Deluxe Corp (DLX) Q4 2018 Earnings Conference Call Transcript

DLX earnings call for the period ending December 31, 2018.

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Deluxe Corp  (NYSE:DLX)
Q4 2018 Earnings Conference Call
Jan. 24, 2019, 11:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

See all our earnings call transcripts.

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2018 Deluxe Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, this conference maybe recorded.

I would now like to turn the conference over to your host for today Ed Merritt, Treasurer and Vice President of Investor Relations, you may begin.

Edward A. Merritt -- Treasurer, Vice President, Investor Relations

Thank you, Sonia, and welcome everyone to Deluxe Corporation's fourth quarter 2018 earnings call. I'm Ed Merritt, Deluxe's Treasurer and Vice President of Investor Relations. Joining me on today's call is Barry McCarthy, our President and Chief Executive Officer; and Keith Bush, our Chief Financial Officer. At the end of today's prepared remarks, Barry, Keith and I will take questions.

I would like to remind you that comments made today regarding financial estimates, projections and management's intentions and expectations regarding the Company's future performance are forward-looking in nature as defined in the Private Securities Litigation Reform Act of 1995. As such, these comments are subject to risks and uncertainties, which could cause actual results to differ materially from those projected. Additional information about various factors that could cause actual results to differ from projections are contained in the press release that we issued this morning, as well as in the Company's Form 10-K for the year ended December 31st, 2017. Portions of the financial and statistical information that will be reviewed during this call are addressed in more detail in today's press release, which is posted on our Investor Relations website at deluxe.com/investor. This information was also furnished to the SEC on Form 8-K filed by the Company this morning. Any references to non-GAAP financial measures are reconciled to the comparable GAAP financial measures in the press release or as part of our presentation during this call.

Now, I'll turn the call over to Barry.

Barry C. McCarthy -- President, Chief Executive Officer

Thank you, Ed, and good morning, everyone. It's a privilege to be with you today at my first earnings call as President and CEO of Deluxe. Before we get started, I'd like to thank Lee Schram for his support during this transition at acknowledges many vital contributions over nearly 13 years here. Along with all of us, I wish him the very best in his retirement, he deserves it.

I'm honored to join Deluxe at this exciting and important time as we accelerate the ongoing transformation from a check printer to a technology enabled solutions provider and continue to create value for our shareholders. In a few minutes, I'll share some of my background, why I chose to become a Deluxer and some initial observations, my first few weeks here.

I'll also provide a general sense of where I'm headed and outline some urgent priority for the coming months. Before I get to that, let me provide some highlights from 2018. I'll have Keith go into more detail shortly. I'm pleased to report that we delivered another year of strong revenue growth. In fact, 2018 marked a record for full-year revenue and we continue to grow adjusted earnings per share and operating cash flow. Total fourth quarter revenue grew 6% year-over-year driven by financial services, which increased 15%, and by small business services, which increased 4%. These increases on the top line were partially offset by direct checks, which declined 8% in the quarter and other performance within our data driven marketing solution. A data driven marketing solutions delivered as expected, 2018 would have been a banner year.

I'll address the challenges and opportunities in data driven marketing in more detail in a few minutes. Checks and forms continue to perform well and I think it's important to note that the fundamental health of the company is very strong. In the fourth quarter, we added with 45% of our business growing revenue at a double digit rate. It's clear that our strategy to transform Deluxe from a check and forms printer to a technology enabled solutions provider is delivering positive financial results.

With that, let me turn the call to Keith for additional details on 2018.

Keith A. Bush -- Chief Financial Officer

Thanks, Barry. We delivered our fourth quarter revenue of $525 million, which as Barry mentioned represents a 6% increase over last year. Organic revenue, which excludes acquisitions, FX and other non-comparable items was about flat. To underscore Barry's earlier point about the company's fundamental health, had data driven marketing grown as expected, the company would have grown organic revenue in the quarter.

