Pitney Bowes (NYSE: PBI), a global shipping and mailing company
that provides technology, logistics, and financial services, today
announced its financial results for the second quarter 2022.
“While there were some very positive aspects to our second
quarter, our financial results were below our expectations,” said
Marc B. Lautenbach, President and CEO, Pitney Bowes. “In Global
Ecommerce, we were not able to overcome macroeconomic headwinds,
including the strength of the US dollar and the COVID shutdown in
China, which caused a reduction in some of our package volumes.
However, we are encouraged by a sustained improvement in our
domestic parcel network service levels, which is driving domestic
parcel revenue growth and a robust pipeline of new clients. Our
Presort and SendTech businesses in the aggregate posted revenue
growth on a constant currency basis. Finally, proceeds from the
sale of Borderfree enhances financial flexibility as we continue to
execute against our long-term plan.”
Second Quarter Financial Highlights
- Revenue in the quarter was $871 million, a decrease of 3
percent on a reported basis and 2 percent on a constant currency
basis from the comparable quarter in 2021
- GAAP EPS and Adjusted EPS were $0.02 in the quarter versus
$0.11 in second quarter 2021
- GAAP cash from operations in the quarter was $35 million
- Free cash flow was $6 million versus $87 million in second
quarter 2021; decrease driven largely by lower customer deposits
and net income
Second Quarter Business Highlights
- Global Ecommerce posted domestic parcel revenue growth of 6
percent
- Domestic parcel gross margins expanded despite lower
volumes
- Presort revenue grew 3 percent on a year-over-year basis
- SendTech revenue grew on a constant currency basis with growth
in shipping and equipment sales offset by lower financing and
services revenues
- Announced divestiture of Borderfree for approximately $100
million with proceeds received in early July
Earnings per share results are summarized in the table below
Second Quarter
2022
2021
GAAP EPS
$0.02
$0.11
Discontinued Operations
-
$0.01
GAAP EPS from Continuing
Operations
$0.02
$0.12
Restructuring Charges
$0.02
$0.02
Gain on Sale of Assets/Business
-
($0.03)
Tax Benefit from Sale of Business
($0.03)
-
Transaction Costs
$0.02
-
Adjusted EPS
$0.02
$0.11
* The sum of the earnings per share may
not equal the totals due to rounding.
Business Segment Reporting
Global Ecommerce
Global Ecommerce provides business to consumer logistics
services for domestic and cross border delivery, returns and
fulfillment.
Second Quarter
($ millions)
2022
2021
% Change
Reported
% Change
Ex Currency
Revenue
$394
$418
(6%)
(5%)
EBITDA
($7)
$8
>(100%)
EBIT
($29)
($11)
>(100%)
Overall segment revenue declined as domestic parcel revenue
growth was offset by lower cross-border volumes amid a more
challenging macroeconomic environment, especially a stronger US
Dollar.
Domestic parcel volumes were 39 million, a 5 million decrease
compared to prior year, driven by weakness in volumes originating
in China and processed by our domestic network. Parcel volumes from
North American clients increased mid-single digits.
Improved domestic parcel gross margins were more than offset by
lower cross-border results and higher operating expenses, resulting
in lower profitability.
Presort Services
Presort Services provides sortation services to qualify large
volumes of First Class Mail, Marketing Mail, Marketing Mail Flats
and Bound Printed Matter for postal workshare discounts.
Second Quarter
($ millions)
2022
2021
% Change
Reported
% Change
Ex Currency
Revenue
$139
$135
3%
3%
EBITDA
$20
$23
(13%)
EBIT
$13
$16
(20%)
Revenue growth was driven by better revenue per piece and new
client volume. Total volumes were impacted by a softening economy
and declined in the quarter. EBITDA and EBIT margins declined in
the quarter due to inflationary pressures on labor and
transportation costs.
SendTech Solutions
Sending Technology Solutions offers physical and digital mailing
and shipping technology solutions, financing, services, supplies
and other applications for small and medium businesses, retail,
enterprise, and government clients around the world to help
simplify and save on the sending, tracking and receiving of
letters, parcels and flats.
Second Quarter
($ millions)
2022
2021
% Change
Reported
% Change
Ex Currency
Revenue
$339
$346
(2%)
0%
EBITDA
$103
$115
(10%)
EBIT
$96
$107
(11%)
Higher equipment sales and shipping related revenues were offset
by lower finance and service revenues. EBITDA and EBIT declines
were driven primarily by a decrease in high margin finance and
service revenues.
