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Published: 2025-04-30 00:00:00 ET
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EX-99.1 2 exhibit99143020258-k.htm EX-99.1 Document
Exhibit 99.1
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Contact:
Brian Anderson, VP, Strategy & Investor RelationsKeith Negrin, VP, Communications
651-447-4197612-669-1459
brian.anderson@deluxe.comkeith.negrin@deluxe.com


DELUXE REPORTS FIRST QUARTER 2025 RESULTS

•Reported revenue increased 0.3%, while comparable adjusted revenue increased 1.4%.
•Net income was $14.0 million, improving from $10.8 million in 2024, on cost management and lower restructuring spend.
•Comparable adjusted EBITDA increased 3.4% to $100.2 million.
•GAAP diluted EPS was $0.31 versus $0.24 in 2024; comparable adjusted diluted EPS improved 4.2% to $0.75.
•Cash from operating activities was $50.3 million; free cash flow increased $18.1 million to $24.3 million.

Minneapolis – April 30, 2025 – Deluxe (NYSE: DLX), a trusted Payments and Data company, today reported operating results for its first quarter ended March 31, 2025.

“We reported a strong start to 2025, demonstrating consistent operating leverage across the portfolio, expanding comparable adjusted EBITDA margin and generating robust operating cash flow,” said Barry McCarthy, President and CEO of Deluxe. “Revenue expanded across each of our Payments and Data operating segments, and execution remained strong across our key initiatives."

“Beyond expanding profits, we were particularly pleased to deliver continued growth of free cash flow, contributing to our clear debt reduction commitments,” said Chip Zint, Senior Vice President and Chief Financial Officer of Deluxe. “Our on-going progress contributed to our recent S&P ratings upgrade and positive ratings outlook, further demonstrating execution against our clear capital allocation priorities.”

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First Quarter 2025 Financial Highlights
(in millions, except per share amounts)
1st Quarter
2025
1st Quarter
2024
% Change
Revenue$536.5  $535.0  0.3 %
Comparable Adjusted Revenue$536.5  $529.0  1.4 %
Net Income$14.0 $10.8 29.6 %
Comparable Adjusted EBITDA$100.2  $96.9  3.4 %
Diluted EPS$0.31 $0.24 29.2 %
Comparable Adjusted Diluted EPS$0.75 $0.724.2 %

•Revenue for the first quarter increased 0.3% from the previous year. Comparable adjusted revenue, reflecting the removal of business exits, increased 1.4% compared to the previous year.
•Net income of $14.0 million was up from $10.8 million in the first quarter of 2024.
•Comparable adjusted EBITDA margin was 18.7%, up 40 basis points from the prior year.
•Comparable adjusted diluted EPS of $0.75 was up 4.2% year over year.

Outlook

The Company left its full-year 2025 outlook ranges unchanged:

•Revenue of $2.090 to $2.155 billion
•Adjusted EBITDA of $415 to $435 million
•Adjusted diluted EPS of $3.25 to $3.55
•Free cash flow of $120 to $140 million

This guidance remains subject to, among other things, prevailing macroeconomic conditions, global instability including tariffs, labor supply challenges, and inflation, as well as the impact of other potential changes to the company's portfolio.

Capital Allocation and Dividend

The Board of Directors recently approved a regular quarterly dividend of $0.30 per share. The dividend will be payable on June 2, 2025, to shareholders of record as of market closing on May 19, 2025.

Earnings Call Information

Deluxe management will host a conference call today at 5:00 p.m. ET (4:00 p.m. CT) to review the financial results. Listeners can access the call by dialing 1-888-256-1007 (access code 1768603). The audio and accompanying slides will be available via a simultaneous webcast on the investor relations website at www.investors.deluxe.com. A replay will be available after 8:00 p.m. ET through midnight on May 7, 2025, via the webcast link and listen-by-phone option.

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About Deluxe Corporation

Deluxe, a trusted Payments and Data company, champions business so communities thrive. Our solutions help businesses pay, get paid, and grow. For more than 100 years, Deluxe customers have relied on our solutions and platforms at all stages of their lifecycle, from start-up to maturity. Our powerful scale supports millions of small businesses, thousands of vital financial institutions, and hundreds of the world’s largest consumer brands, while processing more than $2 trillion in annual payment volume. Our reach, scale, and distribution channels position Deluxe to be our customers’ most trusted business partner. To learn how we can help your business, visit us at www.deluxe.com, www.facebook.com/deluxecorp, www.linkedin.com/company/deluxe, or www.x.com/deluxe.

