Deluxe Reports 7 Percent Revenue Growth in Q3 2012
St. Paul, Minnesota-based Deluxe Corporation announced its financial results for the third quarter ended Sept. 30, 2012.
Revenue and diluted EPS exceeded the high end of the range in the prior outlook due primarily to better than expected check and forms performance in Small Business Services and Financial Services and lower discretionary spend.
"We just delivered our third outstanding quarter this year," said Lee Schram, CEO of Deluxe. "We exceeded both our revenue and EPS outlook in the third quarter, with better than expected performance in checks and 23 percent growth in marketing solutions and other services. We are now well positioned to grow revenue 6 to 7 percent for the full year, which would represent the third consecutive year of revenue growth with a fourth year of revenue growth planned for 2013."
Third Quarter 2012 Highlights:
• Revenue for the quarter was $378.3 million compared to $355.1 million during the third quarter of 2011. Revenue increased 6.5 percent compared to 2011, driven by 14.0 percent growth in Small Business Services, which included the impact of the OrangeSoda acquisition. Marketing solutions and other services revenue increased 22.9 percent compared to 2011 and represented 19.2 percent of consolidated revenue, up from 16.7 percent in the third quarter of 2011.
• Gross margin was 65.2 percent of revenue compared to 65.5 percent in 2011. Increased delivery rates, material costs and performance based compensation expense in 2012 were partially off-set by favorable impacts from price increases and the Company's continued cost reduction initiatives.
• Selling, general and administrative (SG&A) expense increased $8.6 million in the quarter compared to 2011, but as a percent of revenue, was down slightly to 45.3 percent. Increased SG&A expense associated with commissions on increased revenue, as well as higher performance based compensation expense and the OrangeSoda acquisition last quarter was partially offset by benefits from continued execution against cost reduction initiatives.