Company: DLX
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000027996-25-000051
Chunk: 20

Company: DELUXE CORP
Filing Date: 2025-02-21
Form: 10-K
Item: Item 1A
Chunk 20
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 expectations. If our brand promotion activities do not achieve the desired outcome or if we fail to provide a high-quality customer experience for any reason, our ability to attract new customers and maintain customer relationships could be adversely affected, which would harm our business and results of operations.

Our cost reduction initiatives may not be successful.

Given the intense competition faced by all our businesses and the ongoing secular decline in the use of checks and business forms, we are compelled to continually improve our operating efficiency to maintain and improve our profitability. Our cost reduction initiatives have required, and will continue to require, up-front expenditures related to various actions, including redesigning and streamlining processes, standardizing technology applications, further enhancing our strategic supplier sourcing arrangements, improving real estate utilization, and funding employee severance benefits. However, we cannot guarantee that we will achieve future cost reductions or that we will do so without incurring unexpected or greater-than-anticipated expenditures.

Moreover, we may find that achieving business simplification and/or cost reduction goals could disrupt our business, negatively impact our efforts to grow, or reduce the effectiveness of our sustainability practices. As a result, we may choose to delay or forgo certain cost reductions as business conditions require. For instance, streamlining processes or standardizing technology applications might lead to temporary inefficiencies or disruptions that could affect our service delivery or customer satisfaction. Similarly, enhancing strategic supplier sourcing arrangements might involve renegotiating contracts or changing suppliers, which could lead to transitional challenges.

Failure to continue improving our operating efficiency and generating adequate savings to fund necessary investments could adversely affect our business if we are unable to remain competitive. If our cost reduction initiatives do not yield the expected benefits, we may face increased pressure on our profit margins, which could limit our ability to invest in growth opportunities and innovation. While cost reduction initiatives are essential for maintaining competitiveness, they come with inherent risks and challenges. It is crucial to balance these initiatives with the need to sustain business growth, customer satisfaction, and sustainability efforts. Failure to do so could have adverse effects on our results of operations and financial position.

We may be unable to successfully identify future acquisitions, integrate past and future acquisitions, or realize the anticipated benefits of the transactions.

We have completed numerous acquisitions, including the acquisition of First American Payment Systems, L.P. in June 2021, which was the largest acquisition in our history. Additionally, we have occasionally purchased the operations of small business distributors with the intention of growing revenue in our dealer channels. Integrating these acquisitions has required significant management attention and resources.

The integration of any acquisition involves numerous