Document
Document - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 26, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-7945 | |
Entity Registrant Name | DELUXE CORPORATION | |
Entity Central Index Key | 0000027996 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | MN | |
Entity Tax Identification Number | 41-0216800 | |
Entity Address, Address Line One | 801 S. Marquette Ave. | |
Entity Address, City or Town | Minneapolis | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55402-2807 | |
City Area Code | 651 | |
Local Phone Number | 483-7111 | |
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | DLX | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 43,616,556 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents, including securities carried at fair value of $5,000 as of December 31, 2022 | $ 39,052 | $ 40,435 |
Trade accounts receivable, net of allowance for credit losses | 212,267 | 206,617 |
Inventories and supplies | 54,899 | 52,267 |
Funds held for customers, including securities carried at fair value of $8,402 and $8,126, respectively | 155,794 | 302,291 |
Prepaid expenses | 32,820 | 36,642 |
Revenue in excess of billings | 37,236 | 38,761 |
Other current assets | 16,580 | 27,024 |
Total current assets | 548,648 | 704,037 |
Deferred income taxes | 1,341 | 1,956 |
Long-term investments | 66,465 | 47,783 |
Property, plant and equipment, net of accumulated depreciation of $353,847 and $379,988, respectively | 126,967 | 124,894 |
Operating lease assets | 52,500 | 47,132 |
Intangibles, net of accumulated amortization of $831,755 and $823,589, respectively | 430,103 | 458,979 |
Goodwill | 1,430,588 | 1,431,385 |
Other non-current assets | 266,403 | 260,354 |
Total assets | 2,923,015 | 3,076,520 |
Current liabilities: | ||
Accounts payable | 174,662 | 157,055 |
Funds held for customers | 155,182 | 305,138 |
Accrued liabilities | 155,195 | 218,404 |
Current portion of long-term debt | 86,059 | 71,748 |
Total current liabilities | 571,098 | 752,345 |
Long-term debt | 1,581,151 | 1,572,528 |
Operating lease liabilities | 54,470 | 48,925 |
Deferred income taxes | 37,597 | 45,510 |
Other non-current liabilities | 65,070 | 52,988 |
Commitments and contingencies (Note 13) | ||
Shareholders' equity: | ||
Common shares $1 par value (authorized: 500,000 shares; outstanding: June 30, 2023 - 43,613; December 31, 2022 - 43,204) | 43,613 | 43,204 |
Additional paid-in capital | 89,380 | 79,234 |
Retained earnings | 511,058 | 518,635 |
Accumulated other comprehensive loss | (30,891) | (37,264) |
Non-controlling interest | 469 | 415 |
Total shareholders' equity | 613,629 | 604,224 |
Total liabilities and shareholders' equity | $ 2,923,015 | $ 3,076,520 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - USD ($) shares in Thousands, $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Cash and cash equivalents, securities carried at fair value | $ 5,000 | |
Funds held for customers, securities carried at fair value | $ 8,402 | 8,126 |
Accumulated depreciation | 353,847 | 379,988 |
Accumulated amortization | $ 831,755 | $ 823,589 |
Common stock, par value (per share) | $ 1 | $ 1 |
Common stock, shares authorized | 500,000 | 500,000 |
Common stock, shares outstanding | 43,613 | 43,204 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Total revenue | $ 571,686 | $ 562,953 | $ 1,117,051 | $ 1,118,968 |
Total cost of revenue | (269,947) | (264,112) | (520,609) | (513,306) |
Gross profit | 301,739 | 298,841 | 596,442 | 605,662 |
Selling, general and administrative expense | (245,359) | (249,626) | (492,989) | (509,325) |
Restructuring and integration expense | (24,191) | (15,182) | (37,132) | (31,426) |
Gain on sale of businesses and facility | 21,942 | 17,527 | 21,942 | 17,527 |
Operating income | 54,131 | 51,560 | 88,263 | 82,438 |
Interest expense | (31,932) | (21,349) | (61,948) | (41,672) |
Other income | 824 | 2,414 | 3,247 | 4,417 |
Income before income taxes | 23,023 | 32,625 | 29,562 | 45,183 |
Income tax provision | (6,622) | (10,528) | (10,381) | (13,407) |
Net income | 16,401 | 22,097 | 19,181 | 31,776 |
Net income attributable to non-controlling interest | (26) | (35) | (54) | (71) |
Net income attributable to Deluxe | 16,375 | 22,062 | 19,127 | 31,705 |
Total comprehensive income | 25,517 | 26,168 | 25,554 | 38,314 |
Comprehensive income attributable to Deluxe | $ 25,491 | $ 26,133 | $ 25,500 | $ 38,243 |
Basic earnings per share | $ 0.38 | $ 0.51 | $ 0.44 | $ 0.74 |
Diluted earnings per share | $ 0.37 | $ 0.50 | $ 0.44 | $ 0.72 |
Product [Member] | ||||
Total revenue | $ 323,805 | $ 322,109 | $ 634,031 | $ 639,412 |
Total cost of revenue | (125,453) | (117,519) | (243,888) | (231,879) |
Service [Member] | ||||
Total revenue | 247,881 | 240,844 | 483,020 | 479,556 |
Total cost of revenue | $ (144,494) | $ (146,593) | $ (276,721) | $ (281,427) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common shares par value [Member] | Additional paid-in capital [Member] | Retained earnings [Member] | Accumulated other comprehensive loss [Member] | Non-controlling interest [Member] |
Balance, beginning of period at Dec. 31, 2021 | $ 574,598 | $ 42,679 | $ 57,368 | $ 505,763 | $ (31,492) | $ 280 |
Balance (in shares) at Dec. 31, 2021 | 42,679 | |||||
Net income attributable to Deluxe | $ 31,705 | 31,705 | ||||
Net income attributable to non-controlling interest | 71 | 71 | ||||
Net income | 31,776 | |||||
Cash dividends ($0.30 per share for the quarters ended June 30, 2023 and 2022 and $0.60 per share for the six months ended June 30, 2023 and 2022) | (26,571) | (26,571) | ||||
Common shares issued | $ 2,337 | 580 | 1,757 | |||
Common shares issued (in shares) | 580 | |||||
Common shares retired | $ (5,374) | (179) | (5,195) | |||
Common shares retired (in shares) | (179) | |||||
Employee share-based compensation | $ 13,487 | 13,487 | ||||
Other comprehensive income | 6,538 | 6,538 | ||||
Balance, end of period at Jun. 30, 2022 | $ 596,791 | 43,080 | 67,417 | 510,897 | (24,954) | 351 |
Balance (in shares) at Jun. 30, 2022 | 43,080 | |||||
Balance, beginning of period at Mar. 31, 2022 | $ 579,015 | 42,923 | 62,676 | 502,125 | (29,025) | 316 |
Balance (in shares) at Mar. 31, 2022 | 42,923 | |||||
Net income attributable to Deluxe | $ 22,062 | 22,062 | ||||
Net income attributable to non-controlling interest | 35 | 35 | ||||
Net income | 22,097 | |||||
Cash dividends ($0.30 per share for the quarters ended June 30, 2023 and 2022 and $0.60 per share for the six months ended June 30, 2023 and 2022) | (13,290) | (13,290) | ||||
Common shares issued | $ 807 | 201 | 606 | |||
Common shares issued (in shares) | 201 | |||||
Common shares retired | $ (1,214) | (44) | (1,170) | |||
Common shares retired (in shares) | (44) | |||||
Employee share-based compensation | $ 5,305 | 5,305 | ||||
Other comprehensive income | 4,071 | 4,071 | ||||
Balance, end of period at Jun. 30, 2022 | $ 596,791 | 43,080 | 67,417 | 510,897 | (24,954) | 351 |
Balance (in shares) at Jun. 30, 2022 | 43,080 | |||||
Balance, beginning of period at Dec. 31, 2022 | $ 604,224 | 43,204 | 79,234 | 518,635 | (37,264) | 415 |
Balance (in shares) at Dec. 31, 2022 | 43,204 | |||||
Net income attributable to Deluxe | $ 19,127 | 19,127 | ||||
Net income attributable to non-controlling interest | 54 | 54 | ||||
Net income | 19,181 | |||||
Cash dividends ($0.30 per share for the quarters ended June 30, 2023 and 2022 and $0.60 per share for the six months ended June 30, 2023 and 2022) | (26,704) | (26,704) | ||||
Common shares issued | $ 1,679 | 539 | 1,140 | |||
Common shares issued (in shares) | 539 | |||||
Common shares retired | $ (2,383) | (130) | (2,253) | |||
Common shares retired (in shares) | (130) | |||||
Employee share-based compensation | $ 11,259 | 11,259 | ||||
Other comprehensive income | 6,373 | 6,373 | ||||
Balance, end of period at Jun. 30, 2023 | $ 613,629 | 43,613 | 89,380 | 511,058 | (30,891) | 469 |
Balance (in shares) at Jun. 30, 2023 | 43,613 | |||||
Balance, beginning of period at Mar. 31, 2023 | $ 595,649 | 43,421 | 83,800 | 507,992 | (40,007) | 443 |
Balance (in shares) at Mar. 31, 2023 | 43,421 | |||||
Net income attributable to Deluxe | $ 16,375 | 16,375 | ||||
Net income attributable to non-controlling interest | 26 | 26 | ||||
Net income | 16,401 | |||||
Cash dividends ($0.30 per share for the quarters ended June 30, 2023 and 2022 and $0.60 per share for the six months ended June 30, 2023 and 2022) | (13,309) | (13,309) | ||||
Common shares issued | $ 738 | 215 | 523 | |||
Common shares issued (in shares) | 215 | |||||
Common shares retired | $ (349) | (23) | (326) | |||
Common shares retired (in shares) | (23) | |||||
Employee share-based compensation | $ 5,383 | 5,383 | ||||
Other comprehensive income | 9,116 | 9,116 | ||||
Balance, end of period at Jun. 30, 2023 | $ 613,629 | $ 43,613 | $ 89,380 | $ 511,058 | $ (30,891) | $ 469 |
Balance (in shares) at Jun. 30, 2023 | 43,613 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends per share | $ 0.30 | $ 0.30 | $ 0.60 | $ 0.60 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 19,181 | $ 31,776 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 11,052 | 12,146 |
Amortization of intangibles | 75,076 | 74,498 |
Operating lease expense | 10,522 | 9,756 |
Amortization of prepaid product discounts | 17,173 | 17,171 |
Deferred income taxes | (9,489) | (14,482) |
Employee share-based compensation expense | 11,350 | 13,038 |
Gain on sale of businesses and facility | (21,942) | (17,527) |
Other non-cash items, net | 21,606 | 15,546 |
Changes in assets and liabilities: | ||
Trade accounts receivable | (9,889) | 8,976 |
Inventories and supplies | (4,609) | (5,713) |
Other current assets | 11,876 | (8,229) |
Payments for cloud computing arrangement implementation costs | (5,846) | (11,340) |
Other non-current assets | (7,216) | (8,157) |
Accounts payable | 21,134 | (4,345) |
Prepaid product discount payments | (12,742) | (12,285) |
Other accrued and non-current liabilities | (79,900) | (28,642) |
Net cash provided by operating activities | 47,337 | 72,187 |
Cash flows from investing activities: | ||
Purchases of capital assets | (55,904) | (45,246) |
Proceeds from sale of businesses and facility | 27,880 | 23,875 |
Other | (9,878) | 895 |
Net cash used by investing activities | (37,902) | (20,476) |
Cash flows from financing activities: | ||
Proceeds from issuing long-term debt and swingline loans | 437,500 | 314,000 |
Payments on long-term debt and swingline loans | (416,376) | (323,376) |
Net change in customer funds obligations | (149,336) | (100,067) |
Employee taxes paid for shares withheld | (2,383) | (5,374) |
Cash dividends paid to shareholders | (26,852) | (26,591) |
Other | (3,273) | (2,870) |
Net cash used by financing activities | (160,720) | (144,278) |
Effect of exchange rate change on cash, cash equivalents, restricted cash and restricted cash equivalents | 3,063 | (3,336) |
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents | (148,222) | (95,903) |
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of year | 337,415 | 285,491 |
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period | $ 189,193 | $ 189,588 |
Consolidated financial statemen
Consolidated financial statements | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated financial statements | The consolidated balance sheet as of June 30, 2023, the consolidated statements of comprehensive income for the quarters and six months ended June 30, 2023 and 2022, the consolidated statements of shareholders’ equity for the quarters and six months ended June 30, 2023 and 2022 and the consolidated statements of cash flows for the six months ended June 30, 2023 and 2022 are unaudited. The consolidated balance sheet as of December 31, 2022 was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (GAAP). In the opinion of management, all adjustments necessary for a fair statement of the consolidated financial statements are included. Adjustments consist only of normal recurring items, except for any items discussed in the notes below. Interim results are not necessarily indicative of results for a full year or future results. The consolidated financial statements and notes are presented in accordance with instructions for Form 10-Q and do not contain certain information included in our annual consolidated financial statements and notes. The consolidated financial statements and notes appearing in this report should be read in conjunction with the consolidated audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the "2022 Form 10-K"). The preparation of our consolidated financial statements requires us to make certain estimates and assumptions affecting the amounts reported in the consolidated financial statements and related notes. We base our estimates on historical experience and on various other factors and assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of our assets, liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities. Actual results may differ significantly from our estimates and assumptions. Comparability – The consolidated statement of cash flows for the six months ended June 30, 2022 has been modified to conform to the current year presentation. We included proceeds from issuing shares within other financing activities. Previously, this amount was shown separately. |
New accounting pronouncements
New accounting pronouncements | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New accounting pronouncements | In March 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-02, Troubled Debt Restructurings and Vintage Disclosures . This standard modifies the accounting for troubled debt restructurings by creditors and modifies certain disclosure requirements. We adopted this standard on January 1, 2023 and elected to apply it prospectively to modifications occurring on or after January 1, 2023. Adoption of this standard did not impact our financial position as of June 30, 2023 or our results of operations for the six months ended June 30, 2023. In March 2020, the FASB issued ASU No. 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This standard provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by the discontinuation of the London Interbank Offered Rate (LIBOR) or by another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No 2021-01, Reference Rate Reform (Topic 848): Scope , which clarified the scope and application of the original guidance. Effective March 20, 2023, we modified our existing credit facility and our September 2022 interest rate swap agreement (Note 7) to utilize the Secured Overnight Financing Rate (SOFR) as the reference rate in the agreements. In accounting for these modifications, we adopted the reference rate reform guidance on a prospective basis as allowed under the provisions of ASU No. 2022-06, Deferral of the Sunset Date of Topic 848. Adoption of these standards did not have a material impact on our consolidated financial statements. |
Supplemental balance sheet and
Supplemental balance sheet and cash flow information | 6 Months Ended |
