Deluxe Corporation (NYSE: DLX) announced its financial results for the
fourth quarter ended December 31, 2012. Key financial highlights include:
|
|
Q4 2012
|
|
Q4 2011
|
|
Vs. Q4 2011
|
Revenue
|
|
$387.6 million
|
|
$366.4 million
|
|
5.8%
|
Net income
|
|
$42.6 million
|
|
$39.8 million
|
|
7.0%
|
Diluted EPS – GAAP
|
|
$0.83
|
|
$0.78
|
|
6.4%
|
Adjusted Diluted EPS – Non-GAAP
|
|
$0.95
|
|
$0.83
|
|
14.5%
|
|
|
|
|
|
|
|
A reconciliation between earnings per share on a GAAP basis and adjusted
earnings per share on a non-GAAP basis is provided after the
Forward-Looking Statements discussion.
Adjusted Diluted EPS exceeded the high end of the range in the prior
outlook due to strong operating performance, particularly in Financial
Services, and a better than expected effective income tax rate. In
addition, GAAP diluted EPS included a loss of $0.07 per share related to
the early retirement of debt.
“We are excited to deliver our third straight year of revenue growth and
our highest annual revenue growth rate since 1994, excluding the NEBS
acquisition,” said Lee Schram, CEO of Deluxe. “Revenue in the fourth
quarter was at the top end of our outlook and adjusted EPS exceeded our
outlook, driven by strong performance in both Small Business Services
and Financial Services. Full year adjusted EPS grew almost 14% to $3.53.
Looking forward to 2013, in spite of an anticipated continued sluggish
economy, we expect to continue our strong performance with a fourth year
of profitable revenue growth.”
Fourth Quarter 2012 Highlights:
-
Revenue for the quarter was $387.6 million compared to $366.4 million
during the fourth quarter of 2011. Revenue increased 5.8% compared to
2011, driven by 11.2% growth in Small Business Services, which
included the impact of the OrangeSoda, Inc. acquisition in the second
quarter. Marketing solutions and other services revenue, which also
included the impact of the OrangeSoda, Inc. acquisition, increased
26.4% compared to 2011 and represented 22.5% of consolidated revenue,
up from 18.8% in the fourth quarter of 2011.
-
Gross margin was 64.5 percent of revenue, the same as in 2011.
Increased delivery rates, material costs and performance based
compensation expense in 2012 were offset by favorable impacts from
price increases and the Company’s continued cost reduction initiatives.
-
Selling, general and administrative (SG&A) expense increased $10.3
million in the quarter compared to 2011. Increased SG&A expense
associated with commissions on increased revenue, as well as higher
performance based compensation expense, higher brand awareness
spending, and the OrangeSoda acquisition in the second quarter, was
partially offset by benefits from continued execution against expense
reduction initiatives.
-
Operating income in 2012 was $77.8 million compared to $74.0 million
in the fourth quarter of 2011. Restructuring and transaction-related
costs were $4.0 million in 2012 versus $3.1 million in 2011. These
costs were primarily attributable to the Company’s on-going cost
reduction initiatives. Results for 2011 also included an asset
impairment charge of $1.2 million related to a vacant facility.
Operating income was 20.1 percent of revenue compared to 20.2 percent
in the prior year driven primarily by higher performance based
compensation expense, increased delivery rates and material costs, and
the OrangeSoda acquisition in the second quarter, offset by higher
revenue per order and continued cost reductions.
-
Reported diluted EPS increased $0.05 from the prior year driven by a
lower effective income tax rate due to discrete items, and improved
operating performance, partially offset by a charge of approximately
$0.07 per diluted share in 2012 related to early debt retirements.
Segment Highlights
Small Business Services
-
Revenue was $254.5 million versus $228.8 million in 2011. Revenue was
11.2% higher in the quarter driven by growth in marketing solutions
and other services revenue, checks, and in our on-line, Safeguard®
distributor, and dealer channels. Revenue also benefited from price
increases and $8.0 million from the OrangeSoda acquisition.
