UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
Amendment No. 1 on
FORM 8-K/A-1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: January 15, 1999
Date of earliest event reported: December 31, 1998
DELUXE CORPORATION
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(Exact name of registrant as specified in its charter)
MINNESOTA 1-7945 41-0216800
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
3680 Victoria Street North, Shoreview, Minnesota 55126
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(Address of principal executive offices) (Zip Code)
651/483-7111
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(Registrant's telephone number, including area code)
N/A
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(Former name or former address, if changed since last report)
<PAGE>
The information supplied under Item 2 and Item 7 of the Current Report on Form
8-K filed by the Company with the Securities and Exchange Commission on January
15, 1999 is hereby amended to read as follows:
Item 2. Acquisition or Disposition of Assets.
On December 31, 1998, pursuant to a stock and asset purchase agreement entered
into on the same date, Deluxe Corporation sold all of the issued and outstanding
capital stock of PaperDirect, Inc., which had been a wholly-owned subsidiary of
the Company ("PaperDirect"), and all of the assets and liabilities of the Social
Expressions division of Current, Inc., another wholly-owned subsidiary of the
Company ("Social Expressions"), to SE/PDI Acquisition Corporation, a Minnesota
corporation of which Glen A. Taylor, a resident of Minnesota, is the ultimate
parent entity. The combined purchase price for both the capital stock of
PaperDirect and the assets of Social Expressions was $77,100,000 in cash and the
assumption of $9,847,000 in Current, Inc. liabilities.
Item 7. Financial Statements and Exhibits
None.
(b) Pro forma financial information filed as part of this report:
On December 31, 1998, the Company completed the sale of PaperDirect and Social
Expressions. These businesses primarily sold specialty paper, greeting cards,
and stationery products through direct mail.
The following unaudited pro forma consolidated financial statements reflect the
pro forma results of the Company as if the transaction had been completed at an
earlier date. These statements should be read in conjunction with the unaudited
consolidated financial statements and notes thereto included in the Company's
Quarterly Report on Form 10-Q for the period ended September 30, 1998 and the
audited consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997. The
pro forma information may not be indicative of what the financial condition or
results of operations of the Company would have been had the sale been completed
on the dates assumed, nor is such information necessarily indicative of the
financial condition or results of future operations of the Company.
2
<PAGE>
(1) Pro forma consolidated statement of income (unaudited) for the year ended
December 31, 1997:
DELUXE CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED INCOME STATEMENT
Year Ended December 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
(In millions) Pro Forma Adjustments
-------------------------------------------------------------
Deluxe Deluxe
Corporation Corporation
Historical I II Pro Forma
-------------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES $ 1,919.4 $ (231.2) $ 1,688.2
OPERATING EXPENSES
Cost of sales 883.2 (108.8) 774.4
Selling, general and administrative 797.6 (124.1) 673.5
Goodwill impairment charge 82.9 (70.5) 12.4
-------------------------------------------------------------
Total 1,763.7 (303.4) 1,460.3
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INCOME FROM OPERATIONS 155.7 72.2 227.9
OTHER EXPENSE
Other expense 31.7 .4 32.1
Interest expense 8.8 8.8
-------------------------------------------------------------
INCOME BEFORE INCOME TAXES 115.2 71.8 187.0
PROVISION FOR INCOME TAXES 70.5 10.7 81.2
-------------------------------------------------------------
NET INCOME $ 44.7 $ 71.8 $ (10.7) $ 105.8
=============================================================
NET INCOME PER COMMON SHARE
- -- Basic and Diluted $ 0.55 $ 0.88 $ (0.13) $ 1.29
</TABLE>
See Notes to Pro Forma Consolidated Income Statements
3
<PAGE>
(2) Pro forma consolidated statement of income (unaudited) for the nine months
ended September 30, 1998:
DELUXE CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED INCOME STATEMENT
Nine Months Ended September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
(In millions) Pro Forma Adjustments
----------------------------------------------------------
Deluxe Deluxe
Corporation Corporation
Historical I II Pro Forma
----------------------------------------------------------
<S> <C> <C> <C> <C>
NET SALES $1,433.5 $ (149.9) $1,283.6
OPERATING EXPENSES
Cost of sales 693.2 (71.3) 621.9
Selling, general and administrative 596.5 (83.7) 512.8
----------------------------------------------------------
Total 1,289.7 (155.0) 1,134.7
----------------------------------------------------------
INCOME FROM OPERATIONS 143.8 5.1 148.9
OTHER INCOME (EXPENSE)
Other income 13.6 (1.0) 12.6
Interest expense (6.3) (6.3)
----------------------------------------------------------
INCOME BEFORE INCOME TAXES 151.1 4.1 155.2
PROVISION FOR INCOME TAXES 62.4 $ 1.4 63.8
----------------------------------------------------------
NET INCOME $ 88.7 $ 4.1 $ (1.4) $ 91.4
==========================================================
NET INCOME PER COMMON
SHARE
- -- Basic and Diluted $ 1.10 $ 0.05 $ (0.02) $ 1.13
</TABLE>
See Notes to Pro Forma Consolidated Income Statements
4
<PAGE>
NOTES TO PRO FORMA CONSOLIDATED INCOME STATEMENTS
1. Basis of Presentation - The Pro Forma Consolidated Income Statements assume
that the sale of PaperDirect and Social Expressions, as described in Item 2
of this Report on Form 8-K/A-1 dated March 5, 1999, occurred as of January
1, 1997.
