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, 2020 and 2019, and consolidated balance sheets at September 30, 2020 and December 31, 2019 are attached.
Pitney Bowes Inc. | |||||||||||||||||
Consolidated Statements of Income (Loss) | |||||||||||||||||
(Unaudited; in thousands, except per share amounts) | |||||||||||||||||
Three months ended September 30, |
Nine months ended September 30, |
||||||||||||||||
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||||
Revenue: | |||||||||||||||||
Business services | $ |
550,954 |
|
$ |
419,101 |
|
$ |
1,524,323 |
|
$ |
1,243,609 |
|
|||||
Support services |
|
117,519 |
|
|
126,274 |
|
|
353,320 |
|
|
382,578 |
|
|||||
Financing |
|
86,218 |
|
|
90,577 |
|
|
260,758 |
|
|
280,039 |
|
|||||
Equipment sales |
|
79,572 |
|
|
89,618 |
|
|
213,682 |
|
|
264,956 |
|
|||||
Supplies |
|
39,635 |
|
|
44,818 |
|
|
118,117 |
|
|
142,261 |
|
|||||
Rentals |
|
18,000 |
|
|
19,737 |
|
|
55,458 |
|
|
60,339 |
|
|||||
Total revenue |
|
891,898 |
|
|
790,125 |
|
|
2,525,658 |
|
|
2,373,782 |
|
|||||
Costs and expenses: | |||||||||||||||||
Cost of business services |
|
482,965 |
|
|
338,519 |
|
|
1,311,941 |
|
|
1,003,483 |
|
|||||
Cost of support services |
|
37,647 |
|
|
41,086 |
|
|
114,132 |
|
|
123,453 |
|
|||||
Financing interest expense |
|
11,626 |
|
|
11,026 |
|
|
36,054 |
|
|
33,433 |
|
|||||
Cost of equipment sales |
|
59,766 |
|
|
59,859 |
|
|
165,045 |
|
|
182,094 |
|
|||||
Cost of supplies |
|
10,132 |
|
|
12,225 |
|
|
30,751 |
|
|
37,533 |
|
|||||
Cost of rentals |
|
6,055 |
|
|
5,090 |
|
|
18,455 |
|
|
23,223 |
|
|||||
Selling, general and administrative |
|
238,618 |
|
|
254,092 |
|
|
720,882 |
|
|
757,228 |
|
|||||
Research and development |
|
9,255 |
|
|
12,272 |
|
|
28,838 |
|
|
38,421 |
|
|||||
Restructuring charges |
|
3,766 |
|
|
47,017 |
|
|
12,505 |
|
|
56,616 |
|
|||||
Goodwill impairment |
|
- |
|
|
- |
|
|
198,169 |
|
|
- |
|
|||||
Interest expense, net |
|
27,175 |
|
|
28,704 |
|
|
79,504 |
|
|
84,325 |
|
|||||
Other components of net pension and postretirement (income), expense |
|
(109 |
) |
|
(882 |
) |
|
126 |
|
|
(3,138 |
) |
|||||
Other (income) expense, net |
|
(6,325 |
) |
|
667 |
|
|
9,787 |
|
|
18,350 |
|
|||||
Total costs and expenses |
|
880,571 |
|
|
809,675 |
|
|
2,726,189 |
|
|
2,355,021 |
|
|||||
Income (loss) from continuing operations before taxes |
|
11,327 |
|
|
(19,550 |
) |
|
(200,531 |
) |
|
18,761 |
|
|||||
Provision (benefit) for income taxes |
|
554 |
|
|
(24,895 |
) |
|
7,540 |
|
|
(13,351 |
) |
|||||
Income (loss) from continuing operations |
|
10,773 |
|
|
5,345 |
|
|
(208,071 |
) |
|
32,112 |
|
|||||
Income (loss) from discontinued operations, net of tax |
|
616 |
|
|
(8,470 |
) |
|
7,648 |
|
|
(14,199 |
) |
|||||
Net income (loss) | $ |
11,389 |
|
$ |
(3,125 |
) |
$ |
(200,423 |
) |
$ |
17,913 |
|
|||||
Basic earnings (loss) per share (1): | |||||||||||||||||
