Form: 10-Q

Quarterly report pursuant to Section 13 or 15(d)

November 14, 1996

Documents

10-Q: Quarterly report pursuant to Section 13 or 15(d)

Published on November 14, 1996



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q


(Mark one)

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

September 30,1996
For quarterly period ended _____________________________________________________

or

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from ______________________ to ______________________

1-7945
Commission file number: _______________________________________________________

DELUXE CORPORATION
_______________________________________________________________________________
(Exact name of registrant as specified in its charter)

MINNESOTA 41-0216800
_______________________________________________________________________________
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)

3680 Victoria St. N., St. Paul, Minnesota 55126-2966
_______________________________________________________________________________
(Address of principal executive offices) (Zip code)

(612) 483-7111
_______________________________________________________________________________
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes /X/ No / /


The number of shares outstanding of registrant's common stock, par value
$1.00 per share, at November 1, 1996 was 82,371,951.

1


ITEM I. FINANCIAL STATEMENTS

PART I. FINANCIAL INFORMATION
DELUXE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)



September 30, 1996 December 31,
(Unaudited) 1995
------------------ -------------

CURRENT ASSETS
Cash and cash equivalents $ 37,905 $ 13,668
Trade accounts receivable 180,106 169,310
Inventories:
Raw material 23,051 22,475
Semi-finished goods 14,759 24,861
Finished goods 24,913 28,566
Supplies 10,970 11,139
Deferred advertising 16,185 20,017
Deferred income taxes 37,034 35,926
Prepaid expenses and other current assets 48,472 55,136
--------- ---------
Total current assets 393,395 381,098
--------- ---------
LONG-TERM INVESTMENTS 52,563 48,147
PROPERTY, PLANT AND EQUIPMENT
Land 42,760 43,632
Buildings and improvements 307,133 299,954
Machinery and equipment 567,111 578,922
Construction in progress 2,782 18,315
--------- ---------
Total 919,786 940,823
Less accumulated depreciation 461,177 446,665
--------- ---------
Property, plant, and equipment - net 458,609 494,158
INTANGIBLES
Cost in excess of net assets acquired - net 289,208 301,289
Other intangible assets - net 88,663 70,403
--------- ---------
Total intangibles 377,871 371,692
--------- ---------
TOTAL ASSETS $1,282,438 $1,295,095
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 69,774 $ 75,644
Accrued liabilities:
Wages, including vacation pay 63,056 51,549
Employee profit sharing and pension 43,178 56,906
Accrued rebates 38,279 31,373
Restructuring costs 28,107 6,283
Other 94,583 89,392
Short-term debt 13,188 48,962
Long-term debt due within one year 7,527 8,699
--------- ---------
Total current liabilities 357,692 368,808
--------- ---------
LONG-TERM DEBT 110,448 110,997
DEFERRED INCOME TAXES 36,891 34,916
SHAREHOLDERS' EQUITY
Common shares - $1 par value (authorized
500,000,000 shares; issued: 82,329,396) 82,329 82,364
Additional paid-in capital 1,455
Retained earnings 695,217 697,036
Cumulative translation adjustment 638 500
Unearned compensation (580) (739)
Net unrealized change - marketable securities (197) (242)
--------- ---------
Total shareholders' equity 777,407 780,374
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,282,438 $1,295,095
--------- ---------
--------- ---------


See Notes to Consolidated Financial Statements

2



DELUXE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except per Share Amounts)
(Unaudited)



QUARTER ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
--------------------------- -------------------------------
1996 1995 1996 1995
---- ---- ---- ----

NET SALES $ 460,520 $ 449,203 $1,415,188 $1,356,857
OPERATING EXPENSES
Cost of sales 209,670 202,099 671,875 612,611
Selling, general and administrative 176,409 170,999 530,211 513,810
Employee profit sharing and pension 13,690 14,870 42,343 44,633
Employee bonus and stock purchase discount 4,762 5,214 14,851 17,853
---------- -------- ---------- ----------
Total 404,531 393,182 1,259,280 1,188,907
---------- -------- ---------- ----------
INCOME FROM OPERATIONS 55,989 56,021 155,908 167,950

