DLX 10-K & 10-Q changes, risk factors and insider trading

If our long-term growth strategy does not succeed, our businessbusiness, financial condition, and financialresults resultsof operations would be adversely impacted.

Our strategy involvesis leveragingto leverage the cash flows, customer relationships, and brand equity from our Print segment to drive profitable organic growth in our other businesses. More detailsDetails about our strategy can be found under the caption "Our Strategy," located in Part I, Item 1 of this report. WeThere mayis notno assurance that we will achieve our goals,strategic andobjectives or that our investments in our business may notwill yield the expectedanticipated financial results.returns.

SeveralA number of factors could cause our strategic planstrategy to fall short of our expectations, includingincluding, but not limited to:

•Inability to acquire new customers, retain existing ones,customers, andor sellexpand more products and servicessales to both current and newour customers;

•Challenges in implementing further improvements toenhancing our technology infrastructure, digital servicesservices, offerings, andor other key assets to boostimprove efficiency, enhancestrengthen our competitive advantage, and scale our operations;

•Failure to develop and successfully launch new products and services;

•InabilityDifficulties toin effectively managemanaging the growth, increasing complexity, and rapid changes in our business and operations;

•DifficultiesInability into operating,effectively integrating,operate, integrate, or leveragingrealize the expected benefits from acquired businesses;

•InabilityFailure to promote,maintain, strengthen, and protect our brand;

•FailureInability to attract and retain skilledthe talent necessary to execute our strategy and sustain growth;

•GeneralAdverse general economic conditions.

We cannot guarantee that our strategy will be successful in the short term or long term, that it will generate a positive returnreturns on our investment,investments or that it will not materially reducemaintain our adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA)current margins. If our strategy fails, or if there is a perception in the market thatperceives our strategy isas failing,unsuccessful, our reputation and brand could be damaged,harmed, and our stock price maycould decline.

If we are unable to attract and retain customers in a cost-effective manner or effectively managedeliver a seamless multichannel customer experience, our business and results of operations could be negatively impacted.

We continuouslyregularly assessreview and adjust our marketing and sales strategiesapproach to findoptimize the most effective mix ofour promotional methods.mix. CompetitiveHowever, competitive pressures may limitprevent ourus abilityfrom to passpassing increased costs on to our customers through higher prices,customers, and new marketing strategiesinitiatives may not succeed.deliver Eitherthe scenarioexpected results, which could impairweaken our competitive position and adverselynegatively affectimpact our resultsfinancial ofperformance. operations.In Furthermore,addition, whenas our check supply contracts expire, customers have the option tomay renegotiate their contracts with usterms or considerchoose switchingalternative suppliers. FailureIf we are unable to secure favorable contract renewals or to attract new check supply customerscustomers, wouldour leadrevenue tocould reduced revenue.decline.

Moreover, we believe it is crucial to maintainMaintaining a relevant,relevant and flexible multichannel experience tois attractessential for customer acquisition and retain customers.retention. Customers expect to haveinteract thewith flexibilityus to choosethrough their preferred ordering method,channels, whether by mail, computer,online, phone, or mobile device. AlthoughWhile we continually invest in enhancingimproving our user experience, thethere successis ofno guarantee these investments iswill uncertain.be Multichannelsuccessful. The landscape of multichannel marketing is rapidly evolving, and we must keep pace with changingshifting customer expectationspreferences and newcompetitive developments by our competitors.innovations. If we fail to implement improvements toupdate our customer-facing technology in a timely manner,promptly or if our technology does not performfunction as intended, we couldmay strugglelose the ability to attract new and returningretain customers, resultingwhich could result in decreasedlower revenue.

We faceoperate intensein competition,highly competitive markets, and we anticipateexpect thatcompetitive this competitionpressures will continue to escalate.intensify.

In theThe payments industry, competitionindustry is intense.characterized Weby significant competition. In our Merchant Services and B2B Payments segments, we compete against numerousa wide range of financial technology companies, including independent payment processors, credit card processing firms,processors, and treasury management service providers,providers. asIn welladdition, aswe face competition from the in-houseinternal payment processing and treasury management capabilities of financial institutions. RemainingTo cost-competitiveremain requirescompetitive and cost effective, we must maintain high transaction volumes,volumes and offeringcontinuously aenhance broadour rangeservice of services is essentialofferings to remainingmeet relevantevolving tocustomers customers.needs. Although we are a leading check printer in the U.S., we face significant competition inWithin the check printing portion of the payments industryindustry, we are recognized as a leading check printer in the U.S. Nevertheless, we face substantial competition from another largemajor check printer in our traditionalserving financial institutioninstitutions, salesas channel,well as from direct mail and internet-basedonline sellers of personal and business checks, check printing software vendors,providers, and certain major retailers. PricingIn remainsaddition, competitivethe ongoing shift toward digital payment solutions continues to exert downward pressure on the demand for traditional check products, resulting in persistent pricing challenges within our financial institution sales channel, as these institutions strive to maintain profitability levels despite the decline in check usage.channel.

InWithin our Data Solutions segment, our data-driven marketing services compete with a widediverse arraygroup of companies in the data solutions space,companies, including advertising agencies, marketing technology firms, marketing fulfillment providers, data aggregators and brokers, and source data providers. AdaptingKeeping topace newwith technologytechnological isadvancements aand significantattracting challengeand retaining skilled personnel are ongoing challenges in this business, along with hiring and retaining the right talent.segment.

