STAMFORD, Conn.–(BUSINESS WIRE)–Pitney Bowes (NYSE: PBI), a global shipping and mailing company that provides technology, logistics, and financial services, today announced its financial results for the third quarter 2021.

“We continue to see solid demand for services and products across our portfolio,” said Marc B. Lautenbach, President and CEO, Pitney Bowes. “We have taken important steps to ensure that we are well-prepared for the upcoming peak season. Global Ecommerce remains on-track to generate positive EBITDA for full year 2021.”

Third Quarter 2021 Highlights:

  • Revenues of $875 million, down 2 percent from prior year; growth of 11 percent over third quarter 2019;
  • GAAP EPS of $0.05;
  • Adjusted EPS $0.08;
  • GAAP cash from operations of $71 million;
  • Free cash flow of $30 million;
  • Presort revenue growth of 9 percent over prior year and EBIT margin of 15 percent;
  • Global Ecommerce gross margin improved by 100 basis points over prior year;
  • SendTech reported growth in Equipment Sales of 5 percent over prior year;
  • Redeemed 2022 notes for $72 million.

Earnings per share results are summarized in the table below:

 

Third Quarter*

 

2021

2020

GAAP EPS

$0.05

$0.07

Discontinued operations, net of tax

GAAP EPS from continuing operations

$0.05

$0.06

Restructuring charges

0.02

0.02

Loss on debt refinancing

0.01

Adjusted EPS

$0.08

$0.08

* 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

Third Quarter

 

($ millions)

2021

2020

% Change

Reported

% Change

Ex Currency

Revenue

$398

$410

(3%)

(4%)

EBITDA

($3)

NM

 

EBIT

($21)

($20)

(6%)

 

 

Lower revenue was driven by a decrease in Domestic Parcel volumes against a tough prior year comparison, which was partly offset by an increase in revenue per parcel and a strong Cross Border performance. Gross margin improved over prior year despite higher labor and transportation costs, as well as an $8 million charge reflecting the estimated cost of a price assessment. EBITDA and EBIT were also impacted by the $8 million charge in the quarter.

 

Presort Services

Third Quarter

 

($ millions)

2021

2020

% Change

Reported

% Change

Ex Currency

Revenue

$139

$128

9%

9%

EBITDA

$27

$23

21%

 

EBIT

$21

$14

45%

 

 

Revenue growth was largely driven by higher revenue per piece along with an increase in volumes. Revenue per piece benefited in part from investments made in the network and technology to enable a higher level of five-digit sortation services. EBITDA and EBIT improved significantly from prior year despite higher labor and transportation costs.

 

SendTech Solutions

Third Quarter

 

($ millions)

2021

 

2020

% Change

Reported

% Change

Ex Currency

Revenue

$338

$354

(5%)

(5%)

EBITDA

$107

$121

(12%)

 

EBIT

$99

$113

(12%)

 

 

Revenue reflects growth in Equipment Sales and SaaS-based Shipping subscriptions offset by declines in Financing, Services and Supplies. EBITDA and EBIT were down from prior year driven by the decline in Financing revenues along with higher freight and shipping costs.

Full Year 2021 Expectations

The Company’s full year 2021 expectations remain in-line with its previous communications.

  • Revenue still expected to grow over prior year in the low-to-mid single digit range;
  • Adjusted EPS still expected to grow over prior year and be in the range of $0.35 to $0.42;
  • Management continues to expect Global Ecommerce EBITDA to be positive for full year 2021; and
  • Free cash flow is still expected to be lower as compared to prior year, primarily due to increased capital investments.

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 Pitney Bowes 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. 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 nine months ended September 30, 2021 and 2020, and consolidated balance sheets at September 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 September 30, Nine months ended September 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue:
Business services

$

551,384

 

$

550,954

 

$

1,688,860

 

$

1,524,323

 

Support services

 

113,413

 

 

117,519

 

 

347,266

 

 

353,320

 

Financing

 

71,936

 

 

86,218

 

 

223,201

 

 

260,758

 

Equipment sales

 

83,234

 

 

79,572

 

 

256,304

 

 

213,682

 

Supplies

 

38,211

 

 

39,635

 

 

119,090

 

 

118,117

 

Rentals

 

17,271

 

