Pitney Bowes Inc. (NYSE: PBI), a global technology company that
provides commerce solutions in the areas of ecommerce, shipping,
mailing, data and financial services today announced its financial
results for the third quarter 2019.
Quarterly Results:
- Revenue of $790 million, an increase of 4 percent; an increase
of 6 percent when adjusted for both the impact of currency and
market exits
- GAAP EPS loss of $0.02; Adjusted EPS of $0.24
- GAAP EPS includes a non-cash $0.16 per share impairment charge
related to capitalized software costs incurred in the development
of a new enterprise business platform in certain international
markets
- GAAP cash from operations of $96 million; free cash flow of $69
million
Transaction signed and Debt Management:
- On August 26, 2019, the Company announced it entered into a
definitive agreement to sell its Software Solutions business to
Syncsort for $700 million in cash.
- The Company is using the majority of the net proceeds to pay
down near-term debt maturities.
- On September 27, 2019, the Company repaid the balance of its
$200 million September 2020 term loan.
- In November 2019, the Company replaced its existing revolving
credit facility with a new revolving credit facility for $500
million and secured a new five-year Term Loan A for $400
million.
- In November 2019, the Company repaid the $150 million term loan
due in November 2019 and the balance of the $300 million term loan
due in December 2020.
“We made solid progress transforming our company in the third
quarter,” said Marc B. Lautenbach. “Revenue grew six percent, when
adjusted for both the impact of currency and market exits, driven
by strong growth in Commerce Services and improved performance in
SendTech. This was the strongest revenue performance for the
company in some time and is affirmation that the capabilities we
are building are in demand. Six percent revenue growth puts us on
track to grow for the year, which will be our third consecutive
year of growth. At the same time we continued to invest in our
parcel network to accommodate our substantial growth in shipping
volumes.”
Lautenbach added: “In August we announced the sale of our
Software business to Syncsort. The transaction is anticipated to
close by the end of the year, and we expect to use the majority of
the net proceeds to pay down debt. With the conclusion of the sale,
Pitney Bowes will move forward as a more streamlined technology
company focusing on shipping, mailing, and financial services,
which are all markets where we have competitive advantage.
“In addition to the debt we will pay down with the net proceeds,
we recently also repaid term loans, secured a new Term Loan A and
replaced our revolving credit facility. These actions in aggregate
strengthen our balance sheet,” said Lautenbach.
Third Quarter 2019 Results
Revenue totaled $790 million, which was an increase of 4 percent
versus prior year. Revenue increased 6 percent when adjusted for
both the impact of currency and the January 2019 sale of direct
operations in 6 smaller European markets (market exits).
Commerce Services revenue grew 15 percent. Sending Technology
Solutions (SendTech Solutions) revenue declined 6 percent as
reported and 5 percent when adjusted for the impact of currency.
SendTech Solutions revenue declined 3 percent when adjusted for
both the impact of currency and market exits.
GAAP earnings per diluted share (GAAP EPS) was a loss of $0.02,
which includes a non-cash $0.16 per share impairment charge related
to capitalized software costs incurred in the development of a new
enterprise business platform in certain international markets.
Adjusted earnings per diluted share (Adjusted EPS) were
$0.24.
GAAP and adjusted EPS included a net benefit of $0.13 related to
the release of a foreign deferred tax asset valuation
allowance.
The Company’s earnings per share results for the third quarter
are summarized in the table below:
Third Quarter*
2019
2018
GAAP EPS
($0.02
)
$0.43
Discontinued operations
$0.05
($0.17
)
GAAP EPS from continuing
operations
$0.03
$0.25
Restructuring charges and asset
impairments, net
$0.20
$0.02
Loss on extinguishment of debt
-
$0.03
Tax adjustments, net
-
($0.04
)
Adjusted EPS
$0.24
$0.27
* The sum of the earnings per share may
not equal the totals above due to rounding.
