Good day ladies and gentlemen and welcome to the fourth quarter 2008 Deluxe Corporation earnings conference call. My name Erica and I’ll be your coordinator for today. At this time all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions) I would now like to turn the presentation over to your host for today Mr. Terry Peterson, Vice President of Investor Relations and Chief Accounting Officer; you may proceed sir.

Thank you, Erica. Welcome to Deluxe Corporation’s 2008 fourth quarter earnings call. I’m Terry Peterson, Deluxe’s Vice President of Investor Relations and Chief Accounting Officer. Joining me on the call today are Lee Schram, Deluxe’s Chief Executive Officer and Rick Greene, Deluxe’s Chief Financial Officer. Lee, Rick, and I will take questions from analysts after the prepared comments. At that time the operator will instruct you how to ask a question. In accordance with Regulation FD, this call is open to all interested parties. A replay of the call will be available via telephone in Deluxe’s website. I will provide instructions for accessing the replay at the conclusion of our teleconference. Before I begin, let me make this brief cautionary statement. Comments made today regarding financial estimates and projections and any other statements addressing management’s intentions and expectations regarding the company’s future performance are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. As such, these comments are subject to risks and uncertainties which could cause actual results to differ materially from those projected. Additional information about various factors that could cause actual results to differ from those projected are contained in the news release that we issued this morning and on the company’s Form 10-K for the year ended December 31, 2007, as updated in the company’s Form 10-Q for the quarter ended September 30, 2008. In addition, the financial and statistical information that will be reviewed during this call is addressed in greater detail in today’s press release which is posted in the Investor Relations section of our website, www.deluxe.com and was furnished to the SEC on the Form 8-K filed this morning. In particular, any non-GAAP financial measures are reconciled to the comparable GAAP financial measures in the press release. Now I’ll turn the call over to Lee Schram, Deluxe’s CEO.

Thank you Terry and good morning everyone. Given the very difficult economic environment, clearly we had a challenging quarter, but given our strong spending controls, disciplined approach to deploying capital and focus on operating cash flows, we were able to meet our adjusted earnings per share outlook and significantly expand our cost reduction program. In this tough economy, revenue was slightly more negatively impacted than anticipated in holiday cards and other discretionary products such of imaging, apparel, and retail packaging products. It was also impacted by lower check volumes mid-quarter from a couple of large financial institutions that were recently acquired. Even with these revenue shortfalls, we were able to control spending and fully offset the earnings per share impact of the revenue shortfall, excluding the impact of restructuring and impairment charges. With the challenging economy and financial crisis, we continue to focus on basic blocking and tackling in our core check businesses by continuing to extent contracts and further stabilizing margins. We also had our best quarter ever on new non-check revenue. In response to an even further weakening economy, we also challenged ourselves to more aggressively reduce cost and expenses and now have expanded our previous $250 million cost reduction initiative to $300 million. At the same time we continue to invest in our future, with progress in many revenue initiatives, including e-commerce where we continue to see growth in site visitors. We also saw growth in loyalty, retention, fraud and security and new business services including payroll services, logo design, web services and business networking. We are prudently managing our company, closely monitoring the small business and financial institution markets, and focusing on strong free cash flow generation while offering a very attractive dividend as we continue to transform Deluxe and steadfastly execute on our turn-around plan. In a few minutes I will discuss more details around our recent progress and next steps, but first Rick will cover our financial performance.

