Pitney Bowes (NYSE: PBI), a global shipping and mailing company
that provides technology, logistics, and financial services, today
announced its financial results for the fourth quarter and full
year 2022.
“We have made important progress in the quarter against several
initiatives that are key to our long-term objectives,” said Marc B.
Lautenbach, President and Chief Executive Officer. “Although
financial performance did not meet our expectations, we have seen
significant improvements which lay the groundwork for future
success. Our SendTech and Presort businesses continued to deliver a
solid and predictable performance, reaping the benefits of the
investments we have made in those businesses over the last several
years. Importantly, our Financial Services business performed very
well and Global Ecommerce made substantial progress in ramping
network volumes, profitability, and service levels.”
Fourth Quarter Financial Highlights
- Revenue in the quarter was $909 million, a decrease of 8
percent on a reported basis and flat on a comparable basis (1)
- GAAP EPS was $0.04 and Adjusted EPS was $0.06 in the quarter
versus $0.01 and $0.06, respectively, in fourth quarter 2021
- Adjusted EBIT was $49 million compared to $38 million in third
quarter 2022 and $47 million in fourth quarter 2021
- GAAP cash from operating activities was $167 million; Free Cash
Flow was $108 million
- Cash and short-term investments were $681 million at the end of
the year
(1) Comparable basis is defined in the “Business Segment
Reporting” section of the press release
Fourth Quarter Business Highlights
- Global Ecommerce processed 54 million in Domestic Parcel
volume, ending the quarter with an annualized exit rate of
approximately 200 million
- Global Ecommerce gross margins improved 300 basis points versus
prior year, but short of our expectations
- Presort grew year-over-year revenues and expanded EBIT margins
by 440 basis points versus third quarter 2022
- SendTech shipping-related revenues grew 30 percent
year-over-year
Full Year 2022 Financial Highlights
- Revenue of $3.5 billion, a decrease of 4 percent on a reported
basis and flat on a comparable basis
- GAAP EPS was $0.21 in 2022 versus ($0.01) in 2021; Adjusted EPS
was $0.15 in 2022 versus $0.32 in 2021
- Adjusted EBIT was $179 million in 2022 compared to $203 million
in 2021
- GAAP cash from operating activities and Free Cash Flow were
$176 million and $68 million, respectively
Full Year 2022 Business Highlights
- Global Ecommerce processed Domestic Parcel volumes of 170
million, grew Domestic Parcel revenue 10 percent, and expanded unit
margins by $0.34 versus prior year
- Presort processed 16 billion pieces of mail and grew revenue by
5 percent
- SendTech grew equipment sales by 4 percent on a constant
currency basis and increased finance receivables by $44 million to
$1.2 billion
- SendTech introduced the Shipping 360 Platform and launched
PitneyShip Pro, which helped drive shipping-related revenue growth
of 22 percent
Earnings per share results are summarized in the table below
Fourth Quarter
Full Year
2022
2021
2022
2021
GAAP EPS
$0.04
$0.01
$0.21
($0.01)
Discontinued Operations
-
-
-
$0.03
GAAP EPS from Continuing
Operations
$0.04
$0.01
$0.21
$0.02
Loss on Debt Redemption/Refinancing
-
-
$0.02
$0.24
Restructuring Charges
$0.03
$0.03
$0.08
$0.08
Gain on Sale of Assets
-
-
($0.06)
($0.01)
Gain on Sale of Businesses (1)
($0.01)
$0.01
($0.09)
($0.01)
Adjusted EPS (2)
$0.06
$0.06
$0.15
$0.32
(1) Includes transaction costs associated with sale of
businesses (2) The sum of the earnings per share may not equal the
totals due to rounding.
Business Segment Reporting
We are presenting revenue growth on a comparable basis, which
excludes three items, the impacts of foreign currency, the impact
of the divestiture of the Borderfree business effective July 1,
2022, and the impact of a change in the presentation of revenue for
certain services effective October 1, 2022, from a gross basis to
net basis due to an adjustment in terms of one of our contracts
with the United States Postal Service. This change in revenue
presentation impacts both our Global Ecommerce and SendTech
Solutions segments. The impacts of each of the above items on
revenue can be found in the accompanying financial schedules.
Global Ecommerce
Global Ecommerce provides business to consumer logistics
services for domestic and cross-border delivery, returns and
fulfillment.
