July 31, 2020 - 10-Q: Quarterly report pursuant to Section 13 or 15(d)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ___________

Commission file number: 1-7945

DELUXE CORPORATION

(Exact name of registrant as specified in its charter)



MN			41-0216800
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
3680 Victoria St. N.	Shoreview	MN	55126-2966
(Address of principal executive offices)			(Zip Code)

(651) 483-7111

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $1.00 per share	DLX	NYSE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

The number of shares outstanding of registrant’s common stock as of July 21, 2020 was 41,858,236.

PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

DELUXE CORPORATION

CONSOLIDATED BALANCE SHEETS

(unaudited)



(in thousands, except share par value)	June 30, 2020			December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	371,951		$	73,620
Trade accounts receivable, net of allowance for uncollectible accounts of $6,726 and $4,985, respectively	140,285			163,421
Inventories and supplies	47,525			39,921
Funds held for customers, including assets carried at fair value of $23,201 and $34,450, respectively	82,582			117,641
Revenue in excess of billings	25,014			32,790
Other current assets	48,893			44,818
Total current assets	716,250			472,211
Deferred income taxes	5,929			3,907
Long-term investments	44,405			44,995
Property, plant and equipment, net of accumulated depreciation of $361,224 and $377,180, respectively	77,857			96,467
Operating lease assets	45,048			44,372
Intangibles, net of accumulated amortization of $578,915 and $557,023, respectively	230,745			276,122
Goodwill	736,748			804,487
Other non-current assets	203,100			200,750
Total assets	$	2,060,082		$	1,943,311
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	103,639		$	112,198
Funds held for customers	80,672			116,411
Accrued liabilities	174,210			179,338
Total current liabilities	358,521			407,947
Long-term debt	1,140,000			883,500
Operating lease liabilities	34,165			33,585
Deferred income taxes	3,243			14,898
Other non-current liabilities	38,815			32,520
Commitments and contingencies (Notes 12 and 15)
Shareholders' equity:
Common shares $1 par value (authorized: 500,000 shares; outstanding: June 30, 2020 – 41,855; December 31, 2019 – 42,126)	41,855			42,126
Additional paid-in capital	4,950			4,086
Retained earnings	494,243			572,596
Accumulated other comprehensive loss	(55,779		)	(47,947		)
Non-controlling interest	69			—
Total shareholders’ equity	485,338			570,861
Total liabilities and shareholders’ equity	$	2,060,082		$	1,943,311

See Condensed Notes to Unaudited Consolidated Financial Statements

DELUXE CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited)



	Quarter Ended June 30,						Six Months Ended June 30,
(in thousands, except per share amounts)	2020			2019			2020			2019
Product revenue	$	278,709		$	347,061		$	609,396		$	697,580
Service revenue	131,696			146,925			287,432			295,471
Total revenue	410,405			493,986			896,828			993,051
Cost of products	(102,861		)	(133,798		)	(224,450		)	(265,061		)
Cost of services	(59,422		)	(68,730		)	(139,882		)	(137,090		)
Total cost of revenue	(162,283		)	(202,528		)	(364,332		)	(402,151		)
Gross profit	248,122			291,458			532,496			590,900
Selling, general and administrative expense	(198,570		)	(222,292		)	(435,774		)	(452,469		)
Restructuring and integration expense	(20,354		)	(17,342		)	(38,008		)	(22,834		)
Asset impairment charges	(4,883		)	—			(95,213		)	—
Operating income (loss)	24,315			51,824			(36,499		)	115,597
Interest expense	(6,171		)	(9,239		)	(13,171		)	(18,540		)
Other income	1,808			2,168			6,281			3,934
Income (loss) before income taxes	19,952			44,753			(43,389		)	100,991
Income tax provision	(5,074		)	(12,171		)	(1,864		)	(27,219		)
Net income (loss)	14,878			32,582			(45,253		)	73,772
Net income attributable to non-controlling interest	(19		)	—			(19		)	—
Net income (loss) attributable to Deluxe	$	14,859		$	32,582		$	(45,272	)	$	73,772
Total comprehensive income (loss)	$	19,053		$	33,744		$	(53,085	)	$	76,824
Comprehensive income (loss) attributable to Deluxe	19,034			33,744			(53,104		)	76,824
Basic earnings (loss) per share	0.36			0.75			(1.08		)	1.68
Diluted earnings (loss) per share	0.35			0.75			(1.10		)	1.68

