Pitney Bowes Announces First Quarter 2021 Financial Results

STAMFORD, Conn.--(BUSINESS WIRE)--April 30, 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 first quarter 2021.

“We delivered a solid start to the year, with every business making a meaningful contribution to our first quarter results,” said Marc B. Lautenbach, President and CEO, Pitney Bowes. “Revenue continued to demonstrate strong growth, every business improved its EBIT performance from prior year, and we strengthened our balance sheet. As we enter the final chapter of our transformation, we are well-positioned to reach our ultimate goal of achieving improved profitable revenue growth.”

First Quarter 2021

Revenue of $915 million, growth of 15 percent on a reported basis and 14 percent excluding the impact of currency
GAAP EPS of ($0.18), which includes a loss related to debt refinancing
Adjusted EPS of $0.07
EPS reflects a $0.02 tax benefit associated with an affiliate reorganization.
GAAP cash from operations of $66 million; free cash flow net use of $1 million.
The Company reduced debt by $126 million from year-end 2020 and took several actions to refine its capital structure which reduced near-term refinancing risk, improved pricing of its Term Loan B and extended the duration of maturities across its capital structure.
Global Ecommerce grew revenue 41 percent on a reported basis and 40 percent excluding the impact of currency; EBIT margins and EBITDA margins improved over prior year.
Presort Services grew revenue, EBIT margins and EBITDA margins over prior year.
SendTech EBIT margins and EBITDA margins improved over prior year, which is the second consecutive quarter of EBIT and EBITDA year-over-year dollar growth.

Earnings per share results are summarized in the table below:

	First Quarter*
	2021	2020
GAAP EPS	($0.18)	($1.22)
Discontinued operations	(0.02)	(0.06)
GAAP EPS from continuing operations	($0.16)	($1.28)
Restructuring charges	0.01	0.02
Goodwill impairment charge	-	1.15
Loss on debt refinancing	0.22	0.16
Adjusted EPS	$0.07	$0.05

* 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

	First Quarter
($ millions)	2021	2020	% Change Reported	% Change Ex Currency
Revenue	$413	$292	41%	40%
EBITDA	($8)	($11)	28%
EBIT	($26)	($29)	11%

Revenue benefited primarily from growth in volumes across all services. EBIT and EBITDA benefited from improved Cross Border and Digital Delivery Service margins, partly offset by higher costs in Domestic Parcel Services. EBIT and EBITDA improved through the quarter with March being EBITDA positive.

Presort Services

	First Quarter
($ millions)	2021	2020	% Change Reported	% Change Ex Currency
Revenue	$143	$141	2%	2%
EBITDA	$27	$23	13%
EBIT	$19	$16	21%

Revenue benefited primarily from growth in Marketing Mail. EBIT and EBITDA margins improved over prior year and were the highest margins in five quarters.

SendTech Solutions

	First Quarter
($ millions)	2021	2020	% Change Reported	% Change Ex Currency
Revenue	$359	$363	(1%)	(3%)
EBITDA	$122	$116	6%
EBIT	$114	$107	7%

Revenue benefited from growth in equipment sales, business services and rentals, partly offset by declines in financing, supplies and support services. EBIT margin improved from prior year and was the highest margin in three quarters.

Full Year 2021 Expectations

The Company’s full year 2021 expectations are consistent with what was communicated last quarter. The Company expects annual revenue to grow in the low-to-mid single digit range, making 2021 the fifth consecutive year of constant currency growth. The Company expects adjusted EPS to grow over prior year driven largely by improvement in Global Ecommerce, which is expected to be EBITDA positive for the full year. The Company also expects lower free cash flow primarily due to specific 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. EST. Instructions for listening to the earnings results via the Web are available on the Investor Relations page of the Company’s web site at www.pitneybowes.com.

About Pitney Bowes

Pitney Bowes (NYSE:PBI) is a global technology company providing commerce solutions that power billions of transactions. Clients around the world, including 90 percent of the Fortune 500, rely on the accuracy and precision delivered by Pitney Bowes solutions, analytics, and APIs in the areas of ecommerce fulfillment, shipping and returns; cross-border ecommerce; office mailing and shipping; presort services; and financing. For 100 years, Pitney Bowes has been innovating and delivering technologies that remove the complexity of getting commerce transactions precisely right. For additional information, visit www.pitneybowes.com.

Use of Non-GAAP Measures

The Company's financial results are reported in accordance with generally accepted accounting principles (GAAP); however, in its disclosures the Company uses certain non-GAAP measures, such as adjusted earnings before interest and taxes (EBIT), adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted earnings per share (EPS), revenue growth on a constant currency basis and free cash flow.

The Company reports measures such as adjusted EBIT, adjusted EBITDA and adjusted EPS to exclude the impact of items like discontinued operations, restructuring charges, gains, losses and costs related to acquisitions and dispositions, asset impairment charges, goodwill impairment charges and other unusual or one-time items. While these are actual Company income or expenses, they can mask underlying trends associated with its business. Such items are often inconsistent in amount and frequency and as such, the non-GAAP measures provide investors greater insight into the underlying operating trends of the business.