The markets for business forms and promotional products markets are also highly competitive and fragmented. Our current and potential competitors include traditional storefrontprint printing companies,shops, office supply superstores, wholesale printers, online printing companies,platforms, small business product resellers, and providerssuppliers of custom apparel and gifts. The competitive landscape for online suppliersmarketplace, in particular, remains challengingdynamic, aswith new businessesentrants continuecontinually to enter the market.emerging.

WeThere cannotis guaranteeno assurance that we will be able to compete effectivelysuccessfully against current andor future competitors. Our competitors may developintroduce superior products or technologies and may be ablemore agile in responding to adapttechnological more quickly to new or emerging technologieschanges and changesevolving customer needs. Sustained competitive pressures could result in customerlower requirements. Ongoing competition could lead to price reductions,prices, reduced profit margins, and/or loss of customers, allany of which wouldcould adverselynegatively affectimpact our operating results of operations and cash flows.

If we do not adapt to technological changes in technology in a timely and cost-effective manner, we could lose clients or face difficultieschallenges in attracting new ones, therebywhich limitingcould limit our growth potential.and negatively impact our business and results of operations.

The markets for many of our products and services are subjectcharacterized toby rapid, significant,rapid and disruptive technological changes.change, These includeincluding advancements in payment andtechnologies, internet browserand technologies,mobile theplatforms, use of artificial intelligence andAI, machine learning, and developments in technologies supporting our regulatory and compliance obligations, as well as in-store, digital, mobile, and socialdigital commerce. The introduction of competingnew or improved products and services usingby newcompetitors, technologies,changes the evolution ofin industry standards, or the emergence of morealternative attractivetechnologies, productssuch or services, includingas the continued digitization of payments, cryptocurrency, and blockchain, could render some ofmake our products and servicesofferings less desirablecompetitive or even obsolete. Our future success depends on our ability to enhance our current products and services and to develop and introduce innovative offerings.

Checks remain a significant portion of our business, accounting for 33.1%32.4% of our consolidated revenue in 2024,2025 and they provide a significant amount of thegenerating cash flows wethat investsupport investments in our growth businesses. We sellcontinue to supply checks for both personal and business use and believe that there will continue to be demand for these checks for the foreseeable future. However, the totaloverall numbervolume of checks written in the U.S. has been declining since the 1990s, anda trend we expect this trend to continue dueas topayment themethods increasingbecome digitizationincreasingly digital. The widespread adoption of payments. This includes debit cards,and credit cards, direct deposits, wire transfers, and otherdigital payment methodsplatforms, utilized by brands such asincluding PayPal®, Apple Pay®, Square®, Zelle®, and Venmo®, asand wellcryptocurrencies, ashas cryptocurrencies. Further contributing toaccelerated this shiftshift. isThe expansion of real-time payment networks, such as the RTP® network run by The Clearing House Payments Company, LLC and the U.S. Federal Reserve's real-time payments system,Reserve’s FedNow®. service, is also contributing to the move away from traditional checks.

ReportsAdditionally, increased reports of rising check fraud and the associatedrelated publicity may alsofurther contributediscourage tothe a decline in check usage. As awarenessuse of thesechecks, fraudulent activities grows, bothas consumers and businesses may become more cautious and opt forseek alternative payment methods.methods perceived as more secure. This shift could further acceleratehasten the movetransition away from traditional checks towardto digital and electronic payment solutions, which some may perceive as a safer alternative.solutions.

Similarly, thedemand use offor business forms has been declining.declining Continuousdue to ongoing technological improvements,advancements. includingThe theincreasing lower priceaffordability and higher performance capabilitiescapability of personal computers, printers, and mobile devices,devices havehas providedenabled small business customers with alternative meansbusinesses to executemanage transactions and recordrecordkeeping businesswithout transactions.relying Additionally,on preprinted forms. The proliferation of electronic transaction systems, off-the-shelf business software applications,software, web-based solutions, mobile applications, and mobilethe applications have been designed to replace preprinted business forms. Greatergrowing acceptance of electronic signatures hashave alsoall contributed to the overall secular decline in printed products.business Itforms. The rate at which these alternatives will replace traditional forms is difficult to predict the pace at which these alternative products and services will replace standardized business forms.predict. If small business preferences changeshift more rapidly than anticipated, and we are unable to develop new products and services with comparable operating margins,profitability, our operating results of operations wouldmay be adversely affected.

Our business relies on our strong and trusted brand, and any failure to maintain, protect, and enhancepromote our brand would negatively impact our business.

A keycentral componentelement of our brand promotion strategy is building on our relationship offostering trust with our customers, which we believe can be achievedcustomers by providing a high-qualitysuperior customer experience. We have invested,made, and willexpect to continue tomaking, invest,significant investments in websiteour development,digital designplatforms, technology infrastructure, customer service, and technology,operational andcapabilities customerto servicesupport andthis productionobjective. operations.However, Ourour ability to providedeliver a high-qualitypositive customer experience also depends on external factors, including the reliabilityperformance and performancereliability of our third-party suppliers, telecommunications providers, and third-partylogistics carriers.partners. OurFurthermore, our brand value alsois hingesclosely onlinked to our ability to protectsafeguard customer data and usemeet ourevolving customers' data in a manner that meets theirprivacy 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 reductionmanagement initiatives may not beachieve successful.their intended results and could adversely affect our business.

