Pitney Bowes Inc. (NYSE:PBI), a global technology company that
provides products and solutions that power commerce, today reported
financial results for the full year and the fourth quarter 2015.
The Company also provided annual guidance for 2016.
Full-Year 2015:
- Revenue of $3.6 billion, a decline of 3
percent on a constant currency basis and 6 percent on a reported
basis
- Adjusted EPS of $1.75; GAAP EPS of
$2.03. EPS includes a $0.07 per share negative impact of foreign
exchange during the year.
- SG&A expenses of $1.3 billion, a
reduction of $98 million year-over-year
- Free cash flow of $456 million; GAAP
cash from operations of $515 million
- Repurchased $135 million of common
stock; reduced debt by $280 million and refinanced $110 million of
debt
Fourth Quarter 2015:
- Revenue of $937 million, a decline of 2
percent on a constant currency basis and 5 percent on a reported
basis
- Adjusted EPS of $0.48; GAAP EPS of
$0.44. EPS includes a $0.02 per share negative impact of foreign
exchange during the quarter.
- SG&A expenses of $341 million, a
reduction of $6 million
- Free cash flow of $157 million; GAAP
cash from operations of $164 million
- Repurchased $35 million of common stock
and refinanced $110 million of debt using funds from a $150 million
bank term loan
“We made substantial progress against our strategic objectives
in 2015 and entered 2016 in a stronger position," said Marc B.
Lautenbach, President and CEO, Pitney Bowes. “In the fourth
quarter, most of our businesses performed in-line with our long
term expectations; however, our Software business fell short of
what we had expected. As we look forward, we continue to feel good
about where we are in our transformation and our ability to deliver
long term value to our shareholders.”
FULL YEAR 2015 RESULTS
For the full year, revenue totaled $3.6 billion, a decline of 3
percent on a constant currency basis and 6 percent on a reported
basis when compared to the prior year. As part of its previously
announced go-to-market strategy, in 2014 the Company exited a
non-core product line in Norway and transitioned from a direct
sales model to a dealer sales network in six smaller European
markets for the International Mailing and Production Mail segments.
For comparative purposes, revenue for 2015 would have declined 2
percent on a constant currency basis when revenue in the current
and prior years is adjusted for the impact of these divested
revenues.
On a Generally Accepted Accounting Principles (GAAP) basis,
earnings per diluted share were $2.03.
Adjusted earnings per diluted share from continuing operations
were $1.75 and exclude:
- $0.32 which includes a gain from the
sale of Imagitas of $0.44 and net acquisition and disposition
related expenses of $0.12;
- $0.09 of restructuring and asset
impairment charges;
- $0.02 of legal settlement expense;
- $0.04 benefit related to a previous
investment divestiture;
- $0.03 of income from discontinued
operations.
Earnings per share for the year were reduced by $0.07 due to the
impacts of foreign exchange. Additionally, adjusted earnings per
share were adversely impacted by the 33.5 percent tax rate, which
was at the high-end of the Company’s guidance range primarily due
to a greater percentage of U.S. sourced income.
Free cash flow for the year was $456 million and the Company
generated $515 million of cash from operations on a GAAP basis. In
addition to investing in the business, the Company used the cash to
pay $150 million in dividends to its common shareholders;
repurchase $135 million worth of its common stock and make $62
million in restructuring payments during the year. In comparison to
the prior year, free cash flow was lower primarily due to the
timing of working capital requirements.
FOURTH QUARTER 2015 RESULTS
Revenue totaled $937 million, a decline of 2 percent on a
constant currency basis and 5 percent on a reported basis when
compared to the prior year.
Revenue benefited from 14 percent growth on a constant currency
basis and 11 percent growth on a reported basis in the Digital
Commerce Solutions group, driven by growth in Global Ecommerce
offset partially by lower results in the Software segment.
Revenue in the Enterprise Business Solutions group grew 1
percent on a constant currency basis and declined 2 percent on a
reported basis. This resulted from continued growth in Presort
Services offset by a decline in Production Mail.
In the Small and Medium Business (SMB) Solutions group, revenue
declined 3 percent on a constant currency basis and 6 percent on a
reported basis. North America Mailing had a decline of only one
percent for equipment sales in the U.S. compared to the prior year.
