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Pitney Bowes Announces Second Quarter 2020 Financial Results

STAMFORD, Conn. — (BUSINESS WIRE) — July 30, 2020 — 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 2020.

“I want to acknowledge and thank all of the essential workers, including the Pitney Bowes team, for their dedication to their work in what is an unprecedented time. And, likewise, our hearts go out to all who lost loved ones to this virus,” said Marc B. Lautenbach, CEO and President, Pitney Bowes.

“It is times like these that test the resilience of our business,” Lautenbach continued. “We are fortunate to have taken significant actions over the past several years to move into shipping and invest in our digital capabilities, which now enables us to leverage the benefits of a more agile, flexible and contemporary business. We have momentum and are well positioned to emerge from this time as a better and stronger Company.”

Financial Overview:

Other Highlights:

Second Quarter Results

Revenue totaled $837 million, which was growth of 6 percent over prior year on a reported basis and 7 percent when adjusted for the impact of currency.

GAAP earnings per share was a loss of $0.02, which included charges of $0.07 for taxes on the settlement of certain investment securities, $0.02 for discontinued operations and $0.02 for restructuring and asset impairments, partly offset by a $0.05 gain on sale of an equity investment.

Adjusted earnings per share were $0.04.

GAAP cash from operations was $153 million and free cash flow was $148 million. Free cash flow increased over prior year as a result of higher accounts payable and accrued liabilities driven by growth in Global Ecommerce and higher customer deposits. Free cash flow also benefited from the higher run-off of finance receivables.

During the quarter, the Company used cash to invest $34 million in capital expenditures, pay $9 million in dividends to its common shareholders and make $5 million in restructuring payments.

On a year-to-date basis, GAAP cash from operations is $87 million and free cash flow is $101 million.

Earnings per share results for the second quarter are summarized in the table below:

 

   

Second Quarter*

 

   

2020

 

 

2019

GAAP EPS

   

($0.02

)

 

$0.13

Discontinued operations

   

0.02

 

 

0.03

GAAP EPS from continuing operations

   

$0.00

 

 

$0.16

Taxes on settlement of investment securities

   

0.07

 

 

-

Gain on sale of an equity investment

   

(0.05

)

 

-

Restructuring and asset impairments

   

0.02

 

 

0.02

Transaction costs

   

-

 

 

0.01

Adjusted EPS

   

$0.04

 

 

$0.19

* The sum of the earnings per share may not equal the totals due to rounding.

Business Segment Reporting

The Commerce Services group includes the Global Ecommerce and Presort Services segments. Global Ecommerce facilitates domestic retail and ecommerce shipping solutions, including fulfillment and returns, 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.

The Sending Technology Solutions segment 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.

The sum of the segment results may not equal the totals due to rounding.

 

Commerce Services

 

 

Second Quarter

($ millions)

 

2020

 

2019

 

Y/Y
Reported

 

Y/Y Ex
Currency

Revenue

 

 

 

 

 

 

 

 

Global Ecommerce

 

$398

 

$282

 

41%

 

41%

Presort Services

 

118

 

128

 

(8%)

 

(8%)

Commerce Services

 

$517

 

$410

 

26%

 

26%

 

 

 

 

 

 

 

 

 

EBITDA

 

 

 

 

 

 

 

 

Global Ecommerce

 

($2)

 

$1

 

>(100%)

 

 

Presort Services

 

20

 

23

 

(9%)

 

 

Commerce Services

 

$19

 

$24

 

(21%)

 

 

 

 

 

 

 

 

 

 

 

EBIT

 

 

 

 

 

 

 

 

Global Ecommerce

 

($19)

 

($16)

 

(21%)

 

 

Presort Services

 

13

 

15

 

(19%)

 

 

Commerce Services

 

($6)

 

-

 

>(100%)

 

 

Global Ecommerce

Revenue driven by significant growth in Domestic Parcel Delivery services volumes as well as Digital Delivery volumes. EBIT margin improved from the first quarter and versus prior year. EBIT and EBITDA margins benefited from lower transportation and warehousing costs per unit as a result of scale achieved in the quarter, offset by incremental costs associated with Covid-19.

Presort Services

Revenue declined due to lower Marketing Mail and First Class volumes. Marketing Mail Flats and Bound Printed Matter volumes grew significantly over prior year. EBIT and EBITDA margins were impacted by the lower revenue.

