Welcome to the first quarter 2009 Deluxe Corporation earnings conference. (Operator Instructions) I'd now like to turn the presentation over to our host for today's call Terry Peterson, Vice President Investor Relation and Chief Accounting Officer.

For those of you who would like to follow along with our presentation but are having difficulty located it, please go to our website at www.deluxe.com click on the news and investor relations section from the top menu bar. From that page, select the investor information tab from the options on the left side of your screen and you will be directed to the icon, which contains the presentation materials. Welcome to Deluxe Corporations 2009 first quarter earning 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 Green Deluxe's Chief Financial Officer. Lee, Rick and I will take questions from analyst 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 and 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 Security Litigation Reform Act of 1995. As such these comments are subject to risk 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, 2008. In addition, the financial and the statistical information that will be reviewed during this call is addressed in greater detail in today's press release, which is posted in the news and investor relation sections 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 toe Lee Schram, Deluxe's CEO.

In spite of continued very challenging economic conditions, we had a strong quarter and were able to deliver on our financial commitments. We reported revenue near the middle of our expected range while adjusted earnings per share was above the high end of our range. Individual segment revenues were also in line with our outlook, although we experienced greater weakness than expected in more discretionary products, such as imaging, apparel and retail packaging products. We continued our strong execution of our cost reduction program, implemented additional spending controls, and maintained a disciplined approach to deploying capital. We drove strong cash flows and repurchased $31 million of long-term debt at a 32% discount. We saw growth in loyalty, retention, fraud and security and new business services, including payroll services, logo design, web services and business networking. We made further progress strategically and higher growth business services with an early April acquisition of C I Host customers adding small businesses to our already growing base. As planned, we just released in April a revamped deluxe.com and Shop Deluxe e-commerce platforms. We continue to prudently manage our company, closely monitor the small business and financial institution market, and focus on strong free cash flow generation as we continue to transform Deluxe and steadfastly execute on our turnaround 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.

Earlier today we reported diluted earnings per share for the first quarter of $0.24, which included non-cash impairment charges of $0.40 and restructuring related cost of $0.03 partially offset by a $0.11 per share benefit from gains on long-term debt repurchases in the quarter. Excluding these items, adjusted EPS of $0.56 was up 8% from the prior year and was $0.10 favorable to the upper end of our previously communicated outlook. Revenue for the quarter came in at $339.5 million with continued economic softness impacting primarily small business services where more discretionary products such as imaging, apparel, and retail packaging where short of expectations. Revenues from our personal check businesses were in line with our outlook. Excluding the impact of impairment and restructuring charges, operating margins for the quarter were well above our expectations with the favorability coming from continued focus on spending controls, better than expected results on our cost reduction initiatives, and favorable product mix in the quarter. Operating cash flow in the quarter of $63 million also exceeded our expectations due to the favorable operating results, as well as benefits from working capital initiatives. In the first quarter of 2008, we reported diluted earnings per share of $0.52. Higher revenue in the 2008 period and associated margin of flow through was more than offset by significantly higher savings from cost reduction initiatives in 2009 as compared to the net savings generated in the same period last year. Companywide, revenue was down 10% from 2008. There was one less business day in the 2009 quarter, which accounted for a decline of approximately $5.4 million. Continued weakness in the economy, primarily in SBS, as well as the impact on our personal check business of declines in check writing and turmoil in the financial services industry, also contributed to the…

I'll continue my comments with a perspective on our overall enterprise objectives for the balance of 2009, highlight each of our three segments, including how we are progressing against our key initiatives, and close with an update on our cost take-up programs. At the enterprise level, our five key focus areas for 2009 include first, financial institutions where we will work to at least maintain our core check share plus grow outside checks by helping financial institutions expand core deposits. Second, optimize cash flow from the direct to consumer segment. Third, grow revenue in small business core business products sold through enhanced e-commerce capabilities and an improved customer segment focus. Fourth, expand revenue from higher growth business services including logo design, payroll, business networking, web, hosting, and other web services. And fifth, continue advancing the solid cost reduction and simplification work already underway as part of our expanded $300 million cost reduction initiative. Early in the quarter we assembled our key leaders and field sales teams to further accelerate alignment as we continue to transform the company. This was our best leadership event since I joined the company. We talked about how our continued transformation 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 networking services. We will continue to assess the potential tuck-in acquisitions that complement our large customer basis with a focus on business services together with new products and services aimed at helping financial institutions grow their core deposits. We left the meeting committed to building a high performance organization as a unified team of leaders with an outside in and strong customer…

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

Just a quick question for you, you've given a tremendous amount of detail and I thank you for doing that. It's always very helpful in kind of going through the model. But when I look at kind of the uses of free cash flow, Lee, and the $40 million of CapEx spend and given the distressed nature of many of the companies that are in your space that are out there, the smaller companies I should say on the printing side, perhaps would asset purchases be more advantageous given the market environment these days rather than buying new?

