Deluxe Reports Third Quarter 2021 Results; Declares Regular Dividend; Affirms 2021 Outlook
In Q3 2021, Deluxe (NYSE: DLX) reported a 21.1% increase in revenue to $532.1 million, boosted by strong performance in Payments, Cloud, and Promotional Solutions. Notably, the Payments segment soared by 114.6% year-over-year. However, net income fell 57.5% to $12.5 million, impacted by acquisition costs. The company declared a quarterly dividend of $0.30 per share, payable on December 6, 2021. While the outlook remains positive with projected revenue growth of 10-12% for the year, concerns about inflation and macroeconomic factors persist.
- 21.1% increase in revenue to $532.1 million.
- Payments segment grew by 114.6% year-over-year.
- Declared quarterly dividend of $0.30 per share.
- Net income decreased by 57.5% to $12.5 million.
- Adjusted EBITDA margin dropped by 400 basis points to 19.3%.
- Increased acquisition-related expenses affecting income.
-
Third quarter revenue increased
21.1% ; up2.3% excluding contribution from First American - Solid growth in Payments, Cloud, and Promotional Solutions
- First American continues to exceed expectations with cross-selling initiatives well underway
- Declared regular quarterly dividend
“The scale of our Payments business now rivals our legacy Check business, confirming Deluxe is a Payments company. Our One Deluxe go-to-market strategy is working across all our businesses, providing full company organic growth during the third quarter. We are well-positioned to deliver on the fourth quarter and drive momentum into 2022,” said
“We are pleased with our third quarter results which were in-line with expectations, and, as anticipated, were impacted by lingering Covid impacts, inflation and other macroeconomic factors,” said
Third Quarter 2021 Financial and Segment Highlights (in millions, except per share amounts) |
||||||
|
3rd Quarter
|
|
3rd Quarter
|
|
% Change |
|
Revenue |
|
|
|
|
21.1 |
% |
Net Income |
|
|
|
|
(57.5 |
%) |
Adjusted EBITDA |
|
|
|
|
0.2 |
% |
Diluted EPS |
|
|
|
|
(60.0 |
%) |
Adjusted Diluted EPS |
|
|
|
|
(25.2 |
%) |
-
Revenue for the third quarter was
$92.6 million June 1, 2021 , revenue increased$10.1 million 2.3% year-over-year. -
The Payments segment delivered revenue growth of
114.6% over the previous year to$160.3 million $82.5 million -
Net income of
$12.5 million $11.9 million -
Adjusted EBITDA margin was
19.3% , down 400 basis points from the prior year due to planned technology investments, inflationary pressures, product mix, and one-time items. -
Cash flow from operations for the third quarter was
$65.4 million $34.5 million $30.9 million $11.6 million $10.7 million -
Total debt outstanding decreased from
$1,833.4 million June 30, 2021 to$1,776.2 million September 30, 2021 . Net debt was$1,655.1 million $433.6 million September 30, 2021 .
2021 Outlook
The company continues to expect the following for full year 2021:
-
Revenue growth of 10 to
12% -
Excluding First American, revenue growth of 0 to
2% -
Adjusted EBITDA margin between 20 and
21% -
Capital expenditures of
$95 $105 million -
Adjusted tax rate of approximately
25%
The guidance outlined above includes First American and assumes a continued economic recovery and is subject to, among other things, the macroeconomic unknowns associated with the COVID-19 pandemic, including the Delta variant, as well as anticipated continued supply chain constraints, labor supply issues, and inflation.
