Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 15, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | HARTE HANKS INC | |
Entity Central Index Key | 45919 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 62,000,659 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets | ||
Cash and cash equivalents | $33,181 | $56,749 |
Accounts receivable (less allowance for doubtful accounts of $1,718 at March 31, 2015 and $1,224 at December 31, 2014) | 110,408 | 125,295 |
Inventory | 1,231 | 1,235 |
Prepaid expenses | 9,995 | 9,000 |
Current deferred income tax asset | 4,832 | 5,077 |
Prepaid income tax | 1,544 | 1,185 |
Other current assets | 6,895 | 7,953 |
Total current assets | 168,086 | 206,494 |
Property, plant and equipment (less accumulated depreciation of $175,014 at March 31, 2015 and $173,699 at December 31, 2014) | 36,389 | 36,913 |
Goodwill | 440,008 | 398,164 |
Other intangible assets (less accumulated amortization of $9,815 at March 31, 2015 and $9,774 at December 31, 2014) | 7,009 | 2,277 |
Other assets | 3,569 | 3,351 |
Total assets | 655,061 | 647,199 |
Current liabilities | ||
Current maturities of long-term debt | 18,375 | 18,375 |
Accounts payable | 38,162 | 36,478 |
Accrued payroll and related expenses | 10,841 | 9,773 |
Deferred revenue and customer advances | 31,581 | 33,631 |
Income taxes payable | 1,214 | 2,462 |
Customer postage and program deposits | 15,903 | 17,120 |
Other current liabilities | 4,621 | 6,430 |
Total current liabilities | 120,697 | 124,269 |
Long-term debt | 59,719 | 64,312 |
Pensions | 63,729 | 65,156 |
Contingent consideration | 17,940 | |
Other long-term liabilities (including deferred income taxes of $63,464 at March 31, 2015 and $59,532 at December 31, 2014) | 70,561 | 66,786 |
Total liabilities | 332,646 | 320,523 |
Stockholders' equity | ||
Common stock, $1 par value, 250,000,000 shares authorized 119,792,881 shares issued at March 31, 2015 and 119,606,551 shares issued at December 31, 2014 | 119,793 | 119,607 |
Additional paid-in capital | 346,234 | 346,239 |
Retained earnings | 1,161,999 | 1,165,707 |
Less treasury stock, 57,862,185 shares at cost at March 31, 2015 and 57,832,362 shares at cost at December 31, 2014 | -1,257,702 | -1,257,648 |
Accumulated other comprehensive loss | -47,909 | -47,229 |
Total stockholders' equity | 322,415 | 326,676 |
Total liabilities and stockholders' equity | $655,061 | $647,199 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Condensed Consolidated Balance Sheets | ||
Accounts receivable, allowance for doubtful accounts | $1,718 | $1,224 |
Property, plant and equipment, accumulated depreciation | 175,014 | 173,699 |
Other intangible assets, accumulated amortization | 9,815 | 9,774 |
Other long-term liabilities, deferred income taxes | $63,464 | $59,532 |
Common stock, par value (in dollars per share) | $1 | $1 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 119,792,881 | 119,606,551 |
Treasury stock, shares (in shares) | 57,862,185 | 57,832,362 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Condensed Consolidated Statements of Comprehensive Income | ||
Operating revenues | $121,173 | $132,727 |
Operating expenses | ||
Labor | 64,663 | 71,304 |
Production and distribution | 35,959 | 40,276 |
Advertising, selling, general and administrative | 14,099 | 12,730 |
Depreciation, software and intangible asset amortization | 3,437 | 3,838 |
Total operating expenses | 118,158 | 128,148 |
Operating income | 3,015 | 4,579 |
Other expenses | ||
Interest expense, net | 609 | 679 |
Other, net | -407 | 734 |
Total other expenses | 202 | 1,413 |
Income from operations before income taxes | 2,813 | 3,166 |
Income tax expense | 1,198 | 1,321 |
Net income | 1,615 | 1,845 |
Basic earnings per common share (in dollars per share) | $0.03 | $0.03 |
Weighted-average common shares outstanding | 61,872 | 62,686 |
Diluted earnings per common share (in dollars per share) | $0.03 | $0.03 |
Weighted-average common and common equivalent shares outstanding (in shares) | 62,201 | 62,971 |
Other comprehensive income, net of tax | ||
Adjustment to pension liability | 807 | 553 |
Foreign currency translation adjustments | -1,487 | 186 |
Total other comprehensive income (loss), net of tax | -680 | 739 |
Comprehensive income | $935 | $2,584 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash Flows from Operating Activities | ||
Net income | $1,615 | $1,845 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and software amortization | 3,396 | 3,832 |
Intangible asset amortization | 41 | 6 |
Stock-based compensation | 1,316 | 1,288 |
Excess tax benefits from stock-based compensation | -425 | |
Net pension cost (payments) | -82 | 1,404 |
Deferred income taxes | 138 | 3,825 |
Other, net | -875 | |
Changes in operating assets and liabilities, net of acquisitions: | ||
Decrease in accounts receivable, net | 18,611 | 9,944 |
(Increase) decrease in inventory | 4 | -34 |
(Increase) decrease in prepaid expenses and other current assets | 218 | -696 |
Increase in accounts payable | 1,148 | 121 |
Decrease in other accrued expenses and liabilities | -6,130 | -13,810 |
Other, net | 153 | 267 |
Net cash provided by operating activities | 20,428 | 6,692 |
Cash Flows from Investing Activities | ||
Acquisitions, net of cash acquired | -29,863 | |
Purchases of property, plant and equipment | -2,709 | -2,550 |
Net cash used in investing activities | -32,572 | -2,550 |
Cash Flows from Financing Activities | ||
Repayment of borrowings | -4,593 | -3,062 |
Issuance of common stock | -21 | -347 |
Excess tax benefits from stock-based compensation | 425 | |
Purchase of treasury stock | -175 | |
Dividends paid | -5,323 | -5,377 |
Net cash used in financing activities | -9,937 | -8,536 |
Effect of exchange rate changes on cash and cash equivalents | -1,487 | 186 |
Net decrease in cash and cash equivalents | -23,568 | -4,208 |
Cash and cash equivalents at beginning of period | 56,749 | 88,747 |
Cash and cash equivalents at end of period | $33,181 | $84,539 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Changes in Equity (USD $) | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Total |
