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 first quarter 2021.
“We delivered a solid start to the year, with every business
making a meaningful contribution to our first quarter results,”
said Marc B. Lautenbach, President and CEO, Pitney Bowes. “Revenue
continued to demonstrate strong growth, every business improved its
EBIT performance from prior year, and we strengthened our balance
sheet. As we enter the final chapter of our transformation, we are
well-positioned to reach our ultimate goal of achieving improved
profitable revenue growth.”
First Quarter 2021
- Revenue of $915 million, growth of 15 percent on a reported
basis and 14 percent excluding the impact of currency
- GAAP EPS of ($0.18), which includes a loss related to debt
refinancing
- Adjusted EPS of $0.07
- EPS reflects a $0.02 tax benefit associated with an affiliate
reorganization.
- GAAP cash from operations of $66 million; free cash flow net
use of $1 million.
- The Company reduced debt by $126 million from year-end 2020 and
took several actions to refine its capital structure which reduced
near-term refinancing risk, improved pricing of its Term Loan B and
extended the duration of maturities across its capital
structure.
- Global Ecommerce grew revenue 41 percent on a reported basis
and 40 percent excluding the impact of currency; EBIT margins and
EBITDA margins improved over prior year.
- Presort Services grew revenue, EBIT margins and EBITDA margins
over prior year.
- SendTech EBIT margins and EBITDA margins improved over prior
year, which is the second consecutive quarter of EBIT and EBITDA
year-over-year dollar growth.
Earnings per share results are summarized in the table
below:
First Quarter*
2021
2020
GAAP EPS
($0.18)
($1.22)
Discontinued operations
(0.02)
(0.06)
GAAP EPS from continuing
operations
($0.16)
($1.28)
Restructuring charges
0.01
0.02
Goodwill impairment charge
-
1.15
Loss on debt refinancing
0.22
0.16
Adjusted EPS
$0.07
$0.05
* The sum of the earnings per share may not equal the totals due
to rounding.
Business Segment Reporting
Global Ecommerce facilitates domestic retail ecommerce shipping
solutions, including delivery, returns and fulfillment, and global
cross-border ecommerce transactions.
Presort Services provides sortation services to qualify large
volumes of First Class Mail, Marketing Mail, Marketing Mail Flats
and Bound Printed Matter for postal workshare discounts.
Sending Technology Solutions offers physical and digital mailing
and shipping technology solutions, financing, services, supplies
and other applications for small and medium businesses to help
simplify and save on the sending, tracking and receiving of
letters, parcels and flats.
Global Ecommerce
First Quarter
($ millions)
2021
2020
% Change Reported
% Change Ex Currency
Revenue
$413
$292
41%
40%
EBITDA
($8)
($11)
28%
EBIT
($26)
($29)
11%
Revenue benefited primarily from growth in volumes across all
services. EBIT and EBITDA benefited from improved Cross Border and
Digital Delivery Service margins, partly offset by higher costs in
Domestic Parcel Services. EBIT and EBITDA improved through the
quarter with March being EBITDA positive.
Presort Services
First Quarter
($ millions)
2021
2020
% Change Reported
% Change Ex Currency
Revenue
$143
$141
2%
2%
EBITDA
$27
$23
13%
EBIT
$19
$16
21%
Revenue benefited primarily from growth in Marketing Mail. EBIT
and EBITDA margins improved over prior year and were the highest
margins in five quarters.
SendTech Solutions
First Quarter
($ millions)
2021
2020
% Change Reported
% Change Ex Currency
Revenue
$359
$363
(1%)
(3%)
EBITDA
$122
$116
6%
EBIT
$114
$107
7%
Revenue benefited from growth in equipment sales, business
services and rentals, partly offset by declines in financing,
supplies and support services. EBIT margin improved from prior year
and was the highest margin in three quarters.
