Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was just over $536 million, up 1.4% on a comparable adjusted basis year over year [9][19] - Comparable adjusted EBITDA for the quarter was just over $100 million, increasing nearly 3.5% from 2024 [10][20] - Comparable adjusted EPS finished at $0.75, reflecting just over 4% expansion versus the prior year [10][21] - Net debt levels decreased to $1.46 billion, down approximately $80 million from the previous year [28] Business Line Data and Key Metrics Changes - Payments and Data segments grew by a blended rate just above 8.5%, with Data segment revenue growing 29% year over year [11][24] - Merchant Services revenue grew by 1.3% year over year to $97.8 million, with adjusted EBITDA remaining flat at $21.4 million [21] - B2B segment revenues finished at $70.2 million, increasing 1.2% versus 2024, with adjusted EBITDA dollars remaining flat at $13.3 million [22][23] - Print segment revenue declined 4% year over year, with legacy check revenues declining 1.8% [26] Market Data and Key Metrics Changes - The revenue mix shifted towards payments and data offerings, with the ratio moving from 57:43 to 54:46 in favor of payments and data segments [11] - The Data Solutions segment achieved record levels for the quarter, with revenues of $77.2 million, reflecting a growth of 29.3% [24] Company Strategy and Development Direction - The company is focused on executing its North Star strategy, which emphasizes free cash flow and profit growth [5][14] - The management is maintaining overall guidance ranges for 2025 despite macroeconomic uncertainties [31][32] - The company aims to optimize its balance sheet and reduce net debt levels, with a long-term target of three times leverage or better by the end of 2026 [28][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged extraordinary volatility and macroeconomic uncertainty but emphasized control over internal execution [5][6] - The company continues to monitor consumer sentiment and discretionary spending for potential impacts on its outlook [6] - Despite anticipated challenges, management remains confident in achieving its 2025 revenue and EBITDA goals [14][31] Other Important Information - The company received an S&P ratings upgrade, improving its rating from B- to single B, with a positive outlook [28] - Free cash flow for the quarter was $24.3 million, improving by $18.1 million from the previous year [29][30] - A regular quarterly dividend of $0.30 per share was approved, payable on June 2, 2025 [30] Q&A Session Summary Question: Can you provide more detail on the merchant business and its performance? - The merchant business continues to perform well across various market conditions, with strong retention and ongoing volume from diversified customer categories [33][34] Question: What strategic changes might occur with the new leadership in the merchant business? - The new leadership aims to improve partnership relationships and expand distribution channels, with recent partnerships indicating a move upmarket [35][36] Question: How should we model the segment performance, especially with potential declines? - The data segment is expected to continue strong growth, while print may see a larger decline due to promotional pressures [40][43] Question: What is the secret to the data segment's recent success? - The data business leverages a large consumer and small business database combined with advanced AI tools to effectively target marketing campaigns [46][48] Question: What is the potential impact of the Trump administration's commentary on physical checks? - The company has no direct exposure to government checks and does not anticipate significant collateral impacts from the announcement [52][55] Question: Have there been signs of spending pull forward due to tariffs? - There was a small amount of pull forward in promotional products, but no significant evidence of stocking in the business [56] Question: What are the potential catalysts for driving additional partnerships? - The company has strong brand recognition and relationships in the banking sector, which positions it well for future partnerships [61][62]

First Quarter 2025 Earnings April 30, 2025 © 2025 Deluxe Corporation Brian Anderson Vice President, Strategy & Investor Relations 2 Today's Presenters Barry McCarthy President and Chief Executive Officer Chip Zint Senior Vice President and Chief Financial Officer Brian Anderson Vice President, Strategy & Investor Relations 3 Cautionary Statement Statements made in this presentation regarding Deluxe, the company's,or management's intentions, expectations, outlook, or predictions about future results or event ...