Revised 2022 Expectations
Based on uncertain macroeconomic conditions, first half results,
and the sale of Borderfree, the Company expects full year revenue
(constant currency) to range from a low-single digit percentage
decline to a low single digit percentage increase.
The Company also expects full year EBIT to range from a
high-single digit percentage decline to a mid-single digit
percentage increase.
In addition, the Company expects to generate solid free cash
flow for full year 2022 though at a lower level than prior
year.
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: 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.
Adjusted EBIT, Adjusted EBITDA and Adjusted EPS exclude the
impact of discontinued operations, restructuring charges, gains,
losses and costs related to acquisitions and dispositions, asset
and 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.
Free cash flow adjusts cash 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. The Company
reports free cash flow to provide investors insight into the amount
of cash that management could have 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, asset and
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. In particular, we continue to navigate the
impacts of the Covid-19 pandemic (Covid-19) as well as the risk of
a global recession, and the effects that they may have on our, and
our client’s business. Other factors which could cause future
financial performance to differ materially from expectations, and
which may also be exacerbated by Covid-19 or the risk of a global
recession 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, United
States Postal Service (USPS) commercial programs, or our
contractual relationships with the 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 segment; changes in labor
and transportation availability and costs; 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. 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 six months ended June 30, 2022 and 2021,
and consolidated balance sheets at June 30, 2022 and December 31,
2021 are attached.
Disclosure Using Social Media
Pitney Bowes announces material information to its investors
using SEC filings, press releases, public conference calls and
webcasts. The Company already makes frequent use of its investor
relations website to disseminate material information, as well as
social media platforms, including Twitter, Facebook and LinkedIn.
Investors, buy and sell-side analysts, media and influencers should
note that the Company plans to continue to announce material
financial information using the Pitney Bowes investor relations
website, SEC filings, and press releases, public conference calls
and webcasts. Pitney Bowes is notifying investors, media and others
interested in the Company that in the future, the Company may
choose to communicate material information through its social media
channels, or it is possible that information it discloses through
social media channels may be deemed to be material. Therefore,
Pitney Bowes encourages investors, the media, and others interested
in the Company to review the information posted on the Company’s
investor relations site
(https://www.investorrelations.pitneybowes.com/), Twitter
(https://twitter.com/PBnews and https://twitter.com/PitneyBowes),
Facebook (https://www.facebook.com/PitneyBowes/), and LinkedIn
(https://www.linkedin.com/company/pitney-bowes/). The Company may
communicate on social media platforms not listed here as well as
create new accounts in the future. Any updates to the list of
social media channels Pitney Bowes will use to announce material
information will be posted on the Investor Relations page.
Pitney Bowes Inc. Consolidated Statements of
Operations (Unaudited; in thousands, except per share amounts)
Three months ended June
30,
Six months ended June
30,
2022
2021
2022
2021
Revenue:
Business services
$
551,478
$
567,022
$
1,148,862
$
1,137,476
Support services
107,625
115,156
217,977
233,853
Financing
67,298
73,453
139,327
151,265
Equipment sales
89,986
86,267
179,282
173,070
Supplies
38,245
38,655
79,306
80,879