Full Year 2021 Expectations
The Company’s full year 2021 expectations are consistent with
what was communicated last quarter. The Company expects annual
revenue to grow 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 driven largely by
improvement in Global Ecommerce, which is expected to be EBITDA
positive for the full year. The Company also expects lower free
cash flow primarily due to specific items that benefited 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 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 vaccines, 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; the loss of, or significant 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 Global Ecommerce and
Presort Services segments; 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 Global Ecommerce and
Presort Services segments; 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 2020 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 ended March 31, 2021 and 2020, and
consolidated balance sheets at March 31, 2021 and December 31, 2020
are attached.
Pitney Bowes Inc. Consolidated Statements of
Loss (Unaudited; in thousands, except per share amounts)
Three months ended March 31,
2021
2020
Revenue: Business services
$
570,454
$
444,379
Support services
118,697
122,015
Financing
77,812
89,078
Equipment sales
86,803
76,273
Supplies
42,224
45,709
Rentals
19,207
18,814
Total revenue
915,197
796,268
Costs and expenses: Cost of business services
499,534
374,665
Cost of support services
36,717
39,760
Financing interest expense
11,886
12,489
Cost of equipment sales
61,840
57,359
Cost of supplies
11,211
12,240
Cost of rentals
6,447
6,378
Selling, general and administrative
238,102
248,633
Research and development
11,316
12,116
Restructuring charges
2,889
3,817
Goodwill impairment
-
198,169
Interest expense, net
25,158
25,883
Other components of net pension and postretirement expense (income)
350
(151
)
Other expense, net
51,394
33,487
Total costs and expenses
956,844
1,024,845
Loss from continuing operations before taxes
(41,647
)
(228,577
)
Benefit for income taxes
(13,992
)
(10,030
)
Loss from continuing operations
(27,655
)
(218,547
)
(Loss) income from discontinued operations, net of tax
(3,886
)
10,064
Net loss
$
(31,541
)
$
(208,483
)
Basic loss per share (1): Continuing operations
$
(0.16
)
$
(1.28
)
Discontinued operations
(0.02
)
0.06
Net loss
$
(0.18
)
$
(1.22
)
Diluted loss per share (1): Continuing operations
$
(0.16
)
$
(1.28
)
Discontinued operations
(0.02
)
0.06
Net loss
$
(0.18
)
$
(1.22
)
Weighted-average shares used in diluted earnings per share
172,856
170,912
(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 March 31,2021
December 31,2020 Current assets: Cash and cash equivalents
$
680,727
$
921,450
Short-term investments
16,200
18,974
Accounts and other receivables, net
327,755
389,240
Short-term finance receivables, net
551,061
568,050
Inventories
63,680
65,845
Current income taxes
44,288
23,219
Other current assets and prepayments
124,394
120,145
Total current assets
1,808,105
2,106,923
Property, plant and equipment, net
405,226
391,280
Rental property and equipment, net
37,708
38,435
Long-term finance receivables, net
597,012
605,292
Goodwill
1,144,064
1,152,285
Intangible assets, net
152,265
159,839
Operating lease assets
196,843
201,916
Noncurrent income taxes
68,732
72,653
Other assets
531,226
491,514
Total assets
$
4,941,181
$
5,220,137
Liabilities and stockholders'
equity Current liabilities: Accounts payable and accrued
liabilities
$
820,286
$
880,616
Customer deposits at Pitney Bowes Bank
589,406
617,200
Current operating lease liabilities
39,587
39,182
Current portion of long-term debt
19,972
216,032
Advance billings
118,166
114,550
Current income taxes
6,839
2,880
Total current liabilities
1,594,256
1,870,460
Long-term debt
2,418,885
2,348,361
Deferred taxes on income
