Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Pitney Bowes Announces Third Quarter 2023 Financial Results By: Pitney Bowes Inc. via Business Wire November 02, 2023 at 07:00 AM EDT Pitney Bowes (NYSE: PBI) (“Pitney Bowes” or the “Company”), a global shipping and mailing company that provides technology, logistics, and financial services, today announced its financial results for the third quarter of fiscal year 2023. Jason Dies, Interim Chief Executive Officer, commented: “Our SendTech and Presort segments both delivered profit growth and margin expansion during the quarter, reflecting success in our growth strategies and productivity initiatives, as well as resilience in challenging economic conditions. We are ahead of schedule on delivering the savings associated with our previously announced restructuring plan. Building on this momentum, we have identified additional actions and are increasing our 2024 annualized cost savings under this program by an additional $40 million. This brings the total to approximately $115 million inclusive of restructuring and other productivity actions. Global Ecommerce did not meet financial expectations, and we are taking meaningful actions to enable this valuable segment to realize its potential. As we look ahead to next quarter and beyond, our teams will leave no stone unturned while working to identify near-term initiatives and long-term steps that can drive enhanced value for our stockholders and other stakeholders.” Third Quarter Financial Highlights Revenue in the quarter was $784 million, a decrease of 6 percent on a reported basis and 1 percent on a comparable basis versus prior year (1) GAAP EPS was a loss of $0.07 in the quarter versus GAAP EPS of $0.03 in third quarter 2022; Adjusted EPS was $0.00 and flat versus prior year GAAP cash from operating activities was $25 million in the quarter and Free Cash Flow was $15 million; both improved in the quarter compared to the prior year period Cash and short-term investments were $579 million at quarter-end Ahead of target on previously announced restructuring plan, adding incremental $40 million and now targeting $75 to $85 million in annual savings by end of 2024, bringing the total savings to $115 million when other productivity actions are included Used the net proceeds from $275 million private placement offering in July 2023, to redeem the remaining balance of 2024 notes and $30 million of the Term Loan A (1) Comparable basis is defined in the “Use of Non-GAAP Measures” section Earnings per share results are summarized in the table below: Third Quarter 2023 2022 GAAP EPS ($0.07) $0.03 Restructuring Charges and Asset Impairments $0.07 $0.02 Gain on Sale of Businesses - ($0.05) Adjusted EPS (2) $0.00 $0.00 (2) The sum of the earnings per share may not equal the totals due to rounding. Business Segment Reporting SendTech Solutions SendTech Solutions offers physical and digital mailing and shipping technology solutions, financing, services, supplies and other applications for small and medium businesses, retail, enterprise, and government clients around the world to help simplify and save on the sending, tracking and receiving of letters, parcels and flats. Third Quarter ($ millions) 2023 2022 % Change Reported % Change Comparable Basis Revenue $318 $332 (4%) (3%) Adjusted Segment EBITDA $105 $102 3% Adjusted Segment EBIT $98 $95 3% We are in a stage of our product lifecycle where we will have fewer new lease opportunities, which we expect to be generally offset by an increase in fixed term lease extensions. From a financial perspective, this shift results in lower equipment sales partially offset by higher margin financing revenue spread over the lease term. Support service revenue declined in line with the mail market and as a result of exiting certain unprofitable contracts to service equipment of third parties. Shipping-related revenue grew 6 percent year over year, partially offsetting the decline in mail related revenue, and now accounts for 12 percent of segment revenue. Simplification and cost reduction actions more than offset the revenue decline and resulted in Adjusted Segment EBIT improvement. Presort Services Presort Services provides sortation services that enable clients to qualify for USPS workshare discounts in First Class Mail, Marketing Mail, Marketing Mail Flats and Bound Printed Matter. Third Quarter ($ millions) 2023 2022 % Change Reported Revenue $152 $145 5% Adjusted Segment EBITDA $37 $28 35% Adjusted Segment EBIT $29 $21 42% New sales and higher revenue per piece more than offset organic mail decline, driving segment revenue growth. Growth in higher yielding mail classes contributed to increased revenue per piece. Adjusted Segment EBIT growth was driven by higher revenue, improved labor productivity from increased automation and process improvements, and lower unit transportation costs from select route insourcing. Global Ecommerce Global Ecommerce provides business to consumer logistics services for domestic and cross-border delivery, returns and fulfillment. Third Quarter ($ millions) 2023 2022 % Change Reported % Change Comparable Basis Revenue $313 $354 (12%) (1%) Adjusted Segment EBITDA ($25) ($17) (47%) Adjusted Segment EBIT ($42) ($35) (20%) Global Ecommerce processed 51 million domestic parcels in the quarter, which is up 38 percent from third quarter 2022. Domestic parcel revenue growth of 29 percent versus prior year, was more than offset by a loss in revenue from cross-border as that offering resets from the previously announced change in two client relationships. Cross-border revenue stabilized in the quarter versus second quarter 2023. The decline in Adjusted Segment EBIT was primarily a result of lower cross-border revenue, market pressures on domestic parcel revenue per piece, and incremental costs related to network consolidation efforts. Lower operating expenses partially offset the decline. Full Year 2023 Guidance Given our Global Ecommerce segment’s year-to-date performance and continued market headwinds, we now expect the Company’s full-year revenue to decline between 3% and 4% on a comparable basis and full-year adjusted EBIT margins to remain relatively flat versus the prior year. Conference Call and Webcast Management of Pitney Bowes will discuss the Company’s results in a broadcast over the Internet today at 8:00 a.m. ET. Instructions for listening to the earnings results via the Web are available on the Investor Relations page of the Company’s web site at www.pitneybowes.com. About Pitney Bowes Pitney Bowes (NYSE:PBI) is a global shipping and mailing company that provides technology, logistics, and financial services to more than 90 percent of the Fortune 500. Small business, retail, enterprise, and government clients around the world rely on Pitney Bowes to remove the complexity of sending mail and parcels. For additional information, visit: www.pitneybowes.com Use of Non-GAAP Measures Our financial results are reported in accordance with generally accepted accounting principles (GAAP). We also disclose certain non-GAAP measures, such as adjusted earnings before interest and taxes (Adjusted EBIT), adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), adjusted earnings per share (Adjusted EPS), revenue growth on a comparable basis and free cash flow. Adjusted EBIT, Adjusted EBITDA and Adjusted EPS exclude the impact of restructuring charges, goodwill impairment, gains, losses and costs related to the sale of assets, acquisitions and dispositions, losses on debt redemptions and refinancings and other unusual items. Management believes that these non-GAAP measures provide investors greater insight into the underlying operating trends of the business. We disclose revenue growth on a comparable basis, which