Harte Hanks (HHS) 10-Q 16 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 15, 2016
Document and Entity Information
Entity Registrant Name	HARTE HANKS INC
Entity Central Index Key	45,919
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		61,458,282
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets
Cash and cash equivalents	$ 11,676	$ 17,613
Accounts receivable (less allowance for doubtful accounts of $1,251 at March 31, 2016 and $1,249 at December 31, 2015)	93,142	115,155
Inventory	1,122	963
Prepaid expenses	11,626	9,548
Prepaid taxes and income tax receivable	3,263	1,760
Other current assets	4,628	6,459
Total current assets	125,457	151,498
Property, plant and equipment (less accumulated depreciation of $175,238 at March 31, 2016 and $171,415 at December 31, 2015)	35,165	33,913
Goodwill	222,452	218,972
Other intangible assets (less accumulated amortization of $855 at March 31, 2016 and $650 at December 31, 2015)	3,918	4,123
Other assets (including deferred income taxes of $4,756 at March 31, 2016 and $3,000 at December 31, 2015)	7,426	5,907
Total assets	394,418	414,413
Current liabilities
Current maturities of long-term debt	4,125	3,000
Accounts payable	28,080	38,287
Accrued payroll and related expenses	9,734	8,340
Deferred revenue and customer advances	25,459	27,426
Income taxes payable	819	1,246
Customer postage and program deposits	13,935	12,513
Other current liabilities	4,228	6,628
Total current liabilities	86,380	97,440
Long-term debt	74,718	74,105
Pensions	54,721	55,491
Contingent consideration	20,358	20,277
Other long-term liabilities (including deferred income taxes of $22,733 at March 31, 2016 and $20,672 at December 31, 2015)	28,832	26,784
Total liabilities	265,009	274,097
Stockholders’ equity
Common stock, $1 par value, 250,000,000 shares authorized 120,264,526 shares issued at March 31, 2016 and 120,146,720 shares issued at December 31, 2015	120,265	120,147
Additional paid-in capital	352,680	353,050
Retained earnings	962,650	973,538
Less treasury stock, 58,892,253 shares at cost at March 31, 2016 and 58,879,742 shares at cost at December 31, 2015	(1,262,678)	(1,262,859)
Accumulated other comprehensive loss	(43,508)	(43,560)
Total stockholders’ equity	129,409	140,316
Total liabilities and stockholders’ equity	$ 394,418	$ 414,413

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 1,251	$ 1,249
Property, plant and equipment, accumulated depreciation	175,238	171,415
Other intangible assets, accumulated amortization	855	650
Other assets, deferred income taxes	4,756	3,000
Other long-term liabilities, deferred income taxes	$ 22,733	$ 20,672
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)	120,264,526	120,146,720
Treasury stock, shares (in shares)	58,892,253	58,879,742

Condensed Consolidated Statemen

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement [Abstract]
Operating revenues	$ 110,723	$ 121,173
Operating expenses
Labor	68,339	64,663
Production and distribution	30,135	35,959
Advertising, selling, general and administrative	15,070	14,099
Depreciation, software and intangible asset amortization	3,548	3,437
Total operating expenses	117,092	118,158
Operating income (loss)	(6,369)	3,015
Other (income) and expenses
Interest expense, net	1,381	609
Other, net	(172)	(407)
Total other expenses	1,209	202
Income (loss) from operations before income taxes	(7,578)	2,813
Income tax expense (benefit)	(1,975)	1,198
Net Income (loss)	$ (5,603)	$ 1,615
Declared dividends per share (in dollars per share)	$ 0.09	$ 0.09
Basic earnings per common share (in dollars per share)	$ (0.09)	$ 0.03
Weighted-average common shares outstanding (in shares)	61,331	61,872
Diluted earnings per common share (in dollars per share)	$ (0.09)	$ 0.03
Weighted-average common and common equivalent shares outstanding (in shares)	61,331	62,201
Other comprehensive income (loss), net of tax
Adjustment to pension liability	$ 522	$ 807
Foreign currency translation adjustments	(470)	(1,487)
Total other comprehensive income (loss), net of tax	52	(680)
Comprehensive income (loss)	$ (5,551)	$ 935

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash Flows from Operating Activities
Net income (loss)	$ (5,603)	$ 1,615
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and software amortization	3,343	3,396
Intangible asset amortization	205	41
Stock-based compensation	563	1,316
Net pension cost (payments)	100	(82)
Interest accretion on contingent consideration	328	0
Deferred income taxes	(675)	138
Other, net	(220)	0
Changes in operating assets and liabilities, net of acquisitions:
Decrease in accounts receivable, net	22,013	18,611
Increase in inventory	(159)	4
Decrease in prepaid expenses and other current assets	(1,501)	218
Increase (decrease) in accounts payable	(10,213)	1,148
Decrease in other accrued expenses and liabilities	(1,783)	(6,130)
Other, net	0	153
Net cash provided by operating activities	6,398	20,428
Cash Flows from Investing Activities
Acquisitions, net of cash acquired	(3,500)	(29,863)
Purchases of property, plant and equipment	(4,590)	(2,709)
Proceeds from sale of property, plant and equipment	21	0
Net cash used in investing activities	(8,069)	(32,572)
Cash Flows from Financing Activities
Borrowings	81,008	0
Repayment of borrowings	(77,313)	(4,593)
Debt financing costs	(2,165)	0
Issuance of common stock	(81)	(84)
Issuance of treasury stock	40	63
Dividends paid	(5,285)	(5,323)
Net cash used in financing activities	(3,796)	(9,937)
Effect of exchange rate changes on cash and cash equivalents	(470)	(1,487)
Net decrease in cash and cash equivalents	(5,937)	(23,568)
Cash and cash equivalents at beginning of period	17,613	56,749
Cash and cash equivalents at end of period	$ 11,676	$ 33,181

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Income (Loss)
Balance at Dec. 31, 2014	$ 326,676	$ 119,607	$ 346,239	$ 1,165,707	$ (1,257,648)	$ (47,229)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options and release of unvested shares	(84)	186	25		(295)
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 ($0.26 and $0.34 per share for the three months ended March 31, 2016 and twelve months ended December 31, 2015, respectively)	(5,323)			(5,323)
Treasury stock issued	63		(178)		241
Purchase of treasury stock	0
Net income	1,615			1,615
Other comprehensive income	(680)					(680)
Balance at Mar. 31, 2015	322,415	119,793	346,234	1,161,999	(1,257,702)	(47,909)
Balance at Dec. 31, 2015	140,316	120,147	353,050	973,538	(1,262,859)	(43,560)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options and release of unvested shares	(81)	118	(118)		(81)
Net tax effect of stock options exercised and release of unvested shares	(593)		(593)
Stock-based compensation	563		563
Dividends paid ($0.26 and $0.34 per share for the three months ended March 31, 2016 and twelve months ended December 31, 2015, respectively)	(5,285)			(5,285)
Treasury stock issued	40		(222)		262
Net income	(5,603)			(5,603)
Other comprehensive income	52					52
Balance at Mar. 31, 2016	$ 129,409	$ 120,265	$ 352,680	$ 962,650	$ (1,262,678)	$ (43,508)