Barry also noted, we established an all-time revenue record of $1.998 billion. This exceeds the previous high of $1.981 billion set back in 1996. And we grew total revenue for the ninth consecutive year. Marketing solutions and other services revenue grew about 11% over the prior year and represented over 42% of full-year revenue.

Shifting to our segments, Small Business Services revenue was $334 million and grew 3.6% in total were about flat organically. Financial Services revenue was $160 million and grew 15% on reported basis or over 1% organically compared to the fourth quarter of last year. Financial Services check units declined slightly less than expected in the quarter at about 5% and about 6.5% for the full-year. Direct Checks revenue was $31 million declining 8.3% for last year, but ending better than our expectations. As Barry mentioned, we're making good progress on our strategy and we're intently focused on accelerating this transformation and increasing value for our shareholders. Our marketing solutions and other services or MOS are central to our transformation and continue to grow. MOS grew to $238 million or about 45% of total revenue for the quarter, representing a 20% increase over last year, and an increase of 6% organically. MOS represented 42% of total revenue for the year ending at $840 million, an increase about 11% year-over-year or nearly 2% organically. Specifically, we delivered the following annual revenue by MOS category.

Small business marketing solutions ended the year at $292 million, and with slightly better than our expectations, growing 12% year-over-year and about 2% organically. Web services ended the year at $162 million, and was in line with our expectations, growing 23% year-over-year with a slight organic decline of about 1%.

Data driven marketing ended the year at $148 million, declining 2% from the prior year and about 2% organically. Treasury management ended the year at $148 million growing 36% from the prior year in line with our expectations. However, revenue in the fourth quarter grew organically over 22% and about 7% for the year.

Finally, fraud, security and other operational services ended the year at $90 million, about in line with our expectations, declining 12% from the prior year or about 8% organically. Check revenue ended the quarter at $198 million, representing about 38% of total revenue. Forms and accessories ended at $89 million, representing about 17% of total revenue.

Gross margin for the quarter was 59% of revenue and declined by 240 basis points from 2017. The impacts of margin from product and service mix, acquisitions and increased shipping and material costs were only partially offset by previous price increases and improvements in manufacturing productivity. SG&A expense increased $15.2 million from last year and represented 41.2% of revenue compared to 40.6% last year. Continued cost reduction initiatives and gains on asset sales were more than offset by additional SG&A expenses from acquisitions, a favorable legal settlement in the prior year costs related to the CEO transition process and higher average commission in the small business segment.

Excluding non-GAAP adjustments, which I will discuss shortly. Adjusted operating margin for the quarter was 18.6%, down 240 basis points from 21% in 2017. The margin decline was driven primarily by the mix of product and service revenue and acquisitions partially offset by previous price increases and continued cost reductions. Small Business Services adjusted operating margin was 18.8%, a decline of 130 basis points from 20.1% in 2017, driven by acquisitions, a higher average commission rate in increased material and shipping costs only partially offset by previous price increases and continued reduction in the cost reduction initiatives.

Financial Services adjusted operating margin of 15.2% was down 460 basis points from 2017. The continued benefits of cost reduction initiatives only partially offset check usage declines, check pricing allowances and higher shipping rates experienced in the quarter. Revenue under performance of data driven marketing also contributed to the margin compression. In addition, the REMITCO acquisition drove changes in product and service mix along with higher amortization expense.

As a reminder, we had a benefit in 2017 from legal settlement in the same period. Direct checks adjusted operating margin of 34.1% increased 20 basis points from 2017, driven by cost management initiatives. Diluted earnings per share for the fourth quarter was $1.39, and includes aggregate non-GAAP adjustments of $0.15 per share. During the quarter, we recognized charges for restructuring and integration, transaction costs and CEO transition costs of $0.16 per share and a benefit of $0.01 per share related to federal tax reform. Adjusted diluted EPS was $1.54, and ended near the high end of our outlook, driven by lower spending that was partially offset by the flow through profit impact of lower data driven marketing revenue.

Turning to the balance sheet and cash flow statement. We were drawn $910 million on our credit facility at the end of the year with the increase primarily due to higher share repurchases and acquisitions. Cash provided by operating activities for the year was $339 million. Capital expenditures were $62 million. Depreciation and amortization expense was about $34 million(ph), and acquisition and amortization expense was about $77 million.