GAAP Cash from Operations and Free Cash Flow Results
GAAP cash from operations during the quarter was $96 million and
free cash flow was $69 million. Compared to prior year, the decline
in free cash flow was driven by lower net income and higher capital
expenditures, partly offset by higher reserve account deposits.
During the quarter, the Company reduced debt by $175 million,
paid $9 million in dividends to its common shareholders and
repurchased $5 million of its shares.
Debt and Credit Facility Management
In September 2019, the Company repaid the balance of its $200
million September 2020 term loan. In November 2019, the Company
secured a new five-year Term Loan A for $400 million and replaced
its revolving credit facility. The new revolving credit facility is
a $500 million five-year secured facility. In November, the Company
also repaid the $150 million term loan due in November 2019 and the
balance of the $300 million term loan due in December 2020. The
Company is using the majority of the net proceeds from the sale of
its Software Solutions business to pay down near-term debt
maturities.
Status of Sale of Software Solutions
On August 26, 2019, the Company announced that it entered into a
definitive agreement to sell its Software Solutions business to
Syncsort for $700 million in cash. As a result of the sale, the
Software Solutions business has been recorded as a discontinued
operation and prior period amounts have been recast to exclude
Software Solution’s results from continuing operations. The
transaction is expected to close before the end of the calendar
year, pending regulatory approvals and other customary closing
conditions.
Third Quarter 2019 Business Segment Reporting
Effective in the third quarter, the Company revised its segment
reporting to combine the North America Mailing and International
Mailing segments into the Sending Technology Solutions segment to
reflect how it manages these operations and the products and
services it provides to its clients.
The Commerce Services group includes the Global Ecommerce and
Presort Services segments. Global Ecommerce facilitates domestic
retail and ecommerce shipping solutions, including fulfillment and
returns, and global cross-border ecommerce transactions. Presort
Services provides sortation services to qualify large volumes of
First Class Mail, Marketing Mail and Bound and Packet Mail
(Marketing Mail Flats and Bound Printed Matter) for postal
workshare discounts.
The Sending Technology Solutions segment offers physical and
digital mailing and shipping technology solutions, financing,
services, supplies and other applications for small and medium
businesses to help simplify and save on the sending, tracking and
receiving of letters, parcels and flats.
The results for each segment within the group may not equal the
subtotals for the group due to rounding.
Commerce Services
($ millions)
Third Quarter
Revenue
2019
2018
Y/Y
Reported
Y/Y
Ex
Currency
Global Ecommerce
$279
$233
20%
20%
Presort Services
131
125
5%
5%
Commerce Services
$410
$358
15%
15%
EBITDA
Global Ecommerce
($4)
$1
>(100%)
Presort Services
25
24
4%
Commerce Services
$21
$25
(17%)
EBIT
Global Ecommerce
($22)
($14)
(52%)
Presort Services
18
17
1%
Commerce Services
($4)
$3
>(100%)
Global Ecommerce
Revenue increased from prior year across all platforms. The
major volume driver was the domestic parcel platform. EBIT and
EBITDA margins were impacted by investments in market growth
opportunities, including engineering, facilities and marketing
programs. Compared to prior year, the margin decline was also
driven by a shift in the mix of business to faster growing, but
lower-margin services along with additional fulfillment costs in
order to meet client service level agreements.
Presort Services
Revenue growth was driven by volume growth across all mail
classes. Gross margin increased versus prior quarter and prior year
driven by lower labor cost per unit partially offset by lower
revenue per piece. EBIT and EBITDA margins increased from prior
quarter and were relatively flat compared to prior year.
SendTech Solutions
($ millions)
Third Quarter
2019
2018
Y/Y
Y/Y
Y/Y Ex Currency
Reported
Ex
Currency
&
Market Exits*
Revenue
$380
$402
(6%)
(5%)
(3%)
EBITDA
$141
$144
(2%)
EBIT
$131
$135
(3%)
* Excluding $9 million related to market
exits and $3 million related to the impacts of currency
SendTech Solutions
Reported revenue was impacted by the previously announced market
exits. Excluding the effect from currency and market exits, the
revenue decline was driven by lower support services, financing and
supplies revenue partially offset by higher equipment sales and
business services. EBIT and EBITDA margins increased versus prior
year driven by lower expenses partially offset by higher tariff
costs.
