Deluxe Corporation Q1 2023 Earnings Call

May 4, 2023

We are in a listen only mode and today's call is being recorded.

We will begin with opening remarks and introductions.

At this time I would like to turn the conference over to your host Vice President of Investor Relations. Tom Morabito. Please go ahead.

Thank you operator, and welcome to the Deluxe first quarter 2023 earnings call joining.

Joining me on today's call is Barry Mccarthy, our President and Chief Executive Officer, and chips <unk>, Our Chief Financial Officer at the end of today's prepared remarks, we will take questions.

Ladies and gentlemen, thank you for standing by and welcome to the Deluxe first quarter 2023 earnings conference call.

At this time all participants are in a listen only mode and today's call is being recorded.

Before we begin and as you see on this slide I'd like to remind everyone that comments made today regarding management's intentions projections financial estimates or expectations about the company's future strategy or performance are forward looking in nature as defined in the private Securities Litigation Reform Act of 1095.

At this time I would like to turn the conference over to your host Vice President of Investor Relations. Tom Morabito. Please go ahead.

Yeah.

Thank you operator, and welcome to the Deluxe first quarter 2023 earnings call. Joining me on today's call is Barry Mccarthy, our President and Chief Executive Officer, and chips, and our Chief Financial Officer at the end of today's prepared remarks, we will take questions.

Additional information about factors that may cause our actual results to differ from projections.

Set forth in the press release, we furnished today and our Form 10-K for the year ended December 31, 2022 and in other company SEC filings.

On the call today, we will discuss non-GAAP financial measures, including comparable adjusted revenue adjusted and comparable adjusted EBITA adjusted and comparable adjusted EBITDA margin adjusted EPS and free cash flow.

In our press release or presentation, and our filings with the SEC you will find additional disclosures regarding the non-GAAP measures, including reconciliations of these measures to the most comparable measures under U S. GAAP.

Additional information about factors that may cause our actual results to differ from projections is set forth in the press release, we furnished today and our Form 10-K for the year ended December 31, 2022 and in other company SEC filings.

Also in the presentation, we are providing additional reconciliations of GAAP EPS to adjusted EPS, which should help with your modeling.

Now I'll turn it over to Barry.

Thanks, Tom and good morning, everyone.

Deluxe is off to a solid start to 2023 with positive comparable adjusted revenue and EBITDA growth.

You'll recall that last quarter, we began discussing both revenue and EBITDA on a comparable adjusted basis, which will exclude the inconsistency is caused by acquisitions or divestitures in the prior period.

Also in the presentation, we are providing additional reconciliations of GAAP EPS to adjusted EPS, which should help with your modeling.

We're now on our third consecutive year of revenue growth on a comparable adjusted basis and we are delivering on our long term promise of scale growing profits faster than revenue.

Now I'll turn it over to Barry.

Thanks, Tom and good morning, everyone.

Deluxe is off to a solid start to 2023 with positive comparable adjusted revenue and EBITDA growth.

This has been an elusive goal for more than a decade.

While there is still more to do we're cautiously optimistic that this quarter represents our inflection point of improving margin and earnings leverage over time.

You'll recall that last quarter, we began discussing both revenue and EBITDA on a comparable adjusted basis.

We'll exclude the inconsistency is caused by acquisitions or divestitures in the prior periods.

Before we review the quarterly results, let me take a moment to offer a few business updates.

We're now on our third consecutive year of revenue growth on a comparable adjusted basis and we're delivering on our long term promise of scale growing profits faster than revenue.

First in Q1, we completed our three year corporate infrastructure modernization program with the implementation of our ERP.

Early showing our ability to execute well on what is always a difficult project.

This has been an elusive goal for more than a decade.

While there's still more to do we're cautiously optimistic that this quarter represents our inflection point of improving margin and earnings leverage over time.

<unk> will provide additional details at a moment.

Second.

I want to offer some details on first American as we approach the second anniversary of the acquisition.

Before we review the quarterly results, let me take a moment to offer a few business updates.

First American our merchant services platform business continues to meet or exceed our management case for the transaction.

First.

In Q1, we completed our three year corporate infrastructure modernization program with the implementation of our ERP clearly showing our ability to execute well on what is always a difficult project.

Pre acquisition the business was growing lower single digits and is now solidly up mid single digit grower Dilip.

Delivering 7% revenue growth this quarter.

Chip will provide additional details in a moment.

The progress we've made on this acquisition highlights the operational and financial discipline of the power of our one deluxe go to market model.

Second.

Want to offer some details on first American as we approach the second anniversary of the acquisition.

As an example, since the acquisition we've on boarded nearly 1100, new clients that were deluxe relationships or referrals.

First American our merchant services platform business continues to meet or exceed our management case for the transaction.

We continue to see first American as an important value driver for deluxe.

Third at the sale of our North American web hosting and logo business is expected to be completed this month after satisfying all closing conditions.

Now solidly up mid single digit grower.

Delivering 7% revenue growth this quarter.

The progress we've made on this acquisition highlights the operational and financial discipline of the power of our one deluxe go to market model.

As I mentioned on our last call web hosting is a non strategic business line and this divestiture will allow us to further focus on payments and data.

As an example, since the acquisition we've on boarded nearly 11 of hundreds of new clients that were deluxe relationships or referrals.

Post divestiture, 90% of our data business, formerly known as the cloud business will be data driven marketing our DBM.

We continue to see first American as an important value driver for deluxe.

Fourth we made significant strides in our ongoing lockbox improvement efforts by further consolidating sites and shifting work to optimize the operations.

Third at the sale of our North American web hosting and logo business is expected to be completed this month after satisfying all closing conditions.

Chip will share additional details.

As I mentioned on our last call web hosting is a non strategic business line and this divestiture will allow us to further focus on payments and data.

Fifth as announced earlier this week that <unk> entered into a joint venture with Echo health focus expanding the capabilities of our deluxe payment exchange, our <unk> X platform.

Post divestiture, 90% of our data business, formerly known as the cloud business will be data driven marketing or D. D M.

We expect <unk> will positively impact the payments business in future periods and will share more on future calls.

Fourth we made significant strides in our ongoing lockbox improvement efforts by further consolidating sites and shifting work to optimize the operations.

Finally deluxe has once again been recognized as one of America's most trustworthy companies by Newsweek.

This speaks to the quality of our products and services reliability and talent added underscores the mission critical and trusted role we play for our clients.

Chip will share additional details.

Fifth as of now.