Thanks, Lee. Earlier today we reported diluted earnings per share for the fourth quarter of $0.55, which included a loss from discontinued operation of $0.05, following our decision to sell the non-strategic, low-margin, Russell and Miller retail packaging and signage business. Excluding restructuring and impairment charges, we reported earnings per share from continuing operations of $0.68. As Lee indicated, revenue was below our outlook due to an even greater down turn in the economy than expected. However, we were able to fully offset the impact of lower revenue with spending controls and cost reductions, primarily in SG&A expense. Revenue from continuing operations for the quarter came in at $364.9 million, with continued softness primarily in small business services, where we continue to see declines in our seasonal and more discretionary products, including holiday cards. During the quarter, we reclassified $3 million of revenue from the Russell and Miller business to discontinued operations. Excluding the impact of restructuring charges, operating margins for the quarter were in line with our expectations, with favorability coming from our personal check businesses, offset by a small shortfall in SBS. Operating cash flow for the year totaled $198.5 million which was at the upper end of our previous outlook. Cash flow benefited from a delay to 2009 of approximately $10 million in contract acquisition payments. In the fourth quarter of 2007, we reported diluted earnings per share of $0.77. The 2007 period benefited from higher revenue and lower restructuring and asset charges, partially offset by higher performance based compensation in 2007 and additional cost savings in the 2008 period. Company wide, revenue was down 11% from 2007. The year-over-year decline was due to continued weakness in the economy, primarily in SBS, as well as lower volume in our personal check businesses and lower revenue per order…

Thank you, Rick. I’ll continue my comments with an update on what we are focused on overall and then highlight progress in each of our three segments. I will also include throughout, a perspective on what we hope to accomplish in 2009 and wrap up with an update on our cost-reduction initiatives. Especially now during these challenging economic and liquidity crisis times, we understand that it is critical for us to be able to stabilize core checks and business products, while over time demonstrating an ability to drive sustainable revenue growth. We have broad ended our risk-management framework, instituted even more disciplined spending controls and are focused on the strength of our balance sheet. To sharpen our focus and align key leaders and capabilities, we are targeting five key areas for 2009. First, financial institutions and our core check capabilities, plus growth outside checks and helping FI’s expand core deposits. Second, direct to the consumer and optimizing cash flow. Third, small business core business products sold through enhanced e-commerce capabilities and an improved segmented customer focus. Fourth, higher growth business services including logo design, payroll, business networking, web hosting and other web services; and fifth cost-reductions and simplification, where we expect to continue the solid work already underway as part of our expanded $300 million cost reduction initiative. As we enter 2009, although we know it will be more challenging to grow revenue in this economy, we believe our portfolio is becoming better positioned to deliver sustainable future revenue growth opportunities, as the broader economy recovers. It starts with stabilizing the rate of decline in our core check businesses; then adding existing organic initiatives, such as enhanced e-commerce, loyalty retention, and fraud and security offers. It includes growing business services, such as payroll services, logo design, web, hosting and business…

(Operator Instructions) Your first question comes from Charles Strauzer - CJS Securities.

A couple of quick questions; if you could give me a little bit more granularity first of all on CapEx. I believe you are calling for a 25% increase in CapEx year-over-year in your guidance. A little bit more granularity on what that spend will entail and then secondly, Lee, maybe you can give us a little bit more on the puts and takes in the banking industry given that you’ve had Goldman and Morgan become banks. You’ve got a lo0t of moving pieces with acquisitions and disposal of different things to other banks; kind of where you see kind of the year shaking out with potential new RFPs there.

Yes, let me start Charlie with the CapEx. We are planning to spend more clearly from the $32 million, the $40 million and I think the way to think about it is, as Rick said in his prepared comments, really the focus is on, with all the initiatives that we got going right now to get an improved cost structure, yes; but also improved processes. We just decided it is best right now for us to get a lot of those initiatives out of the way now and actually accelerate them and that’s the work that we did in the fourth quarter. So with that Charlie, comes a little bit more in CapEx spending and again I know it’s not allowed what you see out there, but we believe this is a really prudent move for us to get after this now and get some of the things in our manufacturing with our flat packaging done at a faster pace; a little bit more of a shift to digital printing that we think is going to help us in the long term. Then also we made some moves to get a little more ambitious about getting our deluxe.com and our Shop Deluxe e-commerce moving at even a brisker pace. So I think when you add all of those, those are really the core things and then we’re investing organically. We want to keep investing smartly in this tough economy and that’s kind of the net of the additional spend. On the banking, this is very interesting what’s happening out there right now; and what we’re trying to do first and foremost is lock in those big national deals and we’re really proud of the fact that we’ve got a great sales team out there that’s been able to do that already for the 2009 period. Then another one of our focus periods has been to really make sure we are balanced in getting a lot more of our new business in the community bank space as well and in the credit union space and we’ve been able to do that and that’s really our focus as we move forward; is getting that balance between the nationals and the communities and the credit unions, and that’s what we’re going to continue to do in 2009. I think if you think about really what’s happening out there is it’s becoming harder to predict what’s going to happen, as more noise around the bank concerns in the general population. So what we’re trying to do is just make sure that we’re just balanced with the nationals and balanced as best we can in the community and in the credit union space and that’s what our focus is right now.

