Pitney Bowes Inc. (NYSE: PBI), a global technology company that
provides commerce solutions in the areas of ecommerce, shipping,
mailing and financial services, today announced its financial
results for the fourth quarter and full year 2020.
"The fourth quarter was a remarkable ending to an extraordinary
year,” said Marc B. Lautenbach, President and CEO, Pitney Bowes.
“Revenue growth was the highest modern day, organic growth rate
on-record for us.
“We have been on a journey to transform the business,”
Lautenbach continued. “Even with the tremendous uncertainty in our
economy and how the pandemic will play out, we are now poised to
enter this next chapter of our transformation, profitable revenue
growth. While I am proud of what the team has accomplished, we all
recognize there is more work to do and we are ready.”
Fourth Quarter 2020
- Revenue of $1.0 billion, growth of 24 percent on a reported
basis and 23 percent excluding the impact of currency
- GAAP EPS of $0.11; Adjusted EPS of $0.13
- EPS reflects $0.03 in tax benefits primarily related to
deferred tax balances in certain international tax
jurisdictions.
- GAAP cash from operations of $111 million; free cash flow of
$97 million
- The Company reduced debt by $31 million.
- Shipping-related revenues represented 54 percent of total
revenue.
- Global Ecommerce revenue exceeded $500 million for the first
time, representing growth of 60 percent over prior year.
- Global Ecommerce EBIT dollars and margin improved from prior
quarter and over prior year, with positive EBITDA in the
quarter.
- Presort Services revenue improved from prior quarter and was
flat to prior year.
- SendTech grew revenue, EBIT and EBITDA dollars from prior
quarter and over prior year.
- SendTech shipping revenue was $35 million and grew at a
double-digit rate.
Full Year 2020
- Revenue of $3.6 billion, growth of 11 percent
- GAAP EPS loss of $1.06; Adjusted EPS of $0.30
- GAAP cash from operations of $298 million; free cash flow of
$279 million
- The Company ended the year with $940 million in cash and short
term investments.
- The Company reduced debt by $175 million.
- Shipping-related revenues represented 50 percent of total
revenue.
- Global Ecommerce revenue of $1.6 billion, representing growth
of 41 percent.
- Presort Services processed a total of 16.7 billion pieces.
- SendTech shipped 20,000 units of the SendPro Mailstation since
launching in April.
Earnings per share results are summarized in the table
below:
Fourth Quarter
Full Year
2020
2019
2020
2019
GAAP EPS
$
0.11
$
1.03
($
1.06
)
$
1.10
Discontinued Operations
($
0.01
)
($
0.98
)
($
0.06
)
($
0.87
)
GAAP EPS from Continuing
Operations
$
0.09
$
0.05
($
1.12
)
$
0.23
Goodwill Impairment
-
-
$
1.13
-
Loss on Extinguishment of Debt
-
$
0.03
$
0.16
$
0.03
Restructuring Charges and Asset
Impairments
$
0.04
$
0.06
$
0.09
$
0.30
Tax on Settlement of Investment
Securities
-
-
$
0.07
-
Loss on Dispositions and Transaction
Costs
-
$
0.01
-
$
0.13
Gain on Sale of an Equity Investment
-
-
($
0.05
)
-
Adjusted EPS
$
0.13
$
0.14
$
0.30
$
0.68
* The sum of the earnings per share may not equal the totals due
to rounding.
Business Segment Reporting
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, 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 sum of the segment results may not equal the totals due to
rounding.
Commerce Services
Fourth Quarter
($ millions)
2020
2019
B/(W)
Reported
B/(W) Ex
Currency
Revenue
Global Ecommerce
$518
$324
60%
60%
Presort Services
135
135
0%
0%
Commerce Services
$653
$459
42%
42%
EBITDA
Global Ecommerce
$3
$0
>100%
Presort Services
21
30
(30%)
Commerce Services
$24
$30
(20%)
EBIT
Global Ecommerce
($15)
($18)
19%
Presort Services
13
22
(42%)
Commerce Services
($2)
$4
>(100%)
Global Ecommerce
Revenue benefited from growth in volumes in Domestic Parcel,
Cross Border and Digital Delivery Services. EBIT and EBITDA
benefitted from the increased demand and a peak surcharge, offset
by higher costs, particularly around postal, transportation and
labor.
