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 second quarter 2021.
“We delivered a solid second quarter and first half of the
year,” said Marc B. Lautenbach, President and CEO, Pitney Bowes.
“Once again, each business made a positive contribution to the
quarter. Importantly, Global Ecommerce made significant progress
and was EBITDA positive in the quarter putting this business
on-track to our commitment of EBITDA positive for the full year.
SendTech and Presort Services also grew revenue and profit over
prior year. We are well-positioned to reach our goal of achieving
improved profitable revenue growth.”
Second Quarter 2021
- Revenue of $899 million, growth of 7 percent on a reported
basis and 6 percent excluding the impact of currency
- GAAP EPS and Adjusted EPS of $0.11
- EPS reflects a $0.03 tax benefit associated with a UK tax
legislation change
- GAAP cash from operations of $79 million; free cash flow of $87
million
- Global Ecommerce EBIT margin improved by over 200 basis points
compared to prior year; EBITDA was positive.
- Presort grew revenue and EBIT margin over prior year.
- SendTech grew revenue; EBIT grew over prior year for the third
consecutive quarter.
Earnings per share results are summarized in the table
below:
Second Quarter*
2021
2020
GAAP EPS
$0.11
($0.02)
Discontinued operations, net of tax
0.01
0.02
GAAP EPS from continuing
operations
$0.12
$0.00
Restructuring charges
0.02
0.02
Gain on sale of business
(0.02)
-
Gain on sale of assets
(0.01)
-
Gain on sale of equity investment
-
(0.05)
Tax on surrender of company owned life
insurance policies
-
0.07
Adjusted EPS
$0.11
$0.04
* The sum of the earnings per share may not equal the totals due
to rounding.
Business Segment Reporting
Global Ecommerce facilitates domestic retail ecommerce shipping
solutions, including delivery, returns and fulfillment, and global
cross-border ecommerce transactions.
Presort Services provides sortation services to qualify large
volumes of First Class Mail, Marketing Mail, Marketing Mail Flats
and Bound Printed Matter for postal workshare discounts.
Sending Technology Solutions offers physical and digital mailing
and shipping technology solutions, financing, services, supplies
and other applications for small and medium businesses to help
simplify and save on the sending, tracking and receiving of
letters, parcels and flats.
Global Ecommerce
Second Quarter
($ millions)
2021
2020
% Change
Reported
% Change
Ex Currency
Revenue
$418
$398
5%
3%
EBITDA
$8
($2)
>100%
EBIT
($11)
($19)
43%
Revenue grew over prior year despite a tough comparison. EBIT
and EBITDA benefited largely from Cross Border services and lower
bad debt expense.
Presort Services
Second Quarter
($ millions)
2021
2020
% Change
Reported
% Change
Ex Currency
Revenue
$135
$118
14%
14%
EBITDA
$23
$20
12%
EBIT
$16
$13
28%
Revenue grew across all mail classes and benefited from an
easier prior year comparison. EBIT and EBITDA improved from prior
year largely due to the revenue growth and higher gross margin.
SendTech Solutions
Second Quarter
($ millions)
2021
2020
% Change
Reported
% Change
Ex Currency
Revenue
$346
$321
8%
6%
EBITDA
$115
$113
1%
EBIT
$107
$104
3%
Revenue benefited from growth in equipment sales, supplies,
business services and support services, partly offset by a decline
in financing. Revenue also benefited from an easier prior year
comparison. EBIT and EBITDA improved from prior year largely due to
the revenue growth.
Full Year 2021 Expectations
The Company’s full year 2021 expectations remain in-line with
its previous communications. The Company continues to expect annual
revenue to grow in the low-to-mid single digit range. The Company
continues to expect adjusted EPS to grow over prior year driven
largely by the improvement in Global Ecommerce, which is expected
to be EBITDA positive for the full year. More specifically,
adjusted EPS is expected to be in the range of $0.35 to $0.42. The
Company also continues to expect lower free cash flow as compared
to prior year primarily due to certain 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. EDT. 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. 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. Such items are often inconsistent in amount and frequency
and as such, the Company believes that these 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.
