Document
Document - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 27, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-7945 | |
Entity Registrant Name | DELUXE CORPORATION | |
Entity Central Index Key | 0000027996 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | MN | |
Entity Tax Identification Number | 41-0216800 | |
Entity Address, Address Line One | 801 S. Marquette Ave. | |
Entity Address, City or Town | Minneapolis | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55402-2807 | |
City Area Code | 651 | |
Local Phone Number | 483-7111 | |
Title of 12(b) Security | Common Stock, par value $1.00 per share | |
Trading Symbol | DLX | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 42,605,822 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 121,064 | $ 123,122 |
Trade accounts receivable, net of allowances for uncollectible accounts | 174,546 | 161,959 |
Inventories and supplies | 35,355 | 40,130 |
Funds held for customers, including securities carried at fair value of $13,302 and $28,462, respectively | 142,482 | 119,749 |
Revenue in excess of billings | 41,189 | 17,617 |
Other current assets | 52,890 | 44,054 |
Total current assets | 567,526 | 506,631 |
Deferred income taxes | 2,290 | 6,642 |
Long-term investments | 46,832 | 45,919 |
Property, plant and equipment, net of accumulated depreciation of $346,364 and $360,907, respectively | 129,712 | 88,680 |
Operating lease assets | 58,442 | 35,906 |
Intangibles, net of accumulated amortization of $675,417 and $587,273, respectively | 515,936 | 246,760 |
Goodwill | 1,435,483 | 702,958 |
Other non-current assets | 249,972 | 208,679 |
Total assets | 3,006,193 | 1,842,175 |
Current liabilities: | ||
Accounts payable | 138,339 | 116,990 |
Funds held for customers | 141,597 | 117,647 |
Accrued liabilities | 203,784 | 177,183 |
Current portion of long-term debt | 57,167 | 0 |
Total current liabilities | 540,887 | 411,820 |
Long-term debt | 1,719,000 | 840,000 |
Operating lease liabilities | 49,827 | 28,344 |
Deferred income taxes | 66,637 | 5,401 |
Other non-current liabilities | 71,976 | 43,218 |
Commitments and contingencies (Notes 14 and 17) | ||
Shareholders' equity: | ||
Common shares $1 par value (authorized: 500,000 shares; outstanding: September 30, 2021 - 42,601; December 31, 2020 - 41,973) | 42,601 | 41,973 |
Additional paid-in capital | 50,156 | 17,558 |
Retained earnings | 505,100 | 495,153 |
Accumulated other comprehensive loss | (40,231) | (41,433) |
Non-controlling interest | 240 | 141 |
Total shareholders' equity | 557,866 | 513,392 |
Total liabilities and shareholders' equity | $ 3,006,193 | $ 1,842,175 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Funds held for customers, securities carried at fair value | $ 13,302 | $ 28,462 |
Accumulated depreciation | 346,364 | 360,907 |
Accumulated amortization | $ 675,417 | $ 587,273 |
Common stock, par value (per share) | $ 1 | $ 1 |
Common stock, shares authorized | 500,000 | 500,000 |
Common stock, shares outstanding | 42,601 | 41,973 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Total revenue | $ 532,141 | $ 439,461 | $ 1,451,622 | $ 1,336,288 |
Total cost of revenue | (244,151) | (174,461) | (629,237) | (538,792) |
Gross profit | 287,990 | 265,000 | 822,385 | 797,496 |
Selling, general and administrative expense | (239,251) | (198,871) | (685,593) | (634,645) |
Restructuring and integration expense | (12,335) | (18,949) | (38,012) | (56,957) |
Asset impairment charges | 0 | (2,760) | 0 | (101,749) |
Operating income | 36,404 | 44,420 | 98,780 | 4,145 |
Interest expense | (21,494) | (5,083) | (35,548) | (18,254) |
Other income | 2,282 | 2,201 | 6,443 | 8,482 |
Income (loss) before income taxes | 17,192 | 41,538 | 69,675 | (5,627) |
Income tax provision | (4,691) | (12,094) | (20,720) | (13,746) |
Net income (loss) | 12,501 | 29,444 | 48,955 | (19,373) |
Net income attributable to non-controlling interest | (37) | (27) | (99) | (46) |
Net income (loss) attributable to Deluxe | 12,464 | 29,417 | 48,856 | (19,419) |
Total comprehensive loss | 10,099 | 32,319 | 50,157 | (24,330) |
Comprehensive income (loss) attributable to Deluxe | $ 10,062 | $ 32,292 | $ 50,058 | $ (24,376) |
Basic earnings (loss) per share | $ 0.29 | $ 0.70 | $ 1.15 | $ (0.46) |
Diluted earnings (loss) per share | $ 0.28 | $ 0.70 | $ 1.13 | $ (0.48) |
Product [Member] | ||||
Total revenue | $ 302,369 | $ 298,751 | $ 907,646 | $ 908,146 |
Total cost of revenue | (111,008) | (108,369) | (330,896) | (332,818) |
Service [Member] | ||||
Total revenue | 229,772 | 140,710 | 543,976 | 428,142 |
Total cost of revenue | $ (133,143) | $ (66,092) | $ (298,341) | $ (205,974) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Adoption of Accounting Standards Update [Member] | Common shares par value [Member] | Additional paid-in capital [Member] | Retained earnings [Member] | Retained earnings [Member]Adoption of Accounting Standards Update [Member] | Accumulated other comprehensive loss [Member] | Non-controlling interest [Member] |
Balance, beginning of period at Dec. 31, 2019 | $ 546,979 | $ (3,640) | $ 42,126 | $ 4,086 | $ 548,714 | $ (3,640) | $ (47,947) | $ 0 |
Balance (in shares) at Dec. 31, 2019 | 42,126 | |||||||
Net income (loss) attributable to Deluxe | $ (19,419) | (19,419) | ||||||
Net income attributable to non-controlling interest | 46 | 46 | ||||||
Net income (loss) | (19,373) | |||||||
Cash dividends ($0.30 per share for the quarters ended September 30, 2021 and 2020; $0.90 per share for the nine months ended September 30, 2021 and 2020) | (38,562) | (38,562) | ||||||
Common shares issued | $ 3,194 | 334 | 2,860 | |||||
Common shares issued (in shares) | 334 | |||||||
Common shares repurchased | $ (14,000) | (499) | (9,767) | (3,734) | ||||
Common shares repurchased (in shares) | (499) | |||||||
Other common shares retired | $ (2,062) | (68) | (1,994) | |||||
Other common shares retired (in shares) | (68) | |||||||
Employee share-based compensation | $ 16,369 | 16,369 | ||||||
Other comprehensive income (loss) | (4,957) | (4,957) | ||||||
Non-controlling interest, net | 50 | 50 | ||||||
Balance, end of period at Sep. 30, 2020 | $ 483,998 | 41,893 | 11,554 | 483,359 | (52,904) | 96 | ||
Balance (in shares) at Sep. 30, 2020 | 41,893 | |||||||
Balance, beginning of period at Dec. 31, 2019 | $ 546,979 | $ (3,640) | 42,126 | 4,086 | 548,714 | $ (3,640) | (47,947) | 0 |
Balance (in shares) at Dec. 31, 2019 | 42,126 | |||||||
Balance, end of period at Dec. 31, 2020 | $ 513,392 | 41,973 | 17,558 | 495,153 | (41,433) | 141 | ||
Balance (in shares) at Dec. 31, 2020 | 41,973 | |||||||
Balance, beginning of period at Jun. 30, 2020 | $ 457,892 | 41,855 | 4,950 | 466,797 | (55,779) | 69 | ||
Balance (in shares) at Jun. 30, 2020 | 41,855 | |||||||
Net income (loss) attributable to Deluxe | $ 29,417 | 29,417 | ||||||
Net income attributable to non-controlling interest | 27 | 27 | ||||||
Net income (loss) | 29,444 | |||||||
Cash dividends ($0.30 per share for the quarters ended September 30, 2021 and 2020; $0.90 per share for the nine months ended September 30, 2021 and 2020) | (12,855) | (12,855) | ||||||
Common shares issued | $ 637 | 44 | 593 | |||||
Common shares issued (in shares) | 44 | |||||||
Other common shares retired | $ (134) | (6) | (128) | |||||
Other common shares retired (in shares) | (6) | |||||||
Employee share-based compensation | $ 6,139 | 6,139 | ||||||
Other comprehensive income (loss) | 2,875 | 2,875 | ||||||
Balance, end of period at Sep. 30, 2020 | $ 483,998 | 41,893 | 11,554 | 483,359 | (52,904) | 96 | ||
Balance (in shares) at Sep. 30, 2020 | 41,893 | |||||||
Balance, beginning of period at Dec. 31, 2020 | $ 513,392 | 41,973 | 17,558 | 495,153 | (41,433) | 141 | ||
Balance (in shares) at Dec. 31, 2020 | 41,973 | |||||||
Net income (loss) attributable to Deluxe | $ 48,856 | 48,856 | ||||||
Net income attributable to non-controlling interest | 99 | 99 | ||||||
Net income (loss) | 48,955 | |||||||
Cash dividends ($0.30 per share for the quarters ended September 30, 2021 and 2020; $0.90 per share for the nine months ended September 30, 2021 and 2020) | (38,909) | (38,909) | ||||||
Common shares issued | $ 16,399 | 744 | 15,655 | |||||
Common shares issued (in shares) | 744 | |||||||
Common shares repurchased (in shares) | 0 | |||||||
Other common shares retired | $ (4,634) | (116) | (4,518) | |||||
Other common shares retired (in shares) | (116) | |||||||
Employee share-based compensation | $ 21,461 | 21,461 | ||||||
Other comprehensive income (loss) | 1,202 | 1,202 | ||||||
Balance, end of period at Sep. 30, 2021 | $ 557,866 | 42,601 | 50,156 | 505,100 | (40,231) | 240 | ||
Balance (in shares) at Sep. 30, 2021 | 42,601 | |||||||
Balance, beginning of period at Jun. 30, 2021 | $ 552,271 | 42,537 | 41,607 | 505,753 | (37,829) | 203 | ||
Balance (in shares) at Jun. 30, 2021 | 42,537 | |||||||
Net income (loss) attributable to Deluxe | $ 12,464 | 12,464 | ||||||
Net income attributable to non-controlling interest | 37 | 37 | ||||||
Net income (loss) | 12,501 | |||||||
Cash dividends ($0.30 per share for the quarters ended September 30, 2021 and 2020; $0.90 per share for the nine months ended September 30, 2021 and 2020) | (13,117) | (13,117) | ||||||
Common shares issued | $ 1,179 | 75 | 1,104 | |||||
Common shares issued (in shares) | 75 | |||||||
Other common shares retired | $ (463) | (11) | (452) | |||||
Other common shares retired (in shares) | (11) | |||||||
Employee share-based compensation | $ 7,897 | 7,897 | ||||||
Other comprehensive income (loss) | (2,402) | (2,402) | ||||||
Balance, end of period at Sep. 30, 2021 | $ 557,866 | $ 42,601 | $ 50,156 | $ 505,100 | $ (40,231) | $ 240 | ||
Balance (in shares) at Sep. 30, 2021 | 42,601 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends per share | $ 0.30 | $ 0.30 | $ 0.90 | $ 0.90 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 48,955 | $ (19,373) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation | 14,536 | 15,510 |
Amortization of intangibles | 88,393 | 67,555 |
Operating lease expense | 12,897 | 15,044 |
Asset impairment charges | 0 | 101,749 |
Amortization of prepaid product discounts | 23,425 | 21,725 |
Deferred income taxes | 13,733 | (9,607) |
Employee share-based compensation expense | 21,801 | 15,335 |
Other non-cash items, net | 10,459 | 15,231 |
Changes in assets and liabilities, net of effect of acquisition: | ||
Trade accounts receivable | 15,164 | 21,376 |
Inventories and supplies | 3,787 | (11,938) |
Other current assets | (27,495) | 2,158 |
Non-current assets | (35,821) | (13,335) |
Accounts payable | 8,538 | (9,830) |
Prepaid product discount payments | (27,049) | (24,947) |
Other accrued and non-current liabilities | (22,094) | (19,842) |
Net cash provided by operating activities | 149,229 | 166,811 |
Cash flows from investing activities: | ||
Payment for acquisition, net of cash, cash equivalents, restricted cash and restricted cash equivalents acquired | (956,717) | 0 |
Purchases of capital assets | (81,081) | (42,707) |
Proceeds from sales of facilities | 2,648 | 9,713 |
Purchases of customer funds marketable securities | (73) | (3,742) |
Proceeds from customer funds marketable securities | 73 | 3,742 |
Other | (1,211) | 1,326 |
Net cash used by investing activities | (1,036,361) | (31,668) |
Cash flows from financing activities: | ||
Proceeds from issuing long-term debt, net of discount | 1,852,850 | 309,000 |
Payments on long-term debt | (903,438) | (152,500) |
Payments for debt issuance costs | (18,153) | 0 |
Net change in customer funds obligations | 14,913 | (9,375) |
Proceeds from issuing shares | 16,031 | 3,048 |
Employee taxes paid for shares withheld | (4,634) | (2,023) |
Payments for common shares repurchased | 0 | (14,000) |
Cash dividends paid to shareholders | (38,695) | (38,057) |
Other | (7,254) | (2,734) |
Net cash provided by financing activities | 911,620 | 93,359 |
Effect of exchange rate change on cash, cash equivalents, restricted cash and restricted cash equivalents | (793) | (3,297) |
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents | 23,695 | 225,205 |
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of year | 229,409 | 174,811 |
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period | $ 253,104 | $ 400,016 |
Consolidated financial statemen
Consolidated financial statements | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated financial statements | The consolidated balance sheet as of September 30, 2021, the consolidated statements of comprehensive income (loss) for the quarters and nine months ended September 30, 2021 and 2020, the consolidated statements of shareholders’ equity for the quarters and nine months ended September 30, 2021 and 2020 and the consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020 are unaudited. The consolidated balance sheet as of December 31, 2020 was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (GAAP). In the opinion of management, all adjustments necessary for a fair statement of the consolidated financial statements are included. Adjustments consist only of normal recurring items, except for any items discussed in the notes below. Interim results are not necessarily indicative of results for a full year. The consolidated financial statements and notes are presented in accordance with instructions for Form 10-Q and do not contain certain information included in our annual consolidated financial statements and notes. The consolidated financial statements and notes appearing in this report should be read in conjunction with the consolidated audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2020 (the 2020 Form 10-K). The preparation of our consolidated financial statements requires us to make certain estimates and assumptions affecting the amounts reported in the consolidated financial statements and related notes. We base our estimates on historical experience and on various other factors and assumptions that we believe are reasonable under the circumstances, including the estimated impact of extraordinary events, such as the novel coronavirus (COVID-19) pandemic, the results of which form the basis for making judgments about the carrying values of our assets, liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities. Actual results may differ significantly from our estimates and assumptions, including our estimates of the severity and duration of the COVID-19 pandemic. Further information can be found in Note 17. Revision – During the second quarter of 2021, we identified errors in the calculations of the goodwill impairment charges recorded during the third quarter of 2019 and the first quarter of 2020, resulting in an understatement of the goodwill impairment charges and net losses and an overstatement of goodwill. The errors in our calculations resulted from the erroneous application of the simultaneous equation method, which effectively grosses up the goodwill impairment charge to account for the related income tax benefit, so that the resulting carrying value does not exceed the calculated fair value. We assessed the materiality of the errors on prior period financial statements in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 99, Materiality , codified in Accounting Standards Codification (ASC) 250, Presentation of Financial Statements . We concluded that the errors were not material to our prior period consolidated financial statements and therefore, amendments of previously filed consolidated financial statements are not required. In accordance with ASC 250, we have corrected the errors by revising the consolidated financial statements presented herein. Prior periods not presented herein will be revised, as applicable, in future filings. The adjustments for the third quarter of 2019 resulted in an increase of $30,110 in the pretax asset impairment charges. Net of the related tax benefit of $6,228, this resulted in an increase in net loss of $23,882 for the third quarter of 2019 and the year ended December 31, 2019. Revised basic and diluted loss per share for the year ended December 31, 2019 increased from $4.65, as previously reported, to $5.20. The adjustments for the first quarter of 2020 resulted in an increase of $3,776 in the pretax asset impairment charges. Net of the related tax benefit of $212, this resulted in an increase in net loss of $3,564 for the first quarter of 2020 and a decrease in net income of $3,564 for the year ended December 31, 2020. Revised basic earnings per share for the year ended December 31, 2020 decreased from $0.21, as previously reported, to $0.12. Revised diluted earnings per share for the year ended December 31, 2020 decreased from $0.19, as previously reported, to $0.11. The impacts of the revisions on the periods presented herein are provided in the following tables. The impact of the revision on the consolidated statement of comprehensive loss for the nine months ended September 30, 2020 was as follows: (in thousands, except per share amounts) As previously reported Adjustments As revised Asset impairment charges $ (97,973) $ (3,776) $ (101,749) Operating income 7,921 (3,776) 4,145 Loss before income taxes (1,851) (3,776) (5,627) Income tax provision (13,958) 212 (13,746) Net loss (15,809) (3,564) (19,373) Net loss attributable to Deluxe (15,855) (3,564) (19,419) Total comprehensive loss (20,766) (3,564) (24,330) Comprehensive loss attributable to Deluxe (20,812) (3,564) (24,376) Basic loss per share (0.38) (0.08) (0.46) Diluted loss per share (0.40) (0.08) (0.48) The impact of the revision on the consolidated balance sheet as of December 31, 2020 was as follows: (in thousands) As previously reported Adjustments As revised ASSETS Deferred income taxes $ 5,444 $ 1,198 $ 6,642 Goodwill 736,844 (33,886) 702,958 Total assets 1,874,863 (32,688) 1,842,175 LIABILITIES AND SHAREHOLDERS' EQUITY Deferred income taxes $ 10,643 $ (5,242) $ 5,401 Retained earnings 522,599 (27,446) 495,153 Total shareholders' equity 540,838 (27,446) 513,392 Total liabilities and shareholders' equity 1,874,863 (32,688) 1,842,175 The impact of the revision on the consolidated statement of cash flows for the nine months ended September 30, 2020 was as follows: (in thousands) As previously reported Adjustments As revised Cash flows from operating activities: Net loss $ (15,809) $ (3,564) $ (19,373) Asset impairment charges 97,973 3,776 101,749 Deferred income taxes (9,395) (212) (9,607) |
New accounting pronouncements
New accounting pronouncements | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New accounting pronouncements | In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2019-12, Simplifying the Accounting for Income Taxes . This standard addressed several specific areas of accounting for income taxes. We adopted this standard on January 1, 2021. Portions of the standard were adopted prospectively and certain aspects were required to be adopted using the modified retrospective approach. Adoption of this standard did not require an adjustment to retained earnings and did not have a significant impact on our results of operations or financial position. In October 2021, the FASB issued ASU No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . This standard requires an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers . Previously, |
Supplemental balance sheet and
Supplemental balance sheet and cash flow information | 9 Months Ended |