excludes three items. First, the comparison excludes the impacts of foreign currency. Second, we are excluding the impact of the divestiture of the Borderfree business effective July 1, 2022. Third, we are excluding the impact of a change in the presentation of revenue beginning in the fourth quarter of 2022, from a gross basis to net basis due to an adjustment in terms of one of our contracts with the United States Postal Service. The change in revenue presentation impacts both our Global Ecommerce and SendTech Solutions segments. The change in revenue presentation does not impact gross profit. Management believes that excluding these items provides investors with a better understanding of the underlying revenue performance. Free cash flow adjusts cash flow from operations calculated in accordance with GAAP for capital expenditures, restructuring payments and other special items. Management believes free cash flow provides investors better insight into the amount of cash available for other discretionary uses. Adjusted Segment EBIT is the primary measure of profitability and operational performance at the segment level and is determined by deducting from segment revenue the related costs and expenses attributable to the segment. Adjusted Segment EBIT excludes interest, taxes, unallocated corporate expenses, restructuring charges, goodwill impairment, and other items not allocated to a business segment. The Company also reports Adjusted Segment EBITDA as an additional useful measure of segment profitability and operational performance. Complete reconciliations of non-GAAP measures to comparable GAAP measures can be found in the attached financial schedules and at the Company's web site at www.pb.com/investorrelations. This document contains “forward-looking statements” about the Company’s expected or potential future business and financial performance. Forward-looking statements include, but are not limited to, statements about future revenue and earnings guidance and future events or conditions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from those projected. Factors which could cause future financial performance to differ materially from expectations include, without limitation, declining physical mail volumes; changes in postal regulations or the operations and financial health of posts in the U.S. or other major markets or changes to the broader postal or shipping markets; our ability to continue to grow and manage unexpected fluctuations in volumes, gain additional economies of scale and improve profitability within our Global Ecommerce segment; the loss of some of our larger clients in our Global Ecommerce and Presort Services segments; the loss of, or significant changes to, United States Postal Service (USPS) commercial programs, or our contractual relationships with the USPS or their performance under those contracts; the impacts on our cost of debt due to recent increases in interest rates and the potential for future interest rate hikes; and other factors as more fully outlined in the Company's 2022 Form 10-K Annual Report and other reports filed with the Securities and Exchange Commission during 2023. Pitney Bowes assumes no obligation to update any forward-looking statements contained in this document as a result of new information, events or developments. Note: Consolidated statements of income; revenue, adjusted segment EBIT and adjusted segment EBITDA by business segment; and reconciliations of GAAP to non-GAAP measures for the three and nine months ended September 30, 2023 and 2022, and consolidated balance sheets at September 30, 2023 and December 31, 2022 are attached. Pitney Bowes Inc. Consolidated Statements of Operations (Unaudited; in thousands, except per share amounts) Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Revenue: Business services $ 483,987 $ 518,405 $ 1,480,975 $ 1,667,267 Support services 101,855 107,642 310,454 325,619 Financing 68,572 67,757 202,323 207,084 Equipment sales 76,705 83,528 238,766 262,810 Supplies 35,695 37,455 111,035 116,761 Rentals 16,937 16,127 51,217 49,810 Total revenue 783,751 830,914 2,394,770 2,629,351 Costs and expenses: Cost of business services 419,859 452,715 1,276,814 1,433,474 Cost of support services 35,589 36,618 107,447 111,463 Financing interest expense 16,813 13,692 46,112 37,827 Cost of equipment sales 52,952 60,595 166,303 188,181 Cost of supplies 10,498 10,529 32,607 33,074 Cost of rentals 4,289 6,270 14,859 19,052 Selling, general and administrative 209,416 209,576 674,085 678,999 Research and development 10,362 9,812 31,129 32,400 Restructuring charges and asset impairments 16,578 4,264 42,620 12,672 Goodwill impairment - - 118,599 - Interest expense, net 26,782 23,685 72,044 66,816 Other components of net pension and postretirement (income) cost (2,683 ) 1,427 (6,144 ) 3,229 Other income, net - (8,398 ) (3,064 ) (20,299 ) Total costs and expenses 800,455 820,785 2,573,411 2,596,888 (Loss) income before taxes (16,704 ) 10,129 (178,641 ) 32,463 (Benefit) provision for income taxes (4,185 ) 4,642 (16,850 ) 1,819 Net (loss) income $ (12,519 ) $ 5,487 $ (161,791 ) $ 30,644 (Loss) earnings per share: Basic $ (0.07 ) $ 0.03 $ (0.92 ) $ 0.18 Diluted $ (0.07 ) $ 0.03 $ (0.92 ) $ 0.17 Weighted-average shares used in diluted earnings per share 176,099 176,966 175,428 177,418 Pitney Bowes Inc. Consolidated Balance Sheets (Unaudited; in thousands) Assets September 30,2023 December 31,2022 Current assets: Cash and cash equivalents $ 557,696 $ 669,981 Short-term investments 21,732 11,172 Accounts and other receivables, net 288,592 343,557 Short-term finance receivables, net 550,152 564,972 Inventories 83,781 83,720 Current income taxes 6,392 8,790 Other current assets and prepayments 109,189 115,824 Total current assets 1,617,534 1,798,016 Property, plant and equipment, net 391,649 420,672 Rental property and equipment, net 24,652 27,487 Long-term finance receivables, net 641,251 627,124 Goodwill 945,418 1,066,951 Intangible assets, net 66,111 77,944 Operating lease assets 309,995 296,129 Noncurrent income taxes 55,378 46,613 Other assets 370,716 380,419 Total assets $ 4,422,704 $ 4,741,355 Liabilities and stockholders' (deficit) equity Current liabilities: Accounts payable and accrued liabilities $ 793,609 $ 907,083 Customer deposits at Pitney Bowes Bank 642,556 628,072 Current operating lease liabilities 58,270 52,576 Current portion of long-term debt 56,533 32,764 Advance billings 87,739 105,207 Current income taxes 1,819 2,101 Total current liabilities 1,640,526 1,727,803 Long-term debt 2,101,595 2,172,502 Deferred taxes on income 238,391 263,131 Tax uncertainties and other income tax liabilities 21,386 23,841 Noncurrent operating lease liabilities 279,920 265,696 Other noncurrent liabilities 265,995 227,729 Total liabilities 4,547,813 4,680,702 Stockholders' (deficit) equity: Common stock 323,338 323,338 Retained earnings 4,872,439 5,125,677 Accumulated other comprehensive loss (838,071 ) (835,564 ) Treasury stock, at cost (4,482,815 ) (4,552,798 ) Total stockholders' (deficit) equity (125,109 ) 60,653 Total liabilities and stockholders' (deficit) equity $ 4,422,704 $ 4,741,355 Pitney Bowes Inc. Business Segment Revenue (Unaudited; in thousands) Three months ended September 30, Nine months ended September 30, 2023 2022 % Change 2023 2022 % Change Global Ecommerce Revenue, as reported $ 313,161 $ 354,326 (12%) $ 974,306 $ 1,166,623 (16%) Impact of change in revenue presentation (39,795 ) (115,171 ) Impact of Borderfree divestiture - (22,550 ) Comparable revenue before currency 313,161 314,531 (0%) 974,306 1,028,902 (5%) Impact of currency on revenue (1,023 ) 2,255 Comparable revenue $ 312,138 $ 314,531 (1%) $ 976,561 $ 1,028,902 (5%) Presort Services Revenue, as reported $ 152,451 $ 144,824 5% $ 454,460 $ 444,302 2% Sending Technology Solutions Revenue, as reported $ 318,139 $ 331,764 (4%) $ 966,004 $ 1,018,426 (5%) Impact of change in revenue presentation (4,373 ) (12,916 ) Comparable revenue before currency 318,139 327,391 (3%) 966,004 1,005,510 (4%) Impact of currency on revenue (2,106 ) 3,463 Comparable revenue $ 316,033 $ 327,391 (3%) $ 969,467 $ 1,005,510 (4%) Consolidated Revenue, as reported $ 783,751 $ 830,914 (6%) $ 2,394,770 $ 2,629,351 (9%) Impact of change in revenue presentation (44,168 ) (128,087 ) Impact of Borderfree divestiture - (22,550 ) Comparable revenue before currency 783,751 786,746 (0%) 2,394,770 2,478,714 (3%) Impact of currency on revenue (3,129 ) 5,718 Comparable revenue $ 780,622 $ 786,746 (1%) $ 2,400,488 $ 2,478,714 (3%) Pitney Bowes Inc. Adjusted Segment EBIT & EBITDA (Unaudited; in thousands) Three months ended September 30, 2023 2022 % change AdjustedSegmentEBIT (1) D&A AdjustedSegmentEBITDA AdjustedSegmentEBIT (1) D&A AdjustedSegmentEBITDA AdjustedSegmentEBIT AdjustedSegmentEBITDA Global Ecommerce $ (41,712 ) $ 16,872 $ (24,840 ) $ (34,881 ) $ 17,982 $ (16,899 ) (20%) (47%) Presort Services 29,124 8,313 37,437 20,561 7,182 27,743 42% 35% Sending Technology Solutions 97,761 7,494 105,255 95,234 7,248 102,482 3% 3% Segment total $ 85,173 $ 32,679 117,852 $ 80,914 $ 32,412 113,326 5% 4% Reconciliation of Segment Adjusted EBITDA to Net (Loss) Income: Segment depreciation and amortization (32,679 ) (32,412 ) Unallocated corporate expenses (41,704 ) (42,908 ) Restructuring charges and asset impairments (16,578 ) (4,264 ) Gain on sale of businesses, including transaction costs - 13,764 Interest expense, net (43,595 ) (37,377 ) Benefit (provision) for income taxes 4,185 (4,642 ) Net (loss) income $ (12,519 ) $ 5,487 Nine months ended September 30, 2023 2022 % change EBIT (1) D&A EBITDA EBIT (1) D&A EBITDA EBIT EBITDA Global Ecommerce $ (114,033 ) $ 49,906 $ (64,127 ) $ (77,402 ) $ 60,906 $ (16,496 ) (47%) >(100%) Presort Services 76,458 25,172 101,630 53,044 20,601 73,645 44% 38% Sending Technology Solutions 291,912 22,344 314,256 295,374 22,159 317,533 (1%) (1%) Segment total $ 254,337 $ 97,422 351,759 $ 271,016 $ 103,666 374,682 (6%) (6%) Reconciliation of Segment EBITDA to Net (Loss) Income: Segment depreciation and amortization (97,422 ) (103,666 ) Unallocated corporate expenses (145,762 ) (141,537 ) Restructuring charges and asset impairments (42,620 ) (12,672 ) Goodwill impairment (118,599 ) - Gain (loss) on debt redemption 3,064 (4,993 ) Proxy solicitation fees (10,905 ) - Gain on sale of assets - 14,372 Gain on sale of businesses, including transaction costs - 10,920 Interest expense, net (118,156 ) (104,643 ) Benefit (provision) for income taxes 16,850 (1,819 ) Net (loss) income $ (161,791 ) $ 30,644 (1) Adjusted segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges, goodwill impairment, and other items that are not allocated to a particular business segment. Pitney Bowes Inc. Reconciliation of Reported Consolidated Results to Adjusted Results (Unaudited; in thousands, except per share amounts) Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Reconciliation of reported net (loss) income to adjusted EBIT and adjusted EBITDA Net (loss) income $ (12,519 ) $ 5,487 $ (161,791 ) $ 30,644 (Benefit) provision for income taxes (4,185 ) 4,642 (16,850 ) 1,819 (Loss) income before taxes (16,704 ) 10,129 (178,641 ) 32,463 Restructuring charges and asset impairments 16,578 4,264 42,620 12,672 Goodwill impairment - - 118,599 - (Gain) loss on debt redemption - - (3,064 ) 4,993 Proxy solicitation fees - - 10,905 - Gain on sale of assets - - - (14,372 ) Gain on sale of businesses, including transaction costs - (13,764 ) - (10,920 ) Adjusted net (loss) income before tax (126 ) 629 (9,581 ) 24,836 Interest, net 43,595 37,377 118,156 104,643 Adjusted EBIT 43,469 38,006 108,575 129,479 Depreciation and amortization 40,262 39,280 120,032 124,752 Adjusted EBITDA $ 83,731 $ 77,286 $ 228,607 $ 254,231 Reconciliation of reported diluted (loss) earnings per share to adjusted diluted (loss) earnings per share Diluted (loss) earnings per share $ (0.07 ) $ 0.03 $ (0.92 ) $ 0.17 Restructuring charges and asset impairments 0.07 0.02 0.18 0.05 Goodwill impairment - - 0.67 - (Gain) loss on debt redemption - - (0.01 ) 0.02 Proxy solicitation fees - - 0.05 - Gain on sale of assets - - - (0.06 ) Gain on sale of businesses, including transaction costs - (0.05 ) - (0.09 ) Adjusted diluted (loss) earnings per share (1) $ 0.00 $ (0.00 ) $ (0.04 ) $ 0.10 (1) The sum of the earnings per share amounts may not equal the totals due to rounding. Reconciliation of reported net cash from operating activities to free cash flow Net cash from operating activities $ 25,305 $ (36,465 ) $ (14,453 ) $ 9,229 Capital expenditures (22,952 ) (33,359 ) (77,598 ) (97,533 ) Restructuring payments 12,269 3,506 25,152 11,761 Proxy solicitation fees paid 623 - 10,905 - Transaction costs paid - 3,268 - 5,400 Free cash flow $ 15,245 $ (63,050 ) $ (55,994 ) $ (71,143 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20231101617605/en/Contacts Editorial - Kathleen Raymond Head of Communications 203.351.7233 Financial - Phil Landler VP, Investor Relations 203.351.6141 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Pitney Bowes Announces Third Quarter 2023 Financial Results By: Pitney Bowes Inc. via Business Wire November 02, 2023 at 07:00 AM EDT Pitney Bowes (NYSE: PBI) (“Pitney Bowes” or the “Company”), a global shipping and mailing company that provides technology, logistics, and financial services, today announced its financial results for the third quarter of fiscal year 2023. Jason Dies, Interim Chief Executive Officer, commented: “Our SendTech and Presort segments both delivered profit growth and margin expansion during the quarter, reflecting success in our growth strategies and productivity initiatives, as well as resilience in challenging economic conditions. We are ahead of schedule on delivering the savings associated with our previously announced restructuring plan. Building on this momentum, we have identified additional actions and are increasing our 2024 annualized cost savings under this program by an additional $40 million. This brings the total to approximately $115 million inclusive of restructuring and other productivity actions. Global Ecommerce did not meet financial expectations, and we are taking meaningful actions to enable this valuable segment to realize its potential. As we look ahead to next quarter and beyond, our teams will leave no stone unturned while working to identify near-term initiatives and long-term steps that can drive enhanced value for our stockholders and other stakeholders.” Third Quarter Financial Highlights Revenue in the quarter was $784 million, a decrease of 6 percent on a reported basis and 1 percent on a comparable basis versus prior year (1) GAAP EPS was a loss of $0.07 in the quarter versus GAAP EPS of $0.03 in third quarter 2022; Adjusted EPS was $0.00 and flat versus prior year GAAP cash from operating activities was $25 million in the quarter and Free Cash Flow was $15 million; both improved in the quarter compared to the prior year period Cash and short-term investments were $579 million at quarter-end Ahead of target on previously announced restructuring plan, adding incremental $40 million and now targeting $75 to $85 million in annual savings by end of 2024, bringing the total savings to $115 million when other productivity actions are included Used the net proceeds from $275 million private placement offering in July 2023, to redeem the remaining balance of 2024 notes and $30 million of the Term Loan A (1) Comparable basis is defined in the “Use of Non-GAAP Measures” section Earnings per