See Condensed Notes to Unaudited Consolidated Financial Statements

DELUXE CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(unaudited)



(in thousands,)	Common shares		Common shares par value			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Non-controlling interest		Total
Balance, March 31, 2020	41,691		$	41,691		$	—		$	492,230		$	(59,954	)	$	—	$	473,967
Net income	—		—			—			14,859			—			19		14,878
Cash dividends ($0.30 per share)	—		—			—			(12,846		)	—			—		(12,846		)
Common shares issued	209		209			465			—			—			—		674
Common shares retired	(45	)	(45		)	(1,087		)	—			—			—		(1,132		)
Employee share-based compensation	—		—			5,572			—			—			—		5,572
Other comprehensive income	—		—			—			—			4,175			—		4,175
Non-controlling interest, net	—		—			—			—			—			50		50
Balance, June 30, 2020	41,855		$	41,855		$	4,950		$	494,243		$	(55,779	)	$	69	$	485,338



(in thousands,)	Common shares		Common shares par value			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Non-controlling interest		Total
Balance, December 31, 2019	42,126		$	42,126		$	4,086		$	572,596		$	(47,947	)	$	—	$	570,861
Net loss	—		—			—			(45,272		)	—			19		(45,253		)
Cash dividends ($0.60 per share)	—		—			—			(25,707		)	—			—		(25,707		)
Common shares issued	290		290			2,267			—			—			—		2,557
Common shares repurchased	(499	)	(499		)	(9,767		)	(3,734		)	—			—		(14,000		)
Other common shares retired	(62	)	(62		)	(1,866		)	—			—			—		(1,928		)
Employee share-based compensation	—		—			10,230			—			—			—		10,230
Adoption of Accounting Standards Update No. 2016-13 (Note 2)	—		—			—			(3,640		)	—			—		(3,640		)
Other comprehensive loss	—		—			—			—			(7,832		)	—		(7,832		)
Non-controlling interest, net	—		—			—			—			—			50		50
Balance, June 30, 2020	41,855		$	41,855		$	4,950		$	494,243		$	(55,779	)	$	69	$	485,338

See Condensed Notes to Unaudited Consolidated Financial Statements

DELUXE CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (continued)

(unaudited)



(in thousands,)	Common shares		Common shares par value			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Total
Balance, March 31, 2019	43,638		$	43,638		$	—		$	908,614		$	(54,689	)	$	897,563
Net income	—		—			—			32,582			—			32,582
Cash dividends ($0.30 per share)	—		—			—			(13,296		)	—			(13,296		)
Common shares issued	13		13			76			—			—			89
Common shares repurchased	(718	)	(718		)	(5,026		)	(23,152		)	—			(28,896		)
Other common shares retired	(5	)	(5		)	(196		)	—			—			(201		)
Employee share-based compensation	—		—			5,146			—			—			5,146
Other comprehensive income	—		—			—			—			1,162			1,162
Balance, June 30, 2019	42,928		$	42,928		$	—		$	904,748		$	(53,527	)	$	894,149



(in thousands,)	Common shares		Common shares par value			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Total
Balance, December 31, 2018	44,647		$	44,647		$	—		$	927,345		$	(56,579	)	$	915,413
Net income	—		—			—			73,772			—			73,772
Cash dividends ($0.60 per share)	—		—			—			(26,467		)	—			(26,467		)
Common shares issued	99		99			1,938			—			—			2,037
Common shares repurchased	(1,757	)	(1,757		)	(7,504		)	(69,635		)	—			(78,896		)
Other common shares retired	(61	)	(61		)	(2,810		)	—			—			(2,871		)
Employee share-based compensation	—		—			8,376			—			—			8,376
Adoption of Accounting Standards Update No. 2016-02	—		—			—			(267		)	—			(267		)
Other comprehensive income	—		—			—			—			3,052			3,052
Balance, June 30, 2019	42,928		$	42,928		$	—		$	904,748		$	(53,527	)	$	894,149