Sep. 30, 2021 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental balance sheet and cash flow information | Trade accounts receivable – Changes in the allowances for uncollectible accounts included within trade accounts receivable were as follows for the nine months ended September 30, 2021 and 2020: Nine Months Ended (in thousands) 2021 2020 Balance, beginning of year $ 6,428 $ 4,985 Bad debt (benefit) expense (412) 4,174 Write-offs and other (2,555) (2,671) Balance, end of period $ 3,461 $ 6,488 Inventories and supplies – Inventories and supplies were comprised of the following: (in thousands) September 30, December 31, Raw materials $ 5,327 $ 5,412 Semi-finished goods 7,156 7,943 Finished goods 22,788 33,513 Supplies 5,580 5,010 Reserve for excess and obsolete items (5,496) (11,748) Inventories and supplies $ 35,355 $ 40,130 Changes in the reserve for excess and obsolete items were as follows for the nine months ended September 30, 2021 and 2020: Nine Months Ended (in thousands) 2021 2020 Balance, beginning of year $ 11,748 $ 6,600 Amounts charged to expense 2,884 1,270 Write-offs and sales (9,136) (1,188) Balance, end of period $ 5,496 $ 6,682 Available-for-sale debt securities – Available-for-sale debt securities included within funds held for customers were comprised of the following: September 30, 2021 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Funds held for customers: (1) Canadian and provincial government securities $ 9,674 $ — $ (315) $ 9,359 Canadian guaranteed investment certificate 3,943 — — 3,943 Available-for-sale debt securities $ 13,617 $ — $ (315) $ 13,302 (1) Funds held for customers, as reported on the consolidated balance sheet as of September 30, 2021, also included cash of $129,180. December 31, 2020 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Funds held for customers: (1) Domestic money market fund $ 15,000 $ — $ — $ 15,000 Canadian and provincial government securities 9,566 — (33) 9,533 Canadian guaranteed investment certificate 3,929 — — 3,929 Available-for-sale debt securities $ 28,495 $ — $ (33) $ 28,462 (1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2020, also included cash of $91,287. Expected maturities of available-for-sale debt securities as of September 30, 2021 were as follows: (in thousands) Fair value Due in one year or less $ 7,041 Due in two to five years 3,453 Due in six to ten years 2,808 Available-for-sale debt securities $ 13,302 Further information regarding the fair value of available-for-sale debt securities can be found in Note 8. Revenue in excess of billings – Revenue in excess of billings was comprised of the following: (in thousands) September 30, December 31, Conditional right to receive consideration $ 28,157 $ 13,950 Unconditional right to receive consideration (1) 13,032 3,667 Revenue in excess of billings $ 41,189 $ 17,617 (1) Represents revenues that are earned but not currently billable under the related contract terms. Trade accounts receivable on the consolidated balance sheets included unbilled receivables of $29,993 as of September 30, 2021 and $21,319 as of December 31, 2020. Intangibles – Intangibles were comprised of the following: September 30, 2021 December 31, 2020 (in thousands) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Amortizable intangibles: Customer lists/relationships $ 495,416 $ (243,817) $ 251,599 $ 352,895 $ (202,428) $ 150,467 Internal-use software 439,785 (337,242) 102,543 380,144 (303,422) 76,722 Technology-based intangibles 99,813 (35,013) 64,800 33,813 (27,613) 6,200 Partner relationships 67,406 (1,525) 65,881 — — — Trade names 52,033 (30,766) 21,267 30,281 (29,926) 355 Software to be sold 36,900 (27,054) 9,846 36,900 (23,884) 13,016 Intangibles $ 1,191,353 $ (675,417) $ 515,936 $ 834,033 $ (587,273) $ 246,760 During the second quarter of 2021, we acquired amortizable intangible assets in conjunction with the acquisition of First American Payment Systems, L.P. (First American). Further information can be found in Note 6. Amortization of intangibles was $36,570 for the quarter ended September 30, 2021, $22,515 for the quarter ended September 30, 2020, $88,393 for the nine months ended September 30, 2021 and $67,555 for the nine months ended September 30, 2020. Based on the intangibles in service as of September 30, 2021, estimated future amortization expense is as follows: (in thousands) Estimated Remainder of 2021 $ 41,235 2022 130,462 2023 101,863 2024 62,576 2025 46,791 The following intangibles were acquired during the nine months ended September 30, 2021, including assets acquired in conjunction with the acquisition of First American (Note 6): (in thousands) Amount Weighted-average amortization period Customer lists/relationships (1) $ 142,514 8 Partner relationships 67,406 15 Technology-based intangibles 66,000 8 Internal-use software 59,429 3 Trade names 22,000 10 Acquired intangibles $ 357,349 9 (1) Included $118,000 acquired via the First American acquisition (Note 6) with a weighted-average useful life of 8 years. Goodwill – Changes in goodwill by reportable segment and in total for the nine months ended September 30, 2021 were as follows: (in thousands) Payments Cloud Solutions Promotional Solutions Checks Total Balance, December 31, 2020: Goodwill, gross $ 168,165 $ 432,984 $ 252,864 $ 434,812 $ 1,288,825 Accumulated impairment charges — (392,168) (193,699) — (585,867) Goodwill, net of accumulated impairment charges 168,165 40,816 59,165 434,812 702,958 Goodwill resulting from acquisition (Note 6) 732,520 — — — 732,520 Currency translation adjustment — — 5 — 5 Balance, September 30, 2021 $ 900,685 $ 40,816 $ 59,170 $ 434,812 $ 1,435,483 Balance, September 30, 2021: Goodwill, gross $ 900,685 $ 432,984 $ 252,869 $ 434,812 $ 2,021,350 Accumulated impairment charges — (392,168) (193,699) — (585,867) Goodwill, net of accumulated impairment charges $ 900,685 $ 40,816 $ 59,170 $ 434,812 $ 1,435,483 Other non-current assets – Other non-current assets were comprised of the following: (in thousands) September 30, December 31, Postretirement benefit plan asset $ 76,435 $ 71,208 Cloud computing arrangements 52,900 29,242 Prepaid product discounts 51,270 50,602 Loans and notes receivable from distributors, net of allowances for uncollectible accounts (1) 20,424 35,068 Deferred contract acquisition costs (2) 17,480 9,199 Other 31,463 13,360 Other non-current assets $ 249,972 $ 208,679 (1) Amount Includes the non-current portion of loans and notes receivable. The current portion of these receivables is included in other current assets on the consolidated balance sheets and was $1,305 as of September 30, 2021 and $2,008 as of December 31, 2020. (2) Amortization of deferred contract acquisition costs was $3,366 for the nine months ended September 30, 2021 and $2,756 for the nine months ended September 30, 2020. Changes in the allowances for uncollectible accounts related to loans and notes receivable from distributors were as follows for the nine months ended September 30, 2021 and 2020: Nine Months Ended (in thousands) 2021 2020 Balance, beginning of year $ 3,995 $ 284 Adoption of ASU No. 2016-13 — 4,749 Bad debt (benefit) expense (1,158) 5,647 Exchange for customer lists — (6,402) Balance, end of period $ 2,837 $ 4,278 Bad debt expense for the nine months ended September 30, 2020 included loan-specific allowances primarily related to Promotional Solutions distributors that were underperforming. In calculating these reserves, we utilized various valuation techniques to determine the value of the underlying collateral. Past due receivables and those on non-accrual status were not significant as of September 30, 2021 or December 31, 2020. We categorize loans and notes receivable into risk categories based on information about the ability of borrowers to service their debt, including current financial information, historical payment experience, current economic trends and other factors. The highest quality receivables are assigned a 1-2 internal grade. Those that have a potential weakness requiring management's attention are assigned a 3-4 internal grade. The following table presents loans and notes receivable from distributors, including the current portion, by credit quality indicator and by year of origination, as of September 30, 2021. There were no write-offs or recoveries recorded during the nine months ended September 30, 2021. Loans and notes receivable from distributors amortized cost basis by origination year (in thousands) 2020 2019 2018 2017 Prior Total Risk rating: 1-2 internal grade $ 1,256 $ 497 $ 7,187 $ 11,705 $ 1,322 $ 21,967 3-4 internal grade — 2,599 — — — 2,599 Loans and notes receivable $ 1,256 $ 3,096 $ 7,187 $ 11,705 $ 1,322 $ 24,566 Changes in prepaid product discounts during the nine months ended September 30, 2021 and 2020 were as follows: Nine Months Ended (in thousands) 2021 2020 Balance, beginning of year $ 50,602 $ 51,145 Additions (1) 24,284 13,259 Amortization (23,425) (21,725) Other (191) (1,430) Balance, end of period $ 51,270 $ 41,249 (1) Prepaid product discounts are generally accrued upon contract execution. Cash payments for prepaid product discounts were $27,049 for the nine months ended September 30, 2021 and $24,947 for the nine months ended September 30, 2020. Accrued liabilities – Accrued liabilities were comprised of the following: (in thousands) September 30, December 31, Deferred revenue (1) $ 43,081 $ 42,104 Employee cash bonuses, including sales incentives 35,341 21,090 Operating lease liabilities (Note 13) 12,884 11,589 Prepaid product discounts due within one year 11,805 14,365 Customer rebates 8,715 8,179 Other 91,958 79,856 Accrued liabilities $ 203,784 $ 177,183 (1) $33,088 of the December 31, 2020 amount was recognized as revenue during the nine months ended September 30, 2021. Supplemental cash flow information – The reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents to the consolidated balance sheets was as follows: (in thousands) September 30, September 30, Cash and cash equivalents $ 121,064 $ 310,430 Restricted cash and restricted cash equivalents included in funds held for customers 129,180 89,586 Non-current restricted cash included in other non-current assets 2,860 — Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 253,104 $ 400,016 |
Earnings (loss) per share
Earnings (loss) per share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings (loss) per share | The following table reflects the calculation of basic and diluted earnings (loss) per share. During each period, certain stock options, as noted below, were excluded from the calculation of diluted earnings (loss) per share because their effect would have been antidilutive. Quarter Ended Nine Months Ended (in thousands, except per share amounts) 2021 2020 2021 2020 Earnings (loss) per share – basic: Net income (loss) $ 12,501 $ 29,444 $ 48,955 $ (19,373) Net income attributable to non-controlling interest (37) (27) (99) (46) Net income (loss) attributable to Deluxe 12,464 29,417 48,856 (19,419) Income allocated to participating securities (9) (24) (36) (42) Income (loss) attributable to Deluxe available to common shareholders $ 12,455 $ 29,393 $ 48,820 $ (19,461) Weighted-average shares outstanding 42,574 41,872 42,294 41,927 Earnings (loss) per share – basic $ 0.29 $ 0.70 $ 1.15 $ (0.46) Earnings (loss) per share – diluted: Net income (loss) $ 12,501 $ 29,444 $ 48,955 $ (19,373) Net income attributable to non-controlling interest (37) (27) (99) (46) Net income (loss) attributable to Deluxe 12,464 29,417 48,856 (19,419) Income allocated to participating securities (9) — (27) (42) Re-measurement of share-based awards classified as liabilities (329) — (329) (794) Income (loss) attributable to Deluxe available to common shareholders $ 12,126 $ 29,417 $ 48,500 $ (20,255) Weighted-average shares outstanding 42,574 41,872 42,294 41,927 Dilutive impact of potential common shares 457 119 453 40 Weighted-average shares and potential common shares outstanding 43,031 41,991 42,747 41,967 Earnings (loss) per share – diluted $ 0.28 $ 0.70 $ 1.13 $ (0.48) Antidilutive options excluded from calculation 2,314 2,086 2,314 2,160 |
Other comprehensive income (los
Other comprehensive income (loss) | 9 Months Ended |
Sep. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Other comprehensive income (loss) | Reclassification adjustments – Information regarding amounts reclassified from accumulated other comprehensive loss to net income (loss) was as follows: Accumulated other comprehensive loss components Amounts reclassified from accumulated other comprehensive loss Affected line item in consolidated statements of comprehensive income (loss) Quarter Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Realized loss on interest rate swap $ (371) $ (326) $ (1,035) $ (514) Interest expense Tax benefit 97 85 271 134 Income tax provision Realized loss on interest rate swap, net of tax (274) (241) (764) (380) Net income (loss) Amortization of postretirement benefit plan items: Prior service credit 355 355 1,066 1,066 Other income Net actuarial loss (407) (575) (1,221) (1,725) Other income Total amortization (52) (220) (155) (659) Other income Tax (expense) benefit (30) 12 (93) 35 Income tax provision Amortization of postretirement benefit plan items, net of tax (82) (208) (248) (624) Net income (loss) Total reclassifications, net of tax $ (356) $ (449) $ (1,012) $ (1,004) Accumulated other comprehensive loss – Changes in the components of accumulated other comprehensive loss during the nine months ended September 30, 2021 were as follows: (in thousands) Postretirement benefit plans Net unrealized loss on available-for-sale debt securities (1) Net unrealized loss on cash flow hedge (2) Currency translation adjustment Accumulated other comprehensive loss Balance, December 31, 2020 $ (21,956) $ (90) $ (5,351) $ (14,036) $ (41,433) Other comprehensive (loss) income before reclassifications — (208) 1,077 (679) 190 Amounts reclassified from accumulated other comprehensive loss 248 — 764 — 1,012 Net current-period other comprehensive income (loss) 248 (208) 1,841 (679) 1,202 Balance, September 30, 2021 $ (21,708) $ (298) $ (3,510) $ (14,715) $ (40,231) (1) Other comprehensive loss before reclassifications is net of an income tax benefit of $72. (2) Other comprehensive income before reclassifications is net of income tax expense of $382. |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
Acquisition | On June 1, 2021, we acquired all of the equity of First American in a cash transaction for $956,717, net of cash, cash equivalents, restricted cash and restricted cash equivalents acquired, subject to customary adjustments under the terms of the acquisition agreement. First American is a large-scale payments technology company that provides partners and merchants with comprehensive in-store, online and mobile payment solutions. The preliminary allocation of the purchase price to the assets acquired and liabilities assumed resulted in non-tax deductible goodwill of $732,520. The transaction resulted in goodwill as First American provides an end-to-end payments technology platform, which we believe will provide significant leverage to accelerate organic growth. The acquisition was funded with cash on hand and proceeds from new debt. Information regarding our debt can be found in Note 12. The goodwill and results of operations of First American from the date of acquisition are included in the Payments segment. The acquisition was accounted for as a business combination and the preliminary allocation of the purchase price to the assets acquired and liabilities assumed was based upon preliminary valuations performed to determine the fair values of the acquired items as of the acquisition date. The valuations, particularly as they relate to intangible assets, are preliminary. They may be adjusted for up to one year after the closing date to reflect final valuations, as we continue to evaluate the various inputs utilized in the valuations. During the quarter ended September 30, 2021, we recorded measurement-period adjustments that included a $3,788 decrease in goodwill and a $3,694 increase in internal-use software. The following illustrates the preliminary allocation of the purchase price, as of September 30, 2021, to the assets acquired and liabilities assumed: (in thousands) Purchase price allocation Accounts receivable $ 27,296 Other current assets 8,533 Property, plant and equipment 9,873 Operating lease assets 24,396 Intangible assets: Customer relationships 118,000 Partner relationships 67,000 Technology-based intangibles 66,000 Trade names 22,000 Internal-use software 6,111 Total intangible assets 279,111 Goodwill 732,520 Other non-current assets 350 Accounts payable (18,475) Funds held for customers (9,428) Accrued liabilities (20,551) Operating lease liabilities, non-current (21,316) Deferred income taxes (51,216) Other non-current liabilities (4,376) Payment for acquisition, net of cash, cash equivalents, restricted cash and restricted cash equivalents acquired of $15,841 $ 956,717 Information regarding the useful lives of the acquired intangibles can be found in Note 3. Information regarding the calculation of the estimated fair values of the acquired intangibles can be found in Note 8. Our results of operations for the quarter ended September 30, 2021 included revenue of $82,485 and net income of $890 from the operations of First American. Our results of operations for the nine months ended September 30, 2021 included revenue of $109,828 and net income of $824 from the operations of First American. In addition, we incurred acquisition transaction costs of $208 for the quarter ended September 30, 2021 and $18,816 for the nine months ended September 30, 2021, which were included in SG&A expense in the consolidated statements of comprehensive income. The following unaudited pro forma financial information summarizes our consolidated results of operations as though the acquisition occurred on January 1, 2020: Pro Forma Statements of Comprehensive Income (Loss) Quarter Ended Nine Months Ended (in thousands) 2020 2021 2020 Revenue $ 628,356 $ 1,613,333 $ 1,664,644 Net income (loss) attributable to Deluxe 21,694 50,176 (58,565) The unaudited pro forma financial information was prepared in accordance with our accounting policies, which can be found under the caption "Note 1: Significant Accounting Policies" in the Notes to Consolidated Financial Statements appearing in the 2020 Form 10-K. The pro forma information includes adjustments to reflect the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied from January 1, 2020, with the consequential tax effects. The pro forma information also includes adjustments to reflect the additional interest expense on the debt we issued to fund the acquisition (Note 12). The acquisition transaction costs we incurred are reflected in the pro forma results for the nine months ended September 30, 2020. |
Derivative financial instrument
Derivative financial instruments | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative financial instruments | As part of our interest rate risk management strategy, we entered into an interest rate swap in July 2019, which we designated as a cash flow hedge, to mitigate variability in interest payments on a portion of our variable-rate debt (Note 12). The interest rate swap, which terminates in March 2023, effectively converts $200,000 of variable rate debt to a fixed rate of 1.798%. Changes in the fair value of the interest rate swap are recorded in accumulated other comprehensive loss on the consolidated balance sheets and are subsequently reclassified to interest expense as interest payments are made on the variable-rate debt. The fair value of the interest rate swap was $4,716 as of September 30, 2021 and $7,210 as of December 31, 2020 and was included in other non-current liabilities on the consolidated balance sheets. The fair value of this derivative is calculated based on the prevailing LIBOR rate curve on the date of measurement. The cash flow hedge was fully effective as of September 30, 2021 and December 31, 2020 and its impact on consolidated net income (loss) and our consolidated statements of cash flows was not significant. We also do not expect the amount to be reclassified to interest expense over the next 12 months to be significant. |
Fair value measurements
