Minnesota | 1-7945 | 41-0216800 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
3680 Victoria St. North, Shoreview, Minnesota | 55126-2966 | |
(Address of Principal Executive Offices) | (Zip Code) |
o
|
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
o
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
o
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
o
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
|
·
|
Note 17: Supplemental guarantor financial information
|
|
(d)
|
Exhibits
|
|
99.1
|
Item 1. Financial Statements
|
|
101
|
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010, (ii) Consolidated Statements of Income for the quarters and nine months ended September 30, 2011 and 2010, (iii) Consolidated Statements of Cash Flows for the nine months ended September 30, 2011 and 2010 and (vi) Condensed Notes to Unaudited Consolidated Financial Statements*
|
Date: November 22, 2011 | ||
DELUXE CORPORATION | ||
/s/ Terry D. Peterson | ||
Terry D. Peterson | ||
Senior Vice President, | ||
Chief Financial Officer |
Exhibits
|
||
99.1 |
Item 1. Financial Statements
|
|
101 |
Interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets as of September 30, 2011 and December 31, 2010, (ii) Consolidated Statements of Income for the quarters and nine months ended September 30, 2011 and 2010, (iii) Consolidated Statements of Cash Flows for the nine months ended September 30, 2011 and 2010 and (vi) Condensed Notes to Unaudited Consolidated Financial Statements
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$ | 23,021 | $ | 17,383 | ||||
Trade accounts receivable (net of allowances for uncollectible accounts of $3,989 and $4,130, respectively)
|
65,039 | 66,471 | ||||||
Inventories and supplies
|
22,486 | 21,660 | ||||||
Deferred income taxes
|
8,697 | 9,390 | ||||||
Funds held for customers
|
34,611 | 35,720 | ||||||
Other current assets
|
26,602 | 20,613 | ||||||
Total current assets
|
180,456 | 171,237 | ||||||
Long-Term Investments (including $2,157 and $2,283 of investments at fair value, respectively)
|
44,768 | 37,410 | ||||||
Property, Plant, and Equipment (net of accumulated depreciation of $347,469 and $338,419, respectively)
|
116,773 | 120,221 | ||||||
Assets Held for Sale
|
3,937 | 4,527 | ||||||
Intangibles (net of accumulated amortization of $437,497 and $413,412, respectively)
|
163,710 | 155,112 | ||||||
Goodwill
|
776,944 | 725,937 | ||||||
Other Non-Current Assets
|
100,799 | 94,247 | ||||||
Total assets
|
$ | 1,387,387 | $ | 1,308,691 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$ | 63,167 | $ | 60,478 | ||||
Accrued liabilities
|
146,394 | 144,034 | ||||||
Short-term debt
|
33,000 | 7,000 | ||||||
Total current liabilities
|
242,561 | 211,512 | ||||||
Long-Term Debt
|
742,592 | 748,122 | ||||||
Deferred Income Taxes
|
51,926 | 46,752 | ||||||
Other Non-Current Liabilities
|
66,937 | 76,107 | ||||||
Commitments and Contingencies (Notes 12, 13 and 16)
|
||||||||
Shareholders’ Equity:
|
||||||||
Common shares $1 par value (authorized: 500,000 shares; outstanding: 2011 – 50,817; 2010 – 51,338)
|
50,817 | 51,338 | ||||||
Additional paid-in capital
|
54,712 | 62,915 | ||||||
Retained earnings
|
228,326 | 161,957 | ||||||
Accumulated other comprehensive loss
|
(50,484 | ) | (50,012 | ) | ||||
Total shareholders’ equity
|
283,371 | 226,198 | ||||||
Total liabilities and shareholders’ equity
|
$ | 1,387,387 | $ | 1,308,691 |
Quarter Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenue
|
$ | 355,144 | $ | 367,633 | $ | 1,051,170 | $ | 1,050,749 | ||||||||
Cost of goods sold, including restructuring charges
|
122,638 | 121,433 | 363,487 | 361,736 | ||||||||||||
Gross Profit
|
232,506 | 246,200 | 687,683 | 689,013 | ||||||||||||
Selling, general and administrative expense
|
162,524 | 157,589 | 480,868 | 466,319 | ||||||||||||
Net restructuring charges
|
4,337 | 103 | 9,839 | 2,011 | ||||||||||||
Net gain on sale of facility
|
— | — | (110 | ) | — | |||||||||||
Operating Income
|
65,645 | 88,508 | 197,086 | 220,683 | ||||||||||||
Loss on early debt extinguishment
|
— | — | (6,995 | ) | — | |||||||||||
Interest expense
|
(11,831 | ) | (11,207 | ) | (35,922 | ) | (33,250 | ) | ||||||||
Other (expense) income
|
(301 | ) | 383 | (216 | ) | (1,017 | ) | |||||||||
Income Before Income Taxes
|
53,513 | 77,684 | 153,953 | 186,416 | ||||||||||||
Income tax provision
|
16,778 | 26,512 | 49,189 | 67,846 | ||||||||||||
Income From Continuing Operations
|
36,735 | 51,172 | 104,764 | 118,570 | ||||||||||||
Net Loss From Discontinued Operations
|
— | (372 | ) | — | (771 | ) | ||||||||||
Net Income
|
$ | 36,735 | $ | 50,800 | $ | 104,764 | $ | 117,799 | ||||||||
Basic Earnings Per Share:
|
||||||||||||||||
Income from continuing operations
|
$ | 0.72 | $ | 0.99 | $ | 2.04 | $ | 2.31 | ||||||||
Net loss from discontinued operations
|
— | (0.01 | ) | — | (0.02 | ) | ||||||||||
Basic earnings per share
|
0.72 | 0.99 | 2.04 | 2.29 | ||||||||||||
Diluted Earnings Per Share:
|
||||||||||||||||
Income from continuing operations
|
$ | 0.71 | $ | 0.99 | $ | 2.02 | $ | 2.30 | ||||||||
Net loss from discontinued operations
|
— | (0.01 | ) | — | (0.01 | ) | ||||||||||
Diluted earnings per share
|
0.71 | 0.98 | 2.02 | 2.28 | ||||||||||||
Cash Dividends Per Share
|
$ | 0.25 | $ | 0.25 | $ | 0.75 | $ | 0.75 | ||||||||
Total Comprehensive Income
|
$ | 33,812 | $ | 52,369 | $ | 104,292 | $ | 120,261 |
Nine Months Ended
September 30,
|
|||||||||
2011
|
2010
|
||||||||
Cash Flows From Operating Activities:
|
|||||||||
Net income
|
$ | 104,764 | $ | 117,799 | |||||
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:
|
|||||||||
Net loss from discontinued operations
|
— | 771 | |||||||
Depreciation
|
16,165 | 15,728 | |||||||
Amortization of intangibles
|
40,297 | 38,935 | |||||||
Amortization of contract acquisition costs
|
12,737 | 14,696 | |||||||
Deferred income taxes
|
4,086 | 7,164 | |||||||
Employee share-based compensation expense
|
4,503 | 4,548 | |||||||
Loss on early debt extinguishment
|
6,995 | — | |||||||
Other non-cash items, net
|
8,249 | 9,024 | |||||||
Changes in assets and liabilities, net of effect of acquisitions:
|
|||||||||
Trade accounts receivable
|
(1,826 | ) | 1,889 | ||||||
Inventories and supplies
|
(461 | ) | (294 | ) | |||||
Other current assets
|
(5,411 | ) | (249 | ) | |||||
Non-current assets
|
2,429 | 1,974 | |||||||
Accounts payable
|
(76 | ) | (2,502 | ) | |||||
Contract acquisition payments
|
(9,998 | ) | (13,837 | ) | |||||
Other accrued and non-current liabilities
|
(11,206 | ) | (25,162 | ) | |||||
Net cash provided by operating activities of continuing operations