In Thousands, unless otherwise specified | ||||||
Balance at Dec. 31, 2013 | $119,187 | $345,095 | $1,163,201 | ($1,250,311) | ($28,118) | $349,054 |
Increase (Decrease) in Stockholders' Equity | ||||||
Exercise of stock options and release of unvested shares | 420 | -151 | -750 | -481 | ||
Net tax effect of stock options exercised and release of unvested shares | -1,993 | -1,993 | ||||
Stock-based compensation | 4,055 | 4,055 | ||||
Dividends paid ($ 0.085 and $0.34 per share for the three months ended March 31, 2015 and twelve months ended December 31, 2014, respectively) | -21,485 | -21,485 | ||||
Treasury stock issued | -767 | 1,307 | 540 | |||
Purchase of treasury stock | -7,894 | -7,894 | ||||
Net income | 23,991 | 23,991 | ||||
Other comprehensive loss | -19,111 | -19,111 | ||||
Balance at Dec. 31, 2014 | 119,607 | 346,239 | 1,165,707 | -1,257,648 | -47,229 | 326,676 |
Increase (Decrease) in Stockholders' Equity | ||||||
Exercise of stock options and release of unvested shares | 186 | 25 | -295 | -84 | ||
Net tax effect of stock options exercised and release of unvested shares | -1,168 | -1,168 | ||||
Stock-based compensation | 1,316 | 1,316 | ||||
Dividends paid ($ 0.085 and $0.34 per share for the three months ended March 31, 2015 and twelve months ended December 31, 2014, respectively) | -5,323 | -5,323 | ||||
Treasury stock issued | -178 | 241 | 63 | |||
Net income | 1,615 | 1,615 | ||||
Other comprehensive loss | -680 | -680 | ||||
Balance at Mar. 31, 2015 | $119,793 | $346,234 | $1,161,999 | ($1,257,702) | ($47,909) | $322,415 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Equity (Parenthetical) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Condensed Consolidated Statements of Changes in Equity | ||
Dividends paid (in dollars per share) | $0.09 | $0.34 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
Basis of Presentation | |
Basis of Presentation | Note A - Basis of Presentation |
Consolidation | |
The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Harte Hanks, Inc. and subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. As used in this report, the terms “Harte Hanks,” “the Company,” “we,” “us” or “our” may refer to Harte Hanks, Inc., one or more of its consolidated subsidiaries, or all of them taken as a whole. | |
Interim Financial Information | |
The financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) 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 U.S. GAAP 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 ended March 31, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2014. | |
Use of Estimates | |
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results and outcomes could differ from those estimates and assumptions. On an ongoing basis management reviews its estimates based on currently available information. Changes in facts and circumstances could result in revised estimates and assumptions. | |
Operating Expense Presentation in Consolidated Statements of Comprehensive Income | |
“Labor” in the Consolidated Statements of Comprehensive Income includes all employee payroll and benefits, including stock-based compensation, along with temporary labor costs. “Production and distribution” and “Advertising, selling, general and administrative” do not include labor, depreciation or amortization. | |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2015 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | Note B - Recent Accounting Pronouncements |
In April 2015, the FASB issued ASU 2015-03, Interest — Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU is effective for annual periods beginning after December 15, 2015, and interim periods within those annual periods. The impact on the Company will be a reclassification of debt issuance costs; however we do not expect the adoption to have a significant impact on our consolidated financial statements. | |
In January 2015, the FASB issued ASU 2015-01, Income Statement - Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items, which eliminates the concept of extraordinary items from U.S. GAAP as part of its simplification initiative. The ASU does not affect disclosure guidance for events or transactions that are unusual in nature or infrequent in their occurrence. The ASU is effective for interim and annual periods in fiscal years beginning after December 15, 2015. The ASU allows prospective or retrospective application. Early adoption is permitted if applied from the beginning of the fiscal year of adoption. The effective date is the same for both public entities and all other entities. The impact on the Company will be dependent on any transaction or event that is within the scope of the new guidance. | |
On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. On April 1, 2015 the FASB proposed for comment a one-year delay to the effective date of this standard. The Company will continue to monitor the status of this proposal. | |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 3 Months Ended | ||
Mar. 31, 2015 | |||
Fair Value of Financial Instruments | |||
Fair Value of Financial Instruments | Note C - Fair Value of Financial Instruments | ||
FASB ASC 820, Fair Value Measurements and Disclosures, (ASC 820) defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 also establishes a fair value hierarchy that prioritizes the inputs used in valuation methodologies into three levels: | |||
Level 1 | Quoted prices in active markets for identical assets or liabilities. | ||
Level 2 | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||
Level 3 | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||
Because of their maturities and/or variable interest rates, certain financial instruments have fair values approximating their carrying values. These instruments include cash and cash equivalents, accounts receivable and trade payables. The fair value of our outstanding debt is disclosed in Note E, Long-Term Debt. | |||
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2015 | |
Goodwill | |
Goodwill | Note D — Goodwill |