Earlier this week the <unk> entered into a joint venture with Echo health focused on expanding the capabilities of our deluxe payment exchange or D. P X platform.

All of these accomplishments and many more would not have been possible without the hard work and dedication of my fellow <unk>. So.

We expect <unk> will positively impact the payments business in future periods and will share more on future calls.

So let me again say thank you.

Finally, the lots has once again been recognized as one of America's most trustworthy companies by Newsweek.

Now onto the results for the quarter on a reported basis revenue decreased one 9% to $545 million, which was impacted by several business excellent throughout 2022.

This speaks to the quality of our products and services reliability and talent and it underscores the mission critical and trusted role we play for our clients.

On a comparable adjusted basis revenue was up half a percent year over year.

All of these accomplishments and many more would not have been possible without the hard work and dedication of my fellow Dell boxers. So.

Total adjusted EBITDA dollars increased nearly 1% from the first quarter of 2022.

Total comparable adjusted EBITDA dollars increased two 1% as we continue to benefit from ongoing pricing actions and management of our cost structure.

So let me again say thank you.

Now onto the results for the quarter on a reported basis revenue decreased one 9% to $545 million, which was impacted by several business exit throughout 2022.

We continue to be focused on driving quality revenue growth with increasing adjusted EBITDA and free cash flow for the long term.

We expect to see improvements in these metrics as we progressed through 2023.

On a comparable adjusted basis revenue was up half a percent year over year.

Just have we have messaged for some time.

Total adjusted EBITDA dollars increased nearly 1% for the first quarter of 2022.

For the year, we're looking for modest increases in comparable adjusted revenue and EBITA with free cash flow between 80 and $100 million.

Total comparable adjusted EBITDA dollars increased two 1% as we continue to benefit from ongoing pricing actions and management of our cost structure.

Importantly, I wanted to mentioned that we have not seen any associated weakness across our lines of business as a result of the recent banking industry challenges.

We continue to be focused on driving quality revenue growth with increasing adjusted EBITDA and free cash flow for the long term.

We are not banks by any of the directly affected institutions and then collectively represent an immaterial portion of revenue.

We expect to see improvements in these metrics as we progress through 2023.

Perhaps more importantly, as a result of these challenges we want additional business from several institutions and we're competing to win deposits away from the affected institutions.

So if we had messaged for some time.

For the year, we're looking for modest increases in comparable adjusted revenue and EBITA with free cash flow between 80 and $100 million.

Moving onto some segment revenue highlights.

Importantly, I wanted to mentioned that we have not seen any associated weakness across our lines of business as a result of the recent banking industry challenges we.

Payments revenue grew three 5% from the first quarter of 2022.

<unk> services had a strong quarter with revenue increasing 7% at the high end of our long term expectations of mid single digit growth.

We are not banks by any of the directly affected institutions and then collectively represent an immaterial portion of revenue.

The rest of payments, which includes our receivables and payables businesses was roughly flat a solid performance in Treasury management was partially offset by volume and cost pressures in other areas of the business temporarily impacted by our site consolidation efforts and ERP project.

Perhaps more importantly, as a result of these challenges we want additional business from several institutions that we're competing to win deposits away from the affected institutions.

Moving onto subsegment revenue highlights.

Payments revenue grew three 5% from the first quarter of 2022.

The data segments comparable adjusted revenue declined seven 7% in the first quarter.

Commercial services had a strong quarter with revenue increasing 7% at the high end of our long term expectations of mid single digit growth.

Youll recall that several tdm customers pulled forward spending into Q4 2022.

This pull forward along with an unusually strong Q1 2022 comp impacted the performance of this business.

On a blended Q4 and Q1 basis. The DDS business grew six 6% in this six month period, consistent with long term expectations.

The data segments comparable adjusted revenue declined seven 7% in the first quarter.

Last quarter, we highlighted some <unk> related traction we saw in non financial verticals.

You'll recall that several tdm customers pulled forward spending into Q4 2022.

Today I'd like to highlight our continued efforts to expand into regional financial institutions.

This pull forward along with an unusually strong Q1 2022 comp impacted the performance of this business.

For example, RBC bank, one of the largest textbooks regional banks and a deluxe check customer for over 25 years recently expanded their relationship with deluxe to include our <unk> solutions.

On a blended Q4 and Q1 basis. The DDS business grew six 6% in this six month period, consistent with long term expectations.

We helped to IDC introduced an innovative digital outreach solution to expand one of its business lines.

Last quarter, we highlighted some <unk> related traction we saw in non financial verticals.

Another win is Pentagon federal credit Union.

Based in Mclean, Virginia had a fed Matt manders, approximately $25 billion in assets for more than 2 million members.

Today I'd like to highlight our continued efforts to expand into a regional financial institutions.

For example, IDC bank, one of the largest textbooks regional banks and a deluxe checks customer for over 25 years recently expanded their relationship with deluxe to include our <unk> solutions.

A longtime check customer. We also help turn said significantly increased credit line in mortgage applications.

Turning to promo we had another strong quarter, improving comparable adjusted revenue eight 1%.

We helped the IDC introduced an innovative digital outreach solution to expand one of its business lines.

We were also pleased with the improvement in margins.

The protocol business continues to benefit from our strong and growing relationship with Amazon.

Another win is Pentagon Federal credit Union based in Mclean, Virginia had a fed met manages approximately $25 billion in assets for more than 2 million members.

Amazon is using our recently improved deluxe brand center, or <unk>, which is an ordering platform, enabling businesses like Amazon to customize promotional items.

A longtime checks customer. We also help turn said significantly increased credit line and mortgage applications.

We believe having an anchor customer like Amazon and the platform is a testament to our capabilities and the potential to provide this service to many more customers.

Turning to promo we had another strong quarter, improving comparable adjusted revenue eight 1%.

Finally, our check business declined four 5% year over year consistent with our long term expectations of mid single digit revenue declines.

We were also pleased with the improvement in margins.

The protocol business continues to benefit from our strong and growing relationship with Amazon.

The ERP implementation did have a onetime impact on profitability, which chip will discuss.

Amazon is using our recently improved our Lux brand center or D. C, which has an ordering platform, enabling businesses like Amazon to customize promotional items.

Before concluding I do want to briefly discuss our capital allocation process.

We believe having an anchor customer like Amazon and the platform is a testament to our capabilities have the potential to provide this service to many more customers.

Our strategy is focused on growing our payments and data businesses by reinvesting the harvest cash from the print businesses.

We have a very disciplined process to approve growth investments and we are encouraged by our progress.

