Good day, ladies and gentlemen, and welcome to the fourth quarter Deluxe Corporation earnings conference call. My name is [Jenna], and I’ll be your operator for today. At this time, all participants are in listen-only mode. We will be facilitating a question-and-answer session towards the end of today’s conference. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today’s conference, Mr. Jeff Johnson, Treasurer and Vice President of Investor Relations. Please go ahead.

Thank you, [Jenna]. Welcome to Deluxe Corporation’s 2011 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 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 the comparable GAAP financial measures in the press release. Now, I'll turn the call over to Lee.

Thank you, Jeff, and good morning, everyone. Deluxe delivered another very strong quarter. We reported revenue and adjusted earnings per share at the high end of our expected ranges. Revenue grew 4% over the prior year quarter driven by Small Business Services revenue growth of 12%, of which 4% came from the PsPrint acquisition. 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 25% over the prior year. Adjusted diluted earnings per share from continuing operations grew 6% over the prior year in spite of a higher than expected tax rate. 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 process improvements and delivered on our $60 million cost reduction commitment while generating a better than expected $235 million in operating cash flow for the year. In a few minutes, I will discuss more details around our recent progress and next steps, but first, Terry will cover our financial performance.

Thank you, Lee. Earlier today, we reported diluted earnings per share for the fourth quarter of $0.78, which included restructuring and impairment costs of $0.05 per share. Excluding these costs, adjusted EPS from continuing operations of $0.83 was at the upper end of our previous outlook and 6% higher than the $0.78 reported in the fourth quarter of 2010. EPS was negatively impacted in the quarter by $0.04 per share due to a higher than expected effective tax rate, which was driven primarily by discrete tax adjustments for a valuation allowance and a state tax settlement, plus an unfavorable shift in income between tax jurisdictions. The restructuring charges are primarily for employee severance and infrastructure consolidations. Revenue for the quarter came in at $366 million and grew 4% over last year and 3% sequentially from last quarter. All three of our business segments performed well. Small Business Services revenue of $229 million grew 12% versus last year on a reported basis, including PsPrint which added nearly $8 million of revenue in the quarter. While we continue to operate in a weak economic environment, we delivered growth in marketing and other services, our safeguard distributor and dealer channels, and in checks and forms. SBS revenue also benefited from previous price increases. Financial Services revenue of $83 million was down 6% versus the fourth quarter of last year. The impact of lower check orders was only partially offset by higher non-check services revenue. Direct checks revenue totaled $55 million, which was down 7% on a year-over-year basis. Gross margin for the quarter was 64.5% of revenue, up 0.5 percentage points from 2010. Benefits from price increases, improvements in manufacturing productivity and delivery initiatives were partially offset by increased delivery and material rates in 2011. SG&A expense increased $1.5 million in the quarter…

Thank you, Terry. I'll continue my comments with an update on what we accomplished in 2011 overall and then where we are headed in 2012. I will then highlight progress at each of our three segments, including a perspective on what we plan to accomplish in 2012. Deluxe grew revenue in 2011 for the second consecutive year for the first time since the NEBS acquisition. We stabilized our core check and product businesses and invested in future revenue growth areas as we continued our transformation. These investments included organic initiatives like e-commerce, Web services, web-to-print, customer acquisition, regulatory and fraud and security offerings. We acquired Banker’s Dashboard and PsPrint to expand opportunities in higher growth marketing and other services. We also continue to reposition our brand through investments in advertising including radio, online, print, television, and our Project REV, small business marketing lab. In addition to our strong print leadership, we invested in our employment brand and created stronger technology and digital expertise by adding sales, marketing and technology leaders in marketing and other services. Our efforts earned us a jobs to web Best Social Media Innovation Award, a Talent Board Candidate Experience Award and a LinkedIn Recruiting Innovation Award. We also moved to the number one ranking on the EPA list of the largest Green Power Purchasers in the printing industry. In shared services infrastructure, we reduce cost and improve the effectiveness of information technology, finance, human resources, real estate and legal functions. Our intense focus on cost reductions has now delivered savings of $385 million since mid 2006. We excited the year with more robust products and services, solidified processes, a better infrastructure and improved financial results. Our operating cash flow grew for the third straight year allowing us to maintain our dividend and pay down debt, while…

Thank you. (Operator Instructions) And your first question comes from the line of Charlie Strauzer with CJS Securities. Please go ahead. Charles Strauzer – CJS Securities: Hi, good morning.

