Pitney Bowes Inc. (NYSE:PBI), a global technology company that
provides commerce solutions in the areas of ecommerce, shipping,
mailing, and data, today announced its financial results for the
full year and fourth quarter 2018.
“The fourth quarter and 2018 were important moments in the
transformation of our company,” said Marc B. Lautenbach, President
and CEO, Pitney Bowes. “Revenue grew in 2018, marking the second
year of consecutive growth and making the last two years the best
revenue growth performance in a decade.”
Full Year 2018:
- Revenue of $3.5 billion, an increase
over prior year of 13 percent as reported and 2 percent on a
proforma basis
- GAAP EPS of $1.19; Adjusted EPS of
$1.16
- GAAP cash from operations of $392
million; free cash flow of $318 million
- Total debt decreased by $565 million
versus prior year
Fourth Quarter 2018:
- Revenue of $947 million, an increase
over prior year of 3 percent as reported
- GAAP EPS of $0.24; Adjusted EPS of
$0.38
- GAAP cash from operations of $103
million; free cash flow of $153 million
Recent Announcements:
- On January 31, 2019, the Company
announced that it signed a definitive agreement to sell its SMB
direct operations in six smaller European countries to BAVARIA
Industries Group AG.
- On February 4, 2019, the Board of
Directors authorized an incremental $100 million share repurchase
and revised the quarterly dividend to $0.05 on the Company’s common
share.
Share Repurchase and Dividend
The Board of Directors authorized an incremental $100 million
share repurchase, which brings the total authorization to $121
million, and declared a quarterly cash dividend of $0.05 per common
share. The amount of dividend reflects a reduction from the
previous quarter’s dividend of $0.1875 per share. The dividend will
be payable on March 11, 2019 to stockholders of record on February
15, 2019. In addition, a quarterly cash dividend of $0.53 per share
of the Company’s $2.12 convertible preference stock will be payable
on April 1, 2019 to stockholders of record on March 15, 2019, and a
quarterly cash dividend of $0.50 per share on the Company’s 4
percent convertible cumulative preferred stock will be payable on
May 1, 2019 to stockholders of record on April 15, 2019.
“Six years ago, Pitney Bowes was in markets that were declining
and our revenue was declining,” said Lautenbach. “Today, roughly
half of Pitney Bowes revenue is coming from growth markets.
Importantly, Pitney Bowes is winning in those markets and growing
revenue as evidenced by the strong growth in our Global Ecommerce
segment. Consequently, there are opportunities available for Pitney
Bowes to create value for our shareholders and continue to grow.
Therefore, it is appropriate for the Company’s capital allocation
to evolve. Our new capital allocation policy provides sufficient
flexibility for Pitney Bowes to take advantage of these
opportunities and at the same time still return capital to our
shareholders. I am confident our capital allocation will unlock
value for our shareholders.”
Full Year 2018 Results
Revenue totaled $3.5 billion, an increase over prior year of 13
percent as reported and 12 percent at constant currency. On a
proforma basis, revenue increased over prior year by 2 percent as
reported and 1 percent at constant currency.
GAAP earnings per diluted share (GAAP EPS) were $1.19. Adjusted
earnings per diluted share (Adjusted EPS) were $1.16.
GAAP cash from operations was $392 million and free cash flow
was $318 million. During the year, the Company used cash to reduce
debt by $565 million, return $140 million in dividends to
shareholders and to pay $53 million for restructuring payments.
Fourth Quarter 2018 Results
Revenue totaled $947 million, which was an increase over prior
year of 3 percent as reported and 4 percent at constant
currency.
Commerce Services revenue grew 12 percent. Small and Medium
Business (SMB) Solutions revenue declined 7 percent as reported and
6 percent at constant currency. Software Solutions revenue
increased 17 percent as reported and 19 percent at constant
currency.
GAAP EPS was $0.24. Adjusted EPS was $0.38.
GAAP cash from operations during the quarter was $103 million
and free cash flow was $153 million. Compared to the prior year,
free cash flow increased by $19 million largely due to the timing
of accounts payable and higher net income. This was partly offset
by other working capital items. During the quarter, the Company
used cash to return $35 million in dividends to shareholders and to
pay $14 million for restructuring payments.