Total revenue for International Mailing had the lowest rate of
decline on a constant currency basis since the implementation of
the new go-to-market strategy.
On a GAAP basis, earnings per diluted share were $0.44 for the
fourth quarter.
Adjusted earnings per diluted share from continuing operations
were $0.48 and exclude:
- $0.02 of expenses related to the exit
of certain geographic markets during the quarter;
- $0.05 for restructuring charges and
asset impairments;
- $0.03 of income from discontinued
operations.
Earnings per share this quarter were reduced by $0.02 due to the
impacts of foreign exchange.
Free cash flow during the quarter was $157 million, which was
similar to the prior year. The Company generated $164 million of
cash from operations on a GAAP basis. The Company used the cash to
pay $37 million in dividends to its common shareholders; repurchase
$35 million worth of its common stock and make $16 million in
restructuring payments.
The Company’s results for the quarter and full year are
summarized in the table below:
($ millions, except EPS) Fourth
Quarter Full Year
2015
2014
2015
2014
Revenue $937 $984 $3,578 $3,822
Adjusted EPS from continuing
operations
$0.48 $0.51 $1.75 $1.90 Gain on sale of
Imagitas and net acquisition
and disposition related expenses
($0.02)
-
$0.32
-
Restructuring charges and asset impairments ($0.05) ($0.22) ($0.09)
($0.29) Legal settlement -
-
($0.02)
-
Investment divestiture - - $0.04 $0.05 Extinguishment of debt - - -
($0.19)
GAAP EPS from continuing operations $0.41
$0.29 $2.00 $1.47 Discontinued operations –
income $0.03 $0.02 $0.03 $0.17
GAAP EPS $0.44
$0.31 $2.03 $1.64
Free Cash Flow
$157 $154 $456 $571
* The sum of the earnings per share may not equal the totals
above due to rounding.
DEBT MANAGEMENT
During the year, the Company paid down $280 million of debt
using cash on the balance sheet and the issuance of commercial
paper. In the fourth quarter, the Company used funds from a new
$150 million bank term loan to refinance $110 million of debt. In
January 2016, the Company obtained an additional $300 million of
bank term loans and refinanced $371 million of debt that matured in
January.
BUSINESS SEGMENT REPORTING
The Company revised its business segment reporting in the second
quarter 2015 for its Digital Commerce Solutions segment. The
Company’s business segment reporting reflects the clients served in
each market and the way it manages these segments for growth and
profitability. The primary reporting segment groups are the SMB
Solutions group; the Enterprise Business Solutions group; and the
Digital Commerce Solutions group.
The SMB Solutions group offers mailing equipment, financing,
services and supplies for small and medium businesses to
efficiently create mail and evidence postage. This group includes
the North America Mailing and International Mailing segments. North
America Mailing includes the operations of U.S. and Canada Mailing.
International Mailing includes all other SMB operations around the
world.
The Enterprise Business Solutions group provides mailing and
printing equipment and services for large enterprise clients to
process mail, including sortation services to qualify large mail
volumes for postal worksharing discounts. This group includes the
global Production Mail and Presort Services segments.
The Digital Commerce Solutions group provides customer
engagement, customer information and location intelligence
software; and solutions that facilitate global cross-border
ecommerce transactions and shipping solutions for businesses of all
sizes. This group includes the Software Solutions and Global
Ecommerce segments.
The Other segment is comprised of the Imagitas marketing
services business, which was sold on May 29, 2015.
SMB Solutions Group
(millions, except percentages) Fourth
Quarter
Revenue
2015
2014
Y/Y
Reported
Y/Y
Ex
Currency
North America Mailing $363 $376 (3%) (2%) International Mailing
114
134
(15%)
(6%)
SMB Solutions Total $477 $510 (6%)
(3%)
EBIT
North America Mailing $165 $166 (1%) International Mailing
14
21
(32%)
SMB Solutions Total $179 $187 (4%)
North America Mailing
Revenue declined on a constant currency basis at a lesser rate
than through the first nine months of the year. In the U.S.,
equipment sales declined one percent versus the prior year while
recurring revenue streams continued to perform in-line with prior
quarters. EBIT margin improved versus the prior year due to the mix
of business and lower employee-related costs.