Finally, our checks business declined four 5% year over year consistent with our long term expectations of mid single digit revenue declines.

Payments and data are well positioned and strong secular growth markets.

Payments will become our largest revenue business this year, and we expect both payments and data to deliver positive shareholder returns.

The ERP implementation did have a onetime impact on profitability, which chip will discuss.

Before concluding I do want to briefly discuss our capital allocation process.

While we still have a lot of work to do we're pleased with our first quarter results generating positive comparable adjusted revenue growth and modest positive operating leverage.

Our strategy is focused on growing our payments data businesses by reinvesting the harvest cash from the print businesses.

We believe this is an important milestone for the company under this margin leverage should be durable over time.

There's a very disciplined process to approve growth investments and we are encouraged by our progress.

We're also pleased to have now completed our infrastructure modernization efforts and look forward to further unlocking benefits from these investments.

Payments and data are well positioned and strong secular growth markets.

Payments will become our largest revenue business this year, and we expect both payments and data to deliver positive shareholder returns.

Now I'll turn it over to chip, who will provide more details on our financial performance capital allocation priorities and guidance.

While we still have a lot of work to do we're pleased with our first quarter results generating positive comparable adjusted revenue growth and modest positive operating leverage.

Thank you Barry and good morning, everyone. Let's first go through the consolidated highlights for the quarter.

On a reported basis revenue declined one 9% year over year, while total comparable adjusted revenue was relatively flat increasing 5% to $545 million. We reported first quarter GAAP net income of $2 8 million or <unk> <unk> per diluted share down from $9 6 million or <unk> 22 per share in the first quarter of <unk>.

We believe this is an important milestone for the company under this margin leverage should be durable over time.

We're also pleased to have now completed our infrastructure modernization efforts and look forward to further unlocking benefits from these investments.

Now I'll turn it over to chip, who will provide more details on our financial performance capital allocation priorities and guidance.

2022.

Adjusted EBITDA came in at $100 million.

8% and up two 1% on a comparable adjusted basis from last year.

Thank you Barry and good morning, everyone. Let's first go through the consolidated highlights for the quarter.

Movements in promo were partially offset by checks and data, which was impacted by the 2020 to business exits. In addition, we had changes to our benefits plan that helps smooth from corporate benefits cost out better across the quarters.

Comparable adjusted EBITDA margins were 18, 4% up 30 basis points year over year.

First quarter adjusted diluted EPS came in at <unk> 80.

2022.

Down from $1 five in last year's first quarter.

Adjusted EBITDA came in at $100 million.

This decrease was primarily driven by interest expense and depreciation and amortization and.

8% and up two 1% on a comparable adjusted basis from last year improvements in promo were partially offset by checks and data which was impacted by the 2020 to business exits. In addition, we had changes to our benefits plan that helps smooth from corporate benefits cost out better across the quarters.

In the first quarter, we also completed a $200 million interest rate swap, which replaced the existing 2019 swap that expired on March 20th 2023, we also modified our existing credit facility and interest rate swaps to U S. <unk> is the term reference rate and these agreements.

Adjusted EBITDA margins were 18, 4% up 30 basis points year over year.

With this replacement swap our debt remains approximately 60% fixed rate, which should partially insulate the company from future rate hikes, our guidance assumes a made rate increase with sofa, reaching a high of roughly 5% and no rate reductions in 2023.

First quarter adjusted diluted EPS came in at 80.

Down from $1 five in last year's first quarter.

This decrease was primarily driven by interest expense and depreciation and amortization and.

In the first quarter, we also completed a $200 million interest rate swap, which replaced the existing 2019 swap that expired on March 20th 2023, we also modified our existing credit facility and interest rate swaps to you I sofa as the term reference rate and these agreements with this replacement swap our debt remains approximately 60% fixed.

Before going through the segments I'd like to provide some additional details on our ERP implementation.

The system went live we experienced some challenges that did have an impact on revenue and profit.

Notably backlogs built up mostly in February but improvements occurred throughout March we are now operating largely as usual and have satisfied the backlog of orders created by the transition of <unk>.

Which should partially insulate the company from future rate hikes, our guidance assumes a rate increase with sofa, reaching a high at roughly 5% and no rate reductions in 2023.

<unk> segment's profitability was particularly impacted which I will detail in a moment, but overall company profitability was impacted by roughly 80 basis points. Despite these near term issues. The long term benefits of ERP implementation remains examples include savings related to legacy it system costs third party supplier spend and improvements in working capital and supply chain.

Before going through the segments I'd like to provide some additional details on our ERP implementation as the system went live we experienced some challenges that did have an impact on revenue and profit, notably backlogs built up mostly in February with improvements occurred throughout March we're now operating largely as usual and have satisfied the backlog of orders created by the transition.

We also expect to have several million dollars of future value to be saved through operating on a more streamlined end to end ecosystem.

The checks segment's profitability was particularly impacted which I will detail in a moment, but overall company profitability was impacted by roughly 80 basis points. Despite these near term issues. The long term benefits of ERP implementation remains.

This was a massive undertaking and we are very pleased that it has been materially completed. This will also effectively marked the end of the increases in operating expenses to modernize the antiquated infrastructure and now we continue to focus on driving the benefit.

Samples include savings related to legacy it system costs third party supplier spend and improvements in working capital and supply chain.

We also expect to have several million dollars of future value to be saved through operating on a more streamlined end to end ecosystem.

Now turning to our segment details starting with our growth businesses payments and data.

Finally, the reduction of numerous legacy ERP systems will reduce the risk inherent in operating unsupported and non standard systems in our acquired businesses and within our legacy checks and promo businesses. This was a massive undertaking and we are very pleased that it has been materially completed.

Payments grew first quarter revenue three 5% year over year to $172 million with merchant services growing 7% as we have previously indicated we anticipated slower growth for a few quarters as all of payments was up against tough year over year comps, we still expect growth rates to improve as the year progresses.

So also effectively mark the end of the increases in operating expenses to modernize the antiquated infrastructure and now we continue to focus on driving the benefit.

Strength in merchant services from government and nonprofit areas was partially offset by modest softness in consumer spending patterns, while the merchant business is subject to overall market conditions. We remain confident that we have many levers across our payments portfolio to still deliver our guidance for the year.

Now turning to our segment details starting with our growth businesses payments and data.

Payments grew first quarter revenue of three 5% year over year to $172 million with merchant services growing 7%.