Rentals
16,863
18,650
33,683
37,857
Total revenue
871,495
899,203
1,798,437
1,814,400
Costs and expenses:
Cost of business services
477,544
482,814
980,759
982,348
Cost of support services
37,711
37,679
74,845
74,396
Financing interest expense
12,533
11,773
24,135
23,659
Cost of equipment sales
63,815
61,561
127,586
123,401
Cost of supplies
11,028
10,467
22,545
21,678
Cost of rentals
7,473
6,013
12,782
12,460
Selling, general and
administrative
226,638
236,190
469,423
474,292
Research and development
11,254
11,059
22,588
22,375
Restructuring charges
4,224
4,844
8,408
7,733
Interest expense, net
21,007
24,346
43,131
49,504
Other components of net pension
and postretirement expense
958
312
1,802
662
Other (income) expense, net
-
(13,646
)
(11,901
)
37,748
Total costs and expenses
874,185
873,412
1,776,103
1,830,256
(Loss) income from continuing
operations before taxes
(2,690
)
25,791
22,334
(15,856
)
(Benefit) provision for income
taxes
(7,026
)
4,915
(2,823
)
(9,077
)
Income (loss) from continuing
operations
4,336
20,876
25,157
(6,779
)
Loss from discontinued
operations, net of tax
-
(1,020
)
-
(4,906
)
Net income (loss)
$
4,336
$
19,856
$
25,157
$
(11,685
)
Basic earnings (loss) per
share:
Continuing operations
$
0.02
$
0.12
$
0.14
$
(0.04
)
Discontinued operations
-
(0.01
)
-
(0.03
)
Net income (loss)
$
0.02
$
0.11
$
0.14
$
(0.07
)
Diluted earnings (loss) per
share:
Continuing operations
$
0.02
$
0.12
$
0.14
$
(0.04
)
Discontinued operations
-
(0.01
)
-
(0.03
)
Net income (loss)
$
0.02
$
0.11
$
0.14
$
(0.07
)
Weighted-average shares used in
diluted earnings per share
176,969
178,979
177,673
173,367
(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 30,2022 December 31,2021
Current assets:
Cash and cash equivalents
$
570,697
$
732,480
Short-term investments
11,519
14,440
Accounts and other receivables,
net
268,722
334,630
Short-term finance receivables,
net
557,571
560,680
Inventories
82,797
78,588
Current income taxes
15,875
13,894
Assets held for sale
108,677
36,394
Other current assets and
prepayments
151,090
120,947
Total current assets
1,766,948
1,892,053
Property, plant and equipment,
net
427,438
429,162
Rental property and equipment,
net
30,889
34,774
Long-term finance receivables,
net
592,928
587,427
Goodwill
1,060,452
1,135,103
Intangible assets, net
82,770
132,442
Operating lease assets
242,452
208,428
Noncurrent income taxes
62,849
68,398
Other assets
410,865
471,084
Total assets
$
4,677,591
$
4,958,871
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued
liabilities
$
827,639
$
922,543
Customer deposits at Pitney Bowes
Bank
616,150
632,062
Current operating lease
liabilities
42,253
40,299
Current portion of long-term
debt
24,752
24,739
Advance billings
96,573
99,280
Liabilities held for sale
18,700
-
Current income taxes
2,865
9,017
Total current liabilities
1,628,932
1,727,940
Long-term debt
2,194,767
2,299,099
Deferred taxes on income
268,416
286,445
Tax uncertainties and other
income tax liabilities
31,643
31,935
Noncurrent operating lease
liabilities
227,238
192,092
Other noncurrent liabilities
282,441
308,728
Total liabilities
4,633,437
4,846,239
Stockholders' equity:
Common stock
323,338
323,338
Additional paid-in-capital
-
2,485
Retained earnings
5,137,248
5,169,270
Accumulated other comprehensive
loss
(850,053
)
(780,312
)
Treasury stock, at cost
(4,566,379
)
(4,602,149
)
Total stockholders' equity
44,154
112,632
Total liabilities and
stockholders' equity
$
4,677,591
$
4,958,871
Pitney Bowes Inc. Business Segment Revenue
(Unaudited; in thousands)
Three months ended June
30,
Six months ended June
30,
2022
2021
% Change
2022
2021
% Change
Global Ecommerce
$
393,770
$
418,429
(6
%)
$
812,297
$
831,515
(2
%)
Presort Services
138,934
134,619
3
%
299,478
277,745
8
%
Sending Technology Solutions
338,791
346,155
(2
%)
686,662
705,140
(3
%)
Total revenue - GAAP
871,495
899,203
(3
%)
1,798,437
1,814,400
(1
%)
Currency impact on revenue
10,775
-
14,767
-
Revenue, at constant currency
$
882,270
$
899,203
(2
%)
$
1,813,204
$
1,814,400
(0
%)
Pitney Bowes Inc. Business Segment EBIT & EBITDA
(Unaudited; in thousands)
Three months ended June 30,
