DLX - Earnings call 4 2023 | Deluxe Corporation

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Deluxe Quarterly Earnings Conference Call. [Operator Instructions] Today's call is being recorded. 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

Thank you, operator, and welcome to the Deluxe Fourth Quarter and Full Year 2023 Earnings Call.

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

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

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

measures, On find the including SEC, [indiscernible] disclosures revenue, additional call measures you'll the adjusted today, adjusted we [indiscernible] financial the non-GAAP comparable non-GAAP regarding GAAP. will discuss

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

it turn over I'll Now to Barry.

Barry McCarthy

morning, to leverage year for comparable fourth everyone. and operating adjusted robust Thanks, expanding Brian, and the driving quarter I'm EBITDA dollars, strong and report results, both comparable EBITDA pleased XXXX. good margins adjusted growing full our the

progress and results XXXX. us for our improved accompanied these cash further into and the This free growth of Star continued Importantly, the we demonstrate a North strength focused flows, as offerings. also of foundation portfolio they provides strong via execution

key provide Before detail, from XXXX first like X past highlights the year. reviewing results more in the to I'd

we First, faster revenue. grow leveraged to the revenue our profits of organic growth. And enterprise its also this year, year achieved third consecutive than scale

trajectory. company's the changed clearly have We

flow add adjusted million will initiative, nearly of the incremental launched XXXX. double run EBITDA our by Star we rate Second, cash $XX current run North and rate which enterprise-wide

million took we unlock During EBITDA adjusted XXXX, to towards these goals. of annualized $XX incremental actions

I'll a initiatives Star execute value-creating about more XXXX opportunity further throughout the to and bit. continue North progress will We in unlocking provide program, beyond. details within additional our

more the million than from $XXX enabling the X% quarter. our adjusted the This position $XX a EBITDA levels. to our expanded year-end improve debt growing profits, by net XXXX versus us XXXX, prior of first compared improvement peak end than level at we Third, comparable million was to more by

simultaneously our dividend maintaining and lowering remain execute allocation net we our capital discussed, growth continued our ratio debt North well priorities. positioned while begin we've overall and investing as clear for plans. Star As XXXX our improvement of against our leverage for We're

pleased from American with we Services Fourth, of built First the Deluxe very the continue XXXX. in be Merchant to performance acquisition

of We expectations, performance secular continued basis outperforming pleased by XXXX, decline exceed during XX Chip this Check to EBITDA in and cover will our business his decline. And Check comments. to modest more rate margin finally, of points revenue a market forecast. the were accompanying particularly expand

ongoing customer continued and in our and This service our the the retention businesses results strong in durability Print These levels strength of also space. performance reflect wins cash execution and from particular. and our flows highlights Check of the

adjusted last Similar performance, details numbers, we Chip results, reported targeted business comparable our adjusted speak reflect but will Now both some about given comparable full exits. recent provide will business brief underlying on to to and best performance. to here our I focus year believe quarter, which

up was about points or XXXX, full For year revenue billion, year-over-year. basis $X.X $X XX million

sales-driven payments this in a into importantly, shows our trajectory. While consecutive revenue change our further demonstrating modest, rate data was company. It organic was clear our growth our third growth, year and of transformation

year particularly delivering Day. portfolio leverage results. revenue our the objective execution signaled from plan. than as a across Star Total Growing our XXXX, is reflecting or within pleased both XXXX we our of We're faster XXXX North adjusted guidance dollars at operating with for EBITDA leverage Investor this full key significant expectations increased and X.X% operating earnings recent

earnings overall strength of guidance this will pleased morning, and demonstrate reiterate continuation a These to strong more moment. And our of Chip the reflecting revenue we're expected XXXX combined this expansion. portfolio. our cover results in

to high-level on segment highlights. some Moving operating

grew X.X%, XXXX. basis Payments points BXB full and areas some trajectory to during which adjusted while half revenue expanded of the within second the We're the the dollars improvements XX of Merchant challenges margins grew business X.X% overall EBITDA from with toward pleased year, work while of the continuing business, For overall encountered XXXX. the

growth As comparison. calls, well in-year the and as in the within segment impacting headwinds demand revenue year several highlighted margin we've despite quarterly Payments the results prior expansion portfolio as overall prior achieved across nonrecurring some

to way the led business finish Services with strong a Merchant XXXX. Our

fourth pleased the revenue We from we of implementation win business, versus full for the This strong helps new large of finish the overall Services previously. Merchant growth X.X% posted are discussed which quarter the X.X% particularly XXXX, the drive the benefiting this with growth quarter of performance of year. fourth

