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Pitney Bowes Announces Second Quarter 2019 Financial Results
Quarterly Results:
-
Revenue of
$861 million , a decrease of 1 percent; flat when adjusted for the impact of currency; an increase of 2 percent when adjusted for both the impact of currency and market exits -
GAAP EPS of
$0.13 ; Adjusted EPS of$0.21 -
GAAP cash from operations of
$17 million ; free cash flow of$13 million -
Returned a total of
$70 million to shareholders through the repurchase of 11.8 million shares of stock for$61 million and$9 million in dividends - The Company is reaffirming its 2019 annual guidance
“I am pleased with our overall performance in the second quarter,” said
Second Quarter 2019 Results
Revenue totaled
Commerce Services revenue grew 13 percent as reported and 14 percent when adjusted for the impact of currency. Small and Medium Business (SMB) Solutions revenue declined 8 percent as reported and 7 percent when adjusted for the impact of currency. SMB revenue declined 4 percent when adjusted for both the impact of currency and market exits. Software Solutions revenue declined 21 percent as reported and 20 percent adjusted for currency.
GAAP earnings per diluted share (GAAP EPS) were
The Company’s earnings per share results for the second quarter are summarized in the table below:
|
Second Quarter* |
|
|
2019 |
2018 |
GAAP EPS |
$0.13 |
$0.27 |
Discontinued operations |
$0.04 |
($0.01) |
GAAP EPS from continuing operations |
$0.17 |
$0.27 |
Restructuring charges and asset impairments, net |
$0.03 |
$0.04 |
Transaction costs |
$0.01 |
- |
Tax adjustments, net |
- |
($0.03) |
Adjusted EPS |
$0.21 |
$0.28 |
* The sum of the earnings per share may not equal the totals above due to rounding.
GAAP Cash from Operations and Free Cash Flow Results
GAAP cash from operations during the quarter was
During the quarter, the Company repurchased
Second Quarter 2019 Business Segment Reporting
The business reporting groups reflect how the Company manages these groups and the clients served in each market.
The Commerce Services group includes the Global Ecommerce and Presort Services segments. Global Ecommerce facilitates global cross-border ecommerce transactions and domestic retail and ecommerce shipping solutions, including fulfillment and returns. Presort Services provides sortation services to qualify large volumes of First Class Mail, Marketing Mail and Bound and Packet Mail (Marketing Mail Flats and Bound Printed Matter) for postal workshare discounts.
The SMB Solutions group offers mailing and shipping solutions, financing, services, supplies and other applications for small and medium businesses to help simplify and save on the sending, tracking and receiving of letters, parcels and flats. This group includes the North America Mailing and International Mailing segments.
Software Solutions provide customer engagement, customer information, location intelligence software and data.
The results for each segment within the group may not equal the subtotals for the group due to rounding.
Commerce Services
($ millions) |
Second Quarter |
||||||||||||||
Revenue |
2019 |
2018 |
Y/Y Reported |
Y/Y Ex Currency |
|||||||||||
Global Ecommerce |
$282 |
$239 |
18% |
19% |
|||||||||||
Presort Services |
128 |
123 |
4% |
4% |
|||||||||||
Commerce Services |
$410 |
$362 |
13% |
14% |
|||||||||||
|
|
|
|
|
|||||||||||
EBITDA |
|
|
|
|
|||||||||||
Global Ecommerce |
$1 |
$9 |
(86%) |
|
|||||||||||
Presort Services |
23 |
19 |
18% |
|
|||||||||||
Commerce Services |
$24 |
$29 |
(17%) |
|
|||||||||||
|
|
|
|
|
|||||||||||
EBIT |
|
|
|
|
|||||||||||
Global Ecommerce |
($16) |
($6) |
>(100%) |
|
|||||||||||
Presort Services |
15 |
13 |
23% |
|
|||||||||||
Commerce Services |
($0) |
$7 |
>(100%) |
|
|||||||||||
|
|
|
|
|
Global Ecommerce
Revenue increased from prior year driven by growth in domestic parcel and shipping solutions volumes. EBIT and EBITDA margin percentages declined from prior year driven by a shift in the mix of business to faster growing, but lower-margin services. Margins were also impacted by investments in market growth opportunities, including marketing programs, along with investments in operational excellence initiatives.
