Deluxe Reports Third Quarter 2020 Results

Deluxe (NYSE: DLX), a Trusted Business Technology™ company, today reported operating results for its third quarter ended September 30, 2020.

“Deluxe delivered better than expected results for the third quarter while accelerating our historic transformation, despite COVID-19 challenges. Reported revenue, net income and adjusted EBITDA margins all improved sequentially from last quarter, while further reducing debt,” said Barry McCarthy, President & CEO of Deluxe. “Our sales-driven ‘One Deluxe’ approach and financial health helped us win two important new deals in-quarter, closing a total of six of our top 25 prospects year-to-date.”

McCarthy continued, “The durability and strength of our business and strategy are clear in our performance. We also accelerated our transformation, announcing plans to lower future operating expense on several fronts, including relocation of existing sites in Minneapolis and Atlanta and consolidating others. We now have even more confidence in our future.”

*Revenue was $54.1 million lower than last year. COVID-19 continued to negatively impact our results, primarily across the Promotional Solutions, Cloud Solutions and Checks segments.
*The Payments segment delivered strong revenue growth of 15.6% over the same period last year, benefiting from Treasury Management revenue growth of 20.9% in the third quarter driven primarily by December 2019 sales wins.
*Net income of $29.4 million was impacted by COVID-19, compared to a net loss of $318.5 million in the third quarter 2019. 2019 results included pre-tax, non-cash asset impairment charges of $391.0 million. The impairment charges related to goodwill, as well as amortizable intangible assets.
*Cash flow from operations for the nine months ending September 30, 2020 was $166.8 million and capital expenditures were $42.7 million. Free cash flow, defined as cash provided by operating activities less capital expenditures, was $124.1 million, a decrease of $34.2 million as compared to 2019. In addition to COVID-19, free cash flow was impacted by previously disclosed expenditures to support the Company’s business transformation and the ongoing secular decline in checks. These impacts were partially offset by lower income taxes and a legal settlement in the prior year.
*At the end of the third quarter, the Company had $1.04 billion of total debt outstanding under its revolving credit facility, compared to $883.5 million at the beginning of 2020. Liquidity was $413.0 million, with cash and cash equivalents totaling $310.4 million at the end of the quarter.
details at: https://www.deluxe.com/about/news/news-releases/

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