Good day, ladies and gentlemen, and welcome to the Deluxe Corporation’s First Quarter Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Later, we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, today’s conference maybe recorded. I’d now like to introduce your host for today’s conference Mr. Ed Merritt, Treasurer and Vice President of Investor Relations. Sir please go ahead.

Thank you Liz, and welcome everyone to the Deluxe Corporation’s first quarter 2016 earnings call. I’m Ed Merritt, Deluxe’s Treasurer and Vice President of Investor Relations. 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 questions from analysts. I would 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 in the company’s Form 10-K for the year ended December 31, 2015. The financial and statistical information that will be reviewed during this call is addressed in more 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 or as part of our remarks during this call. Now, I’ll turn the call over to Lee.

Thank you, Ed, and good morning everyone. Deluxe delivered a very strong quarter to start the year. We reported revenue and adjusted earnings per share above the upper range of our outlook in spite of the continued sluggish economy. Revenue grew almost 6% over the prior year quarter driven by Financial Services growth of 14% and Small Business Services growth of 5%. Marketing Solutions and other services revenues grew over 19% over the prior year and represented over 31% of total first quarter revenue. Adjusted diluted earnings per share grew more than 14% over the prior year quarter. We generated strong operating cash flow of $73 million for the year and we were drawn $416 million on our credit facility at the end of the quarter. We repurchased $15 million shares in the quarter. 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 delivered on our cost reduction commitment for the quarter. 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 first quarter of $0.18, which included $0.01 per share for restructuring charges and transaction costs. Diluted EPS in the first quarter of last year including a $0.12 per share charge related to the early redemption of the company’s 2019 senior notes and a $0.01 per share of restructuring and transaction cost. Excluding restructuring charges and transaction costs, adjusted diluted EPS of $1.19 exceeded the upper end of our previous outlook and was 14.4% higher than the $1.04 reported in the first quarter of 2015. The increased was driven primarily by stronger operating performance, in addition to a lower effective income tax rate, lower average shares outstanding and lower interest expense. Revenue for the quarter came in at $459 million, growing 5.9% over last year. The growth rate excluding the recent Datamyx and FISC acquisitions and an unfavorable foreign exchange rate was over 3%. Small Business Services revenue of $290 million, grew 4.8% versus last year, despite a continuing sluggish economic environment and unfavorable foreign exchange rates, which negatively impacted revenue growth by 0.6 percentage points in the quarter. We delivered growth in marketing solutions and other services, and from a channel perspective our online distributor and dealer channels grew. Financial Services revenue of $120 million grew 14.1% versus the first quarter of last year. Excluding revenue from acquisitions, Financial Services would have grown 2.7% in the quarter. Higher marketing solutions and other services revenue driven by WAUSAU, FISC, Datamyx and Deluxe Rewards and price increases more than offset the impact of lower check orders. Direct Checks revenue of $42 million was down 7.3% from last year and in line with our expectations. From a product revenue perspective, checks were $224 million, representing 49% of total revenue; marketing…

Thank you, Terry. I will continue my comments with an overall market perspective and implications for Deluxe. An update on MOS revenue and then highlight progress in each of our three segments using our eight strategic initiatives for perspective on how we progressed in the first quarter and then what we expect to accomplish during the balance of 2016. From an overall macroeconomic perspective, clearly pressures continue with challenges from a sluggish U.S. economy, volatile energy oil and gas prices, and strength of the U.S. dollar. As well as an uncertain central bank policy and not to say we are completely immune from these pressures, but we believe the direct impact on our is insignificant. We have developed an incredible execution oriented culture that has operated through various market environments and has delivered strong top and bottom line growth for the past six years. We have built our business on large sized markets and relationships in the small business in the small business and financial institutions spaces with broad, robust and growing product offers that we believe sets us up extremely well for 2016 and beyond. As we have continued to grow marketing solutions and other services revenue both organically and through tuck-in strategic acquisitions our revenue mix is significantly diversified now. This has also positioned us to be a solution base provider to our customers. Our solutions allow us to address a broad range of customers’ needs and pain points. Further enhances to us as a trusted partner and deeply embeds us in their workflows and ultimately leads to sticky relationships. We expect to increase a broadening and more highly diversified marketing solutions and other services revenue stream to 34% of total revenue mix in 2016 towards our goal of MOS representing 40% of revenue by 2018. Within MOS…

[Operator Instructions] Our first question comes from line of Charles Strauzer with CJS Securities.