 

SendTech Solutions

 

 

 

Second Quarter

 

($ millions)

 

2020

 

2019

 

Y/Y
Reported

 

Y/Y Ex
Currency

Revenue

 

$321

 

$378

 

(15%)

 

(15%)

EBITDA

 

$113

 

$137

 

(17%)

 

EBIT

 

$104

 

$125

 

(16%)

 

Revenue declined driven by lower equipment sales, support services, supplies and financing. Business services revenues grew as clients increased their usage of shipping offerings and capabilities. Covid-19 adversely impacted in-period revenue, particularly equipment sales and supplies. EBIT and EBITDA margins performed relatively in-line with prior year despite the lower revenue.

2020 Guidance

Given the continued level of uncertainty around the depth and duration of Covid-19, and consistent with direction provided last quarter, the Company has suspended its 2020 annual guidance.

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 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 Pitney Bowes, the Craftsmen of Commerce, 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. 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, its continuing impact on our operations, employees, the availability and cost of labor, 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 the 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 financial health of posts in the U.S. or other major markets or the loss of, or significant changes to, our contractual relationship with the United States Postal Service (USPS); expenses and potential impacts resulting from a breach of security, including cyber-attacks or other comparable events; our ability to continue to grow volumes, gain additional economies of scale and improve profitability within our Commerce Services group; the loss of some of our larger clients in our Commerce Services group; our success at managing customer credit risk; third-party suppliers' ability to provide products and services required by our clients; changes in labor conditions and transportation costs; capital market disruptions or credit rating downgrades that adversely impact our ability to access capital markets at reasonable costs; our success in developing and marketing new products and services and obtaining regulatory approvals, if required; competitive factors, including pricing pressures, technological developments and the introduction of new products and services by competitors and other factors as more fully outlined in the Company's 2019 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, 2020 and 2019, and consolidated balance sheets at June 30, 2020 and December 31, 2019 are attached.

 

Pitney Bowes Inc.                
Consolidated Statements of Income (Loss)                
(Unaudited; in thousands, except per share amounts)                
                   
      Three months ended June 30,   Six months ended June 30,
     

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

Revenue:                
  Business services  

 $

                                 528,990

 

 

 $

                                 417,963

 

 

 $

                                 973,369

 

 

 $

                                 824,508

 

  Support services  

 

                                    113,786

 

 

 

                                    127,705

 

 

 

                                    235,801

 

 

 

                                    256,304

 

  Financing  

 

                                      85,462

 

 

 

                                      92,419

 

 

 

                                    174,540

 

 

 

                                    189,462

 

  Equipment sales  

 

                                      57,837

 

 

 

                                      85,551

 

 

 

                                    134,110

 

 

 

                                    175,338

 

  Supplies  

 

                                      32,773

 

 

 

                                      46,490

 

 

 

                                      78,482

 

 

 

                                      97,443

 

  Rentals  

 

                                      18,644

 

 

 

                                      18,445

 

 

 

                                      37,458

 

 

 

                                      40,602

 

        Total revenue  

 

                                    837,492

 

 

 

                                    788,573

 

 

 

                                 1,633,760

 

 

 

                                 1,583,657

 

                   
Costs and expenses:                
  Cost of business services  

 

                                    454,311

 

 

 

                                    337,918

 

 

 

                                    828,976

 

 

 

                                    664,964

 

  Cost of support services  

 

                                      36,725

 

 

 

                                      40,520

 

 

 

                                      76,485

 

 

 

                                      82,367

 

  Financing interest expense  

 

                                      11,939

 

 

 

                                      11,043

 

 

 

                                      24,428

 

 

 

                                      22,407

 

  Cost of equipment sales  

 

                                      47,920

 

 

 

                                      58,570

 

 

 

                                    105,279

 

 

 

                                    122,235

 

  Cost of supplies  

 

                                        8,379

 

 

 

                                      11,758

 

 

 

                                      20,619

 

 

 

                                      25,308

 

  Cost of rentals  

 

                                        6,022

 

 

 

                                        8,418

 

 

 

                                      12,400

 

 

 

                                      18,133

 

  Selling, general and administrative  

 

                                    233,631

 

 

 

                                    241,467

 

 

 

                                    482,264

 

 

 

                                    503,136

 

  Research and development  

 