GivenIn theresponse intenseto competitionsignificant facedcompetitive by all our businessespressures and the ongoing secular decline in thedemand use offor checks and business forms, we arehave compelledimplemented, and expect to continuallycontinue implementing, various cost management actions to improve our operating efficiency toand maintain and improve our profitability. OurThese costactions reductionoften initiativesrequire haveupfront required,investments, andsuch will continue to require, up-front expenditures related to various actions, includingas redesigning and streamlining business processes, standardizing technology applications,platforms, further enhancing our strategicoptimizing supplier sourcing arrangements,relationships, improving real estate utilization, and funding employeeproviding severance benefits.benefits However,to weaffected cannotemployees. guaranteeDespite these efforts, there is no assurance that we will achieverealize futurethe anticipated cost reductionssavings or that wesuch savings will dobe soachieved without incurring unexpectedunforeseen or greater-than-anticipatedhigher-than-expected expenditures.costs.

Moreover,Additionally, wethe maypursuit findof thatcost achievingreductions and business simplification and/or cost reduction goals couldmay disrupt our business,operations, negatively impacthinder our effortsgrowth to grow,strategies, or reduceimpact the effectiveness of our sustainability practices.initiatives. AsFor aexample, result,process we may choose to delaychanges or forgo certain cost reductions as business conditions require. For instance, streamlining processes or standardizing technology applicationsstandardization mightcould leadresult toin temporary inefficiencies or disruptions that could affect our service deliverydisruptions, orpotentially affecting customer satisfaction. Similarly,Changes enhancing strategicto supplier sourcing arrangements mightmay involvealso renegotiatingintroduce contractstransitional risks or changing suppliers, which could lead to transitionaloperational challenges.

We may be unable tonot successfully identifyidentify, futurecomplete, acquisitions,or integrate past and future acquisitions, or realize thetheir anticipated benefits of the transactions.benefits.

This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") includesprovides thea comprehensive overview of our financial condition, results of operations, and key factors affecting our performance. The following sections are included:

•Critical Accounting Estimates that discusses the accounting policies and estimates that involverequire amanagement significantto levelmake ofcomplex judgmentjudgments and uncertaintyassumptions and havetheir hadapplication or are reasonably likely tocan have a material impact on our financial condition orand results of operations.

Please be aware that thisThis MD&A discussion contains forward-looking statements that involve risks and uncertainties. Please refer to Part I, Item 1A1A, Risk Factors, for a detailed discussion of this report details known material risks and important information to consider when evaluating our forward-looking statements. The Private Securities Litigation Reform Act of 1995 (the "Reform Act") provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information. WhenStatements we useusing terms such as “should result,” “believe,” “intend,” “plan,” “are expected to,expect,” “targeted,” “will continue,” “will approximate,” “is anticipated,anticipate,” “estimate,” “project,” “outlook,” "forecast," orand similar expressions inare thisintended Annual Report on Form 10-K, in future filings with the Securities and Exchange Commission (SEC), in our press releases, investor presentations, and in oral statements made by our representatives, theseto indicate forward-looking statements within the meaning ofunder the Reform Act.

This MD&A includes financial information prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"). Additionally,We wealso discusspresent certain non-GAAP financial measuresmeasures, such asincluding free cash flow, net debt, adjusted diluted earnings per share (EPS), consolidated adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), and consolidated adjusted EBITDA margin. We believe that these non-GAAP financial measures, when reviewed alongside GAAP financial measures, can provide valuableadditional insightsinsight for investors analyzinginto our current period operating performance and assessing our future operating performance. Consequently, ourthese internalmeasures are also used internally for management reportingreporting. alsoNon-GAAP includes these financial measures, whichmeasures should be considered inalongside, addition to, andbut not as superior to or as a substitutesubstitutes for, GAAP financial measures. We strongly encourage investors and shareholders to review our financial statements and publicly filedpublicly-filed reports in their entirety and not to rely solely on any single financial measure. Our non-GAAP financial measures may not be comparable to similarly titled measures used by other companies and therefore, may not facilitate useful comparisons. The reconciliationReconciliations of our non-GAAP financial measures to the most directly comparable GAAP financial measures canare be foundincluded in the Consolidated Results of Operations section.

We helpempower businesses strengthento theirbuild stronger customer relationships through a broad range of trusted, technology-enabled solutions thatdesigned to facilitate payments, drive growth, and enhanceimprove operational efficiency. Our comprehensive suite of solutionsportfolio includes merchant services,services solutions, marketing and data analytics, treasury management solutions, and promotional products, alongas withwell as customized checks and business forms.forms We support small and medium-sized businesses, financial institutions, and some of the world’s largest consumer brands. We also provide checks and accessories directlytailored to consumers. Our reach, scale, and distribution channels position us to be a trusted business partner, providing the tools and support our customersclients’ need to succeed.needs.

HighlightsBelow are highlights of our 2024 financial resultsperformance for 2025, compared to 2023the include:prior year.

•Adjusted EBITDA – DecreasedIncreased by $5$19.4 million to $412$431.5 million, including the impact of business exits, which drove a $20$5.6 million decrease.decrease Excludingyear-over-year. theThe impactincrease of business exits,in adjusted EBITDA wouldwas haveprimarily increaseddriven due toby the benefits of our pricing strategies and cost reductionmanagement actionsinitiatives, and growth in data-driven marketing and merchant services.marketing. These positive impacts were partially offset by the weaker demand for certain promotional products, ongoing secular declines in the Print segment, and inflationary pressures on our cost structure, and a $6 million increase in bad debt expense, primarily in the Print segment.pressures.