International Mailing
Revenue declined at its lowest rate all year, benefiting from
improved equipment sales trends in most of the major markets where
the Company has completed the shift in its go-to-market strategy.
Equipment sales revenue grew on a constant currency basis, driven
in part by increased sales in the UK. In France, equipment sales
declined at a lesser rate than in previous quarters as the new
sales structure increased productivity. However, equipment sales
growth was offset by a decline in the recurring revenue streams.
During the quarter, the Company sold, or entered into agreements to
sell assets and convert to a dealer model in Mexico, South Africa
and five markets in Asia.
International Mailing’s EBIT margin declined versus the prior
year due to the impact of currency on costs and reduced,
higher-margin recurring stream revenue.
Enterprise Business Solutions
Group
(millions, except percentages) Fourth
Quarter
Revenue
2015
2014
Y/Y
Reported
Y/Y
Ex
Currency
Production Mail $122 $132 (7%) (3%) Presort Services
122
117
4%
4%
Enterprise Business Total $245 $249
(2%) 1%
EBIT
Production Mail $17 $20 (15%) Presort Services
28
30
(8%)
Enterprise Business Total $45 $50 (10%)
Production Mail
Revenue trends improved versus the prior two quarters and
benefited from growth in inserting equipment sales, driven in part
by the new Epic™ product line, and higher supplies revenue. Revenue
was adversely impacted by fewer printer installations than the
prior year. EBIT margin declined versus the prior year due to
product mix and increased engineering investments.
Presort Services
Revenue benefited from higher volumes of First Class and
Standard mail processed versus the prior year, as well as new
client acquisitions. EBIT margin declined versus the prior year due
in part to investments made to expand the network into two new U.S.
markets.
Digital Commerce Solutions
Group
(millions, except percentages) Fourth
Quarter
Revenue
2015
2014
Y/Y
Reported
Y/Y
Ex
Currency
Software Solutions $103 $116 (12%) (7%) Global Ecommerce
112
77
45%
46%
Digital Commerce Total $215 $194 11%
14%
EBIT
Software Solutions $14 $21 (34%) Global Ecommerce
9
8
23%
Digital Commerce Total $23 $28 (19%)
Software Solutions
Revenue declined due to lower licensing revenues in the Americas
and Europe. The Company has allocated additional resources to
expand its channel reach and focus on several high-potential
industries and solutions. EBIT margin declined as a result of the
lower amount of licensing revenue, which has a high margin.
Global Ecommerce
Results included a full quarter of revenue from Borderfree and
growth in UK marketplace revenue. A number of new retail clients
and expanded payment options also added to revenue in the quarter.
However, outbound package shipments from the U.S. continued to be
pressured by the strong U.S. dollar. This was especially true with
regard to the Canadian and Australian dollars, which both declined
in value by 15 percent versus the U.S. currency in comparison to
the prior year. These markets represent two of the top three
markets for volume shipped from the U.S.
EBIT margin declined versus the prior year due to the
amortization of acquisition-related intangible assets, which offset
the early stages of synergy savings.
Other
($ millions) Fourth Quarter
2015
2014
Y/Y
Reported
Y/Y
Ex
Currency
Revenue $0 $31 NM NM
EBIT
$0 $5 NM
The Other segment is comprised of the Imagitas marketing
services business, which was sold in May 2015.
2016 GUIDANCE
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 2014 Form 10-K Annual Report and other
reports filed with the Securities and Exchange Commission.
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. This guidance also assumes that
the global economy and foreign exchange markets in 2016 will not
change significantly from year-end 2015 levels. Volatility in the
foreign exchange markets could have a material effect on the
Company’s reported results compared to guidance. From a sensitivity
perspective, for each 5 percent movement of the exchange rates
material to the Company’s business, reported revenue growth could
be impacted by an approximately 150 basis point change and adjusted
earnings per share could be impacted by about $0.03 per share.
The Company expects in 2016:
- Revenue, excluding the impacts of
currency; to be driven by growth in the double-digit range in
Digital Commerce Solutions; flat to modest growth in Enterprise
Business Solutions and a low single-digit decline in SMB
Solutions.