Lee if you could just talk a little bit more about the Financial Services side business. Some of the recent acquisitions, the Datamyx, FISC, WAUSAU thus nature awards. What has been the overall receptivity from the financial solutions that you're working with? And also I noticed that you mentioned a licensing deal versus for WAUSAU. Are there – can you explain a little bit more about that and what the opportunities are for maybe some of the other recent acquisitions as well to do similar type deals?

Yeah, Charlie, let me start with WAUSAU since you know kind of back in the order ask that would be the first one. When we did the diligence and decided to acquire, we did a lot of work to look at the brand WAUSAU within the Financial Services space. And we found it to be really positive and what we also thought at the time was they fit very well culturally with us and a lot of what that focus how they treat their customers. We actually thought that this was a logical adjacency states that the financial institutions would accept the Deluxe in as well and is exactly what we found. We find that there's a lot of respect for the WAUSAU brand, but I would use the word almost more respect for Deluxe as a whole and so that marriage between us has been a really powerful one. It’s been integrated quite well, WAUSAU people are just being super as far jumping onboard in our culture and getting on the field the transformation bandwagon, so to speak. And what we’re finding is that, we looked at where do we have relationships, where do they have relationships and clearly there the places where we both have them are very strong. But there’s places where they are getting us into a relationship for example the check side or the Datamyx side where we don’t have those relationships and then vice versa. We’re helping them where they’re not and we have the historic check relationships, I mentioned we had a very strong bookings in the quarter. I mentioned this licensing deal, but when you think about it is providers are - financial institutions and they sign up for software and on first service with us and there is a licensing arrangements…

That’s very helpful. Thank you, Lee.

And we have time for more question. We have a question from the line of Josh Elving with Feltl and Company. Your line is now open.

Hi, good morning, nice quarter.

Thank you.

So Terry, you provided a little bit of color on the guidance for the second quarter and I think I missed some of that. I’m wondering if you just kind of go back through that really briefly, the couple of pieces I heard, a little bit of higher brand spend, it might result in about a $0.03 comparative to decline and a little bit lower revenue from direct check. Were there any other pieces there that I missed?

You know those are the two big ones and again, this is a comparison, first quarter to a second quarter. Those are the kind of the two big negatives, if you will, in terms of falling back a little bit. There are some offsets against that because if you are really comparing kind of the first quarter actual results to kind of the midpoint of the range that we provided. So again going to that midpoint, you still don’t have profitability improvements and revenue lift in some of the other segments. So those are the other two pieces really that doesn't kind of offset those two negatives.

Josh, one of the hardest things to always get and honestly Ed, Terry and I really try to do this professionally in the right way. I mean, every year we point out for example that Direct Checks for whatever reason has their strongest quarter. It’s been this way I think from my 10 years as a CEO in the first quarter and as much as we say that, we kind of all look at each other once we get the guidance that comes in from all you guys and we go out, we try, right. So it was an expected deterioration, we’re not at all bothered by it and then there's always to the timing on brand. And we are making as you heard a big blitz next week. You will see us all over CNBC, their our primary partner next week, where we’re going to get out and showcase these towns and we want to get though the market, the vote, the public vote. And it was just a conscious decision we knew that was a time this way, the way we did our plan. So again comes as no surprise to us in terms of how we put together the guidance that we put out there. We thought it would be helpful, Josh, which is why Terry went through that to kind of just try to give you a little bit more context, to say no the business isn’t getting, running away from us here in the second quarter, not at all, it’s not we plan, it’s not how we look at it. Again we feel very good about the balance of the year and obviously with raising guidance for the year that hopefully posts the streets something as well.

No. And as usually you do provide a pretty comprehensive overview. So I get that with the full year, I just didn’t know if there were some other timing related items in there, but no, that’s helpful. Thank you. The one other question I just had was just with regards to the pipeline or the current opportunities you see for additional acquisitions, would you characterize it as similar to what you’ve seen for the past several quarters. Had valuations changed, you continue to anticipate at similar pace of tuck-ins in the kind of small medium type size?

