Pitney Bowes (NYSE: PBI) (“Pitney Bowes” or the “Company”), 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 of 2023.
Jason Dies, Interim Chief Executive Officer, commented:
“Pitney Bowes is beginning 2024 with positive momentum and a
strong set of go-forward priorities following a productive fourth
quarter. At the enterprise level, we are on track with our cost
reduction and restructuring efforts after increasing targets late
last year. Our SendTech and Presort segments again delivered solid
profit increases and margin expansion in the fourth quarter,
reflecting continued focus on both productivity and revenue growth
initiatives. Global Ecommerce delivered improved profitability
year-over-year and sequentially in the fourth quarter,
demonstrating the value of our network in peak and on a go forward
basis. We are continuing to take actions and review options to
realize the value of this segment. Importantly, as we look ahead in
2024, we will continue to operate with intensity and prioritize
actions that support a shift into shipping solutions and our
specific growth goals in SaaS shipping technology.”
Fourth Quarter Financial Highlights
- Revenue in the quarter was $872 million, a decrease of 4
percent on both a reported and comparable basis versus prior year
(1)
- GAAP EPS was a loss of $1.27 compared to GAAP EPS of $0.04 in
fourth quarter 2022; Adjusted EPS was $0.07 compared to $0.06 in
the prior year
- GAAP EPS includes a loss of $1.24 for a non-cash goodwill
impairment charge related to the Global Ecommerce segment and $0.08
for restructuring charges
- GAAP cash from operating activities was $94 million in the
quarter and Free Cash Flow was $78 million
- Progressing well and on target with previously communicated
cost reduction and restructuring efforts
- Cash and short-term investments were $623 million at
year-end
Full Year Financial Highlights
- Revenue was $3.3 billion, a decrease of 8 percent on a reported
basis and 3 percent on a comparable basis versus 2022 (1)
- GAAP EPS was a loss of $2.20 and Adjusted EPS was $0.04
- GAAP EPS includes a loss of $1.91 for non-cash goodwill
impairment charges related to the Global Ecommerce segment and
$0.26 for restructuring charges
- GAAP cash from operating activities was $79 million and Free
Cash Flow was $22 million
- Reduced total debt by $59 million and refinanced our 2024
notes
(1) Comparable basis is defined in the “Use of Non-GAAP
Measures” section
Earnings per share results are summarized in the table
below:
Fourth Quarter
2023
2022
GAAP EPS
($1.27)
$0.04
Restructuring Charges
$0.08
$0.03
Goodwill Impairment
$1.24
-
Foreign Currency Loss on Intercompany
Loans (2)
$0.02
-
Gain on Sale of Business
-
($0.01)
Adjusted EPS (3)
$0.07
$0.06
Full Year
2023
2022
GAAP EPS
($2.20)
$0.21
Restructuring Charges
$0.26
$0.08
Goodwill Impairment
$1.91
-
Foreign Currency Loss on Intercompany
Loans (2)
$0.02
-
(Gain) / Loss on Debt Redemption
($0.01)
$0.02
Proxy Solicitation Fees
$0.05
-
Gain on Sale of Assets
-
($0.06)
Gain on Sale of Business
-
($0.09)
Adjusted EPS (3)
$0.04
$0.15
(2) Going forward, we will be eliminating the effects of foreign
currency on intercompany loans in calculating adjusted
earnings.
(3) The sum of the earnings per share may not equal the totals
due to rounding.
Business Segment Reporting
SendTech Solutions
SendTech Solutions offers physical and digital mailing and
shipping technology solutions, financing, services, supplies and
other applications for small and medium businesses, retail,
enterprise, and government clients around the world to help
simplify and save on the sending, tracking and receiving of
letters, parcels and flats.
Fourth Quarter
($ millions)
2023
2022
% Change
Reported
% Change Comparable
Basis
Revenue
$327
$341
(4%)
(5%)
Adjusted Segment EBITDA
$121
$113
7%
Adjusted Segment EBIT
$113
$106
7%
Full Year
($ millions)
2023
2022
% Change
Reported
% Change Comparable
Basis
Revenue
$1,293
$1,360
(5%)
(4%)
Adjusted Segment EBITDA
$435
$430
1%
Adjusted Segment EBIT
$405
$401
1%
EBIT and EBIT margin expansion in the fourth quarter was driven
by improvements in gross margin, strong execution, and cost
reduction actions.
