Ladies and gentlemen, thank you for standing by, and welcome to the Deluxe Quarterly Earnings Conference Call. All participants are currently in a listen-only mode. And today's call is being recorded. At this time, I would like to turn the conference over to your host, Vice President of Strategy and Investor Relations, Brian Anderson. Please go ahead.

Thank you, operator, and welcome to the Deluxe fourth quarter and full year 2023 earnings call. Joining me on today's call are Barry McCarthy, our President and Chief Executive Officer; and Chip Zint, our Chief Financial Officer. At the end of today's prepared remarks, we will take questions. Before we begin, and as seen on the current slide, I'd like to remind everyone that comments made today regarding management's intentions, projections, financial estimates and expectations about the company's future strategy or performance are forward-looking in nature, as defined in the Private Securities Litigation Reform Act of 1995. Additional information about factors that may cause our actual results to differ from projection is set forth in the press release we furnished today and our Form 10-K for the year ended December 31, 2022, and in other company SEC filings. On the call today, we will discuss non-GAAP financial measures, including comparable adjusted revenue, adjusted and comparable adjusted EBITDA, adjusted and comparable adjusted EBITDA margin, adjusted EPS and free cash flow. In our press release, today's presentation and our filings with the SEC, you will find additional disclosures regarding the non-GAAP measures, including reconciliations of these measures to the most comparable measures under US GAAP. Within the materials, we are also providing reconciliations of GAAP EPS to adjusted EPS, which may assist with your modeling. Now, I will turn it over to Barry.