 

18,000

 

 

55,128

 

 

55,458

 

Total revenue

 

875,449

 

 

891,898

 

 

2,689,849

 

 

2,525,658

 

 
Costs and expenses:
Cost of business services

 

472,216

 

 

482,965

 

 

1,454,564

 

 

1,311,941

 

Cost of support services

 

38,250

 

 

37,647

 

 

112,646

 

 

114,132

 

Financing interest expense

 

11,710

 

 

11,626

 

 

35,369

 

 

36,054

 

Cost of equipment sales

 

62,221

 

 

59,766

 

 

185,622

 

 

165,045

 

Cost of supplies

 

10,705

 

 

10,132

 

 

32,383

 

 

30,751

 

Cost of rentals

 

6,480

 

 

6,055

 

 

18,940

 

 

18,455

 

Selling, general and administrative

 

225,024

 

 

238,618

 

 

699,316

 

 

720,882

 

Research and development

 

10,621

 

 

9,255

 

 

32,996

 

 

28,838

 

Restructuring charges

 

3,701

 

 

3,766

 

 

11,434

 

 

12,505

 

Goodwill impairment

 

 

 

 

 

 

 

198,169

 

Interest expense, net

 

24,312

 

 

27,175

 

 

73,816

 

 

79,504

 

Other components of net pension and postretirement expense (income)

 

46

 

 

(109

)

 

708

 

 

126

 

Other expense (income), net

 

3,193

 

 

(6,325

)

 

40,941

 

 

9,787

 

Total costs and expenses

 

868,479

 

 

880,571

 

 

2,698,735

 

 

2,726,189

 

 
Income (loss) from continuing operations before taxes

 

6,970

 

 

11,327

 

 

(8,886

)

 

(200,531

)

(Benefit) provision for income taxes

 

(1,525

)

 

554

 

 

(10,602

)

 

7,540

 

Income (loss) from continuing operations

 

8,495

 

 

10,773

 

 

1,716

 

 

(208,071

)

Income (loss) from discontinued operations, net of tax

 

572

 

 

616

 

 

(4,334

)

 

7,648

 

Net income (loss)

$

9,067

 

$

11,389

 

$

(2,618

)

$

(200,423

)

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

$

0.05

 

$

0.06

 

$

0.01

 

$

(1.21

)

Discontinued operations

 

 

 

 

 

(0.02

)

 

0.04

 

Net income (loss)

$

0.05

 

$

0.07

 

$

(0.02

)

$

(1.17

)

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

$

0.05

 

$

0.06

 

$

0.01

 

$

(1.21

)

Discontinued operations

 

 

 

 

 

(0.02

)

 

0.04

 

Net income (loss)

$

0.05

 

$

0.07

 

$

(0.02

)

$

(1.17

)

 
Weighted-average shares used in diluted earnings per share

 

179,409

 

 

174,704

 

 

178,949

 

 

171,388

 

 

(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 September 30,
2021
December 31,
2020
Current assets:
Cash and cash equivalents

$

729,149

 

$

921,450

 

Short-term investments

 

14,060

 

 

18,974

 

Accounts and other receivables, net

 

313,765

 

 

389,240

 

Short-term finance receivables, net

 

556,985

 

 

568,050

 

Inventories

 

69,496

 

 

65,845

 

Current income taxes

 

32,290

 

 

23,219

 

Other current assets and prepayments

 

127,513

 

 

120,145

 

Total current assets

 

1,843,258

 

 

2,106,923

 

Property, plant and equipment, net

 

467,396

 

 

391,280

 

Rental property and equipment, net

 

36,461

 

 

38,435

 

Long-term finance receivables, net

 

582,352

 

 

605,292

 

Goodwill

 

1,124,705

 

 

1,152,285

 

Intangible assets, net

 

137,118

 

 

159,839

 

Operating lease assets

 

212,028

 

 

201,916

 

Noncurrent income taxes

 

67,049

 

 

72,653

 

Other assets

 

484,247

 

 

491,514

 

Total assets

$

4,954,614

 

$

5,220,137

 

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

$

871,798

 

$

880,616

 

Customer deposits at Pitney Bowes Bank

 

642,712

 

 

617,200

 

Current operating lease liabilities

 

41,347

 