|
171,247 | 170,484 | |||||||
Cash Flows From Investing Activities:
|
|||||||||
Purchases of capital assets
|
(28,226 | ) | (31,613 | ) | |||||
Payments for acquisitions, net of cash acquired
|
(80,486 | ) | (98,621 | ) | |||||
Payments on company-owned life insurance policies
|
(6,383 | ) | — | ||||||
Loans to distributors
|
(3,515 | ) | — | ||||||
Proceeds from company-owned life insurance policies
|
— | 5,782 | |||||||
Proceeds from sales of marketable securities
|
— | 1,970 | |||||||
Other
|
(1,936 | ) | (1,883 | ) | |||||
Net cash used by investing activities of continuing operations
|
(120,546 | ) | (124,365 | ) | |||||
Cash Flows From Financing Activities:
|
|||||||||
Net proceeds from short-term debt
|
26,000 | 4,000 | |||||||
Payments on long-term debt, including costs of debt reacquisition
|
(215,030 | ) | — | ||||||
Proceeds from issuing long-term debt
|
200,000 | — | |||||||
Payments for debt issue costs
|
(3,470 | ) | (2,361 | ) | |||||
Change in book overdrafts
|
1,982 | (1,595 | ) | ||||||
Proceeds from issuing shares under employee plans
|
7,597 | 3,078 | |||||||
Excess tax benefit from share-based employee awards
|
972 | 396 | |||||||
Payments for common shares repurchased
|
(23,620 | ) | (2,999 | ) | |||||
Cash dividends paid to shareholders
|
(38,395 | ) | (38,586 | ) | |||||
Net cash used by financing activities of continuing operations
|
(43,964 | ) | (38,067 | ) | |||||
Effect Of Exchange Rate Change On Cash
|
(1,099 | ) | 250 | ||||||
Net Change In Cash And Cash Equivalents
|
5,638 | 8,302 | |||||||
Cash And Cash Equivalents:
|
Beginning Of Period
|
17,383 | 12,789 | ||||||
End Of Period
|
$ | 23,021 | $ | 21,091 |
September 30,
2011
|
December 31,
2010
|
|||||||
Raw materials
|
$ | 5,477 | $ | 4,879 | ||||
Semi-finished goods
|
8,905 | 8,393 | ||||||
Finished goods
|
5,208 | 5,083 | ||||||
Supplies, primarily production
|
2,896 | 3,305 | ||||||
Inventories and supplies
|
$ | 22,486 | $ | 21,660 |
September 30, 2011
|
||||||||||||||||
Cost
|
Gross unrealized gains
|
Gross unrealized losses
|
Fair value
|
|||||||||||||
Corporate investments:
|
||||||||||||||||
Money market securities
|
$ | 1,941 | $ | — | $ | — | $ | 1,941 | ||||||||
Funds held for customers:(1)
|
||||||||||||||||
Money market securities
|
4,853 | — | — | 4,853 | ||||||||||||
Canadian and provincial government securities
|
4,988 | 191 | — | 5,179 | ||||||||||||
Marketable securities – funds held for customers
|
9,841 | 191 | — | 10,032 | ||||||||||||
Total marketable securities
|
$ | 11,782 | $ | 191 | $ | — | $ | 11,973 | ||||||||
(1) Funds held for customers, as reported on the consolidated balance sheet as of September 30, 2011, also included cash and cash equivalents of $24,579.
|
December 31, 2010
|
||||||||||||||||
Cost
|
Gross unrealized gains
|
Gross unrealized losses
|
Fair value
|
|||||||||||||
Corporate investments:
|
||||||||||||||||
Money market securities
|
$ | 2,029 | $ | — | $ | — | $ | 2,029 | ||||||||
Funds held for customers:(1)
|
||||||||||||||||
Money market securities
|
5,078 | — | — | 5,078 | ||||||||||||
Canadian and provincial government securities
|
5,148 | 23 | — | 5,171 | ||||||||||||
Marketable securities – funds held for customers
|
10,226 | 23 | — | 10,249 | ||||||||||||
Total marketable securities
|
$ | 12,255 | $ | 23 | $ | — | $ | 12,278 | ||||||||
(1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2010, also included cash and cash equivalents of $25,471.
|
Fair value
|
||||
Due in one year or less
|
$ | 6,794 | ||
Due in one to three years
|
539 | |||
Due in three to five years
|
1,797 | |||
Due after five years
|
2,843 | |||
Total marketable securities
|
$ | 11,973 |
September 30, 2011
|
December 31, 2010
|
|||||||||||||||||||||||
Gross carrying amount
|
Accumulated amortization
|
Net carrying amount
|
Gross carrying amount
|
Accumulated amortization
|
Net carrying amount
|
|||||||||||||||||||
Indefinite-lived:
|
||||||||||||||||||||||||
Trade name
|
$ | 19,100 | $ | — | $ | 19,100 | $ | 19,100 | $ | — | $ | 19,100 | ||||||||||||
Amortizable intangibles:
|
||||||||||||||||||||||||
Internal-use software
|
405,550 | (337,188 | ) | 68,362 | 378,269 | (314,267 | ) | 64,002 | ||||||||||||||||
Customer lists/relationships
|
68,327 | (39,947 | ) | 28,380 | 72,292 | (43,660 | ) | 28,632 | ||||||||||||||||
Distributor contracts
|
30,900 | (27,747 | ) | 3,153 | 30,900 | (26,396 | ) | 4,504 | ||||||||||||||||
Trade names
|
67,661 | (24,912 | ) | 42,749 | 59,361 | (22,009 | ) | 37,352 | ||||||||||||||||
Other
|
9,669 | (7,703 | ) | 1,966 | 8,602 | (7,080 | ) | 1,522 | ||||||||||||||||
Amortizable intangibles
|
582,107 | (437,497 | ) | 144,610 | 549,424 | (413,412 | ) | 136,012 | ||||||||||||||||
Intangibles
|
$ | 601,207 | $ | (437,497 | ) | $ | 163,710 | $ | 568,524 | $ | (413,412 | ) | $ | 155,112 |
Estimated
amortization
expense
|
||||
Remainder of 2011
|
$ | 10,105 | ||
2012
|
32,021 | |||
2013
|
21,669 | |||
2014
|
11,607 | |||
2015
|
8,009 |
Small
Business
Services
|
Financial
Services
|
Direct
Checks
|
Total
|
|||||||||||||
Balance, December 31, 2010:
|
||||||||||||||||
Goodwill
|
$ | 596,534 | $ | 897 | $ | 148,506 | $ | 745,937 | ||||||||
Accumulated impairment charges
|
(20,000 | ) | — | — | (20,000 | ) | ||||||||||
576,534 | 897 | 148,506 | 725,937 | |||||||||||||
Acquisition of Banker’s Dashboard (see Note 5)
|
— | 26,281 | — | 26,281 | ||||||||||||
Acquisition of PsPrint (see Note 5)
|
24,826 | — | — | 24,826 | ||||||||||||
Currency translation adjustment
|
(100 | ) | — | — | (100 | ) | ||||||||||
Balance, September 30, 2011:
|
||||||||||||||||
Goodwill
|
621,260 | 27,178 | 148,506 | 796,944 | ||||||||||||
Accumulated impairment charges
|
(20,000 | ) | — | — | (20,000 | ) | ||||||||||
$ | 601,260 | $ | 27,178 | $ | 148,506 | $ | 776,944 |
September 30,
2011
|
December 31,
2010
|
|||||||
Contract acquisition costs
|
$ | 57,364 | $ | 57,476 | ||||
Deferred advertising costs
|
15,465 | 15,832 | ||||||
Other
|
27,970 | 20,939 | ||||||
Other non-current assets
|
$ | 100,799 | $ | 94,247 |
Nine Months Ended September 30,
|
||||||||
2011
|
2010
|
|||||||
Balance, beginning of year
|
$ | 57,476 | $ | 45,701 | ||||
Additions(1)
|
12,880 | 24,388 | ||||||
Amortization
|
(12,737 | ) | (14,696 | ) | ||||
Write-offs
|
— | (234 | ) | |||||
Other
|
(255 | ) | — | |||||
Balance, end of period
|
$ | 57,364 | $ | 55,159 | ||||
(1) Contract acquisition costs are accrued upon contract execution. Cash payments made for contract acquisition costs were $9,998 for the nine months ended September 30, 2011 and $13,837 for the nine months ended September 30, 2010.