Jun. 30, 2023 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental balance sheet and cash flow information | Trade accounts receivable – Net trade accounts receivable was comprised of the following: (in thousands) June 30, December 31, Trade accounts receivable – gross $ 217,705 $ 210,799 Allowance for credit losses (5,438) (4,182) Trade accounts receivable – net (1) $ 212,267 $ 206,617 (1) Includes unbilled receivables of $54,882 as of June 30, 2023 and $43,902 as of December 31, 2022. Changes in the allowance for credit losses for the six months ended June 30, 2023 and 2022 were as follows: Six Months Ended (in thousands) 2023 2022 Balance, beginning of year $ 4,182 $ 4,130 Bad debt expense 3,027 1,449 Write-offs and other (1,771) (1,326) Balance, end of period $ 5,438 $ 4,253 Inventories and supplies – Inventories and supplies were comprised of the following: (in thousands) June 30, December 31, Raw materials $ 12,028 $ 11,563 Semi-finished goods 6,098 7,777 Finished goods 37,836 32,938 Supplies 7,062 6,389 Reserve for excess and obsolete items (8,125) (6,400) Inventories and supplies, net of reserve $ 54,899 $ 52,267 Changes in the reserve for excess and obsolete items were as follows for the six months ended June 30, 2023 and 2022: Six Months Ended (in thousands) 2023 2022 Balance, beginning of year $ 6,400 $ 5,132 Amounts charged to expense 2,151 1,516 Write-offs and other (426) (1,211) Balance, end of period $ 8,125 $ 5,437 Available-for-sale debt securities – Available-for-sale debt securities were comprised of the following: June 30, 2023 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Funds held for customers: (1) Canadian and provincial government securities $ 9,499 $ — $ (1,097) $ 8,402 Available-for-sale debt securities $ 9,499 $ — $ (1,097) $ 8,402 (1) Funds held for customers, as reported on the consolidated balance sheet as of June 30, 2023, also included cash of $147,392. December 31, 2022 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Cash equivalents: Domestic money market fund $ 5,000 $ — $ — $ 5,000 Funds held for customers: (1) Canadian and provincial government securities 9,190 — (1,064) 8,126 Available-for-sale debt securities $ 14,190 $ — $ (1,064) $ 13,126 (1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2022, also included cash of $294,165. Expected maturities of available-for-sale debt securities as of June 30, 2023 were as follows: (in thousands) Fair value Due in one year or less $ 3,394 Due in two to five years 1,723 Due in six to ten years 3,285 Available-for-sale debt securities $ 8,402 Further information regarding the fair value of available-for-sale debt securities can be found in Note 8. Revenue in excess of billings – Revenue in excess of billings was comprised of the following: (in thousands) June 30, December 31, Conditional right to receive consideration $ 24,608 $ 26,520 Unconditional right to receive consideration (1) 12,628 12,241 Revenue in excess of billings $ 37,236 $ 38,761 (1) Represents revenues that are earned but not currently billable under the related contract terms. Intangibles – Intangibles were comprised of the following: June 30, 2023 December 31, 2022 (in thousands) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Internal-use software $ 526,697 $ (379,518) $ 147,179 $ 529,306 $ (395,514) $ 133,792 Customer lists/relationships 487,127 (335,245) 151,882 497,882 (312,986) 184,896 Technology-based intangibles 97,633 (49,560) 48,073 99,613 (47,478) 52,135 Partner relationships 74,134 (10,790) 63,344 74,682 (9,094) 65,588 Trade names 39,367 (22,742) 16,625 44,185 (26,510) 17,675 Software to be sold 36,900 (33,900) 3,000 36,900 (32,007) 4,893 Intangibles $ 1,261,858 $ (831,755) $ 430,103 $ 1,282,568 $ (823,589) $ 458,979 Amortization of intangibles was $36,859 for the quarter ended June 30, 2023, $38,339 for the quarter ended June 30, 2022, $75,076 for the six months ended June 30, 2023 and $74,498 for the six months ended June 30, 2022. Based on the intangibles in service as of June 30, 2023, estimated future amortization expense is as follows: (in thousands) Estimated Remainder of 2023 $ 65,253 2024 95,983 2025 67,446 2026 42,837 2027 33,036 In the normal course of business, we acquire and develop internal-use software. We also, at times, purchase customer list and partner relationship assets. The following intangibles were capitalized during the six months ended June 30, 2023: (in thousands) Amount Weighted-average amortization period Internal-use software $ 48,829 3 Partner relationships 478 1 Acquired intangibles $ 49,307 3 Goodwill – Changes in goodwill by reportable segment and in total were as follows for the six months ended June 30, 2023: (in thousands) Payments Data Solutions Promotional Solutions Checks Total Balance, December 31, 2022: Goodwill, gross $ 896,681 $ 432,984 $ 252,775 $ 434,812 $ 2,017,252 Accumulated impairment charges — (392,168) (193,699) — (585,867) Goodwill, net of accumulated impairment charges 896,681 40,816 59,076 434,812 1,431,385 Currency translation adjustment and other (828) — 31 — (797) Balance, June 30, 2023 $ 895,853 $ 40,816 $ 59,107 $ 434,812 $ 1,430,588 Balance, June 30, 2023: Goodwill, gross $ 895,853 $ 432,984 $ 252,806 $ 434,812 $ 2,016,455 Accumulated impairment charges — (392,168) (193,699) — (585,867) Goodwill, net of accumulated impairment charges $ 895,853 $ 40,816 $ 59,107 $ 434,812 $ 1,430,588 Other non-current assets – Other non-current assets were comprised of the following: (in thousands) June 30, December 31, Postretirement benefit plan asset $ 82,834 $ 79,343 Cloud computing arrangement implementation costs 67,270 71,547 Prepaid product discounts 46,321 44,824 Deferred contract acquisition costs (1) 24,906 21,300 Loans and notes receivable from distributors, net of allowance for credit losses (2) 12,782 13,259 Other 32,290 30,081 Other non-current assets $ 266,403 $ 260,354 (1) Amortization of deferred contract acquisition costs was $5,315 for the six months ended June 30, 2023 and $3,767 for the six months ended June 30, 2022. (2) Amount includes the non-current portion of loans and notes receivable. The current portion of these receivables is included in other current assets on the consolidated balance sheets and was $970 as of June 30, 2023 and $961 as of December 31, 2022. Changes in the allowance for credit losses related to loans and notes receivable from distributors were as follows for the six months ended June 30, 2023 and 2022: Six Months Ended (in thousands) 2023 2022 Balance, beginning of year $ 1,024 $ 2,830 Bad debt (benefit) expense (73) 264 Other — (402) Balance, end of period $ 951 $ 2,692 Past due receivables and those on non-accrual status were not material as of June 30, 2023 or December 31, 2022. We categorize loans and notes receivable into risk categories based on information about the ability of borrowers to service their debt, including current financial information, historical payment experience, current economic trends and other factors. The highest quality receivables are assigned a 1-2 internal grade. Those that have a potential weakness requiring management's attention are assigned a 3-4 internal grade. The following table presents loans and notes receivable from distributors, including the current portion, by credit quality indicator and by year of origination, as of June 30, 2023. There were no write-offs or recoveries recorded during the six months ended June 30, 2023. Loans and notes receivable from distributors amortized cost basis by origination year (in thousands) 2020 2019 2018 Prior Total Risk rating: 1-2 internal grade $ 1,076 $ 400 $ 3,886 $ 9,341 $ 14,703 3-4 internal grade — — — — — Loans and notes receivable $ 1,076 $ 400 $ 3,886 $ 9,341 $ 14,703 Changes in prepaid product discounts during the six months ended June 30, 2023 and 2022 were as follows: Six Months Ended (in thousands) 2023 2022 Balance, beginning of year $ 44,824 $ 56,527 Additions (1) 18,584 9,413 Amortization (17,173) (17,171) Other 86 (86) Balance, end of period $ 46,321 $ 48,683 (1) Prepaid product discounts are generally accrued upon contract execution. Payments for prepaid product discounts were $12,742 for the six months ended June 30, 2023 and $12,285 for the six months ended June 30, 2022. Accrued liabilities – Accrued liabilities were comprised of the following: (in thousands) June 30, December 31, Employee bonuses, including sales incentives $ 30,573 $ 57,398 Deferred revenue (1) 29,204 47,012 Operating lease liabilities 13,764 12,780 Customer rebates 12,104 12,153 Prepaid product discounts 10,022 4,179 Wages and payroll liabilities, including vacation 9,460 20,264 Other 50,068 64,618 Accrued liabilities $ 155,195 $ 218,404 (1) Revenue recognized for amounts included in deferred revenue at the beginning of the period was $29,637 for the six months ended June 30, 2023 and $20,238 for the six months ended June 30, 2022. Supplemental cash flow information – The reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents to the consolidated balance sheets was as follows: (in thousands) June 30, June 30, Cash and cash equivalents $ 39,052 $ 43,262 Restricted cash and restricted cash equivalents included in funds held for customers 147,392 143,702 Non-current restricted cash included in other non-current assets 2,749 2,624 Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 189,193 $ 189,588 |
Earnings per share
Earnings per share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per share | The following table reflects the calculation of basic and diluted earnings per share. During each period, certain stock options, as noted below, were excluded from the calculation of diluted earnings per share because their effect would have been antidilutive. Quarter Ended Six Months Ended (in thousands, except per share amounts) 2023 2022 2023 2022 Earnings per share – basic: Net income $ 16,401 $ 22,097 $ 19,181 $ 31,776 Net income attributable to non-controlling interest (26) (35) (54) (71) Net income attributable to Deluxe 16,375 22,062 19,127 31,705 Income allocated to participating securities (12) (16) (19) (23) Income attributable to Deluxe available to common shareholders $ 16,363 $ 22,046 $ 19,108 $ 31,682 Weighted-average shares outstanding 43,524 43,016 43,421 42,907 Earnings per share – basic $ 0.38 $ 0.51 $ 0.44 $ 0.74 Earnings per share – diluted: Net income $ 16,401 $ 22,097 $ 19,181 $ 31,776 Net income attributable to non-controlling interest (26) (35) (54) (71) Net income attributable to Deluxe 16,375 22,062 19,127 31,705 Income allocated to participating securities — (16) (10) (23) Re-measurement of share-based awards classified as liabilities — (307) (19) (345) Income attributable to Deluxe available to common shareholders $ 16,375 $ 21,739 $ 19,098 $ 31,337 Weighted-average shares outstanding 43,524 43,016 43,421 42,907 Dilutive impact of potential common shares 216 269 279 349 Weighted-average shares and potential common shares outstanding 43,740 43,285 43,700 43,256 Earnings per share – diluted $ 0.37 $ 0.50 $ 0.44 $ 0.72 Antidilutive options excluded from calculation 1,553 1,891 1,553 1,891 |
Other comprehensive income
Other comprehensive income | 6 Months Ended |
Jun. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Other comprehensive income | Reclassification adjustments – Information regarding amounts reclassified from accumulated other comprehensive loss to net income was as follows: Accumulated other comprehensive loss components Amounts reclassified from accumulated other comprehensive loss Affected line item in consolidated statements of comprehensive income Quarter Ended Six Months Ended (in thousands) 2023 2022 2023 2022 Amortization of postretirement benefit plan items: Prior service credit $ 355 $ 355 $ 711 $ 711 Other income Net actuarial loss (568) (225) (1,137) (450) Other income Total amortization (213) 130 (426) 261 Other income Tax benefit (expense) 16 (79) 32 (157) Income tax provision Amortization of postretirement benefit plan items, net of tax (197) 51 (394) 104 Net income Realized loss on debt securities — (8) — (8) Revenue Tax benefit — 2 — 2 Income tax provision Realized loss on debt securities, net of tax — (6) — (6) Net income Realized gain (loss) on cash flow hedges 634 (144) 1,204 (464) Interest expense Tax (expense) benefit (169) 38 (321) 123 Income tax provision Realized gain (loss) on cash flow hedges, net of tax 465 (106) 883 (341) Net income Currency translation adjustment (1) (863) (5,550) (863) (5,550) Gain on sale of businesses and facility Total reclassifications, net of tax $ (595) $ (5,611) $ (374) $ (5,793) (1) Relates to the sale of our North American web hosting business during the quarter ended June 30, 2023 and the sale of our Australian web hosting business during the quarter ended June 30, 2022. Further information can be found in Note 6. Accumulated other comprehensive loss – Changes in the components of accumulated other comprehensive loss during the six months ended June 30, 2023 were as follows: (in thousands) Postretirement benefit plans Net unrealized loss on debt securities (1) Net unrealized gain on cash flow hedges (2) Currency translation adjustment Accumulated other comprehensive loss Balance, December 31, 2022 $ (26,872) $ (909) $ 2,593 $ (12,076) $ (37,264) Other comprehensive (loss) income before reclassifications — (8) 4,858 1,149 5,999 Amounts reclassified from accumulated other comprehensive loss 394 — (883) 863 374 Net current-period other comprehensive income (loss) 394 (8) 3,975 2,012 6,373 Balance, June 30, 2023 $ (26,478) $ (917) $ 6,568 $ (10,064) $ (30,891) (1) Other comprehensive loss before reclassifications is net of an income tax benefit of $3. (2) Other comprehensive income before reclassifications is net of income tax expense of $1,768. |
Divestitures
Divestitures | 6 Months Ended |
Jun. 30, 2023 | |
Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract] | |
Divestitures | 2023 divestiture – In June 2023, we completed the sale of our North American web hosting and logo design businesses for net cash proceeds of $31,230. We received $27,880 of these proceeds during the quarter ended June 30, 2023, with the remainder to be paid by the end of 2023. These businesses generated annual revenue of approximately $66,000 during 2022, primarily in our Data Solutions segment. During the quarter ended June 30, 2023, we recognized a pretax gain of $21,942 on this sale. The assets and liabilities sold were not material to our consolidated balance sheet. 2022 divestitures – In May 2022, we completed the sale of our Australian web hosting business for net cash proceeds of $17,620. This business generated annual revenue in our Data Solutions segment of $23,766 during 2021. During the quarter ended June 30, 2022, we recognized a pretax gain of $15,166 on this sale. The assets and liabilities sold were not material to our consolidated balance sheet. In April 2022, we sold the assets of our Promotional Solutions strategic sourcing business and in August 2022, we sold the assets of our Promotional Solutions retail packaging business. These businesses generated annual revenue of approximately $29,000 during 2021. Neither the gain on these sales nor the assets and liabilities sold were material to our consolidated financial statements. We believe that these divestitures allow us to focus our resources on the key growth areas of payments and data, while allowing us to optimize our operations. Facility sale – In May 2022, we sold our former facility located in Lancaster, California for net cash proceeds of $6,929, and we recognized a pretax gain on the sale of $2,361 during the quarter ended June 30, 2022. The sale was a result of our continued real estate rationalization process. |
Derivative financial instrument
