Pitney Bowes (NYSE: PBI), a global shipping and mailing company
that provides technology, logistics, and financial services, today
announced its financial results for the third quarter 2021.
“We continue to see solid demand for services and products
across our portfolio,” said Marc B. Lautenbach, President and CEO,
Pitney Bowes. “We have taken important steps to ensure that we are
well-prepared for the upcoming peak season. Global Ecommerce
remains on-track to generate positive EBITDA for full year
2021.”
Third Quarter 2021 Highlights:
- Revenues of $875 million, down 2 percent from prior year;
growth of 11 percent over third quarter 2019;
- GAAP EPS of $0.05;
- Adjusted EPS $0.08;
- GAAP cash from operations of $71 million;
- Free cash flow of $30 million;
- Presort revenue growth of 9 percent over prior year and EBIT
margin of 15 percent;
- Global Ecommerce gross margin improved by 100 basis points over
prior year;
- SendTech reported growth in Equipment Sales of 5 percent over
prior year;
- Redeemed 2022 notes for $72 million.
Earnings per share results are summarized in the table
below:
Third Quarter*
2021
2020
GAAP EPS
$0.05
$0.07
Discontinued operations, net of tax
-
-
GAAP EPS from continuing
operations
$0.05
$0.06
Restructuring charges
0.02
0.02
Loss on debt refinancing
0.01
-
Adjusted EPS
$0.08
$0.08
* The sum of the earnings per share may not equal the totals due
to rounding.
Business Segment Reporting
Global Ecommerce facilitates domestic retail ecommerce shipping
solutions, including delivery, returns and fulfillment, and global
cross-border ecommerce transactions.
Presort Services provides sortation services to qualify large
volumes of First Class Mail, Marketing Mail, Marketing Mail Flats
and Bound Printed Matter for postal workshare discounts.
Sending Technology Solutions offers physical and digital mailing
and shipping technology solutions, financing, services, supplies
and other applications for small and medium businesses to help
simplify and save on the sending, tracking and receiving of
letters, parcels and flats.
Global Ecommerce
Third Quarter
($ millions)
2021
2020
% Change Reported
% Change Ex Currency
Revenue
$398
$410
(3%)
(4%)
EBITDA
-
($3)
NM
EBIT
($21)
($20)
(6%)
Lower revenue was driven by a decrease in Domestic Parcel
volumes against a tough prior year comparison, which was partly
offset by an increase in revenue per parcel and a strong Cross
Border performance. Gross margin improved over prior year despite
higher labor and transportation costs, as well as an $8 million
charge reflecting the estimated cost of a price assessment. EBITDA
and EBIT were also impacted by the $8 million charge in the
quarter.
Presort Services
Third Quarter
($ millions)
2021
2020
% Change Reported
% Change Ex Currency
Revenue
$139
$128
9%
9%
EBITDA
$27
$23
21%
EBIT
$21
$14
45%
Revenue growth was largely driven by higher revenue per piece
along with an increase in volumes. Revenue per piece benefited in
part from investments made in the network and technology to enable
a higher level of five-digit sortation services. EBITDA and EBIT
improved significantly from prior year despite higher labor and
transportation costs.
SendTech Solutions
Third Quarter
($ millions)
2021
2020
% Change Reported
% Change Ex Currency
Revenue
$338
$354
(5%)
(5%)
EBITDA
$107
$121
(12%)
EBIT
$99
$113
(12%)
Revenue reflects growth in Equipment Sales and SaaS-based
Shipping subscriptions offset by declines in Financing, Services
and Supplies. EBITDA and EBIT were down from prior year driven by
the decline in Financing revenues along with higher freight and
shipping costs.
Full Year 2021 Expectations
The Company’s full year 2021 expectations remain in-line with
its previous communications.
- Revenue still expected to grow over prior year in the
low-to-mid single digit range;
- Adjusted EPS still expected to grow over prior year and be in
the range of $0.35 to $0.42;
- Management continues to expect Global Ecommerce EBITDA to be
positive for full year 2021; and
- Free cash flow is still expected to be lower as compared to
prior year, primarily due to increased capital investments.