Thanks, Brian, and good morning, everyone. I'm pleased to report our strong results, growing comparable adjusted EBITDA dollars, expanding comparable adjusted EBITDA margins and driving robust operating leverage for both the fourth quarter and full year 2023. Importantly, these results also accompanied improved free cash flows, and they further demonstrate the strength of our focused portfolio of offerings. This provides us a strong foundation for continued growth and execution via North Star as we progress into 2024. Before reviewing the 2023 results in more detail, I'd like to first provide five key highlights from the past year. First, the enterprise achieved its third consecutive year of organic revenue growth. This year, we also leveraged our scale to grow profits faster than revenue. We have clearly changed the company's trajectory. Second, we launched the enterprise-wide North Star initiative, which will nearly double our current cash flow run rate and add $80 million of incremental run rate adjusted EBITDA by 2026. During 2023, we took actions to unlock $40 million of annualized incremental adjusted EBITDA toward these goals. We will continue to execute additional value-creating initiatives within the program, unlocking further opportunity throughout 2024 and beyond. I'll provide more details about our North Star progress in a bit. Third, we expanded profits, growing comparable adjusted EBITDA by more than 3% compared to 2022, enabling us to improve our net debt position by more than $80 million versus the prior year-end levels. This was a $140 million improvement from our peak 2023 level at the end of the first quarter. As we've discussed, lowering our net debt while simultaneously investing for growth and maintaining our dividend remain our clear capital allocation priorities. We're well positioned for continued improvement of our overall leverage ratio as we begin 2024 and execute against our North Star plans. Fourth, we continue to be very pleased with the performance of Deluxe Merchant Services built from the First American acquisition in 2021. Finally, the performance of our Checks business continued to exceed expectations, outperforming market and secular decline forecasts. We were particularly pleased to expand Checks EBITDA margins by 40 basis points during 2023, accompanying a modest rate of revenue decline. Chip will cover this more in his comments. These results reflect our continued strong customer retention and service levels and ongoing wins in the space. This performance also highlights the strengths of our execution and the durability of the cash flows from our Print businesses and Checks in particular. Now to provide some brief details about full year performance. Similar to last quarter, Chip will speak to both reported and comparable adjusted numbers, but I will focus here on comparable adjusted results, which we believe best reflect our underlying business performance given our recent targeted business exits. For full year 2023, revenue was $2.2 billion, up about $6 million or 30 basis points year-over-year. While our growth rate was modest, importantly, this was our third consecutive year of organic sales-driven revenue growth, demonstrating our clear change in trajectory. It further shows our transformation into a payments and data company. Total adjusted EBITDA dollars increased 3.2% from 2022, reflecting significant operating leverage across our portfolio as we signaled within our guidance expectations for both 2023 and 2024 at our recent Investor Day. Growing earnings faster than revenue or delivering operating leverage is a key objective of the North Star execution plan. We're particularly pleased with this full year result. These overall results demonstrate the strength of our combined portfolio, and we're pleased to reiterate our 2024 guidance this morning, reflecting expected continuation of this revenue and strong earnings expansion. Chip will cover more in a moment. Moving on to some high-level operating segment highlights. For the full year, Payments revenue grew 1.8%, while adjusted EBITDA dollars grew 5.7%, and overall margins expanded 80 basis points in 2022. We're pleased with the overall trajectory of the Merchant business while continuing to work toward improvements within the areas of the B2B business, which encountered some challenges during the second half of 2023. As we've highlighted in prior quarterly calls, the Payments segment achieved overall growth and margin expansion despite several operational headwinds impacting demand across the portfolio as well as some non-recurring revenue results within the prior-year comparison. Our Merchant Services business led the way with a strong finish to 2023. We were particularly pleased with the fourth quarter performance of this business, which posted 8.7% growth versus the fourth quarter of 2022, benefiting from the implementation of the large new win we discussed previously. This strong finish helped drive the overall 4.8% growth of Merchant Services revenue for the full year. Our One Deluxe cross-selling model further contributed to these results. Continued investment in our technology, driving feature and functionality enhancements for our merchant offerings, along with our strong demonstrated customer service capabilities, underpin our continuing optimism for Merchant Services. Moving now to our strong results within Data Solutions. Overall, the data-driven marketing business performed well during 2023, driving overall Data segment revenue growth of 4.3% for the full year. While the previously noted quarter-to-quarter impact from the campaign-oriented nature of the DDM business was seen in our Q4 results, we are confident the prospects for this business remain strong as reflected in the 2023 annual results. Our solid full year DDM growth rate benefited from Financial Institution partners seeking low-cost deposit customers and continuing expansion of their business banking account offerings. We also continued our extension into non-FI and other less interest-rate sensitive market verticals as we have discussed on prior calls. Excluding the first half Web Hosting revenue results within the Data segment, the remaining DDM business grew approximately 7% during 2023, consistent with our longer-term expectations for the business. We remain very pleased with the potential for continued growth and margin expansion opportunities in this area, as the business benefits from increasing scale. Shifting now to our Print businesses, comprised of our Promotional Solutions and Checks segments. Combined, these businesses generated $1.3 billion in annual revenue during 2023, with a blended adjusted EBITDA margin of approximately 32%. Consistent with our guidance for full year 2023, the combined Print businesses experienced an overall revenue decline of just over 1%, while blended EBITDA margins across the combined segments expanded 50 basis points, highlighting our solid execution capability. Before concluding, I also want to share a brief progress report on the North Star initiative. Our long-term goal is to unlock $80 million of incremental comparable adjusted EBITDA and $100 million of incremental free cash flow, all by 2026. As we noted in December, our initial org simplification actions, implemented late in the third quarter, will drive annualized adjusted EBITDA improvement of $40 million against our overall North Star target of $130 million. As a reminder, our overall target of $130 million of EBITDA improvement helps offset impacts of expected secular decline within our Print businesses, generating the overall net $80 million run rate EBITDA improvement objectives. The $40 million impact from our 2023 actions will contribute toward the expanded earnings expectations included within our 2024 guidance range. As the current slide reflects, the 2024 incremental work streams will unlock additional value from both cost savings and revenue-enhancing initiatives. We'll provide further North Star updates during our first quarter earnings call in May. To summarize, our overall 2023 results reflect: A, strong momentum, sustaining organic revenue growth, operating leverage, and increasing cash flow generation; B, further acceleration of our progress against our clear capital allocation priorities under North Star; C, our more focused and rationalized portfolio of offerings will enable additional clarity across the organization's growth objectives; and D, the completion of our infrastructure investments, including our upgraded ERP, which went live one year ago, will serve as a foundation for our continued optimization of processes and efficiency across the enterprise. Before passing this to Chip, I want to thank my fellow Deluxers for another strong year, for their unwavering dedication to our customers and the communities that we serve, and for their continued commitment to transforming Deluxe into a modern payments and data company. Over to you, Chip.