Derivative financial instruments | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative financial instruments | As part of our interest rate risk management strategy, we have entered into interest rate swaps, which we designated as cash flow hedges, to mitigate variability in interest payments on a portion of our variable-rate debt (Note 12). In March 2023, we modified our September 2022 interest rate swap agreement to utilize SOFR as the reference rate in the agreement. Information regarding our accounting for this modification can be found in Note 2. In June 2023, we entered into a 3-year interest rate swap agreement with a variable notional amount that resets quarterly. Our derivative instruments were comprised of the following: June 30, December 31, (in thousands) Notional amount Interest rate Maturity Balance sheet location Fair value Fair value June 2023 amortizing interest rate swap: $ 298,729 4.249 % June 2026 Other non-current assets $ 1,358 $ — March 2023 200,000 4.003 % March 2026 Other non-current assets 2,850 — September 2022 interest rate swap: 300,000 3.990 % September 2025 Other non-current assets 4,807 2,409 July 2019 interest rate swap: 200,000 1.798 % March 2023 Other current assets — 1,184 Changes in the fair values of the interest rate swaps are recorded in accumulated other comprehensive loss on the consolidated balance sheets and are subsequently reclassified to interest expense as interest payments are made on the variable-rate debt. The fair values of the derivatives are calculated based on the applicable reference rate curve on the date of measurement. The cash flow hedges were fully effective as of June 30, 2023 and December 31, 2022, and their impact on |
Fair value measurements
Fair value measurements | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Funds held for customers and cash and cash equivalents included available-for-sale debt securities (Note 3). These securities included a mutual fund investment that invests in Canadian and provincial government securities and as of December 31, 2022, included a domestic money market fund. The mutual fund investment is not traded in an active market and its fair value is determined by obtaining quoted prices in active markets for the underlying securities held by the fund. The cost of the money market fund held as of December 31, 2022, which was traded in an active market, approximated its fair value because of the short-term nature of the investment. Unrealized gains and losses, net of tax, are included in accumulated other comprehensive loss on the consolidated balance sheets. The cost of securities sold is determined using the average cost method. Realized gains and losses are included in revenue on the consolidated statements of comprehensive income and were not material for the quarters or six months ended June 30, 2023 and 2022. Information regarding the fair values of our financial instruments was as follows: Fair value measurements using June 30, 2023 Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (in thousands) Balance sheet location Carrying value Fair value Measured at fair value through comprehensive income: Available-for-sale debt securities Funds held for customers $ 8,402 $ 8,402 $ — $ 8,402 $ — Derivative assets (Note 7) Other non-current assets 9,015 9,015 — 9,015 — Amortized cost: Cash Cash and cash equivalents 39,052 39,052 39,052 — — Cash Funds held for customers 147,392 147,392 147,392 — — Cash Other non-current assets 2,749 2,749 2,749 — — Loans and notes receivable from distributors Other current assets and other non-current assets 13,752 12,754 — — 12,754 Long-term debt Current portion of long-term debt and long-term debt 1,667,210 1,575,872 — 1,575,872 — Fair value measurements using December 31, 2022 Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (in thousands) Balance sheet location Carrying value Fair value Measured at fair value through comprehensive income: Available-for-sale debt securities Cash and cash equivalents $ 5,000 $ 5,000 $ 5,000 $ — $ — Available-for-sale debt securities Funds held for customers 8,126 8,126 — 8,126 — Derivative assets (Note 7) Other current assets and other non-current assets 3,593 3,593 — 3,593 — Amortized cost: Cash Cash and cash equivalents 35,435 35,435 35,435 — — Cash Funds held for customers 294,165 294,165 294,165 — — Cash Other non-current assets 2,815 2,815 2,815 — — Loans and notes receivable from distributors Other current assets and other non-current assets 14,220 13,315 — — 13,315 Long-term debt Current portion of long-term debt and long-term debt 1,644,276 1,574,417 — 1,574,417 — |
Restructuring and integration e
Restructuring and integration expense | 6 Months Ended |
Jun. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and integration expense | Restructuring and integration expense consists of costs related to the consolidation and migration of certain applications and processes, including our financial management systems. It also includes costs related to the integration of acquired businesses into our systems and processes. These costs consist primarily of information technology consulting, project management services and internal labor, as well as other costs associated with our initiatives, such as training, travel, relocation and costs associated with facility closures. In addition, we recorded employee severance costs related to these initiatives, as well as our ongoing cost reduction initiatives across functional areas. We are currently pursuing several initiatives designed to support our growth strategy and to increase our efficiency. Restructuring and integration expense is not allocated to our reportable business segments. Restructuring and integration expense is reflected on the consolidated statements of comprehensive income as follows: Quarter Ended Six Months Ended (in thousands) 2023 2022 2023 2022 Total cost of revenue $ 3,286 $ 26 $ 4,439 $ 85 Operating expenses 24,191 15,182 37,132 31,426 Restructuring and integration expense $ 27,477 $ 15,208 $ 41,571 $ 31,511 Restructuring and integration expense for each period was comprised of the following: Quarter Ended Six Months Ended (in thousands) 2023 2022 2023 2022 External consulting fees $ 12,930 $ 9,141 $ 20,621 $ 17,000 Employee severance benefits 6,161 3,281 6,347 4,406 Internal labor 1,750 2,604 3,872 4,300 Other 6,636 182 10,731 5,805 Restructuring and integration expense $ 27,477 $ 15,208 $ 41,571 $ 31,511 Our restructuring and integration accruals are included in accrued liabilities on the consolidated balance sheets and represent expected cash payments required to satisfy the remaining severance obligations to those employees already terminated and those expected to be terminated under our various initiatives. The majority of the employee reductions and the related severance payments are expected to be completed by the end of 2023. Changes in our restructuring and integration accruals were as follows: (in thousands) Employee severance benefits Balance, December 31, 2022 $ 8,528 Charges 6,720 Reversals (373) Payments (7,406) Balance, June 30, 2023 $ 7,469 The charges and reversals presented in the rollforward of our restructuring and integration accruals do not include items charged directly to expense as incurred, as those items are not reflected in accrued liabilities on the consolidated balance sheets. |
Income tax provision
Income tax provision | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income tax provision | The effective income tax rate for the six months ended June 30, 2023 was 35.1%, compared to the effective tax rate of 22.3% for the year ended December 31, 2022. The reconciliation of our effective tax rate for 2022 to the U.S. federal statutory tax rate can be found under the caption "Note 10: Income Tax Provision" in the Notes to Consolidated Financial Statements appearing in the 2022 Form 10-K. The increase in our effective tax rate for the six months ended June 30, 2023 was primarily driven by the impact of business exit activities, which increased our effective tax rate by 5.3 points. In June 2023, we recognized a capital loss for tax purposes related to the sale of our North American web hosting and logo design businesses, and we recorded a full valuation allowance against the deferred tax asset, as we do not expect to realize the related tax benefit. During the year ended December 31, 2022, we recognized a capital loss for tax purposes related to the sale of our Australian web hosting business, and we recorded a valuation allowance for the portion of the capital loss carryover we did not expect to realize. In addition, the tax impact of share-based compensation drove a 4.9 point increase in our effective tax rate and return to provision adjustments drove a 2.7 point increase in our effective tax rate, as compared to 2022. |
Postretirement benefits
Postretirement benefits | 6 Months Ended |
Jun. 30, 2023 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Postretirement benefits | We have historically provided certain health care benefits for eligible retired U.S. employees. In addition to our retiree health care plan, we also have a U.S. supplemental executive retirement plan. Further information regarding our postretirement benefit plans can be found under the caption “Note 12: Postretirement Benefits” in the Notes to Consolidated Financial Statements appearing in the 2022 Form 10-K. Postretirement benefit income is included in other income on the consolidated statements of comprehensive income and consisted of the following components: Quarter Ended Six Months Ended (in thousands) 2023 2022 2023 2022 Interest cost $ 496 $ 280 $ 993 $ 561 Expected return on plan assets (1,830) (1,866) (3,660) (3,731) Amortization of prior service credit (355) (355) (711) (711) Amortization of net actuarial losses 568 225 1,137 450 Net periodic benefit income $ (1,121) $ (1,716) $ (2,241) $ (3,431) |
Debt
Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt outstanding was comprised of the following: (in thousands) June 30, December 31, Senior, secured term loan facility $ 958,500 $ 987,375 Senior, unsecured notes 475,000 475,000 Amounts drawn on senior, secured revolving credit facility 247,000 197,000 Total principal amount 1,680,500 1,659,375 Less: unamortized discount and debt issuance costs (13,290) (15,099) Total debt, net of discount and debt issuance costs 1,667,210 1,644,276 Less: current portion of long-term debt, net of debt issuance costs (86,059) (71,748) Long-term debt $ 1,581,151 $ 1,572,528 Maturities of long-term debt were as follows as of June 30, 2023: (in thousands) Debt obligations Remainder of 2023 $ 43,312 2024 86,625 2025 101,063 2026 974,500 2027 — Thereafter 475,000 Total principal amount $ 1,680,500 Credit facility – In June 2021, we executed a senior, secured credit facility consisting of a revolving credit facility with commitments of $500,000 and a $1,155,000 term loan facility. The revolving credit facility includes a $40,000 swingline sub-facility and a $25,000 letter of credit sub-facility. Proceeds from the credit facility were used to terminate our previous credit facility agreement and to fund the acquisition of First American Payment Systems, L.P (First American). Loans under the revolving credit facility may be borrowed, repaid and re-borrowed until June 1, 2026, at which time all amounts borrowed must be repaid. The term loan facility will be repaid in equal quarterly installments of $21,656 from September 30, 2023 through June 30, 2025 and $28,875 from September 30, 2025 through March 31, 2026. The remaining balance is due on June 1, 2026. The term loan facility also includes mandatory prepayment requirements related to asset sales, new debt (other than permitted debt) and excess cash flow, subject to certain limitations. No premium or penalty is payable in connection with any mandatory or voluntary prepayment of the term loan facility. Interest is payable on the credit facility at a fluctuating rate of interest determined by reference to the eurodollar rate plus an applicable margin ranging from 1.5% to 2.5%, depending on our consolidated total leverage ratio, as defined in the credit agreement. Through March 20, 2023, the eurodollar rate was derived from LIBOR. Effective March 20, 2023, we modified the credit facility to utilize SOFR as the reference rate in the agreement. Information regarding our accounting for this modification can be found in Note 2. A commitment fee is payable on the unused portion of the revolving credit facility at a rate ranging from 0.25% to 0.35%, depending on our consolidated total leverage ratio. Amounts outstanding under the credit facility had a weighted-average interest rate of 6.72% as of June 30, 2023 and 6.07% as of December 31, 2022, including the impact of interest rate swaps that effectively convert a portion of our variable-rate debt to fixed-rate debt. Further information regarding the interest rate swaps can be found in Note 7. Borrowings under the credit facility are collateralized by substantially all of the present and future tangible and intangible personal property held by us and our subsidiaries that have guaranteed our obligations under the credit facility, subject to certain exceptions. The credit agreement contains customary covenants regarding limits on levels of indebtedness, liens, mergers, certain asset dispositions, changes in business, advances, investments, loans and restricted payments. The covenants are subject to a number of limitations and exceptions set forth in the credit agreement. The credit agreement also includes requirements regarding our consolidated total leverage ratio and our consolidated secured leverage ratio, as defined in the credit agreement. These ratios may not equal or exceed the following amounts during the periods indicated: Fiscal Quarter Ending Consolidated total leverage ratio Consolidated secured leverage ratio June 30, 2023 through March 31, 2024 4.50 to 1:00 3.50 to 1:00 June 30, 2024 and each fiscal quarter thereafter 4.25 to 1:00 3.50 to 1:00 In addition, we must maintain a minimum interest coverage ratio of at least 3.00 to 1.00 throughout the remaining term of the credit facility. Failure to meet any of the above requirements would result in an event of default that would allow lenders to declare amounts outstanding immediately due and payable and would allow the lenders to enforce their interests against collateral pledged if we are unable to settle the amounts outstanding. We were in compliance with all debt covenants as of June 30, 2023. The credit agreement contains customary representations and warranties and, as a condition to borrowing, requires that all such representations and warranties be true and correct in all material respects on the date of each borrowing, including representations as to no material adverse change in our business, assets, operations or financial condition. If our consolidated total leverage ratio exceeds 2.75 to 1.00, the aggregate annual amount of permitted dividends and share repurchases in connection with incentive-based equity and compensation is limited to $60,000. As of June 30, 2023, amounts available for borrowing under our revolving credit facility were as follows: (in thousands) Available borrowings Revolving credit facility commitment $ 500,000 Amounts drawn on revolving credit facility (247,000) Outstanding letters of credit (1) (8,368) Net available for borrowing as of June 30, 2023 $ 244,632 (1) We use standby letters of credit primarily to collateralize certain obligations related to our self-insured workers' compensation claims, as well as claims for environmental matters, as required by certain states.These letters of credit reduce the amount available for borrowing under our revolving credit facility. Senior unsecured notes – In June 2021, we issued $500,000 of 8.0% senior, unsecured notes that mature in June 2029. The notes were issued via a private placement under Rule 144A of the Securities Act of 1933. Proceeds from the offering, net of discount and offering costs, were $490,741, resulting in an effective interest rate of 8.3%. The net proceeds from the notes were used to fund the acquisition of First American in June 2021. Interest payments are due each June and December. During 2022, we settled $25,000 of these notes via open market purchases. |