One contributed model Our results. Deluxe cross-selling to further these

functionality demonstrated along and strong merchant for our our optimism offerings service enhancements continuing in our Merchant investment capabilities customer Continued for our with driving feature underpin Services. technology,

performed of marketing to full driving our for now well the X.X% Solutions. Data within Moving overall the strong year. Data XXXX, business during segment Overall, results data-driven revenue growth

noted confident business XXXX as was reflected strong While the DDM the the impact quarter-to-quarter prospects in campaign-oriented we previously business annual seen this the in of QX the are our from results, remain nature results. for

and benefited account DDM from solid low-cost expansion FI continuing seeking business year offerings. deposit customers growth the partners rate of Our banking full

have interest also We on other verticals less calls. our we market and extension discussed prior as continued rate-sensitive non-FI into

the in longer-term very this pleased Web margin as area growth with half segment, opportunities expansion benefits the expectations within potential XXXX, increasing and Excluding first from Data business for the remaining the the approximately the for grew continued remain with revenue results We business consistent DDM during business. scale. Hosting our X%

experienced across combined EBITDA these with expanded segments annual overall businesses businesses, combined adjusted Promotional points, and generated XXXX, XXXX approximately Shifting with basis now during our $X.X Consistent billion margin solid guidance Combined, XX of revenue capability. blended Print to in execution Print decline highlighting X% businesses comprised blended over the our Solutions just Checks revenue an our the a for margin our of segments. year EBITDA of while XX%. full

also I want a initiative. brief on the progress concluding, North report Star Before share to

long-term is $XXX EBITDA incremental by XXXX. Our unlock and to all comparable million of adjusted flow, million free goal $XX cash incremental of

org overall in As simplification implemented in late of our December, we $XX $XXX of quarter million. Star adjusted noted improvement initial actions EBITDA our target annualized the drive million third against will North

XXXX impacts target $XXX included of overall expanded million net guidance our businesses, the of generating will contribute toward objectives. The our reminder, of a run improvement within secular our million earnings EBITDA within overall EBITDA expected our $XX helps rate decline impact improvement As expectations offset the Print million XXXX $XX actions from range.

savings current streams incremental further and updates As the slide May. from reflects, during revenue-enhancing first quarter our work value initiatives. North unlock additional earnings provide in We'll the Star both XXXX call cost will

organization's which for infrastructure efficiency our and ago, a operating overall reflect: North cash processes will acceleration completion revenue sustaining serve allocation momentum, and offerings our priorities year growth additional clear live more our and progress growth, the leverage ERP XXXX results generation; went To strong flow of Star; rationalized the B, across C, further our under foundation enable of clarity our objectives; as capital will and X organic focused upgraded A, enterprise. our investments, optimization summarize, including the continued increasing of our against D, of portfolio across

data Deluxers another to into to communities year, we unwavering their company. this my our I Chip, passing and want and to customers thank for strong that for modern in fellow payments serve their continued a Deluxe and Before commitment dedication the for transforming

Chip. you, to Over

Chip Zint

Thank and you, Barry, good everyone. morning,

progress, As our Barry year. our generation particularly we XXXX overall and strong with year ratio cash flow noted, the of very leverage improvement during and the were full our pleased QX

highlights year the moving the I'll XXXX operating segment to and begin reaffirmation event. at recent on today guidance Investor for reviewing results the some of of provided we Day before our the consolidated

in posted reported total We by full X% full but the billion, our of basis. increasing GAAP on impact revenue adjusted year-over-year down year, the a year on driven comparable For divestitures $XX reported $X.XXX primarily business a recent we of This $X.XX X.X% interest basis, by $X.XX net year, the for XXXX. $XX or from was reduction income share of costs down or Hosting the driven from million per million per impact share exit. and the higher

up basis X.X% a adjusted were dollars, EBITDA from was million comparable reflecting improving basis comparisons last Adjusted exits, prior EBITDA XX adjusted million, year year margins points margins on on declined basis adjusted $XX while our XX of EBITDA comparable basis. a business year Full or XX%, points. X.X% year. Total inclusive EBITDA improved for $XXX adjusted focused the

primarily down from and taxes, exits, $X.XX, and at in XXXX XXXX amortization. by our in $X.XX in-year business came and impacts EPS depreciation changes to XXXX expense increased from driven interest adjusted year Full

