Minnesota | 1-7945 | 41-0216800 |
(State or Other Jurisdiction | (Commission | (I.R.S. Employer |
of Incorporation) | File Number) | Identification No.) |
3680 Victoria St. North, Shoreview, Minnesota | 55126-2966 |
(Address of Principal Executive Offices) | (Zip Code) |
99.1 | Press Release, dated April 25, 2013, of Deluxe Corporation reporting results from first quarter 2013. |
DELUXE CORPORATION | ||
/s/ Anthony C. Scarfone | ||
Anthony C. Scarfone | ||
Senior Vice President, | ||
General Counsel and Secretary |
99.1 | Press Release, dated April 25, 2013, of Deluxe Corporation reporting results from first quarter 2013 |
Deluxe Corporation P.O. Box 64235 St. Paul, MN 55164-0235 (651) 483-7111 |
NEWS RELEASE | For additional information: Jeff Johnson Treasurer and VP Investor Relations (651) 787-1068 | |
DELUXE REPORTS FIRST QUARTER 2013 FINANCIAL RESULTS |
Revenue grows 2.5% and exceeds high end of outlook |
Diluted EPS of $0.89 grows 3.5%; and adjusted EPS of $0.91, grows 3.4% exceeds high end of outlook |
Tightens revenue and adjusted EPS outlook range to upper end |
Q1 2013 | Q1 2012 | Vs. Q1 2012 | ||||||||
Revenue | $387.6 million | $378.0 million | 2.5 | % | ||||||
Net income | $45.9 million | $44.1 million | 4.1 | % | ||||||
Diluted EPS – GAAP | $0.89 | $0.86 | 3.5 | % | ||||||
Adjusted Diluted EPS – Non-GAAP | $0.91 | $0.88 | 3.4 | % |
• | Revenue for the quarter was $387.6 million compared to $378.0 million during the first quarter of 2012. Revenue increased 2.5% compared to 2012, despite two fewer business days in 2013, driven by 8.1% growth in Small Business Services. Marketing solutions and other services revenue increased 22.2% compared to 2012 and represented 19.2% of consolidated revenue, up from 16.1% in the first quarter of 2012. |
• | Gross margin was 65.6% of revenue, compared to 66.3% in the first quarter of 2012. Unfavorable product mix and increased delivery rates and material costs in 2013, were partly offset by favorable impacts from price increases and the Company's continued cost reduction initiatives. |
• | Selling, general and administrative (SG&A) expense increased $3.3 million in the quarter compared to 2012. Increased SG&A expense associated with commissions on increased revenue, as well as higher brand awareness spending and the OrangeSoda acquisition in the second quarter of 2012, was partially offset by benefits from continued execution against expense reduction initiatives. |
• | Operating income in 2013 was $77.7 million compared to $78.0 million in the first quarter of 2012. Restructuring-related costs were $1.4 million in 2013 versus $1.9 million in 2012. These costs were primarily attributable to the Company's on-going cost reduction initiatives. Operating income was 20.0% of revenue compared to 20.6% in the prior year driven primarily by product mix, increased delivery rates and material costs, and the OrangeSoda acquisition in the second quarter of 2012, partly offset by higher revenue per order and continued cost reductions. |
• | Reported diluted EPS increased $0.03 from the prior year due primarily to lower interest expense driven by the Company's debt refinancing completed in the fourth quarter of 2012. |
• | Revenue was $248.3 million versus $229.6 million in 2012. Revenue was 8.1% higher in the quarter driven by growth in marketing solutions and other services revenue, accessories and other product revenue and in checks, driven by our on-line, Safeguard® distributor, and dealer channels. Revenue also benefited from price increases and the OrangeSoda acquisition. |
• | Operating income in 2013 was flat at $38.6 million, compared to $38.8 million in 2012. |