Thank you, Barry, and good morning, everyone. As Barry noted, we were very pleased with our overall Q4 and full year 2023 progress, particularly our strong cash flow generation and the improvement of our leverage ratio during the year. I'll begin today reviewing some of the consolidated highlights for the year before moving on to the operating segment results and reaffirmation of the 2024 guidance we provided at our recent Investor Day event. For the full year, on a reported basis, we posted total revenue of $2.192 billion, down 2%, driven by the impact of our recent divestitures, but increasing 0.3% year-over-year on a comparable adjusted basis. We reported full year GAAP net income of $26 million or $0.59 per share for the year, down from $65 million or $1.50 per share in 2022. This reduction was primarily driven by higher interest costs and the impact from the Hosting business exit. Full year adjusted EBITDA was $417 million, up $13 million or 3.2% on a comparable adjusted basis from last year. Adjusted EBITDA margins were 19%, improving 50 basis points on a comparable adjusted basis. Total adjusted EBITDA dollars, reflecting prior-year comparison, inclusive of our focused business exits, declined 0.2% for the year, while EBITDA margins improved 30 basis points. Full year adjusted EPS came in at $3.32, down from $4.08 in 2022, primarily driven by impacts from our 2022 and 2023 in-year business exits, increased interest expense, and changes to taxes, depreciation, and amortization. Now, turning to our operating segment details, beginning with our Payments and Data Solution segment. Payments grew fourth quarter revenue by 2% year-over-year to $175 million, with Merchant Services growing 8.7% year-over-year, as Barry noted. The balance of the segment saw declines of 5.1% during the quarter as we lapped some one-time receivable hardware revenues during Q4 of 2022. We also continued to see some year-over-year volume softness within the lockbox business, as we've previously signaled could continue. Overall, Payments adjusted EBITDA margins improved by 260 basis points to 24.2% during the quarter, with adjusted EBITDA dollars growing around 7 times the rate of revenue, expanding 14.3%. These results were driven by both the scaling benefits of the strong Merchant growth as well as continued improvement of the margin profile for the B2B payments offerings, estimated to have improved by more than 300 basis points during the period, despite the year-over-year revenue headwinds. For the full year, segment revenue grew 1.8% year-over-year to $691 million, led by the solid 4.8% growth within Merchant Services. The balance of the segment revenues experienced a 1.3% year-over-year decline for the full year. This result was inclusive of some continued demand softness within lockbox as noted, as well as lapping several non-recurring revenue contributors during the second half of 2022. We noted during our last call that in the third quarter of 2022, we temporarily processed a large amount of one-time volume due to an extended outage experienced by a competitor in the remittance space. 2023 results for B2B payments also lapped some non-recurring revenues related to one-time sales of Remote Deposit Capture, or RDC, hardware and other receivable services during the fourth quarter of 2022. Despite these overall revenue results falling below our expectations, our actions to drive operational improvements, particularly within the lockbox footprint of the B2B business, continue to help drive strong margin outcomes for the year. For the full year, B2B adjusted EBITDA dollars are estimated to have expanded by approximately 6% in line with the overall mid-single-digit result for the full Payment segment. For the total Payment segment, full year adjusted EBITDA growth outpaced the 1.8% topline expansion, increasing 5.7% to $153 million, while adjusted EBITDA margins improved 80 basis points to finish at 22.1% for the year, consistent with our ongoing expectations. Our margin optimization initiatives set us up well to capitalize on growth opportunities within the Merchant and B2B markets going forward. We remain confident that Payments will achieve overall mid-single-digit growth for the coming periods, consistent with the overall outlook we shared during