• Reported revenue decreased 1.9% due to anticipated impact from divestitures, and comparable adjusted revenue increased 0.5%
• First quarter GAAP diluted EPS was $0.06 and adjusted diluted EPS was $0.80
• Net income was $2.8 million, down from $9.7 million in the prior year
• Adjusted EBITDA increased 0.8%, and comparable adjusted EBITDA increased 2.1%
• Affirms full-year 2023 guidance

MINNEAPOLIS--Deluxe, a Trusted Payments and Data company, today reported operating results for its first quarter ended March 31, 2023.

“We had a solid start to 2023 highlighted by increases in both comparable adjusted revenue and EBITDA,” said Barry McCarthy, President and CEO of Deluxe. “We are pleased to see modest growth in both of these metrics, particularly with profits growing faster than revenue, demonstrating continued improvement in operating leverage.”

“We are encouraged by our overall performance in the first quarter, and we are affirming our full-year 2023 guidance,” said Chip Zint, Senior Vice President and Chief Financial Officer of Deluxe. “We also completed the go-live of our ERP system, the last of our "Six Flags" infrastructure modernization initiatives. Now, in addition to continued top line growth, we are better positioned to see increases in operational efficiencies and free cash flow as the year progresses.”

Revenue for the first quarter decreased $10.6 million from the previous year. Comparable adjusted revenue, where we have removed the impact of divesting non-core businesses, increased 0.5%.

Net income of $2.8 million was down from $9.7 million in the first quarter of 2022, primarily due to higher interest expense and a higher income tax rate.
Adjusted EBITDA margin was 18.4%, up 50 basis points from the prior year, driven by pricing actions and improved cost structure.

Adjusted diluted EPS was $0.80 versus $1.05 in the prior year.

Outlook

The Company continues to expect the following for full-year 2023, inclusive of expected divestitures, and all figures are approximate:

Revenue of $2.145 to $2.210 billion
Adjusted EBITDA of $390 to $405 million
Adjusted EPS of $2.90 to $3.25
Free cash flow of $80 to $100 million

Among other things, the guidance outlined above is subject to the closure of the web hosting and logo divestiture in May 2023, prevailing macroeconomic conditions, labor supply issues, inflation, and the impact of other divestitures.

Capital Allocation and Dividend

The Board of Directors recently approved a regular quarterly dividend of $0.30 per share. The dividend will be payable on June 5, 2023 to shareholders of record as of market closing on May 22, 2023.

Earnings Call Information

Deluxe management will host a conference call today at 8:30 a.m. ET (7:30 a.m. CT) to review the financial results. Listeners can access the call by dialing 1-888-210-4748 (access code 7092711). The webcast and presentation will also be available on the investor relations website at www.investors.deluxe.com. Alternatively, an audio replay of the call will be available after 11:30 a.m. ET through midnight on May 11, 2023 by dialing 1-800-770-2030 (access code 7092711).