$XXX to the year-over-year, as Solutions lap noted. Now X% fourth million receivables revenues with turning growing our of of during beginning saw Services quarter revenue Merchant segments. of balance Payments quarter declines to Data as onetime our grew the by during X.X% hardware some year-over-year segment QX operating and segment XXXX. with Barry The we Payments X.X% details,

year-over-year continue some business, We signaled, to also volume we continue. softness lockbox could as within see previously the

headwinds. period of year-over-year were by during scaling XXX with the Xx basis adjusted driven payments merchant revenue, BXB the the profile more estimated improved growing growth adjusted XXX results margin both XX.X% as benefits strong quarter by than to margins around expanding EBITDA EBITDA Overall by These the improved the of Payments as continued to have improvement points the the well basis XX.X%. offerings, dollars the during for revenue points of rate despite

a For full second the Services. of as revenues of well X.X% nonrecurring experienced growth This the full revenue lockbox as million, to several decline within year, year. for demand contributors noted X.X% the result lapping within softness led the $XXX as during solid by The was continued of revenue year-over-year half inclusive balance X.X% the grew some year-over-year XXXX. Merchant segment segment

other to falling outage within space. we or by overall strong to in that quarter the the competitor drive XXXX. our outcomes capture Despite quarter actions hardware continued of of onetime of a the BXB lockbox footprint to for extended results these of help We below some payments expectations, during related of for revenues lapped a to XXXX, business, in last our results year. deposit and large volume onetime improvements, XXXX BXB the processed during margin remittance receivable the our services call an fourth temporarily drive particularly remote also operational RDC, revenue third sales nonrecurring due the amount noted experienced

by EBITDA the are adjusted BXB have for dollars the with in full year, Payments full overall mid-single-digit expanded estimated X%, result the to approximately For line segment.

year increasing while year, segment, points finish XX.X% expansion, Payments full at adjusted total improved margins consistent the for the EBITDA top our X.X% ongoing expectations. outpaced million with basis the growth X.X% XX to $XXX EBITDA to line For adjusted

consistent periods, to us confident forward. overall going the will set outlook markets initiatives optimization during growth BXB Day. and for merchant the growth capitalize margin coming achieve Investor We the up well Payments within with on Our remain opportunities that overall shared we mid-single-digit

Finally, executed of XXXX, half agreements. exit our reminder, HRM payroll during decision businesses to second the conversion as via a the of we lines made and

the We partnering with will business. in with seamless to in existing lines be our ensure U.S., these Canada, clients across Paychex of transitions of Payworks working

a take both to XXXX, discuss result expected place results segments. BXB for begin these how payments anticipated Data reported will on basis, to and comparable to conversions throughout similar for XXXX As the adjusted Promotional Solutions of we we during a

growth U.S. reminder, the HRM more investments, of the businesses other of now require segment platforms X% both which our aligned comprise Canadian just and payroll towards ongoing these businesses. enterprise and redeploy capitalized development software a strategically can And significant revenue, As under of lines areas. and inclusive Payments

revenue Barry quarter-to-quarter year-over-year outsized noted Data's volatility performance to in million. of quarter we of exhibited business, experienced. comments, QX results some $XX As data notably third the reflective decreased the comparison some DDM within year-over-year quarter adjusted his were during X.X% comparable to fourth

business, a under reported from just of fourth divested XXXX Hosting from declined Web the revenues of inclusive quarter XXXX. XX% data's basis, revenue On now the

saw comparisons the a campaigns primary on ago, adjusted business several data customers for of accelerate driver year a basis. [indiscernible] segment of planned year-over-year is isolated QX noted we impact fourth the spend As marketing into XXXX. quarter a comparable This the data-driven

adjusted comparable above. for margins XX.X% from timing campaigns a noted XX.X% EBITDA quarter the Adjusted again, DDM to impact reflecting basis, surrounding year-to-year decreased the on

believe indicator of of our the continuing to a continue the We multi-quarter DDM business strong view performance. remains best