Investor Day. Finally, as a reminder, during the second half of 2023, we made the decision to exit our Payroll and HRM lines of businesses via executed conversion agreements. We will be partnering with Paychex in the US and with Payworks in Canada, working to ensure seamless transitions of our existing clients across these lines of business. As a result of these anticipated conversions expected to take place throughout 2024, we will begin to discuss results for B2B payments on a comparable adjusted basis, similar to how we reported during 2023 for both the Promotional and Data Solution segments. As Barry noted during his comments, fourth quarter Data results were reflective of some of the quarter-to-quarter volatility exhibited within the DDM business, notably in comparison to some outsized year-over-year third quarter performance we experienced. Data's Q4 comparable adjusted revenue decreased 7.5% year-over-year to $44 million. On a reported basis, inclusive of 2022 revenues from the now divested Web Hosting business, Data's revenue declined just under 30% from the fourth quarter of 2022. As we noted a year ago, the data-driven marketing business saw several customers accelerate campaigns, pulling planned data spend into Q4 2022. This year-over-year impact is a primary driver of the isolated fourth quarter comparisons for the segment on a comparable adjusted basis. Adjusted EBITDA margins for the quarter decreased from 22.9% to 16.6% on a comparable adjusted basis, again, reflecting the timing impact surrounding year-to-year DDM campaigns noted above. We continue to believe a multi-quarter view of the DDM business remains the best indicator of our continuing strong performance. For the full year, Data Solutions comparable adjusted revenue increased 4.3% year-over-year to $239 million. On a reported basis, Data declined 10.7%, keeping in mind we completed the divestiture of our Web Hosting and Logo businesses on June 29, 2023. Data's adjusted EBITDA margins declined 60 basis points for the full year on a comparable adjusted basis to 23.3%, again reflecting inclusion of the slightly higher margin profile of the Hosting offerings for one-half of the year. As Barry noted, excluding the declining trajectory for the exit Hosting and Logo lines of business from the 2023 results, the DDM business expanded revenue by 7% compared to the prior year. For 2024, we remain confident that the remaining Data business will achieve mid-single-digit revenue growth rates on a comparable adjusted basis and low-20% adjusted EBITDA margin rate expectations, consistent with what we shared during our December Investor Day presentation. Turning now to our Print businesses, Promo and Checks. Promo's fourth quarter revenue was $142 million, declining 7.3% on a comparable adjusted basis, driven by some demand softness during the fourth quarter relative to some of the seasonal uplifts experienced during Q4 of 2022. On a reported basis, revenue declined 7.7% year-over-year. Adjusted EBITDA margins declined 240 basis points year-over-year to 16.9%, reflecting some of the lower volume impacts as well as higher year-over-year logistics costs, some of which resulted from our continuing transition of the Promo production footprint towards less manufacturing sites. For the full year, Promo revenue finished at $542 million, declining 1.5% year-over-year on a comparable adjusted basis, in line with our expectations as we continue to work towards prioritizing stronger margin offerings within the portfolio. Inclusive of prior year divested business results, Promo revenue reflected a 3.8% decline on a reported basis. Adjusted EBITDA margins for the year were 14.9%, increasing 80 basis points versus 2022 and maintaining mid-teen levels consistent with our stated expectations. For 2024, we continue to expect low-to-mid single-digit comparable adjusted revenue declines with adjusted EBITDA margins remaining in the mid-teens. Finally, as Barry noted, Checks' performance in both the fourth quarter and for full year 2023 exceeded expectations. For the fourth quarter, revenue increased just under $0.5 million from the prior year to $176 million. Fourth quarter adjusted EBITDA margins expanded 230 basis points to 44.8%, as many of the seasonal logistics and other surcharges