Fair value measurements | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Our policies on impairment of goodwill and indefinite-lived intangible assets and impairment of long-lived assets and amortizable intangibles explain our methodology for assessing impairment of these assets and can be found under the caption "Note 1: Significant Accounting Policies" in the Notes to Consolidated Financial Statements appearing in the 2020 Form 10-K. Second quarter 2021 goodwill impairment analyses – As a result of changes in our financial management reporting process during the second quarter of 2021, we concluded that a realignment of our reporting units was required. We analyzed goodwill for impairment immediately prior to this realignment by performing a qualitative analysis for the reporting units with goodwill. The qualitative analyses evaluated factors, including, but not limited to, economic, market and industry conditions, cost factors and the overall financial performance of the reporting units. We also considered the last quantitative analyses we completed. In completing these assessments, we noted no changes in events or circumstances that indicated that it was more likely than not that the fair value of any reporting unit was less than its carrying amount. The realignment of our reporting units, effective April 1, 2021, did not change the reporting units within our Cloud Solutions or Checks segments. Within our Payments segment, the number of reporting units increased from 1 to 4, and within our Promotional Solutions segment, the number of reporting units increased from 1 to 2. Upon completing the realignment, we reallocated the carrying value of goodwill to our new reporting units based on their relative fair values. Immediately subsequent to the realignment, we completed qualitative analyses for the reporting units that changed and to which goodwill was assigned. We determined that it was appropriate to perform qualitative assessments, given that our analysis indicated that the change in reporting units did not mask or prevent an impairment that existed at the time of the change. In completing the qualitative assessments, we noted no changes in events or circumstances that indicated that it was more likely than not that the fair value of any reporting unit was less than its carrying amount. As such, no goodwill impairment charges were recorded during the quarter ended June 30, 2021. 2021 annual goodwill impairment analyses – In completing the 2021 annual impairment analysis of goodwill as of July 31, 2021, we elected to perform qualitative analyses for all of our reporting units. These qualitative analyses evaluated factors, including, but not limited to, economic, market and industry conditions, cost factors and the overall financial performance of the reporting units. We also considered the most recent quantitative analyses completed in prior periods. In completing these assessments, we noted no changes in events or circumstances that indicated that it was more likely than not that the fair values of our reporting units were less than their carrying amounts. 2020 asset impairment charges – During the quarter ended March 31, 2020, we concluded that a triggering event had occurred for 2 of our reporting units as a result of the COVID-19 pandemic. As such, we completed goodwill impairment analyses for these reporting units as of March 31, 2020. Our analyses indicated that the goodwill of our Promotional Solutions reporting unit was partially impaired and the goodwill of our Cloud Solutions Web Hosting reporting unit was fully impaired. As such, we recorded goodwill impairment charges of $67,132 and $4,317, respectively. The impairment charges were measured as the amount by which the reporting units' carrying values exceeded their estimated fair values, limited to the carrying amount of goodwill. After the impairment charges, $59,009 of goodwill remained in the Promotional Solutions reporting unit as of the measurement date. Also as a result of the impacts of the COVID-19 pandemic, we assessed for impairment certain long-lived assets of our Cloud Solutions Web Hosting reporting unit as of March 31, 2020. As a result of these assessments, we recorded asset impairment charges of $17,678, primarily related to customer list, software and trade name intangible assets. With the exception of certain internal-use software assets, we determined that the assets were fully impaired. We utilized the discounted value of estimated future cash flows to estimate the fair value of the asset group. In our analysis, we assumed a revenue decline of 31% and a gross margin decline of 5.2 points in 2020, as well as a discount rate of 9%. During the first quarter of 2020, we assessed for impairment the carrying value of an asset group related to a small business distributor that we previously purchased. Our assessment was the result of customer attrition during the quarter that impacted our projections of future cash flows. Based on our estimate of discounted future cash flows, we determined that the asset group was partially impaired as of February 29, 2020, and we recorded an asset impairment charge of $2,752, reducing the carrying value of the related customer list intangible asset. During the third quarter of 2020, as customer attrition continued, we again assessed this asset group for impairment and recorded an additional asset impairment charge of $2,356, bringing the total impairment charge to $5,108 in 2020. In calculating the estimated fair value of the asset group as of September 30, 2020, we assumed no revenue growth, a 1.0 point improvement in gross margin and a discount rate of 11%. Also during the nine months ended September 30, 2020, we recorded asset impairment charges of $7,514, primarily related to the rationalization of our real estate footprint, as well as internal-use software and a small business customer list. These assets were written down to their estimated fair values less costs to sell and the sale of the related real estate was completed during the quarter ended September 30, 2020. Information regarding the asset impairment analyses completed during the nine months ended September 30, 2020 was as follows: Fair value measurements using Fair value as of measurement date Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Impairment charge (in thousands) (Level 1) (Level 2) (Level 3) Intangible assets (Cloud Solutions Web Hosting reporting unit) (1) $ 2,172 $ — $ — $ 2,172 $ 17,678 Small business distributor 4,479 — — 4,479 5,108 Other assets 11,210 — — 11,210 7,514 Goodwill (2) 71,449 Total $ 101,749 (1) The impairment charge consisted of $8,397 related to customer lists, $6,932 related to internal-use software and $2,349 related to other intangible assets. (2) Amount presented here has been revised from what was previously reported to correct the error described in Note 1. Business combination – On June 1, 2021, we acquired all of the equity of First American (Note 6). For all acquisitions, we are required to measure the fair value of the net identifiable tangible and intangible assets and liabilities acquired. The identifiable net assets acquired were comprised primarily of intangible assets, accounts receivable and operating lease assets and liabilities. The fair values of the customer relationship and partner relationship intangibles were estimated using the multi-period excess earnings method. This valuation model estimates revenues and cash flows derived from the asset and then deducts portions of the cash flow that can be attributed to supporting assets, such as a trade name or technology, that contributed to the generation of the cash flows. The resulting cash flow, which is attributable solely to the customer relationship or partner relationship asset, is then discounted at a rate of return commensurate with the risk of the asset to calculate a present value. Key assumptions used in the calculations included same-customer revenue and partner growth rates, estimated earnings, estimated customer and partner retention rates based on First American's historical information and the discount rate. The estimated fair values of the acquired trade names and technology-based intangibles were estimated using the relief from royalty method, which calculates the cost savings associated with owning rather than licensing the assets. Assumed royalty rates were applied to projected revenue for the estimated remaining useful lives of the assets to estimate the royalty savings. Royalty rates are selected based on the attributes of the asset, including its recognition and reputation in the industry, and in the case of trade names, with consideration of the specific profitability of the products sold under a trade name and supporting assets. The fair value of acquired accounts receivable approximates the gross contractual amounts receivable and we expect to collect all acquired receivables. The fair value of the acquired operating lease liabilities was estimated as if the leases were new. As such, we reassessed the lease term, the discount rate and the lease payments. The fair value of the related operating lease assets was measured at the same amount as the lease liability, adjusted to reflect favorable or unfavorable terms of the lease as compared to market terms. Recurring fair value measurements – Funds held for customers included available-for-sale debt securities (Note 3). These securities included a mutual fund investment that invests in Canadian and provincial government securities and an investment in a Canadian guaranteed investment certificate (GIC) with a maturity of 2 years. As of December 31, 2020, our debt securities also included a money market fund that was traded in an active market. The mutual fund investment is not traded in an active market and its fair value is determined by obtaining quoted prices in active markets for the underlying securities held by the fund. The cost of the GIC approximates its fair value, based on estimates using current market rates offered for deposits with similar remaining maturities. The cost of the money market fund approximated its fair value because of the short-term nature of the investment. Unrealized gains and losses, net of tax, are included in accumulated other comprehensive loss on the consolidated balance sheets. The cost of securities sold is determined using the average cost method. Realized gains and losses are included in revenue on the consolidated statements of comprehensive income (loss) and were not significant during the quarters or nine months ended September 30, 2021 and 2020. Information regarding the fair values of our financial instruments was as follows: Fair value measurements using September 30, 2021 Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (in thousands) Balance sheet location Carrying value Fair value Measured at fair value through comprehensive income (loss): Available-for-sale debt securities Funds held for customers 13,302 13,302 — 13,302 — Derivative liability (Note 7) Other non-current liabilities (4,716) (4,716) — (4,716) — Amortized cost: Cash Cash and cash equivalents 121,064 121,064 121,064 — — Cash Funds held for customers 129,180 129,180 129,180 — — Loans and notes receivable from distributors Other current and non-current assets 21,729 21,683 — — 21,683 Long-term debt Current portion of long-term debt and long-term debt 1,776,167 1,821,713 — 1,821,713 — Fair value measurements using December 31, 2020 Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (in thousands) Balance sheet location Carrying value Fair value Measured at fair value through comprehensive income (loss): Cash equivalents Funds held for customers $ 15,000 $ 15,000 $ 15,000 $ — $ — Available-for-sale debt securities Funds held for customers 13,462 13,462 — 13,462 — Derivative liability (Note 7) Other non-current liabilities (7,210) (7,210) — (7,210) — Amortized cost: Cash Cash and cash equivalents 123,122 123,122 123,122 — — Cash Funds held for customers 91,287 91,287 91,287 — — Loans and notes receivable from distributors Other current and non-current assets 37,076 36,950 — — 36,950 Long-term debt Long-term debt 840,000 840,000 — 840,000 — |
Restructuring and integration e
Restructuring and integration expense | 9 Months Ended |
Sep. 30, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and integration expense | Restructuring and integration expense consists of costs related to the consolidation and migration of certain applications and processes, including our financial and sales management systems. It also includes costs related to the integration of acquired businesses into our systems and processes. These costs consist primarily of information technology consulting, project management services and internal labor, as well as other costs associated with our initiatives, such as training, travel and relocation and costs associated with facility closures. In addition, we recorded employee severance costs related to these initiatives, as well as our ongoing cost reduction initiatives across functional areas. We are currently pursuing several initiatives designed to support our growth strategy and to increase our efficiency. Restructuring and integration expense is not allocated to our reportable business segments. Restructuring and integration expense is reflected on the consolidated statements of comprehensive income (loss) as follows: Quarter Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Total cost of revenue $ 1,559 $ (26) $ 3,073 $ 831 Operating expenses 12,335 18,949 38,012 56,957 Restructuring and integration expense $ 13,894 $ 18,923 $ 41,085 $ 57,788 Restructuring and integration expense for each period was comprised of the following: Quarter Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 External consulting fees $ 6,432 $ 14,898 $ 19,355 $ 37,136 Internal labor 1,756 2,218 6,276 5,200 Employee severance benefits 1,293 752 3,167 10,870 Other 4,413 1,055 12,287 4,582 Restructuring and integration expense $ 13,894 $ 18,923 $ 41,085 $ 57,788 Our restructuring and integration accruals are included in accrued liabilities on the consolidated balance sheets and represent expected cash payments required to satisfy the remaining severance obligations to those employees already terminated and those expected to be terminated under our various initiatives. The majority of the employee reductions are expected to be completed in the fourth quarter of 2021, and we expect most of the related severance payments to be paid by early 2022, utilizing cash from operations. Changes in our restructuring and integration accruals were as follows: (in thousands) Employee severance benefits Balance, December 31, 2020 $ 6,798 Charges 4,690 Reversals (1,523) Payments (8,632) Balance, September 30, 2021 $ 1,333 The charges and reversals presented in the rollforward of our restructuring and integration accruals do not include items charged directly to expense as incurred, as those items are not reflected in accrued liabilities on the consolidated balance sheets. |
Income tax provision
Income tax provision | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income tax provision | The effective tax rate on pretax income (loss) reconciles to the U.S. federal statutory tax rate as follows: Nine Months Ended September 30, 2021 Year Ended December 31, 2020 (1) Income tax at federal statutory rate 21.0 % 21.0 % Goodwill impairment charges (Note 8) — 46.8 % State income tax expense, net of federal income tax benefit 3.1 % 2.1 % Non-deductible acquisition costs 2.8 % — Non-deductible executive compensation 1.7 % 2.2 % Foreign tax rate differences 1.2 % 4.3 % Tax impact of share-based compensation 0.8 % 8.5 % Change in unrecognized tax benefits, including interest and penalties 0.4 % (3.3 %) Research and development tax credit (0.8 %) (3.7 %) Payables and receivables for prior year tax returns (0.3 %) 3.2 % Non-taxable income from employee life insurance policies (0.3 %) (1.1 %) Return to provision adjustments (0.1 %) (2.6 %) Change in valuation allowances — 0.9 % Other 0.2 % 1.8 % Effective tax rate 29.7 % 80.1 % |
Postretirement benefits
Postretirement benefits | 9 Months Ended |
Sep. 30, 2021 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Postretirement benefits | We have historically provided certain health care benefits for a large number of retired U.S. employees. In addition to our retiree health care plan, we also have a U.S. supplemental executive retirement plan. Further information regarding our postretirement benefit plans can be found under the caption “Note 14: Postretirement Benefits” in the Notes to Consolidated Financial Statements appearing in the 2020 Form 10-K. Postretirement benefit income is included in other income on the consolidated statements of comprehensive income (loss) and consisted of the following components: Quarter Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Interest cost $ 242 $ 478 $ 726 $ 1,434 Expected return on plan assets (1,875) (1,905) (5,623) (5,714) Amortization of prior service credit (355) (355) (1,066) (1,066) Amortization of net actuarial losses 407 575 1,221 1,725 Net periodic benefit income $ (1,581) $ (1,207) $ (4,742) $ (3,621) |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt outstanding was comprised of the following: (in thousands) September 30, December 31, 2020 Senior, secured term loan facility $ 1,116,563 $ — Senior, unsecured notes 500,000 — Amounts drawn on senior, secured revolving credit facility 180,000 840,000 Total principal amount 1,796,563 840,000 Less: unamortized discount and debt issuance costs (20,396) — Total debt, net of discount and debt issuance costs 1,776,167 840,000 Less: current portion of long-term debt, net of debt issuance costs (57,167) — Long-term debt $ 1,719,000 $ 840,000 Maturities of long-term debt were as follows as of September 30, 2021: (in thousands) Debt obligations Remainder of 2021 $ 14,438 2022 57,750 2023 72,188 2024 86,625 2025 101,062 Thereafter 1,464,500 Total principal amount $ 1,796,563 Credit facility – Debt outstanding as of December 31, 2020 consisted of amounts drawn on our previous revolving credit facility. In June 2021, we executed a new credit agreement that provides for a 5-year revolving credit facility with commitments of $500,000 and a term loan facility in the amount of $1,155,000. The revolving credit facility includes a $40,000 swingline sub-facility and a $25,000 letter of credit sub-facility. Our previous credit facility agreement was terminated contemporaneously with our entry into the new credit agreement and was repaid utilizing proceeds from the new credit facility. We also utilized the proceeds from the new credit facility to complete the acquisition of First American in June 2021 (Note 6) and to pay related debt issuance costs. Loans under the revolving credit facility may be borrowed, repaid and re-borrowed until June 1, 2026, at which time all amounts borrowed must be repaid. The term loan facility will be repaid in equal quarterly installments of $14,438 from September 30, 2021 through June 30, 2023, $21,656 from September 30, 2023 through June 30, 2025, and $28,875 from September 30, 2025 through March 31, 2026. The remaining balance is due on June 1, 2026. The term loan facility also includes mandatory prepayment requirements related to asset sales, new debt (other than permitted debt) and excess cash flow, subject to certain limitations. No premium or penalty is payable in connection with any mandatory or voluntary prepayment of the term loan facility. Interest is payable on the senior, secured credit facility at a fluctuating rate of interest determined by reference to the eurodollar rate plus an applicable margin ranging from 1.5% to 2.5%, depending on our consolidated total leverage ratio, as defined in the credit agreement. A commitment fee is payable on the unused portion of the revolving credit facility at a rate ranging from 0.25% to 0.35%, depending on our consolidated total leverage ratio. Amounts outstanding under our credit facilities had a weighted-average interest rate of 2.63% as of September 30, 2021 and 2.01% as of December 31, 2020, including the impact of an interest rate swap that effectively converts $200,000 of our variable-rate debt to fixed rate debt. Further information regarding the interest rate swap can be found in Note 7. Borrowings under the credit facility are collateralized by substantially all of the present and future tangible and intangible personal property held by us and our subsidiaries that have guaranteed our obligations under the credit facility, subject to certain exceptions. The credit agreement contains customary covenants regarding limits on levels of indebtedness, liens, mergers, certain asset dispositions, changes in business, advances, investments, loans and restricted payments. The covenants are subject to a number of limitations and exceptions set forth in the credit agreement. The credit agreement also includes requirements regarding our consolidated total leverage ratio and our consolidated secured leverage ratio, as defined in the credit agreement. These ratios may not equal or exceed the following amounts during the periods indicated: Fiscal Quarter Ending Consolidated total leverage ratio Consolidated secured leverage ratio September 30, 2021 through March 31, 2022 5.00 to 1:00 4.00 to 1:00 June 30, 2022 through March 31, 2023 4.75 to 1:00 3.75 to 1:00 June 30, 2023 through March 31, 2024 4.50 to 1:00 3.50 to 1:00 June 30, 2024 and each fiscal quarter thereafter 4.25 to 1:00 3.50 to 1:00 In addition, we must maintain a minimum interest coverage ratio of at least 2.75 to 1.00 through March 31, 2022 and 3.00 to 1.00 thereafter. The credit agreement contains customary representations and warranties and, as a condition to borrowing, requires that all such representations and warranties be true and correct in all material respects on the date of each borrowing, including representations as to no material adverse change in our business, assets, operations or financial condition. If our consolidated total leverage ratio exceeds 2.75 to 1.00, the aggregate annual amount of permitted dividends and share repurchases is limited to $60,000. Daily average amounts outstanding under our current and previous credit agreements were as follows: (in thousands) Nine Months Ended September 30, 2021 Year Ended Daily average amount outstanding $ 1,062,925 $ 1,016,896 Weighted-average interest rate 2.35 % 2.12 % As of September 30, 2021, amounts were available for borrowing under our revolving credit facility as follows: (in thousands) Total available Revolving credit facility commitment $ 500,000 Amounts drawn on revolving credit facility (180,000) Outstanding letters of credit (1) (7,475) Net available for borrowing as of September 30, 2021 $ 312,525 (1) We use standby letters of credit primarily to collateralize certain obligations related to our self-insured workers' compensation claims, as well as claims for environmental matters, as required by certain states.These letters of credit reduce the amount available for borrowing under our revolving credit facility. Senior unsecured notes |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Leases | Leases were reflected on the consolidated balance sheets as follows: (in thousands) September 30, December 31, Operating leases: Operating lease assets $ 58,442 $ 35,906 Accrued liabilities $ 12,884 $ 11,589 Operating lease liabilities 49,827 28,344 Total operating lease liabilities $ 62,711 $ 39,933 Weighted-average remaining lease term (in years) 5.5 4.7 Weighted-average discount rate 4.5 % 3.1 % Finance leases: Property, plant and equipment, gross $ 35,575 $ 6,970 Accumulated depreciation (7,136) (6,324) Property, plant and equipment, net $ 28,439 $ 646 Accrued liabilities $ 347 $ 459 Other non-current liabilities 27,202 140 Total finance lease liabilities $ 27,549 $ 599 Weighted-average remaining lease term (in years) 15.8 1.5 Weighted-average discount rate 6.0 % 2.0 % The components of lease expense were as follows: Quarter Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Operating lease expense $ 4,497 $ 5,006 $ 12,897 $ 15,044 Finance lease expense: Amortization of right-of-use asset $ 547 $ 187 $ 816 $ 561 Interest on lease liabilities 432 5 437 17 Total finance lease expense $ 979 $ 192 $ 1,253 $ 578 Supplemental cash flow information related to leases was as follows: Quarter Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Lease assets obtained in exchange for lease obligations: Operating leases (1) $ — $ — $ 33,948 $ 10,105 Finance leases (2) 26,889 — 26,889 — Cash paid for amounts included in lease obligations: Operating cash flows from operating leases $ 3,653 $ 5,225 $ 12,649 $ 13,993 Operating cash flows from finance leases 2 5 7 17 Financing cash flows from finance leases 104 181 369 575 (1) Includes operating lease assets and related liabilities of $24,396 recorded in conjunction with the acquisition of First American in June 2021 (Note 6). (2) Consists of a lease on a facility located in Minnesota that commenced in July 2021. Maturities of lease liabilities were as follows as of September 30, 2021: (in thousands) Operating lease obligations Finance lease obligations Remainder of 2021 $ 4,032 $ 79 2022 18,545 1,313 2023 13,827 2,709 2024 12,668 2,743 2025 10,691 2,777 Thereafter 23,854 34,691 Total lease payments 83,617 44,312 Less lease incentives receivable (10,250) — Less imputed interest (10,656) (16,763) Present value of lease payments $ 62,711 $ 27,549 |
