Good day, ladies and gentlemen, and welcome to the Third Quarter 2014 Deluxe Corporate Earnings Conference Call. My name is Sarah, and I'll be your operator for today. [Operator Instructions] Just 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. Ed Merritt, Treasurer and Vice President of Investor Relations. Please proceed.

Thank you, Sarah, and welcome, everyone, to Deluxe Corporation's Third Quarter 2014 Earnings Conference Call. I'm Ed Merritt, Deluxe's Treasurer and Vice President of Investor Relations, and joining me on today's call are Lee Schram, our Chief Executive Officer; and Terry Peterson, our Chief Financial Officer. At the conclusion of today's prepared remarks, Lee, Terry and I will take your -- take questions from analysts. I'd like to remind you that comments made today regarding financial estimates, projections and management's intentions and expectations regarding the company's future performance are forward-looking in nature, 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 press release that we issued this morning, as well as the company's Form 10-K for the year ended December 31, 2013. 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 on our Investor Relations website at deluxe.com/investor. This information was also furnished to the SEC on the Form 8-K filed by the company this morning. Any references to 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, Ed, and good morning, everyone. We delivered our third outstanding quarter this year and are well positioned to grow revenue for the full year 5%, despite a continued sluggish economic environment. If achieved, 2014 will represent the fifth consecutive year of revenue growth. The last time we achieved 5 consecutive years of revenue growth dates back 18 years to 1996. We reported revenue in the third quarter near the upper end of our outlook, and adjusted earnings per share exceeded the high end of our outlook. Revenue grew almost 4% over the prior year quarter, driven by Small Business Services revenue growth of over 7%. Checks and forms performed well, and marketing solutions and other services revenues grew over 19% over the prior year. Adjusted diluted earnings per share grew over 7% over prior year. We generated strong operating cash flow and we were not drawn on our credit facility during the quarter, increasing our balance sheet cash position $67 million from last December. We also repurchased over $8 million of common shares in the quarter and have repurchased $60 million year-to-date. Today, we are also announcing that we closed the acquisition of Wausau Financial Systems, which will enhance our marketing solutions and other services' offers and capabilities in our Financial Services segment. We continued our brand awareness campaign to help better position our products and services offerings and drive future revenue growth. We also advanced process improvements and, for the second quarter in a row, exceeded our cost reduction commitment in the quarter. As a result, we now expect our cost reductions to be $60 million for the full year, which is $5 million higher than our previous outlook. 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 $0.88, which included $0.09 per share for noncash asset impairment charges and $0.06 per share for restructuring charges. Excluding these costs, EPS adjusted of $1.03 exceeded the upper end of our previous outlook and was 7.2% higher than the $0.96 reported in the third quarter of 2013. The asset impairment charges related to intangible assets in the Small Business Services segment, specifically associated with our SEM/SEO business and the restructuring charges are for primarily for employee severance and infrastructure consolidations. Revenue for the quarter came in at $413 million and grew 3.8% over last year, or approximately 2%, excluding the impact of recent acquisitions. Small Business Services revenue of $285 million grew 7.2% versus last year, with approximately 6% growth in the quarter, excluding acquisitions. While we continue to operate in a weak Small Business economic environment, we delivered growth in checks and in marketing solutions and other services, and in our online Safeguard distributor, dealer and major accounts channels. Financial Services revenue of $86 million declined 0.9% versus the third quarter of last year and would have declined about 7%, excluding recent acquisitions. The impact of lower check orders was more than offset by benefits of higher revenue per order. Direct Checks' revenue totaled $43 million, which was down 6.9% on a year-over-year basis, but ended ahead of our expectations. From a products and services revenue perspective, checks were $218 million and represented 53% of total revenue; business products were $93 million or 22% of total revenue; and marketing solutions and other services were $102 million, which was 25% of total revenue. Gross margin for the quarter was 63.7% of revenue, which was down 0.6 points from 2013. Less favorable product mix and increased…