experienced in our cost of goods sold during Q4 of 2022 did not repeat. Checks' full year 2023 revenue was $721 million, declining 1.1% year-over-year, while adjusted EBITDA margins were 44.4%, expanding 40 basis points and consistent with our long-term expectations towards maintenance of mid-40% margins profile. These overall results help to contribute to our overall EBITDA leverage across the enterprise. For 2024, we continue to expect low-to-mid single-digit revenue declines for both the Check and combined Print portfolio of offerings. Our investment in print-on-demand technology continues to be a strong contributor towards our expectation to maintain the margin profile of this business. Turning now to our balance sheet and cash flow. We ended the year with a net debt level of $1.52 billion, down $83 million from $1.6 billion last year, consistent with our ongoing commitment to debt reduction as a top capital allocation priority for the enterprise. Our net debt to adjusted EBITDA ratio was 3.6 times at the end of the year, also improving from the 3.8 times ratio a year ago. As we've noted, our long-term strategic target remains approximately 3 times leverage. Free cash flow, defined as cash provided by operating activities less capital expenditures, was a very strong $63.5 million in the quarter, up from $37 million in the fourth quarter of 2022, driven by improved working capital, lower year-over-year capital spending, and improved operating results, partially offset by higher interest and cash tax payments. This was a continuation of the quarterly sequential improvement trend we have seen since the second quarter of the year, noting that first quarter free cash flows are typically our seasonally lowest result. The first quarter is impacted by annual employee compensation payments and other seasonality impacts such as annual license and maintenance payments. Thus, we would expect another negative free cash flow quarter for the first quarter of 2024. For the full year, free cash flow was $97.7 million, increasing $10.8 million from $86.9 million in 2022. This figure exceeded our revised guidance range, primarily as a result of better-than-expected working capital efficiency and lower cash restructuring spend related to North Star. This strong free cash flow performance, combined with adjusted EBITDA results above our forecasted midpoint, led to a leverage ratio better than our projections shared at our Investor Day. We were very pleased with the overall operating cash flows achieved during 2023 and our ability to continue our de-levering path, consistent with our clear capital allocation priorities. Our Board approved a regular quarterly dividend of $0.30 per share on all outstanding shares. The dividend will be payable on March 4, 2024, to all shareholders of record as of market closing on February 20, 2024. Turning now to our 2024 guidance. I'm pleased to reaffirm the expectations for 2024 that we shared in early December, keeping in mind all figures are approximate and reflect the impact of our targeted business divestitures over the past 24 months. Revenue of $2.14 billion to $2.18 billion, reflecting flat to 2% comparable adjusted growth versus 2023. Adjusted EBITDA of $400 million to $420 million, reflecting between 2% and 7% comparable adjusted growth. Adjusted EPS of $3.10 to $3.40, reflecting 1% to 11% comparable adjusted growth. And free cash flow of $60 to $80 million. Also, in order to assist with your modeling, our guidance assumes the following: interest expense of $120 million to $125 million; an adjusted tax rate of 26%; depreciation and amortization of $150 million, of which acquisition amortization is approximately $55 million; an average outstanding share count of 44.5 million shares; and capital expenditures of approximately $100 million. This guidance is subject to, among other things, prevailing macroeconomic conditions, including interest rates, labor supply issues, inflation, and the impact of other divestitures. To summarize, we are very pleased with our fourth quarter and full year 2023 results. We look forward to continuing the momentum in 2024, focused on executing against the comprehensive North Star plan and continuing our organic revenue growth, EBITDA expansion, and strong free cash flow.

