SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Earliest Event Reported
December 29, 2000
DELUXE CORPORATION
(Exact name of registrant as specified in its charter)
MINNESOTA
(State or other jurisdiction of incorporation of organization)
1-7945 41-0216800
(Commission File Number) (IRS Employer Identification Number)
3680 Victoria Street, North
St. Paul, Minnesota 55126-2966
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (651) 483-7111
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On November 30, 2000, the Deluxe Board of Directors (the "Board") approved
the spin-off of eFunds Corporation ("eFunds") to holders of Deluxe common stock.
The spin-off was effected by distributing .5514 of a share of eFunds common
stock to each outstanding share of Deluxe on December 11, 2000, amounting to 40
million shares of eFunds common stock in total, or approximately 87.9% of the
outstanding common stock of eFunds. The distribution was completed as of the
close of business on December 29, 2000. Deluxe received no consideration in
connection with the distribution. A press release with respect to the
distribution is attached as Exhibit 99 to this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) PRO FORMA FINANCIAL INFORMATION
The following unaudited Pro Forma Condensed Consolidated Financial
Statements of Deluxe are included in this Report:
Unaudited Pro Forma Condensed Consolidated Statements of Income for the
nine months ended September 30, 2000
Unaudited Pro Forma Condensed Consolidated Statements of Income for the
years ended December 31, 1999, 1998 and 1997
Unaudited Pro Forma Condensed Consolidated Balance Sheet at September 30,
2000
(c) EXHIBITS
Exhibit 99 Press Release dated January 2, 2001
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 hereunto duly authorized.
DELUXE CORPORATION
(Registrant)
Date: January 12, 2001 By /s/ Anthony C. Scarfone
--------------------------------------
Name: Anthony C. Scarfone
Title: Senior Vice President and
General Counsel
<PAGE>
DELUXE CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial
statements for Deluxe give effect to the spin-off of eFunds Corporation
("eFunds") and the transactions described in the notes to the unaudited pro
forma condensed consolidated financial statements. The unaudited pro forma
condensed consolidated statements of income assume that the spin-off was
completed on January 1, 1997. The unaudited pro forma condensed consolidated
balance sheet assumes that the spin-off was completed on September 30, 2000. The
unaudited pro forma condensed consolidated financial statements are provided for
informational purposes. The unaudited pro forma condensed consolidated financial
statements are not necessarily indicative of what the actual financial condition
or results of operations would have been had the spin-off been completed as of
the dates assumed, and are not indicative of future financial condition or
future results of operations of Deluxe.
The unaudited pro forma condensed consolidated financial statements set
forth herein were prepared for purposes of complying with Regulation S-X of the
Securities and Exchange Commission in connection with the filing of the Form 8-K
of Deluxe relating to the completion of the spin-off of eFunds. These unaudited
pro forma condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements of Deluxe,
incorporated by reference to Deluxe's Report on Form 10-K for the year ended
December 31, 1999.
PF-1
<PAGE>
DELUXE CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 2000 YEAR ENDED DECEMBER 31, 1999
--------------------------------------------------- ----------------------------------------------------
eFUNDS eFUNDS
DELUXE HISTORICAL DELUXE PRO DELUXE HISTORICAL DELUXE PRO
HISTORICAL (A) ADJUSTMENTS FORMA HISTORICAL (A) ADJUSTMENTS FORMA
---------- ---------- ----------- ---------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $1,216,129 $ 305,228 $ 44,078 (B) $ 954,979 $1,650,500 $ 302,340 $ 8,839 (B) $1,356,999
Total cost of sales 527,072 191,372 640 (B) 336,340 741,241 194,290 2,162 (B) 549,113
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Gross margin 689,057 113,856 43,438 618,639 909,259 108,050 6,677 807,886
Total operating expenses 478,462 110,342 37,291 (C) 405,411 607,165 109,138 13,238 (C) 511,265
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from
operations 210,595 3,514 6,147 213,228 302,094 (1,088) (6,561) 296,621
Other income (expense)
Minority interest in
earnings of
subsidiary (470) -- 470 (D) -- -- -- -- --
Legal proceedings -- -- -- -- 2,094 2,094 -- --
Other income (expense) 6,025 374 -- 5,651 28,973 (4,609) -- 33,582
Interest expense (10,455) (1,649) (848)(E) (9,654) (8,506) 963 1,848 (E) (7,621)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) before
income taxes 205,695 2,239 5,769 209,225 324,655 (2,640) (4,713) 322,582
Provision for income
taxes 77,136 1,702 2,159 (F) 77,593 121,633 5,586 2,214 (F) 118,261
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Income from continuing
operations $ 128,559 $ 537 $ 3,610 $ 131,632 $ 203,022 $ (8,226) $ (6,927) $ 204,321
========== ========== ========== ========== ========== ========== ========== ==========
Income from continuing
operations per share
Basic $ 1.78 $ 1.82 $ 2.65 $ 2.66
========== ========== ========== ==========
Diluted $ 1.78 $ 1.82 $ 2.64 $ 2.65
========== ========== ========== ==========
Weighted average shares
outstanding:
Basic 72,265 72,265 76,710 76,710
========== ========== ========== ==========
Diluted 72,346 72,346 77,009 77,009
========== ========== ========== ==========
</TABLE>
---------------------
The following notes are an integral part of these unaudited pro forma condensed
consolidated statements of income.
