BUSINESS SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

BUSINESS SEGMENT INFORMATION

As of December 31, 2019, we operated 3 reportable business segments: Small Business Services, Financial Services and Direct Checks. Our business segments were generally organized by customer type and reflected the way we managed the company through that date.

Small Business Services primarily serves small businesses and promotes and sells its products and services via internet advertising, direct response mail, partner referrals, networks of Safeguard distributors and independent dealers, a direct sales force and an outbound telemarketing group. Financial Services primarily serves financial institutions, including banks, credit unions and financial services companies, and promotes and sells its products and services primarily through a direct sales force. Direct Checks is a leading direct-to-consumer check supplier, selling its products and services directly to consumers via direct marketing, utilizing search engine marketing and optimization strategies and print advertising. All 3 segments operate primarily in the U.S. Small Business Services also has operations in Canada, Australia and portions of Europe, and Financial Services has operations in Canada. No single customer accounted for more than 10% of consolidated revenue during the past 3 years.

During the second quarter of 2019, we announced that as part of our “One Deluxe” strategy, we would realign the company into 4 primary focus areas: Payments, Cloud Solutions, Promotional Solutions and Checks. This realignment was effective on January 1, 2020 and as a result, beginning in 2020, these 4 focus areas become our reportable business segments. We will report financial results for the 4 segments beginning in the first quarter of 2020, and we will retrospectively adjust prior periods to reflect the new reportable segment structure.

Our product and service offerings are comprised of the following:

Marketing solutions and other services (MOS) – We offer products and services designed to meet our customers' sales and marketing needs, as well as various other service offerings. Our MOS offerings generally consist of the following:

• Small business marketing solutions – Our marketing products utilize digital printing and web-to-print solutions to provide printed marketing materials and promotional solutions, such as postcards, brochures, retail packaging supplies, apparel, greeting cards and business cards.

• Treasury management solutions – These solutions include remittance and lockbox processing, remote deposit capture, receivables management, payment processing and paperless treasury management, as well as software, hardware and digital imaging solutions.

• Web services – These service offerings include web hosting and domain name services, logo and web design, payroll services, email marketing, search engine marketing and optimization and business incorporation and organization services.

• Data-driven marketing solutions – These offerings include outsourced marketing campaign targeting and execution and marketing analytics solutions that help our customers grow revenue through strategic targeting, lead optimization, retention and cross-selling services.

• Fraud, security, risk management and operational services – These service offerings include fraud protection and security services, electronic checks and deposits ("ePayments") and digital engagement solutions, including loyalty and rewards programs and financial management tools.

Checks – We are one of the largest providers of personal and business checks in the U.S.

Forms, accessories and other products – We provide printed business forms, including deposit tickets, billing forms, work orders, job proposals, purchase orders, invoices and personnel forms, as well as computer forms compatible with accounting software packages commonly used by small businesses. We also offer other customized products, including envelopes, office supplies, ink stamps, labels, deposit tickets, check registers and checkbook covers.

The following tables present revenue disaggregated by our product and service offerings:

	Year Ended December 31, 2019
(in thousands)	Small Business Services		Financial Services		Direct Checks		Consolidated
Marketing solutions and other services:
Small business marketing solutions	$	281,552	$	—	$	—	$	281,552
Treasury management solutions	—		193,527		—		193,527
Web services	166,025		—		—		166,025
Data-driven marketing solutions	—		157,706		—		157,706
Fraud, security, risk management and operational services	24,572		49,562		13,209		87,343
Total MOS	472,149		400,795		13,209		886,153
Checks	462,950		219,695		100,550		783,195
Forms, accessories and other products	320,680		13,008		5,679		339,367
Total revenue	$	1,255,779	$	633,498	$	119,438	$	2,008,715
	Year Ended December 31, 2018
(in thousands)	Small Business Services		Financial Services		Direct Checks		Consolidated
Marketing solutions and other services:
Small business marketing solutions	$	292,245	$	—	$	—	$	292,245
Treasury management solutions	—		148,011		—		148,011
Web services	161,646		—		—		161,646
Data-driven marketing solutions	—		147,893		—		147,893
Fraud, security, risk management and operational services	25,460		50,499		14,146		90,105
Total MOS	479,351		346,403		14,146		839,900
Checks	476,751		226,554		107,084		810,389
Forms, accessories and other products	327,518		14,010		6,208		347,736
Total revenue	$	1,283,620	$	586,967	$	127,438	$	1,998,025
	Year Ended December 31, 2017
(in thousands)	Small Business Services		Financial Services		Direct Checks		Consolidated
Marketing solutions and other services:
Small business marketing solutions	$	262,192	$	—	$	—	$	262,192
Treasury management solutions	—		109,240		—		109,240
Web services	131,644		—		—		131,644
Data-driven marketing solutions	—		150,572		—		150,572
Fraud, security, risk management and operational services	25,491		61,185		15,354		102,030
Total MOS	419,327		320,997		15,354		755,678
Checks	482,928		249,716		118,392		851,036
Forms, accessories and other products	337,484		14,562		6,796		358,842
Total revenue	$	1,239,739	$	585,275	$	140,542	$	1,965,556