share results are summarized in the table below: Third Quarter 2023 2022 GAAP EPS ($0.07) $0.03 Restructuring Charges and Asset Impairments $0.07 $0.02 Gain on Sale of Businesses - ($0.05) Adjusted EPS (2) $0.00 $0.00 (2) The sum of the earnings per share may not equal the totals due to rounding. Business Segment Reporting SendTech Solutions SendTech Solutions offers physical and digital mailing and shipping technology solutions, financing, services, supplies and other applications for small and medium businesses, retail, enterprise, and government clients around the world to help simplify and save on the sending, tracking and receiving of letters, parcels and flats. Third Quarter ($ millions) 2023 2022 % Change Reported % Change Comparable Basis Revenue $318 $332 (4%) (3%) Adjusted Segment EBITDA $105 $102 3% Adjusted Segment EBIT $98 $95 3% We are in a stage of our product lifecycle where we will have fewer new lease opportunities, which we expect to be generally offset by an increase in fixed term lease extensions. From a financial perspective, this shift results in lower equipment sales partially offset by higher margin financing revenue spread over the lease term. Support service revenue declined in line with the mail market and as a result of exiting certain unprofitable contracts to service equipment of third parties. Shipping-related revenue grew 6 percent year over year, partially offsetting the decline in mail related revenue, and now accounts for 12 percent of segment revenue. Simplification and cost reduction actions more than offset the revenue decline and resulted in Adjusted Segment EBIT improvement. Presort Services Presort Services provides sortation services that enable clients to qualify for USPS workshare discounts in First Class Mail, Marketing Mail, Marketing Mail Flats and Bound Printed Matter. Third Quarter ($ millions) 2023 2022 % Change Reported Revenue $152 $145 5% Adjusted Segment EBITDA $37 $28 35% Adjusted Segment EBIT $29 $21 42% New sales and higher revenue per piece more than offset organic mail decline, driving segment revenue growth. Growth in higher yielding mail classes contributed to increased revenue per piece. Adjusted Segment EBIT growth was driven by higher revenue, improved labor productivity from increased automation and process improvements, and lower unit transportation costs from select route insourcing. Global Ecommerce Global Ecommerce provides business to consumer logistics services for domestic and cross-border delivery, returns and fulfillment. Third Quarter ($ millions) 2023 2022 % Change Reported % Change Comparable Basis Revenue $313 $354 (12%) (1%) Adjusted Segment EBITDA ($25) ($17) (47%) Adjusted Segment EBIT ($42) ($35) (20%) Global Ecommerce processed 51 million domestic parcels in the quarter, which is up 38 percent from third quarter 2022. Domestic parcel revenue growth of 29 percent versus prior year, was more than offset by a loss in revenue from cross-border as that offering resets from the previously announced change in two client relationships. Cross-border revenue stabilized in the quarter versus second quarter 2023. The decline in Adjusted Segment EBIT was primarily a result of lower cross-border revenue, market pressures on domestic parcel revenue per piece, and incremental costs related to network consolidation efforts. Lower operating expenses partially offset the decline. Full Year 2023 Guidance Given our Global Ecommerce segment’s year-to-date performance and continued market headwinds, we now expect the Company’s full-year revenue to decline between 3% and 4% on a comparable basis and full-year adjusted EBIT margins to remain relatively flat versus the prior year. Conference Call and Webcast Management of Pitney Bowes will discuss the Company’s results in a broadcast over the Internet today at 8:00 a.m. ET. Instructions for listening to the earnings results via the Web are available on the Investor Relations page of the Company’s web site at www.pitneybowes.com. About Pitney Bowes Pitney Bowes (NYSE:PBI) is a global shipping and mailing company that provides technology, logistics, and financial services to more than 90 percent of the Fortune 500. Small business, retail, enterprise, and government clients around the world rely on Pitney Bowes to remove the complexity of sending mail and parcels. For additional information, visit: www.pitneybowes.com Use of Non-GAAP Measures Our financial results are reported in accordance with generally accepted accounting principles (GAAP). We also disclose certain non-GAAP measures, such as adjusted earnings before interest and taxes (Adjusted EBIT), adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), adjusted earnings per share (Adjusted EPS), revenue growth on a comparable basis and free cash flow. Adjusted EBIT, Adjusted EBITDA and Adjusted EPS exclude the impact of restructuring charges, goodwill impairment, gains, losses and costs related to the sale of assets, acquisitions and dispositions, losses on debt redemptions and refinancings and other unusual items. Management believes that these non-GAAP measures provide investors greater insight into the underlying operating trends of the business. We disclose revenue growth on a comparable basis, which excludes three items. First, the comparison excludes the impacts of foreign currency. Second, we are excluding the impact of the divestiture of the Borderfree business effective July 1, 2022. Third, we are excluding the impact of a change in the presentation of revenue beginning in the fourth quarter of 2022, from a gross basis to net basis due to an adjustment in terms of one of our contracts with the United States Postal Service. The change in revenue presentation impacts both our Global Ecommerce and SendTech Solutions segments. The change in revenue presentation does not impact gross profit. Management believes that excluding these items provides investors with a better understanding of the underlying revenue performance. Free cash flow adjusts cash flow from operations calculated in accordance with GAAP for capital expenditures, restructuring payments and other special items. Management believes free cash flow provides investors better insight into the amount of cash available for other discretionary uses. Adjusted Segment EBIT is the primary measure of profitability and operational performance at the segment level and is determined by deducting from segment revenue the related costs and expenses attributable to the segment. Adjusted Segment EBIT excludes interest, taxes, unallocated corporate expenses, restructuring charges, goodwill impairment, and other items not allocated to a business segment. The Company also reports Adjusted Segment EBITDA as an additional useful measure of segment profitability and operational performance. Complete reconciliations of non-GAAP measures to comparable GAAP measures can be found in the attached financial schedules and at the Company's web site at www.pb.com/investorrelations. This document contains “forward-looking statements” about the Company’s expected or potential future business and financial performance. Forward-looking statements include, but are not limited to, statements about future revenue and earnings guidance and future events or conditions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from those projected. Factors which could cause future financial performance to differ materially from expectations include, without limitation, declining physical mail volumes; changes in postal regulations or the operations and financial health of posts in the U.S. or other major markets or changes to the broader postal or shipping markets; our ability to continue to grow and manage unexpected fluctuations in volumes, gain additional economies of scale