2019 Guidance
On October 12, 2019, the Company experienced a ransomware
attack. At this point, virtually all operations are up and running
and no data has been compromised. The Company has insurance to
cover these types of events and expects a significant portion of
any profit impact, including the profit associated with any loss of
revenue due to the ransomware attack, to ultimately be covered by
insurance.
Given this ransomware attack is a unique event, the majority of
the incremental costs and subsequent insurance recoveries will be
excluded from the Company’s adjusted EPS.
As a result, the Company is reaffirming its adjusted EPS and
free cash flow annual guidance. The Company expects the impact of
the ransomware attack to full year revenue could be approximately
one-half percent.
- Revenue, on a constant currency basis is expected to be in the
range of 1 percent to 2 percent growth when compared to 2018. This
range does not contemplate any impact of the ransomware attack,
which could be approximately one-half percent.
- Adjusted EPS from continuing operations to be in the range of
$0.65 to $0.75.
- Free cash flow to be in the range of $175 million to $205
million.
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. 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.
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; office mailing and shipping;
presort services; location data; customer information and
engagement software; services; and financing. 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.
Disclosure Using Social Media
Pitney Bowes announces material information to its investors
using SEC filings, press releases, public conference calls and
webcasts. The Company already makes frequent use of its investor
relations website to disseminate material information, as well as
social media platforms, including Twitter, Facebook and LinkedIn.
Investors, buy and sell-side analysts, media and influencers should
note that the Company plans to continue to announce material
financial information using the Pitney Bowes investor relations
website, SEC filings, and press releases, public conference calls
and webcasts. Pitney Bowes is notifying investors, media and others
interested in the Company that in the future, the Company may
choose to communicate material information through its social media
channels, or it is possible that information it discloses through
social media channels may be deemed to be material. Therefore,
Pitney Bowes encourages investors, the media, and others interested
in the Company to review the information posted on the Company’s
investor relations site
(https://www.investorrelations.pitneybowes.com/), Twitter
(https://twitter.com/PBnews and https://twitter.com/PitneyBowes),
Facebook (https://www.facebook.com/PitneyBowes/), and LinkedIn
(https://www.linkedin.com/company/pitney-bowes/). The Company may
communicate on social media platforms not listed here as well as
create new accounts in the future. Any updates to the list of
social media channels Pitney Bowes will use to announce material
information will be posted on the Investor Relations page.
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
EBITDA and adjusted EPS 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. In addition, the Company reported the
comparison of revenue excluding the impact of currency and market
exits to prior year, which excludes the impact of changes in
foreign currency exchange rates since the prior period and also
excludes the revenues associated with the recent market exits in
several smaller markets. 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, as
well as reported revenue to “revenue excluding the impact of
currency and market exits” 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; expenses and potential impact on client relationships
resulting from the October 2019 malware attack that affected the
Company's operations; a breach of security, including a future
cyber-attack or other comparable event; the continued availability
and security of key information technology systems and the cost to
comply with information security requirements and privacy laws;
changes in, or loss of, our contractual relationships with the U.S.
Postal Service or posts in other major markets; changes in postal
regulations; competitive factors, including pricing pressures,
technological developments and the introduction of new products and
services by competitors; the United Kingdom's potential exit from
the European Union (Brexit); our success in developing and
marketing new products and services, and obtaining regulatory
approvals, if required; changes in banking regulations or the loss
of our Industrial Bank charter; changes in labor conditions and
transportation costs; macroeconomic factors, including global and
regional business conditions that adversely impact customer demand,
foreign currency exchange rates and interest rates; changes in
global political conditions and international trade policies,
including the imposition or expansion of trade tariffs and other
factors as more fully outlined in the Company's 2018 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 and nine months ended September 30, 2019 and 2018,
and consolidated balance sheets as of September 30, 2019 and
December 31, 2018 are attached.
