Document
Document - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 26, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
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 | 2022 | |
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 $1.00 per share | |
Trading Symbol | DLX | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 43,136,109 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 45,535 | $ 41,231 |
Trade accounts receivable, net of allowance for credit losses | 195,151 | 197,947 |
Inventories and supplies | 45,249 | 34,928 |
Funds held for customers, including securities carried at fair value of $7,941 and $13,307, respectively | 155,555 | 254,795 |
Prepaid expenses | 34,513 | 37,643 |
Revenue in excess of billings | 38,350 | 30,393 |
Other current assets | 36,066 | 23,536 |
Total current assets | 550,419 | 620,473 |
Deferred income taxes | 1,915 | 2,180 |
Long-term investments | 47,547 | 47,201 |
Property, plant and equipment, net of accumulated depreciation of $373,481 and $338,617, respectively | 122,478 | 125,966 |
Operating lease assets | 51,295 | 58,236 |
Intangibles, net of accumulated amortization of $789,750 and $698,764, respectively | 476,099 | 510,724 |
Goodwill | 1,431,358 | 1,430,141 |
Other non-current assets | 276,210 | 279,463 |
Total assets | 2,957,321 | 3,074,384 |
Current liabilities: | ||
Accounts payable | 148,474 | 153,072 |
Funds held for customers | 155,369 | 256,257 |
Accrued liabilities | 217,495 | 216,832 |
Current portion of long-term debt | 64,506 | 57,197 |
Total current liabilities | 585,844 | 683,358 |
Long-term debt | 1,606,458 | 1,625,752 |
Operating lease liabilities | 52,356 | 56,444 |
Deferred income taxes | 56,432 | 75,121 |
Other non-current liabilities | 54,159 | 59,111 |
Commitments and contingencies (Note 13) | ||
Shareholders' equity: | ||
Common shares $1 par value (authorized: 500,000 shares; outstanding: September 30, 2022 - 43,136; December 31, 2021 - 42,679) | 43,136 | 42,679 |
Additional paid-in capital | 73,856 | 57,368 |
Retained earnings | 512,342 | 505,763 |
Accumulated other comprehensive loss | (27,648) | (31,492) |
Non-controlling interest | 386 | 280 |
Total shareholders' equity | 602,072 | 574,598 |
Total liabilities and shareholders' equity | $ 2,957,321 | $ 3,074,384 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Funds held for customers, securities carried at fair value | $ 7,941 | $ 13,307 |
Accumulated depreciation | 373,481 | 338,617 |
Accumulated amortization | $ 789,750 | $ 698,764 |
Common stock, par value (per share) | $ 1 | $ 1 |
Common stock, shares authorized | 500,000 | 500,000 |
Common stock, shares outstanding | 43,136 | 42,679 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Total revenue | $ 555,038 | $ 532,141 | $ 1,674,006 | $ 1,451,622 |
Total cost of revenue | (256,225) | (244,151) | (769,532) | (629,237) |
Gross profit | 298,813 | 287,990 | 904,474 | 822,385 |
Selling, general and administrative expense | (243,816) | (239,251) | (753,140) | (685,593) |
Restructuring and integration expense | (15,188) | (12,335) | (46,614) | (38,012) |
Gain on sale of businesses and facility | 1,804 | 0 | 19,331 | 0 |
Operating income | 41,613 | 36,404 | 124,051 | 98,780 |
Interest expense | (23,799) | (21,494) | (65,471) | (35,548) |
Other income | 3,075 | 2,282 | 7,492 | 6,443 |
Income before income taxes | 20,889 | 17,192 | 66,072 | 69,675 |
Income tax provision | (6,129) | (4,691) | (19,536) | (20,720) |
Net income | 14,760 | 12,501 | 46,536 | 48,955 |
Net income attributable to non-controlling interest | (35) | (37) | (106) | (99) |
Net income attributable to Deluxe | 14,725 | 12,464 | 46,430 | 48,856 |
Total comprehensive income | 12,066 | 10,099 | 50,380 | 50,157 |
Comprehensive income attributable to Deluxe | $ 12,031 | $ 10,062 | $ 50,274 | $ 50,058 |
Basic earnings per share | $ 0.34 | $ 0.29 | $ 1.08 | $ 1.15 |
Diluted earnings per share | $ 0.34 | $ 0.28 | $ 1.06 | $ 1.13 |
Product [Member] | ||||
Total revenue | $ 317,250 | $ 302,369 | $ 956,662 | $ 907,646 |
Total cost of revenue | (113,608) | (111,008) | (345,488) | (330,896) |
Service [Member] | ||||
Total revenue | 237,788 | 229,772 | 717,344 | 543,976 |
Total cost of revenue | $ (142,617) | $ (133,143) | $ (424,044) | $ (298,341) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common shares par value [Member] | Additional paid-in capital [Member] | Retained earnings [Member] | Accumulated other comprehensive loss [Member] | Non-controlling interest [Member] |
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 attributable to Deluxe | $ 48,856 | 48,856 | ||||
Net income attributable to non-controlling interest | 99 | 99 | ||||
Net income | 48,955 | |||||
Cash dividends ($0.30 per share for the quarters ended September 30, 2022 and 2021 and $0.90 per share for the nine months ended September 30, 2022 and 2021) | (38,909) | (38,909) | ||||
Common shares issued | $ 16,399 | 744 | 15,655 | |||
Common shares issued (in shares) | 744 | |||||
Common shares retired | $ (4,634) | (116) | (4,518) | |||
Common shares retired (in shares) | (116) | |||||
Employee share-based compensation | $ 21,461 | 21,461 | ||||
Other comprehensive income | 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 attributable to Deluxe | $ 12,464 | 12,464 | ||||
Net income attributable to non-controlling interest | 37 | 37 | ||||
Net income | 12,501 | |||||
Cash dividends ($0.30 per share for the quarters ended September 30, 2022 and 2021 and $0.90 per share for the nine months ended September 30, 2022 and 2021) | (13,117) | (13,117) | ||||
Common shares issued | $ 1,179 | 75 | 1,104 | |||
Common shares issued (in shares) | 75 | |||||
Common shares retired | $ (463) | (11) | (452) | |||
Common shares retired (in shares) | (11) | |||||
Employee share-based compensation | $ 7,897 | 7,897 | ||||
Other comprehensive income | (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 | |||||
Balance, beginning of period at Dec. 31, 2021 | $ 574,598 | 42,679 | 57,368 | 505,763 | (31,492) | 280 |
Balance (in shares) at Dec. 31, 2021 | 42,679 | |||||
Net income attributable to Deluxe | $ 46,430 | 46,430 | ||||
Net income attributable to non-controlling interest | 106 | 106 | ||||
Net income | 46,536 | |||||
Cash dividends ($0.30 per share for the quarters ended September 30, 2022 and 2021 and $0.90 per share for the nine months ended September 30, 2022 and 2021) | (39,851) | (39,851) | ||||
Common shares issued | $ 3,116 | 646 | 2,470 | |||
Common shares issued (in shares) | 646 | |||||
Common shares retired | $ (5,597) | (189) | (5,408) | |||
Common shares retired (in shares) | (189) | |||||
Employee share-based compensation | $ 19,426 | 19,426 | ||||
Other comprehensive income | 3,844 | 3,844 | ||||
Balance, end of period at Sep. 30, 2022 | $ 602,072 | 43,136 | 73,856 | 512,342 | (27,648) | 386 |
Balance (in shares) at Sep. 30, 2022 | 43,136 | |||||
Balance, beginning of period at Jun. 30, 2022 | $ 596,791 | 43,080 | 67,417 | 510,897 | (24,954) | 351 |
Balance (in shares) at Jun. 30, 2022 | 43,080 | |||||
Net income attributable to Deluxe | $ 14,725 | 14,725 | ||||
Net income attributable to non-controlling interest | 35 | 35 | ||||
Net income | 14,760 | |||||
Cash dividends ($0.30 per share for the quarters ended September 30, 2022 and 2021 and $0.90 per share for the nine months ended September 30, 2022 and 2021) | (13,280) | (13,280) | ||||
Common shares issued | $ 779 | 66 | 713 | |||
Common shares issued (in shares) | 66 | |||||
Common shares retired | $ (223) | (10) | (213) | |||
Common shares retired (in shares) | (10) | |||||
Employee share-based compensation | $ 5,939 | 5,939 | ||||
Other comprehensive income | (2,694) | (2,694) | ||||
Balance, end of period at Sep. 30, 2022 | $ 602,072 | $ 43,136 | $ 73,856 | $ 512,342 | $ (27,648) | $ 386 |
Balance (in shares) at Sep. 30, 2022 | 43,136 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
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, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 46,536 | $ 48,955 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 18,595 | 14,536 |
Amortization of intangibles | 110,353 | 88,393 |
Operating lease expense | 14,397 | 12,897 |
Amortization of prepaid product discounts | 26,258 | 23,425 |
Deferred income taxes | (21,791) | 13,733 |
Employee share-based compensation expense | 18,766 | 21,801 |
Gain on sale of businesses and facility | (19,331) | 0 |
Other non-cash items, net | 22,940 | 10,459 |
Changes in assets and liabilities, net of effect of acquisition: | ||
Trade accounts receivable | (878) | 15,164 |
Inventories and supplies | (14,540) | 3,787 |
Other current assets | (11,826) | (27,495) |
Payments for cloud computing arrangement implementation costs | (16,608) | (27,989) |
Other non-current assets | (11,808) | (7,832) |
Accounts payable | (1,090) | 8,538 |
Prepaid product discount payments | (23,920) | (27,049) |
Other accrued and non-current liabilities | (12,635) | (22,094) |
Net cash provided by operating activities | 123,418 | 149,229 |
Cash flows from investing activities: | ||
Purchases of capital assets | (73,454) | (81,081) |
Payment for acquisition, net of cash, cash equivalents, restricted cash and restricted cash equivalents acquired | 0 | (956,717) |
Proceeds from sale of businesses and facility | 25,248 | 2,648 |
Other | (1,144) | (1,211) |
Net cash used by investing activities | (49,350) | (1,036,361) |
Cash flows from financing activities: | ||
Proceeds from issuing long-term debt and swingline loans | 511,000 | 1,852,850 |
Payments on long-term debt and swingline loans | (524,175) | (903,438) |
Payments for debt issuance costs | 0 | (18,153) |
Net change in customer funds obligations | (88,079) | 14,913 |
Proceeds from issuing shares | 2,383 | 16,031 |
Employee taxes paid for shares withheld | (5,597) | (4,634) |
Cash dividends paid to shareholders | (39,613) | (38,695) |
Other | (5,480) | (7,254) |
Net cash (used) provided by financing activities | (149,561) | 911,620 |
Effect of exchange rate change on cash, cash equivalents, restricted cash and restricted cash equivalents | (14,107) | (793) |
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents | (89,600) | 23,695 |
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of year | 285,491 | 229,409 |
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period | $ 195,891 | $ 253,104 |
Consolidated financial statemen
Consolidated financial statements | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated financial statements | The consolidated balance sheet as of September 30, 2022, the consolidated statements of comprehensive income for the quarters and nine months ended September 30, 2022 and 2021, the consolidated statements of shareholders’ equity for the quarters and nine months ended September 30, 2022 and 2021 and the consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021 are unaudited. The consolidated balance sheet as of December 31, 2021 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 or future results. 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, 2021 (the "2021 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, 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. Comparability – The consolidated statement of cash flows for the nine months ended September 30, 2021 has been modified to conform to the current year presentation. We presented payments for cloud computing arrangement implementation costs separately within cash flows from operating activities. Previously, this amount was included in other non-current assets. Also, we included purchases of and proceeds from customer funds marketable securities within other investing activities. Previously, these amounts were presented separately. |
New accounting pronouncement
New accounting pronouncement | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New accounting pronouncement | In March 2022, the Financial Accounting Standards Board issued Accounting Standards Update No. 2022-02, Troubled Debt Restructurings and Vintage Disclosures . The standard modifies the accounting for troubled debt restructurings by creditors and modifies certain disclosure requirements. The guidance will be applied prospectively, with the exception of the recognition and measurement of troubled debt restructurings, for which we may elect to apply a modified retrospective transition method. The standard is effective for us on January 1, 2023, and we do not expect its adoption to have a significant impact on our financial position or results of operations. |
Supplemental balance sheet and
Supplemental balance sheet and cash flow information | 9 Months Ended |
