Good day, ladies and gentlemen, and welcome to the Third Quarter 2011 Deluxe Corporation Earnings Conference Call. My name is Jeff, and I'll be your coordinator for today. At this time, all participants are in a listen-only mode. Later, we will facilitate a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Jeff Johnson, Treasurer and Vice President of Investor Relations. And you have the floor, sir.

Thank you, Jeff. Welcome to Deluxe Corporation's 2011 third quarter earnings call. I'm Jeff Johnson, Deluxe's Treasurer and Vice President of Investor Relations. 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 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 in the Company's Form 10-K for the year ended December 31, 2010. 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 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 comparable GAAP financial measures in the press release. Now, I'll turn the call over to Lee.

Thank you, Jeff, and good morning, everyone. In the midst of a continued sluggish economy, Deluxe delivered another solid quarter. Revenue grew almost 4% excluding the one-time $25 million contract settlement in the prior year quarter. Small Business Services’ revenue grew 10% excluding the portion of the contract settlement recorded in this segment in the prior year, and grew over 6% when also excluding PSPrint in the current quarter. This quarterly growth rate is the strongest we have reported since we acquired NEBS in 2004. Checks and forms, both performed well against our expectations, and marketing and other services revenues grew 26% over the prior year. The revenue shortfall against the high-end of our expectations was driven primarily by financial services customer acquisition and regulatory compliance services as financial institutions, delayed decisions and roll outs as well as slower acceleration of SBS search engine marketing services. Adjusted diluted earnings per share from continuing operations exceeded the high end of our outlook driven by favorable product mix and lower average shares outstanding as we opportunistically repurchase $6 million of shares to help offset dilution from employee plans. Excluding the one-time $0.31 per share contract settlement in the prior year quarter, adjusted diluted EPS from continuing operations grew 15% over the prior year. We continue to invest in brand awareness to help better position our marketing and other services offerings and drive future revenue growth. We also advanced our process improvement and cost reduction initiatives while driving strong operating cash flow as we continue to transform Deluxe. 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 third quarter of $0.71, which included $0.07 per share from restructuring and transaction-related costs. Excluding these costs, adjusted EPS of $0.78 was $0.01 favorable to the upper end of our previous outlook. Favorable product mix and lower average shares outstanding drove better than expected EPS performance. Restructuring and transaction-related costs were primarily driven by infrastructure consolidations, employee severance charges in PSPrint acquisition. EPS from continuing operations in the third quarter of 2010 was $0.99 and included a one-time contract settlement gain of $0.31. Revenue for the quarter came in at $355 million, and grew almost 3% on a sequential quarterly basis versus the prior year. Consolidated revenue was up almost 4% excluding the one-time contract settlement gain of $25 million in the prior year. Small Business Services revenue up $214 million grew 4% versus last year on a reported basis that grew 10% excluding the portion of the contract settlement recorded in this segment in the prior year. We recently acquired PSPrint business at nearly $8 million of revenue in the quarter. While we continue to operate in a weak economic environment, we did also deliver growth in marketing and other services. Our Safeguard distributor channel and Canada. SBS revenue also benefited from previous price increases. Financial Services revenue of $85 million was down 17% versus the third quarter of last year, but down only 5% excluding the portion of the contract settlement recorded in this segment in the prior year. The impact of price increases was more than offset by the contract settlements in the prior year quarter, and fewer check orders. Direct Checks revenue totaled $56 million, which was down 5% on a year-over-year basis. Gross margin for the quarter was 65.5% of revenue versus 67.0%…