Pitney Bowes Inc. Consolidated
Statements of Income (Unaudited; in thousands, except share and
per share amounts)
Three months ended September
30,
Nine months ended September
30,
2019
2018
2019
2018
Revenue: Equipment sales
$
89,618
$
88,799
$
264,956
$
289,318
Supplies
44,818
50,403
142,261
165,853
Rentals
19,737
21,432
60,339
65,852
Financing
90,577
96,799
280,039
294,277
Support services
126,274
138,055
382,578
417,303
Business services
419,101
364,793
1,243,609
1,121,505
Total revenue
790,125
760,281
2,373,782
2,354,108
Costs and expenses: Cost of
equipment sales
59,859
52,209
182,094
173,626
Cost of supplies
12,225
13,967
37,533
46,652
Cost of rentals
5,090
9,174
23,223
30,386
Financing interest expense
11,026
10,849
33,433
33,107
Cost of support services
41,086
45,872
123,453
134,204
Cost of business services
338,519
287,237
1,003,483
872,183
Selling, general and administrative
254,092
241,350
757,228
759,469
Research and development
12,272
15,636
38,421
44,651
Restructuring charges and asset impairments, net
47,017
6,099
56,616
18,771
Interest expense, net
28,704
26,588
84,325
89,377
Other components of net pension and postretirement cost
(882
)
(1,852
)
(3,138
)
(6,070
)
Other expense
667
7,964
18,350
7,964
Total costs and expenses
809,675
715,093
2,355,021
2,204,320
(Loss) income from continuing operations
before taxes
(19,550
)
45,188
18,761
149,788
(Benefit) provision for income taxes
(24,895
)
(2,468
)
(13,351
)
17,235
Income from continuing operations
5,345
47,656
32,112
132,553
(Loss) income from discontinued operations, net of tax
(8,470
)
32,621
(14,199
)
59,289
Net (loss) income
$
(3,125
)
$
80,277
$
17,913
$
191,842
Basic earnings (loss) per share (1):
Continuing operations
$
0.03
$
0.25
$
0.18
$
0.71
Discontinued operations
(0.05
)
0.17
(0.08
)
0.32
Net income
$
(0.02
)
$
0.43
$
0.10
$
1.02
Diluted earnings (loss) per share (1):
Continuing operations
$
0.03
$
0.25
$
0.18
$
0.70
Discontinued operations
(0.05
)
0.17
(0.08
)
0.32
Net income
$
(0.02
)
$
0.43
$
0.10
$
1.02
Weighted-average shares used in diluted
earnings per share
171,200,404
188,414,719
179,096,058
188,190,057
(1)
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 September 30,2019
December 31,2018 Current assets: Cash and cash equivalents
$
514,851
$
867,262
Short-term investments
137,032
59,391
Accounts and other receivables, net
365,522
371,797
Short-term finance receivables, net
617,178
653,236
Inventories
76,339
62,279
Current income taxes
25,598
5,947
Other current assets and prepayments
101,829
74,782
Assets of discontinued operations
568,413
602,823
Total current assets
2,406,762
2,697,517
Property, plant and equipment, net
371,666
398,501
Rental property and equipment, net
39,400
46,228
Long-term finance receivables, net
616,746
635,908
Goodwill
1,317,037
1,332,351
Intangible assets, net
199,715
213,200
Operating lease assets
172,617
152,554
Noncurrent income taxes
80,561
65,001
Other assets
392,720
397,159
Total assets
$
5,597,224
$
5,938,419
Liabilities and stockholders'
equity Current liabilities: Accounts payable and accrued
liabilities
$
1,337,214
$
1,348,127
Current operating lease liabilities
34,091
35,208
Current portion of long-term debt
501,728
199,535
Advance billings
106,968
116,862
Current income taxes
8,525
15,284
Liabilities of discontinued operations