Moving on to our 2019 outlook. Note that we are adjusting our go forward planning architecture to provide you with a more transparent view of the business. This outlook excludes the impact from forward-looking M&A activity and any benefits from gains on asset sales. Barry will discuss more fully in a moment. But we will pause on further acquisitions during the first half of 2019 to focus on driving enhanced returns from our current businesses. While this temporarily slow our revenue and profit growth rate, we believe it is important to the strategic direction of the company. This will allow us to focus on scaling our sales and product innovation capabilities as we continue to transition to a technology enabled solutions provider.

We expect to have a challenging first quarter as a result of some non-comparable items versus last year, but we expect the full-year outlook to be solid. For the first quarter, we expect revenue to range from $490 million to $505 million. An adjusted diluted EPS to be in the range of $1.05 per share to $1.15 per share. The first quarter 2018 results included $7.2 million from gains on asset sales. Our guidance for the first quarter does not include any benefit from gains on asset sales. Additionally, treasury management had a very strong Q1 2018. Although we had record orders in the second half of 2018, we expect a slower roll out to the start of 2019 with the ramp over the balance of the year. In addition, we expect higher acquisition -- amortization and medical expenses, the highest tax rate of the year and revenue volume declines in direct checks, all putting pressure on adjusted diluted EPS.

Turning to our full-year 2019 outlook. To give you some directional perspective, we expect full year consolidated revenue to grow low-single digits, and we expect to see full-year improvement in GAAP diluted EPS. In 2018, we delivered adjusted EPS of $5.69, which includes $0.25 from gains on asset sales. For 2019, we are not assuming any benefit from gains on asset sales. After this adjustment, we expect to see a slight year-over-year improvement in adjusted diluted EPS. This outlook is before taking into account incremental investments we are evaluating to accelerate our growth. We are looking for opportunities to sell fund these investments in the current year. However, there maybe timing differences, which might impact this outlook.

As I mentioned earlier, the acquisition pause will make our planned growth appear to slow slightly, but will provide an even better upside for long-term growth as we close on future acquisitions. We will provide greater visibility into our full-year plans, including earnings and cash flow projections on our April call. We expect to make modest internal investments in sales and product innovation and will continue to focus on cost management throughout 2019 and beyond to deliver significant structural improvements. We will provide additional color on all of this in April.

Shifting to our capital structure, we expect to maintain our balanced approach of investing organically and through acquisitions to drive growth transformation. As I mentioned earlier, acquisitions will no longer be included in our outlook. In December, we closed on the acquisition of MyCorporation, which helps new businesses with incorporation, compliance and other services. We believe this acquisition will be a great source of new customers and complements our strategy of developing new channels to source small business customers. This also provides cross-sell opportunities into other Deluxe services. The acquisition was funded through a draw on our credit facility, and we expect it to be slightly accretive in 2019.

In terms of other capital allocation priorities, we expect to continue paying a quarterly dividend. If you recall, last year our Board of Directors authorized a new $500 million share repurchase program. During the fourth quarter, we repurchased $80 million of our common stock, bringing the full year 2018 share repurchases total to $200 million. In 2019, we expect to repurchase additional common stock beginning as early as this quarter. To the extent, we generate excess cash, we plan to reduce the amount outstanding against our credit facility. We ended 2018 with $910 million drawn on our credit facility. And on January 22nd, we expanded that credit facility by $200 million. The proceeds are to be used for general corporate purposes, giving us more flexibility and financial capacity as we continue to execute our transformation.

Now, I'll turn the call back to Barry.

Barry C. McCarthy -- President, Chief Executive Officer

Thank you, Keith. As I mentioned at the beginning of the call, I'm very optimistic about the compelling opportunities ahead for Deluxe. Although I've only been in the position for a few weeks, I spent that time talking to customers, learning the business, listening to our leaders and meeting hundreds of our teammates at many of our sites. And I've looked at our acquisitions and current strategy. Overall, I believe the company is on a solid path, but I recognize we have work to do to achieve our full potential.