Fourth Quarter
($ millions)
2022
2021
% Change
Reported
% Change Comparable
Basis
Revenue
$410
$473
(13%)
0%
EBITDA
($6)
($20)
72%
EBIT
($23)
($41)
43%
Full Year
($ millions)
2022
2021
% Change
Reported
% Change Comparable
Basis
Revenue
$1,576
$1,703
(7%)
(2%)
EBITDA
($22)
($20)
(13%)
EBIT
($100)
($99)
(2%)
Continued improvement in Domestic Parcel was offset by weakness
in Cross-border. Domestic Parcel volumes were 54 million in the
quarter, growing 16 percent year-over-year. Domestic Parcel volume
growth drove revenue growth on a comparable basis. Cross-border
volumes and revenue declined due to continued pressure from a
strong US Dollar and softer international ecommerce activity.
Domestic Parcel unit gross margin improved $0.21 versus third
quarter 2022, driving higher segment margins. A
higher-than-expected mix of light weight parcels received late in
the quarter contributed to lower-than-expected profitability.
Presort Services
Presort Services provides sortation services that enable clients
to qualify for USPS workshare discounts in First Class Mail,
Marketing Mail, Marketing Mail Flats and Bound Printed Matter.
Fourth Quarter
($ millions)
2022
2021
% Change
Reported
Revenue
$158
$156
1%
EBITDA
$37
$30
22%
EBIT
$29
$23
25%
Full Year
($ millions)
2022
2021
% Change
Reported
Revenue
$602
$573
5%
EBITDA
$110
$107
3%
EBIT
$82
$80
3%
Revenue growth in the quarter was driven by new client additions
and higher revenue per piece. Growth was partially offset by lower
volumes from existing clients.
EBIT margins in the fourth quarter improved 440 basis points
sequentially and 360 basis points versus prior year, driven by
higher revenue per piece and productivity gains from investments in
automation.
SendTech Solutions
Sending Technology Solutions offers physical and digital mailing
and shipping technology solutions, financing, services, supplies
and other applications for small and medium businesses, retail,
enterprise, and government clients around the world to help
simplify and save on the sending, tracking and receiving of
letters, parcels and flats.
Fourth Quarter
($ millions)
2022
2021
% Change
Reported
% Change Comparable
Basis
Revenue
$341
$354
(4%)
0%
EBITDA
$113
$116
(3%)
EBIT
$106
$109
(3%)
Full Year
($ millions)
2022
2021
% Change
Reported
% Change Comparable
Basis
Revenue
$1,360
$1,398
(3%)
0%
EBITDA
$430
$459
(6%)
EBIT
$401
$429
(7%)
Revenue was flat compared to prior year on a comparable basis.
Strong demand for our new mailing and shipping products drove
growth in Equipment sales and Service Revenues in the quarter.
Shipping-related revenues grew 30 percent. Financing revenue and
Supplies sales declined in the quarter.
Full Year 2023 Guidance
We expect flat to mid-single digit percentage revenue growth on
a comparable basis.
We also expect percentage EBIT growth to outpace revenue growth
as GEC profitability continues to improve.
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 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: www.pitneybowes.com
Use of Non-GAAP Measures
Our financial results are reported in accordance with generally
accepted accounting principles (GAAP). We also disclose 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 comparable basis and free cash flow.
Adjusted EBIT, Adjusted EBITDA and Adjusted EPS exclude the
impact of discontinued operations, restructuring charges, gains,
losses and costs related to the sale of assets, acquisitions and
dispositions, goodwill impairment charges, losses on debt
redemptions and refinancings and other unusual or one-time items.
Management believes that these non-GAAP measures provide investors
greater insight into the underlying operating trends of the
business.
We disclose revenue growth on a comparable basis, which excludes
three items. First, the comparison excludes the impacts of foreign
currency. Second, we are excluding the impact of the divestiture of
the Borderfree business effective July 1, 2022. Third, we are
excluding the impact of a change in the presentation of revenue
beginning in the fourth quarter of 2022, from a gross basis to net
basis due to an adjustment in terms of one of our contracts with
the United States Postal Service. The change in revenue
presentation impacts both our Global Ecommerce and SendTech
Solutions segments. The change in revenue presentation does not
impact gross profit. Management believes that excluding these items
provides investors with a better understanding of the underlying
revenue performance.
Free cash flow adjusts cash flow from operations calculated in
accordance with GAAP for discontinued operations, capital
expenditures, restructuring payments, changes in customer deposits
held at the Pitney Bowes Bank and other special items. Management
believes free cash flow provides investors better insight into the
amount of cash available for other discretionary uses.
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,
unallocated corporate expenses, restructuring charges, goodwill
impairment charges, and other items not allocated to a segment. The
Company also reports segment EBITDA as an additional useful measure
of segment profitability and operational performance.