Consolidated Statements of Chan

Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Statement of Stockholders' Equity [Abstract]
Dividends paid (in dollars per share)	$ 0.085	$ 0.34

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	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, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 . 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, 2015 . Reclassifications Certain amounts in the financial statements for the prior years have been reclassified to conform to the current year's presentation. 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 (Loss) “Labor” in the Consolidated Statements of Comprehensive Income (Loss) 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 Pronouncement

Recent Accounting Pronouncements	3 Months Ended
	Mar. 31, 2016
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Recent Accounting Pronouncements	Recent Accounting Pronouncements On March 30, 2016 the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-based Payment Accounting, which requires entities with share-based payment awards to recognize all related excess tax benefits and tax deficiencies as income tax expenses or benefit in the income statement. This ASU is effective for interim and annual periods beginning after December 15, 2016. Early adoption is permitted. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. On March 17, 2016, the FASB issue ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which amends the principal-versus-agent implementation guidance and illustrations in ASU 2014-09 (see below). This ASU is intended to provide clarification related to determining the appropriate unit of account under the revenue standard's principal-versus-agent guidance and applying the indicators of whether an entity is a principal or an agent in accordance with ASU 2014-09's control principal. The effective date and the transition retirements are the same as the effective date and transition requirements of ASU 2014-09. We are evaluating the effect that ASU 2016-08 will have on our consolidated financial statements and related disclosures. On February 25, 2016, the FASB issued ASU 2016-02, Leases , which requires all operating leases to be recorded on the balance sheet. The lessee will record a liability for its lease obligations (initially measured at the present value of the future lease payments not yet paid over the lease term, and an asset for its right to use the underlying asset equal to the lease liability, adjusted for lease payments made at or before lease commencement). This ASU is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. 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. As a result, in conjunction with the closing of the 2016 Term Facility and 2016 Revolving Credit Facility, we recorded $2.2 million in unamortized debt discount and debt issuance costs as a reduction of the total debt balance. We also reclassified $0.2 million in unamortized debt issuance costs as a reduction of the debt balance as of December 31, 2015 that were previously included in Other Assets (see Note E, Long-Term Debt ). In April 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement , which provides explicit guidance to help companies evaluate the accounting for fees paid by a customer in a cloud computing arrangement. This ASU is effective for interim and annual periods beginning after December 15, 2015. The adoption of this ASU did not have a material 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 adoption of this ASU did not have a material impact on our consolidated financial statements; however, future 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 standard permits the use of either the retrospective or cumulative effect transition method. On July 9, 2015, the FASB decided to delay the effective date of the new revenue standard by one year. The new effective date is for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted beginning January 1, 2017 (original effective date of the ASU). We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor has we determined the effect of the standard on our ongoing financial reporting.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	3 Months Ended
	Mar. 31, 2016
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	Fair Value of Financial Instruments FASB ASC 820, Fair Value Measurements and Disclosures, 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. Our calculation of goodwill using the residual purchase price methodology and the acquisition related contingent consideration accounted for at fair value on a recurring basis is disclosed in Note M, Acquisition and Disposition.

Goodwill

Goodwill	3 Months Ended
	Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	Goodwill As of March 31, 2016 and December 31, 2015 , we had goodwill of $222.5 million and $219.0 million , respectively. On March 4, 2016, the company completed the purchase of substantially all of the assets of Aleutian Consulting, Inc. 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 $3.5 million in goodwill. The residual purchase price methodology used in the calculation relied on management's assumptions. These assumptions, which are significant to the calculated fair values, are considered Level 3 inputs under the fair value hierarchy established by ASC350, as they are unobservable. See Note M, Acquisition and Disposition . This goodwill will be tax deductible. On March 16, 2015 the company acquired the stock of 3Q Digital, Inc., a digital marketing agency. The company paid some consideration 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 of goodwill. Under the provisions of FASB ASC 350, Intangibles-Goodwill and Other (ASC 350), 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 for each of our reportable segments. We continuously 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, 2016 , 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. The changes in the carrying amount of goodwill are as follows: In thousands Customer Interaction Trillium Software Total Balance at December 31, 2015 $ 69,699 149,273 $ 218,972 Additions to goodwill 3,480 — 3,480 Balance at March 31, 2016 $ 73,179 149,273 $ 222,452