Other commitments and contingen
Other commitments and contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Other commitments and contingencies | Indemnifications – In the normal course of business, we periodically enter into agreements that incorporate general indemnification language. These indemnification provisions generally encompass third-party claims arising from our products and services, including, without limitation, service failures, breach of security, intellectual property rights, governmental regulations and/or employment-related matters. Performance under these indemnities would generally be triggered by our breach of the terms of the contract. In disposing of assets or businesses, we often provide representations, warranties and/or indemnities to cover various risks, including, for example, unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal matters related to periods prior to disposition. We do not have the ability to estimate the potential liability from such indemnities because they relate to unknown conditions. However, we do not believe that any liability under these indemnities would have a material adverse effect on our financial position, annual results of operations or annual cash flows. We have recorded liabilities for known indemnifications related to environmental matters. These liabilities were not significant as of September 30, 2021 or December 31, 2020. First American indemnification – Pursuant to the First American acquisition agreement, we are entitled to limited indemnification for certain expenses and losses, if any, that may be incurred after the consummation of the transaction that arise out of certain matters, including a Federal Trade Commission investigation initiated in December 2019 seeking information to determine whether certain subsidiaries of First American may have engaged in conduct prohibited by the Federal Trade Commission Act, the Fair Credit Reporting Act or the Duties of Furnishers of Information. As fully set forth in the merger agreement, our rights to indemnification for any such expenses and losses are limited to the amount of an indemnity holdback, which will be our sole recourse for any such losses. Neither a liability for any fines nor any asset for the related holdback have been recorded in our consolidated financial statements as of September 30, 2021, as the amount cannot be reasonably estimated. Self-insurance – We are self-insured for certain costs, primarily workers' compensation claims and medical and dental benefits for active employees and those employees on long-term disability. The liabilities associated with these items represent our best estimate of the ultimate obligations for reported claims plus those incurred, but not reported, and totaled $8,738 as of September 30, 2021 and $9,046 as of December 31, 2020. These accruals are included in accrued liabilities and other non-current liabilities on the consolidated balance sheets. Our workers' compensation liability is recorded at present value. The difference between the discounted and undiscounted liability was not significant as of September 30, 2021 or December 31, 2020. Our self-insurance liabilities are estimated, in part, by considering historical claims experience, demographic factors and other actuarial assumptions. The estimated accruals for these liabilities could be significantly affected if future events and claims differ from these assumptions and historical trends. Litigation – Recorded liabilities for legal matters, as well as related charges recorded in each period, were not material to our financial position, results of operations or liquidity during the periods presented, and we do not believe that any of the currently identified claims or litigation will materially affect our financial position, results of operations or liquidity, upon resolution. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. If an unfavorable ruling were to occur, it may cause a material adverse impact on our financial position, results of operations or liquidity in the period in which the ruling occurs or in future periods. |
Shareholders' equity
Shareholders' equity | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' equity | In October 2018, our board of directors authorized the repurchase of up to $500,000 of our common stock. This authorization has no expiration date. No shares were repurchased during the first nine months of 2021 and $287,452 remained available for repurchase under the authorization as of September 30, 2021. During the quarter ended June 30, 2021, we issued 294 thousand shares to employees of First American in conjunction with the acquisition (Note 6), resulting in cash proceeds of $13,000 during the quarter. |
Business segment information
Business segment information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Business segment information | We operate 4 reportable segments, generally organized by product type, as follows: • Payments – This segment includes our treasury management solutions, including remittance and lockbox processing, remote deposit capture, receivables management, payment processing and paperless treasury management; merchant in-store, online and mobile payment solutions; payroll and disbursement services, including Deluxe Payment Exchange; and fraud and security services. • Cloud Solutions – This segment includes web hosting and design services, data-driven marketing solutions and hosted solutions, including digital engagement, logo design, financial institution profitability reporting and business incorporation services. • Promotional Solutions – This segment includes business forms, accessories, advertising specialties, promotional apparel, retail packaging and strategic sourcing services. • Checks – This segment includes printed personal and business checks. The accounting policies of the segments are the same as those described in the Notes to Consolidated Financial Statements included in the 2020 Form 10-K. We allocate corporate costs for our shared services functions to our business segments when the costs are directly attributable to a segment. This includes certain sales and marketing, human resources, supply chain, real estate, finance, information technology and legal costs. Costs that are not directly attributable to a business segment are reported as Corporate operations and consist primarily of marketing, accounting, information technology, facilities, executive management and legal, tax and treasury costs that support the corporate function. Corporate operations also includes other income. All of our segments operate primarily in the U.S., with some operations in Canada. In addition, Cloud Solutions has operations in Australia and portions of Europe, as well as partners in Central and South America. Our chief operating decision maker (i.e., our Chief Executive Officer) reviews earnings before interest, taxes, depreciation and amortization (EBITDA) on an adjusted basis for each segment when deciding how to allocate resources and to assess segment operating performance. Adjusted EBITDA for each segment excludes depreciation and amortization expense, interest expense, income tax expense and certain other amounts, which may include, from time to time: asset impairment charges; restructuring, integration and other costs; CEO transition costs; share-based compensation expense; acquisition transaction costs; certain legal-related expense; and gains or losses on sales of businesses and customer lists. Our Chief Executive Officer does not review segment asset information when making investment or operating decisions regarding our reportable business segments. Segment information for the quarters and nine months ended September 30, 2021 and 2020 was as follows: Quarter Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Payments: Revenue $ 160,268 $ 74,675 $ 343,045 $ 223,886 Adjusted EBITDA 31,598 16,746 71,125 50,352 Cloud Solutions: Revenue 69,497 63,758 199,784 193,600 Adjusted EBITDA 19,036 16,425 55,047 45,494 Promotional Solutions: Revenue 130,330 124,929 389,825 385,667 Adjusted EBITDA 17,673 21,478 56,804 46,529 Checks: Revenue 172,046 176,099 518,968 533,135 Adjusted EBITDA 77,254 84,954 240,979 258,392 Total segment: Revenue $ 532,141 $ 439,461 $ 1,451,622 $ 1,336,288 Adjusted EBITDA 145,561 139,603 423,955 400,767 The following table presents a reconciliation of total segment adjusted EBITDA to consolidated income (loss) before income taxes: Quarter Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Total segment adjusted EBITDA $ 145,561 $ 139,603 $ 423,955 $ 400,767 Corporate operations (42,832) (37,090) (133,259) (131,101) Depreciation and amortization expense (41,906) (27,972) (102,929) (83,065) Interest expense (21,494) (5,083) (35,548) (18,254) Pretax income attributable to non-controlling interest 37 21 99 46 Asset impairment charges — (2,760) — (101,749) Restructuring, integration and other costs (13,894) (18,941) (41,085) (59,064) CEO transition costs — — — (10) Share-based compensation expense (7,434) (6,240) (21,801) (15,335) Acquisition transaction costs (208) — (18,816) (9) Certain legal-related (expense) benefit (638) — (941) 2,165 Loss on sales of customer lists — — — (18) Income (loss) before income taxes $ 17,192 $ 41,538 $ 69,675 $ (5,627) The following tables present revenue disaggregated by our product and service offerings: Quarter Ended September 30, 2021 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 172,046 $ 172,046 Merchant services and other payments solutions 103,014 — — — 103,014 Forms and other products — — 68,646 — 68,646 Marketing and promotional solutions — — 61,684 — 61,684 Treasury management solutions 57,254 — — — 57,254 Data-driven marketing solutions — 41,956 — — 41,956 Web and hosted solutions — 27,541 — — 27,541 Total revenue $ 160,268 $ 69,497 $ 130,330 $ 172,046 $ 532,141 Quarter Ended September 30, 2020 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 176,099 $ 176,099 Merchant services and other payments solutions 19,257 — — — 19,257 Forms and other products — — 77,492 — 77,492 Marketing and promotional solutions — — 47,437 — 47,437 Treasury management solutions 55,418 — — — 55,418 Data-driven marketing solutions — 30,508 — — 30,508 Web and hosted solutions — 33,250 — — 33,250 Total revenue $ 74,675 $ 63,758 $ 124,929 $ 176,099 $ 439,461 Nine Months Ended September 30, 2021 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 518,968 $ 518,968 Merchant services and other payments solutions 170,431 — — — 170,431 Forms and other products — — 218,622 — 218,622 Marketing and promotional solutions — — 171,203 — 171,203 Treasury management solutions 172,614 — — — 172,614 Data-driven marketing solutions — 115,120 — — 115,120 Web and hosted solutions — 84,664 — — 84,664 Total revenue $ 343,045 $ 199,784 $ 389,825 $ 518,968 $ 1,451,622 Nine Months Ended September 30, 2020 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 533,135 $ 533,135 Merchant services and other payments solutions 56,808 — — — 56,808 Forms and other products — — 234,735 — 234,735 Marketing and promotional solutions — — 150,932 — 150,932 Treasury management solutions 167,078 — — — 167,078 Data-driven marketing solutions — 88,927 — — 88,927 Web and hosted solutions — 104,673 — — 104,673 Total revenue $ 223,886 $ 193,600 $ 385,667 $ 533,135 $ 1,336,288 The following tables present revenue disaggregated by geography, based on where items are shipped from or where services are performed: Quarter Ended September 30, 2021 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated United States $ 150,594 $ 60,778 $ 124,571 $ 166,339 $ 502,282 Foreign, primarily Canada and Australia 9,674 8,719 5,759 5,707 29,859 Total revenue $ 160,268 $ 69,497 $ 130,330 $ 172,046 $ 532,141 Quarter Ended September 30, 2020 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated United States $ 66,377 $ 55,755 $ 118,454 $ 170,865 $ 411,451 Foreign, primarily Canada and Australia 8,298 8,003 6,475 5,234 28,010 Total revenue $ 74,675 $ 63,758 $ 124,929 $ 176,099 $ 439,461 Nine Months Ended September 30, 2021 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated United States $ 312,874 $ 173,555 $ 373,042 $ 501,152 $ 1,360,623 Foreign, primarily Canada and Australia 30,171 26,229 16,783 17,816 90,999 Total revenue $ 343,045 $ 199,784 $ 389,825 $ 518,968 $ 1,451,622 Nine Months Ended September 30, 2020 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated United States $ 198,965 $ 169,917 $ 369,023 $ 516,961 $ 1,254,866 Foreign, primarily Canada and Australia 24,921 23,683 16,644 16,174 81,422 Total revenue $ 223,886 $ 193,600 $ 385,667 $ 533,135 $ 1,336,288 |
Risks and uncertainties
Risks and uncertainties | 9 Months Ended |
Sep. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
Risks and uncertainties | The impact on our business of the continuing COVID-19 pandemic continues to evolve. As such, we are uncertain of the impact on our future financial condition, liquidity and/or results of operations. This uncertainty affected several of the assumptions made and estimates used in the preparation of these consolidated financial statements. As discussed in Note 8, the COVID-19 pandemic resulted in a goodwill impairment triggering event during the first quarter of 2020, as the adverse economic effects of the pandemic materially decreased demand for the products and services we provide to our customers. The extent to which the pandemic will continue to impact our business depends on future developments, including the severity and duration of the pandemic, the impact of variants of the virus, the distribution and effectiveness of vaccines, business and workforce disruptions and the ultimate number of businesses that fail. Our evaluation of asset impairment required us to make assumptions about these future events over the life of the assets being evaluated. This required significant judgment and actual results may differ significantly from our estimates. As a result of the continuing impact of COVID-19, we may be required to record additional goodwill or other asset impairment charges in the future.We held loans and notes receivable from our Promotional Solutions distributors of $21,729 as of September 30, 2021. These distributors sell our products and services primarily to small businesses, which have been significantly impacted by the COVID-19 pandemic. As of September 30, 2021, our allowance for expected credit losses on these receivables was $2,837. We utilized all information known to us in determining this allowance, as well as allowances related to our trade accounts receivable and unbilled receivables. If our assumptions prove to be incorrect, we may be required to record additional bad debt expense in the future. Additionally, uncertainty surrounding the impact of COVID-19 could affect estimates we made regarding inventory obsolescence and workers' compensation liabilities and thus, could result in additional expense in the future. |
Consolidated financial statem_2
Consolidated financial statements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Impact of revision on consolidated financial statements | The impact of the revision on the consolidated statement of comprehensive loss for the nine months ended September 30, 2020 was as follows: (in thousands, except per share amounts) As previously reported Adjustments As revised Asset impairment charges $ (97,973) $ (3,776) $ (101,749) Operating income 7,921 (3,776) 4,145 Loss before income taxes (1,851) (3,776) (5,627) Income tax provision (13,958) 212 (13,746) Net loss (15,809) (3,564) (19,373) Net loss attributable to Deluxe (15,855) (3,564) (19,419) Total comprehensive loss (20,766) (3,564) (24,330) Comprehensive loss attributable to Deluxe (20,812) (3,564) (24,376) Basic loss per share (0.38) (0.08) (0.46) Diluted loss per share (0.40) (0.08) (0.48) The impact of the revision on the consolidated balance sheet as of December 31, 2020 was as follows: (in thousands) As previously reported Adjustments As revised ASSETS Deferred income taxes $ 5,444 $ 1,198 $ 6,642 Goodwill 736,844 (33,886) 702,958 Total assets 1,874,863 (32,688) 1,842,175 LIABILITIES AND SHAREHOLDERS' EQUITY Deferred income taxes $ 10,643 $ (5,242) $ 5,401 Retained earnings 522,599 (27,446) 495,153 Total shareholders' equity 540,838 (27,446) 513,392 Total liabilities and shareholders' equity 1,874,863 (32,688) 1,842,175 The impact of the revision on the consolidated statement of cash flows for the nine months ended September 30, 2020 was as follows: (in thousands) As previously reported Adjustments As revised Cash flows from operating activities: Net loss $ (15,809) $ (3,564) $ (19,373) Asset impairment charges 97,973 3,776 101,749 Deferred income taxes (9,395) (212) (9,607) |
Supplemental balance sheet an_2
Supplemental balance sheet and cash flow information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventories and supplies | Inventories and supplies – Inventories and supplies were comprised of the following: (in thousands) September 30, December 31, Raw materials $ 5,327 $ 5,412 Semi-finished goods 7,156 7,943 Finished goods 22,788 33,513 Supplies 5,580 5,010 Reserve for excess and obsolete items (5,496) (11,748) Inventories and supplies $ 35,355 $ 40,130 Changes in the reserve for excess and obsolete items were as follows for the nine months ended September 30, 2021 and 2020: Nine Months Ended (in thousands) 2021 2020 Balance, beginning of year $ 11,748 $ 6,600 Amounts charged to expense 2,884 1,270 Write-offs and sales (9,136) (1,188) Balance, end of period $ 5,496 $ 6,682 |
Available-for-sale debt securities | Available-for-sale debt securities – Available-for-sale debt securities included within funds held for customers were comprised of the following: September 30, 2021 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Funds held for customers: (1) Canadian and provincial government securities $ 9,674 $ — $ (315) $ 9,359 Canadian guaranteed investment certificate 3,943 — — 3,943 Available-for-sale debt securities $ 13,617 $ — $ (315) $ 13,302 (1) Funds held for customers, as reported on the consolidated balance sheet as of September 30, 2021, also included cash of $129,180. December 31, 2020 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Funds held for customers: (1) Domestic money market fund $ 15,000 $ — $ — $ 15,000 Canadian and provincial government securities 9,566 — (33) 9,533 Canadian guaranteed investment certificate 3,929 — — 3,929 Available-for-sale debt securities $ 28,495 $ — $ (33) $ 28,462 (1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2020, also included cash of $91,287. |
Expected maturities of available-for-sale debt securities | Expected maturities of available-for-sale debt securities as of September 30, 2021 were as follows: (in thousands) Fair value Due in one year or less $ 7,041 Due in two to five years 3,453 Due in six to ten years 2,808 Available-for-sale debt securities $ 13,302 |
Revenue in excess of billings | Revenue in excess of billings – Revenue in excess of billings was comprised of the following: (in thousands) September 30, December 31, Conditional right to receive consideration $ 28,157 $ 13,950 Unconditional right to receive consideration (1) 13,032 3,667 Revenue in excess of billings $ 41,189 $ 17,617 |
Intangibles | Intangibles – Intangibles were comprised of the following: September 30, 2021 December 31, 2020 (in thousands) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Amortizable intangibles: Customer lists/relationships $ 495,416 $ (243,817) $ 251,599 $ 352,895 $ (202,428) $ 150,467 Internal-use software 439,785 (337,242) 102,543 380,144 (303,422) 76,722 Technology-based intangibles 99,813 (35,013) 64,800 33,813 (27,613) 6,200 Partner relationships 67,406 (1,525) 65,881 — — — Trade names 52,033 (30,766) 21,267 30,281 (29,926) 355 Software to be sold 36,900 (27,054) 9,846 36,900 (23,884) 13,016 Intangibles $ 1,191,353 $ (675,417) $ 515,936 $ 834,033 $ (587,273) $ 246,760 |
