Pitney Bowes Announces Second Quarter 2021 Financial Results

STAMFORD, Conn.--(BUSINESS WIRE)--August 3, 2021--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 2021.

“We delivered a solid second quarter and first half of the year,” said Marc B. Lautenbach, President and CEO, Pitney Bowes. “Once again, each business made a positive contribution to the quarter. Importantly, Global Ecommerce made significant progress and was EBITDA positive in the quarter putting this business on-track to our commitment of EBITDA positive for the full year. SendTech and Presort Services also grew revenue and profit over prior year. We are well-positioned to reach our goal of achieving improved profitable revenue growth.”

Second Quarter 2021

Revenue of $899 million, growth of 7 percent on a reported basis and 6 percent excluding the impact of currency
GAAP EPS and Adjusted EPS of $0.11
EPS reflects a $0.03 tax benefit associated with a UK tax legislation change
GAAP cash from operations of $79 million; free cash flow of $87 million
Global Ecommerce EBIT margin improved by over 200 basis points compared to prior year; EBITDA was positive.
Presort grew revenue and EBIT margin over prior year.
SendTech grew revenue; EBIT grew over prior year for the third consecutive quarter.

Earnings per share results are summarized in the table below:

	Second Quarter*
	2021	2020
GAAP EPS	$0.11	($0.02)
Discontinued operations, net of tax	0.01	0.02
GAAP EPS from continuing operations	$0.12	$0.00
Restructuring charges	0.02	0.02
Gain on sale of business	(0.02)	-
Gain on sale of assets	(0.01)	-
Gain on sale of equity investment	-	(0.05)
Tax on surrender of company owned life insurance policies	-	0.07
Adjusted EPS	$0.11	$0.04

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

Business Segment Reporting

Global Ecommerce facilitates domestic retail ecommerce shipping solutions, including delivery, returns and fulfillment, 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.

Sending Technology Solutions 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.

Global Ecommerce

	Second Quarter
($ millions)	2021	2020	% Change Reported	% Change Ex Currency
Revenue	$418	$398	5%	3%
EBITDA	$8	($2)	>100%
EBIT	($11)	($19)	43%

Revenue grew over prior year despite a tough comparison. EBIT and EBITDA benefited largely from Cross Border services and lower bad debt expense.

Presort Services

	Second Quarter
($ millions)	2021	2020	% Change Reported	% Change Ex Currency
Revenue	$135	$118	14%	14%
EBITDA	$23	$20	12%
EBIT	$16	$13	28%

Revenue grew across all mail classes and benefited from an easier prior year comparison. EBIT and EBITDA improved from prior year largely due to the revenue growth and higher gross margin.

SendTech Solutions

	Second Quarter
($ millions)	2021	2020	% Change Reported	% Change Ex Currency
Revenue	$346	$321	8%	6%
EBITDA	$115	$113	1%
EBIT	$107	$104	3%

Revenue benefited from growth in equipment sales, supplies, business services and support services, partly offset by a decline in financing. Revenue also benefited from an easier prior year comparison. EBIT and EBITDA improved from prior year largely due to the revenue growth.

Full Year 2021 Expectations

The Company’s full year 2021 expectations remain in-line with its previous communications. The Company continues to expect annual revenue to grow in the low-to-mid single digit range. The Company continues to expect adjusted EPS to grow over prior year driven largely by the improvement in Global Ecommerce, which is expected to be EBITDA positive for the full year. More specifically, adjusted EPS is expected to be in the range of $0.35 to $0.42. The Company also continues to expect lower free cash flow as compared to prior year primarily due to certain items that benefited 2020 and are not expected to continue at the same level in 2021.

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 technology company providing commerce solutions. 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: 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. 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. A reconciliation of reported revenue to constant currency revenue can be found in the attached financial schedules.

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. The Company reports free cash flow to provide investors insight into the amount of cash that management could have available for other discretionary uses. 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 and 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 other unusual or one-time items, 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.

Complete reconciliations of non-GAAP measures to comparable GAAP measures can also 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 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), including its effects on the cost and availability of labor and transportation and global supply chains. Other factors which could cause future financial performance to differ materially from 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 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, our contractual relationships with the United States Postal Service (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 and Presort Services segments; changes in labor and transportation availability and costs; third-party suppliers' ability to provide products and services required by us and our clients; competitive factors, including pricing pressures, technological developments and the introduction of new products and services by competitors; the loss of some of our larger clients in our Global Ecommerce and Presort Services segments; expenses and potential impacts resulting from a breach of security, including cyber-attacks or other comparable events; our success at managing customer credit risk; and other factors as more fully outlined in the Company's 2020 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, 2021 and 2020, and consolidated balance sheets at June 30, 2021 and December 31, 2020 are attached.