Other commitments and contingen
Other commitments and contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Other commitments and contingencies | Indemnifications – In the normal course of business, we periodically enter into agreements that incorporate general indemnification language. These indemnification provisions generally encompass third-party claims arising from our products and services, including, without limitation, service failures, breach of security, intellectual property rights, governmental regulations and/or employment-related matters. Performance under these indemnities would generally be triggered by our breach of the terms of the contract. In disposing of assets or businesses, we often provide representations, warranties and/or indemnities to cover various risks including, for example, unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal matters related to periods prior to disposition. We do not have the ability to estimate the potential liability from such indemnities because they relate to unknown conditions. However, we do not believe that any liability under these indemnities would have a material adverse effect on our financial position, annual results of operations or annual cash flows. We have recorded liabilities for known indemnifications related to environmental matters. These liabilities were not material as of June 30, 2023 or December 31, 2022. First American indemnification – Pursuant to the First American acquisition agreement, we are entitled to limited indemnification for certain expenses and losses, if any, that may be incurred after the consummation of the transaction that arise out of certain matters, including a Federal Trade Commission (FTC) investigation initiated in December 2019 seeking information to determine whether certain subsidiaries of First American may have engaged in conduct prohibited by the Federal Trade Commission Act, the Fair Credit Reporting Act or the Duties of Furnishers of Information. As fully set forth in the merger agreement, our rights to indemnification for any such expenses and losses were limited to the amount of an indemnity holdback, which was our sole recourse for any such losses. The First American subsidiaries entered into a Stipulated Order for Permanent Injunction, Monetary Judgment, and Other Relief (the “Order”) with the FTC, which was approved by the FTC on July 29, 2022. The parties subsequently entered into an amended Order. Pursuant to the Order, among other things, the First American defendants were required to pay $4,900 to the FTC within 7 days of the entry of the Order. The First American defendants also agreed to certain injunctive relief. The payment of the above-referenced amount was made in March 2023, and we were reimbursed for post-closing expenses that we incurred in connection with this matter. These payments did not have a material impact on our consolidated financial statements. Self-insurance – We are self-insured for certain costs, primarily workers' compensation claims and medical and dental benefits for active employees and those employees on long-term disability. The liabilities associated with these items represent our best estimate of the ultimate obligations for reported claims plus those incurred, but not reported, and totaled $8,643 as of June 30, 2023 and $9,661 as of December 31, 2022. These accruals are included in accrued liabilities and other non-current liabilities on the consolidated balance sheets. Our workers' compensation liability is recorded at present value. The difference between the discounted and undiscounted liability was not material as of June 30, 2023 or December 31, 2022. Our self-insurance liabilities are estimated, in part, by considering historical claims experience, demographic factors and other actuarial assumptions. The estimated accruals for these liabilities could be significantly affected if future events and claims differ from these assumptions and historical trends. Litigation – Recorded liabilities for legal matters, as well as related charges recorded in each period, were not material to our financial position, results of operations or liquidity during the periods presented, and we do not believe that any of the currently identified claims or litigation will materially affect our financial position, results of operations or liquidity, upon resolution. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, it may cause a material adverse impact on our financial position, results of operations or liquidity in the period in which the ruling occurs or in future periods. |
Shareholders' equity
Shareholders' equity | 6 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' equity | In October 2018, our board of directors authorized the repurchase of up to $500,000 of our common stock. This authorization has no expiration date. No shares were repurchased under this authorization during the six months ended June 30, 2023 or June 30, 2022, and $287,452 remained available for repurchase as of June 30, 2023. |
Business segment information
Business segment information | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Business segment information | We operate 4 reportable business segments, generally organized by product type, as follows: • Payments – This segment includes our merchant in-store, online and mobile payment solutions; treasury management solutions, including remittance and lockbox processing, remote deposit capture, receivables management, payment processing and paperless treasury management; payroll and disbursement services, including Deluxe Payment Exchange; and fraud and security services. • Data Solutions – This segment includes data-driven marketing solutions and hosted solutions, including digital engagement, financial institution profitability reporting and business incorporation services. Through June 2023, this segment also included web hosting and logo design services. We completed the sale of these businesses in June 2023. Further information regarding the divestiture can be found in Note 6. • Promotional Solutions – This segment includes business forms, accessories, advertising specialties and promotional apparel. • Checks – This segment includes printed business and personal checks. The accounting policies of the segments are the same as those described in the Notes to Consolidated Financial Statements included in the 2022 Form 10-K. We allocate corporate costs for our shared services functions to our business segments when the costs are directly attributable to a segment. This includes certain sales and marketing, human resources, supply chain, real estate, finance, information technology and legal costs. Costs that are not directly attributable to a business segment are reported as Corporate operations and consist primarily of marketing, accounting, information technology, facilities, executive management and legal, tax and treasury costs that support the corporate function. Corporate operations also includes other income. All of our segments operate primarily in the U.S., with some operations in Canada. Until the businesses were sold, Data Solutions also had operations in portions of Europe and partners in Central and South America through June 2023 and had operations in Australia through May 2022. Our chief operating decision maker (i.e., our Chief Executive Officer) reviews earnings before interest, taxes, depreciation and amortization (EBITDA) on an adjusted basis for each segment when deciding how to allocate resources and to assess segment operating performance. Adjusted EBITDA for each segment excludes depreciation and amortization expense, interest expense, income tax expense and certain other amounts, which may include, from time to time: asset impairment charges; restructuring and integration costs; share-based compensation expense; acquisition transaction costs; certain legal-related expense; and gains or losses on sales of businesses and long-lived assets. Our Chief Executive Officer does not review segment asset information when making investment or operating decisions regarding our reportable business segments. Segment information for the quarters and six months ended June 30, 2023 and 2022 was as follows: Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2023 2022 2023 2022 Payments: Revenue $ 174,372 $ 171,154 $ 346,355 $ 337,362 Adjusted EBITDA 36,318 34,986 72,873 71,421 Data Solutions: Revenue 72,090 68,587 130,683 138,084 Adjusted EBITDA 17,741 17,509 33,058 34,836 Promotional Solutions: Revenue 138,800 139,276 274,942 272,519 Adjusted EBITDA 21,239 14,596 40,049 31,540 Checks: Revenue 186,424 183,936 365,071 371,003 Adjusted EBITDA 83,585 82,564 160,064 165,360 Total segment: Revenue $ 571,686 $ 562,953 $ 1,117,051 $ 1,118,968 Adjusted EBITDA 158,883 149,655 306,044 303,157 The following table presents a reconciliation of total segment adjusted EBITDA to consolidated income before income taxes: Quarter Ended Six Months Ended (in thousands) 2023 2022 2023 2022 Total segment adjusted EBITDA $ 158,883 $ 149,655 $ 306,044 $ 303,157 Corporate operations (50,511) (47,918) (97,236) (101,801) Depreciation and amortization expense (42,607) (45,047) (86,128) (86,644) Interest expense (31,932) (21,349) (61,948) (41,672) Net income attributable to non-controlling interest 26 35 54 71 Restructuring and integration costs (27,477) (15,208) (41,571) (31,511) Share-based compensation expense (5,484) (4,896) (11,350) (13,038) Acquisition transaction costs — (12) — (61) Certain legal-related benefit (expense) 183 (162) (245) (845) Gain on sale of businesses and facility 21,942 17,527 21,942 17,527 Income before income taxes $ 23,023 $ 32,625 $ 29,562 $ 45,183 The following tables present revenue disaggregated by our product and service offerings: Quarter Ended June 30, 2023 (in thousands) Payments Data Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 186,424 $ 186,424 Merchant services and other payment solutions 113,206 — — — 113,206 Marketing and promotional solutions — — 72,037 — 72,037 Forms and other products — — 66,763 — 66,763 Treasury management solutions 61,166 — — — 61,166 Data-driven marketing solutions — 54,503 — — 54,503 Web and hosted solutions — 17,587 — — 17,587 Total revenue $ 174,372 $ 72,090 $ 138,800 $ 186,424 $ 571,686 Quarter Ended June 30, 2022 (in thousands) Payments Data Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 183,936 $ 183,936 Merchant services and other payment solutions 111,619 — — — 111,619 Marketing and promotional solutions — — 69,872 — 69,872 Forms and other products — — 69,404 — 69,404 Treasury management solutions 59,535 — — — 59,535 Data-driven marketing solutions — 45,470 — — 45,470 Web and hosted solutions — 23,117 — — 23,117 Total revenue $ 171,154 $ 68,587 $ 139,276 $ 183,936 $ 562,953 Six Months Ended June 30, 2023 (in thousands) Payments Data Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 365,071 $ 365,071 Merchant services and other payment solutions 224,715 — — — 224,715 Marketing and promotional solutions — — 142,689 — 142,689 Forms and other products — — 132,253 — 132,253 Treasury management solutions 121,640 — — — 121,640 Data-driven marketing solutions — 93,785 — — 93,785 Web and hosted solutions — 36,898 — — 36,898 Total revenue $ 346,355 $ 130,683 $ 274,942 $ 365,071 $ 1,117,051 Six Months Ended June 30, 2022 (in thousands) Payments Data Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 371,003 $ 371,003 Merchant services and other payment solutions 219,889 — — — 219,889 Marketing and promotional solutions — — 132,799 — 132,799 Forms and other products — — 139,720 — 139,720 Treasury management solutions 117,473 — — — 117,473 Data-driven marketing solutions — 87,313 — — 87,313 Web and hosted solutions — 50,771 — — 50,771 Total revenue $ 337,362 $ 138,084 $ 272,519 $ 371,003 $ 1,118,968 The following tables present revenue disaggregated by geography, based on where items are shipped from or where services are performed: Quarter Ended June 30, 2023 (in thousands) Payments Data Promotional Solutions Checks Consolidated United States $ 162,422 $ 69,211 $ 132,175 $ 179,692 $ 543,500 Foreign, primarily Canada 11,950 2,879 6,625 6,732 28,186 Total revenue $ 174,372 $ 72,090 $ 138,800 $ 186,424 $ 571,686 Quarter Ended June 30, 2022 (in thousands) Payments Data Promotional Solutions Checks Consolidated United States $ 159,939 $ 63,758 $ 132,886 $ 176,692 $ 533,275 Foreign, primarily Canada and Australia 11,215 4,829 6,390 7,244 29,678 Total revenue $ 171,154 $ 68,587 $ 139,276 $ 183,936 $ 562,953 Six Months Ended June 30, 2023 (in thousands) Payments Data Promotional Solutions Checks Consolidated United States $ 321,886 $ 124,956 $ 262,671 $ 351,539 $ 1,061,052 Foreign, primarily Canada 24,469 5,727 12,271 13,532 55,999 Total revenue $ 346,355 $ 130,683 $ 274,942 $ 365,071 $ 1,117,051 Six Months Ended June 30, 2022 (in thousands) Payments Data Promotional Solutions Checks Consolidated United States $ 316,207 $ 124,382 $ 260,128 $ 355,780 $ 1,056,497 Foreign, primarily Canada and Australia 21,155 13,702 12,391 15,223 62,471 Total revenue $ 337,362 $ 138,084 $ 272,519 $ 371,003 $ 1,118,968 |
Consolidated financial statem_2
Consolidated financial statements (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Comparability | Comparability – The consolidated statement of cash flows for the six months ended June 30, 2022 has been modified to conform to the current year presentation. We included proceeds from issuing shares within other financing activities. Previously, this amount was shown separately. |
Supplemental balance sheet an_2
Supplemental balance sheet and cash flow information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Inventories and supplies | Inventories and supplies – Inventories and supplies were comprised of the following: (in thousands) June 30, December 31, Raw materials $ 12,028 $ 11,563 Semi-finished goods 6,098 7,777 Finished goods 37,836 32,938 Supplies 7,062 6,389 Reserve for excess and obsolete items (8,125) (6,400) Inventories and supplies, net of reserve $ 54,899 $ 52,267 Changes in the reserve for excess and obsolete items were as follows for the six months ended June 30, 2023 and 2022: Six Months Ended (in thousands) 2023 2022 Balance, beginning of year $ 6,400 $ 5,132 Amounts charged to expense 2,151 1,516 Write-offs and other (426) (1,211) Balance, end of period $ 8,125 $ 5,437 |