and improve profitability within our Global Ecommerce segment; the loss of some of our larger clients in our Global Ecommerce and Presort Services segments; the loss of, or significant changes to, United States Postal Service (USPS) commercial programs, or our contractual relationships with the USPS or their performance under those contracts; the impacts on our cost of debt due to recent increases in interest rates and the potential for future interest rate hikes; and other factors as more fully outlined in the Company's 2022 Form 10-K Annual Report and other reports filed with the Securities and Exchange Commission during 2023. Pitney Bowes assumes no obligation to update any forward-looking statements contained in this document as a result of new information, events or developments. Note: Consolidated statements of income; revenue, adjusted segment EBIT and adjusted segment EBITDA by business segment; and reconciliations of GAAP to non-GAAP measures for the three and nine months ended September 30, 2023 and 2022, and consolidated balance sheets at September 30, 2023 and December 31, 2022 are attached. Pitney Bowes Inc. Consolidated Statements of Operations (Unaudited; in thousands, except per share amounts) Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Revenue: Business services $ 483,987 $ 518,405 $ 1,480,975 $ 1,667,267 Support services 101,855 107,642 310,454 325,619 Financing 68,572 67,757 202,323 207,084 Equipment sales 76,705 83,528 238,766 262,810 Supplies 35,695 37,455 111,035 116,761 Rentals 16,937 16,127 51,217 49,810 Total revenue 783,751 830,914 2,394,770 2,629,351 Costs and expenses: Cost of business services 419,859 452,715 1,276,814 1,433,474 Cost of support services 35,589 36,618 107,447 111,463 Financing interest expense 16,813 13,692 46,112 37,827 Cost of equipment sales 52,952 60,595 166,303 188,181 Cost of supplies 10,498 10,529 32,607 33,074 Cost of rentals 4,289 6,270 14,859 19,052 Selling, general and administrative 209,416 209,576 674,085 678,999 Research and development 10,362 9,812 31,129 32,400 Restructuring charges and asset impairments 16,578 4,264 42,620 12,672 Goodwill impairment - - 118,599 - Interest expense, net 26,782 23,685 72,044 66,816 Other components of net pension and postretirement (income) cost (2,683 ) 1,427 (6,144 ) 3,229 Other income, net - (8,398 ) (3,064 ) (20,299 ) Total costs and expenses 800,455 820,785 2,573,411 2,596,888 (Loss) income before taxes (16,704 ) 10,129 (178,641 ) 32,463 (Benefit) provision for income taxes (4,185 ) 4,642 (16,850 ) 1,819 Net (loss) income $ (12,519 ) $ 5,487 $ (161,791 ) $ 30,644 (Loss) earnings per share: Basic $ (0.07 ) $ 0.03 $ (0.92 ) $ 0.18 Diluted $ (0.07 ) $ 0.03 $ (0.92 ) $ 0.17 Weighted-average shares used in diluted earnings per share 176,099 176,966 175,428 177,418 Pitney Bowes Inc. Consolidated Balance Sheets (Unaudited; in thousands) Assets September 30,2023 December 31,2022 Current assets: Cash and cash equivalents $ 557,696 $ 669,981 Short-term investments 21,732 11,172 Accounts and other receivables, net 288,592 343,557 Short-term finance receivables, net 550,152 564,972 Inventories 83,781 83,720 Current income taxes 6,392 8,790 Other current assets and prepayments 109,189 115,824 Total current assets 1,617,534 1,798,016 Property, plant and equipment, net 391,649 420,672 Rental property and equipment, net 24,652 27,487 Long-term finance receivables, net 641,251 627,124 Goodwill 945,418 1,066,951 Intangible assets, net 66,111 77,944 Operating lease assets 309,995 296,129 Noncurrent income taxes 55,378 46,613 Other assets 370,716 380,419 Total assets $ 4,422,704 $ 4,741,355 Liabilities and stockholders' (deficit) equity Current liabilities: Accounts payable and accrued liabilities $ 793,609 $ 907,083 Customer deposits at Pitney Bowes Bank 642,556 628,072 Current operating lease liabilities 58,270 52,576 Current portion of long-term debt 56,533 32,764 Advance billings 87,739 105,207 Current income taxes 1,819 2,101 Total current liabilities 1,640,526 1,727,803 Long-term debt 2,101,595 2,172,502 Deferred taxes on income 238,391 263,131 Tax uncertainties and other income tax liabilities 21,386 23,841 Noncurrent operating lease liabilities 279,920 265,696 Other noncurrent liabilities 265,995 227,729 Total liabilities 4,547,813 4,680,702 Stockholders' (deficit) equity: Common stock 323,338 323,338 Retained earnings 4,872,439 5,125,677 Accumulated other comprehensive loss (838,071 ) (835,564 ) Treasury stock, at cost (4,482,815 ) (4,552,798 ) Total stockholders' (deficit) equity (125,109 ) 60,653 Total liabilities and stockholders' (deficit) equity $ 4,422,704 $ 4,741,355 Pitney Bowes Inc. Business Segment Revenue (Unaudited; in thousands) Three months ended September 30, Nine months ended September 30, 2023 2022 % Change 2023 2022 % Change Global Ecommerce Revenue, as reported $ 313,161 $ 354,326 (12%) $ 974,306 $ 1,166,623 (16%) Impact of change in revenue presentation (39,795 ) (115,171 ) Impact of Borderfree divestiture - (22,550 ) Comparable revenue before currency 313,161 314,531 (0%) 974,306 1,028,902 (5%) Impact of currency on revenue (1,023 ) 2,255 Comparable revenue $ 312,138 $ 314,531 (1%) $ 976,561 $ 1,028,902 (5%) Presort Services Revenue, as reported $ 152,451 $ 144,824 5% $ 454,460 $ 444,302 2% Sending Technology Solutions Revenue, as reported $ 318,139 $ 331,764 (4%) $ 966,004 $ 1,018,426 (5%) Impact of change in revenue presentation (4,373 ) (12,916 ) Comparable revenue before currency 318,139 327,391 (3%) 966,004 1,005,510 (4%) Impact of currency on revenue (2,106 ) 3,463 Comparable revenue $ 316,033 $ 327,391 (3%) $ 969,467 $ 1,005,510 (4%) Consolidated Revenue, as reported $ 783,751 $ 830,914 (6%) $ 2,394,770 $ 2,629,351 (9%) Impact of change in revenue presentation (44,168 ) (128,087 ) Impact of Borderfree divestiture - (22,550 ) Comparable revenue before currency 783,751 786,746 (0%) 2,394,770 2,478,714 (3%) Impact of currency on revenue (3,129 ) 5,718 Comparable revenue $ 780,622 $ 786,746 (1%) $ 2,400,488 $ 2,478,714 (3%) Pitney Bowes Inc. Adjusted Segment EBIT & EBITDA (Unaudited; in thousands) Three months ended September 30, 2023 2022 % change AdjustedSegmentEBIT (1) D&A AdjustedSegmentEBITDA AdjustedSegmentEBIT (1) D&A AdjustedSegmentEBITDA AdjustedSegmentEBIT AdjustedSegmentEBITDA Global Ecommerce $ (41,712 ) $ 16,872 $ (24,840 ) $ (34,881 ) $ 17,982 $ (16,899 ) (20%) (47%) Presort Services 29,124 8,313 37,437 20,561 7,182 27,743 42% 35% Sending Technology Solutions 97,761 7,494 105,255 95,234 7,248 102,482 3% 3% Segment total $ 85,173 $ 32,679 117,852 $ 80,914 $ 32,412 113,326 5% 4% Reconciliation of Segment Adjusted EBITDA to Net (Loss) Income: Segment depreciation and amortization (32,679 ) (32,412 ) Unallocated corporate expenses (41,704 ) (42,908 ) Restructuring charges and asset impairments (16,578 ) (4,264 ) Gain on sale of businesses, including transaction costs - 13,764 Interest expense, net (43,595 ) (37,377 ) Benefit (provision) for income taxes 4,185 (4,642 ) Net (loss) income $ (12,519 ) $ 5,487 Nine months ended September 30, 2023 2022 % change EBIT (1) D&A EBITDA EBIT (1) D&A EBITDA EBIT EBITDA Global Ecommerce $ (114,033 ) $ 49,906 $ (64,127 ) $ (77,402 ) $ 60,906 $ (16,496 ) (47%) >(100%) Presort Services 76,458 25,172 101,630 53,044 20,601 73,645 44% 38% Sending Technology Solutions 291,912 22,344 314,256 295,374 22,159 317,533 (1%) (1%) Segment total $ 254,337 $ 97,422 351,759 $ 271,016 $ 103,666 374,682 (6%) (6%) Reconciliation of Segment EBITDA to Net (Loss) Income: Segment depreciation and amortization (97,422 ) (103,666 ) Unallocated corporate expenses (145,762 ) (141,537 ) Restructuring charges and asset impairments (42,620 ) (12,672 ) Goodwill impairment (118,599 ) - Gain (loss) on debt redemption 3,064 (4,993 ) Proxy solicitation fees (10,905 ) - Gain on sale of assets - 14,372 Gain on sale of businesses, including transaction costs - 10,920 Interest expense, net (118,156 ) (104,643 ) Benefit (provision) for income taxes 16,850 (1,819 ) Net (loss) income $ (161,791 ) $ 30,644 (1) Adjusted segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges, goodwill impairment, and other items that are not allocated to a particular business segment. Pitney Bowes Inc. Reconciliation of Reported Consolidated Results to Adjusted Results (Unaudited; in thousands, except per share amounts) Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Reconciliation of reported net (loss) income to adjusted EBIT and adjusted EBITDA Net (loss) income $ (12,519 ) $ 5,487 $ (161,791 ) $ 30,644 (Benefit) provision for income taxes (4,185 ) 4,642 (16,850 ) 1,819 (Loss) income before taxes (16,704 ) 10,129 (178,641 ) 32,463 Restructuring charges and asset impairments 16,578 4,264 42,620 12,672 Goodwill impairment - - 118,599 - (Gain) loss on debt redemption - - (3,064 ) 4,993 Proxy solicitation fees - - 10,905 - Gain on sale of assets - - - (14,372 ) Gain on sale of businesses, including transaction costs - (13,764 ) - (10,920 ) Adjusted net (loss) income before tax (126 ) 629 (9,581 ) 24,836 Interest, net 43,595 37,377 118,156 104,643 Adjusted EBIT 43,469 38,006 108,575 129,479 Depreciation and amortization 40,262 39,280 120,032 124,752 Adjusted EBITDA $ 83,731 $ 77,286 $ 228,607 $ 254,231 Reconciliation of reported diluted (loss) earnings per share to adjusted diluted (loss) earnings per share Diluted (loss) earnings per share $ (0.07 ) $ 0.03 $ (0.92 ) $ 0.17 Restructuring charges and asset impairments 0.07 0.02 0.18 0.05 Goodwill impairment - - 0.67 - (Gain) loss on debt redemption - - (0.01 ) 0.02 Proxy solicitation fees - - 0.05 - Gain on sale of assets - - - (0.06 ) Gain on sale of businesses, including transaction costs - (0.05 ) - (0.09 ) Adjusted diluted (loss) earnings per share (1) $ 0.00 $ (0.00 ) $ (0.04 ) $ 0.10 (1) The sum of the earnings per share amounts may not equal the totals due to rounding. Reconciliation of reported net cash from operating activities to free cash flow Net cash from operating activities $ 25,305 $ (36,465 ) $ (14,453 ) $ 9,229 Capital expenditures (22,952 ) (33,359 ) (77,598 ) (97,533 ) Restructuring payments 12,269 3,506 25,152 11,761 Proxy solicitation fees paid 623 - 10,905 - Transaction costs paid - 3,268 - 5,400 Free cash flow $ 15,245 $ (63,050 ) $ (55,994 ) $ (71,143 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20231101617605/en/Contacts Editorial - Kathleen Raymond Head of Communications 203.351.7233 Financial - Phil Landler VP, Investor Relations 203.351.6141
Pitney Bowes (NYSE: PBI) (“Pitney Bowes” or the “Company”), a global shipping and mailing company that provides technology, logistics, and financial services, today announced its financial results for the third quarter of fiscal year 2023. Jason Dies, Interim Chief Executive Officer, commented: “Our SendTech and Presort segments both delivered profit growth and margin expansion during the quarter, reflecting success in our growth strategies and productivity initiatives, as well as resilience in challenging economic conditions. We are ahead of schedule on delivering the savings associated with our previously announced restructuring plan. Building on this momentum, we have identified additional actions and are increasing our 2024 annualized cost savings under this program by an additional $40 million. This brings the total to approximately $115 million inclusive of restructuring and other productivity actions. Global Ecommerce did not meet financial expectations, and we are taking meaningful actions to enable this valuable segment to realize its potential. As we look ahead to next quarter and beyond, our teams will leave no stone unturned while working to identify near-term initiatives and long-term steps that can drive enhanced value for our stockholders and other stakeholders.” Third Quarter Financial Highlights Revenue in the quarter was $784 million, a decrease of 6 percent on a reported basis and 1 percent on a comparable basis versus prior year (1) GAAP EPS was a loss of $0.07 in the quarter versus GAAP EPS of $0.03 in third quarter 2022; Adjusted EPS was $0.00 and flat versus prior year GAAP cash from operating activities was $25 million in the quarter and Free Cash Flow was $15 million; both improved in the quarter compared to the prior year period Cash and short-term investments were $579 million at quarter-end Ahead of target on previously announced restructuring plan, adding incremental $40 million and now targeting $75 to $85 million in annual savings by end of 2024, bringing the total savings to $115 million when other productivity actions are included Used the net proceeds from $275 million private placement offering in July 2023, to redeem the remaining balance of 2024 notes and $30 million of the Term Loan A (1) Comparable basis is defined in the “Use of Non-GAAP Measures” section Earnings per share results are summarized in the table below: Third Quarter 2023 2022 GAAP EPS ($0.07) $0.03 Restructuring Charges and Asset Impairments $0.07 $0.02 Gain on Sale of Businesses - ($0.05) Adjusted EPS (2) $0.00 $0.00 (2) The sum of the earnings per share may not equal the totals due to rounding. Business Segment Reporting SendTech Solutions SendTech Solutions offers physical and digital mailing and shipping technology solutions, financing, services, supplies and other applications for small and medium businesses, retail, enterprise, and government clients around the world to help simplify and save on the sending, tracking and receiving of letters, parcels and flats. Third Quarter ($ millions) 2023 2022 % Change Reported % Change Comparable Basis Revenue $318 $332 (4%) (3%) Adjusted Segment EBITDA $105 $102 3% Adjusted Segment EBIT $98 $95 3% We are in a stage of our product lifecycle where we will have fewer new lease opportunities, which we expect to be generally offset by an increase in fixed term lease extensions. From a financial perspective, this shift results in lower equipment sales partially offset by higher margin financing revenue spread over the lease term. Support service revenue declined in line with the mail market and as a result of exiting certain unprofitable contracts to service equipment of third parties. Shipping-related revenue grew 6 percent year over year, partially offsetting the decline in mail related revenue, and now accounts for 12 percent of segment revenue. Simplification and cost reduction actions more than offset the revenue decline and resulted in Adjusted Segment EBIT improvement. Presort Services Presort Services provides sortation services that enable clients to qualify for USPS workshare discounts in First Class Mail, Marketing Mail, Marketing Mail Flats and Bound Printed Matter. Third Quarter ($ millions) 2023 2022 % Change Reported Revenue $152 $145 5% Adjusted Segment EBITDA $37 $28 35% Adjusted Segment EBIT $29 $21 42% New sales and higher revenue per piece more than offset organic mail decline, driving segment revenue growth. Growth in higher yielding mail classes contributed to increased revenue per piece. Adjusted Segment EBIT growth was driven by higher revenue, improved labor productivity from increased automation and process improvements, and lower unit transportation costs from select route insourcing. Global Ecommerce Global Ecommerce provides business to consumer logistics services for domestic and cross-border delivery, returns and fulfillment. Third Quarter ($ millions) 2023 2022 % Change Reported % Change Comparable Basis Revenue $313 $354 (12%) (1%) Adjusted Segment EBITDA ($25) ($17) (47%) Adjusted Segment EBIT ($42) ($35) (20%) Global Ecommerce processed 51 million domestic parcels in the quarter, which is up 38 percent from third quarter 2022. Domestic parcel revenue growth of 29 percent versus prior year, was more than offset by a loss in revenue from cross-border as that offering resets from the previously announced change in two client relationships. Cross-border revenue stabilized in the quarter versus second quarter 2023. The decline in Adjusted Segment EBIT was primarily a result of lower cross-border revenue, market pressures on domestic parcel revenue per piece, and incremental costs related to network consolidation efforts. Lower operating expenses partially offset the decline. Full Year 2023 Guidance Given our Global Ecommerce segment’s year-to-date performance and continued market headwinds, we now expect the Company’s full-year revenue to decline between 3% and 4% on a comparable basis and full-year adjusted EBIT margins to remain relatively flat versus the prior year. Conference Call and Webcast Management of Pitney Bowes will discuss the Company’s results in a broadcast over the Internet today at 8:00 a.m. ET. Instructions for listening to the earnings results via the Web are available on the Investor Relations page of the Company’s web site at www.pitneybowes.com. About Pitney Bowes Pitney Bowes (NYSE:PBI) is a global shipping and mailing company that provides technology, logistics, and financial services to more than 90 percent of the Fortune 500. Small business, retail, enterprise, and government clients around the world rely on Pitney Bowes to remove the complexity of sending mail and parcels. For additional information, visit: www.pitneybowes.com Use of Non-GAAP Measures Our financial results are reported in accordance with generally accepted accounting principles (GAAP). We also disclose certain non-GAAP measures, such as adjusted earnings before interest and taxes (Adjusted EBIT), adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), adjusted earnings per share (Adjusted EPS), revenue growth on a comparable basis and free cash flow. Adjusted EBIT, Adjusted EBITDA and Adjusted EPS exclude the impact of restructuring charges, goodwill impairment, gains, losses and costs related to the sale of assets, acquisitions and dispositions, losses on debt redemptions and refinancings and other unusual items. Management believes that these non-GAAP measures provide investors greater insight into the underlying operating trends of the business. We disclose revenue growth on a comparable basis, which excludes three items. First, the comparison excludes the impacts of foreign currency. Second, we are excluding the impact of the divestiture of the Borderfree business effective July 1, 2022. Third, we are excluding the impact of a change in the presentation of revenue beginning in the fourth quarter of 2022, from a gross basis to net basis due to an adjustment in terms of one of our contracts with the United States Postal Service. The change in revenue presentation impacts both our Global Ecommerce and SendTech Solutions segments. The change in revenue presentation does not impact gross profit. Management believes that excluding these items provides investors with a better understanding of the underlying revenue performance. Free cash flow adjusts cash flow from operations calculated in accordance with GAAP for capital expenditures, restructuring payments and other special items. Management believes free cash flow provides investors better insight into the amount of cash available for other discretionary uses. Adjusted Segment EBIT is the primary measure of profitability and operational performance at the segment level and is determined by deducting from segment revenue the related costs and expenses attributable to the segment. Adjusted Segment EBIT excludes interest, taxes, unallocated corporate expenses, restructuring charges, goodwill impairment, and other items not allocated to a business segment. The Company also reports Adjusted Segment EBITDA as an additional useful measure of segment profitability and operational performance. Complete reconciliations of non-GAAP measures to comparable GAAP measures can be found in the attached financial schedules and at the Company's web site at www.pb.com/investorrelations. This document contains “forward-looking statements” about the Company’s expected or potential future business and financial performance. Forward-looking statements include, but are not limited to, statements about future revenue and earnings guidance and future events or conditions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from those projected. Factors which could cause future financial performance to differ materially from expectations include, without limitation, declining physical mail volumes; changes in postal regulations or the operations and financial health of posts in the U.S. or other major markets or changes to the broader postal or shipping markets; our ability to continue to grow and manage unexpected fluctuations in volumes, gain additional economies of scale and improve profitability within our Global Ecommerce segment; the loss of some of our larger clients in our Global Ecommerce and Presort Services segments; the loss of, or significant changes to, United States Postal Service (USPS) commercial programs, or our contractual relationships with the USPS or their performance under those contracts; the impacts on our cost of debt due to recent increases in interest rates and the potential for future interest rate hikes; and other factors as more fully outlined in the Company's 2022 Form 10-K Annual Report and other reports filed with the Securities and Exchange Commission during 2023. Pitney Bowes assumes no obligation to update any forward-looking statements contained in this document as a result of new information, events or developments. Note: Consolidated statements of income; revenue, adjusted segment EBIT and adjusted segment EBITDA by business segment; and reconciliations of GAAP to non-GAAP measures for the three and nine months ended September 30, 2023 and 2022, and consolidated balance sheets at September 30, 2023 and December 31, 2022 are attached. Pitney Bowes Inc. Consolidated Statements of Operations (Unaudited; in thousands, except per share amounts) Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Revenue: Business services $ 483,987 $ 518,405 $ 1,480,975 $ 1,667,267 Support services 101,855 107,642 310,454 325,619 Financing 68,572 67,757 202,323 207,084 Equipment sales 76,705 83,528 238,766 262,810 Supplies 35,695 37,455 111,035 116,761 Rentals 16,937 16,127 51,217 49,810 Total revenue 783,751 830,914 2,394,770 2,629,351 Costs and expenses: Cost of business services 419,859 452,715 1,276,814 1,433,474 Cost of support services 35,589 36,618 107,447 111,463 Financing interest expense 16,813 13,692 46,112 37,827 Cost of equipment sales 52,952 60,595 166,303 188,181 Cost of supplies 10,498 10,529 32,607 33,074 Cost of rentals 4,289 6,270 14,859 19,052 Selling, general and administrative 209,416 209,576 674,085 678,999 Research and development 10,362 9,812 31,129 32,400 Restructuring charges and asset impairments 16,578 4,264 42,620 12,672 Goodwill impairment - - 118,599 - Interest expense, net 26,782 23,685 72,044 66,816 Other components of net pension and postretirement (income) cost (2,683 ) 1,427 (6,144 ) 3,229 Other income, net - (8,398 ) (3,064 ) (20,299 ) Total costs and expenses 800,455 820,785 2,573,411 2,596,888 (Loss) income before taxes (16,704 ) 10,129 (178,641 ) 32,463 (Benefit) provision for income taxes (4,185 ) 4,642 (16,850 ) 1,819 Net (loss) income $ (12,519 ) $ 5,487 $ (161,791 ) $ 30,644 (Loss) earnings per share: Basic $ (0.07 ) $ 0.03 $ (0.92 ) $ 0.18 Diluted $ (0.07 ) $ 0.03 $ (0.92 ) $ 0.17 