Your first question comes from Lance Vitanza from TD Cowen. Please go ahead.

Thank you, everyone, and great work this quarter. You provided a lot of insight about the fourth quarter. To shift our focus to the upcoming first quarter, Chip, I appreciated your comments about the seasonality of free cash flow. Could you discuss how seasonality affects the operating segments, particularly the expected changes from the fourth quarter to the first quarter, and what that might mean for revenue and margin performance? I have one more question as well. Thank you.

Good morning. So, keeping in mind, we don't guide quarterly, I will try my best to help you because I realize we have a lot going on, especially with rolling in more forecasted exits this year. So, let me start at the highest level and then I can give you a little bit of color by segment. So, the easiest way to think about it is, the seasonality change from the fourth quarter we just reported until what to expect in the first quarter. If you look over the last few years, we typically would step down about 3% in total revenues from the fourth quarter into the first. And so, that would be how I would think about the overall baseline resetting to reflect the seasonality. The most material seasonality item we have is within the Promo business, which has tax forms and other seasonal items. So, I would start out with my guidance. Again, we don't guide directly, but my assumption to you would be to take that fourth quarter revenue result, haircut it by about 3% to get to the kind of baseline starting point for the year. And then off of that, it's a question of how much growth will we drive relative to our full year guidance range. So that will be towards the lower end of our 0% to 2% range. At the highest level, I think a haircut of 2% off of what we just did in the fourth quarter is a solid place to reflect the enterprise.

Very helpful. I have a final question for Barry about the Payments segment. I noticed Michael Reed's departure. Was he one of the new leaders you brought into Deluxe? Also, could you clarify why he left and who will take over his responsibilities? I understand he is expected to serve as an adviser to the company, but did this transition have any effect on the fourth quarter results? Could it also affect the results in 2024? Thank you.

Lance, the first thing I'd want to say is to highlight the great performance in the Merchant business. That business continues to outperform our expectations, and you saw the great performance in Q4 as a result of the big win we had announced earlier. We think it's real evidence of the cross-sell ability of the company to help grow that business. On the B2B side of the business, we're increasingly moving that business towards the Software-as-a-Service aspect of the business. We are investing there while we are continuing to win market share on the lockbox side of the business. The lockbox business was a little bit softer this period, and we didn't have some of the recurring things that we saw in Q4 of last year. I'm very grateful for all the great things that Mike did to help get the company and the B2B business moving in the right direction. He is continuing as an adviser to help us on the transition. That business is reporting to me today while we find a successor. Specifically, we're looking to sort of add more capabilities to the team around the growth area, which is Software-as-a-Service. So, we're grateful for all that Mike did. We are really optimistic about the future of that business and Payments in general.

Thanks for the update. I have a quick follow-up regarding lockbox. In the past, you've mentioned that this business is experiencing a long-term decline. Should we anticipate that this trend will continue industry-wide, leading to a decrease in the range of mid-single digits moving forward? When you mentioned some softness, was that in relation to the expected decline, or is it possible that the business could remain flat or even grow in a more favorable period?

So, first of all, it's important to talk about the complexion of the B2B business in total. It's roughly split between the lockbox business and the growing Software-as-a-Service business. On the lockbox side of the business, yes, there are secular headwinds in that space. But you have seen us do over the last couple of years is that we have significant market share gains or we have won new business, and that helps mitigate the decline there. We've had some very significant wins there. In Q4, we took on volume from a competitor that had an outage, which helped us deliver a terrific result last year. We have a big pipeline, and we think we'll continue to add clients to provide stability. But to be clear, we're focusing more and more on the Software-as-a-Service side of the business, because we see that as the future. We had a successful launch of our new receivables product, and we've got an opportunity next week to be in front of hundreds of customers at our annual customer event, where we'll share more details and expect to build more leads and help that side of the business accelerate.

