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Press Release: Deluxe Reports Fourth Quarter and -2-

· 02/04/2021 16:05
DELUXE CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF INCOME (LOSS) (in millions, except per share amounts) (Unaudited) Quarter Ended Year Ended December 31, December 31, 2020 2019 2020 2019 ------- ------- --------- ----------- Product revenue $322.5 $365.3 $1,230.7 $1,409.1 Service revenue 132.0 156.8 560.1 599.6 ------ ------ -------- -------- Total revenue 454.5 522.1 1,790.8 2,008.7 Cost of products (125.8) (132.5) (458.7) (531.3) Cost of services (66.2) (74.6) (272.1) (281.6) ------ ------ -------- -------- Total cost of revenue (192.0) (207.1) (730.8) (812.9) ------ ------ -------- -------- Gross profit 262.5 315.0 1,060.0 1,195.8 Selling, general and administrative expense (207.0) (225.9) (841.6) (891.7) Restructuring and integration expense (18.9) (22.2) (75.9) (71.2) Asset impairment charges -- -- (98.0) (391.0) ------ ------ -------- -------- Operating income (loss) 36.6 66.9 44.5 (158.1) Interest expense (4.9) (7.4) (23.1) (34.7) Other income 0.7 1.1 9.2 7.2 ------ ------ -------- -------- Income (loss) before income taxes 32.4 60.6 30.6 (185.6) Income tax provision (7.7) (15.8) (21.7) (14.3) ------ ------ -------- -------- Net income (loss) 24.7 44.8 8.9 (199.9) Non-controlling interest -- -- (0.1) -- ------ ------ -------- -------- Net income (loss) attributable to Deluxe $24.7 $44.8 $8.8 ($199.9) ====== ====== ======== ======== Weighted average dilutive shares 42.2 42.3 42.1 43.0 Diluted earnings (loss) per share $0.58 $1.06 $0.19 ($4.65) Adjusted diluted earnings per share 1.38 1.94 5.08 6.82 Capital expenditures 19.9 16.9 62.6 66.6 Depreciation and amortization expense 27.7 30.6 110.8 126.0 EBITDA 65.0 98.6 164.4 (24.9) Adjusted EBITDA 94.9 130.3 364.5 480.9 DELUXE CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (dollars and shares in millions) (Unaudited) December 31, December 31, 2020 2019 ------------- --------------- Cash and cash equivalents $123.1 $73.6 Other current assets 383.5 398.6 Property, plant & equipment 88.7 96.5 Operating lease assets 35.9 44.4 Intangibles 246.8 276.1 Goodwill 736.8 804.5 Other non-current assets 260.1 249.6 ------------- ------------- Total assets $1,874.9 $1,943.3 ============= ============= Total current liabilities $411.8 $407.9 Long-term debt 840.0 883.5 Non-current operating lease liabilities 28.4 33.6 Other non-current liabilities 53.9 47.4 Shareholders' equity 540.8 570.9 ------------- ------------- Total liabilities and shareholders' equity $1,874.9 $1,943.3 ============= ============= Net debt $716.9 $809.9 Shares outstanding 42.0 42.1 Number of employees 6,185 6,352 DELUXE CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (in millions) (Unaudited) Year Ended December 31, 2020 2019(1) -------------- ------------- Cash provided (used) by: Operating activities: Net income (loss) $8.9 ($199.9) Depreciation and amortization of intangibles 110.8 126.0 Asset impairment charges 98.0 391.0 Prepaid product discount payments (33.6) (25.6) Other 33.5 (4.8) ---------- ---------- Total operating activities 217.6 286.7 ---------- ---------- Investing activities: Purchases of capital assets (62.6) (66.6) Payments for acquisitions -- (8.2) Proceeds from sale of facilities 9.7 -- Other (3.2) 2.4 ---------- ---------- Total investing activities (56.1) (72.4) ---------- ---------- Financing activities: Net change in debt (43.5) (26.5) Dividends (50.7) (51.7) Share repurchases (14.0) (118.5) Net change in customer funds obligations (0.2) 12.6 Other (2.2) (6.1) ---------- ---------- Total financing activities (110.6) (190.2) Effect of exchange rate change on cash, cash equivalents, restricted cash and restricted cash equivalents 3.7 5.4 ---------- ---------- Net change in cash, cash equivalents, restricted cash and restricted cash equivalents 54.6 29.5 Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of year 174.8 145.3 ---------- ---------- Cash, cash equivalents, restricted cash and restricted cash equivalents, end of year $229.4 $174.8 ========== ========== Free cash flow $155.0 $220.1 ========== ========== (1) The 2019 statement of cash flows has been revised from amounts reported in the prior year to reflect certain holdback payments for acquisitions and asset purchases within other financing activities. Previously, these amounts were included within investing activities. DELUXE CORPORATION

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; the risk that future acquisitions will not be consummated; risks that any such acquisitions do not produce the anticipated results or synergies; risks that the company's cost reduction initiatives will be delayed or unsuccessful; performance shortfalls by one or more of the company's major suppliers, licensors or service providers; unanticipated delays, costs and expenses in the development and marketing of products and services, including web services and financial technology and treasury management solutions; the failure of such products and services to deliver the expected revenues and other financial targets; risks related to security breaches, computer malware or other cyber-attacks; risks of interruptions to the company's website operations or information technology systems; risks of unfavorable outcomes and the costs to defend litigation and other disputes; and the impact of governmental laws and regulations. The company's cash dividends are declared by the Board of Directors on a current basis and therefore, may be subject to change. The company's forward-looking statements speak only as of the time made, and management assumes no obligation to publicly update any such statements. Additional information concerning these and other factors that could cause actual results and events to differ materially from the company's current expectations are contained in the company's Form 10-K for the year ended December 31, 2019 and in the company's Form 10-Q for the quarter ended September 30, 2020.

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February 04, 2021 16:05 ET (21:05 GMT)