DLX - Earnings call transcript Q3 2024

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Deluxe Quarterly Earnings Conference Call. [Operator Instructions] And today's call is being recorded. At this time, I'd 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 Third Quarter 2024 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 strategy comments regarding and are financial today in in Securities intentions, made as Reform company's expectations and seen of that slide, like the the to begin Private I'd XXXX. remind projections, estimates as management's nature on future performance

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

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

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

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

And with Barry. over that, it I'll to turn

Barry McCarthy

for report and enterprise. earnings of sustained everyone. evening, Brian, pleased strong the flows and comparable I'm cash including of free Thanks, quarter debt third metrics, level results, growth to net core good our expansion across our adjusted continued reduced a

a EBITDA, During year-over-year expansion we adjusted in accompanying XXX margin quarter, basis the drove X% . nearly of comparable points. growth

X.X% also Our free cash for the grew period. flow

our to revenue. earnings demonstrate these key than program expand last third the and Star accelerate designed our faster was systematically Day Investor As metrics, further consistently to our quarter results at December, we outlined ability profitability North

healthy continued our quarter, to results units. top the across During also line we operating payments deliver

million within prior The sequential $XX drove Data of The guidance seen just quarter over revenue profile business of year-over-year the basis, improvement. saw for consistent a time Segment Services. sustained payments the comparable. strong the a more year segment quarters, the returned during also also year-to-date and first modest respectively. strong during data versus growth our X%, and last Merchant growth X BXB exceeded On quarter. growth segment to Merchant than has X% period, this year mid-single-digit X% of We with The through

I'll allocation a more ongoing balance cover in this further execution tonight, for to range. the on for narrow by a few Accompanying debt top are million reduced priority continued to the quarter strong segment additional and enterprise expansion line existing results we're revenue priorities. progress, highlights We earnings our bit in second as across detail a year of sequentially our cash confirming year-to-date the core Building guidance capital net results, moments. the flow within testament our and third full quarter, these $XX our commitment from debt demonstrating company. strong top our a reduction

Chip will share detail comments. his more in during

like execution Now to on providing quarter, the Star progress into our North more to I'd plan. prior highlight insight

XXXX. of free cash trends for $XX incremental improvements improvements both annualized work multiyear was EBITDA are targeted expected decline over of to Star comparable a these As to a results incremental the designed million net factoring $XXX unlock impacts after portfolio, baseline reminder, print of million XXXX across a our $XXX North the identify XX across On program basis, from secular and EBITDA million adjusted flow, our to by streams horizon. adjusted

has to is our we the marked we anniversary initiative. our North third further of scoped goals. progress EBITDA than This the as execution improvements. now more the annualized projects in of the proud comprising completion I'm in and notable fully milestone. enterprise quarter, or share Star During stage reached $XXX a our pleased achieving confidence of success targeted million $XXX the of first increases multiyear the million We're

full XXXX throughout as realization phased our coming Importantly, execution will progresses. quarters the be over benefit reflected

clearest our quarter, see particularly of of noted last within one I improvement the SG&A North corporate. ways via Star As our expense, to the progress continued is

During prior year the the improved than overall corporate by expenses XX% quarter, more third period. from

to Additionally, improved have cash restructuring free trended contributed and results This year flow third cash our integration quarter. the full expenses versus to North relating Star estimates. our favorably year-to-date through

our some Now to provide about performance. additional details third quarter

with to believe results a comparable and for provide consistent reported comments reminder, and calls, our reflect we our adjusted year-to-date business review context. periods, both performance. ongoing additional consolidated the comparable adjusted Chip best my As results quarter will represents prior will which and

quarter, strong that quarter rate operating first I enterprise year reflected in this demonstrating $XXX X% under our the third EBITDA reflects matched the from increasing level, and consecutive net X% reached This third of quarter roughly growth adjusted was third decline leverage the For XXXX. businesses, as of million, million, year-over-year. Total just which of my revenue opening EBITDA exited the comments. robust the of at $XXX.X quarter noted

