Deluxe (DLX) came out with quarterly earnings of $0.80 per share, beating the Zacks Consensus Estimate of $0.69 per share. This compares to earnings of $1.04 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 15.94%. A quarter ago, it was expected that this payments and data company would post earnings of $0.68 per share when it actually produced earnings of $0.79, delivering a surprise of 16.18%.Over the last four quarters, the ...

MINNEAPOLIS--(BUSINESS WIRE)--Deluxe (NYSE: DLX), a Trusted Payments and Data company, today reported operating results for its fourth quarter and year ended December 31, 2023. “We are pleased to report a third consecutive year of organic revenue growth, while also increasing comparable adjusted EBITDA faster than revenue, and generating significantly improved free cash flows during both the fourth quarter and full year periods. These results further demonstrate the power of the combined Deluxe portfolio ...

• Merchant Services improved sequentially to +2.1% year-over-year, +3.4% YTD 3Q'23 • Fulton Bank relationship expands middle-market offering & growth potential • YTD comparable adjusted EBITDA margin has expanded 180 bps yearover-year • Adj EBITDA margin expanded 110 bps to 45.2% Introducing Project North Star • Portfolio approach including 12+ workstreams driving value, mitigating execution risk Trusted Payments and Data Company Promo • 47.1% comparable adjusted EBITDA growth versus 3Q'22 Checks • Revenue ...

Financial Data and Key Metrics Changes - Total revenue for Q3 2023 was flat year-over-year at $538 million, while adjusted EBITDA expanded 3% to $102 million [23][32] - Year-to-date total revenue grew 1%, and EBITDA expanded by 4%, indicating efficient cost management and profitable growth [23][32] - The company reported a GAAP net loss of $8 million, down from net income of $14.7 million in Q3 2022, with adjusted diluted EPS at $0.79, down from $0.99 [32] Business Line Data and Key Metrics Changes - Payments segment revenue was flat year-over-year at $169.5 million, with Merchant Services growing 2.1% and other payments declining 2.5% [16][24] - Data Solutions segment revenue increased over 24%, with adjusted EBITDA growth exceeding 45% driven by strong demand for data-driven marketing services [9][33] - Promotional Solutions revenue declined 7.5%, while the check business revenue decreased 1%, with margins remaining stable in the mid-40s [10][11][35] Market Data and Key Metrics Changes - Merchant Services experienced a sequential revenue growth of just over 2%, with positive trends in retail spending noted [7][8] - The check business showed resilience with a revenue decline of only 1.3%, better than expected, and continued market share gains [35][87] - Data Solutions revenue decreased 4% on a reported basis but increased 24.5% on a comparable adjusted basis, reflecting strong performance in targeted marketing [33] Company Strategy and Development Direction - The company is focusing on Project North Star, aiming to deliver $100 million of incremental run rate free cash flow and $80 million of increased comparable adjusted EBITDA by 2025 [22][29] - The strategy includes investing cash flow from print businesses into payments and data businesses, enhancing operational efficiency and driving growth [13][29] - An Investor Day is scheduled for December 5, 2023, to provide further insights into the North Star initiative and future growth prospects [14][88] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate macroeconomic uncertainties while maintaining growth in the Merchant Services and Data Solutions segments [7][26] - The company anticipates continued softness in certain business areas but remains optimistic about achieving low single-digit revenue growth for the full year [66] - Management highlighted the importance of operational improvements and strategic initiatives in driving future performance and shareholder value [30][67] Other Important Information - Free cash flow for Q3 2023 was $42.7 million, up from $23 million in Q3 2022, with a quarterly dividend of $0.30 per share approved [19] - The company ended the quarter with a net debt level of $1.59 billion, with a net debt to adjusted EBITDA ratio of 3.8x, consistent with long-term targets [62] - The company is transitioning from ERP implementation to Project North Star, which is expected to enhance cash flow and operational efficiency [78][85] Q&A Session Summary Question: Outlook for Merchant Services - Management noted