Deluxe(DLX) - 2024 Q2 - Quarterly Results

Revenue Performance - Reported revenue for Q2 2024 decreased by 5.9% to $537.8 million compared to $571.7 million in Q2 2023[3] - Total revenue for the six months ended June 30, 2024, was $1,072.8 million, a decrease of 4.0% compared to $1,117.1 million for the same period in 2023[13] - Total revenue for the quarter ended June 30, 2024, was $537.8 million, a decrease of 2.9% compared to $571.7 million for the same quarter in 2023[21] - Comparable adjusted revenue for the quarter was $534.9 million, down from $551.6 million in the prior year, reflecting a year-over-year decline[21] Net Income and Earnings Per Share - Net income increased by 25.0% to $20.5 million, up from $16.4 million in the same quarter last year[3] - Net income for the six months ended June 30, 2024, increased to $31.3 million from $19.2 million in the same period of 2023, representing a growth of 63.5%[12] - GAAP diluted EPS expanded by 24.3% to $0.46, while comparable adjusted diluted EPS improved by 4.9% to $0.85[3] Cash Flow and Operating Performance - First half operating cash flows increased by 40% to $66.2 million, with free cash flow at $17.6 million[1] - Cash provided by operating activities for the six months ended June 30, 2024, was $66.2 million, an increase from $47.3 million in the same period of 2023[12] - Free cash flow for the six months ended June 30, 2024, was $17.6 million, a significant improvement from a negative $8.6 million in the same period of 2023[12] - Net cash provided by operating activities for the quarter was $39.6 million, a decrease of 28.2% compared to $54.1 million in the prior year[25] - Free cash flow for the quarter was $11.4 million, down from $23.7 million in the same quarter last year[25] EBITDA and Margins - Comparable adjusted EBITDA increased by 1.6% to $101.8 million, with a margin of 19.0%, up 80 basis points from the prior year[3] - Adjusted EBITDA for the six months ended June 30, 2024, was $203.8 million, slightly down from $208.8 million in the same period of 2023[17] - The adjusted EBITDA margin for the six months ended June 30, 2024, was 19.0%, compared to 18.7% for the same period in 2023, indicating improved operational efficiency[17] - Adjusted EBITDA for the quarter was $103.4 million, a decrease of 1.6% from $108.4 million in the same quarter last year[21] - Comparable adjusted EBITDA margin improved to 19.0% for the quarter, compared to 18.2% in the prior year[21] Debt and Financial Position - Current portion of long-term debt reduced to $43.1 million from $86.2 million at the end of 2023[11] - Net debt as of June 30, 2024, was $1,534.9 million, with shares outstanding at 44.2 million[11] - Total debt as of June 30, 2024, was $1,558.0 million, down from $1,592.9 million at the end of December 2023[23] - Net debt as of June 30, 2024, was $1,534.9 million, slightly up from $1,520.9 million at the end of December 2023[23] Guidance and Future Outlook - The company affirms 2024 guidance for revenue between $2.12 billion and $2.16 billion, adjusted EBITDA of $400 million to $420 million, and adjusted diluted EPS of $3.10 to $3.40[4] - The company has not provided reconciliations for its 2024 outlook guidance due to uncertainties surrounding certain reconciling items, including asset impairment charges and restructuring expenses[15] Dividends and Shareholder Returns - The Board of Directors approved a quarterly dividend of $0.30 per share, payable on September 3, 2024[5] Customer Funds and Withdrawals - The company reported a net change in customer funds obligations of $(328.4) million for the six months ended June 30, 2024, compared to $(149.3) million in the same period of 2023, indicating increased customer withdrawals[12] Business Performance Metrics - Merchant Services revenue for the six months ended June 30, 2024, increased to $195.0 million, up from $180.6 million in 2023, reflecting a growth of 8.5%[13] - B2B Payments revenue decreased to $139.7 million for the six months ended June 30, 2024, down 7.5% from $151.5 million in the same period of 2023[13] Performance Evaluation - The company emphasizes the importance of comparable adjusted measures to evaluate performance excluding the impact of business exits[20] - Management views free cash flow as a key indicator of cash available for debt service and shareholder returns after capital investments[24]