Available-for-sale debt securities | Available-for-sale debt securities – Available-for-sale debt securities were comprised of the following: June 30, 2023 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Funds held for customers: (1) Canadian and provincial government securities $ 9,499 $ — $ (1,097) $ 8,402 Available-for-sale debt securities $ 9,499 $ — $ (1,097) $ 8,402 (1) Funds held for customers, as reported on the consolidated balance sheet as of June 30, 2023, also included cash of $147,392. December 31, 2022 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Cash equivalents: Domestic money market fund $ 5,000 $ — $ — $ 5,000 Funds held for customers: (1) Canadian and provincial government securities 9,190 — (1,064) 8,126 Available-for-sale debt securities $ 14,190 $ — $ (1,064) $ 13,126 (1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2022, also included cash of $294,165. |
Expected maturities of available-for-sale debt securities | Expected maturities of available-for-sale debt securities as of June 30, 2023 were as follows: (in thousands) Fair value Due in one year or less $ 3,394 Due in two to five years 1,723 Due in six to ten years 3,285 Available-for-sale debt securities $ 8,402 |
Revenue in excess of billings | Revenue in excess of billings – Revenue in excess of billings was comprised of the following: (in thousands) June 30, December 31, Conditional right to receive consideration $ 24,608 $ 26,520 Unconditional right to receive consideration (1) 12,628 12,241 Revenue in excess of billings $ 37,236 $ 38,761 (1) Represents revenues that are earned but not currently billable under the related contract terms. |
Intangibles | Intangibles – Intangibles were comprised of the following: June 30, 2023 December 31, 2022 (in thousands) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Internal-use software $ 526,697 $ (379,518) $ 147,179 $ 529,306 $ (395,514) $ 133,792 Customer lists/relationships 487,127 (335,245) 151,882 497,882 (312,986) 184,896 Technology-based intangibles 97,633 (49,560) 48,073 99,613 (47,478) 52,135 Partner relationships 74,134 (10,790) 63,344 74,682 (9,094) 65,588 Trade names 39,367 (22,742) 16,625 44,185 (26,510) 17,675 Software to be sold 36,900 (33,900) 3,000 36,900 (32,007) 4,893 Intangibles $ 1,261,858 $ (831,755) $ 430,103 $ 1,282,568 $ (823,589) $ 458,979 |
Estimated future amortization expense | Based on the intangibles in service as of June 30, 2023, estimated future amortization expense is as follows: (in thousands) Estimated Remainder of 2023 $ 65,253 2024 95,983 2025 67,446 2026 42,837 2027 33,036 |
Acquired intangibles | The following intangibles were capitalized during the six months ended June 30, 2023: (in thousands) Amount Weighted-average amortization period Internal-use software $ 48,829 3 Partner relationships 478 1 Acquired intangibles $ 49,307 3 |
Goodwill | Goodwill – Changes in goodwill by reportable segment and in total were as follows for the six months ended June 30, 2023: (in thousands) Payments Data Solutions Promotional Solutions Checks Total Balance, December 31, 2022: Goodwill, gross $ 896,681 $ 432,984 $ 252,775 $ 434,812 $ 2,017,252 Accumulated impairment charges — (392,168) (193,699) — (585,867) Goodwill, net of accumulated impairment charges 896,681 40,816 59,076 434,812 1,431,385 Currency translation adjustment and other (828) — 31 — (797) Balance, June 30, 2023 $ 895,853 $ 40,816 $ 59,107 $ 434,812 $ 1,430,588 Balance, June 30, 2023: Goodwill, gross $ 895,853 $ 432,984 $ 252,806 $ 434,812 $ 2,016,455 Accumulated impairment charges — (392,168) (193,699) — (585,867) Goodwill, net of accumulated impairment charges $ 895,853 $ 40,816 $ 59,107 $ 434,812 $ 1,430,588 |
Other non-current assets | Other non-current assets – Other non-current assets were comprised of the following: (in thousands) June 30, December 31, Postretirement benefit plan asset $ 82,834 $ 79,343 Cloud computing arrangement implementation costs 67,270 71,547 Prepaid product discounts 46,321 44,824 Deferred contract acquisition costs (1) 24,906 21,300 Loans and notes receivable from distributors, net of allowance for credit losses (2) 12,782 13,259 Other 32,290 30,081 Other non-current assets $ 266,403 $ 260,354 (1) Amortization of deferred contract acquisition costs was $5,315 for the six months ended June 30, 2023 and $3,767 for the six months ended June 30, 2022. (2) Amount includes the non-current portion of loans and notes receivable. The current portion of these receivables is included in other current assets on the consolidated balance sheets and was $970 as of June 30, 2023 and $961 as of December 31, 2022. |
Loans and notes receivable by credit quality Indicator | The following table presents loans and notes receivable from distributors, including the current portion, by credit quality indicator and by year of origination, as of June 30, 2023. There were no write-offs or recoveries recorded during the six months ended June 30, 2023. Loans and notes receivable from distributors amortized cost basis by origination year (in thousands) 2020 2019 2018 Prior Total Risk rating: 1-2 internal grade $ 1,076 $ 400 $ 3,886 $ 9,341 $ 14,703 3-4 internal grade — — — — — Loans and notes receivable $ 1,076 $ 400 $ 3,886 $ 9,341 $ 14,703 |
Changes in prepaid product discounts | Changes in prepaid product discounts during the six months ended June 30, 2023 and 2022 were as follows: Six Months Ended (in thousands) 2023 2022 Balance, beginning of year $ 44,824 $ 56,527 Additions (1) 18,584 9,413 Amortization (17,173) (17,171) Other 86 (86) Balance, end of period $ 46,321 $ 48,683 (1) Prepaid product discounts are generally accrued upon contract execution. Payments for prepaid product discounts were $12,742 for the six months ended June 30, 2023 and $12,285 for the six months ended June 30, 2022. |
Accrued liabilities | Accrued liabilities – Accrued liabilities were comprised of the following: (in thousands) June 30, December 31, Employee bonuses, including sales incentives $ 30,573 $ 57,398 Deferred revenue (1) 29,204 47,012 Operating lease liabilities 13,764 12,780 Customer rebates 12,104 12,153 Prepaid product discounts 10,022 4,179 Wages and payroll liabilities, including vacation 9,460 20,264 Other 50,068 64,618 Accrued liabilities $ 155,195 $ 218,404 (1) Revenue recognized for amounts included in deferred revenue at the beginning of the period was $29,637 for the six months ended June 30, 2023 and $20,238 for the six months ended June 30, 2022. |
Supplemental cash flow information | Supplemental cash flow information – The reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents to the consolidated balance sheets was as follows: (in thousands) June 30, June 30, Cash and cash equivalents $ 39,052 $ 43,262 Restricted cash and restricted cash equivalents included in funds held for customers 147,392 143,702 Non-current restricted cash included in other non-current assets 2,749 2,624 Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 189,193 $ 189,588 |
Trade accounts receivable [Member] | |
Allowance for credit losses | Trade accounts receivable – Net trade accounts receivable was comprised of the following: (in thousands) June 30, December 31, Trade accounts receivable – gross $ 217,705 $ 210,799 Allowance for credit losses (5,438) (4,182) Trade accounts receivable – net (1) $ 212,267 $ 206,617 (1) Includes unbilled receivables of $54,882 as of June 30, 2023 and $43,902 as of December 31, 2022. Changes in the allowance for credit losses for the six months ended June 30, 2023 and 2022 were as follows: Six Months Ended (in thousands) 2023 2022 Balance, beginning of year $ 4,182 $ 4,130 Bad debt expense 3,027 1,449 Write-offs and other (1,771) (1,326) Balance, end of period $ 5,438 $ 4,253 |
Loans and notes receivable [Member] | |
Allowance for credit losses | Changes in the allowance for credit losses related to loans and notes receivable from distributors were as follows for the six months ended June 30, 2023 and 2022: Six Months Ended (in thousands) 2023 2022 Balance, beginning of year $ 1,024 $ 2,830 Bad debt (benefit) expense (73) 264 Other — (402) Balance, end of period $ 951 $ 2,692 |
Earnings per share (Tables)
Earnings per share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per share | The following table reflects the calculation of basic and diluted earnings per share. During each period, certain stock options, as noted below, were excluded from the calculation of diluted earnings per share because their effect would have been antidilutive. Quarter Ended Six Months Ended (in thousands, except per share amounts) 2023 2022 2023 2022 Earnings per share – basic: Net income $ 16,401 $ 22,097 $ 19,181 $ 31,776 Net income attributable to non-controlling interest (26) (35) (54) (71) Net income attributable to Deluxe 16,375 22,062 19,127 31,705 Income allocated to participating securities (12) (16) (19) (23) Income attributable to Deluxe available to common shareholders $ 16,363 $ 22,046 $ 19,108 $ 31,682 Weighted-average shares outstanding 43,524 43,016 43,421 42,907 Earnings per share – basic $ 0.38 $ 0.51 $ 0.44 $ 0.74 Earnings per share – diluted: Net income $ 16,401 $ 22,097 $ 19,181 $ 31,776 Net income attributable to non-controlling interest (26) (35) (54) (71) Net income attributable to Deluxe 16,375 22,062 19,127 31,705 Income allocated to participating securities — (16) (10) (23) Re-measurement of share-based awards classified as liabilities — (307) (19) (345) Income attributable to Deluxe available to common shareholders $ 16,375 $ 21,739 $ 19,098 $ 31,337 Weighted-average shares outstanding 43,524 43,016 43,421 42,907 Dilutive impact of potential common shares 216 269 279 349 Weighted-average shares and potential common shares outstanding 43,740 43,285 43,700 43,256 Earnings per share – diluted $ 0.37 $ 0.50 $ 0.44 $ 0.72 Antidilutive options excluded from calculation 1,553 1,891 1,553 1,891 |
Other comprehensive income (Tab
Other comprehensive income (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Reclassification adjustments | Reclassification adjustments – Information regarding amounts reclassified from accumulated other comprehensive loss to net income was as follows: Accumulated other comprehensive loss components Amounts reclassified from accumulated other comprehensive loss Affected line item in consolidated statements of comprehensive income Quarter Ended Six Months Ended (in thousands) 2023 2022 2023 2022 Amortization of postretirement benefit plan items: Prior service credit $ 355 $ 355 $ 711 $ 711 Other income Net actuarial loss (568) (225) (1,137) (450) Other income Total amortization (213) 130 (426) 261 Other income Tax benefit (expense) 16 (79) 32 (157) Income tax provision Amortization of postretirement benefit plan items, net of tax (197) 51 (394) 104 Net income Realized loss on debt securities — (8) — (8) Revenue Tax benefit — 2 — 2 Income tax provision Realized loss on debt securities, net of tax — (6) — (6) Net income Realized gain (loss) on cash flow hedges 634 (144) 1,204 (464) Interest expense Tax (expense) benefit (169) 38 (321) 123 Income tax provision Realized gain (loss) on cash flow hedges, net of tax 465 (106) 883 (341) Net income Currency translation adjustment (1) (863) (5,550) (863) (5,550) Gain on sale of businesses and facility Total reclassifications, net of tax $ (595) $ (5,611) $ (374) $ (5,793) (1) Relates to the sale of our North American web hosting business during the quarter ended June 30, 2023 and the sale of our Australian web hosting business during the quarter ended June 30, 2022. Further information can be found in Note 6. |
Accumulated other comprehensive loss | Accumulated other comprehensive loss – Changes in the components of accumulated other comprehensive loss during the six months ended June 30, 2023 were as follows: (in thousands) Postretirement benefit plans Net unrealized loss on debt securities (1) Net unrealized gain on cash flow hedges (2) Currency translation adjustment Accumulated other comprehensive loss Balance, December 31, 2022 $ (26,872) $ (909) $ 2,593 $ (12,076) $ (37,264) Other comprehensive (loss) income before reclassifications — (8) 4,858 1,149 5,999 Amounts reclassified from accumulated other comprehensive loss 394 — (883) 863 374 Net current-period other comprehensive income (loss) 394 (8) 3,975 2,012 6,373 Balance, June 30, 2023 $ (26,478) $ (917) $ 6,568 $ (10,064) $ (30,891) (1) Other comprehensive loss before reclassifications is net of an income tax benefit of $3. (2) Other comprehensive income before reclassifications is net of income tax expense of $1,768. |
Derivative financial instrume_2
Derivative financial instruments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative financial instruments | Our derivative instruments were comprised of the following: June 30, December 31, (in thousands) Notional amount Interest rate Maturity Balance sheet location Fair value Fair value June 2023 amortizing interest rate swap: $ 298,729 4.249 % June 2026 Other non-current assets $ 1,358 $ — March 2023 200,000 4.003 % March 2026 Other non-current assets 2,850 — September 2022 interest rate swap: 300,000 3.990 % September 2025 Other non-current assets 4,807 2,409 July 2019 interest rate swap: 200,000 1.798 % March 2023 Other current assets — 1,184 |
Fair value measurements (Tables
Fair value measurements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial instruments | Information regarding the fair values of our financial instruments was as follows: Fair value measurements using June 30, 2023 Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (in thousands) Balance sheet location Carrying value Fair value Measured at fair value through comprehensive income: Available-for-sale debt securities Funds held for customers $ 8,402 $ 8,402 $ — $ 8,402 $ — Derivative assets (Note 7) Other non-current assets 9,015 9,015 — 9,015 — Amortized cost: Cash Cash and cash equivalents 39,052 39,052 39,052 — — Cash Funds held for customers 147,392 147,392 147,392 — — Cash Other non-current assets 2,749 2,749 2,749 — — Loans and notes receivable from distributors Other current assets and other non-current assets 13,752 12,754 — — 12,754 Long-term debt Current portion of long-term debt and long-term debt 1,667,210 1,575,872 — 1,575,872 — Fair value measurements using December 31, 2022 Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (in thousands) Balance sheet location Carrying value Fair value Measured at fair value through comprehensive income: Available-for-sale debt securities Cash and cash equivalents $ 5,000 $ 5,000 $ 5,000 $ — $ — Available-for-sale debt securities Funds held for customers 8,126 8,126 — 8,126 — Derivative assets (Note 7) Other current assets and other non-current assets 3,593 3,593 — 3,593 — Amortized cost: Cash Cash and cash equivalents 35,435 35,435 35,435 — — Cash Funds held for customers 294,165 294,165 294,165 — — Cash Other non-current assets 2,815 2,815 2,815 — — Loans and notes receivable from distributors Other current assets and other non-current assets 14,220 13,315 — — 13,315 Long-term debt Current portion of long-term debt and long-term debt 1,644,276 1,574,417 — 1,574,417 — |
Restructuring and integration_2
Restructuring and integration expense (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and integration expense | Restructuring and integration expense is reflected on the consolidated statements of comprehensive income as follows: Quarter Ended Six Months Ended (in thousands) 2023 2022 2023 2022 Total cost of revenue $ 3,286 $ 26 $ 4,439 $ 85 Operating expenses 24,191 15,182 37,132 31,426 Restructuring and integration expense $ 27,477 $ 15,208 $ 41,571 $ 31,511 Restructuring and integration expense for each period was comprised of the following: Quarter Ended Six Months Ended (in thousands) 2023 2022 2023 2022 External consulting fees $ 12,930 $ 9,141 $ 20,621 $ 17,000 Employee severance benefits 6,161 3,281 6,347 4,406 Internal labor 1,750 2,604 3,872 4,300 Other 6,636 182 10,731 5,805 Restructuring and integration expense $ 27,477 $ 15,208 $ 41,571 $ 31,511 |