The Company’s earnings per share results for the fourth quarter
and full year are summarized in the table below*
Fourth Quarter Full Year 2018
2017 2018 2017
GAAP EPS $ 0.24
$ 0.48 $ 1.19
$ 1.39 Discontinued Operations $ 0.08
($0.07 ) ($0.13 ) ($0.21
)
GAAP EPS from Continuing Operations $ 0.32
$ 0.41 $ 1.06 $ 1.18
Pension Settlement $ 0.12 - $ 0.12 - Tax Legislation ($0.11 )
($0.21 ) ($0.20 ) ($0.21 ) Restructuring Charges and Asset
Impairments, net $ 0.03 $ 0.09 $ 0.11 $ 0.20 Transaction Costs $
0.01 $ 0.01 $ 0.01 $ 0.02 Loss on Extinguishment of Debt - $ 0.01 $
0.03 $ 0.01 State Tax Valuation Allowance – DMT Sale - - $ 0.01 -
Gain on Sale of Technology - -
- ($0.03 )
Adjusted
EPS $ 0.38 $ 0.32 $
1.16 $ 1.18 * The sum of the earnings per
share may not equal the totals above due to rounding.
Fourth Quarter 2018 Business Segment Reporting
The business reporting groups reflect how the Company manages
these groups and the clients served in each market.
The Commerce Services group includes the Global Ecommerce and
Presort Services segments. Global Ecommerce facilitates global
cross-border ecommerce transactions and domestic retail and
ecommerce shipping solutions, including fulfillment and returns.
Presort Services provides sortation services to qualify large
volumes of First Class Mail; Marketing Mail; and Bound and Packet
Mail (Standard Flats and Bound Printed Matter) for postal workshare
discounts.
The SMB Solutions group offers mailing and shipping solutions,
financing, services, and supplies for small and medium businesses
to help simplify and save on the sending, tracking and receiving of
letters, parcels and flats. This group includes the North America
Mailing and International Mailing segments.
Software Solutions provide customer engagement, customer
information, location intelligence software and data.
The results for each segment within the group may not equal the
subtotals for the group due to rounding.
Commerce Services
($ millions) Fourth Quarter
Revenue 2018
2017
Y/YReported
Y/YEx Currency
Global Ecommerce $ 304 $ 263 16 % 16 %
Presort Services
133
128 4
% 4 % Commerce
Services $ 438 $ 391 12
% 12 % EBITDA Global Ecommerce $
12 $ 15 (20 %) Presort Services
24 34
(30 %) Commerce Services $
36 $ 49 (27 %)
EBIT Global Ecommerce ($4 ) $ -
>(100
%)
Presort Services
17
28 (40
%) Commerce Services $ 12
$ 28 (56 %)
Global Ecommerce
Revenue increased from prior year driven by growth in domestic
parcel, fulfillment and shipping solutions volumes partially offset
by lower cross border volumes. This is the first quarter with
Newgistics reporting in both periods. Newgistics revenue grew 23
percent over prior year.
The EBIT loss was driven primarily by investments in market
growth opportunities and operational excellence initiatives, higher
transportation and labor costs as well as the amortization of
acquisition-related intangible assets.
Presort Services
Revenue growth was driven by higher volumes of First Class mail,
Standard Class mail and Bound and Packet mail processed. EBIT and
EBITDA margins declined from prior year primarily due to higher
costs related to the launch of a marketing mail pilot program, as
well as higher labor and transportation costs and lower revenue per
piece.
SMB Solutions
($ millions) Fourth Quarter
Revenue
2018
2017
Y/YReported
Y/YEx Currency
North America Mailing $ 321 $ 340 (6 %)
(6 %) International Mailing
91
102
(10 %) (7 %)
SMB Solutions $ 412 $ 442
(7 %) (6 %) EBITDA North
America Mailing $ 134 $ 144 (7 %) International Mailing
26
17 49 % SMB
Solutions $ 160 $ 162 (1
%) EBIT North America Mailing $ 117 $ 129 (9 %)
International Mailing
22
12 77
% SMB Solutions $ 139 $
141 (1 %)
North America Mailing
The year-over-year decline in recurring revenue streams
continues to stabilize and is in-line with the average of the last
two quarters. Recurring revenue streams declined largely around
rentals, supplies and support services, which was partially offset
by growth in financing and business services. Revenue declined in
equipment sales largely due to a decline in top of the line
products. EBIT and EBITDA margins were lower than prior year due to
the decline in revenue partly offset by lower expenses.
