Company: DLX
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000027996-25-000189
Chunk: 48

Company: DELUXE CORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 1
Chunk 48
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 or expand our asset base. One limitation of using the free cash flow measure is that not all of our free cash flow is available for discretionary spending. We may have mandatory debt payments and other cash requirements that must be deducted from our available cash. Despite this limitation, we believe that the measure of free cash flow offers an additional metric to consistently compare cash generated by operations. It also provides insight into the cash flow available to fund various items such as dividends, mandatory and discretionary debt reduction, acquisitions or other strategic investments, and share repurchases.

Net cash provided by operating activities reconciles to free cash flow as follows:

 Nine Months EndedSeptember 30,(in thousands)20252024Net cash provided by operating activities$168,521 $134,122 Purchases of capital assets(72,556)(69,777)Free cash flow$95,965 $64,345 

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Net debt – Net debt is calculated by subtracting cash and cash equivalents from total debt. One limitation associated with using net debt is that by subtracting cash and cash equivalents, it may imply that management intends to use these funds to reduce outstanding debt. Additionally, net debt can suggest that our debt obligations are lower than what the most comparable GAAP measure indicates. Despite these limitations, management believes that net debt is a valuable metric for assessing our financial leverage and overall balance sheet health. It provides a measure of our debt burden by considering the funds available to offset our debt obligations.

Total debt reconciles to net debt as follows:

(in thousands)September 30, 2025December 31, 2024Total debt$1,449,785 $1,503,151 Cash and cash equivalents(25,803)(34,399)Net debt$1,423,982 $1,468,752 

Adjusted EBITDA and adjusted EBITDA margin – We believe that adjusted EBITDA and adjusted EBITDA margin are useful metrics for evaluating our operating performance. These measures eliminate the effect of interest expense, income taxes, the accounting effects of capital investments (i.e., depreciation and amortization), and certain other items that may vary for reasons unrelated to current period operating performance. Management uses these measures to assess the operating results and performance of the business, perform analytical comparisons, and identify strategies to improve performance. Additionally, we believe that an increasing adjusted EBITDA and adjusted EBITDA margin indicate an increase in the company's value. It is important to note that we do