Earnings call transcript Q2 2023

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Deluxe Second Quarter 2023 Earnings Conference Call. [Operator Instructions] And today's call is being recorded.

We will begin with opening remarks and introductions.

At this time, I would like to turn the conference over to your host, Vice President of Strategy and Investor Relations, Brian Anderson. Please go ahead.

Brian Anderson

welcome Deluxe and earnings quarter operator, call. you, to second the XXXX Thank

today's McCarthy, Financial are Chief me remarks, call Joining on questions. take Barry end today's and Zint, we will the Executive Chip our our At Chief Officer. of prepared Officer; and President

forward-looking we as of projections, intentions, are on Securities in or financial or expectations you Before company's defined the like future I'd performance management's slide, begin, of today nature everyone remind regarding and the the strategy Reform to Litigation that XXXX. see as current in comments made estimates Private Act

Additional December information in differ the will XXXX, company other XX, for in actual forth from we release results XX-K furnished today and in about to factors filings. that press our SEC set ended projections year is Form cause the

flow. call margin, the adjusted revenue, comparable comparable On financial non-GAAP we EPS discuss adjusted comparable and adjusted today, measures, adjusted adjusted including cash adjusted and EBITDA EBITDA, and will free

presentation with In including release, our disclosures measures of the non-GAAP measures U.S. the find will GAAP. to our additional these under today's SEC, reconciliations most measures, you comparable regarding press and the filings

materials, we to EPS, modeling. providing may reconciliations are of adjusted your GAAP assist EPS with also which the Within

Now turn over I'll to it Barry.

Barry McCarthy

morning, good everyone. and Brian, Thanks,

X Deluxe Before roles. nearly deep program. to his strategic and years, new to forward and serving Investor of of we begin, a financial, with introduce look our Strategy operational for I'd in further our leader IR to Relations. been knowledge of like Brian Anderson, Deluxe Brian important We has build leveraging number

revenue all in organic pleased earnings and third growth. guidance adjusted on revenue results our overall. performance and consecutive year XXXX momentum. both we We're based very and EBITDA are second We our pleased quarter segments, the dollar We're raise year across growth operating both full these and X to revenue of delivered with

EBITDA in the deliver the company quarter, adjusted now concurrently. positioned and discussed growth revenue to As first is

I'd highlights, addressing recent environment. additional broader few macroeconomic a like business the by to sharing Before start

discretionary spending regularly As merchant we leading a processor, trends. consumer and confidence monitor broad

slow roughly in line consumer quarter, the modestly start merchant discretionary reports, After and portfolio noting to our improving unfolded. a quarter the as volumes with spending associations market other sentiment card performance and was

Importantly, we mid-single-digit deliver accounts new driven full revenue business new that for for partnerships. ongoing and our pipeline Merchant product confident remain can a year, growth features, pricing actions by strong and the

to on overall on I'll results. some Now brief comments the

$XXX several nonstrategic For impacted quarter, to million. the was increased of second reported growth exits total XXXX. throughout by revenue rate X.X% This businesses

basis, adjusted X.X%. total increased On revenue a comparable

we're on to now year growth. on for than adjusted third our revenue revenue Profits look drive our to As investing earlier, base and the efficiency for while again opportunities of continue profitably I cost and growth faster basis. consecutive quarter, mentioned once in we a grew comparable

Total versus adjusted adjusted points increased both X.X% comparable of quarter management. total second while dollars XXXX. as the disciplined EBITDA cost EBITDA XX operations actions benefit increased continue margins EBITDA our to and responsible pricing from X.X%, Adjusted basis increased dollars

detail. pace, quarter the I expect a rate plan performance, match moment mentioned operating Chip and second trajectory first in half to solid our While us we from ago. full our combining to discuss don't the growth as guidance, lift overall will year back half greater enable

Now for the segment revenue highlights.

