ST. PAUL, Minn., Aug. 5 -- Deluxe announced today that its board of directors has approved a series of actions that will enhance shareholder value by increasing leverage and repurchasing shares. The Company said its board approved a financial strategy that will leverage the strong profitability and cash flow generating capabilities of Deluxe. "By all measures, Deluxe is an under-leveraged company," said Lawrence J. Mosner, Chairman and Chief Executive Officer of Deluxe. "We enjoy steady and predictable cash flows with EBITDA of approximately $400 million annually. We plan to increase our debt level up to $700 million, which will lower our overall cost of capital." Deluxe said that the debt would be a combination of both long-term and short-term borrowings. "Once we reach our target capital structure," Mosner said, "we expect to maintain that level of debt unless our business strategy or outlook were to change dramatically." Deluxe also announced that its board has approved a stock repurchase program, authorizing the repurchase of up to 12 million shares, or approximately 20 percent of its common shares currently outstanding. "At current prices, we believe the repurchase of our stock is a good investment," Mosner said. "We have confidence in our ability to achieve our five-year strategic plan. As a result, the board believes that leveraging our balance sheet and using the cash to repurchase shares is appropriate at this time." Douglas J. Treff, chief financial officer added, "The actions taken by the board are an effective and efficient way to increase the value of Deluxe for our shareholders. These actions allow us to: (1) manage to our target capital structure; (2) acquire shares from time to time, at prices management believes to be opportunistic; and (3) minimize dilution resulting from shares issued through our employee share purchase plan and equity-based compensation programs." "Our general philosophy for evaluating every investment continues to be measured against the return rates available from share repurchase," Mosner said. "Using share repurchase as a guideline, we will invest in growth opportunities, including acquisitions, that are strategic to our existing lines of business and accretive to earnings and cash flow per share." The company said it intends to repurchase shares primarily through open market transactions at prevailing market prices or through other transactions managed by broker dealers. In a separate action, the board of directors also declared a regular quarterly dividend of $.37 per share. The dividend will be payable on September 3, 2002 to shareholders of record at the close of business on August 19, 2002. The Company has 62,451,265 shares outstanding.