Importantly, and even more optimistic about our future now than I was when I joined Deluxe just a few weeks ago. Before I talk about our plans for the coming months, I want to share with you what I saw in Deluxe, why I joined, and how my background positions me well to lead the company into the future.

I enthusiastically came to Deluxe, because I believe the company is significantly underappreciated. We have an impressive collection of assets. For example, our small business services segment has a base of $4.8 million loyal clients and financial services adds another 4,600 financial institution partners. On customer count alone, Deluxe compares favorably with top tier global technology companies with 45% of our business already growing double digits. While our current P/E multiple looks more like a traditional printer than a technology company, I believe is the consequence of the markets not yet recognizing our transformation is already under way. Completing(ph)the picture, the company has a strong balance sheet with low leverage. Our ability to generate consistent cash flow enables us to not only pay a solid dividend, but also invest in the business and repurchase stock. Deluxe is uniquely positioned for growth and increase shareholder value and we're focused on doing so with urgency. To that point, we need to significantly accelerate change in everything we do. These changes won't happen overnight, and I'm sure we'll face difficult decisions. But I'm confident I can lead the company to unlock greater potential. I'm confident, because I tackled similar challenges before. I spent 14 years at First Data running almost every business at the company in financially challenging condition.

I delivered record performance in each role including several turnarounds in both domestic and global businesses. Earlier in my career, I readied ATM and debit business at Wells Fargo, and started micro payments company in the Silicon Valley with a successful exit. I turned around the payments business at VeriSign, leading to its acquisition by PayPal. I began my career at P&G in field sales and sales management, and later at headquarters in product and brand planning roles. The bottom line is that I understand enterprise selling and product management and I know how to deliver a winning innovation cycle. I've also had the great fortune to have worked for and learn from legendary leaders who are main mentors today. And importantly, I have worked at each of our major segments over my career, small business, financial institutions and large enterprises. While I've only been on the job for a few weeks, I do have clarity on what needs to be done and I have an intense sense of urgency to do so.

Let me walk you through my immediate focus areas. First, we will expand enterprise selling and sales capability to accelerate profitable organic revenue growth. This will unlock the full potential of the company and allow us to serve our clients holistically. Second, we will expand our strategy, product management and innovation capabilities to ensure we are competing effectively in the targeted growth markets and to give the sales organization new and better solutions to sell. Third, we will rigorously examine our expense structure with the objective of eliminating unnecessary structural costs to both enhanced margin and self fund needed growth investments. Nothing is untouchable and we will consider all options.

Finally, we need to reinvigorate our culture and structure to put greater focus on clients and accelerate our speed of execution, and we're taking immediate action on this. Our top 75 leaders next week to help us chart the course for what we are calling our new day. And early in February, we'll host hundreds of clients for our Deluxe financial exchange where we expect to build on our partnership and learn more about our clients emerging needs.

As we mentioned earlier, we will pause additional acquisitions during the first half of 2019 to allow us to better integrate the key acquisitions from last year and work on scaling our strategy sales and product efforts. As Keith indicated that this will temporarily slow our revenue and profit growth, but we will have a stronger and more scalable company going forward, and will be better positioned to deliver new organic solutions and more easily integrate future acquisitions to take advantage of our scale.

In addition, we've plans to engage one of the world's foremost management consulting firms to help us stress test our current strategic plan and identify additional opportunities to maximize shareholder return. This will include sales, product management and strategic alliances. In April, when we are next together for our first quarter earnings release, I'll share more specifics about our direction, plan and strategy. I look forward to provide you an update at that time.

Before taking questions, there are a few key points I would like to touch on in advance. First, despite record revenue, we did not meet our organic revenue growth expectations, primarily due to under performance and the data driven marketing business. Macro factors like higher interest rates negatively impacted this business specifically within the mortgage arena. We've had other good customer wins and our pay for performance model is gaining traction. While there's some positive sides of the data driven marketing space, I know there is much more work to be done. For 2019, we anticipate demand from our largest financial institutions to help them grow customer deposits, new business banking relationships and to develop new move or initiatives, all sweet spot for us.