(A) Represents eFunds' consolidated statements of operations which will not be
consolidated in Deluxe's consolidated statements of income subsequent to
the spin-off of eFunds from Deluxe.
(B) Represents the addition of intercompany net sales and intercompany expenses
previously eliminated from Deluxe's consolidated historical results.
(C) Represents the addition of intercompany expenses previously eliminated from
Deluxe's consolidated historical results as well as general corporate
charges that were allocated to eFunds and direct costs of the disposition
of eFunds.
(D) Represents the elimination of the minority shareholder interest in the
earnings of eFunds.
(E) Represents eFunds' interest income (expense) earned (paid) on its
intercompany account previously eliminated from Deluxe's historical
consolidated results.
(F) Represents the tax adjustment necessary to reflect income taxes computed on
a Deluxe stand-alone basis excluding the eFunds operations.
PF-2
<PAGE>
DELUXE CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998 YEAR ENDED DECEMBER 31, 1997
--------------------------------------------------- ----------------------------------------------------
eFUNDS eFUNDS
DELUXE HISTORICAL DELUXE PRO DELUXE HISTORICAL DELUXE PRO
HISTORICAL (A) ADJUSTMENTS FORMA HISTORICAL (A) ADJUSTMENTS FORMA
---------- ---------- ----------- ---------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $1,933,659 $ 267,520 $ 1,586 (B) $1,667,725 $1,920,629 $ 229,065 $ 2,438 (B) $1,694,002
Total cost of sales 935,999 212,308 58 (B) 723,749 897,313 146,436 2,470 (B) 753,347
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Gross margin 997,660 55,212 1,528 943,976 1,020,846 82,629 (32) 940,655
Total operating expenses 754,651 81,823 14,319 (C) 687,147 867,597 81,301 8,608 (C) 794,904
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from
operations 243,009 (26,611) (12,791) 256,829 155,719 1,328 (8,640) 145,751
Other income (expense)
Legal proceedings 4,157 4,157 -- -- (40,050) (40,050) -- --
Other income (expense) 4,022 (3,495) -- 7,517 8,303 (918) -- 9,221
Interest expense (8,273) 2,789 3,021 (D) (8,041) (8,822) (825) 707 (D) (7,290)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) before
income taxes 242,915 (23,160) (9,770) 256,305 115,150 (40,465) (7,933) 147,682
Provision for income
taxes 99,852 (8,569) (5,682)(E) 102,739 70,478 (6,397) 1,773 (E) 78,648
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Income from continuing
operations $ 143,063 $ (14,591) $ (4,088) $ 153,566 $ 44,672 $ (34,068) $ (9,706) $ 69,034
========== ========== ========== ========== ========== ========== ========== ==========
Income from continuing
operations per share
Basic $ 1.77 $ 1.90 $ 0.55 $ 0.84
========== ========== ========== ==========
Diluted $ 1.77 $ 1.90 $ 0.55 $ 0.84
========== ========== ========== ==========
Weighted average shares
outstanding:
Basic 80,648 80,648 81,854 81,854
========== ========== ========== ==========
Diluted 80,855 80,855 81,957 81,957
========== ========== ========== ==========
</TABLE>
---------------------
The following notes are an integral part of these unaudited pro forma condensed
consolidated statements of income.
(A) Represents eFunds' consolidated statements of operations which will not be
consolidated in Deluxe's consolidated statements of income subsequent to
the spin-off of eFunds from Deluxe.
(B) Represents the addition of intercompany net sales and intercompany expenses
previously eliminated from Deluxe's consolidated historical results and the
reversal of certain classifications made to eFunds' consolidated statements
of operations.