The following table presents revenue disaggregated by geography, based on where items are shipped or services are performed:

(in thousands)	Small Business Services		Financial Services		Direct Checks		Total
Year Ended December 31, 2019
U.S.	$	1,157,195	$	611,403	$	119,438	$	1,888,036
Foreign, primarily Canada and Australia	98,584		22,095		—		120,679
Total revenue	$	1,255,779	$	633,498	$	119,438	$	2,008,715
Year Ended December 31, 2018
U.S.	$	1,180,019	$	563,918	$	127,438	$	1,871,375
Foreign, primarily Canada and Australia	103,601		23,049		—		126,650
Total revenue	$	1,283,620	$	586,967	$	127,438	$	1,998,025
Year Ended December 31, 2017
U.S.	$	1,150,055	$	568,801	$	140,542	$	1,859,398
Foreign, primarily Canada and Australia	89,684		16,474		—		106,158
Total revenue	$	1,239,739	$	585,275	$	140,542	$	1,965,556

Substantially all of our long-lived assets reside in the U.S. Long-lived assets of our foreign subsidiaries are located primarily in Canada and Australia and are not significant to our consolidated financial position.

The accounting policies of the segments are the same as those described in Note 1. We allocate corporate costs for our shared services functions to our business segments, including costs of our executive management, human resources, supply chain, real estate, finance, information technology and legal functions. Where costs incurred are directly attributable to a business segment, those costs are charged directly to that segment. Those costs not directly attributable to a business segment, primarily certain human resources costs, are allocated to the segments based on the number of employees in each segment. Corporate assets are not allocated to the segments and consisted primarily of long-term investments and assets related to our corporate shared services functions of manufacturing, information technology and real estate, including property, plant and equipment; internal-use software; operating lease assets; and inventories and supplies. Depreciation and amortization expense related to corporate assets, which was allocated to the segments, was $36,239 in 2019, $33,812 in 2018 and $33,302 in 2017.

We are an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations and the sharing of assets. Therefore, we do not represent that these segments, if operated independently, would report the operating (loss) income and other financial information shown.

The following is our segment information as of and for the years ended December 31:

		Reportable Business Segments
(in thousands)		Small Business Services			Financial Services			Direct Checks		Corporate		Consolidated
Total revenue from external	2019	$	1,255,779		$	633,498		$	119,438	$	—	$	2,008,715
customers:	2018	1,283,620			586,967			127,438		—		1,998,025
	2017	1,239,739			585,275			140,542		—		1,965,556
Operating (loss) income:	2019	(124,235		)	(67,524		)	33,618		—		(158,141		)
	2018	119,808			69,939			41,474		—		231,221
	2017	181,528			101,047			46,601		—		329,176
Depreciation and amortization	2019	62,138			60,622			3,276		—		126,036
expense:	2018	66,031			61,843			3,226		—		131,100
	2017	56,834			62,592			3,226		—		122,652
Asset impairment charges:	2019	273,583			117,397			—		—		390,980
	2018	99,437			1,882			—		—		101,319
	2017	54,880			—			—		—		54,880
Total assets:	2019	841,858			583,555			154,687		363,211		1,943,311
	2018	1,094,262			751,242			157,802		301,790		2,305,096
	2017	1,081,098			679,547			158,827		289,355		2,208,827
Capital asset purchases:	2019	—			—			—		66,595		66,595
	2018	—			—			—		62,238		62,238
	2017	—			—			—		47,450		47,450