Long-Term Debt

Long-Term Debt	3 Months Ended
	Mar. 31, 2016
Debt Disclosure [Abstract]
Long-Term Debt	Long-Term Debt On March 10, 2016, we entered into a secured credit facility with Wells Fargo Bank , N.A. as Administrative Agent, consisting of a maximum $65.0 million revolving credit facility (the 2016 Revolving Credit Facility) and a $45.0 million term loan facility (the 2016 Term Loan, and together with the 2016 Revolving Credit Facility, the Secured Credit Facilities). The Secured Credit Facilities are secured by substantially all of the company's assets and its material domestic subsidiaries. The Secured Credit Facilities will be used for general corporate purposes, and were used to replace, and repay remaining outstanding balances on, the company's (i) 2013 Revolving Credit Facility, and (ii) 2011 Term Loan Facility. The credit and guarantee agreements related to the 2013 Revolving Credit Facility and 2011 Term Loan Facility were likewise terminated. The 2016 Revolving Credit Facility allows for borrowings up to the lesser of (a) $65.0 million or (b) the sum of (i) 85.0% of eligible domestic accounts receivable, (ii) subject to certain sublimits, 85.0% of eligible foreign accounts receivable, and (iii) the lower of (x) $15.0 million or (y) 85.0% of eligible unbilled accounts receivable, all of which are subject to customary reserves and eligibility criteria. The outstanding amount of the 2016 Term Loan is repayable, on a monthly basis, in an amount equal to 1/120th of its original principal amount. Any amount remaining unpaid will be due and payable in full on the Maturity Date March 10, 2021. So long as an established amount of availability under the 2016 Revolving Credit Facility is maintained (described below), the 2016 Term Loan may be prepaid in whole or in part at any time, subject to prior written notice and payment of a prepayment premium ( 3.0% in the first year, 2.0% in the second year, and 1.0% in the third year) of the outstanding principal balance of the amount of the 2016 Term Loan prepaid during such year. The 2016 Term Loan is subject to mandatory prepayments from the net proceeds of certain asset dispositions (subject to limited customary reinvestment exceptions), and the incurrence of certain indebtedness, which prepayments are subject to the prepayment premium. Additionally, if our leverage ratio is greater than 2.0 to 1 in 2016 or 1.75 to 1 in any subsequent year, the 2016 Term Loan is subject to mandatory prepayments in an amount equal to 50.0% of our excess cash flow. Prepayments made with respect to excess cash flow are not subject to the prepayment premium. Voluntary prepayments of the 2016 Term Loan and mandatory prepayments of the 2016 Term Loan from excess cash flow are not permitted if availability under the 2016 Revolving Credit Facility is less than the greater of (a) 13.5% of the maximum amount of the 2016 Revolving Credit Facility and (b) $14.9 million with respect to voluntary prepayments, and the greater of 10.0% of the maximum amount of the 2016 Revolving Credit Facility and $11.0 million with respect to excess cash flow payments. The loans under the Secured Credit Facilities will accrue interest at a rate equal to, at the company's option, (i) the base rate plus the applicable margin, or (b) the LIBOR rate (as defined and limited in the Secured Credit Facilities) plus the applicable margin. The base rate is the greatest of (i) the prime lending rate as publicly announced from time to time by Wells Fargo, (ii) the federal funds rate plus 0.5% , and (iii) the LIBOR rate for one month interest plus 1.0% per annum. The applicable margin for the 2016 Revolving Credit Facility is determined based upon the amount available to be borrowed under the 2016 Revolving Credit Facility in excess of trade payables aged in excess of historical levels and book overdrafts and ranges between 1.0 to 1.5% for loans accruing interest at the base rate and 2.0 to 2.5% for loans accruing interest at the LIBOR rate. The applicable margin for the 2016 Term Loan is 7.22% for loans accruing interest at the LIBOR rate and 6.22% for loans accruing interest at the base rate. We also pay an unused line of credit fee in an amount between 0.25 and 0.375% on the unused capacity on the 2016 Revolving Credit Facility outstanding amount. Under the Secured Credit Facilities, we are required to maintain certain financial covenants: a fixed charge coverage ratio of at least 1.0 to 1 for the 12 month period at each month through June 30, 2016 and 1.1 to 1 for the 12 month period at each month end thereafter; a leverage ratio of 2.25 to 1 at each month end from March 31, 2016 to December 31, 2016 and 2.0 to 1 at each month end thereafter; a minimum rolling four quarter period ending recurring revenue amount of $35.0 million at each quarter end from March 31, 2016 to September 30, 2016, and increasing quarterly from $35.2 million to $42.8 million each quarter thereafter; and capital expenditures not to exceed $14.0 million for the period from March 10, 2016 to December 31, 2016, and each fiscal year thereafter. The Secured Credit Facilities also contain customary covenants restricting the company and its subsidiaries’ ability to create, incur, assume or become liable to indebtedness; create, incur or assume liens; consummate acquisitions; liquidate, dissolve, suspend, or cease subsidiaries or a substantial portion of the business; convey, sell, lease, license, assign, transfer or dispose of assets; change the nature of business; make prepayments and amendments to other obligations and indebtedness; pay dividends and distributions and repurchase capital stock; modify accounting methods (other than as required by U.S. GAAP); make or acquire investments; enter into certain transactions with affiliates; use proceeds; issue equity interests; and amend, increase, fail to pay amounts due to, or terminate certain employee benefits, including a pension plan or multi-employer plan. The Secured Credit Facilities include certain customary representations and warranties, affirmative covenants and events of default, including payment defaults, breach of representations and warranties, covenant defaults, cross-defaults to certain indebtedness, certain events of bankruptcy, certain events under ERISA, material judgments and a change of control. If an event of default occurs, the administrative agent, at the direction of the lenders under the Secured Credit Facilities, will be entitled to take various actions, including the acceleration of all amounts due under the Secured Credit Facilities and all actions permitted to be taken by a secured creditor. As of March 31, 2016, the Company was not in compliance with the Secured Credit Facilities' minimum fixed charge coverage ratio for the period. For the April 1, 2015 to March 31, 2016 covenant reference period, our fixed charge coverage ratio was 0.9 to 1 as compared with the covenant minimum of 1.0 to 1. This covenant violation existing as of March 31, 2016 was waived by Wells Fargo. Our long-term debt obligations were as follows: March 31, December 31, In thousands 2016 2015 2016 Revolving Credit Facility, various interest rates based on the Base rate, due March 10, 2021 ($8.8 million capacity and effective rate of 4.75% at March 31, 2016) $ 36,008 N/A 2016 Term Loan Facility, various interest rates based on the Base rate plus the applicable margin (effective rate of 9.72% at March 31, 2016), due March 10, 2021 45,000 N/A 2013 Revolving Credit Facility ($60.6 million capacity), various interest rates based on the highest of (a) the Agent's prime rate, (b) the Federal Funds Rate plus 0.50% per annum, (c) Eurodollar rate plus 1.00% per annum, plus a spread with is determined based on our total debt-to-EBITDA ratio then in effect, due August 16, 2016 (effective rate of 4.75% at December 31, 2015) N/A 13,000 2011 Term Loan Facility, various interest rates based on LIBOR (effective rate of 2.42% at December 31, 2015), due August 16, 2016 N/A 64,313 Less: unamortized discount and debt issuance costs (2,165 ) (208 ) Total debt 78,843 77,105 Less current maturities 4,125 3,000 Total long-term debt 74,718 74,105 The carrying values and estimated fair values of our outstanding debt were as follows: March 31, 2016 December 31, 2015 In thousands Carrying Fair Value Carrying Fair Value Total Debt $ 78,843 $ 78,843 $ 77,105 $ 77,105 Based on the recent entry into the Secured Credit Facilities, carrying values estimate fair value. These current rates are considered Level 2 inputs under the fair value hierarchy established by ASC 820, Fair Value Measurement .

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	Stock-Based Compensation We recognized $0.6 million and $1.3 million of stock-based compensation expense during the three months ended March 31, 2016 and 2015 , respectively. Equity awards granted during the quarter were as follows: March 31, 2016 Number of Shares Weighted- Average Grant- Date Fair Value Stock options 120,371 $ 1.25 Unvested shares 73,684 $ 2.85 The equity awards granted during the three months ended March 31, 2016 were granted to our Chief Operating Officer as a material inducement to his acceptance of such position. These option and restricted stock awards were not submitted for shareholder approval, and were listed separately with the NYSE.