that regulatory changes are not expected to materially impact the business, emphasizing the successful expansion into the middle market with Fulton Bank [69][70] Question: Expansion into High-Growth Verticals - Management discussed the successful expansion into telecom, utilities, and insurance sectors, leveraging a large data lake and AI tools for targeted marketing [71] Question: Cash Flow and CapEx Expectations - Management confirmed that CapEx is expected to remain around $100 million, with restructuring costs transitioning to support Project North Star initiatives [74] Question: Performance of Data-Driven Marketing - Management highlighted strong demand from banks for low-cost deposit acquisition, contributing to growth in the data-driven marketing business [75][76] Question: Resilience of the Checks Business - Management emphasized market share gains in the checks business, with effective pricing strategies helping to mitigate overall market declines [79][87]

Barry McCarthy Lance Vitanza So you're right, the half a turn a year was our original going out guidance when we did the First American deal a little over 2 years ago. Obviously, interest rate environment has changed that economic conditions have changed a bit. Operator Chip Zint We also nearly had the 4 Web hosting business for the whole quarter, which is about another $4 million of EBITDA. So on a run rate basis, while we're pleased with the $108 million we delivered in the second quarter, we're really mo ...

Tom Morabito - Vice President of Investor Relations Chip Zint - Chief Financial Officer Charles Strauzer - CJS Operator Ladies and gentlemen, thank you for standing by, and welcome to the Deluxe First Quarter 2023 Earnings Conference Call [Operator Instructions]. Today's call is being recorded. We will begin with opening remarks and introductions. Tom Morabito Before we begin, and as you see on this slide, I'd like to remind everyone that comments made today regarding management's intentions, projections, f ...

Financial Data and Key Metrics Changes - Company-wide revenue increased more than 4% year-over-year to $555 million, with quarterly revenue up nearly 7% excluding business exits [11][21] - Total adjusted EBITDA dollars increased nearly 2% year-over-year, with adjusted EBITDA margin at 18.8% [12][22] - Third quarter adjusted EPS was $0.99, down from $1.10 in the previous year, primarily due to interest expense [23] Business Segment Data and Key Metrics Changes - Payments segment revenue grew nearly 6% year-over-year, with Merchant Services revenue increasing 4.5% [13][24] - Cloud Solutions revenue increased almost 5% year-over-year, driven by double-digit growth in the data-driven marketing business [15][26] - Promotional Solutions revenue improved more than 9% year-over-year, with adjusted EBITDA margin improving sequentially [17][28] - Checks business revenue grew 6% year-over-year, maintaining strong margin rates despite expected secular declines [18][29] Market Data and Key Metrics Changes - The company noted ongoing demand for products and services, with a healthy balance of volume and pricing driving revenue growth [11][19] - The Payments segment is expected to become the largest revenue business by early 2023 [14] Company Strategy and Development Direction - The company is focused on transforming into a payments and data company, emphasizing the success of its One Deluxe model [10][19] - Strategic investments in technology and diversification of business lines are aimed at mitigating risks associated with interest rate sensitivity [16][40] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic uncertainties, noting no significant decline in aggregate demand [44][45] - The company is committed to maintaining a balanced approach to capital allocation, focusing on growth investments, dividends, and debt reduction [31][56] Other Important Information - The company ended the quarter with a net debt level of $1.63 billion, improving its net debt to adjusted EBITDA ratio to 3.8 times [30] - A regular quarterly dividend of $0.30 per share was approved, payable on December 5, 2022 [31] Q&A Session Summary Question: Breakdown of volume versus price in various segments - Management indicated that approximately 60% of revenue growth was due to volume increases, with 40% attributed to pricing actions [36][37] Question: Drivers behind DDM business growth - Management highlighted investments in diversifying income sources and expanding into new market verticals