Complete reconciliations of non-GAAP measures to comparable GAAP
measures can be found in the attached financial schedules and at
the Company's web site at 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. While conditions related to the COVID-19
pandemic have improved, the pandemic continues to be dynamic, and
near-term challenges across the economy remain and the effects that
they may have on our, and our clients' businesses remain uncertain.
Other factors which could cause future financial performance to
differ materially from expectations 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, United States Postal
Service (USPS) commercial programs, or our contractual
relationships with the USPS or their performance under those
contracts; our ability to continue to grow volumes, gain additional
economies of scale and improve profitability within our Global
Ecommerce segment; the impacts of inflation and rising prices,
higher interest rates and a slow-down in economic activity,
including a global recession, to the company, our clients and
retail consumers, and the loss of some of our larger clients in our
Global Ecommerce and Presort Services segments; and other factors
as more fully outlined in the Company's 2021 Form 10-K Annual
Report and other reports filed with the Securities and Exchange
Commission during 2022. 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 and twelve months ended December 31, 2022
and 2021, and consolidated balance sheets at December 31, 2022 and
December 31, 2021 are attached.
Pitney Bowes Inc. Consolidated Statements of
Operations (Unaudited; in thousands, except per share amounts)
Three months ended December 31, Twelve months
ended December 31,
2022
2021
2022
2021
Revenue: Business services
$
582,674
$
645,814
$
2,249,941
$
2,334,674
Support services
112,572
113,622
438,191
460,888
Financing
67,424
71,217
274,508
294,418
Equipment sales
92,150
93,834
354,960
350,138
Supplies
37,425
40,348
154,186
159,438
Rentals
16,446
18,877
66,256
74,005
Total revenue
908,691
983,712
3,538,042
3,673,561
Costs and expenses: Cost of business services
500,732
579,913
1,934,206
2,034,477
Cost of support services
37,366
37,060
148,829
149,706
Financing interest expense
13,962
11,690
51,789
47,059
Cost of equipment sales
65,662
66,292
253,843
251,914
Cost of supplies
10,704
11,597
43,778
43,980
Cost of rentals
6,053
5,487
25,105
24,427
Selling, general and administrative
226,571
224,847
905,570
924,163
Research and development
11,257
13,781
43,657
46,777
Restructuring charges
6,043
7,569
18,715
19,003
Interest expense, net
23,164
23,070
89,980
96,886
Other components of net pension and postretirement expense
1,079
302
4,308
1,010
Other (income) expense, net
(1,319
)
633
(21,618
)
41,574
Total costs and expenses
901,274
982,241
3,498,162
3,680,976
Income (loss) from continuing operations before taxes
7,417
1,471
39,880
(7,415
)
Provision (benefit) for income taxes
1,121
(320
)
2,940
(10,922
)
Income from continuing operations
6,296
1,791
36,940
3,507
Loss from discontinued operations, net of tax
-
(524
)
-
(4,858
)
Net income (loss)
$
6,296
$
1,267
$
36,940
$
(1,351
)
Basic earnings (loss) per share: Continuing operations
$
0.04
$
0.01
$
0.21
$
0.02
Discontinued operations
-
-
-
(0.03
)
Net income (loss)
$
0.04
$
0.01
$
0.21
$
(0.01
)
Diluted earnings (loss) per share: Continuing operations
$
0.04
$
0.01
$
0.21
$
0.02
Discontinued operations
-
-
-
(0.03
)
Net income (loss)
$
0.04
$
0.01
$
0.21
$
(0.01
)
Weighted-average shares used in diluted earnings per share
177,999
179,506
177,252
179,105
Pitney Bowes Inc. Consolidated Balance