Presort Services
Revenue growth was driven by volume growth across all mail classes along with higher revenue per piece. The major volume drivers were higher Marketing Mail and Flats processed. EBIT and EBITDA margin percentages increased from prior year and prior quarter primarily due the higher revenue per piece along with lower labor costs.
SMB Solutions
($ millions) |
Second Quarter |
|
||||||||||||||||||
Revenue |
2019 |
2018 |
Y/Y Reported |
Y/Y Ex Currency |
Y/Y Ex Currency
|
|||||||||||||||
North America Mailing |
$303 |
$319 |
(5%) |
(5%) |
(5%) |
|||||||||||||||
International Mailing |
75 |
93 |
(20%) |
(15%) |
(3%) |
|||||||||||||||
SMB Solutions |
$378 |
$412 |
(8%) |
(7%) |
(4%) |
|||||||||||||||
|
|
|
|
|
|
|||||||||||||||
EBITDA |
|
|
|
|
|
|||||||||||||||
North America Mailing |
$123 |
$128 |
(4%) |
|
|
|||||||||||||||
International Mailing |
14 |
15 |
(9%) |
|
|
|||||||||||||||
SMB Solutions |
$137 |
$144 |
(5%) |
|
|
|||||||||||||||
|
|
|
|
|
EBIT |
|
|
|
|
|||||||||
North America Mailing |
$113 |
$120 |
(6%) |
|
|||||||||
International Mailing |
12 |
13 |
(9%) |
|
|||||||||
SMB Solutions |
$125 |
$133 |
(6%) |
|
* Excluding
North America Mailing
Revenue declined on lower equipment sales and recurring revenue streams. The recurring revenue stream decline was driven by lower support services, supplies and financing revenue partially offset by higher business services. EBIT and EBITDA margin percentages were relatively flat to prior year driven by the lower revenue along with higher tariff costs partially offset by lower expenses.
International Mailing
Reported revenue was negatively impacted by the previously announced market exits. Excluding the effect from currency and market exits, the revenue decline was driven by lower services and supplies revenue partially offset by higher rentals revenue. The revenue decline was driven by weakness in the
Software Solutions
($ millions) |
Second Quarter |
||||||||||||||
|
2019 |
2018 |
Y/Y Reported |
Y/Y Ex Currency |
|||||||||||
Revenue |
$72 |
$92 |
(21%) |
(20%) |
|||||||||||
EBITDA |
$4 |
$21 |
(79%) |
|
|||||||||||
EBIT |
$2 |
$18 |
(89%) |
|
Software Solutions
Revenue declined from prior year driven by lower license revenue partially offset by higher data subscriptions and SaaS revenue. Prior year included several large renewal license deals. In addition, new license deals were down compared to prior year. EBIT and EBITDA margin percentages decreased from prior year largely driven by the lower license revenue.
2019 Guidance
The Company is reaffirming its prior annual guidance for 2019. Guidance reflects the shift of the business to the fourth quarter as shipping continues to be a larger part of the portfolio.
- Revenue, on a constant currency (CC) basis, to be in the range of 1 percent to 3 percent growth when compared to 2018.
-
Adjusted EPS from continuing operations to be in the range of
$0.90 to $1.05 . -
Free cash flow to be in the range of
$200 million to $250 million .
This guidance discusses future results, which are inherently subject to unforeseen risks and developments. As such, discussions about the business outlook should be read in the context of an uncertain future, as well as the risk factors identified in the safe harbor language at the end of this release and as more fully outlined in the Company's 2018 Form 10-K Annual Report and other reports filed with the
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. The Company cannot reasonably predict the impact that future changes in currency exchange rates will have on revenue and net income. 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. The Company’s guidance is based on an assumption that the global economy and foreign exchange markets in 2019 will not change significantly.
Conference Call and Webcast
Management of
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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 EPS and adjusted net income 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, this quarter 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.