Payments adjusted EBITDA margins were 21, 2% down 70 basis points from the prior year, mostly driven by volume and cost pressures related to our lockbox consolidation efforts. We closed two lockbox sites this quarter with a third expected to be completed this month.

As we have previously indicated we anticipated slower growth for a few quarters as all of payments was up against tough year over year comps, we still expect growth rates to improve as the year progresses.

Strength of merchant services from government and nonprofit areas was partially offset by modest softness in consumer spending patterns, while the merchant business is subject to overall market conditions. We remain confident that we have many levers across our payments portfolio to still deliver our guidance for the year.

These changes will further improve operating performance and we expect between 102 hundred basis points of margin expansion in subsequent quarters for.

For 2023, we continue to expect to see mid single digit revenue growth and adjusted EBITDA margins in the low to mid 20% range.

The data results were down year over year, and a little softer than we expected due to having to rebuild the pipeline from the strong fourth quarter on a reported basis Data's revenue declined 15, 7% from the first quarter of 2000 $22 million to $59 million comparable adjusted revenue decreased seven 7% year over year adjusting for the $6 million.

These changes will further improve operating performance and we expect between 102 hundred basis points of margin expansion in subsequent quarters for.

The divested revenue related to last year's Australia, and web hosting divestiture.

For 2023, we continue to expect to see mid single digit revenue growth and adjusted EBITDA margins in the low to mid 20% range.

As Barry mentioned data was up against some tough comps experienced the impact of the campaign shifted into the fourth quarter and the results still include the web hosting business, which declined 11, 8% this quarter if.

The data results were down year over year, and a little softer than we expected due to having to rebuild the pipeline from the strong fourth quarter on a reported basis data revenue declined 15, 7% from the first quarter of 2000 $22 million to $59 million comparable adjusted revenue decreased seven 7% year over year adjusting for the $6 million.

If you combine the performance of the two quarters DBM increased a strong six 6%.

Taking these factors into account, we expect to see a solid rebound in revenue growth in the second quarter.

Data is adjusted EBITDA margins in the quarter increased 120 basis points year over year to 26, 1% largely due to product mix and disciplined expense management.

The divested revenue related to last year's Australia, and web hosting divestiture.

As Barry mentioned data was up against some tough comps experienced the impact of the campaign shifts into the fourth quarter and the results still include the web hosting business, which declined 11, 8% this quarter if.

On a comparable adjusted basis EBITDA margins improved 60 basis points.

The 2023, we continue to expect to see low single digit revenue growth on a comparable adjusted basis. We also expect to see comparable adjusted EBITDA margins in the low 20% range.

If you combine the performance of the two quarters DBM increased a strong six 6%.

Taking these factors into account, we expect to see a solid rebound in revenue growth in the second quarter.

Turning now to our print businesses promo and checks promos first quarter revenue was $136 million up two 2% on a reported basis comparable adjusted revenue increased eight 1% driven by new sales wins and pricing actions and adjusting for $7 million of divested revenue from last year's many.

Data is adjusted EBITDA margins in the quarter increased 120 basis points year over year to 26, 1% largely due to product mix and disciplined expense management.

On a comparable adjusted basis EBITDA margins improved 60 basis points.

Business exits.

For 2023, we continue to expect to see low single digit revenue growth on a comparable adjusted basis. We also expect to see comparable adjusted EBITDA margins in the low 20% range.

<unk> adjusted EBITDA margins increased to 100 basis points year over year to 13, 8% as we benefited from continued pricing actions and improvements in operations and cost structure on a comparable adjusted basis EBITDA margins improved 50 basis points from the first quarter of 2022.

For 2023, we continue to expect to see low single digit comparable adjusted revenue growth and adjusted EBITDA margins in the mid teens.

Checks first quarter revenue decreased four 5% from last year to $179 million as.

As the business continues to return to expected secular declines.

Business exits.

<unk> adjusted EBITDA margins increased 100 basis points year over year to 13, 8% as we benefited from continued pricing actions and improvements in operations and cost structure on a comparable adjusted basis EBITDA margins improved 50 basis points from the first quarter of 2022.

Demand remains predictable and we continue to take responsible price actions and maintain high retention rates first.

First quarter adjusted EBITDA margins were 42, 8% down 150 basis points year over year due to the ERP related challenges I mentioned.

For 2023, we continue to expect to see low single digit comparable adjusted revenue growth and adjusted EBITDA margins in the mid teens.

<unk> occurring in February we did not see a significant decline in volumes, but we did see an impact on some higher profit specialty and expedited orders over the past six weeks. The system has been operating as expected and bookings remain on trend.

Checks first quarter revenue decreased four 5% from last year to $179 million as the business continues to return to expected secular declines demand remains predictable and we continue to take responsible price actions and maintain high retention rates.

For 2023, we continue to expect mid single digit revenue declines and adjusted EBITDA margins in the mid 40% range.

Turning now to our balance sheet and cash flow. We ended the quarter with a net debt level of 166 billion flat compared to the first quarter of 2022, our net debt to adjusted EBITDA ratio was four times at the end of the quarter unchanged from a year ago.

First quarter adjusted EBITDA margins were 42, 8% down 150 basis points year over year due to the ERP related challenges I mentioned, mostly occurring in February we did not see a significant decline in volumes, but we did see an impact on some higher profit specialty and expedited orders over the past six weeks the system has been operating as expected and bookings.

Clearly our rate of debt Paydown and reduction in leverage ratio will not be a perfectly linear line the impacts of the first quarter do not change any of our projections and we remain on track for our goals for the year, our long term strategic target remains approximately three times.

We remain on trend.

For 2023, we continue to expect mid single digit revenue declines and adjusted EBITDA margins in the mid 40% range.

Free cash flow defined as cash provided by operating activities less capital expenditures was expected to be negative in the first quarter just as we outlined on the last call. However, free cash flow of negative $32 million was somewhat less than anticipated impacted by temporary changes in working capital related to the ERP implementation.

Turning now to our balance sheet and cash flow, we ended the quarter with a net debt level of $1 six 6 billion flat compared to the first quarter of 2022, our net debt to adjusted EBITDA ratio was four times at the end of the quarter unchanged from a year ago, clearly our rate of debt Paydown and reduction in leverage ratio will not be a perfectly linear line.

This compares to a positive $13 5 million in the first quarter of 2022, and the decrease was primarily driven by the expected increases in capex taxes and interest once again the negative free cash flow was anticipated and we've already seen a recovery early in the second quarter, which gives us confidence free cash flow can remain on track for the year.

