“Deluxe reported the first full year of sales-driven growth in nearly a decade,” said Barry McCarthy, President and CEO of Deluxe.
“In the fourth quarter, all four segments grew, driving transformation just as we promised in 2020. The First American acquisition accelerated this transformation and continues to exceed expectations, delivering 13% top line growth over the prior year quarter, benefiting from our One Deluxe sales model. These results demonstrate our strategy is working and we remain confident in our ability to execute, across all our segments, as we enter 2022."
“Our fourth quarter results demonstrated strong execution of our strategy, as our revenue growth exceeded expectations, and we effectively managed COVID-related and inflationary impacts,” said Scott Bomar, Senior Vice President and Chief Financial Officer of Deluxe. “Looking ahead, we expect to continue our revenue momentum into 2022 and will continue to drive the One Deluxe approach across the business."
Full Year 2021 Financial and Segment Highlights
(in millions, except per share amounts)
Full Year 2021 Full Year 2020 % Change
Revenue $2,022.2 $1,790.8 12.9%
Net Income Attributable to $62.6 $5.2 n/m
Deluxe
Adjusted EBITDA $407.8 $364.5 11.9%
Diluted EPS $1.45 $0.11 n/m
Adjusted Diluted EPS $4.88 $5.08 (3.9%)
Fourth Quarter 2021 Financial and Segment Highlights
(in millions, except per share amounts)
4th Quarter 2021 4th Quarter 2020 % Change
Revenue $570.6 $454.5 25.5 %
Net Income Attributable $13.8 $24.7 (44.1 %)
to Deluxe
Adjusted EBITDA $117.1 $94.9 23.4 %
Diluted EPS $0.32 $0.58 (44.8 %)
Adjusted Diluted EPS $1.26 $1.38 (8.7 %)
The Payments segment delivered revenue growth of 114.5% over the previous year to $167.3 million. Excluding First American, Payments grew 5.4%.
Net income of $13.8 million includes $13.7 million of acquisition amortization from the First American acquisition, as well as increased interest expense associated with the transaction.
Net income also includes tax expense of $4.6 million, or $0.11 per diluted share, resulting from the repatriation of $85.3 million of cash from our Canadian subsidiaries.
Adjusted EBITDA margin was 20.5%, down 40 basis points from the prior year.
Cash flow from operations for the fourth quarter was $61.6 million and capital expenditures were $28.1 million. Free cash flow was $33.5 million, a sequential increase of $2.6 million from the third quarter of 2021, and an increase of $2.7 million compared to the fourth quarter of 2020, despite an $8.2 million increase in capital investments.
2022 Outlook
The company expects the following for full year 2022:
The guidance outlined above is subject to, among other things, the macroeconomic unknowns associated with the COVID-19 pandemic, including the Omicron variant, as well as anticipated continued supply chain constraints, labor supply issues and inflation.
Capital Allocation and Dividend
The Board of Directors recently approved a regular quarterly dividend of $0.30 per share. The dividend will be payable on March 7, 2022 to shareholders of record as of market closing on February 22, 2022.
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