Components of Net Periodic Bene

Components of Net Periodic Benefit Cost	3 Months Ended
	Mar. 31, 2016
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Components of Net Periodic Benefit Cost	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). 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 (the 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 Qualified 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. We elected to freeze benefits under the Restoration Pension Plan as of April 1, 2014. Net pension cost for both plans included the following components: Three Months Ended March 31, In thousands 2016 2015 Interest cost $ 1,950 $ 1,931 Expected return on plan assets (2,061 ) (2,159 ) Recognized actuarial loss 597 1,557 Net periodic benefit cost $ 486 $ 1,329 The period over which the net loss from the Qualified Pension Plan is amortized into net periodic benefit cost has been changed effective in 2016 from the average future service of active participants (approximately 9 years) to the average future lifetime of all participants (approximately 24 years). This change reflects that the Qualified Pension Plan is frozen and that almost all of the plan's participants are not active employees. We are not required to make, and do not intend to make, any contributions to our Qualified Pension Plan in 2016 . Based on current estimates we will not be required to make any contributions to our Qualified Pension Plan until 2018. We are not required to make, and do not intend to make, any contributions to our Restoration Pension Plan in 2016 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, 2016 . 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, 2016
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes Our first quarter 2016 income tax benefit of $2.0 million resulted in an effective income tax rate of 26.1% . Our first quarter 2015 income tax expense of $1.2 million resulted in an effective income tax rate of 42.6% . We have historically, including for 2015, calculated the provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate for the full calendar year to ordinary income or loss for the reporting period. However, we have used a discrete effective tax rate method to calculate income taxes for the three months ended March 31, 2016 because we determined that small changes in estimated ordinary income would result in significant changes in the estimated annual effective tax rate, such that the historical method would not provide a reliable estimate for the three months ended March 31, 2016 . The effective income tax benefit calculated for the first quarter of 2016 differs from the federal statutory rate of 35.0% , primarily due to foreign tax credit limitations on dividends paid from foreign subsidiaries. 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 returns, we are no longer subject to tax examinations for tax years prior to 2011. For U.S. federal and foreign returns, we are no longer subject to tax examinations for tax years prior to 2012. 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 (Loss). We did not have a significant amount of interest or penalties accrued at March 31, 2016 or December 31, 2015 .

Earnings Per Share

Earnings Per Share	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
Earnings Per Share	Earnings Per Share In periods in which the company has net income, the company is required to calculate earnings per share using the two-class method. The two-class method is required because the company's unvested shares are considered participating securities. Participating securities have the right to receive dividends should the company declare dividends on its common stock. Under the two-class method, undistributed and distributed earnings are allocated on a pro-rata basis to the common and restricted stockholders. The weighted-average number of common and restricted shares outstanding during the period is then used to calculate earnings per share (EPS) for each class of shares. In periods in which the company has a net loss, basic loss per share is calculated using the treasury stock method. The treasury stock method is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period. The two-class is method is not used, because the two-class calculation is anti-dilutive. Reconciliations of basic and diluted EPS are as follows: Three Months Ended March 31, In thousands, except per share amounts 2016 2015 Basic Earnings (Loss) per Share Net income (loss) $ (5,603 ) $ 1,615 Weighted-average common shares outstanding used in earnings (loss) per share computations 61,331 61,872 Earnings (loss) per common share $ (0.09 ) $ 0.03 Diluted Earnings (Loss) per Share Net income (loss) $ (5,603 ) $ 1,615 Shares used in diluted earnings per share computations 61,331 62,201 Earnings (loss) per common share $ (0.09 ) $ 0.03 Computation of Shares Used in Earnings (Loss) Per Share Computations Weighted-average common shares outstanding 61,331 61,872 Weighted-average common equivalent shares-dilutive effect of stock options and awards — 329 Shares used in diluted earnings (loss) per share computations 61,331 62,201 4.4 million and 3.2 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, 2016 and 2015 , respectively. 0.9 million anti-dilutive unvested shares were excluded from the calculation of shares used in the diluted EPS calculation for the three months ended March 31, 2016 . No anti-dilutive unvested shares were excluded from the calculation of shares used in the diluted EPS calculation for the three months ended March 31, 2015 .

Comprehensive Income

Comprehensive Income	3 Months Ended
	Mar. 31, 2016
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Comprehensive Income	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 (loss) was as follows: Three Months Ended March 31, In thousands 2016 2015 Net income (loss) $ (5,603 ) $ 1,615 Other comprehensive income (loss): Adjustment to pension liability 870 1,345 Tax expense (348 ) (538 ) Adjustment to pension liability, net of tax 522 807 Foreign currency translation adjustment (470 ) (1,487 ) Total other comprehensive loss 52 (680 ) Total comprehensive income (loss) $ (5,551 ) $ 935 Changes in accumulated other comprehensive loss by component are as follows: In thousands Defined Foreign Total Balance at December 31, 2015 $ (43,915 ) $ 355 $ (43,560 ) Other comprehensive income (loss), net of tax, before reclassifications — (470 ) (470 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax 522 — 522 Net current period other comprehensive income (loss), net of tax 522 (470 ) 52 Balance at March 31, 2016 $ (43,393 ) $ (115 ) $ (43,508 ) In thousands Defined Foreign Total Balance at December 31, 2014 $ (49,560 ) $ 2,331 $ (47,229 ) Other comprehensive income (loss), net of tax, before reclassifications — (1,487 ) (1,487 ) Amounts reclassified from accumulated other comprehensive income (loss), 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 ) Reclassification amounts related to the defined pension plans are included in the computation of net periodic pension benefit cost (see Note G, Components of Net Periodic Pension Benefit Cost ).

Litigation Contingencies

Litigation Contingencies	3 Months Ended
	Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Litigation Contingencies	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, 2016
Segment Reporting [Abstract]
Business Segments	Business Segments We conduct our operations by organizing into two distinct operating divisions: Customer Interaction and Trillium Software. In accordance with FASB 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. Corporate expense consists primarily of pension, workers’ compensation expense, and litigation items from businesses we no longer own. Customer Interaction Our Customer Interaction services offer a wide variety of integrated, multi-channel, data-driven solutions for top brands around the globe. We help our clients gain insight into their customers’ behaviors from their data and use that insight to create innovative multi-channel marketing programs to deliver a return on marketing investment. We believe our clients’ success is determined not only by how good their tools are, but how well we help them use the tools to gain insight and analyze their consumers. This results in a strong and enduring relationship between our clients and their customers which is key to being leaders in Customer Interaction. We offer a full complement of capabilities and resources to provide a broad range of marketing 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 global enterprise data quality solutions provider. Our data quality specialists help organizations achieve increased business from their data management initiatives and existing business-critical processes by providing enterprise data profiling and data cleansing software and services. We offer industry-specific business solutions that help solve data problems experienced by financial services, banking, retail, healthcare, manufacturing, and risk professionals. Our full complement of technologies and services includes global data profiling, data cleansing, enrichment, and data linking for e-business, Big Data 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 perpetual software licenses, annual maintenance and professional services. Trillium Software’s largest cost component is software development, which is comprised primarily of labor. Information about the operations of our two business segments is as follows: Three Months Ended March 31, In thousands 2016 2015 Operating revenues Customer Interaction $ 99,563 $ 109,315 Trillium Software 11,160 11,858 Total operating revenues $ 110,723 $ 121,173 Operating income (loss) Customer Interaction $ (7,909 ) $ 1,527 Trillium Software 2,242 3,013 Corporate (702 ) (1,525 ) Total operating income (loss) $ (6,369 ) $ 3,015 Operating income (loss) $ (6,369 ) $ 3,015 Interest expense, net 1,381 609 Other, Net (172 ) (407 ) Total income (loss) from operations before income taxes $ (7,578 ) $ 2,813