Financial Performance - Reported revenue for Q1 2025 increased by 0.3% to $536.5 million, while comparable adjusted revenue rose by 1.4% to $536.5 million[4]. - Net income improved to $14.0 million, a 29.6% increase from $10.8 million in Q1 2024, driven by cost management and lower restructuring expenses[4]. - Comparable adjusted EBITDA increased by 3.4% to $100.2 million, with a comparable adjusted EBITDA margin of 18.7%, up 40 basis points year-over-year[4][9]. - GAAP diluted EPS rose to $0.31, a 29.2% increase from $0.24 in the previous year, while comparable adjusted diluted EPS improved by 4.2% to $0.75[4][9]. - Adjusted EBITDA for Q1 2025 was $100.2 million, slightly down from $100.5 million in Q1 2024, with an adjusted EBITDA margin of 18.7% compared to 18.8% in the previous year[24][28]. - Adjusted diluted EPS for Q1 2025 was $0.75, slightly down from $0.76 in Q1 2024, indicating stable earnings performance despite fluctuations in expenses[26]. Cash Flow and Debt Management - Free cash flow for Q1 2025 increased significantly by $18.1 million to $24.3 million, compared to $6.2 million in Q1 2024[4][18]. - The company reported a total operating cash flow of $50.3 million for Q1 2025, compared to $26.6 million in Q1 2024[18]. - The company’s net debt decreased to $1,462.3 million from $1,468.7 million, reflecting ongoing debt reduction commitments[16]. - Total debt as of March 31, 2025, was $1,492.6 million, a decrease from $1,503.1 million as of December 31, 2024[31]. - Net debt as of March 31, 2025, was $1,462.3 million, down from $1,468.7 million at the end of 2024, reflecting a slight improvement in financial leverage[31]. - The company continues to focus on free cash flow as a critical metric for funding strategic investments and servicing debt obligations[33]. Revenue Growth and Segments - Revenue growth was observed across all operating segments, with Data Solutions revenue increasing to $77.2 million from $59.7 million in Q1 2024[20]. - Comparable adjusted revenue for Q1 2025 was $536.5 million, up from $529.0 million in Q1 2024, showing a year-over-year growth of 1.3%[28]. Operational Efficiency - Restructuring and integration expenses for Q1 2025 were $8.4 million, down from $14.8 million in Q1 2024, suggesting improved operational efficiency[24][26]. - Management emphasizes that adjusted EBITDA and adjusted EBITDA margin are key indicators of the company's value and operational performance[23]. Outlook and Dividends - The company maintained its full-year 2025 outlook ranges, which include revenue guidance of $2.090 to $2.155 billion and adjusted EBITDA of $415 to $435 million[6][9]. - The Board of Directors approved a quarterly dividend of $0.30 per share, payable on June 2, 2025[7].

Financial Performance - Consolidated revenue decreased by $70 million to $2.12 billion, primarily due to a secular decline in order volumes and business exits, which accounted for a $45 million reduction [178]. - Net income increased by $27 million to $53 million, driven by pricing and cost reduction actions, despite losses from exited businesses and inflationary pressures [178]. - Adjusted EBITDA decreased by $5 million to $412 million, with business exits contributing a $20 million decrease; excluding these exits, adjusted EBITDA would have increased [178]. - Adjusted EBITDA margin improved to 19.4% for 2024, up from 19.0% in 2023, aided by a 14% reduction in corporate operation costs [171]. - SG&A expense decreased by 4.9% to $909.2 million, with SG&A as a percentage of total revenue falling to 42.8% from 43.6% [188]. - Free cash flow increased by $2 million to $100 million, allowing reinvestment into growth businesses [178]. - Net income for 2024 was $52,945, reflecting a 101.9% increase from $26,227 in 2023, while diluted EPS rose to $1.18 from $0.59 [195]. - Free cash flow for 2024 was $99,892, an increase from $97,620 in 2023, with net cash provided by operating activities at $194,281 [197]. Revenue by Segment - Total revenue for the Merchant Services segment in 2024 was $384,038, representing a 5.4% increase compared to 2023's revenue of $364,233 [208]. - Total revenue for the B2B Payments segment decreased to $287,851 in 2024, a decline of 3.8% compared to $299,196 in 2023 [212]. - Total revenue for the Data Solutions segment increased to $234,033 in 2024, a growth of 10.5% compared to $211,788 in 2023 [216]. - Total revenue for the Print segment decreased to $1,205,077 in 2024, a decline of 4.5% compared to $1,261,283 in 2023 [220]. Adjusted EBITDA by Segment - Adjusted EBITDA for the Merchant Services segment in 2024 was $78,540, up 5.6% from $74,399 in 2023, with an adjusted EBITDA margin of 20.5% [208][209]. - Adjusted EBITDA for the B2B Payments segment fell to $57,088 in 2024, down 8.0% from $62,034 in 2023, with an adjusted EBITDA margin of 19.8% [212][213]. - Adjusted EBITDA for the Data Solutions segment rose to $60,443 in 2024, a significant increase of 30.6% from $46,281 in 2023, with an adjusted EBITDA margin of 25.8% [216][217]. - Adjusted EBITDA for the Print segment was $376,601 in 2024, down 6.1% from $400,942 in 2023, with an adjusted EBITDA margin of 31.3% [220][221]. Cash Flow and Liquidity - Cash provided by operating activities decreased by $4 million to $194 million, reflecting secular declines and inflationary pressures [178]. - As of December 31, 2024, the company held cash and cash equivalents of $34 million, with an additional $374 million available for borrowing [180]. - As of December 31, 2024, the company held cash and cash equivalents of $34 million and had an additional $374 million available for borrowing under its revolving credit facility, indicating sufficient liquidity to support operations over the next 12 months [230]. - Net cash provided by operating activities for 2024 was $194,281, a decrease of $4,086 compared to $198,367 in 2023 [225]. Debt and Interest - Total debt decreased to $1,503,151 in 2024 from $1,592,851 in 2023, resulting in net debt of $1,468,752 [198]. - The principal amount of the company's debt obligations was $1.52 billion, down from $1.60 billion in 2023, reflecting a decrease of $82.27 million [231]. - The company executed a $900 million amended and restated credit agreement, with $518 million outstanding at a weighted-average interest rate of 7.23% [233]. - The company issued $450 million of 8.125% senior secured notes maturing in September 2029, with net proceeds of $441 million used to refinance previous debt [234]. - Interest expense decreased by 1.9% to $123,281 in 2024 from $125,643 in 2023, primarily due to a 5.5% reduction in average debt outstanding [193]. - A one percentage point change in the weighted-average interest rate would result in a $6 million change in interest expense for 2025 [256]. Capital Expenditures and Investments - The company anticipates capital expenditures between $90 million and $100 million in 2025, compared to $94 million in 2024 [180]. - The company has committed payments totaling approximately $225 million to third-party service providers for IT services, with $70 million due in 2025 [229]. Compliance and Governance - The company remains in compliance with its debt covenants as of December 31, 2024 [235]. - The company recorded goodwill totaling $1.42 billion as of December 31, 2024, representing 50.3% of total assets, with no impairment charges recorded for the year [244]. Restructuring and Integration - Restructuring and integration expenses for 2024 were $48,570, a decrease of 37.9% from $78,245 in 2023 [190]. Other Financial Metrics - Gain on sale of businesses and long-lived assets decreased by 3.7% to $31,207 in 2024 from $32,421 in 2023 [191]. - Asset impairment charges of $7,743 were recorded in 2024 due to the exit from the U.S. and Canadian payroll and human resources services business [192]. - Income tax provision increased by 73.5% to $23,552 in 2024 from $13,572 in 2023, with an effective tax rate decrease of 3.3 percentage points to 30.8% [194]. - The company paid cash dividends of $54.15 million in 2024, slightly up from $53.33 million in 2023 [228].