X.X% of the we year-over-year businesses XXXX. Web million. For data on the full On increased mind, divestiture June Logo $XXX year, adjusted a XX.X%. in reported Data Solutions revenue declined to Hosting our completed Keeping and XX, basis, comparable

comparable a year. EBITDA XX.X%, points adjusted for hosting of declined Data's adjusted the on slightly XX of inclusion the basis higher profile for margins the margin year of again, to basis the one full reflecting half offerings

business the logo the DDM declining from lines exit As business X% Barry noted, compared of the revenue for year. of to trajectory hosting the prior expanded and XXXX excluding results, the by

mid-single-digit a adjusted during the what growth basis consistent presentation. remain For expectations, Day business XX% remaining and on we margin Data adjusted confident with rates December that revenue rate low XXXX, will EBITDA we achieve shared Investor our comparable

our Print Checks. basis, a on Promo's quarter by QX XXXX. X.X% On relative the to fourth declining during X.X% now during basis businesses, Turning and of driven of million, a seasonal fourth some demand revenue softness Promo comparable $XXX was experienced some reported year-over-year. the to uplift declined adjusted revenue quarter

manufacturing Adjusted the well logistics our which as declined promo less lower the XX.X%, sites. EBITDA some continuing points higher to transition XXX reflecting costs, of basis of margins year-over-year volume production as year-over-year resulted impacts towards of some footprint from

comparable a we year a stronger reported to line promo full adjusted margin offerings at promo results, year, basis. business finished divested decline the on with prioritizing a portfolio. towards X.X% in Inclusive as expectations of within reflected basis, the $XXX For work million, prior revenue on continue declining our X.X% year-over-year revenue

Adjusted XX.X%, increasing with and year EBITDA maintaining the our consistent XXXX margins XX stated for expectations. points levels were basis mid-teen versus

For the decline adjusted remaining revenue continue with margins adjusted mid-teens. in XXXX, to mid-single-digit comparable low to we expect EBITDA

expectations. both Barry in year full fourth noted, exceeded and for as performance the quarter Checks' XXXX Finally,

For the from fourth $XXX to million. $X.X quarter, the revenue year increased under just million prior

XXX full was experienced seasonal of the adjusted while repeat. expanding our consistent to XX.X% in of XX.X%, other maintenance mid-XXs many year-over-year sold QX revenue Fourth expectations expanded $XXX with margins did of goods basis during cost surcharges quarter of EBITDA were results the to declining XXXX points XXXX leverage overall our overall basis logistics profile. XX margins our across Checks towards adjusted not X.X% These enterprise. year and margins as contribute EBITDA points million, to long-term help EBITDA and

to portfolio both continue For XXXX, print check mid-single-digit and of for the expect offerings. low to declines revenue combined we

this continues Our maintain the in margin investment technology of print-on-demand expectation a to strong contributor profile be to towards our business.

$XX enterprise. and Turning the top with now of capital priority debt to sheet down debt balance net from allocation as billion ended $X.X consistent for million our to commitment level year flow. We cash our the reduction year, with billion, a last ongoing a $X.XX

end debt-to-adjusted of net also year Our ratio was EBITDA a from the year, X.Xx ago. the ratio X.Xx at the improving

our noted, leverage. strategic Xx target we've As long-term remains approximately

of capital a $XX.X capital $XX This expenditures, cash very the by the as operating quarter, quarter working Free in capital, the lowest year-over-year flows offset cash by cash improved we XXXX in payments. result. partially [indiscernible] since flow, improvement sequential the activities improved provided defined from that less a million driven results, higher our strong seen first of was million operating lower by up and fourth seasonally free second spending are noting quarter and of year, quarterly tax quarter cash the interest trend was have typically

flow such expect free quarter of as for cash quarter by annual we payments negative first seasonality impacts Thus, and first maintenance payments. The would XXXX. impacted quarter is other annual employee another and compensation license the