attractive structured As of offerings. our X sets a reminder, segment is Payments distinct with

except Merchant card credit small debit Services helps Our businesses, and business cards. to midsized

slower quarter of manage solutions Overall, midsized expectation. XXXX, enterprises helps receivables management efficiently. businesses approximately long-term X% payables from our their the and treasury suite more second revenue of than grew Our Payment’s and

industry-wide discretionary we've mentioned what data. line Merchant processing broadly seen our early Services earlier. we've in spending as over with increased in revenue trends the The are Merchant within X%, mainly softness in from just due seen to business volumes categories,

our volume overall revenues partner we with in We in lockbox sales management remain softness partially X.X% activities. another were expect Treasury pipeline software or by spending to development that grew improvements offset stabilize, to and expect pleased we two. as quarter for and continue

team with to BankUnited, our growth. quarter, over and will payments a leading signed in our customer future Exchange This financial its assets help drive billion institution a Florida-based $XX During Deluxe platform. to Disbursements sales offering strong drive BankUnited BXB the solution Payment base

Data Moving segments. on to our

data-driven performance We the are revenue particularly Data pleased the comparable adjusted segment the during X.X%. a DDM basis, increased posted segment. adjusted strong EBITDA record business, quarter. in revenue with The in our marketing, standout or a and On

focused of beyond this As our industry we've quarter, brands and We less wins signed part XX home FI the new discussed as its interest previously, we're relationships. to rate X logo expand business new quarter. we new strong during this sensitive And on working diligently smart verticals.

In increased deposits. demand market saw addition, in low-cost for of our we attracting support services banks,

XX Specifically, top a deposit we consumer suite delivered business a helping campaigns FI, gathering. for of drive and aggressive

American June hosting as Web Finally, of sale we North our the business XX. on closed of

now X% of financials the Data reflective check quarter of closing Print are a and from businesses, second portfolio Shifting simplify blended results first half. date reshape the segment revenue Print our over segments. Combined, the of these adjusted comprised and to delivered solutions continue to promotional we time. as EBITDA through our The comparable growth XX% margins business and of has our

with significantly margins, Chip a another in discuss quarter, along X.X% will had improved revenue improving adjusted solid Solutions which moment. comparable Promotional

better our Finally, our business long-term of than Check mid-single-digit decline. expectations increased revenue X.X% year-over-year,

were by the on our first discussed call, quarter upgrade. last ERP impacted we system results our As

production the performance. order QX orders, Our normal up addition deliver in this carryover shipped we to to caught backlog and helping

benefited was revenue previous Small remained price demand expectations. still For we business the first from long-term year-over-year, actions. and durable, Check our better our down X.X% than half,

as in mid-XXs. the margins We expected held

most made the some critical on company. aligned and to Now These the core from Data moves directly adjustments are leaders reporting the to team, leadership Merchant We our growth will roles fully greater recently to existing into organization. businesses on realigning strategic our for with and for platforms our me. allow focus priorities

sustainable, ability year full periods In guidance summary, some the in pleased long to deliver leverage our to enabling us reflect over to operating with is We're term than momentum. others. our performance we're our now raise very confident stronger positive our

to Before and passing once strong to for on we priorities thank dedication our quarter results. guidance, performance, and Chip, fellow our second this financial their our again continued details customers will who success, and the both Deluxers more provide my capital half over first enabling company's allocation

Chip Zint

Barry, you, morning, Thank and good everyone.

while for increased Let's On first million. adjusted the revenue highlights reported a revenue quarter. through consolidated year-over-year, X.X% comparable X.X% to increased go $XXX.X basis, total the

of came diluted million, in on last GAAP $X.XX second and or X.X% up on up $XX.X a from at Adjusted We quarter net reported reported share, from year. income per $XX.X XXXX. X.X% second EBITDA comparable down adjusted $XXX.X basis million in million the per quarter or $X.XX of a basis share