I would just add that you're right, Lance, that the lockbox business, in aggregate, is generally in decline, like the rest of the paper parts of our business. We continue ourselves to innovate in different ways to move it to more digital. We're focused on the efficiency of that business and improving the margins and profitability, which as you heard in our prepared remarks, we did a lot of that this year through site consolidation and other efficiency initiatives. Even despite the softness, the volume challenges we had, we were able to expand margins there, which is a testament to the opportunity we have to not only continue to look for opportunities to partner with customers and take on more volume, but we continue to run those operations in a more efficient way and expand the EBITDA margins for that business as well as B2B in totality.

Hi, good morning, and thanks for taking my questions. Just if we could focus a little bit on the free cash flow guidance, the $60 million to $80 million that you provided there? Coming off with a pretty strong in '23, looking at the guidance, what are the drivers and assumptions built into that guidance range? And then, what could potentially prevent you from exceeding that range?

Yeah. Thank you, Charlie, and good morning. Thank you for joining us. I want to first acknowledge the obvious that I did lower that free cash flow guidance range on the Q3 call from our original full year guidance of $80 million to $100 million for 2023 down to $60 million to $80 million. I did that based off two factors. As you'll recall, I did that based off where we were year-to-date through the third quarter, as well as through the introduction of North Star, adding more potential cash restructuring charges as we set the company up. It was the responsible and wise thing to do to reset that range at the time. However, we didn't change our internal focus on running hard at cash flow and continuing to optimize things across the portfolio. When you look at our final result coming in way ahead of where I reset guidance to, that was really a function of the incredible work the team has done to really work on working capital efficiency. I was very impressed with how the team worked inventory down as the year progressed. As an example, as soon as we got through the ERP upgrade, the team worked very hard working through all of the challenges we had dealt with around inventory, starting back in 2021. You think about supply chain disruptions, inflation, as well as the ERP project; we finally got the chance to work through and really bring that down, which was a great working capital efficiency for us. We were also very efficient on our DSO and other levers. I do want to acknowledge that this beat is a great thing, and I'm very pleased with what the team did. As I look ahead, I'm holding the guidance range at $60 million to $80 million for this year, consistent with what I did before. And again across the two-year period, with the beat in 2023, that's a net positive over a two-year period, driving more free cash flow. Looking ahead, I walk it down this way: I think about the $98 million we just delivered in 2023; we must take off estimated impacts from the business exits, which on a cash basis is roughly $15 million. Then, I've got to look at that working capital picture I just described, and while it was a fantastic source of cash in 2023, at this point, I'm planning it to be more of a net neutral, not an inflow, not an outflow. On the lower end of my range, it would be an outflow. But on the upper end, it's neutral, and I think there's an opportunity to drive more. Lastly, we do expect to spend a little bit less cash restructuring, roughly $10 million, but again, it could be a range. We don't have perfect visibility to restructuring spend as you would anticipate through the one-time nature of it. But right now, in my construction, I'm assuming it's about $10 million lower. So, that leaves room for the operations to still improve and get us into that range. I believe the levers to drive it upwards would be continued improvement around working capital as well as potentially lower restructuring charges. The lower end of the range that we've set here is a very responsible place to be. I just want to reiterate across that two-year period how we're ahead of where we thought we'd be in December. We ended the year at 3.6 times leverage, and in December, we estimated we would be at 3.8 times, getting to 3.7 times by the end of this year. We're already at 3.6 times. I am very pleased with that journey. If you take the mid-point of our free cash flow range and the mid-point of our EBITDA range, it suggests we'll end this year between 3.6 times to 3.5 times.

Great. Just segue into the balance sheet, if rates were to come down, are there opportunities potentially to refinance some of the debt or do some swaps to reduce your interest expense?

Yeah. Keep in mind right now, with the swaps we did throughout the last five quarters, effectively, we're at approximately 75% fixed rate, which removes a lot of the current volatility in the markets. As we plan this year, we are planning no change in the interest rates. We, of course, are remaining very cognizant of what the Fed is doing and staying in tune with their updates. The way we put our guidance out assumes no change in the rates. If they start to come down, that would be a reason why we would go into the lower end of our $120 million to $125 million range. We don't see them going up. The reason we would drift upwards would be if free cash flow timing across the year was a little back-end loaded, and we had to draw down on revolving debt earlier in the year and drive more incremental cash costs. Regarding your direct question about refinancing, we still have ample time. Our next major maturity on our credit facility, our Term Loan A and our revolver is not until the end of June of 2026. We will not let that debt go current. This gives us effectively the better part of the year to get educated on the market situation, see what our alternatives are, and leverage our bank group for advice and guidance about what we should do. We don't have a crystal ball on what interest rates will be a year from now, but rest assured, we're going to get working on it early so that we address that well ahead of that debt becoming current. The hope would be that we can do that in a way that our weighted average interest rate cost comes down. If not, we'll continue to deleverage and bring the debt balance down and continue to bring our debt costs down over time.

Hey, good morning, everyone.

Hi, Marc.

So, you actually covered a great deal of where I was going to go with the last answer. So, I do appreciate that. I was sort of curious as to maybe, if you could give us a quick reminder and update us to the timing of some of the tech spend, or if there's anything lumpy that we should be thinking about for the first half of the year as far as the spending needs?

Let me just start by giving a sort of framework on how '24 is different than the last couple of years. So, we have completed all of our investments in modernizing our infrastructure. Recall, last year at this time, we went live with our ERP, which was the last piece of that infrastructure spending. We are now complete with that, fully modernized our core operating systems, moving them into the cloud. This year, we are spending less on those infrastructure items and focusing more on investing in the businesses where we can generate growth, specifically in Payments and Data. So, while Chip said that we expect to slow down the spending a bit, we also expect slightly less on restructuring expenses. The big point to note here is that the spending is shifting towards things that are going to drive more growth rather than simply stabilizing and improving our infrastructure.

What I would add is that on the CapEx side, we guided $100 million. As Barry just said, we've really moved through the ERP. We've moved mostly through the site consolidation. We're anchoring on true product development and software development. I don't think that $100 million is going to be very lumpy. I think it's going to be relatively linear across the period. You're going to see us continue to invest in the right high-return growth initiatives there. If your question is targeting more restructuring charges, Barry alluded to a little bit, last year our overall restructuring charges were $90 million. That was doing a number of things like ERP at the front end of the year, site consolidation, and the launch of North Star towards the end. We've said before and still believe that's kind of the peak of overall restructuring spending for us. We expect it to come down this year. I could see restructuring spending somewhere between $60 million to $80 million.

No, that's perfect. I appreciate that. Thank you. And then, I know it's early, but I was wondering if it was too early to see if there was any insights or any feedback that you're receiving from clients regarding planning or if there's anything that maybe has changed as far as general views, as far as client activity since the Investor Day? Thanks.

A couple of top-line things for you there. We continue to be pleased with how our pipeline is expanding across all our businesses, and we're continuing to see benefits from our ability to cross-sell the whole One Deluxe model that we've talked about previously. We think we're also seeing decent consumer spending. It's early, but so far, early indications seem encouraging. We have pretty good line of sight in the DDM business because we understand how clients will be rolling out their programs across the rest of the year. What I would tell you is, we think what we're seeing today is consistent with what we shared at Investor Day, which gives us confidence to affirm the guidance we provided back in December. We believe we're going to have a really solid year and move our transformation forward.

We have no further questions in our queue at this time. I will turn the call back to Brian Anderson for closing remarks.

Thank you, Krista. Before we conclude, I'd like to share that management will be participating at the JPMorgan Global High Yield and Leveraged Finance Conference on February 26th and 27th, and at the Wolfe Fintech Forum on March 13th and 14th during the quarter. Thanks again for joining us today, and we look forward to speaking with you all again in May as we share our first quarter 2024 results.

This concludes today's conference call. Thank you for your participation, and you may now disconnect.