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; changes in, or loss of, our contractual relationships with the
Note: Consolidated statements of income; revenue and EBIT by business segment; and reconciliation of GAAP to non-GAAP measures for the three and six months ended
Pitney Bowes Inc. | |||||||||||||||||
Consolidated Statements of Income | |||||||||||||||||
(Unaudited; in thousands, except share and per share amounts) | |||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
||||||
Revenue: | |||||||||||||||||
Equipment sales |
$ |
85,551 |
|
$ |
93,811 |
|
$ |
175,338 |
|
$ |
200,519 |
|
|||||
Supplies |
|
46,490 |
|
|
55,457 |
|
|
97,443 |
|
|
115,450 |
|
|||||
Software |
|
72,206 |
|
|
91,703 |
|
|
145,524 |
|
|
167,997 |
|
|||||
Rentals |
|
18,445 |
|
|
19,454 |
|
|
40,602 |
|
|
44,419 |
|
|||||
Financing |
|
92,419 |
|
|
97,129 |
|
|
189,462 |
|
|
197,478 |
|
|||||
Support services |
|
127,683 |
|
|
138,598 |
|
|
256,304 |
|
|
279,248 |
|
|||||
Business services |
|
417,985 |
|
|
369,088 |
|
|
824,508 |
|
|
756,712 |
|
|||||
Total revenue |
|
860,779 |
|
|
865,240 |
|
|
1,729,181 |
|
|
1,761,823 |
|
|||||
Costs and expenses: | |||||||||||||||||
Cost of equipment sales |
|
58,570 |
|
|
58,948 |
|
|
122,235 |
|
|
121,417 |
|
|||||
Cost of supplies |
|
11,758 |
|
|
15,738 |
|
|
25,308 |
|
|
32,685 |
|
|||||
Cost of software |
|
23,419 |
|
|
26,957 |
|
|
46,802 |
|
|
51,086 |
|
|||||
Cost of rentals |
|
8,418 |
|
|
8,464 |
|
|
18,133 |
|
|
21,212 |
|
|||||
Financing interest expense |
|
11,043 |
|
|
11,194 |
|
|
22,407 |
|
|
22,258 |
|
|||||
Cost of support services |
|
40,448 |
|
|
42,306 |
|
|
82,227 |
|
|
88,371 |
|
|||||
Cost of business services |
|
337,918 |
|
|
290,567 |
|
|
664,964 |
|
|
584,946 |
|
|||||
Selling, general and administrative |
|
278,545 |
|
|
289,427 |
|
|
579,527 |
|
|
592,237 |
|
|||||
Research and development |
|
22,630 |
|
|
23,574 |
|
|
44,404 |
|
|
48,069 |
|
|||||
Restructuring charges and asset impairments, net |
|
7,279 |
|
|
11,503 |
|
|
10,877 |
|
|
12,407 |
|
|||||
Interest expense, net |
|
28,019 |
|
|
30,775 |
|
|
55,621 |
|
|
62,789 |
|
|||||
Other components of net pension and postretirement cost |
|
(1,618 |
) |
|
(2,499 |
) |
|
(2,256 |
) |
|
(4,218 |
) |
|||||
Other (income) expense |
|
(27 |
) |
|
- |
|
|
17,683 |
|
|
- |
|
|||||
Total costs and expenses |
|
826,402 |
|
|
806,954 |
|
|
1,687,932 |
|
|
1,633,259 |
|
|||||
Income from continuing operations before taxes |
|
34,377 |
|
|
58,286 |
|
|
41,249 |
|
|
128,564 |
|
|||||
Provision for income taxes |
|
4,099 |
|
|
7,899 |
|
|
12,400 |
|
|
26,694 |
|
|||||
Income from continuing operations |
|
30,278 |
|
|
50,387 |
|
|
28,849 |
|
|
101,870 |
|
|||||
(Loss) income from discontinued operations, net of tax |
|
(6,581 |
) |
|
1,208 |
|
|
(7,811 |
) |
|
9,695 |
|
|||||
Net income |
$ |
23,697 |
|
$ |
51,595 |