See Condensed Notes to Unaudited Consolidated Financial Statements

DELUXE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)



	Six Months Ended June 30,
(in thousands)	2020			2019
Cash flows from operating activities:
Net (loss) income	$	(45,253	)	$	73,772
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation	10,053			8,448
Amortization of intangibles	45,040			56,488
Operating lease expense	10,038			8,782
Asset impairment charges	95,213			—
Amortization of prepaid product discounts	14,174			11,681
Deferred income taxes	(10,886		)	2,718
Employee share-based compensation expense	9,095			9,224
Other non-cash items, net	14,383			7,323
Changes in assets and liabilities:
Trade accounts receivable	20,054			18,881
Inventories and supplies	(8,719		)	(836		)
Other current assets	2,073			(11,975		)
Non-current assets	(6,646		)	(2,249		)
Accounts payable	(16,023		)	(12,621		)
Prepaid product discount payments	(15,806		)	(16,182		)
Other accrued and non-current liabilities	(7,141		)	(48,350		)
Net cash provided by operating activities	109,649			105,104
Cash flows from investing activities:
Purchases of capital assets	(27,085		)	(32,344		)
Purchases of customer funds marketable securities	(3,701		)	(3,778		)
Proceeds from customer funds marketable securities	3,701			3,778
Other	1,837			(456		)
Net cash used by investing activities	(25,248		)	(32,800		)
Cash flows from financing activities:
Proceeds from issuing long-term debt	309,000			154,000
Payments on long-term debt	(52,500		)	(113,000		)
Net change in customer funds obligations	(31,351		)	(10,677		)
Proceeds from issuing shares under employee plans	2,411			1,637
Employee taxes paid for shares withheld	(1,889		)	(2,872		)
Payments for common shares repurchased	(14,000		)	(78,896		)
Cash dividends paid to shareholders	(25,464		)	(26,253		)
Other	(597		)	(1,440		)
Net cash provided (used) by financing activities	185,610			(77,501		)
Effect of exchange rate change on cash, cash equivalents, restricted cash and restricted cash equivalents	(6,490		)	3,996
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents	263,521			(1,201		)
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of year	174,811			145,259
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of period (Note 3)	$	438,332		$	144,058

See Condensed Notes to Unaudited Consolidated Financial Statements

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

NOTE 1: CONSOLIDATED FINANCIAL STATEMENTS

The consolidated balance sheet as of June 30, 2020, the consolidated statements of comprehensive income (loss) for the quarters and six months ended June 30, 2020 and 2019, the consolidated statements of shareholders’ equity for the quarters and six months ended June 30, 2020 and 2019 and the consolidated statements of cash flows for the six months ended June 30, 2020 and 2019 are unaudited. The consolidated balance sheet as of December 31, 2019 was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (GAAP). In the opinion of management, all adjustments necessary for a fair statement of the consolidated financial statements are included. Adjustments consist only of normal recurring items, except for any discussed in the notes below. Interim results are not necessarily indicative of results for a full year. The consolidated financial statements and notes are presented in accordance with instructions for Form 10-Q and do not contain certain information included in our annual consolidated financial statements and notes. The consolidated financial statements and notes appearing in this report should be read in conjunction with the consolidated audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2019 (the 2019 Form 10-K).

The preparation of our consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other factors and assumptions that we believe are reasonable under the circumstances, including the estimated impact of extraordinary events such as the novel coronavirus (COVID-19) pandemic, the results of which form the basis for making judgments about the carrying values of our assets and liabilities. Actual results may differ significantly from our estimates and assumptions, including our estimates of the severity and duration of the COVID-19 pandemic. Further information can be found in Note 15.