-
Operating income in 2012 increased to $43.7 million from $40.5 million
in 2011.
Financial Services
-
Revenue was $82.0 million compared to $82.5 million in 2011. The
impact of check usage declines offset the benefits of price increases,
revenue from a new financial institution client, which began
contributing revenue in the first quarter of 2012, and growth in
non-check revenue.
-
Operating income in 2012 increased to $18.2 million from $16.8 million
in 2011.
Direct Checks
-
Revenue was $51.1 million compared to $55.1 million in 2011, primarily
driven by lower order volume resulting from the continued decline in
check usage.
-
Operating income in 2012 decreased to $15.9 million from $16.7 million
in 2011.
Other Highlights
-
Cash provided by operating activities for 2012 totaled $244.0 million,
an increase of $8.6 million compared to 2011. Improved operating
performance and the discontinuation of payments to our defined
contribution pension plan were partially offset by higher income tax
payments, a planned contribution in the first quarter of 2012 to our
VEBA trust for future medical costs, and higher contract acquisition
payments.
-
The Board of Directors of Deluxe Corporation declared a regular
quarterly dividend of $0.25 per share to all outstanding shares of the
Company. The dividend will be payable on March 4, 2013 to shareholders
of record at the close of business on February 18, 2013. The Company
had 50,642,257 shares outstanding as of January 22, 2013.
Outlook
First Quarter 2013:
|
|
|
|
|
|
|
|
Current outlook (1/24/2013)
|
Revenue
|
|
$377 to $385 million
|
Diluted EPS
|
|
$0.85 to $0.90
|
|
|
|
Full Year 2013:
|
|
|
|
|
|
|
|
Current outlook (1/24/2013)
|
Revenue
|
|
$1.535 to $1.575 billion
|
Marketing solutions & other services revenue
|
|
$330 to $340 million
|
Diluted EPS
|
|
$3.60 to $3.80
|
Operating cash flow
|
|
$240 to $255 million
|
Capital expenditures
|
|
$35 million
|
Depreciation and amortization
|
|
$62 million
|
Effective tax rate
|
|
approximately 34%
|
|
|
|
Editor’s Note
-
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 1-866-713-8310
(access code 74231470).
-
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
February 7th by calling 1-888-286-8010 (access code
93002809). The presentation will be archived on Deluxe’s web site.
About Deluxe Corporation
Deluxe is a growth engine for small
businesses and financial institutions. Over four million small business
customers access Deluxe’s wide range of products and services including
customized checks and forms, as well as web-site development and
hosting, search engine marketing, search engine optimization, logo
design and business networking. For financial institutions, Deluxe
offers industry-leading programs in checks, customer acquisition, fraud
prevention and profitability. Deluxe is also a leading printer of checks
and accessories sold directly to consumers. For more information, visit
us at www.deluxe.com,
www.facebook.com/deluxecorp or
www.twitter.com/deluxecorp.
Forward-Looking Statements
Statements made in this release
concerning the Company’s or management’s intentions, expectations,
outlook 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 and/or additional bank
failures, thereby reducing the number of potential customers and
referral sources and increasing downward pressure on the Company’s
revenue and gross margin; risks that the 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 maintaining
its operating margins, are delayed or unsuccessful; risks that the
Company’s recent acquisitions do not produce the anticipated results or
revenue synergies; 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 web design, hosting and other services, logo design,
search engine marketing, search engine optimization, digital printing
services, fraud protection services, and profitability, and risk
management services,, and the failure of such newer products and
services to deliver the expected revenues and other financial targets;
and the impact of governmental laws and regulations. The Company’s cash
dividends are declared by the Board of Directors on a current basis and
therefore may be subject to change. 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, 2011.