Sep. 30, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental balance sheet and cash flow information | Trade accounts receivable – Net trade accounts receivable was comprised of the following: (in thousands) September 30, December 31, Trade accounts receivable – gross $ 198,685 $ 202,077 Allowance for credit losses (3,534) (4,130) Trade accounts receivable – net (1) $ 195,151 $ 197,947 (1) Includes unbilled receivables of $51,941 as of September 30, 2022 and $47,420 as of December 31, 2021. Changes in the allowance for credit losses for the nine months ended September 30, 2022 and 2021 were as follows: Nine Months Ended (in thousands) 2022 2021 Balance, beginning of year $ 4,130 $ 6,428 Bad debt expense (benefit) 2,410 (412) Write-offs and other (3,006) (2,555) Balance, end of period $ 3,534 $ 3,461 Inventories and supplies – Inventories and supplies were comprised of the following: (in thousands) September 30, December 31, Raw materials $ 7,675 $ 5,316 Semi-finished goods 7,051 6,708 Finished goods 29,550 21,995 Supplies 6,496 6,041 Reserves for excess and obsolete items (5,523) (5,132) Inventories and supplies, net of reserves $ 45,249 $ 34,928 Changes in the reserves for excess and obsolete items were as follows for the nine months ended September 30, 2022 and 2021: Nine Months Ended (in thousands) 2022 2021 Balance, beginning of year $ 5,132 $ 11,748 Amounts charged to expense 2,552 2,884 Write-offs and other (2,161) (9,136) Balance, end of period $ 5,523 $ 5,496 Available-for-sale debt securities – Available-for-sale debt securities included within funds held for customers were comprised of the following: September 30, 2022 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Funds held for customers: (1) Canadian and provincial government securities $ 8,975 $ — $ (1,034) $ 7,941 Available-for-sale debt securities $ 8,975 $ — $ (1,034) $ 7,941 (1) Funds held for customers, as reported on the consolidated balance sheet as of September 30, 2022, also included cash of $147,614. December 31, 2021 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Funds held for customers: (1) Canadian and provincial government securities $ 9,724 $ — $ (374) $ 9,350 Canadian guaranteed investment certificate 3,957 — — 3,957 Available-for-sale debt securities $ 13,681 $ — $ (374) $ 13,307 (1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2021, also included cash of $241,488. Expected maturities of available-for-sale debt securities as of September 30, 2022 were as follows: (in thousands) Fair value Due in one year or less $ 3,415 Due in two to five years 2,819 Due in six to ten years 1,707 Available-for-sale debt securities $ 7,941 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 $ 24,147 $ 22,780 Unconditional right to receive consideration (1) 14,203 7,613 Revenue in excess of billings $ 38,350 $ 30,393 (1) Represents revenues that are earned but not currently billable under the related contract terms. Intangibles – Intangibles were comprised of the following: September 30, 2022 December 31, 2021 (in thousands) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Internal-use software $ 510,141 $ (381,456) $ 128,685 $ 456,133 $ (342,656) $ 113,477 Customer lists/relationships 501,411 (299,318) 202,093 493,495 (255,178) 238,317 Technology-based intangibles 98,813 (44,646) 54,167 98,813 (38,553) 60,260 Partner relationships 74,399 (7,285) 67,114 73,095 (2,990) 70,105 Trade names 44,185 (25,985) 18,200 51,052 (31,277) 19,775 Software to be sold 36,900 (31,060) 5,840 36,900 (28,110) 8,790 Intangibles $ 1,265,849 $ (789,750) $ 476,099 $ 1,209,488 $ (698,764) $ 510,724 Amortization of intangibles was $35,855 for the quarter ended September 30, 2022, $36,570 for the quarter ended September 30, 2021, $110,353 for the nine months ended September 30, 2022 and $88,393 for the nine months ended September 30, 2021. Based on the intangibles in service as of September 30, 2022, estimated future amortization expense is as follows: (in thousands) Estimated Remainder of 2022 $ 37,168 2023 120,753 2024 81,627 2025 48,639 2026 45,553 We acquire and develop internal-use software in the normal course of business. We also, at times, purchase customer list and partner relationship assets. The following intangibles were capitalized during the nine months ended September 30, 2022: (in thousands) Amount Weighted-average amortization period Internal-use software $ 55,776 3 Customer lists/relationships 18,924 6 Partner relationships 1,304 2 Acquired intangibles $ 76,004 4 Goodwill – Changes in goodwill by reportable segment and in total were as follows for the nine months ended September 30, 2022: (in thousands) Payments Cloud Solutions Promotional Solutions Checks Total Balance, December 31, 2021: Goodwill, gross $ 895,338 $ 432,984 $ 252,874 $ 434,812 $ 2,016,008 Accumulated impairment charges — (392,168) (193,699) — (585,867) Goodwill, net of accumulated impairment charges 895,338 40,816 59,175 434,812 1,430,141 Measurement-period adjustment (Note 6) 1,343 — — — 1,343 Currency translation adjustment — — (126) — (126) Balance, September 30, 2022 $ 896,681 $ 40,816 $ 59,049 $ 434,812 $ 1,431,358 Balance, September 30, 2022: Goodwill, gross $ 896,681 $ 432,984 $ 252,748 $ 434,812 $ 2,017,225 Accumulated impairment charges — (392,168) (193,699) — (585,867) Goodwill, net of accumulated impairment charges $ 896,681 $ 40,816 $ 59,049 $ 434,812 $ 1,431,358 Other non-current assets – Other non-current assets were comprised of the following: (in thousands) September 30, December 31, Postretirement benefit plan asset $ 92,802 $ 87,019 Cloud computing arrangement implementation costs 70,519 63,806 Prepaid product discounts 48,591 56,527 Deferred contract acquisition costs (1) 21,671 17,975 Loans and notes receivable from distributors, net of allowance for credit losses (2) 13,525 20,201 Other 29,102 33,935 Other non-current assets $ 276,210 $ 279,463 (1) Amortization of deferred contract acquisition costs was $5,872 for the nine months ended September 30, 2022 and $3,366 for the nine months ended September 30, 2021. (2) 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 $992 as of September 30, 2022 and $1,317 as of December 31, 2021. Changes in the allowance for credit losses related to loans and notes receivable from distributors were as follows for the nine months ended September 30, 2022 and 2021: Nine Months Ended (in thousands) 2022 2021 Balance, beginning of year $ 2,830 $ 3,995 Bad debt expense (benefit) 1,221 (1,158) Other (402) — Balance, end of period $ 3,649 $ 2,837 Past due receivables and those on non-accrual status were not significant as of September 30, 2022 or December 31, 2021. 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, 2022. There were no write-offs or recoveries recorded during the nine months ended September 30, 2022. 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 $ 1,172 $ 443 $ 4,247 $ 8,720 $ 985 $ 15,567 3-4 internal grade — 2,599 — — — 2,599 Loans and notes receivable $ 1,172 $ 3,042 $ 4,247 $ 8,720 $ 985 $ 18,166 Changes in prepaid product discounts during the nine months ended September 30, 2022 and 2021 were as follows: Nine Months Ended (in thousands) 2022 2021 Balance, beginning of year $ 56,527 $ 50,602 Additions (1) 18,721 24,284 Amortization (26,258) (23,425) Other (399) (191) Balance, end of period $ 48,591 $ 51,270 (1) Prepaid product discounts are generally accrued upon contract execution. Cash payments for prepaid product discounts were $23,920 for the nine months ended September 30, 2022 and $27,049 for the nine months ended September 30, 2021. Accrued liabilities – Accrued liabilities were comprised of the following: (in thousands) September 30, December 31, Employee cash bonuses, including sales incentives $ 38,780 $ 45,006 Deferred revenue (1) 36,193 52,645 Wages and payroll liabilities, including vacation 34,679 24,951 Interest 16,021 4,597 Operating lease liabilities 12,672 14,852 Customer rebates 12,140 9,036 Prepaid product discounts 6,568 11,866 Other 60,442 53,879 Accrued liabilities $ 217,495 $ 216,832 (1) $41,222 of the December 31, 2021 amount was recognized as revenue during the nine months ended September 30, 2022. 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 $ 45,535 $ 121,064 Restricted cash and restricted cash equivalents included in funds held for customers 147,614 129,180 Non-current restricted cash included in other non-current assets 2,742 2,860 Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 195,891 $ 253,104 |
Earnings per share
Earnings per share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per share | The following table reflects the calculation of basic and diluted earnings per share. During each period, certain stock options, as noted below, were excluded from the calculation of diluted earnings per share because their effect would have been antidilutive. Quarter Ended Nine Months Ended (in thousands, except per share amounts) 2022 2021 2022 2021 Earnings per share – basic: Net income $ 14,760 $ 12,501 $ 46,536 $ 48,955 Net income attributable to non-controlling interest (35) (37) (106) (99) Net income attributable to Deluxe 14,725 12,464 46,430 48,856 Income allocated to participating securities (10) (9) (33) (36) Income attributable to Deluxe available to common shareholders $ 14,715 $ 12,455 $ 46,397 $ 48,820 Weighted-average shares outstanding 43,116 42,574 42,974 42,294 Earnings per share – basic $ 0.34 $ 0.29 $ 1.08 $ 1.15 Earnings per share – diluted: Net income $ 14,760 $ 12,501 $ 46,536 $ 48,955 Net income attributable to non-controlling interest (35) (37) (106) (99) Net income attributable to Deluxe 14,725 12,464 46,430 48,856 Income allocated to participating securities — (9) (22) (27) Re-measurement of share-based awards classified as liabilities (162) (329) (507) (329) Income attributable to Deluxe available to common shareholders $ 14,563 $ 12,126 $ 45,901 $ 48,500 Weighted-average shares outstanding 43,116 42,574 42,974 42,294 Dilutive impact of potential common shares 234 457 310 453 Weighted-average shares and potential common shares outstanding 43,350 43,031 43,284 42,747 Earnings per share – diluted $ 0.34 $ 0.28 $ 1.06 $ 1.13 Antidilutive options excluded from calculation 1,815 2,314 1,815 2,314 |
Other comprehensive income
Other comprehensive income | 9 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Other comprehensive income | Reclassification adjustments – Information regarding amounts reclassified from accumulated other comprehensive loss to net income was as follows: Accumulated other comprehensive loss components Amounts reclassified from accumulated other comprehensive loss Affected line item in consolidated statements of comprehensive income Quarter Ended Nine Months Ended (in thousands) 2022 2021 2022 2021 Amortization of postretirement benefit plan items: Prior service credit $ 355 $ 355 $ 1,066 $ 1,066 Other income Net actuarial loss (225) (407) (674) (1,221) Other income Total amortization 130 (52) 392 (155) Other income Tax expense (79) (30) (237) (93) Income tax provision Amortization of postretirement benefit plan items, net of tax 51 (82) 155 (248) Net income Realized loss on debt securities — — (8) — Revenue Tax benefit — — 2 — Income tax provision Realized loss on debt securities, net of tax — — (6) — Net income Realized gain (loss) on cash flow hedges 53 (371) (412) (1,035) Interest expense Tax (expense) benefit (15) 97 109 271 Income tax provision Realized gain (loss) on cash flow hedges, net of tax 38 (274) (303) (764) Net income Currency translation adjustment (1) — — (5,550) — Gain on sale of businesses and facility Total reclassifications, net of tax $ 89 $ (356) $ (5,704) $ (1,012) (1) Relates to the sale of our Australian web hosting business during the quarter ended June 30, 2022. Further information can be found in Note 6. Accumulated other comprehensive loss – Changes in the components of accumulated other comprehensive loss during the nine months ended September 30, 2022 were as follows: (in thousands) Postretirement benefit plans Net unrealized loss on debt securities (1) Net unrealized loss on cash flow hedges (2) Currency translation adjustment Accumulated other comprehensive loss Balance, December 31, 2021 $ (15,431) $ (344) $ (2,261) $ (13,456) $ (31,492) Other comprehensive (loss) income before reclassifications — (566) 4,712 (6,006) (1,860) Amounts reclassified from accumulated other comprehensive loss (155) 6 303 5,550 5,704 Net current-period other comprehensive (loss) income (155) (560) 5,015 (456) 3,844 Balance, September 30, 2022 $ (15,586) $ (904) $ 2,754 $ (13,912) $ (27,648) (1) Other comprehensive loss before reclassifications is net of an income tax benefit of $197. (2) Other comprehensive income before reclassifications is net of income tax expense of $1,701. |
Acquisition and divestitures
Acquisition and divestitures | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [Abstract] | |
Acquisition and divestitures | Acquisition – On June 1, 2021, we acquired all of the equity of First American Payment Systems, L.P. (First American). Further information regarding this acquisition can be found under the caption "Note 6: Acquisitions" in the Notes to Consolidated Financial Statements appearing in the 2021 Form 10-K. During the quarter ended June 30, 2022, we finalized the purchase price allocation for this acquisition and we recorded measurement-period adjustments that increased deferred income tax liabilities by $1,343, with a corresponding offset to goodwill. The final allocation of the First American purchase price to the assets acquired and liabilities assumed was as follows: (in thousands) Purchase price allocation Trade accounts receivable $ 27,296 Other current assets 8,533 Property, plant and equipment 9,873 Operating lease assets 24,396 Intangible assets: Customer relationships 127,000 Partner relationships 72,000 Technology-based intangibles 65,000 Trade names 21,000 Internal-use software 6,111 Total intangible assets 291,111 Goodwill 728,516 Other-non-current assets 350 Accounts payable (18,475) Funds held for customers (9,428) Accrued liabilities (23,460) Operating lease liabilities, non-current (21,316) Deferred income taxes (54,506) Other non-current liabilities (4,376) Payments for acquisition, net of cash, cash equivalents, restricted cash and restricted cash equivalents acquired of $15,841 $ 958,514 Further information regarding the acquired First American intangibles can be found under the caption "Note 3: Supplemental Balance Sheet and Cash Flow Information" and "Note 8: Fair Value Measurements," both of which are included in the Notes to Consolidated Financial Statements appearing in the 2021 Form 10-K. First American acquisition transaction costs are included in selling, general and administrative (SG&A) expense in the consolidated statements of comprehensive income and were $208 for the quarter ended September 30, 2021 and $18,816 for the nine months ended September 30, 2021. Operating results for First American were as follows for the nine months ended September 30: Nine Months Ended (in thousands) 2022 2021 Revenue $ 259,724 $ 109,828 Net income attributable to Deluxe 2,902 824 The above results include restructuring and integration costs of $5,209 for the nine months ended September 30, 2022. Pro forma financial information – During the first quarter of 2022, we identified errors in the previously reported pro forma results of operations related to the First American acquisition. These errors related to the amount of historical First American revenue and net income (loss) included for the pre-acquisition periods, as well as errors in the adjustments related to the amortization of acquired intangibles, interest expense on the acquisition financing and transaction costs. For the quarter and six months ended June 30, 2021 and the nine months ended September 30, 2021, these corrections decreased pro forma revenue by $27,595 from the amounts previously reported. For the years ended December 31, 2021 and 2020, these corrections decreased pro forma revenue by $26,335 and $3,027, respectively, from the amounts previously reported. The corrections to adjusted pro forma net income (loss) attributable to Deluxe from the amounts previously reported were as follows: (in thousands) Increase (decrease) in pro forma net income attributable to Deluxe Quarter ended June 30, 2021 $ 7,636 Six Months ended June 30, 2021 5,911 Quarter ended September 30, 2021 2,231 Nine Months ended September 30, 2021 8,142 Year Ended December 31, 2021 10,138 Year Ended December 31, 2020 (9,082) The following unaudited pro forma financial information summarizes our consolidated results of operations as though the First American acquisition occurred on January 1, 2020: As Revised (in thousands) Quarter Ended Quarter Ended Six Months Ended Quarter Ended Sept. 30, 2021 (1) Nine Months Ended Year Ended December 31, 2021 Year Ended December 31, 2020 Revenue $ 518,104 $ 535,493 $ 1,053,597 $ 532,141 $ 1,585,738 $ 2,156,313 $ 2,079,103 Net income (loss) attributable to Deluxe 19,044 24,579 43,623 14,695 58,318 74,843 (54,489) (1) Only net income attributable to Deluxe was revised for the quarter ended September 30, 2021. 