As of March 31, 2015 and December 31, 2014, we had goodwill of $440.0 million and $398.2 million, respectively. On March 16, 2015 the Company acquired the stock of privately-owned digital marketing agency, 3Q Digital, Inc. The Company paid an amount upon closing, with additional consideration payable upon the achievement of revenue performance goals over the three-year period following the closing. The Company performed a valuation to determine the estimate of the total purchase consideration and to estimate values for the tangible and identifiable intangible assets. As a result of the calculation, we recorded $41.8 million in goodwill. | |
Under the provisions of FASB ASC 350, Intangibles-Goodwill and Other, goodwill is tested for impairment at least annually, or more frequently if events or circumstances indicate that it is “more likely than not” that goodwill might be impaired. Such events could include a significant change in business conditions, a significant negative regulatory outcome or other events that could negatively affect our business and financial performance. We perform our annual goodwill impairment assessment as of November 30th of each year. | |
During the second quarter of 2014, Harte Hanks initiated a new strategy and began implementing changes to optimize our operational structure for that strategy. As a result, we determined our reporting units as Customer Interaction and Trillium Software. In this analysis, out goodwill was allocated to each reporting unit based on the estimated fair value of the reporting unit. We performed an impairment test immediately before and after the change in reporting units, utilizing the same methodology as out November 30 annual impairment test and no indication of impairment was identified. | |
We continue to monitor potential triggering events, including changes in the business climate in which we operate, attrition of key personnel, the current volatility in the capital markets, the Company’s market capitalization compared to our book value, our recent operating performance, and financial projections. During the quarter ended March 31, 2015, we did not identify any additional triggering events that require testing for impairment. The occurrence of one or more triggering events could require additional impairment testing, which could result in impairment charges in the future. | |
LongTerm_Debt
Long-Term Debt | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Long-Term Debt | ||||||||||||||
Long-Term Debt | Note E — Long-Term Debt | |||||||||||||
Our long-term debt obligations were as follows: | ||||||||||||||
March 31, | December 31, | |||||||||||||
In thousands | 2015 | 2014 | ||||||||||||
2013 Revolving Credit Facility, various interest rates based on Eurodollar rate, due August 16, 2016 ($73.8 million capacity and effective rate of 2.43% at March 31, 2015) | $ | — | $ | — | ||||||||||
2011 Term Loan Facility, various interest rates based on LIBOR (effective rate of 2.18% at March 31, 2015), due August 16, 2016 | 78,094 | 82,687 | ||||||||||||
Total debt | 78,094 | 82,687 | ||||||||||||
Less current maturities | 18,375 | 18,375 | ||||||||||||
Total long-term debt | $ | 59,719 | $ | 64,312 | ||||||||||
The carrying values and estimated fair values of our outstanding debt were as follows: | ||||||||||||||
March 31, | December 31, | |||||||||||||
2015 | 2014 | |||||||||||||
In thousands | Carrying | Fair Value | Carrying | Fair Value | ||||||||||
Value | Value | |||||||||||||
Total Debt | $ | 78,094 | $ | 78,094 | $ | 82,687 | $ | 82,687 | ||||||
The estimated fair values were calculated using current rates provided to us by our lenders for debt of the same remaining maturity and characteristics. These current rates are considered Level 2 inputs under the fair value hierarchy established by ASC 820. | ||||||||||||||
StockBased_Compensation
Stock-Based Compensation | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Stock-Based Compensation | ||||||||||||
Stock-Based Compensation | Note F — Stock-Based Compensation | |||||||||||
We recognized $1.3 million and $1.0 million of stock-based compensation during the three months ended March 31, 2015 and 2014, respectively. | ||||||||||||
Equity awards granted during the quarter were as follows: | ||||||||||||
March 31, | March 31, | |||||||||||
2015 | 2014 | |||||||||||
Number of | Weighted- | Number of | Weighted- | |||||||||
Shares | Average Grant- | Shares | Average Grant- | |||||||||
Date Fair Value | Date Fair Value | |||||||||||
Stock options | 31,700 | $ | 2.00 | 10,000 | $ | 2.37 | ||||||
Unvested shares | 70,687 | $ | 7.76 | 59,913 | $ | 7.01 | ||||||
Performance stock units | — | $ | — | — | $ | — | ||||||
Components_of_Net_Periodic_Ben
Components of Net Periodic Benefit Cost | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Components of Net Periodic Benefit Cost | ||||||||
Components of Net Periodic Benefit Cost | Note G — Components of Net Periodic Benefit Cost | |||||||
Prior to January 1, 1999, we maintained a defined benefit pension plan for which most of our employees were eligible (the Qualified Pension Plan). In conjunction with significant enhancements to our 401(k) plan, we elected to freeze benefits under the Qualified Pension Plan as of December 31, 1998. | ||||||||
In 1994, we adopted a non-qualified, unfunded, supplemental pension plan (Restoration 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 were it not for limitations imposed by income tax regulation. The benefits under the Restoration Pension Plan were intended to provide benefits equivalent to our Qualified Pension Plan as if such plan had not been frozen. | ||||||||
Effective April 1, 2014, we froze benefits under our Restoration Pension Plan, which was accounted for as a curtailment of the plan in the second quarter of 2014. The plan freeze resulted in a reduction of plan expense of $0.4 million during 2014 and a reduction in the projected benefit obligation of $1.1 million. This curtailment gain offsets the unrecognized loss held by the Restoration Pension Plan in 2014. The remaining portion of the unrecognized loss will be amortized over the average life expectancy of all participants. | ||||||||
