Gross margin was 64.4% of revenue, down from 65.6% in the first quarter of 2013. The decline was primarily driven by a higher services revenue mix and higher delivery and material costs.
“We delivered an outstanding first quarter, hitting on all cylinders in spite of the impact from severe winter weather and a continued sluggish economy,” said Lee Schram, CEO of Deluxe. “We have established a solid baseline first quarter to propel us towards profitable revenue growth again in 2014 for a fifth consecutive year. Marketing solutions and other services grew 21%, and represented 22% of total revenue towards our 25% of revenue objective for the full year. We improved our earnings and operating cash flow outlook for the year, we were more aggressive on share repurchases, and we remained disciplined in maintaining financial flexibility in our capital structure by amending and extending our credit facility to 2019.”