Your next question comes from John Kraft – D.A. Davidson. John Kraft – D.A. Davidson: I just wanted to follow up on the last question first, a little bit first. You mentioned that there were several larger contracts coming up for bid. If you were to win those, would those be 2009 contract starts?

Some of them would John, and some of them would be probably later in the year to the beginning of next year. Also just to comment, there’s probably right now three or four of them that we think are out there, and none of those are included in the guidance that we put out. John Kraft – D.A. Davidson: And would you also say none of those are yours, then?

None of those are ours. John Kraft – D.A. Davidson: Okay and then Lee, back to the beginning of your prepared remarks, you mentioned something that I was a little confused by. You said that it was the best quarter ever for new non-check revenue. Can you clarify that?

If you think about some of the initiatives John, that we’ve been talk about it in the FS segment around trying to bring, loyalty, retention, fraud and security-type offers to our financial institution clients; we have basically had the best quarter we have ever had in revenue in that space. John Kraft – D.A. Davidson: And then you also said that you expect check volumes to be down 6% to 7% in 2009 due to the turmoil. Is that what you see for Deluxe or is that what you see for the industry? And then is that what you see from now on?

John, this is a great question and let me try to be very careful in terms of the way I kind of answer this and careful from being very methodical here. We cannot tell right now if the Fed study that was done in late 2007 and was completed from ‘03 to ‘06 and it said there was basically a 4.1% decline in checks being written and we’ve used 4% to 5%; we can’t tell whether that’s still 4% to 5% at this point in time. What we’re saying, for our guidance that we put out is we are assuming our check orders are going to decline 6% to 7% and we think it’s prudent right now, and based on what we saw in the fourth quarter, just what’s going on in the economy, what’s going on in the banking turmoil and then obviously we know will be a continued commitment towards consumers moving to electronic payments; we just felt the prudent thing to do was to plan for that 6% to 7% from our perspective. John Kraft – D.A. Davidson: Okay, that’s fair, because from your perspective those clients from M&A obviously are impacting the volumes in ‘09. The last question I just wanted to talk broadly about, segmented margin targets. It looks like on the check side in both direct and regular, these are the highest levels we’ve seen forever in a long time. You said the target for direct would be push-in 30%, what about for financial institutions?

Yes I think John, remember to think about the timing. When you think about the Q4 performance in both financial services and direct checks, most of the reductions that you get from a run rate benefit and then the new ones that we get out at the end of the year, we had the biggest quarter of cost takeout in Q4. So that obviously helps the financial performance. So I think the way to think about it for 2009 as I said in my prepared comments is plus or minus 1 to 2 points of 30% in direct checks and I would use the mid-double digits for FS and I would use the low double digits to maybe low teens for the small business services segment. I think that’s pretty consistent with what we’ve communicated historically.

Your next question comes from Jamie Clement – Sidoti & Co. Jamie Clement – Sidoti & Co.: Lee, my question is about the integration of e-commerce in some of your other businesses. I mean, can you take us through what you’ve been able to accomplish in the back half of 2008 and what you want to accomplish in 2009 in terms of integrating whether it’s direct checks, web platform, the Shop Deluxe platform, as well as the logo and networking, the web services businesses that you have acquired. Can you walk us through a little bit more, sort of where you see those businesses going kind of in the next year or so and the kind of work you feel you need to do?