EBITDA adjusted XX up points margins Comparable year-over-year. XX%, basis were

impact adjusted driven quarter came decrease $X.XX by in an second expense, This by diluted higher at quarter. partially last year's was Second $X.XX, performance. offset improved primarily EPS interest from down $X.XX from in operational

details, growth turning of X.X%. starting grew to with Payments Payments X.X% our Now Data. Payments increasing second business balance Merchant X.X% year-over-year the revenue segment and to and $XXX.X quarter businesses, Services with the our growing million

solutions, strong, the reflected for discussed balance some Growth consumer payable Payments some our was the previously. volume Merchant while business receivables Growth and levels lockbox business the segment, discretionary of spending experienced our including softer for softness.

our call, during XX Services noted Operational the management improvements softness challenged second up margins points Payments for Merchant previously. improvement sites, adjusted the prior while due treasury quarter quarter's from last lockbox year. basis business, volume were the modestly across we EBITDA XX.X%, as indicated margin drove margins to were

range. to revenue On results. see data's to in continue we growth from year-over-year, adjusted by to second mid-single-digit data-driven expect increased quarter reported XXXX, adjusted a of XXXX driven and X.X% basis, strong margins EBITDA For to payments Comparable increased low revenue million. mid-XX% X.X% marketing revenue $XX.X the the

in As Barry Web the Deluxe Data's as year-over-year XXX mentioned, XX adjusted June has basis, comparable basis points margins fully basis EBITDA hosting to business adjusted quarter XX.X%. now a decreased of XX. points. declined the On been EBITDA divested margins

of inclusive in half we data high second the Web mid- hosting margins to teens. of of the business, sale expect the adjusted the EBITDA For XXXX,

adjusted expect continue adjusted revenue and to low mid-XX% growth year, a we blended year. low range full on also the margins the the we For see EBITDA for single-digit basis, expect full to to comparable in

businesses, our $XXX.X and promo increased of last revenue and driven by X.X%, a to sales on divested million, actions reported adjusting million year checks. Promotional business Print was flat basis. Solutions new adjusted multiple pricing revenue XXXX revenue second quarter exits. wins, with now Turning comparable $X.X from for Promo's

as points Promo's quarter. margin we returned following XXX challenging increased adjusted levels XX.X% mid-teens to last second to year-over-year year's EBITDA basis

As stabilized operations, and significantly improvements business few actions, quarters. pricing through structure, the last over a a of supply has the chain reminder, cost combination in

the in the X.X% of issues. year adjusted see some million, to XXXX, revenue For benefiting growth comparable EBITDA quarter to impacts expect $XXX.X catch-up Check we and from revenue adjusted margins to low relating continue timing increased second last to from ERP-related single-digit mid-teens.

Checks also impact demand benefited responsible and resilient the continued from price of actions. positive

a adjusted quarter margins Second essentially XX.X%, solid EBITDA flat year-over-year. were

On a year-over-year margins XX.X%. year-to-date revenue Checks down basis, at X.X% with was

now long-term in with revenue mid-single-digit our range, adjusted low expect we the XXXX, mid-XX% to and For margins declines EBITDA expectations. consistent

down first quarter. Turning debt with $X.XX now to a to of billion quarter the billion, level our balance net We from flow. sheet and ended cash $X.XX the compared

strategic the quarter, X.X our end end to first target was at Our of four the from net the debt adjusted approximately and times down three at remains of ratio long-term times. EBITDA times the quarter,

second The amount the fixed completed amortize initial on swap in notional interest quarter, of debt our that to of mention $XXX floating beginning rate. rate swap carried over X-year X.XX% to will life, XX, like a an rate about we at XX% interest million. fixed also would X-year swap XXXX. making a This fixed approximately I an of additional total June

from defined By expenditures, ratio, which insulated capital announced cash operating $XX.X ongoing cash to last quarter rate second are increasing against million compares activities in including as variability now $XX.X week. better of less one Free fixed flow, the we hikes, the was XXXX. our provided debt by potential million,

