Ladies and gentlemen, thank you for standing by, and welcome to the Deluxe quarterly earnings conference call. 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 First Quarter 2024 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 of 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 projections is set forth in the press release we furnished this afternoon, in our Form 10-K for the year ended December 31, 2023, 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 and EBITDA margin, adjusted and comparable adjusted EPS and free cash flow. In our press release, today's presentation and our filings with the SEC, you'll find additional disclosures regarding the non-GAAP measures, including reconciliation of these measures to the most comparable measures under U.S. GAAP. Within the materials, we are also providing reconciliations of GAAP EPS to comparable adjusted EPS, which may assist with your modeling. Finally, as an important additional note, this evening's presentation reflects results aligned to our updated segment reporting structure, as outlined in our filings concurrent with our December Investor Day presentation and today's 8-K filing, which provides unaudited recast business segment revenue and adjusted EBITDA information for both 2022 and 2023, including quarterly details for 2023. Updated operating segment figures are reported excluding any results from exited businesses for the respective periods, which results from such activities reported separately within the filed materials and detailed further within our segment information and reconciliation of GAAP to non-GAAP measure slides in the appendix of today's presentation materials. Chip will add some detail regarding these updates during his comments this evening. And with that, I'll turn it over to Barry.

Thanks, Brian, and good evening, everyone. Two things before I get started. First, today, I'll be discussing comparable adjusted results for the quarter, which we believe best reflect our ongoing business performance. Later, Chip will discuss our reported consolidated and comparable adjusted figures to give even more perspective. Second, as Brian just mentioned, this is the first time we're reporting on our new segments. We'll also be happy to have follow-up conversations that answer questions that you may have on these updates. We think this new segmentation provides better insight into the company and our future. Our strategy is clear: invest in relationships, trust, and brand built in our Print business to grow the Payments and Data businesses. Very simply, Payments and Data are our growth drivers, and Print is our cash generator, helping drive Payments and Data's success. On this chart, you can see Print was 57% of revenue, with Payments and Data combined delivering 43% for the quarter. With Q1 combined Payments and Data revenue of $226 million, growing 8.1% with margins of 22%, this is an attractive portfolio of businesses that we think is often overlooked. Our new operating segments should help highlight these businesses. Over the longer term, we expect the combined Payments and Data businesses to reach revenue parity with Print and expect to provide updates annually. Overall, I'm very pleased to report our strong start to 2024. In the first quarter, we delivered growth across every key metric: revenue, adjusted EBITDA, EPS, and margin. Our adjusted EBITDA expanded at a significantly faster rate than revenue, demonstrating the operating leverage we have now purposely built into the company. We were also particularly pleased with the significant year-over-year improvement in cash flow. As a result of the strong performance, we're raising our 2024 cash flow guidance and affirming all other full-year operating metrics. You will recall accelerated cash flow and profit growth are the key tenets of our overall strategy and North Star program, both of which we outlined during our December Investor Day. We believe the Q1 performance demonstrates our progress. As a reminder, our North Star goal is to unlock $80 million of incremental comparable adjusted EBITDA and $100 million of incremental free cash flow by 2026. As of the end of Q1, we're making progress on all 12 North Star work streams shown here. Initiatives comprising roughly 2/3 of our targeted $130 million of overall EBITDA improvements are now moving to the execution stage. Recall that the $130 million is aligned to our net $80 million incremental earnings target after factoring for expected secular declines through 2026. Benefit realization will phase in during the remainder of this year and throughout 2025. We expect to see in-year benefits accelerate and remain well positioned to achieve our goals. Now before reviewing our first-quarter highlights, I'd like to provide a few comments on the macro economy and key business drivers. First, as we discuss on each of these calls, Deluxe actively monitors trends surrounding overall domestic consumer sentiment, including discretionary spending. We review economic information from many providers, including the Federal Reserve, card associations, and more. Looking at this information alongside our own available data, while it appears consumers still feel inflation pressure, some of the unfavorable spending dynamics between less and more discretionary categories present a year ago appeared to have stabilized a bit. You see this reflected in our Merchant Services performance. Second, our business continues to benefit from our overall One Deluxe go-to-market approach as our growth during the first quarter included new customer wins across each of our reporting segments. Third, trust continues to be a key driver for the company, and as we have noted, is one of our core values. We were honored to be recognized for the third consecutive year as one of America's Most Trustworthy Companies by Newsweek. This ongoing recognition