Net pension cost for both plans included the following components: | ||||||||
Three Months Ended March 31, | ||||||||
In thousands | 2015 | 2014 | ||||||
Service cost | $ | — | $ | 100 | ||||
Interest cost | 1,931 | 1,939 | ||||||
Expected return on plan assets | (2,159 | ) | (2,109 | ) | ||||
Recognized actuarial loss | 1,557 | 921 | ||||||
Net periodic benefit cost | $ | 1,329 | $ | 851 | ||||
We made contributions of $1.0 million to our Qualified Pension Plan in the three months ended March 31, 2015. We plan to make additional contributions of $3.0 million to this pension plan during the remainder of 2015. Contributions to our funded, frozen pension plan are being made in order to obtain the Pension Protection Act of 2006 full funding limit exemption. | ||||||||
We are not required to make and do not intend to make any contributions to our Restoration Pension Plan in 2015 other than to the extent needed to cover benefit payments. We made benefit payments under this supplemental plan of $0.4 million in the three months ended March 31, 2015. In the event of a change of control, as defined in the plan document, the Restoration Pension Plan is required to be fully funded. | ||||||||
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Taxes | |
Income Taxes | Note H - Income Taxes |
Our first quarter 2015 income tax expense of $1.2 million resulted in an effective income tax rate of 42.6%. Our first quarter 2014 income tax provision of $1.3 million resulted in an effective income tax rate of 41.7%. Our effective income tax rate is derived by estimating pretax income and income tax expense for the year ending December 31, 2015. The effective income tax rate calculated for the first three months of 2015 is higher than the federal statutory rate of 35.0%, primarily due to the addition of state income taxes. | |
Harte Hanks, or one of our subsidiaries, files income tax returns in the U.S. federal, U.S. state and foreign jurisdictions. For U.S. state and foreign returns, we are no longer subject to tax examinations for tax years prior to 2010. For U.S. federal returns, we are no longer subject to tax examinations for tax years prior to 2011. | |
We have elected to classify any interest expense and penalties related to income taxes within income tax expense in our Consolidated Statements of Comprehensive Income. We did not have a significant amount of interest or penalties accrued at March 31, 2015 or December 31, 2014. | |
Earnings_Per_Share
Earnings Per Share | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share | ||||||||
Earnings Per Share | Note I - Earnings Per Share | |||||||
Basic earnings per share is computed on the basis of the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and unvested shares. | ||||||||
Reconciliations of basic and diluted earnings per share (EPS) are as follows: | ||||||||
Three Months Ended March 31, | ||||||||
In thousands, except per share amounts | 2015 | 2014 | ||||||
Basic EPS | ||||||||
Net income | $ | 1,615 | $ | 1,845 | ||||
Weighted-average common shares outstanding used in earnings per share computations | 61,872 | 62,686 | ||||||
Earnings per common share | $ | 0.03 | $ | 0.03 | ||||
Diluted EPS | ||||||||
Net income | $ | 1,615 | $ | 1,845 | ||||
Shares used in diluted earnings per share computations | 62,201 | 62,971 | ||||||
Earnings per common share | $ | 0.03 | $ | 0.03 | ||||
Computation of Shares Used in Earnings Per Share Computations | ||||||||
Weighted-average common shares outstanding | 61,872 | 62,686 | ||||||
Weighted-average common equivalent shares- dilutive effect of stock options and awards | 329 | 285 | ||||||
Shares used in diluted earnings per share computations | 62,201 | 62,971 | ||||||
3.2 million and 3.6 million of anti-dilutive market price options have been excluded from the calculation of shares used in the diluted EPS calculation for the three months ended March 31, 2015 and 2014, respectively. There were no anti-dilutive unvested shares excluded from the calculation of shares used in the diluted EPS calculation for the three months ended March 31, 2015 and 2014, respectively. | ||||||||
Comprehensive_Income
Comprehensive Income | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Comprehensive Income | |||||||||||
Comprehensive Income | Note J — Comprehensive Income | ||||||||||
Comprehensive income for a period encompasses net income and all other changes in equity other than from transactions with our stockholders. Our comprehensive income was as follows: | |||||||||||
Three Months Ended March 31, | |||||||||||
In thousands | 2015 | 2014 | |||||||||
Net income | $ | 1,615 | $ | 1,845 | |||||||
Other comprehensive income (loss): | |||||||||||
Adjustment to pension liability | 1,345 | 921 | |||||||||
Tax expense | (538 | ) | (368 | ) | |||||||
Adjustment to pension liability, net of tax | 807 | 553 | |||||||||
Foreign currency translation adjustment | (1,487 | ) | 186 | ||||||||
Total other comprehensive income (loss) | (680 | ) | 739 | ||||||||
Total comprehensive income | $ | 935 | $ | 2,584 | |||||||
Changes in accumulated other comprehensive income by component are as follows: | |||||||||||
In thousands | Defined | Foreign | Total | ||||||||
Benefit | Currency | ||||||||||
Pension Items | Items | ||||||||||
Balance at December 31, 2014 | $ | (49,560 | ) | $ | 2,331 | $ | (47,229 | ) | |||
Other comprehensive (loss), net of tax, before reclassifications | — | (1,487 | ) | (1,487 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | 807 | — | 807 | ||||||||
Net current period other comprehensive income (loss), net of tax | 807 | (1,487 | ) | (680 | ) | ||||||
Balance at March 31, 2015 | $ | (48,753 | ) | $ | 844 | $ | (47,909 | ) | |||
In thousands | Defined | Foreign | Total | ||||||||
Benefit | Currency | ||||||||||
Pension Items | Items | ||||||||||
Balance at December 31, 2013 | $ | (32,279 | ) | $ | 4,161 | $ | (28,118 | ) | |||
Other comprehensive income, net of tax, before reclassifications | — | 186 | 186 | ||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | 553 | — | 553 | ||||||||