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

			Three months ended June 30,						Six months ended June 30,
			2021			2020			2021			2020
Revenue:
		Business services	$	567,022		$	528,990		$	1,137,476		$	973,369
		Support services		115,156			113,786			233,853			235,801
		Financing		73,453			85,462			151,265			174,540
		Equipment sales		86,267			57,837			173,070			134,110
		Supplies		38,655			32,773			80,879			78,482
		Rentals		18,650			18,644			37,857			37,458
		Total revenue		899,203			837,492			1,814,400			1,633,760

Costs and expenses:
		Cost of business services		482,814			454,311			982,348			828,976
		Cost of support services		37,679			36,725			74,396			76,485
		Financing interest expense		11,773			11,939			23,659			24,428
		Cost of equipment sales		61,561			47,920			123,401			105,279
		Cost of supplies		10,467			8,379			21,678			20,619
		Cost of rentals		6,013			6,022			12,460			12,400
		Selling, general and administrative		236,190			233,631			474,292			482,264
		Research and development		11,059			7,467			22,375			19,583
		Restructuring charges		4,844			4,922			7,733			8,739
		Goodwill impairment		-			-			-			198,169
		Interest expense, net		24,346			26,446			49,504			52,329
		Other components of net pension and postretirement cost		312			386			662			235
		Other (income) expense		(13,646	)		(17,375	)		37,748			16,112
		Total costs and expenses		873,412			820,773			1,830,256			1,845,618

Income (loss) from continuing operations before taxes				25,791			16,719			(15,856	)		(211,858	)
Provision (benefit) for income taxes				4,915			17,016			(9,077	)		6,986
Income (loss) from continuing operations				20,876			(297	)		(6,779	)		(218,844	)
(Loss) income from discontinued operations, net of tax				(1,020	)		(3,032	)		(4,906	)		7,032
Net income (loss)			$	19,856		$	(3,329	)	$	(11,685	)	$	(211,812	)

Basic earnings (loss) per share (1):
		Continuing operations	$	0.12		$	-		$	(0.04	)	$	(1.28	)
		Discontinued operations		(0.01	)		(0.02	)		(0.03	)		0.04
		Net income (loss)	$	0.11		$	(0.02	)	$	(0.07	)	$	(1.24	)

Diluted earnings (loss) per share (1):
		Continuing operations	$	0.12		$	-		$	(0.04	)	$	(1.28	)
		Discontinued operations		(0.01	)		(0.02	)		(0.03	)		0.04
		Net income (loss)	$	0.11		$	(0.02	)	$	(0.07	)	$	(1.24	)

Weighted-average shares used in diluted earnings per share				178,979			171,478			173,367			171,167

(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, 2021			December 31, 2020
Current assets:
	Cash and cash equivalents	$	799,470		$	921,450
	Short-term investments		14,904			18,974
	Accounts and other receivables, net		309,177			389,240
	Short-term finance receivables, net		552,858			568,050
	Inventories		67,538			65,845
	Current income taxes		37,384			23,219
	Other current assets and prepayments		117,425			120,145
Total current assets			1,898,756			2,106,923
Property, plant and equipment, net			429,785			391,280
Rental property and equipment, net			38,814			38,435
Long-term finance receivables, net			588,602			605,292
Goodwill			1,130,164			1,152,285
Intangible assets, net			144,692			159,839
Operating lease assets			205,584			201,916
Noncurrent income taxes			69,150			72,653
Other assets			507,748			491,514
Total assets		$	5,013,295		$	5,220,137

Liabilities and stockholders' equity
Current liabilities:
	Accounts payable and accrued liabilities	$	820,065		$	880,616
	Customer deposits at Pitney Bowes Bank		632,833			617,200
	Current operating lease liabilities		41,835			39,182
	Current portion of long-term debt		97,015			216,032
	Advance billings		119,645			114,550
	Current income taxes		5,844			2,880
Total current liabilities			1,717,237			1,870,460
Long-term debt			2,330,698			2,348,361
Deferred taxes on income			286,338			279,451
Tax uncertainties and other income tax liabilities			37,155			38,163
Noncurrent operating lease liabilities			182,746			180,292
Other noncurrent liabilities			405,751			437,015
Total liabilities			4,959,925			5,153,742