Fourth quarter revenue decline was driven by a reduction in our
meter base, timing of our product lifecycle, and a tough prior year
compare in our shipping products. Recurring revenue from our
shipping solutions grew 17 percent versus prior year and helped
offset the decline.
Presort Services
Presort Services provides sortation services that enable clients
to qualify for USPS workshare discounts in First Class Mail,
Marketing Mail, Marketing Mail Flats and Bound Printed Matter.
Fourth Quarter
($ millions)
2023
2022
% Change
Reported
Revenue
$163
$158
3%
Adjusted Segment EBITDA
$43
$37
17%
Adjusted Segment EBIT
$34
$29
17%
Full Year
($ millions)
2023
2022
% Change
Reported
Revenue
$618
$602
3%
Adjusted Segment EBITDA
$145
$110
31%
Adjusted Segment EBIT
$111
$82
35%
Presort delivered strong top and bottom-line performance. New
sales and higher revenue per piece more than offset organic mail
decline, driving revenue growth in the fourth quarter.
Adjusted Segment EBIT and EBITDA growth was driven by higher
revenue and improved labor productivity from increased automation
and process improvements.
Global Ecommerce
Global Ecommerce provides business to consumer logistics
services for domestic and cross-border delivery, returns and
fulfillment.
Fourth Quarter
($ millions)
2023
2022
% Change
Reported
% Change Comparable
Basis
Revenue
$381
$410
(7%)
(7%)
Adjusted Segment EBITDA
($3)
($6)
47%
Adjusted Segment EBIT
($20)
($23)
14%
Full Year
($ millions)
2023
2022
% Change
Reported
% Change Comparable
Basis
Revenue
$1,355
$1,576
(14%)
(6%)
Adjusted Segment EBITDA
($67)
($22)
>(100%)
Adjusted Segment EBIT
($134)
($100)
(33%)
Global Ecommerce experienced strong volumes during peak,
processing 61 million domestic parcels in the fourth quarter, which
is up 13 percent from fourth quarter 2022. Domestic parcel revenue
grew 7 percent in the fourth quarter versus prior year, which was
more than offset by a loss in revenue from cross-border.
Improved EBIT in the fourth quarter reflects the positive impact
of cost actions, higher domestic parcel volumes, and increased
network productivity. These benefits were partially offset by the
decline in cross-border.
Full Year 2024 Guidance
We expect revenue growth to range from flat to a low-single
digit decline and EBIT margins to remain relatively flat on a
year-over-year basis.
We expect incremental benefit in 2024 from our company-wide cost
reduction program as savings from actions taken in 2023 annualize
and we further execute on the plan. We expect restoration of
variable compensation and wage inflation to partially offset
gains.
We also expect similar levels of capital expenditures in 2024 as
in 2023 and interest expense to remain around the elevated rate
incurred in Q4 2023.
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 (Adjusted EBIT), adjusted earnings before interest, taxes,
depreciation and amortization (Adjusted EBITDA), adjusted earnings
per share (Adjusted EPS), revenue growth on a comparable basis and
free cash flow.
Adjusted EBIT, Adjusted EBITDA and Adjusted EPS exclude the
impact of restructuring charges, goodwill impairment charges,
foreign currency gains and losses on intercompany loans, gains,
losses and costs related to acquisitions and dispositions, gains
and losses on debt redemptions and other unusual 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 capital expenditures, restructuring
payments and other special items. Management believes free cash
flow provides investors better insight into the amount of cash
available for other discretionary uses.