Financial Data and Key Metrics Changes - The company reported total revenue of $2.122 billion for the full year, down 3.2% including impacts from business exits, and down 1.2% year-over-year on a comparable adjusted basis [26] - Full-year GAAP net income improved to $52.9 million or $1.18 per share, up from $26.2 million or $0.59 per share in 2023, driven by improved operating results and lower restructuring spend [26] - Comparable adjusted EBITDA was $406 million, improving by $15.3 million or 3.9% from the prior year, with adjusted EBITDA margins at 19.3%, up 100 basis points [27] Business Line Data and Key Metrics Changes - **Merchant Services**: Revenue finished at $384 million, growing by 5.4% versus 2023, with adjusted EBITDA at $78.5 million and margins at 20.4% [28] - **B2B Payments**: Revenues were $287.9 million, reflecting a decline of 3.8% versus the prior year, with adjusted EBITDA at $57.1 million and a margin of 19.8% [34] - **Data Segment**: Revenue reached $234 million, reflecting 10.5% growth, with adjusted EBITDA at $60.5 million and a margin of 25.9% [39] - **Print Segment**: Revenue was $1.21 billion, down 4.5% versus 2023, with adjusted EBITDA at $376.6 million and margins at 31.3% [43] Market Data and Key Metrics Changes - The Data segment experienced a full-year growth rate of over 10%, while the Merchant business delivered more than 5% growth, generally in line with expectations [18] - The B2B payments segment reached a revenue inflection point midyear, recovering from a decline in the first half [18] Company Strategy and Development Direction - The company is focused on executing its North Star plan to increase annualized adjusted EBITDA by $80 million and free cash flows by $100 million by the end of 2026 [8][10] - Strategic investments were made in product development across all business lines, including the Deluxe Payment platform and enhancements in data capabilities [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 and 2026 goals despite encountering revenue headwinds in 2024 [20] - The company anticipates a stable macroeconomic environment and expects to see sequential improvement in revenue growth rates across its segments as 2025 progresses [32][100] Other Important Information - The company maintained its regular quarterly dividend of $0.30 per share, marking the 30th consecutive year of dividends [50] - The company successfully refinanced its 2026 debt maturities, extending maturities to 2029, which provides ample liquidity for growth efforts [51][52] Q&A Session Summary Question: Thoughts on the Merchant business fundamentals - Management is pleased with the Merchant business progress and expects new leadership to enhance product capabilities and market penetration [60][61] Question: Drivers of significant improvement in free cash flow for 2025 - The improvement is attributed to better operating results, lower restructuring spend, and a focus on executing the North Star program [63][66] Question: Pricing flexibility in the Merchant business - Management indicated that while pricing is important, the company competes on customer experience and will not chase low-margin deals [78][70] Question: Impact of tariffs on supply chain - Management does not anticipate significant impacts from tariffs, as most materials are produced domestically [76][77] Question: Incremental revenue wins in the Data segment - The company has invested in cloud capabilities, allowing for quick repositioning and targeting across various markets, contributing to strong revenue growth [88][90] Question: 2026 goals for Merchant Services - Management expects to achieve high single-digit revenue CAGR through 2026, driven by new customer wins and market expansion [92][95] Question: Cadence of quarterly results for 2025 - Management expects low single-digit growth in the first half of 2025, with improvement as the year progresses, particularly in B2B and Merchant segments [96][100]

February 5, 2025 © 2025 Deluxe Corporation Brian Anderson Vice President, Strategy & Investor Relations 2 Today's Presenters Barry McCarthy President and Chief Executive Officer Chip Zint Senior Vice President and Chief Financial Officer Brian Anderson Fourth Quarter and Full Year 2024 Earnings Vice President, Strategy & Investor Relations 3 Cautionary Statement Statements made in this presentation concerning Deluxe, the company's or management's intentions, expectations, outlook or predictions about future ...