Changes in restructuring and integration accruals | Changes in our restructuring and integration accruals were as follows: (in thousands) Employee severance benefits Balance, December 31, 2022 $ 8,528 Charges 6,720 Reversals (373) Payments (7,406) Balance, June 30, 2023 $ 7,469 |
Postretirement benefits (Tables
Postretirement benefits (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Components of net periodic benefit income | Postretirement benefit income is included in other income on the consolidated statements of comprehensive income and consisted of the following components: Quarter Ended Six Months Ended (in thousands) 2023 2022 2023 2022 Interest cost $ 496 $ 280 $ 993 $ 561 Expected return on plan assets (1,830) (1,866) (3,660) (3,731) Amortization of prior service credit (355) (355) (711) (711) Amortization of net actuarial losses 568 225 1,137 450 Net periodic benefit income $ (1,121) $ (1,716) $ (2,241) $ (3,431) |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt outstanding | Debt outstanding was comprised of the following: (in thousands) June 30, December 31, Senior, secured term loan facility $ 958,500 $ 987,375 Senior, unsecured notes 475,000 475,000 Amounts drawn on senior, secured revolving credit facility 247,000 197,000 Total principal amount 1,680,500 1,659,375 Less: unamortized discount and debt issuance costs (13,290) (15,099) Total debt, net of discount and debt issuance costs 1,667,210 1,644,276 Less: current portion of long-term debt, net of debt issuance costs (86,059) (71,748) Long-term debt $ 1,581,151 $ 1,572,528 |
Maturities of long-term debt | Maturities of long-term debt were as follows as of June 30, 2023: (in thousands) Debt obligations Remainder of 2023 $ 43,312 2024 86,625 2025 101,063 2026 974,500 2027 — Thereafter 475,000 Total principal amount $ 1,680,500 |
Leverage ratio requirements | The credit agreement also includes requirements regarding our consolidated total leverage ratio and our consolidated secured leverage ratio, as defined in the credit agreement. These ratios may not equal or exceed the following amounts during the periods indicated: Fiscal Quarter Ending Consolidated total leverage ratio Consolidated secured leverage ratio June 30, 2023 through March 31, 2024 4.50 to 1:00 3.50 to 1:00 June 30, 2024 and each fiscal quarter thereafter 4.25 to 1:00 3.50 to 1:00 |
Credit facility | As of June 30, 2023, amounts available for borrowing under our revolving credit facility were as follows: (in thousands) Available borrowings Revolving credit facility commitment $ 500,000 Amounts drawn on revolving credit facility (247,000) Outstanding letters of credit (1) (8,368) Net available for borrowing as of June 30, 2023 $ 244,632 (1) We use standby letters of credit primarily to collateralize certain obligations related to our self-insured workers' compensation claims, as well as claims for environmental matters, as required by certain states.These letters of credit reduce the amount available for borrowing under our revolving credit facility. |
Business segment information (T
Business segment information (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Business segment information | Segment information for the quarters and six months ended June 30, 2023 and 2022 was as follows: Quarter Ended June 30, Six Months Ended June 30, (in thousands) 2023 2022 2023 2022 Payments: Revenue $ 174,372 $ 171,154 $ 346,355 $ 337,362 Adjusted EBITDA 36,318 34,986 72,873 71,421 Data Solutions: Revenue 72,090 68,587 130,683 138,084 Adjusted EBITDA 17,741 17,509 33,058 34,836 Promotional Solutions: Revenue 138,800 139,276 274,942 272,519 Adjusted EBITDA 21,239 14,596 40,049 31,540 Checks: Revenue 186,424 183,936 365,071 371,003 Adjusted EBITDA 83,585 82,564 160,064 165,360 Total segment: Revenue $ 571,686 $ 562,953 $ 1,117,051 $ 1,118,968 Adjusted EBITDA 158,883 149,655 306,044 303,157 |
Reconciliation of adjusted EBITDA to pretax income | The following table presents a reconciliation of total segment adjusted EBITDA to consolidated income before income taxes: Quarter Ended Six Months Ended (in thousands) 2023 2022 2023 2022 Total segment adjusted EBITDA $ 158,883 $ 149,655 $ 306,044 $ 303,157 Corporate operations (50,511) (47,918) (97,236) (101,801) Depreciation and amortization expense (42,607) (45,047) (86,128) (86,644) Interest expense (31,932) (21,349) (61,948) (41,672) Net income attributable to non-controlling interest 26 35 54 71 Restructuring and integration costs (27,477) (15,208) (41,571) (31,511) Share-based compensation expense (5,484) (4,896) (11,350) (13,038) Acquisition transaction costs — (12) — (61) Certain legal-related benefit (expense) 183 (162) (245) (845) Gain on sale of businesses and facility 21,942 17,527 21,942 17,527 Income before income taxes $ 23,023 $ 32,625 $ 29,562 $ 45,183 |
Revenue disaggregated by product and service offerings | The following tables present revenue disaggregated by our product and service offerings: Quarter Ended June 30, 2023 (in thousands) Payments Data Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 186,424 $ 186,424 Merchant services and other payment solutions 113,206 — — — 113,206 Marketing and promotional solutions — — 72,037 — 72,037 Forms and other products — — 66,763 — 66,763 Treasury management solutions 61,166 — — — 61,166 Data-driven marketing solutions — 54,503 — — 54,503 Web and hosted solutions — 17,587 — — 17,587 Total revenue $ 174,372 $ 72,090 $ 138,800 $ 186,424 $ 571,686 Quarter Ended June 30, 2022 (in thousands) Payments Data Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 183,936 $ 183,936 Merchant services and other payment solutions 111,619 — — — 111,619 Marketing and promotional solutions — — 69,872 — 69,872 Forms and other products — — 69,404 — 69,404 Treasury management solutions 59,535 — — — 59,535 Data-driven marketing solutions — 45,470 — — 45,470 Web and hosted solutions — 23,117 — — 23,117 Total revenue $ 171,154 $ 68,587 $ 139,276 $ 183,936 $ 562,953 Six Months Ended June 30, 2023 (in thousands) Payments Data Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 365,071 $ 365,071 Merchant services and other payment solutions 224,715 — — — 224,715 Marketing and promotional solutions — — 142,689 — 142,689 Forms and other products — — 132,253 — 132,253 Treasury management solutions 121,640 — — — 121,640 Data-driven marketing solutions — 93,785 — — 93,785 Web and hosted solutions — 36,898 — — 36,898 Total revenue $ 346,355 $ 130,683 $ 274,942 $ 365,071 $ 1,117,051 Six Months Ended June 30, 2022 (in thousands) Payments Data Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 371,003 $ 371,003 Merchant services and other payment solutions 219,889 — — — 219,889 Marketing and promotional solutions — — 132,799 — 132,799 Forms and other products — — 139,720 — 139,720 Treasury management solutions 117,473 — — — 117,473 Data-driven marketing solutions — 87,313 — — 87,313 Web and hosted solutions — 50,771 — — 50,771 Total revenue $ 337,362 $ 138,084 $ 272,519 $ 371,003 $ 1,118,968 |
Revenue disaggregated by geography | The following tables present revenue disaggregated by geography, based on where items are shipped from or where services are performed: Quarter Ended June 30, 2023 (in thousands) Payments Data Promotional Solutions Checks Consolidated United States $ 162,422 $ 69,211 $ 132,175 $ 179,692 $ 543,500 Foreign, primarily Canada 11,950 2,879 6,625 6,732 28,186 Total revenue $ 174,372 $ 72,090 $ 138,800 $ 186,424 $ 571,686 Quarter Ended June 30, 2022 (in thousands) Payments Data Promotional Solutions Checks Consolidated United States $ 159,939 $ 63,758 $ 132,886 $ 176,692 $ 533,275 Foreign, primarily Canada and Australia 11,215 4,829 6,390 7,244 29,678 Total revenue $ 171,154 $ 68,587 $ 139,276 $ 183,936 $ 562,953 Six Months Ended June 30, 2023 (in thousands) Payments Data Promotional Solutions Checks Consolidated United States $ 321,886 $ 124,956 $ 262,671 $ 351,539 $ 1,061,052 Foreign, primarily Canada 24,469 5,727 12,271 13,532 55,999 Total revenue $ 346,355 $ 130,683 $ 274,942 $ 365,071 $ 1,117,051 Six Months Ended June 30, 2022 (in thousands) Payments Data Promotional Solutions Checks Consolidated United States $ 316,207 $ 124,382 $ 260,128 $ 355,780 $ 1,056,497 Foreign, primarily Canada and Australia 21,155 13,702 12,391 15,223 62,471 Total revenue $ 337,362 $ 138,084 $ 272,519 $ 371,003 $ 1,118,968 |
Supplemental balance sheet an_3
Supplemental balance sheet and cash flow information (trade accounts receivable, allowance for credit losses) (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | ||
Trade accounts receivable | ||||
Trade accounts receivable - gross | $ 217,705 | $ 210,799 | ||
Allowance for credit losses | (5,438) | (4,182) | ||
Trade accounts receivable - net | [1] | 212,267 | 206,617 | |
Unbilled receivables | 54,882 | $ 43,902 | ||
Changes in allowance for credit losses | ||||
Balance, beginning of year | 4,182 | $ 4,130 | ||
Bad debt expense | 3,027 | 1,449 | ||
Write-offs and other | (1,771) | (1,326) | ||
Balance, end of period | $ 5,438 | $ 4,253 | ||
[1]Includes unbilled receivables of $54,882 as of June 30, 2023 and $43,902 as of December 31, 2022. |
Supplemental balance sheet an_4
Supplemental balance sheet and cash flow information (inventories and supplies) (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Inventories and supplies | |||
Raw materials | $ 12,028 | $ 11,563 | |
Semi-finished goods | 6,098 | 7,777 | |
Finished goods | 37,836 | 32,938 | |
Supplies | 7,062 | 6,389 | |
Reserve for excess and obsolete items | (8,125) | $ (5,437) | (6,400) |
Inventories and supplies | 54,899 | $ 52,267 | |
Changes in reserve for excess and obsolete items | |||
Balance, beginning of year | 6,400 | 5,132 | |
Balance, end of period | 8,125 | 5,437 | |
Reserves for excess and obsolete items | |||
Changes in reserve for excess and obsolete items | |||
Amounts charged to expense | 2,151 | 1,516 | |
Write-offs and other | $ (426) | $ (1,211) |
Supplemental balance sheet an_5
Supplemental balance sheet and cash flow information (available-for-sale debt securities) (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | ||
Available-for-sale debt securities [Line Items] | ||||
Cost | $ 9,499 | $ 14,190 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | (1,097) | (1,064) | ||
Fair value | 8,402 | 13,126 | ||
Expected maturities of available-for-sale debt securities | ||||
Due in one year or less | 3,394 | |||
Due in two to five years | 1,723 | |||
Due in six to ten years | 3,285 | |||
Fair value | 8,402 | 13,126 | ||
Cash and cash equivalents [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cash | 39,052 | 35,435 | ||
Cash and cash equivalents [Member] | Money market securities [Member] | Domestic [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 5,000 | |||
Gross unrealized gains | 0 | |||
Gross unrealized losses | 0 | |||
Fair value | 5,000 | |||
Expected maturities of available-for-sale debt securities | ||||
Fair value | 5,000 | |||
Funds held for customers [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 9,499 | [1] | 14,190 | [2] |
Gross unrealized gains | 0 | [1] | 0 | [2] |
Gross unrealized losses | (1,097) | [1] | (1,064) | [2] |
Fair value | 8,402 | [1] | 13,126 | [2] |
Cash | 147,392 | 294,165 | ||
Expected maturities of available-for-sale debt securities | ||||
Fair value | 8,402 | [1] | 13,126 | [2] |
Funds held for customers [Member] | Canadian and provincial government securities [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 9,499 | 9,190 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | (1,097) | (1,064) | ||
Fair value | 8,402 | 8,126 | ||
Expected maturities of available-for-sale debt securities | ||||
Fair value | $ 8,402 | $ 8,126 | ||
[1]Funds held for customers, as reported on the consolidated balance sheet as of June 30, 2023, also included cash of $147,392.[2]Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2022, also included cash of $294,165. |
Supplemental balance sheet an_6
Supplemental balance sheet and cash flow information (revenue in excess of billings) (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | |
Revenue in excess of billings | |||
Conditional right to receive consideration | $ 24,608 | $ 26,520 | |
Unconditional right to receive consideration | [1] | 12,628 | 12,241 |
Revenue in excess of billings | $ 37,236 | $ 38,761 | |
[1]Represents revenues that are earned but not currently billable under the related contract terms. |
Supplemental balance sheet an_7
Supplemental balance sheet and cash flow information (intangibles) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Amortizable intangibles [Line Items] | |||||
Gross carrying amount | $ 1,261,858 | $ 1,261,858 | $ 1,282,568 | ||
Accumulated amortization | (831,755) | (831,755) | (823,589) | ||
Net carrying amount | 430,103 | 430,103 | 458,979 | ||
Acquired intangibles | $ 49,307 | ||||
Acquired intangibles, weighted-average amortization period (in years) | 3 years | ||||
Amortization of intangibles | 36,859 | $ 38,339 | $ 75,076 | $ 74,498 | |
Estimated future amortization expense | |||||
Remainder of 2023 | 65,253 | 65,253 | |||
2024 | 95,983 | 95,983 | |||
2025 | 67,446 | 67,446 | |||
2026 | 42,837 | 42,837 | |||
2027 | 33,036 | 33,036 | |||
Internal-use software [Member] | |||||
Amortizable intangibles [Line Items] | |||||
Gross carrying amount | 526,697 | 526,697 | 529,306 | ||
Accumulated amortization | (379,518) | (379,518) | (395,514) | ||
Net carrying amount | 147,179 | 147,179 | 133,792 | ||
Acquired intangibles | $ 48,829 | ||||
Acquired intangibles, weighted-average amortization period (in years) | 3 years | ||||
Customer lists/relationships [Member] | |||||
Amortizable intangibles [Line Items] | |||||
Gross carrying amount | 487,127 | $ 487,127 | 497,882 | ||
Accumulated amortization | (335,245) | (335,245) | (312,986) | ||
Net carrying amount | 151,882 | 151,882 | 184,896 | ||
Technology-based intangibles [Member] | |||||
Amortizable intangibles [Line Items] | |||||
Gross carrying amount | 97,633 | 97,633 | 99,613 | ||
Accumulated amortization | (49,560) | (49,560) | (47,478) | ||
Net carrying amount | 48,073 | 48,073 | 52,135 | ||
Partner relationships [Member] | |||||
Amortizable intangibles [Line Items] | |||||
Gross carrying amount | 74,134 | 74,134 | 74,682 | ||
Accumulated amortization | (10,790) | (10,790) | (9,094) | ||
Net carrying amount | 63,344 | 63,344 | 65,588 | ||
Acquired intangibles | $ 478 | ||||
Acquired intangibles, weighted-average amortization period (in years) | 1 year | ||||
Trade names [Member] | |||||
Amortizable intangibles [Line Items] | |||||
Gross carrying amount | 39,367 | $ 39,367 | 44,185 | ||
Accumulated amortization | (22,742) | (22,742) | (26,510) | ||
Net carrying amount | 16,625 | 16,625 | 17,675 | ||
Software to be sold [Member] | |||||
Amortizable intangibles [Line Items] | |||||
Gross carrying amount | 36,900 | 36,900 | 36,900 | ||
Accumulated amortization | (33,900) | (33,900) | (32,007) | ||
Net carrying amount | $ 3,000 | $ 3,000 | $ 4,893 |
Supplemental balance sheet an_8
Supplemental balance sheet and cash flow information (goodwill) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning of year | $ 2,017,252 |
Accumulated impairment charges, beginning of year | (585,867) |