Estimated future amortization expense | Based on the intangibles in service as of September 30, 2021, estimated future amortization expense is as follows: (in thousands) Estimated Remainder of 2021 $ 41,235 2022 130,462 2023 101,863 2024 62,576 2025 46,791 |
Acquired intangibles | The following intangibles were acquired during the nine months ended September 30, 2021, including assets acquired in conjunction with the acquisition of First American (Note 6): (in thousands) Amount Weighted-average amortization period Customer lists/relationships (1) $ 142,514 8 Partner relationships 67,406 15 Technology-based intangibles 66,000 8 Internal-use software 59,429 3 Trade names 22,000 10 Acquired intangibles $ 357,349 9 (1) Included $118,000 acquired via the First American acquisition (Note 6) with a weighted-average useful life of 8 years. |
Goodwill | Goodwill – Changes in goodwill by reportable segment and in total for the nine months ended September 30, 2021 were as follows: (in thousands) Payments Cloud Solutions Promotional Solutions Checks Total Balance, December 31, 2020: Goodwill, gross $ 168,165 $ 432,984 $ 252,864 $ 434,812 $ 1,288,825 Accumulated impairment charges — (392,168) (193,699) — (585,867) Goodwill, net of accumulated impairment charges 168,165 40,816 59,165 434,812 702,958 Goodwill resulting from acquisition (Note 6) 732,520 — — — 732,520 Currency translation adjustment — — 5 — 5 Balance, September 30, 2021 $ 900,685 $ 40,816 $ 59,170 $ 434,812 $ 1,435,483 Balance, September 30, 2021: Goodwill, gross $ 900,685 $ 432,984 $ 252,869 $ 434,812 $ 2,021,350 Accumulated impairment charges — (392,168) (193,699) — (585,867) Goodwill, net of accumulated impairment charges $ 900,685 $ 40,816 $ 59,170 $ 434,812 $ 1,435,483 |
Other non-current assets | Other non-current assets – Other non-current assets were comprised of the following: (in thousands) September 30, December 31, Postretirement benefit plan asset $ 76,435 $ 71,208 Cloud computing arrangements 52,900 29,242 Prepaid product discounts 51,270 50,602 Loans and notes receivable from distributors, net of allowances for uncollectible accounts (1) 20,424 35,068 Deferred contract acquisition costs (2) 17,480 9,199 Other 31,463 13,360 Other non-current assets $ 249,972 $ 208,679 (1) Amount Includes the non-current portion of loans and notes receivable. The current portion of these receivables is included in other current assets on the consolidated balance sheets and was $1,305 as of September 30, 2021 and $2,008 as of December 31, 2020. (2) Amortization of deferred contract acquisition costs was $3,366 for the nine months ended September 30, 2021 and $2,756 for the nine months ended September 30, 2020. |
Loans and notes receivable by credit quality Indicator | The following table presents loans and notes receivable from distributors, including the current portion, by credit quality indicator and by year of origination, as of September 30, 2021. There were no write-offs or recoveries recorded during the nine months ended September 30, 2021. Loans and notes receivable from distributors amortized cost basis by origination year (in thousands) 2020 2019 2018 2017 Prior Total Risk rating: 1-2 internal grade $ 1,256 $ 497 $ 7,187 $ 11,705 $ 1,322 $ 21,967 3-4 internal grade — 2,599 — — — 2,599 Loans and notes receivable $ 1,256 $ 3,096 $ 7,187 $ 11,705 $ 1,322 $ 24,566 |
Changes in prepaid product discounts | Changes in prepaid product discounts during the nine months ended September 30, 2021 and 2020 were as follows: Nine Months Ended (in thousands) 2021 2020 Balance, beginning of year $ 50,602 $ 51,145 Additions (1) 24,284 13,259 Amortization (23,425) (21,725) Other (191) (1,430) Balance, end of period $ 51,270 $ 41,249 (1) Prepaid product discounts are generally accrued upon contract execution. Cash payments for prepaid product discounts were $27,049 for the nine months ended September 30, 2021 and $24,947 for the nine months ended September 30, 2020. |
Accrued liabilities | Accrued liabilities – Accrued liabilities were comprised of the following: (in thousands) September 30, December 31, Deferred revenue (1) $ 43,081 $ 42,104 Employee cash bonuses, including sales incentives 35,341 21,090 Operating lease liabilities (Note 13) 12,884 11,589 Prepaid product discounts due within one year 11,805 14,365 Customer rebates 8,715 8,179 Other 91,958 79,856 Accrued liabilities $ 203,784 $ 177,183 (1) $33,088 of the December 31, 2020 amount was recognized as revenue during the nine months ended September 30, 2021. |
Supplemental cash flow information | Supplemental cash flow information – The reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents to the consolidated balance sheets was as follows: (in thousands) September 30, September 30, Cash and cash equivalents $ 121,064 $ 310,430 Restricted cash and restricted cash equivalents included in funds held for customers 129,180 89,586 Non-current restricted cash included in other non-current assets 2,860 — Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 253,104 $ 400,016 |
Trade accounts receivable [Member] | |
Allowances for uncollectible accounts | Trade accounts receivable – Changes in the allowances for uncollectible accounts included within trade accounts receivable were as follows for the nine months ended September 30, 2021 and 2020: Nine Months Ended (in thousands) 2021 2020 Balance, beginning of year $ 6,428 $ 4,985 Bad debt (benefit) expense (412) 4,174 Write-offs and other (2,555) (2,671) Balance, end of period $ 3,461 $ 6,488 |
Loans and notes receivable [Member] | |
Allowances for uncollectible accounts | Changes in the allowances for uncollectible accounts related to loans and notes receivable from distributors were as follows for the nine months ended September 30, 2021 and 2020: Nine Months Ended (in thousands) 2021 2020 Balance, beginning of year $ 3,995 $ 284 Adoption of ASU No. 2016-13 — 4,749 Bad debt (benefit) expense (1,158) 5,647 Exchange for customer lists — (6,402) Balance, end of period $ 2,837 $ 4,278 |
Earnings (loss) per share (Tabl
Earnings (loss) per share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings (loss) per share | The following table reflects the calculation of basic and diluted earnings (loss) per share. During each period, certain stock options, as noted below, were excluded from the calculation of diluted earnings (loss) per share because their effect would have been antidilutive. Quarter Ended Nine Months Ended (in thousands, except per share amounts) 2021 2020 2021 2020 Earnings (loss) per share – basic: Net income (loss) $ 12,501 $ 29,444 $ 48,955 $ (19,373) Net income attributable to non-controlling interest (37) (27) (99) (46) Net income (loss) attributable to Deluxe 12,464 29,417 48,856 (19,419) Income allocated to participating securities (9) (24) (36) (42) Income (loss) attributable to Deluxe available to common shareholders $ 12,455 $ 29,393 $ 48,820 $ (19,461) Weighted-average shares outstanding 42,574 41,872 42,294 41,927 Earnings (loss) per share – basic $ 0.29 $ 0.70 $ 1.15 $ (0.46) Earnings (loss) per share – diluted: Net income (loss) $ 12,501 $ 29,444 $ 48,955 $ (19,373) Net income attributable to non-controlling interest (37) (27) (99) (46) Net income (loss) attributable to Deluxe 12,464 29,417 48,856 (19,419) Income allocated to participating securities (9) — (27) (42) Re-measurement of share-based awards classified as liabilities (329) — (329) (794) Income (loss) attributable to Deluxe available to common shareholders $ 12,126 $ 29,417 $ 48,500 $ (20,255) Weighted-average shares outstanding 42,574 41,872 42,294 41,927 Dilutive impact of potential common shares 457 119 453 40 Weighted-average shares and potential common shares outstanding 43,031 41,991 42,747 41,967 Earnings (loss) per share – diluted $ 0.28 $ 0.70 $ 1.13 $ (0.48) Antidilutive options excluded from calculation 2,314 2,086 2,314 2,160 |
Other comprehensive income (l_2
Other comprehensive income (loss) (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Reclassification adjustments | Reclassification adjustments – Information regarding amounts reclassified from accumulated other comprehensive loss to net income (loss) was as follows: Accumulated other comprehensive loss components Amounts reclassified from accumulated other comprehensive loss Affected line item in consolidated statements of comprehensive income (loss) Quarter Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Realized loss on interest rate swap $ (371) $ (326) $ (1,035) $ (514) Interest expense Tax benefit 97 85 271 134 Income tax provision Realized loss on interest rate swap, net of tax (274) (241) (764) (380) Net income (loss) Amortization of postretirement benefit plan items: Prior service credit 355 355 1,066 1,066 Other income Net actuarial loss (407) (575) (1,221) (1,725) Other income Total amortization (52) (220) (155) (659) Other income Tax (expense) benefit (30) 12 (93) 35 Income tax provision Amortization of postretirement benefit plan items, net of tax (82) (208) (248) (624) Net income (loss) Total reclassifications, net of tax $ (356) $ (449) $ (1,012) $ (1,004) |
Accumulated other comprehensive loss | Accumulated other comprehensive loss – Changes in the components of accumulated other comprehensive loss during the nine months ended September 30, 2021 were as follows: (in thousands) Postretirement benefit plans Net unrealized loss on available-for-sale debt securities (1) Net unrealized loss on cash flow hedge (2) Currency translation adjustment Accumulated other comprehensive loss Balance, December 31, 2020 $ (21,956) $ (90) $ (5,351) $ (14,036) $ (41,433) Other comprehensive (loss) income before reclassifications — (208) 1,077 (679) 190 Amounts reclassified from accumulated other comprehensive loss 248 — 764 — 1,012 Net current-period other comprehensive income (loss) 248 (208) 1,841 (679) 1,202 Balance, September 30, 2021 $ (21,708) $ (298) $ (3,510) $ (14,715) $ (40,231) (1) Other comprehensive loss before reclassifications is net of an income tax benefit of $72. (2) Other comprehensive income before reclassifications is net of income tax expense of $382. |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
Preliminary allocation of the purchase price to the assets acquired and liabilities assumed | The following illustrates the preliminary allocation of the purchase price, as of September 30, 2021, to the assets acquired and liabilities assumed: (in thousands) Purchase price allocation Accounts receivable $ 27,296 Other current assets 8,533 Property, plant and equipment 9,873 Operating lease assets 24,396 Intangible assets: Customer relationships 118,000 Partner relationships 67,000 Technology-based intangibles 66,000 Trade names 22,000 Internal-use software 6,111 Total intangible assets 279,111 Goodwill 732,520 Other non-current assets 350 Accounts payable (18,475) Funds held for customers (9,428) Accrued liabilities (20,551) Operating lease liabilities, non-current (21,316) Deferred income taxes (51,216) Other non-current liabilities (4,376) Payment for acquisition, net of cash, cash equivalents, restricted cash and restricted cash equivalents acquired of $15,841 $ 956,717 |
Unaudited pro forma financial information | The following unaudited pro forma financial information summarizes our consolidated results of operations as though the acquisition occurred on January 1, 2020: Pro Forma Statements of Comprehensive Income (Loss) Quarter Ended Nine Months Ended (in thousands) 2020 2021 2020 Revenue $ 628,356 $ 1,613,333 $ 1,664,644 Net income (loss) attributable to Deluxe 21,694 50,176 (58,565) |
Fair value measurements (Tables
Fair value measurements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Information regarding the asset impairment analyses completed during the nine months ended September 30, 2020 was as follows: Fair value measurements using Fair value as of measurement date Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs Impairment charge (in thousands) (Level 1) (Level 2) (Level 3) Intangible assets (Cloud Solutions Web Hosting reporting unit) (1) $ 2,172 $ — $ — $ 2,172 $ 17,678 Small business distributor 4,479 — — 4,479 5,108 Other assets 11,210 — — 11,210 7,514 Goodwill (2) 71,449 Total $ 101,749 (1) The impairment charge consisted of $8,397 related to customer lists, $6,932 related to internal-use software and $2,349 related to other intangible assets. (2) Amount presented here has been revised from what was previously reported to correct the error described in Note 1. |
Fair value of financial instruments | Information regarding the fair values of our financial instruments was as follows: Fair value measurements using September 30, 2021 Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (in thousands) Balance sheet location Carrying value Fair value Measured at fair value through comprehensive income (loss): Available-for-sale debt securities Funds held for customers 13,302 13,302 — 13,302 — Derivative liability (Note 7) Other non-current liabilities (4,716) (4,716) — (4,716) — Amortized cost: Cash Cash and cash equivalents 121,064 121,064 121,064 — — Cash Funds held for customers 129,180 129,180 129,180 — — Loans and notes receivable from distributors Other current and non-current assets 21,729 21,683 — — 21,683 Long-term debt Current portion of long-term debt and long-term debt 1,776,167 1,821,713 — 1,821,713 — Fair value measurements using December 31, 2020 Quoted prices in active markets for identical assets Significant other observable inputs Significant unobservable inputs (in thousands) Balance sheet location Carrying value Fair value Measured at fair value through comprehensive income (loss): Cash equivalents Funds held for customers $ 15,000 $ 15,000 $ 15,000 $ — $ — Available-for-sale debt securities Funds held for customers 13,462 13,462 — 13,462 — Derivative liability (Note 7) Other non-current liabilities (7,210) (7,210) — (7,210) — Amortized cost: Cash Cash and cash equivalents 123,122 123,122 123,122 — — Cash Funds held for customers 91,287 91,287 91,287 — — Loans and notes receivable from distributors Other current and non-current assets 37,076 36,950 — — 36,950 Long-term debt Long-term debt 840,000 840,000 — 840,000 — |
Restructuring and integration_2
Restructuring and integration expense (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and integration expense | Restructuring and integration expense is reflected on the consolidated statements of comprehensive income (loss) as follows: Quarter Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Total cost of revenue $ 1,559 $ (26) $ 3,073 $ 831 Operating expenses 12,335 18,949 38,012 56,957 Restructuring and integration expense $ 13,894 $ 18,923 $ 41,085 $ 57,788 Restructuring and integration expense for each period was comprised of the following: Quarter Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 External consulting fees $ 6,432 $ 14,898 $ 19,355 $ 37,136 Internal labor 1,756 2,218 6,276 5,200 Employee severance benefits 1,293 752 3,167 10,870 Other 4,413 1,055 12,287 4,582 Restructuring and integration expense $ 13,894 $ 18,923 $ 41,085 $ 57,788 |
Changes in restructuring and integration accruals | Changes in our restructuring and integration accruals were as follows: (in thousands) Employee severance benefits Balance, December 31, 2020 $ 6,798 Charges 4,690 Reversals (1,523) Payments (8,632) Balance, September 30, 2021 $ 1,333 |
Income tax provision (Tables)
Income tax provision (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Effective income tax rate reconciliation | The effective tax rate on pretax income (loss) reconciles to the U.S. federal statutory tax rate as follows: Nine Months Ended September 30, 2021 Year Ended December 31, 2020 (1) Income tax at federal statutory rate 21.0 % 21.0 % Goodwill impairment charges (Note 8) — 46.8 % State income tax expense, net of federal income tax benefit 3.1 % 2.1 % Non-deductible acquisition costs 2.8 % — Non-deductible executive compensation 1.7 % 2.2 % Foreign tax rate differences 1.2 % 4.3 % Tax impact of share-based compensation 0.8 % 8.5 % Change in unrecognized tax benefits, including interest and penalties 0.4 % (3.3 %) Research and development tax credit (0.8 %) (3.7 %) Payables and receivables for prior year tax returns (0.3 %) 3.2 % Non-taxable income from employee life insurance policies (0.3 %) (1.1 %) Return to provision adjustments (0.1 %) (2.6 %) Change in valuation allowances — 0.9 % Other 0.2 % 1.8 % Effective tax rate 29.7 % 80.1 % |
Postretirement benefits (Tables
Postretirement benefits (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Components of net periodic benefit income | Postretirement benefit income is included in other income on the consolidated statements of comprehensive income (loss) and consisted of the following components: Quarter Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Interest cost $ 242 $ 478 $ 726 $ 1,434 Expected return on plan assets (1,875) (1,905) (5,623) (5,714) Amortization of prior service credit (355) (355) (1,066) (1,066) Amortization of net actuarial losses 407 575 1,221 1,725 Net periodic benefit income $ (1,581) $ (1,207) $ (4,742) $ (3,621) |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt outstanding | Debt outstanding was comprised of the following: (in thousands) September 30, December 31, 2020 Senior, secured term loan facility $ 1,116,563 $ — Senior, unsecured notes 500,000 — Amounts drawn on senior, secured revolving credit facility 180,000 840,000 Total principal amount 1,796,563 840,000 Less: unamortized discount and debt issuance costs (20,396) — Total debt, net of discount and debt issuance costs 1,776,167 840,000 Less: current portion of long-term debt, net of debt issuance costs (57,167) — Long-term debt $ 1,719,000 $ 840,000 |
Maturities of long-term debt | Maturities of long-term debt were as follows as of September 30, 2021: (in thousands) Debt obligations Remainder of 2021 $ 14,438 2022 57,750 2023 72,188 2024 86,625 2025 101,062 Thereafter 1,464,500 Total principal amount $ 1,796,563 |
Leverage ratio requirements | The credit agreement also includes requirements regarding our consolidated total leverage ratio and our consolidated secured leverage ratio, as defined in the credit agreement. These ratios may not equal or exceed the following amounts during the periods indicated: Fiscal Quarter Ending Consolidated total leverage ratio Consolidated secured leverage ratio September 30, 2021 through March 31, 2022 5.00 to 1:00 4.00 to 1:00 June 30, 2022 through March 31, 2023 4.75 to 1:00 3.75 to 1:00 June 30, 2023 through March 31, 2024 4.50 to 1:00 3.50 to 1:00 June 30, 2024 and each fiscal quarter thereafter 4.25 to 1:00 3.50 to 1:00 |
Credit facility | Daily average amounts outstanding under our current and previous credit agreements were as follows: (in thousands) Nine Months Ended September 30, 2021 Year Ended Daily average amount outstanding $ 1,062,925 $ 1,016,896 Weighted-average interest rate 2.35 % 2.12 % As of September 30, 2021, amounts were available for borrowing under our revolving credit facility as follows: (in thousands) Total available Revolving credit facility commitment $ 500,000 Amounts drawn on revolving credit facility (180,000) Outstanding letters of credit (1) (7,475) Net available for borrowing as of September 30, 2021 $ 312,525 (1) We use standby letters of credit primarily to collateralize certain obligations related to our self-insured workers' compensation claims, as well as claims for environmental matters, as required by certain states.These letters of credit reduce the amount available for borrowing under our revolving credit facility. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Balance sheet information related to leases | Leases were reflected on the consolidated balance sheets as follows: (in thousands) September 30, December 31, Operating leases: Operating lease assets $ 58,442 $ 35,906 Accrued liabilities $ 12,884 $ 11,589 Operating lease liabilities 49,827 28,344 Total operating lease liabilities $ 62,711 $ 39,933 Weighted-average remaining lease term (in years) 5.5 4.7 Weighted-average discount rate 4.5 % 3.1 % Finance leases: Property, plant and equipment, gross $ 35,575 $ 6,970 Accumulated depreciation (7,136) (6,324) Property, plant and equipment, net $ 28,439 $ 646 Accrued liabilities $ 347 $ 459 Other non-current liabilities 27,202 140 Total finance lease liabilities $ 27,549 $ 599 Weighted-average remaining lease term (in years) 15.8 1.5 Weighted-average discount rate 6.0 % 2.0 % |
Components of lease expense | The components of lease expense were as follows: Quarter Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Operating lease expense $ 4,497 $ 5,006 $ 12,897 $ 15,044 Finance lease expense: Amortization of right-of-use asset $ 547 $ 187 $ 816 $ 561 Interest on lease liabilities 432 5 437 17 Total finance lease expense $ 979 $ 192 $ 1,253 $ 578 |
Supplemental cash flow information related to leases | Supplemental cash flow information related to leases was as follows: Quarter Ended Nine Months Ended (in thousands) 2021 2020 2021 2020 Lease assets obtained in exchange for lease obligations: Operating leases (1) $ — $ — $ 33,948 $ 10,105 Finance leases (2) 26,889 — 26,889 — Cash paid for amounts included in lease obligations: Operating cash flows from operating leases $ 3,653 $ 5,225 $ 12,649 $ 13,993 Operating cash flows from finance leases 2 5 7 17 Financing cash flows from finance leases 104 181 369 575 (1) Includes operating lease assets and related liabilities of $24,396 recorded in conjunction with the acquisition of First American in June 2021 (Note 6). (2) Consists of a lease on a facility located in Minnesota that commenced in July 2021. |