                                        7,467

 

 

 

                                      13,572

 

 

 

                                      19,583

 

 

 

                                      26,149

 

  Goodwill impairment  

 

                                              -

 

 

 

                                              -

 

 

 

                                    198,169

 

 

 

                                              -

 

  Restructuring charges and asset impairments  

 

                                        4,922

 

 

 

                                        5,899

 

 

 

                                        8,739

 

 

 

                                        9,599

 

  Interest expense, net  

 

                                      26,446

 

 

 

                                      28,019

 

 

 

                                      52,329

 

 

 

                                      55,621

 

  Other components of net pension and postretirement income  

 

                                           386

 

 

 

                                      (1,618

)

 

 

                                           235

 

 

 

                                      (2,256

)

  Other (income) expense  

 

                                    (17,375

)

 

 

                                           (27

)

 

 

                                      16,112

 

 

 

                                      17,683

 

       Total costs and expenses  

 

                                    820,773

 

 

 

                                    755,539

 

 

 

                                 1,845,618

 

 

 

                                 1,545,346

 

                   
Income (loss) from continuing operations before taxes  

 

                                      16,719

 

 

 

                                      33,034

 

 

 

                                  (211,858

)

 

 

                                      38,311

 

Provision for income taxes  

 

                                      17,016

 

 

 

                                        3,724

 

 

 

                                        6,986

 

 

 

                                      11,544

 

(Loss) income from continuing operations   

 

                                         (297

)

 

 

                                      29,310

 

 

 

                                  (218,844

)

 

 

                                      26,767

 

(Loss) income from discontinued operations, net of tax  

 

                                      (3,032

)

 

 

                                      (5,613

)

 

 

                                        7,032

 

 

 

                                      (5,729

)

Net (loss) income  

 $

                                   (3,329

)

 

 $

                                   23,697

 

 

 $

                               (211,812

)

 

 $

                                   21,038

 

                   
Basic (loss) earnings per share (1):                
  Continuing operations  

 $

                                           -

 

 

 $

                                       0.17

 

 

 $

                                     (1.28

)

 

 $

                                       0.15

 

  Discontinued operations  

 

                                        (0.02

)

 

 

                                        (0.03

)

 

 

                                          0.04

 

 

 

                                        (0.03

)

  Net (loss) income  

 $

                                     (0.02

)

 

 $

                                       0.13

 

 

 $

                                     (1.24

)

 

 $

                                       0.12

 

                   
Diluted (loss) earnings per share (1):                
  Continuing operations  

 $

                                           -

 

 

 $

                                       0.16

 

 

 $

                                     (1.28

)

 

 $

                                       0.15

 

  Discontinued operations  

 

                                        (0.02

)

 

 

                                        (0.03

)

 

 

                                          0.04

 

 

 

                                        (0.03

)

  Net (loss) income  

 $

                                     (0.02

)

 

 $

                                       0.13

 

 

 $

                                     (1.24

)

 

 $

                                       0.12

 

                   
Weighted-average shares used in diluted earnings per share  

 

                                    171,478

 

 

 

                                    178,281

 

 

 

                                    171,167

 

 

 

                                    182,638

(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,
 2020
  December 31,
 2019
Current assets:      
  Cash and cash equivalents

 $

                                    862,897

 

 

 $

                                    924,442

 

  Short-term investments

 

                                        153,221

 

 

 

                                        115,879

 

  Accounts and other receivables, net

 

                                        391,748

 

 

 

                                        373,471

 

  Short-term finance receivables, net

 

                                        555,196

 

 

 

                                        629,643

 

  Inventories

 

                                          73,653

 

 

 

                                          68,251

 

  Current income taxes

 

                                            1,893

 

 

 

                                            5,565

 

  Other current assets and prepayments

 

                                        121,924

 

 

 

                                        101,601

 

  Assets of discontinued operations

 

                                                   -

 

 

 

                                          17,229

 

Total current assets

 

                                    2,160,532

 

 

 

                                    2,236,081

 

         
Property, plant and equipment, net

 

                                        375,465

 

 

 

                                        376,177

 

Rental property and equipment, net

 

                                          40,875

 

 

 

                                          41,225

 

Long-term finance receivables, net

 

                                        583,839

 

 

 

                                        625,487

 

Goodwill

 

                                    1,132,785

 

 

 

                                    1,324,179

 