 

39,182

 

Current portion of long-term debt

 

24,733

 

 

216,032

 

Advance billings

 

104,094

 

 

114,550

 

Current income taxes

 

4,078

 

 

2,880

 

Total current liabilities

 

1,688,762

 

 

1,870,460

 

Long-term debt

 

2,314,151

 

 

2,348,361

 

Deferred taxes on income

 

283,395

 

 

279,451

 

Tax uncertainties and other income tax liabilities

 

35,380

 

 

38,163

 

Noncurrent operating lease liabilities

 

193,861

 

 

180,292

 

Other noncurrent liabilities

 

390,402

 

 

437,015

 

Total liabilities

 

4,905,951

 

 

5,153,742

 

 
Stockholders’ equity:
Common stock

 

323,338

 

 

323,338

 

Additional paid-in-capital

 

2,463

 

 

68,502

 

Retained earnings

 

5,172,527

 

 

5,201,195

 

Accumulated other comprehensive loss

 

(841,230

)

 

(839,131

)

Treasury stock, at cost

 

(4,608,435

)

 

(4,687,509

)

Total stockholders’ equity

 

48,663

 

 

66,395

 

Total liabilities and stockholders’ equity

$

4,954,614

 

$

5,220,137

 

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

Three months ended September 30,

Nine months ended September 30,

2021

 

 

2020

% Change

 

2021

 

 

2020

% Change

 
Global Ecommerce

$

398,011

 

$

409,981

(3

%)

$

1,229,526

 

$

1,100,757

12

%

 
Presort Services

 

139,296

 

 

127,705

9

%

 

417,041

 

 

386,552

8

%

 
Sending Technology Solutions

 

338,142

 

 

354,212

(5

%)

 

1,043,282

 

 

1,038,349

0

%

 
Total revenue – GAAP

 

875,449

 

 

891,898

(2

%)

 

2,689,849

 

 

2,525,658

7

%

 
Currency impact on revenue

 

(5,268

)

 

 

(27,593

)

 

 
Revenue, at constant currency

$

870,181

 

$

891,898

(2

%)

$

2,662,256

 

$

2,525,658

5

%

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

2021

 

2020

 

% change

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

$

(20,950

)

$

20,935

$

(15

)

$

(19,757

)

$

16,824

$

(2,933

)

(6

%)

>100%
 
Presort Services

 

21,062

 

 

6,235

 

27,297

 

 

14,481

 

 

8,031

 

22,512

 

45

%

21

%

 
Sending Technology Solutions

 

98,950

 

 

7,694

 

106,644

 

 

112,599

 

 

7,955

 

120,554

 

(12

%)

(12

%)

 
Segment total

$

99,062

 

$

34,864

 

133,926

 

$

107,323

 

$

32,810

 

140,133

 

(8

%)

(4

%)

 
Reconciliation of Segment EBITDA to Net Income:
Segment depreciation and amortization

 

(34,864

)

 

(32,810

)

Unallocated corporate expenses

 

(49,176

)

 

(53,429

)

Restructuring charges

 

(3,701

)

 

(3,766

)

Loss on debt refinancing

 

(3,193

)

 

 

Interest, net

 

(36,022

)

 

(38,801

)

Benefit (provision) for income taxes

 

1,525

 

 

(554

)

Income from continuing operations

 

8,495

 

 

10,773

 

Income from discontinued operations, net of tax

 

572

 

 

616

 

Net income

$

9,067

 

$

11,389

 

 
 
 
Nine months ended September 30,

2021

 

2020

 

% change

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

$

(58,157

)

$

58,171

$

14

 

$

(68,126

)

$

52,187

$

(15,939

)

15

%

>100%
 
Presort Services

 

56,247

 

 

20,532

 

76,779

 

 

42,758

 

 

23,662

 

66,420

 

32

%

16

%

 
Sending Technology Solutions

 

320,541

 

 

22,835

 

343,376

 

 

323,429

 

 

25,771

 

349,200

 

(1

%)

(2

%)

 
Segment Total

$

318,631

 

$

101,538

 

420,169

 

$

298,061

 

$

101,620

 

399,681

 

7

%

5

%

 
Reconciliation of Segment EBITDA to Net Loss:
Segment depreciation and amortization

