Deluxe Posts Spike in Net Income on More Modest Revenue Increase
ST. PAUL, MI—April 26, 2012—Deluxe Corp. announced its financial results for the first quarter ended March 31, 2012. The company reported revenue of $378.0 million, an 8.1 percent increase from $349.8 million in first quarter of 2011, and net income of $44.1 million, up 35.3 percent from $32.6 million in the previous year’s first quarter.
“We hit a home run this quarter and are off to a fantastic start to the year,” said Lee Schram, CEO of Deluxe. “We reported revenue and adjusted EPS well above our expected outlook with strong contributions coming from all three segments. Core check products revenue exceeded our expectation and marketing solutions and other services revenue grew 35 percent and is solidly on track to achieve its projected growth this year.”
First Quarter 2012 Highlights:
Revenue for the quarter was $378.0 million compared to $349.8 million during the first quarter of 2011. Revenue increased 8.1 percent compared to 2011, with growth in Small Business Services and Financial Services. Both the number of orders in the quarter and revenue per order were up vs. 2011. Marketing solutions and other services revenue increased 35 percent compared to 2011 and represented 16.1 percent of consolidated revenue, up from 12.8 percent in the first quarter of 2011.
Gross margin was 66.3 percent of revenue compared to 65.6 percent in 2011. Favorable impacts from price increases and the Company’s continued cost reduction initiatives more than offset increased delivery rates and material costs in 2012.
Selling, general and administrative (SG&A) expense increased $11.2 million in the quarter compared to 2011, but as a percent of revenue, was down slightly to 45.5 percent. Increased SG&A expense associated with commissions on increased revenue, 2011 acquisitions, investments in revenue generating initiatives and higher performance based compensation expense was partially offset by benefits from continued execution against cost reduction initiatives and lower amortization related to previous acquisitions.