Treasury management solutions made strong progress in 2018, regarding revenue, signing new multi-year clients and integrating REMITCO. In the small business segment, Web Services grew 23% in 2018. We're pleased about the recent acquisition of MyCorporation, which enables us to provide incorporation services to small businesses. Capturing clients at business formation, we believe will enable us to cross-sell existing products and services, such as logo design, web design, web hosting, email marketing, payroll services, and more.

Finally, before I open the call up for questions, I'd like to take this opportunity to thank all my Deluxe teammates for their hard work and dedication. A company is only as good as this people and we have great people. I'm proud to wear the Deluxe jersey and call myself a Deluxer. I hope you've now heard my strong sense of urgency by attraction and optimism for our future. There's clearly work to be done, but the future of our company has never than brighter.

Now Keith, Ed and I will open the call for questions.


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Questions and Answers:

Operator

Thank you. (Operator Instructions) Our first question comes from Charlie Strauzer of CJS Securities. Your line is now open.

Charlie Strauzer -- CJS Securities -- Analyst

Hi. Good morning.

Barry C. McCarthy -- President, Chief Executive Officer

Good morning, Charlie.

Charlie Strauzer -- CJS Securities -- Analyst

Welcome to the Board, Barry.

Barry C. McCarthy -- President, Chief Executive Officer

Thank you. Glad to be here.

Charlie Strauzer -- CJS Securities -- Analyst

Looking forward to working with you. Just a couple of quick questions -- this morning, just when you look at the initial guidance that you're giving out, and I appreciate that's only a couple of weeks into your hone there, but if you look at the revenue assumptions this year, is there a baking in any organic growth into that assumption for the full year?

Barry C. McCarthy -- President, Chief Executive Officer

So, what is in that forecast, I think most important thing, which was a difference in our planning architecture is that we are -- we've taken two things specifically out going forward. So, we are not assuming or planning any gains on sale, and we are not assuming any new acquisition. So we're trying to give you the most transparent view of the business as we can. I think if you're specifically asking about organic growth, I think we're forecasting very, very modest increase in organic growth. But to that -- the numbers you've seen is what -- our first path and how we're thinking about full year.

Charlie Strauzer -- CJS Securities -- Analyst

Got it. And then move -- look at the Q1 guidance, and you talked about the EPS for Q1 versus the -- I'm sorry, for the full year guidance for EPS, you're talking about -- on the adjusted side -- using a base of 569 (ph) for this past year, or is it more 544 (ph), should we using this as that kind of base?

Keith A. Bush -- Chief Financial Officer

Hi. Charlie, this is Keith. Yes, your thinking about it right. The 569 is our recorded basis, and that did include $0.25 of gain on sale benefit. So, we have not included any gain on sale benefit in our 2019 guidance. So, you would be working from that lower number.

Charlie Strauzer -- CJS Securities -- Analyst

Got it. So assuming it's a modest growth off the lower numbers, what you're trying to say?

Keith A. Bush -- Chief Financial Officer

Correct.

Charlie Strauzer -- CJS Securities -- Analyst

Got it. Okay. Great. And then just -- thinking broadly Barry, just a little bit more on terms of the strategy here, obviously, data driven marketing was a little bit disappointing this past year or there's -- fixes that you think you can employ there to kind of get that turn back around again?

Barry C. McCarthy -- President, Chief Executive Officer

So, what I know today, it's a really nice business and an opportunity for us to continue to grow. We have some terrific assets, and I know the team have plans in place that we expect will help improve performance for the year, that's an area over the coming weeks I intend to invest time to work with those teams to accelerate our growth.

Charlie Strauzer -- CJS Securities -- Analyst

That's helpful. Thank you. I'll jump back in queue. Thank you.

Operator

Thank you. And our next question comes from Jamie Clement of Buckingham. Your line is now open.