Acquisition and Disposition

Acquisition and Disposition	3 Months Ended
	Mar. 31, 2016
Business Combinations [Abstract]
Acquisition and Disposition	Acquisition and Disposition On March 4, 2016, we completed the acquisition of Aleutian Consulting, which now operates as Harte Hanks Consulting. The results of Harte Hanks Consulting Operations have been included in our financial statements since that date and are reported in the Customer Interaction segment. The purchase price was $3.5 million in cash. The fair value of identified tangible assets residual purchase price methodology used in the calculation to determine goodwill allocation relied on management's assumptions. These assumptions, which are significant to the calculated fair values, are considered Level 3 inputs under the fair value hierarchy established by ASC350, as they are unobservable. On March 16, 2015, we completed the acquisition of 3Q Digital. The results of 3Q Digital’s operations have been included in our consolidated financial statements since that date and are reported in the Customer Interaction segment. The initial purchase price was $30.2 million in cash. In addition, the purchase agreement includes a contingent consideration arrangement that requires us 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 under the contingent consideration arrangement is between $0 and $35.0 million in cash in 2018. The intangible assets include customer relationships, trade names and non-compete agreements. The following table summarizes the consideration paid and the 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 $ 48,185 (in thousands) Recognized amounts of tangible assets and liabilities: 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 deferred tax adjustment of $2,298) 41,845 Total $ 50,484 The fair value of the tangible net assets, identifiable intangible assets and goodwill recognized on acquisition 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). In accordance with ASC 805-30-35, Business Combinations, Goodwill or gain from bargain purchase, including consideration transferred, we consider re-measurement of contingent consideration at each reporting date until the contingency is resolved, with the changes in fair value recognized in earnings. We determined that a re-measurement was appropriate as of the end of the first quarter, 2016. As such, we determined that the contingent consideration fair value had decreased slightly, and recorded a $0.2 million adjustment to the present value of the liability as of the quarter ended March 31, 2016. Significant assumptions were used in the fair value calculation of the contingent consideration, including (i) discount rate, (ii) weighted-average cost of capital, (iii) risk premium, and (iv) tax rate. These assumptions are considered Level 3 inputs under the fair value hierarchy established by FASB ASC 820, Fair Value Measurements and Disclosures. A reconciliation of the beginning and ending accrued balances of the contingent consideration for the three months ended March 31, 2016 follows: (in thousands) Fair Value Contingent consideration at acquisition date $ 17,940 Accretion of interest 2,665 Adjustment to fair value $ (247 ) Accrued earnout liability as of March 31, 2016 $ 20,358 The purchase price has been allocated based on the estimated fair values of assets described above and are subject to achievement of revenue goals. On April 14, 2015, Harte Hanks sold its B2B research business. The B2B research business represented less than 5% of our total 2014 revenues. The related asset group does not meet the criteria to be classified as a component of an entity. Expenses are possible in future periods based upon certain working capital settlement provisions.

Basis of Presentation (Policies

Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Consolidation	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	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, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 . 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, 2015 .
Reclassifications	Reclassifications Certain amounts in the financial statements for the prior years have been reclassified to conform to the current year's presentation.
Use of Estimates	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 (Loss)	Operating Expense Presentation in Consolidated Statements of Comprehensive Income (Loss) “Labor” in the Consolidated Statements of Comprehensive Income (Loss) 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 Pronouncements	Recent Accounting Pronouncements On March 30, 2016 the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-based Payment Accounting, which requires entities with share-based payment awards to recognize all related excess tax benefits and tax deficiencies as income tax expenses or benefit in the income statement. This ASU is effective for interim and annual periods beginning after December 15, 2016. Early adoption is permitted. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. On March 17, 2016, the FASB issue ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , which amends the principal-versus-agent implementation guidance and illustrations in ASU 2014-09 (see below). This ASU is intended to provide clarification related to determining the appropriate unit of account under the revenue standard's principal-versus-agent guidance and applying the indicators of whether an entity is a principal or an agent in accordance with ASU 2014-09's control principal. The effective date and the transition retirements are the same as the effective date and transition requirements of ASU 2014-09. We are evaluating the effect that ASU 2016-08 will have on our consolidated financial statements and related disclosures. On February 25, 2016, the FASB issued ASU 2016-02, Leases , which requires all operating leases to be recorded on the balance sheet. The lessee will record a liability for its lease obligations (initially measured at the present value of the future lease payments not yet paid over the lease term, and an asset for its right to use the underlying asset equal to the lease liability, adjusted for lease payments made at or before lease commencement). This ASU is effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. We are evaluating the effect that this will have on our consolidated financial statements and related disclosures. 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. As a result, in conjunction with the closing of the 2016 Term Facility and 2016 Revolving Credit Facility, we recorded $2.2 million in unamortized debt discount and debt issuance costs as a reduction of the total debt balance. We also reclassified $0.2 million in unamortized debt issuance costs as a reduction of the debt balance as of December 31, 2015 that were previously included in Other Assets (see Note E, Long-Term Debt ). In April 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement , which provides explicit guidance to help companies evaluate the accounting for fees paid by a customer in a cloud computing arrangement. This ASU is effective for interim and annual periods beginning after December 15, 2015. The adoption of this ASU did not have a material 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 adoption of this ASU did not have a material impact on our consolidated financial statements; however, future 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 standard permits the use of either the retrospective or cumulative effect transition method. On July 9, 2015, the FASB decided to delay the effective date of the new revenue standard by one year. The new effective date is for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted beginning January 1, 2017 (original effective date of the ASU). We are evaluating the effect that ASU 2014-09 will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor has we determined the effect of the standard on our ongoing financial reporting.

