Good day, ladies and gentlemen, and welcome to the fourth quarter 2009 Deluxe Corporation earnings conference call. My name is Francis, and I will be your coordinator for today. (Operator Instructions). I would now like to turn the presentation over to your host for today, Jeff Johnson, Treasurer and Vice President of Investor Relations.

Thank you, Francis. Welcome to Deluxe Corporation’s 2009 fourth quarter earnings call. I’m Jeff Johnson, Deluxe’s Vice-President of Investor Relations and Treasurer. Joining me on the call today are Lee Schram, Deluxe’s Chief Executive Officer, and Terry Peterson, Deluxe’s Chief Financial Officer. Lee, Terry 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 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 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 in the Company’s Form 10-K for the year ended December 31, 2008. In addition, the financial and statistical information that will be reviewed during the call is addressed in greater detail in today’s press release, which is posted in the News and 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, Jeff. And good morning, everyone. I’d like to begin by welcoming both Terry and Jeff to their new positions as Chief Financial Officer and Head of Investor Relations. I am already seeing significant contributions from each of them and I’m confident they will truly partner with me in continuing to transform Deluxe. In a continued challenging economic environment, we delivered a very strong quarter. We reported revenue at the high-end of our expected range while adjusted earnings per share was well above the high-end of our range. All three segments delivered strong revenue. Checks and forms both performed well and we continue to grow loyalty and retention, broaden security and new business services revenues over the prior year. We saw stronger revenue performance later in the quarter than expected. We also continued with strong execution against our cost reduction programs and spending controls, all of which drove better than expected adjusted earnings per share and operating cash flow. Adjusted diluted earnings per share from continuing operations grew 3% over the prior year, and we generated $206 million in operating cash flow for the year. We are prudently managing our Company and not taking our eyes off of process improvements and cost reductions while driving strong operating cash flow. But we are investing in future growth areas and focusing more on sustainable revenue growth as we continue to transform Deluxe and execute our turnaround plan. In a few minutes, I will discuss more details around our recent progress and next steps, but first, Terry will cover our financial performance.

Thanks, Lee. Earlier today, we reported diluted earnings per share for the fourth quarter of $0.59, which included restructuring and transaction-related costs of $0.11. Excluding the restructuring and transaction costs, adjusted EPS from continuing operations of $0.70 was $0.06 favorable to the upper end of our previous outlook, and 3% higher than the $0.68 reported in the fourth quarter of 2008. The prior year benefit is from higher revenue levels and the associated margin flow-through, plus an approximate $0.06 per share benefit related to lower performance-based incentive compensation expense. Revenue for the quarter came in at $340 million, which was at the high-end of the range of our previous outlook. In fact, all three of our business segments delivered at the high-end of our expectations. Revenue was down only 6.7% from 2008 and grew on a sequential quarterly basis. Small Business Services revenue of $206 million was down 5.8% versus 2008, and up $12 million from the third quarter. Revenue was unfavorably impacted by continued economic weakness, including a weaker than expected result in holiday cards, but sales of checks and forms were stronger and business services showed solid growth. Financial Services revenue of $95 million was down 7.2% versus the fourth quarter of last year. The decline was due to the impact of lower check orders, partially offset by higher revenue per order as a result of the third quarter price increase. Direct Checks revenue totaled $39 million, down 10.3% on a year-over-year basis, but better than the full-year rate of decline due to improved re-order performance. Gross margin for the quarter was 62.8% of revenue, up slightly from 2008. Benefits from improvements and manufacturing productivity, plant consolidations, delivery initiatives and product mix were partly offset by increased performance-based compensation expense and material and delivery rates. SG&A expense decreased…

Thank you, Terry. I will 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 2010. At the enterprise level, our strategic intent remains the same, becoming the best at helping small businesses and financial institutions grow. We will continue to target our three customer segments, Small Businesses, Financial Services and Consumers. Over the strategic period, we intend to drive the revenue mix of our business from 2009’s 63% Checks, 30% Business Products, and 7% Business Services to approximately 45% Checks, 30% Business Products, and 25% Business Services. In 2010, we will not take our eyes off of cost reductions and process improvement initiatives. Even in what we expect will continue to be a challenging economic environment, we will shift our primary focus to revenue expansion. As we enter 2010, we believe our portfolio is becoming better positioned to deliver sustainable future revenue growth opportunities as we hope the broader economy recovers. Growth opportunities start with stabilizing and gaining share in our core check businesses, then helping financial institutions expand core deposits with loyalty, retention, analytics-driven deposit acquisition and rewards checking offers. It includes enhancing our Internet capabilities, improving customer segmentation and adding new small business customers. Finally, the most significant opportunity is growing Business Services, including web and hosting services, logo design, search engine marketing, payroll, broaden security and business networking services. We will continue to assess potential small to medium-sized acquisitions that complement our large customer bases with a focus on Business Services, and new products and services aimed at helping financial institutions grow their core deposits. On our third quarter call, we provided an initial perspective on 2010, including a…

(Operator Instructions) And your first question is from the line of Charlie Strauzer with CJS Securities.