|
September 30,
2011
|
December 31,
2010
|
|||||||
Funds held for customers
|
$ | 34,100 | $ | 35,475 | ||||
Employee profit sharing/cash bonus and pension
|
21,138 | 34,109 | ||||||
Customer rebates
|
19,896 | 19,201 | ||||||
Contract acquisition costs due within one year
|
13,518 | 8,550 | ||||||
Interest
|
13,241 | 5,227 | ||||||
Wages, including vacation
|
9,215 | 5,898 | ||||||
Restructuring due within one year (see Note 9)
|
5,692 | 6,435 | ||||||
Other
|
29,594 | 29,139 | ||||||
Accrued liabilities
|
$ | 146,394 | $ | 144,034 |
Quarter Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Earnings per share – basic:
|
||||||||||||||||
Income from continuing operations
|
$ | 36,735 | $ | 51,172 | $ | 104,764 | $ | 118,570 | ||||||||
Income allocated to participating securities
|
(240 | ) | (267 | ) | (565 | ) | (627 | ) | ||||||||
Income available to common shareholders
|
$ | 36,495 | $ | 50,905 | $ | 104,199 | $ | 117,943 | ||||||||
Weighted-average shares outstanding
|
50,889 | 51,171 | 51,112 | 51,120 | ||||||||||||
Earnings per share – basic
|
$ | 0.72 | $ | 0.99 | $ | 2.04 | $ | 2.31 | ||||||||
Earnings per share – diluted:
|
||||||||||||||||
Income from continuing operations
|
$ | 36,735 | $ | 51,172 | $ | 104,764 | $ | 118,570 | ||||||||
Income allocated to participating securities
|
(166 | ) | (265 | ) | (325 | ) | (625 | ) | ||||||||
Re-measurement of share-based awards classified as liabilities
|
(77 | ) | 2 | (65 | ) | 53 | ||||||||||
Income available to common shareholders
|
$ | 36,492 | $ | 50,909 | $ | 104,374 | $ | 117,998 | ||||||||
Weighted-average shares outstanding
|
50,889 | 51,171 | 51,112 | 51,120 | ||||||||||||
Dilutive impact of potential common shares
|
314 | 191 | 431 | 197 | ||||||||||||
Weighted-average shares and potential common shares outstanding
|
51,203 | 51,362 | 51,543 | 51,317 | ||||||||||||
Earnings per share – diluted
|
$ | 0.71 | $ | 0.99 | $ | 2.02 | $ | 2.30 | ||||||||
Antidilutive options excluded from calculation
|
1,961 | 2,357 | 1,961 | 2,357 |
Notional amount
|
Fair value of interest rate swaps
|
Increase in debt due to fair value adjustment
|
||||||||||
Fair value hedge related to long-term debt due in 2012
|
$ | 84,847 | $ | 1,719 | $ | 1,114 | ||||||
Fair value hedge related to long-term debt due in 2014
|
198,000 | 3,781 | 3,366 | |||||||||
Total fair value hedges
|
$ | 282,847 | $ | 5,500 | $ | 4,480 |
Notional amount
|
Fair value of interest rate swaps
|
Increase in debt due to fair value adjustment
|
||||||||||
Fair value hedge related to long-term debt due in 2012
|
$ | 210,000 | $ | 5,456 | $ | 4,879 |
Quarter Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Gain from derivatives
|
$ | 2,866 | $ | 1,831 | $ | 2,592 | $ | 6,800 | ||||||||
Loss from change in fair value of hedged debt
|
(2,792 | ) | (1,706 | ) | (3,115 | ) | (6,349 | ) | ||||||||
Net decrease (increase) in interest expense
|
$ | 74 | $ | 125 | $ | (523 | ) | $ | 451 |
Fair value measurements using
|
||||||||||||||||
Fair value
as of
September 30,
2011
|
Quoted prices in active markets for identical assets (Level 1)
|
Significant other
observable inputs
(Level 2)
|
Significant unobservable inputs
(Level 3)
|
|||||||||||||
Marketable securities – funds held for customers
|
$ | 10,032 | $ | — | $ | 10,032 | $ | — | ||||||||
Marketable securities – corporate investments
|
1,941 | — | 1,941 | — | ||||||||||||
Long-term investment in mutual funds
|
2,157 | 2,157 | — | — | ||||||||||||
Derivative assets
|
5,500 | — | 5,500 | — |
Fair value measurements using
|
||||||||||||||||
Fair value
as of
December 31, 2010
|
Quoted prices in active markets for identical assets (Level 1)
|
Significant other
observable inputs
(Level 2)
|
Significant unobservable inputs
(Level 3)
|
|||||||||||||
Marketable securities – funds held for customers
|
$ | 10,249 | $ | — | $ | 10,249 | $ | — | ||||||||
Marketable securities – corporate investments
|
2,029 | — | 2,029 | — | ||||||||||||
Long-term investment in mutual funds
|
2,283 | 2,283 | — | — | ||||||||||||
Derivative assets
|
5,456 | — | 5,456 | — |
September 30, 2011
|
December 31, 2010
|
|||||||||||||||
Carrying amount
|
Fair value
|
Carrying amount
|
Fair value
|
|||||||||||||
Cash and cash equivalents
|
$ | 23,021 | $ | 23,021 | $ | 17,383 | $ | 17,383 | ||||||||
Cash and cash equivalents – funds held for customers
|
24,579 | 24,579 | 25,471 | 25,471 | ||||||||||||
Short-term debt
|
33,000 | 33,000 | 7,000 | 7,000 | ||||||||||||
Long-term debt
|
742,592 | 736,843 | 748,122 | 751,978 |
Quarter Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Severance accruals
|
$ | 3,011 | $ | 384 | $ | 5,834 | $ | 3,591 | ||||||||
Severance reversals
|
(205 | ) | (686 | ) | (1,114 | ) | (2,238 | ) | ||||||||
Operating lease obligations
|
52 | — | 52 | 415 | ||||||||||||
Operating lease reversals
|
— | (72 | ) | — | (380 | ) | ||||||||||
Net restructuring accruals
|
2,858 | (374 | ) | 4,772 | 1,388 | |||||||||||
Other costs
|
1,740 | 476 | 5,904 | 1,185 | ||||||||||||
Net restructuring charges
|
$ | 4,598 | $ | 102 | $ | 10,676 | $ | 2,573 |
Quarter Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Cost of goods sold
|
$ | 261 | $ | (1 | ) | $ | 837 | $ | 562 | |||||||
Operating expenses
|
4,337 | 103 | 9,839 | 2,011 | ||||||||||||
Net restructuring charges
|
$ | 4,598 | $ | 102 | $ | 10,676 | $ | 2,573 |
2008
initiatives
|
2009
initiatives
|
2010
initiatives
|
2011
initiatives
|
Total
|
||||||||||||||||
Balance, December 31, 2010
|
$ | 117 | $ | 652 | $ | 6,029 | $ | — | $ | 6,798 | ||||||||||
Restructuring charges
|
— | 4 | 75 | 5,807 | 5,886 | |||||||||||||||
Restructuring reversals
|
(11 | ) | (56 | ) | (990 | ) | (57 | ) | (1,114 | ) | ||||||||||
Payments
|
(106 | ) | (378 | ) | (3,655 | ) | (1,595 | ) | (5,734 | ) | ||||||||||
Balance, September 30, 2011
|
$ | — | $ | 222 | $ | 1,459 | $ | 4,155 | $ | 5,836 | ||||||||||
Cumulative amounts:
|
||||||||||||||||||||
Restructuring charges
