Business segment information

3 Months Ended

Mar. 31, 2020

For several years, we operated 3 reportable business segments: Small Business Services, Financial Services and Direct Checks. These segments were generally organized by customer type and reflected the way we managed the company. Effective January 1, 2020, we reorganized our reportable business segments to align with structural and management reporting changes in support of our growth strategy. We now operate 4 reportable segments, as follows:


•	Payments – This segment includes our treasury management solutions, including remittance and lockbox processing, remote deposit capture, receivables management, payment processing and paperless treasury management, in addition to payroll and disbursement services, including Deluxe Payment Exchange and fraud and security services.


•	Cloud Solutions – This segment includes web hosting and design services, data-driven marketing solutions and hosted solutions, including digital engagement, logo design, financial institution profitability reporting, account switching tools and business incorporation services.


•	Promotional Solutions – This segment includes business forms, accessories, advertising specialties, promotional apparel, retail packaging and strategic sourcing services.

•Checks – This segment includes printed personal and business checks.

The accounting policies of the segments are the same as those described in the Notes to Consolidated Financial Statements included in the 2019 Form 10-K. We allocate corporate costs for our shared services functions to our business segments when the costs are directly attributable to a segment. This includes certain sales and marketing, human resources, supply chain, real estate, finance, information technology and legal costs. Costs that are not directly attributable to a business segment are reported as Corporate operations and consist primarily of marketing, accounting, information technology, facilities, executive management and legal, tax and treasury costs that support the corporate function. Corporate operations also includes other income. All of our segments operate primarily in the United States, with some operations in Canada. In addition, Cloud Solutions has operations in Australia and portions of Europe, as well as partners in Central and South America.

Under the new segment structure, our chief operating decision maker (i.e., our Chief Executive Officer) reviews earnings before interest, taxes, depreciation and amortization (EBITDA) on an adjusted basis for each segment when deciding how to allocate resources and to assess segment operating performance. Adjusted EBITDA for each segment excludes depreciation and amortization expense, interest expense, income tax expense and certain other amounts, which may include, from time to time: asset impairment charges; restructuring, integration and other costs; CEO transition costs; share-based compensation expense; acquisition transaction costs; certain legal-related expense; and gains or losses on sales of businesses and customer lists. Our Chief Executive Officer does not review segment asset information when making investment or operating decisions regarding our reportable business segments.

The following is our segment information for the quarters ended March 31, 2020 and 2019. The segment information for 2019 has been revised to reflect our current segment structure.



	Quarter Ended March 31,
(in thousands)	2020		2019
Payments:
Revenue	$	77,040	$	65,150
Adjusted EBITDA	18,023		16,867
Cloud Solutions:
Revenue	75,945		78,288
Adjusted EBITDA	14,920		17,060
Promotional Solutions:
Revenue	142,794		155,829
Adjusted EBITDA	11,197		23,590
Checks:
Revenue	190,644		199,798
Adjusted EBITDA	90,712		102,234
Total segment:
Revenue	$	486,423	$	499,065
Adjusted EBITDA	134,852		159,751

The following table presents a reconciliation of total segment adjusted EBITDA to consolidated (loss) income before income taxes:



	Quarter Ended March 31,
(in thousands)	2020			2019
Total segment adjusted EBITDA	$	134,852		$	159,751
Corporate operations	(51,518		)	(46,043		)
Depreciation and amortization	(28,430		)	(32,419		)
Interest expense	(6,999		)	(9,301		)
Asset impairment charges	(90,330		)	—
Restructuring, integration and other costs	(19,633		)	(6,283		)
CEO transition costs	180			(5,488		)
Share-based compensation expense	(3,618		)	(3,291		)
Acquisition transaction costs	(9		)	(177		)
Certain legal-related expenses	2,164			(412		)
Loss on sales of businesses and customer lists	—			(99		)
(Loss) income before income taxes	$	(63,341	)	$	56,238

The following tables present revenue disaggregated by our product and service offerings. In conjunction with the realignment of our reportable segments on January 1, 2020, we refined the disaggregation of our revenue by product and service offering. As such, certain amounts reported in the prior year have been revised from previously reported amounts.



	Quarter Ended March 31, 2020
(in thousands)	Payments		Cloud Solutions		Promotional Solutions		Checks		Consolidated
Checks	$	—	$	—	$	—	$	190,644	$	190,644
Forms and other products	—		—		81,813		—		81,813
Marketing and promotional solutions	—		—		60,981		—		60,981
Treasury management solutions	56,867		—		—		—		56,867
Data-driven marketing solutions	—		38,997		—		—		38,997
Web and hosted solutions	—		36,948		—		—		36,948
Other payments solutions	20,173		—		—		—		20,173
Total revenue	$	77,040	$	75,945	$	142,794	$	190,644	$	486,423



	Quarter Ended March 31, 2019
(in thousands)	Payments		Cloud Solutions		Promotional Solutions		Checks		Consolidated
Checks	$	—	$	—	$	—	$	199,798	$	199,798
Forms and other products	—		—		86,706		—		86,706
Marketing and promotional solutions	—		—		69,123		—		69,123
Treasury management solutions	45,471		—		—		—		45,471
Data-driven marketing solutions	—		36,784		—		—		36,784
Web and hosted solutions	—		41,504		—		—		41,504
Other payments solutions	19,679		—		—		—		19,679
Total revenue	$	65,150	$	78,288	$	155,829	$	199,798	$	499,065

The following tables present revenue disaggregated by geography, based on where items are shipped from or where services are performed:



	Quarter Ended March 31, 2020
(in thousands)	Payments		Cloud Solutions		Promotional Solutions		Checks		Consolidated
United States	$	68,358	$	68,070	$	136,814	$	184,294	$	457,536
Foreign, primarily Canada and Australia	8,682		7,875		5,980		6,350		28,887
Total revenue	$	77,040	$	75,945	$	142,794	$	190,644	$	486,423



	Quarter Ended March 31, 2019
(in thousands)	Payments		Cloud Solutions		Promotional Solutions		Checks		Consolidated
United States	$	56,944	$	69,451	$	149,423	$	194,087	$	469,905
Foreign, primarily Canada and Australia	8,206		8,837		6,406		5,711		29,160
Total revenue	$	65,150	$	78,288	$	155,829	$	199,798	$	499,065