Adjusted 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. Adjusted Segment EBIT excludes
interest, taxes, unallocated corporate expenses, foreign currency
gains and losses on intercompany loans, restructuring charges,
goodwill impairment, and other items not allocated to a business
segment. The Company also reports Adjusted 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. 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; our ability to continue to grow and manage
unexpected fluctuations in volumes, gain additional economies of
scale and improve profitability within our Global Ecommerce
segment; the loss of some of our larger clients in our Global
Ecommerce and Presort Services segments; 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; the impacts of higher
interest rates and the potential for future interest rate increases
on our cost of debt; and other factors as more fully outlined in
the Company's 2022 Form 10-K Annual Report and other reports filed
with the Securities and Exchange Commission during 2023. 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, adjusted
segment EBIT and adjusted segment EBITDA by business segment; and
reconciliations of GAAP to non-GAAP measures for the three and
twelve months ended December 31, 2023 and 2022, and consolidated
balance sheets at December 31, 2023 and 2022 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,
2023
2022
2023
2022
Revenue: Business services
$
564,094
$
582,674
$
2,045,069
$
2,249,941
Support services
100,280
112,572
410,734
438,191
Financing
68,874
67,424
271,197
274,508
Equipment sales
84,973
92,150
323,739
354,960
Supplies
36,674
37,425
147,709
154,186
Rentals
16,683
16,446
67,900
66,256
Total revenue
871,578
908,691
3,266,348
3,538,042
Costs and expenses: Cost of business services
477,545
500,732
1,756,616
1,934,206
Cost of support services
32,486
37,366
137,676
148,829
Financing interest expense
17,169
13,962
63,281
51,789
Cost of equipment sales
57,454
65,662
223,757
253,843
Cost of supplies
10,740
10,704
43,347
43,778
Cost of rentals
4,755
6,053
19,614
25,105
Selling, general and administrative
223,175
226,571
897,260
905,570
Research and development
10,276
11,257
41,405
43,657
Restructuring charges
18,965
6,043
61,585
18,715
Goodwill impairment
220,585
-
339,184
-
Interest expense, net
28,401
23,164
100,445
89,980
Other components of net pension and postretirement (income) cost
(2,112
)
1,079
(8,256
)
4,308
Other income, net
-
(1,319
)
(3,064
)
(21,618
)
Total costs and expenses
1,099,439
901,274
3,672,850
3,498,162
(Loss) income before taxes
(227,861
)
7,417
(406,502
)
39,880
(Benefit) provision for income taxes
(4,025
)
1,121
(20,875
)
2,940
Net (loss) income
$
(223,836
)
$
6,296
$
(385,627
)
$
36,940
(Loss) earnings per share: Basic
$
(1.27
)
$
0.04
$
(2.20
)
$
0.21
Diluted
$
(1.27
)
$
0.04
$
(2.20
)
$
0.21
Weighted-average shares used in diluted earnings per share
176,342
177,999
175,640
177,252
Pitney Bowes Inc. Consolidated Balance Sheets
(Unaudited; in thousands)
Assets December 31,2023 December
31,2022 Current assets: Cash and cash equivalents
$
601,053
$
669,981
Short-term investments
22,166
11,172
Accounts and other receivables, net
342,236
343,557
Short-term finance receivables, net
563,536
564,972
Inventories
70,053
83,720
Current income taxes
564
8,790
Other current assets and prepayments
98,802
115,824
Total current assets
1,698,410
1,798,016
Property, plant and equipment, net
383,628
420,672
Rental property and equipment, net
23,583
27,487
Long-term finance receivables, net