|
$ | 27,545 | $ | 11,019 | $ | 9,715 | $ | 5,807 | $ | 54,086 | ||||||||||
Restructuring reversals
|
(5,881 | ) | (1,669 | ) | (1,254 | ) | (57 | ) | (8,861 | ) | ||||||||||
Payments
|
(21,664 | ) | (9,128 | ) | (7,002 | ) | (1,595 | ) | (39,389 | ) | ||||||||||
Balance, September 30, 2011
|
$ | — | $ | 222 | $ | 1,459 | $ | 4,155 | $ | 5,836 |
Employee severance benefits
|
Operating lease obligations
|
|||||||||||||||||||||||||||
Small Business Services
|
Financial Services
|
Direct Checks
|
Corporate
|
Small Business Services
|
Direct Checks
|
Total
|
||||||||||||||||||||||
Balance, December 31, 2010
|
$ | 1,248 | $ | 1,954 | $ | 252 | $ | 2,616 | $ | 236 | $ | 492 | $ | 6,798 | ||||||||||||||
Restructuring charges
|
1,209 | 2,235 | 79 | 2,311 | 52 | — | 5,886 | |||||||||||||||||||||
Restructuring reversals
|
(687 | ) | (222 | ) | (32 | ) | (173 | ) | — | — | (1,114 | ) | ||||||||||||||||
Inter-segment transfer
|
125 | 234 | 2 | (361 | ) | — | — | — | ||||||||||||||||||||
Payments
|
(1,003 | ) | (2,045 | ) | (216 | ) | (2,167 | ) | (150 | ) | (153 | ) | (5,734 | ) | ||||||||||||||
Balance, September 30, 2011
|
$ | 892 | $ | 2,156 | $ | 85 | $ | 2,226 | $ | 138 | $ | 339 | $ | 5,836 | ||||||||||||||
Cumulative amounts(1):
|
||||||||||||||||||||||||||||
Restructuring charges
|
$ | 15,219 | $ | 8,936 | $ | 2,898 | $ | 24,662 | $ | 1,862 | $ | 509 | $ | 54,086 | ||||||||||||||
Restructuring reversals
|
(2,454 | ) | (1,056 | ) | (157 | ) | (4,801 | ) | (393 | ) | — | (8,861 | ) | |||||||||||||||
Inter-segment transfer
|
914 | 619 | 63 | (1,596 | ) | — | — | — | ||||||||||||||||||||
Payments
|
(12,787 | ) | (6,343 | ) | (2,719 | ) | (16,039 | ) | (1,331 | ) | (170 | ) | (39,389 | ) | ||||||||||||||
Balance, September 30, 2011
|
$ | 892 | $ | 2,156 | $ | 85 | $ | 2,226 | $ | 138 | $ | 339 | $ | 5,836 |
Postretirement benefit
plan
|
Pension plan
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Interest cost
|
$ | 1,667 | $ | 1,820 | $ | 41 | $ | 45 | ||||||||
Expected return on plan assets
|
(1,963 | ) | (1,806 | ) | — | — | ||||||||||
Amortization of prior service credit
|
(936 | ) | (936 | ) | — | — | ||||||||||
Amortization of net actuarial losses
|
1,354 | 1,352 | — | — | ||||||||||||
Total periodic benefit expense
|
$ | 122 | $ | 430 | $ | 41 | $ | 45 |
Postretirement benefit
plan
|
Pension plan
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Interest cost
|
$ | 5,002 | $ | 5,461 | $ | 123 | $ | 135 | ||||||||
Expected return on plan assets
|
(5,888 | ) | (5,419 | ) | — | — | ||||||||||
Amortization of prior service credit
|
(2,807 | ) | (2,807 | ) | — | — | ||||||||||
Amortization of net actuarial losses
|
4,061 | 4,055 | — | — | ||||||||||||
Total periodic benefit expense
|
$ | 368 | $ | 1,290 | $ | 123 | $ | 135 |
September 30,
2011
|
December 31,
2010
|
|||||||
5.0% senior, unsecured notes due December 15, 2012, net of discount, including cumulative change in fair value of hedged debt: 2011 - $1,114 increase; 2010 - $4,879 increase
|
$ | 85,897 | $ | 284,843 | ||||
5.125% senior, unsecured notes due October 1, 2014, net of discount, including cumulative change in fair value of hedged debt: 2011 - $3,366 increase
|
256,695 | 263,279 | ||||||
7.375% senior notes due June 1, 2015
|
200,000 | 200,000 | ||||||
7.0% senior notes due March 15, 2019
|
200,000 | — | ||||||
Long-term portion of debt
|
742,592 | 748,122 | ||||||
Amounts drawn on credit facility
|
33,000 | 7,000 | ||||||
Total debt
|
$ | 775,592 | $ | 755,122 |
Nine Months Ended
September 30, 2011
|
Year Ended
December 31, 2010
|
|||||||
Daily average amount outstanding
|
$ | 22,670 | $ | 49,957 | ||||
Weighted-average interest rate
|
3.02 | % | 3.20 | % |
Total
available
|
||||
Credit facility commitment
|
$ | 200,000 | ||
Amounts drawn on credit facility
|
(33,000 | ) | ||
Outstanding letters of credit
|
(8,551 | ) | ||
Net available for borrowing as of September 30, 2011
|
$ | 158,449 |
Common shares
|
Additional
|
Accumulated other
|
Total
|
|||||||||||||||||||||
Number
|
Par
|
paid-in
|
Retained
|
comprehensive
|
shareholders’
|
|||||||||||||||||||
of shares
|
value
|
capital
|
earnings
|
loss
|
equity
|
|||||||||||||||||||
Balance, December 31, 2010
|
51,338 | $ | 51,338 | $ | 62,915 | $ | 161,957 | $ | (50,012 | ) | $ | 226,198 | ||||||||||||
Net income
|
— | — | — | 104,764 | — | 104,764 | ||||||||||||||||||
Cash dividends
|
— | — | — | (38,395 | ) | — | (38,395 | ) | ||||||||||||||||
Common shares issued
|
482 | 482 | 7,394 | — | — | 7,876 | ||||||||||||||||||
Common shares to be issued for Banker’s Dashboard acquisition (see Note 5)
|
— | — | 4,300 | — | — | 4,300 | ||||||||||||||||||
Tax impact of share-based awards
|
— | — | 240 | — | — | 240 | ||||||||||||||||||
Common shares repurchased
|
(940 | ) | (940 | ) | (22,680 | ) | (23,620 | ) | ||||||||||||||||
Other common shares retired
|
(63 | ) | (63 | ) | (1,575 | ) | — | — | (1,638 | ) | ||||||||||||||
Fair value of share-based compensation
|
— | — | 4,118 | — | — | 4,118 | ||||||||||||||||||
Amortization of postretirement prior service credit, net of tax
|
— | — | — | — | (1,746 | ) | (1,746 | ) | ||||||||||||||||
Amortization of postretirement net actuarial losses, net of tax
|
— | — | — | — | 2,525 | 2,525 | ||||||||||||||||||
Amortization of loss on derivatives, net of tax(1)
|
— | — | — | — | 1,313 | 1,313 | ||||||||||||||||||
Net unrealized gain on marketable securities, net of tax
|
— | — | — | — | 131 | 131 | ||||||||||||||||||
Currency translation adjustment
|
— | — | — | — | (2,695 | ) | (2,695 | ) | ||||||||||||||||
Balance, September 30, 2011
|
50,817 | $ | 50,817 | $ | 54,712 | $ | 228,326 | $ | (50,484 | ) | $ | 283,371 |
September 30, 2011
|
December 31, 2010
|
|||||||
Postretirement and defined benefit pension plans:
|
||||||||
Unrealized prior service credit
|
$ | 13,905 | $ | 15,651 | ||||
Unrealized net actuarial losses
|
(65,818 | ) | (68,343 | ) | ||||