Revenue Performance - Full year reported revenue decreased by 3.2% to $2,121.8 million, while comparable adjusted revenue decreased by 1.2% to $2,111.0 million[4]. - Total revenue for the year ended December 31, 2024, was $2,121.8 million, a decrease of 3.2% compared to $2,192.3 million in 2023[30]. - Comparable adjusted revenue for the year ended December 31, 2024, was $2,111.0 million, down from $2,136.5 million in 2023, reflecting a decline of 1.2%[30]. Profitability - Full year net income increased by 101.9% to $52.9 million, up from $26.2 million in 2023, driven by cost management and lower restructuring expenses[4]. - Net income for the year ended December 31, 2024, increased to $52.9 million from $26.2 million in 2023, representing a growth of 101.5%[20]. - Full year GAAP diluted EPS was $1.18, compared to $0.59 in 2023, while comparable adjusted diluted EPS improved by 7.9% to $3.26[4]. - The adjusted diluted EPS for the year ended December 31, 2024, was $3.29, a slight decrease from $3.32 in 2023[28]. Cash Flow and Liquidity - Cash from operating activities for 2024 was $194.3 million, with free cash flow increasing by 2.4% to $100.0 million[4]. - Free cash flow for the year ended December 31, 2024, was $100.0 million, compared to $97.7 million in 2023, showing an increase of 2.4%[20]. - Total operating activities cash flow for the year ended December 31, 2024, was $194.3 million, slightly down from $198.4 million in 2023[20]. - The company reported a net change in cash and equivalents of $(148.8) million for the year ended December 31, 2024, compared to an increase of $120.6 million in 2023[20]. - Cash and cash equivalents improved from $(72.0) million in 2023 to $(34.4) million in 2024, indicating a positive change in liquidity[33]. Debt Management - Total debt was reduced by $89.8 million, while net debt decreased by $52.2 million, resulting in a net debt of $1,468.7 million[4]. - Total debt decreased from $1,592.9 million in 2023 to $1,503.1 million in 2024, a reduction of approximately 5.6%[33]. - Net debt decreased from $1,520.9 million in 2023 to $1,468.7 million in 2024, reflecting a decline of about 3.4%[33]. - The refinancing of the debt capital stack during the fourth quarter positions the company to support key growth opportunities in the coming years[3]. Operational Efficiency - Comparable adjusted EBITDA increased by 3.9% to $406.5 million for the full year, with a comparable adjusted EBITDA margin of 19.3%, up 100 basis points from the prior year[7]. - Adjusted EBITDA for the year ended December 31, 2024, was $412.1 million, slightly down from $417.1 million in 2023, indicating a decrease of 1.2%[30]. - The adjusted EBITDA margin for the year ended December 31, 2024, improved to 19.4% from 19.0% in 2023[30]. - The company achieved four consecutive quarters of operating leverage in 2024, with comparable adjusted EBITDA growth outpacing revenue growth for the second consecutive year[3]. Future Outlook - The company expects full-year 2025 revenue guidance between $2,090 million and $2,155 million, with adjusted EBITDA projected between $415 million and $435 million[13]. - A regular quarterly dividend of $0.30 per share was approved, payable on March 3, 2025[10]. Management Insights - Management considers free cash flow an important indicator for servicing debt and shareholder returns after capital investments[35]. - The company emphasizes that not all free cash flow is available for discretionary spending due to mandatory debt payments and other cash requirements[35]. - Management believes net debt is a valuable metric for assessing financial leverage and overall balance sheet health[32]. - The company aims to consistently compare cash generated by operations through the free cash flow measure[35].