Diluted EPS Reconciliation
The table below is provided to
assist in understanding the comparability of the Company’s results of
operations for the quarters ended December 31, 2012 and 2011. The
Company’s management believes that adjusted earnings per share (EPS) is
a useful financial measure because certain items during 2012 and 2011
(restructuring and related costs, transaction-related costs, an asset
impairment charge, and losses on repurchases of debt) impact the
comparability of reported net income. The presentation below is not
intended as an alternative to results reported in accordance with
generally accepted accounting principles (GAAP) in the United States of
America. Instead, the Company believes that this information is a useful
financial measure to be considered in addition to GAAP performance
measures.
Adjusted EPS reconciles to reported EPS as follows:
|
|
Actual
|
|
|
Q4 2012
|
|
Q4 2011
|
|
|
|
|
|
Adjusted Diluted EPS
|
|
$0.95
|
|
|
$0.83
|
|
Net loss on repurchases of debt
|
|
(0.07
|
)
|
|
—
|
|
Restructuring and related costs
|
|
(0.05
|
)
|
|
(0.04
|
)
|
Asset impairment charge
|
|
—
|
|
|
(0.01
|
)
|
Reported Diluted EPS
|
|
$0.83
|
|
|
$0.78
|
|
|
|
|
|
|
Actual
|
|
|
Total Year
|
|
Total Year
|
|
|
2012
|
|
2011
|
|
|
|
|
|
Adjusted Diluted EPS
|
|
$3.53
|
|
|
$3.11
|
|
Restructuring and related costs
|
|
(0.13
|
)
|
|
(0.18
|
)
|
Net loss on repurchases of debt
|
|
(0.07
|
)
|
|
(0.11
|
)
|
Transaction-related costs
|
|
(0.01
|
)
|
|
(0.01
|
)
|
Asset impairment charge
|
|
—
|
|
|
(0.01
|
)
|
Reported Diluted EPS
|
|
$3.32
|
|
|
$2.80
|
|
|
|
|
|
|
|
|
Financial Highlights
|
DELUXE CORPORATION
|
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
|
(Dollars and shares in millions, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
Quarter Ended December 31,
|
|
|
2012
|
|
2011
|
Revenue
|
|
$387.6
|
|
|
|
|
$366.4
|
|
|
|
Cost of goods sold, including net restructuring charges
|
|
(137.6
|
)
|
|
(35.5
|
%)
|
|
(129.9
|
)
|
|
(35.5
|
%)
|
Gross profit
|
|
250.0
|
|
|
64.5
|
%
|
|
236.5
|
|
|
64.5
|
%
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense
|
|
(169.7
|
)
|
|
(43.8
|
%)
|
|
(159.4
|
)
|
|
(43.5
|
%)
|
Asset impairment charge
|
|
—
|
|
|
—
|
|
|
(1.2
|
)
|
|
(0.3
|
%)
|
Net restructuring charges
|
|
(2.5
|
)
|
|
(0.6
|
%)
|
|
(1.9
|
)
|
|
(0.5
|
%)
|
Operating income
|
|
77.8
|
|
|
20.1
|
%
|
|
74.0
|
|
|
20.2
|
%
|
|
|
|
|
|
|
|
|
|
Loss on early extinguishment of debt
|
|
(5.3
|
)
|
|
(1.4
|
%)
|
|
—
|
|
|
—
|
|
Interest expense
|
|
(11.9
|
)
|
|
(3.1
|
%)
|
|
(11.9
|
)
|
|
(3.2
|
%)
|
Other income
|
|
0.3
|
|
|
0.1
|
%
|
|
—
|
|
|
—
|
|
Income before income taxes
|
|
60.9
|
|
|
15.7
|
%
|
|
62.1
|
|
|
16.9
|
%
|
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
(18.3
|
)
|
|
(4.7
|
%)
|
|
(22.3
|
)
|
|
(6.1
|
%)
|
Net income
|
|
$42.6
|
|
|
11.0
|
%
|
|
$39.8
|
|
|
10.9
|
%
|
|
|
|
|
|
|
|
|
|
Weighted average dilutive shares outstanding
|
|
51.1
|
|
|
|
|
51.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
