Deluxe Corporation is a financial services company based in the United States. The company provides customer life cycle management solutions as well as payment solutions to its customers across multiple channels. Deluxe Corp and its subsidiary brands operate in three segments: “Small Business Services segment, Financial Services segment, and Direct Checks segment” (Deluxe Corporation, 2019). The Small Business Services segment provides a wide range of products, such as business checks, printed forms, and marketing material (Deluxe Corporation, 2019). The Financial Services segments offer personal and business checks. It also provides fraud monitoring and protection services (Deluxe Corporation, 2019). The Direct Check segment supplies checks and related products and services.
Financial Figures
Despite competing in multiple markets where there are virtually zero barriers to entry, Deluxe Corporation has been able to create a sustainable revenue stream. The company’s total revenue has been increasing steadily since 2014 –the total revenue has increased from $1,674,082 in 2014 to $1,998,025 in 2018 (Deluxe Corporation, 2019). The growth in Small Business Services drove the increase in total revenue. In 2018, the gross profits were 60.4 percent of revenue, compared to 62.2 percent in 2017 (Deluxe Corporation, 2019). Selling, general, and administrative expense has decreased from 43 percent in 2014 to 42.7 percent in 2018, primarily due to cost reduction initiatives. The company's operating income has been increasing steadily from 2014 to 2016 but decreased afterward. The increase in operating income was primarily due to prices increases as well as due to continued price reduction initiatives. Generally, Deluxe Corporation looks well-positioned for near-term gains. The company has a healthy income statement, cash flow statement, and balance sheet.
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Management’s Explanation
According to the management, in the past few years, the company was focused on opportunities to increase revenue and operating income. The company was able to achieve this by offering new products and services, reducing costs, investing in new technologies, and extending its reach in sales (Deluxe Corporation, 2019). The company was also focused in cost reduction initiatives to reduce costs. In 2019, Deluxe Corporation anticipates an increase in revenue.
References
Deluxe Corporation. (2019). 2018 Annual Report –Deluxe Corporation. [Online]. Retrieved from: https://deluxecorporation.gcs-web.com/static-files/00c2cf81-8b80-4b70-886b-1b28fa75d965 . Accessed January 11, 2020.