Presort Services
Revenue was flat to prior year driven by flat First Class
revenue, a decline in Marketing Mail and growth in Marketing Mail
Flats and Bound Printed Matter. EBIT and EBITDA margins were
relatively in line with prior quarters. Compared to prior year,
EBIT and EBITDA declined largely due to higher medical claims and
increased labor costs as well as Covid-related direct costs.
SendTech Solutions
Fourth Quarter
($ millions)
2020
2019
B/(W)
Reported
B/(W) Ex
Currency
Revenue
$376
$372
1%
0%
EBITDA
$126
$122
4%
EBIT
$118
$112
5%
Revenue growth over prior year driven by equipment sales and
business services, partly offset by declines in support services,
supplies and financing revenues. EBIT and EBITDA margins improved
from prior year driven largely by lower expenses.
2021 Expectations
The Company expects annual revenue to grow over prior year in
the low-to-mid single digit range, making 2021 the fifth
consecutive year of constant currency growth. The Company expects
adjusted EPS to grow over prior year. The Company also expects
lower free cash flow primarily due to the changes in certain
working capital items that benefitted 2020 and are not expected to
continue at the same level in 2021.
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. EST. 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; and financing. For 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
EBITDA and adjusted EPS to exclude the impact of items like
discontinued operations, restructuring charges, gains, losses and
costs related to acquisitions and dispositions, asset impairment
charges, goodwill impairment charges and other unusual or one-time
items. While these are actual Company income or expenses, they can
mask underlying trends associated with its business. Such items are
often inconsistent in amount and frequency and as such, the
non-GAAP measures provide investors greater insight into the
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 is
calculated by converting the current period non-U.S. dollar
denominated revenue using the prior year’s exchange rate for the
comparable quarter. We believe that excluding the impacts of
currency exchange rates provides investors a better understanding
of the underlying revenue performance. A reconciliation of reported
revenue to constant currency revenue can be found in the 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 cash flows of discontinued operations,
capital expenditures, restructuring payments, changes in customer
deposits held at the Pitney Bowes Bank, transaction costs and other
special items. A reconciliation of GAAP cash from operations to
free cash flow can be found in the 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 also provides segment EBITDA, which further excludes
depreciation and amortization expense for the segment, as an
additional useful measure of segment profitability and operational
performance. 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 the severity, magnitude and duration of the
Covid-19 pandemic (Covid-19), including governments' responses to
Covid-19, the efficacy and availability of a vaccine, its
continuing impact on our operations, employees, the availability
and cost of labor and transportation, global supply chain and
demand across our and our clients' businesses as well as any
deterioration or instability in global macroeconomic conditions.
Other factors, which could cause future financial performance to
differ materially from expectations, and which may also be
exacerbated by Covid-19 or a negative change in the economy,
include, without limitation: declining physical mail volumes;
changes in postal regulations or operations, or the financial
health of posts in the U.S. or other major markets or significant
changes to the broader postal or shipping industry; changes in our
contractual relationships with the United States Postal Service
(USPS) or USPS’ performance under those contracts; our ability to
continue to grow and manage volumes, gain additional economies of
scale and improve profitability within our Commerce Services group;
changes in labor and transportation availability and costs;
third-party suppliers' ability to provide products and services
required by us and our clients; competitive factors, including
pricing pressures, technological developments and the introduction
of new products and services by competitors; the loss of some of
our larger clients in our Commerce Services group; expenses and
potential impacts resulting from a breach of security, including
cyber-attacks or other comparable events; our success at managing
customer credit risk; and other factors as more fully outlined in
the Company's 2019 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, EBIT and
EBITDA by business segment; and reconciliations of GAAP to non-GAAP
measures for the three months and twelve months ended December 31,
2020 and 2019, and consolidated balance sheets at December 31, 2020
and December 31, 2019 are attached.
