Deluxe Posts Spike in Net Income on More Modest Revenue Increase

Gross margin was 66.3 percent of revenue compared to 65.6 percent in 2011. Favorable impacts from price increases and the Company’s continued cost reduction initiatives more than offset increased delivery rates and material costs in 2012.

Selling, general and administrative (SG&A) expense increased $11.2 million in the quarter compared to 2011, but as a percent of revenue, was down slightly to 45.5 percent. Increased SG&A expense associated with commissions on increased revenue, 2011 acquisitions, investments in revenue generating initiatives and higher performance based compensation expense was partially offset by benefits from continued execution against cost reduction initiatives and lower amortization related to previous acquisitions.