OTHER INCOME (EXPENSE)
Other income 4,031 1,335 6,939 8,779
Interest expense (1,994) (3,555) (7,300) (9,832)
---------- -------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 58,026 53,801 155,547 166,897
PROVISION FOR INCOME TAXES 24,502 23,543 65,046 71,345
---------- -------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS 33,524 30,258 90,501 95,552
DISCONTINUED OPERATIONS
Loss from operations (net of income tax benefit of $610
and $1,802 for the quarter and nine months ended
September 30, 1995, respectively) (882) (2,604)
---------- -------- ---------- ----------
NET INCOME 33,524 29,376 90,501 92,948
---------- -------- ---------- ----------
---------- -------- ---------- ----------
AVERAGE COMMON SHARES OUTSTANDING 82,331,984 82,486,220 82,374,954 82,435,645
NET INCOME PER COMMON SHARE FROM CONTINUING OPERATIONS $0.41 $ 0.37 $1.10 $ 1.16
NET INCOME PER COMMON SHARE FROM DISCONTINUED OPERATIONS $(0.01) $(0.03)
---------- -------- ---------- ----------
NET INCOME PER SHARE $0.41 $ 0.36 $1.10 $ 1.13

CASH DIVIDENDS PER COMMON SHARE $0.37 $ 0.37 $1.11 $ 1.11


See Notes to Consolidated Financial Statements


3



DELUXE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1996 and 1995
(Dollars in Thousands)
(Unaudited)




1996 1995
------- ---------

CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 90,501 $ 92,948
Discontinued operations 2,604
------- -------
Income from continuing operations 90,501 95,552
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 50,652 49,317
Amortization of intangibles 29,227 25,241
Stock purchase discount 5,723 6,135
Net gain on sales of businesses (1,881)
Changes in assets and liabilities, net of effects from
acquisitions, discontinued operations and sales of businesses:
Trade accounts receivable (8,532) (16,246)
Inventories 9,727 (12,320)
Accounts payable (6,572) (2,804)
Restructuring costs 19,106
Other assets and liabilities 12,426 (11,932)
------- -------
Net cash provided by continuing operations 200,377 132,943
Net cash used by discontinued operations (1,784) (2,125)
------- -------
Net cash provided by operating activities 198,593 130,818

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of marketable securities with maturities of
more than 3 months 6,250 20,317
Purchases of property, plant and equipment (62,393) (91,904)
Payments for acquisitions, net of cash acquired (10,947) (37,313)
Net proceeds from sales of businesses 26,317
Other 11,913 (2,190)
------- -------
Net cash used in investing activities (28,860) (111,090)

CASH FLOWS FROM FINANCING ACTIVITIES
Payments on long-term debt (9,051) (7,094)
Payments to retire common stock (30,791) (21,980)
Proceeds from issuing stock under employee plans 22,145 18,917
Net (payments on), proceeds from short-term debt (36,252) 74,558
Cash dividends paid to shareholders (91,547) (91,657)
------- -------
Net cash used in financing activities (145,496) (27,256)
------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 24,237 (7,528)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 13,668 29,139
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 37,905 $ 21,611
------- -------
------- -------


See Notes to Consolidated Financial Statements


4


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. The consolidated balance sheet as of September 30, 1996, and the
consolidated statements of income for the three-month and nine-month
periods ended September 30, 1996 and 1995 and the consolidated
statements of cash flows for the nine-month periods ended September 30,
1996 and 1995 are unaudited; in the opinion of management, all
adjustments necessary for a fair presentation of such financial
statements are included. Other than those discussed in the notes
below, such adjustments consist only of normal recurring items.
Interim results are not necessarily indicative of results for a full
year.

The financial statements and notes are presented in accordance with
instructions for Form 10-Q, and do not contain certain information
included in the Company's annual financial statements and notes.

2. The Company has uncommitted bank lines of credit of $189.4 million
available at variable interest rates. As of September 30, 1996, $13.2
million was drawn on those lines at a weighted average interest rate of
6.2%. Also, the Company has in place a $150 million committed line of
credit which is available for borrowing and as support for commercial
paper. As of September 30, 1996, the Company had no commercial paper
outstanding. The Company has in place a medium-term note program for
the issuance of up to $300 million of medium-term notes to be used for
general corporate purposes, including working capital, capital
expenditures, possible acquisitions and repayment or repurchase of
outstanding indebtedness and other securities of the Company. As of
September 30, 1996, no such notes were issued or outstanding.