Capital Allocation and Dividend
The Board of Directors recently approved a regular quarterly dividend of
Earnings Call Information
An open-access conference call will be held today at
About
Deluxe, a Trusted Payments and Business Technology™ company, champions business so communities thrive. Our solutions help businesses pay and get paid, accelerate growth and operate more efficiently. For more than 100 years, Deluxe customers have relied on our solutions and platforms at all stages of their lifecycle, from start-up to maturity. Our powerful scale supports millions of small businesses, thousands of vital financial institutions and hundreds of the world’s largest consumer brands, while processing more than
Forward-Looking Statements
Statements made in this release concerning Deluxe, the company’s or management’s intentions, expectations, outlook or predictions about future results or events are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements reflect management’s current intentions or beliefs and are subject to risks and uncertainties that could cause actual results or events to vary from stated expectations, which variations could be material and adverse. Factors that could produce such a variation include, but are not limited to, the following: potential continuing negative impacts from pandemic health issues, such as the coronavirus / COVID-19, along with the impact of government restrictions or similar directives on our future results of operations, our future financial condition and our ability to continue business activities in affected regions; the impact that further deterioration or prolonged softness in the economy may have on demand for the company’s products and services; the company’s ability to execute its transformational strategy and to realize the intended benefits; the inherent unreliability of earnings, revenue and cash flow predictions due to numerous factors, many of which are beyond the company’s control; declining demand for the company’s checks, check-related products and services and business forms; risks that the company’s strategies intended to drive sustained revenue and earnings growth, despite the continuing decline in checks and forms, are delayed or unsuccessful; intense competition; continued consolidation of financial institutions and/or additional bank failures, thereby reducing the number of potential customers and referral sources and increasing downward pressure on the company’s revenue and gross profit; risks related to the company’s acquisition of
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS) (in millions, except per share amounts) (Unaudited) |
||||||||||||
|
Quarter Ended
|
|
Nine Months Ended
|
|||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020(1) |
|||||
Product revenue |
|
|
|
|
|
|
|
|
|
|
|
|
Service revenue |
229.8 |
|
|
140.7 |
|
|
544.0 |
|
|
428.1 |
|
|
Total revenue |
532.1 |
|
|
439.5 |
|
|
1,451.6 |
|
|
1,336.3 |
|
|
Cost of products |
(111.0 |
) |
|
(108.4 |
) |
|
(330.9 |
) |
|
(332.8 |
) |
|
Cost of services |
(133.1 |
) |
|
(66.1 |
) |
|
(298.3 |
) |
|
(206.0 |
) |
|
Total cost of revenue |
(244.1 |
) |
|
(174.5 |
) |
|
(629.2 |
) |
|
(538.8 |
) |
|
Gross profit |
288.0 |
|
|
265.0 |
|
|
822.4 |
|
|
797.5 |
|
|
Selling, general and administrative expense |
(239.3 |
) |
|
(198.9 |
) |
|
(685.6 |
) |
|
(634.6 |
) |
|
Restructuring and integration expense |
(12.3 |
) |
|
(18.9 |
) |
|
(38.0 |
) |
|
(57.0 |
) |
|
Asset impairment charges |
— |
|
|
(2.8 |
) |
|
— |
|
|
(101.7 |
) |
|
Operating income |
36.4 |
|
|
44.4 |
|
|
98.8 |
|
|
4.2 |
|
|
Interest expense |
(21.5 |
) |
|
(5.1 |
) |
|
(35.5 |
) |
|
(18.3 |
) |
|
Other income |
2.3 |
|
|
2.2 |
|
|
6.4 |
|
|
8.5 |
|
|
Income (loss) before income taxes |
17.2 |
|
|
41.5 |
|
|
69.7 |
|
|
(5.6 |
) |