2. Pro Forma Adjustments:
I. Reflects the elimination of the PaperDirect and Social Expressions
businesses historical results of operations, as previously included in
the Company's consolidated statements of income.
II. Reflects the tax effects related to the elimination of PaperDirect
and Social Expressions historical results of operations. For the nine
months ended September 30, 1998, the effective tax rate used is the
statutory rate of 35 percent. For the year ended December 31, 1997,
tax expense was recalculated to reflect the actual tax impact of the
elimination of the results of the businesses sold.
3. No assumptions were made in the pro forma consolidated income statements
concerning the use of the cash received in consideration for the sale of
the businesses.
5
<PAGE>
(3) Pro forma condensed consolidated balance sheet (unaudited) as of September
30, 1998.
DELUXE CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
(In millions) Pro Forma Adjustments
----------------------------------------------------------
Deluxe Deluxe
Corporation Corporation
Historical I II Pro Forma
----------------------------------------------------------
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 150.2 $ 77.1 $ 227.3
Marketable securities 17.5 17.5
Accounts receivable 157.9 (6.2) 151.7
Inventories 50.4 (26.6) 23.8
Other current assets 122.9 (18.4) 104.5
----------------------------------------------------------
Total current assets 498.9 25.9 524.8
LONG-TERM INVESTMENTS 46.2 46.2
PROPERTY, PLANT AND
EQUIPMENT -- NET 400.7 (42.4) 358.3
INTANGIBLES -- NET 198.7 (4.7) 194.0
----------------------------------------------------------
TOTAL ASSETS $1,144.5 $ (21.2) $1,123.3
==========================================================
CURRENT LIABILITIES $ 418.4 $ (14.5) $ (3.4) $ 400.5
LONG-TERM DEBT 109.8 109.8
OTHER LONG-TERM LIABILITIES 41.2 2.9 44.1
SHAREHOLDERS' EQUITY
Common Stock 80.3 80.3
Retained Earnings 495.1 (9.6) 3.4 488.9
Unearned compensation (.3) (.3)
Net unrealized gain -- marketable securities .2 .2
Cumulative translation adjustment (.2) (.2)
----------------------------------------------------------
Total shareholders' equity 575.1 (9.6) 3.4 568.9
----------------------------------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,144.5 $ (21.2) $ 0.0 $1,123.3
==========================================================
</TABLE>
See Notes to Pro Forma Condensed Consolidated Balance Sheet
6
<PAGE>
NOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
1. Basis of Presentation - The Pro Forma Condensed Consolidated Balance Sheet
assumes that the sale of PaperDirect and Social Expressions, as described
in Item 2 of this Report on Form 8-K/A-1 dated March 5, 1999, occurred on
September 30, 1998.
2. Pro Forma Adjustments:
I. Reflects the sale of the Company's equity interest in PaperDirect and
the assets of Social Expressions, as well as all costs resulting from
the sale. Cash consideration received is shown prior to any related
transaction costs, as such costs are assumed to be paid subsequent to
the sale date.
II. Reflects the tax related to the pre-tax loss on disposal. The
effective tax rate used is the statutory rate of 35 percent.
3. Had the businesses been sold on September 30, 1998, the loss recognized
on the sale would have been $9.6 million. The actual loss on the sale
recognized as of December 31, 1998 was $10.5 million.
(c) The following exhibit is filed as a part of this report:
Exhibit Method of
No. Description Filing
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10.21 Stock and Asset Purchase Agreement made as of December Filed
31, 1998 among Deluxe Corporation, Current, Inc., a herewith
Colorado corporation and a wholly-owned subsidiary of
Deluxe Corporation, SE/PDI Acquisition Corporation, a
Minnesota corporation and Taylor Corporation, a
Minnesota corporation.
7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DELUXE CORPORATION
(Registrant)
Date: March 4, 1999 /s/ Thomas W. VanHimbergen
--------------------------
Senior Vice President and Chief
Financial Officer
(Chief Accounting Officer)
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