• Reported revenue decreased 3.1% including impact from divestitures, while comparable adjusted revenue was flat year-over-year
• Third quarter GAAP diluted EPS was ($0.18) while adjusted diluted EPS was $0.79
• Net loss of $8.0 million including restructuring and other charges in the quarter, down from net income of $14.7 million in the prior year
• Adjusted EBITDA decreased 2.6%, while comparable adjusted EBITDA increased 3.0%
• Increases full-year 2023 guidance for adjusted EBITDA and adjusted EPS

MINNEAPOLIS--Deluxe, a Trusted Payments and Data company, today reported operating results for its third quarter ended September 30, 2023.

“We are pleased with our third quarter and year-to-date results, as comparable adjusted EBITDA expanded faster than revenue for the third consecutive quarter, putting us on-track for meaningful full- year operating leverage across the business, and demonstrating the true scalability of our portfolio,” said Barry McCarthy, President and CEO of Deluxe. “In addition, our execution against the new holistic enterprise-wide North Star initiative will extend this momentum, enabling our ability to drive more than $100 million of run-rate free cash flow and $80 million of incremental run-rate EBITDA over our multi-year planning horizon.”

“We continued our strong momentum during the third quarter, including significant sequential improvement in free cash flow, and continued reduction of our net debt levels,” said Chip Zint, Senior Vice President and Chief Financial Officer of Deluxe. “Given our year-to-date results and our outlook for the year, including expected fourth-quarter benefits from the North Star initiative, we are once again raising our full-year 2023 earnings guidance.”

Revenue for the third quarter decreased 3.1% from the previous year.

Comparable adjusted revenue, reflecting the removal of prior year business divestitures, was flat compared to the previous year.

Net loss of $8.0 million was down from net income of $14.7 million in the third quarter of 2022, primarily due to restructuring activities, higher interest expense and business exit activity.

Adjusted EBITDA margin was 18.9%, up 10 basis points from the prior year, while comparable adjusted EBITDA margin was up 50 basis points.

Adjusted diluted EPS was $0.79 versus $0.99 in the prior year.

Outlook

The Company updated the following guidance for full-year 2023, inclusive of divestitures, and all figures are approximate:

Revenue of $2.180 to $2.220 billion, unchanged from our prior guidance

Adjusted EBITDA of $405 to $420 million, up from $400 to $415 million

Adjusted EPS of $3.20 to $3.45, up from $3.10 to $3.40

Free cash flow of $60 to $80 million, lowered from $80 to $100 million to reflect in-year cash charges

The guidance outlined above is subject to, among other things, prevailing macroeconomic conditions, global unrest, labor supply issues, inflation, and the impact of 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 December 4, 2023 to shareholders of record as of market closing on November 20, 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 by dialing 1-888-210-4748 (access code 7092711). The audio and accompanying slides will be available via a simultaneous webcast on the investor relations website at www.investors.deluxe.com.  Alternatively, an audio replay will be available after 11:30 a.m. ET through midnight on November 9, 2023 by dialing 1-800-770-2030 (access code 7092711).