is a testament to the quality both of our products and services and the commitment of all Deluxers delivering every day for customers. Now to provide some additional details about our first-quarter performance. For the quarter, net of business exits, revenue was $529 million, up 1.2% or just over $6 million year-over-year. The combined growth in our Payments and Data businesses more than offset the single-digit secular declines in Print, consistent with our strategy. Importantly, the company is now in its fourth consecutive year of delivering organic revenue growth, demonstrating that our shift towards a Payments and Data company is working. Total adjusted EBITDA dollars increased 7% from the first quarter of 2023 to $97 million, continuing to reflect robust operating leverage across our portfolio, as noted in my opening comments. Adjusted EBITDA margins finished the quarter at 18.3%, reflecting an expansion of a full 100 basis points versus the prior year. We remain particularly pleased with the results, helping to demonstrate our progress around continued optimization of our operating expense base and expansion of adjusted EBITDA levels outlined within our North Star execution plans. Moving on to some segment highlights, beginning with Merchant Services. For the quarter, Merchant segment revenue grew 8.3% while adjusted EBITDA dollars grew 16.3% and margins expanded 150 basis points from 2023 on strong processing volumes. We're pleased with the strong performance of this business as we approach the third anniversary of the acquisition on June 1. Since the combination, revenue, profit, operating leverage, and margin have all materially accelerated, further demonstrating the power of our One Deluxe model. We will continue to leverage our strong bank partner relationships, increase penetration with integrated software vendors, or ISVs, and direct selling resources. Additionally, we continue to invest responsibly in our differentiated service capabilities, technology, and feature enhancements. Moving now to results within the B2B payment segment. While we saw year-over-year declines of 7.7% for B2B, the overall results were largely in line with our internal expectations for the first quarter. As we have shared on previous calls, we're transitioning to a Software as a Service, or a SaaS model, reducing our dependency on one-time nonrecurring revenue like software licenses and check imaging devices. This move to SaaS will also reduce our dependence on core transaction processing revenue over time. This means we are deliberately reducing focus on selling one-time nonrecurring products. As we anticipated and as indicated in our first-quarter results, the short-term impact has been less revenue but improved margins. During the first quarter, B2B margins expanded 120 basis points, resulting in modest EBITDA impacts despite the drop in revenue. Additionally, we remain encouraged by our growing pipeline, demonstrating strong demand for our newest products. While we shift our focus to SaaS, we will continue to focus on efficiencies across lockbox, leveraging recent site consolidations and other operating improvements. We have continued to win new deals in the lockbox business, helping to offset secular volume pressure and fund the transition to SaaS products. We have several high-quality deals currently in the implementation phase, and despite some customer delays, we expect these deals to go live later this year. To be clear, we do expect to see revenue, profit, and margin grow simultaneously as the shift towards SaaS unfolds over the next several quarters. We also expect to announce a new leader for this segment in the coming weeks. Moving now to Data Solutions, which delivered particularly strong first-quarter results. The core Data Driven Marketing, or DDM, business had a solid quarter, driving segment revenue growth of 34.5% and adjusted EBITDA growth of 46% during the period. These results reflect continued strong demand for customer acquisition marketing activities across our expansive base of core SI partners. Additionally, Data continues to broaden its portfolio of clients, extending to other attractive nonfinancial service verticals, including telecom, utility, and smart home technology providers. As we've discussed previously, quarter-to-quarter lumpiness results from the campaign-oriented nature of the DDM business, with customers often shifting planned marketing expense between quarters. Accordingly, we would not expect the levels of growth reported during the first quarter to recur over the balance of the year. Shifting finally to our Print segment. Consistent with our expectations and prior guidance, the Print business experienced a revenue decline of just over 3% to $303 million while adjusted EBITDA margins held at 30%, in line with our outlook and typical first-quarter seasonality. Within the segment, legacy Check revenues remained roughly flat during the quarter, at just over $178 million. Total revenue declines were consistent with our expectations for the first quarter, which typically lag sequentially from Q4 holiday-related seasonal strength. Overall, we continue to manage the Print portfolio to maximize cash flow through operating efficiencies, pricing actions, and responsible investments. To summarize, our overall first-quarter results speak to our transformation and North Star progress. This ongoing performance improvement provides us with a great foundation to deliver our 2024 revenue growth and EBITDA expansion goals. While work remains, our consistent and sustained pace of progress creates even greater confidence in our bright future as a Payments and Data company. Finally, before passing this to Chip, I want to acknowledge and thank all fellow Deluxers who work hard every day to deliver these results for our customers and investors. With that, I'll turn it over to Chip.