The impacts of the first quarter do not change any of our projections and we remain on track for our goals for the year, our long term strategic target remains approximately three times.

Our board approved a regular quarterly dividend of <unk> 30 per share on all outstanding shares the dividend will be payable on June five 2023 to all shareholders of record as of market closing on May 22023.

In the first quarter of 2022, and the decrease was primarily driven by the expected increases in capex taxes and interest once again the negative free cash flow was anticipated and we've already seen a recovery early in the second quarter, which gives us confidence free cash flow can remain on track for the year.

To build on Barry's comments around capital allocation, where responsible investing with significant free cash flow generated by our core checks business into payments and data businesses that we believe can generate more robust growth over time, our current processes disciplined and our priorities for capital allocation are clear, reducing our debt and net leverage delivering.

High return internal investments and paying our dividend, we facilitate a rigorous annual planning process, ensuring all investments have a compelling business case and target returns above our 15% hurdle rate.

To build on Barry's comments around capital allocation, we are responsibly investing the significant free cash flow generated by our core checks business into payments and data businesses that we believe can generate more robust growth over time, our current processes disciplined and our priorities for capital allocation are clear, reducing our data net leverage delivering.

We returned value to shareholders through our dividend, which is currently 30 per share per quarter and equates to a very attractive roughly 8% yield we continue to review the dividend with our board and our current focus is to grow out of that high yield through improving business performance.

Finally, we remain focused on accelerating our rate of debt paydown through even more improved EBITDA and free cash flow growth that we can get back below three times Levered, we plan to share more details on upcoming calls.

High return internal investments.

Paying our dividend, we facilitate a rigorous annual planning process, ensuring all investments have a compelling business case and target returns above our 15% hurdle rate we've.

Turning now to guidance today, we are affirming our expectations for 2023, keeping in mind all figures are approximate and reflect the expected impact of the web hosting and logo divestiture, which are now expected to close this month.

We returned value to shareholders through our dividend, which is currently 30 per share per quarter and equates to a very attractive roughly 8% yield we continue to review the data with our board and our current focus is to grow out of that high yield through improving business performance.

We continue to expect revenue of $2 145 billion to $2 to $1 billion adjusted EBIT of $390 million of $405 million adjusted.

Adjusted EPS of $2 90 to $3 25.

And free cash flow of $80 million to $100 million as we mentioned on our previous call on a comparable adjusted basis 2023 revenue represents a range of negative one to positive 2% growth the comparable adjusted EBITDA range represents negative two to positive 2% growth.

Adjusted EPS is expected to decline year over year due to a full year impact of rising interest rates incremental depreciation and amortization and an estimated <unk> <unk> impact from the announced divestiture. However, after factoring in the impact of the divestiture. The free cash flow guide remains an increase year over year on a comparable adjusted basis.

We continue to expect revenue of $2 145 billion to $2 to $1 billion adjusted EBITDA of $390 million of $405 million adjusted EPS of $2 90 to $3 25.

Also in order to assist with your modeling our guidance continues to assume the following interest expense of $120 million to $125 million and adjusted tax rate of 26% depreciation and amortization of $170 million of which acquisition amortization is approximately $75 million and average outstanding share count of four.

Adjusted EPS is expected to decline year over year due to the full year impact of rising interest rates incremental depreciation and amortization and an estimated now 20 <unk> impact from the announced divestiture. However, after factoring in the impact of the divestiture. The free cash flow guide remains an increase year over year on a comparable adjusted basis.

$43 7 million shares and capital expenditures of approximately $100 million.

Among other things this guidance is subject to prevailing macroeconomic conditions, including interest rates labor supply issues of inflation and the impact of other divestitures.

To summarize while we have additional work to do we are encouraged with our first quarter results and believe we're off to a solid start to 2023, our ERP implementation is now live and we expect to see significant benefits going forward as we move through 2023. In addition to continued revenue growth. We're also expecting increased operational efficiencies, which should help us.

$43 7 million shares and capital expenditures of approximately $100 million.

Grow EBITDA improved free cash flow pay down debt and lower our leverage ratio operator, we are now ready to take questions.

Among other things this guidance is subject to prevailing macroeconomic conditions, including interest rates labor supply issues of inflation and the impact of other divestitures.

Thank you if you would like to ask a question Press Star then the number one on your telephone keypad.

If you would like to withdraw your question Press Star one once again.

We'll pause for just a moment to compile the Q&A roster.

We will take our first question from Lance Vitanza with TD Cowen Your line is open.

Grow EBITDA improved free cash flow pay down debt and lower our leverage ratio operator, we are now ready to take questions.

Hi, Thanks, guys good morning.

Barry could we start actually with the Echo health JV I, just wondering if you could talk a little bit more about the motivation to set up the JV was that was that more about accelerating volumes in this revenue growth or is it more about improving the cost structure in that line of business.

Thank you if he would like to ask a question Press Star then the number one on your telephone keypad.

If you would like to withdraw your question Press Star one once again.

We'll pause for just a moment to compile the Q&A roster.

In any case could you just talk about how you expect the partnership to help deluxe and whether this is.

We will take our first question from Lance Vitanza with TD Cowen Your line is open.

A one off or potentially a blueprint for additional ventures in the future whether with other partners or perhaps in other verticals.

Hi, Thanks, guys good morning.

Barry could we start actually with the Echo health JV I, just wondering if you could talk a little bit more about the.

Sure Good morning, Lance So first of all.

Youll recall that we have continued to make progress in the area of digital payables or the outbound side of payments and digitizing what are often on paper based payments and had great success with a product that we have internally called <unk> as well as something we created.

The motivation to set up the JV was that was that more about accelerating volumes in this revenue growth or is it more about improving the cost structure in that line of business.

A one off or potentially a blueprint for additional ventures in the future whether with other partners or perhaps in other verticals.

I guess about two years ago called <unk> or the medical payment exchange that really helped solve for medical payments outbound payments streamlining that and making it a much more digital process. We saw the opportunity to deliver that same type of solution for the middle market that is very large and underserved.

Sure Good morning, Lance So first of all.

Day with digital payout mechanisms.

And we have some of the assets that are required to succeed there and the partner Echo has other assets and so we saw by bringing our assets together and going to market with a collection of these assets, we had a real opportunity to take a meaningful share of the payables market for in the middle of the payables business in the <unk>.

I guess about two years ago called M. P X or the medical payment exchange that really helped solve for medical payments outbound payments streamlining that and making it a much more digital process. We saw the opportunity to deliver that same type of solution for the middle market that is very large and underserved.