|
Income tax provision |
(4.7 |
) |
|
(12.1 |
) |
|
(20.7 |
) |
|
(13.7 |
) |
|
Net income (loss) |
12.5 |
|
|
29.4 |
|
|
49.0 |
|
|
(19.3 |
) |
|
Non-controlling interest |
— |
|
|
— |
|
|
(0.1 |
) |
|
(0.1 |
) |
|
Net income (loss) attributable to Deluxe |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||||
Weighted average dilutive shares |
43.0 |
|
|
42.0 |
|
|
42.7 |
|
|
42.0 |
|
|
Diluted earnings (loss) per share |
|
|
|
|
|
|
|
|
|
( |
) |
|
Adjusted diluted earnings per share |
1.10 |
|
|
1.47 |
|
|
3.62 |
|
|
3.70 |
|
|
Capital expenditures |
34.5 |
|
|
15.6 |
|
|
81.1 |
|
|
42.7 |
|
|
Depreciation and amortization expense |
41.9 |
|
|
28.0 |
|
|
102.9 |
|
|
83.1 |
|
|
EBITDA |
80.6 |
|
|
74.6 |
|
|
208.0 |
|
|
95.7 |
|
|
Adjusted EBITDA |
102.7 |
|
|
102.5 |
|
|
290.7 |
|
|
269.7 |
|
|
(1) |
The statement of net loss for the nine months ended |
CONSOLIDATED CONDENSED BALANCE SHEETS (dollars and shares in millions) (Unaudited) |
||||||
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
Other current assets |
446.5 |
|
383.5 |
|
367.5 |
|
Property, plant & equipment |
129.7 |
|
88.7 |
|
80.7 |
|
Operating lease assets |
58.4 |
|
35.9 |
|
40.5 |
|
Intangibles |
515.9 |
|
246.8 |
|
234.8 |
|
|
1,435.5 |
|
703.0 |
|
703.0 |
|
Other non-current assets |
299.1 |
|
261.2 |
|
239.5 |
|
Total assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt |
|
|
$— |
|
$— |
|
Other current liabilities |
483.7 |
|
411.8 |
|
378.9 |
|
Long-term debt |
1,719.0 |
|
840.0 |
|
1,040.0 |
|
Non-current operating lease liabilities |
49.8 |
|
28.3 |
|
30.9 |
|
Other non-current liabilities |
138.6 |
|
48.7 |
|
42.6 |
|
Shareholders' equity |
557.9 |
|
513.4 |
|
484.0 |
|
Total liabilities and shareholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt |
|
|
|
|
|
|
Shares outstanding |
42.6 |
|
42.0 |
|
41.9 |
|
Number of employees |
6,389 |
|
6,185 |
|
6,388 |
|
(1)
|
|
The 2020 balance sheets have been revised from amounts reported in the prior year to correct an error in the amount of goodwill impairment charges in the first quarter of 2020 and the third quarter of 2019. |
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (in millions) (Unaudited) |
||||||
|
Nine Months Ended |
|||||
|
2021 |
|
2020(1) |
|||
Cash provided (used) by: |
|
|
|
|||
Operating activities: |
|
|
|
|||
Net income (loss) |
|
|
|
( |
) |
|
Depreciation and amortization of intangibles |
102.9 |
|
|
83.1 |
|
|
Asset impairment charges |
— |
|
|
101.7 |
|
|
Prepaid product discount payments |
(27.0 |
) |
|
(24.9 |
) |
|
Other |
24.3 |
|
|
26.2 |
|
|
Total operating activities |
149.2 |
|
|
166.8 |
|
|
Investing activities: |
|
|
|
|||
Payment for acquisition, net of cash, cash equivalents, restricted cash and restricted cash equivalents acquired |
(956.7 |
) |
|
— |
|
|
Purchases of capital assets |
(81.1 |
) |
|
(42.7 |
) |
|
Proceeds from facility sales |
2.7 |
|
|
9.7 |
|
|
Other |
(1.2 |
) |
|
1.3 |
|
|
Total investing activities |
(1,036.3 |
) |
|
(31.7 |
) |
|
Financing activities: |
|
|
|
|||
Net change in debt, net of debt issuance costs |
931.3 |
|
|
156.5 |
|
|
Proceeds from issuing shares |
16.0 |
|
|
3.1 |
|
|
Dividends |
(38.7 |
) |
|
(38.1 |
) |
|
Share repurchases |
— |
|
|
(14.0 |
) |
|
Net change in customer funds obligations |
14.9 |
|
|
(9.4 |
) |
|
Other |
(11.9 |
) |
|
(4.7 |
) |
|
Total financing activities |
911.6 |
|
|
93.4 |
|
|
Effect of exchange rate change on cash, cash equivalents, restricted cash and restricted cash equivalents |
(0.8 |
) |
|
(3.3 |
) |
|
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents |
23.7 |
|
|
225.2 |
|
|
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of year |
229.4 |
|
|
174.8 |
|
|
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period |
|
|
|
|
|
|
Free cash flow |
|
|
|
|
|
|
(1)