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. The Company
reports free cash flow to provide investors insight into the amount
of cash that management could have available for other
discretionary uses. 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 and 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 other unusual or one-time items,
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.
Complete reconciliations of non-GAAP measures to comparable GAAP
measures can also 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 future revenue and earnings guidance
and future events or conditions. Forward-looking statements are not
guarantees of future performance and involve risks and
uncertainties that could cause actual results to differ materially
from those projected. In particular, we continue to navigate the
impacts of the Covid-19 pandemic (Covid-19), including its effects
on the cost and availability of labor and transportation and global
supply chains. 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 the operations and
financial health of posts in the U.S. or other major markets or
changes to the broader postal or shipping markets; the loss of, or
significant changes to, 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 and six months ended June 30, 2021
and 2020, and consolidated balance sheets at June 30, 2021 and
December 31, 2020 are attached.
Pitney Bowes Inc. Consolidated Statements of
Operations (Unaudited; in thousands, except per share amounts)
Three months ended June 30, Six months ended June
30,
2021
2020
2021
2020
Revenue: Business services
$
567,022
$
528,990
$
1,137,476
$
973,369
Support services
115,156
113,786
233,853
235,801
Financing
73,453
85,462
151,265
174,540
Equipment sales
86,267
57,837
173,070
134,110
Supplies
38,655
32,773
80,879
78,482
Rentals
18,650
18,644
37,857
37,458
Total revenue
899,203
837,492
1,814,400
1,633,760
Costs and expenses: Cost of business services
482,814
454,311
982,348
828,976
Cost of support services
37,679
36,725
74,396
76,485
Financing interest expense
11,773
11,939
23,659
24,428
Cost of equipment sales
61,561
47,920
123,401
105,279
Cost of supplies
10,467
8,379
21,678
20,619
Cost of rentals
6,013
6,022
12,460
12,400
Selling, general and administrative
236,190
233,631
474,292
482,264
Research and development
11,059
7,467
22,375
19,583
Restructuring charges
4,844
4,922
7,733
8,739
Goodwill impairment
-
-
-
198,169
Interest expense, net
24,346
26,446
49,504
52,329
Other components of net pension and postretirement cost
312
386
662
235
Other (income) expense
(13,646
)
(17,375
)
37,748
16,112
Total costs and expenses
873,412
820,773
1,830,256
1,845,618
Income (loss) from continuing operations before taxes
25,791
16,719
(15,856
)
(211,858
)
Provision (benefit) for income taxes
4,915
17,016
(9,077
)
6,986
Income (loss) from continuing operations
20,876
(297
)
(6,779
)
(218,844
)
(Loss) income from discontinued operations, net of tax
(1,020
)
(3,032
)
(4,906
)
7,032
Net income (loss)
$
19,856
$
(3,329
)
$
(11,685
)
$
(211,812
)
Basic earnings (loss) per share (1): Continuing operations
$
0.12
$
-
$
(0.04
)
$
(1.28
)
Discontinued operations
(0.01
)
(0.02
)
(0.03
)
0.04
Net income (loss)
$
0.11
$
(0.02
)
$
(0.07
)
$
(1.24
)
Diluted earnings (loss) per share (1): Continuing operations
$
0.12
$
-
$
(0.04
)
$
(1.28
)
Discontinued operations
(0.01
)
(0.02
)
(0.03
)
0.04
Net income (loss)
$
0.11
$
(0.02
)
$
(0.07
)
$
(1.24
)
Weighted-average shares used in diluted earnings per share
178,979
171,478
