Deluxe Corp. Reports Strong Quarter and Year

Deluxe Corp. had a good year in 2001, generating increases in both revenue and net income. But the firm faces a mature market, and is looking for ways to diversify, CEO Lawrence J. Mosner told analysts today.

Revenue for 2001 totaled $1.27 billion, a 1.2% increase over 2000. Net income rose to $185.9 million, compared with $169.5 million the year before.

And the company showed even better results in the fourth quarter. Revenue rose by 5.3% to $318.7 million, and net income by almost 20% to $48 million.

The firm’s Direct Checks division, which sells checks and related products by direct mail, posted an 11.3% increase, compared with the same quarter last year. Mosner attributed this to expanded acquisition efforts.

Another division, Business Services, enjoyed a 7.4% revenue gain. And the Financial Services unit, which sells checks through financial institutions, posted a 2.4% hike, marking the first time all three businesses have increased their revenue “since I started [here] in 1995,” Mosner said.

However, they didn’t for the entire year. Direct checks grew by 9.8%, and Business Services by 7.7%. But Financial Services declined by 3.3%.

This news comes as the entire paper check field has “peaked and started a gradual decline,” Mosner said.

Because of this, Deluxe expects its overall revenue growth to remain flat or grow slightly this year. And it has started or is mulling several new initiatives to counter the trend.

For example, the company might leverage its direct marketing expertise to “engage customers directly on behalf of financial institutions,” Mosner said.

This would entail the selling of ancillary products and building of customer loyalty for the banks.

Deluxe is looking for revenue streams that are “non-check related but adjacent to the space that we’re in,” Mosner continued.

The company also wants to boost its personalized check sales.

“All too often, check writers order and use unadorned checks,” Mosner said. “We’re closing the gap between what they order and what they prefer to use.”

In other news, the company said that it has repurchased 11.3 million shares in a stock repurchase program announced last year. The target is 14 million shares. The firm is now carrying $160 million in debt.