01.26.15
Deluxe Corporation announced its financial results for the fourth quarter ended December 31, 2014. Key financial highlights included revenue of $448.5 million, up 7.3% from $417.8 million in 4Q 2013. Net income was $58 million, up 26.9% from 2013.
Both revenue and adjusted diluted EPS exceeded the high end of the range in the prior outlook. The earnings results were driven by stronger than expected operating results, primarily in the Financial Services segment, as well as a favorable effective tax rate.
“Our transformation continues to move forward with revenue and EPS in the quarter exceeding the high end of our outlook,” said Lee Schram, CEO of Deluxe. “On an annual basis, we delivered our fifth consecutive year of revenue growth and our sixth consecutive year of increasing cash flow from operations. Looking ahead to 2015, we will continue to execute our growth strategy and plan to deliver another year of revenue, EPS and operating cash flow growth, and increasing value for our shareholders.”
Fourth Quarter 2014 Highlights:
Revenue increased 7.3% year-over-year due to the Financial Services segment, which included the results of Wausau Financial Systems, acquired in October 2014, and Destination Rewards, acquired in December 2013, and the Small Business Services segment which grew 5.8%.
Revenue from marketing solutions and other services increased 30.5% year-over-year and accounted for 30.4% of total revenue in the quarter.
Gross margin was 63.1% of revenue, down from 63.6% in the fourth quarter of 2013. The decline was primarily driven by an unfavorable product revenue mix and higher delivery and material costs, partially offset by a favorable services revenue mix.
Operating income increased 15.5% year-over-year and includes restructuring, transaction-related costs and impairment charges/loss on sale-leaseback in both periods. Adjusted operating income, which excludes these items, increased 4.3% year-over-year from higher revenue per order and continued cost reductions partially offset by higher performance-based compensation.
Both revenue and adjusted diluted EPS exceeded the high end of the range in the prior outlook. The earnings results were driven by stronger than expected operating results, primarily in the Financial Services segment, as well as a favorable effective tax rate.
“Our transformation continues to move forward with revenue and EPS in the quarter exceeding the high end of our outlook,” said Lee Schram, CEO of Deluxe. “On an annual basis, we delivered our fifth consecutive year of revenue growth and our sixth consecutive year of increasing cash flow from operations. Looking ahead to 2015, we will continue to execute our growth strategy and plan to deliver another year of revenue, EPS and operating cash flow growth, and increasing value for our shareholders.”
Fourth Quarter 2014 Highlights:
Revenue increased 7.3% year-over-year due to the Financial Services segment, which included the results of Wausau Financial Systems, acquired in October 2014, and Destination Rewards, acquired in December 2013, and the Small Business Services segment which grew 5.8%.
Revenue from marketing solutions and other services increased 30.5% year-over-year and accounted for 30.4% of total revenue in the quarter.
Gross margin was 63.1% of revenue, down from 63.6% in the fourth quarter of 2013. The decline was primarily driven by an unfavorable product revenue mix and higher delivery and material costs, partially offset by a favorable services revenue mix.
Operating income increased 15.5% year-over-year and includes restructuring, transaction-related costs and impairment charges/loss on sale-leaseback in both periods. Adjusted operating income, which excludes these items, increased 4.3% year-over-year from higher revenue per order and continued cost reductions partially offset by higher performance-based compensation.