Maturities of lease liabilities | Maturities of lease liabilities were as follows as of September 30, 2021: (in thousands) Operating lease obligations Finance lease obligations Remainder of 2021 $ 4,032 $ 79 2022 18,545 1,313 2023 13,827 2,709 2024 12,668 2,743 2025 10,691 2,777 Thereafter 23,854 34,691 Total lease payments 83,617 44,312 Less lease incentives receivable (10,250) — Less imputed interest (10,656) (16,763) Present value of lease payments $ 62,711 $ 27,549 |
Business segment information (T
Business segment information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Business segment information | Segment information for the quarters and nine months ended September 30, 2021 and 2020 was as follows: Quarter Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Payments: Revenue $ 160,268 $ 74,675 $ 343,045 $ 223,886 Adjusted EBITDA 31,598 16,746 71,125 50,352 Cloud Solutions: Revenue 69,497 63,758 199,784 193,600 Adjusted EBITDA 19,036 16,425 55,047 45,494 Promotional Solutions: Revenue 130,330 124,929 389,825 385,667 Adjusted EBITDA 17,673 21,478 56,804 46,529 Checks: Revenue 172,046 176,099 518,968 533,135 Adjusted EBITDA 77,254 84,954 240,979 258,392 Total segment: Revenue $ 532,141 $ 439,461 $ 1,451,622 $ 1,336,288 Adjusted EBITDA 145,561 139,603 423,955 400,767 |
Reconciliation of adjusted EBITDA to pretax income (loss) | The following table presents a reconciliation of total segment adjusted EBITDA to consolidated income (loss) before income taxes: Quarter Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Total segment adjusted EBITDA $ 145,561 $ 139,603 $ 423,955 $ 400,767 Corporate operations (42,832) (37,090) (133,259) (131,101) Depreciation and amortization expense (41,906) (27,972) (102,929) (83,065) Interest expense (21,494) (5,083) (35,548) (18,254) Pretax income attributable to non-controlling interest 37 21 99 46 Asset impairment charges — (2,760) — (101,749) Restructuring, integration and other costs (13,894) (18,941) (41,085) (59,064) CEO transition costs — — — (10) Share-based compensation expense (7,434) (6,240) (21,801) (15,335) Acquisition transaction costs (208) — (18,816) (9) Certain legal-related (expense) benefit (638) — (941) 2,165 Loss on sales of customer lists — — — (18) Income (loss) before income taxes $ 17,192 $ 41,538 $ 69,675 $ (5,627) |
Revenue disaggregated by product and service offerings | e following tables present revenue disaggregated by our product and service offerings: Quarter Ended September 30, 2021 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 172,046 $ 172,046 Merchant services and other payments solutions 103,014 — — — 103,014 Forms and other products — — 68,646 — 68,646 Marketing and promotional solutions — — 61,684 — 61,684 Treasury management solutions 57,254 — — — 57,254 Data-driven marketing solutions — 41,956 — — 41,956 Web and hosted solutions — 27,541 — — 27,541 Total revenue $ 160,268 $ 69,497 $ 130,330 $ 172,046 $ 532,141 Quarter Ended September 30, 2020 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 176,099 $ 176,099 Merchant services and other payments solutions 19,257 — — — 19,257 Forms and other products — — 77,492 — 77,492 Marketing and promotional solutions — — 47,437 — 47,437 Treasury management solutions 55,418 — — — 55,418 Data-driven marketing solutions — 30,508 — — 30,508 Web and hosted solutions — 33,250 — — 33,250 Total revenue $ 74,675 $ 63,758 $ 124,929 $ 176,099 $ 439,461 Nine Months Ended September 30, 2021 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 518,968 $ 518,968 Merchant services and other payments solutions 170,431 — — — 170,431 Forms and other products — — 218,622 — 218,622 Marketing and promotional solutions — — 171,203 — 171,203 Treasury management solutions 172,614 — — — 172,614 Data-driven marketing solutions — 115,120 — — 115,120 Web and hosted solutions — 84,664 — — 84,664 Total revenue $ 343,045 $ 199,784 $ 389,825 $ 518,968 $ 1,451,622 Nine Months Ended September 30, 2020 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 533,135 $ 533,135 Merchant services and other payments solutions 56,808 — — — 56,808 Forms and other products — — 234,735 — 234,735 Marketing and promotional solutions — — 150,932 — 150,932 Treasury management solutions 167,078 — — — 167,078 Data-driven marketing solutions — 88,927 — — 88,927 Web and hosted solutions — 104,673 — — 104,673 Total revenue $ 223,886 $ 193,600 $ 385,667 $ 533,135 $ 1,336,288 |
Revenue disaggregated by geography | The following tables present revenue disaggregated by geography, based on where items are shipped from or where services are performed: Quarter Ended September 30, 2021 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated United States $ 150,594 $ 60,778 $ 124,571 $ 166,339 $ 502,282 Foreign, primarily Canada and Australia 9,674 8,719 5,759 5,707 29,859 Total revenue $ 160,268 $ 69,497 $ 130,330 $ 172,046 $ 532,141 Quarter Ended September 30, 2020 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated United States $ 66,377 $ 55,755 $ 118,454 $ 170,865 $ 411,451 Foreign, primarily Canada and Australia 8,298 8,003 6,475 5,234 28,010 Total revenue $ 74,675 $ 63,758 $ 124,929 $ 176,099 $ 439,461 Nine Months Ended September 30, 2021 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated United States $ 312,874 $ 173,555 $ 373,042 $ 501,152 $ 1,360,623 Foreign, primarily Canada and Australia 30,171 26,229 16,783 17,816 90,999 Total revenue $ 343,045 $ 199,784 $ 389,825 $ 518,968 $ 1,451,622 Nine Months Ended September 30, 2020 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated United States $ 198,965 $ 169,917 $ 369,023 $ 516,961 $ 1,254,866 Foreign, primarily Canada and Australia 24,921 23,683 16,644 16,174 81,422 Total revenue $ 223,886 $ 193,600 $ 385,667 $ 533,135 $ 1,336,288 |
Consolidated financial statem_3
Consolidated financial statements (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2021 | |
Asset impairment charges | $ 0 | $ (2,760) | $ 0 | $ (101,749) | ||||||
Operating income | 36,404 | 44,420 | 98,780 | 4,145 | ||||||
Income (loss) before income taxes | 17,192 | 41,538 | 69,675 | (5,627) | ||||||
Income tax provision | (4,691) | (12,094) | (20,720) | (13,746) | ||||||
Net income (loss) | 12,501 | 29,444 | 48,955 | (19,373) | ||||||
Net income (loss) attributable to Deluxe | 12,464 | 29,417 | 48,856 | (19,419) | ||||||
Total comprehensive loss | 10,099 | 32,319 | 50,157 | (24,330) | ||||||
Comprehensive loss attributable to Deluxe | $ 10,062 | $ 32,292 | $ 50,058 | $ (24,376) | ||||||
Basic earnings (loss) per share | $ 0.29 | $ 0.70 | $ 1.15 | $ (0.46) | $ 0.12 | $ (5.20) | ||||
Diluted earnings (loss) per share | $ 0.28 | $ 0.70 | $ 1.13 | $ (0.48) | $ 0.11 | $ (5.20) | ||||
ASSETS | ||||||||||
Deferred income taxes | $ 2,290 | $ 2,290 | $ 6,642 | |||||||
Goodwill | 1,435,483 | 1,435,483 | 702,958 | |||||||
Assets | 3,006,193 | 3,006,193 | 1,842,175 | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
Deferred income taxes | 66,637 | 66,637 | 5,401 | |||||||
Retained earnings | 505,100 | 505,100 | 495,153 | |||||||
Total shareholders' equity | 557,866 | $ 483,998 | $ 457,892 | 557,866 | $ 483,998 | 513,392 | $ 546,979 | $ 552,271 | ||
Total liabilities and shareholders' equity | 3,006,193 | 3,006,193 | $ 1,842,175 | |||||||
Cash flows from operating activities: | ||||||||||
Net income | 12,501 | 29,444 | 48,955 | (19,373) | ||||||
Asset impairment charges | $ 0 | $ 2,760 | 0 | 101,749 | ||||||
Deferred income taxes | $ 13,733 | (9,607) | ||||||||
As previously reported [Member] | ||||||||||
Asset impairment charges | (97,973) | |||||||||
Operating income | 7,921 | |||||||||
Income (loss) before income taxes | (1,851) | |||||||||
Income tax provision | (13,958) | |||||||||
Net income (loss) | (15,809) | |||||||||
Net income (loss) attributable to Deluxe | (15,855) | |||||||||
Total comprehensive loss | (20,766) | |||||||||
Comprehensive loss attributable to Deluxe | $ (20,812) | |||||||||
Basic earnings (loss) per share | $ (0.38) | $ 0.21 | $ (4.65) | |||||||
Diluted earnings (loss) per share | $ (0.40) | $ 0.19 | $ (4.65) | |||||||
ASSETS | ||||||||||
Deferred income taxes | $ 5,444 | |||||||||
Goodwill | 736,844 | |||||||||
Assets | 1,874,863 | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
Deferred income taxes | 10,643 | |||||||||
Retained earnings | 522,599 | |||||||||
Total shareholders' equity | 540,838 | |||||||||
Total liabilities and shareholders' equity | 1,874,863 | |||||||||
Cash flows from operating activities: | ||||||||||
Net income | $ (15,809) | |||||||||
Asset impairment charges | 97,973 | |||||||||
Deferred income taxes | (9,395) | |||||||||
Adjustment [Member] | ||||||||||
Asset impairment charges | $ (3,776) | $ (30,110) | (3,776) | |||||||
Operating income | (3,776) | |||||||||
Income (loss) before income taxes | (3,776) | |||||||||
Income tax provision | 212 | 6,228 | 212 | |||||||
Net income (loss) | (3,564) | (3,564) | (23,882) | (3,564) | $ (23,882) | |||||
Net income (loss) attributable to Deluxe | (3,564) | (3,564) | ||||||||
Total comprehensive loss | (3,564) | |||||||||
Comprehensive loss attributable to Deluxe | $ (3,564) | |||||||||
Basic earnings (loss) per share | $ (0.08) | |||||||||
Diluted earnings (loss) per share | $ (0.08) | |||||||||
ASSETS | ||||||||||
Deferred income taxes | 1,198 | |||||||||
Goodwill | (33,886) | |||||||||
Assets | (32,688) | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
Deferred income taxes | (5,242) | |||||||||
Retained earnings | (27,446) | |||||||||
Total shareholders' equity | (27,446) | |||||||||
Total liabilities and shareholders' equity | $ (32,688) | |||||||||
Cash flows from operating activities: | ||||||||||
Net income | $ (3,564) | (3,564) | (23,882) | $ (3,564) | $ (23,882) | |||||
Asset impairment charges | $ 3,776 | $ 30,110 | 3,776 | |||||||
Deferred income taxes | $ (212) |
Supplemental balance sheet an_3
Supplemental balance sheet and cash flow information (trade accounts receivable, allowances for uncollectible accounts) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Accounts receivable, allowances for uncollectible accounts [Roll Forward] | ||
Balance, beginning of year | $ 6,428 | $ 4,985 |
Bad debt (benefit) expense | (412) | 4,174 |
Write-offs and other | (2,555) | (2,671) |
Balance, end of period | $ 3,461 | $ 6,488 |
Supplemental balance sheet an_4
Supplemental balance sheet and cash flow information (inventories and supplies) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Inventories and supplies | |||
Raw materials | $ 5,327 | $ 5,412 | |
Semi-finished goods | 7,156 | 7,943 | |
Finished goods | 22,788 | 33,513 | |
Supplies | 5,580 | 5,010 | |
Reserve for excess and obsolete items | (5,496) | $ (6,682) | (11,748) |
Inventories and supplies | 35,355 | $ 40,130 | |
Change in reserve for excess and obsolete items | |||
Balance, beginning of year | 11,748 | 6,600 | |
Amounts charged to expense | 2,884 | 1,270 | |
Write-offs and sales | (9,136) | (1,188) | |
Balance, end of period | $ 5,496 | $ 6,682 |
Supplemental balance sheet an_5
Supplemental balance sheet and cash flow information (available-for-sale debt securities) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | ||
Available-for-sale debt securities [Line Items] | ||||
Cost | $ 13,617 | $ 28,495 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | (315) | (33) | ||
Fair value | 13,302 | 28,462 | ||
Expected maturities of available-for-sale debt securities | ||||
Due in one year or less | 7,041 | |||
Due in two to five years | 3,453 | |||
Due in six to ten years | 2,808 | |||
Fair value | 13,302 | 28,462 | ||
Funds held for customers [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 13,617 | [1] | 28,495 | [2] |
Gross unrealized gains | 0 | [1] | 0 | [2] |
Gross unrealized losses | (315) | [1] | (33) | [2] |
Fair value | 13,302 | [1] | 28,462 | [2] |
Cash | 129,180 | 91,287 | ||
Expected maturities of available-for-sale debt securities | ||||
Fair value | 13,302 | [1] | 28,462 | [2] |
Funds held for customers [Member] | Money market securities [Member] | Domestic [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 15,000 | |||
Gross unrealized gains | 0 | |||
Gross unrealized losses | 0 | |||
Fair value | 15,000 | |||
Expected maturities of available-for-sale debt securities | ||||
Fair value | 15,000 | |||
Funds held for customers [Member] | Canadian and provincial government securities [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 9,674 | 9,566 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | (315) | (33) | ||
Fair value | 9,359 | 9,533 | ||
Expected maturities of available-for-sale debt securities | ||||
Fair value | 9,359 | 9,533 | ||
Funds held for customers [Member] | Canadian guaranteed investment certificates [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 3,943 | 3,929 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | 0 | 0 | ||
Fair value | 3,943 | 3,929 | ||
Expected maturities of available-for-sale debt securities | ||||
Fair value | $ 3,943 | $ 3,929 | ||
[1] | Funds held for customers, as reported on the consolidated balance sheet as of September 30, 2021, also included cash of $129,180. | |||
[2] | Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2020, also included cash of $91,287. |
Supplemental balance sheet an_6
Supplemental balance sheet and cash flow information (revenue in excess of billings) (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | |
Revenue in excess of billings | |||
Conditional right to receive consideration | $ 28,157 | $ 13,950 | |
Unconditional right to receive consideration | [1] | 13,032 | 3,667 |
Revenue in excess of billings | 41,189 | 17,617 | |
Unbilled receivables | $ 29,993 | $ 21,319 | |
[1] | Represents revenues that are earned but not currently billable under the related contract terms. Trade accounts receivable on the consolidated balance sheets included unbilled receivables of $29,993 as of September 30, 2021 and $21,319 as of December 31, 2020. |
Supplemental balance sheet an_7
Supplemental balance sheet and cash flow information (intangibles) (Details) - USD ($) $ in Thousands | Jun. 01, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Amortizable intangibles [Line Items] | |||||||
Gross carrying amount | $ 1,191,353 | $ 1,191,353 | $ 834,033 | ||||
Accumulated amortization | (675,417) | (675,417) | (587,273) | ||||
Net carrying amount | 515,936 | 515,936 | 246,760 | ||||
Acquired intangibles | $ 357,349 | ||||||
Acquired intangibles, weighted-average amortization period (in years) | 9 years | ||||||
Amortization of intangibles | 36,570 | $ 22,515 | $ 88,393 | $ 67,555 | |||
Estimated future amortization expense | |||||||
Remainder of 2021 | 41,235 | 41,235 | |||||
2022 | 130,462 | 130,462 | |||||
2023 | 101,863 | 101,863 | |||||
2024 | 62,576 | 62,576 | |||||
2025 | 46,791 | 46,791 | |||||
First American Payment Systems, L.P. [Member] | |||||||
Amortizable intangibles [Line Items] | |||||||
Acquired intangibles | $ 279,111 | ||||||
Customer lists/relationships [Member] | |||||||
Amortizable intangibles [Line Items] | |||||||
Gross carrying amount | 495,416 | 495,416 | 352,895 | ||||
Accumulated amortization | (243,817) | (243,817) | (202,428) | ||||
Net carrying amount | 251,599 | 251,599 | 150,467 | ||||
Acquired intangibles | [1] | $ 142,514 | |||||
Acquired intangibles, weighted-average amortization period (in years) | [1] | 8 years | |||||
Customer lists/relationships [Member] | First American Payment Systems, L.P. [Member] | |||||||
Amortizable intangibles [Line Items] | |||||||
Acquired intangibles | $ 118,000 | ||||||
Acquired intangibles, weighted-average amortization period (in years) | 8 years | ||||||
Internal-use software [Member] | |||||||
Amortizable intangibles [Line Items] | |||||||
Gross carrying amount | 439,785 | $ 439,785 | 380,144 | ||||
Accumulated amortization | (337,242) | (337,242) | (303,422) | ||||
Net carrying amount | 102,543 | 102,543 | 76,722 | ||||
Acquired intangibles | $ 59,429 | ||||||
Acquired intangibles, weighted-average amortization period (in years) | 3 years | ||||||
Internal-use software [Member] | First American Payment Systems, L.P. [Member] | |||||||
Amortizable intangibles [Line Items] | |||||||
Acquired intangibles | $ 6,111 | ||||||
Technology-based intangibles [Member] | |||||||
Amortizable intangibles [Line Items] | |||||||
Gross carrying amount | 99,813 | $ 99,813 | 33,813 | ||||
Accumulated amortization | (35,013) | (35,013) | (27,613) | ||||
Net carrying amount | 64,800 | 64,800 | 6,200 | ||||
Acquired intangibles | $ 66,000 | ||||||
Acquired intangibles, weighted-average amortization period (in years) | 8 years | ||||||
Technology-based intangibles [Member] | First American Payment Systems, L.P. [Member] | |||||||
Amortizable intangibles [Line Items] | |||||||
Acquired intangibles | 66,000 | ||||||
Partner relationships [Member] | |||||||
Amortizable intangibles [Line Items] | |||||||
Gross carrying amount | 67,406 | $ 67,406 | 0 | ||||
Accumulated amortization | (1,525) | (1,525) | 0 | ||||
Net carrying amount | 65,881 | 65,881 | 0 | ||||
Acquired intangibles | $ 67,406 | ||||||
Acquired intangibles, weighted-average amortization period (in years) | 15 years | ||||||
Partner relationships [Member] | First American Payment Systems, L.P. [Member] | |||||||
Amortizable intangibles [Line Items] | |||||||
Acquired intangibles | 67,000 | ||||||
Trade names [Member] | |||||||
Amortizable intangibles [Line Items] | |||||||
Gross carrying amount | 52,033 | $ 52,033 | 30,281 | ||||
Accumulated amortization | (30,766) | (30,766) | (29,926) | ||||
Net carrying amount | 21,267 | 21,267 | 355 | ||||
Acquired intangibles | $ 22,000 | ||||||
Acquired intangibles, weighted-average amortization period (in years) | 10 years | ||||||
Trade names [Member] | First American Payment Systems, L.P. [Member] | |||||||
Amortizable intangibles [Line Items] | |||||||
Acquired intangibles | $ 22,000 | ||||||
Software to be sold [Member] | |||||||
Amortizable intangibles [Line Items] | |||||||
Gross carrying amount | 36,900 | $ 36,900 | 36,900 | ||||
Accumulated amortization | (27,054) | (27,054) | (23,884) | ||||
Net carrying amount | $ 9,846 | $ 9,846 | $ 13,016 | ||||
[1] | Included $118,000 acquired via the First American acquisition (Note 6) with a weighted-average useful life of 8 years. |
Supplemental balance sheet an_8
Supplemental balance sheet and cash flow information (goodwill) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning of year | $ 1,288,825 |
Accumulated impairment charges, beginning of year | (585,867) |
Goodwill, net of accumulated impairment charges, beginning of year | 702,958 |
Goodwill resulting from acquisition (Note 6) | 732,520 |
Currency translation adjustment | 5 |
Goodwill, gross, end of period | 2,021,350 |
Accumulated impairment charges, end of period | (585,867) |
Goodwill, net of accumulated impairment charges, end of period | 1,435,483 |
Reportable business segments [Member] | Payments [Member] | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning of year | 168,165 |
Accumulated impairment charges, beginning of year | 0 |
Goodwill, net of accumulated impairment charges, beginning of year | 168,165 |
Goodwill resulting from acquisition (Note 6) | 732,520 |
Goodwill, gross, end of period | 900,685 |
Accumulated impairment charges, end of period | 0 |
Goodwill, net of accumulated impairment charges, end of period | 900,685 |
Reportable business segments [Member] | Cloud Solutions [Member] | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning of year | 432,984 |
Accumulated impairment charges, beginning of year | (392,168) |
Goodwill, net of accumulated impairment charges, beginning of year | 40,816 |
Goodwill, gross, end of period | 432,984 |
Accumulated impairment charges, end of period | (392,168) |
Goodwill, net of accumulated impairment charges, end of period | 40,816 |
Reportable business segments [Member] | Promotional Solutions [Member] | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning of year | 252,864 |
Accumulated impairment charges, beginning of year | (193,699) |
Goodwill, net of accumulated impairment charges, beginning of year | 59,165 |
Currency translation adjustment | 5 |
Goodwill, gross, end of period | 252,869 |
Accumulated impairment charges, end of period | (193,699) |
Goodwill, net of accumulated impairment charges, end of period | 59,170 |
Reportable business segments [Member] | Checks [Member] | |
Goodwill [Roll Forward] | |
Goodwill, gross, beginning of year | 434,812 |
Accumulated impairment charges, beginning of year | 0 |
Goodwill, net of accumulated impairment charges, beginning of year | 434,812 |
Goodwill, gross, end of period | 434,812 |
Accumulated impairment charges, end of period | 0 |
Goodwill, net of accumulated impairment charges, end of period | $ 434,812 |
Supplemental balance sheet an_9
Supplemental balance sheet and cash flow information (other non-current assets) (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Other non-current assets | |||||
