Deluxe Earns 75 Cents Per Share

More good earnings news: Deluxe ($DLX) just reported Q1 earnings of 75 cents per share. The company had said to expect Q1 earnings of 68 cents to 73 cents per share. The Street was at 73 cents per share.

Deluxe Corporation reported first quarter revenue of $349.8 million, up 4% compared to the prior year and at the high end of the Company’s previous outlook. Adjusted diluted earnings per share (EPS) from continuing operations of $0.75 exceeded outlook and compared favorably to $0.73 in the prior year. Adjusted diluted EPS for 2011 excludes losses on debt repurchases related to the retirement of a portion of the Company’s long-term debt due in 2012 and 2014. Adjusted diluted EPS for both periods excludes restructuring costs related to cost reduction initiatives. Adjusted diluted EPS for 2010 also excludes the impact of transaction-related costs associated with acquisitions. Earnings were better than the Company’s previous outlook for the current period due primarily to favorable product mix.

Reported diluted EPS was $0.63 on net income of $32.6 million in the first quarter of 2011 and was $0.65 on net income of $33.4 million in the first quarter of 2010. Results for 2011 include pre-tax losses of $8.3 million, or $0.10 per diluted share, related to debt repurchases and $1.5 million, or $0.02 per diluted share, of restructuring-related costs associated primarily with infrastructure consolidations. Results for 2010 included restructuring and transaction-related costs of $0.6 million.

“We delivered another strong quarter and are off to a solid start to the year,” said Lee Schram, CEO of Deluxe. “Both Small Business Services and Direct Checks grew over last year, while Financial Services was flat sequentially from the fourth quarter. Checks and forms both performed well against our expectations and services revenue grew 19 percent over the prior year. In addition, we took advantage of a favorable high yield bond market and strengthened our capital structure by refinancing a portion of our long-term debt.”

And here’s their guidance:

The Company stated that for the second quarter of 2011, revenue is expected to be between $340 and $348 million. Adjusted diluted EPS is expected to be between $0.66 and $0.71, including an estimated $0.02 per diluted share of higher interest expense primarily associated with the new 2019 senior unsecured notes. The second quarter outlook excludes $0.03 related to restructuring and transaction costs. For the full year, revenue is expected to be between $1.385 and $1.420 billion, and adjusted diluted EPS is expected to be between $2.90 and $3.10, including an estimated $0.05 per diluted share of higher interest expense primarily associated with the new 2019 senior unsecured notes. The full year outlook excludes $0.17 related to losses on long-term debt repurchases and restructuring and transaction-related costs. The Company also stated that it expects operating cash flow to be between $215 million and $230 million in 2011. Capital expenditures are expected to be approximately $35 million.

Posted by on April 28th, 2011 at 8:42 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.