Postretirement and defined benefit pension plans, net of tax
|
(51,913 | ) | (52,692 | ) | ||||
Loss on derivatives, net of tax
|
(3,209 | ) | (4,522 | ) | ||||
Unrealized gain on marketable securities, net of tax
|
144 | 13 | ||||||
Currency translation adjustment
|
4,494 | 7,189 | ||||||
Accumulated other comprehensive loss
|
$ | (50,484 | ) | $ | (50,012 | ) |
Reportable Business Segments
|
|||||||||||||||||||||
Small Business Services
|
Financial Services
|
Direct Checks
|
Corporate
|
Consolidated
|
|||||||||||||||||
Revenue from external customers:
|
2011
|
$ | 214,442 | $ | 85,194 | $ | 55,508 | $ | — | $ | 355,144 | ||||||||||
2010
|
206,572 | 102,614 | 58,447 | — | 367,633 | ||||||||||||||||
Operating income:
|
2011
|
34,650 | 14,128 | 16,867 | — | 65,645 | |||||||||||||||
2010
|
45,298 | 27,157 | 16,053 | — | 88,508 | ||||||||||||||||
Depreciation and amortization
|
2011
|
11,437 | 3,292 | 3,050 | — | 17,779 | |||||||||||||||
expense:
|
2010
|
11,099 | 2,911 | 5,369 | — | 19,379 | |||||||||||||||
Total assets:
|
2011
|
816,500 | 104,375 | 173,118 | 293,394 | 1,387,387 | |||||||||||||||
2010
|
779,588 | 65,054 | 181,982 | 298,227 | 1,324,851 | ||||||||||||||||
Capital asset purchases:
|
2011
|
— | — | — | 8,930 | 8,930 | |||||||||||||||
2010
|
— | — | — | 10,547 | 10,547 |
Reportable Business Segments
|
|||||||||||||||||||||
Small Business Services
|
Financial Services
|
Direct Checks
|
Corporate
|
Consolidated
|
|||||||||||||||||
Revenue from external customers:
|
2011
|
$ | 617,600 | $ | 259,865 | $ | 173,705 | $ | — | $ | 1,051,170 | ||||||||||
2010
|
592,063 | 302,307 | 156,379 | — | 1,050,749 | ||||||||||||||||
Operating income:
|
2011
|
104,749 | 43,039 | 49,298 | — | 197,086 | |||||||||||||||
2010
|
104,843 | 71,178 | 44,662 | — | 220,683 | ||||||||||||||||
Depreciation and amortization
|
2011
|
33,970 | 9,457 | 13,035 | — | 56,462 | |||||||||||||||
expense:
|
2010
|
34,230 | 8,880 | 11,553 | — | 54,663 | |||||||||||||||
Total assets:
|
2011
|
816,500 | 104,375 | 173,118 | 293,394 | 1,387,387 | |||||||||||||||
2010
|
779,588 | 65,054 | 181,982 | 298,227 | 1,324,851 | ||||||||||||||||
Capital asset purchases:
|
2011
|
— | — | — | 28,226 | 28,226 | |||||||||||||||
2010
|
— | — | — | 31,613 | 31,613 |
September 30, 2011
|
||||||||||||||||||||
Deluxe
Corporation
|
Guarantor
subsidiaries
|
Non-
guarantor
subsidiaries
|
Eliminations
|
Total
|
||||||||||||||||
ASSETS
|
||||||||||||||||||||
Current Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 1,779 | $ | 987 | $ | 20,255 | $ | — | $ | 23,021 | ||||||||||
Trade accounts receivable, net
|
— | 53,082 | 11,957 | — | 65,039 | |||||||||||||||
Inventories and supplies
|
— | 20,405 | 2,081 | — | 22,486 | |||||||||||||||
Deferred income taxes
|
1,215 | 6,715 | 767 | — | 8,697 | |||||||||||||||
Funds held for customers
|
— | — | 34,611 | — | 34,611 | |||||||||||||||
Other current assets
|
9,445 | 11,537 | 5,620 | — | 26,602 | |||||||||||||||
Total current assets
|
12,439 | 92,726 | 75,291 | — | 180,456 | |||||||||||||||
Long-term Investments
|
35,979 | 8,789 | — | — | 44,768 | |||||||||||||||
Property, Plant and Equipment, net
|
— | 100,121 | 16,652 | — | 116,773 | |||||||||||||||
Assets Held for Sale
|
— | 3,937 | — | — | 3,937 | |||||||||||||||
Intangibles, net
|
— | 161,401 | 2,309 | — | 163,710 | |||||||||||||||
Goodwill
|
— | 775,044 | 1,900 | — | 776,944 | |||||||||||||||
Investments In Consolidated Subsidiaries
|
1,261,717 | 13,785 | — | (1,275,502 | ) | — | ||||||||||||||
Intercompany (Payable) Receivable
|
(245,905 | ) | 292,362 | (46,457 | ) | — | — | |||||||||||||
Other Non-Current Assets
|
14,624 | 72,713 | 13,462 | — | 100,799 | |||||||||||||||
Total assets
|
$ | 1,078,854 | $ | 1,520,878 | $ | 63,157 | $ | (1,275,502 | ) | $ | 1,387,387 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||||||||||||||
Current Liabilities:
|
||||||||||||||||||||
Accounts payable
|
$ | 15,618 | $ | 43,515 | $ | 4,034 | $ | — | $ | 63,167 | ||||||||||
Accrued liabilities
|
18,694 | 88,473 | 39,227 | — | 146,394 | |||||||||||||||
Short-term debt
|
33,000 | — | — | — | 33,000 | |||||||||||||||
Total current liabilities
|
67,312 | 131,988 | 43,261 | — | 242,561 | |||||||||||||||
Long-Term Debt
|
742,592 | — | — | — | 742,592 | |||||||||||||||
Deferred Income Taxes
|
(20,266 | ) | 68,963 | 3,229 | — | 51,926 | ||||||||||||||
Other Non-Current Liabilities
|
5,845 | 58,210 | 2,882 | — | 66,937 | |||||||||||||||
Total Shareholders’ Equity
|
283,371 | 1,261,717 | 13,785 | (1,275,502 | ) | 283,371 | ||||||||||||||
Total liabilities and shareholders’ equity
|
$ | 1,078,854 | $ | 1,520,878 | $ | 63,157 | $ | (1,275,502 | ) | $ | 1,387,387 |
December 31, 2010
|
||||||||||||||||||||
Deluxe
Corporation
|
Guarantor
subsidiaries
|
Non-
guarantor
subsidiaries
|
Eliminations
|
Total
|
||||||||||||||||
ASSETS
|
||||||||||||||||||||
Current Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 3,197 | $ | 683 | $ | 13,503 | $ | — | $ | 17,383 | ||||||||||
Trade accounts receivable, net
|
— | 53,679 | 12,792 | — | 66,471 | |||||||||||||||
Inventories and supplies
|
— | 19,350 | 2,310 | — | 21,660 | |||||||||||||||
Deferred income taxes
|
2,854 | 6,303 | 233 | — | 9,390 | |||||||||||||||
Funds held for customers
|
— | — | 35,720 | — | 35,720 | |||||||||||||||
Other current assets
|
9,463 | 8,047 | 3,103 | — | 20,613 | |||||||||||||||
Total current assets
|
15,514 | 88,062 | 67,661 | — | 171,237 | |||||||||||||||
Long-term Investments
|
34,905 | 2,427 | 78 | 37,410 | ||||||||||||||||
Property, Plant and Equipment, net
|
— | 102,427 | 17,794 | — | 120,221 | |||||||||||||||
Assets Held for Sale
|
— | 4,527 | — | — | 4,527 | |||||||||||||||
Intangibles, net
|
— | 151,512 | 3,600 | — | 155,112 | |||||||||||||||
Goodwill
|
— | 723,938 | 1,999 | — | 725,937 | |||||||||||||||
Investments In Consolidated Subsidiaries
|
986,484 | 615 | — | (987,099 | ) | — | ||||||||||||||
Intercompany (Payable) Receivable
|
(68,348 | ) | 114,299 | (45,951 | ) | — | — | |||||||||||||