we first basis, second remain a represented plan, quarter quarter the our from year. improvement slightly significant year-to-date prior On and but a behind the

dividend $X.XX all Our regular a approved quarterly shares. Board share on of per outstanding

on over believe of to free will closing market responsibly cash record time. comments on growth flow To core investing the by my X, businesses last XXXX, Data around capital generate call as Payments September reiterate dividend The Print all more of and are we from August our significant we shareholders XXXX. our generated be XX, into payable robust businesses that can allocation, the

internal and leverage ensuring to capital level dividend. three business our Our priorities clear: allocation process, rigorous and are net high-return our facilitate above XX% planning compelling hurdle investments reducing all rate. below a times, have a for debt target returns annual case paying a funding investments and a We

We dividend, attractive and a roughly per share per returned $X.XX yield. which value is currently to our to shareholders very X% quarter through equates

and Board, improving our focus our We is business with grow review performance. current continue to high that of through to yield the dividend out

accelerating that focused flow we Importantly, three free paydown remain on times EBITDA get back generation through further we can of debt so levered. below cash continued our and improved rate

As our to further efficiency previously example, will completion for serve and new continued unlock an opportunities structure. foundation a the referenced ERP our upgrade of as operational improve cost

Turning the hosting impact of now full XXXX for to all raising on in keeping expectations approximate closed earnings, mind year the our are Web we which guidance. reflect figures and divestiture, are June Today, XX. revenue and

which million to free within to previous $X.XX million, detailed of of of our increasing $X.XX to EPS unchanged and adjusted expecting million, billion $XXX EBITDA million $XXX we further cash billion, $XX today's are adjusted guidance. $XXX $X.XX flow revenue from guidance, press our As release, $X.XX of is now to

X% We EBITDA strong to growing basis, yielding start adjusted see based adjusted progress operational the positive between On comparable off XXXX year X% and in between raising we and our revenue continued comparable negative and to X% a are our X% guidance efficiencies. growth.

of while our due is incremental a to recently divestiture. estimated rates, $X.XX depreciation amortization impact decline substantial impact full rising original year to EPS, and from improvement the closed an still expected and guidance from the interest Adjusted year-over-year

outstanding adjusted $XXX your million; based of of modeling, and average prudent $XXX and in Also, expenditures hold is confident of of to year-to-date rate full an count of guide $XXX of shares the on order free year approximately results. prior the share remains it amortization our tax depreciation believe capital interest to an approximately expense million range amortization $XX million, guidance which assist We to million. following: XX.X million acquisition assumes remain in our and our $XXX XX%; with million; cash flow

second conditions, half we solid other we including is Among rates, this the and have into guidance macroeconomic the things, inflation labor issues, prevailing believe interest and to of our momentum heading subject impact are divestitures. with second of spending, To the consumer encouraged results quarter supply summarize, year.

lower laser efficiencies free In EBITDA, continued ratio. to help flow, and revenue further continue on grow down leverage operational us to focus debt growth, pay cash improve addition our increasing will our

Operator

We are now questions. ready to take

Operator

Lance first Your from with question Vitanza Instructions] Cowen. [Operator line of TD is the

Lance Vitanza

Hey the I questions, can guys. Thanks I X squeeze for if nice taking in. my all questions. them Congratulations quarter. on had

Merchant I first because anything by the The was there to -- talked was you wondering Barry, acquisition soft. consumer sentiment a touch the spending underlying Services, is consumer call influenced and Merchant like. did But about being else I and out somewhat and there if the seem numbers know,

getting And clarify, to was that then by that could what by timeframe to mid-single-digit or in I said the line. of growth to second year, the growth? you was half the back But of sort there you'd mid-single-digit it for the just you think the back revenue get expect in end

Barry McCarthy

Sure.