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 shipping and mailing company
that provides technology, logistics, and financial services to more
than 90 percent of the Fortune 500. Small business, retail,
enterprise, and government clients around the world rely on Pitney
Bowes to remove the complexity of sending mail and parcels. For
additional information visit Pitney Bowes 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. 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 nine months ended September 30,
2021 and 2020, and consolidated balance sheets at September 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 September 30, Nine months ended
September 30,
2021
2020
2021
2020
Revenue: Business services
$
551,384
$
550,954
$
1,688,860
$
1,524,323
Support services
113,413
117,519
347,266
353,320
Financing
71,936
86,218
223,201
260,758
Equipment sales
83,234
79,572
256,304
213,682
Supplies
38,211
39,635
119,090
118,117
Rentals
17,271
18,000
55,128
55,458
Total revenue
875,449
891,898
2,689,849
2,525,658
Costs and expenses: Cost of business services
472,216
482,965
1,454,564
1,311,941
Cost of support services
38,250
37,647
112,646
114,132
Financing interest expense
11,710
11,626
35,369
36,054
Cost of equipment sales
62,221
59,766
185,622
165,045
Cost of supplies
10,705
10,132
32,383
30,751
Cost of rentals
6,480
6,055
18,940
18,455
Selling, general and administrative
225,024
238,618
699,316
720,882
Research and development
10,621
9,255
32,996
28,838
Restructuring charges
3,701
3,766
11,434
12,505
Goodwill impairment
-
-
-
198,169
Interest expense, net
24,312
27,175
73,816
79,504
Other components of net pension and postretirement expense (income)
46
(109
)
708
126
Other expense (income), net
3,193
(6,325
)
40,941
9,787
Total costs and expenses
868,479
880,571
2,698,735
2,726,189
Income (loss) from continuing operations before taxes
6,970
11,327
(8,886
)
(200,531
)
(Benefit) provision for income taxes
(1,525
)
554
(10,602
)
7,540
Income (loss) from continuing operations
8,495
10,773
1,716
(208,071
)
Income (loss) from discontinued operations, net of tax
572
616
(4,334
)
7,648
Net income (loss)
$
9,067
$
11,389
$
(2,618
)
$
(200,423
)
Basic earnings (loss) per share (1): Continuing operations
$
0.05
$
0.06
$
0.01
$
(1.21
)
Discontinued operations
-
-
(0.02
)
0.04
Net income (loss)
$
0.05
$
0.07
$
(0.02
)
$
(1.17
)
Diluted earnings (loss) per share (1): Continuing operations
$
0.05
$
0.06
$
0.01
$
(1.21
)
Discontinued operations
-
-
(0.02
)
0.04
Net income (loss)
$
0.05
$
0.07
$
(0.02
)
$
(1.17
)
Weighted-average shares used in diluted earnings per share
179,409
174,704
178,949
171,388
(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 September 30,2021 December
31,2020 Current assets: Cash and cash equivalents
$
729,149
$
921,450
Short-term investments
14,060
18,974
Accounts and other receivables, net
313,765
389,240
Short-term finance receivables, net
556,985
568,050
Inventories
69,496
65,845
Current income taxes
32,290
23,219
Other current assets and prepayments
127,513
120,145
Total current assets
1,843,258
2,106,923
Property, plant and equipment, net
467,396
391,280
Rental property and equipment, net
36,461
38,435
Long-term finance receivables, net
582,352
605,292
Goodwill
1,124,705
1,152,285
Intangible assets, net
137,118
159,839
Operating lease assets
212,028
201,916
Noncurrent income taxes
67,049
72,653
Other assets
484,247
491,514
Total assets
$
4,954,614
$
5,220,137
Liabilities and stockholders'
equity Current liabilities: Accounts payable and accrued
liabilities
$
871,798
$
880,616
Customer deposits at Pitney Bowes Bank
642,712
617,200
Current operating lease liabilities
41,347
39,182
Current portion of long-term debt
24,733
216,032
Advance billings
104,094
114,550
Current income taxes
4,078
2,880
Total current liabilities
1,688,762
1,870,460
Long-term debt
2,314,151
2,348,361
Deferred taxes on income
283,395
279,451
Tax uncertainties and other income tax liabilities
35,380
38,163
Noncurrent operating lease liabilities
193,861
180,292
Other noncurrent liabilities
390,402
437,015
Total liabilities
4,905,951
5,153,742
Stockholders' equity: Common stock
323,338
323,338
Additional paid-in-capital
2,463
68,502
Retained earnings
5,172,527
5,201,195
Accumulated other comprehensive loss
(841,230
)
(839,131
)
Treasury stock, at cost
(4,608,435
)
(4,687,509
)
Total stockholders' equity
48,663
66,395
Total liabilities and stockholders' equity
$
4,954,614
$
5,220,137
Pitney Bowes Inc. Business Segment Revenue
(Unaudited; in thousands)
Three months ended September
30,
Nine months ended September
30,
2021
2020
% Change
2021
2020
% Change
Global Ecommerce
$
398,011
$
409,981
(3
%)
$
1,229,526
$
1,100,757
12
%
Presort Services
139,296