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 2021 Form 10-K. The pro forma information includes adjustments to reflect the additional amortization that would have been recorded assuming the fair value adjustments to intangible assets had been applied from January 1, 2020. The pro forma information also includes adjustments to reflect the additional interest expense on the debt we issued to fund the acquisition, and the acquisition transaction costs we incurred during 2021 are reflected in the 2020 pro forma results. This pro forma financial information is for informational purposes only. It does not reflect the integration of the businesses or any synergies that may result from the acquisition. As such, it is not indicative of the results of operations that would have been achieved had the acquisition been consummated on January 1, 2020. In addition, the pro forma amounts are not indicative of future operating results. Divestitures – In May 2022, we completed the sale of our Australian web hosting business for cash proceeds of $17,620, net of costs of the sale. This business generated annual revenue in our Cloud Solutions segment of $23,766 for 2021. During the quarter ended June 30, 2022, we recognized a pretax gain of $15,166 on this sale. The assets and liabilities sold were not significant to our consolidated balance sheet. In April 2022, we sold the assets of our Promotional Solutions strategic sourcing business, and in August 2022, we sold the assets of our Promotional Solutions retail packaging business. These businesses generated annual revenue of approximately $29,000 during 2021. Neither the gain on these sales nor the assets and liabilities sold were significant to our consolidated financial statements. We believe that the sale of these businesses allows us to focus our resources on the key growth areas of payments and data, while allowing us to optimize our operations. Facility sale – In May 2022, we sold our former facility located in Lancaster, California for cash proceeds of $6,929, net of costs of the sale, and we recognized a pretax gain on the sale of $2,361 during the quarter ended June 30, 2022. The sale was a result of our continued real estate rationalization process. |
Derivative financial instrument
Derivative financial instruments | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative financial instruments | As part of our interest rate risk management strategy, we entered into interest rate swaps, which we designated as cash flow hedges, to mitigate variability in interest payments on a portion of our variable-rate debt (Note 12). Information regarding our cash flow hedges was as follows: September 30, December 31, (in thousands) Notional amount Interest Rate Maturity Balance Sheet Location Fair Value Fair Value July 2019 $ 200,000 1.798 % March 2023 Other current assets $ 2,071 $ — Other non-current liabilities — (3,028) September 2022 interest rate swap: 300,000 3.895 % September 2025 Other non-current assets 1,726 — Changes in the fair values of the interest rate swaps 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 values of the derivatives are calculated based on the prevailing LIBOR rate curve on the date of measurement. The cash flow hedges were fully effective as of September 30, 2022 and December 31, 2021, and their impact on consolidated net income and our consolidated statements of cash flows was not significant. We also expect that the amount that will be reclassified to interest expense during the next 12 months will not be significant. |
Fair value measurements
Fair value measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | 2022 annual goodwill impairment analysis – Our impairment of goodwill policy can be found under the caption "Note 1: Significant Accounting Policies" in the Notes to Consolidated Financial Statements appearing in the 2021 Form 10-K. This policy explains our methodology for assessing the impairment of goodwill. In completing the 2022 annual impairment analysis of goodwill as of July 31, 2022, we elected to perform qualitative analyses for all of our reporting units, with the exception of our Cloud Data Analytics reporting unit. 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 value of any reporting unit was less than its carrying amount. The quantitative analysis of our Cloud Data Analytics reporting unit indicated that the estimated fair value of this reporting unit exceeded its carrying value by approximately $46,000, or by 39% above the carrying value of its net assets. As such, no goodwill impairment charges were recorded as a result of our annual impairment analysis. 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 as of December 31, 2021, also included an investment in a Canadian guaranteed investment certificate (GIC) with an original maturity of 2 years. The GIC investment matured during the quarter ended June 30, 2022. 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 approximated its fair value, based on estimates using current market rates offered for deposits with similar remaining maturities. 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 and were not significant during the quarters and nine months ended September 30, 2022 and 2021. Information regarding the fair values of our financial instruments was as follows: Fair value measurements using September 30, 2022 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: Available-for-sale debt securities Funds held for customers $ 7,941 $ 7,941 $ — $ 7,941 $ — Derivative assets (Note 7) Other current and non-current assets 3,797 3,797 — 3,797 — Amortized cost: Cash Cash and cash equivalents 45,535 45,535 45,535 — — Cash Funds held for customers 147,614 147,614 147,614 — — Cash Other non-current assets 2,742 2,742 2,742 — — Loans and notes receivable from distributors Other current and non-current assets 14,517 13,090 — — 13,090 Long-term debt Current portion of long-term debt and long-term debt 1,670,964 1,597,546 — 1,597,546 — Fair value measurements using December 31, 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: Available-for-sale debt securities Funds held for customers $ 13,307 $ 13,307 $ — $ 13,307 $ — Derivative liability (Note 7) Other non-current liabilities (3,028) (3,028) — (3,028) — Amortized cost: Cash Cash and cash equivalents 41,231 41,231 41,231 — — Cash Funds held for customers 241,488 241,488 241,488 — — Cash Other non-current assets 2,772 2,772 2,772 — — Loans and notes receivable from distributors Other current and non-current assets 21,518 22,344 — — 22,344 Long-term debt Current portion of long-term debt and long-term debt 1,682,949 1,728,515 — 1,728,515 — |
Restructuring and integration e
Restructuring and integration expense | 9 Months Ended |
Sep. 30, 2022 | |
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, 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 as follows: Quarter Ended Nine Months Ended (in thousands) 2022 2021 2022 2021 Total cost of revenue $ 131 $ 1,559 $ 216 $ 3,073 Operating expenses 15,188 12,335 46,614 38,012 Restructuring and integration expense $ 15,319 $ 13,894 $ 46,830 $ 41,085 Restructuring and integration expense for each period was comprised of the following: Quarter Ended Nine Months Ended (in thousands) 2022 2021 2022 2021 External consulting fees $ 7,670 $ 6,432 $ 24,670 $ 19,355 Internal labor 1,877 1,756 6,177 6,276 Employee severance benefits 3,826 1,293 8,232 3,167 Other 1,946 4,413 7,751 12,287 Restructuring and integration expense $ 15,319 $ 13,894 $ 46,830 $ 41,085 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 and the related severance payments are expected to be completed by mid-2023. Changes in our restructuring and integration accruals were as follows: (in thousands) Employee severance benefits Balance, December 31, 2021 $ 5,672 Charges 8,928 Reversals (696) Payments (7,502) Balance, September 30, 2022 $ 6,402 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, 2022 | |
Income Tax Disclosure [Abstract] | |
Income tax provision | The effective tax rate on pretax income reconciles to the U.S. federal statutory tax rate as follows: Nine Months Year Ended Income tax at federal statutory rate 21.0 % 21.0 % Change in valuation allowance 10.2 % 0.1 % Tax impact of share-based compensation 4.0 % 0.9 % State income tax expense, net of federal income tax benefit 2.8 % 2.4 % Non-deductible executive compensation 2.2 % 1.7 % Foreign tax rate differences 1.5 % 1.7 % Tax on repatriation of foreign earnings 1.5 % 4.9 % Non-deductible acquisition costs 0.1 % 1.5 % Sale of business (Note 6) (12.5 %) — Research and development tax credit (1.0 %) (0.9 %) Other (0.2 %) (0.2 %) Effective tax rate 29.6 % 33.1 % |
Postretirement benefits
Postretirement benefits | 9 Months Ended |
Sep. 30, 2022 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Postretirement benefits | We have historically provided certain health care benefits for eligible 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 13: Postretirement Benefits” in the Notes to Consolidated Financial Statements appearing in the 2021 Form 10-K. Postretirement benefit income is included in other income on the consolidated statements of comprehensive income and consisted of the following components: Quarter Ended Nine Months Ended (in thousands) 2022 2021 2022 2021 Interest cost $ 280 $ 242 $ 841 $ 726 Expected return on plan assets (1,866) (1,875) (5,596) (5,623) Amortization of prior service credit (355) (355) (1,066) (1,066) Amortization of net actuarial losses 225 407 674 1,221 Net periodic benefit income $ (1,716) $ (1,581) $ (5,147) $ (4,742) |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt outstanding was comprised of the following: (in thousands) September 30, December 31, Senior, secured term loan facility $ 1,001,813 $ 1,072,125 Senior, unsecured notes 475,000 500,000 Amounts drawn on senior, secured revolving credit facility 210,000 130,000 Total principal amount 1,686,813 1,702,125 Less: unamortized discount and debt issuance costs (15,849) (19,176) Total debt, net of discount and debt issuance costs 1,670,964 1,682,949 Less: current portion of long-term debt, net of debt issuance costs (64,506) (57,197) Long-term debt $ 1,606,458 $ 1,625,752 Maturities of long-term debt were as follows as of September 30, 2022: (in thousands) Debt obligations Remainder of 2022 $ 14,438 2023 72,188 2024 86,625 2025 101,062 2026 937,500 Thereafter 475,000 Total principal amount $ 1,686,813 Credit facility – In June 2021, we executed a senior, secured credit facility consisting of a revolving credit facility with commitments of $500,000 and a $1,155,000 term loan facility. The revolving credit facility includes a $40,000 swingline sub-facility and a $25,000 letter of credit sub-facility. Proceeds from the credit facility were used to terminate our previous credit facility agreement and to fund the acquisition of First American (Note 6). 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 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 under the 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 the credit facility had a weighted-average interest rate of 5.30% as of September 30, 2022 and 2.67% as of December 31, 2021, including the impact of interest rate swaps that effectively convert $500,000 of our variable-rate debt to fixed rate debt. Further information regarding the interest rate swaps 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, 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 are required to maintain a minimum interest coverage ratio of at least 3.00 to 1.00 throughout the remaining term of the credit facility. Failure to meet any of the above requirements would result in an event of default that would allow lenders to declare amounts outstanding immediately due and payable and would allow the lenders to enforce their interests against collateral pledged if we are unable to settle the amounts outstanding. We were in compliance with all debt covenants as of September 30, 2022. 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 Year Ended Daily average amount outstanding $ 1,477,841 $ 1,109,819 Weighted-average interest rate 4.00 % 2.43 % As of September 30, 2022, amounts available for borrowing under our revolving credit facility were as follows: (in thousands) Available borrowings Revolving credit facility commitment $ 500,000 Amounts drawn on revolving credit facility (210,000) Outstanding letters of credit (1) (7,823) Net available for borrowing as of September 30, 2022 $ 282,177 (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 – In June 2021, we issued $500,000 of 8.0% senior, unsecured notes that mature in June 2029. The notes were issued via a private placement under Rule 144A of the Securities Act of 1933. Proceeds from the offering, net of discount and offering costs, were $490,741, resulting in an effective interest rate of 8.3%. The net proceeds from the notes were used to fund the acquisition of First American in June 2021 (Note 6). Interest payments are due each June and December. During the quarter ended September 30, 2022, we settled $25,000 of these notes via open market purchases. We realized a pretax gain of $1,726 on these debt retirements that is included in interest expense in the consolidated statements of comprehensive income for the quarter and nine months ended September 30, 2022. |
Other commitments and contingen
Other commitments and contingencies | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 or December 31, 2021. 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 (FTC) 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 is our sole recourse for any such losses. The First American subsidiaries entered into a Stipulated Order for Permanent Injunction, Monetary Judgment, and Other Relief (the “Order”) with the FTC, which was approved by the FTC on July 29, 2022. The parties subsequently entered into an amended Order. Pursuant to the Order, among other things, the First American defendants are required to pay $4,900 to the FTC within 7 days of the entry of the Order. The First American defendants also agreed to certain injunctive relief. The above description is qualified in its entirety to the terms of the Order, which was filed as Exhibit 10.1 to the Current Report on Form 8-K that we filed on July 29, 2022. The revised Order is attached as Exhibit 10.1 to this report. The payment of the above-referenced amount, together with post-closing expenses that we and First American incurred in connection with this matter, will be withdrawn from the holdback referenced above. As such, the payment of such amount will not have a material impact on our consolidated financial statements. 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 $10,130 as of September 30, 2022 and $7,401 as of December 31, 2021. 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, 2022 or December 31, 2021. 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, 2022 | |
