Deluxe Corp Releases 10-K Report, Revenue Declines 2%

Deluxe Corporation has released its 10-K report, providing an overview of its operations, financial performance, and outlook for the future. The company offers technology-enabled solutions to enterprises, small businesses, and financial institutions across various regions. It operates through four segments: Payments, Data Solutions, Promotional Solutions, and Checks. Deluxe Corporation aims to deepen customer relationships and help businesses pay and get paid, accelerate growth, and operate more efficiently through its range of solutions.

In the year ended December 31, 2023, Deluxe Corporation reported total revenue of $2.19 billion, representing a 2.0% decrease from the previous year's revenue of $2.24 billion. The decline in revenue was attributed to various factors, including the impact of business exits, which resulted in a decrease in revenue of approximately $52 million for 2023. Additionally, the company experienced a continuing secular decline in order volume for checks, business forms, and certain Promotional Solutions business accessories.

Deluxe Corporation's cash provided by operating activities for 2023 increased by $6.8 million compared to 2022, driven by positive changes in working capital, pricing and cost-saving actions, and growth in data-driven marketing and merchant services revenue. However, the company also faced challenges such as a $28.4 million increase in interest payments due to rising interest rates, as well as inflationary pressures on hourly wages, materials, and delivery.

The company's net debt as of December 31, 2023, was reported at $1.52 billion, with cash and cash equivalents amounting to $72.0 million. Deluxe Corporation's liquidity stood at $312.5 million. The company's capital allocation priorities include reducing debt and net leverage, delivering high return internal investments, and paying dividends. It expects capital expenditures to be approximately $100 million in 2024, as it continues important innovation investments and building scale across its product categories.

Deluxe Corporation reported diluted earnings per share (EPS) of $0.59 for 2023, down from $1.50 for 2022. Adjusted diluted EPS for 2023 was $3.32 compared to $4.08 for 2022, excluding the impact of non-cash items or items that are not indicative of the current period's operating performance. The decrease in adjusted diluted EPS was driven by factors such as increased interest expense, investments in the business, inflationary pressures, and the impact of business exits.

Looking ahead to 2024, Deluxe Corporation expects revenue to be between $2.14 billion and $2.18 billion, compared to 2023 revenue of $2.19 billion. The company anticipates adjusted EBITDA for 2024 to be between $400 million and $420 million, compared to $417 million for 2023. These estimates are subject to prevailing macroeconomic conditions, global unrest, labor supply issues, inflation, and the impact of business exits.

In summary, Deluxe Corporation's 10-K report reflects its efforts to navigate challenges such as declining revenue in certain segments, rising interest expenses, and inflationary pressures, while focusing on growth investments and cost management to drive future profitability and shareholder value. Following these announcements, the company's shares moved -1.8%, and are now trading at a price of $19.11. For more information, read the company's full 10-K submission here.

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