little commentary a color you give more just me let there. So

our Our very how business pleased merchants acquisition and in be partners. and are solid new we're and with solid that to activations of developing continue

the softness that's of economic just saw at data. forecast the in same unfolded. the quarter in the we What And exactly discretionary also lots beginning categories the improved in pattern that second modestly associations card quarter seen spending we've that of that's was a as

the far mid-single-digit perform. able that we're goes year portfolio, its the pretty as we believe So deliver full to be just we're the because ability the for to year then entire along, year as in confident growth going to

will feel was how even out. quarter year that seen about part And and improvement, some softness, first though we've there play full the of April the I good

Lance Vitanza

in Solutions appreciate because have be super then had help both there? extent. Solutions, the was actually growth to actually, clarification. the a Data drivers was somewhat driven by helpful. in would the kind me to And the I more closely whatever would you quite untangle the I slowness it part early But the through was consumer performance Data revenue that's to robust. of the quarter? seem that Merchant on that No, related Great. what expected where acquisition spending have might chug to could and certain And of sentiment enabled match we

Barry McCarthy

question. success And verticals. new the into across really it think we've in the Appreciate expanding market Lance, and I had highlights,

business comments, were able rate So some that secure in as not we mentioned we at our to sensitive interest and categories all. in are win

had significant institution in financial some also We wins more traditional channels.

pivot show that and I who gain business win at this for nice really a gather that. with to diversified XX business consumer launched to to the And on to that new a -- is able and and we've think a had we've goes how whatever need the program in also top time, really both FI, allows business it moment we But been new us just deposits, accounts. to capitalize market

our growth. to investment and able the space able Banks that. into of and really are that do are results, of looking for producing proud we're the commitment avenues we're help think market And we gathering to shift we shows At that. deposits, and just to banks same time, is to so expand it us verticals different that new provide

Lance Vitanza

Great.

me -- then for is delever sheet. remind apologize and -- missed you there. this time? A but to And the balance for on last you how if target call on said I have the over us, the quickly Okay. do job and expect you quickly a is how actually you Could nice it, I that one

had know a you a recollecting or if talked point, about turn I I'm one but current that think if I year, correctly? don't at half still a that's

Chip Zint

a we environment changed changed First guidance you're a X a when interest little a over that was So bit. Obviously, did ago. going the half the American our conditions original economic has year have right, rate turn years deal out

there. a projections that as a trajectory from the three back now, at get to little time look see the just back we down that time Right bit. free we step go, to committed of horizon business, some point us that in cash in had still to remain flow, near to There's for get XXXX. we ways and progress we've think of bit can but the So we

Lance Vitanza

so it. Thanks much, Great. guys. Appreciate

Operator

is with Your the Charles Securities. CJS Strauzer from next question of line

Charles Strauzer

a could range there. you of and the behind bit end the assumptions talk just we I'm more low have it's pretty both end numbers, the the of and the little about guidance. the morning. some just confidence And range good high Good there, just a Hi. hoping and is

give if color in a more numbers. could little you Just you're to on assuming -- those what that

Chip Zint

Thanks, Great. Charlie.

So half first pleased very of all, we're first with the performance.

quarter, plan. against was we we delivered in at the those getting good issues ERP-related internal first through and in our about the As half, stand on the second feel whether we first it where quarter, what we look just recovering really the

As and of year-to-date about we on couple for is inside look really that on the ahead, anchor important sure momentum, continued to half need It full a good guide clear very there's year. feel make the of we the note what should look we our performance just see like. we second you to dynamics to it's

if second really think million, that, we're and I there's sure inside X of you make of that $XXX EBITDA think caveats quarter to about So you the of clear. want

had basis EBITDA million from That's in cleared itself we the a wouldn't of quarter $X that on now landed first and carryforward repeat ERP related the to second roughly forward. going delay So year-to-date the quarter.