Adjusted EBITDA margin of 19.4% for 2024 increased asto 20.2% in 2025, compared to 19.0%19.4% forin 2023.2024. OurThe margin improvement was primarily driven by our pricing strategies and cost optimizationmanagement actionsinitiatives, more thanpartially offset the impact of the Print secular declines, theby inflationary pressures, and the higher bad debt expense.pressures. A reconciliation of net income to adjusted EBITDA can be found in the Consolidated Results of Operations section.

•Free cash flow – Increased by $2$75.3 million to $100$175.3 million, definedreflecting asthe same factors that drove the increase in net cash flowsprovided fromby operating activities less purchases of capital assets.activities. We continue to reinvest the free cash flow generated by our Print business into our growthother businesses. Free cash flow is defined as net cash provided by operating activities less purchases of capital assets. A reconciliation of free cash flow to its comparable GAAP financial measure can be found in the Consolidated Results of Operations section.

We continuallycontinuously monitor themacroeconomic factors that may affect our business, including interest raterates, environmentinflation, and itsglobal impacteconomic on our outstanding debt.trends. As of December 31, 2024,2025, 61%64% of our debt had a weighted-average fixed interest rate of 8.1%, which partiallyprovides insulatespartial usinsulation fromagainst future interest rate increases.volatility. This approach helps us manage exposure to rising borrowing costs and supports our long-term financial stability.

As of December 31, 2024,2025, we held cash and cash equivalents of $34$36.9 million, along with an additional $374$379.6 million available for borrowing under our revolving credit facility. We anticipate that capital expenditures will be between $90$90.0 and $100$100.0 million in 2026, compared to $95.3 million in 2025, compared to $94 million in 2024, as we continue to buildinvest in innovation and scale across our product categories and invest in innovation.offerings. Our capital allocation priorities remain focused on responsible growth investments, debt reduction, and returning capital to shareholders through dividends.dividends, We expect to maintain our regular quarterly dividend payments. However, dividendswhich are subject to quarterly approval by our board of directors each quarter and, therefore, may change.directors.

Cost of revenue primarily consists ofincludes raw materials usedfor toproduct manufacture our products,manufacturing, shipping and handling costs,handling, third-party costs for outsourced products and services, payroll and related expenses, information technology costs, depreciation and amortization of assets used in the production process and in support of digital serviceassets, offerings,residuals paid to independent sales organization (ISOs), and related overhead.

Consolidated Selling, General & Administrative (SG&A) Expense

Total SG&A expense asAs a percentage of total revenuerevenue, forSG&A 2024expense decreased in 2025 compared to 2023,2024, asreflecting the combined effectsimpact of price increases and our cost management actions moreand thanlower amortization and bad debt expense, partially offset by the increase in badmedical debt expense.costs.

We are actively pursuing several initiatives aimed at aligning our business with our growth strategy and enhancing operational efficiency. As we implement these initiatives, the amount of restructuring and integration expense is expected to fluctuate from period to period. Further information regarding these costs can be found in the Restructuring and Integration Expense section.

DuringIn 2024, wethe recordedincome goodwillrecognized impairmentwas chargesprimarily associated with our exit from the U.S. and Canadian payroll and human resources services business.business, Additionala process that was substantially completed during 2024. Further information can be found under the caption "Note 6: Acquisition and Divestitures" in the Notes to Consolidated Financial Statements located in Part II, Item 8 of this report.

TheInterest decreaseexpense decreased in interest expense for 2024,2025 compared to 2023,2024, was mainlyprimarily due to a decreasereduction in the average debt outstanding.outstanding, Thiswhich positive effect was partially offset byoutweighed the impacteffect of higher interest ratesrates. andAdditionally, interest expense ofin $22024 included a $1.7 million fromcharge related to the retirement of debt dueas topart theof debt refinancing completed in theour fourth quarter ofdebt 2024.refinancing, which did not recur in 2025. Further information regarding the debt refinancing of our debt can be found under the caption "Note 1312: Debt" in the Notes to Consolidated Financial Statements located in Part II, Item 8 of this report. Based on the amount of variable-rate debt outstanding as of December 31, 2024, a one percentage point change in the weighted-average interest rate would result in a $6 million change in interest expense for 2025.

This MD&A includes financial information prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"). We also present certain non-GAAP financial measures, including free cash flow, net debt, adjusted diluted earnings per share (EPS), consolidated adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), and consolidated adjusted EBITDA margin. We believe that these non-GAAP financial measures, when reviewed alongside GAAP financial measures, can provide additional insight into our operating performance. Consequently, these measures are also used internally for management reporting. Our non-GAAP measures should not be considered substitutes for GAAP financial measures. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely solely on any single financial measure. Our non-GAAP financial measures may not be comparable to similarly titled measures used by other companies and therefore, may not facilitate useful comparisons. Reconciliations of our non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the Consolidated Results of Operations section.

A comprehensive discussion of our strategy is provided in Part I, Item 1 of the 2025 Form 10-K. InDuring the first quarterhalf of 2026, we continued to execute on our strategic priorities of accelerating profitable growth, enhancing operational efficiency, and disciplined capital allocation.