Goodwill (Tables)

Goodwill (Tables)	3 Months Ended
	Mar. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Goodwill	The changes in the carrying amount of goodwill are as follows: In thousands Customer Interaction Trillium Software Total Balance at December 31, 2015 $ 69,699 149,273 $ 218,972 Additions to goodwill 3,480 — 3,480 Balance at March 31, 2016 $ 73,179 149,273 $ 222,452

Long-Term Debt (Tables)

Long-Term Debt (Tables)	3 Months Ended
	Mar. 31, 2016
Debt Disclosure [Abstract]
Schedule of long-term debt obligations	Our long-term debt obligations were as follows: March 31, December 31, In thousands 2016 2015 2016 Revolving Credit Facility, various interest rates based on the Base rate, due March 10, 2021 ($8.8 million capacity and effective rate of 4.75% at March 31, 2016) $ 36,008 N/A 2016 Term Loan Facility, various interest rates based on the Base rate plus the applicable margin (effective rate of 9.72% at March 31, 2016), due March 10, 2021 45,000 N/A 2013 Revolving Credit Facility ($60.6 million capacity), various interest rates based on the highest of (a) the Agent's prime rate, (b) the Federal Funds Rate plus 0.50% per annum, (c) Eurodollar rate plus 1.00% per annum, plus a spread with is determined based on our total debt-to-EBITDA ratio then in effect, due August 16, 2016 (effective rate of 4.75% at December 31, 2015) N/A 13,000 2011 Term Loan Facility, various interest rates based on LIBOR (effective rate of 2.42% at December 31, 2015), due August 16, 2016 N/A 64,313 Less: unamortized discount and debt issuance costs (2,165 ) (208 ) Total debt 78,843 77,105 Less current maturities 4,125 3,000 Total long-term debt 74,718 74,105
Schedule of carrying values and estimated fair values of outstanding debt	The carrying values and estimated fair values of our outstanding debt were as follows: March 31, 2016 December 31, 2015 In thousands Carrying Fair Value Carrying Fair Value Total Debt $ 78,843 $ 78,843 $ 77,105 $ 77,105

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of shares granted and weighted-average grant-date fair value	Equity awards granted during the quarter were as follows: March 31, 2016 Number of Shares Weighted- Average Grant- Date Fair Value Stock options 120,371 $ 1.25 Unvested shares 73,684 $ 2.85

Components of Net Periodic Be25

Components of Net Periodic Benefit Cost (Tables)	3 Months Ended
	Mar. 31, 2016
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Schedule of net pension cost of plans	Net pension cost for both plans included the following components: Three Months Ended March 31, In thousands 2016 2015 Interest cost $ 1,950 $ 1,931 Expected return on plan assets (2,061 ) (2,159 ) Recognized actuarial loss 597 1,557 Net periodic benefit cost $ 486 $ 1,329

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
Reconciliation of basic and diluted earnings per share	Reconciliations of basic and diluted EPS are as follows: Three Months Ended March 31, In thousands, except per share amounts 2016 2015 Basic Earnings (Loss) per Share Net income (loss) $ (5,603 ) $ 1,615 Weighted-average common shares outstanding used in earnings (loss) per share computations 61,331 61,872 Earnings (loss) per common share $ (0.09 ) $ 0.03 Diluted Earnings (Loss) per Share Net income (loss) $ (5,603 ) $ 1,615 Shares used in diluted earnings per share computations 61,331 62,201 Earnings (loss) per common share $ (0.09 ) $ 0.03 Computation of Shares Used in Earnings (Loss) Per Share Computations Weighted-average common shares outstanding 61,331 61,872 Weighted-average common equivalent shares-dilutive effect of stock options and awards — 329 Shares used in diluted earnings (loss) per share computations 61,331 62,201

Comprehensive Income (Tables)

Comprehensive Income (Tables)	3 Months Ended
	Mar. 31, 2016
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Schedule of comprehensive income	Our comprehensive income (loss) was as follows: Three Months Ended March 31, In thousands 2016 2015 Net income (loss) $ (5,603 ) $ 1,615 Other comprehensive income (loss): Adjustment to pension liability 870 1,345 Tax expense (348 ) (538 ) Adjustment to pension liability, net of tax 522 807 Foreign currency translation adjustment (470 ) (1,487 ) Total other comprehensive loss 52 (680 ) Total comprehensive income (loss) $ (5,551 ) $ 935
Schedule of changes in accumulated other comprehensive income	Changes in accumulated other comprehensive loss by component are as follows: In thousands Defined Foreign Total Balance at December 31, 2015 $ (43,915 ) $ 355 $ (43,560 ) Other comprehensive income (loss), net of tax, before reclassifications — (470 ) (470 ) Amounts reclassified from accumulated other comprehensive income (loss), net of tax 522 — 522 Net current period other comprehensive income (loss), net of tax 522 (470 ) 52 Balance at March 31, 2016 $ (43,393 ) $ (115 ) $ (43,508 ) In thousands Defined Foreign Total Balance at December 31, 2014 $ (49,560 ) $ 2,331 $ (47,229 ) Other comprehensive income (loss), net of tax, before reclassifications — (1,487 ) (1,487 ) Amounts reclassified from accumulated other comprehensive income (loss), 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 )

Business Segments (Tables)

Business Segments (Tables)	3 Months Ended
	Mar. 31, 2016
Segment Reporting [Abstract]
Business segment reporting information	Information about the operations of our two business segments is as follows: Three Months Ended March 31, In thousands 2016 2015 Operating revenues Customer Interaction $ 99,563 $ 109,315 Trillium Software 11,160 11,858 Total operating revenues $ 110,723 $ 121,173 Operating income (loss) Customer Interaction $ (7,909 ) $ 1,527 Trillium Software 2,242 3,013 Corporate (702 ) (1,525 ) Total operating income (loss) $ (6,369 ) $ 3,015 Operating income (loss) $ (6,369 ) $ 3,015 Interest expense, net 1,381 609 Other, Net (172 ) (407 ) Total income (loss) from operations before income taxes $ (7,578 ) $ 2,813

Acquisition and Disposition (Ta

Acquisition and Disposition (Tables)	3 Months Ended
	Mar. 31, 2016
Business Combinations [Abstract]
Schedule of estimated fair value of the assets acquired	The following table summarizes the consideration paid and the 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 $ 48,185 (in thousands) Recognized amounts of tangible assets and liabilities: 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 deferred tax adjustment of $2,298) 41,845 Total $ 50,484
Schedule of reconciliation of beginning and ending balances of contingent earnout consideration	A reconciliation of the beginning and ending accrued balances of the contingent consideration for the three months ended March 31, 2016 follows: (in thousands) Fair Value Contingent consideration at acquisition date $ 17,940 Accretion of interest 2,665 Adjustment to fair value $ (247 ) Accrued earnout liability as of March 31, 2016 $ 20,358