Pardon me?

You said you wanted to ramp the digital platform with CapEx in your $40 million, basically are there some distressed assets out there that could potentially be more advantageous purchases rather than purchasing new equipment I should say?

We didn't imply that everything was new in terms of what we're purchasing there. So I think what we're trying to do basically, Charlie, in the capital space is continue to follow our transformation in terms of the work that we think that we need to get done to, not only get our costs out, but also to get more efficient over time and the way we do manufacturing. But not only in the way we do manufacturing, but also in the other areas that we think are important to continue to build the company, so e-commerce investments and other organic investments that we talked about loyalty retention, fraud and security and so on and so forth. So it's a real balanced perspective, but we didn't mean to imply that everything is necessarily new in terms of asset purchases.

So you are thinking the same way and then just if you could expand a little more on current trends with Hostopia? I know that's into an area that's being viewed as a way for businesses to kind of reduce their expenses by taking advantage of going online a little bit. Have you seen a kind of pick up in trends there at all?

Love this acquisition. I just continue to be so impressed with the team. Here's the best way I would view it right now. We had another strong quarter in the first quarter, and what we're continuing to see we saw more of a ramp in the, if you remember their model is first and foremost a Telco focused model, a wholesale model where they get access to their small businesses, and we had more new business in the quarter and actually did better there than we expected in the quarter. And then also what we're starting to do, Charlie, is really ramp the synergy revenue from the Deluxe customers that we're trying to get to buy hosting and web services. So all I could tell you at this point in time is that we're very pleased with the acquisition and we delivered it to what we expected in the quarter.

And would you say that that's fully integrated at this point? We're at the point where you can kind of fully kind of sell a full suite of products to your existing Deluxe customers?

We can absolutely do that. We believe there are more opportunities to get more efficient in how we do that. So all of the different channels, whether it's online or through phone, outbound, inbound, using Hostopia, using Deluxe, we still have opportunities, Charlie, to get better with that. But I would argue that only gives us more potential to do well with this acquisition.

And then taking that a step further I know one of the things you were excited about when you made the acquisition was potentially going to your financial services customers and tapping that customer base as well. Have you had inroads into, you're talking about joint ventures or partnerships on that side?

I wouldn't use the word joint ventures so much as just opportunities exist absolutely to go in and leverage that platform and we are the best way to describe it right now is we're executing and doing that exactly where we thought we'd be at this point.

Your next question comes from Jamie Clement - Sidoti & Co. Jamie Clement - Sidoti & Co.: Just a quick bookkeeping question, Rick, I'm not sure you gave this number. I know you gave the contract acquisition payment expectation number for 2009. Do you know what the amortization number will be approximately?

Yes I can, we usually don't provide full guidance on that for the year, but once it starts… Jamie Clement - Sidoti & Co.: Well I was just curious like where that was running. I mean if it's going to be roughly in line with last year?

It will probably be a little bit higher than last year. Our payments are expected to be a little bit higher this year so that will flow through. Jamie Clement - Sidoti & Co.: Lee, on the check side as you look out over the next couple of years when you are, or even just over the last couple of quarters, as you've extended contracts and as you look to win new business with the additional services that you all have built up over the last couple of years, how has your marketing changed to big financial institutions?

The way I would look at it is absolutely helped us. We're able to go in and position Deluxe as a company a lot stronger than just going in and trying to compete on just the pure check side. So we're able to sit down with our financial institution clients and present more horsepower, whether that's loyalty and retention, fraud and security products and services that helped those financial institutions directly, Jamie, or whether we bring more small business services through products that we already had through our Deluxe Business Advantage program, or now through the new business service offers that we have. So it's just, the way to think about it is there's just more in the toolkit for us to be able to bring to those customers and it allows them to feel like they're going to be working with somebody who's got more things that helps create stickiness to their end customers. So I believe it's directly helped us. Jamie Clement - Sidoti & Co.: And then just kind of changing gears a little bit on the long-term revenue growth enablers that you all have developed, whether this is e-commerce or whether it's just less manufacturing and more services, particularly to small business, how in a pretty deep recession and small businesses are obviously a big portion of your customer base, they appear to me to be taking the lion's share of the beating during this recession. How do you measure from a trend perspective what's working, what needs improvement in an environment like this?