In addition, revenue growth is presented on a constant currency basis to exclude the impact of changes in foreign currency exchange rates since the prior period under comparison. Constant currency is calculated by converting the current period non-U.S. dollar denominated revenue using the prior year’s exchange rate for the comparable quarter. We believe that excluding the impacts of currency exchange rates provides investors a better understanding of the underlying revenue performance. A reconciliation of reported revenue to constant currency revenue can be found in the attached financial schedules.

The Company reports free cash flow in order to provide investors insight into the amount of cash that management could have available for other discretionary uses. Free cash flow adjusts GAAP cash from operations for cash flows of discontinued operations, capital expenditures, restructuring payments, changes in customer deposits held at the Pitney Bowes Bank, transaction costs and other special items. A reconciliation of GAAP cash from operations to free cash flow can be found in the attached financial schedules.

Segment EBIT is the primary measure of profitability and operational performance at the segment level. Segment EBIT is determined by deducting from segment revenue the related costs and expenses attributable to the segment. Segment EBIT excludes interest, taxes, general corporate expenses not allocated to a particular business segment, restructuring charges and goodwill and asset impairments, which are recognized on a consolidated basis. The Company also provides segment EBITDA, which further excludes depreciation and amortization expense for the segment, as an additional useful measure of segment profitability and operational performance. A reconciliation of segment EBIT and EBITDA to net income can be found in the attached financial schedules.

Pitney Bowes has provided a quantitative reconciliation to GAAP in supplemental schedules. This information can be found at the Company's web site www.pb.com/investorrelations.

This document contains “forward-looking statements” about the Company’s expected or potential future business and financial performance. Forward-looking statements include, but are not limited to, statements about its future revenue and earnings guidance and other statements about future events or conditions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks and uncertainties include the severity, magnitude and duration of the Covid-19 pandemic (Covid-19), including governments' responses to Covid-19, the efficacy and availability of vaccines, its continuing impact on our operations, employees, the availability and cost of labor and transportation, global supply chain and demand across our and our clients' businesses as well as any deterioration or instability in global macroeconomic conditions. Other factors, which could cause future financial performance to differ materially from 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 operations, or the financial health of posts, in the U.S. or other major markets or significant changes to the broader postal or shipping industry; the loss of, or significant changes in, 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 ended March 31, 2021 and 2020, and consolidated balance sheets at March 31, 2021 and December 31, 2020 are attached.


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

			Three months ended March 31,
				2021			2020
Revenue:
		Business services	$	570,454		$	444,379
		Support services		118,697			122,015
		Financing		77,812			89,078
		Equipment sales		86,803			76,273
		Supplies		42,224			45,709
		Rentals		19,207			18,814
		Total revenue		915,197			796,268

Costs and expenses:
		Cost of business services		499,534			374,665
		Cost of support services		36,717			39,760
		Financing interest expense		11,886			12,489
		Cost of equipment sales		61,840			57,359
		Cost of supplies		11,211			12,240
		Cost of rentals		6,447			6,378
		Selling, general and administrative		238,102			248,633
		Research and development		11,316			12,116
		Restructuring charges		2,889			3,817
		Goodwill impairment		-			198,169
		Interest expense, net		25,158			25,883
		Other components of net pension and postretirement expense (income)		350			(151	)
		Other expense, net		51,394			33,487
		Total costs and expenses		956,844			1,024,845

Loss from continuing operations before taxes				(41,647	)		(228,577	)
Benefit for income taxes				(13,992	)		(10,030	)
Loss from continuing operations				(27,655	)		(218,547	)
(Loss) income from discontinued operations, net of tax				(3,886	)		10,064
Net loss			$	(31,541	)	$	(208,483	)

Basic loss per share (1):
		Continuing operations	$	(0.16	)	$	(1.28	)
		Discontinued operations		(0.02	)		0.06
		Net loss	$	(0.18	)	$	(1.22	)

Diluted loss per share (1):
		Continuing operations	$	(0.16	)	$	(1.28	)
		Discontinued operations		(0.02	)		0.06
		Net loss	$	(0.18	)	$	(1.22	)

Weighted-average shares used in diluted earnings per share				172,856			170,912

(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		March 31, 2021			December 31, 2020
Current assets:
	Cash and cash equivalents	$	680,727		$	921,450
	Short-term investments		16,200			18,974
	Accounts and other receivables, net		327,755			389,240
	Short-term finance receivables, net		551,061			568,050
	Inventories		63,680			65,845
	Current income taxes		44,288			23,219
	Other current assets and prepayments		124,394			120,145
Total current assets			1,808,105			2,106,923
Property, plant and equipment, net			405,226			391,280
Rental property and equipment, net			37,708			38,435
Long-term finance receivables, net			597,012			605,292
Goodwill			1,144,064			1,152,285
Intangible assets, net			152,265			159,839
Operating lease assets			196,843			201,916
Noncurrent income taxes			68,732			72,653
Other assets			531,226			491,514
Total assets		$	4,941,181		$	5,220,137