Other Non-Current Assets
|
12,337 | 71,032 | 10,878 | — | 94,247 | |||||||||||||||
Total assets
|
$ | 980,892 | $ | 1,258,839 | $ | 56,059 | $ | (987,099 | ) | $ | 1,308,691 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||||||||||||||
Current Liabilities:
|
||||||||||||||||||||
Accounts payable
|
$ | 11,697 | $ | 42,798 | $ | 5,983 | $ | — | $ | 60,478 | ||||||||||
Accrued liabilities
|
9,440 | 92,038 | 42,556 | — | 144,034 | |||||||||||||||
Short-term debt
|
7,000 | — | — | — | 7,000 | |||||||||||||||
Total current liabilities
|
28,137 | 134,836 | 48,539 | — | 211,512 | |||||||||||||||
Long-Term Debt
|
748,122 | — | — | — | 748,122 | |||||||||||||||
Deferred Income Taxes
|
(25,898 | ) | 68,794 | 3,856 | — | 46,752 | ||||||||||||||
Other Non-Current Liabilities
|
4,333 | 68,725 | 3,049 | — | 76,107 | |||||||||||||||
Total Shareholders’ Equity
|
226,198 | 986,484 | 615 | (987,099 | ) | 226,198 | ||||||||||||||
Total liabilities and shareholders’ equity
|
$ | 980,892 | $ | 1,258,839 | $ | 56,059 | $ | (987,099 | ) | $ | 1,308,691 |
Quarter Ended September 30, 2011
|
||||||||||||||||||||
Deluxe
Corporation
|
Guarantor
subsidiaries
|
Non-
guarantor
subsidiaries
|
Eliminations
|
Total
|
||||||||||||||||
Revenue
|
$ | 2,128 | $ | 318,933 | $ | 68,984 | $ | (34,901 | ) | $ | 355,144 | |||||||||
Total cost of goods sold
|
— | 113,365 | 39,888 | (30,615 | ) | 122,638 | ||||||||||||||
Gross Profit
|
2,128 | 205,568 | 29,096 | (4,286 | ) | 232,506 | ||||||||||||||
Selling, general and administrative expense, including net restructuring charges
|
2,529 | 146,427 | 22,191 | (4,286 | ) | 166,861 | ||||||||||||||
Operating (Loss) Income
|
(401 | ) | 59,141 | 6,905 | — | 65,645 | ||||||||||||||
Interest expense
|
(11,785 | ) | (2,106 | ) | (298 | ) | 2,358 | (11,831 | ) | |||||||||||
Other income (expense)
|
2,930 | 382 | (1,255 | ) | (2,358 | ) | (301 | ) | ||||||||||||
(Loss) Income Before Income Taxes
|
(9,256 | ) | 57,417 | 5,352 | — | 53,513 | ||||||||||||||
Income tax (benefit) provision
|
(6,227 | ) | 23,171 | (166 | ) | — | 16,778 | |||||||||||||
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries
|
(3,029 | ) | 34,246 | 5,518 | — | 36,735 | ||||||||||||||
Equity In Earnings Of Consolidated Subsidiaries
|
39,764 | 5,518 | — | (45,282 | ) | — | ||||||||||||||
Income From Continuing Operations
|
36,735 | 39,764 | 5,518 | (45,282 | ) | 36,735 | ||||||||||||||
Net Loss From Discontinued Operations
|
— | — | — | — | — | |||||||||||||||
Net Income
|
$ | 36,735 | $ | 39,764 | $ | 5,518 | $ | (45,282 | ) | $ | 36,735 |
Quarter Ended September 30, 2010
|
||||||||||||||||||||
Deluxe Corporation
|
Guarantor subsidiaries
|
Non-guarantor subsidiaries
|
Eliminations
|
Total
|
||||||||||||||||
Revenue
|
$ | 2,329 | $ | 335,542 | $ | 65,624 | $ | (35,862 | ) | $ | 367,633 | |||||||||
Total cost of goods sold
|
— | 112,973 | 39,456 | (30,996 | ) | 121,433 | ||||||||||||||
Gross Profit
|
2,329 | 222,569 | 26,168 | (4,866 | ) | 246,200 | ||||||||||||||
Selling, general and administrative expense, including net restructuring charges
|
(181 | ) | 140,378 | 22,361 | (4,866 | ) | 157,692 | |||||||||||||
Operating Income
|
2,510 | 82,191 | 3,807 | — | 88,508 | |||||||||||||||
Interest expense
|
(11,176 | ) | (1,772 | ) | (248 | ) | 1,989 | (11,207 | ) | |||||||||||
Other income (expense)
|
1,368 | (17 | ) | 1,021 | (1,989 | ) | 383 | |||||||||||||
(Loss) Income Before Income Taxes
|
(7,298 | ) | 80,402 | 4,580 | — | 77,684 | ||||||||||||||
Income tax (benefit) provision
|
(5,878 | ) | 28,714 | 3,676 | — | 26,512 | ||||||||||||||
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries
|
(1,420 | ) | 51,688 | 904 | — | 51,172 | ||||||||||||||
Equity In Earnings Of Consolidated Subsidiaries
|
52,220 | 904 | — | (53,124 | ) | — | ||||||||||||||
Income From Continuing Operations
|
50,800 | 52,592 | 904 | (53,124 | ) | 51,172 | ||||||||||||||
Net Loss From Discontinued Operations
|
— | (372 | ) | — | — | (372 | ) | |||||||||||||
Net Income
|
$ | 50,800 | $ | 52,220 | $ | 904 | $ | (53,124 | ) | $ | 50,800 |
Nine Months Ended September 30, 2011
|
||||||||||||||||||||
Deluxe
Corporation
|
Guarantor
subsidiaries
|
Non-
guarantor
subsidiaries
|
Eliminations
|
Total
|
||||||||||||||||
Revenue
|
$ | 6,383 | $ | 943,429 | $ | 208,821 | $ | (107,463 | ) | $ | 1,051,170 | |||||||||
Total cost of goods sold
|
— | 336,306 | 121,448 | (94,267 | ) | 363,487 | ||||||||||||||
Gross Profit
|
6,383 | 607,123 | 87,373 | (13,196 | ) | 687,683 | ||||||||||||||
Selling, general and administrative expense, including net restructuring charges
|
9,313 | 427,005 | 67,585 | (13,196 | ) | 490,707 | ||||||||||||||
Net gain on sale of facility
|
— | (110 | ) | — | — | (110 | ) | |||||||||||||
Operating (Loss) Income
|
(2,930 | ) | 180,228 | 19,788 | — | 197,086 | ||||||||||||||
Loss on early debt extinguishment
|
(6,995 | ) | — | — | — | (6,995 | ) | |||||||||||||
Interest expense
|
(35,795 | ) | (7,363 | ) | (1,023 | ) | 8,259 | (35,922 | ) | |||||||||||
Other income (expense)
|
7,750 | 970 | (677 | ) | (8,259 | ) | (216 | ) | ||||||||||||
(Loss) Income Before Income Taxes
|
(37,970 | ) | 173,835 | 18,088 | — | 153,953 | ||||||||||||||
Income tax (benefit) provision
|
(18,539 | ) | 64,987 | 2,741 | — | 49,189 | ||||||||||||||
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries
|
(19,431 | ) | 108,848 | 15,347 | — | 104,764 | ||||||||||||||
Equity In Earnings Of Consolidated Subsidiaries
|
124,195 | 15,347 | — | (139,542 | ) | — | ||||||||||||||
Income From Continuing Operations
|
104,764 | 124,195 | 15,347 | (139,542 | ) | 104,764 | ||||||||||||||
Net Loss From Discontinued Operations
|
— | — | — | — | — | |||||||||||||||
Net Income
|
$ | 104,764 | $ | 124,195 | $ | 15,347 | $ | (139,542 | ) | $ | 104,764 |
Nine Months Ended September 30, 2010
|
||||||||||||||||||||
Deluxe
Corporation
|
Guarantor
subsidiaries
|
Non-
guarantor
subsidiaries
|
Eliminations