Recent Accounting Pronounceme30

Recent Accounting Pronouncements Recent Accounting Pronouncements (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Debt issuance costs	$ 2.2
Other Assets | Accounting Standards Update 2015-03
Debt Instrument [Line Items]
Debt issuance costs		$ (0.2)
Long-term Debt | Accounting Standards Update 2015-03
Debt Instrument [Line Items]
Debt issuance costs		$ 0.2

Goodwill (Details)

Goodwill (Details) - USD ($) $ in Thousands	Mar. 16, 2015	Mar. 31, 2016	Dec. 31, 2015
Goodwill [Line Items]
Goodwill		$ 222,452	$ 218,972
Customer Interaction
Goodwill [Line Items]
Goodwill		$ 73,179	$ 69,699
3Q Digital Inc
Goodwill [Line Items]
Goodwill	$ 41,845
Period for achievement for revenue performance goals	3 years

Goodwill - (Details 2)

Goodwill - (Details 2) $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)
Goodwill [Roll Forward]
Balance at December 31, 2015	$ 218,972
Additions to goodwill	3,480
Balance at March 31, 2016	222,452
Customer Interaction
Goodwill [Roll Forward]
Balance at December 31, 2015	69,699
Additions to goodwill	3,480
Balance at March 31, 2016	73,179
Trillium Software
Goodwill [Roll Forward]
Balance at December 31, 2015	149,273
Additions to goodwill	0
Balance at March 31, 2016	$ 149,273

Long-Term Debt (Details)

Long-Term Debt (Details) - USD ($) $ in Thousands	Mar. 10, 2016	Mar. 31, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Less: unamortized discount and debt issuance costs		$ 2,165	$ 208
Total debt		78,843	77,105
Current maturities of long-term debt		4,125	3,000
Long-term debt		74,718	74,105
2016 Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt gross		36,008
Remaining borrowing capacity		$ 8,800
Effective rate of interest (as a percent)		4.75%
2016 Revolving Credit Facility | Federal Funds Rate
Debt Instrument [Line Items]
Rate spread on variable rate	0.50%
2016 Term Loan
Debt Instrument [Line Items]
Long-term debt gross		$ 45,000
Total debt	$ 45,000
Effective rate of interest (as a percent)		9.72%
2013 Revolving Credit Facility, due August 16, 2016
Debt Instrument [Line Items]
Total debt			$ 13,000
Effective rate of interest (as a percent)			4.75%
2013 Revolving Credit Facility, due August 16, 2016 | Federal Funds Rate
Debt Instrument [Line Items]
Rate spread on variable rate		0.50%
2013 Revolving Credit Facility, due August 16, 2016 | Eurodollar
Debt Instrument [Line Items]
Rate spread on variable rate		1.00%
2011 Term Loan Facility, due August 16, 2016
Debt Instrument [Line Items]
Total debt			$ 64,313
Effective rate of interest (as a percent)			2.42%

Long-Term Debt (Details 2)

Long-Term Debt (Details 2) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Carrying Value
Carrying values and estimated fair values of outstanding debt
Total debt	$ 78,843	$ 77,105
Fair Value | Significant Other Observable Inputs (Level 2)
Carrying values and estimated fair values of outstanding debt
Total debt	$ 78,843	$ 77,105

Long-Term Debt (Details 3)

Long-Term Debt (Details 3) - USD ($)	Mar. 10, 2016	Mar. 31, 2016	Dec. 31, 2015
Line of Credit Facility [Line Items]
Term loan		$ 78,843,000	$ 77,105,000
2016 Revolving Credit Facility
Line of Credit Facility [Line Items]
Long-term line of credit	$ 65,000,000
Percentage of eligible trade A/R	85.00%
Percentage of eligible A/R additional borrowing amount	$ 15,000,000
Percentage of eligible unbilled A/R	85.00%
Prepayment premium, year one	3.00%
Prepayment premium, year two	2.00%
Prepayment premium, year three	1.00%
Minimum rolling four quarter revenue amount	$ 35,000,000
Maximum capital expenditures	$ 14,000,000
2016 Revolving Credit Facility | Debt Covenant, Time Period One
Line of Credit Facility [Line Items]
Minimum fixed charge coverage ratio	1
Debt Instrument, Required Leverage Ratio	2.25
Fixed charge coverage ratio	0.9
2016 Revolving Credit Facility | Debt Covenant, Time Period Two
Line of Credit Facility [Line Items]
Minimum fixed charge coverage ratio	1.1
Debt Instrument, Required Leverage Ratio	2
2016 Revolving Credit Facility | Federal Funds Rate
Line of Credit Facility [Line Items]
Rate spread on variable rate	0.50%
2016 Revolving Credit Facility | London Interbank Offered Rate (LIBOR)
Line of Credit Facility [Line Items]
Rate spread on variable rate	1.00%
2016 Revolving Credit Facility | Minimum
Line of Credit Facility [Line Items]
Unused capacity commitment fee percentage	0.25%
Minimum subsequent rolling four quarter revenue amount	$ 35,200,000
2016 Revolving Credit Facility | Minimum | London Interbank Offered Rate (LIBOR)
Line of Credit Facility [Line Items]
Average excess availability	200.00%
2016 Revolving Credit Facility | Minimum | Base Rate
Line of Credit Facility [Line Items]
Average excess availability	100.00%
2016 Revolving Credit Facility | Maximum
Line of Credit Facility [Line Items]
Unused capacity commitment fee percentage	0.375%
Minimum subsequent rolling four quarter revenue amount	$ 42,800,000
2016 Revolving Credit Facility | Maximum | London Interbank Offered Rate (LIBOR)
Line of Credit Facility [Line Items]
Average excess availability	2.50%
2016 Revolving Credit Facility | Maximum | Base Rate
Line of Credit Facility [Line Items]
Average excess availability	1.50%
2016 Term Loan
Line of Credit Facility [Line Items]
Term loan	$ 45,000,000
Leverage ratio, current year	2
Leverage ratio, subsequent years	1.75
Mandatory prepayment percentage of excess cash flows	50.00%
Maximum percentage of the revolving credit facility	13.50%
Voluntary prepayment maximum amount	$ 14,900,000
Excess cash flow payment, minimum percentage of the maximum amounts of the revolving credit facility	10.00%
Excess cash flow payments maximum amount	$ 11,000,000
2016 Term Loan | London Interbank Offered Rate (LIBOR)
Line of Credit Facility [Line Items]
Rate spread on variable rate		7.22%
2016 Term Loan | Base Rate
Line of Credit Facility [Line Items]
Rate spread on variable rate		6.22%

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Stock-Based Compensation
Stock-based compensation expense	$ 0.6	$ 1.3
Stock Options
Stock-Based Compensation
Number of options granted (in shares	120,371
Weighted-Average Grant-Date Fair Value (in dollars per share)	$ 1.25
Unvested Shares
Stock-Based Compensation
Number of shares granted (in shares)	73,684
Weighted-Average Grant-Date Fair Value (in dollars per share)	$ 2.85