Forward-Looking Statements

Statements made in this presentation regarding Deluxe, the company’s, or management’s intentions, expectations, outlook, or predictions about future results or events are considered “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. These statements reflect management’s current intentions or beliefs and are subject to risks and uncertainties that could cause actual results or events to differ from stated expectations, which variations could be material and adverse. Factors that could lead to such variations include, but are not limited to, the following: changes in local, regional, national, and international economic or political conditions, including those arising from heightened inflation, rising interest rates, a recession, uncertainties surrounding trade policies or tariffs, or intensified international hostilities, and their impact on the company, its data, customers, or demand for the company’s products and services; the effects of proposed and enacted legislative and regulatory actions affecting the company or the financial services industry as a whole; ongoing cost increases and/or declines in the availability of data, materials, and other services; the company’s ability to execute its strategy and to realize the intended benefits; the inherent unreliability of earnings, revenue, and cash flow predictions due to numerous factors, many of which are beyond the company’s control; declining demand for the company’s checks, check-related products and services, and business forms; risks that the company’s strategies intended to drive sustained revenue and earnings growth, despite the continuing decline in checks and forms, are delayed or unsuccessful; intense competition; consolidation of financial institutions and/or bank failures, reducing the number of potential customers and referral sources and increasing downward pressure on the company’s revenue and gross profit; risks related to acquisitions, including integration-related risks and risks that future acquisitions will not be consummated; risks that any such acquisitions do not produce the anticipated results or synergies; risks that the company’s cost reduction initiatives will be delayed or unsuccessful; risks related to any divestitures contemplated or undertaken by the company; performance shortfalls by one or more of the company’s major suppliers, licensors, or data or service providers; continuing supply chain and labor supply issues; unanticipated delays, costs, and expenses in the development and marketing of products and services, including financial technology and treasury management solutions; the failure of such products and services to deliver the expected revenues and other financial targets; risks related to security breaches, computer malware, or other cyber-attacks; risks of interruptions to the company’s website operations or information technology systems; and risks of unfavorable outcomes and the costs to defend litigation and other

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disputes. The company’s forward-looking statements speak only as of the time made, and management assumes no obligation to publicly update any such statements. Additional information concerning these and other factors that could cause actual results and events to differ materially from the company’s current expectations are contained in the company’s Form 10-K for the year ended December 31, 2024, and other filings made with the SEC. The company undertakes no obligation to update or revise any forward-looking statements to reflect subsequent events, new information, or future circumstances.


DELUXE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in millions, except per share amounts)
(Unaudited)

Quarter Ended
March 31,
20252024
Revenue$536.5 $535.0 
Cost of revenue
(255.5)(251.5)
Gross profit281.0 283.5 
Selling, general and administrative expense
(225.2)(234.1)
Restructuring and integration expense(7.7)(13.8)
Gain on sale of businesses and long-lived assets— 8.6 
Operating income48.1 44.2 
Interest expense(31.3)(30.8)
Other income2.5 3.0 
Income before income taxes19.3 16.4 
Income tax provision(5.3)(5.6)
Net income$14.0 $10.8 
Weighted average dilutive shares45.3 44.5 
Diluted earnings per share$0.31 $0.24 
Adjusted diluted earnings per share0.75 0.76 
Comparable adjusted diluted earnings per share0.75 0.72 
Depreciation and amortization expense35.3 41.7 
EBITDA85.9 88.9 
Adjusted EBITDA100.2 100.5 
Comparable adjusted EBITDA100.2 96.9 




DELUXE CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(dollars and shares in millions)
(Unaudited)

                            
March 31,
2025		December 31,
2024
Cash and cash equivalents$30.3 $34.4 
Other current assets337.3 577.2 
Property, plant & equipment107.0 111.6 
Operating lease assets48.0 49.4 
Intangibles322.4 331.1 
Goodwill1,422.7 1,422.7 
Other non-current assets306.1 304.6 
  Total assets$2,573.8 $2,831.0 
Current portion of long-term debt$37.2 $37.1 
Other current liabilities359.5 588.4 
Long-term debt1,455.4 1,466.0 
Non-current operating lease liabilities46.9 49.0 
Other non-current liabilities52.3 69.6 
Shareholders' equity622.5 620.9 
Total liabilities and shareholders' equity$2,573.8 $2,831.0 
Net debt$1,462.3 $1,468.7 
Shares outstanding44.7 44.3 