Accelerating profitable growth – We continued to execute on our strategy of growing our payments and data businesses while optimizing our overall portfolio, delivering stronger revenue mix and profitability. In March 2026, we completed the divestiture of the Safeguard small business distributor channel within our Print segment, generatinga $22.8strategic millionaction ofenabling netgreater proceeds.focus on our growth businesses and ongoing portfolio optimization objectives. The transactiondivestiture reduced first quarterfirst-half 2026 Print segment revenue by approximately $12.6$47.1 million and Print adjusted EBITDA by approximately $1.7$4.9 million,million andcompared enablesto greaterthe focusfirst onhalf ourof core2025. growthAt businessesthe andsame ongoing portfolio optimization. Collectively,time, our payments and data businesses delivereddemonstrated 12.5%strong momentum, collectively delivering 11.1% year-over-year revenue growth and a 22.8%14.6% increase in adjusted EBITDA in the first quarterhalf of 2026.

Enhancing operational efficiency – In the first quarterhalf of 2026, we reduced selling, general and administrative (SG&A) expense by 7.1%6.4% year-over-year, reflecting the benefits of our ongoing and prior cost management efforts. Additionally, despite revenue pressures in the Print segment, operational improvements resulted in adjusted EBITDA margin improvement for this segment. These results contributed to year-over-year increases in net income, consolidated adjusted EBITDA, and consolidated adjusted EBITDA margin in the first quarterhalf of 2026.

Disciplined capital allocation – We continued to apply our capital allocation framework, working to ensure investments are aligned with our growth objectives and deliver optimal returns. In the first quarterhalf of 2026, net cash provided by operating activities increased by $2.4$32.5 million year-over-year, and we reduced total debt by $32.3$77.2 million compared to year-end 2025. The Celero acquisition reflects our commitment to accelerating growth, and we remain focused on disciplined deleveraging. The strong cash generation of our business, combined with available capacity under our credit arrangements, positions us well to service our obligations, reduce leverage over time, and continue delivering value for shareholders.

Highlights of our financial results for the first quarterhalf of 2026 compared to the first quarterhalf of 2025 include:

•Consolidated revenue – IncreasedDecreased by $1.6$20.3 million to $538.1$1,037.4 million, primarily driven by growththe infirst allquarter threebusiness ofexit, ourwhich paymentsreduced and data businesses. This growth was partially offsetrevenue by demandapproximately softness$47.1 formillion. promotional products andAdditionally, the ongoing secular decline in order volumes for checks, business forms, and various business accessories in our Print segment.segment Incontributed addition,to the decrease. These unfavorable drivers were partially offset by growth in all three of our firstpayments quarterand businessdata exit resulted in a decrease in revenue of approximately $12.6 million.businesses.

•Net income – Increased by $21.8$18.5 million to $35.8$55.0 million, primarily reflecting the impact of our cost management and pricing initiatives, as well as lower restructuring and integration expense. Growth in our payments and data businesses further contributed to the improvement. Additionally, duringinterest theexpense firstdecreased quarter$6.6 ofmillion 2026,year-over-year and we recognized a $5.1 million gain from the sale of the Safeguard small business distributor channel within the Print segment, and interest expense decreased $3.6 million year-over-year.segment. These favorable factors were partially offset by the continuing demand softness and secular declines in the Print segment, as well as inflationary pressures impacting material and delivery costs.costs, and transaction costs related to the Celero acquisition of $5.6 million in the first half of 2026.

Adjusted EBITDA margin increased to 21.9% for the first quarterhalf of 2026, compared to 18.7%19.5% for the first quarterhalf of 2025. The margin improvement was primarily driven by our cost management and pricing initiatives, partially offset by inflationary pressures and the shift in mix toward our growth businesses. A reconciliation of net income to adjusted EBITDA can be found in the Consolidated Results of Operations section.

•Net cash provided by operating activities – Increased by $2.4$32.5 million to $52.7$133.9 million. The increase was primarily driven by the benefits of our cost management and pricing actions, lower income tax payments due to the impact of federal tax law changes,changes enacted in July 2025, favorable changes in working capital, and lower cash expenditures for restructuring and integration activities.

These benefits were partially offset by higher payouts for performance-based employee cash bonuses related to our 2025 performance, timing-related changes in accounts payable, demand softness and continuing secular declines in the Print segment, and inflationary cost pressures.

We continually monitor macroeconomic conditions and other external factors that may affect our business, including interest rates, inflation, small business sentiment, consumer spending trends, and global economic conditions. As of MarchJune 31,30, 2026, 66%68% of our debt had a weighted-average fixed interest rate of 8.1%, which provides partial insulation from changes in market interest rates. This capital structure helps moderate our exposure to interest rate volatility in a higher‑rate environment, although future changes in rates could still affect our borrowing costs due to our variable-rate debt.

InflationaryMacroeconomic pressuresconditions, haveincluding continuedinflation, toenergy affectprice thevolatility, broaderand economy,fluctuations particularlyin with respect to logistics, energy,logistics and certain raw material costs.costs, Thesecontinue pressuresto remain an important external factor influencinginfluence our cost structure, pricing dynamics, and customer demand. In response, we implemented targeted price adjustments, particularly within our PrintMerchant Services and Merchant ServicesPrint segments, to help offset increased costs while remaining mindful of customer price sensitivity. We continue to monitor inflationthese trends closely, including the potential for further cost volatility drivenresulting byfrom changes in energy markets, supply chain disruptions, energy markets,conditions, and raw material price fluctuations.pricing.