|
The 2020 statement of cash flows has been revised from amounts reported in the prior year to correct an error in the amount of goodwill impairment charges in the first quarter of 2020, which were previously understated by |
SEGMENT INFORMATION (In millions) (Unaudited) |
||||||||||||
|
Quarter Ended
|
|
Nine Months Ended
|
|||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|||||
Revenue: |
|
|
|
|
|
|
|
|||||
Payments |
|
|
|
|
|
|
|
|
|
|
|
|
Cloud Solutions |
69.5 |
|
|
63.8 |
|
|
199.8 |
|
|
193.6 |
|
|
Promotional Solutions |
130.3 |
|
|
124.9 |
|
|
389.8 |
|
|
385.7 |
|
|
Checks |
172.0 |
|
|
176.1 |
|
|
519.0 |
|
|
533.1 |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
|||||
Payments |
|
|
|
|
|
|
|
|
|
|
|
|
Cloud Solutions |
19.0 |
|
|
16.4 |
|
|
55.0 |
|
|
45.5 |
|
|
Promotional Solutions |
17.7 |
|
|
21.5 |
|
|
56.8 |
|
|
46.5 |
|
|
Checks |
77.2 |
|
|
85.0 |
|
|
241.0 |
|
|
258.4 |
|
|
Corporate |
(42.8 |
) |
|
(37.1 |
) |
|
(133.2 |
) |
|
(131.1 |
) |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin: |
|
|
|
|
|
|
|
|||||
Payments |
19.7 |
% |
|
22.4 |
% |
|
20.7 |
% |
|
22.5 |
% |
|
Cloud Solutions |
27.3 |
% |
|
25.7 |
% |
|
27.5 |
% |
|
23.5 |
% |
|
Promotional Solutions |
13.6 |
% |
|
17.2 |
% |
|
14.6 |
% |
|
12.1 |
% |
|
Checks |
44.9 |
% |
|
48.3 |
% |
|
46.4 |
% |
|
48.5 |
% |
|
Total |
19.3 |
% |
|
23.3 |
% |
|
20.0 |
% |
|
20.2 |
% |
|
The segment information reported here was calculated utilizing the methodology outlined in the Notes to Consolidated Financial Statements included in the company's Annual Report on Form 10-K for the year ended
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(in millions)
(Unaudited)
Note that the company has not reconciled the adjusted EBITDA or adjusted effective income tax rate outlook for full year 2021 to the directly comparable GAAP financial measures because the company does not provide outlook guidance for net income or pretax income or the reconciling items between these GAAP measures and adjusted EBITDA. Because of the substantial uncertainty and variability surrounding certain of these forward-looking reconciling items, including asset impairment charges; restructuring, integration and other costs; and certain legal-related expenses, a reconciliation of the non-GAAP financial measure outlook guidance to the corresponding GAAP measures is not available without unreasonable effort. The probable significance of certain of these reconciling items is high and, based on historical experience, could be material.
EBITDA AND ADJUSTED EBITDA
Management discloses EBITDA and Adjusted EBITDA because it believes they are useful in evaluating the company's operating performance, as the calculations eliminate the effect of interest expense, income taxes, the accounting effects of capital investments (i.e., depreciation and amortization) and in the case of Adjusted EBITDA, certain items, as presented below, that may not be indicative of current period operating performance. In addition, management utilizes Adjusted EBITDA to assess the operating results and performance of the business, to perform analytical comparisons and to identify strategies to improve performance. Management also believes that an increasing EBITDA and Adjusted EBITDA depict an increase in the value of the company. Management does not consider EBITDA and Adjusted EBITDA to be measures of cash flow, as they do not consider certain cash requirements, such as interest, income taxes, debt service payments or capital investments. Management does not consider EBITDA or Adjusted EBITDA to be substitutes for operating income or net income. Instead, management believes that EBITDA and Adjusted EBITDA are useful performance measures that should be considered in addition to GAAP performance measures.