Goodwill, net of accumulated impairment charges, beginning of year | 1,431,385 |
Currency translation adjustment and other | (797) |
Goodwill, gross, end of period | 2,016,455 |
Accumulated impairment charges, end of period | (585,867) |
Goodwill, net of accumulated impairment charges, end of period | 1,430,588 |
Reportable business segments [Member] | Payments [Member] | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning of year | 896,681 |
Accumulated impairment charges, beginning of year | 0 |
Goodwill, net of accumulated impairment charges, beginning of year | 896,681 |
Currency translation adjustment and other | (828) |
Goodwill, gross, end of period | 895,853 |
Accumulated impairment charges, end of period | 0 |
Goodwill, net of accumulated impairment charges, end of period | 895,853 |
Reportable business segments [Member] | Data Solutions [Member] | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning of year | 432,984 |
Accumulated impairment charges, beginning of year | (392,168) |
Goodwill, net of accumulated impairment charges, beginning of year | 40,816 |
Goodwill, gross, end of period | 432,984 |
Accumulated impairment charges, end of period | (392,168) |
Goodwill, net of accumulated impairment charges, end of period | 40,816 |
Reportable business segments [Member] | Promotional Solutions [Member] | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning of year | 252,775 |
Accumulated impairment charges, beginning of year | (193,699) |
Goodwill, net of accumulated impairment charges, beginning of year | 59,076 |
Currency translation adjustment and other | 31 |
Goodwill, gross, end of period | 252,806 |
Accumulated impairment charges, end of period | (193,699) |
Goodwill, net of accumulated impairment charges, end of period | 59,107 |
Reportable business segments [Member] | Checks [Member] | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning of year | 434,812 |
Accumulated impairment charges, beginning of year | 0 |
Goodwill, net of accumulated impairment charges, beginning of year | 434,812 |
Goodwill, gross, end of period | 434,812 |
Accumulated impairment charges, end of period | 0 |
Goodwill, net of accumulated impairment charges, end of period | $ 434,812 |
Supplemental balance sheet an_9
Supplemental balance sheet and cash flow information (other non-current assets) (Details) - USD ($) $ in Thousands | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Other non-current assets | |||||
Postretirement benefit plan asset | $ 82,834 | $ 79,343 | |||
Cloud computing arrangements implementation costs | 67,270 | 71,547 | |||
Prepaid product discounts | 46,321 | $ 48,683 | 44,824 | $ 56,527 | |
Deferred contract acquisition costs | [1] | 24,906 | 21,300 | ||
Loans and notes receivable from distributors, net of allowance for credit losses | [2] | 12,782 | 13,259 | ||
Other | 32,290 | 30,081 | |||
Other non-current assets | 266,403 | 260,354 | |||
Amortization of deferred contract acquisition costs | 5,315 | 3,767 | |||
Loans and notes receivable, current | 970 | $ 961 | |||
Loans and notes receivable from distributors [Member] | |||||
Loans and notes receivable from distributors, allowance for credit losses [Line Items] | |||||
Balance, beginning of year | 1,024 | 2,830 | |||
Bad debt (benefit) expense | (73) | 264 | |||
Other | 0 | (402) | |||
Balance, end of period | 951 | $ 2,692 | |||
Write-offs | 0 | ||||
Recoveries | 0 | ||||
Loans and notes receivable from distributors, credit quality information | |||||
2020 | 1,076 | ||||
2019 | 400 | ||||
2018 | 3,886 | ||||
Prior | 9,341 | ||||
Total | 14,703 | ||||
Loans and notes receivable from distributors [Member] | 1-2 internal grade member [Member] | |||||
Loans and notes receivable from distributors, credit quality information | |||||
2020 | 1,076 | ||||
2019 | 400 | ||||
2018 | 3,886 | ||||
Prior | 9,341 | ||||
Total | 14,703 | ||||
Loans and notes receivable from distributors [Member] | 3-4 internal grade [Member] | |||||
Loans and notes receivable from distributors, credit quality information | |||||
2020 | 0 | ||||
2019 | 0 | ||||
2018 | 0 | ||||
Prior | 0 | ||||
Total | $ 0 | ||||
[1]Amortization of deferred contract acquisition costs was $5,315 for the six months ended June 30, 2023 and $3,767 for the six months ended June 30, 2022.[2]Amount includes the non-current portion of loans and notes receivable. The current portion of these receivables is included in other current assets on the consolidated balance sheets and was $970 as of June 30, 2023 and $961 as of December 31, 2022. |
Supplemental balance sheet a_10
Supplemental balance sheet and cash flow information (other) (Details) - USD ($) $ in Thousands | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Prepaid product discounts [Roll Forward] | |||||
Balance, beginning of year | $ 44,824 | $ 56,527 | |||
Additions | [1] | 18,584 | 9,413 | ||
Amortization | (17,173) | (17,171) | |||
Other | 86 | (86) | |||
Balance, end of period | 46,321 | 48,683 | |||
Prepaid product discount payments | 12,742 | 12,285 | |||
Accrued liabilities | |||||
Employee bonuses, including sales incentives | 30,573 | $ 57,398 | |||
Deferred revenue | [2] | 29,204 | 47,012 | ||
Operating lease liabilities | 13,764 | 12,780 | |||
Customer rebates | 12,104 | 12,153 | |||
Prepaid product discounts | 10,022 | 4,179 | |||
Wages and payroll liabilities, including vacation | 9,460 | 20,264 | |||
Other | 50,068 | 64,618 | |||
Accrued liabilities | 155,195 | 218,404 | |||
Deferred revenue recognized | 29,637 | 20,238 | |||
Supplemental cash flow information | |||||
Cash and cash equivalents | 39,052 | 43,262 | 40,435 | ||
Non-current restricted cash included in other non-current assets | 2,749 | 2,624 | 2,815 | ||
Total cash, cash equivalents, restricted cash and restricted cash equivalents | 189,193 | 189,588 | $ 337,415 | $ 285,491 | |
Funds held for customers [Member] | |||||
Supplemental cash flow information | |||||
Restricted cash and restricted cash equivalents included in funds held for customers | $ 147,392 | $ 143,702 | |||
[1]Prepaid product discounts are generally accrued upon contract execution. Payments for prepaid product discounts were $12,742 for the six months ended June 30, 2023 and $12,285 for the six months ended June 30, 2022.[2]Revenue recognized for amounts included in deferred revenue at the beginning of the period was $29,637 for the six months ended June 30, 2023 and $20,238 for the six months ended June 30, 2022. |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings per share - basic: | ||||
Net income | $ 16,401 | $ 22,097 | $ 19,181 | $ 31,776 |
Net income attributable to non-controlling interest | (26) | (35) | (54) | (71) |
Net income attributable to Deluxe | 16,375 | 22,062 | 19,127 | 31,705 |
Income allocated to participating securities | (12) | (16) | (19) | (23) |
Income attributable to Deluxe available to common shareholders | $ 16,363 | $ 22,046 | $ 19,108 | $ 31,682 |
Weighted-average shares outstanding | 43,524 | 43,016 | 43,421 | 42,907 |
Earnings per share - basic | $ 0.38 | $ 0.51 | $ 0.44 | $ 0.74 |
Earnings per share - diluted: | ||||
Net income | $ 16,401 | $ 22,097 | $ 19,181 | $ 31,776 |
Net income attributable to non-controlling interest | (26) | (35) | (54) | (71) |
Net income attributable to Deluxe | 16,375 | 22,062 | 19,127 | 31,705 |
Income allocated to participating securities | 0 | (16) | (10) | (23) |
Re-measurement of share-based awards classified as liabilities | 0 | (307) | (19) | (345) |
Income attributable to Deluxe available to common shareholders | $ 16,375 | $ 21,739 | $ 19,098 | $ 31,337 |
Weighted-average shares outstanding | 43,524 | 43,016 | 43,421 | 42,907 |
Dilutive impact of potential common shares | 216 | 269 | 279 | 349 |
Weighted-average shares and potential common shares outstanding | 43,740 | 43,285 | 43,700 | 43,256 |
Earnings per share - diluted | $ 0.37 | $ 0.50 | $ 0.44 | $ 0.72 |
Antidilutive options excluded from calculation | 1,553 | 1,891 | 1,553 | 1,891 |
Other comprehensive income (rec
Other comprehensive income (reclassification adjustments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Reclassifications from accumulated other comprehensive loss | ||||
Prior service credit | $ 355 | $ 355 | $ 711 | $ 711 |
Net actuarial loss | (568) | (225) | (1,137) | (450) |
Total amortization | (213) | 130 | (426) | 261 |
Tax benefit (expense) | 16 | (79) | 32 | (157) |
Amortization of postretirement benefit plan items, net of tax | (197) | 51 | (394) | 104 |
Realized loss on debt securities | 0 | (8) | 0 | (8) |
Tax benefit | 0 | 2 | 0 | 2 |
Realized loss on debt securities, net of tax | 0 | (6) | 0 | (6) |
Realized gain (loss) on cash flow hedges | 634 | (144) | 1,204 | (464) |
Tax (expense) benefit | (169) | 38 | (321) | 123 |
Realized gain (loss) on cash flow hedges, net of tax | 465 | (106) | 883 | (341) |
Foreign currency translation adjustment | 863 | 5,550 | 863 | 5,550 |
Total reclassifications, net of tax | $ (595) | $ (5,611) | $ (374) | $ (5,793) |
Other comprehensive income (acc
Other comprehensive income (accumulated other comprehensive loss) (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 USD ($) | ||
Postretirement benefit plans [Member] | ||
Accumulated other comprehensive loss [Line Items] | ||
Balance, December 31, 2022 | $ (26,872) | |
Other comprehensive (loss) income before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive loss | 394 | |
Net current-period other comprehensive income (loss) | 394 | |
Balance, June 30, 2023 | (26,478) | |
Net unrealized loss on debt securities [Member] | ||
Accumulated other comprehensive loss [Line Items] | ||
Balance, December 31, 2022 | (909) | |
Other comprehensive (loss) income before reclassifications | (8) | [1] |
Amounts reclassified from accumulated other comprehensive loss | 0 | |
Net current-period other comprehensive income (loss) | (8) | |
Balance, June 30, 2023 | (917) | |
Unrealized gain on debt securities arising during the period, tax benefit | 3 | |
Net unrealized gain on cash flow hedges [Member] | ||
Accumulated other comprehensive loss [Line Items] | ||
Balance, December 31, 2022 | 2,593 | |
Other comprehensive (loss) income before reclassifications | 4,858 | [2] |
Amounts reclassified from accumulated other comprehensive loss | (883) | |
Net current-period other comprehensive income (loss) | 3,975 | |
Balance, June 30, 2023 | 6,568 | |
Unrealized loss on cash flow hedge arising during the period, tax expense | 1,768 | |
Currency translation adjustment [Member] | ||
Accumulated other comprehensive loss [Line Items] | ||
Balance, December 31, 2022 | (12,076) | |
Other comprehensive (loss) income before reclassifications | 1,149 | |
Amounts reclassified from accumulated other comprehensive loss | 863 | |
Net current-period other comprehensive income (loss) | 2,012 | |
Balance, June 30, 2023 | (10,064) | |
Accumulated other comprehensive loss [Member] | ||
Accumulated other comprehensive loss [Line Items] | ||
Balance, December 31, 2022 | (37,264) | |
Other comprehensive (loss) income before reclassifications | 5,999 | |
Amounts reclassified from accumulated other comprehensive loss | 374 | |
Net current-period other comprehensive income (loss) | 6,373 | |
Balance, June 30, 2023 | $ (30,891) | |
[1]Other comprehensive loss before reclassifications is net of an income tax benefit of $3[2]Other comprehensive income before reclassifications is net of income tax expense of $1,768. |
Divestitures (Details)
Divestitures (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Divestitures [Line Items] | |||||||
Proceeds from sale of businesses and facility | $ 27,880 | $ 23,875 | |||||
Total revenue | $ 571,686 | $ 562,953 | 1,117,051 | 1,118,968 | |||
Gain on sale of businesses and facility | 21,942 | 17,527 | $ 21,942 | $ 17,527 | |||
North American web hosting and logo design businesses [Member] | |||||||
Divestitures [Line Items] | |||||||
Proceeds from sale of businesses and facility | 27,880 | ||||||
Total revenue | $ 66,000 | ||||||
Gain on sale of businesses and facility | $ 21,942 | ||||||
North American web hosting and logo design businesses [Member] | Forecast [Member] | |||||||
Divestitures [Line Items] | |||||||
Proceeds from sale of businesses and facility | $ 31,230 | ||||||
Australian web hosting business [Member] | |||||||
Divestitures [Line Items] | |||||||
Proceeds from sale of businesses and facility | 17,620 | ||||||
Total revenue | $ 23,766 | ||||||
Gain on sale of businesses and facility | 15,166 | ||||||
Promotional Solutions business exits [Member] | |||||||
Divestitures [Line Items] | |||||||
Total revenue | $ 29,000 | ||||||
Lancaster, California facility [Member] | |||||||
Divestitures [Line Items] | |||||||
Proceeds from sale of businesses and facility | 6,929 | ||||||
Gain on sale of businesses and facility | $ 2,361 |
Derivative financial instrume_3
Derivative financial instruments (Details) - USD ($) $ in Thousands | Jun. 20, 2023 | Jun. 30, 2023 | Mar. 20, 2023 | Dec. 31, 2022 | Sep. 20, 2022 | Jul. 19, 2019 |
Interest rate swap June 2023 [Member] | ||||||
Derivative [Line Items] | ||||||
Contract term | 3 years | |||||
Notional amount | $ 298,729 | |||||
Interest rate | 4.249% | |||||
Fair value asset / (liability), other non-current assets | $ 1,358 | |||||
Interest rate swap March 2023 [Member] | ||||||
Derivative [Line Items] | ||||||
Notional amount | $ 200,000 | |||||
Interest rate | 4.003% | |||||
Fair value asset / (liability), other non-current assets | 2,850 | |||||
Interest rate swap September 2022 [Member] | ||||||
Derivative [Line Items] | ||||||
Notional amount | $ 300,000 | |||||
Interest rate | 3.99% | |||||
Fair value asset / (liability), other non-current assets | $ 4,807 | $ 2,409 | ||||
Interest rate swap July 2019 [Member] | ||||||
Derivative [Line Items] | ||||||
Notional amount | $ 200,000 | |||||
Interest rate | 1.798% | |||||
Fair value asset / (liability), other current assets | $ 1,184 |
Fair value measurements (Detail
Fair value measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | ||
Fair value measurements [Line Items] | |||||
Available-for-sale debt securities (funds held for customers) | $ 8,402 | $ 13,126 | |||
Derivative assets (Note 7) [Extensible Enumeration] | Other non-current assets | Assets | |||
Derivative assets (Note 7) | $ 9,015 | $ 3,593 | |||
Cash, fair value | 5,000 | ||||
Restricted cash, carrying value | 2,749 | 2,815 | $ 2,624 | ||
Restricted cash, fair value | 2,749 | 2,815 | |||
Recurring fair value measurements [Member] | |||||
Fair value measurements [Line Items] | |||||
Derivative assets (Note 7) | 9,015 | 3,593 | |||
Quoted prices in active markets for identical assets (Level 1) [Member] | |||||
Fair value measurements [Line Items] | |||||
Restricted cash, fair value | 2,749 | 2,815 | |||
Significant other observable inputs (Level 2) [Member] | Recurring fair value measurements [Member] | |||||
Fair value measurements [Line Items] | |||||
Derivative assets (Note 7) | 9,015 | 3,593 | |||
Funds held for customers [Member] | |||||
Fair value measurements [Line Items] | |||||
Available-for-sale debt securities (funds held for customers) | 8,402 | [1] | 13,126 | [2] | |
Cash, carrying value | 147,392 | 294,165 | |||
Cash, fair value | 147,392 | 294,165 | |||
Funds held for customers [Member] | Foreign debt securities [Member] | |||||
Fair value measurements [Line Items] | |||||
Available-for-sale debt securities (funds held for customers) | 8,402 | 8,126 | |||