$0.83
|
|
|
|
|
$0.78
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
$9.6
|
|
|
|
|
$7.3
|
|
|
|
Depreciation and amortization expense
|
|
16.0
|
|
|
|
|
16.9
|
|
|
|
Number of employees-end of period
|
|
5,476
|
|
|
|
|
5,565
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP financial measure - EBITDA(1) |
|
$88.8
|
|
|
|
|
$90.9
|
|
|
|
Non-GAAP financial measure - Adjusted EBITDA(1) |
|
98.1
|
|
|
|
|
95.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Earnings Before Interest, Taxes, Depreciation and Amortization
(EBITDA) and Adjusted EBITDA are not measures of financial
performance under generally accepted accounting principles (GAAP) in
the United States of America. We disclose EBITDA and Adjusted EBITDA
because we believe they are useful in evaluating our operating
performance compared to that of other companies in our industry, as
the calculation eliminates the effects of long-term financing (i.e.,
interest expense), income taxes, the accounting effects of capital
investments (i.e., depreciation and amortization) and in the case of
Adjusted EBITDA, certain items (i.e., restructuring and related
costs, transaction-related costs, asset impairment charges and loss
on debt retirements), which may vary for companies for reasons
unrelated to overall operating performance. In our case,
depreciation and amortization of intangibles and interest expense in
the current year and in previous years have been significantly
impacted by acquisitions. Certain transactions in 2012 and 2011 also
impacted the comparability of reported net income. We believe that
measures of operating performance which exclude these impacts are
helpful in analyzing our results. We also believe that an increasing
EBITDA and Adjusted EBITDA depict increased ability to attract
financing and an increase in the value of our business. We do not
consider EBITDA and Adjusted EBITDA to be measures of cash flow, as
they do not consider certain cash requirements such as interest,
income taxes or debt service payments. We do not consider EBITDA or
Adjusted EBITDA to be substitutes for operating income or net
income. Instead, we believe that EBITDA and Adjusted EBITDA are
useful performance measures which should be considered in addition
to GAAP performance measures. EBITDA and Adjusted EBITDA are derived
from net income as follows:
|
|
|
|
|
|
Quarter Ended December 31,
|
|
|
2012
|
|
2011
|
Adjusted EBITDA
|
|
$98.1
|
|
|
$95.2
|
|
Restructuring and related costs
|
|
(4.0
|
)
|
|
(3.0
|
)
|
Transaction-related costs
|
|
—
|
|
|
(0.1
|
)
|
Asset impairment charge
|
|
—
|
|
|
(1.2
|
)
|
Loss on early extinguishment of debt
|
|
(5.3
|
)
|
|
—
|
|
EBITDA
|
|
88.8
|
|
|
90.9
|
|
Income tax provision
|
|
(18.3
|
)
|
|
(22.3
|
)
|
Interest expense
|
|
(11.9
|
)
|
|
(11.9
|
)
|
Depreciation and amortization expense
|
|
(16.0
|
)
|
|
(16.9
|
)
|
Net income
|
|
$42.6
|
|
|
$39.8
|
|
|
|
|
|
|
|
|
DELUXE CORPORATION
|
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
|