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 the fourth quarter, and finally provide some context looking forward to 2012 and beyond. Our primary focus continues to be on revenue growth. In the third quarter, we had strong check performance with continued high demand for our new high security checks in SBS and better revenue rates in direct checks from improving our sales of additional accessories in Custom Direct. The business products we continue to enhance our Internet and segmentation capabilities, and we grew revenue in the Internet and distributor channels. In marketing and other services, we are off to a solid start with out PSPrint acquisition delivering nearly $8 million in revenue. We also continue to invest organically in the third quarter in marketing and other services for our small business and financial institution customers including our recently introduced SwitchAgent service and regulatory compliance offers. In the quarter, we did a tremendous amount of work including gaining insight from a significant number of current and potential investors to thoroughly asses how we describe our products and services. Investors are advocating that we provide better clarity around three primary offers checks, forms and marketing and other services. Based on our assessment and external input, we concluded that certain marketing solutions such as promotional products and apparel are better classified as marketing solutions. These products were previously classified as business products despite being growing part of our business. The result is, we now have a more comprehensive and complete view of all marketing and other services. Marketing and other services revenue grew 26% in the third quarter.…

All right, thank you very much. (Operator Instructions) Our first question comes from the line of Charlie Strauzer with CJS Securities. Please proceed sir. Charles Strauzer – CJS Securities: Hi, good morning.

Good morning, Charlie. Charles Strauzer – CJS Securities: Hey, a couple of questions. One of the clarification, Lee, I think you said small business services growth including PSPrint would be double digits of that growth?

That business growth including which time frame? Charles Strauzer – CJS Securities: For Q4, I think you said?

Figured it through the year, we put out $225 million now, and that compare for everything, compared to the $186 million now for the prior year, and what I said Charlie is we expect double-digit growth next year, and the way to think about it is, think of organic growth in the mid-teens. Charles Strauzer – CJS Securities: Got it. Okay. And more specifically, I was talking about the Small Business Services segment, you’d said…

Yes, we expect double-digit growth, yes. Charles Strauzer – CJS Securities: Got it. Okay, great. And then the one large customer that hasn’t yet signed, it’s been kind of pushed off a few quarters there, can you give a little bit more colors as to what maybe causing delay, and maybe kind of update us little bit more there?

One of things you have to remember is, we’ve seen this and went through this many times in the history of our company, is that for whatever reason, I found it interesting when I first joined, you would think that combined between the locks in the financial institution, it was a process of signing on and getting into and migrating to a new relationship would go quickly. Sometimes it just doesn’t go as fast as all of us would like. But what I can’t tell you is, both sides are extremely enthusiastic about the opportunity and we think we can serve them and their clients not only through the check programs, but also through other marketing and other services initiatives. So I would just liken it to again, sometimes it just takes longer to work through the process, but we’re thrilled about it, and thrilled about the opportunity to really work with this new financial institution. Charles Strauzer – CJS Securities: Once that’s all wrapped up and kind of underway will you be able to announce who the customer is?

Yeah Charlie, we actually announced it, we announced it today, it’s Citizen Financial Group. Charles Strauzer – CJS Securities: That’s the same –when we are talking about. Okay, got it.

That’s it. Charles Strauzer – CJS Securities: I thought that was an additional customer, I’m sorry.

No, that’s the customer. Charles Strauzer – CJS Securities: Got it. Okay. Great. And then in the Direct Checks, the margins have been treating up very nicely over the last few quarters, what’s kind of driving that, is that really just a flat packaging or is that just a combination of that and efficiencies or does Custom Direct bring anything to the table that may be help you get more efficient on your side or visa versa?

Yeah, the way to think about is, we had lower margins when we first completed the acquisition and we expected the margins to improve with all the initiatives that were actually driving. And the way I would describe it as, think of this best-in-class direct-to-consumer experience. There were wonderful things that we brought to the table, that there were wonderful things that Custom Direct brought to the table. We are continuing to get better and better, and more and more efficient everywhere not only on the revenue generating side, but also on the cost side, also on the SG&A side. So the combination of all of those are helping us, and then you also have to remember, we’ve said it in previous (inaudible) call, we’re also getting some of the acquisition and amortization behind us as well. So it’s a lot of hardwork and a lot of initiatives across the board that’s really helping us here. Charles Strauzer – CJS Securities: And do you think those kind of margin rates are kind of sustainable, kind of going forward at least in the near-term 29% to 30% kind of range, is that as we look into next year, is that something that you think is kind of sustainable there?