which hosting another had X for We $X quarter, whole Web business the the of is also nearly about EBITDA. million

give while basis, of with trajectory we're $XXX a or to second rate take. quarter, we're we million on more run million, the delivered a on So pleased closer the really in $XXX

that as good about year. second launching guidance. so the for point feel the you our And think the to We need of of half

broader we course, a to revenue improve to on structure cash continue it's wise side. EBITDA to the drive the improvements to flow. continue conditions and and continue free We have to cost on the of operational macroeconomic range think work monitor And and

pipeline, of driven revenue at a disposal. range Merchant, but on bit. get hopefully, in the and the levers that And the more can maintain range with we quarter, there's Barry to outcome. confidence we mentioned, sales the there, pleased bit fourth our so way We're our tighten a we've a we when volatility

Charles Strauzer

are side the ongoing the more efficient plate? helpful. very Can a the of That's still to years you've business fiscal. cost on reduction some then few on that a more cost -- and make now little just you bit for the and talk And looking your some more just effort of doing efforts efforts cost about healthy been

Chip Zint

Sure.

So you'll call. the on and about consolidations site recall first closures quarter we talked

lockbox specifically, actual partners. includes site of which with on estate function to work So we more partner external and continue -- getting operation focus on and done a locations, how labor the gets force managing our consolidating real automated efficient

we at footprint. of We production addition, to in production continue second In quarter. the the look site the closure announced a

So we operations down. to continue that shut to and fulfillment look at

We infrastructure-related know we've ERP, chapter I for a We've about completed time. to now technology it the the also talked when which spend. comes turned long

have business And to now for so about with on we and do projects. looking to really the it's other really go it take opportunities out about forward, an costs of think high-return initiatives eye and

right look company. automation, We resources the to that's an deploy will us business, or, return, process to in the costs but expect of efficiencies follow case to across is at a in should just that, we attractive how of tech stack the out whether continue areas the end more to business course, get to you spend continue to and has it

Operator

Silver is David question of the Your from next King. CL with line

Thomas Ginsburg

for This is today. David King. CL filling in Thomas I'm Ginsburg from

And an first fastest could Solutions incremental particular, adjusted EBITDA. for My regard to Data acceleration questions. among to as the full Payments in main are prospects growth? drivers And well provided, updated the your as guidance growth the for X will you revenue what record highlight financial in In the continue have question. year you I segments? So

Chip Zint

Okay.

lot that. going to with to the a there. unpack So We'll side. I'm first start Data try

they So the as what Barry quarter. mentioned, very, very delivered second pleased with in

a Given dynamic. the divestiture of few business, Web of the there's hosting pieces

to it's we I lay out. think that clear need

a was segment year-to-date the or rolling basis So basis, overall first of X-month up on year-over-year. X% all,

Web rolling is a basis. roll-on declines X% reason it The externally portfolio. basis Sorry, the X% reported because a X-month hosting was up of up on it's on It's up the inside X%.

quarter further second declined mentioned quarter. more it the had We and actually call, it in first in the declined X%,

for and So well specific second the year back look you when it year. way you that the DDM X-month we right digits of as it's really part take the at portfolio, half average, the rolling the mid-single along as and will that of that's believe a full that step match

first you When you where year, digits. all low the because hosting it the single full of year blend declining of the piece Web half to together the of our of get from guide portfolio that's

what to think data going to do we it's do. So continue can

little we see but that it going. basis That a and have continue and a business. at overall just really stronger business that feeling to good look it's over see can and trajectory be periods to momentum good periods, seasonal maybe to how And weaker a is important rolling of

the solid year, On guide the got I full half, a so we've and first what to about go. think and great delivered we've we feel

we've said I before, As a to range. got maintain higher

You lot opportunity. of a of see area

long secular to return levers We second quarter, you the pull to very decline. see perspective and that -- strong production, being return ERP enough was Check That's even definitely important. fulfilling from secular from it backlog or to to It the a see. some that abating but efficiencies having declines even forward whether had we a a do very expect Payments