- Revenue is expected to benefit from:
- the completion of the go-to-market
shift in the Company’s major markets;
- new product launches across the
portfolio;
- recent acquisitions, including
Borderfree, Real Time Content (RTC) and Enroute Systems
Corporation;
- the addition of new brands and
retailers in ecommerce;
- the expansion of the Company’s Presort
Services network.
- Ongoing improvement in SG&A as a
percent of revenue as a result of the expected benefits from the
implementation of the new ERP program. The majority of these
benefits in 2016 are expected to be realized in the second half of
the year, after the U.S. launch and stabilization period.
- Incremental Marketing expense related
to the Company’s new advertising campaign that is expected to be
the highest in the first and fourth quarters.
- A tax rate in the range of 32 to 35
percent.
Based on the above assumptions, the Company’s 2016 guidance is
as follows:
- Revenue, on a constant currency basis,
is expected to be in the range of a 1 percent decline to 2 percent
growth when compared to 2015.
- Earnings per diluted share from
continuing operations to be in the range of $1.80 to $2.00 on both
an adjusted and GAAP basis. This guidance does not anticipate any
potential adjustments to earnings.
- Free cash flow to be in the range of
$425 million to $525 million.
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.pb.com.
About Pitney Bowes
Pitney Bowes (NYSE: PBI) is a global technology company offering
innovative products and solutions that enable commerce in the areas
of customer information management, location intelligence, customer
engagement, shipping and mailing, and global ecommerce. More than
1.5 million clients in approximately 100 countries around the world
rely on products, solutions and services from Pitney Bowes. For
additional information, visit Pitney Bowes at
www.pitneybowes.com.
The Company's financial results are reported in accordance with
generally accepted accounting principles (GAAP). The Company uses
measures such as adjusted earnings before interest and taxes
(EBIT), adjusted earnings per share, adjusted income from
continuing operations and free cash flow to exclude the impact of
special items like restructuring charges, tax adjustments, and
goodwill and asset write-downs, because, 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.
The use of free cash flow provides investors insight into the
amount of cash that management could have available for other
discretionary uses. It adjusts GAAP cash from operations for
capital expenditures, as well as special items like cash used for
restructuring charges, unusual tax settlements or payments and
contributions to its pension funds. Management uses segment EBIT to
measure profitability and performance at the segment level. Segment
EBIT is determined by deducting from 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. 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.
Pitney Bowes has provided a quantitative reconciliation to GAAP
in supplemental schedules. This information may 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 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: mail volumes; the
uncertain economic environment; timely development, market
acceptance and regulatory approvals, if needed, of new products;
fluctuations in customer demand; changes in postal regulations;
interrupted use of key information systems; management of
outsourcing arrangements; the implementation of a new enterprise
resource planning system; changes in business portfolio; the
success of our investment in rebranding the Company; the risk of
customer concentration in our Digital Commerce Solutions group;
integrating newly acquired businesses, including operations and
product and service offerings; foreign currency exchange rates;
changes in our credit ratings; management of credit risk; changes
in interest rates; the financial health of national posts; and
other factors beyond its control as more fully outlined in the
Company's 2014 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 and EBIT by
business segment; and reconciliation of GAAP to non-GAAP measures
for the three months and twelve months ended December 31, 2015 and
2014, and consolidated balance sheets at December 31, 2015 and 2014
are attached.