Net current period other comprehensive income, net of tax | 553 | 186 | 739 | ||||||||
Balance at March 31, 2014 | $ | (31,726 | ) | $ | 4,347 | $ | (27,379 | ) | |||
Reclassification amounts related to the defined pension plans are included in the computation of net period pension benefit cost (see Note G, Components of Net Periodic Pension Benefit Cost). | |||||||||||
Litigation_Contingencies
Litigation Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Litigation Contingencies | |
Litigation Contingencies | Note K — Litigation Contingencies |
In the normal course of our business, we are obligated under some agreements to indemnify our clients as a result of claims that we infringe on the proprietary rights of third parties. The terms and duration of these commitments vary and, in some cases, may be indefinite, and certain of these commitments do not limit the maximum amount of future payments we could become obligated to make thereunder; accordingly, our actual aggregate maximum exposure related to these types of commitments cannot be reasonably estimated. Historically, we have not been obligated to make significant payments for obligations of this nature, and no liabilities have been recorded for these obligations in our financial statements. | |
We are also currently subject to various other legal proceedings in the course of conducting our businesses and, from time to time, we may become involved in additional claims and lawsuits incidental to our businesses. In the opinion of management, after consultation with counsel, none of these matters is currently considered to be reasonably possible of resulting in a material adverse effect on our consolidated financial position or results of operations. Nevertheless, we cannot predict the impact of future developments affecting our pending or future claims and lawsuits and any resolution of a claim or lawsuit within a particular fiscal quarter may adversely impact our results of operations for that quarter. We expense legal costs as incurred, and all recorded legal liabilities are adjusted as required as better information becomes available to us. The factors we consider when recording an accrual for contingencies include, among others: (i) the opinions and views of our legal counsel; (ii) our previous experience; and (iii) the decision of our management as to how we intend to respond to the complaints. | |
Business_Segments
Business Segments | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Business Segments | ||||||||
Business Segments | Note L — Business Segments | |||||||
We conduct our operations by organizing into two distinct operating divisions: Customer Interaction and Trillium Software. In accordance with ASC 280, Segment Reporting, we report the two operating divisions as two reportable segments — Customer Interaction and Trillium Software. Our reportable segments are described below. | ||||||||
Customer Interaction | ||||||||
Our Customer Interaction services offer a wide variety of integrated, multi-channel, data-driven marketing service solutions for our customers. We derive revenues by offering a full complement of capabilities and resources to provide these services in media from direct mail to email, including: | ||||||||
· | agency and digital services; | |||||||
· | database marketing solutions and business-to-business lead generation; | |||||||
· | direct mail; and | |||||||
· | contact centers. | |||||||
Customer Interaction’s largest cost components are labor, outsourced costs and mail supply chain costs. | ||||||||
Trillium Software | ||||||||
Trillium Software is a leading enterprise data quality solutions provider. Our full complement of technologies and services include global data profiling, data cleansing, enrichment, and data linking for e-business, customer relationship management, data governance, enterprise resource planning, supply chain management, data warehouse, and other enterprise applications. Revenues from the Trillium Software segment are comprised primarily of software, maintenance and professional services. | ||||||||
Trillium Software’s largest cost component is software development, which is comprised primarily of labor. | ||||||||
Corporate expense consists primarily of pension and worker’s compensation expense related to employees from operations we no longer own. | ||||||||
Information about the operations of our two business segments is as follows: | ||||||||
Three Months Ended March 31, | ||||||||
In thousands | 2015 | 2014 | ||||||
Operating revenues | ||||||||
Customer Interaction | $ | 109,315 | $ | 118,734 | ||||
Trillium Software | 11,858 | 13,993 | ||||||
Total operating revenues | $ | 121,173 | $ | 132,727 | ||||
Operating income | ||||||||
Customer Interaction | $ | 1,527 | $ | 1,950 | ||||
Trillium Software | 3,013 | 3,595 | ||||||
Corporate | (1,525 | ) | (966 | ) | ||||
Total operating income | $ | 3,015 | $ | 4,579 | ||||
Acquisition
Acquisition | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Acquisition | |||||
Acquisition | Note M — Acquisition | ||||
On March 16, 2015, Harte Hanks, Inc. completed the acquisition of 3Q Digital, Inc. The results of 3Q Digital’s operations have been included in the consolidated financial statements since that date and are reported in the Customer Interactions segment. At the time of the acquisition, (i) each outstanding share of 3Q Digital, Inc. capital stock that was vested was converted into the right to receive a portion of the merger consideration (including the right to receive a portion of the earnout consideration, if any), (ii) each outstanding share of 3Q capital stock that was not vested was cancelled, (iii) outstanding vested stock options were converted into the right to receive a portion of the merger consideration (including the right to receive a portion of the defined earnout consideration, if any) (net of the exercise price of such options) and (iv) unvested stock options were cancelled. The initial purchase price was $30.2 million in cash. In addition, the purchase price includes a contingent consideration arrangement that requires the Company to pay the former owners of 3Q Digital an additional cash payment depending on achievement of certain revenue growth goals. The potential undiscounted amount of all future payments that could be required to be paid in cash in 2017 under the contingent consideration arrangement is between $0 and $35.0 million. | |||||
