Deluxe Reports Fourth Quarter 2017 Financial Results

Deluxe Corporation (NYSE: DLX), a leader in providing small businesses and financial institutions with products and services to drive customer revenue, announced its financial results for the fourth quarter ended December 31, 2017.

Revenue was at the low end of the range of the Company’s prior outlook driven primarily by lower revenue within marketing solutions and other services (MOS). GAAP diluted EPS was $1.75 and included a federal tax benefit from the Tax Cut and Jobs Act of $0.42 per share, as well as aggregate charges of $0.07 per share for restructuring, integration and transaction costs. Excluding these charges, adjusted diluted EPS was within the range of the prior outlook.

“The fourth quarter marked the end of a very good year for us,” said Lee Schram, CEO of Deluxe. “Annual revenue increased for the eighth consecutive year and grew over 6 percent compared to the prior year, with both EPS and cash flow from operations also increasing. Our strategy continues to deliver profitable growth and looking ahead to 2018 and beyond, we have identified areas within MOS where we plan to pivot for faster organic growth and moderately more aggressive acquisition growth.”

Fourth Quarter 2017 Highlights
• Revenue increased 3.1% year-over-year, driven by Financial Services growth of 11.0% which includes the results of FMCG Direct and Data Support Systems, which were acquired in the fourth quarter of 2016 and RDM Corporation, which was acquired in April 2017, and Small Business Services growth of 1.3% which includes the results of several small tuck-in acquisitions.
• Revenue from marketing solutions and other services increased 14.8% year-over-year and grew to 40.0% of total revenue in the quarter.
• Gross margin was 61.4% of revenue, compared to 63.2% in the fourth quarter of 2016. The impact of acquisitions and increased delivery and material costs this year were only partially offset by previous price increases and continued improvements in manufacturing productivity.
• Selling, general and administrative (SG&A) expense decreased 3.3% from last year primarily due to continued cost reduction initiatives compared to the prior year which were partially offset by additional SG&A expense from acquisitions. SG&A as a percent of revenue was well leveraged at 40.6% in the quarter compared to 43.2% last year.
• Operating income increased 6.1% year-over-year. Adjusted operating income, which excludes restructuring, integration and transaction costs, increased 3.9% year-over-year primarily from price increases and continued cost reduction initiatives, partially offset by the continuing decline in check and forms usage.
• Diluted EPS increased $0.64 per share year-over-year and included $0.42 per share from the benefit of federal tax reform and aggregate charges of $0.07 per share for restructuring, integration and transaction costs. Adjusted diluted EPS, which excludes these items as well as a loss from debt extinguishment in 2016, increased 3.7% year-over-year driven primarily by favorable operating performance.
more detail at:  http://phx.corporate-ir.net/phoenix.zhtml?c=61257&p=irol-newsArticle_Print&ID=2328430

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