P.O. Box 64235
St. Paul, MN 55164-0235
Treasurer and VP of Investor Relations
DELUXE REPORTS THIRD QUARTER 2018 FINANCIAL RESULTS
Deluxe to Announce Successor to Lee Schram as President, CEO and Director on November 6th
Marketing solutions & other services revenue grows to 43% of total revenue
Board increases share repurchase program to $500 million
Declares regular quarterly dividend
St. Paul, Minn. – October 25, 2018 – 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 third quarter ended September 30, 2018. Key financial highlights include:
Net (Loss) Income
Diluted (Loss) Earnings Per Share – GAAP
Adjusted Diluted EPS – Non-GAAP(1)
(1) A reconciliation of diluted (loss) earnings per share (EPS) on a GAAP basis and adjusted diluted EPS on a non-GAAP basis is provided after the Forward-Looking Statements. Non-GAAP adjustments include restructuring costs, which include integration activities; transaction costs; CEO transition costs; asset impairment charges; a loss on debt retirement; and one-time impacts of accounting for federal tax reform.
Revenue was in the middle of the Company’s outlook range of $489.0 to $497.0 million provided on August 16, 2018 and GAAP diluted loss per share was ($0.67). During the quarter, the Company recognized non-GAAP adjustments of $2.03 per share. Of this amount, $1.59 per share was a non-cash goodwill impairment in the Small Business Services segment primarily in the distributor channel attributable to changes in strategy and in the mix of products and services sold, including declining checks and forms. The Company also recognized non-cash asset impairment charges of $0.34 per share, primarily for the Safeguard® trade name. In addition, charges for restructuring and CEO transition costs totaled $0.13 per share, and the company recorded a benefit of $0.03 per share related to federal tax reform. Adjusted diluted EPS was $1.36 and excluded the aggregate charges of $2.03 per share discussed above. Adjusted diluted EPS exceeded the high end of the range of the July 2018 outlook driven primarily by lower shares outstanding, a lower income tax rate and continued expense management initiatives, partially offset by lower check and forms usage.
The Company also announced today that it has concluded its search for and signed an employment agreement with the successor to Lee Schram as President, Chief Executive Officer and a member of its Board of Directors. This individual will assume these roles effective November 26th. Deluxe has agreed to formally announce the appointment on Tuesday, November 6th as an accommodation to this person’s current employer.
“We delivered a solid quarter,” said Lee Schram, CEO of Deluxe. “We continue to see our transformation taking hold and this was the first quarter that marketing solutions & other services (MOS) revenue was the largest component of revenue, accounting for 43% of total revenue in the quarter. We believe we have established a foundation that will allow us to continue to grow revenue and profitability in MOS for the foreseeable future.”
“We are also pleased to announce the successful conclusion of the search for my successor,” continued Mr. Schram. “This executive, whose appointment received the unanimous approval of the Board, has an exceptional record of developing, building, organically growing and scaling businesses that serve both the financial institution and small business markets. An innovator in FinTech and other technology driven businesses with a strong sales
The following information was filed by Deluxe Corp (DLX) on Thursday, October 25, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.