Global economic conditions remain uncertain, reflecting ongoing geopolitical unrest and evolving trade policies, treaties, and tariffs. These developments have the potential tomay disrupt supply chains, increase operating costs, and affect the availabilityavailability, timing, and timingpricing of certain goods and services. In addition, heightened geopolitical tensions and an increasingly complex threat environment have increasedelevated cybersecurity and technology‑related risks, reinforcing the importance of continued investments in information security, data protection, and technology resilience.

We also closely track trends in small business sentiment and consumer discretionary spending, as these factors influence demand across our portfolio. Our analysis incorporates data from credit card networks, the Federal Reserve, leading economic forecasters, and our proprietary analytics. Recent economic indicators suggest continued pressurecaution onamong consumerconsumers confidence,and whichsmall has contributed to softer demand trends, particularly within discretionary spending categories. Small business sentiment softened in early 2026businesses amid higherongoing economic uncertainty and cost pressures,pressures. althoughWhile employment conditions and other underlying demandeconomic indicators have generally remained stable, shifts in consumer and employmentbusiness indicatorsspending remainedpatterns relativelycould stable.influence Persistenttransaction inflation concerns, uncertaintyvolumes in theour Merchant Services segment and demand for certain discretionary products within our Print segment. Inflation, labor market outlook,conditions, trade policies, tariffs, and trade‑relatedother disruptionsmacroeconomic factors may continue to influence our customers’customer purchasing behavior. A sustained period of economic uncertainty or a broader slowdown in global economic activity could adversely affect our financial position, results of operations, and future growth prospects.

As of MarchJune 31,30, 2026, we held cash and cash equivalents of $27.2$34.9 million, along with an additional $380.9$384.3 million available for borrowing under our revolving credit facility. We anticipate that capital expenditures will be between $90.0$100.0 million and $100.0$110.0 million for the full year, compared to $95.3 million in 2025, as we continue to build scale across our product categories and invest in innovation. Our capital allocation priorities remain focused on responsible growth investments, debt reduction, and returning capital to shareholders through dividends, which are subject to quarterly approval by our board of directors.

We believe that net cash generated by operations, together with our cash and cash equivalents on hand and available credit, will be sufficient to meet our operational needs, contractual obligations, and debt service requirements over the next 12 months. This assessment takes into account our working capital position and anticipated cash flows.flows, including those associated with the additional debt incurred in connection with the acquisition of Celero. We regularly monitor our liquidity position in light of potential risks, including market volatility, interest rate fluctuations, and macroeconomic uncertainty, and we are prepared to adjust our capital allocation strategy as needed. As of MarchJune 31,30, 2026, we were in compliance with our debt covenants. Additional information regarding our long-term capital requirements and debt maturities can be found in the Cash Flows and Liquidity and Capital Resources sections.

Total revenue increaseddecreased in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025, primarily driven by strongthe demandfirst forquarter ourbusiness data-drivenexit marketingdiscussed services,in the Executive Overview section, which contributedreduced a $20.5 million year-over-year increase. Revenue growth was also supportedrevenue by strategicapproximately price$34.5 increasesmillion. implemented in response to inflation, particularly within our Print and Merchant Services segments, as well as growth in Merchant Services volume driven by favorable government channel activity and new customer implementations. These increases were partially offset byAdditionally, soft demand for promotional products and the continued secular decline in order volumes for checks, business forms, and various business accessories inwithin our Print segment,segment ascontributed well asto the impact of the first quarter business exit, which resulted in an approximate $12.6 million year-over-year reduction in revenue.decrease.

Total cost of revenue increaseddecreased in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025,2025. The decrease was primarily due to the revenue growth in our data-driven marketing business and inflationary pressures on materials and delivery costs. These increases were partially offset by lower costs associated with the soft demand for promotional products and the continued secular declines in the Print segment, as well as the impact of our cost management initiatives. In addition, the first quarter business exit discussed in the Executive Overview section reduced cost of revenue by approximately $6.0$16.3 million in the firstsecond quarter.quarter of 2026. These decreases were partially offset by the revenue growth and higher favorability in the prior year from vendor rebates in our data-driven marketing business, as well as inflationary pressures on materials and delivery costs.

As a percentage of total revenue, total cost of revenue increased in the second quarter and first quarterhalf of 2026 compared to the firstsame quarterperiods ofin 2025.2025, Inflationarydriven by inflationary pressures and a shift in revenue mix toward our lower-margin growth businessesbusinesses. contributedThese toincreases margin pressure,were partially offset by the benefits of cost management initiatives andtargeted pricing actions implemented to address inflation.inflation and cost management initiatives.

SG&A expense decreased in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025, primarily as a result of our ongoing cost management initiatives, including actions such as workforce adjustments across multiple functions and the optimization of our marketing strategies.functions. In addition, medical costs were lower and commission expense declined due to lower Print revenue volumes. The first quarter business exit duringdiscussed in the quarterExecutive Overview section further reduced SG&A expense by approximately $5.9$17.2 million.million in the second quarter of 2026. Partially offsetting these decreases in SG&A expense were transaction costs of $5.6 million related to the Celero acquisition discussed in the Executive Overview section.

As a percentage of total revenue, SG&A expense decreased in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025, reflectingas our cost management actions and the impact of ourthe costfirst managementquarter actions.business exit more than offset the impact of the acquisition transaction costs incurred during the quarter.