(Dollars and shares in millions, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
Year Ended December 31,
|
|
|
2012
|
|
2011
|
Revenue
|
|
$1,514.9
|
|
|
|
|
$1,417.6
|
|
|
|
Cost of goods sold, including net restructuring charges
|
|
(524.4
|
)
|
|
(34.6
|
%)
|
|
(493.4
|
)
|
|
(34.8
|
%)
|
Gross profit
|
|
990.5
|
|
|
65.4
|
%
|
|
924.2
|
|
|
65.2
|
%
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense
|
|
(680.2
|
)
|
|
(44.9
|
%)
|
|
(640.2
|
)
|
|
(45.2
|
%)
|
Asset impairment charge
|
|
—
|
|
|
—
|
|
|
(1.2
|
)
|
|
(0.1
|
%)
|
Net restructuring charges
|
|
(8.3
|
)
|
|
(0.5
|
%)
|
|
(11.7
|
)
|
|
(0.8
|
%)
|
Operating income
|
|
302.0
|
|
|
19.9
|
%
|
|
271.1
|
|
|
19.1
|
%
|
|
|
|
|
|
|
|
|
|
Loss on early extinguishment of debt
|
|
(5.3
|
)
|
|
(0.3
|
%)
|
|
(7.0
|
)
|
|
(0.5
|
%)
|
Interest expense
|
|
(46.8
|
)
|
|
(3.1
|
%)
|
|
(47.8
|
)
|
|
(3.4
|
%)
|
Other income (expense)
|
|
0.9
|
|
|
0.1
|
%
|
|
(0.2
|
)
|
|
—
|
|
Income before income taxes
|
|
250.8
|
|
|
16.6
|
%
|
|
216.1
|
|
|
15.2
|
%
|
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
(80.3
|
)
|
|
(5.3
|
%)
|
|
(71.5
|
)
|
|
(5.0
|
%)
|
Net income
|
|
$170.5
|
|
|
11.3
|
%
|
|
$144.6
|
|
|
10.2
|
%
|
|
|
|
|
|
|
|
|
|
Weighted average dilutive shares outstanding
|
|
51.1
|
|
|
|
|
51.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
$3.32
|
|
|
|
|
$2.80
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
$35.2
|
|
|
|
|
$35.5
|
|
|
|
Depreciation and amortization expense
|
|
65.7
|
|
|
|
|
73.3
|
|
|
|
Number of employees-end of period
|
|
5,476
|
|
|
|
|
5,565
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP financial measure - EBITDA(1) |
|
$363.3
|
|
|
|
|
$337.2
|
|
|
|
Non-GAAP financial measure - Adjusted EBITDA(1) |
|
379.8
|
|
|
|
|
360.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
See the discussion of EBITDA and Adjusted EBITDA on the previous
page. EBITDA and Adjusted EBITDA are derived from net income as
follows:
|
|
|
|
|
|
Year Ended December 31,
|
|
|
2012
|
|
2011
|
Adjusted EBITDA
|
|
$379.8
|
|
|
$360.1
|
|
Restructuring and related costs
|
|
(10.8
|
)
|
|
(13.7
|
)
|
Transaction-related costs
|
|
(0.4
|
)
|
|
(1.0
|
)
|
Asset impairment charge
|
|
—
|
|
|
(1.2
|
)
|
Loss on early debt extinguishment
|
|
(5.3
|
)
|
|
(7.0
|
)
|
EBITDA
|
|
363.3
|
|
|
337.2
|
|
Income tax provision
|
|
(80.3
|
)
|
|
(71.5
|
)
|
Interest expense
|
|
(46.8
|
)
|
|
(47.8
|
)
|
Depreciation and amortization expense
|
|
(65.7
|
)
|
|
(73.3
|
)
|
Net income
|
|
$170.5
|
|
|
$144.6
|
|
|
|
|
|
|
|
|
DELUXE CORPORATION
|
CONSOLIDATED CONDENSED BALANCE SHEETS
|
(In millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
2012
|
|
2011
|
Cash and cash equivalents
|
|
$45.4
|
|
$28.7
|
Other current assets
|
|
174.3
|
|
163.9
|
Property, plant & equipment-net
|
|
104.2
|
|
113.4
|
Intangibles-net
|
|
150.7
|
|
157.3
|
Goodwill
|
|
789.6
|
|
777.0
|
Other non-current assets
|
|
148.2
|
|
148.5
|
Total assets
|
|
$1,412.4
|
|
$1,388.8
|
|
|
|
|
|
Current portion of long-term debt