• | Revenue was $87.2 million compared to $90.6 million in 2012. The impact of check usage declines and two fewer business days offset the benefits of price increases and growth in non-check revenue. |
• | Operating income in 2013 increased to $22.9 million from $21.9 million in 2012. |
• | Revenue was $52.1 million compared to $57.8 million in 2012, primarily driven by lower order volume resulting from the continued decline in check usage and two fewer business days, partially off-set by higher revenue per order. |
• | Operating income in 2013 decreased to $16.2 million from $17.3 million in 2012. |
Current outlook (4/25/2013) | |||
Revenue | $375 to $382 million | ||
Diluted EPS – GAAP | $0.84 to $0.89 | ||
Adjusted Diluted EPS – Non-GAAP | $0.85 to $0.90 |
Prior outlook (1/24/2013) | Current outlook (4/25/2013) | ||
Revenue | $1.535 to $1.575 billion | $1.545 to $1.575 billion | |
Marketing solutions & other services | $330 to $340 million | $330 to $340 million | |
Diluted EPS – GAAP | $3.60 to $3.80 | $3.61 to $3.76 | |
Adjusted Diluted EPS – Non-GAAP | $3.60 to $3.80 | $3.65 to $3.80 | |
Operating cash flow | $240 to $255 million | $240 to $245 million | |
Capital expenditures | $35 million | $35 million | |
Depreciation and amortization | $62 million | $62 million | |
Effective tax rate | approximately 34% | approximately 34% |
• | Deluxe will hold an open-access teleconference call today at 11:00 a.m. ET (10:00 a.m. CT) to review the financial results. All interested persons may listen to the call by dialing 1-800-237-9752 (access code 77662157). |
• | The presentation also will be available via a simultaneous webcast on our investor relations website at www.deluxe.com/investor. |
• | An audio replay of the call will be available through midnight on May 9th by calling 1-888-286-8010 (access code 33314252). The presentation will be archived on Deluxe's web site. |
Actual | |||||||
Q1 2013 | Q1 2012 | ||||||
Adjusted Diluted EPS | $0.91 | $0.88 | |||||
Restructuring and related costs | (0.02 | ) | (0.02 | ) | |||
Reported Diluted EPS | $0.89 | $0.86 |
Outlook | |||||
Total Year | |||||
Q2 2013 | 2013 | ||||
Adjusted Diluted EPS | $0.85 to $0.90 | $3.65 to $3.80 | |||
Restructuring and related costs | (0.01 | ) | (0.04 | ) | |
Reported Diluted EPS | $0.84 to $0.89 | $3.61 to $3.76 |
Quarter Ended March 31, | |||||||||||||
2013 | 2012 | ||||||||||||
Product revenue | $339.9 | $341.4 | |||||||||||
Service revenue | 47.7 | 36.6 | |||||||||||
Total revenue | 387.6 | 378.0 | |||||||||||
Cost of products sold | (112.3 | ) | (29.0 | %) | (111.6 | ) | (29.5 | %) | |||||
Cost of services provided | (21.0 | ) | (5.4 | %) | (15.9 | ) | (4.2 | %) | |||||
Total cost of revenue | (133.3 | ) | (34.4 | %) | (127.5 | ) | (33.7 | %) | |||||
Gross profit | 254.3 | 65.6 | % | 250.5 | 66.3 | % | |||||||
Selling, general and administrative expense | (175.2 | ) | (45.2 | %) | (171.9 | ) | (45.5 | %) | |||||
Net restructuring charges | (1.4 | ) | (0.4 | %) | (0.6 | ) | (0.2 | %) | |||||
Operating income | 77.7 | 20.0 | % | 78.0 | 20.6 | % | |||||||
Interest expense | (9.5 | ) | (2.5 | %) | (11.7 | ) | (3.1 | %) | |||||
Other income | 0.4 | 0.1 | % | 0.1 | — | ||||||||
Income before income taxes | 68.6 | 17.7 | % | 66.4 | 17.6 | % | |||||||
Income tax provision | (22.7 | ) | (5.9 | %) | (22.3 | ) | (5.9 | %) | |||||
Net income | $45.9 | 11.8 | % | $44.1 | 11.7 | % | |||||||
Weighted average dilutive shares outstanding | 51.2 | 51.2 | |||||||||||
Diluted earnings per share | $0.89 | $0.86 | |||||||||||
Capital expenditures | $8.3 | $9.0 | |||||||||||
Depreciation and amortization expense | 15.9 | 17.1 | |||||||||||
Number of employees-end of period | 5,413 | 5,589 | |||||||||||
Non-GAAP financial measure - EBITDA(1) | $94.0 | $95.2 | |||||||||||