Components of Net Periodic Be37

Components of Net Periodic Benefit Cost (Details) - Restoration Pension Plan $ in Millions	3 Months Ended
	Mar. 31, 2016USD ($)
Defined Benefit Plan Disclosure
Average future service period of active participants	9 years
Average future lifetime of all participants	24 years
Benefits paid	$ 0.4

Components of Net Periodic Be38

Components of Net Periodic Benefit Cost (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net pension cost of plans
Interest cost	$ 1,950	$ 1,931
Expected return on plan assets	(2,061)	(2,159)
Recognized actuarial loss	597	1,557
Net periodic benefit cost	$ 486	$ 1,329

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ (1,975)	$ 1,198
Effective income tax rate (as a percent)	26.10%	42.60%
Statutory income tax rate (as a percent)	35.00%
Interest and penalties accrued	$ 0		$ 0

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Basic Earnings (Loss) per Share
Net income (loss)	$ (5,603)	$ 1,615
Weighted-average common shares outstanding used in earnings per share computations (in shares)	61,331	61,872
Basic earnings per common share (in dollars per share)	$ (0.09)	$ 0.03
Diluted Earnings (Loss) per Share
Net income (loss)	$ (5,603)	$ 1,615
Shares used in diluted earnings per share computations (in shares)	61,331	62,201
Diluted earnings per common share (in dollars per share)	$ (0.09)	$ 0.03
Computation of Shares Used in Earnings (Loss) Per Share Computations
Weighted-average common shares outstanding (in shares)	61,331	61,872
Weighted-average common equivalent shares - dilutive effect of stock options and awards (in shares)	0	329
Shares used in diluted earnings per share computations (in shares)	61,331	62,201

Earnings Per Share (Details 2)

Earnings Per Share (Details 2) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award
Weighted-average anti-dilutive shares have been excluded from the EPS calculations (in shares)	4,400,000	3,200,000
Unvested Shares
Share-based Compensation Arrangement by Share-based Payment Award
Weighted-average anti-dilutive shares have been excluded from the EPS calculations (in shares)	900,000	0

Comprehensive Income (Details)

Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Net income (loss)	$ (5,603)	$ 1,615
Other comprehensive income (loss):
Adjustment to pension liability	870	1,345
Tax expense	(348)	(538)
Adjustment to pension liability, net of tax	522	807
Foreign currency translation adjustment	(470)	(1,487)
Total other comprehensive loss, net of tax	52	(680)
Comprehensive income (loss)	(5,551)	935
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance	140,316	326,676
Other comprehensive income (loss), net of tax, before reclassifications	(470)	(1,487)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	522	807
Total other comprehensive income (loss), net of tax	52	(680)
Balance	129,409	322,415
Defined Benefit Pension Items
Other comprehensive income (loss):
Total other comprehensive loss, net of tax	522	807
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance	(43,915)	(49,560)
Other comprehensive income (loss), net of tax, before reclassifications	0	0
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	522	807
Total other comprehensive income (loss), net of tax	522	807
Balance	(43,393)	(48,753)
Foreign Currency Items
Other comprehensive income (loss):
Total other comprehensive loss, net of tax	(470)	(1,487)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance	355	2,331
Other comprehensive income (loss), net of tax, before reclassifications	(470)	(1,487)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	0	0
Total other comprehensive income (loss), net of tax	(470)	(1,487)
Balance	(115)	844
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance	(43,560)	(47,229)
Balance	$ (43,508)	$ (47,909)

Litigation Contingencies (Detai

Litigation Contingencies (Details)	Mar. 31, 2016USD ($)
Commitments and Contingencies Disclosure [Abstract]
Litigation liability	$ 0

Business Segments (Details)

Business Segments (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)segments	Mar. 31, 2015USD ($)
Segment Reporting [Abstract]
Number of operating segments | segments	2
Number of reportable segments | segments	2
Business segments, information about operations
Operating revenues	$ 110,723	$ 121,173
Operating income (loss)	(6,369)	3,015
Other, net	(172)	(407)
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest	(7,578)	2,813
Operating Segments | Customer Interaction
Business segments, information about operations
Operating revenues	99,563	109,315
Operating income (loss)	(7,909)	1,527
Operating Segments | Trillium Software
Business segments, information about operations
Operating revenues	11,160	11,858
Operating income (loss)	2,242	3,013
Corporate, Non-Segment
Business segments, information about operations
Operating income (loss)	(702)	(1,525)
Segment Reconciling Items
Business segments, information about operations
Interest expense, net	1,381	609
Other, net	(172)	(407)
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest	$ (7,578)	$ 2,813

Acquisition and Disposition (De

Acquisition and Disposition (Details) - USD ($)	Mar. 04, 2016	Mar. 16, 2015	Mar. 31, 2016	Mar. 31, 2016	Dec. 31, 2014	Dec. 31, 2015
Recognized amounts of tangible assets and liabilities:
Goodwill (including deferred tax adjustment of $2,298)			$ 222,452,000	$ 222,452,000		$ 218,972,000
Aleutian Consulting Inc
Total consideration
Cash consideration per purchase agreement	$ 3,500,000
Recognized amounts of tangible assets and liabilities:
Goodwill (including deferred tax adjustment of $2,298)	$ 3,500,000
3Q Digital Inc
Acquisition and Disposition
Estimate of potential undiscounted future contingent consideration payments, low end of range		$ 0
Estimate of potential undiscounted future contingent consideration payments, high end of range		35,000,000
Total consideration
Cash consideration per purchase agreement		30,245,000
Estimated fair value of contingent consideration		17,940,000
Business Combination, 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 $2,298)		41,845,000
Total		50,484,000
Deferred tax adjustment		2,298,000
Increase (decrease) in contingent consideration			(200,000)
3Q Digital Inc | Customer relationships
Recognized amounts of tangible assets and liabilities:
Identifiable intangible assets		$ 4,300,000
Amortization period		7 years
3Q Digital Inc | Tradenames and trademarks
Recognized amounts of tangible assets and liabilities:
Identifiable intangible assets		$ 300,000
Amortization period		2 years
3Q Digital Inc | Non-compete agreements
Recognized amounts of tangible assets and liabilities:
Identifiable intangible assets		$ 200,000
Amortization period		3 years
3Q Digital Inc | Level 3 | Contingent Consideration
Reconciliation of accrued earnout consideration
Contingent consideration at acquisition date				17,940,000
Accretion of interest				2,665,000
Adjustment to fair value				(247,000)
March 31, 2016		$ 17,940,000	$ 20,358,000	$ 20,358,000
B2B research business | Maximum
Sale of business
Percent of total Company revenue (less than)					5.00%