|
Quarter Ended
|
|
Nine Months Ended
|
|||||||
|
2021 |
|
2020 |
|
2021 |
|
2020(1) |
|||
Net income (loss) |
|
|
|
|
|
|
|
( |
) |
|
Non-controlling interest |
— |
|
— |
|
(0.1 |
) |
|
(0.1 |
) |
|
Interest expense |
21.5 |
|
5.1 |
|
35.5 |
|
|
18.3 |
|
|
Income tax provision |
4.7 |
|
12.1 |
|
20.7 |
|
|
13.7 |
|
|
Depreciation and amortization expense |
41.9 |
|
28.0 |
|
102.9 |
|
|
83.1 |
|
|
EBITDA |
80.6 |
|
74.6 |
|
208.0 |
|
|
95.7 |
|
|
Asset impairment charges |
— |
|
2.8 |
|
— |
|
|
101.7 |
|
|
Restructuring, integration and other costs |
13.9 |
|
18.9 |
|
41.1 |
|
|
59.1 |
|
|
Share-based compensation expense |
7.4 |
|
6.2 |
|
21.8 |
|
|
15.4 |
|
|
Acquisition transaction costs |
0.2 |
|
— |
|
18.8 |
|
|
— |
|
|
Certain legal-related expense (benefit) |
0.6 |
|
— |
|
1.0 |
|
|
(2.2 |
) |
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
(1)
|
Information for the nine months ended |
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (continued)
(in millions, except per share amounts)
(Unaudited)
ADJUSTED DILUTED EPS
By excluding the impact of non-cash items or items that may not be indicative of current period operating performance, management believes that Adjusted Diluted EPS provides useful comparable information to assist in analyzing the company's current and future operating performance. As such, Adjusted Diluted EPS is one of the key financial performance metrics used to assess the operating results and performance of the business and to identify strategies to improve performance. It is reasonable to expect that one or more of the excluded items will occur in future periods, but the amounts recognized may vary significantly. Management does not consider Adjusted Diluted EPS to be a substitute for GAAP performance measures, but believes that it is a useful performance measure that should be considered in addition to GAAP performance measures.
|
Quarter Ended
|
|
Nine Months Ended
|
|||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020(1) |
|||||
Net income (loss) |
|
|
|
|
|
|
|
|
|
( |
) |
|
Non-controlling interest |
— |
|
|
— |
|
|
(0.1 |
) |
|
(0.1 |
) |
|
Net income (loss) attributable to Deluxe |
12.5 |
|
|
29.4 |
|
|
48.9 |
|
|
(19.4 |
) |
|
Asset impairment charges |
— |
|
|
2.8 |
|
|
— |
|
|
101.7 |
|
|
Acquisition amortization |
25.2 |
|
|
13.7 |
|
|
55.7 |
|
|
42.0 |
|
|
Restructuring, integration and other costs |
13.9 |
|
|
18.9 |
|
|
41.1 |
|
|
59.1 |
|
|
Share-based compensation expense |
7.4 |
|
|
6.2 |
|
|
21.8 |
|
|
15.4 |
|
|
Acquisition transaction costs |
0.2 |
|
|
— |
|
|
18.8 |
|
|
— |
|
|
Certain legal-related expense (benefit) |
0.6 |
|
|
— |
|
|
1.0 |
|
|
(2.2 |
) |
|
Adjustments, pre-tax |
47.3 |
|
|
41.6 |
|
|
138.4 |
|
|
216.0 |
|
|
Income tax provision impact of pretax adjustments(2) |
(12.0 |
) |
|
(9.4 |
) |
|
(32.3 |
) |
|
(39.9 |
) |
|
Adjustments, net of tax |
35.3 |
|
|
32.2 |
|
|
106.1 |
|
|
176.1 |
|
|
Adjusted net income attributable to Deluxe |
47.8 |
|
|
61.6 |
|
|
155.0 |
|
|
156.7 |
|
|
Income allocated to participating securities |
(0.1 |
) |
|
— |
|
|
(0.1 |
) |
|
(0.1 |
) |
|
Re-measurement of share-based awards classified as liabilities |
(0.3 |
) |
|
— |
|
|
(0.3 |
) |
|
(0.8 |
) |
|
Adjusted income attributable to Deluxe available to common shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Weighted-average dilutive shares |
43.0 |
|
|
42.0 |
|
|
42.7 |
|
|
42.0 |
|
|
Adjustment(3) |
— |
|
|
— |
|
|
— |
|
|
0.1 |
|
|
Adjusted weighted-average dilutive shares |
43.0 |
|
|
42.0 |
|
|
42.7 |
|
|
42.1 |
|
|
|
|
|
|
|
|
|
|
|||||
GAAP Diluted EPS |
|
|
|
|
|
|
|
|
|
( |
) |
|
Adjustments, net of tax |
0.82 |
|
|
0.77 |
|
|
2.49 |
|
|
4.18 |
|
|
Adjusted Diluted EPS |
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Information for the nine months ended |
|
|
||
(2) |
The tax effect of the pretax adjustments considers the tax treatment and related tax rate(s) that apply to each adjustment in the applicable tax jurisdiction(s). Generally, this results in a tax impact that approximates the |
|
|
||
(3) |
The adjustment to total weighted-average dilutive shares for the nine months ended |
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (continued)
(in millions)
(Unaudited)
REVENUE EXCLUDING FIRST AMERICAN
Because of the magnitude of the First American acquisition, management views the measure of revenue growth, excluding the First American acquisition, as an important indicator when assessing and evaluating the performance of the business and when identifying strategies to improve performance. This measure of revenue growth may be expressed as a dollar amount or as a percentage rate. By excluding the First American revenue, management is able to evaluate internally-generated revenue, measured by comparable sales of products and services year-over-year. This measure will be utilized by management until the acquisition has been under the company's ownership for at least four full fiscal quarters at the beginning of a reporting period.