International Mailing
Equipment sales and recurring revenue streams both contributed
to the revenue decline. The equipment sales decline was driven by
weakness in the UK and France, partly offset by growth in Japan.
EBIT and EBITDA margins increased versus prior year primarily
driven by lower expenses.
Software Solutions
($ millions) Fourth Quarter
2018
2017
Y/YReported
Y/YEx Currency
Revenue $ 97 $ 83 17 % 19 % EBITDA $ 25
$ 11 121 % EBIT $ 23 $ 9 155 %
Software Solutions
Revenue increased from prior year driven by higher license
revenue, primarily in Data and Location Intelligence, strong growth
in SaaS revenues, as well as from the implementation of the new
revenue recognition standard (ASC 606). Revenue also benefited from
growth in smaller deals. EBIT and EBITDA margins increased from
prior year largely driven by operating leverage on the higher
revenue.
2019 Guidance
The Company expects for the full year 2019:
- Revenue, on a constant currency (CC)
basis, to be in the range of 1 percent to 4 percent growth, when
compared to 2018.
- Adjusted EPS from continuing operations
to be in the range of $1.05 to $1.20.
- Free cash flow to be in the range of
$225 million to $275 million. Free cash flow will be impacted by
third party leasing initiatives.
The Company’s 2019 guidance has been adjusted for the financial
results related to the sale of SMB direct operations in six smaller
European countries as a result of the recently signed definitive
agreement. The year-to-year revenue comparison will be adversely
impacted by approximately $40 million, or 1 percent, as a result of
this sale. The Company’s 2019 guidance also considers the
incremental expense associated with the current tariff level of 10
percent with China.
In aggregate, these items are expected to adversely impact EPS
by approximately $0.04 to $0.05. Additionally, if the current
tariff level with China increases to 25 percent, the Company has
estimated that this would have an additional adverse impact of
approximately $0.04 to $0.06 on EPS results.
The Company’s 2019 guidance reflects the new lease accounting
standard (ASC 842), which is not expected to have a material impact
on overall 2019 results. Prior years will be recast in the first
quarter to conform to the new standard.
This guidance discusses future results, which are inherently
subject to unforeseen risks and developments. As such, discussions
about the business outlook should be read in the context of an
uncertain future, as well as the risk factors identified in the
safe harbor language at the end of this release and as more fully
outlined in the Company's 2017 Form 10-K Annual Report and other
reports filed with the Securities and Exchange Commission. This
guidance excludes any unusual items that may occur or additional
portfolio or restructuring actions, not specifically identified, as
the Company implements plans to further streamline its operations
and reduce costs. Revenue guidance is provided on a constant
currency basis. The Company cannot reasonably predict the impact
that future changes in currency exchange rates will have on revenue
and net income. Additionally, the Company cannot provide GAAP EPS
and GAAP cash from operations guidance due to the uncertainty of
future potential restructurings, goodwill and asset write-downs,
unusual tax settlements or payments, special contributions to its
pension funds, acquisitions, divestitures and other potential
adjustments, which could, individually or in the aggregate, have a
material impact on the Company’s performance. The Company’s
guidance is based on an assumption that the global economy and
foreign exchange markets in 2019 will not change significantly. The
Company’s guidance also includes changes in accounting standards
implemented at the beginning of the 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 technology company providing
commerce solutions that power billions of transactions. Clients
around the world, including 90 percent of the Fortune 500, rely on
the accuracy and precision delivered by Pitney Bowes solutions,
analytics, and APIs in the areas of ecommerce fulfillment, shipping
and returns; cross-border ecommerce; presort services; office
mailing and shipping; location data; and software. For nearly 100
years Pitney Bowes has been innovating and delivering technologies
that remove the complexity of getting commerce transactions
precisely right. For additional information visit Pitney Bowes, the
Craftsmen of Commerce, at www.pitneybowes.com.