Continuing operations | $ |
0.06 |
|
$ |
0.03 |
|
$ |
(1.21 |
) |
$ |
0.18 |
|
|||||
Discontinued operations |
|
- |
|
|
(0.05 |
) |
|
0.04 |
|
|
(0.08 |
) |
|||||
Net income (loss) | $ |
0.07 |
|
$ |
(0.02 |
) |
$ |
(1.17 |
) |
$ |
0.10 |
|
|||||
Diluted earnings (loss) per share (1): | |||||||||||||||||
Continuing operations | $ |
0.06 |
|
$ |
0.03 |
|
$ |
(1.21 |
) |
$ |
0.18 |
|
|||||
Discontinued operations |
|
- |
|
|
(0.05 |
) |
|
0.04 |
|
|
(0.08 |
) |
|||||
Net income (loss) | $ |
0.07 |
|
$ |
(0.02 |
) |
$ |
(1.17 |
) |
$ |
0.10 |
|
|||||
Weighted-average shares used in diluted earnings per share |
|
174,704 |
|
|
171,201 |
|
|
171,388 |
|
|
179,096 |
|
|||||
(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,
2020 |
December 31,
2019 |
|||||||
Current assets: | |||||||||
Cash and cash equivalents | $ |
799,177 |
|
$ |
924,442 |
|
|||
Short-term investments |
|
21,185 |
|
|
115,879 |
|
|||
Accounts and other receivables, net |
|
348,565 |
|
|
373,471 |
|
|||
Short-term finance receivables, net |
|
559,148 |
|
|
629,643 |
|
|||
Inventories |
|
66,974 |
|
|
68,251 |
|
|||
Current income taxes |
|
11,477 |
|
|
5,565 |
|
|||
Other current assets and prepayments |
|
115,981 |
|
|
101,601 |
|
|||
Assets of discontinued operations |
|
- |
|
|
17,229 |
|
|||
Total current assets |
|
1,922,507 |
|
|
2,236,081 |
|
|||
Property, plant and equipment, net |
|
367,466 |
|
|
376,177 |
|
|||
Rental property and equipment, net |
|
40,352 |
|
|
41,225 |
|
|||
Long-term finance receivables, net |
|
587,548 |
|
|
625,487 |
|
|||
Goodwill |
|
1,142,144 |
|
|
1,324,179 |
|
|||
Intangible assets, net |
|
167,493 |
|
|
190,640 |
|
|||
Operating lease assets |
|
213,490 |
|
|
200,752 |
|
|||
Noncurrent income taxes |
|
69,305 |
|
|
71,903 |
|
|||
Other assets |
|
533,726 |
|
|
400,456 |
|
|||
Total assets | $ |
5,044,031 |
|
$ |
5,466,900 |
|
|||
Liabilities and stockholders' equity | |||||||||
Current liabilities: | |||||||||
Accounts payable and accrued liabilities | $ |
760,363 |
|
$ |
793,690 |
|
|||
Customer deposits at Pitney Bowes Bank |
|
610,582 |
|
|
591,118 |
|
|||
Current operating lease liabilities |
|
38,007 |
|
|
36,060 |
|
|||
Current portion of long-term debt |
|
63,509 |
|
|
20,108 |
|
|||
Advance billings |
|
102,919 |
|
|
101,920 |
|
|||
Current income taxes |
|
2,527 |
|
|
17,083 |
|
|||
Liabilities of discontinued operations |
|
- |
|
|
9,713 |
|
|||
Total current liabilities |
|
1,577,907 |
|
|
1,569,692 |
|
|||
Long-term debt |
|
2,531,712 |
|
|
2,719,614 |
|
|||
Deferred taxes on income |
|
279,526 |
|
|
274,435 |
|
|||
Tax uncertainties and other income tax liabilities |
|
40,642 |
|
|
38,834 |
|
|||
Noncurrent operating lease liabilities |
|
192,789 |
|
|
177,711 |
|
|||
Other noncurrent liabilities |
|
342,330 |
|
|
400,518 |
|
|||
Total liabilities |
|
4,964,906 |
|
|
5,180,804 |
|
|||
Stockholders' equity: | |||||||||
Common stock |
|
323,338 |
|
|