I think the important thing Jamie first of all is what we inherited when we acquired NEB several years ago. We had disparate systems and tools, based on the philosophy the NEBS management team had in running their various brands. What we’ve been working really hard is bringing all those together and really getting all of those and we believe that as I’ve said in my prepared comments again, that by the beginning of the second quarter or early in the second quarter, we will have 90% of our products and services on to one system. Then getting rid of all of those platforms, the legacy platforms and then really continuing to build upon that strong linkage to deluxe.com and we want to be able to have a seamless order entry and cross-selling for our call center sales force and be able to bring that in to a much simpler and a much clearer and cleaner overall e-commerce platform. Then we see again, as I said in my prepared comments, the wonderful opportunity to continue to have the interface into Hostopia as I said earlier, but also to be able to leverage more products and services, really more service in the case of Hostopia, on that unified technology platform. So it’s bringing all this together more and more and the exciting news from our end is this is becoming more and more; it’s closer to being a reality for us and there’s been a lot of hard work that’s gone in between the segments and our CIO function, but we’re starting to get close, as you can hear now in my comments, so where we think we’re going to have a lot more robust systems and tools and just helps our customers, helps all our call center associates and so on and so forth. Jamie Clement – Sidoti & Co.: Just to follow up Lee, you just mentioned timing there. Are we sort of to understand that, by the end of 2009, significant progress will have been met, so that what you want to have out there in terms of the storefront to your small business customers will be close to the way you want it. I mean is that the right time frame, like a couple of quarters to a year, how should we think about that?

I don’t think you’re ever done in this day and age with this, but I think as you used the words, as we exit 2009, yes, I think we’re going to have a much more robust and kind of where we want it to be, but always continuing to make improvements. We want to be able to stay ahead of what is out there and what will be in the industry, but I think you’re going to see a significantly stronger overall platform. Jamie Clement – Sidoti & Co.: That is very fair; thank you and just one follow-up question. One thing that I was just a little bit curious about was I think you mentioned in the prepared remarks that in FS, your average revenue per order was down. What sort of confused me about that a little bit was you did have a price increase during the quarter, but all of that together -- I was surprised by the magnitude that your segment profit margin was up year-over-year. Was that all cost savings? What else might have been going on there?

Yes, I think you heard it right in Rick’s comments. Clearly the challenge is that this continues to be a very price competitive market and some of it I think and obviously it is a competitive landscape, but also it’s “Where are the banks at this point?” and pushing the competitors and ourselves in terms of where they see the value of checks in terms of their model. But where did the big benefit come from? It clearly came from the fact that we have annualized benefit coming through from all of the cost reductions, plus our strongest quarter of the year in terms of cost takeout and that’s just again the timing of what happened and that’s why I made comments this year; it is not linear every quarter, but our best quarter was in Q4 of ‘08.

Your next question comes from Adam Spielman - PPM America.

I just had a couple of quick housekeeping. I think you guys said it, but I just missed it. For the full year outlook, you said something about depreciation and then you said including $20 million or something of acquisition, depreciation. Can you just repeat that please?

Yes, for the outlook for 2009 in my comments, I said the depreciation and amortization expense would be approximately $70 million, including $19 million of acquisition related amortization in that number.

Contract acquisition or you mean acquired companies?

Acquired companies.

And did you say what the tax rate was?

For the full year, approximately a 35% tax rate.

Okay and then the second one is just to talk a little bit about -- I mean, it looks like in this quarter it was kind of an 11% decline. It looks like on the low end you’re calling for that in Q1 and at the low end it’s about what you’re calling for 2009. How much visibility do you have in to first quarter for instance and then how conservative do you think that kind of 11% decline is when you look out over the whole year?