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 under this authorization during the nine months ended September 30, 2022 or September 30, 2021, and $287,452 remained available for repurchase as of September 30, 2022. 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 second quarter of 2021. |
Business segment information
Business segment information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Business segment information | We operate 4 reportable segments, generally organized by product type, as follows: • Payments – This segment includes our merchant in-store, online and mobile payment solutions; treasury management solutions, including remittance and lockbox processing, remote deposit capture, receivables management, payment processing and paperless treasury management; payroll and disbursement services, including Deluxe Payment Exchange; and fraud and security services. • Cloud Solutions – This segment includes data-driven marketing solutions; hosted solutions, including digital engagement, logo design, financial institution profitability reporting and business incorporation services; and web hosting and design services. • Promotional Solutions – This segment includes business forms, accessories, advertising specialties and promotional apparel. • Checks – This segment includes printed business and personal checks. The accounting policies of the segments are the same as those described in the Notes to Consolidated Financial Statements included in the 2021 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 portions of Europe, as well as partners in Central and South America, and had operations in Australia until May 2022 when this business was sold (Note 6). 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; share-based compensation expense; acquisition transaction costs; certain legal-related expense; and gains or losses on sales of businesses and long-lived assets. 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, 2022 and 2021 was as follows: Quarter Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Payments: Revenue $ 169,787 $ 160,268 $ 507,149 $ 343,045 Adjusted EBITDA 36,184 31,598 107,605 71,125 Cloud Solutions: Revenue 66,739 69,497 204,824 199,784 Adjusted EBITDA 16,034 19,036 50,869 55,047 Promotional Solutions: Revenue 136,081 130,330 408,600 389,825 Adjusted EBITDA 18,255 17,673 49,795 56,804 Checks: Revenue 182,431 172,046 553,433 518,968 Adjusted EBITDA 80,478 77,254 245,838 240,979 Total segment: Revenue $ 555,038 $ 532,141 $ 1,674,006 $ 1,451,622 Adjusted EBITDA 150,951 145,561 454,107 423,955 The following table presents a reconciliation of total segment adjusted EBITDA to consolidated income before income taxes: Quarter Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Total segment adjusted EBITDA $ 150,951 $ 145,561 $ 454,107 $ 423,955 Corporate operations (46,359) (42,832) (148,159) (133,259) Depreciation and amortization expense (42,304) (41,906) (128,948) (102,929) Interest expense (23,799) (21,494) (65,471) (35,548) Net income attributable to non-controlling interest 35 37 106 99 Restructuring, integration and other costs (15,319) (13,894) (46,830) (41,085) Share-based compensation expense (5,728) (7,434) (18,766) (21,801) Acquisition transaction costs (51) (208) (112) (18,816) Certain legal-related benefit (expense) 1,659 (638) 814 (941) Gain on sale of businesses and facility 1,804 — 19,331 — Income before income taxes $ 20,889 $ 17,192 $ 66,072 $ 69,675 The following tables present revenue disaggregated by our product and service offerings: Quarter Ended September 30, 2022 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 182,431 $ 182,431 Merchant services and other payment solutions 108,255 — — — 108,255 Forms and other products — — 71,797 — 71,797 Marketing and promotional solutions — — 64,284 — 64,284 Treasury management solutions 61,532 — — — 61,532 Data-driven marketing solutions — 46,993 — — 46,993 Web and hosted solutions — 19,746 — — 19,746 Total revenue $ 169,787 $ 66,739 $ 136,081 $ 182,431 $ 555,038 Quarter Ended September 30, 2021 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 172,046 $ 172,046 Merchant services and other payment 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 Nine Months Ended September 30, 2022 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 553,433 $ 553,433 Merchant services and other payment solutions 328,144 — — — 328,144 Forms and other products — — 211,517 — 211,517 Marketing and promotional solutions — — 197,083 — 197,083 Treasury management solutions 179,005 — — — 179,005 Data-driven marketing solutions — 134,307 — — 134,307 Web and hosted solutions — 70,517 — — 70,517 Total revenue $ 507,149 $ 204,824 $ 408,600 $ 553,433 $ 1,674,006 Nine Months Ended September 30, 2021 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 518,968 $ 518,968 Merchant services and other payment 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 The following tables present revenue disaggregated by geography, based on where items are shipped from or where services are performed: Quarter Ended September 30, 2022 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated United States $ 159,160 $ 64,111 $ 129,697 $ 175,481 $ 528,449 Foreign, primarily Canada 10,627 2,628 6,384 6,950 26,589 Total revenue $ 169,787 $ 66,739 $ 136,081 $ 182,431 $ 555,038 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 Nine Months Ended September 30, 2022 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated United States $ 475,368 $ 188,494 $ 389,824 $ 531,260 $ 1,584,946 Foreign, primarily Canada and Australia 31,781 16,330 18,776 22,173 89,060 Total revenue $ 507,149 $ 204,824 $ 408,600 $ 553,433 $ 1,674,006 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 |
Consolidated financial statem_2
Consolidated financial statements (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Comparability | Comparability – The consolidated statement of cash flows for the nine months ended September 30, 2021 has been modified to conform to the current year presentation. We presented payments for cloud computing arrangement implementation costs separately within cash flows from operating activities. Previously, this amount was included in other non-current assets. Also, we included purchases of and proceeds from customer funds marketable securities within other investing activities. Previously, these amounts were presented separately. |
Supplemental balance sheet an_2
Supplemental balance sheet and cash flow information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventories and supplies | Inventories and supplies – Inventories and supplies were comprised of the following: (in thousands) September 30, December 31, Raw materials $ 7,675 $ 5,316 Semi-finished goods 7,051 6,708 Finished goods 29,550 21,995 Supplies 6,496 6,041 Reserves for excess and obsolete items (5,523) (5,132) Inventories and supplies, net of reserves $ 45,249 $ 34,928 Changes in the reserves for excess and obsolete items were as follows for the nine months ended September 30, 2022 and 2021: Nine Months Ended (in thousands) 2022 2021 Balance, beginning of year $ 5,132 $ 11,748 Amounts charged to expense 2,552 2,884 Write-offs and other (2,161) (9,136) Balance, end of period $ 5,523 $ 5,496 |
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, 2022 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Funds held for customers: (1) Canadian and provincial government securities $ 8,975 $ — $ (1,034) $ 7,941 Available-for-sale debt securities $ 8,975 $ — $ (1,034) $ 7,941 (1) Funds held for customers, as reported on the consolidated balance sheet as of September 30, 2022, also included cash of $147,614. December 31, 2021 (in thousands) Cost Gross unrealized gains Gross unrealized losses Fair value Funds held for customers: (1) Canadian and provincial government securities $ 9,724 $ — $ (374) $ 9,350 Canadian guaranteed investment certificate 3,957 — — 3,957 Available-for-sale debt securities $ 13,681 $ — $ (374) $ 13,307 (1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2021, also included cash of $241,488. |
Expected maturities of available-for-sale debt securities | Expected maturities of available-for-sale debt securities as of September 30, 2022 were as follows: (in thousands) Fair value Due in one year or less $ 3,415 Due in two to five years 2,819 Due in six to ten years 1,707 Available-for-sale debt securities $ 7,941 |
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 $ 24,147 $ 22,780 Unconditional right to receive consideration (1) 14,203 7,613 Revenue in excess of billings $ 38,350 $ 30,393 (1) Represents revenues that are earned but not currently billable under the related contract terms. |
Intangibles | Intangibles – Intangibles were comprised of the following: September 30, 2022 December 31, 2021 (in thousands) Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Internal-use software $ 510,141 $ (381,456) $ 128,685 $ 456,133 $ (342,656) $ 113,477 Customer lists/relationships 501,411 (299,318) 202,093 493,495 (255,178) 238,317 Technology-based intangibles 98,813 (44,646) 54,167 98,813 (38,553) 60,260 Partner relationships 74,399 (7,285) 67,114 73,095 (2,990) 70,105 Trade names 44,185 (25,985) 18,200 51,052 (31,277) 19,775 Software to be sold 36,900 (31,060) 5,840 36,900 (28,110) 8,790 Intangibles $ 1,265,849 $ (789,750) $ 476,099 $ 1,209,488 $ (698,764) $ 510,724 |
Estimated future amortization expense | Based on the intangibles in service as of September 30, 2022, estimated future amortization expense is as follows: (in thousands) Estimated Remainder of 2022 $ 37,168 2023 120,753 2024 81,627 2025 48,639 2026 45,553 |
Acquired intangibles | We acquire and develop internal-use software in the normal course of business. We also, at times, purchase customer list and partner relationship assets. The following intangibles were capitalized during the nine months ended September 30, 2022: (in thousands) Amount Weighted-average amortization period Internal-use software $ 55,776 3 Customer lists/relationships 18,924 6 Partner relationships 1,304 2 Acquired intangibles $ 76,004 4 |
Goodwill | Goodwill – Changes in goodwill by reportable segment and in total were as follows for the nine months ended September 30, 2022: (in thousands) Payments Cloud Solutions Promotional Solutions Checks Total Balance, December 31, 2021: Goodwill, gross $ 895,338 $ 432,984 $ 252,874 $ 434,812 $ 2,016,008 Accumulated impairment charges — (392,168) (193,699) — (585,867) Goodwill, net of accumulated impairment charges 895,338 40,816 59,175 434,812 1,430,141 Measurement-period adjustment (Note 6) 1,343 — — — 1,343 Currency translation adjustment — — (126) — (126) Balance, September 30, 2022 $ 896,681 $ 40,816 $ 59,049 $ 434,812 $ 1,431,358 Balance, September 30, 2022: Goodwill, gross $ 896,681 $ 432,984 $ 252,748 $ 434,812 $ 2,017,225 Accumulated impairment charges — (392,168) (193,699) — (585,867) Goodwill, net of accumulated impairment charges $ 896,681 $ 40,816 $ 59,049 $ 434,812 $ 1,431,358 |
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 $ 92,802 $ 87,019 Cloud computing arrangement implementation costs 70,519 63,806 Prepaid product discounts 48,591 56,527 Deferred contract acquisition costs (1) 21,671 17,975 Loans and notes receivable from distributors, net of allowance for credit losses (2) 13,525 20,201 Other 29,102 33,935 Other non-current assets $ 276,210 $ 279,463 (1) Amortization of deferred contract acquisition costs was $5,872 for the nine months ended September 30, 2022 and $3,366 for the nine months ended September 30, 2021. (2) 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 $992 as of September 30, 2022 and $1,317 as of December 31, 2021. |
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, 2022. There were no write-offs or recoveries recorded during the nine months ended September 30, 2022. 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 $ 1,172 $ 443 $ 4,247 $ 8,720 $ 985 $ 15,567 3-4 internal grade — 2,599 — — — 2,599 Loans and notes receivable $ 1,172 $ 3,042 $ 4,247 $ 8,720 $ 985 $ 18,166 |
Changes in prepaid product discounts | Changes in prepaid product discounts during the nine months ended September 30, 2022 and 2021 were as follows: Nine Months Ended (in thousands) 2022 2021 Balance, beginning of year $ 56,527 $ 50,602 Additions (1) 18,721 24,284 Amortization (26,258) (23,425) Other (399) (191) Balance, end of period $ 48,591 $ 51,270 (1) Prepaid product discounts are generally accrued upon contract execution. Cash payments for prepaid product discounts were $23,920 for the nine months ended September 30, 2022 and $27,049 for the nine months ended September 30, 2021. |
Accrued liabilities | Accrued liabilities – Accrued liabilities were comprised of the following: (in thousands) September 30, December 31, Employee cash bonuses, including sales incentives $ 38,780 $ 45,006 Deferred revenue (1) 36,193 52,645 Wages and payroll liabilities, including vacation 34,679 24,951 Interest 16,021 4,597 Operating lease liabilities 12,672 14,852 Customer rebates 12,140 9,036 Prepaid product discounts 6,568 11,866 Other 60,442 53,879 Accrued liabilities $ 217,495 $ 216,832 (1) $41,222 of the December 31, 2021 amount was recognized as revenue during the nine months ended September 30, 2022. |
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 $ 45,535 $ 121,064 Restricted cash and restricted cash equivalents included in funds held for customers 147,614 129,180 Non-current restricted cash included in other non-current assets 2,742 2,860 Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 195,891 $ 253,104 |
Trade accounts receivable [Member] | |
Allowance for credit losses | Trade accounts receivable – Net trade accounts receivable was comprised of the following: (in thousands) September 30, December 31, Trade accounts receivable – gross $ 198,685 $ 202,077 Allowance for credit losses (3,534) (4,130) Trade accounts receivable – net (1) $ 195,151 $ 197,947 (1) Includes unbilled receivables of $51,941 as of September 30, 2022 and $47,420 as of December 31, 2021. Changes in the allowance for credit losses for the nine months ended September 30, 2022 and 2021 were as follows: Nine Months Ended (in thousands) 2022 2021 Balance, beginning of year $ 4,130 $ 6,428 Bad debt expense (benefit) 2,410 (412) Write-offs and other (3,006) (2,555) Balance, end of period $ 3,534 $ 3,461 |
Loans and notes receivable [Member] | |