|
|
$—
|
|
$85.6
|
Other current liabilities
|
|
220.1
|
|
214.8
|
Long-term debt
|
|
652.6
|
|
656.1
|
Deferred income taxes
|
|
75.1
|
|
49.8
|
Other non-current liabilities
|
|
31.7
|
|
79.8
|
Shareholders’ equity
|
|
432.9
|
|
302.7
|
Total liabilities & shareholders’ equity
|
|
$1,412.4
|
|
$1,388.8
|
|
|
|
|
|
Shares outstanding
|
|
50.6
|
|
50.8
|
|
|
|
|
|
DELUXE CORPORATION
|
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
|
(In millions)
|
(Unaudited)
|
|
|
|
|
|
Year Ended December 31,
|
|
|
2012
|
|
2011
|
Cash provided (used) by:
|
|
|
|
|
Operating activities:
|
|
|
|
|
Net income
|
|
$170.5
|
|
|
$144.6
|
|
Depreciation and amortization of intangibles
|
|
65.7
|
|
|
73.3
|
|
Loss on early debt extinguishment
|
|
5.3
|
|
|
7.0
|
|
Contract acquisition payments
|
|
(17.0
|
)
|
|
(12.2
|
)
|
Other
|
|
19.5
|
|
|
22.7
|
|
Total operating activities
|
|
244.0
|
|
|
235.4
|
|
Investing activities:
|
|
|
|
|
Purchases of capital assets
|
|
(35.2
|
)
|
|
(35.5
|
)
|
Payments for acquisitions
|
|
(34.2
|
)
|
|
(85.6
|
)
|
Payments on company-owned life insurance policies
|
|
—
|
|
|
(6.4
|
)
|
Loans to distributors
|
|
(3.3
|
)
|
|
(5.2
|
)
|
Other
|
|
4.2
|
|
|
0.9
|
|
Total investing activities
|
|
(68.5
|
)
|
|
(131.8
|
)
|
Financing activities:
|
|
|
|
|
Net change in debt
|
|
(88.9
|
)
|
|
(22.0
|
)
|
Dividends
|
|
(50.9
|
)
|
|
(51.1
|
)
|
Share repurchases
|
|
(27.2
|
)
|
|
(23.6
|
)
|
Shares issued under employee plans
|
|
12.3
|
|
|
7.7
|
|
Other
|
|
(4.8
|
)
|
|
(2.7
|
)
|
Total financing activities
|
|
(159.5
|
)
|
|
(91.7
|
)
|
Effect of exchange rate change on cash
|
|
0.7
|
|
|
(0.6
|
)
|
Net change in cash and cash equivalents
|
|
16.7
|
|
|
11.3
|
|
Cash and cash equivalents: Beginning of period
|
|
28.7
|
|
|
17.4
|
|
Cash and cash equivalents: End of period
|
|
$45.4
|
|
|
$28.7
|
|
|
|
|
|
|
|
|
DELUXE CORPORATION
|
SEGMENT INFORMATION
|
(In millions)
|
(Unaudited)
|
|
|
|
|
|
Quarter Ended December 31,
|
|
|
2012
|
|
2011
|
Revenue:
|
|
|
|
|
Small Business Services
|
|
$254.5
|
|
$228.8
|
Financial Services
|
|
82.0
|
|
82.5
|
Direct Checks
|
|
51.1
|
|
55.1
|
Total
|
|
$387.6
|
|
$366.4
|
|
|
|
|
|
Operating income: (1) |
|
|
|
|
Small Business Services
|
|
$43.7
|
|
$40.5
|
Financial Services
|
|
18.2
|
|
16.8
|
Direct Checks
|
|
15.9
|
|
16.7
|
Total
|
|
$77.8
|
|
$74.0
|
|
|
|
|
|
Year Ended December 31,
|
|
|
2012
|
|
2011
|
Revenue:
|
|
|
|
|
Small Business Services
|
|
$961.6
|
|
$846.4
|
Financial Services
|
|
341.1
|
|
342.4
|
Direct Checks
|
|
212.2
|
|
228.8
|
Total
|
|
$1,514.9
|
|
$1,417.6
|
|
|
|
|
|
Operating income: (1) |
|
|
|
|
Small Business Services
|
|
$160.4
|
|
$145.2
|
Financial Services
|
|
77.7
|
|
59.8
|
Direct Checks
|
|
63.9
|
|
66.1
|
Total
|
|
$302.0
|
|
$271.1
|
|
|
|
|
|
The segment information reported here was calculated utilizing the
methodology outlined in the Notes to Consolidated Financial Statements
included in our Annual Report on Form 10-K for the year ended December
31, 2011.