323,338 |
|
|||
Additional paid-in-capital |
|
67,512 |
|
|
98,748 |
|
|||
Retained earnings |
|
5,190,914 |
|
|
5,438,930 |
|
|||
Accumulated other comprehensive loss |
|
(813,572 |
) |
|
(840,143 |
) |
|||
Treasury stock, at cost |
|
(4,689,067 |
) |
|
(4,734,777 |
) |
|||
Total stockholders' equity |
|
79,125 |
|
|
286,096 |
|
|||
Total liabilities and stockholders' equity | $ |
5,044,031 |
|
$ |
5,466,900 |
|
|||
Pitney Bowes Inc. | ||||||||||||||||||||
Business Segment Revenue | ||||||||||||||||||||
(Unaudited; in thousands) | ||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
|
2020 |
|
|
2019 |
% Change |
|
2020 |
|
2019 |
% Change |
||||||||||
REVENUE | ||||||||||||||||||||
Global Ecommerce | $ |
409,981 |
|
$ |
278,995 |
47 |
% |
$ |
1,100,757 |
$ |
827,568 |
33 |
% |
|||||||
Presort Services |
|
127,705 |
|
|
131,483 |
(3 |
%) |
|
386,552 |
|
394,468 |
(2 |
%) |
|||||||
Commerce Services |
|
537,686 |
|
|
410,478 |
31 |
% |
|
1,487,309 |
|
1,222,036 |
22 |
% |
|||||||
Sending Technology Solutions |
|
354,212 |
|
|
379,647 |
(7 |
%) |
|
1,038,349 |
|
1,151,746 |
(10 |
%) |
|||||||
Total revenue - GAAP |
|
891,898 |
|
|
790,125 |
13 |
% |
|
2,525,658 |
|
2,373,782 |
6 |
% |
|||||||
Currency impact on revenue |
|
(2,454 |
) |
|
- |
|
2,514 |
|
- |
|||||||||||
Revenue, at constant currency | $ |
889,444 |
|
$ |
790,125 |
13 |
% |
$ |
2,528,172 |
$ |
2,373,782 |
7 |
% |
|||||||
Pitney Bowes Inc. | |||||||||||||||||||||||
Business Segment EBIT & EBITDA | |||||||||||||||||||||||
(Unaudited; in thousands) | |||||||||||||||||||||||
Three months ended September 30, | |||||||||||||||||||||||
2020 |
|
2019 |
|
% change |
|||||||||||||||||||
EBIT (1) |
D&A |
EBITDA |
EBIT (1) |
D&A |
EBITDA |
EBIT |
EBITDA |
||||||||||||||||
Global Ecommerce | $ |
(19,757 |
) |
$ |
16,824 |
$ |
(2,933 |
) |
$ |
(21,793 |
) |
$ |
17,356 |
$ |
(4,437 |
) |
9 |
% |
34 |
% |
|||
Presort Services |
|
14,481 |
|
|
8,031 |
|
22,512 |
|
|
17,687 |
|
|
7,667 |
|
25,354 |
|
(18 |
%) |
(11 |
%) |
|||
Commerce Services |
|
(5,276 |
) |
|
24,855 |
|
19,579 |
|
|
(4,106 |
) |
|
25,023 |
|
20,917 |
|
(28 |
%) |
(6 |
%) |
|||
Sending Technology Solutions |
|
112,599 |
|
|
7,955 |
|
120,554 |
|
|
130,954 |
|
|
9,579 |
|
140,533 |
|
(14 |
%) |
(14 |
%) |
|||
Segment total | $ |
107,323 |
|
$ |
32,810 |
|
140,133 |
|
$ |
126,848 |
|
$ |
34,602 |
|
161,450 |
|
(15 |
%) |
(13 |
%) |
|||
Reconciliation of Segment EBITDA to Net (Loss) Income: | |||||||||||||||||||||||
Segment depreciation and amortization |
|
(32,810 |
) |
|
(34,602 |
) |
|||||||||||||||||
Interest, net |
|
(38,801 |
) |
|
(39,730 |
) |
|||||||||||||||||
Unallocated corporate expenses (2) |
|
(53,429 |
) |
|
(58,277 |
) |
|||||||||||||||||
Restructuring charges and asset impairments |
|
(3,766 |
) |
|
(47,017 |
) |
|||||||||||||||||
Loss on debt extinguishment |
|
- |
|
|
(667 |
) |
|||||||||||||||||
Transaction costs and other |
|