Funds held for customers [Member] | Foreign debt securities [Member] | Recurring fair value measurements [Member] | |||||
Fair value measurements [Line Items] | |||||
Available-for-sale debt securities (funds held for customers) | 8,402 | 8,126 | |||
Funds held for customers [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | |||||
Fair value measurements [Line Items] | |||||
Cash, fair value | 147,392 | 294,165 | |||
Funds held for customers [Member] | Significant other observable inputs (Level 2) [Member] | Foreign debt securities [Member] | Recurring fair value measurements [Member] | |||||
Fair value measurements [Line Items] | |||||
Available-for-sale debt securities (funds held for customers) | 8,402 | 8,126 | |||
Other current and noncurrent assets [Member] | |||||
Fair value measurements [Line Items] | |||||
Loans and notes receivable from distributors | 13,752 | 14,220 | |||
Loans and notes receivable from distributors, fair value | 12,754 | 13,315 | |||
Other current and noncurrent assets [Member] | Significant unobservable inputs (Level 3) [Member] | |||||
Fair value measurements [Line Items] | |||||
Loans and notes receivable from distributors, fair value | 12,754 | 13,315 | |||
Cash and cash equivalents [Member] | |||||
Fair value measurements [Line Items] | |||||
Cash, carrying value | 39,052 | 35,435 | |||
Cash, fair value | 39,052 | 35,435 | |||
Cash and cash equivalents [Member] | Money market securities [Member] | |||||
Fair value measurements [Line Items] | |||||
Cash equivalents | 5,000 | ||||
Cash and cash equivalents [Member] | Money market securities [Member] | Recurring fair value measurements [Member] | |||||
Fair value measurements [Line Items] | |||||
Cash, fair value | 5,000 | ||||
Cash and cash equivalents [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | |||||
Fair value measurements [Line Items] | |||||
Cash, fair value | 39,052 | 35,435 | |||
Cash and cash equivalents [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Money market securities [Member] | Recurring fair value measurements [Member] | |||||
Fair value measurements [Line Items] | |||||
Cash, fair value | 5,000 | ||||
Current portion of long-term debt and long-term debt [Member] | |||||
Fair value measurements [Line Items] | |||||
Long-term debt | 1,667,210 | 1,644,276 | |||
Long-term debt, fair value | 1,575,872 | 1,574,417 | |||
Current portion of long-term debt and long-term debt [Member] | Significant other observable inputs (Level 2) [Member] | |||||
Fair value measurements [Line Items] | |||||
Long-term debt, fair value | $ 1,575,872 | $ 1,574,417 | |||
[1]Funds held for customers, as reported on the consolidated balance sheet as of June 30, 2023, also included cash of $147,392.[2]Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2022, also included cash of $294,165. |
Restructuring and integration_3
Restructuring and integration expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | $ 27,477 | $ 15,208 | $ 41,571 | $ 31,511 |
Total cost of revenue [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | 3,286 | 26 | 4,439 | 85 |
Operating expenses [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | 24,191 | 15,182 | 37,132 | 31,426 |
External consulting fees [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | 12,930 | 9,141 | 20,621 | 17,000 |
Employee severance benefits [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | 6,720 | |||
Restructuring charges, net | 6,161 | 3,281 | 6,347 | 4,406 |
Internal labor [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | 1,750 | 2,604 | 3,872 | 4,300 |
Other [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | $ 6,636 | $ 182 | $ 10,731 | $ 5,805 |
Restructuring and integration_4
Restructuring and integration expense (accruals) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||||
Charges | $ 27,477 | $ 15,208 | $ 41,571 | $ 31,511 |
Employee severance benefits [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Balance, December 31, 2022 | 8,528 | |||
Charges | 6,720 | |||
Reversals | (373) | |||
Payments | (7,406) | |||
Balance, June 30, 2023 | $ 7,469 | $ 7,469 |
Income tax provision (Details)
Income tax provision (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Reconciliation of effective income tax rate | ||
Effective income tax rate | 35.10% | 22.30% |
Business exit activities | 5.30% | |
Tax impact of share-based compensation | (4.90%) | |
Return to provision adjustments | 2.70% |
Postretirement benefits (Detail
Postretirement benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Net periodic benefit income | ||||
Interest cost | $ 496 | $ 280 | $ 993 | $ 561 |
Expected return on plan assets | (1,830) | (1,866) | (3,660) | (3,731) |
Amortization of prior service credit | (355) | (355) | (711) | (711) |
Amortization of net actuarial losses | 568 | 225 | 1,137 | 450 |
Net periodic benefit income | $ (1,121) | $ (1,716) | $ (2,241) | $ (3,431) |
Debt (Details)
Debt (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | 24 Months Ended | 33 Months Ended | |||||||||||||
Jun. 01, 2021 USD ($) | Mar. 31, 2026 USD ($) | Dec. 31, 2025 USD ($) | Sep. 30, 2025 USD ($) | Jun. 30, 2025 USD ($) | Mar. 31, 2025 USD ($) | Dec. 31, 2024 USD ($) | Sep. 30, 2024 USD ($) | Jun. 30, 2024 USD ($) | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Mar. 31, 2024 | Mar. 31, 2026 | Mar. 31, 2026 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Debt instruments [Line Items] | |||||||||||||||||
Total principal amount | $ 1,680,500 | $ 1,659,375 | |||||||||||||||
Less: unamortized discount and debt issuance costs | (13,290) | (15,099) | |||||||||||||||
Total debt, net of discount and debt issuance costs | 1,667,210 | 1,644,276 | |||||||||||||||
Less: current portion of long-term debt, net of debt issuance costs | (86,059) | (71,748) | |||||||||||||||
Long-term debt | 1,581,151 | $ 1,572,528 | |||||||||||||||
Maturities of long-term debt | |||||||||||||||||
Remainder of 2023 | 43,312 | ||||||||||||||||
2024 | 86,625 | ||||||||||||||||
2025 | 101,063 | ||||||||||||||||
2026 | 974,500 | ||||||||||||||||
2027 | 0 | ||||||||||||||||
Thereafter | 475,000 | ||||||||||||||||
Credit facility | |||||||||||||||||
Revolving credit facility, commitment | $ 500,000 | $ 500,000 | |||||||||||||||
Weighted-average interest rate at period end | 6.72% | 6.07% | |||||||||||||||
Outstanding letters of credit | $ (8,368) | ||||||||||||||||
Net available for borrowing as of June 30, 2023 | 244,632 | ||||||||||||||||
Forecast [Member] | |||||||||||||||||
Credit facility | |||||||||||||||||
Maximum consolidated total leverage ratio | 4.50 | 4.25 | |||||||||||||||
Maximum consolidated secured leverage ratio | 3.50 | 3.50 | |||||||||||||||
Minimum interest coverage ratio | 3 | ||||||||||||||||
Consolidated total leverage ratio limiting permitted payments | 2.75 | ||||||||||||||||
Permitted payments | $ 60,000 | ||||||||||||||||
Senior, secured term loan facility [Member] | |||||||||||||||||
Debt instruments [Line Items] | |||||||||||||||||
Total principal amount | 1,155,000 | 958,500 | $ 987,375 | ||||||||||||||
Senior, secured term loan facility [Member] | Forecast [Member] | |||||||||||||||||
Credit facility | |||||||||||||||||
Repayment amount | $ 28,875 | $ 28,875 | $ 28,875 | $ 21,656 | $ 21,656 | $ 21,656 | $ 21,656 | $ 21,656 | $ 21,656 | $ 21,656 | $ 21,656 | ||||||
Senior, unsecured notes [Member] | |||||||||||||||||
Debt instruments [Line Items] | |||||||||||||||||
Total principal amount | $ 500,000 | 475,000 | 475,000 | ||||||||||||||
Senior, unsecured notes | |||||||||||||||||
Stated interest rate | 8% | ||||||||||||||||
Proceeds from debt offering, net of discount and debt issuance costs | $ 490,741 | ||||||||||||||||
Effective interest rate | 8.30% | ||||||||||||||||
Debt settled | 25,000 | ||||||||||||||||
Senior, secured revolving credit facility [Member] | |||||||||||||||||
Debt instruments [Line Items] | |||||||||||||||||
Total principal amount | $ 247,000 | $ 197,000 | |||||||||||||||
Swingline sub-facility [Member] | |||||||||||||||||
Credit facility | |||||||||||||||||
Revolving credit facility, commitment | $ 40,000 | ||||||||||||||||
Letter of credit sub-facility [Member] | |||||||||||||||||
Credit facility | |||||||||||||||||
Revolving credit facility, commitment | $ 25,000 | ||||||||||||||||
Minimum [Member] | |||||||||||||||||
Credit facility | |||||||||||||||||
Interest rate margin on variable-rate debt | 1.50% | ||||||||||||||||
Revolving credit facility, commitment fee | 0.25% | ||||||||||||||||
Maximum [Member] | |||||||||||||||||
Credit facility | |||||||||||||||||
Interest rate margin on variable-rate debt | 2.50% | ||||||||||||||||
Revolving credit facility, commitment fee | 0.35% |
Other commitments and conting_2
Other commitments and contingencies (Details) - USD ($) $ in Thousands | Jul. 29, 2022 | Jun. 30, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | |||
Self-insurance liabilities | $ 8,643 | $ 9,661 | |
Litigation settlement, amount awarded | $ 4,900 | ||
Litigation settlement, period | 7 days |
Shareholders' equity (Details)
Shareholders' equity (Details) - USD ($) shares in Thousands, $ in Thousands | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Oct. 24, 2018 | |
Stockholders' Equity Note [Abstract] | |||
Amount remaining under share repurchase authorization | $ 287,452 | ||
Common shares repurchased (in shares) | 0 | 0 | |
Share repurchase program, authorized amount | $ 500,000 |
Business segment information (D
Business segment information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) segment | |
Business segment information [Line Items] | ||||
Number of reportable business segments | segment | 4 | 4 | ||
Revenue | $ 571,686 | $ 562,953 | $ 1,117,051 | $ 1,118,968 |
Depreciation and amortization | (42,607) | (45,047) | (86,128) | (86,644) |
Interest expense | (31,932) | (21,349) | (61,948) | (41,672) |
Net income attributable to non-controlling interest | 26 | 35 | 54 | 71 |
Restructuring and integration costs | (27,477) | (15,208) | (41,571) | (31,511) |
Share-based compensation expense | (5,484) | (4,896) | (11,350) | (13,038) |
Acquisition transaction costs | 0 | (12) | 0 | (61) |
Certain legal-related benefit (expense) | 183 | (162) | (245) | (845) |
Gain on sale of businesses and facility | 21,942 | 17,527 | 21,942 | 17,527 |
Income before income taxes | 23,023 | 32,625 | 29,562 | 45,183 |
Reportable business segments [Member] | ||||
Business segment information [Line Items] | ||||
Revenue | 571,686 | 562,953 | 1,117,051 | 1,118,968 |
Adjusted EBITDA | 158,883 | 149,655 | 306,044 | 303,157 |
Reportable business segments [Member] | Payments [Member] | ||||
Business segment information [Line Items] | ||||
Revenue | 174,372 | 171,154 | 346,355 | 337,362 |
Adjusted EBITDA | 36,318 | 34,986 | 72,873 | 71,421 |
Reportable business segments [Member] | Data Solutions [Member] | ||||
Business segment information [Line Items] | ||||
Revenue | 72,090 | 68,587 | 130,683 | 138,084 |
Adjusted EBITDA | 17,741 | 17,509 | 33,058 | 34,836 |
Reportable business segments [Member] | Promotional Solutions [Member] | ||||
Business segment information [Line Items] | ||||
Revenue | 138,800 | 139,276 | 274,942 | 272,519 |
Adjusted EBITDA | 21,239 | 14,596 | 40,049 | 31,540 |
Reportable business segments [Member] | Checks [Member] | ||||
Business segment information [Line Items] | ||||
Revenue | 186,424 | 183,936 | 365,071 | 371,003 |
Adjusted EBITDA | 83,585 | 82,564 | 160,064 | 165,360 |
Corporate [Member] | ||||
Business segment information [Line Items] | ||||
Adjusted EBITDA | $ (50,511) | $ (47,918) | $ (97,236) | $ (101,801) |
Business segment information _2
Business segment information (disaggregated revenue information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregated revenue information | ||||
Revenue | $ 571,686 | $ 562,953 | $ 1,117,051 | $ 1,118,968 |
Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 571,686 | 562,953 | 1,117,051 | 1,118,968 |
United States [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 543,500 | 533,275 | 1,061,052 | 1,056,497 |
Foreign, primarily Canada [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 28,186 | 29,678 | 55,999 | 62,471 |
Payments [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 174,372 | 171,154 | 346,355 | 337,362 |
Payments [Member] | United States [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 162,422 | 159,939 | 321,886 | 316,207 |
Payments [Member] | Foreign, primarily Canada [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 11,950 | 11,215 | 24,469 | 21,155 |
Data Solutions [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 72,090 | 68,587 | 130,683 | 138,084 |
Data Solutions [Member] | United States [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 69,211 | 63,758 | 124,956 | 124,382 |
Data Solutions [Member] | Foreign, primarily Canada [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 2,879 | 4,829 | 5,727 | 13,702 |
Promotional Solutions [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 138,800 | 139,276 | 274,942 | 272,519 |
Promotional Solutions [Member] | United States [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 132,175 | 132,886 | 262,671 | 260,128 |
Promotional Solutions [Member] | Foreign, primarily Canada [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 6,625 | 6,390 | 12,271 | 12,391 |
Checks [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 186,424 | 183,936 | 365,071 | 371,003 |
Checks [Member] | United States [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 179,692 | 176,692 | 351,539 | 355,780 |
Checks [Member] | Foreign, primarily Canada [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 6,732 | 7,244 | 13,532 | 15,223 |
Checks [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 186,424 | 183,936 | 365,071 | 371,003 |
Checks [Member] | Checks [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 186,424 | 183,936 | 365,071 | 371,003 |
Merchant services and other payments solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 113,206 | 111,619 | 224,715 | 219,889 |
Merchant services and other payments solutions [Member] | Payments [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 113,206 | 111,619 | 224,715 | 219,889 |
Marketing and promotional solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 72,037 | 69,872 | 142,689 | 132,799 |
Marketing and promotional solutions [Member] | Promotional Solutions [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 72,037 | 69,872 | 142,689 | 132,799 |
Forms and other products [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 66,763 | 69,404 | 132,253 | 139,720 |
Forms and other products [Member] | Promotional Solutions [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 66,763 | 69,404 | 132,253 | 139,720 |
Treasury management solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 61,166 | 59,535 | 121,640 | 117,473 |
Treasury management solutions [Member] | Payments [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 61,166 | 59,535 | 121,640 | 117,473 |
Data-driven marketing solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 54,503 | 45,470 | 93,785 | 87,313 |
Data-driven marketing solutions [Member] | Data Solutions [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 54,503 | 45,470 | 93,785 | 87,313 |
Web and hosted solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 17,587 | 23,117 | 36,898 | 50,771 |
Web and hosted solutions [Member] | Data Solutions [Member] | Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | $ 17,587 | $ 23,117 | $ 36,898 | $ 50,771 |