Market Overview - U.S. stock markets showed mixed reactions as investors awaited the Federal Reserve's decision on interest rates, with the S&P 500 up 0.4% to 6,074.08, Nasdaq Composite rising 1.2% to a record 20,173.89, and Dow Jones Industrial Average down 0.3% to 43,717.48 [1] Federal Reserve and Interest Rates - The Federal Reserve is expected to announce another rate cut, maintaining an accommodative monetary stance, but may signal a slower pace of reductions in the future, which could influence investor strategies [2] Value Stocks - Value stocks are highlighted as a compelling investment option, trading below their intrinsic value and offering a margin of safety during market fluctuations [2] - The Price to Cash Flow (P/CF) ratio is emphasized as an effective valuation metric for evaluating value stocks, with lower ratios indicating better value [3][6] Financial Health and Cash Flow - Positive cash flow is crucial for a company's liquidity, allowing it to settle debts, meet expenses, reinvest, and pay back shareholders, while negative cash flow indicates declining liquidity [8] - Analysts caution that earnings can be manipulated, making cash flow a more reliable indicator of a company's financial health [7] Investment Strategy - A comprehensive investment strategy should include multiple valuation metrics such as price-to-book, price-to-earnings, and price-to-sales ratios, along with a favorable Zacks Rank and Value Score to avoid value traps [9][12][13] Selected Value Stocks - Tyson Foods (TSN) has a Zacks Rank 1, with a trailing four-quarter earnings surprise of 57% and a Value Score of A, with shares rising 15.5% in the past year [15][16] - General Motors (GM) holds a Zacks Rank 2, with a trailing four-quarter earnings surprise of 17.5% and shares up 47.4% in the past year [17] - Fresenius Medical Care (FMS) also has a Zacks Rank 2, with a trailing four-quarter earnings surprise of 19% and shares advancing 15.3% in the past year [18] - Deluxe Corporation, with a Zacks Rank 2 and a trailing four-quarter earnings surprise of 18.4%, has seen shares jump 21.9% in the past year [19]

Core Viewpoint - Small-cap stocks can provide consistent dividends, and three specific companies have shown strong performance and positive market sentiment over the past three months [1] Group 1: Sinclair Broadcast Group - Sinclair currently offers a quarterly dividend of $0.25 per share, resulting in a dividend yield of 5.5% [2] - The company's shares have increased by 30% in the last three months, indicating strong market performance [2] - Sinclair operates in 86 markets, including major cities like Washington, D.C., Seattle, and Minneapolis, making it one of the largest local news producers in the U.S. [2] - Revenue growth has been positive every quarter in 2024, with Q1 growth at 3% and accelerating to 20% in Q3 [3] - The local broadcasting sector has lost less than 0.5% of market share compared to cable, which lost nearly 4% from September 2023 to September 2024 [4] Group 2: Deluxe Corporation - Deluxe has maintained a quarterly dividend of $0.30 per share since at least 2017, yielding 5.2% over the past year [5] - Shares have risen by 14% in the last three months, reflecting positive investor sentiment [5] - The company generated over $700 million in revenue from check printing in 2023, with only a 2% decline in check revenue last quarter [8] - Management forecasts a revenue growth of around 3% and aims to increase free cash flow significantly [9] - Analysts suggest that Deluxe remains undervalued, with a potential 34% upside according to average Wall Street price targets [9] Group 3: Silvercrest Asset Management Group - Silvercrest has increased its quarterly dividend by 67% since 2017, currently paying $0.20 per share, resulting in a dividend yield of 4.4% [10] - The firm manages over $35 billion in assets, reflecting a 13% increase from the previous year [11] - The company has maintained a 98% average client retention rate since 2006, indicating strong client satisfaction [13] - Although revenue growth has been modest at 2% to 4% in recent quarters, the ultra-high-net-worth individual market is expected to grow, with a 5% increase in 2023 [13]

Core Viewpoint - The article emphasizes the importance of confirming the sustainability of stock trends for profitable short-term investing, highlighting the use of a specific screening strategy to identify stocks with strong fundamentals and positive price momentum [1][2]. Group 1: Stock Screening Strategy - The "Recent Price Strength" screen is designed to identify stocks with sufficient fundamental strength to maintain their recent uptrend, focusing on those trading in the upper portion of their 52-week high-low range, indicating bullishness [3]. - Deluxe (DLX) is identified as a suitable candidate that passed through this screening process, showing a solid price increase of 26.2% over the past 12 weeks, reflecting investor confidence [4]. - In addition to the 12-week price increase, DLX has also seen a 26.6% price increase over the past four weeks, confirming that the upward trend is still intact [5]. Group 2: Fundamental Strength - DLX holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, which are critical for near-term price movements [6]. - The Zacks Rank system has a strong track record, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988, indicating the effectiveness of this ranking system [7]. - The Average Broker Recommendation for DLX is 1 (Strong Buy), suggesting high optimism from the brokerage community regarding the stock's near-term performance [7]. Group 3: Investment Opportunities - The article suggests that the price trend for DLX is unlikely to reverse soon, and there are several other stocks that also meet the criteria of the "Recent Price Strength" screen, presenting additional investment opportunities [8]. - Investors are encouraged to explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stock picks [8].