Postretirement benefit plan asset | $ 76,435 | $ 71,208 | |||
Cloud computing arragements | 52,900 | 29,242 | |||
Prepaid product discounts | $ 51,145 | 51,270 | $ 41,249 | 50,602 | |
Loans and notes receivable from distributors, net of allowances for uncollectible accounts | [1] | 20,424 | 35,068 | ||
Deferred contract acquisition costs | [2] | 17,480 | 9,199 | ||
Other | 31,463 | 13,360 | |||
Other non-current assets | 249,972 | 208,679 | |||
Loans and notes receivable, current | 1,305 | $ 2,008 | |||
Amortization of deferred contract acquisition costs | 3,366 | 2,756 | |||
Loans and notes receivable from distributors, allowances for uncollectible accounts [Line Items] | |||||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2016-13 [Member] | ||||
Loans and notes receivable from distributors [Member] | |||||
Loans and notes receivable from distributors, allowances for uncollectible accounts [Line Items] | |||||
Balance, beginning of year | 3,995 | 284 | |||
Bad debt (benefit) expense | (1,158) | 5,647 | |||
Exchange for customer lists | (6,402) | ||||
Balance, end of period | $ 284 | 2,837 | 4,278 | ||
Write-offs | 0 | ||||
Recoveries | 0 | ||||
Loans and notes receivable from distributors, credit quality information | |||||
2020 | 1,256 | ||||
2019 | 3,096 | ||||
2018 | 7,187 | ||||
2017 | 11,705 | ||||
Prior | 1,322 | ||||
Total | 24,566 | ||||
Loans and notes receivable from distributors [Member] | 1-2 internal grade member [Member] | |||||
Loans and notes receivable from distributors, credit quality information | |||||
2020 | 1,256 | ||||
2019 | 497 | ||||
2018 | 7,187 | ||||
2017 | 11,705 | ||||
Prior | 1,322 | ||||
Total | 21,967 | ||||
Loans and notes receivable from distributors [Member] | 3-4 internal grade [Member] | |||||
Loans and notes receivable from distributors, credit quality information | |||||
2020 | 0 | ||||
2019 | 2,599 | ||||
2018 | 0 | ||||
2017 | 0 | ||||
Prior | 0 | ||||
Total | $ 2,599 | ||||
Loans and notes receivable from distributors [Member] | Adoption of Accounting Standards Update [Member] | |||||
Loans and notes receivable from distributors, allowances for uncollectible accounts [Line Items] | |||||
Balance, beginning of year | $ 4,749 | ||||
Balance, end of period | $ 4,749 | ||||
[1] | Amount Includes the non-current portion of loans and notes receivable. The current portion of these receivables is included in other current assets on the consolidated balance sheets and was $1,305 as of September 30, 2021 and $2,008 as of December 31, 2020. | ||||
[2] | Amortization of deferred contract acquisition costs was $3,366 for the nine months ended September 30, 2021 and $2,756 for the nine months ended September 30, 2020. |
Supplemental balance sheet a_10
Supplemental balance sheet and cash flow information (other) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Prepaid product discounts [Roll Forward] | |||||
Balance, beginning of year | $ 50,602 | $ 51,145 | |||
Additions | [1] | 24,284 | 13,259 | ||
Amortization | (23,425) | (21,725) | |||
Other | (191) | (1,430) | |||
Balance, end of period | 51,270 | 41,249 | |||
Prepaid product discount payments | 27,049 | 24,947 | |||
Accrued liabilities | |||||
Deferred revenue | [2] | 43,081 | $ 42,104 | ||
Employee cash bonuses, including sales incentives | 35,341 | 21,090 | |||
Operating lease liabilities (Note 13) | 12,884 | 11,589 | |||
Prepaid product discounts due within one year | 11,805 | 14,365 | |||
Customer rebates | 8,715 | 8,179 | |||
Other | 91,958 | 79,856 | |||
Accrued liabilities | 203,784 | 177,183 | |||
Deferred revenue recognized | 33,088 | ||||
Supplemental cash flow information | |||||
Cash and cash equivalents | 121,064 | 310,430 | 123,122 | ||
Total cash, cash equivalents, restricted cash and restricted cash equivalents | 253,104 | 400,016 | 229,409 | $ 174,811 | |
Funds held for customers [Member] | |||||
Supplemental cash flow information | |||||
Restricted cash and restricted cash equivalents included in funds held for customers | 129,180 | $ 89,586 | |||
Other non-current assets [Member] | |||||
Supplemental cash flow information | |||||
Non-current restricted cash included in other non-current assets | $ 2,860 | $ 0 | |||
[1] | Prepaid product discounts are generally accrued upon contract execution. Cash payments for prepaid product discounts were $27,049 for the nine months ended September 30, 2021 and $24,947 for the nine months ended September 30, 2020. | ||||
[2] | $33,088 of the December 31, 2020 amount was recognized as revenue during the nine months ended September 30, 2021. |
Earnings (loss) per share (Deta
Earnings (loss) per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings (loss) per share - basic: | ||||||
Net income (loss) | $ 12,501 | $ 29,444 | $ 48,955 | $ (19,373) | ||
Net income attributable to non-controlling interest | (37) | (27) | (99) | (46) | ||
Net income (loss) attributable to Deluxe | 12,464 | 29,417 | 48,856 | (19,419) | ||
Income allocated to participating securities | (9) | (24) | (36) | (42) | ||
Income (loss) attributable to Deluxe available to common shareholders | $ 12,455 | $ 29,393 | $ 48,820 | $ (19,461) | ||
Weighted-average shares outstanding | 42,574 | 41,872 | 42,294 | 41,927 | ||
Earnings (loss) per share - basic | $ 0.29 | $ 0.70 | $ 1.15 | $ (0.46) | $ 0.12 | $ (5.20) |
Earnings (loss) per share - diluted: | ||||||
Net income (loss) | $ 12,501 | $ 29,444 | $ 48,955 | $ (19,373) | ||
Net income attributable to non-controlling interest | (37) | (27) | (99) | (46) | ||
Net income (loss) attributable to Deluxe | 12,464 | 29,417 | 48,856 | (19,419) | ||
Income allocated to participating securities | (9) | 0 | (27) | (42) | ||
Re-measurement of share-based awards classified as liabilities | (329) | 0 | (329) | (794) | ||
Income (loss) attributable to Deluxe available to common shareholders | $ 12,126 | $ 29,417 | $ 48,500 | $ (20,255) | ||
Weighted-average shares outstanding | 42,574 | 41,872 | 42,294 | 41,927 | ||
Dilutive impact of potential common shares | 457 | 119 | 453 | 40 | ||
Weighted-average shares and potential common shares outstanding | 43,031 | 41,991 | 42,747 | 41,967 | ||
Earnings (loss) per share - diluted | $ 0.28 | $ 0.70 | $ 1.13 | $ (0.48) | $ 0.11 | $ (5.20) |
Antidilutive options excluded from calculation | 2,314 | 2,086 | 2,314 | 2,160 |
Other comprehensive income (l_3
Other comprehensive income (loss) (reclassification adjustments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Reclassification adjustments [Line Items] | ||||
Total reclassifications, net of tax | $ (356) | $ (449) | $ (1,012) | $ (1,004) |
Prior service credit [Member] | ||||
Reclassification adjustments [Line Items] | ||||
Amounts reclassified from accumulated other comprehensive loss | 355 | 355 | 1,066 | 1,066 |
Net actuarial loss [Member] | ||||
Reclassification adjustments [Line Items] | ||||
Amounts reclassified from accumulated other comprehensive loss | (407) | (575) | (1,221) | (1,725) |
Postretirement benefit plans [Member] | ||||
Reclassification adjustments [Line Items] | ||||
Amounts reclassified from accumulated other comprehensive loss | (52) | (220) | (155) | (659) |
Tax (expense) benefit | (30) | 12 | (93) | 35 |
Total reclassifications, net of tax | (82) | (208) | (248) | (624) |
Realized loss on interest rate swap [Member] | ||||
Reclassification adjustments [Line Items] | ||||
Amounts reclassified from accumulated other comprehensive loss | (371) | (326) | (1,035) | (514) |
Tax (expense) benefit | 97 | 85 | 271 | 134 |
Total reclassifications, net of tax | $ (274) | $ (241) | $ (764) | $ (380) |
Other comprehensive income (l_4
Other comprehensive income (loss) (accumulated other comprehensive loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Accumulated other comprehensive loss [Line Items] | |||||
Amounts reclassified from accumulated other comprehensive loss | $ 356 | $ 449 | $ 1,012 | $ 1,004 | |
Postretirement benefit plans [Member] | |||||
Accumulated other comprehensive loss [Line Items] | |||||
Balance, December 31, 2020 | (21,956) | ||||
Other comprehensive (loss) income before reclassifications | 0 | ||||
Amounts reclassified from accumulated other comprehensive loss | 82 | 208 | 248 | 624 | |
Net current-period other comprehensive income (loss) | 248 | ||||
Balance, September 30, 2021 | (21,708) | (21,708) | |||
Net unrealized loss on available-for-sale debt securities [Member] | |||||
Accumulated other comprehensive loss [Line Items] | |||||
Balance, December 31, 2020 | (90) | ||||
Other comprehensive (loss) income before reclassifications | [1] | (208) | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | ||||
Net current-period other comprehensive income (loss) | (208) | ||||
Balance, September 30, 2021 | (298) | (298) | |||
Unrealized loss on securities arising during the period, tax | (72) | ||||
Net unrealized loss on cash flow hedge [Member] | |||||
Accumulated other comprehensive loss [Line Items] | |||||
Balance, December 31, 2020 | (5,351) | ||||
Other comprehensive (loss) income before reclassifications | [2] | 1,077 | |||
Amounts reclassified from accumulated other comprehensive loss | 274 | $ 241 | 764 | $ 380 | |
Net current-period other comprehensive income (loss) | 1,841 | ||||
Balance, September 30, 2021 | (3,510) | (3,510) | |||
Unrealized gain on cash flow hedge arising during the period, tax expense | 382 | ||||
Currency translation adjustment [Member] | |||||
Accumulated other comprehensive loss [Line Items] | |||||
Balance, December 31, 2020 | (14,036) | ||||
Other comprehensive (loss) income before reclassifications | (679) | ||||
Amounts reclassified from accumulated other comprehensive loss | 0 | ||||
Net current-period other comprehensive income (loss) | (679) | ||||
Balance, September 30, 2021 | (14,715) | (14,715) | |||
Accumulated other comprehensive loss [Member] | |||||
Accumulated other comprehensive loss [Line Items] | |||||
Balance, December 31, 2020 | (41,433) | ||||
Other comprehensive (loss) income before reclassifications | 190 | ||||
Amounts reclassified from accumulated other comprehensive loss | 1,012 | ||||
Net current-period other comprehensive income (loss) | 1,202 | ||||
Balance, September 30, 2021 | $ (40,231) | $ (40,231) | |||
[1] | Other comprehensive loss before reclassifications is net of an income tax benefit of $72. | ||||
[2] | Other comprehensive income before reclassifications is net of income tax expense of $382. |
Acquisition (Details)
Acquisition (Details) - USD ($) $ in Thousands | Jun. 01, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Acquisition [Line Items] | |||||
Goodwill | $ 732,520 | ||||
Payment for acquisition, net of cash, cash equivalents, restricted cash and restricted cash equivalents acquired | 956,717 | $ 0 | |||
Total revenue | $ 532,141 | $ 439,461 | 1,451,622 | 1,336,288 | |
Net income attributable to Deluxe | 12,464 | 29,417 | 48,856 | (19,419) | |
Acquisition transaction costs | 208 | 0 | 18,816 | 9 | |
Pro forma revenue | 628,356 | 1,613,333 | 1,664,644 | ||
Pro forma net income (loss) attributable to Deluxe | $ 21,694 | 50,176 | $ (58,565) | ||
First American Payment Systems, L.P. [Member] | |||||
Acquisition [Line Items] | |||||
Measurement-period adjustment, goodwill | (3,788) | ||||
Accounts receivable | $ 27,296 | ||||
Other current assets | 8,533 | ||||
Property, plant and equipment | 9,873 | ||||
Operating lease assets | 24,396 | ||||
Intangible assets: | 279,111 | ||||
Goodwill | 732,520 | 732,520 | |||
Other non-current assets | 350 | ||||
Accounts payable | (18,475) | ||||
Funds held for customers | (9,428) | ||||
Accrued liabilities | (20,551) | ||||
Operating lease liabilities, non-current | (21,316) | ||||
Deferred income taxes | (51,216) | ||||
Other non-current liabilities | (4,376) | ||||
Payment for acquisition, net of cash, cash equivalents, restricted cash and restricted cash equivalents acquired | 956,717 | ||||
Cash, cash equivalents, restricted cash, restricted cash equivalents | 15,841 | ||||
Total revenue | 82,485 | 109,828 | |||
Net income attributable to Deluxe | 890 | $ 824 | |||
First American Payment Systems, L.P. [Member] | Customer lists/relationships [Member] | |||||
Acquisition [Line Items] | |||||
Intangible assets: | 118,000 | ||||
First American Payment Systems, L.P. [Member] | Partner relationships [Member] | |||||
Acquisition [Line Items] | |||||
Intangible assets: | 67,000 | ||||
First American Payment Systems, L.P. [Member] | Technology-based intangibles [Member] | |||||
Acquisition [Line Items] | |||||
Intangible assets: | 66,000 | ||||
First American Payment Systems, L.P. [Member] | Trade names [Member] | |||||
Acquisition [Line Items] | |||||
Intangible assets: | 22,000 | ||||
First American Payment Systems, L.P. [Member] | Internal-use software [Member] | |||||
Acquisition [Line Items] | |||||
Measurement-period adjustment, internal-use software | $ 3,694 | ||||
Intangible assets: | $ 6,111 |
Derivative financial instrume_2
Derivative financial instruments (Details) - Interest rate swap [Member] - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Jul. 19, 2019 |
Derivative [Line Items] | |||
Interest rate swap amount | $ 200,000 | ||
Derivative fixed interest rate | 1.798% | ||
Fair value of derivative liability | $ 4,716 | $ 7,210 |
Fair value measurements (goodwi
Fair value measurements (goodwill and non-recurring asset impairment analyses) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($)reporting_units | Mar. 31, 2021reporting_units | Sep. 30, 2020USD ($) | Mar. 31, 2020USD ($)reporting_units | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Jun. 30, 2020USD ($) | |
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Goodwill impairment charges | $ 0 | $ 71,449 | |||||||
Goodwill | $ 1,435,483 | $ 1,435,483 | $ 702,958 | ||||||
Total impairment charge | 0 | $ 2,760 | 0 | $ 101,749 | |||||
Reportable business segments [Member] | Payments [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Number of reporting units | reporting_units | 4 | 1 | |||||||
Goodwill | 900,685 | 900,685 | 168,165 | ||||||
Reportable business segments [Member] | Promotional Solutions [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Number of reporting units | reporting_units | 2 | 1 | |||||||
Goodwill | $ 59,170 | $ 59,170 | $ 59,165 | ||||||
Reporting units for which quantitative analysis completed [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Number of reporting units | reporting_units | 2 | ||||||||
Promotional Solutions reporting unit [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Goodwill impairment charges | $ 67,132 | ||||||||
Goodwill | 59,009 | ||||||||
Cloud Solutions Web Hosting reporting unit [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Goodwill impairment charges | 4,317 | ||||||||
Non-recurring fair value measurement [Member] | Assets held for sale [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Asset impairment charges | 7,514 | ||||||||
Other assets | $ 11,210 | ||||||||
Non-recurring fair value measurement [Member] | Small business distributors [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Estimated fair value, intangibles | $ 4,479 | $ 4,479 | |||||||
Non-recurring fair value measurement [Member] | Small business distributors [Member] | Measurement input, revenue growth rate [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Intangibles fair value inputs | 0.00% | 0.00% | |||||||
Non-recurring fair value measurement [Member] | Small business distributors [Member] | Measurement input, gross margin growth rate [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Intangibles fair value inputs | 1.00% | 1.00% | |||||||
Non-recurring fair value measurement [Member] | Small business distributors [Member] | Measurement input, discount rate [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Intangibles fair value inputs | 11.00% | 11.00% | |||||||
Non-recurring fair value measurement [Member] | Amortizable intangibles [Member] | Cloud Solutions Web Hosting reporting unit [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Asset impairment charges | $ 17,678 | ||||||||
Non-recurring fair value measurement [Member] | Amortizable intangibles [Member] | Cloud Solutions Web Hosting reporting unit [Member] | Measurement input, revenue growth rate [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Intangibles fair value inputs | (31.00%) | ||||||||
Non-recurring fair value measurement [Member] | Amortizable intangibles [Member] | Cloud Solutions Web Hosting reporting unit [Member] | Measurement input, gross margin growth rate [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Intangibles fair value inputs | (5.20%) | ||||||||
Non-recurring fair value measurement [Member] | Amortizable intangibles [Member] | Cloud Solutions Web Hosting reporting unit [Member] | Measurement input, discount rate [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Intangibles fair value inputs | 9.00% | ||||||||
Non-recurring fair value measurement [Member] | Customer lists/relationships [Member] | Small business distributors [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Asset impairment charges | $ 2,356 | $ 2,752 | $ 5,108 | ||||||
Non-recurring fair value measurement [Member] | Customer lists/relationships [Member] | Cloud Solutions Web Hosting reporting unit [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Asset impairment charges | 8,397 | ||||||||
Non-recurring fair value measurement [Member] | Internal-use software [Member] | Cloud Solutions Web Hosting reporting unit [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Asset impairment charges | 6,932 | ||||||||
Estimated fair value, intangibles | 2,172 | ||||||||
Non-recurring fair value measurement [Member] | Other intangible assets [Member] | Cloud Solutions Web Hosting reporting unit [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Asset impairment charges | 2,349 | ||||||||
Non-recurring fair value measurement [Member] | Significant unobservable inputs (Level 3) [Member] | Assets held for sale [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Other assets | $ 11,210 | ||||||||
Non-recurring fair value measurement [Member] | Significant unobservable inputs (Level 3) [Member] | Small business distributors [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Estimated fair value, intangibles | $ 4,479 | $ 4,479 | |||||||
Non-recurring fair value measurement [Member] | Significant unobservable inputs (Level 3) [Member] | Internal-use software [Member] | Cloud Solutions Web Hosting reporting unit [Member] | |||||||||
Goodwill impairment and non-recurring fair value measurements [Line Items] | |||||||||
Estimated fair value, intangibles | $ 2,172 |
Fair value measurements (financ
Fair value measurements (financial instruments) (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2021 | Dec. 31, 2020 | |||
Fair value measurements, financial instruments [Line Items] | ||||
Available-for-sale debt securities (funds held for customers) | $ 13,302 | $ 28,462 | ||
Derivative liability (Note 7) | (4,716) | (7,210) | ||
Loans and notes receivable from distributors | 21,729 | 37,076 | ||
Loans and notes receivable from distributors, fair value | 21,683 | 36,950 | ||
Long-term debt | 1,776,167 | 840,000 | ||
Long-term debt, fair value | 1,821,713 | 840,000 | ||
Recurring fair value measurements [Member] | ||||
Fair value measurements, financial instruments [Line Items] | ||||
Derivative liability (Note 7) | (4,716) | (7,210) | ||
Significant other observable inputs (Level 2) [Member] | ||||
Fair value measurements, financial instruments [Line Items] | ||||
Long-term debt, fair value | 1,821,713 | 840,000 | ||
Significant other observable inputs (Level 2) [Member] | Recurring fair value measurements [Member] | ||||
Fair value measurements, financial instruments [Line Items] | ||||
Derivative liability (Note 7) | (4,716) | (7,210) | ||
Significant unobservable inputs (Level 3) [Member] | ||||
Fair value measurements, financial instruments [Line Items] | ||||
Loans and notes receivable from distributors, fair value | 21,683 | 36,950 | ||
Cash and cash equivalents [Member] | ||||
Fair value measurements, financial instruments [Line Items] | ||||
Cash | 121,064 | 123,122 | ||
Cash, fair value | 121,064 | 123,122 | ||
Cash and cash equivalents [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||||
Fair value measurements, financial instruments [Line Items] | ||||
Cash, fair value | 121,064 | 123,122 | ||
Funds held for customers [Member] | ||||
Fair value measurements, financial instruments [Line Items] | ||||
Available-for-sale debt securities (funds held for customers) | 13,302 | [1] | 28,462 | [2] |
Cash | 129,180 | 91,287 | ||
Cash, fair value | $ 129,180 | 91,287 | ||
Funds held for customers [Member] | Canadian guaranteed investment certificates [Member] | ||||
Fair value measurements, financial instruments [Line Items] | ||||
Maturity period, debt securities | 2 years | |||
Available-for-sale debt securities (funds held for customers) | $ 3,943 | 3,929 | ||
Funds held for customers [Member] | Money market securities [Member] | ||||
Fair value measurements, financial instruments [Line Items] | ||||
Cash equivalents | 15,000 | |||
Funds held for customers [Member] | Money market securities [Member] | Recurring fair value measurements [Member] | ||||