Hi, Charlie. Charles Strauzer – CJS Securities: First of all, thank you for that extensive run through (inaudible) and I appreciate the added clarity there. Lee, if you can talk a little bit more and give a little bit more color into what would happen with the Small Business Services side, the marketing services side I should say, if the economy were to continue to uptick and kind of above what your expectations with that. With that fast track, do you think those growth expectations from the mid-teens to maybe it’s more like we saw this year?

Yes. The way I would look at it is, if we get a more cooperative economy, I think we believe we can drive a larger growth rate, Charlie, in marketing and other services. But I think for now, we’ve done a good job at the way we thought about that where the economy is and where the range is? And again, I think we are very comfortable with our organic growth of being in the mid-teens. Charles Strauzer – CJS Securities: Got it. And then talking a little bit more about your own contracts that are kind of potentially up for re-bid over the next call in 24 month or so, can you give us a little bit more insight there – you’ve done a good job in kind of walking up or extending contracts. Any big ones that our RFPs out there right now for you on the re-bid side?

No. In fact there is just a handful that are [coming to] this year and they are very small in terms of the size of the annual revenues and they are, what you would consider to be large nationals. But they’re not and they’re not the biggest ones, Charlie. So we do not have a lot that are doing. As I said in my prepared comments, we also have 20% fewer community bank contracts that are up for renewal this year than 2011. So the way to think about it and the way Terry and I are thinking about it is, this gives us more stability and that checking being predictive around where a check declines are going to be and then how we level (inaudible) our factories and how we run our business. So we are very encouraged and honestly it’s all due to the Financial Services sales teams and really working the contracts hard and get out in front of these. And I just – I can’t say in a positive about the performance and what they are doing. Charles Strauzer – CJS Securities: That’s encouraging. Thank you very much.

Welcome.

Your next question comes from the line of Jamie Clement with Sidoti. Please go ahead. James Clement – Sidoti & Company, LLC: Yeah, good morning gentlemen.

Hi, Jamie.

Hi, Jamie. James Clement – Sidoti & Company, LLC: Terry, if I could, I just was – wanted to just one housekeeping item. The charts towards the bottom of your press release, which shows the segment breakdown of our restructuring and impairment charges?

Yeah. James Clement – Sidoti & Company, LLC: That that number and I apologize actually lost my – that number actually, excuse me, differs from the number, it’s in the text by a little bit. And so I think we see $4.3 million in the chart and then I think you highlight $3.1 million?

Yeah. James Clement – Sidoti & Company, LLC: Or earlier so, I assume the difference is the $1.2 million impairment charge?

Yeah, that is the difference entirely. James Clement – Sidoti & Company, LLC: And Terry where, what segment is that in?

The impairment charge actually will come through the Small Business Services segment. James Clement – Sidoti & Company, LLC: Small Business Services. Okay, just wanted further up and Lee more sort of more important issues that I’ve asked that if this question or similar is being the question before. As you all have continued to build the marketing services business, the just the non-print businesses in general. Can you give us an update on what you learned about building the Deluxe brand among the Small Business customers, and particularly looking out to 2012, where your marketing dollars that are going to go in terms of advertising in brand building, what’s worth and maybe what hasn’t worth?

Yeah, I think what we are finding is that, it starts with a general brand awareness that Deluxe can do more than just be a great check company and where we put what we call chart Jamie put general dollars into that and we believe its working. We’ve also put money into most of the money other than that into demand generation and direct marketing capability and the way to think about or again is where we believe that a combination of radio, which has been the primary way we’ve spent the money, but continued – will continue to look at the television market to see if that make sense, because we’ve gotten some benefit from that. We will look at the partnerships that we have and the relationships we have. I’ll use the example in an entrepreneur.com has been a wonderful partner for us. And we’ll continue to do the print, things that we do and we think that we do well. So we are constantly looking at this Jamie and trying to figure out all the time how do we get better and how do we make sure we understand the return we get on the investments that we’re making there. And we’ll continue to do that in 2012 and we – as I said in the prepared comments, we’re going to put more money into that in 2012 than we did in ’11, but we’re also keep looking for what we believe is the right returns on investment and that’s how we are approaching it. James Clement – Sidoti & Company, LLC: Okay, and just if I could ask one follow-up Lee. As if you talk about returns on investment, it’s you not getting the point where the next maturity likely to be taking care of in cash. If you think about the balance sheet and you think about acquisition opportunities and what you want your balance sheet to look like, have you – do you think there is any benefit to delevering the balance sheet in a more meaningful way over the next couple of years to really have a balance sheet that looks more like a services company than print manufacture. I mean [does] that answer it all into the thinking?