|
$ |
21,038 |
|
$ |
111,565 |
|
|||||
Basic earnings (loss) per share (1): | |||||||||||||||||
Continuing operations |
$ |
0.17 |
|
$ |
0.27 |
|
$ |
0.16 |
|
$ |
0.54 |
|
|||||
Discontinued operations |
|
(0.04 |
) |
|
0.01 |
|
|
(0.04 |
) |
|
0.05 |
|
|||||
Net income |
$ |
0.13 |
|
$ |
0.28 |
|
$ |
0.12 |
|
$ |
0.60 |
|
|||||
Diluted earnings (loss) per share (1): | |||||||||||||||||
Continuing operations |
$ |
0.17 |
|
$ |
0.27 |
|
$ |
0.16 |
|
$ |
0.54 |
|
|||||
Discontinued operations |
|
(0.04 |
) |
|
0.01 |
|
|
(0.04 |
) |
|
0.05 |
|
|||||
Net income |
$ |
0.13 |
|
$ |
0.27 |
|
$ |
0.12 |
|
$ |
0.59 |
|
|||||
Weighted-average shares used in diluted earnings per share |
|
178,280,533 |
|
|
188,113,750 |
|
|
182,638,896 |
|
|
188,056,884 |
|
|||||
(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) | ||||||||
Assets |
June 30,
|
December 31,
|
||||||
Current assets: | ||||||||
Cash and cash equivalents |
$ |
771,042 |
|
$ |
867,262 |
|
||
Short-term investments |
|
59,516 |
|
|
59,391 |
|
||
Accounts and other receivables, net |
|
419,776 |
|
|
456,138 |
|
||
Short-term finance receivables, net |
|
682,828 |
|
|
752,773 |
|
||
Inventories |
|
73,347 |
|
|
62,279 |
|
||
Current income taxes |
|
22,474 |
|
|
5,947 |
|
||
Other current assets and prepayments |
|
132,878 |
|
|
100,625 |
|
||
Assets of discontinued operations |
|
- |
|
|
4,854 |
|
||
Total current assets |
|
2,161,861 |
|
|
2,309,269 |
|
||
Property, plant and equipment, net |
|
416,512 |
|
|
410,114 |
|
||
Rental property and equipment, net |
|
36,917 |
|
|
46,228 |
|
||
Long-term finance receivables, net |
|
554,075 |
|
|
536,369 |
|
||
Goodwill |
|
1,754,610 |
|
|
1,766,511 |
|
||
Intangible assets, net |
|
212,596 |
|
|
227,137 |
|
||
Operating lease assets |
|
180,983 |
|
|
156,788 |
|
||
Noncurrent income taxes |
|
63,013 |
|
|
66,326 |
|
||
Other assets |
|
377,420 |
|
|
419,677 |
|
||
Total assets |
$ |
5,757,987 |
|
$ |
5,938,419 |
|
||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued liabilities |
$ |
1,295,712 |
|
$ |
1,390,362 |
|
||
Current operating lease liabilities |
|
34,612 |
|
|
37,208 |
|
||
Current portion of long-term debt |
|
214,927 |
|
|
199,535 |
|
||
Advance billings |
|
211,061 |
|
|
229,379 |
|
||
Current income taxes |
|
6,011 |
|
|
15,284 |
|
||
Liabilities of discontinued operations |
|
- |
|
|
3,276 |
|
||
Total current liabilities |
|
1,762,323 |
|
|
1,875,044 |
|
||
Long-term debt |
|
3,029,246 |
|
|
3,066,073 |
|
||
Deferred taxes on income |
|
264,191 |
|
|
254,353 |
|
||
Tax uncertainties and other income tax liabilities |
|
45,586 |
|
|
39,548 |
|
||
Noncurrent operating lease liabilities |
|
154,648 |
|
|
127,237 |
|
||
Other noncurrent liabilities |
|
449,021 |
|
|
474,322 |
|
||
Total liabilities |
|
5,705,015 |
|
|
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 |
|
105,341 |
|
|
121,475 |