Pitney Bowes Inc. Consolidated Statements of Income
(Loss) (Unaudited; in thousands, except per share amounts)
Three months ended December 31, Twelve months
ended December 31,
2020
2019
2020
2019
Revenue: Business services
$
666,983
$
467,192
$
2,191,306
$
1,710,801
Support services
119,972
123,609
473,292
506,187
Financing
80,276
88,051
341,034
368,090
Equipment sales
101,200
87,148
314,882
352,104
Supplies
41,165
45,026
159,282
187,287
Rentals
18,821
20,317
74,279
80,656
Total revenue
1,028,417
831,343
3,554,075
3,205,125
Costs and expenses: Cost of business services
592,137
386,086
1,904,078
1,389,569
Cost of support services
35,856
38,847
149,988
162,300
Financing interest expense
12,108
11,215
48,162
44,648
Cost of equipment sales
71,671
62,116
236,716
244,210
Cost of supplies
10,928
12,349
41,679
49,882
Cost of rentals
7,145
8,307
25,600
31,530
Selling, general and administrative
242,441
246,761
963,323
1,003,989
Research and development
9,546
12,837
38,384
51,258
Restructuring charges and asset impairments
8,207
12,990
20,712
69,606
Goodwill impairment
-
-
198,169
-
Interest expense, net
26,249
26,585
105,753
110,910
Other components of net pension and postretirement (income) expense
(1,834
)
(1,087
)
(1,708
)
(4,225
)
Other (income) expense
(1,636
)
5,956
8,151
24,306
Total costs and expenses
1,012,818
822,962
3,739,007
3,177,983
Income (loss) from continuing operations before taxes
15,599
8,381
(184,932
)
27,142
(Benefit) provision for income taxes
(813
)
344
6,727
(13,007
)
Income (loss) from continuing operations
16,412
8,037
(191,659
)
40,149
Income from discontinued operations, net of tax
2,467
168,659
10,115
154,460
Net income (loss)
$
18,879
$
176,696
$
(181,544
)
$
194,609
Basic earnings (loss) per share (1):
Continuing operations
$
0.10
$
0.05
$
(1.12
)
$
0.23
Discontinued operations
0.01
0.99
0.06
0.88
Net income (loss)
$
0.11
$
1.04
$
(1.06
)
$
1.10
Diluted earnings (loss) per share (1): Continuing operations
$
0.09
$
0.05
$
(1.12
)
$
0.23
Discontinued operations
0.01
0.98
0.06
0.87
Net income (loss)
$
0.11
$
1.03
$
(1.06
)
$
1.10
Weighted-average shares used in diluted earnings per share
176,835
171,659
171,519
177,449
(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)
Assets December 31, 2020 December
31, 2019 Current assets: Cash and cash equivalents
$
921,450
$
924,442
Short-term investments
18,974
115,879
Accounts and other receivables, net
389,240
373,471
Short-term finance receivables, net
568,050
629,643
Inventories
65,845
68,251
Current income taxes
23,219
5,565
Other current assets and prepayments
120,145
101,601
Assets of discontinued operations
-
17,229
Total current assets
2,106,923
2,236,081
Property, plant and equipment, net
391,280
376,177
Rental property and equipment, net
38,435
41,225
Long-term finance receivables, net
605,292
625,487
Goodwill
1,152,285
1,324,179
Intangible assets, net
159,839
190,640
Operating lease assets
201,916
200,752
Noncurrent income taxes
72,653
71,903
Other assets
489,201
400,456
Total assets
$
5,217,824
$
5,466,900
Liabilities and stockholders'
equity Current liabilities: Accounts payable and accrued
liabilities
$
878,303
$
793,690
Customer deposits at Pitney Bowes Bank
617,200
591,118
Current operating lease liabilities
39,182
36,060
Current portion of long-term debt
216,032
20,108
Advance billings
114,550
101,920
Current income taxes
2,880
17,083
Liabilities of discontinued operations
-
9,713
Total current liabilities
1,868,147
1,569,692
Long-term debt
2,348,361
2,719,614
Deferred taxes on income
279,451
274,435
Tax uncertainties and other income tax liabilities
38,163
38,834
Noncurrent operating lease liabilities
180,292
177,711
Other noncurrent liabilities
437,015
400,518