as key drivers for DDM growth [39][40] Question: Macro outlook and potential economic pressures - Management noted no significant economic slowdown impacting aggregate demand, despite some month-to-month variations in customer buying patterns [44][45] Question: Corporate expense management - Management acknowledged the need to reduce corporate costs and indicated a focus on achieving operating leverage as revenue grows [51][54] Question: Inflation impact on costs - Management stated that they have caught up with inflation through pricing adjustments and feel confident in managing future inflationary pressures [58][59] Question: Treasury management win factors - Management attributed the win with the Bank of Missouri to exceptional customer service, product feature enhancements, and alignment of company values [61][64]

[Part I – Financial Information](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section provides the unaudited consolidated financial statements and related notes for Deluxe Corporation, detailing financial position, performance, and cash flows [Financial Statements](index=3&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) This section presents Deluxe Corporation's unaudited consolidated financial statements, including balance sheets, income, equity, and cash flow statements Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $550,419 | $620,473 | | **Total Assets** | **$2,957,321** | **$3,074,384** | | **Total Current Liabilities** | $585,844 | $683,358 | | **Total Liabilities** | $2,355,249 | $2,499,786 | | **Total Shareholders' Equity** | $602,072 | $574,598 | Consolidated Statement of Comprehensive Income Highlights (in thousands, except per share amounts) | Metric | Quarter Ended Sep 30, 2022 | Quarter Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $555,038 | $532,141 | $1,674,006 | $1,451,622 | | **Operating Income** | $41,613 | $36,404 | $124,051 | $98,780 | | **Net Income** | $14,760 | $12,501 | $46,536 | $48,955 | | **Diluted EPS** | $0.34 | $0.28 | $1.06 | $1.13 | Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $123,418 | $149,229 | | **Net Cash from Investing Activities** | ($49,350) | ($1,036,361) | | **Net Cash from Financing Activities** | ($149,561) | $911,620 | | **Net Change in Cash** | ($89,600) | $23,695 | [Condensed Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Condensed%20Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) These notes provide detailed explanations for financial statement line items, covering acquisitions, divestitures, debt, segment performance, and restructuring activities - The company finalized the purchase price allocation for the First American acquisition, which occurred on June 1, 2021, and in 2022, divested its Australian web hosting business for **$17.6 million**, its Promotional Solutions strategic sourcing business, and its retail packaging business[47](index=47&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk) - As of Sep 30, 2022, total debt was **$1.67 billion**, consisting primarily of a senior secured term loan facility (**$1.0 billion**) and senior unsecured notes (**$475 million**), with the company in compliance with all debt covenants[80](index=80&type=chunk)[83](index=83&type=chunk) - The company incurred restructuring and integration expenses of **$15.3 million** for Q3 2022 and **$46.8 million** for the nine months ended Sep 30, 2022, primarily related to IT consulting, internal labor, and employee severance[71](index=71&type=chunk)[73](index=73&type=chunk) - For the nine months ended Sep 30, 2022, revenue was led by Checks (**$553.4 million**) and Payments (**$507.1 million**)[98](index=98&type=chunk)[106](index=106&type=chunk)[109](index=109&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=30&type=section&id=Item%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management provides insights into the company's financial performance, condition, and strategic initiatives, including the impact of acquisitions and market conditions [Executive Overview](index=30&type=section&id=EXECUTIVE%20OVERVIEW) This overview discusses the business model, First American acquisition impact, market conditions, and the company's 2022 financial outlook - The company expects revenue to increase **8% to 10%** for 2022, with an adjusted EBITDA margin of **18.5% to 19.0%**, while business exits are expected to reduce revenue growth by approximately **2.0 percentage points**[131](index=131&type=chunk) - The First American acquisition