Allowance for credit losses | Changes in the allowance for credit losses related to loans and notes receivable from distributors were as follows for the nine months ended September 30, 2022 and 2021: Nine Months Ended (in thousands) 2022 2021 Balance, beginning of year $ 2,830 $ 3,995 Bad debt expense (benefit) 1,221 (1,158) Other (402) — Balance, end of period $ 3,649 $ 2,837 |
Earnings per share (Tables)
Earnings per share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per share | The following table reflects the calculation of basic and diluted earnings per share. During each period, certain stock options, as noted below, were excluded from the calculation of diluted earnings per share because their effect would have been antidilutive. Quarter Ended Nine Months Ended (in thousands, except per share amounts) 2022 2021 2022 2021 Earnings per share – basic: Net income $ 14,760 $ 12,501 $ 46,536 $ 48,955 Net income attributable to non-controlling interest (35) (37) (106) (99) Net income attributable to Deluxe 14,725 12,464 46,430 48,856 Income allocated to participating securities (10) (9) (33) (36) Income attributable to Deluxe available to common shareholders $ 14,715 $ 12,455 $ 46,397 $ 48,820 Weighted-average shares outstanding 43,116 42,574 42,974 42,294 Earnings per share – basic $ 0.34 $ 0.29 $ 1.08 $ 1.15 Earnings per share – diluted: Net income $ 14,760 $ 12,501 $ 46,536 $ 48,955 Net income attributable to non-controlling interest (35) (37) (106) (99) Net income attributable to Deluxe 14,725 12,464 46,430 48,856 Income allocated to participating securities — (9) (22) (27) Re-measurement of share-based awards classified as liabilities (162) (329) (507) (329) Income attributable to Deluxe available to common shareholders $ 14,563 $ 12,126 $ 45,901 $ 48,500 Weighted-average shares outstanding 43,116 42,574 42,974 42,294 Dilutive impact of potential common shares 234 457 310 453 Weighted-average shares and potential common shares outstanding 43,350 43,031 43,284 42,747 Earnings per share – diluted $ 0.34 $ 0.28 $ 1.06 $ 1.13 Antidilutive options excluded from calculation 1,815 2,314 1,815 2,314 |
Other comprehensive income (Tab
Other comprehensive income (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 was as follows: Accumulated other comprehensive loss components Amounts reclassified from accumulated other comprehensive loss Affected line item in consolidated statements of comprehensive income Quarter Ended Nine Months Ended (in thousands) 2022 2021 2022 2021 Amortization of postretirement benefit plan items: Prior service credit $ 355 $ 355 $ 1,066 $ 1,066 Other income Net actuarial loss (225) (407) (674) (1,221) Other income Total amortization 130 (52) 392 (155) Other income Tax expense (79) (30) (237) (93) Income tax provision Amortization of postretirement benefit plan items, net of tax 51 (82) 155 (248) Net income Realized loss on debt securities — — (8) — Revenue Tax benefit — — 2 — Income tax provision Realized loss on debt securities, net of tax — — (6) — Net income Realized gain (loss) on cash flow hedges 53 (371) (412) (1,035) Interest expense Tax (expense) benefit (15) 97 109 271 Income tax provision Realized gain (loss) on cash flow hedges, net of tax 38 (274) (303) (764) Net income Currency translation adjustment (1) — — (5,550) — Gain on sale of businesses and facility Total reclassifications, net of tax $ 89 $ (356) $ (5,704) $ (1,012) (1) Relates to the sale of our Australian web hosting business during the quarter ended June 30, 2022. Further information can be found in Note 6. |
Accumulated other comprehensive loss | Accumulated other comprehensive loss – Changes in the components of accumulated other comprehensive loss during the nine months ended September 30, 2022 were as follows: (in thousands) Postretirement benefit plans Net unrealized loss on debt securities (1) Net unrealized loss on cash flow hedges (2) Currency translation adjustment Accumulated other comprehensive loss Balance, December 31, 2021 $ (15,431) $ (344) $ (2,261) $ (13,456) $ (31,492) Other comprehensive (loss) income before reclassifications — (566) 4,712 (6,006) (1,860) Amounts reclassified from accumulated other comprehensive loss (155) 6 303 5,550 5,704 Net current-period other comprehensive (loss) income (155) (560) 5,015 (456) 3,844 Balance, September 30, 2022 $ (15,586) $ (904) $ 2,754 $ (13,912) $ (27,648) (1) Other comprehensive loss before reclassifications is net of an income tax benefit of $197. (2) Other comprehensive income before reclassifications is net of income tax expense of $1,701. |
Acquisition and divestitures (T
Acquisition and divestitures (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Impact of revision on unaudited pro forma financial information | The corrections to adjusted pro forma net income (loss) attributable to Deluxe from the amounts previously reported were as follows: (in thousands) Increase (decrease) in pro forma net income attributable to Deluxe Quarter ended June 30, 2021 $ 7,636 Six Months ended June 30, 2021 5,911 Quarter ended September 30, 2021 2,231 Nine Months ended September 30, 2021 8,142 Year Ended December 31, 2021 10,138 Year Ended December 31, 2020 (9,082) |
Unaudited pro forma financial information | The following unaudited pro forma financial information summarizes our consolidated results of operations as though the First American acquisition occurred on January 1, 2020: As Revised (in thousands) Quarter Ended Quarter Ended Six Months Ended Quarter Ended Sept. 30, 2021 (1) Nine Months Ended Year Ended December 31, 2021 Year Ended December 31, 2020 Revenue $ 518,104 $ 535,493 $ 1,053,597 $ 532,141 $ 1,585,738 $ 2,156,313 $ 2,079,103 Net income (loss) attributable to Deluxe 19,044 24,579 43,623 14,695 58,318 74,843 (54,489) (1) Only net income attributable to Deluxe was revised for the quarter ended September 30, 2021. |
First American Payment Systems, L.P. [Member] | |
Purchase price allocation and results of acquired business | The final allocation of the First American purchase price to the assets acquired and liabilities assumed was as follows: (in thousands) Purchase price allocation Trade accounts receivable $ 27,296 Other current assets 8,533 Property, plant and equipment 9,873 Operating lease assets 24,396 Intangible assets: Customer relationships 127,000 Partner relationships 72,000 Technology-based intangibles 65,000 Trade names 21,000 Internal-use software 6,111 Total intangible assets 291,111 Goodwill 728,516 Other-non-current assets 350 Accounts payable (18,475) Funds held for customers (9,428) Accrued liabilities (23,460) Operating lease liabilities, non-current (21,316) Deferred income taxes (54,506) Other non-current liabilities (4,376) Payments for acquisition, net of cash, cash equivalents, restricted cash and restricted cash equivalents acquired of $15,841 $ 958,514 Further information regarding the acquired First American intangibles can be found under the caption "Note 3: Supplemental Balance Sheet and Cash Flow Information" and "Note 8: Fair Value Measurements," both of which are included in the Notes to Consolidated Financial Statements appearing in the 2021 Form 10-K. First American acquisition transaction costs are included in selling, general and administrative (SG&A) expense in the consolidated statements of comprehensive income and were $208 for the quarter ended September 30, 2021 and $18,816 for the nine months ended September 30, 2021. Operating results for First American were as follows for the nine months ended September 30: Nine Months Ended (in thousands) 2022 2021 Revenue $ 259,724 $ 109,828 Net income attributable to Deluxe 2,902 824 |
Fair value measurements (Tables
Fair value measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial instruments | Information regarding the fair values of our financial instruments was as follows: Fair value measurements using September 30, 2022 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: Available-for-sale debt securities Funds held for customers $ 7,941 $ 7,941 $ — $ 7,941 $ — Derivative assets (Note 7) Other current and non-current assets 3,797 3,797 — 3,797 — Amortized cost: Cash Cash and cash equivalents 45,535 45,535 45,535 — — Cash Funds held for customers 147,614 147,614 147,614 — — Cash Other non-current assets 2,742 2,742 2,742 — — Loans and notes receivable from distributors Other current and non-current assets 14,517 13,090 — — 13,090 Long-term debt Current portion of long-term debt and long-term debt 1,670,964 1,597,546 — 1,597,546 — Fair value measurements using December 31, 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: Available-for-sale debt securities Funds held for customers $ 13,307 $ 13,307 $ — $ 13,307 $ — Derivative liability (Note 7) Other non-current liabilities (3,028) (3,028) — (3,028) — Amortized cost: Cash Cash and cash equivalents 41,231 41,231 41,231 — — Cash Funds held for customers 241,488 241,488 241,488 — — Cash Other non-current assets 2,772 2,772 2,772 — — Loans and notes receivable from distributors Other current and non-current assets 21,518 22,344 — — 22,344 Long-term debt Current portion of long-term debt and long-term debt 1,682,949 1,728,515 — 1,728,515 — |
Restructuring and integration_2
Restructuring and integration expense (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and integration expense | Restructuring and integration expense is reflected on the consolidated statements of comprehensive income as follows: Quarter Ended Nine Months Ended (in thousands) 2022 2021 2022 2021 Total cost of revenue $ 131 $ 1,559 $ 216 $ 3,073 Operating expenses 15,188 12,335 46,614 38,012 Restructuring and integration expense $ 15,319 $ 13,894 $ 46,830 $ 41,085 Restructuring and integration expense for each period was comprised of the following: Quarter Ended Nine Months Ended (in thousands) 2022 2021 2022 2021 External consulting fees $ 7,670 $ 6,432 $ 24,670 $ 19,355 Internal labor 1,877 1,756 6,177 6,276 Employee severance benefits 3,826 1,293 8,232 3,167 Other 1,946 4,413 7,751 12,287 Restructuring and integration expense $ 15,319 $ 13,894 $ 46,830 $ 41,085 |
Changes in restructuring and integration accruals | Changes in our restructuring and integration accruals were as follows: (in thousands) Employee severance benefits Balance, December 31, 2021 $ 5,672 Charges 8,928 Reversals (696) Payments (7,502) Balance, September 30, 2022 $ 6,402 |
Income tax provision (Tables)
Income tax provision (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Effective income tax rate reconciliation | The effective tax rate on pretax income reconciles to the U.S. federal statutory tax rate as follows: Nine Months Year Ended Income tax at federal statutory rate 21.0 % 21.0 % Change in valuation allowance 10.2 % 0.1 % Tax impact of share-based compensation 4.0 % 0.9 % State income tax expense, net of federal income tax benefit 2.8 % 2.4 % Non-deductible executive compensation 2.2 % 1.7 % Foreign tax rate differences 1.5 % 1.7 % Tax on repatriation of foreign earnings 1.5 % 4.9 % Non-deductible acquisition costs 0.1 % 1.5 % Sale of business (Note 6) (12.5 %) — Research and development tax credit (1.0 %) (0.9 %) Other (0.2 %) (0.2 %) Effective tax rate 29.6 % 33.1 % |
Postretirement benefits (Tables
Postretirement benefits (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 and consisted of the following components: Quarter Ended Nine Months Ended (in thousands) 2022 2021 2022 2021 Interest cost $ 280 $ 242 $ 841 $ 726 Expected return on plan assets (1,866) (1,875) (5,596) (5,623) Amortization of prior service credit (355) (355) (1,066) (1,066) Amortization of net actuarial losses 225 407 674 1,221 Net periodic benefit income $ (1,716) $ (1,581) $ (5,147) $ (4,742) |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt outstanding | Debt outstanding was comprised of the following: (in thousands) September 30, December 31, Senior, secured term loan facility $ 1,001,813 $ 1,072,125 Senior, unsecured notes 475,000 500,000 Amounts drawn on senior, secured revolving credit facility 210,000 130,000 Total principal amount 1,686,813 1,702,125 Less: unamortized discount and debt issuance costs (15,849) (19,176) Total debt, net of discount and debt issuance costs 1,670,964 1,682,949 Less: current portion of long-term debt, net of debt issuance costs (64,506) (57,197) Long-term debt $ 1,606,458 $ 1,625,752 |
Maturities of long-term debt | Maturities of long-term debt were as follows as of September 30, 2022: (in thousands) Debt obligations Remainder of 2022 $ 14,438 2023 72,188 2024 86,625 2025 101,062 2026 937,500 Thereafter 475,000 Total principal amount $ 1,686,813 |
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, 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 Year Ended Daily average amount outstanding $ 1,477,841 $ 1,109,819 Weighted-average interest rate 4.00 % 2.43 % As of September 30, 2022, amounts available for borrowing under our revolving credit facility were as follows: (in thousands) Available borrowings Revolving credit facility commitment $ 500,000 Amounts drawn on revolving credit facility (210,000) Outstanding letters of credit (1) (7,823) Net available for borrowing as of September 30, 2022 $ 282,177 (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. |
Business segment information (T
Business segment information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Business segment information | Segment information for the quarters and nine months ended September 30, 2022 and 2021 was as follows: Quarter Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Payments: Revenue $ 169,787 $ 160,268 $ 507,149 $ 343,045 Adjusted EBITDA 36,184 31,598 107,605 71,125 Cloud Solutions: Revenue 66,739 69,497 204,824 199,784 Adjusted EBITDA 16,034 19,036 50,869 55,047 Promotional Solutions: Revenue 136,081 130,330 408,600 389,825 Adjusted EBITDA 18,255 17,673 49,795 56,804 Checks: Revenue 182,431 172,046 553,433 518,968 Adjusted EBITDA 80,478 77,254 245,838 240,979 Total segment: Revenue $ 555,038 $ 532,141 $ 1,674,006 $ 1,451,622 Adjusted EBITDA 150,951 145,561 454,107 423,955 |
Reconciliation of adjusted EBITDA to pretax income | The following table presents a reconciliation of total segment adjusted EBITDA to consolidated income before income taxes: Quarter Ended September 30, Nine Months Ended September 30, (in thousands) 2022 2021 2022 2021 Total segment adjusted EBITDA $ 150,951 $ 145,561 $ 454,107 $ 423,955 Corporate operations (46,359) (42,832) (148,159) (133,259) Depreciation and amortization expense (42,304) (41,906) (128,948) (102,929) Interest expense (23,799) (21,494) (65,471) (35,548) Net income attributable to non-controlling interest 35 37 106 99 Restructuring, integration and other costs (15,319) (13,894) (46,830) (41,085) Share-based compensation expense (5,728) (7,434) (18,766) (21,801) Acquisition transaction costs (51) (208) (112) (18,816) Certain legal-related benefit (expense) 1,659 (638) 814 (941) Gain on sale of businesses and facility 1,804 — 19,331 — Income before income taxes $ 20,889 $ 17,192 $ 66,072 $ 69,675 |