$XX.X working and million, from XXXX. a was $XX.X primarily in full revised Star. free the lower $XX.X spend as efficiency North flow For related range million our capital exceeded to increasing This cash million figure cash of result guidance better-than-expected restructuring year,

pleased XXXX projections with strong free better our operating our the We and to combined achieved performance flow ability ratio delevering a than capital consistent led Investor were cash results our priorities. adjusted to This with continue midpoint clear our cash Day. allocation flows at very with above shared EBITDA forecasted path our overall during leverage our

on $X.XX XX, of to X, of a be approved shareholders all The quarterly will share record XXXX, shares. outstanding as per February regular all market XXXX. on payable of Our on Board closing March dividend dividend

XXXX. we keeping I'm our to our divestitures free reaffirm and comparable and billion of now X% growth X% Adjusted to of X% comparable million, of billion, $X.XX Adjusted to Turning months. $XX to in early XXXX reflect XX% the XX to and approximate flow XXXX expectations X% are mind pleased that of growth for $X.XX, growth. cash million reflecting versus to EPS shared figures guidance. comparable targeted $X.XX million. million adjusted December, in $X.XX to between the past adjusted $XX over $XXX all business Revenue to reflecting adjusted impact the flat reflecting $XXX EBITDA of

your of million; of and macroeconomic shares; the to order with capital of guidance interest share XX%; rates, interest million other things, acquisition $XXX million in outstanding impact following: XX.X expenditures of the million. $XXX average $XXX guidance approximately expense supply our to assist million; inflation an tax This modeling, amortization and including other an prevailing Also, count rate is $XX is of assumes and of $XXX of to, issues, conditions, million, labor adjusted subject approximately amortization depreciation divestitures. among which

very against organic forward momentum we To summarize, our Star focused pleased in cash results. are We EBITDA the free flow. year growth, our look plan quarter North revenue full XXXX to expansion and continuing XXXX, with the and continuing and fourth strong executing on comprehensive

now take Operator, ready we questions. are to

Operator

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

Lance Vitanza

Good job on the quarter.

gave the about lot information You fourth a quarter. of

to we maybe how question in margins? performance upcoming in in in that you'd got you operating And focus only expect your segments And So should But sort the first quarter. thinking I've be could then about for seasonality from I and on but not did XQ first seasonality quarter terms think free what of other translate maybe talk comments on the -- the that as well. flow. the sort quarter into the about themselves regarding the to seasonality typical XQ might revenue of one the cash of impact just of you Chip, hear

Chip Zint

exits help rolling I on, going realize forecasted quarterly, year. guide especially we I have this will in try you don't we best mind lot because with in to keeping a more So my

I level, then give bit the me you little and let of by color highest segment. start So a can at

So what the just expect change quarter. the into the in it the to we way easiest to is from first quarter think seasonality about reported fourth

And we in so few typically revenues fourth if you first. look last the quarter about the from years, over X% total would step the down into

I be would how resetting would seasonality. that think so overall And the about the baseline reflect to

And we other items. business, seasonality most have is which tax the material forms within the and has item Promo seasonal

about to directly, So result, year. Again, would to point X% don't start you baseline fourth the guide to starting with quarter that it get be assumption my we revenue guidance. would the out I by my but for take kind of haircut

of relative question how full of range. will our it's a off then growth that, guidance much And year we drive to

So that will be towards X the lower to X of our end range.

a at highest quarter in what fourth I the factor level, seasonal we enterprise. to just haircut off the the So is the lower but quarter necessarily And got think place we course, did Data that business. isn't the the of a we've the will solid a quarter. across in help X% it's business of reflect fourth And Data change said, the in seasonal had as flexibility quarters. The of campaign-oriented of

using capture be would well typical the capture So would the exits math as what the quarter to you'll the haircut business of think the of you, as DDM as seasonality first kind I we be able in of as impact back well business picking gave we Promo that up anticipate. just the

or the volume year. you think across across the about of quarter as our lowest think with obviously, period. would volume cost you're what mix spreading about that Then I business, that And math, portfolio, of you'll profile the costs the the should get the structure is be corporate you lowest if what fixed somewhat to of say margin

rate you drop can EBITDA guided set here ending XXX to first get the for the be to consistent would about all from rate. And relatively you to roughly and the guidance the across point. my perspective, EPS up I by relatively you figures bps QX it those an take in margin So think and And of margin EBITDA take consider the year, linear. then the I that quarter can

point lower guys the would year. the And represent as year the you think for of well right starting around I revenues anchors said, EBITDA. the as so on I mark as And that that

up aspects to expect come goes would in. revenues, year other seasonal So we on the as pick and

And our and our North Star, cost way range. working both then, execute we the course, we of year, of in as its throughout grow more our towards revenue should -- initiatives. bring EBITDA guidance

trajectory in across hopefully, as color So you giving overall well bit of helpful that's terms the a as the segments.