|
Total
|
||||||||||||||||
Revenue
|
$ | 6,986 | $ | 952,273 | $ | 202,288 | $ | (110,798 | ) | $ | 1,050,749 | |||||||||
Total cost of goods sold
|
— | 336,817 | 121,957 | (97,038 | ) | 361,736 | ||||||||||||||
Gross Profit
|
6,986 | 615,456 | 80,331 | (13,760 | ) | 689,013 | ||||||||||||||
Selling, general and administrative expense, including net restructuring charges
|
2,078 | 409,325 | 70,687 | (13,760 | ) | 468,330 | ||||||||||||||
Operating Income
|
4,908 | 206,131 | 9,644 | — | 220,683 | |||||||||||||||
Interest expense
|
(33,174 | ) | (5,146 | ) | (774 | ) | 5,844 | (33,250 | ) | |||||||||||
Other income (expense)
|
4,284 | 67 | 476 | (5,844 | ) | (1,017 | ) | |||||||||||||
(Loss) Income Before Income Taxes
|
(23,982 | ) | 201,052 | 9,346 | — | 186,416 | ||||||||||||||
Income tax (benefit) provision
|
(9,954 | ) | 72,363 | 5,437 | — | 67,846 | ||||||||||||||
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries
|
(14,028 | ) | 128,689 | 3,909 | — | 118,570 | ||||||||||||||
Equity In Earnings Of Consolidated Subsidiaries
|
131,827 | 3,909 | — | (135,736 | ) | — | ||||||||||||||
Income From Continuing Operations
|
117,799 | 132,598 | 3,909 | (135,736 | ) | 118,570 | ||||||||||||||
Net Loss From Discontinued Operations
|
— | (771 | ) | — | — | (771 | ) | |||||||||||||
Net Income
|
$ | 117,799 | $ | 131,827 | $ | 3,909 | $ | (135,736 | ) | $ | 117,799 |
Nine Months Ended September 30, 2011
|
||||||||||||||||
Deluxe
Corporation
|
Guarantor
subsidiaries
|
Non-
guarantor
subsidiaries
|
Total
|
|||||||||||||
Net Cash Provided By Operating Activities of Continuing Operations
|
$ | 9,051 | $ | 151,251 | $ | 10,945 | $ | 171,247 | ||||||||
Cash Flows From Investing Activities:
|
||||||||||||||||
Purchases of capital assets
|
— | (27,111 | ) | (1,115 | ) | (28,226 | ) | |||||||||
Payments for acquisitions, net of cash acquired
|
— | (80,486 | ) | — | (80,486 | ) | ||||||||||
Payments on company-owned life insurance policies
|
— | (6,383 | ) | — | (6,383 | ) | ||||||||||
Loans to distributors
|
— | (3,219 | ) | (296 | ) | (3,515 | ) | |||||||||
Other
|
(256 | ) | 711 | (2,391 | ) | (1,936 | ) | |||||||||
Net cash used by investing activities of continuing operations
|
(256 | ) | (116,488 | ) | (3,802 | ) | (120,546 | ) | ||||||||
Cash Flows From Financing Activities:
|
||||||||||||||||
Net proceeds from short-term debt
|
26,000 | — | — | 26,000 | ||||||||||||
Payments on long-term debt, including costs of debt reacquisition
|
(215,030 | ) | — | — | (215,030 | ) | ||||||||||
Proceeds from issuing long-term debt
|
200,000 | — | — | 200,000 | ||||||||||||
Payments for debt issue costs
|
(3,470 | ) | — | — | (3,470 | ) | ||||||||||
Change in book overdrafts
|
2,832 | (850 | ) | — | 1,982 | |||||||||||
Proceeds from issuing shares under employee plans
|
7,597 | — | — | 7,597 | ||||||||||||
Excess tax benefit from share-based employee awards
|
972 | — | — | 972 | ||||||||||||
Payments for common shares repurchased
|
(23,620 | ) | — | — | (23,620 | ) | ||||||||||
Cash dividends paid to shareholders
|
(38,395 | ) | — | — | (38,395 | ) | ||||||||||
Advances from (to) consolidated subsidiaries
|
32,901 | (33,609 | ) | 708 | — | |||||||||||
Net cash (used) provided by financing activities of continuing operations
|
(10,213 | ) | (34,459 | ) | 708 | (43,964 | ) | |||||||||
Effect Of Exchange Rate Change on Cash
|
— | — | (1,099 | ) | (1,099 | ) | ||||||||||
Net Change In Cash And Cash Equivalents
|
(1,418 | ) | 304 | 6,752 | 5,638 | |||||||||||
Cash And Cash Equivalents: Beginning Of Period
|
3,197 | 683 | 13,503 | 17,383 | ||||||||||||
End Of Period
|
$ | 1,779 | $ | 987 | $ | 20,255 | $ | 23,021 |
Nine Months Ended September 30, 2010
|
||||||||||||||||
Deluxe
Corporation
|
Guarantor
subsidiaries
|
Non-
guarantor
subsidiaries
|
Total
|
|||||||||||||
Net Cash Provided By Operating Activities of Continuing Operations
|
$ | 11,407 | $ | 155,855 | $ | 3,222 | $ | 170,484 | ||||||||
Cash Flows From Investing Activities:
|
||||||||||||||||
Purchases of capital assets
|
— | (30,894 | ) | (719 | ) | (31,613 | ) | |||||||||
Payments for acquisitions, net of cash acquired
|
— | (98,621 | ) | — | (98,621 | ) | ||||||||||
Proceeds from company-owned life insurance policies
|
5,782 | — | — | 5,782 | ||||||||||||
Proceeds from sales of marketable securities
|
— | — | 1,970 | 1,970 | ||||||||||||
Other
|
(1,759 | ) | (116 | ) | (8 | ) | (1,883 | ) | ||||||||
Net cash provided (used) by investing activities of continuing operations
|
4,023 | (129,631 | ) | 1,243 | (124,365 | ) | ||||||||||
Cash Flows From Financing Activities:
|
||||||||||||||||
Net proceeds from short-term debt
|
4,000 | — | — | 4,000 | ||||||||||||
Payments for debt issue costs
|
(2,361 | ) | — | — | (2,361 | ) | ||||||||||
Change in book overdrafts
|
(1,494 | ) | (101 | ) | — | (1,595 | ) | |||||||||
Proceeds from issuing shares under employee plans
|
3,078 | — | — | 3,078 | ||||||||||||
Excess tax benefit from share-based employee awards
|
396 | — | — | 396 | ||||||||||||
Payments for common shares repurchased
|
(2,999 | ) | (2,999 | ) | ||||||||||||
Cash dividends paid to shareholders
|
(38,586 | ) | — | — | (38,586 | ) | ||||||||||
Advances from (to) consolidated subsidiaries
|
23,529 | (25,042 | ) | 1,513 | — | |||||||||||
Net cash (used) provided by financing activities of continuing operations
|
(14,437 | ) | (25,143 | ) | 1,513 | (38,067 | ) | |||||||||
Effect Of Exchange Rate Change on Cash
|
— | — | 250 | 250 | ||||||||||||
Net Change In Cash And Cash Equivalents
|
993 | 1,081 | 6,228 | 8,302 | ||||||||||||
Cash And Cash Equivalents: Beginning Of Period
|
2,725 | 497 | 9,567 | 12,789 | ||||||||||||
End Of Period
|
$ | 3,718 | $ | 1,578 | $ | 15,795 | $ | 21,091 |
Income tax provision (Details) (USD $) In Thousands, unless otherwise specified | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |
Income tax provision [Abstract] | ||
Effective tax rate (in hundredths) | 32.00% | 35.00% |