Use of Non-GAAP Measures
The Company's financial results are reported in accordance with
generally accepted accounting principles (GAAP); however, in its
disclosures the Company uses certain non-GAAP measures, such as
adjusted earnings before interest and taxes (EBIT), adjusted
earnings before interest, taxes, depreciation and amortization
(EBITDA), adjusted earnings per share (EPS), revenue growth on a
constant currency basis and free cash flow.
The Company reports measures such as adjusted EBIT, adjusted EPS
and adjusted net income to exclude the impact of special items like
restructuring charges, tax adjustments, goodwill and asset
write-downs, and costs related to dispositions and acquisitions.
While these are actual Company expenses, they can mask underlying
trends associated with its business. Such items are often
inconsistent in amount and frequency and as such, the adjustments
allow an investor greater insight into the current underlying
operating trends of the business.
In addition, revenue growth is presented on a constant currency
basis to exclude the impact of changes in foreign currency exchange
rates since the prior period under comparison. Constant currency
measures are intended to help investors better understand the
underlying operational performance of the business excluding the
impacts of shifts in currency exchange rates over the period.
Constant currency is calculated by converting our current quarter
reported results using the prior year’s exchange rate for the
comparable quarter. This comparison allows an investor insight into
the underlying revenue performance of the business and true
operational performance from a comparable basis to prior period. A
reconciliation of reported revenue to constant currency revenue can
be found in the Company’s attached financial schedules.
The Company reports free cash flow in order to provide investors
insight into the amount of cash that management could have
available for other discretionary uses. Free cash flow adjusts GAAP
cash from operations for capital expenditures, restructuring
payments, unusual tax settlements, special contributions to the
Company’s pension fund and cash used for other special items. A
reconciliation of GAAP cash from operations to free cash flow can
be found in the Company’s attached financial schedules.
Segment EBIT is the primary measure of profitability and
operational performance at the segment level. Segment EBIT is
determined by deducting from segment revenue the related costs and
expenses attributable to the segment. Segment EBIT excludes
interest, taxes, general corporate expenses not allocated to a
particular business segment, restructuring charges and goodwill and
asset impairments, which are recognized on a consolidated basis.
The Company has also included segment EBITDA as a useful measure
for profitability and operational performance, and an additional
way to look at the economics of the segments, especially in light
of some of the Company’s more recent, larger acquisitions. Segment
EBITDA further excludes depreciation and amortization expense for
the segment. A reconciliation of segment EBIT and EBITDA to net
income can be found in the attached financial schedules.
Pitney Bowes has provided a quantitative reconciliation to GAAP
in supplemental schedules. This information can be found at the
Company's web site 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 its future revenue and earnings
guidance and other statements about 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. These risks and
uncertainties include, but are not limited to: declining physical
mail volumes; competitive factors, including pricing pressures,
technological developments and the introduction of new products and
services by competitors; our success in developing new products and
services, including digital-based products and services; obtaining
regulatory approvals, if required, and the market’s acceptance of
these new products and services; changes in postal or banking
regulations; changes in, or loss of, our contractual relationships
with the United States Postal Service or posts in our other major
markets; changes in labor conditions and transportation costs;
macroeconomic factors, including global and regional business
conditions that adversely impact customer demand, foreign currency
exchange rates, interest rates and tariffs; economic tensions
between governments and changes in international trade policies,
Brexit and other factors as more fully outlined in the Company's
2017 Form 10-K Annual Report and other reports filed with the
Securities and Exchange Commission. 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 and EBIT by
business segment; and reconciliation of GAAP to non-GAAP measures
for the three months and twelve months ended December 31, 2018 and