Liabilities and stockholders' equity
Current liabilities:
	Accounts payable and accrued liabilities	$	820,286		$	880,616
	Customer deposits at Pitney Bowes Bank		589,406			617,200
	Current operating lease liabilities		39,587			39,182
	Current portion of long-term debt		19,972			216,032
	Advance billings		118,166			114,550
	Current income taxes		6,839			2,880
Total current liabilities			1,594,256			1,870,460
Long-term debt			2,418,885			2,348,361
Deferred taxes on income			282,192			279,451
Tax uncertainties and other income tax liabilities			37,936			38,163
Noncurrent operating lease liabilities			174,798			180,292
Other noncurrent liabilities			413,951			437,015
Total liabilities			4,922,018			5,153,742

Stockholders' equity:
	Common stock		323,338			323,338
	Additional paid-in-capital		15,269			68,502
	Retained earnings		5,161,029			5,201,195
	Accumulated other comprehensive loss		(847,538	)		(839,131	)
	Treasury stock, at cost		(4,632,935	)		(4,687,509	)
Total stockholders' equity			19,163			66,395
Total liabilities and stockholders' equity		$	4,941,181		$	5,220,137


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

		Three months ended March 31,
			2021		2020	% Change

	Global Ecommerce	$	413,086	$	292,323	41%

	Presort Services		143,126		140,720	2%

	Sending Technology Solutions		358,985		363,225	(1%)

	Total revenue - GAAP		915,197		796,268	15%

	Currency impact on revenue		(8,803)		-

	Revenue, at constant currency	$	906,394	$	796,268	14%


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

	Three months ended March 31,
	2021						2020						% change
	EBIT (1)		D&A		EBITDA		EBIT (1)		D&A		EBITDA		EBIT	EBITDA

Global Ecommerce	$	(26,376)	$	18,176	$	(8,200)	$	(29,475)	$	18,065	$	(11,410)	11%	28%

Presort Services		19,051		7,499		26,550		15,695		7,774		23,469	21%	13%

Sending Technology Solutions		114,470		7,604		122,074		106,562		9,039		115,601	7%	6%

Segment total	$	107,145	$	33,279		140,424	$	92,782	$	34,878		127,660	15%	10%

Reconciliation of Segment EBITDA to Net Income:
Segment depreciation and amortization						(33,279)						(34,878)
Unallocated corporate expenses						(57,465)						(43,722)
Restructuring charges						(2,889)						(3,817)
Interest, net						(37,044)						(38,372)
Goodwill impairment						-						(198,169)
Loss on debt refinancing						(51,394)						(36,987)
Transaction costs						-						(292)
Benefit for income taxes						13,992						10,030
Loss from continuing operations						(27,655)						(218,547)
(Loss) income from discontinued operations, net of tax						(3,886)						10,064
Net loss					$	(31,541)					$	(208,483)

(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 March 31,
		2021		2020

Reconciliation of reported net loss to adjusted EBIT and EBITDA
Net loss	$	(31,541)	$	(208,483)
Loss (income) from discontinued operations, net of tax		3,886		(10,064)
Benefit for income taxes		(13,992)		(10,030)
Loss from continuing operations before taxes		(41,647)		(228,577)
Restructuring charges		2,889		3,817
Goodwill impairment		-		198,169
Loss on debt refinancing		51,394		36,987
Transaction costs		-		292
Adjusted net income before tax		12,636		10,688
Interest, net		37,044		38,372
Adjusted EBIT		49,680		49,060
Depreciation and amortization		39,594		40,719
Adjusted EBITDA	$	89,274	$	89,779

Reconciliation of reported diluted loss per share to adjusted diluted earnings per share
Diluted loss per share	$	(0.18)	$	(1.22)
Loss (income) from discontinued operations, net of tax		0.02		(0.06)
Restructuring charges		0.01		0.02
Goodwill impairment		-		1.15
Loss on debt refinancing		0.22		0.16
Adjusted diluted earnings per share ⁽¹⁾	$	0.07	$	0.05

Reconciliation of reported net cash from operating activities to free cash flow
Net cash provided by (used in) operating activities	$	65,924	$	(67,355)
Net cash used in operating activities - discontinued operations		-		37,805
Capital expenditures		(43,328)		(25,778)
Restructuring payments		3,955		6,047
Change in customer deposits at PB Bank		(27,794)		(888)
Transaction costs paid		-		1,740
Free cash flow	$	(1,243)	$	(48,429)

⁽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	Apr. 30, 2021
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Apr. 30, 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
Entity Information, Former Legal or Registered Name	Not Applicable
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

Apr. 30, 2021

Cover [Abstract]

Document Type

8-K

Amendment Flag

false

Document Period End Date

Apr. 30, 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

Entity Information, Former Legal or Registered Name

Not Applicable

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.

April 30, 2021


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