Thank you, Terry. I will continue my comments with an update on our key revenue growth area, marketing solutions and other services, including some details on our Wausau acquisition, and provide an update on our brand awareness campaign. I will then highlight progress in each of our 3 segments, including a perspective on what we hope to accomplish in the fourth quarter, and finally, provide some context looking forward to 2015. Our primary focus for the balance of the year continues to be profitable revenue growth and increasing the mix of marketing solutions and other services revenues towards our goal of 40% by 2018. As part of this revenue growth focus, we will continue to assess potential small- to medium-sized acquisitions that complement our large customer bases, with a focus on marketing solutions and other services. We are adding more products and services to our portfolio, and we continue to strengthen our channel reach. Deluxe is now more capable of helping small businesses pursue their passion as a trusted provider of a growing suite of products and services a Small Business needs to market and operate their business. And helping financial institutions with customer acquisition, risk management, and now with acquisition of Wausau, with a comprehensive suite of payment software, services and outsourcing solutions. Here is an update on our 4 subcategories framework for marketing solutions and other services. We ended the third quarter right in line with our expectations in revenue, with mix in the 4 subcategories basically in line with our expectations. First, Small Business marketing is expected to represent approximately 40% of revenue in 2014, with expected growth approximately 20% this year. We saw growth in the third quarter in the Web-to-print space, as we cross-sold to our customer base and added new customers through distributors, dealers…

[Operator Instructions] And our first question here comes from Charlie Strauzer from CJS Securities.

The question I have, I guess, is more of, kind of, a more macro question for you, Lee. And that's with the acquisition now of Wausau, are you signaling that you're kind of happy with the portfolio more on the, kind of, Small Business side, and now there's some opportunities that you want take advantage of in the Financial Services space to kind of add these kinds of services and the technologies, kind of, going forward? Or are you just saying this is -- was opportunistic and it's just another way to kind of expand that second segment?

No, Charlie. The way to think about it is we've been talking about the opportunity to continue to build on and grow in the Financial Services space. So when Ed, Terry and I are out in the road, one of the consistent messages we've been talking about is we -- we're -- we feel good about where we're going, and we're still looking to invest and still looking at acquisition opportunities in Small Business Services. But the tipping point to get the company to grow even faster is getting the Financial Services segment to grow as well. And so we've been looking and we added the Destination Rewards play in December and now adding the Wausau play. So again, I think it's very much in line with what we've been saying. We continue to be extremely enthusiastic about Small Business, continue to look for opportunities there to get our technology better. In the prepared comments, you've heard me talk about that being our focus area still for small- to mid-sized tuck-in acquisitions. So hopefully that gives you a sense of how we're thinking about it. And I think it's very consistent with what we've talked about.

Yes, that's very helpful, actually. And I think it kind of gives you a better picture of that small businesses, kind of, showing you the growth that you'd like. You're more comfortable there. And it sounds like there's some pretty good opportunities facing you now here on Financial Services. And, kind of, taking it from there, I mean, in Small Business, I know one of the things that was -- has been discussed over the last couple of years has been you get to a certain point where you can start to cross-sell more, up-sell more, taking just your basic check customer and then providing them with more services they may not have known were available through Deluxe. Where are you today versus maybe a couple of years ago in that kind of product life cycle or sales cycle, I should say?

Charlie, we're getting better and better, but I think the exciting thing for us is we believe we still have a nice opportunity here. If you, again, listened to some of my comments in the prepared remarks around this integrated end-to-end customer technology experience, we're working on this. We've been working on it. And we think this is going to be an opportunity to pull a lot of those offers that we have in the services space as well as in the print space together, over time, and make it easier -- I use the word simple and intuitive for our Small Business customer to really get at whatever they want, whether it's a logo or a web design or a website or e-mail marketing, social. So we're working on that. We'll talk more about that, as we exit the year this year and on the fourth quarter call. But we got a lot of room to go here, and again, I think that bodes very well for us and leaves us, again, with the level of confidence that we're on the right track and we've got an opportunity to continue to get the cross-sell to be stronger.

Our next question comes from Randy Hugen from Feltl Company.

I just wanted to clarify on the, I guess, initial 2015 guidance. On the EPS growth rate, is that a GAAP earnings growth rate? Or is that also GAAP and adjusted?

Well, that growth rate is from the adjusted EPS. It's kind of anchoring off the 2014 adjusted EPS, and it's the growth rate off of that. And at this point, that would represent our views on both GAAP and adjusted for 2015. But it clearly is anchored off of the 2014 adjusted.

All right, that's helpful. And so despite, I guess, a 1% headwind from the Wausau acquisition, you're still hoping to grow earnings faster than revenue next year?

Yes. On the top end, by about 1 percentage point, is what we signaled.

All right. Perfect. And then on the asset impairment and the, I guess, revenue reduction for SEM/SEO, that's just one particular part of the business. You're still planning on continuing those activities for the rest of the business and, this is just a particular product that you're shutting down?