157,034
174,798
Total current liabilities
2,145,560
1,889,814
Long-term debt
2,567,363
3,066,073
Deferred taxes on income
253,151
253,560
Tax uncertainties and other income tax liabilities
45,179
39,548
Noncurrent operating lease liabilities
148,125
125,294
Other noncurrent liabilities
412,434
462,288
Total liabilities
5,571,812
5,836,577
Stockholders' equity: Cumulative preferred stock, $50 par
value, 4% convertible
-
1
Cumulative preference stock, no par value, $2.12 convertible
-
396
Common stock, $1 par value
323,338
323,338
Additional paid-in-capital
101,651
121,475
Retained earnings
5,270,741
5,279,682
Accumulated other comprehensive loss
(926,452
)
(948,961
)
Treasury stock, at cost
(4,743,866
)
(4,674,089
)
Total stockholders' equity
25,412
101,842
Total liabilities and stockholders' equity
$
5,597,224
$
5,938,419
Pitney Bowes Inc. Business Segment Revenue
(Unaudited; in thousands)
Three months
ended September 30, Nine months ended September 30,
2019
2018
% Change
2019
2018
% Change
REVENUE Global Ecommerce
$
278,995
$
232,845
20
%
$
827,568
$
718,535
15
%
Presort Services
131,483
125,334
5
%
394,468
382,522
3
%
Commerce Services
410,478
358,179
15
%
1,222,036
1,101,057
11
%
Sending Technology Solutions
379,647
402,102
(6
%)
1,151,746
1,253,051
(8
%)
Total revenue
$
790,125
$
760,281
4
%
$
2,373,782
$
2,354,108
1
%
Reconciliation of reported revenue to
revenue excluding currency and Market Exits Total
revenue
$
790,125
$
760,281
4
%
$
2,373,782
$
2,354,108
1
%
Currency impact on revenue
4,068
-
17,982
-
Revenue, at constant currency
794,193
760,281
4
%
2,391,764
2,354,108
2
%
Less revenue from Market Exits
1,470
10,873
9,549
39,350
Revenue, excluding currency and Market Exits
$
792,723
$
749,408
6
%
$
2,382,215
$
2,314,758
3
%
Pitney Bowes Inc. Business Segment
EBIT & EBITDA (Unaudited; in thousands)
Three
Months Ended September 30,
2019
2018
% change EBIT (1) D&A EBITDA
EBIT (1) D&A EBITDA EBIT
EBITDA Global Ecommerce
$ (21,793)
$ 17,356
$ (4,437)
$ (14,330)
$ 15,150
$ 820
(52%)
>(100%)
Presort Services
17,687
7,667
25,354
17,435
6,867
24,302
1%
4%
Commerce Services
(4,106)
25,023
20,917
3,105
22,017
25,122
>(100%)
(17%)
Sending Technology Solutions
130,954
9,579
140,533
134,607
9,499
144,106
(3%)
(2%)
Segment Total
$ 126,848
$ 34,602
161,450
$ 137,712
$ 31,516
169,228
(8%)
(5%)
Reconciliation of Segment EBITDA to Net Income:
Segment depreciation and amortization (2)
(34,602)
(31,516)
Unallocated corporate expenses
(58,277)
(40,988)
Restructuring charges and asset impairments, net
(47,017)
(6,099)
Interest, net
(39,730)
(37,437)
Other expense
(667)
(7,964)
Transaction costs
(707)
(36)
Benefit for income taxes
24,895
2,468
Income from continuing operations
5,345
47,656
(Loss) income from discontinued operations, net of tax
(8,470)
32,621
Net (loss) income
$ (3,125)
$ 80,277
Nine Months Ended September 30,
2019
2018
% change EBIT (1) D&A EBITDA
EBIT (1) D&A EBITDA EBIT
EBITDA Global Ecommerce
$ (51,969)
$ 50,697
$ (1,272)
$ (28,034)
$ 45,047
$ 17,013
(85%)
>(100%)
Presort Services
48,215
21,675
69,890
57,026
19,652
76,678
(15%)
(9%)
Commerce Services
(3,754)
72,372
68,618
28,992
64,699
93,691
>(100%)
(27%)
Sending Technology Solutions
378,095
30,347
408,442
412,427
30,979
443,406
(8%)
(8%)
Segment Total
$ 374,341
$ 102,719
477,060
