Deluxe Corp. Reports Operating Results (10-Q)
Deluxe Corporation has a market cap of $1.58 billion; its shares were traded at around $31.445 with a P/E ratio of 9.2 and P/S ratio of 1.1. The dividend yield of Deluxe Corporation stocks is 3.2%. Deluxe Corporation had an annual average earning growth of 0.6% over the past 10 years.
Highlight of Business Operations:2012 outlook – We anticipate that consolidated revenue will be between $1.508 billion and $1.515 billion for 2012, compared to $1.418 billion for 2011. In Small Business Services, we expect the percentage increase in revenue to be in the low double digits compared to 2011 revenue of $846.4 million, as volume declines in core business products are expected to be more than offset by price increases and growth in our e-commerce, distributor, dealer and major accounts channels and in our marketing solutions and other services offerings. This projected revenue increase includes incremental revenue from the PsPrint acquisition in July 2011 and the OrangeSoda acquisition in May 2012. In Financial Services, we expect the percentage decrease in revenue to be in the very low single digits compared to 2011 revenue of $342.4 million, driven by check order declines of approximately five to six percent for the remainder of the year, partially offset by higher revenue per order, a new large customer which began contributing volume early in the first quarter of 2012, and continued contributions from marketing solutions and other services offerings. In Direct Checks, we expect the percentage decrease in revenue to be in the middle to high single digits compared to 2011 revenue of $228.8 million, driven by check usage declines.
We expect that 2012 diluted earnings per share will be between $3.30 and $3.37, including estimated total charges of $0.13 per share related to restructuring-related costs and transaction costs related to the OrangeSoda acquisition, compared to $2.80 for 2011, which included total charges of $0.31 per share related to restructuring-related costs, losses on debt retirements, transaction costs related to acquisitions, and an asset impairment charge. We expect that the benefits of our cost reduction activities will be partially offset by continued investments in revenue growth opportunities, increased performance-based compensation, and increases in material and delivery rates. We estimate that our annual effective tax rate for 2012 will be approximately 33%, the same as in 2011.
We anticipate that net cash provided by operating activities will be between $239 million and $245 million in 2012, compared to $235 million in 2011, driven by higher earnings, offset by higher income tax and contract acquisition payments, as well as contributions to our trust used to pay medical benefits. We anticipate contract acquisition payments of approximately $20 million in 2012, and we estimate that capital spending will be approximately $35 million in 2012 as we continue to invest in key revenue growth initiatives and order fulfillment and information technology infrastructure.
between 5% and 6% in 2013, as compared to 2012. We expect that marketing solutions and other services revenue will represent approximately 22% of total revenue in 2013, and by the fourth quarter, will represent approximately 25% of our total revenue. The anticipated revenue increase is expected to produce an increase in earnings per share of between 8% and 11% in 2013, as compared to 2012, including a $0.10 per share decrease in restructuring and transaction-related costs. Our earnings per share outlook assumes that we will increase spending on brand awareness and that our effective tax rate in 2013 will be higher than in 2012.
We anticipate that net cash provided by operating activities will be between $239 million and $245 million in 2012, compared to $235 million in 2011, driven by higher earnings, offset by higher income tax and contract acquisition payments, as well as contributions to our trust used to pay medical benefits. We anticipate that cash generated by operating activities in 2012 will be utilized for payments of $84.8 million due in December 2012 when a portion of our long-term notes matures, dividend payments of approximately $50 million, capital expenditures of approximately $35 million, payments for acquisitions already completed in 2012 of $32.6 million, additional debt reduction if we are able to purchase our long-term notes on the open market, share repurchases, and possibly additional small-to-medium-sized acquisitions. We intend to focus our capital spending on key revenue growth initiatives and investments in order fulfillment and information technology infrastructure.
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