Revenue disaggregated by product and service offerings | The following tables present revenue disaggregated by our product and service offerings: Quarter Ended September 30, 2022 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 182,431 $ 182,431 Merchant services and other payment solutions 108,255 — — — 108,255 Forms and other products — — 71,797 — 71,797 Marketing and promotional solutions — — 64,284 — 64,284 Treasury management solutions 61,532 — — — 61,532 Data-driven marketing solutions — 46,993 — — 46,993 Web and hosted solutions — 19,746 — — 19,746 Total revenue $ 169,787 $ 66,739 $ 136,081 $ 182,431 $ 555,038 Quarter Ended September 30, 2021 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 172,046 $ 172,046 Merchant services and other payment 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 Nine Months Ended September 30, 2022 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 553,433 $ 553,433 Merchant services and other payment solutions 328,144 — — — 328,144 Forms and other products — — 211,517 — 211,517 Marketing and promotional solutions — — 197,083 — 197,083 Treasury management solutions 179,005 — — — 179,005 Data-driven marketing solutions — 134,307 — — 134,307 Web and hosted solutions — 70,517 — — 70,517 Total revenue $ 507,149 $ 204,824 $ 408,600 $ 553,433 $ 1,674,006 Nine Months Ended September 30, 2021 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated Checks $ — $ — $ — $ 518,968 $ 518,968 Merchant services and other payment 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 |
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, 2022 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated United States $ 159,160 $ 64,111 $ 129,697 $ 175,481 $ 528,449 Foreign, primarily Canada 10,627 2,628 6,384 6,950 26,589 Total revenue $ 169,787 $ 66,739 $ 136,081 $ 182,431 $ 555,038 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 Nine Months Ended September 30, 2022 (in thousands) Payments Cloud Solutions Promotional Solutions Checks Consolidated United States $ 475,368 $ 188,494 $ 389,824 $ 531,260 $ 1,584,946 Foreign, primarily Canada and Australia 31,781 16,330 18,776 22,173 89,060 Total revenue $ 507,149 $ 204,824 $ 408,600 $ 553,433 $ 1,674,006 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 |
Supplemental balance sheet an_3
Supplemental balance sheet and cash flow information (trade accounts receivable, allowance for credit losses) (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | ||
Trade accounts receivable | ||||
Trade accounts receivable - gross | $ 198,685 | $ 202,077 | ||
Allowance for credit losses | (3,534) | (4,130) | ||
Trade accounts receivable - net | [1] | 195,151 | 197,947 | |
Unbilled receivables | 51,941 | $ 47,420 | ||
Changes in allowance for credit losses | ||||
Balance, beginning of year | 4,130 | $ 6,428 | ||
Bad debt expense (benefit) | 2,410 | (412) | ||
Write-offs and other | (3,006) | (2,555) | ||
Balance, end of period | $ 3,534 | $ 3,461 | ||
[1]Includes unbilled receivables of $51,941 as of September 30, 2022 and $47,420 as of December 31, 2021. |
Supplemental balance sheet an_4
Supplemental balance sheet and cash flow information (inventories and supplies) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Inventories and supplies | |||
Raw materials | $ 7,675 | $ 5,316 | |
Semi-finished goods | 7,051 | 6,708 | |
Finished goods | 29,550 | 21,995 | |
Supplies | 6,496 | 6,041 | |
Reserves for excess and obsolete items | (5,523) | $ (5,496) | (5,132) |
Inventories and supplies | 45,249 | $ 34,928 | |
Changes in reserves for excess and obsolete items | |||
Balance, beginning of year | 5,132 | 11,748 | |
Balance, end of period | 5,523 | 5,496 | |
Reserves for excess and obsolete items | |||
Changes in reserves for excess and obsolete items | |||
Amounts charged to expense | 2,552 | 2,884 | |
Write-offs and other | $ (2,161) | $ (9,136) |
Supplemental balance sheet an_5
Supplemental balance sheet and cash flow information (available-for-sale debt securities) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | ||
Available-for-sale debt securities [Line Items] | ||||
Cost | $ 8,975 | $ 13,681 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | (1,034) | (374) | ||
Fair value | 7,941 | 13,307 | ||
Expected maturities of available-for-sale debt securities | ||||
Due in one year or less | 3,415 | |||
Due in two to five years | 2,819 | |||
Due in six to ten years | 1,707 | |||
Fair value | 7,941 | 13,307 | ||
Funds held for customers [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 8,975 | [1] | 13,681 | [2] |
Gross unrealized gains | 0 | [1] | 0 | [2] |
Gross unrealized losses | (1,034) | [1] | (374) | [2] |
Fair value | 7,941 | [1] | 13,307 | [2] |
Cash | 147,614 | 241,488 | ||
Expected maturities of available-for-sale debt securities | ||||
Fair value | 7,941 | [1] | 13,307 | [2] |
Funds held for customers [Member] | Canadian and provincial government securities [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 8,975 | 9,724 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | (1,034) | (374) | ||
Fair value | 7,941 | 9,350 | ||
Expected maturities of available-for-sale debt securities | ||||
Fair value | $ 7,941 | 9,350 | ||
Funds held for customers [Member] | Canadian guaranteed investment certificates [Member] | ||||
Available-for-sale debt securities [Line Items] | ||||
Cost | 3,957 | |||
Gross unrealized gains | 0 | |||
Gross unrealized losses | 0 | |||
Fair value | 3,957 | |||
Expected maturities of available-for-sale debt securities | ||||
Fair value | $ 3,957 | |||
[1]Funds held for customers, as reported on the consolidated balance sheet as of September 30, 2022, also included cash of $147,614.[2]Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2021, also included cash of $241,488. |
Supplemental balance sheet an_6
Supplemental balance sheet and cash flow information (revenue in excess of billings) (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | |
Revenue in excess of billings | |||
Conditional right to receive consideration | $ 24,147 | $ 22,780 | |
Unconditional right to receive consideration | [1] | 14,203 | 7,613 |
Revenue in excess of billings | $ 38,350 | $ 30,393 | |
[1]Represents revenues that are earned but not currently billable under the related contract terms. |
Supplemental balance sheet an_7
Supplemental balance sheet and cash flow information (intangibles) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Amortizable intangibles [Line Items] | |||||
Gross carrying amount | $ 1,265,849 | $ 1,265,849 | $ 1,209,488 | ||
Accumulated amortization | (789,750) | (789,750) | (698,764) | ||
Net carrying amount | 476,099 | 476,099 | 510,724 | ||
Acquired intangibles | $ 76,004 | ||||
Acquired intangibles, weighted-average amortization period (in years) | 4 years | ||||
Amortization of intangibles | 35,855 | $ 36,570 | $ 110,353 | $ 88,393 | |
Estimated future amortization expense | |||||
Remainder of 2022 | 37,168 | 37,168 | |||
2023 | 120,753 | 120,753 | |||
2024 | 81,627 | 81,627 | |||
2025 | 48,639 | 48,639 | |||
2026 | 45,553 | 45,553 | |||
Internal-use software [Member] | |||||
Amortizable intangibles [Line Items] | |||||
Gross carrying amount | 510,141 | 510,141 | 456,133 | ||
Accumulated amortization | (381,456) | (381,456) | (342,656) | ||
Net carrying amount | 128,685 | 128,685 | 113,477 | ||
Acquired intangibles | $ 55,776 | ||||
Acquired intangibles, weighted-average amortization period (in years) | 3 years | ||||
Customer lists/relationships [Member] | |||||
Amortizable intangibles [Line Items] | |||||
Gross carrying amount | 501,411 | $ 501,411 | 493,495 | ||
Accumulated amortization | (299,318) | (299,318) | (255,178) | ||
Net carrying amount | 202,093 | 202,093 | 238,317 | ||
Acquired intangibles | $ 18,924 | ||||
Acquired intangibles, weighted-average amortization period (in years) | 6 years | ||||
Technology-based intangibles [Member] | |||||
Amortizable intangibles [Line Items] | |||||
Gross carrying amount | 98,813 | $ 98,813 | 98,813 | ||
Accumulated amortization | (44,646) | (44,646) | (38,553) | ||
Net carrying amount | 54,167 | 54,167 | 60,260 | ||
Partner relationships [Member] | |||||
Amortizable intangibles [Line Items] | |||||
Gross carrying amount | 74,399 | 74,399 | 73,095 | ||
Accumulated amortization | (7,285) | (7,285) | (2,990) | ||
Net carrying amount | 67,114 | 67,114 | 70,105 | ||
Acquired intangibles | $ 1,304 | ||||
Acquired intangibles, weighted-average amortization period (in years) | 2 years | ||||
Trade names [Member] | |||||
Amortizable intangibles [Line Items] | |||||
Gross carrying amount | 44,185 | $ 44,185 | 51,052 | ||
Accumulated amortization | (25,985) | (25,985) | (31,277) | ||
Net carrying amount | 18,200 | 18,200 | 19,775 | ||
Software to be sold [Member] | |||||
Amortizable intangibles [Line Items] | |||||
Gross carrying amount | 36,900 | 36,900 | 36,900 | ||
Accumulated amortization | (31,060) | (31,060) | (28,110) | ||
Net carrying amount | $ 5,840 | $ 5,840 | $ 8,790 |
Supplemental balance sheet an_8
Supplemental balance sheet and cash flow information (goodwill) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Jun. 30, 2022 | Sep. 30, 2022 | |
Goodwill [Roll Forward] | ||
Goodwill, gross, beginning of year | $ 2,016,008 | |
Accumulated impairment charges, beginning of year | (585,867) | |
Goodwill, net of accumulated impairment charges, beginning of year | 1,430,141 | |
Measurement-period adjustment (Note 6) | $ 1,343 | |
Currency translation adjustment | (126) | |
Goodwill, gross, end of period | 2,017,225 | |
Accumulated impairment charges, end of period | (585,867) | |
Goodwill, net of accumulated impairment charges, end of period | 1,431,358 | |
Reportable business segments [Member] | Payments [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill, gross, beginning of year | 895,338 | |
Accumulated impairment charges, beginning of year | 0 | |
Goodwill, net of accumulated impairment charges, beginning of year | 895,338 | |
Measurement-period adjustment (Note 6) | $ 1,343 | |
Goodwill, gross, end of period | 896,681 | |
Accumulated impairment charges, end of period | 0 | |
Goodwill, net of accumulated impairment charges, end of period | 896,681 | |
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 | 252,874 | |
Accumulated impairment charges, beginning of year | (193,699) | |
Goodwill, net of accumulated impairment charges, beginning of year | 59,175 | |
Currency translation adjustment | (126) | |
Goodwill, gross, end of period | 252,748 | |
Accumulated impairment charges, end of period | (193,699) | |
Goodwill, net of accumulated impairment charges, end of period | 59,049 | |
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 | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Other non-current assets | |||||
Postretirement benefit plan asset | $ 92,802 | $ 87,019 | |||
Cloud computing arrangements implementation costs | 70,519 | 63,806 | |||
Prepaid product discounts | 48,591 | $ 51,270 | 56,527 | $ 50,602 | |
Deferred contract acquisition costs | [1] | 21,671 | 17,975 | ||
Loans and notes receivable from distributors, net of allowance for credit losses | [2] | 13,525 | 20,201 | ||
Other | 29,102 | 33,935 | |||
Other non-current assets | 276,210 | 279,463 | |||
Amortization of deferred contract acquisition costs | 5,872 | 3,366 | |||
Loans and notes receivable, current | 992 | $ 1,317 | |||
Loans and notes receivable from distributors [Member] | |||||
Loans and notes receivable from distributors, allowance for credit losses [Line Items] | |||||
Balance, beginning of year | 2,830 | 3,995 | |||
Bad debt expense (benefit) | 1,221 | (1,158) | |||
Other | (402) | 0 | |||
Balance, end of period | 3,649 | $ 2,837 | |||
Write-offs | 0 | ||||
Recoveries | 0 | ||||
Loans and notes receivable from distributors, credit quality information | |||||
2020 | 1,172 | ||||
2019 | 3,042 | ||||
2018 | 4,247 | ||||
2017 | 8,720 | ||||
Prior | 985 | ||||
Total | 18,166 | ||||
Loans and notes receivable from distributors [Member] | 1-2 internal grade member [Member] | |||||
Loans and notes receivable from distributors, credit quality information | |||||
2020 | 1,172 | ||||
2019 | 443 | ||||
2018 | 4,247 | ||||
2017 | 8,720 | ||||
Prior | 985 | ||||
Total | 15,567 | ||||
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 | ||||
[1]Amortization of deferred contract acquisition costs was $5,872 for the nine months ended September 30, 2022 and $3,366 for the nine months ended September 30, 2021.[2]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 $992 as of September 30, 2022 and $1,317 as of December 31, 2021. |
Supplemental balance sheet a_10
Supplemental balance sheet and cash flow information (other) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Prepaid product discounts [Roll Forward] | |||||
Balance, beginning of year | $ 56,527 | $ 50,602 | |||
Additions | [1] | 18,721 | 24,284 | ||
Amortization | (26,258) | (23,425) | |||
Other | (399) | (191) | |||
Balance, end of period | 48,591 | 51,270 | |||
Prepaid product discount payments | 23,920 | 27,049 | |||
Accrued liabilities | |||||
Employee cash bonuses, including sales incentives | 38,780 | $ 45,006 | |||
Deferred revenue | [2] | 36,193 | 52,645 | ||
Wages and payroll liabilities, including vacation | 34,679 | 24,951 | |||
Interest | 16,021 | 4,597 | |||
Operating lease liabilities | 12,672 | 14,852 | |||
Customer rebates | 12,140 | 9,036 | |||
Prepaid product discounts | 6,568 | 11,866 | |||
Other | 60,442 | 53,879 | |||
Accrued liabilities | 217,495 | 216,832 | |||
Deferred revenue recognized | 41,222 | ||||
Supplemental cash flow information | |||||
Cash and cash equivalents | 45,535 | 121,064 | 41,231 | ||
Non-current restricted cash included in other non-current assets | 2,742 | 2,860 | 2,772 | ||
Total cash, cash equivalents, restricted cash and restricted cash equivalents | 195,891 | 253,104 | $ 285,491 | $ 229,409 | |
Funds held for customers [Member] | |||||
Supplemental cash flow information | |||||
Restricted cash and restricted cash equivalents included in funds held for customers | $ 147,614 | $ 129,180 | |||
[1]Prepaid product discounts are generally accrued upon contract execution. Cash payments for prepaid product discounts were $23,920 for the nine months ended September 30, 2022 and $27,049 for the nine months ended September 30, 2021.[2]$41,222 of the December 31, 2021 amount was recognized as revenue during the nine months ended September 30, 2022. |
Earnings per share (Details)
Earnings per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings per share - basic: | ||||
Net income | $ 14,760 | $ 12,501 | $ 46,536 | $ 48,955 |
Net income attributable to non-controlling interest | (35) | (37) | (106) | (99) |