2022
2021
% change EBIT (1) D&A EBITDA
EBIT (1) D&A EBITDA EBIT
EBITDA Global Ecommerce
$
(28,825
)
$
21,480
$
(7,345
)
$
(10,831
)
$
19,060
$
8,229
>(100%) >(100%) Presort Services
12,851
7,000
19,851
16,134
6,798
22,932
(20
%)
(13
%)
Sending Technology Solutions
95,565
7,908
103,473
107,121
7,537
114,658
(11
%)
(10
%)
Segment total
$
79,591
$
36,388
115,979
$
112,424
$
33,395
145,819
(29
%)
(20
%)
Reconciliation of Segment EBITDA to Net Income:
Segment depreciation and amortization
(36,388
)
(33,395
)
Unallocated corporate expenses
(40,761
)
(56,316
)
Restructuring charges
(4,224
)
(4,844
)
Gain on sale of assets
-
1,434
Gain on sale of business
-
10,201
Loss on debt redemption/refinancing
-
(989
)
Transaction costs
(3,756
)
-
Interest, net
(33,540
)
(36,119
)
Benefit (provision) for income taxes
7,026
(4,915
)
Income from continuing operations
4,336
20,876
Loss from discontinued operations, net of tax
-
(1,020
)
Net income
$
4,336
$
19,856
Six months ended June
30,
2022
2021
% change
EBIT (1)
D&A
EBITDA
EBIT (1)
D&A
EBITDA
EBIT
EBITDA
Global Ecommerce
$
(42,521
)
$
42,924
$
403
$
(37,207
)
$
37,236
$
29
(14
%)
>100% Presort Services
32,483
13,419
45,902
35,185
14,297
49,482
(8
%)
(7
%)
Sending Technology Solutions
200,140
14,911
215,051
221,591
15,140
236,731
(10
%)
(9
%)
Segment Total
$
190,102
$
71,254
261,356
$
219,569
$
66,673
286,242
(13
%)
(9
%)
Reconciliation of Segment EBITDA to Net Income
(Loss): Segment depreciation and amortization
(71,254
)
(66,673
)
Unallocated corporate expenses
(98,595
)
(113,781
)
Restructuring charges
(8,408
)
(7,733
)
Gain on sale of assets
14,372
1,434
Gain on sale of business
2,522
10,201
Loss on debt redemption/refinancing
(4,993
)
(52,383
)
Transaction costs
(5,400
)
-
Interest, net
(67,266
)
(73,163
)
Benefit for income taxes
2,823
9,077
Income (loss) from continuing operations
25,157
(6,779
)
Loss from discontinued operations, net of tax
-
(4,906
)
Net income (loss)
$
25,157
$
(11,685
)
(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 $3 million and $7 million for the three and six months
ended June 30, 2022, 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,
2022
2021
2022
2021
Reconciliation of reported net income (loss) to adjusted
EBIT and EBITDA Net income (loss)
$
4,336
$
19,856
$
25,157
$
(11,685
)
Loss from discontinued operations, net of tax
-
1,020
-
4,906
(Benefit) provision for income taxes
(7,026
)
4,915
(2,823
)
(9,077
)
(Loss) income from continuing operations before taxes
(2,690
)
25,791
22,334
(15,856
)
Restructuring charges
4,224
4,844
8,408
7,733
Gain on sale of assets
-
(1,434
)
(14,372
)
(1,434
)
Gain on sale of business
-
(10,201
)
(2,522
)
(10,201
)
Loss on debt redemption/refinancing
-
989
4,993
52,383
Transaction costs
3,756
-
5,400
-
Adjusted net income before tax
5,290
19,989
24,241
32,625
Interest, net
33,540
36,119
67,266
73,163
Adjusted EBIT
38,830
56,108
91,507
105,788
Depreciation and amortization
43,470
39,822
85,472
79,416
Adjusted EBITDA
$
82,300
$
95,930
$
176,979
$
185,204
Reconciliation of reported diluted earnings (loss) per
share to adjusted diluted earnings per share Diluted earnings
(loss) per share
$
0.02
$
0.11
$
0.14
$
(0.07
)
Loss from discontinued operations, net of tax
-
0.01
-
0.03
Restructuring charges
0.02
0.02
0.03
0.03
Gain on sale of assets
-
(0.01
)
(0.06
)
(0.01
)
Gain on sale of business
-
(0.02
)
(0.02
)
(0.02
)
Loss on debt redemption/refinancing
-
-
0.02
0.22
Tax benefit on sale of business
(0.03
)
(0.03
)
Transaction costs
0.02
-
0.02
-
Adjusted diluted earnings per share (1)
$
0.02
$
0.11
$
0.10
$
0.19
(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
$
35,132
$
78,806
$
45,694
$
144,729
Capital expenditures
(31,619
)
(40,375
)
(64,174
)
(83,703
)
Restructuring payments
4,970
4,870
8,255
8,825
Change in customer deposits at PB Bank
(2,953
)
43,427
(15,912
)
15,633
Transaction costs paid
-
-
2,132
-
Free cash flow
$
5,530
$
86,728
$
(24,005
)
$
85,484
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220728005208/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
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