Deluxe Corp. posted net income of $32.6 million for the second quarter, a decrease from $36 million in the prior year.
The cataloger and check printer reported revenue of $367.7 million for the quarter ended June 30, a decrease from $399.9 million last year.
The St. Paul, MN firm reported that small business services revenue during the quarter was $18.6 million lower than last year.
The company attributed this primarily to economic softness. Financial services revenue was down $7.9 million from the prior year due primarily to anticipated lower revenue per order while direct checks revenue decreased $5.7 million due to lower order volume.
Deluxe reported that gross margin was 62% of revenue compared to 64.3% in 2007. The company attributed this to reductions in manufacturing costs from production efficiencies which were more than offset by the lower revenue per order in financial services, an unfavorable shift in product mix and higher delivery-related costs mostly from fuel surcharges.
Selling, general and administrative (SG&A) expense decreased $23 million in the quarter. The decrease was driven by lower performance-based compensation, benefits from cost reduction initiatives and lower amortization of acquired intangible assets. As a percent of revenue, SG&A decreased to 45.3% from 47.4% in 2007.
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