3. During the fourth quarter of 1995, the Company adopted a plan to
discontinue its Printwise ink business. The Company recorded charges
in the fourth quarter of 1995 for the disposal of the business, and
anticipated operating losses until disposal. Accordingly, Printwise is
reported as a discontinued operation for the 1996 and 1995 periods
presented.

4. During the first quarter of 1996, the Company recorded charges of $34.8
million related to the closing of 21 of its check printing plants and
the movement of PaperDirect's operations from New Jersey to existing
company facilities in Colorado and Minnesota. The $34.8 million of
charges include employee severance costs and expected losses on the
disposition of plant and equipment. Expenses of $32 million are
included in cost of goods sold and $2.8 million in selling, general and
administrative expense. $27.5 million of the charges are expected to
be in the form of cash outlays occurring in 1996 and 1997, almost all
of which will be applied to employee severance costs. The Company
expects to fund such outlays from cash generated by operations.

5. During the third quarter of 1996, the Company sold its T/Maker and
Internal Bank Forms units. The effect of these transactions was not
material to the operating results of the Company, nor will the absence
of these units materially effect future operating results.

6. In October of 1996, the Company completed the sale of substantially all
of the assets and certain liabilities of its Colwell unit for $61.5
million. The operating results of this unit are not material to the
operating results of the Company. The Company expects to recognize a
gain from the sale of Colwell in the fourth quarter.

5




ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

COMPANY PROFILE

Effective January 1, 1996, the Company reorganized its many independent
business units into two market-serving segments, Financial Services and
Deluxe Direct. Through Deluxe Financial Services, the Company provides check
printing, direct marketing assistance, and related services to financial
institutions in the United States, Canada, and the United Kingdom and payment
systems protection services, including check authorization, account
verification, and collection services to financial institutions and
retailers. Through Deluxe Direct, the Company provides direct mail checks
and specialty papers to households and small businesses; tax forms and
electronic tax filing services to tax preparers; and direct mail greeting
cards, gift wrap, and related products to households.

In September 1996, the Company created another management reporting function
which is referred to as the Deluxe Data market serving unit. Through this
division, the Company provides electronic funds transfer and other software
solutions to financial institutions and electronic benefit transfer services
to state governments. The results of operations of this division are
included in those of the Deluxe Financial Services.

During the first quarter of 1996, the Company recorded charges of $34.8
million related to the closing of 21 of its check printing plants, and the
movement of PaperDirect's operations from New Jersey to existing company
facilities in Colorado and Minnesota. Although no assurances can be given in
such regard, the Company anticipates that the consolidation of its check
printing plants and its other restructuring and cost reduction efforts may
result in annualized pre-tax cost reductions of approximately $150 million.
Although the Company may delay one or more of its anticipated plant closings,
other cost reduction efforts are expected to enable the Company to achieve
the anticipated level of annualized reductions. Such anticipated reductions
will be reflected primarily in the form of reduced facility, materials and
employee expenses in the Company's operating results. There can be no
assurance that increased expenses or other factors will not offset some or
all of the savings expected to be achieved through the Company's cost
reduction efforts. See "Item 5 - Other Information - Risk Factors and
Cautionary Statements."

RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE
MONTHS ENDED SEPTEMBER 30, 1995

Net sales were $1,415.2 million for the nine months ended September 30, 1996,
up 4.3% over the nine months ended September 30, 1995, when sales were
$1,356.9 million. The Deluxe Financial Services segment's revenue for the
first nine months of 1996 increased 8.4% over the first nine months of 1995,
due to revenue growth in all principal operating units. Financial
institution check printing revenues were up 3.2%. The improved results are
due to an improved product mix, a first quarter 1996 price increase, and
benefits from the integration of the businesses that serve financial
institutions. The Deluxe Direct segment's revenue for the first nine months
of 1996 decreased 3.7% from the first nine months of 1995, due primarily to
lower sales of social expressions products.

