02.01.16
Deluxe Corporation announced its financial results for the fourth quarter ended Dec. 31, 2015. Key financial highlights include:
Revenue increased 3.3% year-over-year, to $463.5 million primarily due to the Small Business Services segment, which grew 3.3% to $303.7 million, as well as the Financial Services segment, which grew 7.3% to $120.3 million and included the results of Datamyx LLC, which was acquired in October 2015. Net income was $59.7 million, an increase of 2.9%.
“Our team delivered another strong year of financial results - growing revenue for the sixth consecutive year and growing cash flow from operations for the seventh consecutive year,” said Lee Schram, CEO of Deluxe. “Throughout 2015 we made substantial progress on our transformation and we further strengthened our marketing solutions and other services product offerings by aggressively expanding our focus and investments into the Financial Services segment, where we added comprehensive data analytics and enhanced treasury management solutions and products.
“In addition, we added even more robust technologies for web-hosting customers and expanded our direct sales channels to expose more small businesses to our extensive assortment of marketing capabilities,” Schram added. “Looking into 2016, we expect to continue our track record of growth in revenue, EPS and cash flow from operations and we expect that marketing solutions & other services will account for over one-third of our total revenue.”
Revenue from marketing solutions and other services increased 12.3% year-over-year and accounted for 33.1% of consolidated revenue in the quarter. Gross margin was 63.0% of revenue, flat compared to 63.1% in the fourth quarter of 2014. Unfavorable product revenue mix and increased delivery and material costs were offset by previous price increases, an increase in service margins and improvements in manufacturing productivity.
Cash provided by operating activities for 2015 was $307.9 million, an increase of $27.5 million compared to 2014, driven primarily by lower interest payments and improved operating performance, partially offset by higher income tax and performance-based compensation payments. At the end of the fourth quarter, the company had $631 million of total debt outstanding.
Revenue increased 3.3% year-over-year, to $463.5 million primarily due to the Small Business Services segment, which grew 3.3% to $303.7 million, as well as the Financial Services segment, which grew 7.3% to $120.3 million and included the results of Datamyx LLC, which was acquired in October 2015. Net income was $59.7 million, an increase of 2.9%.
“Our team delivered another strong year of financial results - growing revenue for the sixth consecutive year and growing cash flow from operations for the seventh consecutive year,” said Lee Schram, CEO of Deluxe. “Throughout 2015 we made substantial progress on our transformation and we further strengthened our marketing solutions and other services product offerings by aggressively expanding our focus and investments into the Financial Services segment, where we added comprehensive data analytics and enhanced treasury management solutions and products.
“In addition, we added even more robust technologies for web-hosting customers and expanded our direct sales channels to expose more small businesses to our extensive assortment of marketing capabilities,” Schram added. “Looking into 2016, we expect to continue our track record of growth in revenue, EPS and cash flow from operations and we expect that marketing solutions & other services will account for over one-third of our total revenue.”
Revenue from marketing solutions and other services increased 12.3% year-over-year and accounted for 33.1% of consolidated revenue in the quarter. Gross margin was 63.0% of revenue, flat compared to 63.1% in the fourth quarter of 2014. Unfavorable product revenue mix and increased delivery and material costs were offset by previous price increases, an increase in service margins and improvements in manufacturing productivity.
Cash provided by operating activities for 2015 was $307.9 million, an increase of $27.5 million compared to 2014, driven primarily by lower interest payments and improved operating performance, partially offset by higher income tax and performance-based compensation payments. At the end of the fourth quarter, the company had $631 million of total debt outstanding.