8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): September 3, 2008

Deluxe Corporation
__________________________________________
(Exact name of registrant as specified in its charter)

Minnesota	1-7945	41-0216800
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
3680 Victoria St. N., Shoreview, Minnesota		55126
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 651-483-7111

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.05 Costs Associated with Exit or Disposal Activities.

On September 3, 2008, we announced the planned closing of our Greensboro, North Carolina and North Wales, Pennsylvania manufacturing facilities and our Thorofare, New Jersey manufacturing facility and call center. In addition, we identified further opportunities to streamline portions of our business unit support and corporate shared services functions. These actions are the result of the previously announced review of our cost structure in response to the impact a weakened U.S. economy continues to have on our business. The North Wales and Thorofare closures are expected to be completed in the first quarter of 2009, while the Greensboro facility will play a transitional role and is expected to close later in 2009. The other employee reductions are expected to be completed by the end of the third quarter of 2009.

Total charges related to these actions are estimated to be $22 million. We expect that $20 million will be recorded in the third quarter of 2008, with the remaining $2 million recorded in th e fourth quarter of 2008. The charges are comprised of approximately $16 million of severance benefits and $6 million of other associated costs such as reserves for inventory and supplies, facility closure and transition costs, and the acceleration of expense for employee share-based compensation awards. Of the estimated $22 million charge, $18 million will result in future cash expenditures.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On September 3, 2008, it was announced that Luanne Widener, Senior Vice President and a named executive officer in our most recent proxy statement, has decided to retire from the company later this year. The expected date of Ms. Widener’s retirement is October 31, 2008.

Item 7.01 Regulation FD Disclosure.

Furnished as Exhibit 99.1 is a press release of Deluxe Corporation dated September 3, 2008, addressing the matters referenced in Item 2.05 of this Report.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1 Press release of Deluxe Corporation dated September 3, 2008.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Deluxe Corporation
September 5, 2008	By:	Terry D. Peterson
		Name: Terry D. Peterson
		Title: Vice President, Investor Relations and Chief Accounting Officer

Exhibit Index

Exhibit No.	Description
99.1	Press release of Deluxe Corporation dated September 3, 2008

EX-99.1

Exhibit 99.1

Deluxe Corporation
P.O. Box 64235
St. Paul, MN 55164-0235

For additional information:
Terry D. Peterson
VP, Investor Relations and Chief Accounting Officer
(651) 787-1068

NEWS RELEASE

September 3, 2008

DELUXE ANNOUNCES EXPANSION OF COST REDUCTION PROGRAM

St. Paul, Minn. – Deluxe Corporation (NYSE: DLX) announced today that it has completed a previously announced review of its cost structure in response to the impact a weakened U.S. economy continues to have on the business. As a result, the Company plans to close its Greensboro, North Carolina and North Wales, Pennsylvania, manufacturing facilities and its Thorofare, New Jersey, manufacturing facility and call center. In addition, the Company has identified further opportunities to streamline portions of its business unit support and corporate shared services functions. Combined, these actions will reduce the Company’s workforce by approximately 570 people on a net basis.

The North Wales and Thorofare closures are expected to be complete in the first quarter of 2009, while the Greensboro facility will play a transitional role and is expected to close later in 2009. The other employee reductions should be complete by the end of the third quarter of 2009.

“These were difficult decisions to make, particularly because of the impact on both our employees and three communities,” said Lee Schram, CEO of Deluxe. We truly appreciate our long-standing relationships in each of these communities and the quality service and support employees at these facilities have provided to Deluxe and its customers.”

Deluxe will provide eligible employees with transition support services including severance benefits, outplacement assistance and the opportunity to apply for other open positions within Deluxe.

“These actions, while difficult, along with our strategic focus on driving higher growth business services from our recent acquisitions plus enhanced e-commerce capabilities while sustaining our core check businesses, will better position Deluxe to accelerate our transformation in a challenging economic environment,” Schram stated.

Business Outlook
The Company reaffirmed its revenue outlook for 2008 with an estimated range of $367 million to $374 million for the third quarter and $1.515 billion to $1.535 billion for the full year. The Company also stated that its previously communicated EPS outlook for 2008 has not changed except that it has been updated to include the impact of the additional cost reduction initiatives, including an estimated $22 million for restructuring and other one-time charges. As a result, the Company now expects diluted EPS for the third quarter to be between $0.29 and $0.33, and for the full year to be between $2.25 and $2.35. Operating cash flow for the full year is still expected to be between $195 million and $205 million.

“It was important for us to respond quickly and aggressively to the recent changes in our small business core products’ trends in order to keep our transformation on track,” Schram continued. “These changes will permanently lower our fixed cost structure and help us to offset new cost headwinds as we look to grow EPS in 2009 between 5% and 9% excluding the 2008 restructuring charges.”

Given the expansion of the cost reduction actions, the Company now expects to deliver $250 million of savings, net of investments, through 2010, with approximately $50 million expected to be realized in 2008, $60 million in 2009 and the remaining $35 million in 2010 which includes the full benefit of plant closures and headcount reductions that will be completed throughout 2009.

About Deluxe Corporation

Deluxe Corporation, through its industry-leading businesses and brands, helps financial institutions and small businesses better manage, promote, and grow their businesses. The Company uses direct marketing, distributors, and a North American sales force to provide a wide range of customized products and services: personalized printed items (checks, forms, business cards, stationery, greeting cards, labels, and retail packaging supplies), promotional products and merchandising materials, fraud prevention services, and customer retention programs. The Company also sells personalized checks and accessories directly to consumers. For more information about Deluxe, visit www.deluxe.com.

Forward-Looking Statements
Statements made in this release concerning the Company’s or management’s intentions, expectations, or predictions about future results or events are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements reflect management’s current expectations or beliefs, and are subject to risks and uncertainties that could cause actual results or events to vary from stated expectations, which variations could be material and adverse. Factors that could produce such a variation include, but are not limited to, the following: the impact that a further deterioration or prolonged softness in the economy may have on demand for the Company’s products and services; the inherent unreliability of earnings, revenue and cash flow predictions due to numerous factors, many of which are beyond the Company’s control; declining demand for the Company’s check and check-related products and services due to increasing use of alternative payment methods; intense competition in the check printing business; continued consolidation of financial institutions, thereby reducing the number of potential customers and referral sources and increasing downward pressure on our revenues and gross margins; risks that our Small Business Services segment strategies to increase its pace of new customer acquisition and average annual sales to existing customers, while at the same time increase its operating margins, are delayed or unsuccessful; risks that the Company’s cost reduction initiatives will be delayed or unsuccessful; performance shortfalls by the Company’s major suppliers, licensors or service providers; unanticipated delays, costs and expenses in the development and marketing of new products and services, including new e-commerce, customer loyalty and business services, and the failure of such new products and services to deliver the expected revenues and other financial targets; and the impact of governmental laws and regulations. Our forward-looking statements speak only as of the time made, and we assume no obligation to publicly update any such statements. Additional information concerning these and other factors that could cause actual results and events to differ materially from the Company’s current expectations are contained in the Company’s Form 10-K for the year ended December 31, 2007.

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