Selling, general and administrative expenses increased $16.4 million or 3.2%
for the first nine months of 1996 over the first nine months of 1995. The
Deluxe Financial Services segment's selling, general and administrative
expenses increased 7.2% over 1995, due primarily to costs related to the
closing of 21 check printing plants and increased selling expense for
financial institution check printing. The Deluxe Direct segment's selling,
general and administrative expenses for the first nine months of 1995
decreased 6.1% from the first nine months of 1995, due primarily to lower
advertising expense and reductions in general and administrative expenses
throughout the majority of the segment.

Net income from continuing operations was $90.5 million for the first nine
months of 1996, or 6.4% of sales, compared to $95.6 million for the first
nine months of 1995, or 7.0% of sales. The decrease from 1995 is due
primarily to $34.8 million of pretax charges taken in the first quarter of
1996 for the closing of 21 check printing plants and the movement of
PaperDirect's operations from New Jersey to existing company facilities in
Colorado and Minnesota. Also, included in the 1995 income is approximately
$5 million of pretax gain resulting from insurance payments for 1994
earthquake damages to Company facilities.

RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO
THREE MONTHS ENDED SEPTEMBER 30, 1995

Net sales were $460.5 million for the third quarter of 1996, up 2.5% over the
third quarter of 1995, when sales were $449.2 million. The Deluxe Financial
Services segment's revenue increased 6.9% over the third quarter of 1995, due
to revenue growth in all principal operating units. Financial institution
check printing revenues were up 3.0% over 1995. The improved results are due
to an improved product mix, higher prices, and benefits from the integration
of the businesses that serve financial institutions. The Deluxe Direct
segment's revenue decreased 6.4% from 1995, due primarily to lower sales of
social expressions products.

6


Selling, general and administrative expenses increased $5.4 million or 3.2%
in third quarter 1996 over third quarter 1995. The Deluxe Financial
Services segment's third quarter 1996 selling, general and administrative
expenses increased 12.6% over third quarter 1995, due primarily to increased
selling expenses for financial institution check printing. The Deluxe Direct
segment's selling, general and administrative expenses decreased 8.3% from
third quarter 1995, due primarily to lower advertising expenses and other
cost reductions throughout the majority of the segment.

Net income from continuing operations was $33.5 million for the third quarter
of 1996, or 7.3% of sales, compared to $30.3 million for the third quarter of
1995, or 6.7% of sales. The increase over 1995 is attributable to
improvements in both the Deluxe Financial Services and Deluxe Direct segments.

FINANCIAL CONDITION - LIQUIDITY

Cash provided by continuing operations was $198.6 million for the first nine
months of 1996, compared with $130.8 million for the first nine months of
1995. The increase is primarily the result of lower inventory and prepaid
asset levels in 1996. This represents the Company's primary source of
working capital for financing capital expenditures and paying cash dividends.
The Company's working capital on September 30, 1996 was $35.7 million
compared to $12.3 million on December 31, 1995.

FINANCIAL CONDITION - CAPITAL RESOURCES

Purchases of property, plant and equipment totaled $62.4 million for the
first nine months of 1996 compared to $91.9 million during the comparable
period one year ago. The decrease is the result of planned decreases in the
Deluxe Direct segment.

The Company has uncommitted bank lines of credit of $189.4 million. As of
September 30, 1996, $13.2 million was drawn on those lines. In addition, the
Company has in place a $150 million committed line of credit which is
available for borrowing and as support for commercial paper. As of
September 30, 1996, no commercial paper was issued and outstanding. The
Company also has in place a medium-term note program for the issuance of up
to $300 million of medium-term notes. As of September 30, 1996, no such
notes were issued or outstanding.

Cash dividends totaled $91.5 million for the first nine months of 1996
compared to $91.7 million for the first nine months of 1995.

7



PART II - OTHER INFORMATION

ITEM 5 - OTHER INFORMATION

When used in this Form 10-Q and in past and future filings by the Company
with the Securities and Exchange Commission, in the Company's press releases
and in oral statements made with the approval of an authorized executive
officer, the words or phrases "should result," "are expected to," "will
continue," "will approximate," "is anticipated," "estimate," "project" or
similar expressions are intended to identify "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are necessarily subject to certain risks and uncertainties,
including those discussed under the caption "Risk Factors and Cautionary
Statements" below, that could cause actual results to differ materially from
the Company's historical experience and its present expectations or
projections. Caution should be taken not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. The
factors listed below could affect the Company's financial performance and
could cause the Company's actual results for future periods to differ from
any opinions or statements expressed with respect thereto. Such differences
could be material and adverse.