DELUXE CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in millions)
(Unaudited)
Quarter Ended
March 31,
20252024
Cash provided (used) by:
  Operating activities:
Net income$14.0 $10.8 
Depreciation and amortization of intangibles35.3 41.7 
Gain on sale of businesses and long-lived assets— (8.6)
Other1.0 (17.3)
Total operating activities50.3 26.6 
  Investing activities:
Proceeds from sale of businesses and long-lived assets2.0 — 
Purchases of capital assets(26.0)(20.4)
Other(0.6)(0.2)
Total investing activities(24.6)(20.6)
  Financing activities:
Net change in debt, including debt issuance costs(11.6)(34.6)
Dividends(14.5)(14.0)
Change in settlement processing obligations(237.0)(272.8)
Other(5.5)(5.2)
Total financing activities(268.6)(326.6)
  Effect of exchange rate change on cash, cash equivalents, restricted cash, and restricted cash equivalents1.0 (2.6)
Net change in cash, cash equivalents, restricted cash, and restricted cash equivalents(241.9)(323.2)
Cash, cash equivalents, restricted cash, and restricted cash equivalents, beginning of year309.2 458.0 
Cash, cash equivalents, restricted cash, and restricted cash equivalents, end of period$67.3 $134.8 
Free cash flow
$24.3 $6.2 




DELUXE CORPORATION
SEGMENT INFORMATION
(In millions)
(Unaudited)
Quarter Ended
March 31,
20252024
Revenue:
Merchant Services$97.8$96.5
B2B Payments70.269.4
Data Solutions77.259.7
Print291.3303.4
Business exits(1)
—6.0
Total$536.5$535.0
Comparable Adjusted Revenue$536.5$529.0
Adjusted EBITDA:
Merchant Services$21.4$21.4
B2B Payments13.313.3
Data Solutions19.714.9
Print90.891.0
Business Exits(1) / Corporate
(45.0)(40.1)
Total$100.2$100.5
Comparable Adjusted EBITDA$100.2$96.9
Adjusted EBITDA Margin:
Merchant Services21.9 %22.2 %
B2B Payments18.9 %19.2 %
Data Solutions25.5 %25.0 %
Print31.2 %30.0 %
Total18.7 %18.8 %
Comparable Adjusted EBITDA18.7 %18.3 %

(1) Includes the payroll and human resources services business, which the company substantially exited during 2024.



DELUXE CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(in millions)
(Unaudited)

The company has not reconciled the adjusted EBITDA, adjusted diluted EPS, or free cash flow outlook for 2025 to the directly comparable GAAP financial measures because the company does not provide outlook guidance for the reconciling items between net income, adjusted net income, and adjusted EBITDA, and some of these reconciling items affect cash flows from operating activities. Due to the significant uncertainty and variability associated with certain forward-looking reconciling items such as asset impairment charges, restructuring and integration expense, gains and losses on sales of businesses and long-lived assets, and certain legal and environmental expenses, a reconciliation of the outlook for these non-GAAP financial measures to the corresponding GAAP measures is not available without unreasonable effort. The potential impact of these reconciling items is substantial and, based on past experience, could be material.

EBITDA, ADJUSTED EBITDA, AND ADJUSTED EBITDA MARGIN

Management believes that EBITDA, adjusted EBITDA, and adjusted EBITDA margin are useful metrics for evaluating the company's operating performance. These measures eliminate the effect of interest expense, income taxes, the accounting effects of capital investments (i.e., depreciation and amortization), and certain other items that may vary for reasons unrelated to current period operating performance. Management uses these measures to assess the operating results and performance of the business, perform analytical comparisons, and identify strategies to improve performance. Additionally, management believes that an increasing adjusted EBITDA and adjusted EBITDA margin indicate an increase in the company's value. It is important to note that management does not consider EBITDA or adjusted EBITDA to be measures of cash flow, as they do not account for certain cash requirements such as interest, income taxes, debt service payments, or capital investments. Management does not consider EBITDA, adjusted EBITDA, or adjusted EBITDA margin to be substitutes for operating income or net income. Instead, management believes that these amounts are useful performance measures that should be considered in addition to GAAP performance measures.

Quarter Ended
March 31,
20252024
Net income$14.0 $10.8 
Interest expense31.3 30.8 
Income tax provision5.3 5.6 
Depreciation and amortization expense35.3 41.7 
EBITDA85.9 88.9 
Restructuring and integration expense8.4 14.8 
Share-based compensation expense5.4 5.1 
Certain legal and environmental expense0.5 0.3 
Gain on sale of businesses and long-lived assets— (8.6)
Adjusted EBITDA$100.2 $100.5 
Adjusted EBITDA as a percentage of revenue (adjusted EBITDA margin)18.7 %18.8 %


DELUXE CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (continued)
(in millions, except per share amounts)
(Unaudited)

ADJUSTED DILUTED EPS AND COMPARABLE ADJUSTED DILUTED EPS

Management believes that adjusted diluted EPS and comparable adjusted diluted EPS are valuable metrics for providing comparable information that assists in analyzing current period operating performance and assessing future operating performance. By excluding the impact of non-cash items or items that may not be indicative of current period operating performance, adjusted diluted EPS offers a useful view of underlying business performance. While it is reasonable to expect that one or more of the excluded items will occur in future periods, the amounts recognized may vary significantly. Comparable adjusted diluted EPS also excludes the impact of business exits, allowing management to evaluate comparable results on a year-over-year basis. Management does not consider adjusted diluted EPS or comparable adjusted diluted EPS to be substitutes for GAAP performance measures, but believes that they are useful performance measures that should be considered in addition to GAAP performance measures.