In the first quarter of 2026, we recognized a gain on the sale of the Safeguard small business distributor channel within our Print segment. Further information can be found under the caption "Note 6: Acquisition and Divestitures" in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part 1, Item 1 of this report.

Interest expense decreased in the second quarter and first quarterhalf of 2026 compared to the firstsame quarterperiods ofin 2025 primarily due to a reduction in both average debt outstandingoutstanding, andas thewell as a lower weighted-average interest rate. OurAs exposureof June 30, 2026, $440.0 million of our debt was subject to variable-ratevariable debtrates, remainswhich aexposes keyus considerationto forfluctuations futurein market interest expense.rates. Based on the amount of variable-rate debt outstanding as of MarchJune 31,30, 2026, a one percentage point change in the weighted-average interest rate would result in a $4.0$2.0 million impact on interest expense for the remainder of 2026.

TheOur effective income tax rate decreasedof in28.3% for the firstsix quartermonths ofended June 30, 2026 was unchanged compared to the firstsame quarterperiod ofin 2025. The 2026 rate benefited from a higher tax benefit related to employee share-based compensation and lower foreign income tax expense.taxes. These decreasesfavorable in our effective income tax rateimpacts were partially offset by anseveral factors, including a $2.3 million increase in the deferred tax valuation allowance of $2.3 million related to a capital loss carryforward generated during the quarterperiod that we do not expect to fully utilize, as well as the tax impact related to the surrender of COLI policies, higher non-deductible executive compensation expenseexpense, and state income taxes. Further information regarding our income tax provision can be found under the caption "Note 9: Income Taxes" in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part I, Item 1 of this report.

Net income and diluted EPS increased in the first quarterhalf of 2026 as compared to the first quarterhalf of 2025, driven by the factors discussed above.above regarding our results for the first half of the year. Adjusted diluted EPS also increased year-over-year, primarily reflecting the benefits of our cost management and pricing initiatives, as well as growth in our payments and data businesses.businesses and a reduction in interest expense. These favorable impacts were partially offset by the soft demand for promotional products andproducts, the ongoing secular declines in the Print segment andsegment, inflationary cost pressures.pressures, and higher amortization expense driven by our technology investments. In addition, the first quarter business exit discussed in the Executive Overview section reduced adjusted diluted EPS by $0.03 per share on a year-over-year basis.basis Aby reconciliation$0.08 per share for the first half of net income to adjusted net income, as used in the calculation of adjusted diluted EPS, can be found in the following section.2026.

By the end of 2025, we had completed the material components of our North Star program, a comprehensive, multi-year initiative designed to enhance shareholder value by accelerating adjusted EBITDA growth, increasing cash flow, reducing debt, and improving our leverage ratio. We did not incur any additionalRelated restructuring and integration expense relatedincurred to the North Star program induring the first quarterhalf of 2026.2026 was not material. However, we continue to realize the benefits of actions taken under the program, which contributed to improved operating results during the first quarter ofin 2026.

Both adjusted EBITDA and adjusted EBITDA margin increased year-over-year during the first quarterhalf of 2026. These improvements were supported by a 7.1%6.4% reduction in SG&A expense. Within our Print segment, adjusted EBITDA margin also improved as a result of our optimization actions, even as revenue pressures continue in the business. In addition, net cash provided by operating activities increased by $2.4$32.5 million year-over-year, and we reduced total debt by $32.3$77.2 million compared to the prior year-end. These results reflect the ongoing benefits of initiatives completed in prior periods, as well as incremental improvements from current‑period actions.

The restructuring and integration expense recognized in the first quarterhalf of 2026 relates to various employee reductions and other efficiency initiatives. The majority of the employee reductions included in our restructuring and integration accruals as of MarchJune 31,30, 2026, along with the related severance payments, are expected to be completed by the end of 2026. As a result of these employee reductions, we expect to realize annual cost savings in 2026 of approximately $2.0 million in cost of sales and $20.0 million in SG&A expense compared to our 2025 results of operations. These expected savings relate only to the employee reductions and do not reflect the total impact of all cost reduction initiatives. Actual results may be affected by factors such as inflationary cost pressures and continued investments in the business.

Total revenue increased in the second quarter and first quarterhalf of 2026 compared to the firstsame quarterperiods ofin 2025, driven by a combination of factors, including new customer implementations, higher transaction volumes from governmentexisting clients,partners newacross bankingseveral customer implementations,channels, and targeted pricing actions. These positive drivers were partially offset by ongoing economic uncertainty, which continued to exert pressure on consumer and business spending in certain customer channels.

Adjusted EBITDA and adjusted EBITDA margin also improved in the second quarter and first quarterhalf of 2026 compared to the firstsame quarterperiods ofin 2025, reflecting targeted price increases, cost management initiatives, including the year-end 2025 purchase of residual commission rights from an independent sales organization (ISO) partner, and contributions from new banking client implementations.

Total revenue increased in the second quarter and first quarterhalf of 2026 compared to the firstsame quarterperiods ofin 2025, driven by the onboarding of new receivableslockbox and remittance processing clients, increased lockboxremittance processing volume, and the implementation of modest price increases to counteract inflationary pressure. These impacts were partially offset by pressure on receivablesremittance processing volumes in certain customer relationships.

Adjusted EBITDA and adjusted EBITDA margin also increased in the second quarter and first quarterhalf of 2026 as compared to the firstsame quarterperiods ofin 2025, largely attributable to our pricing strategies and ongoing cost management actions, including operational efficiencies within our lockbox processing operations and marketing optimization strategies. Additionally, the impact of new client implementations contributed to adjusted EBITDA in both periods.