282,192
279,451
Tax uncertainties and other income tax liabilities
37,936
38,163
Noncurrent operating lease liabilities
174,798
180,292
Other noncurrent liabilities
413,951
437,015
Total liabilities
4,922,018
5,153,742
Stockholders' equity: Common stock
323,338
323,338
Additional paid-in-capital
15,269
68,502
Retained earnings
5,161,029
5,201,195
Accumulated other comprehensive loss
(847,538
)
(839,131
)
Treasury stock, at cost
(4,632,935
)
(4,687,509
)
Total stockholders' equity
19,163
66,395
Total liabilities and stockholders' equity
$
4,941,181
$
5,220,137
Pitney Bowes Inc. Business Segment
Revenue (Unaudited; in thousands)
Three months ended
March 31,
2021
2020
% Change
Global Ecommerce
$
413,086
$
292,323
41%
Presort Services
143,126
140,720
2%
Sending Technology Solutions
358,985
363,225
(1%)
Total revenue - GAAP
915,197
796,268
15%
Currency impact on revenue
(8,803)
-
Revenue, at constant currency
$
906,394
$
796,268
14%
Pitney Bowes Inc. Business Segment EBIT
& EBITDA (Unaudited; in thousands)
Three months
ended March 31,
2021
2020
% change EBIT (1) D&A EBITDA
EBIT (1) D&A EBITDA EBIT
EBITDA Global Ecommerce
$
(26,376)
$
18,176
$
(8,200)
$
(29,475)
$
18,065
$
(11,410)
11%
28%
Presort Services
19,051
7,499
26,550
15,695
7,774
23,469
21%
13%
Sending Technology Solutions
114,470
7,604
122,074
106,562
9,039
115,601
7%
6%
Segment total
$
107,145
$
33,279
140,424
$
92,782
$
34,878
127,660
15%
10%
Reconciliation of Segment EBITDA to Net Income:
Segment depreciation and amortization
(33,279)
(34,878)
Unallocated corporate expenses
(57,465)
(43,722)
Restructuring charges
(2,889)
(3,817)
Interest, net
(37,044)
(38,372)
Goodwill impairment
-
(198,169)
Loss on debt refinancing
(51,394)
(36,987)
Transaction costs
-
(292)
Benefit for income taxes
13,992
10,030
Loss from continuing operations
(27,655)
(218,547)
(Loss) income from discontinued operations, net of tax
(3,886)
10,064
Net loss
$
(31,541)
$
(208,483)
(1) Segment EBIT excludes interest, taxes, general corporate
expenses, restructuring charges, 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 March 31,
2021
2020
Reconciliation of reported net loss to adjusted EBIT and
EBITDA Net loss
$
(31,541)
$
(208,483)
Loss (income) from discontinued operations, net of tax
3,886
(10,064)
Benefit for income taxes
(13,992)
(10,030)
Loss from continuing operations before taxes
(41,647)
(228,577)
Restructuring charges
2,889
3,817
Goodwill impairment
-
198,169
Loss on debt refinancing
51,394
36,987
Transaction costs
-
292
Adjusted net income before tax
12,636
10,688
Interest, net
37,044
38,372
Adjusted EBIT
49,680
49,060
Depreciation and amortization
39,594
40,719
Adjusted EBITDA
$
89,274
$
89,779
Reconciliation of reported diluted loss per share to
adjusted diluted earnings per share Diluted loss per share
$
(0.18)
$
(1.22)
Loss (income) from discontinued operations, net of tax
0.02
(0.06)
Restructuring charges
0.01
0.02
Goodwill impairment
-
1.15
Loss on debt refinancing
0.22
0.16
Adjusted diluted earnings per share (1)
$
0.07
$
0.05
Reconciliation of reported net cash from operating
activities to free cash flow Net cash provided by (used in)
operating activities
$
65,924
$
(67,355)
Net cash used in operating activities - discontinued operations
-
37,805
Capital expenditures
(43,328)
(25,778)
Restructuring payments
3,955
6,047
Change in customer deposits at PB Bank
(27,794)
(888)
Transaction costs paid
-
1,740
Free cash flow
$
(1,243)
$
(48,429)
(1) The sum of the earnings per share amounts may not equal
the totals due to rounding.
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version on businesswire.com: https://www.businesswire.com/news/home/20210430005042/en/
Editorial - Bill Hughes Chief Communications Officer
203/351-6785
Financial - Adam David VP, Investor Relations 203/351-7175
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