I'll start and Shirish if want to follow up on that one. So on the 3Q, we’re not leaving digital. Digital is a very large category, as you know. The 3Q, we will continue to partner with 3Q. They are a search, basically digital search agency. So they purchase search for their clients. We have a broader capability in terms of recommending so we start with the data and the analytics to recommend mostly depending on the clients’ needs where is the best dollar for them to spend their money. And work with them on the different tactics and campaigns. And sometimes we use partners to execute on the actual execution of that, and sometime we’re able to do it with our internal resources. So really depends on a client and it depends on their situation. We do see continue opportunity in digital as a broad category, and optimizing really any channel be it direct mail, be it social, be it traditional. And that’s where we see most of the conversation happening with the clients. But I'll let Shirish add on to that.

Shirish Lal: As Karen said, we do not -- 3Q was the only digital media buying we offered. We don’t offer traditional media buying. So we will continue to have a relationship with 3Q, but we will offer a whole series of services like Web site optimization, social, mobile, around digital, above and beyond just to find search and some of the other related activities. But clearly, 3Q will be a core partner, going forward, just as Wipro is for some of the technical areas. In terms of the creative and overall agency, as Karen said, we did a lot of work last year. So going into 4Q, we were declining in our agents in that particular area they’ve been referencing. We really did a lot of work to really restructuring streamline that part of the business and feel really good that we’re on a very different trajectory. You did see the NBTY win early part of this year was a big win for us.

Operator: And for our last question we’ll go to Nick [indiscernible] with NR Management.

Unidentified Analyst: I was just wondering if you’re comfortable providing a longer term target operating margin goal. I know it's from what you said right now, if you could provide that that would be very helpful. Thank you.

Karen Puckett: I appreciate the request. But at this point, we’re working on getting the first quarter posted and we’ll continue to update and do the best we can to provide the visibility that you all are asking for as we move forward.

Operator: And that concludes our question-and-answer session and our conference for today. Thank you for your participation.