Yeah, Josh, to give some more clarity, I added some target areas when I went through my prepared comments and we are always looking for opportunities to expand partnerships that we have as well as things that’s on the acquisitive front that makes sense and can strengthen either capabilities or get us into a newer space, that’s close to what we’re doing. Or do some doubling down, again, the last best example I can give you there is when we bought FISC in December and we kind of called it a double down for the WAUSAU deal. So the market is still out there. I consider the market to be good. I think one of the things that I think you all have shown a lot of confidence in us, is the respect we have for trying to be smart deals. So we never want to overpay for something, we’re so dilutive for such a long period of time that it doesn’t make sense for us. But we don't know – our goal is not to do that has we move forward, but we try to be smart about what we’re looking for in the market and where thing are at. But I would tell you, it’s the same process, the same pipeline, the same, yeah, I’m looking at things now, partnerships and on acquisitions, but I would tell you that I've been always looking for them.

Sure. Thank you very much.

You’re welcome.

We have time for one more question. Our last question comes from the line of Tim Klasell with Northland Securities.

Yeah, hey guys. Just quick question and I’ve asked this in the past, but with the continued strong success in Financial Services, that had been an area where you hadn’t done a lot of acquisitions let’s say up until a little while ago. Now the last couple of really seem to have done quite well. Does that make you guys maybe rethink of how aggressive you’re going to go after Financial Services, may be move that up on the priority list relative to some of your other areas?

Tim, let me, you did ask this and I’m going to stay true to my colors here. We mapped Datamyx probably three years ago. We like them, we try to create a relationship with them, they became a partner to help us with our cornerstone and act on offers and we tried to acquire them back then. We just couldn't come together. Just sometimes that's the way it works. So if I would have done that three years ago, so it’s not that we haven't been looking, sometimes it’s just that timing of when things occur. So a great example is we just did, I mentioned a small tuck-in C-panel acquisition in the first quarter. Although last one I just did now was small business one. So what we’re trying to do is continue to get stronger in both of those segments. And as we’ve been public out before Tim, I now believe that once this year laps and we get Datamyx behind us and head into the ‘17 year, that the two largest segments for the company, which will be over 90% of our revenue now has the opportunity to organically grow. And I would say for the first time since I've been with the company. Doesn’t mean it will, because we got to execute, but I believe the opportunity is there. So we will continue to look and it’s balanced in my prepared comments, Tim, both in Financial Services as well as in Small Business Services for those opportunities.

Okay, great, thank you. This is very helpful. And then another one quick follow-on. When you say all your large check deals or you have any until the end of this year. How could we look at 2017, are there multiples coming in 2017 or should it be a fairly balanced year?

Yeah there is one that would probably be considered large, another that’s bigger, but not significant and we’re already working those to renew as well. So I would call it a probably less than what we normally see in a year, having one big one and another one kind of sitting there.

Okay. Great. Thank you very much. Very helpful.

You’re welcome.

And that concludes today’s question-and-answer session. I’d like to turn the call back to Mr. Lee Schram for closing remarks.

Let me just thank everybody for your participation and your questions. I want to summarize the call into three thoughts. First, we delivered a very strong quarter to start the year. Second, marketing solutions and other services revenue did grow 19% and our mixed improved towards our 34% of total company revenue in 2016 and again towards our goal of 40% by 2018. And third, we established a solid baseline first quarter which we believe propels us towards revenue growth again for 2016 and we’re targeting to do this for seventh consecutive year. As I always say we’re now going to roll our sleeves up and we’re going to get back to work and we look forward to providing another positive progress report on our next call. And now I want to turn it over to Ed for some final housekeeping.

Thanks, Lee. Before we conclude today’s call, I’d like to mention that Deluxe Management will be participating in their several upcoming events in the second quarter where you can hear more about our transformation. On May 10th, we’ll be in San Francisco at the SunTrust Robinson Humphrey Internet and Digital Media Conference. On May 18, we’ll be in New York at the Needham Internet and Software Conference. On June 2nd, we’ll be back in New York at the Macquarie Global Emerging Leaders Conference and then on June 8th, we’ll be in New York at the R.W. Baird Consumer, Technology and Services Conference. Thanks for joining us and that concludes the Deluxe First Quarter 2016 Earnings Call.

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