points, the margins EBITDA year-to-date enabling under trend expanded basis quarter capital basis We finished a $XX the focused by full has a flow North of EBITDA our toward Star. reflecting just points the On pleased expansion cash year. basis, these under have our XXX priorities and particularly margins improved year-to-date further allocation adjusted Adjusted progress by XXX prior while results, versus adjusted XX%, continuation our more cash million figures. the sequential by remain growing from year-to-date and EBITDA flow free at than comparable with XXXX

beginning to our highlights, quarter with revenue now Merchant Moving Services. segment third

segment over just the For revenue quarter, X%. grew

signaled call, Total processing new wins. year-to-date overall on While this the very we to continue the remain from X% benefit moderation second with pleased of merchant reflected our business. last trajectory as volumes nearly and remain solid, from we trajectory, quarter our we

recent the trends As internal providers always, sources. our to from economic we continue and spending other the material card and forecast as discretionary brands, well macroeconomic data insights our monitor leveraged surrounding Fed sentiment. We proprietary as consumer

have pressure a events but win bit, we stabilized the last to trends that remains, believe portfolio lap us to While we during went enable deliver November. healthy will appear as growth the our to from weather Impacts major even some quarter. largely live some growth overall may diversified continue third that economic recent uncertainty

to BXB results within the segment. payment Shifting

fourth anticipated, we of BXB the recovered XXXX. segment growth decline with in commentary the This in last provided Consistent As we experienced of with quarter, period. about improvement reported year-over-year was will sequentially line during the anticipate across call. the We for growth expectations, the improve revenue BXB first trajectory during from rates half the we our the quarter. our third X% the revenue

near-term incremental remittance SaaS growth of lines outlook We volumes. of these remain given existing opportunities our onboarding longer-term new and in business, strong for confident pipeline our of

million. Solutions, more Moving strong Data than continued deliver versus quarter just expanding which the results, now to revenue over to $XX sequentially to X% by second

our client in quarter, As the revenue we for campaign data-driven marketing again resulting driven the last or decline prior business, signaled core specific timing once third DDM lapped by a during a call, compare during year this challenging X.X% period.

As and of we've strong of view growth year-to-date acquisition reflective remains noted length. On our FI basis X%, multi-quarter customer clients that expanding more previously, data demand across for growth through a both best data's a remained believe activities the than through continued X marketing for verticals. at we core growth trajectory quarters, revenue

its low business returned Shifting revenue This during to quarter. profile decline Print single-digit the segment. finally expected to our

declining X% quarter versus roughly the prior Third revenues year. $XXX over million, finished just

This is than declines under to and guidance Fed revenues just have on rate X% year-to-date experienced Check a overall aligned legacy estimates. our long-term Importantly, basis. better

Star deleveraging and To particularly demonstrate North quarter robust and within continued our summarize, our of remains results, reduction focused flow transformation deliver continuing costs expansion demonstrated third free operating path our ongoing our our enterprise QX on diligently overall progress. debt and of of leverage. our net cash earnings, execution operating to management The

to again I thank this my a take moment passing want once fellow Finally, to before to Chip, Deluxers.

to day. is of and driving the Your customers our exceeding commitment continuous and consistent every recognized appreciated needs improvement

You Deluxe are difference. the

to over Chip. I'll that, With turn it

Chip Zint

Thank you, evening, and Barry, everyone. good

were his year-over-year with and expansion, in Barry the continued of generation adjusted third quarter, comparable growth and during during our As progress noted the strong margin period. particularly pleased EPS cash flow we our EBITDA free opening,

consolidated and our additional guidance. providing period for to segment flow context quarters, around balance and bit our cash on past in today XXXX moving I'll the As our results, the begin sheet of progress highlights a before

reported exits revenue down of the $XXX.X For impact prior of X.X%, of adjusted million, a while basis, total declining year X.X% the basis. we comparable posted on year-over-year our inclusive quarter, a on

the quarter this businesses. of second have the year, divestiture of end the lapped web of our we fully As hosting of

quarter our We or reported the exited quarters the negative in only period, the income impacts such, $X of net per will or loss $X.XX of $X.X GAAP remaining for improving and $X.XX the business. As XXXX. from third million conversion business ongoing the share million reflect of share payroll are per of lowered