Let me give you a little more color here, Randy. We're still -- we still believe in the SEM/SEO space. It's an important part of our portfolio, but when you look at all the elements that we were going after, the market, whether it's, we call it, enterprise space, a direct space, white label areas, reseller areas, how we get at Small Business, there were parts of that, that we -- were proving to be unprofitable for us. And then as the algorithms with Google have changed over time, we've been at this for a while and just decided this is not making sense for us. And this isn't a big amount of revenue, but yes, we still believe in the space, need the space, important part of our portfolio. And -- but again, at this point in time, we're getting -- we're basically think of it as stepping away from some of the unprofitable revenues part of that collective offer.

Yes. And just to be clear, too, Randy. I mean, we are not paring back on the product offering or the technology that we used to deliver that product, so that's still all going to be an important part of our portfolio.

It's one of the channels where we're going.

Channels, exactly.

Okay, that's helpful. And then, I guess, related to both some of those offerings, as well as your broader check offering. Obviously, we've seen, kind of, a steady stream of these data breaches over the past year, and that's probably somewhat helpful for the check business. Have you seen any negative impact on renewal rates on some of your subscription products to your customers as a result?

No, no. We haven't seen any impact or any negativity at all, Randy.

All right. Great. We do have time for one more question, and it comes from Tim Klasell from Northland Securities.

First question has to go with the Wausau acquisition. Clearly, it's a little bit dilutive, but on an earnings basis. But how about on a cash flow basis? How should we be thinking about that? And will there be any change to the seasonality around that, as this looks like it might be a business that might be a little bit more back-end weighted in the year? How should we think about that?

From a cash flow basis, it's the amortization from all of the purchase accounting that kind of creates the dilution on an EPS basis. But on a cash flow basis, this for us will be accretive on a cash flow basis really right out of the gate, just beginning here in the fourth quarter and certainly continuing into next year. And that positive cash flow, that is not just because of those tax attributes that we said would create the positive cash tax savings of $4 million. It's the normal operations that will generate positive cash flow, on top of those tax attributes. So that piece is good. That business, we don't expect it to have a significant impact on seasonality. It's more of a SaaS base, so there's monthly recurring revenue streams that come in from that business. So we don't see it -- aside from the fact that we just have one quarter of that business that will be part of our results for 2014, but going forward, we don't see that having a big impact on seasonality.

And Tim, remember, we are a company that just believes in fully allocating and burdening everything back. We generally don't, as you know, play games with adjusted EBITDAs and all this stuff. So we have to swallow the acquisition amortization, and we go through a rigorous process to do that. We're actually excited. We think there's a very short period of dilution at roughly, call it, a year or slightly less than a year. So in terms of things that are out there and the things that are, as you know, pretty expensive in the market, we think we got a -- we think we did well with this deal.

Okay, great. And then on that rigorous analysis, you guys are, obviously, shutting down a business that is not as profitable as you would like it to be. Can you give us any sort of a framework of how you think about that? Because you do -- I'm sure you look at other portions of your business on a regular basis. Is there a threshold you have, as far as profitability? Or I don't know, maybe you can walk us through that a little bit.

Yes. First of all, Tim, we're not shutting the whole business down. Again, back to the comments that Randy asked and try to clarified here, we're -- it's parts of how we go-to-market in the various channels we go-to-market. And some of those channels are just -- were proving to be unprofitable for us. And so we looked at that. We've been at it. And obviously, a goal that we have, at anything that we do, is to make money at it. So yes, we're -- if there is something else that wouldn't be doing well, we would always look to assess, take action and move through something. But right now, there's nothing else that's in our portfolio. This is -- by the way, also, you're newer to the story, but we -- when we bought these businesses over time, they were never expected to be high-profit margin businesses, but we needed them as part of our complete offer for services to that Small Business. So unfortunately, this just became a little bit teetering in the wrong direction, too much for us to stomach in. And again, not big revenues, but just an area we just thought doesn't make sense for us to be targeting anymore and not really required for us in terms of what we're doing.

All right, great. We have no time for further questions, so I'll turn the call back over to Lee Schram for closing remarks.

Thank you, everybody, for your participation today and also for your questions, and let me leave you with 4 thoughts: first, we delivered our third outstanding quarter this year; second, we are now positioned to deliver our fifth consecutive year of revenue growth; third, we added Wausau Financial Systems, which enhances our marketing solutions and other services portfolio; and fourth, we have established a solid foundation to grow revenue again in 2015. We're now going to roll up our sleeves, get back to work, and we look forward to providing a positive progress report on our next earnings call. And I'm going to turn it over to Ed for some final housekeeping.