Intangible assets, net

 

                                        175,460

 

 

 

                                        190,640

 

Operating lease assets

 

                                        199,162

 

 

 

                                        200,752

 

Noncurrent income taxes

 

                                          68,449

 

 

 

                                          71,903

 

Other assets

 

                                        379,611

 

 

 

                                        400,456

 

Total assets

 $

                                 5,116,178

 

 

 $

                                 5,466,900

 

         
Liabilities and stockholders' equity       
Current liabilities:      
  Accounts payable and accrued liabilities

 $

                                    732,048

 

 

 $

                                    793,690

 

  Customer deposits at Pitney Bowes Bank

 

                                        613,449

 

 

 

                                        591,118

 

  Current operating lease liabilities

 

                                          35,432

 

 

 

                                          36,060

 

  Current portion of long-term debt 

 

                                        163,257

 

 

 

                                          20,108

 

  Advance billings

 

                                        122,606

 

 

 

                                        101,920

 

  Current income taxes

 

                                          11,723

 

 

 

                                          17,083

 

  Liabilities of discontinued operations

 

                                                   -

 

 

 

                                            9,713

 

Total current liabilities

 

                                    1,678,515

 

 

 

                                    1,569,692

 

         
Long-term debt

 

                                    2,553,490

 

 

 

                                    2,719,614

 

Deferred taxes on income

 

                                        270,376

 

 

 

                                        274,435

 

Tax uncertainties and other income tax liabilities

 

                                          35,928

 

 

 

                                          38,834

 

Noncurrent operating lease liabilities

 

                                        177,901

 

 

 

                                        177,711

 

Other noncurrent liabilities

 

                                        355,388

 

 

 

                                        400,518

 

Total liabilities

 

                                    5,071,598

 

 

 

                                    5,180,804

 

         
Stockholders' equity:      
  Common stock

 

                                        323,338

 

 

 

                                        323,338

 

  Additional paid-in-capital

 

                                          68,498

 

 

 

                                          98,748

 

  Retained earnings

 

                                    5,188,119

 

 

 

                                    5,438,930

 

  Accumulated other comprehensive loss

 

                                      (836,262

)

 

 

                                      (840,143

)

  Treasury stock, at cost

 

                                   (4,699,113

)

 

 

                                   (4,734,777

)

Total stockholders' equity 

 

                                          44,580

 

 

 

                                        286,096

 

Total liabilities and stockholders' equity

 $

                                 5,116,178

 

 

 $

                                 5,466,900

 

Pitney Bowes Inc.                      
Business Segment Revenue                      
(Unaudited; in thousands)                      
                         
     Three months ended June 30,     Six months ended June 30, 
   

 

2020

 

 

2019

 

 % Change 

 

 

2020

 

 

2019

 

 % Change

REVENUE                      
  Global Ecommerce

 $

                      398,453

 

 $

                      282,319

 

41

%

 

 $

                      690,776

 

 $

                      548,573

 

26

%

  Presort Services

 

                         118,127

 

 

                         128,138

 

(8

%)

 

 

                         258,847

 

 

                         262,985

 

(2

%)

  Commerce Services

 

                         516,580

 

 

                         410,457

 

26

%

 

 

                         949,623

 

 

                         811,558

 

17

%

                         
  Sending Technology Solutions

 

                         320,912

 

 

                         378,116

 

(15

%)

 

 

                         684,137

 

 

                         772,099

 

(11

%)

  Total revenue - GAAP

 

                         837,492

 

 

                         788,573

 

6

%

 

 

                      1,633,760

 

 

                      1,583,657

 

3

%

                         
  Currency impact on revenue

 

                             2,627

 

 

                                   -  

     

 

                             4,967

 

 

                                   -  

   
  Revenue, at constant currency

 $

                      840,119

 

 $

                      788,573

 

7

%

 

 $

                   1,638,727

 

 $

                   1,583,657

 

3

%

 

Pitney Bowes Inc.                    
Business Segment EBIT & EBITDA                    
(Unaudited; in thousands)                    
                     
  Three months ended June 30,
 

2020

 

2019

 

% change

  EBIT (1) D&A EBITDA   EBIT (1) D&A EBITDA   EBIT EBITDA
                     
Global Ecommerce

 $

     (18,894

)

 $

       17,297

 $

       (1,597

)