The Company will not undertake and specifically declines any obligation to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect events or circumstances occurring after
the date of such statements or to reflect the occurrence of anticipated or
unanticipated events.

RISK FACTORS AND CAUTIONARY STATEMENTS

TIMING AND AMOUNT OF ANTICIPATED COST REDUCTIONS. With regard to the results
of the Company's ongoing cost reduction efforts, there can be no assurance
that the anticipated $150 million of annualized pre-tax cost savings will be
fully realized or will be achieved within the time periods expected. The
implementation of the printing plant closures is, in large part, dependent
upon the successful development of the software needed to streamline the
check ordering process and redistribute the resultant order flow among the
Company's remaining printing plants. Because of the complexities inherent in
and the lengthy testing periods associated with the development of software
products as sophisticated as those needed to accomplish this task, there can
be no assurance that unanticipated development delays will not occur. Any
such occurrence could adversely affect the planned consolidation of the
Company's printing facilities and delay the realization or reduce the amount
of the anticipated expense reductions. The Company may defer one or more
plant closings previously scheduled for 1997 into the first half of 1998.

In addition, the achievement of the expected level of cost savings is
dependent upon the successful execution of a variety of other cost reduction
strategies. These additional efforts include the consolidation of the
Company's purchasing process, the disposition of unprofitable or low-margin
businesses and other efforts. The optimum means of actualizing many of these
strategies is, in some cases, still being evaluated by the Company.
Unexpected delays, complicating factors and other hindrances are common in
these types of endeavors and can arise from a variety of sources, some of
which are likely to have been unanticipated. A failure to timely achieve one
or more of the Company's primary cost reduction objectives could materially
reduce the benefit to the Company of its cost savings programs and strategies
or substantially delay the full realization of their expected benefits.

Further, there can be no assurance that increased expenses attributable to
other areas of the Company's operations or to increases in raw material,
labor, equipment or other costs will not offset some or all of the savings
expected to be achieved through the cost reduction efforts. Competitive
pressures and other market factors may also require the Company to share the
benefit of some or all of any savings with its customers or otherwise
adversely affect the prices it receives or the market for its products. As a
result, even if the expected cost reductions are fully achieved in a timely
manner, such reductions may not be fully reflected by commensurate gains in
the Company's net income, dividend rate or the price of its Common Stock.

EFFECT OF FINANCIAL INSTITUTION CONSOLIDATION. There is an ongoing trend
towards increasing consolidation within the banking industry that has
resulted in increased competition and pressure on prices. This concentration
greatly increases the importance to the Company of retaining its major
customers and attracting significant additional customers in an increasingly
competitive environment. Although the Company devotes considerable efforts
towards the development of a competitively priced, high quality suite of
products for the financial services industry, there can be no assurance that
significant customers will not be lost nor that any such loss can be
counterbalanced through the addition of new customers or by expanded sales to
the Company's remaining customers.

RAW MATERIALS AND POSTAGE COSTS. Increases in the price of paper and the
cost of postage can adversely affect the profitability of the Company's
printing and mail order businesses. Competitive pressures and overall trends
in the retail marketplace may have the effect of inhibiting the Company's
ability to reflect increased costs of production in the retail prices of its
products.

COMPETITION. Although the Company believes it is the leading check printer
in the United States, it faces considerable competition from other smaller
companies in both its traditional marketing channel to financial institutions
and from direct mail marketers of checks. From time to time, one or more of
these competitors reduce the price of their products in an attempt to gain
market share. The corresponding pricing pressure placed on the Company has
resulted in reduced profit margins in the past and there can be no assurance
that similar pressures will not be exerted in the future.