(C) Represents the addition of intercompany expenses previously eliminated from
Deluxe's consolidated historical results as well as general corporate
charges that were allocated to eFunds and the reversal of certain
classifications made to eFunds' consolidated statements of operations.
(D) Represents eFunds' interest income (expense) earned (paid) on its
intercompany account previously eliminated from Deluxe's historical
consolidated results.
(E) Represents the tax adjustment necessary to reflect income taxes computed on
a Deluxe stand-alone basis excluding the eFunds operations.
PF-3
<PAGE>
DELUXE CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
September 30, 2000
-------------------------------------------------------------
Deluxe eFunds Deluxe Pro
Historical Historical (A) Adjustments Forma
------------ -------------- ------------- ------------
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents and marketable securities $ 155,141 $ 88,851 $ 8,540 (B) $ 74,830
Time deposit subject to compensating balance 10,000 10,000 --
Restricted custodial cash 4,837 4,837 --
Trade accounts receivable 131,330 66,524 64,806
Inventories and supplies 23,673 30 23,643
Deferred advertising 10,894 -- 10,894
Deferred income taxes 19,108 13,947 5,161
Prepaid expenses and other current assets 37,971 8,631 5,364 (C) 34,704
----------- ----------- ----------- -----------
Total current assets 392,954 192,820 13,904 214,038
LONG-TERM ASSETS 65,267 25,193 3,760 (D) 43,834
RESTRICTED CASH 27,913 27,913 --
PROPERTY, PLANT, AND EQUIPMENT, NET 252,452 72,485 179,967
INTANGIBLES, NET 328,572 89,642 (3,064)(E) 235,866
----------- ----------- ----------- -----------
Total assets $ 1,067,158 $ 408,053 $ 14,600 $ 673,705
=========== =========== =========== ===========
CURRENT LIABILITIES
Accounts payable $ 59,397 $ 31,091 28,306
Accrued liabilities 265,482 76,243 8,228 (F) 197,467
Short-term debt 29,941 12,877 7,936 (B) 25,000
Long-term debt due within one year 102,802 2,197 100,605
----------- ----------- ----------- -----------
Total current liabilities 457,622 122,408 16,164 351,378
LONG-TERM DEBT 12,770 2,349 10,421
DEFERRED INCOME TAXES 46,623 -- 1,500 (G) 48,123
OTHER LONG-TERM LIABILITIES 9,183 50 9,133
MINORITY INTEREST IN NET ASSETS OF SUBSIDIARY 34,435 -- (34,435)(H) --
SHAREHOLDERS' EQUITY
Common shares $1 par value 72,452 -- 72,452
Additional paid-in capital 41,997 -- 41,997
Retained earnings 393,777 284,820 31,371 140,328
Accumulated other comprehensive loss (1,701) (1,574) (127)
----------- ----------- ----------- -----------
Total shareholders' equity 506,525 283,246 31,371 254,650
----------- ----------- ----------- -----------
Total liabilities and shareholders' equity $ 1,067,158 $ 408,053 $ 14,600 $ 673,705
=========== =========== =========== ===========
</TABLE>
---------------------
The following notes are an integral part of this unaudited pro forma condensed
consolidated balance sheet.
(A) Represents eFunds' consolidated balance sheet which will not be
consolidated in Deluxe's consolidated balance sheet subsequent to the
spin-off of eFunds from Deluxe.
(B) Represents the settlement of the intercompany account between eFunds and
Deluxe and payment by eFunds for certain liabilities of eFunds retained by
Deluxe.
(C) Represents retention by Deluxe of amounts related to eFunds employees'
retiree healthcare benefits and the establishment of a receivable from
eFunds related to eFunds' share of Deluxe's income tax obligation, which
eFunds must reimburse to Deluxe pursuant to a tax sharing agreement.
(D) Represents reversal of a $1.5 million classification made for eFunds'
balance sheet, and the retention by Deluxe of certain assets related to the
funding of the obligation for eFunds employees who have participated in
Deluxe's deferred compensation plan.
(E) Represents certain infrastructure costs related to the eFunds businesses
which will have no further utility after the spin-off of eFunds from
Deluxe.
(F) Represents the retention by Deluxe of certain employee benefit and income
tax obligations that were recorded on eFunds' financial statements.
(G) Represents reversal of certain classifications made for eFunds' balance
sheet.
(H) Represents the elimination of the minority interest in the equity of
eFunds.
PF-4
<PAGE>
EXHIBIT INDEX
Exhibit 99 Press Release dated January 2, 2001.
