Seeking to drastically reengineer its flagging core business, Deluxe Corp. said it will close nearly two-thirds of its check-printing facilities over the next two years, company officials said last week.
Executives at St. Paul-based Deluxe said they would take a pretax restructuring charge of between $30 million to $35 million for the consolidation in the first quarter of 1996. The company said it plans to shut 21 plants by the end of 1997 - in addition to the five facilities already slated for closure.
The closings will affect 2,400 full-time and 600 part-time employees. At the same time, officials said they expect to add up to 1,800 positions in the company's remaining 15 printing plants by expanding the number of work shifts.
"Given the advancements in telecommunications and order processing technology, it's no longer necessary or efficient to operate a printing plant in every major city in the United States," said Deluxe president and chief executive J.A. Blanchard. He added that the company is developing a new order processing and customer service system to be installed later this year.
Blanchard said the plant closings are a major component of Deluxe's overall cost-cutting plan to reduce annual operating exspenses by $150 million.
The plant-closing announcement came on the heels of a lackluster fourth- quarter financial report from Deluxe . The company reported a net loss of $5.9 million on sales of $501.1 million for the quarter, compared with a $40 million net profit and revenues of $478.8 million a year earlier.
John H. Harland Co., a major Deluxe competitor in the check-printing business, also reported a setback in fourth-quarter earnings. Atlanta-based Harland said it earned $9.8 million, or 32 cents a share in the period, off from $12.3 million a year earlier.