Pitney Bowes Inc. Consolidated Statements of
Income
(Unaudited; in
thousands, except per share data)
Three months ended December 31,
Twelve months ended December 31, 2015
2014 2015 2014 Revenue: Equipment sales $ 199,831 $
212,339 $ 695,159 $ 770,371 Supplies 72,925 71,691 288,103 300,040
Software 103,265 116,852 386,506 429,743 Rentals 107,934 119,560
441,663 484,629 Financing 103,043 107,330 410,035 432,859 Support
services 139,149 154,372 554,764 625,135 Business services
210,800 201,769 801,830 778,727
Total revenue 936,947 983,913 3,578,060
3,821,504 Costs and expenses: Cost of equipment sales
98,363 103,388 331,069 365,724 Cost of supplies 22,890 23,546
88,802 93,675 Cost of software 27,996 30,337 113,580 123,760 Cost
of rentals 21,061 23,065 84,188 97,338 Financing interest expense
17,620 18,829 71,791 78,562 Cost of support services 78,107 88,800
322,960 377,003 Cost of business services 140,642 138,257 546,201
544,729 Selling, general and administrative 340,643 346,903
1,279,961 1,378,400 Research and development 26,463 29,030 110,156
109,931 Restructuring charges and asset impairments, net 11,477
61,894 25,782 84,560 Interest expense, net 22,383 23,184 87,583
90,888 Other expense (income), net 78 -
(94,838 ) 45,738 Total costs and expenses
807,723 887,233 2,967,235 3,390,308
Income from continuing operations before income taxes
129,224 96,680 610,825 431,196 Provision for income taxes
44,204 33,134 189,778 112,815
Income from continuing operations 85,020 63,546 421,047
318,381 Income from discontinued operations, net of tax
5,853 3,576 5,271 33,749
Net income before attribution of noncontrolling interests 90,873
67,122 426,318 352,130 Less: Preferred stock dividends of
subsidiaries attributable to noncontrolling interests 4,594
4,594 18,375 18,375 Net income -
Pitney Bowes Inc. $ 86,279 $ 62,528 $ 407,943 $ 333,755
Amounts attributable to common stockholders: Income
from continuing operations $ 80,426 $ 58,952 $ 402,672 $ 300,006
Income from discontinued operations, net of tax 5,853
3,576 5,271 33,749 Net income - Pitney
Bowes Inc. $ 86,279 $ 62,528 $ 407,943 $ 333,755
Basic earnings per share attributable to common stockholders (1):
Continuing operations $ 0.41 $ 0.29 $ 2.01 $ 1.49 Discontinued
operations 0.03 0.02 0.03 0.17
Net income - Pitney Bowes Inc. $ 0.44 $ 0.31 $ 2.04 $
1.65 Diluted earnings per share attributable to common
stockholders (1): Continuing operations $ 0.41 $ 0.29 $ 2.00 $ 1.47
Discontinued operations 0.03 0.02 0.03
0.17 Net income - Pitney Bowes Inc. $ 0.44 $ 0.31 $
2.03 $ 1.64 Weighted-average shares used in diluted
EPS 197,959,779 203,110,509 200,944,874
203,961,446
(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 per share data)
Assets
December 31,
2015
December 31,
2014 (1)
Current assets: Cash and cash equivalents $ 677,431 $ 1,079,145
Short-term investments 102,122 32,121 Accounts receivable,
gross 466,589 448,017 Allowance for doubtful accounts (9,262
) (10,742 ) Accounts receivable, net 457,327 437,275
Short-term finance receivables 950,684 1,019,412 Allowance for
credit losses (15,514 ) (19,108 ) Short-term finance
receivables, net 935,170 1,000,304 Inventories 88,824 84,827
Current income taxes 6,584 28,584 Other current assets and
prepayments 64,325 57,173 Assets held for sale -
52,271 Total current assets 2,331,783
2,771,700 Property, plant and equipment, net 330,088 285,091
Rental property and equipment, net 180,662 200,380 Long-term
finance receivables 769,303 828,723 Allowance for credit losses
(6,249 ) (9,002 ) Long-term finance receivables, net
763,054 819,721 Goodwill 1,745,957 1,672,721 Intangible
assets, net 187,378 82,173 Non-current income taxes 70,294 98,806
Other assets 532,245 569,110
Total assets $ 6,141,461 $ 6,499,702
Liabilities,
noncontrolling interests and stockholders' equity
Current liabilities: Accounts payable and accrued liabilities $
1,457,614 $ 1,572,971 Current income taxes 16,620 30,527 Current
portion of long-term debt and notes payable 461,085 324,879 Advance
billings 353,025 386,846 Total
current liabilities 2,288,344 2,315,223 Deferred taxes on
income 205,668 114,950 Tax uncertainties and other income tax
liabilities 68,429 86,127 Long-term debt 2,507,912 2,927,127 Other
non-current liabilities 596,017 682,646
Total liabilities 5,666,370 6,126,073
Noncontrolling interests (Preferred stockholders'
equity in subsidiaries) 296,370 296,370 Stockholders'
equity: Cumulative preferred stock, $50 par value, 4% convertible 1
1 Cumulative preference stock, no par value, $2.12 convertible 505
548 Common stock, $1 par value 323,338 323,338 Additional
paid-in-capital 161,280 178,852 Retained earnings 5,155,537
4,897,708 Accumulated other comprehensive loss (888,635 ) (846,156
) Treasury stock, at cost (4,573,305 ) (4,477,032 )
Total Pitney Bowes Inc. stockholders' equity 178,721
77,259 Total liabilities, noncontrolling
interests and stockholders' equity $ 6,141,461 $ 6,499,702
(1)Certain prior year amounts have been
revised.