653,085
627,124
Goodwill
734,409
1,066,951
Intangible assets, net
62,250
77,944
Operating lease assets
309,958
296,129
Noncurrent income taxes
60,995
46,613
Other assets
352,360
380,419
Total assets
$
4,278,678
$
4,741,355
Liabilities and stockholders'
(deficit) equity Current liabilities: Accounts payable
and accrued liabilities
$
881,969
$
907,083
Customer deposits at Pitney Bowes Bank
640,323
628,072
Current operating lease liabilities
60,069
52,576
Current portion of long-term debt
58,931
32,764
Advance billings
89,087
105,207
Current income taxes
6,523
2,101
Total current liabilities
1,736,902
1,727,803
Long-term debt
2,087,101
2,172,502
Deferred taxes on income
211,477
263,131
Tax uncertainties and other income tax liabilities
19,091
23,841
Noncurrent operating lease liabilities
277,981
265,696
Other noncurrent liabilities
314,702
227,729
Total liabilities
4,647,254
4,680,702
Stockholders' (deficit) equity: Common stock
270,338
323,338
Retained earnings
3,077,988
5,125,677
Accumulated other comprehensive loss
(851,245
)
(835,564
)
Treasury stock, at cost
(2,865,657
)
(4,552,798
)
Total stockholders' (deficit) equity
(368,576
)
60,653
Total liabilities and stockholders' (deficit) equity
$
4,278,678
$
4,741,355
Pitney Bowes Inc. Business Segment Revenue
(Unaudited; in thousands)
Three months ended December 31, Twelve months
ended December 31,
2023
2022
% Change
2023
2022
% Change
Global Ecommerce Revenue, as reported
$
381,020
$
409,725
(7
%)
$
1,355,326
$
1,576,348
(14
%)
Impact of change in revenue presentation
-
(115,171
)
Impact of Borderfree divestiture
-
(22,550
)
Comparable revenue before currency
381,020
409,725
(7
%)
1,355,326
1,438,627
(6
%)
Impact of currency on revenue
(955
)
1,300
Comparable revenue
$
380,065
$
409,725
(7
%)
$
1,356,626
$
1,438,627
(6
%)
Presort Services Revenue, as reported
$
163,139
$
157,714
3
%
$
617,599
$
602,016
3
%
Sending Technology Solutions Revenue, as reported
$
327,419
$
341,252
(4
%)
$
1,293,423
$
1,359,678
(5
%)
Impact of change in revenue presentation
-
(12,916
)
Comparable revenue before currency
327,419
341,252
(4
%)
1,293,423
1,346,762
(4
%)
Impact of currency on revenue
(1,745
)
1,719
Comparable revenue
$
325,674
$
341,252
(5
%)
$
1,295,142
$
1,346,762
(4
%)
Consolidated Revenue, as reported
$
871,578
$
908,691
(4
%)
$
3,266,348
$
3,538,042
(8
%)
Impact of change in revenue presentation
-
(128,087
)
Impact of Borderfree divestiture
-
(22,550
)
Comparable revenue before currency
871,578
908,691
(4
%)
3,266,348
3,387,405
(4
%)
Impact of currency on revenue
(2,700
)
3,019
Comparable revenue
$
868,878
$
908,691
(4
%)
$
3,269,367
$
3,387,405
(3
%)
Pitney Bowes Inc. Adjusted Segment EBIT & EBITDA
(Unaudited; in thousands)
Three months
ended December 31,
2023
2022
% change Adjusted Segment EBIT (1) D&A
Adjusted Segment EBITDA Adjusted Segment EBIT (1)
D&A Adjusted Segment EBITDA Adjusted Segment
EBIT Adjusted Segment EBITDA Global Ecommerce
$
(19,700
)
$
16,758
$
(2,942
)
$
(22,906
)
$
17,390
$
(5,516
)
14
%
47
%
Presort Services
34,454
8,470
42,924
29,386
7,438
36,824
17
%
17
%
Sending Technology Solutions
113,435
7,661
121,096
105,535
7,330
112,865
7
%
7
%
Segment total
$
128,189
$
32,889
161,078
$
112,015
$
32,158
144,173
14
%
12
%
Reconciliation of Segment Adjusted EBITDA to Net (Loss)
Income: Segment depreciation and amortization
(32,889
)
(32,158
)
Unallocated corporate expenses
(65,169
)
(62,748
)
Restructuring charges
(18,965
)
(6,043
)
Goodwill impairment
(220,585
)
-
Foreign currency loss on intercompany loans
(5,761
)
-