2017, and consolidated balance sheets as of December 31, 2018 and
December 31, 2017 are attached
Pitney Bowes Inc. Consolidated Statements of Income
(Unaudited; in thousands, except share and per share amounts)
Three months ended December 31,
Twelve months ended December 31, 2018
2017
2018
2017
Revenue: Equipment sales $ 113,393 $ 127,290 $ 430,451 $ 476,691
Supplies 52,451 58,091 218,304 231,412 Software 96,832 83,452
340,855 331,843 Rentals 85,507 94,036 363,057 384,123 Financing
81,274 80,508 314,778 330,985 Support services 74,103 76,736
293,413 299,792 Business services 443,580
396,293 1,561,522 1,068,426
Total revenue 947,140 916,406
3,522,380 3,123,272 Costs and expenses:
Cost of equipment sales 49,253 55,666 181,766 201,116 Cost of
supplies 14,308 18,025 60,960 66,302 Cost of software 25,424 24,411
100,681 95,033 Cost of rentals 19,371 20,834 86,330 82,703
Financing interest expense 12,332 12,219 48,857 50,665 Cost of
support services 42,276 41,000 168,271 163,889 Cost of business
services 363,555 302,162 1,246,084 773,052 Selling, general and
administrative (1) 275,835 309,167 1,123,116 1,170,905 Research and
development 31,433 30,105 125,588 118,703 Restructuring charges and
asset impairments, net 7,438 27,114 27,077 56,223 Other components
of net pension and postretirement cost (1) 28,495 1,334 22,425
5,413 Interest expense, net 24,941 31,620 110,900 113,497 Other
expense - 3,856 7,964
3,856 Total costs and expenses 894,661
877,513 3,310,019 2,901,357
Income from continuing operations before taxes 52,479
38,893 212,361 221,915 (Benefit) provision for income taxes
(8,362 ) (38,147 ) 12,383 553
Income from continuing operations 60,841 77,040 199,978 221,362
(Loss) income from discontinued operations, net of tax
(15,856 ) 12,908 23,687 39,978
Net income $ 44,985 $ 89,948 $ 223,665
$ 261,340 Basic earnings (loss) per share
attributable to common stockholders (2): Continuing operations $
0.32 $ 0.41 $ 1.07 $ 1.19 Discontinued operations (0.08 )
0.07 0.13 0.21 Net income
$ 0.24 $ 0.48 $ 1.19 $ 1.40
Diluted earnings (loss) per share attributable to common
stockholders (2): Continuing operations $ 0.32 $ 0.41 $ 1.06 $ 1.18
Discontinued operations (0.08 ) 0.07
0.13 0.21 Net income $ 0.24 $ 0.48
$ 1.19 $ 1.39 Weighted-average shares
used in diluted earnings per share 188,806,855
188,046,578 188,381,647 187,435,080
(1)
Effective January 1, 2018, components of net periodic
pension and postretirement costs, other than service costs, are
required to be reported separately. Accordingly, for the three and
twelve months ended December 30, 2017, $1.3 million and $5.4
million of costs have been reclassified from selling, general and
administrative expense to other components of net pension and
postretirement cost.
(2)
The sum of the earnings per share amounts may not equal the totals
due to rounding.
Pitney Bowes Inc. Consolidated
Balance Sheets (Unaudited; in thousands, except share amounts)
Assets
December 31,2018
December 31,2017
Current assets: Cash and cash equivalents $ 866,742 $ 1,009,021
Short-term investments 56,449 48,988 Accounts receivable, net
455,807 427,022 Short-term finance receivables, net 789,661 828,003
Inventories 41,964 40,769 Current income taxes 5,947 58,439 Other
current assets and prepayments 99,332 83,293 Assets of discontinued
operations 4,854 334,848 Total current
assets 2,320,756 2,830,383 Property, plant and equipment,
net 410,114 373,503 Rental property and equipment, net 178,099
183,956 Long-term finance receivables, net 592,165 652,087 Goodwill
1,766,511 1,774,645 Intangible assets, net 227,137 272,186
Noncurrent income taxes 61,420 59,909 Other assets 416,701
540,751 Total assets $ 5,972,903 $
6,687,420
Liabilities and
stockholders' equity
Current liabilities: Accounts payable and accrued liabilities $
1,401,635 $ 1,458,854 Current income taxes 15,165 8,823 Current
portion of long-term debt 199,535 271,057 Advance billings 237,529
257,766 Liabilities of discontinued operations 3,276
72,808 Total current liabilities 1,857,140 2,069,308
Deferred taxes on income 295,808 249,143 Tax uncertainties
and other income tax liabilities 39,548 102,051 Long-term debt
3,066,073 3,559,278 Other noncurrent liabilities 474,862
519,079 Total liabilities 5,733,431
6,498,859 Stockholders' equity:
Cumulative preferred stock, $50 par value, 4% convertible 1 1
Cumulative preference stock, no par value, $2.12 convertible 396
441 Common stock, $1 par value 323,338 323,338 Additional
paid-in-capital 121,475 138,367 Retained earnings 5,416,777
5,229,584 Accumulated other comprehensive loss (948,426 ) (792,173
) Treasury stock, at cost (4,674,089 ) (4,710,997 )
Total stockholders' equity 239,472 188,561
Total liabilities and stockholders' equity $ 5,972,903
$ 6,687,420
Pitney Bowes Inc.