Pitney Bowes Inc. Revenue and EBIT
Business Segments
(Unaudited; in
thousands)
Three Months Ended
December 31, %
2015 2014 Change
Revenue
North America Mailing $ 363,316 $ 376,421 (3 %)
International Mailing 113,930 133,621
(15 %)
Small & Medium Business Solutions 477,246
510,042 (6 %) Production Mail 122,298
131,730 (7 %) Presort Services 122,247 117,350
4 %
Enterprise Business Solutions 244,545
249,080 (2 %) Software Solutions
102,992 116,462 (12 %) Global Ecommerce 112,164
77,244 45 %
Digital Commerce Solutions
215,156 193,706 11 % Other -
31,085 (100 %)
Total revenue $
936,947 $ 983,913 (5 %)
EBIT
(1)
North America Mailing $ 164,537 $ 165,764 (1 %)
International Mailing 14,485 21,363 (32
%)
Small & Medium Business Solutions 179,022
187,127 (4 %) Production Mail 16,793
19,678 (15 %) Presort Services 27,709 29,995
(8 %)
Enterprise Business Solutions 44,502
49,673 (10 %) Software Solutions 13,627
20,573 (34 %) Global Ecommerce 9,267 7,533
23 %
Digital Commerce Solutions 22,894
28,106 (19 %) Other -
5,275 (100 %)
Total EBIT 246,418 270,181 (9 %)
Unallocated amounts: Interest, net (2) (40,003 ) (42,013 )
Corporate and other expenses (61,136 ) (69,594 ) Restructuring
charges and asset impairments, net (11,477 ) (61,894 ) Other
expense, net (78 ) - Acquisition/disposition related expenses
(4,500 ) -
Income from continuing
operations before income taxes $ 129,224 $ 96,680
(1) Segment EBIT excludes interest, taxes, general corporate
expenses, restructuring charges and other items, which are not
allocated to a particular business segment. (2) Includes financing
interest expense and interest expense, net.
Pitney
Bowes Inc. Revenue and EBIT Business Segments
(Unaudited; in
thousands)
Twelve Months Ended
December 31, % 2015
2014 Change
Revenue
North America Mailing $ 1,435,140 $ 1,491,927 (4 %)
International Mailing 445,328 572,440
(22 %)
Small & Medium Business Solutions
1,880,468 2,064,367 (9 %) Production
Mail 421,178 462,199 (9 %) Presort Services 473,612
456,556 4 %
Enterprise Business Solutions
894,790 918,755 (3 %) Software
Solutions 385,908 428,662 (10 %) Global Ecommerce 362,087
281,643 29 %
Digital Commerce Solutions
747,995 710,305 5 % Other
54,807 128,077 (57 %)
Total
revenue $ 3,578,060 $ 3,821,504 (6 %)
EBIT
(1)
North America Mailing $ 646,913 $ 642,521 1 % International
Mailing 51,070 88,710 (42 %)
Small
& Medium Business Solutions 697,983
731,231 (5 %) Production Mail 48,254 47,543 1 %
Presort Services 104,655 98,230 7 %
Enterprise Business Solutions 152,909
145,773 5 % Software Solutions 48,531 51,193 (5 %)
Global Ecommerce 19,229 16,633 16 %
Digital Commerce Solutions 67,760
67,826 (0 %) Other 10,569 19,240
(45 %)
Total EBIT 929,221 964,070 (4 %)
Unallocated amounts: Interest, net (2) (159,374 ) (169,450 )
Corporate and other expenses (213,095 ) (233,126 ) Restructuring
charges and asset impairments, net (25,782 ) (84,560 ) Other income
(expense), net 94,838 (45,738 ) Acquisition/disposition related
expenses (14,983 ) -
Income from
continuing operations before income taxes $ 610,825 $
431,196 (1) Segment EBIT excludes interest, taxes,
general corporate expenses, restructuring charges and other items,
which are not allocated to a particular business segment. (2)
Includes financing interest expense and interest expense, net.