Sheets (Unaudited; in thousands)
Assets December 31,2022 December
31,2021 Current assets: Cash and cash equivalents
$
669,981
$
732,480
Short-term investments
11,172
14,440
Accounts and other receivables, net
343,557
334,630
Short-term finance receivables, net
564,972
560,680
Inventories
83,720
78,588
Current income taxes
8,790
13,894
Other current assets and prepayments
115,824
157,341
Total current assets
1,798,016
1,892,053
Property, plant and equipment, net
420,672
429,162
Rental property and equipment, net
27,487
34,774
Long-term finance receivables, net
627,124
587,427
Goodwill
1,066,951
1,135,103
Intangible assets, net
77,944
132,442
Operating lease assets
296,129
208,428
Noncurrent income taxes
47,662
68,398
Other assets
380,419
471,084
Total assets
$
4,742,404
$
4,958,871
Liabilities and stockholders'
equity Current liabilities: Accounts payable and accrued
liabilities
$
907,083
$
922,543
Customer deposits at Pitney Bowes Bank
628,072
632,062
Current operating lease liabilities
52,576
40,299
Current portion of long-term debt
32,764
24,739
Advance billings
105,207
99,280
Current income taxes
3,150
9,017
Total current liabilities
1,728,852
1,727,940
Long-term debt
2,172,502
2,299,099
Deferred taxes on income
263,131
286,445
Tax uncertainties and other income tax liabilities
23,841
31,935
Noncurrent operating lease liabilities
265,696
192,092
Other noncurrent liabilities
227,729
308,728
Total liabilities
4,681,751
4,846,239
Stockholders' equity: Common stock
323,338
323,338
Additional paid-in-capital
-
2,485
Retained earnings
5,125,677
5,169,270
Accumulated other comprehensive loss
(835,564
)
(780,312
)
Treasury stock, at cost
(4,552,798
)
(4,602,149
)
Total stockholders' equity
60,653
112,632
Total liabilities and stockholders' equity
$
4,742,404
$
4,958,871
Pitney Bowes Inc. Business Segment
Revenue (Unaudited; in thousands)
Three months
ended December 31, Twelve months ended December 31,
2022
2021
% Change
2022
2021
% Change
Global Ecommerce Revenue, as reported
$
409,725
$
473,054
(13%)
$
1,576,348
$
1,702,580
(7%)
Impact of change in revenue presentation
(44,228
)
(44,228
)
Impact of Borderfree divestiture
(16,384
)
(30,024
)
Comparable revenue before currency (1)
409,725
412,442
(1%)
1,576,348
1,628,328
(3%)
Impact of currency on revenue
4,726
12,643
Comparable revenue
$
414,451
$
412,442
0%
$
1,588,991
$
1,628,328
(2%)
Presort Services Revenue, as reported
$
157,714
$
156,439
1%
$
602,016
$
573,480
5%
Impact of currency on revenue
-
-
Revenue at constant currency
$
157,714
$
156,439
1%
602,016
$
573,480
5%
Sending Technology Solutions Revenue, as reported
$
341,252
$
354,219
(4%)
$
1,359,678
$
1,397,501
(3%)
Impact of change in revenue presentation
(3,102
)
(3,102
)
Comparable revenue before currency (1)
341,252
351,117
(3%)
1,359,678
1,394,399
(2%)
Impact of currency on revenue
8,311
28,517
Comparable revenue
$
349,563
$
351,117
(0%)
$
1,388,195
$
1,394,399
(0%)
Consolidated Revenue, as reported
$
908,691
$
983,712
(8%)
$
3,538,042
$
3,673,561
(4%)
Impact of change in revenue presentation
(47,330
)
(47,330
)
Impact of Borderfree divestiture
(16,384
)
(30,024
)
Comparable revenue before currency (1)
908,691
919,998
(1%)
3,538,042
3,596,207
(2%)
Impact of currency on revenue
13,037
41,160
Comparable revenue
$
921,728
$
919,998
0%
$
3,579,202
$
3,596,207
(0%)
(1)
Revenue on a comparable basis before currency for 2021 excludes the
impact of the change in revenue presentation for certain services
from a gross basis to net basis for the fourth quarter of 2021 and
the revenue from the Borderfree business for the third and fourth
quarters of 2021.