SG&A third improved of driven was the to million, EBITDA integration-related exit. basis restructuring our was as both expense gain well margins versus third adjusted improving lower quarter year. and by related as Barry a EBITDA payroll X.X% of up noted. improvement as spend quarter versus were points adjusted the XXX XXXX, XX.X%, Comparable Comparable and $XXX.X last This

period. came net by previously the from at the noted, income improving XXXX, EPS tax in adjusted the for $X.XX, net in comparable QX driven $X.XX provision primarily to of drivers increases

trend in the million, improving to X.X% Barry versus year-to-year $XX.X Merchant year-to-date at prior revenue the quarter margins driven beginning the X.X% comments. to first XX%, his year with from by dynamics year-to-date X.X% Services of through while Segment The year, by details, primarily growth $XX.X adjusted Merchant finished our dollar months the the maintaining to period. growth rate, segment turning the the third EBITDA segment bringing operating consistently at down mix prior opening grew as XX.X% Now million, finished throughout while slightly margin year-over-year seen we've business. noted X channel year,

continued period mid-market comments, lap implementation levels November revenue in year. noted fourth the during prior we of Merchant last anticipate the FI the activity we as that year-to-date prior moderation year would our we began during quarter some As of growth begin from quarter to

consistent both Day and for the growth with XXXX year rates remains guidance to the prior our horizon and in single-digit mid- high outlook full Investor included communications. Our longer-term

our adjusted year-to-date segment. consistent of Merchant the quarter margins EBITDA for Third this also segment remained for XX.X% with outlook

BXB to payments. Moving

For revenue X.X% million, $XX.X the segment $X.X and growing BXB versus sequentially million at improving prior finished the quarter third from XXXX. quarter,

lockbox quarter, factors remittance initial on While wins onboarding we call. in multiple during we prior primary drivers of customer implementation the the included to new the material saw anticipated overall from volume trajectory third activity We've and these mentioned additions business, previously those contributed our the quarterly deals. and improved

and This moderation previously. to saw declining overall license on-premise X% legacy XX.X%, impacts more the a basis treasury management while of a business EBITDA points continue revenue from million, business and across we comps implemented which hardware, year rate the Adjusted the within our BXB we of our prior finished share execute maintaining year for of result overall quarter migration towards receivables software other model. onetime improvement level. included adjusted recurring activity EBITDA sequential as business revenue $XX.X Additionally, XX of at onboarding mix lockbox as of period reflected noted margin initial nonrecurring shifts from the second from gain prior during a balance

including a improvement, third year-to-date revenue range. the decline also adjusted for we around that quarter to low year our these results, revenue remain margin stabilize mid-XX% low EBITDA on segment noted trajectory We the single-digit in to full should continue included as Based last the quarter. confident anticipate we updated guidance, rate

period partners, reflecting Solutions. another same quarter. which year-over-year core Data of during strong quarter XXXX, the decline and inclusive the comp $XX.X of both year at Data X.X% the revenues prior its finished of prior second strong third on discussed XXXX. for activity lapping quarters versus we FI year among This campaign of deposit-seeking during a million third very to performance, segment the Moving revenue continued challenging

noted Adjusted from second during margins quarter the core average by strong million, favorably results had and adjusted improved Segment EBITDA mix in at previously prior segment quarter activity the of growth period. XX.X% we expanded of XX.X% of operating sequentially the campaign overall the on basis while to comparison. revenues third barometer management very X favorable DDM $XX.X finished the the Overall, against QX reflecting revenue a XXX X X.X%. quarter performed trailing to the year, versus of expense continued EBITDA points for