|
||
Retained earnings |
|
5,282,374 |
|
|
5,279,682 |
|
||
Accumulated other comprehensive loss |
|
(907,678 |
) |
|
(948,961 |
) |
||
Treasury stock, at cost |
|
(4,750,403 |
) |
|
(4,674,089 |
) |
||
Total stockholders' equity |
|
52,972 |
|
|
101,842 |
|
||
Total liabilities and stockholders' equity |
$ |
5,757,987 |
|
$ |
5,938,419 |
|
Pitney Bowes Inc. | |||||||||||||||||||||
Business Segment Revenue | |||||||||||||||||||||
(Unaudited; in thousands) | |||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||
2019 |
2018 |
% Change |
2019 |
2018 |
% Change |
||||||||||||||||
REVENUE | |||||||||||||||||||||
Global Ecommerce |
$ |
282,319 |
$ |
239,100 |
18% |
$ |
548,573 |
$ |
485,690 |
13% |
|||||||||||
Presort Services |
|
128,138 |
|
122,730 |
4% |
|
262,985 |
|
257,188 |
2% |
|||||||||||
Commerce Services |
|
410,457 |
|
361,830 |
13% |
|
811,558 |
|
742,878 |
9% |
|||||||||||
North America Mailing |
|
303,417 |
|
318,901 |
(5%) |
|
618,891 |
|
659,712 |
(6%) |
|||||||||||
International Mailing |
|
74,699 |
|
92,806 |
(20%) |
|
153,208 |
|
191,236 |
(20%) |
|||||||||||
Small & Medium Business Solutions |
|
378,116 |
|
411,707 |
(8%) |
|
772,099 |
|
850,948 |
(9%) |
|||||||||||
Software Solutions |
|
72,206 |
|
91,703 |
(21%) |
|
145,524 |
|
167,997 |
(13%) |
|||||||||||
Total revenue |
$ |
860,779 |
$ |
865,240 |
(1%) |
$ |
1,729,181 |
$ |
1,761,823 |
(2%) |
|||||||||||
Reconciliation of reported revenue to revenue excluding currency and Market Exits |
|||||||||||||||||||||
Total revenue |
$ |
860,779 |
$ |
865,240 |
(1%) |
$ |
1,729,181 |
$ |
1,761,823 |
(2%) |
|||||||||||
Currency impact on revenue |
|
7,224 |
|
- |
|
17,207 |
|||||||||||||||
Revenue, at constant currency |
|
868,003 |
|
865,240 |
0% |
|
1,746,388 |
|
1,761,823 |
(1%) |
|||||||||||
Less revenue from Market Exits |
|
(2,356) |
|
(14,014) |
|
(8,369) |
|
(28,893) |
|||||||||||||
Revenue, excluding currency and Market Exits |
$ |
865,647 |
$ |
851,226 |
2% |
$ |
1,738,019 |
$ |
1,732,930 |
0% |
Pitney Bowes Inc. | ||||||||||
Business Segment EBIT & EBITDA | ||||||||||
(Unaudited; in thousands) | ||||||||||
Three Months Ended June 30, | ||||||||||
2019 |
2018 |
% change |
||||||||
EBIT (1) | D&A | EBITDA | EBIT (1) | D&A | EBITDA | EBIT | EBITDA | |||
Global Ecommerce |
$ (15,576) |
$ 16,883 |
$ 1,307 |
$ (5,993) |
$ 15,467 |
$ 9,474 |
>(100%) |
(86%) |
||
Presort Services |
15,462 |
7,087 |
22,549 |
12,565 |
6,623 |
19,188 |
23% |
18% |
||
Commerce Services |
(114) |
23,970 |
23,856 |
6,572 |
22,090 |
28,662 |
>(100%) |
(17%) |
||
North America Mailing |
112,804 |
9,794 |
122,598 |
120,139 |
8,049 |
128,188 |
(6%) |
(4%) |
||
International Mailing |
11,934 |
2,115 |
14,049 |
13,091 |
2,322 |
15,413 |
(9%) |
(9%) |
||
Small & Medium Business Solutions |
124,738 |
11,909 |
136,647 |
133,230 |
10,371 |
143,601 |
(6%) |
(5%) |
||
Software Solutions |