Lance Vitanza

final Barry you the Reed noticed as was Could And the you the question of the departure. guys segment. We helpful. Deluxe regarding he me, for Very one that a leadership? then wave just Michael remind of new into part of Payments brought

And the -- to is case, taking and could fourth transition still on the I transition the comment in so to who's for be it you XXXX Did left, impact in results results plan But him? or for he as, did adviser and over know serving he's him an why believe, forth? quarter? in I Might the impact any the perhaps company.

Barry McCarthy

to the expectation, the big That We outperform evidence thing Lance, announced to highlight the it's business. business great of as to the of to real continues great grow ability the business. and performance in you I'd cross-sell the had first saw earlier. company win result is help performance a QX want that of our in we say think the Merchant

And service while market lockbox On we the increasingly business we of business. share have the didn't of there that are last business. continuing QX side And we year. a are as towards the a on side software BXB saw was things the lockbox investing we business, moving the of the of this aspect that to the softer win some and we're of little the period, in bit business recurring

to adviser for us the the help BXB right that all continuing the business to help he Mike the is And get transition. the and as grateful company great direction. Very moving in on did things an

a capabilities is we we're while specifically, as add around area, of the the successor. Software today which me looking find is business to to And a sort reporting growth team That more Service. to

So we're grateful for all did. that Mike

of future Payments that general. business optimistic are about We the and really in

Lance Vitanza

that -- I I secular you as past, you've I long-term in in describe described maybe right, mean the could, decline. just business of quick a one if think regarding lockbox. Would somewhat follow-up, And

Or And to I'm kind be digits to -- I be of out? we just that mean, sort I'm expect down of wondering when wondering, we business And business that expect from shouldn't should here on industry-wide, a mid-single a of business it be relative in to you period perhaps bit talk was wrong, do softness, have about better that I softness a it flat would that's little even and growing? that? or

Barry McCarthy

first lockbox I business. to important the roughly BXB think total. of And business of the business the growing split So all, talk and between it's complexion about it's the in Software Service as a

And win are do gains so the on headwinds the decline mitigate we lockbox there. But of space. market then helps we have the seen share the side you've that secular yes, significant in last years and business, that have there is of what or new over us business, couple that

year. us significant in there. on the you had fourth in some that a where had very really And competitor deliver volume QX terrific then an of last course, helped that of year wins quarter And we've of outage, a saw, from last result we took

big We have clear, we're on we the business future. as think Service more got the Software And we a clients a and be on lockbox to to see provide stability. to side more focusing add of pipeline. as that But because some the we'll the continue

more to of accelerate. expect details, leads opportunity be business successful annual build a our got more had we've help to receivables front week launch that new hundreds the at of We of And be customers next sharing an in side customer and of event, where our we'll product.

Chip Zint

business. generally right, the that you're aggregate rest the that add just the business our of Lance, decline, would like in of I paper parts is lockbox in

digital. We in continue to move to to ourselves ways innovate different more it

our that which on improving lot of efficiency business and remarks, you the efficiency site profitability, that did a we consolidation through as other heard of this in margins We're really year and focused the previous and initiatives.

in margins softness, we really run more a margins business to able the for had, a those in the not with to but the efficient to opportunities only to and way take is as more and have to challenges we we partner expand volume EBITDA customers expand we as operations testament BXB continue there, which volume, were totality. look well for on the continue to that despite Even opportunity

Lance Vitanza

helpful. Congrats again. Super

Operator

line from of Your question Strauzer comes the Charlie next CJS. from

Charles Strauzer

Just drivers bit you at million the to guidance and that if the focus there. a strong potentially could assumptions you we guidance, And built guidance, off provided the could on cash range? what looking a range? that that into pretty flow million then with free $XX little the from in what $XX Coming are [indiscernible] 'XX, exceeding