Thank you, Barry, and good evening, everyone. As Barry noted in his opening, we were very pleased with our first-quarter progress, particularly our better-than-anticipated cash flow generation and our strong comparable adjusted EBITDA growth during the period. As Brian pointed out up front, our updated segment reporting reflects the removal of all business exit impacts to both ongoing and recasted historical operating segment financials. This will allow for a clean view of our segment performance over time, net of any impacts from divested lines of business. The combined impact of the business exits can be seen separately within the historical results of today's 8-K filing as well as within the enterprise-level non-GAAP reconciliations found within the appendix of today's materials and in our past filings. Importantly, 2024 operating segment results will continue to be reported, excluding any impacts from residual payroll business results that may be realized as customer migrations take place over the course of the year. This is consistent with the conversion agreements we executed during the second half of 2023 as we made the decision to exit these businesses. As a result, our total enterprise 2024 results will now incorporate a comparable adjusted revenue figure in addition to comparable adjusted EBITDA and EPS to remove any payroll business impacts incurred from both the current and prior year results. Now with that out of the way, I'll begin today with a bit of additional color around our consolidated highlights for the period before moving on to the segment results, our balance sheet and cash flow progress, and updated 2024 guidance. For the quarter, on a reported basis, we posted total revenue of $535 million, down 1.9%, driven by the impact of our prior year exits but increasing 1.2% year-over-year on a comparable adjusted basis. We reported GAAP net income of $10.8 million or $0.24 per share for the period, improving from $2.8 million or $0.06 per share in the first quarter of 2023. This increase was driven by improved operating results, particularly lower SG&A expense, as well as gains relating to the business exits during the period. Comparable adjusted EBITDA was $96.9 million, up $6.3 million or 7% versus the first quarter of last year. Comparable adjusted EBITDA margins were 18.3%, improving 100 basis points versus the first quarter of 2023. Q1 comparable adjusted EPS came in at $0.72, improving from $0.69 in 2023, primarily driven by the improved operating income results previously noted. Now turning to our operating segment details, beginning with the Merchant Services business. The Merchant business grew first-quarter revenue by 8.3% year-over-year to $96.5 million, reflecting strong Q1 performance, as Barry noted. Segment adjusted EBITDA finished at $21.4 million, improving $3 million or 16.3% versus the prior year, with margins expanding 150 basis points to 22.2% of revenue, mainly resulting from the strong top-line growth and our ongoing profit enhancement initiatives. In addition to the highlights Barry covered, the Merchant business also benefited from robust seasonal volumes within the government vertical during the quarter and remains well positioned to continue momentum towards our mid- to high-single-digit revenue growth and low 20% adjusted EBITDA long-term outlook. Turning to B2B payments. As a reminder, our B2B segment includes our treasury management offerings, featuring both our R360 software and lockbox remittance offerings on the AR side, in addition to our eCheck and DPX AP disbursement solutions. Results from RDC and other scanner hardware and our fraud and security suite of offerings are also included within this segment. For the first quarter, B2B segment revenues finished at $69.4 million, down from $75.2 million during 2023, consistent with our expectation for Q1 performance. While overall remittance volumes remained fairly stable on a sequential basis during the quarter, the balance of the business was unable to fully offset some nonrecurring hardware sales from 2023 and other one-time items, resulting in an overall 7.7% decline year-over-year. Despite the revenue headwinds within the segment, adjusted EBITDA margins continued to improve, consistent with the focus on operational efficiencies to which we have alluded on our prior two quarterly earnings calls. Margins improved by 120 basis points to 19.2% during the quarter, with adjusted EBITDA dollars declining 1.5% from 2023 to finish at $13.3 million. Despite the expected soft start to the year, we anticipate flat to low single-digit full-year revenue growth as we transition to recurring revenues, as Barry discussed. Overall EBITDA margins are expected to improve to the low to mid-20% range over time. Moving on to Data Solutions. This segment rebounded very strongly on both a year-over-year and sequential basis, delivering strong results for the first quarter. Data revenues finished at $59.7 million for the quarter, reflecting a sequential increase of more than $15.5 million from its seasonally lowest fourth quarter, achieving overall growth of 34.5% versus Q1 of 2023. As we noted a quarter ago, the Data-driven marketing business saw several customers accelerate campaigns into the fourth quarter of 2022, pulling planned data spend from the prior year first quarter comparable results. As Barry referenced, the quarter-to-quarter volatility of campaign timing within this business can make sequential growth rates difficult to predict with great precision. We continue to suggest averaging the two to three most recent quarters' actual results for both revenue and EBITDA dollars as a good barometer for ongoing segment-level financial performance over the balance of the year. We remain very encouraged by the recent performance of this segment and believe our mid- to high-single-digit longer-term growth guidance remains appropriate