Stockholders' equity:
	Common stock		323,338			323,338
	Additional paid-in-capital		5,903			68,502
	Retained earnings		5,172,185			5,201,195
	Accumulated other comprehensive loss		(831,303	)		(839,131	)
	Treasury stock, at cost		(4,616,753	)		(4,687,509	)
Total stockholders' equity			53,370			66,395
Total liabilities and stockholders' equity		$	5,013,295		$	5,220,137

Pitney Bowes Inc.
Business Segment Revenue
(Unaudited; in thousands)

		Three months ended June 30,							Six months ended June 30,
		2021			2020		% Change		2021			2020		% Change

	Global Ecommerce	$	418,429		$	398,453	5	%	$	831,515		$	690,776	20	%

	Presort Services		134,619			118,127	14	%		277,745			258,847	7	%

	Sending Technology Solutions		346,155			320,912	8	%		705,140			684,137	3	%

	Total revenue - GAAP		899,203			837,492	7	%		1,814,400			1,633,760	11	%

	Currency impact on revenue		(13,521	)		-				(22,324	)		-

	Revenue, at constant currency	$	885,682		$	837,492	6	%	$	1,792,076		$	1,633,760	10	%

Pitney Bowes Inc.
Business Segment EBIT & EBITDA
(Unaudited; in thousands)

	Three months ended June 30,
	2021								2020								% change
	EBIT (1)			D&A		EBITDA			EBIT (1)			D&A		EBITDA			EBIT		EBITDA

Global Ecommerce	$	(10,831	)	$	19,060	$	8,229		$	(18,894	)	$	17,297	$	(1,597	)	43	%	>100%

Presort Services		16,134			6,798		22,932			12,582			7,857		20,439		28	%	12	%

Sending Technology Solutions		107,121			7,537		114,658			104,268			8,776		113,044		3	%	1	%

Segment total	$	112,424		$	33,395		145,819		$	97,956		$	33,930		131,886		15	%	11	%

Reconciliation of Segment EBITDA to Net Income (Loss):
Segment depreciation and amortization							(33,395	)							(33,930	)
Unallocated corporate expenses							(56,316	)							(49,489	)
Restructuring charges							(4,844	)							(4,922	)
Gain on sale of business							10,201								-
Gain on sale of assets							1,434								-
Loss on debt refinancing							(989	)							-
Gain on sale of equity investment							-								11,908
Transaction costs							-								(349	)
Interest, net							(36,119	)							(38,385	)
Provision for income taxes							(4,915	)							(17,016	)
Income (loss) from continuing operations							20,876								(297	)
Loss from discontinued operations, net of tax							(1,020	)							(3,032	)
Net income (loss)						$	19,856							$	(3,329	)



	Six months ended June 30,
	2021								2020								% change
	EBIT (1)			D&A		EBITDA			EBIT (1)			D&A		EBITDA			EBIT		EBITDA

Global Ecommerce	$	(37,207	)	$	37,236	$	29		$	(48,369	)	$	35,363	$	(13,006	)	23	%	>100%

Presort Services		35,185			14,297		49,482			28,277			15,631		43,908		24	%	13	%

Sending Technology Solutions		221,591			15,140		236,731			210,830			17,815		228,645		5	%	4	%

Segment Total	$	219,569		$	66,673		286,242		$	190,738		$	68,809		259,547		15	%	10	%

Reconciliation of Segment EBITDA to Net Loss:
Segment depreciation and amortization							(66,673	)							(68,809	)
Unallocated corporate expenses							(113,781	)							(93,211	)
Restructuring charges							(7,733	)							(8,739	)
Loss on debt refinancing							(52,383	)							(36,987	)
Gain on sale of business							10,201								-
Gain on sale of assets							1,434								-
Goodwill impairment							-								(198,169	)
Gain on sale of equity investment							-								11,908
Transaction costs							-								(641	)
Interest, net							(73,163	)							(76,757	)
Benefit (provision) for income taxes							9,077								(6,986	)
Loss from continuing operations							(6,779	)							(218,844	)
(Loss) income from discontinued operations, net of tax							(4,906	)							7,032
Net loss						$	(11,685	)						$	(211,812	)

(1) Segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges, and other items that are not allocated to a particular business segment.