Weighted-average shares used in diluted earnings per share 176,099 176,966 175,428 177,418 Pitney Bowes Inc. Consolidated Balance Sheets (Unaudited; in thousands) Assets September 30,2023 December 31,2022 Current assets: Cash and cash equivalents $ 557,696 $ 669,981 Short-term investments 21,732 11,172 Accounts and other receivables, net 288,592 343,557 Short-term finance receivables, net 550,152 564,972 Inventories 83,781 83,720 Current income taxes 6,392 8,790 Other current assets and prepayments 109,189 115,824 Total current assets 1,617,534 1,798,016 Property, plant and equipment, net 391,649 420,672 Rental property and equipment, net 24,652 27,487 Long-term finance receivables, net 641,251 627,124 Goodwill 945,418 1,066,951 Intangible assets, net 66,111 77,944 Operating lease assets 309,995 296,129 Noncurrent income taxes 55,378 46,613 Other assets 370,716 380,419 Total assets $ 4,422,704 $ 4,741,355 Liabilities and stockholders' (deficit) equity Current liabilities: Accounts payable and accrued liabilities $ 793,609 $ 907,083 Customer deposits at Pitney Bowes Bank 642,556 628,072 Current operating lease liabilities 58,270 52,576 Current portion of long-term debt 56,533 32,764 Advance billings 87,739 105,207 Current income taxes 1,819 2,101 Total current liabilities 1,640,526 1,727,803 Long-term debt 2,101,595 2,172,502 Deferred taxes on income 238,391 263,131 Tax uncertainties and other income tax liabilities 21,386 23,841 Noncurrent operating lease liabilities 279,920 265,696 Other noncurrent liabilities 265,995 227,729 Total liabilities 4,547,813 4,680,702 Stockholders' (deficit) equity: Common stock 323,338 323,338 Retained earnings 4,872,439 5,125,677 Accumulated other comprehensive loss (838,071 ) (835,564 ) Treasury stock, at cost (4,482,815 ) (4,552,798 ) Total stockholders' (deficit) equity (125,109 ) 60,653 Total liabilities and stockholders' (deficit) equity $ 4,422,704 $ 4,741,355 Pitney Bowes Inc. Business Segment Revenue (Unaudited; in thousands) Three months ended September 30, Nine months ended September 30, 2023 2022 % Change 2023 2022 % Change Global Ecommerce Revenue, as reported $ 313,161 $ 354,326 (12%) $ 974,306 $ 1,166,623 (16%) Impact of change in revenue presentation (39,795 ) (115,171 ) Impact of Borderfree divestiture - (22,550 ) Comparable revenue before currency 313,161 314,531 (0%) 974,306 1,028,902 (5%) Impact of currency on revenue (1,023 ) 2,255 Comparable revenue $ 312,138 $ 314,531 (1%) $ 976,561 $ 1,028,902 (5%) Presort Services Revenue, as reported $ 152,451 $ 144,824 5% $ 454,460 $ 444,302 2% Sending Technology Solutions Revenue, as reported $ 318,139 $ 331,764 (4%) $ 966,004 $ 1,018,426 (5%) Impact of change in revenue presentation (4,373 ) (12,916 ) Comparable revenue before currency 318,139 327,391 (3%) 966,004 1,005,510 (4%) Impact of currency on revenue (2,106 ) 3,463 Comparable revenue $ 316,033 $ 327,391 (3%) $ 969,467 $ 1,005,510 (4%) Consolidated Revenue, as reported $ 783,751 $ 830,914 (6%) $ 2,394,770 $ 2,629,351 (9%) Impact of change in revenue presentation (44,168 ) (128,087 ) Impact of Borderfree divestiture - (22,550 ) Comparable revenue before currency 783,751 786,746 (0%) 2,394,770 2,478,714 (3%) Impact of currency on revenue (3,129 ) 5,718 Comparable revenue $ 780,622 $ 786,746 (1%) $ 2,400,488 $ 2,478,714 (3%) Pitney Bowes Inc. Adjusted Segment EBIT & EBITDA (Unaudited; in thousands) Three months ended September 30, 2023 2022 % change AdjustedSegmentEBIT (1) D&A AdjustedSegmentEBITDA AdjustedSegmentEBIT (1) D&A AdjustedSegmentEBITDA AdjustedSegmentEBIT AdjustedSegmentEBITDA Global Ecommerce $ (41,712 ) $ 16,872 $ (24,840 ) $ (34,881 ) $ 17,982 $ (16,899 ) (20%) (47%) Presort Services 29,124 8,313 37,437 20,561 7,182 27,743 42% 35% Sending Technology Solutions 97,761 7,494 105,255 95,234 7,248 102,482 3% 3% Segment total $ 85,173 $ 32,679 117,852 $ 80,914 $ 32,412 113,326 5% 4% Reconciliation of Segment Adjusted EBITDA to Net (Loss) Income: Segment depreciation and amortization (32,679 ) (32,412 ) Unallocated corporate expenses (41,704 ) (42,908 ) Restructuring charges and asset impairments (16,578 ) (4,264 ) Gain on sale of businesses, including transaction costs - 13,764 Interest expense, net (43,595 ) (37,377 ) Benefit (provision) for income taxes 4,185 (4,642 ) Net (loss) income $ (12,519 ) $ 5,487 Nine months ended September 30, 2023 2022 % change EBIT (1) D&A EBITDA EBIT (1) D&A EBITDA EBIT EBITDA Global Ecommerce $ (114,033 ) $ 49,906 $ (64,127 ) $ (77,402 ) $ 60,906 $ (16,496 ) (47%) >(100%) Presort Services 76,458 25,172 101,630 53,044 20,601 73,645 44% 38% Sending Technology Solutions 291,912 22,344 314,256 295,374 22,159 317,533 (1%) (1%) Segment total $ 254,337 $ 97,422 351,759 $ 271,016 $ 103,666 374,682 (6%) (6%) Reconciliation of Segment EBITDA to Net (Loss) Income: Segment depreciation and amortization (97,422 ) (103,666 ) Unallocated corporate expenses (145,762 ) (141,537 ) Restructuring charges and asset impairments (42,620 ) (12,672 ) Goodwill impairment (118,599 ) - Gain (loss) on debt redemption 3,064 (4,993 ) Proxy solicitation fees (10,905 ) - Gain on sale of assets - 14,372 Gain on sale of businesses, including transaction costs - 10,920 Interest expense, net (118,156 ) (104,643 ) Benefit (provision) for income taxes 16,850 (1,819 ) Net (loss) income $ (161,791 ) $ 30,644 (1) Adjusted segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges, goodwill impairment, and other items that are not allocated to a particular business segment. Pitney Bowes Inc. Reconciliation of Reported Consolidated Results to Adjusted Results (Unaudited; in thousands, except per share amounts) Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Reconciliation of reported net (loss) income to adjusted EBIT and adjusted EBITDA Net (loss) income $ (12,519 ) $ 5,487 $ (161,791 ) $ 30,644 (Benefit) provision for income taxes (4,185 ) 4,642 (16,850 ) 1,819 (Loss) income before taxes (16,704 ) 10,129 (178,641 ) 32,463 Restructuring charges and asset impairments 16,578 4,264 42,620 12,672 Goodwill impairment - - 118,599 - (Gain) loss on debt redemption - - (3,064 ) 4,993 Proxy solicitation fees - - 10,905 - Gain on sale of assets - - - (14,372 ) Gain on sale of businesses, including transaction costs - (13,764 ) - (10,920 ) Adjusted net (loss) income before tax (126 ) 629 (9,581 ) 24,836 Interest, net 43,595 37,377 118,156 104,643 Adjusted EBIT 43,469 38,006 108,575 129,479 Depreciation and amortization 40,262 39,280 120,032 124,752 Adjusted EBITDA $ 83,731 $ 77,286 $ 228,607 $ 254,231 Reconciliation of reported diluted (loss) earnings per share to adjusted diluted (loss) earnings per share Diluted (loss) earnings per share $ (0.07 ) $ 0.03 $ (0.92 ) $ 0.17 Restructuring charges and asset impairments 0.07 0.02 0.18 0.05 Goodwill impairment - - 0.67 - (Gain) loss on debt redemption - - (0.01 ) 0.02 Proxy solicitation fees - - 0.05 - Gain on sale of assets - - - (0.06 ) Gain on sale of businesses, including transaction costs - (0.05 ) - (0.09 ) Adjusted diluted (loss) earnings per share (1) $ 0.00 $ (0.00 ) $ (0.04 ) $ 0.10 (1) The sum of the earnings per share amounts may not equal the totals due to rounding. Reconciliation of reported net cash from operating activities to free cash flow Net cash from operating activities $ 25,305 $ (36,465 ) $ (14,453 ) $ 9,229 Capital expenditures (22,952 ) (33,359 ) (77,598 ) (97,533 ) Restructuring payments 12,269 3,506 25,152 11,761 Proxy solicitation fees paid 623 - 10,905 - Transaction costs paid - 3,268 - 5,400 Free cash flow $ 15,245 $ (63,050 ) $ (55,994 ) $ (71,143 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20231101617605/en/
Editorial - Kathleen Raymond Head of Communications 203.351.7233 Financial - Phil Landler VP, Investor Relations 203.351.6141