Total revenue increased in the second quarter and first quarterhalf of 2026 compared to the firstsame quarterperiods ofin 2025, driven by a $20.5 million year-over-year increase in data-driven marketing revenue,revenue of $14.7 million in the second quarter and $35.1 million in the first half of the year, reflecting strong demand for customer acquisition marketing activities, particularly from our financial institution partners.

Total revenue decreased in the second quarter and first quarterhalf of 2026 compared to the firstsame quarterperiods ofin 2025, mainlyprimarily duedriven toby soft demand for promotional products and the ongoing secular decline in order volumes for checks, business forms, and various business accessories. In addition, during the first quarter of 2026, we completed the sale of the Safeguard small business distributor channel, which drove a decrease in revenue of approximately $12.6$34.5 million.million in the second quarter of 2026 and $47.1 million in the first half of 2026. These revenue declines were partially offset by our pricing strategies implemented to address inflationary pressures.

Adjusted EBITDA also decreased in the second quarter and first quarterhalf of 2026 compared to the firstsame quarterperiods ofin 2025, largely attributable to the lower revenue and inflationary pressures affecting material and delivery costs. In addition, the exit from the Safeguard small business distributor channel drove a decrease in adjusted EBITDA of approximately $1.7$3.2 million.million in the second quarter of 2026 and $4.9 million in the first half of 2026. We continued to execute cost management actions, including disciplined operating expense control and process efficiency improvements, which partially offset these impacts.

Adjusted EBITDA margin increased year-over-year in theboth first quarter of 2026 compared to the first quarter of 2025,periods, as pricing actions, cost management initiatives, and a shift in revenue mix toward higher-margin check products more than offset the effect of inflationary cost pressures.

As of MarchJune 31,30, 2026, we held cash and cash equivalents of $27.2$34.9 million. Additionally, we had restricted cash and restricted cash equivalents, which were included in settlement processing assets and other non-current assets on the consolidated balance sheet, totaling $35.1$19.5 million. The following table should be read in conjunction with the consolidated statements of cash flows located in Part I, Item 1 of this report.

Net cash provided by operating activities increased by $2.4$32.5 million in the first quarterhalf of 2026 compared to the first quarterhalf of 2025. The increase was primarily driven by the benefits of our cost management and pricing actions, a $14.3$26.3 million reduction in income tax payments due to the impact of federal tax law changes,changes enacted in July 2025, favorable changes in working capital, and lower cash expenditures for restructuring and integration activities. These increasesfavorable impacts were partially offset by a $12.4 million increase in payouts for performance-based employee cash bonuses related to our 2025 performance, timing-related changes in accounts payable, continuing demand softness and secular declines in the Print segment, and inflationary cost pressures.

Net cash providedused by investing activities for the first quarterhalf of 2026 increaseddecreased $35.7by $43.1 million compared to the first quarterhalf of 2025. The increasedecrease was primarily driven by proceeds from the surrender of company-ownedCOLI lifepolicies, insuranceas policieswell andas proceeds from the sale of the Safeguard small business distributor channel within our Print segment.segment in the first quarter.

Net cash used by financing activities for the first quarterhalf of 2026 increased by $45.5$63.9 million compared to the first quarterhalf of 2025, driven by higher net payments on debt and a holdback payment made in 2026 related to the 2025prior year acquisition of the CheckMatch electronic check conveyance service business. In addition,Additionally, payments for payroll taxes on the vesting of employee share-based awards were higher in 2026 due to our higher stock price.

When assessing our liquidity and capital resource requirements, we consider a range of factors, including scheduled debt service, lease obligations, other contractual commitments, and contingent liabilities. Detailed Informationinformation regarding the maturities of our long-term debt and our contingent liabilities can be found under the captions “Note 11: Debt” and "Note 12: Other Commitments and Contingencies," both of which appear in the Condensed Notes to Unaudited Consolidated Financial Statements located in Part I, Item 1 of this report. Information regarding our lease obligations can be found under the caption "Note 13: Leases" in the Notes to Consolidated Financial Statements appearing in the 2025 Form 10-K, and information regarding our contractual obligations can be found in the MD&A section of the 2025 Form 10-K, under the section entitled Cash Flows and Liquidity. In April 2026, we entered into a new facility lease agreement that will commence on June 1, 2026. The lease has a term of 16 years and provides for gross rental payments beginning in 2027, totaling approximately $88.0 million over the lease term.

As of MarchJune 31,30, 2026, we held cash and cash equivalents of $27.2$34.9 million and had $380.9$384.3 million of available borrowing capacity under our revolving credit facility. We believe that net cash generated by operations, together with our cash and cash equivalents on hand and the available credit,revolver capacity, will be sufficient to meet our operational needs, contractual obligations, and debt service requirements over the next 12 months. This assessment takes into account our working capital position and anticipated cash flows.flows, including those associated with the additional debt incurred in connection with the acquisition of Celero, as discussed in the Executive Overview section. We regularly monitor our liquidity position in light of potential risks, including market volatility, interest rate fluctuations, and macroeconomic uncertainty, and we are prepared to adjust our capital allocation strategy as needed.

As of MarchJune 31,30, 2026, the principal amount of our debt obligations was $1.41$1.37 billion, compared to $1.44 billion as of December 31, 2025. Our capital structure for each period was as follows: