STAMFORD, Conn.--(BUSINESS WIRE)--Nov 5, 2019--

Pitney Bowes Inc. (NYSE: PBI), a global technology company that provides commerce solutions in the areas of ecommerce, shipping, mailing, data and financial services today announced its financial results for the third quarter 2019.

Quarterly Results:

  • Revenue of $790 million, an increase of 4 percent; an increase of 6 percent when adjusted for both the impact of currency and market exits
  • GAAP EPS loss of $0.02; Adjusted EPS of $0.24
  • GAAP EPS includes a non-cash $0.16 per share impairment charge related to capitalized software costs incurred in the development of a new enterprise business platform in certain international markets
  • GAAP cash from operations of $96 million; free cash flow of $69 million

Transaction signed and Debt Management:

  • On August 26, 2019, the Company announced it entered into a definitive agreement to sell its Software Solutions business to Syncsort for $700 million in cash.
  • The Company is using the majority of the net proceeds to pay down near-term debt maturities.
  • On September 27, 2019, the Company repaid the balance of its $200 million September 2020 term loan.
  • In November 2019, the Company replaced its existing revolving credit facility with a new revolving credit facility for $500 million and secured a new five-year Term Loan A for $400 million.
  • In November 2019, the Company repaid the $150 million term loan due in November 2019 and the balance of the $300 million term loan due in December 2020.

“We made solid progress transforming our company in the third quarter,” said Marc B. Lautenbach. “Revenue grew six percent, when adjusted for both the impact of currency and market exits, driven by strong growth in Commerce Services and improved performance in SendTech. This was the strongest revenue performance for the company in some time and is affirmation that the capabilities we are building are in demand. Six percent revenue growth puts us on track to grow for the year, which will be our third consecutive year of growth. At the same time we continued to invest in our parcel network to accommodate our substantial growth in shipping volumes.”

Lautenbach added: “In August we announced the sale of our Software business to Syncsort. The transaction is anticipated to close by the end of the year, and we expect to use the majority of the net proceeds to pay down debt. With the conclusion of the sale, Pitney Bowes will move forward as a more streamlined technology company focusing on shipping, mailing, and financial services, which are all markets where we have competitive advantage.

“In addition to the debt we will pay down with the net proceeds, we recently also repaid term loans, secured a new Term Loan A and replaced our revolving credit facility. These actions in aggregate strengthen our balance sheet,” said Lautenbach.

Third Quarter 2019 Results

Revenue totaled $790 million, which was an increase of 4 percent versus prior year. Revenue increased 6 percent when adjusted for both the impact of currency and the January 2019 sale of direct operations in 6 smaller European markets (market exits).

Commerce Services revenue grew 15 percent. Sending Technology Solutions (SendTech Solutions) revenue declined 6 percent as reported and 5 percent when adjusted for the impact of currency. SendTech Solutions revenue declined 3 percent when adjusted for both the impact of currency and market exits.

GAAP earnings per diluted share (GAAP EPS) was a loss of $0.02, which includes a non-cash $0.16 per share impairment charge related to capitalized software costs incurred in the development of a new enterprise business platform in certain international markets.

Adjusted earnings per diluted share (Adjusted EPS) were $0.24.

GAAP and adjusted EPS included a net benefit of $0.13 related to the release of a foreign deferred tax asset valuation allowance.

The Company’s earnings per share results for the third quarter are summarized in the table below:

 

Third Quarter*

 

2019

 

2018

 

GAAP EPS

($0.02

)

$0.43

 

Discontinued operations

$0.05

 

($0.17

)

GAAP EPS from continuing operations

$0.03

 

$0.25

 

Restructuring charges and asset impairments, net

$0.20

 

$0.02

 

Loss on extinguishment of debt

-

 

$0.03

 

Tax adjustments, net

-

 

($0.04

)

Adjusted EPS

$0.24

 

$0.27

 

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

GAAP Cash from Operations and Free Cash Flow Results

GAAP cash from operations during the quarter was $96 million and free cash flow was $69 million. Compared to prior year, the decline in free cash flow was driven by lower net income and higher capital expenditures, partly offset by higher reserve account deposits.

During the quarter, the Company reduced debt by $175 million, paid $9 million in dividends to its common shareholders and repurchased $5 million of its shares.

Debt and Credit Facility Management

In September 2019, the Company repaid the balance of its $200 million September 2020 term loan. In November 2019, the Company secured a new five-year Term Loan A for $400 million and replaced its revolving credit facility. The new revolving credit facility is a $500 million five-year secured facility. In November, the Company also repaid the $150 million term loan due in November 2019 and the balance of the $300 million term loan due in December 2020. The Company is using the majority of the net proceeds from the sale of its Software Solutions business to pay down near-term debt maturities.

Status of Sale of Software Solutions

On August 26, 2019, the Company announced that it entered into a definitive agreement to sell its Software Solutions business to Syncsort for $700 million in cash. As a result of the sale, the Software Solutions business has been recorded as a discontinued operation and prior period amounts have been recast to exclude Software Solution’s results from continuing operations. The transaction is expected to close before the end of the calendar year, pending regulatory approvals and other customary closing conditions.

Third Quarter 2019 Business Segment Reporting

Effective in the third quarter, the Company revised its segment reporting to combine the North America Mailing and International Mailing segments into the Sending Technology Solutions segment to reflect how it manages these operations and the products and services it provides to its clients.

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 and Bound and Packet 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 results for each segment within the group may not equal the subtotals for the group due to rounding.

Commerce Services

($ millions)

Third Quarter

Revenue

2019

2018

Y/Y

Reported

Y/Y

Ex Currency

Global Ecommerce

$279

$233

20%

20%

Presort Services

131

125

5%

5%

Commerce Services

$410

$358

15%

15%

 

 

 

 

 

EBITDA

 

 

 

 

Global Ecommerce

($4)

$1

>(100%)

 

Presort Services

25

24

4%

 

Commerce Services

$21

$25

(17%)

 

 

 

 

 

 

EBIT

 

 

 

 

Global Ecommerce

($22)

($14)

(52%)

 

Presort Services

18

17

1%

 

Commerce Services

($4)

$3

>(100%)

 

 

 

 

 

 

Global Ecommerce

Revenue increased from prior year across all platforms. The major volume driver was the domestic parcel platform. EBIT and EBITDA margins were impacted by investments in market growth opportunities, including engineering, facilities and marketing programs. Compared to prior year, the margin decline was also driven by a shift in the mix of business to faster growing, but lower-margin services along with additional fulfillment costs in order to meet client service level agreements.

Presort Services

Revenue growth was driven by volume growth across all mail classes. Gross margin increased versus prior quarter and prior year driven by lower labor cost per unit partially offset by lower revenue per piece. EBIT and EBITDA margins increased from prior quarter and were relatively flat compared to prior year.

SendTech Solutions

($ millions)

Third Quarter

 

2019

2018

Y/Y

Y/Y

 

Y/Y Ex Currency

 

 

 

Reported

Ex Currency

 

& Market Exits*

Revenue

$380

$402

(6%)

(5%)

 

(3%)

EBITDA

$141

$144

(2%)

 

 

 

EBIT

$131

$135

(3%)

 

 

 

* Excluding $9 million related to market exits and $3 million related to the impacts of currency

SendTech Solutions

Reported revenue was impacted by the previously announced market exits. Excluding the effect from currency and market exits, the revenue decline was driven by lower support services, financing and supplies revenue partially offset by higher equipment sales and business services. EBIT and EBITDA margins increased versus prior year driven by lower expenses partially offset by higher tariff costs.

2019 Guidance

On October 12, 2019, the Company experienced a ransomware attack. At this point, virtually all operations are up and running and no data has been compromised. The Company has insurance to cover these types of events and expects a significant portion of any profit impact, including the profit associated with any loss of revenue due to the ransomware attack, to ultimately be covered by insurance.

Given this ransomware attack is a unique event, the majority of the incremental costs and subsequent insurance recoveries will be excluded from the Company’s adjusted EPS.

As a result, the Company is reaffirming its adjusted EPS and free cash flow annual guidance. The Company expects the impact of the ransomware attack to full year revenue could be approximately one-half percent.

  • Revenue, on a constant currency basis is expected to be in the range of 1 percent to 2 percent growth when compared to 2018. This range does not contemplate any impact of the ransomware attack, which could be approximately one-half percent.
  • Adjusted EPS from continuing operations to be in the range of $0.65 to $0.75.
  • Free cash flow to be in the range of $175 million to $205 million.

This guidance excludes any unusual items that may occur or additional portfolio or restructuring actions, not specifically identified, as the Company implements plans to further streamline its operations and reduce costs. Revenue guidance is provided on a constant currency basis. Additionally, the Company cannot provide GAAP EPS and GAAP cash from operations guidance due to the uncertainty of future potential restructurings, goodwill and asset write-downs, unusual tax settlements or payments, special contributions to its pension funds, acquisitions, divestitures and other potential adjustments, which could, individually or in the aggregate, have a material impact on the Company’s performance.

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; location data; customer information and engagement software; services; and financing. For nearly 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.

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.

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 special items like restructuring charges, tax adjustments, goodwill and asset write-downs, and costs related to dispositions and acquisitions. While these are actual Company expenses, they can mask underlying trends associated with its business. Such items are often inconsistent in amount and frequency and as such, the adjustments allow an investor greater insight into the current 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 measures are intended to help investors better understand the underlying operational performance of the business excluding the impacts of shifts in currency exchange rates over the period. Constant currency is calculated by converting our current quarter reported results using the prior year’s exchange rate for the comparable quarter. In addition, the Company reported the comparison of revenue excluding the impact of currency and market exits to prior year, which excludes the impact of changes in foreign currency exchange rates since the prior period and also excludes the revenues associated with the recent market exits in several smaller markets. This comparison allows an investor insight into the underlying revenue performance of the business and true operational performance from a comparable basis to prior period. A reconciliation of reported revenue to constant currency revenue, as well as reported revenue to “revenue excluding the impact of currency and market exits” can be found in the Company’s 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 capital expenditures, restructuring payments, unusual tax settlements, special contributions to the Company’s pension fund and cash used for other special items. A reconciliation of GAAP cash from operations to free cash flow can be found in the Company’s 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 has also included segment EBITDA as a useful measure for profitability and operational performance, and an additional way to look at the economics of the segments, especially in light of some of the Company’s more recent, larger acquisitions. Segment EBITDA further excludes depreciation and amortization expense for the segment. 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 sitewww.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, but are not limited to: declining physical mail volumes; expenses and potential impact on client relationships resulting from the October 2019 malware attack that affected the Company's operations; a breach of security, including a future cyber-attack or other comparable event; the continued availability and security of key information technology systems and the cost to comply with information security requirements and privacy laws; changes in, or loss of, our contractual relationships with the U.S. Postal Service or posts in other major markets; changes in postal regulations; competitive factors, including pricing pressures, technological developments and the introduction of new products and services by competitors; the United Kingdom's potential exit from the European Union (Brexit); our success in developing and marketing new products and services, and obtaining regulatory approvals, if required; changes in banking regulations or the loss of our Industrial Bank charter; changes in labor conditions and transportation costs; macroeconomic factors, including global and regional business conditions that adversely impact customer demand, foreign currency exchange rates and interest rates; changes in global political conditions and international trade policies, including the imposition or expansion of trade tariffs and other factors as more fully outlined in the Company's 2018 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 and EBIT by business segment; and reconciliation of GAAP to non-GAAP measures for the three and nine months ended September 30, 2019 and 2018, and consolidated balance sheets as of September 30, 2019 and December 31, 2018 are attached.

   
Pitney Bowes Inc.
Consolidated Statements of Income
(Unaudited; in thousands, except share and per share amounts)
   

Three months ended September 30,

 

 

 

Nine months ended September 30,

2019

 

2018

 

 

 

2019

 

2018

Revenue:  
Equipment sales

$

89,618

 

$

88,799

 

  

$

264,956

 

$

289,318

 

Supplies

 

44,818

 

 

50,403

 

  

 

142,261

 

 

165,853

 

Rentals

 

19,737

 

 

21,432

 

  

 

60,339

 

 

65,852

 

Financing

 

90,577

 

 

96,799

 

  

 

280,039

 

 

294,277

 

Support services

 

126,274

 

 

138,055

 

  

 

382,578

 

 

417,303

 

Business services

 

419,101

 

 

364,793

 

  

 

1,243,609

 

 

1,121,505

 

Total revenue

 

790,125

 

 

760,281

 

  

 

2,373,782

 

 

2,354,108

 

   
Costs and expenses:  
Cost of equipment sales

 

59,859

 

 

52,209

 

  

 

182,094

 

 

173,626

 

Cost of supplies

 

12,225

 

 

13,967

 

  

 

37,533

 

 

46,652

 

Cost of rentals

 

5,090

 

 

9,174

 

  

 

23,223

 

 

30,386

 

Financing interest expense

 

11,026

 

 

10,849

 

  

 

33,433

 

 

33,107

 

Cost of support services

 

41,086

 

 

45,872

 

  

 

123,453

 

 

134,204

 

Cost of business services

 

338,519

 

 

287,237

 

  

 

1,003,483

 

 

872,183

 

Selling, general and administrative

 

254,092

 

 

241,350

 

  

 

757,228

 

 

759,469

 

Research and development

 

12,272

 

 

15,636

 

  

 

38,421

 

 

44,651

 

Restructuring charges and asset impairments, net

 

47,017

 

 

6,099

 

  

 

56,616

 

 

18,771

 

Interest expense, net

 

28,704

 

 

26,588

 

  

 

84,325

 

 

89,377

 

Other components of net pension and postretirement cost

 

(882

)

 

(1,852

)

  

 

(3,138

)

 

(6,070

)

Other expense

 

667

 

 

7,964

 

  

 

18,350

 

 

7,964

 

Total costs and expenses

 

809,675

 

 

715,093

 

  

 

2,355,021

 

 

2,204,320

 

   
(Loss) income from continuing operations before taxes

 

(19,550

)

 

45,188

 

  

 

18,761

 

 

149,788

 

(Benefit) provision for income taxes

 

(24,895

)

 

(2,468

)

  

 

(13,351

)

 

17,235

 

Income from continuing operations

 

5,345

 

 

47,656

 

  

 

32,112

 

 

132,553

 

(Loss) income from discontinued operations, net of tax

 

(8,470

)

 

32,621

 

  

 

(14,199

)

 

59,289

 

Net (loss) income

$

(3,125

)

$

80,277

 

  

$

17,913

 

$

191,842

 

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

$

0.03

 

$

0.25

 

  

$

0.18

 

$

0.71

 

Discontinued operations

 

(0.05

)

 

0.17

 

  

 

(0.08

)

 

0.32

 

Net income

$

(0.02

)

$

0.43

 

  

$

0.10

 

$

1.02

 

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

$

0.03

 

$

0.25

 

  

$

0.18

 

$

0.70

 

Discontinued operations

 

(0.05

)

 

0.17

 

  

 

(0.08

)

 

0.32

 

Net income

$

(0.02

)

$

0.43

 

  

$

0.10

 

$

1.02

 

   
Weighted-average shares used in diluted earnings per share

 

171,200,404

 

 

188,414,719

 

  

 

179,096,058

 

 

188,190,057

 

(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, except share amounts)
 
AssetsSeptember 30,
2019
December 31,
2018
Current assets:
Cash and cash equivalents

$

514,851

 

$

867,262

 

Short-term investments

 

137,032

 

 

59,391

 

Accounts and other receivables, net

 

365,522

 

 

371,797

 

Short-term finance receivables, net

 

617,178

 

 

653,236

 

Inventories

 

76,339

 

 

62,279

 

Current income taxes

 

25,598

 

 

5,947

 

Other current assets and prepayments

 

101,829

 

 

74,782

 

Assets of discontinued operations

 

568,413

 

 

602,823

 

Total current assets

 

2,406,762

 

 

2,697,517

 

 
Property, plant and equipment, net

 

371,666

 

 

398,501

 

Rental property and equipment, net

 

39,400

 

 

46,228

 

Long-term finance receivables, net

 

616,746

 

 

635,908

 

Goodwill

 

1,317,037

 

 

1,332,351

 

Intangible assets, net

 

199,715

 

 

213,200

 

Operating lease assets

 

172,617

 

 

152,554

 

Noncurrent income taxes

 

80,561

 

 

65,001

 

Other assets

 

392,720

 

 

397,159

 

Total assets

$

5,597,224

 

$

5,938,419

 

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

$

1,337,214

 

$

1,348,127

 

Current operating lease liabilities

 

34,091

 

 

35,208

 

Current portion of long-term debt

 

501,728

 

 

199,535

 

Advance billings

 

106,968

 

 

116,862

 

Current income taxes

 

8,525

 

 

15,284

 

Liabilities of discontinued operations

 

157,034

 

 

174,798

 

Total current liabilities

 

2,145,560

 

 

1,889,814

 

 
Long-term debt

 

2,567,363

 

 

3,066,073

 

Deferred taxes on income

 

253,151

 

 

253,560

 

Tax uncertainties and other income tax liabilities

 

45,179

 

 

39,548

 

Noncurrent operating lease liabilities

 

148,125

 

 

125,294

 

Other noncurrent liabilities

 

412,434

 

 

462,288

 

Total liabilities

 

5,571,812

 

 

5,836,577

 

 
Stockholders' equity:
Cumulative preferred stock, $50 par value, 4% convertible

 

-

 

 

1

 

Cumulative preference stock, no par value, $2.12 convertible

 

-

 

 

396

 

Common stock, $1 par value

 

323,338

 

 

323,338

 

Additional paid-in-capital

 

101,651

 

 

121,475

 

Retained earnings

 

5,270,741

 

 

5,279,682

 

Accumulated other comprehensive loss

 

(926,452

)

 

(948,961

)

Treasury stock, at cost

 

(4,743,866

)

 

(4,674,089

)

Total stockholders' equity

 

25,412

 

 

101,842

 

Total liabilities and stockholders' equity

$

5,597,224

 

$

5,938,419

 

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

2019

 

2018

 

% Change

2019

2018

% Change

REVENUE  
Global Ecommerce

$

278,995

 

$

232,845

 

20

%

$

827,568

$

718,535

15

%

Presort Services

 

131,483

 

 

125,334

 

5

%

 

394,468

 

382,522

3

%

Commerce Services

 

410,478

 

 

358,179

 

15

%

 

1,222,036

 

1,101,057

11

%

   
Sending Technology Solutions

 

379,647

 

 

402,102

 

(6

%)

 

1,151,746

 

1,253,051

(8

%)

   
Total revenue

$

790,125

 

$

760,281

 

4

%

$

2,373,782

$

2,354,108

1

%

   
Reconciliation of reported revenue to revenue excluding currency and Market Exits  
Total revenue

$

790,125

 

$

760,281

 

4

%

$

2,373,782

$

2,354,108

1

%

Currency impact on revenue

 

4,068

 

 

-

 

 

17,982

 

-

Revenue, at constant currency

 

794,193

 

 

760,281

 

4

%

 

2,391,764

 

2,354,108

2

%

Less revenue from Market Exits

 

1,470

 

 

10,873

 

 

9,549

 

39,350

Revenue, excluding currency and Market Exits

$

792,723

 

$

749,408

 

6

%

$

2,382,215

$

2,314,758

3

%

   
Pitney Bowes Inc.
Business Segment EBIT & EBITDA
(Unaudited; in thousands)
 
Three Months Ended September 30,

2019

2018

% change
EBIT (1)D&AEBITDAEBIT (1)D&AEBITDAEBITEBITDA
 
Global Ecommerce

$ (21,793)

$ 17,356

$ (4,437)

$ (14,330)

$ 15,150

$ 820

(52%)

>(100%)

Presort Services

17,687

7,667

25,354

17,435

6,867

24,302

1%

4%

Commerce Services

(4,106)

25,023

20,917

3,105

22,017

25,122

>(100%)

(17%)

 
Sending Technology Solutions

130,954

9,579

140,533

134,607

9,499

144,106

(3%)

(2%)

 
Segment Total

$ 126,848

$ 34,602

161,450

$ 137,712

$ 31,516

169,228

(8%)

(5%)

 
Reconciliation of Segment EBITDA to Net Income:
Segment depreciation and amortization (2)

(34,602)

(31,516)

Unallocated corporate expenses

(58,277)

(40,988)

Restructuring charges and asset impairments, net

(47,017)

(6,099)

Interest, net

(39,730)

(37,437)

Other expense

(667)

(7,964)

Transaction costs

(707)

(36)

Benefit for income taxes

24,895

2,468

Income from continuing operations

5,345

47,656

(Loss) income from discontinued operations, net of tax

(8,470)

32,621

Net (loss) income

$ (3,125)

$ 80,277

 
 
Nine Months Ended September 30,

2019

2018

% change
EBIT (1)D&AEBITDAEBIT (1)D&AEBITDAEBITEBITDA
 
Global Ecommerce

$ (51,969)

$ 50,697

$ (1,272)

$ (28,034)

$ 45,047

$ 17,013

(85%)

>(100%)

Presort Services

48,215

21,675

69,890

57,026

19,652

76,678

(15%)

(9%)

Commerce Services

(3,754)

72,372

68,618

28,992

64,699

93,691

>(100%)

(27%)

 
Sending Technology Solutions

378,095

30,347

408,442

412,427

30,979

443,406

(8%)

(8%)

 
Segment Total

$ 374,341

$ 102,719

477,060

$ 441,419

$ 95,678

537,097

(15%)

(11%)

 
Reconciliation of Segment EBITDA to Net Income:
Segment depreciation and amortization (2)

(102,719)

(95,678)

Unallocated corporate expenses

(160,283)

(141,321)

Restructuring charges and asset impairments, net

(56,616)

(18,771)

Interest, net

(117,758)

(122,484)

Other expense

(18,350)

(7,964)

Transaction costs

(2,573)

(1,091)

Benefit (provision) for income taxes

13,351

(17,235)

Income from continuing operations

32,112

132,553

(Loss) income from discontinued operations, net of tax

(14,199)

59,289

Net income

$ 17,913

$ 191,842

(1) Segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges, and other items that are not allocated to a particular business segment.
(2) Represents depreciation and amortization expense of reporting segments only and does not include corporate depreciation and amortization expense of $5,935 and $5,111 for the three months ended September 30, 2019 and 2018, respectively, and $15,795 and $16,477 for the nine months ended September 30, 2019 and 2018, respectively.
 