The way I would look at is, obviously I’ve been giving you specific guidance into next year, but my comment was, for the year, this year we should expect the margins to approximate for the total year of 30% range. So yeah, I’m confident that if we can continue to do the hard work that we’re doing and keep the integration going, that we should be able to stay in that range, again it’s already been out being more specific with guidance for next year, yet. Charles Strauzer – CJS Securities: That’s perfect. Thank you very much. Just one kind of more broader picture question, when you look at all the different pieces in marketing services that you have now, from web hosting to social media, etcetera, and you talk about helping business kind of, do all that and how it’s now at Deluxe. If the sales side of it, is that kind of where you wanted to be in terms of being able to kind of reach out to a small business, say hey, we’re Deluxe but did you know we can do all these things now or is it still kind of a work in progress?

It’s becoming a clear and clear story for people. We have wonderful customers now that start with us and do everything from a logo to getting their website to hosting it, to then providing email marketing, providing search optimization, wrapping ourself around their social – what they’re doing in the social media space; all we have to do in search engine marketing and then managing, I’m hoping for. And so, Charlie the way I would describe it is, it’s a work in process too, we have the suite of services that we think are important and we’ve partner in places where we go in. And gain if those things that we think we need to add, we will do some tuck-in work as we – acquisition work. But we have a lot of those knowledge just continuing to get that story out clear and clear and show the wonderful customer base that, that we can actually do this. And I think that, clearly the excitement we have is in the – the belief we have as we can continue to grow that, that revenue base, because we can get more and more customers that will buy more and more of the products and services that we have, and we’ll offer them. Charles Strauzer – CJS Securities: Great. Thank you very much, Lee.

Welcome, Charlie.

Our next question comes from the line of John Kraft with D. A. Davidson. Please proceed. John Kraft – D. A. Davidson & Co.: Good morning, gentlemen.

Hey, John. John Kraft – D. A. Davidson & Co.: Congrats on the progress so far.

Thank you.

Thanks, John. John Kraft – D. A. Davidson & Co.: I guess, I just wanted to clarify first a couple things, I’m sorry for maybe this, bit of the repeat here, but so the Citizens contract was the contract that’s delayed into Q1, and that’s the reason why the contract acquisition payments have been reduced for 2011. Where does that leave us with the SunTrust migration?

SunTrust migration, that – it was ready to put it last year. We bought their mine, and are producing all of their checks, effective really the mid point of last year. John Kraft – D. A. Davidson & Co.: Okay. So I guess I am getting mixed up with some of these RFPs that are out there. Is there any others that were part of that group that you’d been talking about for the last couple of quarters?

Yes John, here is the way to think about it. But to answer your other question, yes the contract acquisition payments we’ve brought down this year in part due to delay of the final implementation of Citizens.

Yes, there are, as I said it my comments, there are other RFPs, competitive RFPs. We’ve responded to another one, and we are expecting a decision in the fourth quarter, and there are several others that we are expecting to get this year. That well we expect will be decisions that will be made in the 2012 timeframe.

Only a helpful point of clarity for the whole audience out there is, what we’ve talked about in terms of the directional perspective I’ve provided for 2012, Citizens again is in there, I mentioned that, nothing else is in there. John Kraft – D. A. Davidson & Co.: And Citizens was the one that you didn’t mention specifically by the name, but discussed on the last call?

Yes John Kraft – D. A. Davidson & Co.: Okay. And then as far that you’ve provided some high level growth guidance on SBS segment for 2012, did I miss it, did you give some targets for the Financial Services Group?

I’ve provided company overall guidance for next year. I didn’t provide specific other than to say that, marketing and other services overall for the company will grow double digits, and the way to think about it is, think organic growth in the mid-teens. John Kraft – D. A. Davidson & Co.: Gotcha. Okay, so the targets that you’ve provided were across the board. Okay. And then, just lastly I did see your switch kit at BAI this year, it looks great, and I guess my question is, how are you going to place that. Is that per click or per switch?

Yeah, the way it works is, it’s not the end consumer that pays for any of those, the bank pays for it, and think of it as there is a step up fee arrangement depending on the size of the financial institution, and then there is a per switch charge that we charge the bank. John Kraft – D. A. Davidson & Co.: Gotcha. They made it sound like, once I talked to you, that it takes an average of, I think they said three phone calls and they do some of that legwork for the customer?