Pitney Bowes Inc. Business
Segment EBIT & EBITDA (Unaudited; in thousands)
Three months ended December 31,
2022
2021
% change EBIT (1) D&A EBITDA
EBIT (1) D&A EBITDA EBIT
EBITDA Global Ecommerce
$
(22,906
)
$
17,390
$
(5,516
)
$
(40,516
)
$
20,957
$
(19,559
)
43
%
72
%
Presort Services
29,386
7,438
36,824
23,474
6,711
30,185
25
%
22
%
Sending Technology Solutions
105,535
7,330
112,865
108,874
7,116
115,990
(3
%)
(3
%)
Segment total
$
112,015
$
32,158
144,173
$
91,832
$
34,784
126,616
22
%
14
%
Reconciliation of Segment EBITDA to Net Income:
Segment depreciation and amortization
(32,158
)
(34,784
)
Unallocated corporate expenses
(62,748
)
(44,817
)
Restructuring charges
(6,043
)
(7,569
)
Gain (loss) on sale of businesses, including transaction costs
1,319
(2,582
)
Loss on debt redemption/refinancing
-
(633
)
Interest, net
(37,126
)
(34,760
)
(Provision) benefit for income taxes
(1,121
)
320
Income from continuing operations
6,296
1,791
Loss from discontinued operations, net of tax
-
(524
)
Net income
$
6,296
$
1,267
Twelve months ended December 31,
2022
2021
% change EBIT (1) D&A EBITDA
EBIT (1) D&A EBITDA EBIT
EBITDA Global Ecommerce
$
(100,308
)
$
78,296
$
(22,012
)
$
(98,673
)
$
79,128
$
(19,545
)
(2
%)
(13
%)
Presort Services
82,430
28,039
110,469
79,721
27,243
106,964
3
%
3
%
Sending Technology Solutions
400,909
29,489
430,398
429,415
29,951
459,366
(7
%)
(6
%)
Segment Total
$
383,031
$
135,824
518,855
$
410,463
$
136,322
546,785
(7
%)
(5
%)
Reconciliation of Segment EBITDA to Net Income
(Loss): Segment depreciation and amortization
(135,824
)
(136,322
)
Unallocated corporate expenses
(204,251
)
(207,774
)
Restructuring charges
(18,715
)
(19,003
)
Gain on sale of assets
14,372
1,434
Gain on sale of business, including transaction costs
12,205
7,619
Loss on debt redemption/refinancing
(4,993
)
(56,209
)
Interest, net
(141,769
)
(143,945
)
(Provision) benefit for income taxes
(2,940
)
10,922
Income from continuing operations
36,940
3,507
Loss from discontinued operations, net of tax
-
(4,858
)
Net income (loss)
$
36,940
$
(1,351
)
(1)
Segment EBIT excludes interest, taxes, general corporate expenses,
restructuring charges, and other items that are not allocated to a
particular business segment. In 2022, we refined the methodology
for allocating transportation costs between Global Ecommerce and
Presort Services, resulting in an increase in Global Ecommerce EBIT
and a corresponding decrease in Presort Services EBIT of $1 million
and $10 million for the three and twelve months ended December 31,
2022, respectively.
Pitney Bowes Inc.
Reconciliation of Reported Consolidated Results to Adjusted
Results (Unaudited; in thousands, except per share amounts)
Three months endedDecember 31, Twelve months
endedDecember 31,
2022
2021
2022
2021
Reconciliation of reported net income (loss) to adjusted
EBIT and EBITDA Net income (loss)
$
6,296
$
1,267
$
36,940
$
(1,351
)
Loss from discontinued operations, net of tax
-
524
-
4,858
Provision (benefit) for income taxes
1,121
(320
)
2,940
(10,922
)
Income (loss) from continuing operations before taxes
7,417
1,471
39,880
(7,415
)
Restructuring charges
6,043
7,569
18,715
19,003
Gain on sale of assets
-
-
(14,372
)
(1,434
)
(Gain) loss on sale of businesses, including transaction costs
(1,319
)
2,582
(12,205
)
(7,619
)
Loss on debt redemption/refinancing
-
633
4,993
56,209
Adjusted net income before tax
12,141
12,255
37,011
58,744
Interest, net
37,126
34,760
141,769
143,945
Adjusted EBIT
49,267
47,015
178,780
202,689
Depreciation and amortization
39,064
41,634
163,816
162,859
Adjusted EBITDA
$
88,331
$
88,649
$
342,596
$
365,548
Reconciliation of reported diluted earnings (loss) per
share to adjusted diluted earnings per share Diluted earnings
(loss) per share
$
0.04
$
0.01
$
0.21
$
(0.01
)
Restructuring charges
0.03
0.03
0.08
0.08
Gain on sale of assets
-
-
(0.06
)
(0.01
)
(Gain) loss on sale of businesses, including transaction costs
(0.01
)
0.01
(0.09
)
(0.01
)
Loss on debt redemption/refinancing
-
-
0.02
0.24
Loss from discontinued operations, net of tax
-
-
-
0.03
Adjusted diluted earnings per share (1)
$
0.06
$
0.06
$
0.15
$
0.32
(1) 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
from operating activities
$
166,754
$
85,341
$
175,983
$
301,515
Capital expenditures
(27,307
)
(43,135
)
(124,840
)
(184,042
)
Restructuring payments
3,645
7,143
15,406
21,990
Change in customer deposits at PB Bank
(35,349
)
(10,650
)
(3,990
)
14,862
Transaction costs paid
379
-
5,779
-
Free cash flow
$
108,122
$
38,699
$
68,338
$
154,325
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230130005722/en/
Editorial - Bill Hughes Chief Communications Officer
203.351.6785 Financial - Ned Zachar, CFA VP, Investor Relations
203.614.1092 Alex Brown Senior Manager, Investor Relations
203.351.7639
Pitney Bowes (NYSE:PBI)
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