contributed incremental revenue of **$144.2 million** and adjusted EBITDA of **$30.2 million** for the first nine months of 2022[117](index=117&type=chunk) - The company is experiencing inflationary pressures on labor, delivery, and material costs, which it is addressing with targeted price increases, and also faced supply disruptions in the Promotional Solutions segment[120](index=120&type=chunk) - Capital allocation priorities include investing in growth, paying dividends, reducing debt, and returning value to shareholders, with total debt at **$1.67 billion** as of Sep 30, 2022[122](index=122&type=chunk) [Consolidated Results of Operations](index=34&type=section&id=CONSOLIDATED%20RESULTS%20OF%20OPERATIONS) This section analyzes consolidated financial results, detailing changes in revenue, expenses, and non-GAAP measures, attributing shifts to acquisitions, inflation, and divestitures - Total revenue increased **4.3%** in Q3 2022 and **15.3%** in the first nine months of 2022 year-over-year, primarily driven by the First American acquisition, which contributed **$144.2 million** in incremental revenue[135](index=135&type=chunk) - Cost of revenue as a percentage of revenue increased to **46.0%** for the first nine months of 2022 from **43.3%** in 2021 due to inflation and the First American acquisition, while SG&A expense increased **9.9%** reflecting First American costs and transformational investments[137](index=137&type=chunk)[142](index=142&type=chunk) - Interest expense for the first nine months of 2022 increased **84.2%** to **$65.5 million**, primarily due to debt issued to fund the First American acquisition and rising interest rates[145](index=145&type=chunk)[147](index=147&type=chunk) Non-GAAP Reconciliation Highlights (Nine Months Ended Sep 30) | Metric | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Adjusted Diluted EPS | $3.04 | $3.62 | (16.0%) | | Adjusted EBITDA (in millions) | $305.9 | $290.7 | 5.2% | [Segment Results](index=41&type=section&id=SEGMENT%20RESULTS) This section details the performance of the Payments, Cloud Solutions, Promotional Solutions, and Checks segments, highlighting revenue drivers and challenges - Payments Segment revenue for the first nine months of 2022 increased **47.8%** to **$507.1 million**, and adjusted EBITDA increased **51.3%** to **$107.6 million**, primarily due to the First American acquisition[175](index=175&type=chunk) - Cloud Solutions Segment revenue for the first nine months of 2022 increased **2.5%** to **$204.8 million**, with growth in data-driven marketing partially offset by the sale of the Australian web hosting business and churn in North American hosting[177](index=177&type=chunk)[178](index=178&type=chunk) - Promotional Solutions Segment revenue for the first nine months of 2022 increased **4.8%** to **$408.6 million** due to new clients and price increases, but adjusted EBITDA decreased **12.3%** due to inflation and supply chain disruptions[181](index=181&type=chunk)[183](index=183&type=chunk) - Checks Segment revenue for the first nine months of 2022 increased **6.6%** to **$553.4 million**, driven by new client wins and price increases, which offset secular declines[186](index=186&type=chunk) [Cash Flows and Liquidity](index=43&type=section&id=CASH%20FLOWS%20AND%20LIQUIDITY) This section analyzes cash flows, noting a decrease in operating cash due to higher payments, reduced investing cash without major acquisitions, and net debt repayments in financing activities - Net cash provided by operating activities decreased by **$25.8 million** for the first nine months of 2022 compared to 2021, driven by higher interest payments (**+$32.8 million**), bonus payments (**+$22.8 million**), and tax payments (**+$17.7 million**)[190](index=190&type=chunk)[191](index=191&type=chunk) - Net cash used by investing activities was **$49.4 million** in the first nine months of 2022, compared to **$1.04 billion** in the same period of 2021, primarily due to the **$956.7 million** net payment for the First American acquisition in 2021[189](index=189&type=chunk)[193](index=193&type=chunk) - Net cash used by financing activities was **$149.6 million** in the first nine months of 2022, compared to net cash provided of **$911.6 million** in 2021, with the 2021 period including large debt proceeds to fund the acquisition[189](index=189&type=chunk)[194](index=194&type=chunk) [Capital Resources](index=44&type=section&id=CAPITAL%20RESOURCES) This section details the company's