What we are actually finding out right now in the 15 that we’re working through is that, the process is actually working quite well, and as the call that get initiated and the whole switch is automated, and then there is generally a closure call with the consumer. So we’re really excited about this, and it’s something that we have obviously showcased very well, and you had a chance to see that BAI is around. John Kraft – D. A. Davidson & Co.: Gotcha. Thanks guys.

Our next question comes from the line of Jamie Clement with Sidoti. Please proceed. James Clement – Sidoti & Company, LLC.: Lee, Terry, Jeff good morning.

Hi, Jamie.

Good morning, Jamie.

Hi, Jamie. James Clement – Sidoti & Company, LLC.: Lee, I was wondering, if you look back, I don’t know four or five years or whatever it is, the way that Deluxe generated a new small business customer is different than it is today. And you have a lot more tools, a lot more services with which to attract customers. Have you all internally kind of attempted to quantify or kind of put into baskets, where your new customer generation is really kind of coming from right now. And can you give us any color on kind of how you’re thinking about that, particularly as you all have spent more in terms of marketing, and will fund business strategy over the last two years?

Jamie, let me put it into a channel focus for you here. The way to think about as I mentioned in my prepared comments, we continue to get new customers from the Deluxe Business Advantage program or we work with the financial institution. James Clement – Sidoti & Company, LLC.: Sure. James Clement – Sidoti & Company, LLC.: And if you think of it that way, and we provide marketing products and services for them, that’s another way of getting increased customers, small business customers as well. So our world right now is our reach to your point, I think is what your promise was that our reach is getting better and better across the online, the direct face-to-face, through our distributor in that channel, through our dealer channel, through our new, brands that we bought in. So it’s a comp across the board, Jamie, of what you think about it. James Clement – Sidoti & Company, LLC.: Yeah, and I guess what I’m kind of getting at least, there historically has been a – even really at – if you go to kind of mid-2008, there has been a lot of focus on big bank, small business lending. And if that channel is not open for a while, then Deluxe is going to have problems, and it seems like your results over the last two years show otherwise.

Our reach is now stronger in terms of the access points we have and the channels we have. James Clement – Sidoti & Company, LLC.: And just one follow-up if I can. How is PartnerUp fitting into some of this? That’s kind of a one area that I don’t quite, I mean I see how it fits in, but it’s not clear to me, if that’s something that’s ancillary to some of the other kind of more direct revenue generating services, can you just kind of give us a little color on that?

Sure. I think it’s interesting. I would say, it is ancillary, those things that we are now doing with small businesses in the social area to help them on how to use Facebook, how to use Twitter, how to use LinkedIn. And then, how they can communicate with their peer-to-peer network. And so that’s when PartnerUp absolutely is, and again I would call it an ancillary tool as you said for the small business owner. James Clement – Sidoti & Company, LLC.: Yeah.

The other thing that’s interesting though is, we actually are using it for our regulatory compliance offer as well. So we have an automated online compliance offer, and if a financial institution wants to talk to another financial institution about something in the regulatory space, that they’re all dealing with, not a bank trade secret so to speak, but something they’re all dealing with. We are using the PartnerUp network capability there as well. So we’ve extended our reach with that out of just a small world, and now into the financial institution world. James Clement – Sidoti & Company, LLC.: And I just wanted to clarify, I was not asking that question out of any kind of criticism, it’s just that the world of social networking seems to be hopping on a week-to-week basis, and that’s really why was asking the question.

All right. And I think I hopefully answered it well. James Clement – Sidoti & Company, LLC.: Absolutely, absolutely.

Okay. James Clement – Sidoti & Company, LLC.: Thanks very for your time.

Thank you, Jamie.

(Operator Instructions) Up next we have Ben Glaze with Stone Tower Capital. Please proceed. Ben Glaze – Stone Tower Capital: Hi, I have a quick question, I guess your primary competitor in your recent proxy filing kind of changed their view on forecast of the total check volumes, in the industry and become more negative. I think that’s kind of low double digits, and it sounds like you guys disagree with that, I was just curious, if that is the case, you’re disagreeing if you want to attribute, maybe that view to anything secularly changing, and how you view kind of the impacts of Durbin amendment and maybe banks reducing incentives, they have rewards checking in general and things like that.

Ben, what I said in my prepared comments is, we in the third quarter, once again and we probably have been at this clearly four or five quarters now, well we’ve been in that 7% to 8% range. And that’s what we’re seeing and that’s what we’ve been consistently public about. You’ll have to talk to the other player to get more clarity. Ben Glaze – Stone Tower Capital: Okay. And on some of these kind of competitive bids and renewals or expansions of your existing customers that you’ve experienced, because I’m just curious how has all the pricing been looking forward, essentially on kind of the more profitable mid-size and small-size institutions?

Here is the way that I would, that I think you should look at any large competitive opportunity. The process, where that we’ve take is, Deluxe has, and now it’s been public about this as well as, is Duplex is taking a technology wrapped around the call center approach to what we do, best digital presence that we can get. Automated flat processing and packaging technology we can get. Best automated online tools to help our financial institutions run their check program, all wrapped around a best class experience with our great call center agents. So that’s how we are approaching it, I will tell you, sure, price is always, they’re going to be out there, and you’re going to be competitive, but it’s a lot more than price, it’s all of the things that we think we can differentiate and bring to the table and that’s how we are trying compete in the market place. Ben Glaze – Stone Tower Capital: Okay, thanks. And on the, kind of existing smaller institutions, is that pretty competitive or is the pricing trying to change?

Again, it’s always been competitive Ben. Again I would continue to believe, it will always be competitive as we move forward as well. Ben Glaze – Stone Tower Capital: Okay. And just kind of a house keeping question for modeling purposes. I guess just given the capital structure, it seems like you have a fair amount of refinancing to deal over the next couple of years, I’d say, maybe $500 million between 2012 and 2015, just curious what your view is on kind of addressing that and timing and whether you are comparable waiting to address some of those 14 and 15 maturities for a couple of more years?

Yeah, Ben this is Jeff. We are feeling pretty comfortable with our capital structure right now, we took care of the 24 new term maturities, we kick off a lot of cash on an annual basis. So I think right now we’re feeling pretty comfortable coming into the 14th and the 15th. Ben Glaze – Stone Tower Capital: Okay. And sorry one final, just have a quick question. I want to understand that change you guys made at the way you’re disposing marketing and other services, what exactly was the revenue that you add to the prior period, and then I think you said $2.25 is the expectation for 2011, is that right?

Yeah, the way I would think about is, again all we did is, we went back and just did a thorough assessment. And when we produced our K for the year, you will be able to get up a further support for. But basically what we’ve now done is, that $0.59 has become $1.86 and become now for this year $2.20, $2.25. So ‘09, ‘10 and ’11. That’s the way to think about it. Ben Glaze – Stone Tower Capital: Okay. So that implies actually that your expected growth rate in that segment has declined if you didn’t make that change or not, because I think you said $1.75 before?

Well, you guys consider all, first of all your basis figure, and all the product, the marketing and other services that are now in there, and they’re moving, some of them move at different growth rates than others, but it’s still again what I can give you in terms of support for your modeling, and everybody is expected organic mid-teens growth is the way you should think about it. Ben Glaze – Stone Tower Capital: All right. Thank you.

Welcome.

Ladies and gentlemen, that will conclude the question-and-answer portion of our call. I’d now like to turn the event back over to Mr. Lee Schram for closing remarks.

Again everybody, I just like to thank you for your participation, and your questions and your continued support and interest in Deluxe. And as I normally say, we’re going to get back to work now, and we look forward to providing another positive progress report on our next call. And I’ll turn it over to Jeff for some closing housekeeping comments.

All right, thank you, Lee. This is a reminder that a replay of this call will be available until November 10, by dialing 888-286-8010. When instructed, provide the access code 61870952. 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, have a good afternoon.

Ladies and gentlemen, that concludes today’s conference. Thank you for your participation you may all disconnect and have a wonderful day.