- |
|
|
(707 |
) |
|||||||||||||||||
(Provision) benefit for income taxes |
|
(554 |
) |
|
24,895 |
|
|||||||||||||||||
Income from continuing operations |
|
10,773 |
|
|
5,345 |
|
|||||||||||||||||
Income (loss) from discontinued operations, net of tax |
|
616 |
|
|
(8,470 |
) |
|||||||||||||||||
Net income (loss) | $ |
11,389 |
|
$ |
(3,125 |
) |
|||||||||||||||||
|
Nine months ended September 30, | ||||||||||||||||||||||
|
|
2020 |
|
|
2019 |
|
|
% change |
|||||||||||||||
EBIT (1) |
D&A |
EBITDA |
EBIT (1) |
D&A |
EBITDA |
EBIT |
EBITDA |
||||||||||||||||
Global Ecommerce | $ |
(68,126 |
) |
$ |
52,187 |
$ |
(15,939 |
) |
$ |
(51,969 |
) |
$ |
50,697 |
$ |
(1,272 |
) |
(31 |
%) |
>(100%) | ||||
Presort Services |
|
42,758 |
|
|
23,662 |
|
66,420 |
|
|
48,215 |
|
|
21,675 |
|
69,890 |
|
(11 |
%) |
(5 |
%) |
|||
Commerce Services |
|
(25,368 |
) |
|
75,849 |
|
50,481 |
|
|
(3,754 |
) |
|
72,372 |
|
68,618 |
|
>(100%) | (26 |
%) |
||||
Sending Technology Solutions |
|
323,429 |
|
|
25,771 |
|
349,200 |
|
|
378,095 |
|
|
30,347 |
|
408,442 |
|
(14 |
%) |
(15 |
%) |
|||
Segment Total | $ |
298,061 |
|
$ |
101,620 |
|
399,681 |
|
$ |
374,341 |
|
$ |
102,719 |
|
477,060 |
|
(20 |
%) |
(16 |
%) |
|||
Reconciliation of Segment EBITDA to Net Income: | |||||||||||||||||||||||
Segment depreciation and amortization |
|
(101,620 |
) |
|
(102,719 |
) |
|||||||||||||||||
Interest, net |
|
(115,558 |
) |
|
(117,758 |
) |
|||||||||||||||||
Unallocated corporate expenses (2) |
|
(146,640 |
) |
|
(160,283 |
) |
|||||||||||||||||
Restructuring charges and asset impairments |
|
(12,505 |
) |
|
(56,616 |
) |
|||||||||||||||||
Goodwill impairment |
|
(198,169 |
) |
|
- |
|
|||||||||||||||||
Gain on sale of equity investment |
|
11,908 |
|
|
- |
|
|||||||||||||||||
Loss on debt extinguishment |
|
(36,987 |
) |
|
(667 |
) |
|||||||||||||||||
Loss on dispositions and transaction costs |
|
(641 |
) |
|
(20,256 |
) |
|||||||||||||||||
(Provision) benefit for income taxes |
|
(7,540 |
) |
|
13,351 |
|
|||||||||||||||||
(Loss) income from continuing operations |
|
(208,071 |
) |
|
32,112 |
|
|||||||||||||||||
Income (loss) from discontinued operations, net of tax |
|
7,648 |
|
|
(14,199 |
) |
|||||||||||||||||
Net (loss) income | $ |
(200,423 |
) |
$ |
17,913 |
|
|||||||||||||||||
(1) Segment EBIT excludes interest, taxes, general corporate expenses, restructuring charges, and other items that are not allocated to a particular business segment. | ||||||||||
(2) Includes corporate depreciation and amortization expense of $5,806 and $5,935 for the three months ended September 30, 2020 and 2019, respectively and $18,783 and $15,795 for the nine months ended September 30, 2020 and 2019, 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, | ||||||||||||||||
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||||
Reconciliation of reported net income (loss) to adjusted net income, adjusted EBIT and adjusted EBITDA | |||||||||||||||||