Pitney Bowes Inc. Reconciliation of
Reported Consolidated Results to Adjusted Results (Unaudited;
in thousands, except per share data)
Three Months Ended December 31,
Twelve Months Ended December 31, 2015
2014 2015
2014 Income from continuing operations
after income taxes, as reported: $ 80,426 $ 58,952 $ 402,672 $
300,006 Restructuring charges and asset impairments, net 9,481
44,188 18,089 59,349 Loss (gain) on sale/disposition of businesses
4,149 - (84,250 ) - Acquisition and disposition transaction costs
48 - 11,475 - Legal settlement - - 4,250 - Acquisition related
compensation expense - - 7,246 - Investment divestiture - - (7,756
) (9,774 ) Extinguishment of debt - -
- 37,833
Income from continuing
operations after income taxes, as adjusted: $
94,104 $ 103,140 $
351,726 $ 387,414
Diluted earnings per share from continuing operations, as reported:
$ 0.41 $ 0.29 $ 2.00 $ 1.47 Restructuring charges and asset
impairments, net 0.05 0.22 0.09 0.29 Loss (gain) on
sale/disposition of businesses 0.02 - (0.42 ) - Acquisition and
disposition transaction costs - - 0.06 - Legal settlement - - 0.02
- Acquisition related compensation expense - - 0.04 - Investment
divestiture - - (0.04 ) (0.05 ) Extinguishment of debt -
- - 0.19
Diluted earnings per share from continuing operations, as
adjusted: $ 0.48 $ 0.51
$ 1.75 $ 1.90
Net cash provided by operating activities, as
reported: $ 163,924 $ 258,094 $ 514,639 $ 655,526 Capital
expenditures (36,686 ) (59,286 ) (166,329 ) (180,556 )
Restructuring payments 16,030 14,011 62,086 56,162
(Receipts) payments related to
investment
divestiture
- (59,475 ) 20,602 (5,737 ) Reserve account deposits 1,428 253
(24,202 ) (15,666 ) Acquisition related compensation payment - -
10,483 - Tax payment related to sale of Imagitas 5,306 - 21,224 -
Cash transaction fees related to acquisitions and dispositions
6,856 - 17,971 - Extinguishment of debt - -
- 61,657
Free cash
flow, as adjusted: $ 156,858 $
153,597 $ 456,474 $
571,386 Note: The sum of
the earnings per share amounts may not equal the totals due to
rounding.
Pitney Bowes Inc. Reconciliation
of Reported Consolidated Results to Adjusted Results
(Unaudited; in thousands)
Three Months Ended December 31, Twelve Months
Ended December 31, 2015 2014 2015 2014
Income from continuing operations after income taxes, as
reported $ 80,426 $ 58,952 $ 402,672 $ 300,006 Restructuring
charges and asset impairments, net 9,481 44,188 18,089 59,349 Loss
(gain) on sale/disposition of businesses 4,149 - (84,250 ) -
Acquisition and disposition transaction costs 48 - 11,475 - Legal
settlement - - 4,250 - Acquisition related compensation expense - -
7,246 - Investment divestiture - - (7,756 ) (9,774 ) Extinguishment
of debt - -
- 37,833
Income from continuing operations after income taxes, as
adjusted 94,104 103,140 351,726 387,414 Provision for income taxes,
as adjusted 46,581 50,840 186,651 155,705 Preferred stock dividends
of subsidiaries attributable to noncontrolling interests
4,594 4,594
18,375 18,375
Income from continuing operations before income taxes, as
adjusted 145,279 158,574 556,752 561,494 Interest, net
40,003 42,013
159,374
169,450
Adjusted EBIT 185,282 200,587
716,126 730,944 Depreciation and amortization
45,826 54,728
173,312
197,234
Adjusted EBITDA
$ 231,108 $ 255,315
$ 889,438
$ 928,178
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160202005267/en/
For Pitney Bowes Inc.EditorialBill Hughes, 203-351-6785Chief
Communications OfficerorFinancialCharles F. McBride,
203-351-6349VP, Investor Relations
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