2,002 |
2,356 |
4,358 |
18,433 |
2,564 |
20,997 |
(89%) |
(79%) |
||
Segment Total |
$ 126,626 |
$ 38,235 |
164,861 |
$ 158,235 |
$ 35,025 |
193,260 |
(20%) |
(15%) |
||
Reconciliation of Segment EBITDA to Net Income: | ||||||||||
Segment depreciation and amortization (2) |
(38,235) |
(35,025) |
||||||||
Unallocated corporate expenses |
(43,785) |
(46,477) |
||||||||
Restructuring charges and asset impairments, net |
(7,279) |
(11,503) |
||||||||
Gain on disposition of businesses |
27 |
- |
||||||||
Interest, net |
(39,062) |
(41,969) |
||||||||
Transaction costs |
(2,150) |
- |
||||||||
Provision for income taxes |
(4,099) |
(7,899) |
||||||||
Income from continuing operations |
30,278 |
50,387 |
||||||||
(Loss) income from discontinued operations, net of tax |
(6,581) |
1,208 |
||||||||
Net income |
$ 23,697 |
$ 51,595 |
||||||||
Six Months Ended June 30, | ||||||||||
2019 |
2018 |
% change |
||||||||
EBIT (1) | D&A | EBITDA | EBIT (1) | D&A | EBITDA | EBIT | EBITDA | |||
Global Ecommerce |
$ (30,176) |
$ 33,341 |
$ 3,165 |
$ (13,704) |
$ 29,897 |
$ 16,193 |
>(100%) |
(80%) |
||
Presort Services |
30,528 |
14,008 |
44,536 |
39,591 |
12,785 |
52,376 |
(23%) |
(15%) |
||
Commerce Services |
352 |
47,349 |
47,701 |
25,887 |
42,682 |
68,569 |
(99%) |
(30%) |
||
North America Mailing |
223,417 |
16,234 |
239,651 |
248,707 |
15,548 |
264,255 |
(10%) |
(9%) |
||
International Mailing |
23,724 |
4,533 |
28,257 |
29,113 |
5,932 |
35,045 |
(19%) |
(19%) |
||
Small & Medium Business Solutions |
247,141 |
20,767 |
267,908 |
277,820 |
21,480 |
299,300 |
(11%) |
(10%) |
||
Software Solutions |
3,694 |
4,836 |
8,530 |
20,925 |
4,808 |
25,733 |
(82%) |
(67%) |
||
Segment Total |
$ 251,187 |
$ 72,952 |
324,139 |
$ 324,632 |
$ 68,970 |
393,602 |
(23%) |
(18%) |
||
Reconciliation of Segment EBITDA to Net Income: | ||||||||||
Segment depreciation and amortization (2) |
(72,952) |
(68,970) |
||||||||
Unallocated corporate expenses |
(99,474) |
(97,559) |
||||||||
Restructuring charges and asset impairments, net |
(10,877) |
(12,407) |
||||||||
Loss on disposition of businesses |
(17,683) |
- |
||||||||
Interest, net |
(78,028) |
(85,047) |
||||||||
Transaction costs |
(3,876) |
(1,055) |
||||||||
Provision for income taxes |
(12,400) |
(26,694) |
||||||||
Income from continuing operations |
28,849 |
101,870 |
||||||||
(Loss) income from discontinued operations, net of tax |
(7,811) |
9,695 |
||||||||
Net income |
$ 21,038 |
$ 111,565 |
||||||||
(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 depreciation and amortization expense of reporting segments only, and excludes corporate depreciation and amortization expense of $5,213 and $5,572 for the three months ended June 30, 2019 and 2018, respectively, and $9,861 and $11,365 for the six months ended June 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 June 30, | Six months ended June 30, | |||||||||||||||||
