Deluxe(US:DLX)2020-05-10 01:56Financial Data and Key Metrics Changes - Total revenue for Q1 2020 was $486.4 million, representing a decline of 2.5% compared to the previous year [34] - GAAP diluted loss per share was $1.45, including asset impairment charges of $90.3 million [35] - Adjusted diluted EPS was $1.08, down from $1.54 in 2019 [35] - Reported EBITDA for the quarter was a loss of $27.9 million, with adjusted EBITDA at approximately $83.3 million, down from $113.7 million last year [36] Business Line Data and Key Metrics Changes - Payments segment revenue grew 18% to $77 million, driven by new business wins [35][21] - Cloud Solutions revenue was nearly $76 million, declining about $2 million from last year [35] - Promotional Solutions revenue was approximately $143 million, down about $13 million from last year [35] - Checks revenue delivered nearly $191 million, declining about $9 million from last year [35] Market Data and Key Metrics Changes - The Northeast region experienced the most significant revenue declines due to COVID-19 [16] - Promotional Solutions and Cloud Solutions were the most impacted segments, with declines expected to continue into Q2 [14][17] Company Strategy and Development Direction - The company is focused on its "One Deluxe" strategy to become a sales-driven revenue growth company, moving away from reliance on acquisitions [9][11] - The Payments segment is seen as a key growth area, with new products and partnerships enhancing market position [22][54] - The company is identifying new business opportunities, such as selling PPE, to mitigate revenue declines [16][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy despite the challenges posed by COVID-19, noting that the strategy is yielding positive results [11][46] - The company anticipates a gradual recovery, with expectations for modest volume improvements in the latter half of the year [14][62] - Management highlighted the importance of maintaining financial flexibility and liquidity during the downturn [30][47] Other Important Information - The company has implemented cost-cutting measures, including a 20% reduction in salaried employees and the suspension of merit pay adjustments [29] - The company has drawn $1.14 billion on its credit facility to enhance liquidity, maintaining a cash position of about $300 million [39][40] Q&A Session Summary Question: General sentiment about the timeline of eventual recovery - Management believes the recovery will be gradual, resembling a "Nike Swoosh" shape, but lacks precise timing [61][62] Question: Additional cost management levers - Management indicated that there are still opportunities for structural efficiencies and cost savings [63][66] Question: Expectations for margin pressure - Management remains optimistic about long-term margin expansion despite short-term impacts from COVID-19 [70][71] Question: Growth expectations for the Payments side - Management expects the Payments business to outperform the broader economy due to new products and financial stability [74][75] Question: Changes in go-to-market strategy - The company has integrated its go-to-market strategy, allowing for broader conversations with customers and attracting competitors' clients [79][80]