(1)
|
|
Operating income includes the following restructuring and
transaction-related costs in each period, as well as an asset
impairment charge in 2011:
|
|
|
|
|
|
Quarter Ended
|
|
|
Year Ended
|
|
|
December 31,
|
|
|
December 31,
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
Small Business Services
|
|
$1.9
|
|
|
$2.7
|
|
|
$6.5
|
|
|
$8.2
|
Financial Services
|
|
1.3
|
|
|
0.7
|
|
|
2.0
|
|
|
5.8
|
Direct Checks
|
|
0.8
|
|
|
0.9
|
|
|
2.7
|
|
|
1.9
|
Total
|
|
$4.0
|
|
|
$4.3
|
|
|
$11.2
|
|
|
$15.9
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below is provided to assist in understanding the comparability
of the Company’s results of operations for the quarters and years ended
December 31, 2012 and 2011. The Company’s management believes that
operating income by segment, excluding restructuring and
transaction-related costs in each period, as well as an asset impairment
charge in 2011, is a useful financial measure because these items
impacted the comparability of reported operating income during 2012 and
2011. The presentation below is not intended as an alternative to
results reported in accordance with generally accepted accounting
principles (GAAP) in the United States of America. Instead, the Company
believes that this information is a useful financial measure to be
considered in addition to GAAP performance measures.
DELUXE CORPORATION
|
SEGMENT OPERATING INCOME
|
EXCLUDING RESTRUCTURING AND TRANSACTION-RELATED COSTS AND ASSET
IMPAIRMENT CHARGE
|
(In millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Quarter Ended December 31,
|
|
|
2012
|
|
2011
|
Adjusted operating income: (1) |
|
|
|
|
Small Business Services
|
|
$45.6
|
|
$43.2
|
Financial Services
|
|
19.5
|
|
17.5
|
Direct Checks
|
|
16.7
|
|
17.6
|
Total
|
|
$81.8
|
|
$78.3
|
|
|
|
|
|
Year Ended December 31,
|
|
|
2012
|
|
2011
|
Adjusted operating income: (1) |
|
|
|
|
Small Business Services
|
|
$166.9
|
|
$153.4
|
Financial Services
|
|
79.7
|
|
65.6
|
Direct Checks
|
|
66.6
|
|
68.0
|
Total
|
|
$313.2
|
|
$287.0
|
|
|
|
|
|
(1)
|
|
Operating income excluding restructuring and transaction-related
costs in each period, as well as an asset impairment charge in 2011,
reconciles to reported operating income as follows:
|
|
|
|
|
|
Quarter Ended
|
|
Year Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Adjusted operating income
|
|
$81.8
|
|
|
$78.3
|
|
|
$313.2
|
|
|
$287.0
|
|
|
|
|
|
|
|
|
|
|
Restructuring and transaction- related costs and asset impairment
charge:
|
|
|
|
|
|
|
|
|
Small Business Services
|
|
(1.9
|
)
|
|
(2.7
|
)
|
|
(6.5
|
)
|
|
(8.2
|
)
|
Financial Services
|
|
(1.3
|
)
|
|
(0.7
|
)
|
|
(2.0
|
)
|
|
(5.8
|
)
|
Direct Checks
|
|
(0.8
|
)
|
|
(0.9
|
)
|
|
(2.7
|
)
|
|
(1.9
|
)
|
Total
|
|
(4.0
|
)
|
|
(4.3
|
)
|
|
(11.2
|
)
|
|
(15.9
|
)
|
|
|
|
|
|
|
|
|
|
Reported operating income
|
|
$77.8
|
|
|
$74.0
|
|
|
$302.0
|
|
|
$271.1
|
|