capital structure, including total debt, available liquidity, and the status of its share repurchase authorization - Total debt principal was **$1.69 billion** as of Sep 30, 2022, with nearly **60%** of debt at a fixed rate due to interest rate swaps[121](index=121&type=chunk)[198](index=198&type=chunk)[200](index=200&type=chunk) - As of Sep 30, 2022, the company had **$282.2 million** available for borrowing under its revolving credit facility[203](index=203&type=chunk) - The company has a **$500 million** share repurchase authorization from October 2018, with **$287.5 million** remaining available as of September 30, 2022, and no shares repurchased under this plan during the nine months ended Sep 30, 2022[97](index=97&type=chunk)[201](index=201&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is interest rate exposure on variable-rate debt, mitigated by swaps, with foreign currency risk deemed insignificant - The company is exposed to interest rate risk from its variable-rate credit facility, where a hypothetical **one percentage point** change in the weighted-average interest rate would have resulted in a **$7.3 million** change in interest expense for the first nine months of 2022[212](index=212&type=chunk)[219](index=219&type=chunk) - The company uses interest rate swaps to mitigate interest rate variability, effectively converting **$500.0 million** of its variable-rate debt to a fixed rate[218](index=218&type=chunk) - Exposure to foreign currency exchange rates, primarily the Canadian dollar, is not expected to have a significant impact on earnings and cash flows[221](index=221&type=chunk) [Controls and Procedures](index=47&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal control over financial reporting - Management concluded that as of September 30, 2022, the company's disclosure controls and procedures were effective[222](index=222&type=chunk) - No changes in internal control over financial reporting were identified during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[223](index=223&type=chunk) [Part II – Other Information](index=49&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section addresses legal proceedings, risk factors, and unregistered equity sales, noting no material legal liabilities or significant changes to risk factors [Legal Proceedings](index=49&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company asserts that recorded liabilities for legal matters are not material to its financial position, operations, or liquidity - The company believes that recorded reserves for legal matters are adequate and that currently identified claims or litigation will not materially affect its financial position, results of operations, or liquidity[226](index=226&type=chunk) [Risk Factors](index=49&type=section&id=ITEM%201A.%20RISK%20FACTORS) There have been no significant changes to the company's risk factors since the filing of its 2021 Annual Report on Form 10-K - There have been no significant changes in the company's risk factors since the filing of the 2021 Form 10-K[227](index=227&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECU RITIES%20AND%20USE%20OF%20PROCEEDS) The company did not repurchase shares in Q3 2022 but withheld **10,570 shares** for tax obligations on employee equity awards, with **$287.5 million** remaining for future repurchases - No shares were repurchased under the publicly announced plan during Q3 2022[228](index=228&type=chunk)[229](index=229&type=chunk) - The company withheld **10,570 shares** at an average price of **$21.14** to satisfy tax obligations on vested equity awards for employees[228](index=228&type=chunk) - **$287.5 million** remained available for repurchase under the board's authorization as of September 30, 2022[229](index=229&type=chunk)

Deluxe Corporation (NYSE:DLX) Q2 2022 Earnings Conference Call August 4, 2022 8:30 AM ET Company Participants Thomas Morabito - VP of IR Barry McCarthy - President and CEO Scott Bomar - CFO Conference Call Participants Lance Vitanza - Cowen Charlie Strauzer - CJS Marla Backer - Sidoti David Silver - CL King Lance Vitanza - Cowen Operator Ladies and gentlemen, thank you for standing by, and welcome to the Deluxe Second Quarter 2022 Earnings Conference Call. [Operator Instructions] Today's call is being recor ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ___________ Commission file number: 1-7945 DELUXE CORPORATION (Exact name of registrant as specified in its charter) MN (State or other jurisdiction ...