Non-controlling interest – Effective April 1, 2020, we executed an agreement to form MedPay Exchange LLC (MPX), which delivers payments to healthcare providers from insurance companies and other payers. This entity is a variable interest entity (VIE), as defined in Accounting Standards Codification Topic 810, Consolidation. As we are the primary beneficiary of the VIE, we are required to consolidate MPX in our consolidated financial statements. Our partner’s interest in MPX is reported as non-controlling interest in the consolidated balance sheet within equity, separate from our equity. Net income (loss) and comprehensive income (loss) are attributed to us and the non-controlling interest. The amounts attributable to the non-controlling interest were not significant for the quarter ended June 30, 2020.

Comparability – Amounts on the consolidated balance sheet as of December 31, 2019 and amounts within cash flows from operating activities and cash flows from investing activities on the consolidated statement of cash flows for the six months ended June 30, 2019 have been modified to conform to the current year presentation. On the consolidated balance sheet, assets held for sale are included within other non-current assets. In the previous year, this amount was presented separately. Within cash flows from operating activities, loss on sales of businesses and customer lists is included within other non-cash items, net. In the previous year, this amount was presented separately. Within cash flows from investing activities, payments for acquisitions, net of cash acquired, is included within the other caption. In the previous year, this amount was presented separately.

NOTE 2: NEW ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Standards

ASU No. 2016-13 – In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-13, Measurement of Credit Losses on Financial Instruments. Subsequently, the FASB issued several amendments to this standard. These standards replace the incurred loss methodology previously utilized for valuing financial instruments with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology. The measurement of expected losses under the CECL methodology is applicable to financial instruments measured at amortized cost, including accounts and notes receivable. The standards also made targeted changes to the accounting for available-for-sale debt securities. We adopted the standards on January 1, 2020 using the modified retrospective method for financial instruments measured at amortized cost. Under this method, prior period amounts continue to be reported in accordance with previously applicable GAAP. We recorded a net decrease in retained earnings of $3,640 as of January 1, 2020 for the cumulative effect of adopting the standards, which consisted primarily of an increase in the allowance for credit losses on loans and notes receivable, net of the related deferred income tax impact. We recorded no allowance for credit losses related to our available-for-sale debt securities. Further information regarding these investments can be found in Note 3.

An allowance for uncollectible accounts is a valuation account that is deducted from an asset's amortized cost basis to present the net amount expected to be collected. Amounts are charged off against the allowance when we believe the

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

uncollectibility of an account is confirmed. In calculating the allowances related to trade accounts receivable and revenue in excess of billings, we utilize a combination of aging schedules with reserve rates applied to both current and aged receivables and roll-rate reserves using historical loss rates and changes in current or projected conditions. In determining the allowance for uncollectible accounts related to loans and notes receivable from distributors, we utilize a loss-rate analysis based on historical loss information, current delinquency rates, the credit quality of the loan recipients and the portfolio mix to determine an appropriate credit risk measurement, adjusted to reflect current loan-specific risk characteristics and changes in environmental conditions affecting our small business distributors. Changes in conditions that may affect our distributors include, but are not limited to, general economic conditions, changes in the markets for their products and services and changes in governmental regulations. In completing our analysis, we utilize a reversion methodology for periods beyond the reasonable and supportable forecast period, as many of our loans and notes receivable have longer terms. Further information regarding current risks and uncertainties affecting our loans and notes receivable can be found in Note 15. Further information regarding our allowances for uncollectible accounts can be found in Note 3.

Our trade accounts receivable and unbilled receivables are not interest-bearing. Interest rates on our loans and notes receivable generally range from 6% to 8% and reflect market interest rates at the time the transactions were executed. Accrued interest included in loans and notes receivable is not significant.

ASU No. 2018-13 – In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurements. This standard removes, modifies and adds certain disclosures related to recurring and nonrecurring fair value measurements. During 2018, we adopted the provisions of the standard that remove and modify disclosure requirements. The additional disclosures were effective for us on January 1, 2020 and are required to be applied prospectively to fair value measurements completed on or after that date. Disclosures regarding our fair value measurements can be found in Note 7.