our longer-term data segment mid- growth shared in expectations a XXXX line for the returning single-digit high with segment the anticipate during our We with profile to year-over-year year anticipated consistent and growth quarter trajectory for Day. during to full this Investor fourth guidance

for outlook We confidence low strong maintained in this rate mid-XX% longer-term the to also EBITDA segment. adjusted

offerings X.X% Turning expectations, quarter now declining perform declining revenues businesses. was Print as just platforms. higher-margin quarter solutions broad our The Print revenue continued year-over-year basis. promotional focus our our over with leverage short-cycle on $XXX.X X.X% million, quarter. declined to balance offerings, segment printed print spending dynamics in X% line our the well during the Legacy of a continued discretionary last third which on Check the reflecting both to as discussed manufacturing

while for margins year the chain XX leveraging Print at manage ongoing versus print-on-demand print the which improved quarter very efficiency, XX.X%, flow investments EBITDA quality continue for prior to we the adjusted basis from as capacity segment expanding portfolio finished to points highest decline cash a and our products the EBITDA the Overall, X.X% utilization proactively supply $XX.X drive modest Adjusted maximizing while reflected Print to deliver generation. prior million, year.

XXs low- Print outlook. expect our longer-term Consistent continue segment, shared we with declines adjusted remaining the year outlook margins low to full mid-single-digit to see with at XXXX EBITDA our Day, the across Investor within to revenue in

cash cash ended improving flow for improved and a noted. of $X.XX as the debt our strong from million million by results, on with $XX.X results sheet of end QX $XX.X net the sequentially period level of $X.XX billion, billion flow balance quarter. our mark the our quarter to the third billion, from Barry year-end XXXX at We while third level Turning $X.XX

X-month results to cash activities the $XX.X prior at finished year-end. the through million million while a Our restructuring driven results, and flow, less a of cash at and ratio the lower end spend, Free at X.Xx the income year-to-date by as improved $XX.X EBITDA on months million capital quarter at reported flat adjusted defined reflecting $XX.X X.Xx the quarter, the X the third improving net versus finished operating capital improving inclusive year. from XXXX, reported the improvement net debt provided year-to-date working remaining of of to for ratio lower sequential expenditures, period by for capital efficiency expenditures versus from basis continuing

clear operating flow We trajectory priorities. with ability and be consistent generation sustain continue capital to year-to-date our pleased our to our our deleveraging cash quarter with third allocation

overall our to capital structure. Moving

As last with engaged we we our rate other surrounding consistently broader to our stack. lending exploration environment current optionality available continue quarter, longer-term of interest regarding remain debt shared monitor capital actively and and group advisers the

internal fixed remains XX% rate, our here, bonds existing facilities loan June while profile in shown of As carry our interest roughly maturities, our credit X% and XXXX mature revolving XXXX.

going on any liquidity structure financing comfortable levels. We'll additional provide We forward with or also available remain other our capital updates developments as applicable.

guidance, dividend The of of to shareholders our December Board November all quarterly consistent on share outstanding XXXX. will per Before on regular prior turning of approved X, quarters, $X.XX record XXXX, all on market with dividend a closing shares. to as be XX. payable

detailed Star to our make progress strong key against Barry we initiatives. previously, continue North As

metrics for months. the the reflected guidance of guidance outlook. XXXX Barry's figures on mind exits ranges. existing of prior impacts reflect we stream guidance all Tonight, shown in work approximate year the full XX in Full ranges realization narrowing business slide, comments our year Forecasted over within noted impact to the are our estimates the keeping are current implemented are from within fully

billion reflecting X% between $XXX flat a EBITDA adjusted to million, $X.XX, of the $XX reflecting billion, and to $X.XX to EPS operating growth. Adjusted leverage forecasts of X% delivered cash reflecting of growth continuation $X.XX quarters. to across Adjusted adjusted adjusted comparable growth comparable the versus Revenue comparable to comparable of X% XXXX. XX% and results flow of to million we've adjusted decline These million $X.XX X X% first $XXX reflect robust free million. of through $XXX