Metal market and that was the motivation we think it's a very attractive way for us to do this that limits our capex investment.

Day with digital payout mechanisms.

But allows us to have that additional feature functionality and get to market quicker and take a bigger piece of the pie faster.

We have some of the assets that are required to succeed there and the partner Echo has other assets and so we saw by bringing our assets together and going to market with a collection of these assets, we had a real opportunity to take a meaningful share of the payables market for in the middle and the payables business in the.

And so great. Thank you. So in terms of the structure is this going to be consolidated on your financial statements or is this sort of income from our equity stake that we need to be thinking about.

No answers chip, so theres actually various streams to think about here. So theres three streams of revenue. The first is we will be a distributor of the platform towards the joint venture. So we will continue to have distribution revenue as we go find clients and drivers of the sales force will be a servicer of the platform leveraging our technology selling that into the.

<unk> venture and getting a revenue stream from the servicing side and then we will have the <unk>.

<unk> method investment side, the third stream, where we will share and our percentage ownership of the net income of the joint venture of record that as an equity method investment inside our consolidated financials.

Great. Okay. Thanks for the clarification there.

Let me turn to the corporate expense line.

Did much better than we would at least expect it it was down about 13% year on year and it was about eight 5% of revenues I guess that ladder stat that eight 5% of revenues is that how we should model corporate expense going forward over the balance of the year or any additional color box there.

So first of all as I would say it's been a while since I think we've had a quarter, where we could talk about corporate improving year over year, so fantastic to be in that place. The journey we've been on.

Restructure upgrades and modernization having to deal with various headwinds reinstating benefits from Covid. So it's nice to be where we are here now to start to kind of eat into it. The one the one comment I made on the call. It is important to understand we made a minor change in part of our benefits plan that will help smooth out some of the timing of corporate as you know we've been a little front end loaded in.

I figured it was down about 13% year on year and was about 8.5% of revenues I guess that ladder stat that 8.5% of revenues is that how we should model corporate expense going forward over the balance of the year or any additional color thoughts there.

So first of all as I would say, it's it's been awhile since I think we've had a quarter, where we could talk about corporate improving year over year, so fantastic to be in that place.

Q1, and lower in Q4 over the past history of our business and that had to do a certain benefits timing. So there was about $3 million that we have now shifted kind of from Q4 into Q1 that will help smooth things out still despite that though we were overall down $7 million. So there's $4 million worth of cost improvements that we were able to manage that.

Any we've been on.

Restructure upgrades of modernization, having to deal with various headwinds reinstating benefits from Covid. So it's nice to be where we are here now to start to kind of eat into it. The one the one comment I made on the call. It is important understand we made a minor change in part of our benefits plan that will help smooth out some of the timing of corporate as you know we've been a little front end loaded in queue.

We feel good about I would continue to assume somewhere around roughly 9% now percentage of revenue for now as we continue to get into the year continue to execute on our plans to take cost out there and get more efficient.

One in lower in queue for over the past history of our business and I had to do a certain benefits timing. So there was about $3 million that we've now shifted kind of from two four and a Q1 that'll help smooth things out still despite that though we were overall down $7 million. So there's $4 million worth of <unk>.

But roughly 9% eight 5% to 9% is a good spot to be from your modeling.

Okay, and then last one for me just on the free cash flow that came in a bit.

Akshay well below our expectation and unfortunately, I can't really see where we were off because the delta seems to be all lumped into the other line and your cash flow statement at least in the short.

Cos improvements that we were able to manage that we that we feel good about I would continue to assume somewhere around roughly 9% now percentage of revenue for now as we continue to get the year continue to execute on our plans to take cost out there and get more efficient, but you know roughly 9% eight and after nine per cent is a good spot to be from your modeling.

Please.

A year ago other cash outflows were $9 million. This year other cash outflows were $46 million could you unpack that for US and then just for the full year should we be think I know you reiterated the guide, but should we be thinking more about the low end given the slow start to the year or were there some timing items there.

Okay and then the last one for me just on the free cash flow that that came in a bit well actually well below our expectation and unfortunately, I I can't really see where we were off because the delta seems to be all lumped into the other line in your cash flow statement at least in the release, so a year ago other <unk>.

That you think could reverse in subsequent quarters.

Yeah. So we continue to maintain our guide we mentioned on the last call. We expect to be negative. We of course didn't go as far to exactly tell you the number but I can tell you now our internal plan was negative 25% in the first quarter. So the negative 32 as I said was slightly worse than we thought and it really was tied up in working capital. So we mentioned the ERP.

Cash outflows were $9 million. This year other cash outflows were $46 million could you unpack that forest and then just for the full year should we be thinking I know you reiterated the guide, but should we be thinking more about the low and given the slow start to the year or there's some timing items. There that you think could reverse in such school.

Once again, we're just we're so glad we've gotten through that the team did a fantastic job. It was a difficult project, but like any of those things that have its bumps. It has its delays and so working capital was not immune from that specifically, some AR collections and a little bit of inventory, so really that $7 million difference in working capital bridges may from the 32, we delivered to the 25, we had in our plan.

<unk> thanks, Yeah.

Yeah. So we continue to maintain our guide we mentioned on the last call. We expect to be negative. We of course didn't go as far to exactly tell you the number but I can tell you know our internal plan was negative 25 in the first quarter. So the negative 32 as I said was slightly worse than we thought and it really was tied up and working capital. So we mentioned the E. R. P.

Now the good news is we've already had significant customer collection activity here in April that's even higher than that $7 million Miss so as I sit here today without perfect visibility I actually think gotten ahead of plan on a year to date basis, which continues to give me confidence that Q2 can be a good quarter solid rebound in and Theres nothing to worry about in terms of moving.

<unk> once again, we're just we're so glad we've gotten through that the team did a fantastic job it was a difficult project, but.

Like any of those things that has its bumps. It has its delays and start working capital was not immune from that specifically some a R collections and a little bit of inventory. So really that's 7 million dollar difference in working capital bridges may from the 32, we deliver it to the 25, we had in our plan now the good news is we've already had significant customer collection activity here in April .

Up or down in the range that I remain a range remains solid and we feel confident with the year to perfectly be able to give you a reconciliation of others I don't think I can do real time here on the call. So let us follow back up with you offline and we'll see we can do but we know the big drivers year over year, where we called out on the last call that we expected higher interest costs.

That's even higher than that 7 million dollar mess, so as I sit here today without perfect visibility I actually think I'm ahead of plan on here today basis, which continues to give me confidence that you too can be a good quarter solid rebounded and there's nothing to worry about in terms of moving up or down in the range that remain arrange remained solid.