 

 $

     (15,576

)

 $

       16,883

 $

         1,307

 

 

(21

%)

>(100%)
Presort Services

 

          12,582

 

 

            7,857

 

          20,439

 

 

 

          15,462

 

 

            7,088

 

          22,550

 

 

(19

%)

(9

%)

Commerce Services

 

          (6,312

)

 

          25,154

 

          18,842

 

 

 

             (114

)

 

          23,971

 

          23,857

 

  >(100%)

(21

%)

                     
Sending Technology Solutions

 

        104,268

 

 

            8,776

 

        113,044

 

 

 

        124,738

 

 

          11,911

 

        136,649

 

 

(16

%)

(17

%)

                     
Segment total

 $

       97,956

 

 $

       33,930

 

        131,886

 

 

 $

     124,624

 

 $

       35,882

 

        160,506

 

 

(21

%)

(18

%)

                     
Reconciliation of Segment EBITDA to Net (Loss) Income:                    
Segment depreciation and amortization     

 

        (33,930

)

     

 

        (35,882

)

     
Unallocated corporate expenses (2)    

 

        (49,489

)

     

 

        (45,048

)

     
Interest, net     

 

        (38,385

)

     

 

        (39,062

)

     
Restructuring charges and asset impairments    

 

          (4,922

)

     

 

          (5,899

)

     
Gain on sale of equity investment    

 

          11,908

 

     

 

                  -

 

     
Transaction costs     

 

             (349

)

     

 

          (1,581

)

     
Provision for income taxes    

 

        (17,016

)

     

 

          (3,724

)

     
(Loss) income from continuing operations    

 

             (297

)

     

 

          29,310

 

     
Loss from discontinued operations, net of tax    

 

          (3,032

)

     

 

          (5,613

)

     
Net (loss) income    

 $

       (3,329

)

     

 $

       23,697

 

     
                     
                     
                     
  Six months ended June 30,
 

2020

 

2019

 

% change

  EBIT (1) D&A EBITDA   EBIT (1) D&A EBITDA   EBIT EBITDA
                     
Global Ecommerce

 $

     (48,369

)

 $

       35,363

 $

     (13,006

)

 

 $

     (30,176

)

 $

       33,341

 $

         3,165

 

 

(60

%)

>(100%)
Presort Services

 

          28,277

 

 

          15,631

 

          43,908

 

 

 

          30,528

 

 

          14,008

 

          44,536

 

 

(7

%)

(1

%)

Commerce Services

 

        (20,092

)

 

          50,994

 

          30,902

 

 

 

               352

 

 

          47,349

 

          47,701

 

  >(100%)

(35

%)

                     
Sending Technology Solutions

 

        210,830

 

 

          17,815

 

        228,645

 

 

 

        247,141

 

 

          20,768

 

        267,909

 

 

(15

%)

(15

%)

                     
Segment Total

 $

     190,738

 

 $

       68,809

 

        259,547

 

 

 $

     247,493

 

 $

       68,117

 

        315,610

 

 

(23

%)

(18

%)

                     
Reconciliation of Segment EBITDA to Net (Loss) Income:                    
Segment depreciation and amortization    

 

        (68,809

)

     

 

        (68,117

)

     
Unallocated corporate expenses (2)    

 

        (93,211

)

     

 

      (102,006

)

     
Interest, net     

 

        (76,757

)

     

 

        (78,028

)

     
Goodwill impairment    

 

      (198,169

)

     

 

                  -

 

     
Restructuring charges and asset impairments    

 

          (8,739

)

     

 

          (9,599

)

     
Gain on sale of equity investment    

 

          11,908

 

     

 

                  -

 

     
Loss on debt extinguishment    

 

        (36,987

)

     

 

                  -

 

     
Loss on dispositions and transaction costs    

 

             (641

)

     

 

        (19,549

)

     
Provision for income taxes    

 

          (6,986

)

     

 

        (11,544

)

     
(Loss) income from continuing operations    

 

      (218,844

)

     

 

          26,767

 

     
Income (loss) from discontinued operations, net of tax    

 

            7,032

 

     

 

          (5,729

)

     
Net (loss) income    

 $

   (211,812

)

     

 $

       21,038

 

     

 