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

North Star results. continued focus our our with quarter during pleased third were year-to-date the overall we summary, on In and execution

clear months the the Through improve we objectives. expand like I'd mic we're for year, all cash executing EBITDA, continued against X leave our to free first margins, you simply open we've well Before statement with and grow to the questions, be of that debt flow and our intended and performance to will way and you we we the look our pay that execution focus quarter our sharing remain would. confident reflected told call. fourth forward to down on continue We progress in fourth quarter our a

questions. Operator, are ready now take to we

Operator

TD from Vitanza And come our will with Instructions] [Operator Lance first question Cowen.

Lance Vitanza

was off, I data EBITDA the to and I in revenue first job basis. little the nice was a know on So down all disappointed up. and appreciate but And like-for-like tone services same. just see a flow. solutions total wasn't on the cash merchant it [indiscernible], it improving down I

question, here. my and you we confident growth here, think consolidated So Barry, obviously, I'm for year. XXXX can see about as not that full how guidance X-parter a kind I'm the expecting of revenue you but are

Obviously, that growing some are nicely. you've businesses I appreciate got

businesses secular also some headwinds. You've are some got facing that

So maybe I couple get mentioned wanted there? And you to the just a then times. Day of Investor Chip, temperature your for

Is be would math it at a you in and if perhaps have what normal the be for go exit it Is size long-term my back Any those helpful. less? your could very there growth factoring expectations and sectors, the out when X%? we expect don't XXXX, should XXXX, each for Is growth as lay businesses it it remind If of consolidated more? And Is us in we out year? then fingertips. of I X%? color turns to the X it we

Barry McCarthy

let the Lance, me start with question. So first

our that to and It's you'll also grow development, North against pleased more than Star we're product recall all, more our revenue. with improving Star is of cost. helping progress launching product North initiatives. the just First very And

see to fruits sort starting the of the you're so of first And that.

I to a be to gets the of think for growth year, year we business in QX rest goal point growth. BXB start look have better or for and you and have without how its think And that trajectory a . We now slightly a the be growth would business. sequential XXXX providing what's shared guidance that is that's the said guided at in there'll would we've just I we to ultimately And business happening we this from that tough digit it that for QX. got think -- mid-single rate. to we positive

look very continues that business, on that well. as be that, see you we're proud footing We marketing. at solid merchant what If well data-driven think very of we in the business to as as

or Now in we think that tough I super a think as year, business comp particularly for prepared data our last remarks, a QX. this horizon. is said particular a multi-quarter made over we expect recover in healthy to which in mid-single versus quarter, the QX. grow over better in had year, But growth really very this that difficult We

we of put horizons. prospects, the long-term data-driven are to their path those on with their together, delivering things said growth So all businesses what marketing, BXB be would growth Merchant think we've Services, great

we holding enterprise. growth While on helps same our at that are to the [indiscernible] the time, across with the Print margins fuel business really

Chip Zint

Lance Yes, by your of well the I'll part question. and take said Barry. second was that

at to business, the range speaking, we expecting to well BXB simplify expecting But over we're upper data directionally few range. you think upper in X-year single-digit The growing if things, in grow Day, So the out CAGR and the mid-single-digit it single-digit showed guys grow range horizon. business, next ranges as about merchant [ as in we're laid the the ] ranges, horizon. a across I'll you we what Investor

that, on declining then to range. of And low Print business in the top have the you mid-single-digit

guided algorithm, of in where I put not near-term you based all We vacuum, the growth CAGRs if to next will When XXXX, year trajectory. the end put are value horizon. our it where off we're all we lower this right? it the put have think guided we'll it But those few be, the us in year, So going end over right? to we think you