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|||||||
Reconciliation of reported net income to adjusted earnings | ||||||||||||||||||
Net income |
$ |
23,697 |
|
$ |
51,595 |
|
$ |
21,038 |
|
$ |
111,565 |
|
||||||
Loss (income) from discontinued operations, net of tax |
|
6,581 |
|
|
(1,208 |
) |
|
7,811 |
|
|
(9,695 |
) |
||||||
Restructuring charges and asset impairments, net |
|
5,252 |
|
|
8,461 |
|
|
7,911 |
|
|
9,132 |
|
||||||
(Gain) loss on disposition of businesses |
|
(27 |
) |
|
- |
|
|
19,396 |
|
|
- |
|
||||||
Transaction costs |
|
1,602 |
|
|
- |
|
|
2,891 |
|
|
786 |
|
||||||
Tax legislation |
|
- |
|
|
(5,980 |
) |
|
- |
|
|
(5,980 |
) |
||||||
Adjusted net income |
|
37,105 |
|
|
52,868 |
|
|
59,047 |
|
|
105,808 |
|
||||||
Provision for income taxes, as adjusted |
|
6,674 |
|
|
16,921 |
|
|
14,638 |
|
|
36,216 |
|
||||||
Interest, net |
|
39,062 |
|
|
41,969 |
|
|
78,028 |
|
|
85,047 |
|
||||||
Adjusted EBIT |
|
82,841 |
|
|
111,758 |
|
|
151,713 |
|
|
227,071 |
|
||||||
Depreciation and amortization |
|
43,448 |
|
|
40,597 |
|
|
82,813 |
|
|
80,335 |
|
||||||
Adjusted EBITDA |
$ |
126,289 |
|
$ |
152,355 |
|
$ |
234,526 |
|
$ |
307,406 |
|
||||||
Reconciliation of reported diluted earnings per share to adjusted diluted earnings per share |
||||||||||||||||||
Diluted earnings per share |
$ |
0.13 |
|
$ |
0.27 |
|
$ |
0.12 |
|
$ |
0.59 |
|
||||||
Loss (income) from discontinued operations, net of tax |
|
0.04 |
|
|
(0.01 |
) |
|
0.04 |
|
|
(0.05 |
) |
||||||
Restructuring charges and asset impairments, net |
|
0.03 |
|
|
0.04 |
|
|
0.04 |
|
|
0.05 |
|
||||||
(Gain) loss on disposition of businesses |
|
(0.00 |
) |
|
- |
|
|
0.11 |
|
|
- |
|
||||||
Transaction costs |
|
0.01 |
|
|
- |
|
|
0.02 |
|
|
0.00 |
|
||||||
Tax legislation |
|
- |
|
|
(0.03 |
) |
|
- |
|
|
(0.03 |
) |
||||||
Adjusted diluted earnings per share |
$ |
0.21 |
|
$ |
0.28 |
|
$ |
0.32 |
|
$ |
0.56 |
|
||||||
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 |
$ |
16,925 |
|
$ |
85,040 |
|
$ |
86,782 |
|
$ |
154,493 |
|
||||||
Net cash used in (provided by) operating activities - discontinued operations |
|
3,267 |
|
|
(16,916 |
) |
|
6,881 |
|
|
(41,772 |
) |
||||||
Capital expenditures |
|
(32,441 |
) |
|
(50,640 |
) |
|
(61,327 |
) |
|
(79,481 |
) |
||||||
Restructuring payments |
|
6,139 |
|
|
11,943 |
|
|
14,283 |
|
|
27,528 |
|
||||||
Reserve account deposits |
|
14,720 |
|
|
(695 |
) |
|
(8,316 |
) |
|
5,959 |
|
||||||
Transaction costs paid |
|
4,269 |
|
|
1,444 |
|
|
6,108 |
|
|
4,037 |
|
||||||
Free cash flow |
$ |
12,879 |
|
$ |
30,176 |
|
$ |
44,411 |
|
$ |
70,764 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190806005112/en/
Source:
Editorial -
Bill Hughes
Chief Communications Officer
203/351-6785
Financial -
Adam David
VP, Investor Relations
203/351-7175