It's the toughest question, I raise this every day literally as my team are tired of hearing this from me, but how do you separate the cyclical declines versus the structural declines, your ability to execute cyclically versus structurally? And the way I would describe it is we believe we're getting better and better at being able to determine which products and services and then the interactions that we have with our small businesses drive more the secular things that are going in the market versus structural things we're either executing better or not executing as well as we think we need to be. And all I can tell you is that we're not great at it yet, but I also would tell you that the ramp is improving quite a bit. And we just use a combination of tools and then research, outside research as well as direct research that we do with our huge customer base to try to drive at when are our products and services being economically challenged versus when are our products and services being more structurally challenged. So that's probably the best I can do explaining it at this point for you.

Your next question is from John Kraft - D.A. Davidson.

I wanted to briefly ask about the Chase WaMu renewal. That was the contract that you had hoped to sign or renew in Q4 and just got pushed out?

Yes.

And wasn't there though another larger contract that would have been a new win for you that was out there that you were bidding for?

Bidding for at this point or...

Yes, I thought you had mentioned that there were some contracts maybe you were just talking about throughout 2009.

Throughout 2009, I mentioned, John, that there's one that's eminent and I would describe it as that, at this point as well. John Kraft – D.A. Davidson: And, Rick, you mentioned pricing pressure is that coming from competition, which has seemed to have been pretty muted lately, as far as pricing pressure, or from the banks themselves?

Yes, that's specifically within our financial services segment and that's really just the continued activity going on with contract renewals, and certainly we see this more in the community bank space, given the shorter tenure of those contracts. So as they're coming up for renewal, it continues to remain a very competitive pricing environment overall. We were able to offset that in the first quarter here, given the price increases that we implemented in the fourth quarter of last year. So on a year-over-year basis we saw fairly flat pricing activity in the quarter, but it remains a competitive environment certainly.

Yes, John, the best way I would look at it right now, I think Rick's on the right track here, the banks are obviously looking at their cost structures very closely at this point, so that alone creates pressure on the check vendors that are out there. And I would not describe the competitive environment to have been any easier than it's been. John Kraft – D.A. Davidson: But specific to the Q3 upcoming price increases, now that's going to be on the larger segment or is there a particular segment there?

Again, it's across both the nationals and the community and the credit union space. It's normally what we're, by contract, able to do when there are more material and delivery increases that we get. And again, I want to point out to the comment that I made is that was a planned increase. John Kraft – D.A. Davidson: And this acquisition C I Host, what sort of revenue run rate are you acquiring there and can you tell us what you paid?

It's very small it's not significant either on the revenue or on the acquisition side. So think of something less than $5 million. John Kraft – D.A. Davidson: And I guess last question in the small business, you keep an eye out for other tuck-ins, I mean other holes that you're trying to fill or areas that you're particularly focusing on?

Absolutely, as I think I've been pretty consistent for many quarters now, we continue to look at what are the opportunities that are out there that will allow us to get stronger. And really the principle area, John, is in the business services area. So, just things that will help our customers in logo and web and business networking and related type of services, as well as we're also focused on is there things that we can do to really be stronger in helping our financial institutions grow their core deposits. So those are the principle two areas, as we mentioned in the script, that we're looking at. John Kraft – D.A. Davidson: But primarily more technology products rather than printing products, is that fair to say?

There could be things where you can get more of a technology play, John, but you also have the opportunity to pick up print capability at the same time. So again, there's things out there that we're looking at that would probably fit both of those, and again, we're trying to be smart. We're absolutely focused on making sure that we're organically, if we can organically do something better, and that's where we should focus, but tuck-in things that work, balance that with making sure that we're smarter around the cash that we're using and again, as Rick mentioned, if there's debt opportunities to buyback, then we'll play that card as well. We're not trying to run the company for a quarter. We're trying to make sure that we're smart in this difficult economy, but we're also trying to make sure that we're investing for the longer term Deluxe.

(Operator Instructions) Your next question comes from [Eric Swanson]. [Eric Swanson]: Could you provide a breakout between the two bond issues that you will retire?

Yes, we purchased a portion of both the 2012 notes as well as the 2014 notes. About $20 million of the 2012s were repurchased, face value, and approximately $12 million of the 2014 notes. The average discount of those two blended together was 32%.

At this time, we are showing no further questions available. Mr. Schram, you may proceed.

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

This is a reminder that a replay of this call will be available until May 8 by dialing 888-286-8010. When instructed, provide the access code 61030752. The accompanying slides are archived in the newest 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 in today's conference. This concludes the presentation, you may now disconnect. Have a great day.