from a full-year perspective. Data's adjusted EBITDA margins for the quarter improved 200 basis points to 25%, again reflecting campaign timing impacts within the Q1 compare as referenced previously. Adjusted EBITDA for the quarter was $14.9 million, up 46.1% from the prior year period. We continue to have strong confidence in the long-term low to mid-20% adjusted EBITDA rate guidance for this segment. Turning now to our Print businesses. Print segment first-quarter revenue was $303.4 million, declining 3.4% on a year-over-year basis. This decline was in line with our secular unit decline expectations across this business, with legacy promotional solutions revenue driving nearly all the full segment decline as we continue to prioritize stronger margin printed forms and other business essentials. Adjusted EBITDA margins declined 30 basis points year-over-year to 30%, continuing to reflect our operating expense discipline and efficiency across cost of goods sold inputs in particular. Consistent with our long-term outlook, for the balance of 2024, we continue to expect to see low- to mid-single-digit revenue declines across the Print segment, with adjusted EBITDA margins remaining in the low 30s. Turning now to our balance sheet and cash flow. We ended the first quarter with a net debt level of $1.54 billion, modestly up from our 2023 year-end level while remaining materially lower than the $1.66 billion mark at the end of Q1 of the prior 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 3.7x at the end of the quarter, also increasing minimally from the 3.6x reported at year-end. As we've noted, our long-term strategic target remains approximately 3x leverage, and the first quarter typically reflects our seasonally lowest cash flow result, which tends to drive slight increases to our reporting leverage ratio relative to the balance of the year. Free cash flow, defined as cash provided by operating activities less capital expenditures, finished at $6.2 million for the quarter, improving by $38 million from the negative results reported during the first quarter of 2023, driven by continued strong working capital efficiency in addition to reduced year-over-year CapEx spend, lower cash incentive payments, and improved operating results. This was a continuation of the stronger-than-anticipated operating cash flow results we have reported since the second quarter of last year, noting that we guided to an expected negative first-quarter free cash flow result on our prior earnings call. We continue to expect the first quarter to reflect our seasonally lowest cash flow results, inclusive of payments for annual license and maintenance expenditures, employee compensation payments, and other items. As a result of this first-quarter performance and our updated forecast, we are raising our full-year free cash flow guidance range, as Barry alluded within his opening remarks. We remain very pleased with our overall operating cash flow generation during recent quarters and our ability to continue our delevering path consistent with our clear capital allocation priorities. As an additional note regarding our overall capital structure, I wanted to take a moment to provide a bit of additional color as to the status of our present debt maturities summarized on the current slide. As we announced during the first quarter, in mid-March, we entered into an accounts receivable securitization facility with a capacity of up to $80 million. Through the first quarter, we have drawn approximately $65 million on the facility, directing these funds towards prepayments against the balance of our 2024 required quarterly term loan amortization. This AR facility provides us two primary benefits relative to our prior capital structure. First, the 36-month agreement terminates in the first quarter of 2027, and as such, acts to shift out as much as $80 million of maturities to the column labeled 2027+ on the current slide. Secondly, the base rate plus 140 basis points of interest on the new facility provide rate advantage borrowing against the balance of our 2026 variable rate debt. As shown here, our current revolving credit and term loan facilities carried June of 2026 maturities, while our 8% bonds mature in 2029. We remain very comfortable with our present levels of available liquidity and look forward to providing additional updates on any capital structure developments going forward. Before turning to guidance, consistent with past quarters, our Board approved a regular quarterly dividend of $0.30 per share on all outstanding shares. The dividend will be payable on June 3, 2024, to all shareholders of record as of market closing on May 20, 2024. I'm pleased to update our 2024 guidance, reaffirming our estimates from our December Investor Day and raising our free cash flow range this evening. As Barry noted previously, we continue to make strong progress in line with our original expectations across all key North Star initiatives. Forecasted realization of the implemented work stream impacts noted in Barry's comments are fully reflected within our existing 2024 guidance ranges. Our updated guidance figures are as follows, keeping in mind all figures are approximate and reflect the impact of business exits over the past 12 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 3% to 13% comparable adjusted growth; and free cash flow of $80 million to $100 million, increased from our prior guidance range of $60 million to $80 million. Finally, 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 the first quarter 2024 performance and resulting increased cash flow forecast. We look forward to continuing the growth and operating leverage momentum throughout the balance of the year while remaining focused on executing against our broad North Star initiatives and continuing our organic revenue growth, EBITDA expansion, and deleveraging journey.