Fair value measurements, financial instruments [Line Items] | ||||
Cash equivalents | 15,000 | |||
Funds held for customers [Member] | Foreign debt securities [Member] | ||||
Fair value measurements, financial instruments [Line Items] | ||||
Available-for-sale debt securities (funds held for customers) | 13,302 | 13,462 | ||
Funds held for customers [Member] | Foreign debt securities [Member] | Recurring fair value measurements [Member] | ||||
Fair value measurements, financial instruments [Line Items] | ||||
Available-for-sale debt securities (funds held for customers) | 13,302 | 13,462 | ||
Funds held for customers [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||||
Fair value measurements, financial instruments [Line Items] | ||||
Cash, fair value | 129,180 | 91,287 | ||
Funds held for customers [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Money market securities [Member] | Recurring fair value measurements [Member] | ||||
Fair value measurements, financial instruments [Line Items] | ||||
Cash equivalents | 15,000 | |||
Funds held for customers [Member] | Significant other observable inputs (Level 2) [Member] | Foreign debt securities [Member] | Recurring fair value measurements [Member] | ||||
Fair value measurements, financial instruments [Line Items] | ||||
Available-for-sale debt securities (funds held for customers) | $ 13,302 | $ 13,462 | ||
[1] | Funds held for customers, as reported on the consolidated balance sheet as of September 30, 2021, also included cash of $129,180. | |||
[2] | Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2020, also included cash of $91,287. |
Restructuring and integration_3
Restructuring and integration expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | $ 13,894 | $ 18,923 | $ 41,085 | $ 57,788 |
Total cost of revenue [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | 1,559 | (26) | 3,073 | 831 |
Operating expenses [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | 12,335 | 18,949 | 38,012 | 56,957 |
External consulting fees [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | 6,432 | 14,898 | 19,355 | 37,136 |
Internal labor [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | 1,756 | 2,218 | 6,276 | 5,200 |
Employee severance benefits [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | 4,690 | |||
Restructuring charges, net | 1,293 | 752 | 3,167 | 10,870 |
Other [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | $ 4,413 | $ 1,055 | $ 12,287 | $ 4,582 |
Restructuring and integration_4
Restructuring and integration expense (accruals) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||||
Charges | $ 13,894 | $ 18,923 | $ 41,085 | $ 57,788 |
Employee severance benefits [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Balance, December 31, 2020 | 6,798 | |||
Charges | 4,690 | |||
Reversals | (1,523) | |||
Payments | (8,632) | |||
Balance, September 30, 2021 | $ 1,333 | $ 1,333 |
Income tax provision (Details)
Income tax provision (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Reconciliation of effective tax rate | ||
Income tax at federal statutory rate | 21.00% | 21.00% |
Goodwill impairment charges (Note 8) | 0.00% | 46.80% |
State income tax, net of federal income tax benefit | 3.10% | 2.10% |
Non-deductible acquisition costs | 2.80% | 0.00% |
Non-deductible executive compensation | 1.70% | 2.20% |
Foreign tax rate differences | 1.20% | 4.30% |
Tax impact of share-based compensation | 0.80% | 8.50% |
Change in unrecognized tax benefits, including interest and penalties | 0.40% | (3.30%) |
Research and development tax credit | (0.80%) | (3.70%) |
Payables and receivables for prior year tax returns | (0.30%) | 3.20% |
Non-taxable income from employee life insurance policies | (0.30%) | (1.10%) |
Return to provision adjustments | (0.10%) | (2.60%) |
Change in valuation allowances | 0.00% | 0.90% |
Other | 0.20% | 1.80% |
Effective tax rate | 29.70% | 80.10% |
Postretirement benefits (Detail
Postretirement benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net periodic benefit income | ||||
Interest cost | $ 242 | $ 478 | $ 726 | $ 1,434 |
Expected return on plan assets | (1,875) | (1,905) | (5,623) | (5,714) |
Amortization of prior service credit | (355) | (355) | (1,066) | (1,066) |
Amortization of net actuarial losses | 407 | 575 | 1,221 | 1,725 |
Net periodic benefit income | $ (1,581) | $ (1,207) | $ (4,742) | $ (3,621) |
Debt (Details)
Debt (Details) $ in Thousands | Jun. 01, 2021USD ($) | Mar. 31, 2026USD ($) | Dec. 31, 2025USD ($) | Sep. 30, 2025USD ($) | Jun. 30, 2025USD ($) | Mar. 31, 2025USD ($) | Dec. 31, 2024USD ($) | Sep. 30, 2024USD ($) | Jun. 30, 2024USD ($) | Mar. 31, 2024USD ($) | Dec. 31, 2023USD ($) | Sep. 30, 2023USD ($) | Jun. 30, 2023USD ($) | Mar. 31, 2023USD ($) | Dec. 31, 2022USD ($) | Sep. 30, 2022USD ($) | Jun. 30, 2022USD ($) | Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) | Sep. 30, 2021USD ($) | Mar. 31, 2022 | Sep. 30, 2021USD ($) | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2020USD ($) | Mar. 31, 2026 | Mar. 31, 2026 | Jun. 01, 2026USD ($) | Jul. 19, 2019USD ($) |
Debt instruments [Line Items] | |||||||||||||||||||||||||||||
Total principal amount | $ 1,796,563 | $ 1,796,563 | $ 840,000 | ||||||||||||||||||||||||||
Amounts drawn on senior, secured revolving credit facility | 180,000 | 180,000 | 840,000 | ||||||||||||||||||||||||||
Less: unamortized discount and debt issuance costs | (20,396) | (20,396) | 0 | ||||||||||||||||||||||||||
Total debt, net of discount and debt issuance costs | 1,776,167 | 1,776,167 | 840,000 | ||||||||||||||||||||||||||
Less: current portion of long-term debt, net of debt issuance costs | (57,167) | (57,167) | 0 | ||||||||||||||||||||||||||
Long-term debt | 1,719,000 | 1,719,000 | $ 840,000 | ||||||||||||||||||||||||||
Maturities of long-term debt | |||||||||||||||||||||||||||||
Remainder of 2021 | 14,438 | 14,438 | |||||||||||||||||||||||||||
2022 | 57,750 | 57,750 | |||||||||||||||||||||||||||
2023 | 72,188 | 72,188 | |||||||||||||||||||||||||||
2024 | 86,625 | 86,625 | |||||||||||||||||||||||||||
2025 | 101,062 | 101,062 | |||||||||||||||||||||||||||
Thereafter | 1,464,500 | 1,464,500 | |||||||||||||||||||||||||||
Credit facility | |||||||||||||||||||||||||||||
Revolving credit facility, current commitment | $ 500,000 | $ 500,000 | $ 500,000 | ||||||||||||||||||||||||||
Weighted-average interest rate at period end | 2.63% | 2.63% | 2.01% | ||||||||||||||||||||||||||
Daily average amount outstanding | $ 1,062,925 | $ 1,016,896 | |||||||||||||||||||||||||||
Weighted-average interest rate | 2.35% | 2.12% | |||||||||||||||||||||||||||
Outstanding letters of credit | $ (7,475) | $ (7,475) | |||||||||||||||||||||||||||
Net available for borrowing as of September 30, 2021 | 312,525 | 312,525 | |||||||||||||||||||||||||||
Forecast [Member] | |||||||||||||||||||||||||||||
Credit facility | |||||||||||||||||||||||||||||
Maximum consolidated total leverage ratio | 5 | 4.50 | 4.75 | 4.25 | |||||||||||||||||||||||||
Maximum consolidated secured leverage ratio | 4 | 3.50 | 3.75 | 3.50 | |||||||||||||||||||||||||
Minimum interest coverage ratio | 2.75 | 3 | |||||||||||||||||||||||||||
Consolidated total leverage ratio limiting permitted payments | 2.75 | ||||||||||||||||||||||||||||
Permitted payments | $ 60,000 | ||||||||||||||||||||||||||||
Senior, secured term loan facility [Member] | |||||||||||||||||||||||||||||
Debt instruments [Line Items] | |||||||||||||||||||||||||||||
Total principal amount | 1,155,000 | 1,116,563 | 1,116,563 | $ 0 | |||||||||||||||||||||||||
Credit facility | |||||||||||||||||||||||||||||
Repayment amount | 14,438 | ||||||||||||||||||||||||||||
Senior, secured term loan facility [Member] | Forecast [Member] | |||||||||||||||||||||||||||||
Credit facility | |||||||||||||||||||||||||||||
Repayment amount | $ 28,875 | $ 28,875 | $ 28,875 | $ 21,656 | $ 21,656 | $ 21,656 | $ 21,656 | $ 21,656 | $ 21,656 | $ 21,656 | $ 21,656 | $ 14,438 | $ 14,438 | $ 14,438 | $ 14,438 | $ 14,438 | $ 14,438 | $ 14,438 | |||||||||||
Senior, unsecured notes [Member] | |||||||||||||||||||||||||||||
Debt instruments [Line Items] | |||||||||||||||||||||||||||||
Total principal amount | $ 500,000 | $ 500,000 | $ 500,000 | $ 0 | |||||||||||||||||||||||||
Senior, unsecured notes | |||||||||||||||||||||||||||||
Stated interest rate | 8.00% | ||||||||||||||||||||||||||||
Proceeds from debt offering, net of discount and debt issuance costs | $ 490,741 | ||||||||||||||||||||||||||||
Effective interest rate | 8.30% | ||||||||||||||||||||||||||||
Senior, secured revolving credit facility [Member] | |||||||||||||||||||||||||||||
Credit facility | |||||||||||||||||||||||||||||
Credit facility term | 5 years | ||||||||||||||||||||||||||||
Swingline sub-facility [Member] | |||||||||||||||||||||||||||||
Credit facility | |||||||||||||||||||||||||||||
Revolving credit facility, current commitment | $ 40,000 | ||||||||||||||||||||||||||||
Letter of credit sub-facility [Member] | |||||||||||||||||||||||||||||
Credit facility | |||||||||||||||||||||||||||||
Revolving credit facility, current commitment | $ 25,000 | ||||||||||||||||||||||||||||
Interest rate swap [Member] | |||||||||||||||||||||||||||||
Credit facility | |||||||||||||||||||||||||||||
Interest rate swap amount | $ 200,000 | ||||||||||||||||||||||||||||
Minimum [Member] | |||||||||||||||||||||||||||||
Credit facility | |||||||||||||||||||||||||||||
Interest rate margin on variable-rate debt | 1.50% | ||||||||||||||||||||||||||||
Revolving credit facility, commitment fee | 0.25% | ||||||||||||||||||||||||||||
Maximum [Member] | |||||||||||||||||||||||||||||
Credit facility | |||||||||||||||||||||||||||||
Interest rate margin on variable-rate debt | 2.50% | ||||||||||||||||||||||||||||
Revolving credit facility, commitment fee | 0.35% |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 01, 2021 | Dec. 31, 2020 | |||
Leases [Line Items] | ||||||||
Operating lease assets | $ 58,442 | $ 58,442 | $ 35,906 | |||||
Operating leases, accrued liabilities | 12,884 | 12,884 | 11,589 | |||||
Operating lease liabilities | 49,827 | 49,827 | 28,344 | |||||
Total operating lease liabilities | $ 62,711 | $ 62,711 | $ 39,933 | |||||
Operating leases, weighted-average remaining lease term (in years) | 5 years 6 months | 5 years 6 months | 4 years 8 months 12 days | |||||
Operating leases, weighted-average discount rate | 4.50% | 4.50% | 3.10% | |||||
Finance leases, property, plant and equipment, gross | $ 35,575 | $ 35,575 | $ 6,970 | |||||
Finance leases, accumulated depreciation | (7,136) | (7,136) | (6,324) | |||||
Finance leases, property, plant and equipment, net | 28,439 | 28,439 | 646 | |||||
Finance leases, accrued liabilities | 347 | 347 | 459 | |||||
Finance leases, other non-current liabilities | 27,202 | 27,202 | 140 | |||||
Total finance lease liabilities | $ 27,549 | $ 27,549 | $ 599 | |||||
Finance leases, weighted-average remaining lease term (in years) | 15 years 9 months 18 days | 15 years 9 months 18 days | 1 year 6 months | |||||
Finance leases, weighted-average discount rate | 6.00% | 6.00% | 2.00% | |||||
Lease expense | ||||||||
Operating lease expense | $ 4,497 | $ 5,006 | $ 12,897 | $ 15,044 | ||||
Amortization of right-of-use asset | 547 | 187 | 816 | 561 | ||||
Interest on lease liabilities | 432 | 5 | 437 | 17 | ||||
Total finance lease cost | 979 | 192 | 1,253 | 578 | ||||
Lease assets obtained in exchange for lease obligations, operating leases | 0 | 0 | 33,948 | [1] | 10,105 | |||
Lease assets obtained in exchange for lease obligations, finance leases | 26,889 | [2] | 0 | 26,889 | [2] | 0 | ||
Operating cash flows from operating leases | 3,653 | 5,225 | 12,649 | 13,993 | ||||
Operating cash flows from finance leases | 2 | 5 | 7 | 17 | ||||
Financing cash flows from finance leases | 104 | $ 181 | 369 | $ 575 | ||||
Maturities of operating lease liabilities | ||||||||
Remainder of 2021 | 4,032 | 4,032 | ||||||
2022 | 18,545 | 18,545 | ||||||
2023 | 13,827 | 13,827 | ||||||
2024 | 12,668 | 12,668 | ||||||
2025 | 10,691 | 10,691 | ||||||
Thereafter | 23,854 | 23,854 | ||||||
Total lease payments | 83,617 | 83,617 | ||||||
Lease incentives receivable | (10,250) | (10,250) | ||||||
Less imputed interest | (10,656) | (10,656) | ||||||
Total operating lease liabilities | 62,711 | 62,711 | $ 39,933 | |||||
Maturities of finance lease liabiliites | ||||||||
Remainder of 2021 | 79 | 79 | ||||||
2022 | 1,313 | 1,313 | ||||||
2023 | 2,709 | 2,709 | ||||||
2024 | 2,743 | 2,743 | ||||||
2025 | 2,777 | 2,777 | ||||||
Thereafter | 34,691 | 34,691 | ||||||
Total lease payments | 44,312 | 44,312 | ||||||
Less imputed interest | (16,763) | (16,763) | ||||||
Total finance lease liabilities | $ 27,549 | $ 27,549 | $ 599 | |||||
First American Payment Systems, L.P. [Member] | ||||||||
Lease expense | ||||||||
Operating lease assets acquired | $ 24,396 | |||||||
Operating lease liabilities assumed | $ 24,396 | |||||||
[1] | Includes operating lease assets and related liabilities of $24,396 recorded in conjunction with the acquisition of First American in June 2021 (Note 6). | |||||||
[2] | Consists of a lease on a facility located in Minnesota that commenced in July 2021. |
Other commitments and conting_2
Other commitments and contingencies (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Self-insurance liabilities | $ 8,738 | $ 9,046 |
Shareholders' equity (Details)
Shareholders' equity (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Oct. 24, 2018 | |
Share repurchase program, authorized amount | $ 500,000 | |||
Common shares repurchased (in shares) | 0 | 499 | ||
Amount remaining under share repurchase authorization | $ 287,452 | $ 287,452 | ||
First American Payment Systems, L.P. [Member] | ||||
Stock issued, shares | 294 | |||
Stock issued, value | $ 13,000 |
Business segment information (D
Business segment information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($)segment | |
Business segment information [Line Items] | ||||
Number of reportable business segments | segment | 4 | 4 | ||
Revenue | $ 532,141 | $ 439,461 | $ 1,451,622 | $ 1,336,288 |
Depreciation and amortization | (41,906) | (27,972) | (102,929) | (83,065) |
Interest expense | (21,494) | (5,083) | (35,548) | (18,254) |
Net income attributable to non-controlling interest | 37 | 21 | 99 | 46 |
Asset impairment charges | 0 | (2,760) | 0 | (101,749) |
Restructuring integration and other costs | (13,894) | (18,941) | (41,085) | (59,064) |
CEO transition costs | 0 | 0 | 0 | (10) |
Share-based compensation expense | (7,434) | (6,240) | (21,801) | (15,335) |
Acquisition transaction costs | (208) | 0 | (18,816) | (9) |
Certain legal-related (expense) benefit | (638) | 0 | (941) | 2,165 |
Loss on sales of customer lists | 0 | 0 | 0 | (18) |
Income (loss) before income taxes | 17,192 | 41,538 | 69,675 | (5,627) |
Reportable business segments [Member] | ||||
Business segment information [Line Items] | ||||
Revenue | 532,141 | 439,461 | 1,451,622 | 1,336,288 |
Adjusted EBITDA | 145,561 | 139,603 | 423,955 | 400,767 |
Reportable business segments [Member] | Payments [Member] | ||||
Business segment information [Line Items] | ||||
Revenue | 160,268 | 74,675 | 343,045 | 223,886 |
Adjusted EBITDA | 31,598 | 16,746 | 71,125 | 50,352 |
Reportable business segments [Member] | Cloud Solutions [Member] | ||||
Business segment information [Line Items] | ||||
Revenue | 69,497 | 63,758 | 199,784 | 193,600 |
Adjusted EBITDA | 19,036 | 16,425 | 55,047 | 45,494 |
Reportable business segments [Member] | Promotional Solutions [Member] | ||||
Business segment information [Line Items] | ||||
Revenue | 130,330 | 124,929 | 389,825 | 385,667 |
Adjusted EBITDA | 17,673 | 21,478 | 56,804 | 46,529 |
Reportable business segments [Member] | Checks [Member] | ||||
Business segment information [Line Items] | ||||
Revenue | 172,046 | 176,099 | 518,968 | 533,135 |
Adjusted EBITDA | 77,254 | 84,954 | 240,979 | 258,392 |
Corporate [Member] | ||||
Business segment information [Line Items] | ||||
Adjusted EBITDA | $ (42,832) | $ (37,090) | $ (133,259) | $ (131,101) |
Business segment information _2
Business segment information (disaggregated revenue information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregated revenue information | ||||
Revenue | $ 532,141 | $ 439,461 | $ 1,451,622 | $ 1,336,288 |
United States [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 502,282 | 411,451 | 1,360,623 | 1,254,866 |
Foreign, primarily Canada and Australia [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 29,859 | 28,010 | 90,999 | 81,422 |
Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 532,141 | 439,461 | 1,451,622 | 1,336,288 |
Reportable business segments [Member] | Payments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 160,268 | 74,675 | 343,045 | 223,886 |
Reportable business segments [Member] | Payments [Member] | United States [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 150,594 | 66,377 | 312,874 | 198,965 |
Reportable business segments [Member] | Payments [Member] | Foreign, primarily Canada and Australia [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 9,674 | 8,298 | 30,171 | 24,921 |
Reportable business segments [Member] | Cloud Solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 69,497 | 63,758 | 199,784 | 193,600 |
Reportable business segments [Member] | Cloud Solutions [Member] | United States [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 60,778 | 55,755 | 173,555 | 169,917 |
Reportable business segments [Member] | Cloud Solutions [Member] | Foreign, primarily Canada and Australia [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 8,719 | 8,003 | 26,229 | 23,683 |
Reportable business segments [Member] | Promotional Solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 130,330 | 124,929 | 389,825 | 385,667 |
Reportable business segments [Member] | Promotional Solutions [Member] | United States [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 124,571 | 118,454 | 373,042 | 369,023 |
Reportable business segments [Member] | Promotional Solutions [Member] | Foreign, primarily Canada and Australia [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 5,759 | 6,475 | 16,783 | 16,644 |
Reportable business segments [Member] | Checks [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 172,046 | 176,099 | 518,968 | 533,135 |
Reportable business segments [Member] | Checks [Member] | United States [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 166,339 | 170,865 | 501,152 | 516,961 |
Reportable business segments [Member] | Checks [Member] | Foreign, primarily Canada and Australia [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 5,707 | 5,234 | 17,816 | 16,174 |
Checks [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 172,046 | 176,099 | 518,968 | 533,135 |
Checks [Member] | Reportable business segments [Member] | Checks [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 172,046 | 176,099 | 518,968 | 533,135 |
Merchant services and other payments solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 103,014 | 19,257 | 170,431 | 56,808 |
Merchant services and other payments solutions [Member] | Reportable business segments [Member] | Payments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 103,014 | 19,257 | 170,431 | 56,808 |
Forms and other products [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 68,646 | 77,492 | 218,622 | 234,735 |
Forms and other products [Member] | Reportable business segments [Member] | Promotional Solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 68,646 | 77,492 | 218,622 | 234,735 |
Marketing and promotional solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 61,684 | 47,437 | 171,203 | 150,932 |
Marketing and promotional solutions [Member] | Reportable business segments [Member] | Promotional Solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 61,684 | 47,437 | 171,203 | 150,932 |
Treasury management solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 57,254 | 55,418 | 172,614 | 167,078 |
Treasury management solutions [Member] | Reportable business segments [Member] | Payments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 57,254 | 55,418 | 172,614 | 167,078 |
Data-driven marketing solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 41,956 | 30,508 | 115,120 | 88,927 |
Data-driven marketing solutions [Member] | Reportable business segments [Member] | Cloud Solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 41,956 | 30,508 | 115,120 | 88,927 |
Web and hosted solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 27,541 | 33,250 | 84,664 | 104,673 |
Web and hosted solutions [Member] | Reportable business segments [Member] | Cloud Solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | $ 27,541 | $ 33,250 | $ 84,664 | $ 104,673 |
Risks and uncertainties (Detail
Risks and uncertainties (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Loans and notes receivable from distributors, allowances for uncollectible accounts [Line Items] | ||||
Loans and notes receivable from distributors | $ 21,729 | $ 37,076 | ||
Loans and notes receivable from distributors [Member] | ||||
Loans and notes receivable from distributors, allowances for uncollectible accounts [Line Items] | ||||
Allowance for uncollectible accounts | $ 2,837 | $ 3,995 | $ 4,278 | $ 284 |