The intangible assets include customer relationships, trade names and non-compete agreements. | |||||
The following table summarizes the consideration paid and the preliminary amounts of estimated fair value of the assets acquired and liabilities assumed at the acquisition date. | |||||
(in thousands) | |||||
Cash consideration per purchase agreement | $ | 30,245 | |||
Estimated fair value of contingent consideration | 17,940 | ||||
Fair value of total consideration transferred | $ | 48,185 | |||
(in thousands) | |||||
Recognized amounts of tangible assets and liabiities: | |||||
Current assets | $ | 4,135 | |||
Property and equipment | 164 | ||||
Other assets | 389 | ||||
Current liabilities | (822 | ) | |||
Other liabilities | — | ||||
Total tangible assets and liabilities: | 3,866 | ||||
Identifiable intangible assets | 4,773 | ||||
Goodwill (including deferrred tax adjustment of $2,298) | 41,844 | ||||
Total | $ | 50,483 | |||
The fair value of the net tangible assets, identifiable intangible assets and goodwill is $48.2 million. The acquired intangible assets, which are being amortized, are as follows: customer relationships of $4.3 million (amortized over seven years), trade names and trademarks of $0.3 million (amortized over two years) and non-compete agreements of $0.2 million (amortized over three years). | |||||
The purchase price has been preliminarily allocated based on the estimated fair values of assets described above and are subject to achievement of revenue goals. Future purchase price adjustments are possible in future quarters based upon further evaluation and analysis. | |||||
Subsequent_Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Event | |
Subsequent Event | Note N — Subsequent Event |
On April 14, 2015, Harte Hanks completed the sale of our Aberdeen Group and Market Intelligence businesses in our Customer Interaction business segment to affiliates of Halyard Capital for approximately $9.0 million, subject to a post-closing working capital adjustment, and will recognize a pre-tax charge of approximately $10.5 million in the second quarter of 2015. This transaction is estimated to result in an after-tax loss of approximately $7.8 million. The historical operating results of these business to business research divisions were not material to the Company. | |
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Long-Term Debt | ||||||||||||||
Schedule of long-term debt obligations | March 31, | December 31, | ||||||||||||
In thousands | 2015 | 2014 | ||||||||||||
2013 Revolving Credit Facility, various interest rates based on Eurodollar rate, due August 16, 2016 ($73.8 million capacity and effective rate of 2.43% at March 31, 2015) | $ | — | $ | — | ||||||||||
2011 Term Loan Facility, various interest rates based on LIBOR (effective rate of 2.18% at March 31, 2015), due August 16, 2016 | 78,094 | 82,687 | ||||||||||||
Total debt | 78,094 | 82,687 | ||||||||||||
Less current maturities | 18,375 | 18,375 | ||||||||||||
Total long-term debt | $ | 59,719 | $ | 64,312 | ||||||||||
Schedule of carrying values and estimated fair values of outstanding debt | March 31, | December 31, | ||||||||||||
2015 | 2014 | |||||||||||||
In thousands | Carrying | Fair Value | Carrying | Fair Value | ||||||||||
Value | Value | |||||||||||||
Total Debt | $ | 78,094 | $ | 78,094 | $ | 82,687 | $ | 82,687 | ||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2015 | ||||||||||||
Stock-Based Compensation | ||||||||||||
Schedule of shares granted and weighted-average grant-date fair value | March 31, | March 31, | ||||||||||
2015 | 2014 | |||||||||||
Number of | Weighted- | Number of | Weighted- | |||||||||
Shares | Average Grant- | Shares | Average Grant- | |||||||||
Date Fair Value | Date Fair Value | |||||||||||
Stock options | 31,700 | $ | 2.00 | 10,000 | $ | 2.37 | ||||||
Unvested shares | 70,687 | $ | 7.76 | 59,913 | $ | 7.01 | ||||||
Performance stock units | — | $ | — | — | $ | — | ||||||
Components_of_Net_Periodic_Ben1
Components of Net Periodic Benefit Cost (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Components of Net Periodic Benefit Cost | ||||||||
Schedule of net pension cost of plans | Three Months Ended March 31, | |||||||
In thousands | 2015 | 2014 | ||||||
Service cost | $ | — | $ | 100 | ||||
Interest cost | 1,931 | 1,939 | ||||||
Expected return on plan assets | (2,159 | ) | (2,109 | ) | ||||
Recognized actuarial loss | 1,557 | 921 | ||||||
Net periodic benefit cost | $ | 1,329 | $ | 851 | ||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share | ||||||||
Reconciliation of basic and diluted earnings per share | Three Months Ended March 31, | |||||||
In thousands, except per share amounts | 2015 | 2014 | ||||||
Basic EPS | ||||||||
Net income | $ | 1,615 | $ | 1,845 | ||||
Weighted-average common shares outstanding used in earnings per share computations | 61,872 | 62,686 | ||||||
Earnings per common share | $ | 0.03 | $ | 0.03 | ||||
Diluted EPS | ||||||||
Net income | $ | 1,615 | $ | 1,845 | ||||
Shares used in diluted earnings per share computations | 62,201 | 62,971 | ||||||
Earnings per common share | $ | 0.03 | $ | 0.03 | ||||
Computation of Shares Used in Earnings Per Share Computations | ||||||||
Weighted-average common shares outstanding | 61,872 | 62,686 | ||||||
Weighted-average common equivalent shares- dilutive effect of stock options and awards | 329 | 285 | ||||||
Shares used in diluted earnings per share computations | 62,201 | 62,971 | ||||||
Comprehensive_Income_Tables
Comprehensive Income (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Comprehensive Income | |||||||||||
Schedule of Comprehensive Income | |||||||||||
Three Months Ended March 31, | |||||||||||
In thousands | 2015 | 2014 | |||||||||