173,367
171,167
(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 June 30,2021 December
31,2020 Current assets: Cash and cash equivalents
$
799,470
$
921,450
Short-term investments
14,904
18,974
Accounts and other receivables, net
309,177
389,240
Short-term finance receivables, net
552,858
568,050
Inventories
67,538
65,845
Current income taxes
37,384
23,219
Other current assets and prepayments
117,425
120,145
Total current assets
1,898,756
2,106,923
Property, plant and equipment, net
429,785
391,280
Rental property and equipment, net
38,814
38,435
Long-term finance receivables, net
588,602
605,292
Goodwill
1,130,164
1,152,285
Intangible assets, net
144,692
159,839
Operating lease assets
205,584
201,916
Noncurrent income taxes
69,150
72,653
Other assets
507,748
491,514
Total assets
$
5,013,295
$
5,220,137
Liabilities and stockholders'
equity Current liabilities: Accounts payable and accrued
liabilities
$
820,065
$
880,616
Customer deposits at Pitney Bowes Bank
632,833
617,200
Current operating lease liabilities
41,835
39,182
Current portion of long-term debt
97,015
216,032
Advance billings
119,645
114,550
Current income taxes
5,844
2,880
Total current liabilities
1,717,237
1,870,460
Long-term debt
2,330,698
2,348,361
Deferred taxes on income
286,338
279,451
Tax uncertainties and other income tax liabilities
37,155
38,163
Noncurrent operating lease liabilities
182,746
180,292
Other noncurrent liabilities
405,751
437,015
Total liabilities
4,959,925
5,153,742
Stockholders' equity: Common stock
323,338
323,338
Additional paid-in-capital
5,903
68,502
Retained earnings
5,172,185
5,201,195
Accumulated other comprehensive loss
(831,303
)
(839,131
)
Treasury stock, at cost
(4,616,753
)
(4,687,509
)
Total stockholders' equity
53,370
66,395
Total liabilities and stockholders' equity
$
5,013,295
$
5,220,137
Pitney Bowes Inc. Business Segment Revenue
(Unaudited; in thousands)
Three months ended June 30,
Six months ended June 30,
2021
2020
% Change
2021
2020
% Change
Global Ecommerce
$
418,429
$
398,453
5
%
$
831,515
$
690,776
20
%
Presort Services
134,619
118,127
14
%
277,745
258,847
7
%
Sending Technology Solutions
346,155
320,912
8
%
705,140
684,137
3
%
Total revenue - GAAP
899,203
837,492
7
%
1,814,400
1,633,760
11
%
Currency impact on revenue
(13,521
)
-
(22,324
)
-
Revenue, at constant currency
$
885,682
$
837,492
6
%
$
1,792,076
$
1,633,760
10
%
Pitney Bowes Inc. Business Segment EBIT & EBITDA
(Unaudited; in thousands)
Three months ended June 30,
2021
2020
% change
EBIT (1) D&A EBITDA EBIT (1)
D&A EBITDA EBIT EBITDA
Global Ecommerce
$
(10,831
)
$
19,060
$
8,229
$
(18,894
)
$
17,297
$
(1,597
)
43
%
>100% Presort Services
16,134
6,798
22,932
12,582
7,857
20,439
28
%
12
%
Sending Technology Solutions
107,121
7,537
114,658
104,268
8,776
113,044
3
%
1
%
Segment total
$
112,424
$
33,395
145,819
$
97,956
$
33,930
131,886
15
%
11
%
Reconciliation of Segment EBITDA to Net Income
(Loss): Segment depreciation and amortization
(33,395
)
(33,930
)
Unallocated corporate expenses
(56,316
)
(49,489
)
Restructuring charges
(4,844
)
(4,922
)
Gain on sale of business
10,201
-
Gain on sale of assets
1,434
-
Loss on debt refinancing
(989
)
-
Gain on sale of equity investment
-
11,908
Transaction costs
-
(349
)
Interest, net
(36,119
)
(38,385
)
Provision for income taxes
(4,915
)
(17,016
)
Income (loss) from continuing operations
20,876
(297
)
Loss from discontinued operations, net of tax
(1,020
)
(3,032
)
Net income (loss)
$
19,856
$
(3,329
)
Six months ended June 30,
2021
2020
% change
