Company: DLX
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000027996-25-000051
Chunk: 33

Company: DELUXE CORP
Filing Date: 2025-02-21
Form: 10-K
Item: Item 1A
Chunk 33
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 to existing clients.

Global events, such as illness outbreaks and pandemics like COVID-19, along with political and economic instability, including uncertainties surrounding trade policies, treaties, and tariffs, as well as war or other hostilities, significantly increase economic uncertainty. Given the ongoing and dynamic nature of these events, we cannot predict their impact on our business, financial position, or results of operations. Even after such impacts subside, the U.S. economy may experience a recession, which could further adversely affect our business.

20

Asset impairment charges have a negative impact on our results of operations.

As of December 31, 2024, goodwill accounted for 50.3% of our total assets. We conduct an annual assessment to determine if the carrying value of goodwill is impaired, considering various factors such as economic, market, and industry conditions. Several circumstances could indicate a decline in the fair value of one or more of our reporting units, including:

•A downturn in economic conditions that adversely affects our actual and forecasted operating results;

•Changes in our business strategy, structure, or resource allocation;

•The failure of our growth strategy;

•The inability of our acquisitions to achieve expected operating results;

•Changes in market conditions, including increased competition; 

•The loss of significant customers;

•A sustained decline in our stock price; or

•A material acceleration in the decline of order volumes for checks or business forms.

These situations may necessitate recording an impairment charge for a portion of goodwill. Additionally, we are required to assess the carrying value of other long-lived assets, including intangible assets. Information regarding our 2024 impairment analyses can be found under the caption "Note 8: Fair Value Measurements" in the Notes to Consolidated Financial Statements located in Part II, Item 8 of this report.

In the past, we have encountered situations where it was necessary to write down the value of certain assets. It is possible that similar circumstances may arise in the future, requiring us to reassess and potentially reduce the recorded value of our assets once again. These write-downs have been, and could continue to be, material to our results of operations. If we are required to record additional asset impairment charges for any reason, our consolidated results of operations would be adversely affected.

Existing or future leverage may adversely affect our financial condition and results of operations.

As of December 31, 2024, we had $1.52 billion in debt. Both we, and our subsidiaries, may incur significant additional indebtedness in the future. This