Total liabilities
5,151,429
5,180,804
Stockholders' equity:
Common stock
323,338
323,338
Additional paid-in-capital
68,502
98,748
Retained earnings
5,201,195
5,438,930
Accumulated other comprehensive loss
(839,131
)
(840,143
)
Treasury stock, at cost
(4,687,509
)
(4,734,777
)
Total stockholders' equity
66,395
286,096
Total liabilities and stockholders' equity
$
5,217,824
$
5,466,900
Pitney Bowes Inc. Business Segment Revenue
(Unaudited; in thousands)
Three months ended December
31,
Twelve months ended December
31,
2020
2019
% Change
2020
2019
% Change
Global Ecommerce
$
518,140
$
323,942
60
%
$
1,618,897
$
1,151,510
41
%
Presort Services
134,660
135,120
-
521,212
529,588
(2
%)
Commerce Services
652,800
459,062
42
%
2,140,109
1,681,098
27
%
Sending Technology Solutions
375,617
372,281
1
%
1,413,966
1,524,027
(7
%)
Total revenue - GAAP
1,028,417
831,343
24
%
3,554,075
3,205,125
11
%
Currency impact on revenue
(3,980
)
-
(1,467
)
-
Revenue, at constant currency
$
1,024,437
$
831,343
23
%
$
3,552,608
$
3,205,125
11
%
Pitney Bowes Inc. Business Segment EBIT & EBITDA
(Unaudited; in thousands)
Three months ended
December 31,
2020
2019
% change EBIT (1) D&A EBITDA
EBIT (1) D&A EBITDA EBIT
EBITDA Global Ecommerce
$
(14,768
)
$
17,490
$
2,722
$
(18,177
)
$
17,687
$
(490
)
19
%
>100% Presort Services
13,041
8,107
21,148
22,478
7,765
30,243
(42
%)
(30
%)
Commerce Services
(1,727
)
25,597
23,870
4,301
25,452
29,753
>(100%)
(20
%)
Sending Technology Solutions
117,656
8,545
126,201
112,227
9,411
121,638
5
%
4
%
Segment total
$
115,929
$
34,142
150,071
$
116,528
$
34,863
151,391
(1
%)
(1
%)
Reconciliation of Segment EBITDA to Net Income:
Segment depreciation and amortization
(34,142
)
(34,863
)
Interest, net
(38,357
)
(37,800
)
Unallocated corporate expenses (2)
(53,766
)
(51,246
)
Restructuring charges and asset impairments
(8,207
)
(12,990
)
Loss on debt extinguishment
-
(5,956
)
Transaction costs
-
(155
)
Benefit (provision) for income taxes
813
(344
)
Income from continuing operations
16,412
8,037
Income from discontinued operations, net of tax
2,467
168,659
Net income
$
18,879
$
176,696
Twelve months ended December 31,
2020
2019
% change EBIT (1) D&A EBITDA
EBIT (1) D&A EBITDA EBIT
EBITDA Global Ecommerce
$
(82,894
)
$
69,676
$
(13,218
)
$
(70,146
)
$
68,385
$
(1,761
)
(18
%)
>(100%) Presort Services
55,799
31,769
87,568
70,693
29,440
100,133
(21
%)
(13
%)
Commerce Services
(27,095
)
101,445
74,350
547
97,825
98,372
>(100%)
(24
%)
Sending Technology Solutions
441,085
34,316
475,401
490,322
39,758
530,080
(10
%)
(10
%)
Segment Total
$
413,990
$
135,761
549,751
$
490,869
$
137,583
628,452
(16
%)
(13
%)
Reconciliation of Segment EBITDA to Net (Loss)
Income: Segment depreciation and amortization
(135,761
)
(137,583
)
Interest, net
(153,915
)
(155,558
)
Unallocated corporate expenses (2)
(200,406
)
(211,529
)
Restructuring charges and asset impairments
(20,712
)
(69,606
)
Goodwill impairment
(198,169
)
-
Gain on sale of equity investment
11,908
-
Loss on debt extinguishment
(36,987
)
(6,623
)
Loss on dispositions and transaction costs
(641
)
(20,411
)
(Provision) benefit for income taxes
(6,727
)
13,007
(Loss) income from continuing operations
(191,659
)
40,149
Income from discontinued operations, net of tax
10,115
154,460
Net (loss) income
$
(181,544
)
$
194,609
(1) Segment EBIT excludes interest, taxes, general corporate
expenses, restructuring charges, and other items that are not
allocated to a particular business segment. (2) Includes corporate
depreciation and amortization expense of $6,080 and $5,765 for the
three months ended December 31, 2020 and 2019, respectively and
$24,864 and $21,559 for the twelve months ended December 31, 2020
and 2019, respectively.