But profit with it well. the the the lower you that end haven't scale fully somewhere to I going we the said should I the guided to algorithm think over And how expect, long faster just I to off along think term initially of will play X% is value than The kind based and expanding of XXXX. we journey, on that grow X%. together. in revenue. be think X% again, it X% That's would would in the Barry what's

starting I for show think to if that putting low I with quarter, third the have be single-digit data board close the to were those BXB that again, there quarter, the tough with able points to growth, comp think the we on the had data. to and comp wouldn't been turn

trajectory set up feel we So businesses year we'll I and and guide to shaping XXXX year, up for good about the the which are next the exit ability how that think on us the the call. with right

Operator

CJS. question next the Charlie from will And with come Strauzer

Charles Strauzer

actually a you pretty margin and maybe bit on mix in EBITDA And more moreover, little were on Can that? Maybe quarter well. color in for was expense that some my then too. reductions, quarter. more commentary strong. the margins the I color being in questions, of data behind your in but shed strong said that, on very as little drivers you more the revenue there XX% light nearly know bit shed line despite kind a

Barry McCarthy

we're significant is we spending. at focused company, our of been you and operating profile improving very can the very high can because on on corporate corporate have Just -- what know our reduction the the line overall doing of you level, the best on see efficiency in course, of we've see improved place year-on-year quarter-on-quarter in this, being you see line the margin our you to very in the where efficiency, efficiency Charlie, had

execution also had that healthy the periods. each of just it's businesses But across broad

it a doing that business, darn want had selling quarter, a last think well execution good more can overall. honestly is they're It a grew as comp add this and features there, milestone on the was pretty million Chip the $XX It over just job and gigantic quarter. data think Whatever additional which business, QX had was sequentially. that of great great to And and as I here against add a that.... good functions I year. up for

Chip Zint

Yes.

I of expand think to the needed grow part and time the faster drive I EBITDA enterprise, the the and is North the to starting do with a margins for than vision revenue. this what Star leverage, we Charlie, of mean, operating period

And so the execute North with center and line, the about accelerated even the you're the talking grow seeing roll what [indiscernible], the or to P&L. the of program, growth P&L, relative noise more work, noticing, to in really margin and right? our into initiatives, doing the corporate in things across the the procurement the you're Star, of whether realized top via numbers efficiently would all the business . We're run we that it's towards track down The revenue the leading we're we slightly out, EBITDA tough business cost progress expect as savings we the comps we whether it's good inside through or expansion, all revenue.

we I So about think feel good that. really

margin how us we data, up said, the relative this terms value our taking, to Barry in well maybe obviously driving that of long-term segment, deals business some setting as continues efficiency the and campaign higher And there. inside North of to we're to the realizing thought be be of inside really what would on business, we're rates Star end mix perform

business. data over So feel that to to us it That's XXs an the optimism for long that maintain for of is area perform kind the But continue it I continues good for obviously, think is. team executing. term, range how about really to like we and we low mid-XXs

Charles Strauzer

sheet. Chip, then, gears And little switching just helpful. bit very the That's a balance to

the and going commentary the more debt the some With direction, and near-term sooner rates kind your thoughts are rather that lower later? heading to of in maturities. You made tackle of some about right than

Chip Zint

through I thoughts we're bank with mean our and Yes. strategies group. those still working

next the all want of let in current. obviously, of mature side And those go know don't we the will equation I year. to it's we think -- maturities June bank

of or nearing very this we we're to next. look it, or have where window whether opportunity we done, we're walking as a here that get we into at that would So quarter soon, want

And spreads for interest think at have credit progressed on so going speaking seeing the what's us, broadly find it's timing. the hearing with looking I to and how trying right market, rates,

announce next to we'll about, near year. the nothing ] something get to short debt before order but we definitely going nothing talk in really sure [ it's yet, make to So address current anywhere

Operator

with our come Will next Brenneman question Research. And NorthCoast from will

Unknown Analyst

was changes as going in to if you're seeing pressure you And has are on to, any I then you competitive in within business Merchant any looked how any environment business? provide guys color for the ask, the growth could transaction the us possibly pricing able well.