Barry McCarthy

as I And in spending business, spending, return be acquisition, So our in our for activation more new great the helpful we'll is Merchant feel said consumer we which would earlier, Payments volumes, think about we us. normalizes the that business, again, merchants. normal Merchant as to about which

help us got including in normal path back business. in we payment what of in we consider a get a think and additional space, we've similarly, And bring revenue more products to number year introduced plays, be that our that us will that the will later growth BXB

feel pretty feel Payments. before the the great blend we about we So year, about great

We feel for year. is the feel our terrific, business, Data very the that slightly business rest great overall of guidance of and more great that course, business The about although can lumpy. about be

Thomas Ginsburg

have sorry. It's Okay. First American. more And question, about actually I X

our So to biggest obviously, years about American. First since X it's in acquisition date been

the is to growing XX what And is So that asset how asset your compared performing over next your expectations? that months? plan for

Chip Zint

So the with actually ever history. most company's We overall, very the It's successful. in largest very, believe undertaken also we are acquisition. that pleased we've the it's

When just it a acquired sustainable single-digit we Revenue me there. think a pleased business, that. you grower, the examples was we grower. low have Let give a very revenue couple mid-single-digit. it of We by that made

think We the potential done it there. by upside has there's that and Deluxe additional distribution bringing great unleashing We've institutions. in the financial

bank X,XXX partners. have We

We have of customers. business millions small

And as a wins America result, expanded partnership the banks. First larger-scale within the profile of has to

I XX% well average of -- the number think bank as it's over XX% win are overall up as we targeting, now that size we over in a banks in well bank I rate the wins increase winning significantly, over as increase well. of are the think, the and in are

think and So verticals, to you'll there's market far next, we as in it. right I about as great invest and we We've us feel we higher-growth We continued continue relationships. distribution think where win. great a got to where existing think see upside. that go we segments have And future

Thomas Ginsburg

Perfect. Thank so much. you

Operator

is question Sidoti. Marc next Your of the from with Riddick line

Marc Riddick

Hey. Good everyone. morning,

have I you are how maybe the a after seeing that couple and pipeline potential of feeling far I I areas was of of one into dovetails about follow-ups ask -- about. of out around valuation that And And at was to add-ons that. kind that to as sort you're as then maybe the what So looking the maybe and acquisition actually, there? going wanted you're

Barry McCarthy

Marc. the question, Appreciate

me by start really, Let being clear. really

debt we've is think a better that primary our the Our And side. things before value. leverage going deliver is we're on shareholder way and business job we improving ratio. grown it cost doing focus reduction will those And the our do by great to faster and growing than today

think will we note, really American, we First capacity acquisitions. and is that we the and direction future that also true, I believe we fact bought at We that growth believe the in and a absolutely we Now you're were for move to appropriate has that from were alluding platform still bolt-on fundamentally buying that time. capability the clear when

pleased the ratio why to the improve and whole in and and full second really through quarter first what And our we're the for But we're forecast happened able priority also that's immediate leverage operations. year. that our is the what improving do half to with of

think it's yielding benefit. focus I showing our is there

Marc Riddick

a with that was I if you now could talk live a additional a if that some maybe more time the little or the things distance about and gleaned more you from learnings wondered little talk that ERP. going I we wondering have last benefits little so. you've from time Excellent. bit about some maybe

Barry McCarthy

So the started we systems -- really remind ERP were we They because that the I'll integrated. had at just quite to program that needed modernized. be

dig allows our all what the to gives us, what our our behind and to efficiency, But that costing to it is insight platforms more what deeper now our in around happens retail do gives prices us into gives but are, opportunity into -- us chain. streamline, our us also technology things in better it opportunity what's happening just our business us is, not supply and

to time to we're We that. And and to us visibility starting action to see pleased for going hard we're think visibility on a time. had that door consider the that? yield add to into. deepen that opens that really we want on that multiple you getting a results take It will facets Do over continue