Chip Zint

Charlie. Yes. Thank you,

we I think that XX want from set adding acknowledge was company we call that the to quarter where X flow cash charges a cash more off obvious as do I through free guidance XXX the restructuring based the did year-to-date the Star North XXXX that full year lower original on first our up. and that to reset thing time. It that did recall. through to I XX. off as range were for guidance factors, QX down I to third wise of XX as And did at you'll I the to as to based well of responsible potential the range introduction

on hard at running and change flow focus internal portfolio. to continuing the optimize things didn't we however, across our cash Now

of look ahead the done really when was really work on coming at So you working to, where team's in reset efficiency. result I of our that way a capital to the final work guidance function incredible

the team with inventory how was very worked impressed down. I

with inventory year progressed working we team dealt as back got the As ERP XXXX. of the upgrade, through challenges had the example, around worked through we starting as in all very hard as soon an

about ERP as think inflation the chain well You project. supply disruptions, as

and working We for us. our on other finally got also the capital a chance We were to work DSO through was and down, really efficiency bring which very efficient levers. great that

acknowledge just and the So I'm thing, with did. I that great very do beats team want pleased to what a

across what I'm cash we're XX with the period free again, And XX the that's I at did with for now flow. the range As consistent positive. X-year X-year driving ahead, look Over in beat guidance period, I this more year, a holding net to XXXX, before. a

really a in strong down after look I now ahead way. quarter, as But having fourth walk this I moment, off come this it right just

about think delivered we just XXXX. XX I in the

We off $XX top, on is basis to which from the off impacts business roughly take have cash estimated million. exits, the a

just I that working at outflow. it of neutral, an XXXX, not I'm then in capital more And cash an source inflow, planning time, not got look be point through. took in I to this it you was of a at net picture to a while fantastic

drive On the my an more. upper opportunity of I it's on But there's maybe and lower an would it outflow. range, to neutral, end, be end think the

don't So to just as cash a bit but before, to could restructuring, again, have restructuring anticipate We $XX But spend the as perfect million visibility XX, said it nature kind assuming less set lastly, we through expect, that it. in now, construction, it, onetime about there. be of I'm a lower. And right would we've my you do to little call of then range. it's roughly spend,

operations room do. would and still in into the how to get give my us see us execute And So be to leaves we for start that improve view range. to that year time to the

that lower a to place I it continued think well to levers the then drive upwards improvement we've restructuring as And around would lower of the think, is potentially as end very be here, responsible range I capital be. set the And working charges.

to ahead thought last call reiterate, want out we'd thing just in again, where December. I I'll that X-year we're how be we the And is, across just period, of

to would X.Xx year. estimated X.X. X.X, end X.X we at ended we be at December, In leverage. We're by year the this already of the getting And so that

on we that with pleased very journey. So where are

end cash flow our take round. depending you we're in midpoint of to EBITDA range, between the year X.X, take suggest If range, midpoint on our the in the you that this of would free X.X going

with just ahead It's that priority positive. progress, a I'm again, critical pleased strategic really So for all of us. getting

Charles Strauzer

come If some And sheet. reduce do refi balance your segueing rates to Great. just or opportunities the were are potentially there expense? swaps, whatever, to the to down, interest to debt some of

Chip Zint

Yes.

XX% a now approximately So volatility throughout rate, quarters in we're with markets. removes we current swaps at effectively, in X did the fixed last the of lot the keep mind right which the

we are the change no this rates. plan year, we planning interest As in

they change in tune with doing start would them going what updates guidance the And go is of rates. We, end what don't into put range. assuming be the are lower would and the of the out, a that are. really our our their obviously, we we're up. We no remaining to But to come XXX of why very course, way in Fed down, we see if staying reason cognizant XXX

The a in drive reason little cash would loaded, upwards to just bit debt be on year revolving draw flow more we would and drift was we across had more back-end free earlier the if timing cash cost. down year the

I question would To sit about with your time. the is we what refinancing say here side, still ample direct just

facility, our of next our major maturity is on until revolver credit So loan end XXXX. the term of June our our A and not

go that current. let We not obviously will debt

do. what better is, us start that advice part So for effectively and guidance on bank the see get to and leverage should gives to just our educated group a and on the the market what of alternatives our we are situation year what perspective really

what interest markets that capital of on have look perspective. a don't time or we from a like market the period from ball year rates be crystal will what So will a now come

not, going it be assured, of that and hope get on current. continue our that average to bring But a so in And continue cost that can we debt ahead and down that we're working down time. bring the debt obviously, would balance way that early weighted well we rest do that the rate comes costs interest But to our over to down. if we'll debt becoming address delever