Jamie Clement -- Buckingham -- Analyst

Good morning, gentlemen. Thanks in advance for taking my questions, and Barry, welcome.

Barry C. McCarthy -- President, Chief Executive Officer

Thank you, Jamie.

Jamie Clement -- Buckingham -- Analyst

So Barry, comments from you about improving on sales force processes, becoming more customer centric, if you will across the organization, obviously, if you look at your small business customers radically, radically, radically different group of customers than your financial institution customers, but are there any kind of common themes or big picture thoughts initially that you have here, thematically across the two that we can kind of look for in terms of progress going forward?

Barry C. McCarthy -- President, Chief Executive Officer

Thanks for the question, Jamie. And here's, only a few weeks into this, I can only give you really...

Jamie Clement -- Buckingham -- Analyst

Totally acknowledged, totally acknowledged.

Barry C. McCarthy -- President, Chief Executive Officer

I can give you my thoughts sort of philosophically, and what I'm thinking about. And as I look at our company, I really see a company of companies where we have many fantastic assets that we have not leveraged more holistically. So, I think by putting together an integrated catalog that we can present to customers, especially enterprise class customers, including financial institution. We have an opportunity to distribute and sell our existing book of business to our existing clients. The -- I agree with you that the small business opportunity is different than enterprise or FI opportunity, but believe there's even an opportunity to present multiple solutions to our small business clients and that's one of the reasons we're pleased about the MyCorporation acquisition, because it puts us at the very beginning of a business formation. And at that moment in time, a business is not only needing to incorporate, but they're going to need all of the many other services that we can provide. And we think we're really well positioned in that, especially for e-commerce, mobile commerce, merchants going forward with our ability to host websites, design websites, do logo design, et cetera. And if we can present more solutions to a customer, in this case small businesses at the time of formation, we believe is an opportunity and that's an area for cross-sell as well.

Jamie Clement -- Buckingham -- Analyst

Okay. So, just curious for your thoughts on the macro, it's just -- it's one number, but the small business sentiment data has deteriorated a little bit over the last couple of months, you got small business administration shutdown with the government shutdown. Are you all seeing -- what are you all hearing, or what are your feelings on the macro backdrop over the last couple of months?

Barry C. McCarthy -- President, Chief Executive Officer

You know, Jamie, I read all the same things that you read. But let me tell you how I think about it relative to our business. And so, we have a very sturdy business, because the services that we provide to small businesses are really foundational to their ongoing operation. Even if there's a wobble of the small business environment, businesses generally don't turn off their website. They generally don't stop trying to find new customers, and those are places that are sweet spot for us where we got a nice footprint. So, in the immediate term, we like our -- the durability of sturdiness of our solutions and I think that gives us -- a bit of protection regardless what's happening in the macro environment.

Jamie Clement -- Buckingham -- Analyst

Okay. Just on guidance, and I think you all mentioned obviously, we'll wait for the next earnings release for more of a comprehensive 2019 guide, but I'm noticing your presentation, you're looking for an organic revenue decline with that 2% in the first quarter, this data driven marketing have to turnaround in 2019 for you all to transition from a minus to the positive as the year goes by, or do you feel like there's enough truth in the other aspects of the business to turn positive?

Keith A. Bush -- Chief Financial Officer

So, this is Keith.

Jamie Clement -- Buckingham -- Analyst

Hey, Keith.

Keith A. Bush -- Chief Financial Officer

How are you, Jamie? So -- I think it's just important that we do make acknowledgement that data driven marketing is in this wobble, and we are giving it attention to move through. But when you're looking at the first quarter of 2019, it's also important to recognize that, that quarter last year was a really strong quarter for treasury management. And they wrapped up 2018 with an incredible year. So in the first quarter of 2019, we're rebuilding our pipeline and we're feeling the effect of that, but we most certainly need to be focused on the data driven marketing piece as well to ramp up that growth.

Jamie Clement -- Buckingham -- Analyst

Okay. That is valuable additional commentary. I appreciate. I'll get back in the queue.

