Company: DLX
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0000027996-25-000142
Chunk: 75

Company: DELUXE CORP
Filing Date: 2025-05-02
Form: 10-Q
Item: Item 8
Chunk 75
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 the positive impacts of our pricing and cost management actions, lower performance-based employee cash bonuses, reduced restructuring and integration spend, and the growth in data-driven marketing. These impacts were partially offset by the continuing secular declines in the Print segment, higher income tax payments due to the timing of federal payments, inflationary pressures on our cost structure, and the impact of business exits.

•Free cash flow – Increased by $18 million to $24 million, defined as net cash provided by operating activities less purchases of capital assets. We continue to reinvest the free cash flow generated by our Print business into our 

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growth businesses. A reconciliation of free cash flow to its comparable GAAP financial measure can be found in the Consolidated Results of Operations section.

Recent Market Conditions

We continually monitor the interest rate environment and its effect on our outstanding debt. As of March 31, 2025, 61% of our debt carried a weighted-average fixed interest rate of 8.1%, providing us with some protection against potential future interest rate increases.

We also closely monitor the impact of inflation on our labor, delivery, and material costs. In response to inflationary pressures, we have implemented targeted price increases, particularly within our Print and Merchant Services segments. Despite these price adjustments, our revenue volumes remain robust, underscoring the strength of our business and the sustained demand for our products and services. We have occasionally faced supply chain disruptions, particularly in the supply of certain printed products within our Print segment. Additionally, ongoing global unrest and uncertainties related to trade policies, treaties, and tariffs could further disrupt the global supply chain and lead to increased costs. To mitigate these risks, we actively monitor our supply chain to prevent delays or disruptions. We have also previously encountered labor supply challenges in certain areas of our business. The severity and duration of inflation, as well as supply chain and labor issues, remains difficult to predict and could continue to impact our business, financial position, and results of operations.

We also monitor trends in small business sentiment and consumer discretionary spending. We analyze various data sources, including information from credit card brands, the Federal Reserve, other economic forecast providers, and our proprietary data. These trends significantly influence multiple areas of our portfolio, particularly our Merchant Services and Print segments. The data suggests some erosion of consumer confidence, which raises some concern about overall general economic conditions. Notably, during the first quarter of 2025, we observed a continuation of the softer demand we experienced toward the end of last year, especially in more discretionary categories such as our