This is actually Torin Eastburn filling in for Charlie. I think you answered all my questions in your prepared remarks.

Your next question comes from the line of Jamie Clement with Sidoti. You may proceed.

Lee, you ran through some pretty detailed assumptions with respect to your guidance. What I’m curious about is today, compared to three months ago when you first started talking about 2010 in general terms, was the economy the biggest driving factor in kind of being able to tick up some of those assumptions? Or are there some things that you got done internally at Deluxe over the last three months that has you more encouraged? I assume it’s probably a mix, but maybe you could discuss that a little.

Jamie, it’s actually everything. I would also add the new, large national win. Again, we did not have anything, as we indicated, when we gave the initial perspective in October last year. I think what’s happened right now is we clearly feel like a lot of the hard work and a lot of the initiatives that we’re putting in place are starting to play out for us. I would say that we feel a little bit better about where things are from an economic standpoint, but not great. I think you can see that pretty consistent with everybody out there on a similar vein right now. But I think, Jamie, the best way to answer it is I think the number on things that we’re doing internally, things that we see in the economy and then, obviously, the focus on getting this new opportunity with this large national bank.

Okay. And perhaps the next question best to Terry. With respect to the transformation to flat packaging, I think you said you should be pretty much wrapped up in the second quarter of 2010, is that right?

Yeah. That is correct.

Well, approximately what percentage of orders are going out flat right now? Like how far along the way are you?

Well we’ve got one of our three manufacturing plants converted over to that new system. And this system produces the packaging for any orders that we send out where it’s one box. So if there’s multi-boxes, it would go out in a different configuration. But one of the three plants is up and running.

Okay. And are we to assume that the costs associated with converting the other two plants, are you not generating any net savings due to this process just yet?

Certainly we are generating savings from the one plant that is...

Sure. But in terms of the amount of money that you have to spend on the other two, does that offset how much your savings just at this time. Obviously, I assume in the second half of 2010, you’ll be fully positive?

Well, really, what we’ll be investing in primarily is capital equipment, so to get the actual machines into the plants and up in running. So most of that is actually capital related. So certainly there are some operating costs to get that converted and to get it up to running to full capacity. But most of the dollars that we’re talking about are actually capital.

Your next question is from the line of John Kraft with D.A. Davidson.

Just, well first, congratulations to you, Terry and Jeff, and also for all of you on the SunTrust deal. Specific to that, I guess, I have a few questions. The first is should I assume that the uptick in contract acquisition payments in Q4 was related to that deal? Or is that something that should hit in 2010?

It’s never really been our practice to comment on contract acquisition costs related to any one particular customer. The little uptick that we had at the end of this year versus what our previous expectation one was really driven more around a payment that was due at the very beginning of January that actually slipped into December. So it was really just more of a timing matter than anything else.

Well along that line, before I go back to the SunTrust, what do you expect for that line in ‘010? I didn’t hear you say that.

Approximately $10 million for next year.

10 million. Okay. And back to the SunTrust deal, can you talk about how and what was the reasoning, the rationale that they chose you? Was there more than simply price?

John, this is Lee. I think the way I would best describe it is that I think what we did is we surrounded them with the innovation that we put into our plants in terms of the flat packaging, the digital presses. I think we also talked to them extensively about our small business offer and what we’ve been doing to enhance that with a lot of the business services moves that we’ve been making. And, clearly, price is always going to play an element in these, John. But I think what we try to do is focus on the differentiation that we believe we have right now versus the competitors that are out there, so that was the focus. And I’m just extremely pleased and proud of the Financial Services team and all the people that actually had a chance to play in this, and this, obviously is a significant win for us.

Did they also sign up for the Business Advantage program?

Yes.

Yes?

Yes, John.

Interesting. And then changing gears a little bit, Lee, you said that on the financial institutions side of the business that revenue sort of picked up late in the quarter. I guess I was wondering whether or not you have seen follow through in January?

What I think I said is in Small Business Services we saw it pickup. We actually saw an improving trend from October to November to December, it is really therefore, the strongest was late in the quarter. And, again, these are only slight, John, at this point in time. And I think also mentioned that the rate of decline in checks, we put out there at 8%. We performed a little bit better there as well. So it was really in both those. And then with the only 10% decline in Direct Checks in the fourth quarter and year, particularly year, we were down like 13%. We clearly saw some improvement there. So I think it was all three, which is why we’re encouraged with the way results played out. As far as this year, the best way I would describe it right now is the guidance that we put out there between the low and the high-end takes into account exactly the perspective that we had as we exited the year and kind of the not too far out ahead, but not too much worse in terms of the economy. The same way we looked at the full year at this point, John.