Non-GAAP financial measure - Adjusted EBITDA(1) | 95.4 | 97.1 |
Quarter Ended March 31, | ||||||||
2013 | 2012 | |||||||
Adjusted EBITDA | $95.4 | $97.1 | ||||||
Restructuring and related costs | (1.4 | ) | (1.9 | ) | ||||
EBITDA | 94.0 | 95.2 | ||||||
Income tax provision | (22.7 | ) | (22.3 | ) | ||||
Interest expense | (9.5 | ) | (11.7 | ) | ||||
Depreciation and amortization expense | (15.9 | ) | (17.1 | ) | ||||
Net income | $45.9 | $44.1 |
March 31, 2013 | December 31, 2012 | March 31, 2012 | |||||||||
Cash and cash equivalents | $70.7 | $45.4 | $58.7 | ||||||||
Other current assets | 185.1 | 174.3 | 167.4 | ||||||||
Property, plant & equipment-net | 101.8 | 104.2 | 110.7 | ||||||||
Intangibles-net | 146.0 | 150.7 | 152.1 | ||||||||
Goodwill | 789.6 | 789.6 | 777.0 | ||||||||
Other non-current assets | 148.6 | 148.2 | 144.1 | ||||||||
Total assets | $1,441.8 | $1,412.4 | $1,410.0 | ||||||||
Current portion of long-term debt | $0.2 | $— | $85.5 | ||||||||
Other current liabilities | 217.5 | 220.1 | 209.6 | ||||||||
Long-term debt | 650.4 | 652.6 | 656.5 | ||||||||
Deferred income taxes | 74.8 | 75.1 | 52.2 | ||||||||
Other non-current liabilities | 35.1 | 31.7 | 66.6 | ||||||||
Shareholders' equity | 463.8 | 432.9 | 339.6 | ||||||||
Total liabilities and shareholders' equity | $1,441.8 | $1,412.4 | $1,410.0 | ||||||||
Shares outstanding | 50.7 | 50.6 | 51.0 |
Quarter Ended March 31, | |||||||
2013 | 2012 | ||||||
Cash provided (used) by: | |||||||
Operating activities: | |||||||
Net income | $45.9 | $44.1 | |||||
Depreciation and amortization of intangibles | 15.9 | 17.1 | |||||
Contract acquisition payments | (3.2 | ) | (9.4 | ) | |||
Other | (7.1 | ) | 0.2 | ||||
Total operating activities | 51.5 | 52.0 | |||||
Investing activities: | |||||||
Purchases of capital assets | (8.3 | ) | (9.0 | ) | |||
Payments for acquisitions | (1.4 | ) | (0.4 | ) | |||
Other | (0.2 | ) | 0.3 | ||||
Total investing activities | (9.9 | ) | (9.1 | ) | |||
Financing activities: | |||||||
Dividends | (12.7 | ) | (12.8 | ) | |||
Share repurchases | (12.6 | ) | — | ||||
Shares issued under employee plans | 9.0 | 2.7 | |||||
Other | 0.8 | (3.3 | ) | ||||
Total financing activities | (15.5 | ) | (13.4 | ) | |||
Effect of exchange rate change on cash | (0.8 | ) | 0.5 | ||||
Net change in cash and cash equivalents | 25.3 | 30.0 | |||||
Cash and cash equivalents: Beginning of period | 45.4 | 28.7 | |||||
Cash and cash equivalents: End of period | $70.7 | $58.7 |
Quarter Ended March 31, | |||||||
2013 | 2012 | ||||||
Revenue: | |||||||
Small Business Services | $248.3 | $229.6 | |||||
Financial Services | 87.2 | 90.6 | |||||
Direct Checks | 52.1 | 57.8 | |||||
Total | $387.6 | $378.0 | |||||
Operating income: (1) | |||||||
Small Business Services | $38.6 | $38.8 | |||||
Financial Services | 22.9 | 21.9 | |||||
Direct Checks | 16.2 | 17.3 | |||||
Total | $77.7 | $78.0 |
Quarter Ended March 31, | |||||||
2013 | 2012 | ||||||
Small Business Services | $0.7 | $1.1 | |||||
Financial Services | 0.5 | — | |||||
Direct Checks | 0.2 | 0.8 | |||||
Total | $1.4 | $1.9 |
Quarter Ended March 31, | |||||||
2013 | 2012 | ||||||
Adjusted operating income: (1) | |||||||
Small Business Services | $39.3 | $39.9 | |||||
Financial Services | 23.4 | 21.9 | |||||
Direct Checks | 16.4 | 18.1 | |||||
Total | $79.1 | $79.9 |
Quarter Ended March 31, | |||||||
2013 | 2012 | ||||||
Adjusted operating income | $79.1 | $79.9 | |||||
Restructuring and related costs: | |||||||
Small Business Services | (0.7 | ) | (1.1 | ) | |||
Financial Services | (0.5 | ) | — | ||||
Direct Checks | (0.2 | ) | (0.8 | ) | |||
Total | (1.4 | ) | (1.9 | ) | |||
Reported operating income | $77.7 | $78.0 |