EBIT (1)
D&A
EBITDA
EBIT (1)
D&A
EBITDA
EBIT
EBITDA
Global Ecommerce
$
(37,207
)
$
37,236
$
29
$
(48,369
)
$
35,363
$
(13,006
)
23
%
>100% Presort Services
35,185
14,297
49,482
28,277
15,631
43,908
24
%
13
%
Sending Technology Solutions
221,591
15,140
236,731
210,830
17,815
228,645
5
%
4
%
Segment Total
$
219,569
$
66,673
286,242
$
190,738
$
68,809
259,547
15
%
10
%
Reconciliation of Segment EBITDA to Net Loss: Segment
depreciation and amortization
(66,673
)
(68,809
)
Unallocated corporate expenses
(113,781
)
(93,211
)
Restructuring charges
(7,733
)
(8,739
)
Loss on debt refinancing
(52,383
)
(36,987
)
Gain on sale of business
10,201
-
Gain on sale of assets
1,434
-
Goodwill impairment
-
(198,169
)
Gain on sale of equity investment
-
11,908
Transaction costs
-
(641
)
Interest, net
(73,163
)
(76,757
)
Benefit (provision) for income taxes
9,077
(6,986
)
Loss from continuing operations
(6,779
)
(218,844
)
(Loss) income from discontinued operations, net of tax
(4,906
)
7,032
Net loss
$
(11,685
)
$
(211,812
)
(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 June 30, Six months
ended June 30,
2021
2020
2021
2020
Reconciliation of reported net income (loss) to adjusted
EBIT and EBITDA Net income (loss)
$
19,856
$
(3,329
)
$
(11,685
)
$
(211,812
)
Loss (income) from discontinued operations, net of tax
1,020
3,032
4,906
(7,032
)
Provision (benefit) for income taxes
4,915
17,016
(9,077
)
6,986
Income (loss) from continuing operations before taxes
25,791
16,719
(15,856
)
(211,858
)
Restructuring charges
4,844
4,922
7,733
8,739
Gain on sale of business
(10,201
)
-
(10,201
)
-
Gain on sale of assets
(1,434
)
-
(1,434
)
-
Loss on debt refinancing
989
-
52,383
36,987
Goodwill impairment
-
-
-
198,169
Gain on sale of equity investment
-
(11,908
)
-
(11,908
)
Transaction costs
-
349
-
641
Adjusted net income before tax
19,989
10,082
32,625
20,770
Interest, net
36,119
38,385
73,163
76,757
Adjusted EBIT
56,108
48,467
105,788
97,527
Depreciation and amortization
39,822
41,068
79,416
81,787
Adjusted EBITDA
$
95,930
$
89,535
$
185,204
$
179,314
Reconciliation of reported diluted earnings (loss) per
share to adjusted diluted earnings per share (1) Diluted
earnings (loss) per share
$
0.11
$
(0.02
)
$
(0.07
)
$
(1.24
)
Loss (income) from discontinued operations, net of tax
0.01
0.02
0.03
(0.04
)
Restructuring charges
0.02
0.02
0.03
0.03
Gain on sale of business
(0.02
)
-
(0.02
)
-
Gain on sale of assets
(0.01
)
-
(0.01
)
-
Loss on debt refinancing
-
-
0.22
0.16
Goodwill impairment
-
-
-
1.14
Gain on sale of equity investment
-
(0.05
)
-
(0.05
)
Tax on surrender of company owned life insurance policies
-
0.07
-
0.07
Adjusted diluted earnings per share
$
0.11
$
0.04
$
0.19
$
0.09
Reconciliation of reported net cash from operating
activities to free cash flow Net cash from operating activities
$
78,805
$
153,777
$
144,729
$
86,422
Net cash used in operating activities - discontinued operations
-
618
-
38,423
Capital expenditures
(40,375
)
(34,176
)
(83,703
)
(59,954
)
Restructuring payments
4,870
5,318
8,825
11,365
Change in customer deposits at PB Bank
43,427
23,219
15,633
22,331
Transaction costs paid
-
377
-
2,117
Free cash flow
$
86,727
$
149,133
$
85,484
$
100,704
(1) The sum of the earnings per share amounts may not equal
the totals due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210803005244/en/
Editorial - Bill Hughes Chief Communications Officer
203/351-6785
Financial - Adam David VP, Investor Relations 203/351-7175
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