Chip Zint

team hard underscore the I on this. would worked just how can't we just Marc, say

stable live, to continue a the into getting team about we work have We effort great first where put they and of we year, are. half the and it. very the and to feel busy It's been all for thank

fix We to have side. place We're whether back the of of where to fulfill experience, being not we how the orders. reseller the with in to work and do or still anymore customer a it's single production billing internally aspect little things report dealer up that's about able keeping end-to-end to bit every

process these going bit small where focus a underneath. of but that focus you're have are things customer to we'll the And to grand on scheme immaterial see still base. little but to of We us do, the company is in on our to continue work the important

of things we lot that's working the process-related that just improvements on how do on way technology through take we of a ERP, from unlock the all heavy processes. which takes capacity, a whether work, end we are through we So go management to the think operational investment order the system, process front systems doesn't the now and resources can and can

And of turn year. to focus going so the our half that's in here where second we're the

Marc Riddick

my to Excellent. about guess, I what SG&A just how is And that one various for there a revenue little the the to percentage least you at of cost year in last were full better where I the than and as numbers measures, wanted relative for guidance? anything that we quarter, that, plays into that me cost talk certainly nature were, saw a controls, expecting. bit was

Chip Zint

Yes.

I work you can't your good in exactly what we about just had speak the But general, feel doing. we've in So model. to been

So obviously, year-over-year, which million, growth operating leverage and shows $X with what SG&A is favorable revenue doing. we're about

one the enterprise out continue real that. organic to general costs improvements growth. where revenue out no can And and take focus we there's call across and and driving deliver specific EBITDA the cost of both what's That's to just adjusted

Operator

question line follow-up We have from Vitanza. Lance a of the

Lance Vitanza

of flow you know I quarter. I'm talking nonrecurring cash in in unchanged. the and just sort about But you EBITDA this addressed being -- terms the wondering the wondering of Just guidance --

capital recur thinking that flow perhaps first onetime we items half unusual will or I'm the whether as wondering if negatively on it generation that that in cash flow quarter the else about? there anything second might in changes in some in impact we the back think anything the expect, won't there that in the be cash working can the half, second was about half current there's anything or we half

Chip Zint

Lance. you. question, Thank Yes. Great

first result. So free pleased we're all, the with quarter cash of second very flow

a we're little on I As our year-to-date a plan behind still said, basis.

in number But having positive been quarter was deliver negative great nearly the and to offset, start. first a a to it

so higher obviously earnings, capital. And got improvement we there in through working

that And of don't a another occur first the period. repeat that quarter the year in there's few items

half. half, expect going do about the half think second a things. both of the those you second to We to if so continuation And CapEx lighter be first the versus you're in see

those mentioned, we things around and consolidation projects for estate the front were site more loaded the Those efforts year. real

So year. second of us that, CapEx of give tailwinds some the business, Web hosting half plus the on the sale

Taxes so in lower have year. the them, the of portion half of a second a be to bit seasonal they'll

incentive year. that half that, going the in capital. We then first really of be to obviously a that And don't in repeat quarter the working beyond have annual occur it's second on payments the focus

to It year, that's our doesn't to take guide, we're whether all that in to live or second balances to be that, better on challenges capital now last continue efforts supply all deliver the half Herculean our our of continuing and of focus on we through collections aspects work working inventory and of ERP chain but down continue DSO. the management about

to you impressive very our for it's and a full midpoint and half to deliver if confidence think of half, second delivering. so the about the it, forward second range really have And in, that's year, the we we look

Operator

for over At there further are any questions. closing remarks. Brian call hand back this I no now time, Anderson to will the

Brian Anderson

Tamika. Thanks,

will management XX. King's September Annual that mention Small on to Best XX like Conference I'd CAP Sidoti the XXst on conclude, Conference be in we participating and Before Virtual Ideas September CL

forward today, look for XXXX again share as us joining you we speaking with you Quarter November to Results. Third and in we Thank our

Operator

you today's concludes Thank call. joining. for This

lines. your disconnect now may You

Deluxe (DLX) 3 Aug 232023 Q2 Earnings call transcript