Net income (loss) | $ |
11,389 |
|
$ |
(3,125 |
) |
$ |
(200,423 |
) |
$ |
17,913 |
|
|||||
(Income) loss from discontinued operations, net of tax |
|
(616 |
) |
|
8,470 |
|
|
(7,648 |
) |
|
14,199 |
|
|||||
Restructuring charges and asset impairments |
|
2,639 |
|
|
34,722 |
|
|
8,493 |
|
|
41,709 |
|
|||||
Goodwill impairment |
|
- |
|
|
- |
|
|
196,600 |
|
|
- |
|
|||||
Gain on sale of equity investment |
|
- |
|
|
- |
|
|
(8,943 |
) |
|
- |
|
|||||
Tax on surrender of company owned life insurance policies |
|
- |
|
|
- |
|
|
12,229 |
|
|
- |
|
|||||
Loss on debt extinguishment |
|
- |
|
|
497 |
|
|
27,777 |
|
|
497 |
|
|||||
Loss on dispositions and transaction costs |
|
- |
|
|
527 |
|
|
487 |
|
|
21,313 |
|
|||||
Adjusted net income |
|
13,412 |
|
|
41,091 |
|
|
28,572 |
|
|
95,631 |
|
|||||
Interest, net |
|
38,801 |
|
|
39,730 |
|
|
115,558 |
|
|
117,758 |
|
|||||
Provision (benefit) for income taxes, as adjusted |
|
1,681 |
|
|
(12,250 |
) |
|
7,291 |
|
|
669 |
|
|||||
Adjusted EBIT |
|
53,894 |
|
|
68,571 |
|
|
151,421 |
|
|
214,058 |
|
|||||
Depreciation and amortization |
|
38,616 |
|
|
40,537 |
|
|
120,403 |
|
|
118,514 |
|
|||||
Adjusted EBITDA | $ |
92,510 |
|
$ |
109,108 |
|
$ |
271,824 |
|
$ |
332,572 |
|
|||||
Reconciliation of reported diluted earnings (loss) per share to adjusted diluted earnings per share | |||||||||||||||||
Diluted earnings (loss) per share | $ |
0.07 |
|
$ |
(0.02 |
) |
$ |
(1.17 |
) |
$ |
0.10 |
|
|||||
(Income) loss from discontinued operations, net of tax |
|
- |
|
|
0.05 |
|
|
(0.04 |
) |
|
0.08 |
|
|||||
Restructuring charges and asset impairments |
|
0.02 |
|
|
0.20 |
|
|
0.05 |
|
|
0.23 |
|
|||||
Goodwill impairment |
|
- |
|
|
- |
|
|
1.14 |
|
|
- |
|
|||||
Gain on sale of equity investment |
|
- |
|
|
- |
|
|
(0.05 |
) |
|
- |
|
|||||
Tax on surrender of company owned life insurance policies |
|
- |
|
|
- |
|
|
0.07 |
|
|
- |
|
|||||
Loss on debt extinguishment |
|
- |
|
|
- |
|
|
0.16 |
|
|
- |
|
|||||
Loss on dispositions and transaction costs |
|
- |
|
|
- |
|
|
- |
|
|
0.12 |
|
|||||
Adjusted diluted earnings per share | $ |
0.08 |
|
$ |
0.24 |
|
$ |
0.17 |
|
$ |
0.53 |
|
|||||
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 | $ |
103,815 |
|
$ |
95,502 |
|
$ |
190,624 |
|
$ |
182,284 |
|
|||||
Net cash (provided by) used in operating activities - discontinued operations |
|
- |
|
|
(10,324 |
) |
|
38,423 |
|
|
(15,858 |
) |
|||||
Capital expenditures |
|
(20,833 |
) |
|
(36,034 |
) |
|
(80,787 |
) |
|
(95,221 |
) |
|||||
Restructuring payments |
|
4,504 |
|
|
5,840 |
|
|
15,869 |
|
|
18,845 |
|
|||||
Change in customer deposits at PB Bank |
|
(2,867 |
) |
|
11,441 |
|
|
19,464 |
|
|
3,125 |
|
|||||
Transaction costs paid |
|
- |
|
|
2,917 |
|
|
2,117 |
|
|
9,025 |
|
|||||
Free cash flow | $ |
84,619 |
|
$ |
69,342 |
|
$ |
185,710 |
|
$ |
102,200 |
|
|||||