I think, our capital structure really, today really isn’t driving what we are trying to do with transformation and what we are trying to do with strategy. But we also recognize to that, from many parts of our business, we’re still generating a lot of cash flow. James Clement – Sidoti & Company, LLC: Absolutely.

Cash flow to the levels that are probably in excess of our needs. James Clement – Sidoti & Company, LLC: Exactly.

And with the way we are looking out, we do anticipate that we will continue overtime to reduce that debt level some just like we have been over the past four or five years as well. So I would expect that pattern and that trend to continue. But again, I just want to make sure that people understand that our capital structure is in no way limiting or driving to direction we go with the transformation. James Clement – Sidoti & Company, LLC : And Terry, just to sort of clarify my question, I was really asking that question more from the fact that you are on a position of strength now.

Yeah. James Clement – Sidoti & Company, LLC: With respect to where you are and you actually have probably more flexibility than you certainly had three years ago.

Yeah we do. Now going forward is when we say we want to pay down debt, it’s not quite as easy as it was. James Clement – Sidoti & Company, LLC: Yeah, absolutely.

…perhaps with the credit facility because our public know us we don’t trade quite as heavily as we might like… James Clement – Sidoti & Company, LLC: Right.

…in order to be able to pay down the days we want to pay down. James Clement – Sidoti & Company, LLC: Understood. Thanks as always for your time.

All right. Thank you, Jamie.

Your next question comes from the line of John Kraft, D. A. Davidson. Please go ahead. John Kraft – D. A. Davidson & Co.: Hey guys hope I can – hope you can hear me well I’m on a cell phone here. I just had a couple of follow-ups. The first regarding something I think Lee you just said and I just want to make sure I heard it (inaudible) obviously you’ve ramped up your marketing spending. Did you say you were going to ramp it further?

Yes, we plan to spend more and what I would call on brand and demand creation and the direct marketing campaign initiatives in 2012 than we did in 2011. John Kraft – D. A. Davidson & Co.: Great. Certainly it seems like it’s working for you.

Yeah. John Kraft – D. A. Davidson & Co.: And then on the large Telco wins. Can you talk a little bit more about what the Telcos are doing and what they had been doing before kind of their motivations for switching over to you?

Yes. We are really excited about these and at some point, we hope to be able to release the specific names, but think of it as they’ve used others to start their Small Business, web hosting and Web services and they’ve decided to come to Deluxe both what we’re excited about, both from a migration of the base, as well as what really got them excited is, we’re good at doing this and also the opportunity to bring more of the services that we have in our portfolio than other providers that they’ve used in the past. So I think of it as the strength, John, of the migration capability of the great development and engineering team that we’ve got, as well as the products and services that we can wrap around that and are richer in our portfolio and that’s really the reasons why they made the move. So we expect that these migrations as you know, we’ve done some on the past they take time, but we expect these to come on board in the latter half of the year. John Kraft – D. A. Davidson & Co.: So they were competitive takeaways.

Yes. John Kraft – D. A. Davidson & Co.: Nice. That’s all I’ve got. Thanks, Lee.

You’re welcome, John.

Your next question comes from the line of David Leibowitz with Horizon Kinetics. Please go ahead. David Leibowitz – Horizon Kinetics: Good noon. A few quick questions. One, what is the status of your underfunded pension plan at the end of the year versus a year-ago?

We are fully funded on the – it’s actually a post employment benefits plan. We are fully funded for the portion that those assets can be used for. There is a small pool of benefits out there that the asset pool did not relate to, but we are – even as you look at it overall, we’re nearly fully funded. David Leibowitz – Horizon Kinetics: And what is the size of the stock repurchase program still left to be utilized?

I believe we have roughly about half a million or 5 million shares I think still outstanding. David Leibowitz – Horizon Kinetics: And do you have any intention this year of making significant purchases or is this more stock price related or acquisition related?

