Deluxe (DLX) to Close Greensboro, NC, North Wales, PA and Thorofare, NJ Facilities; Will Reduce Workforce by 570; Issues Q3/FY08 Guidance
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Deluxe Corporation (NYSE: DLX) announced today that it has completed a previously announced review of its cost structure in response to the impact a weakened U.S. economy continues to have on the business.
As a result, the Company plans to close its Greensboro, North Carolina and North Wales, Pennsylvania, manufacturing facilities and its Thorofare, New Jersey, manufacturing facility and call center. In addition, the Company has identified further opportunities to streamline portions of its business unit support and corporate shared services functions. Combined, these actions will reduce the Company's workforce by approximately 570 people on a net basis.
The North Wales and Thorofare closures are expected to be complete in Q109, while the Greensboro facility will play a transitional role and is expected to close later in 2009. The other employee reductions should be complete by the end of Q309.
Deluxe reaffirms its Q3 sale guidance of $367-$374 million and FY08 guidance of $1.515-$1.535 billion. he Street estimates are currently $369.62 million for Q3 and $1.52 billion for FY08. EPS for Q3 and FY08 are expected to be $0.29-$0.33 and $2.25-$2.35, respectively. The Street expects EPS for the quarter to be $0.58 and $2.54 for the full year.
Given the expansion of the cost reduction actions, the Company now expects to deliver $250 million of savings, net of investments, through 2010, with approximately $50 million expected to be realized in 2008, $60 million in 2009 and the remaining $35 million in 2010.
Deluxe Corporation, together with its subsidiaries, provides various personalized printed products, promotional products, and merchandising materials to small businesses, financial institutions, and consumers in the United States and Canada.
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