Business Segments
(Unaudited; in thousands)
Three months ended December 31,
Twelve months ended December 31, 2018
2017 % Change 2018 2017
% Change REVENUE Global Ecommerce $ 304,327 $
263,403 16 % $ 1,022,862 $ 552,242 85 % Presort Services
133,273 127,698 4 % 515,795
497,901 4 %
Commerce Services 437,600
391,101 12 % 1,538,657
1,050,143 47 % North America Mailing 320,945 340,412
(6 %) 1,275,025 1,357,405 (6 %) International Mailing 91,478
101,615 (10 %) 367,843
384,097 (4 %)
Small & Medium Business Solutions
412,423 442,027 (7 %) 1,642,868
1,741,502 (6 %)
Software
Solutions 97,117 83,278 17 %
340,855 331,627 3 %
Total revenue $
947,140 $ 916,406 3 % $ 3,522,380 $ 3,123,272
13 %
EBIT Global Ecommerce $ (4,345 ) $ (5 )
>(100%) $ (32,379 ) $ (17,899 ) (81 %) Presort Services
16,742 28,045 (40 %) 73,768
97,506 (24 %)
Commerce Services 12,397
28,040 (56 %) 41,389
79,607 (48 %) North America Mailing 117,435 128,567
(9 %) 470,268 498,571 (6 %) International Mailing 21,780
12,292 77 % 63,820 48,531
32 %
Small & Medium Business Solutions
139,215 140,859 (1 %) 534,088
547,102 (2 %)
Software Solutions
22,644 8,890 >100% 47,094
33,818 39 %
Segment EBIT (1) $ 174,256
$ 177,789 (2 %) $ 622,571 $ 660,527 (6
%)
EBITDA Global Ecommerce $ 11,654 $ 14,523 (20 %) $
28,667 $ 18,763 53 % Presort Services 23,928
34,158 (30 %) 100,606 124,047
(19 %)
Commerce Services 35,582 48,681
(27 %) 129,273 142,810 (9 %)
North America Mailing 134,190 144,431 (7 %) 538,518 563,374
(4 %) International Mailing 25,738 17,246
49 % 79,962 67,093 19 %
Small
& Medium Business Solutions 159,928
161,677 (1 %) 618,480 630,467 (2
%)
Software Solutions 24,860
11,267 >100% 56,634 42,796 32
%
Segment EBITDA (2) $ 220,370 $ 221,625 (1 %)
$ 804,387 $ 816,073 (1 %)
Reconciliation of
segment EBITDA to net income
Segment EBITDA $ 220,370 $ 221,625 $ 804,387 $
816,073 Less: Segment depreciation and amortization (3)
(46,114 ) (43,836 ) (181,816 ) (155,546 )
Segment EBIT 174,256 177,789 622,571 660,527 Corporate
expenses (43,224 ) (62,599 ) (180,481 )
(214,072 )
Adjusted EBIT 131,032 115,190 442,090 446,455
Interest, net (4) (37,273 ) (43,839 ) (159,757 ) (164,162 ) Pension
settlement (31,329 ) - (31,329 ) - Restructuring charges and asset
impairments, net (7,438 ) (27,114 ) (27,077 ) (56,223 ) Loss on
extinguishment of debt - (3,856 ) (7,964 ) (3,856 ) Gain on sale of
technology - - - 6,085 Transaction costs (2,513 ) (1,488 ) (3,602 )
(6,384 ) Benefit (provision) for income taxes 8,362
38,147 (12,383 ) (553 )
Income from
continuing operations 60,841 77,040 199,978 221,362 (Loss)
income from discontinued operations, net of tax (15,856 )
12,908 23,687 39,978
Net income $ 44,985 $ 89,948 $ 223,665
$ 261,340 (1) Segment EBIT excludes interest, taxes,
general corporate expenses, restructuring charges, and other items
that are not allocated to a particular business segment. (2)
Segment EBITDA is calculated as Segment EBIT plus segment
depreciation and amortization expense. (3) Includes depreciation
and amortization expense of reporting segments only. Does not
include corporate depreciation and amortization expense. (4)
Includes financing interest expense and interest expense, net.