Pitney Bowes Inc.
Reconciliation of Reported Consolidated Results to Adjusted Results
(Unaudited; in thousands, except per share amounts)
    
Three months ended
September 30,
 Nine months ended
September 30,

 

2019

 

 

 

2018

 

 

 

2019

 

 

 

2018

 

    
Reconciliation of reported net income to adjusted earnings   
Net (loss) income

$

(3,125

)

 

$

80,277

 

 

$

17,913

 

 

$

191,842

 

Loss (income) from discontinued operations, net of tax

 

8,470

 

 

 

(32,621

)

 

 

14,199

 

 

 

(59,289

)

Restructuring charges and asset impairments, net

 

34,722

 

 

 

4,466

 

 

 

41,709

 

 

 

13,784

 

Loss on disposition of businesses

 

-

 

 

 

-

 

 

 

19,396

 

 

 

-

 

Loss on extinguishment of debt

 

497

 

 

 

5,933

 

 

 

497

 

 

 

5,933

 

Transaction costs

 

527

 

 

 

27

 

 

 

1,917

 

 

 

814

 

Tax adjustments, net

 

-

 

 

 

(7,986

)

 

 

-

 

 

 

(13,966

)

Adjusted net income

 

41,091

 

 

 

50,096

 

 

 

95,631

 

 

 

139,118

 

(Benefit) provision for income taxes, as adjusted

 

(12,250

)

 

 

9,191

 

 

 

669

 

 

 

38,496

 

Interest, net

 

39,730

 

 

 

37,437

 

 

 

117,758

 

 

 

122,484

 

Adjusted EBIT

 

68,571

 

 

 

96,724

 

 

 

214,058

 

 

 

300,098

 

Depreciation and amortization

 

40,537

 

 

 

36,627

 

 

 

118,514

 

 

 

112,155

 

Adjusted EBITDA

$

109,108

 

 

$

133,351

 

 

$

332,572

 

 

$

412,253

 

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

$

(0.02

)

 

$

0.43

 

 

$

0.10

 

 

$

1.02

 

Loss (income) from discontinued operations, net of tax

 

0.05

 

 

 

(0.17

)

 

 

0.08

 

 

 

(0.32

)

Restructuring charges and asset impairments, net

 

0.20

 

 

 

0.02

 

 

 

0.23

 

 

 

0.07

 

Loss on disposition of businesses

 

-

 

 

 

-

 

 

 

0.11

 

 

 

-

 

Loss on extinguishment of debt

 

-

 

 

 

0.03

 

 

 

-

 

 

 

0.03

 

Transaction costs

 

-

 

 

 

-

 

 

 

0.01

 

 

 

-

 

Tax adjustments, net

 

-

 

 

 

(0.04

)

 

 

-

 

 

 

(0.07

)

Adjusted diluted earnings per share

$

0.24

 

 

$

0.27

 

 

$

0.53

 

 

$

0.74

 

    
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

$

95,502

 

 

$

104,077

 

 

$

182,284

 

 

$

258,570

 

Net cash used in operating activities - discontinued operations

 

(10,324

)

 

 

(20,954

)

 

 

(15,858

)

 

 

(68,428

)

Capital expenditures

 

(36,034

)

 

 

(27,854

)

 

 

(95,221

)

 

 

(105,295

)

Restructuring payments

 

5,840

 

 

 

11,449

 

 

 

18,845

 

 

 

39,242

 

Reserve account deposits

 

11,441

 

 

 

905

 

 

 

3,125

 

 

 

6,864

 

Transaction costs paid

 

2,917

 

 

 

9,205

 

 

 

9,025

 

 

 

13,242

 

Free cash flow

$

69,342

 

 

$

76,828

 

 

$

102,200

 

 

$

144,195

 

 

CONTACT: Editorial -

Bill Hughes

Chief Communications Officer

203/351-6785

Financial -

Adam David

VP, Investor Relations

203/351-7175

KEYWORD: CONNECTICUT UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: PROFESSIONAL SERVICES ONLINE RETAIL RETAIL OTHER PROFESSIONAL SERVICES TECHNOLOGY OTHER TECHNOLOGY SOFTWARE

SOURCE: Pitney Bowes Inc.

Copyright Business Wire 2019.

PUB: 11/05/2019 07:00 AM/DISC: 11/05/2019 07:01 AM

Copyright Business Wire 2019.