Quarter Ended
March 31,
20252024
Net income$14.0 $10.8 
Acquisition amortization11.8 14.8 
Accelerated amortization— 3.1 
Restructuring and integration expense8.4 14.8 
Share-based compensation expense5.4 5.1 
Certain legal and environmental expense0.5 0.3 
Gain on sale of businesses and long-lived assets— (8.6)
Adjustments, pre-tax26.1 29.5 
Income tax provision impact of pretax adjustments(1)
(6.2)(6.5)
Adjustments, net of tax19.9 23.0 
Adjusted net income available to common shareholders (A)
33.9 33.8 
Business exits, pretax— (2.2)
Income tax provision impact of business exits(1)
— 0.6 
Business exits, net of tax— (1.6)
Comparable adjusted income available to common shareholders (B)
$33.9 $32.2 
Weighted-average dilutive shares (C)
45.3 44.5 
Adjusted Diluted EPS (A) / (C)
$0.75 $0.76 
Comparable Adjusted Diluted EPS (B) / (C)
$0.75 $0.72 

(1) The tax effect of the pretax adjustments considers the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). Generally, this results in a tax impact that approximates the U.S. effective tax rate for each adjustment. However, the tax impact of certain adjustments, such as share-based compensation expense, depends on whether the amounts are deductible in the respective tax jurisdictions and the applicable effective tax rate(s) in those jurisdictions.




DELUXE CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (continued)
(in millions)
(Unaudited)

COMPARABLE ADJUSTED REVENUE, COMPARABLE ADJUSTED EBITDA, AND COMPARABLE ADJUSTED EBITDA MARGIN

Management considers the measures of comparable adjusted revenue, comparable adjusted EBITDA, and comparable adjusted EBITDA margin, which exclude the impact of business exits, as important indicators for assessing, evaluating, and improving the company's performance. By excluding the effects of business exits, management can evaluate comparable results on a year-over-year basis. These measures allow management to compare operational performance across fiscal periods when acquisitions or business exits occur.

Quarter Ended
March 31,
20252024
Revenue$536.5 $535.0 
Business exits— (6.0)
Comparable adjusted revenue$536.5 $529.0 

Adjusted EBITDA(1)
$100.2$100.5
Business exits—(3.6)
Comparable adjusted EBITDA$100.2$96.9
Comparable adjusted EBITDA margin18.7 %18.3 %

(1) The reconciliation of net income to adjusted EBITDA can be found on a preceding page.

NET DEBT

Net debt is calculated by subtracting cash and cash equivalents from total debt. One limitation associated with using net debt is that by subtracting cash and cash equivalents, it may imply that management intends to use these funds to reduce outstanding debt. Additionally, net debt can suggest that the company's debt obligations are lower than what the most comparable GAAP measure indicates. Despite these limitations, management believes that net debt is a valuable metric for assessing the company's financial leverage and overall balance sheet health. It provides a measure of the company's debt burden considering the funds available to offset debt obligations.

March 31,
2025		December 31,
2024
Total debt$1,492.6 $1,503.1 
Cash and cash equivalents(30.3)(34.4)
Net debt$1,462.3 $1,468.7 





DELUXE CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (continued)
(in millions)
(Unaudited)


FREE CASH FLOW

Free cash flow is calculated as net cash provided by operating activities minus purchases of capital assets. Management considers free cash flow to be an important indicator of cash available for servicing debt and for shareholders, after making necessary capital investments to maintain or expand the company's asset base. One limitation of using the free cash flow measure is that not all of the free cash flow is available for discretionary spending. The company may have mandatory debt payments and other cash requirements that must be deducted from available cash. Despite this limitation, management believes that the measure of free cash flow offers an additional metric to consistently compare cash generated by operations. It also provides insight into the cash flow available to fund various items such as dividends, mandatory and discretionary debt reduction, acquisitions or other strategic investments, and share repurchases.

Quarter Ended
March 31,
20252024
Net cash provided by operating activities$50.3 $26.6 
Purchases of capital assets(26.0)(20.4)
Free cash flow$24.3 $6.2 

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