|
Quarter Ended
|
|
Nine Months Ended
|
|||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|||
Total revenue |
|
|
|
|
|
|
|
|
|
|
Less: First American revenue |
(82.5 |
) |
|
— |
|
(109.8 |
) |
|
— |
|
Revenue excluding First American |
|
|
|
|
|
|
|
|
|
|
Revenue growth excluding First American |
|
|
|
|
|
|
|
|
|
|
Revenue growth excluding First American % |
2.3 |
% |
|
|
|
0.4 |
% |
|
|
|
|
Full Year Outlook |
|
Full Year |
|
|
2021 |
|
2020 |
|
Total revenue |
|
|
|
|
Less: First American revenue |
(188) - (193) |
|
— |
|
Revenue excluding First American |
|
|
|
|
Revenue growth excluding First American % |
|
|
|
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (continued)
(in millions)
(Unaudited)
NET DEBT
Management believes that net debt is an important measure to monitor leverage and to evaluate the balance sheet. In calculating net debt, cash and cash equivalents are subtracted from total debt because they could be used to reduce the company’s debt obligations. A limitation associated with using net debt is that it subtracts cash and cash equivalents, and therefore, may imply that management intends to use cash and cash equivalents to reduce outstanding debt. In addition, net debt suggests that our debt obligations are less than the most comparable GAAP measure indicates.
|
|
|
|
|
|
||||
Total debt |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
(121.1 |
) |
|
(123.1 |
) |
|
(310.4 |
) |
|
Net debt |
|
|
|
|
|
|
|
|
|
FREE CASH FLOW
Management defines free cash flow as net cash provided by operating activities less purchases of capital assets. Management believes that free cash flow is an important indicator of cash available for debt service and for shareholders, after making capital investments to maintain or expand the company’s asset base. Free cash flow is limited and not all of the company’s free cash flow is available for discretionary spending, as the company may have mandatory debt payments and other cash requirements that must be deducted from its cash available for future use. Free cash flow is not a substitute for GAAP liquidity measures. Instead, management believes that this measurement provides an additional metric to compare cash generated by operations on a consistent basis and to provide insight into the cash flow available to fund items such as dividends, mandatory and discretionary debt reduction, acquisitions or other strategic investments, and share repurchases.
|
|
Quarter Ended
|
|
Nine Months Ended
|
||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||
Net cash provided by operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of capital assets |
|
(34.5 |
) |
|
(15.6 |
) |
|
(81.1 |
) |
|
(42.7 |
) |
Free cash flow |
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (continued)
(in millions)
(Unaudited)
LIQUIDITY
Management defines liquidity as cash and cash equivalents plus the amount available for borrowing under our revolving credit facility. Management considers liquidity to be an important metric for demonstrating the amount of cash that is available or that could be readily available to the company on short notice. This financial measure is not a substitute for GAAP liquidity measures. Instead, management believes that this measurement enhances investors’ understanding of the funds that are currently available to the company.
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
Amounts available for borrowing under revolving credit facility |
|
312.5 |
|
302.3 |
Liquidity |
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20211104005137/en/
470-607-5567
tom.morabito@deluxe.com
651-233-7735
cameron.potts@deluxe.com
Source:
FAQ
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