Pitney Bowes Inc.
Reconciliation of Reported Consolidated Results to Adjusted Results
(Unaudited; in thousands, except per share amounts)

	Three months ended June 30,						Six months ended June 30,
	2021			2020			2021			2020

Reconciliation of reported net income (loss) to adjusted EBIT and EBITDA
Net income (loss)	$	19,856		$	(3,329	)	$	(11,685	)	$	(211,812	)
Loss (income) from discontinued operations, net of tax		1,020			3,032			4,906			(7,032	)
Provision (benefit) for income taxes		4,915			17,016			(9,077	)		6,986
Income (loss) from continuing operations before taxes		25,791			16,719			(15,856	)		(211,858	)
Restructuring charges		4,844			4,922			7,733			8,739
Gain on sale of business		(10,201	)		-			(10,201	)		-
Gain on sale of assets		(1,434	)		-			(1,434	)		-
Loss on debt refinancing		989			-			52,383			36,987
Goodwill impairment		-			-			-			198,169
Gain on sale of equity investment		-			(11,908	)		-			(11,908	)
Transaction costs		-			349			-			641
Adjusted net income before tax		19,989			10,082			32,625			20,770
Interest, net		36,119			38,385			73,163			76,757
Adjusted EBIT		56,108			48,467			105,788			97,527
Depreciation and amortization		39,822			41,068			79,416			81,787
Adjusted EBITDA	$	95,930		$	89,535		$	185,204		$	179,314

Reconciliation of reported diluted earnings (loss) per share to adjusted diluted earnings per share ⁽¹⁾
Diluted earnings (loss) per share	$	0.11		$	(0.02	)	$	(0.07	)	$	(1.24	)
Loss (income) from discontinued operations, net of tax		0.01			0.02			0.03			(0.04	)
Restructuring charges		0.02			0.02			0.03			0.03
Gain on sale of business		(0.02	)		-			(0.02	)		-
Gain on sale of assets		(0.01	)		-			(0.01	)		-
Loss on debt refinancing		-			-			0.22			0.16
Goodwill impairment		-			-			-			1.14
Gain on sale of equity investment		-			(0.05	)		-			(0.05	)
Tax on surrender of company owned life insurance policies		-			0.07			-			0.07
Adjusted diluted earnings per share	$	0.11		$	0.04		$	0.19		$	0.09

Reconciliation of reported net cash from operating activities to free cash flow
Net cash from operating activities	$	78,805		$	153,777		$	144,729		$	86,422
Net cash used in operating activities - discontinued operations		-			618			-			38,423
Capital expenditures		(40,375	)		(34,176	)		(83,703	)		(59,954	)
Restructuring payments		4,870			5,318			8,825			11,365
Change in customer deposits at PB Bank		43,427			23,219			15,633			22,331
Transaction costs paid		-			377			-			2,117
Free cash flow	$	86,727		$	149,133		$	85,484		$	100,704

⁽¹⁾ The sum of the earnings per share amounts may not equal the totals due to rounding.

Contacts

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

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

Document and Entity Information	Aug. 03, 2021
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 03, 2021
Entity Registrant Name	Pitney Bowes Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-03579
Entity Tax Identification Number	06-0495050
Entity Address, Address Line One	3001 Summer Street
Entity Address, City or Town	Stamford
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06926
City Area Code	203
Local Phone Number	356-5000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0000078814
Title of 12(b) Security	Common Stock, $1 par value per share
Trading Symbol	PBI
Security Exchange Name	NYSE

Document and Entity Information

Aug. 03, 2021

Cover [Abstract]

Document Type

8-K

Amendment Flag

false

Document Period End Date

Aug. 03, 2021

Entity Registrant Name

Pitney Bowes Inc.

Entity Incorporation, State or Country Code

Entity File Number

001-03579

Entity Tax Identification Number

06-0495050

Entity Address, Address Line One

3001 Summer Street

Entity Address, City or Town

Stamford

Entity Address, State or Province

Entity Address, Postal Zip Code

06926

City Area Code

203

Local Phone Number

356-5000

Written Communications

false

Soliciting Material

false

Pre-commencement Tender Offer

false

Pre-commencement Issuer Tender Offer

false

Entity Emerging Growth Company

false

Entity Central Index Key

0000078814

Title of 12(b) Security

Common Stock, $1 par value per share

Trading Symbol

PBI

Security Exchange Name

NYSE

Delaware	001-03579	06-0495050
(State or other jurisdiction of incorporation or organization)	(Commission file number)	(I.R.S. Employer Identification No.)

Title of each class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock, $1 par value per share		PBI		New York Stock Exchange

	Pitney Bowes Inc.

August 3, 2021

	/s/ Joseph R. Catapano
	Joseph R. Catapano
	Vice President, Chief Accounting Officer
	(Principal Accounting Officer)

(c)	Exhibits

	99.1 Press release of Pitney Bowes Inc. dated August 3, 2021.