127,705
9
%
417,041
386,552
8
%
Sending Technology Solutions
338,142
354,212
(5
%)
1,043,282
1,038,349
0
%
Total revenue - GAAP
875,449
891,898
(2
%)
2,689,849
2,525,658
7
%
Currency impact on revenue
(5,268
)
-
(27,593
)
-
Revenue, at constant currency
$
870,181
$
891,898
(2
%)
$
2,662,256
$
2,525,658
5
%
Pitney Bowes Inc. Business Segment EBIT & EBITDA
(Unaudited; in thousands)
Three months ended September
30,
2021
2020
% change
EBIT (1) D&A EBITDA EBIT (1)
D&A EBITDA EBIT EBITDA
Global Ecommerce
$
(20,950
)
$
20,935
$
(15
)
$
(19,757
)
$
16,824
$
(2,933
)
(6
%)
>100% Presort Services
21,062
6,235
27,297
14,481
8,031
22,512
45
%
21
%
Sending Technology Solutions
98,950
7,694
106,644
112,599
7,955
120,554
(12
%)
(12
%)
Segment total
$
99,062
$
34,864
133,926
$
107,323
$
32,810
140,133
(8
%)
(4
%)
Reconciliation of Segment EBITDA to Net Income:
Segment depreciation and amortization
(34,864
)
(32,810
)
Unallocated corporate expenses
(49,176
)
(53,429
)
Restructuring charges
(3,701
)
(3,766
)
Loss on debt refinancing
(3,193
)
-
Interest, net
(36,022
)
(38,801
)
Benefit (provision) for income taxes
1,525
(554
)
Income from continuing operations
8,495
10,773
Income from discontinued operations, net of tax
572
616
Net income
$
9,067
$
11,389
Nine months ended September 30,
2021
2020
% change
EBIT (1) D&A EBITDA EBIT (1)
D&A EBITDA EBIT EBITDA
Global Ecommerce
$
(58,157
)
$
58,171
$
14
$
(68,126
)
$
52,187
$
(15,939
)
15
%
>100% Presort Services
56,247
20,532
76,779
42,758
23,662
66,420
32
%
16
%
Sending Technology Solutions
320,541
22,835
343,376
323,429
25,771
349,200
(1
%)
(2
%)
Segment Total
$
318,631
$
101,538
420,169
$
298,061
$
101,620
399,681
7
%
5
%
Reconciliation of Segment EBITDA to Net Loss: Segment
depreciation and amortization
(101,538
)
(101,620
)
Unallocated corporate expenses
(162,957
)
(146,640
)
Restructuring charges
(11,434
)
(12,505
)
Loss on debt refinancing
(55,576
)
(36,987
)
Gain on sale of business
10,201
-
Gain on sale of assets
1,434
11,908
Goodwill impairment
-
(198,169
)
Transaction costs
-
(641
)
Interest, net
(109,185
)
(115,558
)
Benefit (provision) for income taxes
10,602
(7,540
)
Income (loss) from continuing operations
1,716
(208,071
)
(Loss) income from discontinued operations, net of tax
(4,334
)
7,648
Net loss
$
(2,618
)
$
(200,423
)
(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 endedSeptember 30, Nine
months endedSeptember 30,
2021
2020
2021
2020
Reconciliation of reported net income (loss) to adjusted
EBIT and EBITDA Net income (loss)
$
9,067
$
11,389
$
(2,618
)
$
(200,423
)
(Income) loss from discontinued operations, net of tax
(572
)
(616
)
4,334
(7,648
)
(Benefit) provision for income taxes
(1,525
)
554
(10,602
)
7,540
Income (loss) from continuing operations before taxes
6,970
11,327
(8,886
)
(200,531
)
Restructuring charges
3,701
3,766
11,434
12,505
Loss on debt refinancing
3,193
-
55,576
36,987
Goodwill impairment
-
-
-
198,169
Gain on sale of business
-
-
(10,201
)
-
Gain on sale of assets
-
-
(1,434
)
(11,908
)
Transaction costs
-
-
-
641
Adjusted net income before tax
13,864
15,093
46,489
35,863
Interest, net
36,022
38,801
109,185
115,558
Adjusted EBIT
49,886
53,894
155,674
151,421
Depreciation and amortization
41,809
38,616
121,225
120,403
Adjusted EBITDA
$
91,695
$
92,510
$
276,899
$
271,824
Reconciliation of reported diluted earnings (loss) per
share to adjusted diluted earnings per share (1) Diluted
earnings (loss) per share
$
0.05
$
0.07
$
(0.02
)
$
(1.17
)
Loss (income) from discontinued operations, net of tax
-
-
0.02
(0.04
)
Restructuring charges
0.02
0.02
0.05
0.05
Loss on debt refinancing
0.01
-
0.23
0.16
Goodwill impairment
-
-
-
1.14
Gain on sale of business
-
-
(0.02
)
-
Gain on sale of assets
-
-
(0.01
)
(0.05
)
Tax on surrender of company owned life insurance policies
-
-
-
0.07
Adjusted diluted earnings per share
$
0.08
$
0.08
$
0.26
$
0.17
Reconciliation of reported net cash from operating
activities to free cash flow Net cash provided by operating
activities
$
71,446
$
104,744
$
216,174
$
191,166
Net cash used in operating activities - discontinued operations
-
-
-
38,423
Capital expenditures
(57,204
)
(20,833
)
(140,907
)
(80,787
)
Restructuring payments
6,023
4,504
14,847
15,869
Change in customer deposits at PB Bank
9,879
(2,867
)
25,512
19,464
Transaction costs paid
-
377
-
2,117
Free cash flow
$
30,144
$
85,925
$
115,626
$
186,252
(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/20211103005149/en/
Editorial - Bill Hughes Chief Communications Officer
203/351-6785
Financial - Ned Zachar, CFA VP, Investor Relations
203/614-1092
Pitney Bowes (NYSE:PBI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Pitney Bowes (NYSE:PBI)
Historical Stock Chart
From Jul 2023 to Jul 2024