Favorably (unfavorable) impact on effective tax rate, Medicare Part D subsidies (in hundredths) | 1.00% | (1.70%) |
Favorably (unfavorably) impact on effective tax rate, other items (in hundredths) | 1.20% | |
Charge resulting from the Health Care and Education Reconciliation Act of 2010 | $ 4,063 | |
Favorable impact on effective tax rate, uncertain tax positions (in hundredths) | 1.30% |
Market risks (Details) (USD $) In Thousands | 3 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2010 | Dec. 31, 2009 | Mar. 31, 2009
Downturn in U.S. Economy [Member] | Dec. 31, 2010
Downturn in U.S. Economy [Member] | Dec. 31, 2009
Downturn in U.S. Economy [Member] | Dec. 31, 2008
Downturn in U.S. Economy [Member] | Sep. 30, 2011
Downturn in U.S. Economy [Member] | |
Economic conditions [Abstract] | |||||||||
Impairment charge, goodwill, Small Business Services segment | $ 20,000 | ||||||||
Impairment charge, indefinite-lived trade name, Small Business Services segment | 4,900 | ||||||||
Postretirement benefit plan [Abstract] | |||||||||
Increase in unfunded status of postretirement benefit plan | 29,879 | ||||||||
Increase in postretirement benefit expense | 2,374 | ||||||||
Increase in fair value of plan assets | 10,990 | 21,592 | |||||||
Financial institution clients [Abstract] | |||||||||
Contract acquisition costs | 57,364 | 57,476 | 55,159 | 45,701 | 57,364 | ||||
Liabilities for contract acquisition costs not paid | $ 21,083 |
Supplemental balance sheet information (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Inventories and supplies [Abstract] | ||
Raw materials | $ 5,477 | $ 4,879 |
Semi-finished goods | 8,905 | 8,393 |
Finished goods | 5,208 | 5,083 |
Supplies, primarily production | 2,896 | 3,305 |
Inventories and supplies | $ 22,486 | $ 21,660 |
Derivative financial instruments (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative financial instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | The fair value of the interest rate swaps is included in other non-current assets on the consolidated balance sheets. Information regarding the interest rate swaps as of September 30, 2011 is as follows:
Information regarding the interest rate swaps as of December 31, 2010 is as follows:
|
Debt (credit facility) (Details) (USD $) In Thousands, unless otherwise specified | 9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | |
Line of Credit Facility [Line Items] | ||
Amounts drawn on credit facility | $ 33,000 | $ 7,000 |
Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Credit facility, date of expiration | March 2013 | |
Commitment fees, minimum (in hundredths) | 0.40% | |
Commitment fees, maximum (in hundredths) | 0.50% | |
Daily average amount outstanding | 22,670 | 49,957 |
Weighted-average interest rate on daily average amount outstanding (in hundredths) | 3.02% | 3.20% |
Weighted-average interest rate on amount outstanding at end of period (in hundredths) | 3.21% | 5.25% |
Credit facility commitment | 200,000 | |
Amounts drawn on credit facility | (33,000) | |
Outstanding letters of credit | (8,551) | |
Net available for borrowing at end of period | $ 158,449 | |
Ratio of EBITDA to interest expense | two to one |
Supplemental balance sheet information (other) (Details) (USD $) In Thousands | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Dec. 31, 2010 | |||||
Other non-current assets [Abstract] | |||||||
Contract acquisition costs | $ 57,364 | $ 55,159 | |||||
Deferred advertising costs | 15,465 | 15,832 | |||||
Other | 27,970 | 20,939 | |||||
Other non-current assets | 100,799 | 94,247 | |||||
Contract acquisition costs [Abstract] | |||||||
Balance, beginning of year | 57,476 | 45,701 | |||||
Additions | 12,880 | [1] | 24,388 | [1] | |||
Amortization | (12,737) | (14,696) | |||||
Write-offs | 0 | (234) | |||||
Other | (255) | 0 | |||||
Balance, end of period | 57,364 | 55,159 | |||||
Contract acquisition payments | 9,998 | 13,837 | |||||
Accrued liabilities [Abstract] | |||||||
Funds held for customers | 34,100 | 35,475 | |||||
Employee profit sharing/cash bonus and pension | 21,138 | 34,109 | |||||
Customer rebates | 19,896 | 19,201 | |||||
Contract acquisition costs due within one year | 13,518 | 8,550 | |||||
Interest | 13,241 | 5,227 | |||||
Wages, including vacation | 9,215 | 5,898 | |||||
Restructuring due within one year (see Note 9) | 5,692 | 6,435 | |||||
Other | 29,594 | 29,139 | |||||
Accrued liabilities | $ 146,394 | $ 144,034 | |||||
|
Pension and other postretirement benefits (Details) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Other Postretirement Benefit Plans, Defined Benefit [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | $ 1,667 | $ 1,820 | $ 5,002 | $ 5,461 |
Expected return on plan assets | (1,963) | (1,806) | (5,888) | (5,419) |
Amortization of prior service credit | (936) | (936) | (2,807) | (2,807) |
Amortization of net actuarial losses | 1,354 | 1,352 | 4,061 | 4,055 |
Total periodic benefit expense | 122 | 430 | 368 | 1,290 |
Pension Plans, Defined Benefit [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Interest cost | 41 | 45 | 123 | 135 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service credit | 0 | 0 | 0 | 0 |
Amortization of net actuarial losses | 0 | 0 | 0 | 0 |
Total periodic benefit expense | $ 41 | $ 45 | $ 123 | $ 135 |
Earnings per share | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per share | Note 4: Earnings per share The following table reflects the calculation of basic and diluted earnings per share from continuing operations. During each period, certain options, as noted below, were excluded from the calculation of diluted earnings per share because their effect would have been antidilutive.
Earnings per share amounts for continuing operations, discontinued operations and net income, as presented on the consolidated statements of income, are calculated individually and may not sum due to rounding differences. |