Net income | $ | 1,615 | $ | 1,845 | |||||||
Other comprehensive income (loss): | |||||||||||
Adjustment to pension liability | 1,345 | 921 | |||||||||
Tax expense | (538 | ) | (368 | ) | |||||||
Adjustment to pension liability, net of tax | 807 | 553 | |||||||||
Foreign currency translation adjustment | (1,487 | ) | 186 | ||||||||
Total other comprehensive income (loss) | (680 | ) | 739 | ||||||||
Total comprehensive income | $ | 935 | $ | 2,584 | |||||||
Schedule of changes in accumulated other comprehensive income | In thousands | Defined | Foreign | Total | |||||||
Benefit | Currency | ||||||||||
Pension Items | Items | ||||||||||
Balance at December 31, 2014 | $ | (49,560 | ) | $ | 2,331 | $ | (47,229 | ) | |||
Other comprehensive (loss), net of tax, before reclassifications | — | (1,487 | ) | (1,487 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | 807 | — | 807 | ||||||||
Net current period other comprehensive income (loss), net of tax | 807 | (1,487 | ) | (680 | ) | ||||||
Balance at March 31, 2015 | $ | (48,753 | ) | $ | 844 | $ | (47,909 | ) | |||
In thousands | Defined | Foreign | Total | ||||||||
Benefit | Currency | ||||||||||
Pension Items | Items | ||||||||||
Balance at December 31, 2013 | $ | (32,279 | ) | $ | 4,161 | $ | (28,118 | ) | |||
Other comprehensive income, net of tax, before reclassifications | — | 186 | 186 | ||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | 553 | — | 553 | ||||||||
Net current period other comprehensive income, net of tax | 553 | 186 | 739 | ||||||||
Balance at March 31, 2014 | $ | (31,726 | ) | $ | 4,347 | $ | (27,379 | ) | |||
Business_Segments_Tables
Business Segments (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Business Segments | ||||||||
Business segment reporting information | Three Months Ended March 31, | |||||||
In thousands | 2015 | 2014 | ||||||
Operating revenues | ||||||||
Customer Interaction | $ | 109,315 | $ | 118,734 | ||||
Trillium Software | 11,858 | 13,993 | ||||||
Total operating revenues | $ | 121,173 | $ | 132,727 | ||||
Operating income | ||||||||
Customer Interaction | $ | 1,527 | $ | 1,950 | ||||
Trillium Software | 3,013 | 3,595 | ||||||
Corporate | (1,525 | ) | (966 | ) | ||||
Total operating income | $ | 3,015 | $ | 4,579 | ||||
Acquisition_Tables
Acquisition (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Acquisition | |||||
Schedule of estimated fair value of the assets acquired | |||||
(in thousands) | |||||
Cash consideration per purchase agreement | $ | 30,245 | |||
Estimated fair value of contingent consideration | 17,940 | ||||
Fair value of total consideration transferred | $ | 48,185 | |||
Schedule of reconciliation of total consideration | (in thousands) | ||||
Recognized amounts of tangible assets and liabiities: | |||||
Current assets | $ | 4,135 | |||
Property and equipment | 164 | ||||
Other assets | 389 | ||||
Current liabilities | (822 | ) | |||
Other liabilities | — | ||||
Total tangible assets and liabilities: | 3,866 | ||||
Identifiable intangible assets | 4,773 | ||||
Goodwill (including deferrred tax adjustment of $2,298) | 41,844 | ||||
Total | $ | 50,483 | |||
Goodwill_Details
Goodwill (Details) (USD $) | 3 Months Ended | 0 Months Ended | |
Mar. 31, 2015 | Mar. 16, 2015 | Dec. 31, 2014 | |
Goodwill | |||
Goodwill | $440,008,000 | $398,164,000 | |
Impairment of goodwill | 0 | ||
3Q Digital Inc | |||
Goodwill | |||
Goodwill | $41,844,000 | ||
Period for achievement of revenue performance goals | 3 years |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Long-term debt obligation | ||
Total debt | $78,094,000 | $82,687,000 |
Less current maturities | 18,375,000 | 18,375,000 |
Total long-term debt | 59,719,000 | 64,312,000 |
2013 Revolving Credit Facility, due August 16, 2016 | ||
Long-term debt obligation | ||
Basis of interest rate | Eurodollar rate | |
Remaining borrowing capacity | 73,800,000 | |
Effective rate of interest (as a percent) | 2.43% | |
2011 Term Loan Facility, due August 16, 2016 | ||
Long-term debt obligation | ||
Basis of interest rate | LIBOR | |
Total debt | $78,094,000 | $82,687,000 |
Effective rate of interest (as a percent) | 2.18% |
LongTerm_Debt_Details_2
Long-Term Debt (Details 2) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Carrying Value | ||
Carrying values and estimated fair values of outstanding debt | ||
Total debt | $78,094 | $82,687 |
Fair Value | Significant Other Observable Inputs (Level 2) | ||
Carrying values and estimated fair values of outstanding debt | ||
Total debt | $78,094 | $82,687 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Stock-Based Compensation | ||
Stock-based compensation expense | $1.30 | $1 |
Stock Options | ||
Stock-Based Compensation | ||
Number of Shares Granted | 31,700 | 10,000 |
Weighted-Average Grant-Date Fair Value (in dollars per share) | $2 | $2.37 |
Unvested Shares | ||
Stock-Based Compensation | ||
Number of Shares Granted | 70,687 | 59,913 |
Weighted-Average Grant-Date Fair Value (in dollars per share) | $7.76 | $7.01 |
Components_of_Net_Periodic_Ben2
Components of Net Periodic Benefit Cost (Details) (USD $) | 3 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Restoration Pension Plan | ||
Defined Benefit Plan Disclosure | ||
Reduction of plan expense | $0.40 | |
Reduction in the projected benefit obligation | 1.1 | |
Benefits paid | 0.4 | |
Qualified Pension Plan | ||
Defined Benefit Plan Disclosure | ||
Contributions made | 1 | |
Planned contributions in remainder of year | $3 |
Components_of_Net_Periodic_Ben3
Components of Net Periodic Benefit Cost (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net pension cost of plans | ||
Service cost | $100 | |
Interest cost | 1,931 | 1,939 |
Expected return on plan assets | -2,159 | -2,109 |
Recognized actuarial loss | 1,557 | 921 |
Net periodic benefit cost | $1,329 | $851 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Taxes | ||
Income tax expense | $1,198 | $1,321 |
Effective income tax rate (as a percent) | 42.60% | 41.70% |
Federal statutory rate (as a percent) | 35.00% |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Basic EPS | |||
