Company: DLX
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000027996-25-000189
Chunk: 70

Company: DELUXE CORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 8
Chunk 70
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 Information regarding these fair value estimates can be found in Note 7.Divestitures – In recent years, we decided to exit certain businesses and dispose of other assets. We believe these actions have enabled us to concentrate our resources on our growth businesses, while optimizing our operations. In September and December 2023, we executed agreements to transition our U.S. and Canadian payroll and human resources services customers to other service providers. The recognition of income from this business exit was based on the timing of customer conversion and retention activities, which were substantially completed during 2024. During the quarter ended September 30, 2024, we recognized a related goodwill impairment charge of $6,700, as we determined that the remaining cash flows expected to be generated by these businesses no longer supported the carrying value of the related reporting unit. The remaining cash proceeds from this business exit were received during the quarter ended March 31, 2025. The results of this business are reported as All other in Note 13.Business exits and asset sales were as follows for the nine months ended September 30, 2025 and September 30, 2024:(in thousands)Gain on sale of businesses and long-lived assetsProceeds from sale of businesses and long-lived assetsNine months ended September 30, 2025:Payroll and human resources services business$— $1,968 Nine months ended September 30, 2024:Payroll and human resources services business$28,190 $18,321 Small business distributor customer list(1)1,000 — Total$29,190 $18,321 (1) A note receivable was executed in conjunction with this sale. No cash proceeds were received.

NOTE 7: FAIR VALUE MEASUREMENTSGoodwill impairment analysis – Our policy regarding goodwill impairment can be found under the caption "Note 1: Significant Accounting Policies" in the Notes to Consolidated Financial Statements located in the 2024 Form 10K. This policy explains our methodology for assessing the impairment of goodwill.For the 2025 annual goodwill analysis as of July 31, 2025, we chose to perform quantitative analyses for our Merchant Services and Treasury Management reporting units. These analyses indicated that the estimated fair values of these reporting units exceeded their carrying values. Estimating the fair values of our reporting units requires us to estimate several factors, including revenue growth rates, earnings before interest, taxes, depreciation, and amortization (EBITDA) margins, terminal growth rates,