Pitney Bowes Inc. Reconciliation
of Reported Consolidated Results to Adjusted Results
(Unaudited; in thousands, except per share amounts)
Three months ended
December 31,
Twelve months ended
December 31,
2020
2019
2020
2019
Reconciliation of reported net income (loss) to adjusted
net income, adjusted EBIT and adjusted EBITDA Net income (loss)
$
18,879
$
176,696
$
(181,544
)
$
194,609
Income from discontinued operations, net of tax
(2,467
)
(168,659
)
(10,115
)
(154,460
)
Restructuring charges and asset impairments
7,148
10,719
15,641
52,427
Goodwill impairment
-
-
196,600
-
Gain on sale of equity investment
-
-
(8,943
)
-
Tax on surrender of company owned life insurance policies
-
-
12,229
-
Loss on debt extinguishment
-
4,464
27,777
4,961
Loss on dispositions and transaction costs
-
999
487
22,313
Adjusted net income
23,560
24,219
52,132
119,850
Interest, net
38,357
37,800
153,915
155,558
Provision for income taxes, as adjusted
246
3,264
7,537
3,933
Adjusted EBIT
62,163
65,283
213,584
279,341
Depreciation and amortization
40,222
40,628
160,625
159,142
Adjusted EBITDA
$
102,385
$
105,911
$
374,209
$
438,483
Reconciliation of reported diluted earnings (loss) per
share to adjusted diluted earnings per share Diluted earnings
(loss) per share
$
0.11
$
1.03
$
(1.06
)
$
1.10
Diluted earnings per share - discontinued operations
(0.01
)
(0.98
)
(0.06
)
(0.87
)
Restructuring charges and asset impairments
0.04
0.06
0.09
0.30
Goodwill impairment
-
-
1.13
-
Gain on sale of equity investment
-
-
(0.05
)
-
Tax on settlement of investment securities
-
-
0.07
-
Loss on debt extinguishment
-
0.03
0.16
0.03
Loss on dispositions and transaction costs
-
0.01
-
0.13
Adjusted diluted earnings per share
$
0.13
$
0.14
$
0.30
$
0.68
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
$
110,777
$
84,479
$
297,887
$
271,961
Net cash (provided by) used in operating activities - discontinued
operations
(511
)
6,587
37,912
(9,272
)
Capital expenditures
(24,201
)
(42,032
)
(104,988
)
(137,253
)
Restructuring payments
4,145
8,303
20,014
27,148
Change in customer deposits at PB Bank
6,618
13,216
26,082
16,341
Transaction costs paid
-
10,463
2,117
19,488
Free cash flow
$
96,828
$
81,016
$
279,024
$
188,413
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210202005102/en/
Editorial - Bill Hughes Chief Communications Officer
203/351-6785
Financial - Adam David VP, Investor Relations 203/351-7175
Pitney Bowes (NYSE:PBI)
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Pitney Bowes (NYSE:PBI)
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