Okay. And just last question probably for Terry here. Could you just rattle through your various debt instruments and balances as of the end of the quarter?

Yeah. Our credit facility, we had about $26 million drawn at the end of the period. The 2012s had approximately $280 million outstanding, the 2014s had about $263 million, and then the 2015s had about 200 million even. So that was roughly about $769 million total.

Sure. And then just last piece on the credit facility. What was the rate again?

The credit facility rate at the end of the year, it’s LIBOR plus 75 basis points. So it was well under 1%.

(Operator Instructions) Your next question is from the line of Mike Hamilton with RBC.

Could you step back and give some views. You highlighted the changes, the turmoil in FI, and just kind of walk through what you’re seeing in terms of how that’s relating to your business, the bidding process, anything going on in pricing dynamics worth noting? In other words, are we seeing any big picture changes?

Mike, I think this has been out there for a while now, and we’ll continue that. Financial institutions, large and small, are doing what every one of us is doing that’s in business, and that is looking for continued ways to improve their infrastructure and their cost structure and their processes. So would I say it’s heightened, more heightened now? I would say it’s just continuing to be a focus of theirs. And we built our infrastructure, and we’ll continue to build our infrastructure, that this will continue to be the way it will play out as we go forward. So I don’t think it’s any more than it’s been throughout 2009. But I think it’s prudent for us to believe that it’s going to continue as we play into 2010. And, therefore, that’s our job as we’ve been doing to continue to get our infrastructure lower and lower, and our processes improved.

We’re seeing, out of at least a few institutions, indication of going away from free checking. What’s your assessment of opportunities or risks off of that for you?

I think we have this very well surrounded. I think if you think about that, if it happens, I think if you think about the world of the direct-to-consumer space, I think if you think about the focus we have in the non-check space now in the financial institutions, the partnership that we announced with BancVue and the Rewards Checking, I think the best way to think about it is financial institutions are going to continue to need to try to figure out how they differentiate to get consumers to win in core deposits and core deposit growth. So anything that we can do to help balance that out and give more offers and more opportunities to be able to help them with that, I think plays to our advantage. So I think we’ve surrounded it with a lot of the work that we’ve done. And, again, we’re very excited actually about this BancVue partnership that we created as well. So that’s the best way right now, Mike, I would think about it.

Yeah. That makes sense. Thanks. Lastly, we’ve come off of a couple of fairly weak years on the holiday-related sales in small business. Any changes in your thinking or approach as we go to 2010?

I would first start with we didn’t bank on a huge dependency on it in 2009. So although we missed, I also would comment that it was later in the year that we saw a pickup. So it clearly was people postponing what we’ve seen as kind of historical trends. And then at the end we actually performed quite well compared to what we expected. The best way that I would describe us right now is we know and we see, each of us here sees, that we’re getting more electronic cards than we are paper-based cards. So we’ve thoughtfully planned through that. We just did a little bit lower there, Mike, than we expected. And we’ll continue to look at, as we get into 2010, where do we expect that to go and then try to determine how much of that was more economic-based versus a change that is happening more in electronification there. But I think it’s important, again, to put out there that this is not a huge percentage of our business in the Small Business segment. So although we didn’t like the outcome, this isn’t something to be majorly alarmed with.

Yeah. It looks in your outlook like some of the fourth quarter hockey stick that we’ve seen in prior year expectations is out of the picture in the current year?

I would look at that. And don’t forget too, again, some of that we mentioned the forms, we had strong performance there. We had some seasonality too, Mike, in the tax forms areas which we actually saw perform well in the quarter.

Your next question is from the line of Melissa Valcovic from Credit Suisse.

Can you say who you won the SunTrust contract from?

We won it with SunTrust Bank.

Right. But could you say who had previously serviced the bank?

No. I’m not at liberty to disclose that.

At this time, there are no other questions. I’d like to turn the call over to Lee Schram.

I just want to thank everybody for your participation, and, again, for the questions today. And we’re clearly excited about our finish here. We’re going to get back to work and we do look forward to providing another positive progress report on our next call.

Thank you, Lee. This is a reminder that a replay of this call will be available until February 11 by dialing 888-286-8101. When instructed, provide the access code 10080199. The accompanying slides are archived in the News and Investor Relations section of Deluxe’s website at www.deluxe.com. Again, thank you for joining us, and have a good morning.

And ladies and gentlemen, thank you all again for your participation in today’s conference call. This concludes the presentation and you may now disconnect.