Operator

Marc line the from comes Sidoti. question next from Your Instructions] Riddick [Operator of

Marc Riddick

I was go give spend could I if appreciate you to So of deal for reminder the of that. to as the to as half answer, actually going last a I of so just us great and quick the curious spending covered the update I far of tech maybe was with some any do wanted sort of timing -- a lumpy to you if the there's or that year about thinking we the should needs? be us as -- anything first where

Barry McCarthy

on framework different how of years. sort is the last a giving 'XX than of by couple start just me Let

So infrastructure. completed in of our have all our we modernizing investments

at the which our last year, time, live this infrastructure with So that ERP, went recall piece last we spending. was of

cloud. systems complete now, our the fully all modernized of core them we're moving that into So with operating

can growth, we those generate focusing on So payments we are investing items more and and infrastructure specifically this less businesses spending in year, where the on in data.

a also So slow less while we the slightly that down restructuring expect bit, to expect Chip spending on we expense. said

think that on? I infrastructure. towards add our going things do are here -- rather our want than that shifting growth you more is and What note to to the is point and big spending the to drive simply modernizing stabilizing improving

Chip Zint

it. I multiple your layers there's Marc, question, think to Yes,

predict there. just getting my I'm if it going try I'll and not best So where you're clarify to

we But on $XXX the side, million. CapEx guided

the Barry just moved We site through we've said, through the moved As consolidation. mostly obviously ERP. really

prod So you're [indiscernible] development. to on starting true really software dev

very So think I to million going $XXX don't that be lumpy. is really

relatively I think be across to linear it's period. the going

us on there. right see to high-return initiatives the going growth invest to continue You're

year, If is keep charge, end charges your of overall the consolidation million. mind, then getting doing number the site as middle a $XX front alluded our lockbox in end. last North were and at little Star a as more to the optimization that things, question of restructuring the ERP And the year, was well the towards of Barry in bit, restructuring as towards the

I As all it it, we've range peak really nature to the somewhere the start of year that's estimate it said you that's but XX restructuring see of to North with still between and see believe coming spending us, kind could of Again, for perfectly can't this restructuring of overall the down. before XX. spending we Star. really

We million you in XXX Star-related. And spent $XX between guided to would to million guys so be Star last that $XX spend year, that overall XXX. was we roughly of North North the

there early occur the to puts with this charges to XX frame. XX near year the us remaining job obviously in end around year this time XXXX through spending the So of

that for. So you're hopefully, gives perspective what overall looking you

Marc Riddick

then you're changed No, to know if that if I planning far too I from maybe activity views any anything there's see general was Investor appreciate or as I receiving the that. that's since has And as perfect. as early insights client far there any it as it's wondering if or feedback but clients was Day? that early, was as far as

Barry McCarthy

couple of there. a for line you of So things top sort

all with model we're from of to And to the ability across our to whole our how is We we've cross-sell continuing businesses. pipeline continue be that pleased benefit One expanding see talked previously. Deluxe about our

so we've a decent be of the year. early seeing DDM how understanding early, business far, their also got in because rest of indications rolling It's will the have but spending. pretty seem we're good And encouraging. consumer programs think obviously out we the clients I across line sight of

we're our And a we tell you think today forward. what which to Day, back year what consistent very we're really believe affirm we in and going December. confidence we And would so shared moving with is seeing have us I the -- we is you to at Investor what solid gives provided transformation guidance

Operator

We queue call Brian our Anderson at this have time. in further no questions will back the to I for closing turn remarks.

Brian Anderson

Thank you, Krista.

XX like the conclude, High at to we on Yield Conference quarter. will Finance Forum Wolfe XX the XX FinTech Global JPMorgan be Before that and I'd management February the and participating XX Leverage during at and share on and March

share all and quarter we us as look again for with in today, Thanks first again speaking we our results. May XXXX joining you to forward

Operator

for your Thank and may This disconnect. now you conference concludes you participation, call. today's

Deluxe (DLX) 1 Feb 242023 Q4 Earnings call transcript