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Press Release: Deluxe Reports Fourth Quarter and -4-

· 02/04/2021 16:05
CONTACT: Jane Elliott, Chief Communications and HR OfficerDecember 31, 2020 --------------- Cash and cash equivalents $123.1 Amounts available for borrowing under revolving credit facility 302.3 ------------- Liquidity $425.4 =============Year Ended December 31, 2020 2019 ------- --------- Net cash provided by operating activities $217.6 $286.7 Purchases of capital assets (62.6) (66.6) ------ ------ Free cash flow $155.0 $220.1 ====== ======December 31, December 31, 2020 2019 ------------- --------------- Total debt $840.0 $883.5 Cash and cash equivalents (123.1) (73.6) ------------ ------------ Net debt $716.9 $809.9 ============ ============GAAP Diluted EPS $0.58 $1.06 $0.19 ($4.65) Adjustments, net of tax 0.80 0.88 4.89 11.47 ----- ----- ------ ------- Adjusted Diluted EPS $1.38 $1.94 $5.08 $6.82 ===== ===== ====== ======= (1) 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 U.S. effective tax rate for each adjustment. However, the tax impact of certain adjustments, such as asset impairment charges, share-based compensation expense and CEO transition costs, depends on whether the amounts are deductible in the respective tax jurisdictions and the applicable effective tax rate(s) in those jurisdictions. (2) The adjustment to total weighted-average dilutive shares is due to the net loss reported for the year ended December 31, 2019. The GAAP EPS calculation for this period excluded a higher number of share-based compensation awards because their effect was antidilutive.

DELUXE CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (continued)

(in millions)

(Unaudited)

NET DEBT

Net debt is not a GAAP financial measure. Nevertheless, management believes that net debt is an important measure to monitor leverage and 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 and that there is less company debt than the most comparable GAAP measure indicates.

FREE CASH FLOW

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 share repurchases, dividends, mandatory and discretionary debt reduction and acquisitions or other strategic investments.

DELUXE CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (continued)

(in millions)

(Unaudited)

LIQUIDITY

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210204005761/en/

770-833-3500

investorrelations@Deluxe.com

Cam Potts, VP, Communications

651-233-7735

Cameron.Potts@Deluxe.com

(END) Dow Jones Newswires

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