8


TECHNOLOGICAL CHANGE. Check printing is, and is expected to continue to be,
an essential part of the Company's business and the principal source of its
operating income. A wide variety of alternative payment delivery systems,
including credit cards, debit cards, smart cards, ATM machines, direct
deposit and bill paying services, home banking applications and
Internet-based retail services, are in various stages of development and
additional systems will likely be introduced. Although the Company expects
that there will continue to be a substantial market for checks for the
foreseeable future, the rate and the extent to which these alternative
systems will achieve consumer acceptance and replace checks cannot be
predicted.

An unexpected surge in the popularity of any of these alternative payment
methods could have a material, adverse effect on the market for the Company's
primary products and its account verification, payment protection and
collection services. In addition, the publicity generated by the promoters
of these systems and the attendant media coverage of their development and
introduction may have a depressing effect on the market price of the
Company's Common Stock that is disproportionate to their actual competitive
impact.

SEASONALITY. A significant portion of the revenues and earnings of the
Company's Deluxe Direct market serving unit is dependent upon its results of
operations during the fourth quarter holiday season. As a result, the
results reported for this segment during the first three quarters of any
given year are not necessarily indicative of those which may be expected for
the entire year.

ANALYST ESTIMATES. From time to time, authorized representatives of the
Company may comment on the perceived reasonableness of published reports by
independent analysts regarding the Company's projected future performance.
Such comments should not be interpreted as an endorsement or adoption of any
given estimate or range of estimates or the assumptions and methodologies
upon which such estimates are based. The Company does not make public its
own internal projections, budgets or estimates. Undue reliance should not be
placed on any comments regarding the conformity, or lack thereof, of any
independent estimates with the Company's own present expectations regarding
its future results of operations.

Any forecast regarding the Company's future performance reflects various
assumptions. These assumptions are subject to significant uncertainties and,
as a matter of course, many of them will prove to be incorrect. Further, the
achievement of any forecast depends on numerous factors, many of which are
beyond the Company's control. In addition, the methodologies employed by the
Company in arriving at its own internal projections and the approaches taken
by independent analysts in making their estimates are likely different in
many significant respects. Although the Company may presently perceive a
given estimate to be reasonable, changes in the Company's business, market
conditions or the general economic climate may have varying effects on the
results obtained through the use of differing analyses and assumptions. The
Company expressly disclaims any continuing responsibility to advise analysts
or the public markets of its view regarding the current accuracy of the
published estimates of outside analysts. Persons relying on such estimates
should pursue their own independent investigation and analysis of their
accuracy and the reasonableness of the assumptions on which they are based.

9



PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K


(a) The following exhibits are filed as part of this report:

Exhibit No. Description Method of Filing
---------- ----------- ----------------
10.4 Deluxe Corporation 1996 Filed herewith
Annual Incentive Plan
(as amended August 9, 1996)

10.5 Deluxe Corporation Stock Filed herewith
Incentive Plan (as amended
August 9, 1996)

10.6 Deluxe Corporation Performance Filed herewith
Share Plan (as amended
August 9, 1996)

10.7 Deluxe Corporation Employee Filed herewith
Stock Purchase Plan (as amended
August 9, 1996)

12.3 Computation of Ratio of Filed herewith
Earnings to Fixed Charges

27.4 Financial Data Schedule Filed herewith

(b) The registrant did not, and was not required to, file any reports
on Form 8-K during the quarter for which this report is filed.



10



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 November 14, 1996 /s/ J.A. Blanchard III
----------------- -----------------------------
J.A. Blanchard III, President
and Chief Executive Officer
(Principal Executive Officer)


Date November 14, 1996 /s/ C.M. Osborne
----------------- -----------------------------
C.M. Osborne, Senior Vice President
and Chief Financial Officer
(Principal Financial Officer)


11



INDEX TO EXHIBITS


Exhibit No. Description Page No.
- ---------- ----------- --------
10.4 Deluxe Corporation 1996
Annual Incentive Plan (as amended August 9, 1996)

10.5 Deluxe Corporation Stock
Incentive Plan (as amended August 9, 1996)

10.6 Deluxe Corporation Performance
Share Plan (as amended August 9, 1996)

10.7 Deluxe Corporation Employee Stock Purchase Plan
(as amended August 9, 1996)

12.3 Computation of Ratio of Earnings to Fixed Charges

27.4 Financial Data Schedule


12