Barry, on the Merchant Services side of the business, you saw pretty good growth. And I'm wondering, as you look at your business and try to compare it with the industry or kind of the credit card association numbers out there, what type of growth would you anticipate relative to the growth that the associations would see?

So Kartik, thanks for being here. I would tell you that we're very pleased with the growth that we're seeing in our Merchant business. As you know, the business that we have there is very focused in good secular growth categories, and we think that we're actually outperforming the market in those categories. If you look at the card association numbers, they also include volume growth in very, very high-growth categories that often also include higher risk. Our portfolio is a very clean, healthy portfolio that produces quality results over time, and we're very pleased by that performance. And you know from when we acquired the business, it was a low to mid-single-digit grower, and we've expanded that and we have a great guide for the year that we think really talks about and shows the power of bringing that business inside of Deluxe and our One Deluxe go-to-market model, where we can bring more products and services to more customers and leverage the trust that customers have in us now expanded across a bigger portfolio of businesses.

Yes, I appreciate the question. So I'll tell you, the strong Q1 really was, once again, a narrative of really good working capital efficiency. You may recall in the fourth quarter, we surprised to the positive based on extremely strong working capital. That left me hesitant to change my existing guidance range coming into the year. And once again here in the first quarter, the team managed the working capital very well, and we really pulled forward cash to deliver a solid number, nearly $40 million better than a year ago. Given it is working capital, I have to be mindful that some of it could be timing and a pull forward of future quarters. So my view is roughly half of that sticks for the year at this moment in time. And at this point, we need to continue to execute and see how the year goes on. And for sure, there's an opportunity to over-improve with execution and other levers as the year goes on. But at this moment in time, I look at that strong start as a good sign of what's to come. We raised the $20 million range for now and then we'll see how we execute as the year goes on.

And then just one last question, Chip. Last quarter, you gave a very good overview of maybe how the quarters were going to play out from an EPS standpoint. And I'm wondering if you could provide just maybe cadence or your expectations as we go through the year.

I’ll begin by addressing your question about EPS. I'm very pleased with the Data business and the impressive 35% growth rate they achieved, which is remarkable. However, we do not anticipate this growth to continue in the second quarter. In my prior remarks, I suggested looking at the average revenue from the last two to three quarters, specifically focusing on the last three, as the revenue was approximately $65 million in the third quarter of last year, $45 million in the fourth quarter, and $60 million in the first quarter of this year. Averaging these figures provides a reasonable indication of what to expect for Data revenue in the second quarter. Data will face some challenging comparisons, particularly in the second and third quarters. Therefore, getting Data right is crucial for establishing an accurate starting point for revenue. As for profitability, I don’t have precise guidance, but we do expect that, as the year progresses, the benefits from North Star, as Barry mentioned, will increase, especially leading up to the fourth quarter when we compare it to last year's significant benefit. I anticipate that margins will remain solid over the next few quarters, with overall dollar growth, which should translate to reasonable EPS figures in the upcoming quarters.