Net income attributable to Deluxe | 14,725 | 12,464 | 46,430 | 48,856 |
Income allocated to participating securities | (10) | (9) | (33) | (36) |
Income attributable to Deluxe available to common shareholders | $ 14,715 | $ 12,455 | $ 46,397 | $ 48,820 |
Weighted-average shares outstanding | 43,116 | 42,574 | 42,974 | 42,294 |
Earnings per share - basic | $ 0.34 | $ 0.29 | $ 1.08 | $ 1.15 |
Earnings per share - diluted: | ||||
Net income | $ 14,760 | $ 12,501 | $ 46,536 | $ 48,955 |
Net income attributable to non-controlling interest | (35) | (37) | (106) | (99) |
Net income attributable to Deluxe | 14,725 | 12,464 | 46,430 | 48,856 |
Income allocated to participating securities | 0 | (9) | (22) | (27) |
Re-measurement of share-based awards classified as liabilities | (162) | (329) | (507) | (329) |
Income attributable to Deluxe available to common shareholders | $ 14,563 | $ 12,126 | $ 45,901 | $ 48,500 |
Weighted-average shares outstanding | 43,116 | 42,574 | 42,974 | 42,294 |
Dilutive impact of potential common shares | 234 | 457 | 310 | 453 |
Weighted-average shares and potential common shares outstanding | 43,350 | 43,031 | 43,284 | 42,747 |
Earnings per share - diluted | $ 0.34 | $ 0.28 | $ 1.06 | $ 1.13 |
Antidilutive options excluded from calculation | 1,815 | 2,314 | 1,815 | 2,314 |
Other comprehensive income (rec
Other comprehensive income (reclassification adjustments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Reclassifications from accumulated other comprehensive loss | |||||
Prior service credit | $ 355 | $ 355 | $ 1,066 | $ 1,066 | |
Net actuarial loss | (225) | (407) | (674) | (1,221) | |
Total amortization | 130 | (52) | 392 | (155) | |
Tax expense | (79) | (30) | (237) | (93) | |
Amortization of postretirement benefit plan items, net of tax | 51 | (82) | 155 | (248) | |
Realized loss on debt securities | 0 | 0 | (8) | 0 | |
Tax benefit | 0 | 0 | 2 | 0 | |
Realized loss on debt securities, net of tax | 0 | 0 | (6) | 0 | |
Realized loss on interest rate swap | 53 | (371) | (412) | (1,035) | |
Tax benefit | (15) | 97 | 109 | 271 | |
Realized loss on interest rate swap, net of tax | 38 | (274) | (303) | (764) | |
Foreign currency translation adjustment | 0 | 0 | (5,550) | [1] | 0 |
Total reclassifications, net of tax | $ 89 | $ (356) | $ (5,704) | $ (1,012) | |
[1]Relates to the sale of our Australian web hosting business during the quarter ended June 30, 2022. Further information can be found in Note 6. |
Other comprehensive income (acc
Other comprehensive income (accumulated other comprehensive loss) (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) | ||
Postretirement benefit plans [Member] | ||
Accumulated other comprehensive loss [Line Items] | ||
Balance, December 31, 2021 | $ (15,431) | |
Other comprehensive (loss) income before reclassifications | 0 | |
Amounts reclassified from accumulated other comprehensive loss | (155) | |
Net current-period other comprehensive (loss) income | (155) | |
Balance, September 30, 2022 | (15,586) | |
Net unrealized loss on debt securities [Member] | ||
Accumulated other comprehensive loss [Line Items] | ||
Balance, December 31, 2021 | (344) | |
Other comprehensive (loss) income before reclassifications | (566) | [1] |
Amounts reclassified from accumulated other comprehensive loss | 6 | |
Net current-period other comprehensive (loss) income | (560) | |
Balance, September 30, 2022 | (904) | |
Unrealized loss on debt securities arising during the period, tax benefit | 197 | |
Net unrealized loss on cash flow hedge [Member] | ||
Accumulated other comprehensive loss [Line Items] | ||
Balance, December 31, 2021 | (2,261) | |
Other comprehensive (loss) income before reclassifications | 4,712 | [2] |
Amounts reclassified from accumulated other comprehensive loss | 303 | |
Net current-period other comprehensive (loss) income | 5,015 | |
Balance, September 30, 2022 | 2,754 | |
Unrealized gain on cash flow hedge arising during the period, tax expense | 1,701 | |
Currency translation adjustment [Member] | ||
Accumulated other comprehensive loss [Line Items] | ||
Balance, December 31, 2021 | (13,456) | |
Other comprehensive (loss) income before reclassifications | (6,006) | |
Amounts reclassified from accumulated other comprehensive loss | 5,550 | |
Net current-period other comprehensive (loss) income | (456) | |
Balance, September 30, 2022 | (13,912) | |
Accumulated other comprehensive loss [Member] | ||
Accumulated other comprehensive loss [Line Items] | ||
Balance, December 31, 2021 | (31,492) | |
Other comprehensive (loss) income before reclassifications | (1,860) | |
Amounts reclassified from accumulated other comprehensive loss | 5,704 | |
Net current-period other comprehensive (loss) income | 3,844 | |
Balance, September 30, 2022 | $ (27,648) | |
[1]Other comprehensive loss before reclassifications is net of an income tax benefit of $197.[2]Other comprehensive income before reclassifications is net of income tax expense of $1,701. |
Acquisition and divestitures (D
Acquisition and divestitures (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Jun. 01, 2021 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Acquisition and divestitures [Line Items] | ||||||||||||
Measurement-period adjustment, goodwill | $ 1,343 | |||||||||||
Purchase accounting adjustment, deferred income tax liabilities | 1,343 | |||||||||||
Acquired intangibles | $ 76,004 | |||||||||||
Payment for acquisition, net of cash, cash equivalents, restricted cash and restricted cash equivalents acquired | 0 | $ 956,717 | ||||||||||
Acquisition transaction costs | $ 51 | $ 208 | 112 | 18,816 | ||||||||
Total revenue | 555,038 | 532,141 | 1,674,006 | 1,451,622 | ||||||||
Net income (loss) attributable to Deluxe | 14,725 | 12,464 | 46,430 | 48,856 | ||||||||
Restructuring and integration expense | 15,319 | 13,894 | 46,830 | 41,085 | ||||||||
Pro forma revenue | 532,141 | [1] | $ 535,493 | $ 518,104 | $ 1,053,597 | 1,585,738 | $ 2,156,313 | $ 2,079,103 | ||||
Pro forma net income (loss) attributable to Deluxe | 14,695 | [1] | 24,579 | $ 19,044 | 43,623 | 58,318 | 74,843 | (54,489) | ||||
Proceeds from sale of businesses and facility | 25,248 | 2,648 | ||||||||||
Gain on sale of businesses and facility | 1,804 | 0 | 19,331 | 0 | ||||||||
Customer lists/relationships [Member] | ||||||||||||
Acquisition and divestitures [Line Items] | ||||||||||||
Acquired intangibles | 18,924 | |||||||||||
Partner relationships [Member] | ||||||||||||
Acquisition and divestitures [Line Items] | ||||||||||||
Acquired intangibles | 1,304 | |||||||||||
Internal-use software [Member] | ||||||||||||
Acquisition and divestitures [Line Items] | ||||||||||||
Acquired intangibles | 55,776 | |||||||||||
Australian web hosting business [Member] | ||||||||||||
Acquisition and divestitures [Line Items] | ||||||||||||
Proceeds from sale of businesses and facility | 17,620 | |||||||||||
Gain on sale of businesses and facility | 15,166 | |||||||||||
Lancaster, California facility [Member] | ||||||||||||
Acquisition and divestitures [Line Items] | ||||||||||||
Proceeds from sale of businesses and facility | 6,929 | |||||||||||
Gain on sale of businesses and facility | $ 2,361 | |||||||||||
Reportable business segments [Member] | ||||||||||||
Acquisition and divestitures [Line Items] | ||||||||||||
Total revenue | 555,038 | 532,141 | 1,674,006 | 1,451,622 | ||||||||
Reportable business segments [Member] | Cloud Solutions [Member] | ||||||||||||
Acquisition and divestitures [Line Items] | ||||||||||||
Total revenue | 66,739 | 69,497 | 204,824 | 199,784 | ||||||||
Reportable business segments [Member] | Cloud Solutions [Member] | Australian web hosting business [Member] | ||||||||||||
Acquisition and divestitures [Line Items] | ||||||||||||
Total revenue | 23,766 | |||||||||||
Reportable business segments [Member] | Promotional Solutions [Member] | ||||||||||||
Acquisition and divestitures [Line Items] | ||||||||||||
Total revenue | $ 136,081 | 130,330 | 408,600 | 389,825 | ||||||||
Reportable business segments [Member] | Promotional Solutions [Member] | Promotional Solutions business exits [Member] | ||||||||||||
Acquisition and divestitures [Line Items] | ||||||||||||
Total revenue | 29,000 | |||||||||||
Adjustment [Member] | ||||||||||||
Acquisition and divestitures [Line Items] | ||||||||||||
Pro forma revenue | (27,595) | (27,595) | (27,595) | (26,335) | (3,027) | |||||||
Pro forma net income (loss) attributable to Deluxe | $ 2,231 | $ 7,636 | $ 5,911 | 8,142 | 10,138 | $ (9,082) | ||||||
First American Payment Systems, L.P. [Member] | ||||||||||||
Acquisition and divestitures [Line Items] | ||||||||||||
Accounts receivable | $ 27,296 | |||||||||||
Other current assets | 8,533 | |||||||||||
Property, plant and equipment | 9,873 | |||||||||||
Operating lease assets | 24,396 | |||||||||||
Acquired intangibles | 291,111 | |||||||||||
Goodwill | 728,516 | |||||||||||
Other non-current assets | 350 | |||||||||||
Accounts payable | (18,475) | |||||||||||
Funds held for customers | (9,428) | |||||||||||
Accrued liabilities | (23,460) | |||||||||||
Operating lease liabilities, non-current | (21,316) | |||||||||||
Deferred income taxes | (54,506) | |||||||||||
Other non-current liabilities | (4,376) | |||||||||||
Payment for acquisition, net of cash, cash equivalents, restricted cash and restricted cash equivalents acquired | $ 958,514 | |||||||||||
Cash, cash equivalents, restricted cash and restricted cash equivalents acquired | 15,841 | |||||||||||
Total revenue | 259,724 | 109,828 | ||||||||||
Net income (loss) attributable to Deluxe | 2,902 | $ 824 | ||||||||||
Restructuring and integration expense | $ 5,209 | |||||||||||
First American Payment Systems, L.P. [Member] | Customer lists/relationships [Member] | ||||||||||||
Acquisition and divestitures [Line Items] | ||||||||||||
Acquired intangibles | 127,000 | |||||||||||
First American Payment Systems, L.P. [Member] | Partner relationships [Member] | ||||||||||||
Acquisition and divestitures [Line Items] | ||||||||||||
Acquired intangibles | 72,000 | |||||||||||
First American Payment Systems, L.P. [Member] | Technology-based intangibles [Member] | ||||||||||||
Acquisition and divestitures [Line Items] | ||||||||||||
Acquired intangibles | 65,000 | |||||||||||
First American Payment Systems, L.P. [Member] | Trade names [Member] | ||||||||||||
Acquisition and divestitures [Line Items] | ||||||||||||
Acquired intangibles | 21,000 | |||||||||||
First American Payment Systems, L.P. [Member] | Internal-use software [Member] | ||||||||||||
Acquisition and divestitures [Line Items] | ||||||||||||
Acquired intangibles | $ 6,111 | |||||||||||
[1]Only net income attributable to Deluxe was revised for the quarter ended September 30, 2021. |
Derivative financial instrume_2
Derivative financial instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Sep. 20, 2022 | Dec. 31, 2021 | Jul. 19, 2019 |
Derivative [Line Items] | ||||
Fair value, other current assets | $ 2,071 | |||
Derivative liability (Note 7) | $ (3,028) | |||
Fair value, other non-current assets | 1,726 | |||
Interest rate swap [Member] | ||||
Derivative [Line Items] | ||||
Notional amount | $ 500,000 | $ 300,000 | $ 200,000 | |
Interest rate | 3.895% | 1.798% |
Fair value measurements (Detail
Fair value measurements (Details) - USD ($) $ in Thousands | 9 Months Ended | |||||
Sep. 30, 2022 | Jul. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |||
Fair value measurements [Line Items] | ||||||
Available-for-sale debt securities (funds held for customers) | $ 7,941 | $ 13,307 | ||||
Derivative assets (Note 7) | 3,797 | |||||
Derivative liability (Note 7) | (3,028) | |||||
Cash, carrying value | 2,742 | 2,772 | $ 2,860 | |||
Cash, fair value | 2,742 | 2,772 | ||||
Recurring fair value measurements [Member] | ||||||
Fair value measurements [Line Items] | ||||||
Derivative assets (Note 7) | 3,797 | |||||
Derivative liability (Note 7) | (3,028) | |||||
Quoted prices in active markets for identical assets (Level 1) [Member] | ||||||
Fair value measurements [Line Items] | ||||||
Cash, fair value | 2,742 | 2,772 | ||||
Significant other observable inputs (Level 2) [Member] | Recurring fair value measurements [Member] | ||||||
Fair value measurements [Line Items] | ||||||
Derivative assets (Note 7) | 3,797 | |||||
Derivative liability (Note 7) | (3,028) | |||||
Funds held for customers [Member] | ||||||
Fair value measurements [Line Items] | ||||||
Available-for-sale debt securities (funds held for customers) | 7,941 | [1] | 13,307 | [2] | ||
Cash, carrying value | 147,614 | 241,488 | ||||
Cash, fair value | $ 147,614 | 241,488 | ||||
Funds held for customers [Member] | Canadian guaranteed investment certificates [Member] | ||||||
Fair value measurements [Line Items] | ||||||
Maturity period, debt securities | 2 years | |||||
Available-for-sale debt securities (funds held for customers) | 3,957 | |||||
Funds held for customers [Member] | Foreign debt securities [Member] | ||||||
Fair value measurements [Line Items] | ||||||
Available-for-sale debt securities (funds held for customers) | $ 7,941 | 13,307 | ||||
Funds held for customers [Member] | Foreign debt securities [Member] | Recurring fair value measurements [Member] | ||||||
Fair value measurements [Line Items] | ||||||
Available-for-sale debt securities (funds held for customers) | 7,941 | 13,307 | ||||
Funds held for customers [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||||||
Fair value measurements [Line Items] | ||||||
Cash, fair value | 147,614 | 241,488 | ||||
Funds held for customers [Member] | Significant other observable inputs (Level 2) [Member] | Foreign debt securities [Member] | Recurring fair value measurements [Member] | ||||||
Fair value measurements [Line Items] | ||||||
Available-for-sale debt securities (funds held for customers) | 7,941 | 13,307 | ||||
Other current and noncurrent assets [Member] | ||||||
Fair value measurements [Line Items] | ||||||
Loans and notes receivable from distributors | 14,517 | 21,518 | ||||
Loans and notes receivable from distributors, fair value | 13,090 | 22,344 | ||||
Other current and noncurrent assets [Member] | Significant unobservable inputs (Level 3) [Member] | ||||||
Fair value measurements [Line Items] | ||||||
Loans and notes receivable from distributors, fair value | 13,090 | 22,344 | ||||
Cash and cash equivalents [Member] | ||||||
Fair value measurements [Line Items] | ||||||
Cash, carrying value | 45,535 | 41,231 | ||||
Cash, fair value | 45,535 | 41,231 | ||||
Cash and cash equivalents [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | ||||||
Fair value measurements [Line Items] | ||||||
Cash, fair value | 45,535 | 41,231 | ||||
Current portion of long-term debt and long-term debt [Member] | ||||||
Fair value measurements [Line Items] | ||||||
Long-term debt | 1,670,964 | 1,682,949 | ||||