Many many rate hikes as we've all seen since a year ago. So we knew interest would be higher when your taxes would be higher we knew capex would be a bit higher as we continue to reinvest in the growth products and so those things all played out the way we knew they would and for me, it's all about working capital and getting more efficient and improving our execution there.

Feel confident with the ear.

Perfect, we'd be able to give you a reconciliation of others I I don't think I can do real time here on the call. So let us follow back up with you offline and we'll see what we can do but we know the big drivers year over year were called out on the last call and will be expected higher interest costs. Many many rate hikes as we've all seen since a year ago. So we knew interests would be higher we knew taxes would be higher.

Great. That's very helpful. Thanks, guys I appreciate it I'll get back in queue.

Our plants.

Yeah.

And we will take our next question from Charles Strausser with C. J F. Your line is open.

Hi, good morning.

Yeah.

Both of you.

We knew capex would be a bit higher as we continue to reinvest in the growth products and so those things all played out the way we knew they would and for me, it's all about working capital and getting more efficient and improving our execution there.

Various thoughts if you could.

Thinking turmoil.

Possibly you could turn this into.

Positive potential share gains there as customers are shifting banks chase buying first Republic things like that.

Great. That's very helpful. Thanks, guys I appreciate it I'll get back into your.

Are there potential for positive there too.

Phone plans.

Yes.

Bill customers and take share there.

And we will take our next question from Charles Strawser with C. J S. Your line is open.

So Charlie I mean at the highest level.

Hi, good morning.

Of course, we serve the banking sector as one of our distribution channels.

Now are you driving.

Good luck with your various thoughts if it could the banking turmoil and.

But so far we have not seen any impact from the banking challenges are very specifically want to reiterate we said in the opening comments we do.

Possibly you could turn this into [noise].

Positive potential showed gains there was his customers are shifting banks you know chased by first Republic things like that you know if other potentials for positive there too I like I said.

Don't have any significant banking relationships with any of the institutions. Even those that you see in headlines. This morning that our banking us or where we have any if any.

The bill the customers and fix it over there.

So Charlie I've been at the highest level Uhm. We are of course, we serve the banking sector as one of our distribution of channels.

Material revenue exposure.

But as far as opportunity every time there are banking consolidations.

So far we have not seen any impact from the banking challenges.

It turns into an average a net positive for US we are a net winner when there are bank consolidations and whether thats in and whether thats in our trucking business and our data businesses or otherwise we tend to be a net winner when there is consolidation.

Very specifically want to reiterate we said in the opening comments, we don't have any significant banking relationships with any of the institutions. Even those that you see in the headlines. This morning that our banking us or where we have any any material revenue exposure.

This is something that we thought was very encouraging Ashley on the first quarter and our data business.

Some of our customers were looking to accelerate their ability to go.

But as far as an opportunity every time there are banking consolidations uhm it turns into an average a net positive for us.

Attract deposits from affected institutions it turned into additional revenue for us in helping those institutions quickly go to market with short term campaigns to draw deposits.

That winter weather, our bank consolidations, and whether that and whether that's in our checking business in our data businesses or otherwise we tend to be in that winter when there's consolidation.

So while there is definitely a concern at some change happening in the sector. We think in the at the end analysis as a net positive for us and we have not seen any impact to our volumes or what we see on the horizon.

Did say something that we thought was very encouraging Ashley in the first quarter and her date of business and some of our customers were looking to accelerate their ability to go.

That's helpful. Thank you for that.

Track deposits from affected institutions, it's hurdle two additional revenue for us in helping those institutions quickly go to market with you know short term campaigns to draw deposits and so.

Just shifting gears, a little bit to the balance sheet.

Right.

The board is.

Discussions about.

Our capital allocation and things like that.

There have been more discussions at the board level to maybe more do some more things more aggressively to help pay down that debt.

While there is definitely you know concern and some change happening in the sector. We think in the in the end analysis.

Positive for us and we have not seen any impact to our volumes uhm or what we see on the horizon.

Down a little bit more quickly.

First of all we are very focused on that.

Improving the balance sheet overall.

That's helpful. Thank you for that and you just need to use a little bit to the balance sheet <unk>.

And that one of the biggest things we knew we needed to do is get this ERP implementation complete which we've done because it gives us opportunities now that we did not have before to streamline the operation of the company and I think over coming quarters, you will see us focused there and talk about things that we're trying to do to make improvements.

<unk> and his discussions about you know.

Capital allocation and things like that you know.

And you know more discussions at the board level too you know maybe more do some more things more aggressively to help pay down.

And of course, the board is very engaged with us on capital allocation decisions to make sure that we are getting great shareholder returns for what we do completely understand is very precious shareholder capital and we feel like we have been good stewards of that and I think that especially that <unk> got some of these.

A little bit more quickly.

You know first of all we are very focused on improving the balance sheet overall at the one of the biggest things. We do we needed to do is get this E. R. P. Upon mentation complete which we've done because it gives us opportunities now that we did not have before to streamline the operation of.

Infrastructure and things behind Us we have opportunity for some additional improvement.

The company and I think overcoming quarters, you will see his focus there and talk about things that we're trying to do to make improvements and of course. The board is very engaged with us at capital allocation decisions to make sure that we are getting great shareholder returns for what we we do completely understand it's very precious.

Excellent. Thank you very much.

Yeah.

And we'll take our final question from Marc Riddick with Sidoti Your line is open.

Hey, good morning.

So I was wondering if we could start in the prepared remarks, there was commentary around the pricing environment and the retention rate I was wondering if you talk a little bit more about that and maybe some of those controls and then we can shift over to a few year over your questions.

Shareholder capital and we feel like we have been good stewards of that and I think that especially now that we've got some of these infrastructure things behind us we have opportunity for some <unk> some additional perfect.

So I decided to Backrow and then it should come in and give you a little more specificity.

Excellent. Thank you very much.

And we will take our final question from Margaret.

But at the macro level, we've been very pleased by our ability to take price increases at a hold volume.

You remind me of <unk>.

Good morning.

We think that is really important.

So I was wondering if we could start in the prepared remarks, there was commentary around the pricing environment and retention rates I was wanting to talk a little bit more about that and maybe some of those controls and then we can shift over to review your IP questions.

Message about the durability of demand for our solutions I think this is very important to note that the durability of demand for our solutions continues so all across our entire portfolio, we're seeing solid and sustainable demand.