Operator

Thank you. And we have time for one more question. And that will be coming from Chris McGinnis of Sidoti & Company. Your line is now open.

Christopher McGinnis -- Sidoti & Company -- Analyst

Good morning. Thanks for taking my questions and congratulations, Barry, on the appointment.

Barry C. McCarthy -- President, Chief Executive Officer

Thank you, Chris. Nice to meet you here.

Christopher McGinnis -- Sidoti & Company -- Analyst

So I guess just -- I know it's early, I know it's been stressed already on the call, but I guess when you look at the three lines of business in terms of FI and small business and direct checks, so anything that excites you more about one or the other, do you feel more confident in kind of helping, drive that transformation, maybe we could just start there, if you don't mind? Thanks.

Barry C. McCarthy -- President, Chief Executive Officer

Sure. Let me tell you what I think is sort of most exciting about our company and our prospects, and it really comes down to our incredible customer footprint. So with, 4.8 million small businesses, 4,600 banks and financial institutions, we already have relationships with an enviable portfolio of businesses. And embedded in that, we have many enterprise relationships that we think can be expanded beyond just traditional small business or financial institutions. So, I start from a place -- that with strong relationships with customers like us, and customers that want us to succeed, we just need to find a way to take the product and service we already have, and deliver it to them at an easier and more -- an easier way to consume, and in a way that can extend the relationship we have. And I made the comment earlier that, an early observation is that we really operate much like a company of companies, and if we can become a more integrated enterprise and sell the entire suite of what we offer, we just have huge opportunity even within the footprint we've already got, which can help us lead to organic growth, which will also help our margins and that we can do -- we can make the company stronger with the things we've already got. And so, I wouldn't highlight any one product over another, because I think we have multiple plays here. The biggest thing we got to do, which is why it's the first initiative on our new day program is we've got to scale our sales and distribution capability to reach our customers better and more holistically.

Christopher McGinnis -- Sidoti & Company -- Analyst

Understood. That makes a lot of sense. I appreciate that. And then one just -- one last question, because you're buying to the quarter, do we get maybe end of your share count just for that purpose going forward? Thank you.

Barry C. McCarthy -- President, Chief Executive Officer

Yes. We're going to need to wait until the 10-K to provide that information.

Christopher McGinnis -- Sidoti & Company -- Analyst

Okay. Thank you very much, and good luck in Q1.

Barry C. McCarthy -- President, Chief Executive Officer

Great. Thank you.

Operator

Thank you. And I would now like to turn the call back over to Barry McCarthy for any further remarks.

Barry C. McCarthy -- President, Chief Executive Officer

Well. Thank you all for your participation and questions today. If I could give you a small summary. First, I plan to spend much of my time in the coming weeks on improving the effectiveness of the sales organization. Driving the development and delivery of innovative new products and services, reviewing the structure of our organization and processes to reduce costs and enhancing our culture, so we can hold stronger partnerships with our clients to support their needs. And second, by our April earnings call, I'll have an additional 90 days under my belt, I'd be in a better position to provide more detailed insights into our strategic direction and how I see our company transforming to achieve profitable organic revenue growth for the long-term.

So now I'll turn the call back to Ed for some final comments.

Edward A. Merritt -- Treasurer, Vice President, Investor Relations

Thanks, Barry. Before we conclude today's call, I'd like to remind you that Deluxe management will be participate at the following conferences in the first quarter. On March 11th and 12th will be in New York at Susquehanna Tech Summit, and on March 19th and 20th will be in New York at the Telsey Advisory Group Investor Conference. Thanks for joining us, and that concludes the Deluxe fourth quarter 2018 earnings call.

Operator

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

Duration: 41 minutes

Call participants:

Edward A. Merritt -- Treasurer, Vice President, Investor Relations

Barry C. McCarthy -- President, Chief Executive Officer

Keith A. Bush -- Chief Financial Officer

Charlie Strauzer -- CJS Securities -- Analyst

Jamie Clement -- Buckingham -- Analyst

Christopher McGinnis -- Sidoti & Company -- Analyst

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