(1) Segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges, and other items that are not allocated to a particular business segment.
(2) Includes corporate depreciation and amortization expense of $7,138 and $5,210 for the three months ended June 30, 2020 and 2019, respectively and $12,978 and $9,860 for the six months ended June 30, 2020 and 2019, respectively.
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,

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Reconciliation of reported net (loss) income to adjusted net income, adjusted EBIT and adjusted EBITDA
Net (loss) income

 $

             (3,329

)

 $

            23,697

 

 $

         (211,812

)

 $

            21,038

 

Loss (income) from discontinued operations, net of tax

 

                 3,032

 

 

                 5,613

 

 

                (7,032

)

 

                 5,729

 

Goodwill impairment

 

                         -

 

 

                       -

 

 

             196,600

 

 

                       -

 

Restructuring charges and asset impairments

 

                 3,183

 

 

                 4,242

 

 

                 5,854

 

 

                 6,987

 

Gain on sale of equity investment

 

                (8,943

)

 

                       -

 

 

                (8,943

)

 

                       -

 

Tax on settlement of investment securities

 

               12,229

 

 

                       -

 

 

               12,229

 

 

                       -

 

Loss on extinguishment of debt

 

                         -

 

 

                       -

 

 

               27,777

 

 

                       -

 

Loss on dispositions and transaction costs

 

                    264

 

 

                 1,171

 

 

                    487

 

 

               20,786

 

Adjusted net income

 

                 6,436

 

 

               34,723

 

 

               15,160

 

 

               54,540

 

Interest, net

 

               38,385

 

 

               39,062

 

 

               76,757

 

 

               78,028

 

Provision for income taxes, as adjusted

 

                 3,646

 

 

                 5,791

 

 

                 5,610

 

 

               12,919

 

Adjusted EBIT

 

               48,467

 

 

               79,576

 

 

               97,527

 

 

             145,487

 

Depreciation and amortization

 

               41,068

 

 

               41,092

 

 

               81,787

 

 

               77,977

 

Adjusted EBITDA

 $

            89,535

 

 $

          120,668

 

 $

          179,314

 

 $

          223,464

 

Reconciliation of reported diluted (loss) earnings per share to adjusted diluted earnings per share
Diluted (loss) earnings per share 

 $

               (0.02

)

 $

                0.13

 

 $

               (1.24

)

 $

                0.12

 

Loss (income) from discontinued operations, net of tax

 

                   0.02

 

 

                   0.03

 

 

                  (0.04

)

 

                   0.03

 

Goodwill impairment

 

                         -

 

 

                         -

 

 

                   1.14

 

 

                         -

 

Restructuring charges and asset impairments

 

                   0.02

 

 

                   0.02

 

 

                   0.03

 

 

                   0.04

 

Gain on sale of equity investment

 

                  (0.05

)

 

                         -

 

 

                  (0.05

)

 

                         -

 

Tax on settlement of investment securities

 

                   0.07

 

 

                         -

 

 

                   0.07

 

 

                         -

 

Loss on debt extinguishment

 

                         -

 

 

                         -

 

 

                   0.16

 

 

                         -

 

Loss on dispositions and transaction costs

 

                         -

 

 

                   0.01

 

 

                         -

 

 

                   0.11

 

Adjusted diluted earnings per share

 $

                0.04

 

 $

                0.19

 

 $

                0.09

 

 $

                0.30

 

Note: 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 provided by operating activities 

 $

          153,093

 

 $

            17,054

 

 $

            86,809

 

 $

            86,782

 

Net cash used in (provided by) operating activities - discontinued operations  

 

                    618

 

 

                (4,277

)

 

               38,423

 

 

                (5,534

)

Capital expenditures

 

              (34,176

)

 

              (31,493

)

 

              (59,954

)

 

              (59,187

)

Restructuring payments 

 

                 5,318

 

 

                 4,759

 

 

               11,365

 

 

               13,005

 

Change in customer deposits at PB Bank

 

               23,219

 

 

               14,720

 

 

               22,331

 

 

                (8,316

)

Transaction costs paid

 

                    377

 

 

                 4,269

 

 

                 2,117

 

 

                 6,108

 

Free cash flow

 $

          148,449

 

 $

              5,032

 

 $

          101,091

 

 $

            32,858

 

 



Contact:

Editorial -
Bill Hughes
Chief Communications Officer
203/351-6785

Financial -
Adam David
VP, Investor Relations
203/351-7175