Here’s again the way I would position when we tried to put this out in our prepared comments. When we look at the top end of the 1.4 which we put out, that assumes that we are not going to get any improvement in what we see in the economy as we kind of exit 2008. What we then said is look, “It’s becoming harder to predict this. It’s becoming harder for everybody.” So what we said is that on the low end at the $1.3 billion, that would say that over the course of the year that we would have continued deterioration in the business and so the frames that we put out is, yes, we believe we have clear visibility earlier in the year in the first quarter obviously and closer to where we are today, but over time, that becomes harder to tell. No one has a clear picture of where the economy is going. So that’s kind of the way we did our framework and our thinking. We think it’s the prudent way to do it and what we really like about our strategy is we’ve got more and more after our cost structure; we’ve got more and more after improving our processes, putting better metrics around them and what we believe is we also are continuing the investments that we want to make organically and then continuing to try to drive the acquisitions that we’ve done to get them to be a stronger foothold in our company. What we like about that is, we believe that as we do that, if the economy does cooperate better than what we’ve predicted, that’s going to help our operating income tremendously and so that’s the prudency of what we’ve done and we just think it’s the right way to do it and we’ve got everybody rallied around that in terms of the way we’re running the company today.

Alright, one more just on capital allocation. I heard you loud and clear and you guys have been good soldiers putting outlooks out there in light of what is low visibility for almost everybody. It is not rocket science to get to your -- you have a kind of a cash flow number, you have CapEx and you have the dividend which you basically said you plan on keeping. Can you commit to a debt-reduction number or conversely do you have an acquisition kind of number you’re looking to spend this year?

I think with the pieces of information we have put out there and you mentioned CapEx and dividend, you have enough data there to be able to estimate what the debt reduction would be for the year.

And I also mentioned Adam, tuck-in acquisitions. So all we’re trying to project is the same thing I just went through, a very balanced approach to being prudent now in the marketplace, given the liquidity issues that are out there in the outside world and then just being balanced with making sure that we’re doing the things organically and to tuck-in acquisitions as it makes sense for us to continue to advance the ball here at Deluxe.

Just to be clear here, I mean to the extent, are you saying you’re going to pay down debt in the absence of any acquisitions? I mean, you are saying acquisitions; that would reduce the amount of debt you pay down, right?

If we reduce acquisitions, it would reduce the amount of debt you we pay down, yes and we do not have a specific number of acquisitions or debts that we’re giving here today.

Your next question comes from Todd Morgan - Oppenheimer & Co. Todd Morgan - Oppenheimer & Co: You talked about this a little bit, but I was hoping you might be able to parse it again for us. Check order volume you said was down about 7% in the fourth quarter and sort of a similar-type range is what you expect for the year. If I look at your past stuff and the statements you talked about order volume being down around 4.5% excluding acquisitions, I don’t know if that’s a comparison; if that sort of check trends would sort of foot both of those numbers. Assuming that’s the case it obviously spiked up in the fourth quarter. Can you give us a sense of how much of that would have been tied to the bank mergers, how much is sort of the general economy if there’s any way to delineate that and how much is any change in what you think is a secular shift going on there?

I can’t Todd. To be honest with you it’s just too short a period of time right now and I mentioned we saw some of the banks that were acquired go down mid-quarter, but then they came back up and we’re not far enough in to the new year here to see how predictive, the turmoil in the banking industry and what other banks are going to play in to that right now and how deep it’s going to go, how broad it’s going to go, and then again we know electronic payments are moving over time and becoming more prevalent and then they weaken the economy. So our view is, we cannot figure out exactly what that historic 4% to 5% is right now, so we’re just being prudent in the way we plan we believe in saying our view right now, best we can tell is that 6% to 7% check order decline; the best we can do for you. Todd Morgan - Oppenheimer & Co: Okay. Do you have any sense of what your sort of market share trend is in check printing at this point?

No, I don’t, other than the fact that I have made comments around we have been retaining at record levels and we have been winning deals as well clearly in the community and in the credit union space, so I’ll let you figure out market share from there. Todd Morgan - Oppenheimer & Co: Then I guess lastly, 2009 I mean I think I appreciate you guys framing the sort of revenue stories as you have here, to the extent that that isn’t the way the world turns. Can you talk about what sort of contingency plans may exist or other things you could do on the cost front? Are there other things beyond those sort of cost plans that you have for this year that might be available if needed?