Jonnathan on for Lance. Nice job on the quarter. Nice level of free cash flow as well. I know you said this was largely driven by working capital. So can you maybe walk us through the puts and takes, like what items in working capital drove the positive free cash flow?

Yes. Sure, Jonnathan. It was mostly from an AR perspective. So very pleased with where our DSO landed on the AR side. By my calculation, the DSO was at 28 days at the end of the quarter was a substantial improvement from where it was a year ago. Now you got to keep in mind a year ago, we had just gone live on our ERP upgrade so that did impact our overall AR balance a bit and so was definitely one of the reasons why AR could be so solid, but the 28 days DSO compares to 31 at the end of the year. So it does show, regardless of the timing of the year-over-year perspective from ERP, we did make progress. The other thing I'll just point you to is we continue to do well managing our inventory. This is a journey we've been talking about probably since the second quarter of last year, but we've been steadily walking our inventory balances down as, again, we go live on ERP. It's been many, many years but we're through the supply chain disruptions and some of the challenges that we faced back in the 2021 time frame. And so as you look at what we've done since about Q2 of last year to where we are now, inventory was a good driver of working capital improvement as well. So really, at the highest level, you're going to see it in AR and inventory when you get a chance to digest our Q later this week.

Great. My second one is on EBITDA. What levers do you guys have available to improve EBITDA margins in 2024? And is there any segment that stands out with the most opportunity?

The question, what levers do we have to improve EBITDA?

Yes, that's right. Definitely it's largely driven by cost improvements but just curious.

Yes. So if you think back to our Investor Day, it's the page I always think of, it's the page I said if there's one page I want you guys to remember from the day, it's this one. I clearly remembered it. But I did a walk of kind of our starting point for the program of North Star to where we'd be at the very end of 2026. But if you think about narrowing that focus into just this year, it's really the same walk. So we started at 391 as our comparable adjusted beginning balance of the year. Of course, right off, you have to take off the secular declines, which I like big round numbers so let's call that 25. Really from that point to the mid-range of our guidance, that lever is going to be what we're achieving in North Star. As a reminder, we've got all the work streams that go across org discipline, pricing actions, procurement savings, you name it. We've laid it all out on the slide deck. All of those levers are there. And so if you combine the cost levers we're doing as part of North Star along with the revenue initiatives and just growth across the Payments and Data business, which as a reminder, are scaled businesses that as we grow the top line across the three, B2B, Merchant, and Data, it should bring improved margins with it. And again, really as part of North Star going after the corporate cost center as well to try and remove costs from the shared services. So I think the answer is it's all of the obvious levers you would expect, and it's all the things we've gone through as part of the North Star journey. And the simple walk is exactly like I laid out.

Got it. And my last question is actually on North Star itself. Can you just share a little bit of details of where we are today? How much was spent in North Star during the first quarter? And yes, that's it.

In our earnings release, we reported approximately $15 million in restructuring costs during the first quarter, primarily related to North Star. There were also about $1 million to $2 million in activities not associated with North Star. Overall, it's mainly tied to that initiative. You may remember we had spent around $45 million on this program by the end of last year, so we are currently at about $60 million in restructuring expenses for North Star. The total estimated cost for the program is between $115 million and $135 million, meaning we still have $55 million to $75 million left to spend. We anticipate some costs may carry over into the first half of next year, mainly in the first quarter. Everything is progressing as planned from a spending perspective. Additionally, in Q1, I noted that we spent $90 million on restructuring in 2023 and indicated that this amount would decrease in 2024. I had provided a range of $60 million to $80 million, and I remain within that range. Considering what I've shared, we are at $60 million now for the first quarter, with $55 million to $75 million still to go in the program, some of which may shift into next year, while overall staying within the anticipated range.