So I'd like to start with the macro and then you know <unk> how they are they give me a little more specificity.

For the solutions, even as we take price.

But at the macro level, we've been very pleased by our ability to take price increases at a hold volume.

So we sit to be room for us to continue on the price journey inflation is not over our customers understand that and while they may not like the fact that we're going to talk to them with a much greater frequency now on pricing actions that we have in anyone's memory I think they understand and have accepted that reality.

That is really important.

Message about the durability of demand for solutions I think this is very important to note that the durability of demand for our solutions continues.

So I'll I'll cross our entire portfolio are saying you know <unk>.

That is going to help us going forward. If you want to talk any more about specific mark in the prepared remarks, I think you used the term responsibly, taking price and I think that's the way we've gone about it or.

Sustainable demand for the solutions, even as we take price so uhm, we say.

Orders.

Just to be room for us to continue on the price journey inflation is not over our customers understand that and while they may not like the fact that we're going to talk to them with a much greater frequency now on pricing actions that we have in anyone's memory I think they understand and have accepted that reality uhm and that is gonna help us.

We aren't simply using this as an opportunity to just doubt prices and make profits were really looking at our input costs.

Our contractual.

Requirements for our customers and doing it in partnership and being very responsible that we built up new muscle over the last year I think we're very thoughtful about how we go about it the rhythm we take price inputs were using to do the analysis on what that price should be and we just continue to keep it front and center and look at inflation, obviously inflation is slowing down a bit.

Going forward you Wanna talk any more about specifics down dark I mean, I and the prepared remarks I use the term responsibly, taking price and I think that's the way we've gone about it or.

Where we want it yet, but it is coming down so the degree to which we're having to have this conversation internally continue to rethink about pricing, it's getting slower, but we continue to be responsible about it and use it as an opportunity to make sure.

<unk>.

You know we aren't simply using this as an opportunity to just doubt prices and make profits were really looking at our input costs.

Sure a contractual.

Requirements for our customers and doing it in partnership and being very responsible that we built up new muscle or last year I think we're very thoughtful about how we go about it the rhythm we take prize the inputs were using the data the analysis on what that price should be and we just continue to keep it front and center in and look at inflation, obviously inflation is slowing down a bit not not where we want it.

We stay whole on the bottom line and continue to do what's right by by our customers.

Well I also wanted to sort of highlight the three year journey in the being on the other side of the ERP.

As always it's always good to get to the other side of that journey. So congratulations.

Why don't you talk a little bit about sort of.

You kind of touched on this a little bit but.

I would imagine there are some things that you.

Maybe held off on doing.

Until you got to the other side of that and so sort of wondering.

To what degree you can sort of share a little bit about some of maybe the initial.

Efforts or targets that you might have.

Post ERP and then maybe some of the longer term benefits that we can look forward to.

Sure. Thank you for acknowledging that journey. The team worked very hard and we're very pleased to be here.

You could imagine one through it for a long period of time.

Now near term, we're focused on stabilizing the operations fixing the bugs are the issues that we know we come out about and that has kind of manual processes around them and getting them re automated so near term, it's going to be very low cost we call. It kind of hyper care Hyperfocus just get get what we have going working perfectly and get it smoothly, we will start to transit.

<unk> to more of a traditional regular cadence that you would see anyone do will always be slowly investing in the platform, we're not going to underinvest in it or leave it on the shelves. So we will continue to improve the functionality I think near term. We will look to do is improve our consolidation process, which will give us faster visibility and our close faster analytics and really think.

How we drive business performance, but really to me, it's a little bit off start to use what we put in place.

Went through the quarter and we dealt with the bumps that everyone deals with the.

The amazing opportunity, we got was to leverage the new system right away standup a daily a daily cadence to really manage the output of the plant the fulfillment process look at things like <unk>.

Our billing inventory get very insightful on what the business going on and it was a big part of how we improve the operations from February end of March we had to get stable, we had to get right for our customers. That's now an area of opportunity for us to keep doing daily going forward and help improve working capital get very efficient up how we run the business. So to me I think it's just business as usual continue to expect.

For us to do right by the system and make it more feature.

Full feature and better for our needs, but we are going to really just run the business now and get the benefits and efficiencies out of it now the only thing I would add on that is it does allow us to further streamline the actual operating infrastructure of the company so that over time.

We'll be able to put.

More reliance on the new ERP and step away from other systems.

Do that in one quarter, but it does give us the opportunity.

That absolute spend overtime as well.

Okay excellent and then I know you had mentioned that.

And then I appreciate the commentary around the <unk>.

The banking challenges that we see in the headlines every day and sort of.

And your exposure or lack thereof exposure there so wanted to talk a little bit about maybe from a longer term perspective, you've talked about maybe some some opportunities.

I was wondering if you if you're getting a sense of the types of opportunities are those do those tend to be sort of cost savings generating in nature from from those clients.

Clients.

Or are you getting the sense of this is sort of just sort of a little bit of an emergency kind of bridging type of moves that they are going through that youre able to benefit from.

As a trusted provider.

Yeah.

Yeah in aggregate.

Lynn.

There is industry consolidation, we're not winners on multiple levels.

And that's from revenue.

Which of course has a profit dollars associated with it.

And we think that.

And in the past, we expect that to continue going forward.

I think mark I think the important thing.

And its a bit overblown.

Our attachment to what's going on because what we have to always remind ourselves.

<unk> the financial institution their partner their vehicle to get to the customer the end user but that end user is still banned right. So we kind of look at it is where the customer banks multiple around it in order to move into a portfolio of ours, where we have a relationship that may move out of it we get the opportunity to leverage our data analytics side to go help target marketing.

Help kind of move the customer to the journey, but for us it's a little bit of.

We just keep operating business as usual and it's not really a material impact at all but we were but as Barry said, we know on average it's going to play out in our favor and we just continue to be ready to serve the customers.

Okay, great. Thank you.

Yeah.

And there are no further questions at this time I will now turn the call back to Tamara <unk> for closing remark.

Yeah.

Thanks, Debbie before we conclude I'd like to mention that management will be participating in the 18th annual Needham Technology and media conference on May 18 Cowen.

<unk> 51st annual TMT conference on May 31, and the Sidoti virtual small cap conference on June 15th.

Thank you again for joining us today, and we look forward to speaking with you in August as we share our second quarter 2023 results.

And ladies and gentlemen, this concludes today's conference call and we thank you for your participation you may now disconnect.

Deluxe Corporation Q1 2023 Earnings Call

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