Net income | $1,615 | $1,845 | $23,991 |
Weighted-average common shares outstanding used in earnings per share computations | 61,872 | 62,686 | |
Basic earnings per common share (in dollars per share) | $0.03 | $0.03 | |
Diluted EPS | |||
Net income | $1,615 | $1,845 | $23,991 |
Shares used in diluted earnings per share computations | 62,201 | 62,971 | |
Diluted earnings per common share (in dollars per share) | $0.03 | $0.03 | |
Computation of Shares Used in Earnings Per Share Computations | |||
Weighted-average common shares outstanding | 61,872 | 62,686 | |
Weighted-average common equivalent shares - dilutive effect of stock options and awards | 329 | 285 | |
Shares used in diluted earnings per share computations | 62,201 | 62,971 |
Earnings_Per_Share_Details_2
Earnings Per Share (Details 2) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Weighted-average anti-dilutive shares have been excluded from the EPS calculations | 3.2 | 3.6 |
Unvested Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Weighted-average anti-dilutive shares have been excluded from the EPS calculations | 0 | 0 |
Comprehensive_Income_Details
Comprehensive Income (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Comprehensive Income | |||
Net income | $1,615 | $1,845 | $23,991 |
Other comprehensive income (loss): | |||
Adjustment to pension liability | 1,345 | 921 | |
Tax expense | -538 | -368 | |
Adjustment to pension liability, net of tax | 807 | 553 | |
Foreign currency translation adjustment | -1,487 | 186 | |
Total other comprehensive income (loss), net of tax | -680 | 739 | |
Comprehensive income | 935 | 2,584 | |
Accumulated other comprehensive income | |||
Balance at beginning of period | -47,229 | -28,118 | -28,118 |
Other comprehensive income (loss), net of tax, before reclassifications | -1,487 | 186 | |
Amounts reclassified from accumulated other comprehensive income, net of tax | 807 | 553 | |
Net current period other comprehensive income (loss), net of tax | -680 | 739 | -19,111 |
Balance at end of period | -47,909 | -27,379 | -47,229 |
Defined Benefit Pension Items | |||
Accumulated other comprehensive income | |||
Balance at beginning of period | -49,560 | -32,279 | -32,279 |
Amounts reclassified from accumulated other comprehensive income, net of tax | 807 | 553 | |
Net current period other comprehensive income (loss), net of tax | 807 | 553 | |
Balance at end of period | -48,753 | -31,726 | |
Foreign Currency Items | |||
Accumulated other comprehensive income | |||
Balance at beginning of period | 2,331 | 4,161 | 4,161 |
Other comprehensive income (loss), net of tax, before reclassifications | -1,487 | 186 | |
Net current period other comprehensive income (loss), net of tax | -1,487 | 186 | |
Balance at end of period | $844 | $4,347 |
Litigation_Contingencies1
Litigation Contingencies (USD $) | Mar. 31, 2015 |
Litigation Contingencies | |
Litigation liability | $0 |
Business_Segments_Details
Business Segments (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
segment | ||
Business Segments | ||
Number of operating segments | 2 | |
Number of reportable segments | 2 | |
Business segments, information about operations | ||
Operating revenues | $121,173 | $132,727 |
Operating income | 3,015 | 4,579 |
Operating Segments | Customer Interaction | ||
Business segments, information about operations | ||
Operating revenues | 109,315 | 118,734 |
Operating income | 1,527 | 1,950 |
Operating Segments | Trillium Software | ||
Business segments, information about operations | ||
Operating revenues | 11,858 | 13,993 |
Operating income | 3,013 | 3,595 |
Corporate, Non-Segment | ||
Business segments, information about operations | ||
Operating income | ($1,525) | ($966) |
Acquisition_Details
Acquisition (Details) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | ||
Mar. 16, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | |
Acquisitions | |||||
Cash purchase price excluding transaction fees and expenses | $30,200,000 | ||||
Contingent consideration | 17,940,000 | 17,940,000 | |||
Recognized amounts of tangible assets and liabilities: | |||||
Goodwill (including deferred tax adjustment of $2,134 | 440,008,000 | 440,008,000 | 398,164,000 | ||
Amortization of intangible assets | 41,000 | 6,000 | |||
3Q Digital Inc | |||||
Total consideration | |||||
Cash consideration per purchase agreement | 30,245,000 | ||||
Estimated fair value of contingent consideration | 17,940,000 | ||||
Fair value of total consideration transferred | 48,185,000 | ||||
Recognized amounts of tangible assets and liabilities: | |||||
Current assets | 4,135,000 | ||||
Property and equipment | 164,000 | ||||
Other assets | 389,000 | ||||
Current liabilities | -822,000 | ||||
Total tangible assets and liabilities: | 3,866,000 | ||||
Identifiable intangible assets | 4,773,000 | ||||
Goodwill (including deferred tax adjustment of $2,134 | 41,844,000 | ||||
Total | 50,483,000 | ||||
Deferred tax adjustment | 2,298,000 | ||||
3Q Digital Inc | Customer relationships | |||||
Recognized amounts of tangible assets and liabilities: | |||||
Amortization of intangible assets | 4,300,000 | ||||
Amortization period | 7 years | ||||
3Q Digital Inc | Tradenames and trademarks | |||||
Recognized amounts of tangible assets and liabilities: | |||||
Amortization of intangible assets | 300,000 | ||||
Amortization period | 2 years | ||||
3Q Digital Inc | Non-compete agreements | |||||
Recognized amounts of tangible assets and liabilities: | |||||
Amortization of intangible assets | 200,000 | ||||
Amortization period | 3 years | ||||
Minimum | 3Q Digital Inc | |||||
Acquisitions | |||||
Contingent consideration | 0 | ||||
Maximum | 3Q Digital Inc | |||||
Acquisitions | |||||
Contingent consideration | $35,000,000 |
Subsequent_Event_Details
Subsequent Event (Details) (Subsequent Event, USD $) | 3 Months Ended | 0 Months Ended |
In Millions, unless otherwise specified | Jun. 30, 2015 | Apr. 14, 2015 |
Subsequent Event | ||
Pre-tax charge | $10.50 | |
After-tax loss | 7.8 | |
Customer Interaction | The Aberdeen Group and Market Intelligence | ||
Subsequent Event | ||
Proceeds from sale | $9 |