Just when looking at the project North Star, and you talked a lot about that today, one of the things that's always kind of a hallmark of Deluxe is the ability to take cost out of the business over the years, and yet the revenue side has always been the more elusive or a more difficult one to capitalize on those opportunities. Where are you on the revenue front there? And can you maybe provide a little more color as to some of the opportunities that are in front of you on the revenue side?

Thank you for your question, Charlie. It highlights a significant aspect of Deluxe's current position. At the start of my remarks, I mentioned the advancements we’re making in our Payments and Data business, which contributes approximately 43% of our revenue. In the first quarter, those businesses collectively experienced over 8% growth with healthy margins of 22%. We believe the company is in a much better position today, with 43% of our revenue growing in the high single-digit range and maintaining attractive margins. Simultaneously, we are managing the decline in traditional areas like Checks, where we continue to gain market share and implement operational improvements to safeguard cash flow. Overall, Deluxe has transformed into a very different company compared to a few years ago when we were not seeing organic growth. Notably, we are now in our fourth consecutive year of organic revenue growth. Although the growth may be modest, it demonstrates our ability to consistently expand, driven by the success of our Payments and Data businesses as a whole.

I was curious if we could discuss some of the other important topics that we haven't covered yet, one of which is real estate. Could you provide us with an update on that and let us know if there are any considerations we should be aware of?

Marc, you may recall, we have made a lot of progress on real estate consolidating our operating footprint, especially around our Print production, our lockbox operation, etc. We continue to make more progress even in the first quarter consolidating some of our office locations and the space we have in that in our footprint. I think you'll continue to see us to make incremental improvement there. But over the last few years, we've already made a very significant step forward on consolidating our real estate footprint. And while there's a bit more to go, I feel like we have made significant progress there.

Great. I wanted to revisit a previous comment regarding cash flow improvement year-over-year. Chip, I believe you mentioned the timing of the ERP system last year. If I recall correctly, there was a slight issue when you went live that could have delayed you by about a week. So, in comparison, it seems you faced some challenges last year related to that. Did this have any impact that was not present this year, which may have been beneficial?

Yes, a little bit. I mean if you think about our Print businesses, they would have had a little bit of pressure in Q1 a year ago with not being able to get everything out the door with perfect timing and then made up for it in the second quarter. In the blend of everything when you think about secular unit declines, everything going on, it's not a huge part of the Print story. But if you're looking at it in absolute terms, there was a bit of pressure we would have seen in the first quarter last year that gave us favorability in the second quarter. So as you look ahead to Q2 comps, there will be a little bit of pressure with Print, but we think it really doesn't change the narrative of what's going on there with the business just continuing to execute in this low to mid-single-digit decline levels.

Right, got you. And then finally for me, I was sort of curious as to maybe if you could give a little bit of a pricing dynamic update of what you're seeing out there as far as, are there any particular areas where pricing pressures or any pushback has been seen that should be called out? Or what are we seeing there as far as your expectations as to pricing and escalations there?

We are successfully increasing the prices of our products across the portfolio, and we believe this is due to the quality of our products and the services we provide. While no customer welcomes a price increase, we have approached this responsibly, and our customers likely agree. We have implemented price increases that we expect to benefit us later in the year, as there is often a delay before they impact the P&L. Despite these increases, we continue to see stability in our volume.

Yes. Marc, I would just add that you may recall at Investor Day, we talked about pricing as one of the North Star initiatives and how it was just advancing itself from inflationary input costs relative to output price and really moving to more of an analytical view of price stratification across the customer base or product base, really moving the needle on how we do it. And so that is part of the initiatives and is one of the drivers behind why we continue to do it and feel good about the responsible price we're taking. I would say if you boil it all the way up and you got to remember, you got parts of the business with some decline aspects of it. You got to normalize it all, but at the highest level, I'd say our growth in the first quarter was probably right down the middle of 50-50 price, volume, healthy mix of both.

That concludes our Q&A session. I will now turn the conference back over to Brian Anderson for closing remarks.

Thank you, Mark. Before we conclude, I'd like to share that management will be participating in-person at both the Needham Technology, Media and Consumer Conference on May 14 and 15, and the TD Cowen Technology, Media and Telecom Conference on May 29 and 30, both in New York during the quarter. Thank you again for joining us today, and we look forward to speaking with you all again in August as we share our second quarter results.

Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect.