Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2014 Deluxe Corporation Earnings Conference Call. My name is Shaun, and I'll be your operator for today. At this time, all participants are on listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions) As a reminder, this call is being recorded for replay purposes. I would like to turn the call over to Mr. Ed Merritt, Treasurer and Vice President to Investor Relations. Please proceed.

Thank you, Shaun and welcome everyone to Deluxe Corporation's fourth quarter 2014 earnings conference call. I’m Ed Merritt the Treasurer and Vice President, 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’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. The financial and statistical information that will be reviewed during this call is addressed in greater detail in today’s press release, which was posted on our Investor Relations Web site at deluxe.com/investor. This information was also furnished to the SEC on 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. Deluxe delivered our fourth outstanding quarter of 2014. We reported revenue and adjusted earnings per share well above the high-end of our outlook. Revenue grew more than 7% over the prior year quarter, driven by financial services growth of almost 22% and small business services grow of 6%. Marketing solutions and other services revenues grew over 30% over the prior year and represented over 30% of total fourth quarter revenue. Adjusted diluted earnings per share grew more than 14% over the prior year. We generated strong operating cash flow of $280 million for the year and we were drawn $160 million on our credit facility at year-end. We did not repurchase any common shares in the quarter. But we purchased $60 million for the year. We continue 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 $60 million cost reduction commitment. 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 $1.16, which included $0.03 per share collectively for restructuring charges, a loss on the sale leaseback and transaction cost. Excluding these costs, adjusted EPS of $1.19 exceeded the upper-end of our previous outlook and was 14.4% higher than the $1.04 reported in the fourth quarter of 2013. The restructuring charges are for primarily for employee severance and infrastructure consolidations, the loss on the sale leaseback related to a facility in our direct check segment and the transaction charge was primarily related to the Wausau Financial Systems acquisition. Revenue for the quarter came in at $449 million, growing 7.3% over last year, and 8% sequentially from last quarter. All three of our business segments performed well compared with our expectations. Small business services revenue of $301 million grew 5.8% versus last year, despite continuing sluggish economic environment and an unfavorable Canadian exchange rate. We delivered growth in marketing solutions and other services, checks and in our online Safeguard distributor and dealer channels. Financial Services revenue of $105 million grew 21.5% versus the fourth quarter of last year and would have declined less than 5%, excluding recent acquisitions. Higher marketing solutions and other services revenue driven by Wausau and Destination Rewards price increases and revenue from Zions more than offset the impact of lower check orders and the impact on pricing from a large customer contract renewal in early 2014. Direct Checks revenue of $42 million was down 9.2% on a year-over-year basis. From a product revenue perspective, checks were $213 million representing 48% of total revenue. Business products were $100 million or 22% of total revenue and marketing solutions and other services were $136 million which was 30% of total revenue. Gross margin for the…

Thank you, Terry. I will continue my comments with a perspective on what we accomplished overall in 2014, frame expectations for 2015 for our key revenue growth area, marketing solutions and other services, as well as provide an update on our longer term strategic revenue mix and provide an update on our brand transformation. I will then highlight progress in each of our three segments, including a perspective on what we plan to accomplish in 2015. Deluxe grew revenue in 2014 for the fifth consecutive year for the first time since 1996. We saw a continued stability in our core check and product businesses and improved our mix of faster growing marketing solutions and other services revenues to almost 26% of total annual revenue. We acquired Wausau Financial Systems and Gift Box to expand opportunities in higher growth marketing solutions and other services. We also accelerated our brand transformation. In addition to our strong print leadership, we continue to invest in our employment brand, in digital technology and extending our sales channel reach and in our communities. We ended 2014 with nearly 4.6 million small business customers, of which approximately 25% of them are marketing solutions and other services customers. And we served approximately 5600 financial institutions. In Shared Services infrastructure, we reduced cost and improved the effectiveness of information technology, finance, human resources, real estate and legal functions. Our intense focus on cost reductions has now delivered enterprise-wide savings of $550 million since mid-2006. We exited the year with more robust and innovative products and service, solidified processes of better infrastructure and improved financial results. Our operating cash flow grew for the sixth straight year, allowing us to raise our dividend, pay down debt and pay cash for acquisitions. We recognize that there is still a tremendous amount of…

Thank you, ladies and gentlemen. (Operator Instructions) Your first question comes from the line of Jamie Clement from Macquarie. Please proceed.

Lee, first question, when you were talking about the brand marketing and brand awareness initiatives upcoming in 2015, you used a term sticky content. I'm just curious what you meant by that?

Yes, historically what we’ve done as we have put more -- just printout there, basic printout there and things online digital, what we’re trying to do now Jamie is make it more -- we have more key to it. And this whole idea of the small business revolution we think is just going to create, gravitate small businesses a lot more to what we’re doing make it a lot more unique that what we have historically done. And candidly Jamie we have already moved on this, we have our first photo essay out. We’re in the process of doing our second one right now and we’re seeing hits to small business revolution and the comments that are coming back into those customers and through our employees in the social media is just a lot stronger and it’s just resonating a lot better, so that’s the stickiness we mean is trying to really personalize a lot more than we have traditionally done.

Okay that’s very helpful and switching to the balance sheet, if I may, from a credit metric perspective, I mean wow, you are a lot better than you were five or six years ago, and I mean depending on where exactly you come in 2015, I mean, you are well less than 1.5 times EBITDA, of net debt-to-EBITDA, as you look for over the next three to five years what do you think sort of the appropriate leverage ratio kind of range is for this business, obviously being cognizant of switch more towards smaller business services in a way from just traditional checks from a percentage of revenue perspective?

Jamie, this is Terry. I am going to go ahead and take a stab at answering that question. Our goals around capital structure are really very clear and very crystal in maintaining that flexibility to really support all the needs of this transformation has so that we can keep being successful there, so certainly in the horizon as you referenced there that will continue to be our focus there. If you were to go back a few years like you mentioned, our leverage ratio has been higher it’s never ever been even close to a level that we’ve been uncomfortable with as a financial team or never ever at a level that we have felt like it’s constrained us from an ability to invest in our transformation. So in terms of looking ahead and in terms of what the appropriate ratio is, I think all of the scenarios that we could see in terms of how we invest in this transformation none of them are going to take us outside of a range that we have seen in the past or something that would kind of put us at the outer limits of what we feel what we are really comfortable with. So I don’t have a specific target saying that we will never go above certain a level but at the same time too in the wide ranges that we have played in it’s nothing it has ever been close to, to making us uncomfortable.

Okay and then just sort of follow-up on that, no shares repurchased during the fourth quarter and it sounds like that program, it sounds like will probably more resume kind of midyear or second half of 2015, is there anything that kind of causes you to pause as a result of maybe calling the bonds anything like that just I'm curious why you would be feel that you wouldn't be in the market maybe in the first half?

Yes the brief pause that you’ve picked up on there is certainly as we are in steady preparation for the call of the 200 million. There will be a little bit of a premium there so it’s actually -- when you consider the interest payment that’s also due in that date and the premium it’s about $214 million payment that we’ll have to make. So we’ve certainly been preparing for that.

Yes, I know, that makes perfect sense. I just wanted to make sure there was nothing else going on. Thanks very much for your time, as always.

Jamie, I’ll also add that we continue to be very committed to the repurchase market so to speak, but again I think to use the word as well, it’s a smart -- we think it’s a smart pause as we kind of head towards pulling the 2019 spec so to speak and then move on as we go through the year, exactly what levels we’ll completely do again as we said in our prepared remarks it will be at least to cover dilution, but we will continue to be active in the market, we’d continue to believe that it’s a good return for our investors.

That makes perfect sense. I just wanted to make sure we weren't missing anything.

Thank you. The next question comes from the line of Randy Hugen of Feltl and Company. Please proceed.

So financial services had really strong results in the quarter, were there any areas that came in a lot better than you were expecting? Was that driven by Wausau?

Yes, Randy we had better results with Wausau. The challenge we had when we guided on the deal originally in October last year we came out was just trying to really get our arms around how much because it's new for the company not new for many of us who have technology backgrounds but trying to get that deferred revenue rates. So we actually weren't exactly sure, so obviously we were trying to be conservative. So we did a little better there but we also performed a little better overall, things have gone quite well. Also in the prepared commentary I talked about destination rewards. If you remember back in the third quarter call we talked about moving the $15 million up to the $19 million for the year, and we actually ended up finishing closer to $20 million there as well. So those really were the two key drivers although we had strength in some of the other MOS spaces within FS as well.

Perfect, thanks. And then could you give an update on your currency exposure? Are you still basically 100% U.S. and Canada?

We are mostly U.S based, we do have even operation up in Canada both in the, I saw in the small business segment and very little over in Europe, but there is some Web site business that's over in Europe. So it's not a significant part of our revenue stream but certainly meaningful enough when the rates move like they have in the past several months to have some impact.

And I will just add on we have a little bit of business that we've been expanding on in South America as well in the Web hosting space, so those were all the big currency impact. But as Terry said the biggest one really is Canada.

All right. And then one last question here. Do you find yourself more likely or increasingly considering larger acquisitions?

We never would not consider and keep an open mind in terms of what we're doing. We also don't have that as part of the get to the 40%, we get asked that question quite a bit Randy is it something big that we would do or need to do to get there. At this point in time it's not assumed in there but we always keep an eye on what's out there and we always should access whether or not something bigger makes sense. We do that and what I would tell you is we will continue to do that as well.

Thank you. The next question you have comes from the line of Tim Klasell of Northland Capital. Please proceed.

Hey. Good morning, everybody. Congrats on the quarter. Just have a set of questions here. So let's start with the high level macro. I know it's been a while since we've came out of a recession -- maybe we've been in this one for too long. But your businesses, do they have a tendency to lead or lag coming out of a recession? And maybe you could talk to us maybe what you would think high by segment, what we should expect to see, because indicators are in the positive direction right now, leading in --?

It's a great question Tim. We're really wrestling with this -- we exited, we watch the optimism in the season small business in the October gets better, November and then December. And then we're watching what's going on as we start the New Year and I am challenging my small business team to really understand what are the signs of life for things that are there that tell us it's getting better than it has. And what we try to do is look for everything from the number of small businesses that we do payroll services for. What are we -- the dialogues that we are having in the call center on marketing, the dialogues that we're having with the need or the desire to have more services in a small business portfolio. What I'd tell you is that those are more encouraging right now as weave through the tail end of the year and started the New Year. But Tim it's really hard yet to declare a victory here, right or we through it. I still believe it's sluggish at this point in time and I think what we've tried to guide is rates adjusting for -- some of the things that Terry talked about on the SEM and SEO and the exchange rates there kind of where we've seen the business the last couple of years organically. Could we have upside if things continue to get better the answer was of course but right now I think it's too early for us to really tell what's happening there. As you step into the banking world and the MOS space I can't tell you that a lot of what we're doing right now is stronger view of the consumer so to speak. Lot of our offers are more traditional through the commercial and the retail sides of the bank and more for the benefit of the bank than all the way down in all cases to the consumer, so little harder for us to get a read on that but this is obviously something that everybody is going to be wrestling with right now but I would tell you I think there is more upside right now if things continue to improve and sustain improvement than downside I think we’ve appropriately balanced our guidance in terms of our ranges for where think things are at right now. Terry I don’t know if you want to add anything.

No I think that’s well said.

Okay, good. And then just real quickly on your SEO and SEM products that you're -- or services that you are discontinuing. Part of the Deluxe brand has been able to walk in with a pretty broad platform. Has that impacted your sales cycles or your sales efforts? Or are they not strategic to your customers? What are you finding out so far?

Tim the areas that we stepped away from where were more channels, not the SEM, SEO products but just channels where we were -- we’ve been grinding for some time and we talked about this bit on the third quarter call as well we just felt we’re just on profitable opportunity. Remember we target direct, we target enterprises, we’ve target resellers, partners and what we try to do is decompose where were targeting and who is willing to pay for good services and who is not. And so that’s more what we do it wasn’t taking the products out for say it was just how we target the channels that we’re going after.

Okay, good. And then on Wausau, some old performance, but some of that was driven by, let's say, an accounting treatment. How about on a bookings basis? How is Wausau doing relative to your initial expectations?

Yes it’s a great question. The number one thing when you really understand these businesses Tim is where do they get close the year on bookings compared to I call how do they end their backlog for 2014 compared to 2013, so that we know what we got to get from a sell and bill basis going forward. And what I would tell you is that we close very well or right in line with what we expected. So we still got big numbers to get from our book or sell and bill ratio this year. But now we finish, I would say right what we wanted to be maybe slightly better and I think that projects well for our commitment to deliver the 80 million this year.

And then one for you, Terry, tax rates relative to my model is down 50 basis points for 2015. What drove that and is there room for further improvement in the near-term?

I think there is always kind of a one-off thing that will happen in tax effect and cause that rate to bounce around a little bit. But we’ve done a pretty job in terms of thinking through 2015 and what some of those one-time items might be as we look through the year and try to bill that in. So the difference between what we’ve seen in the past and how we see it going forward is more driven by some of those one-time benefits in cost versus any significant in unitary tax rates or any significant mix change between what jurisdictions we’re operating in.

And Tim one of the comments that I would add and because pushing Terry and his team in and actually our whole company on how we get better at lowering our tax rate, one of the challenges that we ended up having is when we guided kind of preliminary in the third quarter we said it was flat year-on-year. We now have ended the year '14 with lower tax rate. So that gives us the $0.05 I think Terry referenced on the call that is dilutive to last year. So our job is to keep after this and see if there is other thing that we could do. And in other way I would look at is just smart moves in the business and looking at like Terry said at those discreet items. So another area of focus for us and hopefully something that we can better at, but I think we’re comfortable right now with that 33.5% rate.

We have one last question from the line of Charlie Strauzer of CJS Securities. Please proceed.

Two questions, just to take up on Jamie's questions on leverage and just the decision to call your bonds -- the 2019 bonds now versus maybe wait until you build some cash?

Yes the 2019 notes were at -- or are at the 7% stated rate it is the only issuance that we’ve outstanding for a while that we’ve not had hedged. So it has been for quite some time and by quite a bit our most expensive debt. And the decision to refinance that now is clearly the opportunity to lower that rate that we’re paying. We had expanded our credit facility last year from the normal $200 million level that we’ve had up to 350 and just certainly with the favorable rate we were anxious to that as quickly as we could. And choose not to kind of resize that back down to the $200 million level. And on the context of repaying that and the sufficiency of cash that we have one of the reasons that we’re financing a little bit of that repurchase with the new bank note, is not because we don’t have enough cash to repurchase it. It’s really because we want to maintain just a healthy level of cushion in there because our credit facility has historically been there to fund acquisitions that come up, so that we’re not having to issue debt every time we do $20 million, $30 million, $40 million acquisitions so we wanted to maintain that level of cushion so that we could continue on with that strategy and not tighten ourselves to, get ourselves too tight there.

Got it, that makes some sense. And secondly, just if you could, I know you gave out kind of a blended dilution number that includes the marketing spend on kind of your brand awareness. Can you isolate that a little bit further, just as to what the brand awareness component dilution might be?

Yes, you’re talking about the reference in second quarter where we said a $0.06 dilution for the Wausau piece and the brand spend?

Correct. And also if you could give us a sense for the full year, a range of what you might be looking to spend there?

Yes, the extra spending that we’ll be doing there, we’ll carry through on a full year basis, so we’ll be spending at a higher level than we did for all of 2014 as well. We’ve not published or we’ve not given out that specific number because the second quarter it was just more of an anomaly that we typically will have, we felt that it was necessary to call that out, and that’s a piece of that $0.06.

And obviously, you're spending a little bit more, it sounds like, because it sounds like you're getting some decent traction from that?

Yes we’re very happy with, again we’re very early with the small business revolution spend that we’re doing this year, but we feel really good about the start we’ve seen.

Thank you. I would now like the turn the call over to Lee Schram for closing remarks.

Yes, I just like to thank everybody for your participation and questions today and I’d like to summarize just on three points, first we delivered our fourth outstanding quarter of 2014, we also delivered our fifth consecutive year of revenue growth and we have established what we believe is a solid foundation to grow our revenue again in 2016 for the sixth consecutive year. So we’re going to get back to work, roll up our sleeves and I look forward to providing a positive progress report on our next call and I am going to close with -- let Ed close with some housekeeping.

Thanks, Lee. Before we conclude today’s call, I would just like to mention that Deluxe management will be participating in quite a few upcoming events in the first quarter where you can hear more about our transformation. On February 23rd and 24th, we’ll be at the JPMorgan Global High Yield & Leveraged Finance Conference in Miami. On February 25th we’ll be at Robert W. Baird & Company 2015 Business Solutions Conference in New York. On March 11th, we’ll be in New York at the Credit Suisse Global Services Conference. On March 17th, we’ll be at the Sidoti & Company Conference in New York. March 18th, we’ll be at the Northland Capital Growth Conference in New York, and on March 25th, we’ll be attending the Telsey Advisory Group, the TAG Spring Consumer Conference. Thank you for joining us and that concludes the Deluxe fourth quarter 2014 earnings call.