$ 441,419
$ 95,678
537,097
(15%)
(11%)
Reconciliation of Segment EBITDA to Net Income:
Segment depreciation and amortization (2)
(102,719)
(95,678)
Unallocated corporate expenses
(160,283)
(141,321)
Restructuring charges and asset impairments, net
(56,616)
(18,771)
Interest, net
(117,758)
(122,484)
Other expense
(18,350)
(7,964)
Transaction costs
(2,573)
(1,091)
Benefit (provision) for income taxes
13,351
(17,235)
Income from continuing operations
32,112
132,553
(Loss) income from discontinued operations, net of tax
(14,199)
59,289
Net income
$ 17,913
$ 191,842
(1) Segment EBIT excludes interest, taxes, general corporate
expenses, restructuring charges, and other items that are not
allocated to a particular business segment. (2) Represents
depreciation and amortization expense of reporting segments only
and does not include corporate depreciation and amortization
expense of $5,935 and $5,111 for the three months ended September
30, 2019 and 2018, respectively, and $15,795 and $16,477 for the
nine months ended September 30, 2019 and 2018, respectively.
Pitney Bowes Inc. Reconciliation of Reported Consolidated
Results to Adjusted Results (Unaudited; in thousands, except
per share amounts)
Three months
endedSeptember 30, Nine months endedSeptember 30,
2019
2018
2019
2018
Reconciliation of reported net
income to adjusted earnings Net (loss)
income
$
(3,125
)
$
80,277
$
17,913
$
191,842
Loss (income) from discontinued operations, net of tax
8,470
(32,621
)
14,199
(59,289
)
Restructuring charges and asset impairments, net
34,722
4,466
41,709
13,784
Loss on disposition of businesses
-
-
19,396
-
Loss on extinguishment of debt
497
5,933
497
5,933
Transaction costs
527
27
1,917
814
Tax adjustments, net
-
(7,986
)
-
(13,966
)
Adjusted net income
41,091
50,096
95,631
139,118
(Benefit) provision for income taxes, as adjusted
(12,250
)
9,191
669
38,496
Interest, net
39,730
37,437
117,758
122,484
Adjusted EBIT
68,571
96,724
214,058
300,098
Depreciation and amortization
40,537
36,627
118,514
112,155
Adjusted EBITDA
$
109,108
$
133,351
$
332,572
$
412,253
Reconciliation of reported diluted
earnings per share to adjusted diluted earnings per share
Diluted (loss) earnings per share
$
(0.02
)
$
0.43
$
0.10
$
1.02
Loss (income) from discontinued operations, net of tax
0.05
(0.17
)
0.08
(0.32
)
Restructuring charges and asset impairments, net
0.20
0.02
0.23
0.07
Loss on disposition of businesses
-
-
0.11
-
Loss on extinguishment of debt
-
0.03
-
0.03
Transaction costs
-
-
0.01
-
Tax adjustments, net
-
(0.04
)
-
(0.07
)
Adjusted diluted earnings per share
$
0.24
$
0.27
$
0.53
$
0.74
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
$
95,502
$
104,077
$
182,284
$
258,570
Net cash used in operating activities - discontinued operations
(10,324
)
(20,954
)
(15,858
)
(68,428
)
Capital expenditures
(36,034
)
(27,854
)
(95,221
)
(105,295
)
Restructuring payments
5,840
11,449
18,845
39,242
Reserve account deposits
11,441
905
3,125
6,864
Transaction costs paid
2,917
9,205
9,025
13,242
Free cash flow
$
69,342
$
76,828
$
102,200
$
144,195
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191105005270/en/
Editorial - Bill Hughes Chief Communications Officer
203/351-6785 Financial - Adam David VP, Investor Relations
203/351-7175
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