Here’s the way I would think about it. We put guidance out that we believe that we can make within the ranges that we have on the revenue and the ranges that we have on earnings per share and we tried giving our best. A lot of people are going away from it right now, but we believe we can make we guidance that we got out there. We believe what we’ve shown in the fourth quarter, is we went back to hard work and got more identified in terms of cost reductions and I think the way to think about Deluxe is we’re going to continue to do that and continue to operate that way and if we see something that I think what you’re alluding to, if it gets even worse than the low end, on the revenue, what would we do? We would continue to get after this as best as we can, stay on top of it as early and we can and hopefully be able to protect that low end of that $1.95 that we put out there for earnings per share. I think that’s the way this management team has operated in the past and I think you can continue to see us robustly staying after this as we move forward.

Your next question comes from [Robert Corwic] - RH Capital.

I just wanted to understand; just looking through your numbers, assuming no acquisitions, it looks like you pay off your bank debt by the end of the year?

Are you talking about the credit revolver?

Yes.

Yes.

And where is your bank debt now?

In terms of the credit facilities?

Yes, in terms of how much is outstanding?

Approximately $80 million to $85 million right now. Let me make sure you walk back here. the total debt at the end of the year, Robert was $855 million. Of that amount 775 is in the 2012, 14s, and 15s. The balance of that is what Rick was alluding to in the credit facility. I just wanted to make sure we were clear.

Yes, that what I was thinking about and how are you thinking about further debt reduction? Would you consider buying back bonds at some point?

Yes, I mean in recent years our debt reduction was focused primarily on paying down our credit facilities, but we also have the stability to consider opportunistic repurchases of long-term matures, either through open market purchases or private transactions and that’s something that we have disclosed in our SEC filings.

Your next question comes from Mike Hamilton - RBC. Mike Hamilton – RBC: This isn’t as big of factor as perhaps in past years, but as we look out in to the fourth quarter next year with some of the discretionary items that typically have built in holiday cards, apparel, etc, obviously there’s a lot more pressure there and some of these businesses may actually be eroding at an industry macro level. How are you thinking about those areas as part of any longer-term business model?

As to whether or not Mike we stay in them or… Mike Hamilton – RBC: No, no, what kind of growth is really available? Feel free if you want to touch on -- I assume at this juncture you aren’t going anywhere on business that are maybe there for divestiture, but our areas like holiday cards moving toward a longer-term secular decline?

I think that we absolutely believe there’s growth in what we call the imaging and the apparel and those surrounding more discretionary type retail packaging product type of things. The way Mike to look at the holiday greeting card area is it’s not a big growing market, it has never been a big-growing market, but because we’ve had such little volumes primarily, it’s not a big part of the Deluxe business. We’ve had an opportunity to gain wallet share in that space andthat’s been the opportunity more than it’s a big growth market for holiday greeting cards; it’s a small growth market, but we have the ability to grab share. The challenge that we’ve had is again we just sold less holiday greeting cards in the quarter and by the way it wasn’t just Deluxe. I think that you’re going to find that as the people in those segments out there are going to tell you the same story, because we’ve seen some of the releases on that as well, but now we want to continue to be in the market. We think it’s a good opportunity for us and we’ll continue to play in the imaging and the apparel, and the retail packages and the holiday card space.

And we have no further questions in queue. I would now like to turn it over to Mr. Lee Schram for closing remarks.

Thank you everybody for your participation and your questions today and clearly we’re going to get back to work here and we look forward to providing another positive progress report on our next earnings call.

Thank you. This is a reminder that a replay of this call will be available until February 2 by dialling 88-286-8010. When instructed, provide the access code 82005908. The accompany slides are archived in the Investor Relations section of Deluxe’s website at www.deluxe.com. Again, thank you for joining us and have a good afternoon.

Thank you for your participation. You may now disconnect and have a wonderful day.