ASU No. 2018-15 – In August 2018, the FASB issued ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The accounting for the service element of a hosting arrangement that is a service contract is not affected by the new standard. We adopted this standard on January 1, 2020, applying it prospectively to eligible costs incurred on or after this date. Adoption of this standard did impact our results of operations and financial position, as we previously expensed these implementation costs as incurred. As of June 30, 2020, $12,166 of cloud computing implementation costs were included within other non-current assets on the consolidated balance sheet. These costs primarily relate to our planned implementation of a new enterprise resource planning system.

Accounting Standards Not Yet Adopted

ASU No. 2019-12 – In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes. This standard addresses several specific areas of accounting for income taxes. The guidance is effective for us on January 1, 2021. Portions of the standard are required to be adopted prospectively and certain aspects will be adopted using the modified retrospective approach. We do not expect the application of this standard to have a significant impact on our results of operations or financial position.

NOTE 3: SUPPLEMENTAL BALANCE SHEET AND CASH FLOW INFORMATION

Trade accounts receivable – Changes in the allowance for uncollectible accounts included within trade accounts receivable for the six months ended June 30, 2020 and 2019 were as follows:



	Six Months Ended June 30,
(in thousands)	2020			2019
Balance, beginning of year	$	4,985		$	3,639
Bad debt expense	3,374			2,549
Write-offs and other	(1,633		)	(1,669		)
Balance, end of period	$	6,726		$	4,519

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

Inventories and supplies – Inventories and supplies were comprised of the following:



(in thousands)	June 30, 2020		December 31, 2019
Raw materials	$	7,001	$	6,977
Semi-finished goods	7,070		7,368
Finished goods	30,082		21,982
Supplies	3,372		3,594
Inventories and supplies	$	47,525	$	39,921

Available-for-sale debt securities – Available-for-sale debt securities included within funds held for customers were comprised of the following:



	June 30, 2020
(in thousands)	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Funds held for customers:⁽¹⁾
Domestic money market fund	$	7,000	$	—	$	—	$	7,000
Canadian and provincial government securities	8,732		126		—		8,858
Canadian guaranteed investment certificates	7,343		—		—		7,343
Available-for-sale debt securities	$	23,075	$	126	$	—	$	23,201

⁽¹⁾Funds held for customers, as reported on the consolidated balance sheet as of June 30, 2020, also included cash of $59,381.



	December 31, 2019
(in thousands)	Cost		Gross unrealized gains		Gross unrealized losses			Fair value
Funds held for customers:⁽¹⁾
Domestic money market fund	$	18,000	$	—	$	—		$	18,000
Canadian and provincial government securities	9,056		—		(304		)	8,752
Canadian guaranteed investment certificates	7,698		—		—			7,698
Available-for-sale debt securities	$	34,754	$	—	$	(304	)	$	34,450

⁽¹⁾Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2019, also included cash of $83,191.

Expected maturities of available-for-sale debt securities as of June 30, 2020 were as follows:



(in thousands)	Fair value
Due in one year or less	$	16,318
Due in two to five years	2,861
Due in six to ten years	4,022
Available-for-sale debt securities	$	23,201

Further information regarding the fair value of available-for-sale debt securities can be found in Note 7.

DELUXE CORPORATION

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts)

Revenue in excess of billings – Upon adoption of ASU No. 2016-13 and related amendments on January 1, 2020 (Note 2), we recorded an allowance for uncollectible accounts related to revenue in excess of billings. This allowance was not significant upon adoption or as of June 30, 2020. Revenue in excess of billings, net of the allowance for uncollectible acounts, was comprised of the following:



(in thousands)	June 30, 2020		December 31, 2019
Conditional right to receive consideration	$	16,839	$	24,499
Unconditional right to receive consideration	8,175		8,291
Revenue in excess of billings	$	25,014	$	32,790

Intangibles – Intangibles were comprised of the following:



	June 30, 2020							December 31, 2019
(in thousands)	Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Amortizable intangibles:
Internal-use software	$	397,913	$	(321,204	)	$	76,709	$	380,905	$	(299,698	)	$	81,207
Customer lists/relationships	310,282		(181,761		)	128,521		348,055		(187,462		)	160,593
Software to be sold	36,900		(21,770		)	15,130		36,900		(19,657		)	17,243

Form: 10-Q

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