No, the share repurchases that we have been doing for the past couple of years have really been focused on offsetting dilution from the employee plan activity. We actually have limitations in a couple of our note agreements that limit some of the share repurchase capabilities for the company. So I would not that we would be looking to step that up beyond just the need to offset that dilution. David Leibowitz – Horizon Kinetics: And lastly, do you have a target for free cash flow this year versus 2011?

We do – I mean we actually don’t issue specific guidance on free cash flow, but we do give you the components. We have indicted operating cash flow of 225 to 245 and then CapEx of about $35 million. So – David Leibowitz – Horizon Kinetics: Now you seem to leave a lot of room to possibly increase the dividend rather than just [an answer] will be maintained, is there any reason why the board has chosen not to increase the dividend?

Our top priority right now from a free cash flow usage today is really to make sure that we have made the right organic investments and the right small to medium size tuck-in acquisitions to really keep this transformation moving forward and to make sure that we get it to a level where it’s really sustaining – a changed revenue profile for this company. So that really continues to be our top priority and I believe I can speak to the Board in saying that until we have advanced that transformation further along, we don’t anticipate that redeploying more capital towards dividends. And this time is the right move for us.

And first, David, the think about the dividend yield that we are giving today, we think is a very competitive market rate as well. So that’s how we look at where we are with the dividend. David Leibowitz – Horizon Kinetics: Just one observation on your last comment, the fact that your dividend yield is a function of stock price as much as what you were paying on dividend, so it could be argued that perhaps being a little more liberal with the shareholders would give you a higher stock price which would then reduce the yield on the stock. But again that’s just an observation based on what you said and let me thank you for the time.

Welcome, David.

Your next question comes from the line of [John Robert with Provident]. Please go ahead.

Hi guys. Congrats on a good quarter. Thank you, Joe.

Thanks, Joe.

Just a clarification on 2012, it looks like implied adjusted EBITDA will be about flat year-over-year. I’m just wondering why that is given the revenue growth and given the $50 million of net cost savings.

As we have done in the past, I mean our cost savings on a net basis, we don’t just let those drop down to the bottom line, dollar for dollar. We do use some of that to provide investments back into the business to help the transformation. We will also – we also have little bit less D&A coming in next year as part of that as well and I think those are kind of the top things that come to mind quickly.

And could you share with us the revenue contribution from the acquisitions in Q4 and 2012 guidance?

Yeah, we did indicate that the largest of the acquisitions that are coming through this quarter that weren’t there a year ago was the PsPrint acquisition and that was just about $8 million for the quarter.

And for 2012?

For 2012, we don’t have any guidance built in for future possible acquisitions.

Okay. Thank you.

You’re welcome.

You have a follow-up question, it’s from the line of John Kraft, D. A. Davidson. Please go ahead. John Kraft – D.A. Davidson & Co.: Hey just one additional question that was on the price increase in Small Business Services. Can you give us some details I guess specifically how much that contributed to the growth and, as well as specifically where those price increases were the most prominent?

John, we won’t give you the real specifics competitively. But to think about what we continue to do is we look at where our products and services are priced and versus what’s going on in the marketplace and we take advantage where we can to make sure that we continue to be what we would call market competitive. So that’s the way to think about it and by the way it works no different in Financial Services as well. John Kraft – D. A. Davidson & Co.: And as well as I guess then maybe a follow-up on that. Would you anticipate this is kind of a one-time reset of your pricing or would you potentially have kind of something planned going forward with that as well?

No, we’re always looking at this John. We’ve continuously done this for the last several years. We’ve gotten better and better understanding where the competitors are, where we can raise price, what we can raise price for. How we do it and its not a one-size fits all formula, where we just slap something out there. It’s very scientific with the process we have to go through and that’s probably the best I can do in giving you a framework for it. John Kraft – D. A. Davidson & Co.: Okay. That’s helpful. Thanks guys.

You’re welcome, John.

That concludes the Q&A session. I’d like to turn the call back over to Mr. Lee Scharm for closing.

Again, I just like to thank everybody for your participation and questions. We actually got more questions today, which was terrific. And we’re going to go back to work and we’ll get back to you and hopefully be able to provide a positive progress reports on our next earnings call. I’m going to turn it back for Jeff for some housekeeping close.

Thank you, Lee. This is a reminder that a replay of this call will be available until February 9 by dialing 888-286-8010. When instructed, provide the access code 98465171. 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 afternoon.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect and have a great day.