 

(101,538

)

 

(101,620

)

Unallocated corporate expenses

 

(162,957

)

 

(146,640

)

Restructuring charges

 

(11,434

)

 

(12,505

)

Loss on debt refinancing

 

(55,576

)

 

(36,987

)

Gain on sale of business

 

10,201

 

 

 

Gain on sale of assets

 

1,434

 

 

11,908

 

Goodwill impairment

 

 

 

(198,169

)

Transaction costs

 

 

 

(641

)

Interest, net

 

(109,185

)

 

(115,558

)

Benefit (provision) for income taxes

 

10,602

 

 

(7,540

)

Income (loss) from continuing operations

 

1,716

 

 

(208,071

)

(Loss) income from discontinued operations, net of tax

 

(4,334

)

 

7,648

 

Net loss

$

(2,618

)

$

(200,423

)

(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
September 30,
Nine months ended
September 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

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

$

9,067

 

$

11,389

 

$

(2,618

)

$

(200,423

)

(Income) loss from discontinued operations, net of tax

 

(572

)

 

(616

)

 

4,334

 

 

(7,648

)

(Benefit) provision for income taxes

 

(1,525

)

 

554

 

 

(10,602

)

 

7,540

 

Income (loss) from continuing operations before taxes

 

6,970

 

 

11,327

 

 

(8,886

)

 

(200,531

)

Restructuring charges

 

3,701

 

 

3,766

 

 

11,434

 

 

12,505

 

Loss on debt refinancing

 

3,193

 

 

 

 

55,576

 

 

36,987

 

Goodwill impairment

 

 

 

 

 

 

 

198,169

 

Gain on sale of business

 

 

 

 

 

(10,201

)

 

 

Gain on sale of assets

 

 

 

 

 

(1,434

)

 

(11,908

)

Transaction costs

 

 

 

 

 

 

 

641

 

Adjusted net income before tax

 

13,864

 

 

15,093

 

 

46,489

 

 

35,863

 

Interest, net

 

36,022

 

 

38,801

 

 

109,185

 

 

115,558

 

Adjusted EBIT

 

49,886

 

 

53,894

 

 

155,674

 

 

151,421

 

Depreciation and amortization

 

41,809

 

 

38,616

 

 

121,225

 

 

120,403

 

Adjusted EBITDA

$

91,695

 

$

92,510

 

$

276,899

 

$

271,824

 

 
Reconciliation of reported diluted earnings (loss) per share to adjusted diluted earnings per share (1)
Diluted earnings (loss) per share

$

0.05

 

$

0.07

 

$

(0.02

)

$

(1.17

)

Loss (income) from discontinued operations, net of tax

 

 

 

 

 

0.02

 

 

(0.04

)

Restructuring charges

 

0.02

 

 

0.02

 

 

0.05

 

 

0.05

 

Loss on debt refinancing

 

0.01

 

 

 

 

0.23

 

 

0.16

 

Goodwill impairment

 

 

 

 

 

 

 

1.14

 

Gain on sale of business

 

 

 

 

 

(0.02

)

 

 

Gain on sale of assets

 

 

 

 

 

(0.01

)

 

(0.05

)

Tax on surrender of company owned life insurance policies

 

 

 

 

 

 

 

0.07

 

Adjusted diluted earnings per share

$

0.08

 

$

0.08

 

$

0.26

 

$

0.17

 

 
Reconciliation of reported net cash from operating activities to free cash flow
Net cash provided by operating activities

$

71,446

 

$

104,744

 

$

216,174

 

$

191,166

 

Net cash used in operating activities – discontinued operations

 

 

 

 

 

 

 

38,423

 

Capital expenditures

 

(57,204

)

 

(20,833

)

 

(140,907

)

 

(80,787

)

Restructuring payments

 

6,023

 

 

4,504

 

 

14,847

 

 

15,869

 

Change in customer deposits at PB Bank

 

9,879

 

 

(2,867

)

 

25,512

 

 

19,464

 

Transaction costs paid

 

 

 

377

 

 

 

 

2,117

 

Free cash flow

$

30,144

 

$

85,925

 

$

115,626

 

$

186,252

 

(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 –

Ned Zachar, CFA

VP, Investor Relations

203/614-1092

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