Barry McCarthy

going I'm So to sort answer those of separately.

is So local first not-for-profit, and on repair integrated others, compete about auto channel the like et a pressure, pressure price of course, bank marketplace. among our strongest government, of the state and pressure one, competitive vendors, and number of really areas one competitive great but foothold on software in always in But the there's leads. things where including cetera, we and where

ongoing focus is which durable business. that on We pressure the how of sturdy level, and less flipping us that These the allowed -- very present other our constant has more really service to that is it's are and are areas we subject parts to think win in in our space. of

helping Of time, that's we our are cabinet category facility a course, and business. you win full have show that service, the and us to some priced competitively. come in see to merchant you be you'd the were awards of Fort Worth, around at best-in-class in that But see

and we were for implemented about was moving priced, we And value, very a November, service a bank, midsized platform. win. regional win our to It competitively it were on able announced recall wasn't their significant last You'll about and to us while entire and price. we portfolio

win think processing prepared we processing our volume across in trends. business additional us processing is far volume, remarks as And said don't we release helping that's footprint. specifically as that our solid. we But volume So

now course, shared point, what in largely, capital move stabilized this the plenty with the think less earlier we've categories with about Of happening mix stabilizing. is We consumer. towards the that at was year we thought discretionary

we're So quarter forward XXXX looking and the optimistic about fourth to

Unknown Analyst

then just more. Okay. And X

we new kind on an increase were administration was curious with M&A if check the bank business? that would the what and in So have office, impact there of

Barry McCarthy

together, loved don't couple very will bank, public The scenario sides that In ]. rate success I tell bank almost high the for both question the of always when winning you we years I a positive both have one BB&T a it the were came is in we our a existing that We because banks sell ago better, of And and And very one Truist about company's that can merged is [ of sale come a Deluxe. up those together. consolidation we more very notable most SunTrust when is customer. sides the can was the of their largest better. of ended show that service environments, help we that a can bank show we being and to we it's history. product our the show when in formation single

is sheet Our balance better.

than to the much we less are industry in up result, only been business a And a happens, check by has is consolidations, are that part but went when and a overall very a in in the how and share very, of there. able perfect, what's when much disproportionate that we course, contracts bank to information decline happening as for renewal, is our And as we're keep even regularly. that's win disproportionate shared not we -- very not share Fed but rate

in fact help consolidation sheet, a and any we customers better, we us we the renewal deliver a bank have really that a have environment, whether it's the product better or a balance service environment for better -- So product, basis. on win

Chip Zint

Will, in. is just think, I this Chip. I'll chime And

any to follow-up I calm concerns aspect may just it, of that think in the question or come from. Barry next but where nailed

important they're us. Additionally, ultimately, still the They're us. when the partners volumes, sell-through they're consumers, important consolidate, and merge banks to end end to vehicles But businesses, there. the

regardless to So portfolio if service, less banks. drive we'll we still we'll equipment, lockbox the partner of checks, number end our whether all to partner, of the with, aspects it's the markets still of have deliver banks

new a gain It's have customer So negative it didn't more right. that consolidation. before. more to is about or wallet share creates the there no there's gain we us Barry from for maybe opportunity

Operator

from And then with the Sidoti. next question Mark will Riddick come

Marc Riddick

revenue touch productivity spend there or any the have revenue I I that Check to in management I sort But seeing relative was of on as bit -- where seeing year discretionary there. we to client as what helpful. standpoint, change certainly, curious to I wanted from much wondering, you're guess, if I you're might was a the was as ahead been and little expense margin in pickup far both a that know and I on, mix to were behavior was. earlier where relative key. was was

Barry McCarthy

volume. think -- I business, producing printing made a to gives helps checks just expense an seeing can as the win Mark, of we made cost, really significant think us check in as variable fixed investments, you know so of effectively. And in we that in most having steady other The have we manage go. are the of our business, that variable fruits we instead example, that and I And expenses. we inventory we as it's then the the of capabilities some

with smart And product. all it's a the and how in along we made so around we manage investments produce strong print think I and execution