Pitney Bowes Inc. Reconciliation of Reported
Consolidated Results to Adjusted Results (Unaudited; in
thousands, except per share amounts)
Three months endedDecember
31,
Twelve months endedDecember
31,
2018 2017 Y/Y Chg.
2018
2017 Y/Y Chg.
Reconciliation
of reported revenue to revenue excluding currency Revenue, as
reported $ 947,140 $ 916,406 3 % $ 3,522,380 $ 3,123,272 13 %
Currency impact on revenue 6,787 -
(12,797 ) -
Revenue, at constant currency $ 953,927 $ 916,406
4 % $ 3,509,583 $ 3,123,272 12 %
Reconciliation of reported revenue growth to pro forma revenue
growth Revenue, as reported $ 3,522,380 $ 3,123,272 13 % Less:
Newgistics revenue included in PBI revenue 555,022
139,794 PBI excluding Newgistics
2,967,358 2,983,478 (1 %) Actual Newgistics revenue, including
preacquisition period 555,022 480,018
16 % Proforma revenue 3,522,380 3,463,496 2 % Currency
impact on revenue (12,797 ) Proforma
revenue, at constant currency $ 3,509,583 $ 3,463,496
1 %
Reconciliation of reported net income to
adjusted earnings Net income $ 44,985 $ 89,948 $ 223,665 $
261,340 Loss (income) from discontinued operations, net of tax
15,856 (12,908 ) (23,687 ) (39,978 ) Pension settlement 23,402 -
23,402 - Restructuring charges and asset impairments, net 6,530
17,813 20,950 37,248 Tax legislation (20,316 ) (38,774 ) (36,909 )
(38,774 ) State tax valuation allowance - Production Mail Business
sale - - 2,628 - Transaction costs 1,876 953 2,690 4,052 Loss on
extinguishment of debt - 2,375 5,933 2,375 Gain on sale of
technology - - -
(5,605 ) Adjusted net income 72,333 59,407 218,672 220,658
Provision for income taxes, as adjusted 21,426 11,944 63,661 61,635
Interest, net 37,273 43,839
159,757 164,162 Adjusted EBIT 131,032 115,190
442,090 446,455 Depreciation and amortization 51,112
49,762 203,293 179,650
Adjusted EBITDA $ 182,144 $ 164,952 $ 645,383
$ 626,105
Reconciliation of reported
diluted earnings per share to adjusted diluted earnings per
share Diluted earnings per share $ 0.24 $ 0.48 $ 1.19 $ 1.39
Loss (income) from discontinued operations, net of tax 0.08 (0.07 )
(0.13 ) (0.21 ) Pension settlement 0.12 - 0.12 - Restructuring
charges and asset impairments, net 0.03 0.09 0.11 0.20 Tax
legislation (0.11 ) (0.21 ) (0.20 ) (0.21 ) State tax valuation
allowance - Production Mail Business sale - - 0.01 - Transaction
costs 0.01 0.01 0.01 0.02 Loss on extinguishment of debt - 0.01
0.03 0.01 Gain on sale of technology - -
- (0.03 ) Adjusted diluted earnings per
share $ 0.38 $ 0.32 $ 1.16 $ 1.18
Note: 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 provided by operating activities $
102,660 $ 165,236 $ 392,261 $ 495,813 Net cash (used in) provided
by operating activities - discontinued operations 72,278 (10,986 )
29,103 (29,006 ) Capital expenditures (50,911 ) (49,746 ) (191,444
) (168,097 ) Restructuring payments 13,898 9,012 52,974 37,454
Reserve account deposits 14,144 13,462 21,008 10,954 Transaction
costs paid 961 7,396 14,203
7,396 Free cash flow $ 153,030 $
134,374 $ 318,105 $ 354,514
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190205005167/en/
Editorial -Bill HughesChief Communications
Officer203/351-6785
Financial -Adam DavidVP, Investor Relations203/351-7175
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