Gain on sale of businesses, including transaction costs
-
1,319
Interest expense, net
(45,570
)
(37,126
)
Benefit (provision) for income taxes
4,025
(1,121
)
Net (loss) income
$
(223,836
)
$
6,296
Twelve months ended December 31,
2023
2022
% change EBIT (1) D&A EBITDA
EBIT (1) D&A EBITDA EBIT
EBITDA Global Ecommerce
$
(133,733
)
$
66,664
$
(67,069
)
$
(100,308
)
$
78,296
$
(22,012
)
(33
%)
>(100%) Presort Services
110,912
33,642
144,554
82,430
28,039
110,469
35
%
31
%
Sending Technology Solutions
405,347
30,005
435,352
400,909
29,489
430,398
1
%
1
%
Segment total
$
382,526
$
130,311
512,837
$
383,031
$
135,824
518,855
(0
%)
(1
%)
Reconciliation of Segment EBITDA to Net (Loss)
Income: Segment depreciation and amortization
(130,311
)
(135,824
)
Unallocated corporate expenses
(210,931
)
(204,251
)
Restructuring charges
(61,585
)
(18,715
)
Goodwill impairment
(339,184
)
-
Gain (loss) on debt redemption
3,064
(4,993
)
Foreign currency loss on intercompany loans
(5,761
)
-
Proxy solicitation fees
(10,905
)
-
Gain on sale of assets
-
14,372
Gain on sale of businesses, including transaction costs
-
12,205
Interest expense, net
(163,726
)
(141,769
)
Benefit (provision) for income taxes
20,875
(2,940
)
Net (loss) income
$
(385,627
)
$
36,940
(1)
Adjusted segment EBIT excludes interest, taxes, general corporate
expenses, restructuring charges, goodwill impairment, 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 December 31,
Twelve months ended December 31,
2023
2022
2023
2022
Reconciliation of reported net (loss) income to adjusted
EBIT and adjusted EBITDA Net (loss) income
$
(223,836
)
$
6,296
$
(385,627
)
$
36,940
(Benefit) provision for income taxes
(4,025
)
1,121
(20,875
)
2,940
(Loss) income before taxes
(227,861
)
7,417
(406,502
)
39,880
Restructuring charges
18,965
6,043
61,585
18,715
Goodwill impairment
220,585
-
339,184
-
(Gain) loss on debt redemption
-
-
(3,064
)
4,993
Foreign currency loss on intercompany loans
5,761
-
5,761
-
Proxy solicitation fees
-
-
10,905
-
Gain on sale of assets
-
-
-
(14,372
)
Gain on sale of businesses, including transaction costs
-
(1,319
)
-
(12,205
)
Adjusted net income before tax
17,450
12,141
7,869
37,011
Interest, net
45,570
37,126
163,726
141,769
Adjusted EBIT
63,020
49,267
171,595
178,780
Depreciation and amortization
40,398
39,064
160,430
163,816
Adjusted EBITDA
$
103,418
$
88,331
$
332,025
$
342,596
Reconciliation of reported diluted (loss) earnings per
share to adjusted diluted earnings per share Diluted (loss)
earnings per share
$
(1.27
)
$
0.04
$
(2.20
)
$
0.21
Restructuring charges
0.08
0.03
0.26
0.08
Goodwill impairment
1.24
-
1.91
-
(Gain) loss on debt redemption
-
-
(0.01
)
0.02
Foreign currency loss on intercompany loans
0.02
-
0.02
-
Proxy solicitation fees
-
-
0.05
-
Gain on sale of assets
-
-
-
(0.06
)
Gain on sale of businesses, including transaction costs
-
(0.01
)
-
(0.09
)
Adjusted diluted earnings per share (1)
$
0.07
$
0.06
$
0.04
$
0.15
(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
$
93,921
$
166,754
$
79,468
$
175,983
Capital expenditures
(25,280
)
(27,307
)
(102,878
)
(124,840
)
Restructuring payments
9,291
3,645
34,443
15,406
Proxy solicitation fees paid
-
-
10,905
-
Transaction costs paid
-
379
-
5,779
Free cash flow
$
77,932
$
143,471
$
21,938
$
72,328
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240131897055/en/
Editorial - Kathleen Raymond Head of Communications
203.351.7233
Financial - Phil Landler VP, Investor Relations 203.351.6141
Pitney Bowes (NYSE:PBI)
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