Marc Riddick

of Great. was my year X probably the initially and we're all the Star probably And on pieces then introduced the in a in about favorite sort is as more far a was the -- Slide year broadly since North the slide investor at as deck event. call in now wondering it's then and you so or been of areas different I that there's was that nature part maybe are the things X among any are many you seeing ago of months that plan. involved. maybe sort level so those optimism I upside, that at of wondering, pieces different of see now versus where of are and there look a opportunities if sort

Barry McCarthy

I series $XXX booking of of guess the by are on And We thing we ahead you initiatives we go $XX flow we and X, by an of with would on and those would guess, track saw initiatives, and said or said the of I that progress. and are million EBITDA. on going savings. first we as get the incremental really Page there, we following, proud were track I to Mark, increase there is a we're for XXXX cash company time, the by our start million

or sometimes because works, the goal the to get and multiple you've and know, implementation getting we've got to you've you've Now add progress, quarters. just $XXX of year a of and phase beyond. the you hit with that big how over prepared you on very plus . I from to full Chip, in million completed of we process you work value actually don't this understand million that? a it course, takes that milestone said the want pleased value implemented, $XXX do in that because earn our that But anything we're remarks

Chip Zint

just as mean not of we I to that identified, clarify, but in yet think executed realized. Yes. process,

or the whether fully the certain org last realize then on savings. lapping of value a it's like things Other of year depending technology application pricing, quicker program, getting of to and half design last the the year. time, the realizing decommission did take late So nature things

So it all sequences.

year get build we year So next guidance that we'll XXXX. this our we're into we're and be going going from to where where all how end in to to for

we're But way on as I played together the we've a think out, been team. the with think executing target, things way I stayed stayed very have pleased we've well

you mentioned North the leave I'll piece launched of you delivered mentioned Star we north would little with, we IRR it $XXX but Barry think and a we I last as be the roughly a as Investor thing thought program talked as enable that spend it kind of we think $XXX home in one roughly the dollars to important it when million well script, I I to we million of bit it here, I'll for of we XX%. hit guys Day, at when about restructuring think would

the We're spending promised script, And I the actually but anticipated. executing there, than is, less being value And path. restructuring we're in stewards of I think we we Barry on news disciplined spend. said, full still the we're said very we're as great the see as We that well.

spent we've now So We $XX about of $XX just north program. see million another to million. the date about through

the say I on which down as you program we've the even drifted the So makes end better. that of the lower returns to do math, range, would

we returns free we've above end, swing we're started out, guidance to pleased lower obviously restructuring the year. And on you free cash is playing haven't maybe going year, for deliver. with flow year. we the to that's high think us tightened spend which also yet, to again, step lead again, we're next going how I very but then have well at. next And material flow then finish see look the where it's We've improving along which give way some year So And to year. we the forward ultimately, cash as the the this can ability to as guided up a cash raised free flow

So overall, team and proud stacked and I just very pleased Mark, the very think delivery has the partnered of hands on here. way the

Operator

At Instructions] now And [Operator Anderson conference time, Brian to are back any remarks. this additional no I'll questions. over there closing the turn further for or

Brian Anderson

Thanks, Justin.

website. share as results. Investment Technology joining Securities forward for will on again XX to we XXXX well and which Conference X, I'd the fourth be share Finance early with during applicable us Annual for UBS BofA on the you management attending you as to as Investor full quarter, Relations and this quarter X Stephens our year November that in speaking Conference and respectively, to look will in webcast Nashville like Global our XXXX again be Conference and the Leveraged December any XXXX posted we conclude, information all Thank evening, Before the we

Operator

conclude Thank conference. an We does excellent you. day. for that your thank you do And participation. today's Have

Deluxe (DLX) 6 Nov 242024 Q3 Earnings call transcript