Long-term debt, fair value | 1,597,546 | 1,728,515 | ||||
Current portion of long-term debt and long-term debt [Member] | Significant other observable inputs (Level 2) [Member] | ||||||
Fair value measurements [Line Items] | ||||||
Long-term debt, fair value | $ 1,597,546 | $ 1,728,515 | ||||
Cloud Data Analytics [Member] | ||||||
Fair value measurements [Line Items] | ||||||
Amount of fair value in excess of carrying value | $ 46,000 | |||||
Percentage of fair value in excess of carrying value | 39% | |||||
[1]Funds held for customers, as reported on the consolidated balance sheet as of September 30, 2022, also included cash of $147,614.[2]Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2021, also included cash of $241,488. |
Restructuring and integration_3
Restructuring and integration expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | $ 15,319 | $ 13,894 | $ 46,830 | $ 41,085 |
Total cost of revenue [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | 131 | 1,559 | 216 | 3,073 |
Operating expenses [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | 15,188 | 12,335 | 46,614 | 38,012 |
External consulting fees [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | 7,670 | 6,432 | 24,670 | 19,355 |
Internal labor [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | 1,877 | 1,756 | 6,177 | 6,276 |
Employee severance benefits [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | 8,928 | |||
Restructuring charges, net | 3,826 | 1,293 | 8,232 | 3,167 |
Other [Member] | ||||
Restructuring and integration expense [Line Items] | ||||
Restructuring and integration expense | $ 1,946 | $ 4,413 | $ 7,751 | $ 12,287 |
Restructuring and integration_4
Restructuring and integration expense (accruals) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||
Charges | $ 15,319 | $ 13,894 | $ 46,830 | $ 41,085 |
Employee severance benefits [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Balance, December 31, 2021 | 5,672 | |||
Charges | 8,928 | |||
Reversals | (696) | |||
Payments | (7,502) | |||
Balance, September 30, 2022 | $ 6,402 | $ 6,402 |
Income tax provision (Details)
Income tax provision (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Reconciliation of effective income tax rate | ||
Income tax at federal statutory rate | 21% | 21% |
Change in valuation allowances | 10.20% | 0.10% |
Tax impact of share-based compensation | 4% | 0.90% |
State income tax, net of federal income tax benefit | 2.80% | 2.40% |
Non-deductible executive compensation | 2.20% | 1.70% |
Foreign tax rate differences | 1.50% | 1.70% |
Tax on repatriation of foreign earnings | 1.50% | 4.90% |
Non-deductible acquisition costs | 0.10% | 1.50% |
Sale of business (Note 6) | (12.50%) | 0% |
Research and development tax credit | (1.00%) | (0.90%) |
Other | (0.20%) | (0.20%) |
Effective tax rate | 29.60% | 33.10% |
Postretirement benefits (Detail
Postretirement benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net periodic benefit income | ||||
Interest cost | $ 280 | $ 242 | $ 841 | $ 726 |
Expected return on plan assets | (1,866) | (1,875) | (5,596) | (5,623) |
Amortization of prior service credit | (355) | (355) | (1,066) | (1,066) |
Amortization of net actuarial losses | 225 | 407 | 674 | 1,221 |
Net periodic benefit income | $ (1,716) | $ (1,581) | $ (5,147) | $ (4,742) |
Debt (Details)
Debt (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | 24 Months Ended | ||||||||||||||||||
Jun. 01, 2021 USD ($) | Mar. 31, 2026 USD ($) | Dec. 31, 2025 USD ($) | Sep. 30, 2025 USD ($) | Jun. 30, 2025 USD ($) | Mar. 31, 2025 USD ($) | Dec. 31, 2024 USD ($) | Sep. 30, 2024 USD ($) | Jun. 30, 2024 USD ($) | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Mar. 31, 2023 USD ($) | Sep. 30, 2022 USD ($) | Mar. 31, 2024 | Dec. 31, 2021 USD ($) | Mar. 31, 2026 | Sep. 20, 2022 USD ($) | Jul. 19, 2019 USD ($) | |
Debt instruments [Line Items] | ||||||||||||||||||||||
Total principal amount | $ 1,686,813 | $ 1,686,813 | $ 1,702,125 | |||||||||||||||||||
Less: unamortized discount and debt issuance costs | (15,849) | (15,849) | (19,176) | |||||||||||||||||||
Total debt, net of discount and debt issuance costs | 1,670,964 | 1,670,964 | 1,682,949 | |||||||||||||||||||
Less: current portion of long-term debt, net of debt issuance costs | (64,506) | (64,506) | (57,197) | |||||||||||||||||||
Long-term debt | 1,606,458 | 1,606,458 | $ 1,625,752 | |||||||||||||||||||
Maturities of long-term debt | ||||||||||||||||||||||
Remainder of 2022 | 14,438 | 14,438 | ||||||||||||||||||||
2023 | 72,188 | 72,188 | ||||||||||||||||||||
2024 | 86,625 | 86,625 | ||||||||||||||||||||
2025 | 101,062 | 101,062 | ||||||||||||||||||||
2026 | 937,500 | 937,500 | ||||||||||||||||||||
Thereafter | 475,000 | 475,000 | ||||||||||||||||||||
Credit facility | ||||||||||||||||||||||
Revolving credit facility, commitment | $ 500,000 | $ 500,000 | $ 500,000 | |||||||||||||||||||
Weighted-average interest rate at period end | 5.30% | 5.30% | 2.67% | |||||||||||||||||||
Daily average amount outstanding | $ 1,477,841 | $ 1,109,819 | ||||||||||||||||||||
Weighted-average interest rate | 4% | 2.43% | ||||||||||||||||||||
Outstanding letters of credit | $ (7,823) | $ (7,823) | ||||||||||||||||||||
Net available for borrowing as of September 30, 2022 | 282,177 | 282,177 | ||||||||||||||||||||
Forecast [Member] | ||||||||||||||||||||||
Credit facility | ||||||||||||||||||||||
Maximum consolidated total leverage ratio | 4.75 | 4.50 | 4.25 | |||||||||||||||||||
Maximum consolidated secured leverage ratio | 3.75 | 3.50 | 3.50 | |||||||||||||||||||
Minimum interest coverage ratio | 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 | 1,001,813 | 1,001,813 | $ 1,072,125 | ||||||||||||||||||
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 | $ 14,438 | $ 14,438 | $ 14,438 | |||||||||
Senior, unsecured notes [Member] | ||||||||||||||||||||||
Debt instruments [Line Items] | ||||||||||||||||||||||
Total principal amount | $ 500,000 | 475,000 | 475,000 | 500,000 | ||||||||||||||||||
Senior, unsecured notes | ||||||||||||||||||||||
Stated interest rate | 8% | |||||||||||||||||||||
Proceeds from debt offering, net of discount and debt issuance costs | $ 490,741 | |||||||||||||||||||||
Effective interest rate | 8.30% | |||||||||||||||||||||
Debt settled | 25,000 | 25,000 | ||||||||||||||||||||
Gain on debt retirements | 1,726 | 1,726 | ||||||||||||||||||||
Senior, secured revolving credit facility [Member] | ||||||||||||||||||||||
Debt instruments [Line Items] | ||||||||||||||||||||||
Total principal amount | 210,000 | 210,000 | $ 130,000 | |||||||||||||||||||
Swingline sub-facility [Member] | ||||||||||||||||||||||
Credit facility | ||||||||||||||||||||||
Revolving credit facility, commitment | $ 40,000 | |||||||||||||||||||||
Letter of credit sub-facility [Member] | ||||||||||||||||||||||
Credit facility | ||||||||||||||||||||||
Revolving credit facility, commitment | $ 25,000 | |||||||||||||||||||||
Interest rate swap [Member] | ||||||||||||||||||||||
Credit facility | ||||||||||||||||||||||
Interest rate swap amount | $ 500,000 | $ 500,000 | $ 300,000 | $ 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% |
Other commitments and conting_2
Other commitments and contingencies (Details) - USD ($) $ in Thousands | Jul. 29, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | |||
Self-insurance liabilities | $ 10,130 | $ 7,401 | |
Litigation settlement, amount awarded | $ 4,900 | ||
Litigation settlement, period | 7 days |
Shareholders' equity (Details)
Shareholders' equity (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Oct. 24, 2018 | |
Share repurchase program, authorized amount | $ 500,000 | |||
Common shares repurchased (in shares) | 0 | 0 | ||
Amount remaining under share repurchase authorization | $ 287,452 | |||
First American Payment Systems, L.P. [Member] | ||||
Common shares issued, shares | 294 | |||
Proceeds from common shares | $ 13,000 |
Business segment information (D
Business segment information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) segment | |
Business segment information [Line Items] | ||||
Number of reportable business segments | segment | 4 | 4 | ||
Revenue | $ 555,038 | $ 532,141 | $ 1,674,006 | $ 1,451,622 |
Depreciation and amortization | (42,304) | (41,906) | (128,948) | (102,929) |
Interest expense | (23,799) | (21,494) | (65,471) | (35,548) |
Net income attributable to non-controlling interest | 35 | 37 | 106 | 99 |
Restructuring integration and other costs | (15,319) | (13,894) | (46,830) | (41,085) |
Share-based compensation expense | (5,728) | (7,434) | (18,766) | (21,801) |
Acquisition transaction costs | (51) | (208) | (112) | (18,816) |
Certain legal-related benefit (expense) | 1,659 | (638) | 814 | (941) |
Gain on sale of businesses and facility | 1,804 | 0 | 19,331 | 0 |
Income before income taxes | 20,889 | 17,192 | 66,072 | 69,675 |
Reportable business segments [Member] | ||||
Business segment information [Line Items] | ||||
Revenue | 555,038 | 532,141 | 1,674,006 | 1,451,622 |
Adjusted EBITDA | 150,951 | 145,561 | 454,107 | 423,955 |
Reportable business segments [Member] | Payments [Member] | ||||
Business segment information [Line Items] | ||||
Revenue | 169,787 | 160,268 | 507,149 | 343,045 |
Adjusted EBITDA | 36,184 | 31,598 | 107,605 | 71,125 |
Reportable business segments [Member] | Cloud Solutions [Member] | ||||
Business segment information [Line Items] | ||||
Revenue | 66,739 | 69,497 | 204,824 | 199,784 |
Adjusted EBITDA | 16,034 | 19,036 | 50,869 | 55,047 |
Reportable business segments [Member] | Promotional Solutions [Member] | ||||
Business segment information [Line Items] | ||||
Revenue | 136,081 | 130,330 | 408,600 | 389,825 |
Adjusted EBITDA | 18,255 | 17,673 | 49,795 | 56,804 |
Reportable business segments [Member] | Checks [Member] | ||||
Business segment information [Line Items] | ||||
Revenue | 182,431 | 172,046 | 553,433 | 518,968 |
Adjusted EBITDA | 80,478 | 77,254 | 245,838 | 240,979 |
Corporate [Member] | ||||
Business segment information [Line Items] | ||||
Adjusted EBITDA | $ (46,359) | $ (42,832) | $ (148,159) | $ (133,259) |
Business segment information _2
Business segment information (disaggregated revenue information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregated revenue information | ||||
Revenue | $ 555,038 | $ 532,141 | $ 1,674,006 | $ 1,451,622 |
United States [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 528,449 | 502,282 | 1,584,946 | 1,360,623 |
Foreign, primarily Canada and Australia [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 26,589 | 29,859 | 89,060 | 90,999 |
Reportable business segments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 555,038 | 532,141 | 1,674,006 | 1,451,622 |
Reportable business segments [Member] | Payments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 169,787 | 160,268 | 507,149 | 343,045 |
Reportable business segments [Member] | Payments [Member] | United States [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 159,160 | 150,594 | 475,368 | 312,874 |
Reportable business segments [Member] | Payments [Member] | Foreign, primarily Canada and Australia [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 10,627 | 9,674 | 31,781 | 30,171 |
Reportable business segments [Member] | Cloud Solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 66,739 | 69,497 | 204,824 | 199,784 |
Reportable business segments [Member] | Cloud Solutions [Member] | United States [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 64,111 | 60,778 | 188,494 | 173,555 |
Reportable business segments [Member] | Cloud Solutions [Member] | Foreign, primarily Canada and Australia [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 2,628 | 8,719 | 16,330 | 26,229 |
Reportable business segments [Member] | Promotional Solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 136,081 | 130,330 | 408,600 | 389,825 |
Reportable business segments [Member] | Promotional Solutions [Member] | United States [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 129,697 | 124,571 | 389,824 | 373,042 |
Reportable business segments [Member] | Promotional Solutions [Member] | Foreign, primarily Canada and Australia [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 6,384 | 5,759 | 18,776 | 16,783 |
Reportable business segments [Member] | Checks [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 182,431 | 172,046 | 553,433 | 518,968 |
Reportable business segments [Member] | Checks [Member] | United States [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 175,481 | 166,339 | 531,260 | 501,152 |
Reportable business segments [Member] | Checks [Member] | Foreign, primarily Canada and Australia [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 6,950 | 5,707 | 22,173 | 17,816 |
Checks [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 182,431 | 172,046 | 553,433 | 518,968 |
Checks [Member] | Reportable business segments [Member] | Checks [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 182,431 | 172,046 | 553,433 | 518,968 |
Merchant services and other payments solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 108,255 | 103,014 | 328,144 | 170,431 |
Merchant services and other payments solutions [Member] | Reportable business segments [Member] | Payments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 108,255 | 103,014 | 328,144 | 170,431 |
Forms and other products [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 71,797 | 68,646 | 211,517 | 218,622 |
Forms and other products [Member] | Reportable business segments [Member] | Promotional Solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 71,797 | 68,646 | 211,517 | 218,622 |
Marketing and promotional solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 64,284 | 61,684 | 197,083 | 171,203 |
Marketing and promotional solutions [Member] | Reportable business segments [Member] | Promotional Solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 64,284 | 61,684 | 197,083 | 171,203 |
Treasury management solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 61,532 | 57,254 | 179,005 | 172,614 |
Treasury management solutions [Member] | Reportable business segments [Member] | Payments [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 61,532 | 57,254 | 179,005 | 172,614 |
Data-driven marketing solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 46,993 | 41,956 | 134,307 | 115,120 |
Data-driven marketing solutions [Member] | Reportable business segments [Member] | Cloud Solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 46,993 | 41,956 | 134,307 | 115,120 |
Web and hosted solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | 19,746 | 27,541 | 70,517 | 84,664 |
Web and hosted solutions [Member] | Reportable business segments [Member] | Cloud Solutions [Member] | ||||
Disaggregated revenue information | ||||
Revenue | $ 19,746 | $ 27,541 | $ 70,517 | $ 84,664 |